We expect 15% to 20% revenue growth this financial year: Nalin Gupta, J Kumar Infraprojects

"So, we are targeting something between 6,000 to 8,000 crores for sure for this financial year. And we intend to keep our order book to around 22,000 crores for the coming FY25 March," says Nalin Gupta, MD, J Kumar Infraprojects.

Wanted to begin by asking you, overall, this year has been very fantastic for you with respect to the order inflow that you saw in FY24, almost 12,000 odd crores. Your order book has burgeoned to the level of around 25,000 odd crores. But what is the pipeline looking like right now? If I had to ask you in FY25, what would be the order inflow target? What is the number that you would want to tell your investors?
Nalin Gupta: I would say that the last year has been surely historical for J Kumar in terms of the order book of 12,000 crores that we have bagged, taking the order book to 21,000 crores.

And this year, in the Q1 itself, we are L1 in projects worth around 4,600 crores, mainly from two projects coming in from MSRDC for the access control expressways that MSRDC is constructing and one project at Hari Nagar for the building job of around 500 crores.

So, we are targeting something between 6,000 to 8,000 crores for sure for this financial year. And we intend to keep our order book to around 22,000 crores for the coming FY25 March.

But how big an overhang is the local election in the sense of state elections which is coming up because part of your orders are largely concentrated in Maharashtra. Is that something which becomes a bit of an overhang?
Nalin Gupta: I would say that J Kumar's order book is spread pan-India and it is a matter of opportunity wherein currently you can see around more than 60% of the order book coming in from Maharashtra. But this is a matter of opportunity that comes and we are already operative into seven states. And I would say Maharashtra as well as pan-India will look at a lot of traction in terms of the order book and we are very hopeful that there should be a good spending on the order book for this financial year as well by the government.

What I also want to know is in terms of when you are looking at it, your sales growth, FY24 has been a fabulous year in terms of the order pipeline. But in terms of growth in the last three years, we are seeing a bit of a decline. What should one be expecting for FY25 from the company in terms of the revenue growth that you are looking to target now?
Nalin Gupta: Well, I would say that we are already growing at a pace of around 15% to 16% on a year-on-year basis. And for the current year also we expect around 15% to 20% growth in the revenue, taking our revenue to around 5500 to 5700 crores approximately.

And though we will come to know the numbers based on the Q2 results once we are there because the new projects would start contributing Q2 onwards and major contribution will come from the next financial year.

So, I would say there is, of course, not a decline in terms of the order book or the top line and I am very sure that with the amount of spending that the government is looking into, even last budget also if we see, there was a huge investment in terms of the capex that the government has infused into infrastructure segment and even this financial year the budget should be really good and focus towards the infra spending. So, the revenues have been growing at 15% to 17% and this year 15% to 20% is what we are expecting in terms of the top line.

Also, previously you had given a comment in terms of the EBITDA margin, you were talking about a range that you want to look at is around 15% to 16% in FY25. Does that still hold or do you expect better margin is what we could watch out for?
Nalin Gupta: Well, I would say that the EBITDA margin made by J Kumar to the tune of around 14.5%, between 14-15, is what we have been doing in the past years and that itself is a good EBITDA margin I would say in the industry of infrastructure.

But yes, as you have rightly said we are thriving our best efforts to see that we get this EBITDA margins in the tune of 15% to 16% in the coming six to eight quarters and with the optimisation, of course, with the size of order book and the geographical benefits that we have bagged these orders we are confident that we should be able to improve our EBITDA margins by some basis points again.

We were just speaking with SNS of L&T a few days ago and he was highlighting how labour has become a big challenge and something which is beyond the control of you, him or anyone for that matter that is the weather. The heatwave has been very bad. Now, there is just that heavy rainfall which is happening. In terms of the execution, how difficult it is for you to manage manpower in midst of entire these weather issues coming up?
Nalin Gupta: Well, I would say that as rightly mentioned this particular quarter we could see lot of shortage in terms of the labour because there was I would say lot of things that came together, it is the elections.

When the elections are there, there is a shortage of labour inflow, the people who go to villages do not come back so easily till the elections are over due to the local restrictions.

And again the heatwave, the rains. So, I feel this is a very temporary issue and though there has been some shortage, I do not deny to it, but with the only solution I would say to infrastructure to gain these momentum that is required is to go into more and more of mechanical methods of execution wherein the dependency on labour can be reduced by like technologies, like making precast elements more and more wherein the labour requirement can be dropped.
Again the formwork that has been used is of larger panel sizes, automated formworks, so the labour requirement again decreases to some extent.

But yes, there is a labour shortage temporarily as of now, but I think that should be overcome in the coming one or two months’ time.

In the coming one-two months you are expecting it to become better, but at least in terms of Q1 then would we see a bit of an impact of that in terms of execution due to the labour issues that are going on?
Nalin Gupta: There should not be a major impact as per se that I would say that there is a major impact. There was some shortage I fully agree and this has been throughout the infrastructure sector and that is for the reasons which I have already mentioned.

But I do not see this as a hurdle, as a major hurdle or as a something which is going to be persistent and as we have said that labours have already started coming in. In June month also we could see good number of labours that have come and in July I think it should regain the total normalcy is what is I believe in.