ITD Cementation Ltd. is expecting revenue growth of over 40% in the current financial year as it aims to focus on fewer but higher value orders to improve margin.
The company might see a bit of a slowdown in the second quarter due to the monsoon, but it expects execution to pick up in the next two quarters, Prasad Patwardhan, chief financial officer at ITD Cementation, told BQ Prime.
"There were few significant orders that were awarded to the company," Patwardhan said. Execution pace has picked up and it has helped the company to ramp up the scale of operations this year.
The company recently received a marine order that must be completed in roughly 40 months. About 33% of the whole order book is made up of marine orders, the CFO said.
After taking into account this recent order, the order book is estimated to be around Rs 22,000 crore and is to be executed within 3-3.5 years, he said.
ITD Cementation expects revenue of Rs 7,200–7,500 crore in FY24. "We might be able to do better than that as well. That will depend on how things go in Q3 and Q4," he said.
Financials
ITD Cementation is trying to focus on orders where it does not need to spend more on capital expenditure, so that the cash flow is not adversely impacted, Patwardhan said.
It will focus on higher value orders, which will help recover fixed cost faster. This will contribute to margin growth because bigger projects often have stronger margin, he said.
"We are targeting to reach a double-digit margin in quarter three and quarter four. There were some legacy orders, which are behind us," he said.
The company's gross debt, as of now, is around Rs 800 crore.
"This year, the debt might go up a bit, but we do not expect an increase in debt as much as the debt increase in the previous financial year," he said. "The pace of increase in debt will slow down and from next year, we expect debt to start reducing."
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