Dilip Buildcon’s full-year guidance of 15-20% growth is very much intact: Rohan Suryavanshi

We will achieve our target of reducing debt equity, strengthening our balance sheet furthermore at the end of this financial year, says Rohan Suryavanshi, Head, Strategy & Planning, Dilip Buildcon. Excerpts from an interview with ETNOW.

How has the first quarter panned out for you? Was it led by faster than anticipated execution of various projects?
Q1 was decent for us and eventful in the sense that we completed a whole bunch of projects. We completed six projects till now including Q1 and right now. We have already received about Rs 91 crore bonus till this year, out of which Rs 38 crore was won in Q1.

The revenue was about Rs 2,300 crore. The execution could have been a little bit more because there was a delay in appointed dates. We could not get the number that we wanted but our full-year guidance of 15-20% growth which roughly translates to about Rs 10,500-11,000 crore of revenue is very much intact.

We expect to do about 40% of that in the first half of the financial year and 60% in the second half, which is typical in our industry. We are very much on track to do that.

What gives you the confidence that you will manage to maintain your guidance and are you hoping for some sort of recovery in the second half?
About 40% revenue in our industry is done in the first half. If you do a rough calculation of our full year guidance which is Rs 10,500 to 11,000, 40% roughly translates to Rs 4,200-4,400 crore and we are very much confident of hitting that number when the second quarter numbers come out. We are seeing execution is going at a very good pace because earlier we had not received appointed dates for a lot of projects and so we could not work on those projects. Now we have received appointed dates for all projects but two. where we will receive appointed dates in September and October.

The revenue that will flow for the rest of the year is going to be very strong and that is why we are very confident of hitting that number without any hiccups.

Other than Shrem, The company is planning to sell about 12 new HAM projects. How is this going to help the company overall?
Shrem has always maintained that we are an EPC company, we only do PPP projects to get the EPC business. Our idea is always to monetise those projects, get our equity back and then reinvest in further projects where we can again repeat the cycle. The reason why we do this is because the Government of India does not have enough money for all the assets that they want to build. There will always be some projects which will come under the PPP route.

If that is the reality of the sector and of the industry, then we would always want to make sure that our equity gets churned again and again. This is what the Shrem deals was and even for the next 12 HAM projects, we have always maintained that we are only doing these projects to get the EPC business. As and when, we get investors, we will monetise these projects as well and move on to the next bunch of projects.

On the debt level, do you expect it to come down further because we have already seen the net debt equity moving down to about 1.06 times from about 1.3 times two years back?
Absolutely. Four years ago, it was about 2.4 times debt equity which actually at this quarter has come down to 1.01 times. So there has already been a 5% improvement from last quarter to this quarter. We have given the guidance for a debt equity of about 0.8% at the end of this financial year which means we are expecting a 20%-25% improvement in debt equity. Of that, 5% is already being seen in the first quarter.

You can be rest assured that we will achieve our target of reducing debt equity, strengthening our balance sheet furthermore at the end of this financial year.