Q3 Results: Welspun Enterprises On Track To Achieve FY19 Outlook, Says Sandeep Garg
Welspun Enterprises Ltd.’s quarterly results will boost the company’s confidence to achieve its revenue and profit outlook as well as maintain its margin guidance for the ongoing financial year, said its Managing Director and Chief Executive Officer Sandeep Garg.
The construction company reported a 49 percent jump in its revenue for the December-ended quarter and its net profit nearly tripled to Rs 43 crore on a year-on-year basis.
Garg attributed the company’s performance to its “operational excellence”. “We have been operating at a very fast pace. All our projects are ahead of schedule...which gives us not only the revenue but also reduces our costs,” Garg told BloombergQuint in a post-earnings conversation.
Welspun’s results have been gradually improving from the last seven quarters, inching the company towards its full-year Ebitda guidance, said Garg, adding the company has four projects contributing towards its fourth quarter revenue.
We are on a strong foothold, right now, in the industry to go on to the exponential curve of growth with a profitable bottom line.Sandeep Garg, MD and CEO, Welspun Enterprises Ltd.
Garg said that the company is “very capital prudent and focussed on bottom line” and that all their projects are profit making at a minimum percentage level. This, he said, would help Welspun maintain its profit and revenue guidance for the year.
He, however, expects a lull in the economy in the beginning of the financial year 2020 due to lack of new projects. The company, according to Garg, would see revenue accretion from the hybrid annuity model projects by the third quarter of FY20.
- Expects to win at least 1 to 2 HAM projects for the remainder year
- Continue to explore divestment opportunities of completed assets, such as the Delhi-Meerut Expressway
- Gross debt of Rs 123 crore is a short-debt debt
- Needs no fresh equity; Welspun has cash in hand of about 750 crore
Q3 Result Highlights (YoY)
- Revenue jumps 49 percent to Rs 446 crore
- Net profit nearly triples to Rs 43 crore, from Rs 15.6 crore
- Ebitda quadruples to Rs 46.3 crore, from Rs 11.6 crore
- Ebitda margins improves at 10.4 percent versus 3.9 percent
- Exceptional gain of Rs 18 crore on stake sale in Dewa Bhopal Corridor
- Lower cost of material, subcontracting charges and other expenses aided Ebitda
- Current Engineering, procurement and construction order book is at Rs 5,752 crore, with HAM portfolio of 7 projects
Watch the full interview here: