Ceigall India (NSE:CEIGALL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to CEIGALL India 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 will be an opportunity for you to ask question after the presentation conclude. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit from at Factors PR. Thank you, and over to you, Mohit. Thank you. Good evening, everyone, and welcome to Q2 and H1 FY 'twenty seven earnings conference call of CEIGALL India Limited. Today, we have with us Mr. Ramani Sahgal, Chairperson and Managing Director Mr. Apul Agarwal, CFO and Mr. Sarwanan, Full Time Director. Before I hand over for opening comments, let me mention a cautionary statement that this conference may include forward looking statements about the company, which are based on belief, opinion and expectation of the company as of the date of this call. These statements are made are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict.

1:17 We will begin the call with the opening remarks from the management, after which we will have forum open for question and answer session. I now hand over the conference to Mr. Ramnik Ceigall for his opening comments. Thank you, and over to you, sir. Good evening, everyone, and thank you for joining us for CEIGALL India's Q2 H1 Financial Year twenty seven Earnings Conference Call. I hope all of you are doing well. Before we begin, on behalf of the entire CEIGALL India team and family, I would like to extend my warm wishes to all our investors, analysts, stakeholders on the vision of Diwali. I wish you and your family a very happy Diwali and a prosperous New Year.

2:06 Joining me on today's call is Mr. Kapil Agarwal, along with our Investor Relations team. Our financial results, investor presentation and press release have been shared with the stock exchanges now also available on our website. I hope all of you had an opportunity to review them. The second quarter and the first half of the financial '27 have been a strong period for CEIGALL India as we continue to deliver healthy growth in revenue, profitability, while making significant progress across our diversified infrastructure portfolio. Our performance reflects sustained execution across our ongoing projects, improving operational efficiencies and our continued focus on expanding into high potential infrastructure segments.

2:58 During the quarter, we further strengthened our order book, which stood at approximately INR22681 crore of 09/30/2026, providing strong revenue visibility over the coming years. Importantly, our order book is becoming increasingly diversified across other sectors in roads and highways. We are in metros, renewable energy, transmission, distribution, industrial infrastructure and positioning us well to capture emerging opportunities across India's infrastructure landscape. One of the significant developments during the quarter was our expansion into the Power Transmission segment. We received the letter of intent from REC Power Development and Consultancy, Nimtri, for the development of Lakadia Jam, Khambalaya Jamalilwal transmission project in Gujarat, which is a project of approximately INR 5,007 crores including GST.

3:59 The project involves the development of seven sixty five only 400 kV substation and approximately 300 kilometers of transmission lines with a construction period of thirty six months followed by a thirty five year operational period. This presents an important milestone in our diversification strategy and strengthen our presence in long term infrastructure assets. Our core roads and highway business also witnessed a healthy order inflow during the quarter. Through our joint venture, we secured five packages for NH 913 Franta Highway in Arunachal Pradesh, aggregating approximately INR 3,128 crores and spanning around two seventy eight kilometers. These projects further strengthen our presence in Northeast India and reinforce our capability in executing large scale infrastructure projects across the challenging geographies.

4:54 On the execution front, we received awardees for three AMPs, namely Varanasi Ranchik Konshuta Highway Packages eleven and twelve and Indore Ujjeng Greenfield Highway project worth INR 4,050 crore. This is an important development as these projects now move into the execution phase and will contribute to our construction pipeline over the coming quarters. We also continued to make meaningful progress in our renewable energy business. During the quarter, our only owned subsidiary successfully commissioned 10 megawatt of the solar subsidy solar capacity under 147 megawatt solar power plant in Maharashtra ahead of schedule. This marks an encouraging beginning to our operational journey in renewable energy. We remain focused on scaling up the execution across our solar and battery storage projects.

5:48 Another important area of focus continued to be our HAM asset monetization strategy. Following the successful monetization of first HAM asset, we are progressing with the monetization of the other mature assets, including Batendra Diwali and Jalbiraj Shahabad project. During the contract quarter, we also achieved the provisional COD for Jalbiraj Shahabad project. Our objective remains to recycle the capital from completed assets into the new projects, improve capital efficiency, support our future growth requirement, while maintaining differential discipline and while selling these projects, our debt is also reducing. Subsequent to the quarter, we also received completion certificate for Delhi Saranpur Highway project, marking another important contractual milestone and reinforcing our execution track record in complex road infrastructure.

6:43 Looking ahead, we remain confident in the opportunities emerging across India's infrastructure sector with a strong and diversified order book, a healthy execution pipeline and expanding presence in renewable energy and transmission power transmission, our focus will remain on accelerating project execution, maintaining operational efficiency and pursuing opportunities that create sustainable long term value for our stakeholders. Before I conclude, I would like to thank our clients, business partners, lenders, shareholders and most importantly our employees of their continued trust and support. With that, I would like to now hand over the call to our Chief Financial Officer, Mr. Kapil Agarwal, who will take you through the financial performance for Q2 and H1 financial year 2027 in a greater detail. Thank you, guys. Thank you.

7:40 Thank you, Ramnishar, and warm welcome to everyone joining us today. It is a pleasure to take you through our financial and operational performance for the second quarter and first half of the FY 'twenty seven. I'll begin with our stand alone financial performance. Our stand alone revenue from operations for Q2 FY 'twenty five stood at INR 974.5 crore compared to INR $7.87 crore in Q2 FY 'twenty six, registering a year on year growth of 23.8%. For half year 'twenty seven, stand alone revenue from operations stood at INR $18.76 crores compared to 1,605.3 crores in H1 FY 'twenty six, registering a growth of 16.9%. Our stand alone EBITDA for Q2 FY 'twenty seven stood at INR 130.5 crores compared to INR91.8 crores in Q2 FY 'twenty six, resisting a growth of 42.3.

8:35 Stand alone EBITDA margins improved to 13.4% compared to 11.7% in the corresponding quarter last year. For half year FY 'twenty seven, stand alone EBITDA stood at INR 2 and 51.6 crore, resisting a year on year growth of 35.8 with a stand alone EBITDA margin improving to 13.4% from 11.5% in half year FY twenty twenty six. Our stand alone profit after tax for Q2 FY twenty twenty seven stood at INR82 crore compared to INR55.9 crore in Q2 FY twenty twenty six, registering a growth of 46.7%. Stand alone PAT margins improved to 8.4% from 7.1% in the corresponding quarter last year. For half year FY 'twenty seven, stand alone PAT stood at INR 157.2 crores, registering a growth of 40.6% year on year with a stand alone PAT margin improving to 8.4% from 7% in half year FY 'twenty six.

9:31 Consolidated financial performance. Moving on to our consolidated financial performance. Our consolidated revenue from operations for Q2 FY 'twenty seven stood at INR1022.5 crores compared to INR806.6 crores in Q2 FY 'twenty six, resisting a year on year growth of 26.8%. For half year FY 'twenty seven, consolidated revenue from operations stood at INR 1,992.1 crore compared to INR 1,644.7 crore in half year FY 'twenty six, resisting a growth of 21.1%. Our consolidated EBITDA for Q2 FY twenty seven stood at INR174 crores compared to INR113.6 crores in Q2 FY twenty six, registering a growth of 53.2%.

10:18 Consolidated EBITDA margins improved to 17% compared to 14.1% in Q2 FY 'twenty six. For half year FY 'twenty seven, consolidated EBITDA stood at INR317.4 crores, registering a year on growth to 42.5% with the consolidated EBITDA margins improving to 15.9% from 13.5% in half year FY 'twenty six. Our consolidated profit after tax for Q2 FY 'twenty seven stood at INR92.2 crores compared to INR56.2 crores in Q2 FY 'twenty six, resisting a growth of 64.1. Consolidated PAT margins improved to 9% compared to 7% in the corresponding quarter last year. For half year FY 'twenty seven, consolidated PAT stood at approximately INR 156 crore, registering a year on year growth of around 45% with consolidated PAT margin improving to 7.8% from 6.5% in H1 'twenty six.

11:15 Coming to our order book and operational performance. As on 09/30/2026, our order book stood at crore, providing a strong execution visibility over the coming years. Our order book comprises of 18 APC projects, 10 HAM projects, one DBFOT project and 10 tariff based projects. In terms of sector wise composition, routes and highways continues to account for the largest share of our order book at approximately 55%, followed by transmission and distribution at 21%, renewable energy at 16%, metro projects at 4% and Indian infrastructure projects at 3%. This reflects our continued effort to diversify our business while maintaining a strong presence in our core infrastructure segments.

12:02 On the balance sheet front, our stand alone debt stood at approximately $4.36 crore as of 09/30/2026, while our consolidated debt stood at approximately INR $7.30 crore INR $17.30 crore. Our stand alone debt to equity ratio remained at 0.2x, while our consolidated debt to equity ratio stood at 0.8%. Going forward, our focus remains on timely execution of our projects, improving our operational efficiencies and maintaining financial discipline. With a diversified order book and a healthy execution pipeline, we remain well positioned to support our growth ambitions across infrastructure segments. With this, I conclude my remarks and would request the moderator to open the floor for question and answer session. Thank you, everyone. Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may please press star and 2. Participants are request to use handsets while asking a question.

13:03 Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of with James Financial. Please go ahead. Yeah. Hi, sir. Firstly, on guidance. So we had guided for around 15% kind of a growth, but the growth has been very strong in the first half. Also, margins have been very strong at 13.4%. So would you like to revise the guidance for the revenue growth and margins? Vipar. Was expecting first question from the as always. So thank you so much for the question. After the IPO, we guided our investment that will be between 10% to 15%. Of course, we achieved more than that.

13:55 And here also this year, we have guided our investors that we'll have minimum 15% and of course, we have overachieved it. And we will always wanted to be a little conservative on this and it's always better for the investor to see these surprises. So as a driver of growth is renewable business and T and D and that is really giving us a push. If you see, we have already delivered 10 megawatt of renewable and it is progressing very fast. And if you see, we are getting the incentive also in that business. So again, the guidance would be minimum 15% and we'll try to achieve it. Thank you.

14:46 On EBITDA margins? So the guidance will be same. We'll try to overachieve it. So secondly, on the few of the solar and gas projects. So for the MP project, when do we start the expect to start the execution? No. So MP, there are two projects. One is solar, which has already started, which is a custom. For Marina, there are three things required. One is PPA. We have already given the land. It's there. The third thing is the transmission line. So transmission lines, one, it is completed and the department indicates that it's about to complete or you can start, we'll start the project. Thank you.

15:34 So we expect start the project this year or next year? So this year looks tough because I think they are under the stage of finalizing the contractor for transmission line. Once that is done, then the contractor would execute it, then it will be then handed over to us. Sir, secondly, on monetization, so what inflow are we expecting from monetization of Baghena Dabbali and Deltara Sabad? And by when do you expect the cash to come in? So, inflows should be around INR250 crores and debt around INR540 crores will be reduced. But Indah Diwali, we are targeting in this quarter, Dhildirah Sabah next quarter.

16:22 We want to close everything before March 31. Okay. Sir, lastly, what will be the total liquidity required for the entire asset portfolio and how do we intend to spend it to fund it? Yes, yes, yes. So we have the requirement of crores, INR669 crores already infused till now and INR $9.62 crores is the balance and INR 161 crores we have already infused in this year, balance is INR $180.01 crore. And this year we're targeting another 700 crores. So next two years, again around the same INR 700 crores and then it would be around 400 crores. So equity, we were sitting on INR400 crores cash surplus last year in our balance sheet and close to INR450 crores is coming from Neo And there is a cash accrual also you would have seen in both the quarters, INR75 crores plus INR82 crores and going forward also there is a cash accrual.

17:27 So there is no such challenge, but as per the CV guidelines, we have to reduce it up to INR82.06 crores to 35%. So we expect money coming there also and that will also be used for the growth of the company. Just to confirm the number, two thousand six thirty two is total required, six thirty nine is in queues as of September, so pending is nineteen sixty two. Of 1962, we are expecting 700 to be spent in second half of this year? Yes, yes. 1960 is... 1962 was at the start of the year. During the year till first second quarter, we have already received 161. So balance of $70.07 for the current financial year will be invested in two quarters. And for next year, it is $730,000,000 and then obviously for the third year, it is $397,000,000 So by FY 'twenty, the entire investment will be done?

18:25 Yes, yes, yes. And sir, lastly, this new project, the last one, so what would be the EPC value for that? And when do we expect to start the work for that? So INR 5,300 crore is including the GST, and we are targeting to start it before March 31. That's really aggressive, but we are trying to do that. Okay. Thank you, sir. Those are my questions. Thank you. Next question comes from the line of Madhav Das with Meta Investments. Please go ahead. Madhav Das, please proceed right with the question.

19:11 Thank you. Mister Das, we request... You can please proceed right with the question. As there's no response from mister Das, we will move to the next questioner. Next question comes from the line of with Patel Investments. Please go ahead. Hi, sir. Good evening. Thank you so much for the opportunity. So your order book has increased to approximately 22,680 crores, which is providing a book to bill ratio of around 4.8 x. How should we look at this conversion of the order book into revenue over the next two to three years? And could you elaborate on the expected execution trajectory of across EPC, HEM and tariff based projects?

20:07 So good question, Ishpal. First of all, out of INR22681 crore, our order book from HAM is close to the road is 56%, 36% from T and D and solar. The rest is a mix of metro, industrial and other projects. So in terms of developer side, our order book is 73% and the company bring us minimum 15% growth. And of course, we have shown the better numbers. Going forward, we have a good order book for next four years. Okay. And sir, how are you assessing the infrastructure infrastructure opportunity in India over the next three to five years, particularly considering the government's focus on highways, expressways, railways, renewable as well as power? So which segment do you believe will be the strongest tendering activity?

21:12 So there is no looking back in this wealthy country. If you see, we have 11 verticals, 16 states. So for CEIGAL, what matters is we need to break projects at 25% IRR. And if you see in last three projects, which is Malawali, Adhawali, Alkira, We have guided investors to get 25% at IRR level and we have achieved much more what we said. So it doesn't matter that we get a IV project or we get a solar project or we get a hybrid project or we get a transmission project or any other vertical. We need to make money minimum 25% IRR on the project level or EPC or 30%, 40% EBITDA.

21:58 So that is achievable. And since we have so many verticals in so many states, getting order book is not a challenge for CEIGALL. Thank you. Yes. And sir, last question from my end. You recently received appointment dates for three Hem projects, which is aggregating over INR 4,000 crores. Could you like walk us through the initial execution milestones for these projects, including the land availability, financial disclosure, mobilization of equipments and commencement? So good thing about CEIGAL is before these appointed dates, we have fairly good time where we mobilized before time. Number two, FC's, CEIGAL has always shown this in past, we've been furnishing it before time and good news is all our highway projects financial closes are done and executed.

22:56 And third, VRK 11 and 12, every month we are getting the payments, running bill payments and we are expecting for Indore also before Diwali. And the projects have picked up and we are really looking forward for good execution in coming months, especially March. Sir, can I ask an additional question? Please, please go ahead. Sir, you have also entered and expanded into Arunachal Pradesh through multiple frontier highway packages, right? Yes, yes. So what are the challenges like there are a lot of challenges and geographical conditions in the Northeast.

23:48 So could you elaborate on the execution methodology, the logistical requirements and cost implications compared with the projects in, say, the Northern Plains? So good question. We are already present in Hamanin train. We have done Kirchhorn, was a leftover work of ILFS. We were executed before time. Then we have executed a tunnel in Ramban Banyal, which was one of the most toughest train before us many contractors tried, they couldn't execute. With us, there's another renowned company of the country. They could only execute 1,500, 1,600 meters. We completed 6.5 kilometer. In fact, this year the Yamalat Yadra happened to that. We have to take another pad next to that, which is also about 60% completed.

24:38 So we our company has been working in Himalayan terrain for more than ten years. Our USP is working in Himalayan terrain is there. We've been executing projects before time and completing projects before time in Himalayan terrain also. So expertise and execution team, mobilization is not challenge. That's USDOC. Right. Okay, sir. But sir, despite the strong improvement in profitability, the consolidated operating cash flow actually remained negative during the first half. So what are the key reasons for this, particularly the working capital absorption? And when should we expect cash flow conversion to improve?

25:26 This is basically because of the HAM project. If you look at the consolidated cash flow, we are only getting 40% payment from the NHI. So moreover, it is a half year. When we are going for a full year result, things will be different. Okay. Makes sense. Thank you so much for answering my questions patiently, sir. And all the best for future endeavors. Pleasure, pleasure, pleasure. Thank you. Thank you so much. Next question comes from the line of with Mehta Investments. Please go ahead. Yes. Hi. Thank you for the opportunity. So, I I have few questions in line for the same.

26:13 One being that our consolidated revenue has grown 27% Y o Y. So could you help me understand which projects or segments drove this growth? And how does... How do we look at the execution momentum for the second half of FY twenty seven for the same one? Can you repeat the question, please? Yes. Sure. The question is that, sir, consolidated... Our consolidated revenues have grown 27% by o y. So if you could help me understand which projects or segments have driven this growth, And how should we look at the execution momentum for the rest of the FY 'twenty seven?

27:00 Yes. This year, renewable is basically the key factor. So we have achieved a turnover almost INR 143 crore in the renewable sector, which was not there last year. So going forward also, we expect a good turnover from renewables and transmissions, which is going to add to the turnover of the company. Okay. Thank you, sir. And the other question being, our EBITDA margins have improved for this quarter. So if you could explain me the... If you could help me understand the three factors for this improvement, and are the margin sustainable going forward? The improvement margins are sustainable in the long run, if you could help me understand this? So we are getting healthy margins and this is So the which has resulted into the improvements of the EBITDA. And moreover, we have recently started our AM projects, BRK eleven and twelve, so which are good profitable projects for us.

27:54 And sir, can I take up the last question? Madhu, there is a a lot of background noise coming from your end. Can please check? Thank you. Certainly. Is it better now? Okay. You can go ahead with the question. Thank you. So given our strong order wins during the first half, what is the order in store target for for FY '27, and how much additional ordering activity are we expecting in the half of FY 'twenty seven? So we have provided 6,000 crores to the investors.

28:40 We have already achieved close to INR 5,400 And we have already quoted tenders more than INR 10,000 crore and INR 6,000 is easily achievable that will be achieved. Last year also we guided INR 5,000, we got INR 11,500. Thank you so much for answering the questions patiently and thank you for the opportunity. Thank you so much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Ramlik Seibel for the closing comments. Thank you. And over to you, sir. Thank you, everyone, for joining us today for your active participation in the discussion. We sincerely appreciate your continued interest and confidence in CEIGALL India. As we move forward, our focus remains on accelerating project execution, strengthening our presence across emerging infrastructure segments and maintaining financial discipline.

29:37 With a robust and diversified order book, we remain confident in our ability to deliver sustainable growth and create long term value for our stakeholders. We hope we have been able to address all your queries. In case you have any further questions, please feel free to reach out our Investor Relations team at AddFactor PR. Thank you once again for your continued support. Have a great and happy Diwali. Have a great evening. Thank you so much. Have a good day. Thank you so much. Ladies and gentlemen, on behalf of CEIGALL Limited, that concludes today's call. Thank you for joining us, and you may now disconnect your lines. Thank you.