GPT Infraprojects (NSE:GPTINFRA) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to GPT Infraprojects Limited Q2 and H1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. To discuss this quarter's performance, we have from the management, Mr. Atul Tantia, joint managing director and CFO. Before we proceed with this call, I would like to mention that some of the statements made in today's call may be forward looking in nature and may involve risks and uncertainties.

0:50 For more details, kindly refer to the investor presentation and other filings that can be found on the company's website and stock exchanges. With that, I would like to hand over the call to Mr. Atul Tantia for his opening remarks. Thank you, and over to you, sir. Thank you. Good morning, everyone. Ladies and gentlemen, first of all, I would like to wish you a very happy Diwali in advance. I welcome you all to the GPT Infraprojects Limited Q2 and H1 FY twenty twenty seven Earnings Conference Call. I hope you have had the opportunity to review our financial results and investor presentations, which were uploaded on our website as well as the website of the stock exchanges yesterday. With me, I have Cygnus Partners, our new IR firm, who will be assisting us going forward.

1:41 Coming to our H1 FY 'twenty seven performance. Exhibition across our projects remained broadly stable during the period. However, certain projects witnessed temporary moderation due to the West Bengal assembly elections during April and May, along with an excellent monsoon across several parts of the country. These factors impacted workforce availability and project execution during the period. With workforce availability now normalized, execution is gaining momentum. Alongside this, improving order inflows and a healthy project pipeline are expected to support our growth outlook for the coming quarters. Despite these temporary hiccups, we continue to make steady progress in strengthening our project portfolio, expanding our presence in railway infrastructure and diversifying our business through the addition of signaling capabilities and the expansion of our international operations.

2:39 As we look ahead, we believe that the company is entering into an important phase. The opportunity before us is not merely to grow the scale of our existing operations, but to build on our established engineering and execution capabilities to participate in a wider range of infrastructure projects, improve the business mix and enhance long term profitability. Coming to our key business developments. Our order book continues to provide a strong foundation for the company's growth. As of date, our outstanding order book stood at approximately INR5373 crores, equivalent to around 4.3x our FY 'twenty six revenues, providing strong revenue visibility.

3:24 During the quarter, we secured a significant railway infrastructure order valued at INR $4.84 crores from RVNL for the construction of an important five forty four meter long open web stream girder bridge over Mahanadi in Odisha. This order further strengthens our railway infrastructure portfolio. Alongside this, Alcon Builders and Engineers, the wholly owned subsidiary of the company, which was acquired in February 2026, has secured multiple signaling contracts aggregating to approximately INR $4.28 crores. This takes Alcon's total outstanding order book as on date to approximately INR $4.80 crores, its highest ever level, providing strong revenue visibility and strengthening our presence in the railway segment signaling segment.

4:15 Some of the key contracts secured by Alcon include INR 134 crores from Western Railway, Latam Division for the survey, design, supply and installation, testing and commissioning of four aspect automatic block signaling, electronic interlocking and associated works along various sections of the Klam Division INR114.82 crores from Northeast Frontier Railway, Kattihar Division for the provision of electronic interlocking at 10 stations along the HDNHUN route 85.53 crore contract from Eastern Illinois, Azinsul Division for the commissioning of the automatic singling using NASDAQ electronic interlocking at New Magma Yard, approximately 25 kilometers of the dedicated headquarter section.

5:02 As discussed in our earlier earnings call, our Africa business is also expected to deliver strong order inflows during the coming quarters, which providing good visibility from this geography over the next three to four years. In this regard, I am pleased to share that our subsidiary, GPT Concrete Products South Africa Private Limited, has secured a significant five year contract valued at approximately $3.85 crores from Transnet Freight Rail, the primary customer. This order further strengthens our presence in the African railway infrastructure market and provides long term visibility. For FY 'twenty seven, we expect our African operations to contribute approximately INR 80 crores in revenue, with South Africa and Ghana being the principal contributors.

5:55 We continue to pursue opportunities across our established markets, targeting an order inflow of minimum INR 3,000 crores in FY twenty twenty seven. Recent order wins will support H2 performance and contribute towards achieving our revenue target. Supported by sustained public sector investments and a favorable infrastructure spending environment, we continue to evaluate opportunities selectively and while maintaining a disciplined bidding approach with strong emphasis on project quality, risk management, execution time lines and expected returns. Our order book strategy remains largely focused on balancing growth with execution quality. With a substantial order book and a healthy bidding pipeline, our priority is to convert these opportunities into timely execution and sustainable growth.

6:46 Moving on to our financial performance for Q2 and H1 ended 09/30/2026. Starting with revenue performance on a stand alone basis, our revenue from operations for Q2 FY 'twenty seven stood at crores compared to INR269 crores in corresponding quarter of the previous year, registering a growth of approximately 2% year on year. While H1 FY 'twenty seven stand alone revenue from operations stood at INR557 crores. On a consolidated basis, revenue from operations for Q2 FY 'twenty seven stood at INR291 crores compared to INR279 crores in the corresponding quarter last year, reflecting a growth of approximately 5%. For H1 FY 'twenty seven, the consolidated revenues stood at INR594 crores compared to INR591 crores in the last year.

7:37 Moving on to operating performance. Stand alone EBITDA for Q2 FY 'twenty seven increased by 17.7% to INR44 crores compared to INR37 crores in the corresponding quarter last year. EBITDA margin expanded by two fifteen basis points to 15% compared to 13.9% in FY twenty twenty six. For H1, stand alone EBITDA grew by 13.4% to INR83 crores compared to INR73 crores in the corresponding period last year. EBITDA margin improved to 14.9%, representing an expansion of two twenty seven basis points. On a consolidated basis, EBITDA for Q2 FY twenty twenty seven stood at INR41 crores compared to INR40 crores in the corresponding quarter, registering a growth of 4.5%. The consolidated EBITDA margin for the quarter stood at 14.2%.

8:26 For H1 FY 'twenty seven, consolidated EBITDA increased by 16.1% to INR89 crores compared to INR77 crores in H1 FY twenty twenty six. The EBITDA margin improved to 15% from 12.9%, representing an expansion of two zero three basis points. We are very confident that the EBITDA margins will be in the range of 14% to 15 on a consolidated basis, and this is due to the addition of the high margin signaling business and the Africa operations picking up quite well. Improved execution efficiencies, better operating leverage and our Calgary project mix continue to support this margin stability. Going forward, the addition of the Signalling business and the gradual scaling up of our international operations, particularly in Africa, are expected to further strengthen our overall margin profile and support profitability over the medium to long term.

9:23 Coming to profitability. Stand alone PAT for Q2 FY 'twenty seven stood at INR 20 crores with a PAT margin of 7.3%. On a consolidated basis, PATs stood at INR 18 crores for Q2 FY 'twenty seven with a margin of 6.3%. For H1 FY 'twenty seven stand alone PATs stood at INR 42 crores with a margin of 7.6, while consolidated BAT stood at INR43 crores with a margin of 7.2%. For H1 FY 'twenty seven, our reported profitability also included an additional amortization charge of INR 8 crores arising from the goodwill amortization for the acquisition of Alcon. This is a non cash expense. Excluding this additional charge, our reported property would have been higher.

10:13 We obviously do get some tax benefit out of this as well, which will be strengthened during the merger as well post the merger as well. Our net cash flow from operations for H1 FY twenty twenty seven stood at approximately INR54 crores compared to INR12 crores in the corresponding period last year, representing an increase of almost 5x. This significant improvement reflects our continued focus on strengthening cash flow generation, improving working capital efficiency and maintaining financial discipline, ensuring stable and sustainable cash flows as we grow our business. Now coming to our segment performance for the quarter. Our business continues to be driven by two key segments, Infrastructure and Concrete Sleevers. Starting with Infrastructure segment, segment contributed INR $2.62 crores to revenue during the quarter, accounting for nearly 90% of our revenues. The performance was supported by higher execution across key projects like Prahaya Rajinga Bridge, Kolaghat and Kona Expressway.

11:17 This segment reported a EBIT of INR 33 crores contributing to almost 92% of the overall EBIT supported by improved execution and better margin profile. Our infrastructure order book stood at INR 4,521 crores, providing strong revenue visibility. During the quarter during the period, Alcon, our subsidiary secured multiple signaling contracts of INR $4.28 crores. And also, like I mentioned earlier, we secured an EPC contract of INR $4.84 crores from RVNL. Moving on to the Congressweeper segment. Revenue for the quarter stood at INR 30 crores, contributing to almost 10% of our overall revenue while EBIT stood at INR 2.5 crores.

12:04 This segment contributed to continue to benefit from a stable domestic operations and a healthy contribution from the export supplies with our Africa operations continuing to perform quite well. The accomplishments of the segment recorded an order book of INR852 crores, accounting for almost 16% of the order book. This represents the highest ever order book in the segment, marking a significant milestone in the history of the company. Given the segment's relatively better margin profile, this is also expected to contribute positively to the company's overall profitability. We have also, during the quarter during this period, secured multiple smaller contracts for our Panagar factory from for export to Bangladesh as well as local domestic supplies.

12:51 Overall, our Infrastructure segment continues to demonstrate strong execution capabilities, supported by a robust order book, a healthy project pipeline and an increasing opportunity in the railway signaling segment. With the addition of Alcon, we are further strengthening our capabilities in the signaling space and expanding our margin our participation across railway infrastructure projects. The Board has also proposed an interim dividend announced interim dividend of Rs. 1 per share that is 10% with a record date of November 11. With this, I would like to now open the floor for any question and answers. Thank you. I request the moderator to kindly queue up the questions. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on the touch tone telephone.

13:40 If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. First question is from the line of from Alpha Plus Capital. Please go ahead. Thanks for taking my question. So, sir, in last quarter, we conveyed our full year growth for this year will be targeted roughly around 30%.

14:26 And now given our h one performance, now to meet that sort of a target, we will need roughly around, like, 1,100 crores in h two. That's almost double of h one. So what what kind of confidence do we have as of today given the order book in hand? And do we expect to maintain that, or we trim our expectations? So we are very, very confident of doing INR 1,000 plus crores in terms of H2 performance, which will take us to almost 25%. The guidance was between 27% to 30%, I agree. So we will be between 25% to 27% in terms of overall achievement for the full year. Okay.

15:13 Secondly, on our contract assets, they are currently at around INR 600 odd crores, That is 55 crores more from March quarter. Now that is on flat revenues. So two things I want to understand on this front. One is how much of it is more than a year old? And secondly, which sort of projects make the bulk of these contract assets? And when do we expect to build them? So contract assets is almost 45 crores higher than compared to March in the last six months. This is an account of certain new contracts which has started, which we have secured and which obviously the billing has not happened, like the Chamble contract, the Kashyyang average, Rapti contract, etcetera, which have recently we have bagged and obviously till the first billing milestone has not happened and we have spent almost that amount of money, 40 crores, 45 crores on those projects.

16:21 And having said that, some billing has started to happen in Chambhala, etcetera, in the current month or last month, I would say, October. So this is a is a pointed project in any EPC company wherein newer contracts do lead to an addition in the contract assets. And in terms of answering your question about aging, I would say out of 543 crores, approximately 10 crores would be more than a year old, and the balance is all current. Okay. Fair enough. Lastly, if I can squeeze on the Alcon's performance. I just want to know what was our H1 performance, like revenue and EBITDA for Alcon? So Alcon revenue for H1 was almost 36 crores, and EBITDA has been close to 20% for Alcon.

17:16 Okay. So given the order book in hand of INR 400 plus crores, we can easily surpass last year number of INR 130 crores? Or how is it? Yeah. We expect to do INR 150 odd crores this year in Alcon. Okay. Congrats. And again, thanks a lot for taking my question. Thank you. Thank you. Thank you. Next question is from the line of Santosh Chetty from LCG Capital. Please go ahead. Thanks for the opportunity. So my first question is the order book has increased from, like, approximately from 105,070 crores from, like, INR 4,303 crores in Q1 FY 'twenty seven. So how much of this increase is attributable to the Manaji Bridge and recent Alcon orders?

18:07 So we have got almost INR 1,400 crores in this financial year, and the entire increase is attributable to those two contracts. So INR $3.85 crores is from the South African contract, large contracts I'm talking about, 25 crore is from the signaling business, INR $4.84 crore is from the Mahanan rig business, and the balance is other smaller contracts. Okay. And like earlier management indicated that it was targeting INR 3,000 crore of order inflows and hoped to exceed the target. So what is the current status of the bidding pipeline? And how much has been secured so far? So like I said, we have secured close to INR $14.50 crores of contract in this financial till now, and we are quite confident of exceeding the target of 3,000 crores for the full year.

19:06 Our bidding pipeline remains strong. Obviously, we are bidding every day for new contracts, and we are quite confident of some of the bids that we have submitted that they should be hopefully in our favor. Alright. Thank you so much, and all the best. Thank you. Thank you.. Next question is from the line of Rajiv Chen from Arkan Wealth Investments. Please go ahead. Hello. Thank you for the opportunity. So I just have couple of questions. So your consolidated revenue growth remained modest at 4.6% year on year in q two FY twenty ten, while the h one revenue was almost flat. Given the strong order book, when do you expect revenue growth to accelerate?

19:54 And what level of growth should investors anticipate for the second half of FY 'twenty seven? So for the full year, we expect revenues to cross INR 1,600 crores, which would be of almost INR 1,000 crores in this H2. This would represent a growth of close to 25% in terms of the full year. This would entail growth of almost 30% close to more than 30% in the second half. Understood, sir. Understood. This will almost 40% in the second half. This would be on back of the new orders that we've got as well as the higher execution from the existing contracts as well because like I said in my opening remarks, the monsoon has been extended in this year because of El Nino or whatever.

20:50 And that is leading to a better that has led to a subdued performance in Q2. However, with monsoon subsiding, we expect performance in H2 to be much, much better. Understood, sir. Understood. Also, what particular what quarterly revenue run rate would be required in H2 to achieve FY 'twenty seven guidance that we have already given? And is the existing order book sufficient to support this? So the H2 requirement is about INR 1,000 crores, like I said, so which is monthly run rate of almost INR 160 odd crores. And the existing order book of INR5300 crores is quite sufficient to kind of achieve that number of INR1000 crores in H2, and we are on track to do that.

21:48 Understood, sir. Understood. And lastly, with the workforce availability now normalized, how quickly are you seeing execution momentum recover across key projects? And has the recovery already started in October? Or will the improvement be more visible in fourth quarter? So recovery has already started in October. October, we have started seeing significant billing. And also, we have due to strong realizations in the from existing contracts, our cash flow is also very, very strong. And that has led to a realization of some new old outstanding as well. And we expect the momentum to carry forward in the next balance five months as well. Understood, sir. Understood. That's all from my side.

22:34 And all the best for the future quarters. Thank you. Thank you. Next question is from the line of from DB Capital Holdings. Please go ahead. Hi, sir. Thanks for the opportunity. Hi. I have some setup questions with me. So my first question is that the concrete sleeper segment contributed approximately 16% of revenue. Right? So, like, what is the expected growth trajectory of the domestic sleeper business over the next two years? I think over the next two years, the domestic business would grow by almost 51%, which is a significant number to be had. This is also both in terms of inflationary growth as well as increased production, and we expect the growth to be very strong for the African business as well.

23:40 Okay. Okay. Great, sir. Like, despite the order book being more than four times five f by '26 revenue, h one revenue growth remained muted. So, like, what is the expected timeline for converting the current order book into accelerated revenue growth? So a lot of the orders were back ended and received in the last nine to ten months. Obviously, certain contracts do take time to pick up and start. And H2 will see the impact of that. And obviously, FY 'twenty eight and 'twenty nine will also see the impact of that as well. We are quite hopeful that we will be able to convert these order books into execution in the next two, two and a half years.

24:28 Okay. Okay, sir. And my last question is that what is the current writing pipeline, particularly the value of contracts, like, where GPT has involved as L1? So, like, when can investors expect the L1 opportunities to convert into the confirmed orders? So any project where we are L1, we do announce it to the stock exchanges as per our website. Currently, there is no project in which we are l one in. We will come back to the stock exchanges once we are l one. Okay. Okay. Understood, sir. Thank you so much. Always. Thank you. Next question is from from Plus ninety one Asset Management. Please go ahead.

25:19 Hi, sir. How are you doing? I hope I'm all good. Good. Very much. Sir, just one doubt about contract assets. So I wanted clarification. Contract assets which are recorded in the balance sheet, that is essentially revenue already recognized or is yet to be recognized in P and L? The contract assets includes a whole host of things. It includes retention money, which is receivable from contracts from various clients. It includes, what do you call, unbilled revenue, it includes price escalation as well.

26:05 So all it's everything the unbilled revenue, obviously, over the period is recognized in the P and L, same for price escalation. And obviously, the same goes for retention money, which is deducted from the bills, cash retention money of almost 100 odd crores, which has been deducted from the bills and will be released upon completion of the contract. Right. So that's helpful. So essentially, what I really just want to understand is the INR 500 plus crores of contract assets, which are there in the balance sheet will be recognized as revenues during the balance of the year or has already been recognized as revenue and is yet to be receivable, I mean, from that perspective?

26:56 It has been recognized over the years, not in this year. It has been recognized over the years. So in this year, I would say the increase in contract assets is almost INR 15 crores to 20 crores in first H1 and increase in unbilled revenue, increase in contract assets is almost INR 45 crores, but that, like I said, includes also retention money, etcetera. But unbilled revenue is almost INR 15 crores to 20 increase. Next question is from the line of Yash Mehta from Star Capital. So I've got a few sets of questions. So firstly, since the company has like secured a INR $3.85 crore order from South Africa along with fresh orders from the Eastern Railways in Bangladesh.

27:56 So, like, can you provide an update on the execution time line for this project and also the expected revenue contribution? And along with that, the growth opportunities in both domestic international markets? Sure. So the domestic market for concrete sleeper, like I said earlier, would grow by almost 15%. This includes supplies to the domestic market in India as well as supplies to Bangladesh. And it is obviously on back of various orders that we are securing in India as well as in supplies in Bangladesh, etcetera. In terms of the African market, we expect that to have an exponential growth because the INR $3.85 crores contract in South Africa would lead to a significant improvement in revenues for South Africa. So South Africa itself receives revenues of almost INR 70 crores, 75 crores a year because this INR $3.85 crores is a five year contract to be executed in South Africa.

28:58 And obviously, Ghana will also start contributing in our very cost as well. So all this will lead to a much better contribution in... From South Africa... From Africa as well. Understood. Understood, sir. And, also, like, what are the key risks associated with these international operations, particularly from currency fluctuations and geopolitical developments? So obviously, currency is a big risk and with, what do you call, changes in political government do lead to risk in various countries. But I think that most of our contracts are well protected in terms of price escalation, and we are not affected that much by raw material prices that much.

29:53 Got it. Got it. And just the last question. So, like, given the company's expansion plan, so does the current balance sheet have sufficient capacity to support the future growth? Yes, yes. Our working capital cycle is we are trying to reduce, which is the reason why we are seeing better cash flows as well and from operations. And therefore, the current balance sheet is able to support the growth for the entire operations. Got it. Got it. Yes. That's helpful. Thank you so much. Thank you. Thank you. Next question is from the line of from Nirva Securities. Please go ahead.

30:39 Good morning, sir. Thank you so much for the opportunity. So the management indicated that Alcon could contribute approximately 120 crores to INR 130 crores in FY 'twenty seven revenue. Has this outlook changed the following recent order wins? Yes. So with the order wins, we are expecting this year to be almost INR 150 crores and next year to be close to INR 200 crores from Alcon or INR 200 crores plus from Alcon. And this is a... This is obviously on back of the recent order wins. This is something that is quite achievable, I would say.

31:26 Okay. So on on that, with the acquisition of Alcon, GPT has strategically entered the high margin delivery signaling segment. Could you elaborate on the execution expertise that Alcon takes to the growth, the key opportunities available in this segment and the current bidding pipeline? So again, the opportunity, like, if you were to I would refer you to our presentation wherein we have given the entire gamut of opportunities in the railway signaling segment. It is an opportunity of almost $1,500,000,000 in terms of the current signaling market. And the current planned outlook of the rail base is almost $1,000,000,000,000 over the next six years.

32:13 This includes, obviously, a lot of new signaling works, new track works as well on the new tracks as well. We are addressing continuously bidding for new contracts, and we are capable to bid for contracts up to INR 200 crores plus in our own name. And post this merger, obviously, this will slightly go up because the network will boost, and we will be able to generate better revenues from Alcon. Sir, GPT secured multiple railway signaling contracts worth $4.28 crores through Alcon Builders and engineers along with the $4.84 crore EPC contract for construction of a bridge over the Mahanadi River.

33:00 Do these orders then strengthen the company's order book and revenue visibility over the coming years? Yes. Obviously, our our order book is 5,373 crores currently, which is 4.3x our FY 'twenty six revenues. And this gives us strong potential to grow over the next couple of years. And we are also expecting further order inflows in this financial year. We are quite confident of the growth part that we have given in the last in the previous calls as well. Okay, sir. What is the expected EBITDA contribution from Alcon in FY 'twenty seven? And how much could it contribute to the consolidated EBITDA over the medium term? EBITDA contribution from Alcon is expected to be close to INR 30 odd crores, which would be close to 20% of the expected revenues, and we expect Alcon revenues Alcon EBITDA to be close to 20% going forward as well.

34:03 Okay. Just last question from my end. During H1, what order inflows does management expect, like, at the second half of the year? H one or h two? You asked h one. I think I'm sorry. H two. Yeah. H two. I'm sorry. So we've guided 3,000 crores for the full year, out of which INR $14.90 is already received. So balance, 1,500, obviously, we should be able to get in H2, plus we should obviously exceed that. So we expect minimum INR 2,000 crores in H2. Next question is from the line of Santosh Shetty from LGC Capital. Sir, just a follow-up question. Does management expect an improvement in internal approvals and cash flow conversion going forward?

34:58 Yes. We do expect, like I said earlier, cash from operations has been almost 5x our last year number from INR 12 crores to almost INR 50 odd to 55 crores. And we expect this year, full year to be also quite strong in terms of overall cash flow operations. And with the new West Bengal government having a strong mandate, so how does management see the opportunity for new infrastructure orders in the state? So the government in its law... In the budget has announced couple of new bridges in the state and which is almost INR 2,100 crores in terms of connectivity contracts. And we are obviously going to participate in those bridges in those contracts, and we expect to bag one or two of them.

35:51 Perfect, sir. Thank you so much for the opportunity. All the best. Thank you. Thank you very much. Thank you, everyone, for joining us today. For any further queries, please contact Cygnus Partners Private Limited, the Investor Relations Advisors to GPT Infraprojects Limited. On behalf of GPT Infraprojects Limited, we thank you for your participation. This concludes today's conference call. You may now disconnect your lines. Thank you.