PSP Projects Limited (PSPPROJECT) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the PSP Projects Q2F527 or NICS conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. Now I would like to hand over the conference to Ms. Krishna Patel. Thank you and over to Iman.

Thank you, Avirat, and good evening, everyone. Welcome you all to PSP Projects Limited Q2-SY27 and H1-SY27 earnings conference call. To take us through the results and to answer your questions, we have with us the management of PSP projects, represented by Mr. Pralabhaya Patel, the Chairman and Managing Director, Ms. Pooja Patel, the Chief Executive Officer, and Ms. April Patel, the Chief Financial Officer. Please note that the discussions that we may have today will contain certain forward-looking statements relating to the future events and future performance. Numerous factors could cause the actual results to differ materially from those in the forward-looking statements. Now, I would like to hand over the call to Ms. Suja Patel, the CTO, for her opening comments. Thank you, and over to you, Suja.

Thank you, Krishna, for the introduction. Good evening, everyone, and thank you for joining us today to discuss our financial

and operational performance for the second quarter and half year ending.

September 30, 2026. We concluded the board meeting earlier today. I am pleased to share that TSE projects delivered its highest-ever quarterly and half-yearly revenue. Revenue from operations stood at 1,113 crores in Q2FY27, registering growth of 58% year-on-year, while H1FY27 revenue increased by 61% year-on-year to 1,967 crores. This performance was supported by healthy execution across our project portfolio and improved availability of labor and other execution resources. During Q2 FY27, EBITDA increased by 38% year-on-year to $69, while profit after tax increased by 87% to $30. For H1 FY27, EBITDA grew by 66% year-on-year to $124 and profit after tax increased by $193 to $48. H1 FY22, EBITDA margin is 2.6.30% compared with 6.12% in H1 FY26. As of 30th September 2026, outstanding order book food at 12,872 Crohn, 30% year-on-year growth, providing a healthy multi-year revenue visibility. Of the total order book within group projects accounts for approximately 72%, that is 9,229 crore, while external projects contribute the remaining 28%. During H1 FY27, we secured order inflow of approximately 1,305 crore, including 675 crore during the second quarter. The quarter 2 additional comprise projects across healthcare, airport infrastructure, office building, refurbishment, and steel accommodation from Adani Group. During the quarter, we completed an important landmark project, Project 90, which demonstrates the speed and scalability of our PICAS capabilities. The project comprises three basement levels, a ground floor, and 18 upper floors, and its artisan structure was completed in only 121 days, making it one of the fastest, weakest, high-right projects executed in Gujarat. As part of Project 90, we also completed our new PSP corporate house located adjacent to Project 90 in two 40 days, including MEP and interior fit-out work. This project demonstrates how FICAS technology can enable faster execution, consistent quality, improved precision, and more efficient deployment of labor and resources. Given the demands visible across building and infrastructure projects, we are progressing

with capacity enhancement at our FICAS facility.

I am also pleased to say that we will commence operations of our new corporate house on November 4th, 2026. During the quarter, overall, the company successfully completed 17 projects, of which major completed projects in addition to the project 90, are six-class complex cabled up projects and supplies of noise barriers for National High-Speed Trade Corporation Limited for L&E in Gujarat. Service order of SITC of Civil, Structure, Facade, Interior, and MAP work for Navabharat Mega Developer, Private Limited. Out of the current order book, please make note the key projects and their outstanding contract value. See Ambaji Mata Temple 931 girls. We have started work on the all fronts that is general development work that is starting and filling. And all building work which are on different levels, that is on foundation and on plinth level. For SMC high-rate buildings, 600 huttings are on. As you all know, RCC work is already completed. MVP work is completed to the 15th floor. Interior work is going on from 1st to 5th floor. And Hussar work is going on from 5th to 10th floor. Construction of Vintech building at Gips City, Gujarat, 251 crore. Currently, we are doing RCC work from 6th floor. Human Biology Science Gallery at Science City, 238 crore. Major work of RCC and fabrication is already done and soon we will be starting MEP work in that project. Building biggest residential project in Gibbs City, 187 crore. We have completed all ICC work up to ground floor for that particular project and are executing at third level, first level, and second level for different buildings, that is block A, B, C, D. Development of Dhari Dam region, 171 crore. Kabamati riverfront development phase 2, which is 155 crore. Update on RVNL project, out of three buildings, we have successfully hand over two buildings, that is lab and map buildings. In our hostel building, we are currently doing flooring work, MEP work, interior work, and facade work. The current bid pipeline is 7800 plus crore with 52% group projects and 48% external projects.

To conclude, based on the execution achieved during

H1 FY27, the strength of our order book and the progress of our team projects, we remain on track to achieve our stated guidance of approximately 25% year-on-year revenue growth in FY25. Our priorities for the second half will remain discipline, project execution, timely delivery, cost controls, working capital management, and the selective purchase of new orders. With this, I will now hand over the call to Resselman to share the financial things for their details. Thank you, Prisha. Good afternoon, everyone. We'll brief about the consolidated financial performance for the quarter ended September 30, 2026. Q2 FY27 versus Q2 FY26. Revenue from operations for the quarter is Rs. 1113 CR versus Rs. 703 CR, which is increased by 58% on YY babies. EBITDA for the quarter is at 69 CR versus 50 CR, increased by 38% on YOY babies. EBITDA margin is at 6.21%, which was 7.10% in similar earlier quarter year. Net profit for the quarter is Rs.30CR versus 16CR, which is increased by 87% on year-on-year babies. Net profit margin is 2.69% versus 2.28%. During the quarter under review, employee cost has increased from 33CR to 50CR on viable babies, This is mainly on account of annual increments and increasing number of employees. Increasing depreciation from 20 CR to 20 CR on year-on-year basis is mainly attributable to additions

in assets block during H1 FY27.

During Q2 FY27, company has incurred capex of 62 crores. And in H1, half-year ended 30 September, CAPEX stands at 91 CR. So, the gross block as on 30 September is 851 CR and net block is 451 CR. I would like to mention some of the numbers which are important as on 30th September 26. Long-term borrowing stands at 30 CR which includes short-term maturity of 14 CR. Short-term borrowing is 238 CR excluding 14 CR of a short-term maturity. Net unbuild revenue is 632 CR. Trade receivable is 809 CR. Trade payables are 499 crores. Retention money, 229 current and non-current goods. Mobilization advance stands at 933 CR. Inventories of 416 CR comprises of 247 CR of construction materials, 140 CR of work in progress, and 29 crores of finished goods. During the quarter, company has reduced its sanctioned credit limits by 110 CR as it was no longer required. Out of revised sanctioned credit facilities of 1,387 crores, company utilizes non-fund based facilities of 753 crores and fund based utilization is 142 crores. Free limit available for utilization is 492 crores. As on September 30, 2026, the company has total 6 deposits of 237 crores, out of which lien-free deposits are of 44 crores and fees worth 193 CRs are under lien-riched banks and for credit facilities and given as securities deposits to clients. Work on hand as on 30th September is 12,872 crores. Detailed bifurcation is provided in the uploaded presentation. Let's conclude the update on the financials and we are now open for the question and answer session. Thank you.

Thank you very much.

We will now begin the question and answer session. Anyone who wishes to ask the question, can press star and one on the touch-down telephone.

If you wish to remove yourself from the question, you will press star and move. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question will be assembled. The first question is from the line of Jan and Jay Mishra from Centrum Program. Please go ahead.

Yeah, congrats on very strong Q2 numbers. Sir, what is the outlook for order inflow? We have 5 months left in this financial year. Okay, so based on current bid type line, which is about 7000 plus, we will be winning for 3000 more. And sir, any outlook on margin, I mean, we can expect improvement in EBITDA margin in H2 or it will be in a range of H1 only?

It will be in the same range, but there will be an improvement of this minus 1%.

Okay. So 6.5%, 6.3% we have done in H1. So, there could be improvement of 30-40 percent, 30-40 years?

Yeah. So, we can say it can go up to 10 percent.

Okay. And next year it should be 7 percent, sir, FY28?

Yeah. Yeah.

Okay, okay. And we have said that we will be doing 25 percent CAIGAR for next three years, right, in terms of properly.

Yeah. Yeah.

Okay, sir, thank you.

Thank you. The next question is from the line of Lakshmi Narayan K.G. from Tunga Investments. Please go ahead.

Yeah, thank you. Just a couple of things. I just want to understand what is the geographical mix of the current, you know, what are they executing as well as the geographical mix of the order book?

Actually, majority of projects are within Gujarat only, almost 70%. Around 25% is within Maharashtra. And just we have small projects in all over many states, but they are not significant.

Okay, okay.

I think we are getting an increase in inflation, sorry, or inflation for workforce as well as material. So, how are you managing this inflation in terms of variabilizing some of your project cost or your proposals? Can you just help me understand how you are managing this cost inflation? If at all, it is there in both the workforce, skilled, semi-skilled, unskilled, etc., as well as the material cost.

Sir, we are aware that our order book is almost 75% as adhani and 75% as non-adhani.

Sorry, I can't hear you clearly, sir. Can you? Sorry, I can't hear you clearly, sir.

Hello? Hello? Are you able to hear me?

Yes, sir. Now I am able to hear you.

Okay. So, as I say, as the government says that our order book is almost 75% as adhani and 25% as non-adhani, If you understand that we are working with Adani Group as cost-plus percentage also, so all the material cost difference has to be reimbursed by the group, so we don't share any risk as this Adani Group project is concerned. Since you are working

on a cost-trust model in terms of the capital projects, what is the gross What margin target you have, and what is the working capital facility? What kind of working capital is there for this kind of project?

This we have been seeing since the day we have partnered with Ajani Group. They are saying that these have been cleared for 75 percent. These are cleared between 7 to 10 days and the rest of the group. Sorry, your second question was related to margin.

So, three years, particular growth rate, we have a strong order book in your hand. So, this order book, what kind of, by when, I mean, there's around 13,000 crores order book which you have. I assume this is excluding GST, right? 13,000 crore order book.

So, maximum project time for any of the projects which is included in this order book is not going here in 36 months. So, we can consider that this is...

We have guidance which you have given. That includes what kind of project pipeline you think actually would need to deal for that, which should be there for you to have a... In addition to completing these over the next 36 months?

See, as far as PSP is concerned, and we talk about non-Azhani group, we have been an expert in the Zumbagi, and the ex-Azhani group is concerned, we are associated with it.

Ahmedabad airport, as well as the Mumbai airport, is it also part of your order book?

No, totally, Ahmedabad airport is not a part of my stopover, the Mumbai airport is a part of me, and we are part of PSP. Today, we have placed at both the locations. We are doing some of those only here in the...

Anything which we will be doing, the current expansion, P1?

Yes, sir. Thanks, sir, for the opportunity. Sir, am I audible?

Yeah.

Okay, thank you, sir. Sir, I think you did provide guidance in terms of revenue growth rate next three years. But, sir, particularly if I have to talk about this particular year, we are doing a pretty strong set of execution. First half is almost up 70-60% on Y&Y basis. So, FY27, I mean, like, you know, can we say probably the run rate will be higher than the 25%? Any ballpark trajectory that can you can provide, sir?

Yeah, we need to see a little bit on a higher side, but presently we have given you a range of 25-30% of income, and we have a target of working on that.

Sorry, I couldn't hear you, sir, clearly.

Okay, as I said at present, commitment is specified to 30% year on year from year, but today, as we are saying, there can be a good guarantee in this year, which I have also admitted, but that is an internal target which we have still tied to.

So, this year, probably the second half number could be on the soft side. So, that's the reason I was asking.

If you see our past, if you see our past, it has been always wrong. If you can, it is a dead part, it will be minutes because it is...

I have provided a lot of details regarding pre-cast and the number of days when we are doing it has gone down. So, when we are doing work under precast for Adani, so, or probably non-Adani, does this improve margins for us or how exactly it benefits? I mean, both the side difficulties.

See, as far as Adani, as far as Adani concerns the biggest benefit which we have is the success of getting, consider the reality of the cost of a project, distribution project, cost of a distribution, or distributed cost of a project. You will see that always structure is 30%. Rest of the thing is 70%. And if structure is completed half the time, the second time part of the project goes a little bit faster. So your revenue rate goes a little bit faster. So that's the biggest benefit which we are getting in Adhani, not as a part of margin. Tomorrow, if we go to the market, of course, that will give a better margin because commitment on half the timeline to anyone who is referring to leave the project or is user of the project like industry, it will always give us a better price.

Okay, okay, okay. Got it, sir. I think that's all from my side, and I'll come back in the queue. Thank you very much.

Thank you. The next question is from the line of Shravan Shah from London Capital. Please go ahead.

Hi, sir. Thank you. Sir, just to get a more clarity, so to get a more kind of a precise or closer to the precise number, is it fair that we can easily reach close to a 4,500 crore kind of a revenue for this year?

Yeah, it's an assumption to be fair, it is right. But as I said, that given this is our internal target to cross your 4,000. But just on the safer side, I think.

Okay, got it. And particularly, sir, in terms of the margins, because that's the one which is still not able to understand, though we are saying that the 7% margin for this year, 6.30% that we have done in the EBITDA margin in the 1H FF27. So, just to want to understand, so let's say we reach to a 4,500 odd crore, then also, and then also up from FF20 onwards, as we are saying, 25% kind of a growth will be there. So, there also the max that would be a kind of a 7% margin that we can see. So, this is primarily because the Adani we will be definitely then would be having a kind of a 5.7% kind of a margin and that's why the margin is it looks on the lower side because the delta on the 1% margin extra or lower has a significant impact on the apex. So, that's what I'm trying to understand.

Yes, you are absolutely right.

So, from next year onwards, FI 28, when, let's say, maybe we will be doing more than a 5,500 crore kind of a revenue. So, then, is it fair that we should be doing at least 7% or there is a possibility to reach even 7.5?

As I previously said also, the calculations which we have made with the crew is landing at 7. At the end of the project, each and every project has to be reconciled also, because each and every project has a different, different typography of overheads also, different types of challenges also. These 7% markets and the overalls have been calculated based on ESP's past projects, such a large project where we have calculated 3 years of our work, 3 years of our PFO commitment, 3 years of our safety requirement, all these things. These are the basis of the data which we have taken from the past projects. So probably at the end of the project, it should be more than 7, because I personally see that previously also we were working at costless at 8.5. I don't see any problem that this can go below 7. It has to go above 7.5 or 8%. But that's the time which I cannot commit on today because as and when the projects, different types of projects have different challenges also. It's not only about Adhani or non-Adhani, but in Adhani also, the space and the projects for MEPF and interior, that gives the better margins when the project is getting. Your 30% revenue is getting converted, 30% revenue is done in one year, and your 70% revenue is done in the next seven months, eight months. That's what I am trying to tell you.

Okay, and in terms of the order inflow for this year, so 13, yeah, last one, last one, yeah,

1300 crores that we have received, so for full year, how much, last time we said 5-6000 crores, so that.

Yeah, I am still expecting it on the year overall.

Thank you, thank you, sir, and all the best.

Thank you. Thank you. Ladies and gentlemen, this is from the line of Bible.

Firstly, on the Sura, diamond board receivables, is there any update? Have you received any money from there? And also, sir, save from UP projects?

See, first I will talk about Surat. No, yes, there is no coming from from their side. Again, we are hoping that the base, yes, we have to do it now.

It was roughly 40 crores as of March. So, how much have we received?

About 20 crores.

The remainder should come by the year ends, by March.

No, no, no, maybe by the third quarter we have received.

Okay, and SDV amount is 90 crores. It stays as it is. Okay. And lastly, one bit on margin. So last quarter, we were guiding for something around 7.5% to 8%. Today, also, you mentioned that we target that internally, but we are guiding on a lower end. That's correct?

No, I think the last question was asked by this one and I have made it very clear. I'm not saying that it should improve from here and it should be within the range of 7.5%.

We have incurred around 90 CR, so for the around 100 CR, we might need more.

And next year?

That will be, again, as I always say, that it should be in the range of 3 to 4 percent of our revenue, because if you are in the range of 35 to 60 percent, each year you require minimum 3 to 4 percent of capex, plus the capex which you have already bought to be utilized for the revenue projects. So, additionally, it should be in the range of 34 percent of the revenue, every year. If you want to maintain 30 percent, 30 percent of the revenue projects.

Okay. Thank you, sir. Those are my questions.

Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all participants in the conference, please limit the questions to all participants. The next question is from the line of Nishitha Lohan from Smile Investments.

Hi, sir. Thank you for the opportunity. My question is with respect to precast. So, what is our revenue potential here, and currently we are operating at what capacity utilization level?

See, even if we utilize the maximum capabilities, it is 30 million. So, we should have 30 million as part of the project, and we are doing 100% precarious. We are able to execute the value that we can do in a particular year. That is 250. Yes, presently we are operating at full potential.

So, are we planning to do CAPEX here?

Today we are not in that plan, but small, small CAPEX are always main, because small things will be related to the project that will be required for machine use of mold, but there will not be substantial, it will be very important. But the shades and whatever required for the project, by expanding this project to double, we already have to insert the shades A couple of questions from my side.

Firstly, on the margins, is there any component of expected credit loss during this quarter which are impacted by margin performance? Is there any component of expected credit loss, ECL losses, on the legacy projects for this quarter?

Yes, yes, we are providing based on the metrics for

India, and very well, we see that advance or the receivables are down.

So, what is the number for this? Yeah, yeah, it is around 8-3 years.

And secondly, what has been the contribution from the Adani group?

We don't have a separate feed of what was done in Adani, what was not done in the U.S. Department.

Last one, labor front, sir. Last quarter, I believe the total number of labor was closer to around 11,000 numbers. I believe it has improved lately. So what have you done with the number and what is the situation currently? And is it sufficient for our...

Presently, it is ranging between 23 to 25,000, but now we are operating at about 23 to 25,000.

And is it sufficient, or are we more able to...

As of now, as it is about the overall market, it is sufficient for projects, projects that can be developed from 10 to 20 percent less, and then the project is much larger.

Yes, most of the major government projects teams, they are now satisfying the bills, put

it in unbuilt revenue only, like the way done projects.

Yes, it will be.

But again, it will depend on what type of bills are not being done and we are not able to reserve.

Thank you. Before we take the next question, we would like to invite participants that you might press The next question is from the line of Bala Subramaniam from Arihan Capital. Please go ahead.

Good evening, sir. Thank you so much for the opportunities. Sir, Adhani Group is building out 5 gigawatt of AI infrastructure. I think 1 gigawatt is falling into Maharashtra, especially in Nabi Mumbai side. I think they had an MOU of nearly 50,000 crores with Maharashtra government. I just want to understand this Navi Mumbai is falling into our key focus areas like Gujarat and Mumbai, Maharashtra side. Whether we have a capability for this data center build out, and is there any scope to get some work in those areas? Why I am asking this question because these projects will be Like up to 2035. I think we have nearly 8 to 10 years time frame.

That's what I'm saying. This is nothing like building only. It is not about the technology. It's only about our capabilities going further. And you are talking about 2035, which is our second year journey. And we are now getting up to that we are able to increase our capabilities.

Okay, sir. Thank you.

Thank you. The next question is from the line of Raj Shah from CBA Asset Managers. Please go ahead.

Yeah, hi. Congratulations. This is a good set of numbers. My question is, we had a provision for the asset advance to the tune of 8.1 crores for this quarter. Are we expecting any provisions going forward?

Sorry, you gave a number of which budgets last year.

The provision for doubtful advance was 8.1 crores. As stated in the cash flow statement for 8 crores. My reckoning is that it is specifically for quarter 2. Are you expecting any provisions going forward in quarter 3 and quarter 4? And also, if you could highlight about the doubtful advance to the tune of 8.1 crores, It was regarding which project?

See, we again have to review our advances and balances in the receivables. Then only we can decide. So, in front of our visa, it will be, again, even down to our visa. Because last year, also, one of the CapEx advances we have made, it was around 2 years.

And this is a year, which we expect that we might not be receiving the invoids or receiving

We have to review the numbers, quarter and quarter will be.

Okay, because adjusting for that, the EBITDA margin for this quarter is roughly about 6.7% and it's been few quarters that every quarter they start for the other write-off or the provisions which is happening.

See, normally it is ECL, I'll brief you, it's an expected credit clause which is normally calculated based on the matrix. That is based on the aging of the trade usable. So, every year, you will see that there will be around 3 to 4 CR of addition is going to be there in this year also.

Well, adjusting for that, is it fair to assume that it will be closer to 7% in H2?

Yes, we can consider it.

Okay, that's it for myself. Thank you and all the best.

Thank you.

Thank you. As there are no further questions from the participants, I now have the conference over to the management for closing comments.

Thank you all for joining us today and for the active participation in the earning conference call. We sincerely appreciate the continued trust, confidence, and support of our shareholders, investors, analysts, and other stakeholders. We hope we have been able to address your key questions and provide a clean perspective on ESL performance, growth plans, and outlook for FY3. If you have any further queries, please feel free to reach out to our investor relationship advisor, EBI, who will be happy to coordinate with us and assist you offline. Wishing you and your beloved ones a very happy Diwali. Moderators, you can now close the call. Thank you all.

Thank you. On behalf of PSP Projects, that concludes this project. Thank you for joining us and you may now please connect with us.

Yes, thank you.