Summary of earnings call for Dilip Buildcon Ltd published on 02 Aug, 2025
Dilip Buildcon Limited
Q1 FY26
Call date · July 30, 2025
1 · Management Commentary
Key Positives
- Coal MDO operations (Siarmal: 5.4 million MT, Pachhwara: 2.9 million MT in Q1) are on track to meet FY26 targets (25 million MT and 7 million MT, respectively).
- Partial divestment in 3 HAM projects to Alpha Alternatives for INR125 crores; InvIT formation process nearing completion with in-principle approvals from NSE, BSE, and SEBI.
- Profit after tax increased significantly Y-o-Y (standalone: +61% to INR123 crores; consolidated: +93.7% to INR271 crores).
- EBITDA margin improved at consolidated level due to completed HAM projects and coal business.
Key Negatives
- Revenue declined Y-o-Y (standalone: -14.7% to INR2,010 crores; consolidated: -16.4% to INR2,620 crores) due to muted order inflow and heightened competition.
- Order book temporarily declined as DBL maintained threshold margin levels amid intense competition and lower bid standards.
- Inventory days increased from 75 to 84 due to lower revenue.
Forward Guidance
- Capex plans: All capex paused except for negligible replacement capex (INR40–50 crores expected for FY26); major Siarmal CHP capex (~INR900 crores) to start only when production exceeds 35 million MT.
- New products/segments: Continued focus on mining (coal, iron ore, bauxite), metro, water, tunnels, bridges, and renewables.
- Expected client wins/losses: Anticipates INR12,000–15,000 crores of new order inflow in FY26, with momentum expected in Q3/Q4 as qualification criteria tighten.
- Revenue/margin outlook: Standalone revenue guidance of INR8,000–8,500 crores for FY26; EBITDA margin ~11%.
- Other strategic initiatives: InvIT launch expected in September 2025; plan to be net debt free at standalone level by FY27 remains intact.
2 · Q&A Highlights
Q 1 (Composite): What is the updated guidance for order inflow, revenue, EBITDA margin, and capex for FY26?
A (Management):
• Order inflow expected at INR12,000–15,000 crores; revenue guidance INR8,000–8,500 crores; EBITDA margin ~11%; capex negligible (INR40–50 crores).
Q 2 (Composite): What is the status and impact of debt reduction, InvIT formation, and asset monetization?
A (Management):
• Standalone debt reduction target of INR500 crores by March 2026 is intact; net debt free by FY27.
• InvIT to launch in September 2025, transferring 8 completed assets (INR3,850 crores debt to move); remaining 10 assets to transfer by FY27.
• CPPIB debt outstanding at INR285 crores as of June 30, 2025; plan to prepay within FY26.
Q 3 (Composite): How have changes in NHAI/MoRTH qualification criteria affected competitive intensity and order prospects?
A (Management):
• Tightened net worth and technical criteria now implemented for HAM and EPC projects, reducing unrecognized/small player participation; expect major order momentum in Q3/Q4.
Q 4 (Composite): What is the outlook for order inflow and sector diversification beyond roads?
A (Management):
• Bidding for projects worth INR20,000 crores across water, metro, tunnels, bridges, mining, and renewables; confident of INR12,000–15,000 crores new orders in FY26.
Q 5 (Composite): What is the margin outlook and rationale for not chasing low-margin orders?
A (Management):
• Current 10–11% EBITDA margin seen as bottom; expect 300–400 bps improvement as order book replenishes and fixed costs are absorbed; focus remains on profitability and quality over order book size.
Q 6 (Composite): What is the status of working capital, inventory, and Jal Jeevan Mission payments?
A (Management):
• Inventory days increased due to lower revenue, not higher inventory; expect to end FY26 at 75–80 days.
• Jal Jeevan Mission payments are regular, with only 1 month outstanding.
Q 7 (Composite): What is the status of coal MDO business and future mining opportunities?
A (Management):
• Coal MDO operations on track for FY26 targets; actively bidding for new coal, iron ore, bauxite, and underground mining projects.
Q 8 (Composite): What is the expected cash flow from JJM hydro testing and asset sales?
A (Management):
• INR450 crores expected from JJM hydro testing in Q3; proceeds from asset sales and InvIT units to be used for debt reduction and operational investment.
3 · Other Key Numbers
- Siarmal MDO Q1 production: 5.4 million MT; FY26 target: 25 million MT.
- Pachhwara MDO Q1 production: 2.9 million MT; FY26 target: 7 million MT.
- Total coal MDO FY26 production target: 32 million MT.
- Standalone revenue Q1 FY26: INR2,010 crores (↓14.7% Y-o-Y).
- Standalone EBITDA Q1 FY26: INR203 crores (↓22.5% Y-o-Y).
- Standalone PAT Q1 FY26: INR123 crores (↑61% Y-o-Y).
- Consolidated revenue Q1 FY26: INR2,620 crores (↓16.4% Y-o-Y).
- Consolidated EBITDA Q1 FY26: INR520 crores (↑9% Y-o-Y).
- Consolidated PAT Q1 FY26: INR271 crores (↑93.7% Y-o-Y).
- Standalone net debt as of June 30, 2025: INR1,661 crores.
- Consolidated net debt as of June 30, 2025: INR8,266 crores.
- Debt to be transferred to InvIT: INR3,850 crores (8 assets).
- Under-construction HAM project debt: INR2,418 crores (to increase by INR1,000 crores by March 2026).
- CPPIB debt outstanding: INR285 crores as of June 30, 2025.
- Inventory days: 84 (up from 75 in March 2025).
- Order book (excluding coal MDO): ~INR10,000 crores.
- Capex for Siarmal CHP: ~INR900 crores (to commence post 35 million MT production).
- Other income Q1 FY26 (standalone): INR28 crores (breakdown: INR6 crores deposit interest, INR8 crores InvIT distribution, INR12 crores asset sale, INR1.1 crores dividend).
- Shrem InvIT distribution Q1 FY26: INR8 crores.
- Projects bid for (pending outcome): ~INR20,000 crores across sectors.
- NHAI/MoRTH order pipeline for FY26: INR3 lakh crores.
- Warrant amount received in Q1 FY26: INR399 crores.
- Working capital investment in Q1 FY26: INR491 crores.
- Cash flow impact for Q1 FY26: INR61 crores negative.
Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.