G R Infraprojects (GRIL)’s revenue declined 12% YoY to ~INR19.9b in 4QFY23 and was marginally below our estimate. EBITDA margin stood at 14.5% (in line). EBITDA decreased 28% YoY to INR2.9b and was 8% below our estimate. Lower execution along with slightly high operating expenses dragged APAT by 28% YoY to INR1.9b (in line). Net working capital stood at 104 days at end-4QFY23 (v/s 82 days at 3Q-end). Despite weak order inflows during 9MFY23 primarily due to competitive intensity, 4QFY23 order inflows were strong taking the total order book position to INR195b (excl. L1) at end-Mar’23. The order pipeline is strong (~INR1.6t worth of projects) at present, with GRIL expecting INR200b of new project wins in FY24. The majority of the new orders are likely from the Roads segment with the balance being from Railways, Ropeways and Power Transmission.
OutlookWe have reduced our FY24/FY25 EPS estimates by 10%/5% to factor in the cautious outlook on margin improvement with orders from new segments coming into execution. With current order book, we now expect GRIL to clock 15% revenue CAGR over FY23-25, with EBITDA margin in the 14-15% range. Reiterate BUY with a revised SoTP-based TP of INR1,400.
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