- 16 Aug 2024
- ICICI Securities
Revenue growth during Q1FY25 remained subdued, execution is expected to pick-up
News: Revenue increased by 8.5% YoY (-24.1% QoQ) to Rs 2357 crore. EBITDA margin improved significantly by 1935 bps YoY (+1036 bps QoQ) to 27.2%, primarily on account of lower RM cost. Subsequently, EBITDA was up 274.1% YoY (+22.5% QoQ) to Rs 642.3 crore. Other income was higher by 16.5% YoY to Rs 271 crore. PAT increased 121.4% YoY (+5% QoQ) to Rs 696.1 crore.
Views: Though revenue growth during Q1FY25 remained subdued, execution is expected to pick-up in the coming quarters as the company is going through a phase of maximum revenue recognition (primarily in contracts like P-75 submarines, P-17A frigates, P-15B destroyers). EBITDA margin is expected to normalise at 14-15% for full year. Order backlog stands strong at Rs 36839 crore (3.8x TTM revenues). Though orders pipeline also looks robust in defence ship-building, future growth after FY26E is dependent on-time awarding of expected key contracts like 3 additional kalvari submarines and 6 P-75 I submarines.
Impact: Neutral