Sanghvi Movers Ltd (SANGHVIMOV) Q2FY27 Concall Transcript - Sep-2026 Qtr
Michelle: Good evening, ladies and gentlemen. I am Michelle, moderator for this conference call.
Moderator: Good afternoon and a warm welcome everyone to Q2 and H1 FY27 earnings call of Sanghvi Movers Limited. Please note the investor presentation and financial results are available on the company website and the stock exchanges. Also anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement, must be reviewed in conjunction with the risk that the company faces. The conference call is being recorded and the transcript along with the audio of the same will be made available on the website of the company as well as on the exchanges. Please also note that the audio of the conference call is the copyright material of Sanghvi Movers Limited and cannot be copied, rebroadcasted, or attributed in the press or media without specific and written consent of the company. From the management, we have with us Mr. Rishi Sanghvi, Managing Director, Mr. Gaurang Desai, Chief Executive Officer, and Mr. Pradeep Mehta, Chief Financial Officer. I would now request Mr. Pradeep Mehta, Chief Financial Officer of Sanghvi Movers Limited, to provide you with the updates for the quarter and half year ended 30th September 2026. Thank you and over to you, sir.
Pradeep Mehta (Sanghvi Movers Limited): Thank you, shame, and good afternoon, everyone. I will take you through the financial and operating performance for the second quarter and first half of FY27, followed by balance sheet, cash flow, and capital expenditure positions. On a consolidated basis, revenue from operations for Q2 FY27 was 277 crore, compared with 210 crore in Q2 FY26, which representing a year-on-year growth of 32%. Total income stood at 296 crore, up by 36% year-on-year. EBITDA was 106 crore, an increase of 20% with EBITDA margin of 36%. Profit after tax was 40 crore, compared with 36 crore in corresponding quarter, while cash profit stood at approximately 78 crore. For H1 FY27, revenue from operations increased by 36% year-on-year to 657 crore, while total income grew by 38% to Rs. 689 crore, and EBITDA increased by 25% to 245 crore with a blended margin of 36%. Profit after tax rose by 22% to 106 crore, and cash profit increased by 181 crore. These results demonstrate healthy growth across the group, supported by the scale up of our renewable energy engineering and construction business and continued contribution from the crane rental business. Sequentially, Q2 revenue was lower than Q1, primarily reflecting the normal phasing of renewable project execution, the monsoon-led moderation in the domestic activity, and the timing of crane deployment in the Middle East. We view this largely as an execution and timing effect rather than a weakening of underlying demand environment. During H1 FY27, the group revenue mix comprised approximately 62% from crane rentals, 36% from energy engineering and construction, and 2% from project EPC. For the full year, now we expect broadly 60 to 40 mix between crane rental and renewable E&C, compared with the earlier expectation of approximately 2/3 and 1/3. The stronger contribution from asset-light renewable business will support our absolute EBITDA and is accretive to return on capital employed, that is ROCE, though although even it moderates the blended reported margin percentages. In India and Botswana crane rental business, H1 total income was 406 crore, and fleet utilization stood at 78% with yield at 2.24% and EBITDA margin is 46%. The margin movement compared with FY26 reflect a higher share of ancillary and external externally hired equipment, crane and trailer hire charges, freight and carriage, insurance, and one-time indemnity and the performance of project EPC segment. Several of these factors are either linked to revenue mix or are non-recurring. Importantly, the underlying crane rental franchise remained healthy and supported by strong order book and enquiry pipeline. The GCC crane rental business reported H1 total income of 39 crore, utilization of 86%, and yield at 3.80%
Pradeep Mehta (Sanghvi Movers Limited): improvement from the gestation stage performance in FY '26. The Middle East business continue to validate the original investment thesis through higher utilization and yields above our annual expectations. Although its near-term scale-up has been affected by shipping constraints, port congestion, and delivery delayed delivery of the cranes. So, this renewable EPC business generated actual total income of 365 crores and EBITDA margin of approximately 14%. This business remains asset-light and highly capital-efficient, with the ROCE of 63% on TTM basis, that is trailing 12-month basis. And we continue to expect sustainable margin to settle within our indicated range as the business scales, while execution timing and POCM accounting may create some quarter-on-quarter variations. On order book, as of 23rd October 2026, group order book stood at 1,582 crores, which is representing growth of 26% from 1,253 crores as reported earlier on 24th July 2026. So, this comprises 686 crore in India and Botswana, that is crane rental business, and 45 crore in GCC from crane rentals, and 854 crore in renewable EPC business. The total enquiry pipeline stood around 6,700 crores, which provide a healthy funnel across the business segments, and our working capital performance improved meaningfully during this first half of the year. Our group DSO stood at 81 days, with India and Botswana crane rental is around 89 days, renewable EPC is below 60 days, and GCC at 165 days. GCC DSO is reduced from 201 days in Q1 to 165 days in Q2, which reflecting our focused collection effort, and we will continue to prioritize billing discipline, certification cycle, and collection. On balance sheet, our balance sheet remains strong and supports the next phase of growth. Consolidated net worth increased to 1,398 crores as on 30th September, and gross debt stood at 805 crore. If you consider treasury position of 400 crores 414 crore, then resulting into net debt of 391 crore. So, gross debt to equity ratio is 0.58x, which is comfortably within the FY '27 ceiling of 0.72x. And our weighted average cost of borrowing is 8.28%. All other ratios are in comfortable range, and cash flow conversion are healthy. So, this first half, the consolidated cash flow from operations was around 231 crore in H1 FY '27, which is equivalent to 83% of the full year of FY '26. So, this is what we achieved within six months. And on capital expenditure, FY '27 CapEx pooling is revised to 583 crores, and which includes carry forward CapEx of FY '26 and the revised plan plan of FY '27. Out of this, 182 crores was already capitalized during H1 FY '27, which includes 90 crore in Q2, and now leaving 401 crore pending to be executed in this second half of FY '27. So, approximately 96% of our plans full related to revenue-generating assets. And in the Middle East, due to logistic disruptions and vessel availability constraint and port congestion from affected, which has affected our timing of crane delivery. And that's what impacted our revised CapEx. So, this portion of KSA CapEx, which have been rephased for FY '28, this is a disciplined response to the timing condition, not a change in our long-term view of the market. Procurement is being aligned with the contracted demand and prioritized towards the highest-return assets. In India, Q2 capitalization was also moderated by the monsoon period, and with the deployment expected to improve as project activity normalized. With that, I will hand over to our Chief Executive Officer, Mr. Gaurang Desai.
Gaurang Desai (Sanghvi Movers Limited): Good afternoon, everybody, and thank you for joining us today. So, let me begin with the environment we are operating in. So, if you look at the macroeconomic environment, India continues to be the fastest-growing major economy, and GDP grew almost 7.8% in April to June quarter, well ahead of expectations, and RBI has since revised FY '27 growth forecast to 7.1%. You know, for most more importantly for us, this growth is investment
Gaurang Desai (Sanghvi Movers Limited): led. I mean fixed capital formation grew almost by 12% in this quarter. And, it's a twice the pace a year ago. And investments now accounts for around 34% of the GDP. We are mindful of the risk. The West Asia conflict has pushed the prices of crude and inflation, and you know RBI raise the repo rate by 25 basis point in October. But the underlying growth momentum remains strong, and we believe the investment cycle has many years to run. So what you know quick update on the industry sectors we operate in. So we are, let me start by infrastructure. So, project approvals have continued a pace this quarter. In September, the cabinet cleared eight railway projects worth 20,000 crores, and in October, approved 1.8 lakh crore green energy corridor for power transmission. On the ground, heavy steel bridges launches on the Mumbai-Ahmedabad high speed rail corridor shows exactly the kind of complex lifting this pipeline creates. Cement the capacity is set to grow from 686 to 850 million tons by FY '30, and around 70 to 75 million ton is commissioning this year alone. And demand is expected to grow 7% to 8%, driving plant erection and waste heat re recovery work for us. Steel, capacity is expected to rise from about 220 to 300 million tons by FY '30. The safeguard duty has cuts imports by almost 1/3, supporting domestic mill expansion which again is works in favor of heavy lifting. Refining, in October, BPCL set up a dedicated project company for its proposed greenfield refinery and petrochemical complex in Andhra Pradesh with an investment outlay of almost 1 lakh crore. Thermal, around 36 or almost 39 GW is under construction and further 23 GW has been awarded, as the government targets towards almost 300 GW of thermal capacity by FY '30. And you know, this gives us a study pipeline of boiler and turbine to lift. Nuclear Power: The SHANTI Act has opened up the sector to private players and groups such as Tata, Reliance, Adani has responded to the first small modular reactor tender. So, capacity is targeted to grow from 8.8 GW to 22.5 GW by FY '30. Wind, which is, you know, our one of the dominant segment, has added a record 6 GW in FY '26, up by 46%, with 29 GW under construction and a target of 100 GW by 2030. So, while we remain watchful of you know, pressures in steel, cost escalation, our presence across these sectors reduces our dependence on any single cycle. Let me talk about performance. Pradeep did touch upon briefly, and I will be quick here. So, you know, we delivered a strong first half. Revenue from operations grew 36% to 656 crores. EBITDA grew by 25% and PAT grew by 22%. And in Q2, revenue grew by 32% with an EBITDA margin of 20%. As Pradeep mentioned, our order book in in just 13 weeks grew by 26% and we are close to almost 600 crores of order booking with an inquiry pipeline of 6,700 crores, which gives us a strong visibility for the rest of the year. So in terms of utilization was for 78% for the first half, with a yield of 2.24% in line with FY '26 levels and within our historical range of 73% to 84%. You know, as Pradeep touched upon the seasonality aspect, so Q2 utilization in India was 71 compared to 86 in Q1, reflecting the normal monsoon slow down. However, it was ahead of the 70% we reported last year, and a yield improvement from 2.22 sorry, yield improvement to 2.20 from 2.04. Middle East utilization
Gaurang Desai (Sanghvi Movers Limited): in India typically picks up sharply as project activity resumes after monsoon. So, our revenue mix is changing and I will not dwell too much into it because Pradeep has already mentioned. You know, so looking ahead, we are confident that we have a strong wind runway support of our core business, growing asset light crane stream and you know, two growth engines. I mean Saudi CapEx is you know, deferred So, let me give a quick update on Middle East as well. So, shipping and port disruption in West Asia have delayed new crane deployment in Saudi Arabia and we have moved part of the CapEx to FY28. So, this is a timing issue not a demand issue. The cranes we have deployed are highly utilized and earning above target yields and the business is EBITDA positive. We are facing investment, we are facing investment in line with orders and prioritizing the high return assets. I will not talk about CapEx as Pradeep has covered. You know, Pradeep also mentioned that we've done good work in terms of our DSO, which has come down to 81 days from 116 in Q1. Our customer satisfaction core score has risen from 7.5 to 9.18 this year, which is a milestone for the company. If I talk about safety, remains non-negotiable for us. I mean we've we have received many safety awards including the likes of GE GE's contractor Gold Standard Recognition. You know and we we hold safety to our hearts. We continue to build a stronger organization to support growth. So in in terms of digital journey, we are now live with CRM and HRMS. You know, we'll be focusing on getting talent our offer to join ratio improved to 86%, retention fell to 6.5% in the first half. You know, and in terms of our culture, we are working towards Great Place to Work. So based on our first half year performance and order book, we reaffirm our FY27 guidance of total income of 14, 1,400 to 1,500 crores and EBITDA of 525 to 575. With healthy demand across infrastructure industry, energy, a growing renewable platform, disciplined capital allocation, we are confident in delivering on Elevate 2030. So, I would like to thank all of you for your time. Thank you.
Moderator: We will now begin the question and answer session. Participants who wish to ask a question may press star then one on their touchtone phone. We will wait for a while for the questions to assemble. Participants who wish to ask a question may press star then one on their touchtone phone. The first question comes from the line of Sunil Jain from Nirmal Bang Securities. Please go ahead.
Sunil Jain (Nirmal Bang Securities): Yeah. Thanks for this opportunity, sir. And congratulation and good order book growth. Sir, my question relate to first, a data question regarding order book only. Since your order book is now 1,582 crores which is to be executed in the current year or there could be something spill over to next year next year as well in this?
Gaurang Desai (Sanghvi Movers Limited): So thanks, Sunil. So this order is execu- executable in this financial year. However, you know, in E&C business, there is always a 10% chance that you know, things may be deferred due to various issues of RoW and etcetera, you know, those kind of issues. But otherwise, this is all executable in this year.
Sunil Jain (Nirmal Bang Securities): Yeah. So since your guidance of revenue is 1,400 to 1,500 and you may get some more orders in the coming period which can be executed in the current year. So, there is a possibility of you exceeding your guidance as well?
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