Analyst Meet / AGM - Analyst Meet
Debt and interest will peak out by FY 2017
ILFS Transportation Networks (ITNL) held its analyst meet on 13th May 2016 and was addressed by K Ramchand Managing Director
Key Highlights
ITNL has total of 14680 lane km under its road assets portfolio comprising of a mix of toll and annuity based projects. It has a Pan India presence with 31 BOT projects across various States in India. The company has 11 ongoing road development projects both Toll and Annuity based at various stage of completion which will be completed by end of FY'17.
The company has an operational road asset portfolio of around 10176 lane kms of highways, and one bus transportation project as on June'15.
As on Mar'16, about 1281 kms of 15 road projects are at RFQ stage post qualification which translates into revenue of around Rs 17304 crore. 7 of these projects are from NHAI, 7 from States and rest from MORTH (Ministry of Road transport & highways). As on Mar'16, about 1380 kms of 22 road projects are at RFP stage which translates into revenue of around Rs 18563 crore. 19 of these projects are from NHAI, 2 from States and rest from MORTH (Ministry of Road transport & highways).
For FY'16, Ebdita margin of around 37% at consolidated level was achieved due to 27% increase in revenues on back of construction and completion of 4 BOT projects achieved during the year.
Average borrowing during FY'16 increased to Rs 8214 crore from Rs 6032 crore in FY'15. While interest on Toll based projects are capitalized unless these projects are commissioned, the interest on Annuity based projects are charged to P&L even during the stage of completion of these projects.
For FY'16 at consolidated level, net sales have grown by around 27% largely due to a 37% increase in construction income which stood at Rs 5079 crore. The company booked construction income of 4 projects and fee income of another 4 projects whose construction will be completed in FY'17. During FY'16, the company further received clearance of 5 BOT projects whose fee income will be booked in FY'17.
Consolidated debt equity ratio stands at 4.08 as on Mar'16 which is more or less the same as on Mar'15. Incremental equity commitments required for the ongoing projects is around Rs 1400 crore of which around Rs 740 crore is already raised through right issue.
The company has an order book of about Rs 14625 crore as on Mar'16 as compared to order book of around Rs 15790 crore as on Mar'15. 60% of the order book is from NHAI, 33% from Non NHAI road projects and rest are non road projects including Metro and Border check posts. 62% of the order book are Toll based projects, 31% is annuity based project and rest are non road projects.
Gross Average Daily collection from Toll and Annuity in Mar'16 quarter is around Rs 7.9 crore as compared to around Rs 6.8 crore in Mar'15 quarter. Total toll revenue in FY'15 stood at Rs 905 crore as compared to Rs 1176 crore for FY'16.
About Rs 450 crore worth of project will be constructed by June'16, around Rs 2000 crore worth of project in Aug'16, around Rs 2400 crore in Sep'16, around Rs 2200 crore in Nov'16,
As per the management, the company is fully aware for need of funds and is confident of ensuring the same either through securitization of BOT projects or through sell or partial exits of some of the projects. Also by FY'17 when all projects become operational, and toll revenue collection will reach to around Rs 14 crore per day, management is confident that the debt and interest will peak out in FY'17 and will start coming down significantly on YoY basis post FY'17.
While management has achieved the Ebidta margin of around 37% as guided last year and is confident of the margin to hover around the current level or to improve further, it is still struggling to ensure the debt equity ratio of around 3 by end of FY'17 as targeted earlier. As per the management, upon the completion of the construction of the projects in FY'17, the debt equity of around 3 will happen by end of FY'18 instead of earlier target of FY'17.
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