Hindustan Construction Company (500185) Q2 24/25 earnings summary

Executive summary

• Standalone E&C turnover for Q2 FY25 was ₹1,203 crore, up from ₹1,138.8 crore in Q2 FY24; net profit was ₹50.2 crore versus ₹52.4 crore year-over-year.

• Consolidated revenue was ₹1,407 crore, down from ₹1,832.6 crore due to the sale of Steiner's construction business; consolidated profit rose sharply to ₹64 crore from ₹6.4 crore year-over-year.

• Order book stood at ₹9,773 crore as of September 30, 2024, with new contracts worth ₹1,032 crore awarded in October and L1 in projects worth ₹3,860 crore.

• Major project milestones include the inauguration of the Mumbai Coastal Road Project, progress in Delhi Metro, Tehri Pumped Storage Plant, and Vishnugad Pipalkoti hydropower.

• Received LOA for Agardanda Creek Bridge (₹1,032 crore) and maintains a robust bid pipeline of ₹46,000 crore.

Financial highlights

• Standalone EBITDA margin improved to 17.8% in Q2 FY25 from 14.4% in Q2 FY24; consolidated EBITDA margin rose to 17.2% from 13.9%.

• Awards contributed ₹300 crore to turnover and ₹40-50 crore to margins, providing a one-time boost.

• Interest cost expected to reduce by ₹35 crore annually due to prepayment of ₹307 crore OCD at ₹234 crore.

• Total debt, including accrued interest, is ₹3,600 crore, expected to reduce to around ₹3,000 crore by year-end, with further prepayment plans.

• Net worth (consolidated) as of September 30, 2024, was ₹223.93 crore, up from negative net worth a year ago.

Outlook and guidance

• Revenue growth for FY25 expected to be muted due to limited new project starts; focus is on building order book for future years.

• Order intake for the year targeted at around ₹10,000 crore, with new orders expected to convert in Q3.

• QIP fundraise targeted for completion by end of Q3 (December), with up to 25% of proceeds to support subsidiary Prolific.

• Management remains confident in the recoverability of large receivables under arbitration or litigation.

• Lender consortium agreed in principle to limit corporate guarantee on Prolific Resolution Pvt. Ltd. debt, supporting growth plans.