Dilip Buildcon on track to meet its annual guidance of Rs 9,500 cr: Rohan Suryavanshi

The company is growing in its top line even then the debt-equity is reducing further. We will see even a cut on the absolute debt numbers in the next financial year, Rohan Suryavanshi, Head of Strategy and Planning, Dilip Buildcon, tells ET Now.

Edited excerpts:

How was the third quarter? Has execution improved as opposed to what you saw in Q2? Also, is the company on track to meet the execution guidance of Rs 9,500 crore?

Yes, the execution has improved significantly in Q3 but that was expected because quarter two is a monsoon quarter and always a very weak quarter for all construction companies. But when I talk about YoY, the Q3 this year Q3 three last year, we have delivered a growth of almost 30% in top line and similar has been the growth in our EBITDA and PAT.

Also, the company is very much on track to meet its guidance of about Rs 9,500 crore which would be about 20-25% growth from last year the revenue of Rs 7,700 crore.

How exactly has the order inflow been in Q3 and what is the expectation going into the next quarter?

The order inflow in third quarter has been about Rs 1,800 crore. If you look at the total order inflow for this year, it has been about Rs 6,000 crore or so. We are expecting about Rs 3,000 crore worth new orders in Q4. As of December 2018, our total order book stood at about Rs 23,000 crore which gives us a very good visibility for next 2-2.5 years.

Your working capital in about 83 days has improved now from 103 days earlier. Are you looking at further improvement?

Absolutely. Four-five years ago, our working capital was as high as about 180-190 days which has come down to less than half. Now this has happened when the company’s revenue has continued growing at 50% CAGR. We are still very much looking to reduce this further and in Q4, you will see further improvement. Next year, there will be another cut in the working capital cycle and that has been the trajectory for the company in the last few years.

You have also managed to reduce the debt of the company from the peak of 1.24 times to nearly 1.16. What is the target to offset your debt in the coming months?

At the end of Q4, we are expecting equity to fall to below one and in the next financial year ,we are expecting it to be somewhere between 0.7 to 0.8. Now this will happen while the company will still grow about 15-20% in top line. So the company is growing in its top line even then the debt-equity is reducing further. We will see even a cut on the absolute debt numbers in the next financial year.

What is the status then on your 12 HAM projects? You have received appointment dates for how many projects? How many more are you expecting?

We have received appointed dates for about four or the twelve projects. Two more we are expecting in this quarter and the rest we are expecting in the first quarter of next financial year. So there has been a meaningful delay in all these appointed dates but right now, brand acquisition for most of these projects at a very high stage.

So we do not expect any further delay from the dates that we have said. And what has happened is because of this delay in appointed dates, our mobilisation advance from these projects did not come. We were expected to receive about Rs 2,100 crore of mobilisation advance this year from the national government but because of delay in appointed dates, we have only received Rs 230 crore of mobilisation advance till now. That means only 10% of what the company should have rightfully received. Even in that tough environment, our debt-equity has come down. Had this whole money, the extra Rs 1,900 crore come in, our debt picture would have looked absolutely different from where it is right now.