Revenue decreased 11% YoY to ~INR15.7b in 2QFY24 and was 20% below estimates. Revenue was down 27% on a QoQ basis. Lower execution was on account of delay in Appointed Date (AD) for several projects and heavy monsoon in certain states. EBITDA margin stood at 12.3% in 2QFY24 (down 230 bp YoY). EBITDA declined 25% YoY to INR1.9b and was 32% below our estimate. Lower execution and high operating expenses led to a 25% YoY decline in APAT to INR1.2b (31% below our estimates). At the end of Sep’23, net working capital in days stands at 92 days, reflecting a decrease from the 104 days in Mar’23. Furthermore, debt to equity improved to 0.21x as of Sep’23 vs. 0.26x as of Mar’23.
OutlookGRIL is looking to diversify order book and bid for projects with ticket size of more than INR 10b. To incorporate the weak performance and subdued growth outlook, we cut our FY24/FY25 EPS by 11%/10%. We expect GRIL to clock 7% revenue growth over FY23- 25E, with EBITDA margin in the range of 14-15%. We retain our BUY rating with a revised TP of INR1,360 based on an SoTP valuation.
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