ITD Cementation: PAT growth of 111% & Revenue growth of 61% in H1-24 at a PE of 27

37%+ revenue growth in FY24 followed by 25% growth in FY25 on the back of a strong order book. Strong bidding pipeline in place to fuel future growth for ITDCEM.

1. EPC player undertaking Heavy Civil & Infrastructure projects

itdcem.co.in | NSE : ITDCEM

2. FY20-23: PAT CAGR = 42% & Revenue CAGR = 21%

3. Strong FY23: PAT up 80% & Revenue up 34%

4. Strong Q1-24: PAT up 73% & Revenue up 67%

5. Strong Q2-24: PAT up 168% & Revenue up 56%

6. Strong H1-24: PAT up 111% & Revenue up 61%

7. Business metrics: Improving return ratios

8. Outlook: 37% revenue growth in FY24 followed by 25% growth in FY25

i. 37%+ top-line growth in FY24

Revenue expected to grow to Rs 7,000 cr+ in FY24 implies a 37%+ growth in FY24.

I think, we’ll maintain the same, which is around INR 7,000-core-plus in the top line. We hope that EBITDA will be just 10% above this end of the year.

ii. 25% top-line growth in FY25

So, revenue-wise, we should be able to achieve around 25% more than this year.

iii. Strong order-book: Multi year revenue visibility

  • Robust orderbook of Rs 22,080 crore
  • Diversified order book to minimize risks from slowdown in any business areas
  • Strong bidding pipeline to fuel future growth

9. PAT growth of 111% & Revenue growth of 61% in H1-24 at a PE of 27

10. So Wait and Watch

If I hold the stock then one may continue holding on to ITDCEM

  • Coverage of ITDCEM was initiated after Q1-24 results. The investment thesis has not changed after a strong H1-24. The only changes are the delivery of a strong H1-24 and the increased confidence in the management to deliver a stronger FY24
  • ITDCEM management is indicating for a H2-24 stronger than H1-24

We have to consider that in Q2 due to monsoon revenue was a little less. So normally, Q3 and Q4 we can expect better revenues than Q1 and Q2.

  • Order book is strong, 4X+ FY23 revenue, with indications of margin expansion
  • One needs to wait and keep watching for efficient execution of order book and the new orders coming in each quarter.

11. Or else join the ride

If I am looking to enter ITDCEM then

  • ITDCEM has delivered PAT growth of 111% & Revenue growth of 61% in H1-24 at a PE of 27 which makes the valuations look reasonable.
  • Top-line growth of 37%+ in FY24 followed by 25% revenue growth in FY25 with expanding margins at a PE of 27 which makes the valuations look reasonable.
  • Guidance for 10% EBITDA implies bottom-line would grow faster than the top-line

Leave a Comment