Published on 13/06/2019 12:21:28 PM | Source: Yes Securities Ltd

Update On ITD Cementation India Ltd - Yes Securities

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Bengaluru Metro loss hits overall profitability

ITD Cementation (ITD) reported subdued numbers during the quarter ended March 2019 with ~10% yoy decline in consolidated topline. Also, its margins got impacted owing to ~Rs.400 mn provision pertaining to the Bengaluru Metro project. This led to a loss at the net level to the tune of Rs.353mn. Backed by strong inflows of ~Rs.51bn during FY19, the company is sitting on robust orderbook of ~Rs.100bn as of March end. This excludes orders worth Rs.3.6bn won post 31st March 2019 and L1 position of Rs.19bn. The current order book (excluding L1) translates into ~3.1x consolidated FY19 revenues, which provides decent revenue visibility. While the order book stands robust, it’s highly skewed towards the urban infra segment which is more working capital intensive. The future growth now significantly hinges on how the order flows shape up in the marine segment. Within Urban Infra, ITD is particularly looking at underground metro projects post the poor experience in Bengaluru Metro. This makes the addressable market even smaller for the company in that space. The expected increase in competition in Urban infra and marine segment would also impact order inflows in near term.


While massive order book provides revenue visibility, new order inflows in marine segment crucial.

ITD is currently sitting on a strong order book of ~Rs.100 bn (excluding recent order wins of Rs.3.6 bn and L1 orders worth ~Rs.19 bn). Going ahead, the company expects order inflow in the marine and metros (underground) segments. We believe, the new order inflows (especially in marine segment) would be the key to sustainable growth. The Company is looking to generate better profitability with lower working capital in Marine segment which is the need of the hour for ITD.


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