G R Infraprojects (GRINFRA)’s revenue was down 12% YoY to ~INR18.9b in 1QFY25 (in line). EBITDA margin was 13% (-160bp YoY) vs. our estimate of 13.7%. EBITDA dipped 22% YoY to INR2.5b, and was 8% above our estimate. Higher other income offset the weak operating performance as APAT dipped 3% YoY to ~INR2b, (9% above our estimates). As of Jun’24, net working capital days rose to 122 from 112 days in Mar’24, primarily due to SPV debtors. The debt-to-equity ratio improved to 0.12x as of Jun’24 vs. 0.13x as of Mar’24. During 1QFY25, Bharat Highways InVIT claimed a sum of INR494m for the loss incurred to one of its subsidiaries, and GRINFRA had to compensate for such a loss, which was recorded as an exceptional item in the standalone financial results.
OutlookWe largely retain our EPS estimates for FY25/FY26 by and expect GRINFRA to post a revenue CAGR of 9% over FY24-26, with an EBITDA margin in the range of 13-15%. We reiterate our BUY rating with a revised TP of INR1,910 (based on SoTP valuation).
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