SKIPPER - Skipper Limited Share Price

Management Outlook and Key Points:

1. Revenue Growth: Targeting 25% CAGR over the next two years, driven by a robust order book (Rs.6,215 crores) and a strong bidding pipeline (Rs.16,730 crores). FY24 revenue surged 66% YoY to Rs.3,282 crores, exceeding guidance.

2. Margins: Aim to sustain Engineering EBITDA margins at ~11.6% and achieve consolidated EBITDA margins of 10%+ in FY25. Focus on operational efficiency, better contract mix, and export growth (28% of Engineering revenue in Q4).

3. Capacity Expansion: Increasing capacity from 300,000 to 375,000 tons by FY25-end, with further expansions planned. Polymer segment targets double-digit margins via volume growth (30% volume increase in FY24).

4. Order Visibility: Diversified order book (2.2x FY24 sales) with 87% domestic (53% T&D, 34% non-T&D) and 13% international. Telecom (BSNL/Vodafone projects) and global T&D (leveraging China+1 strategy) are key drivers.

5. Financial Discipline: Net working capital reduced to 88 days (from 131 days). Finance costs targeted at 4.4-4.5% of sales (vs. 4.7% in FY24). Focus on debt reduction and credit rating upgrades.

6. Segmental Focus: Infrastructure segment (Rs.349 crores in Q4) to sustain growth via T&D/railway projects. Polymer sales to benefit from stable commodity prices and rural demand.

7. Risks: Near-term election impact on order inflows, offset by long-term infrastructure spending tailwinds.

Major Highlights: Record revenue/order book, margin resilience, and focus on high-margin exports/international projects underpin confidence in sustained growth.

Dhruv Agarwal: What were the reasons for the significant fall in gross profit margins year-on-year and quarter-on-quarter?
The decline in quarterly margins was attributed to project mix variations, but annual EBITDA margins remained stable at 9.7%. Costs were offset by reduced expenses (other expenses dropped from 14.1% to 10% of revenue), ensuring consistent profitability. Gross margin fluctuations arose from differences in contract execution phases and project expenses.

Dhruv Agarwal: Will working capital days (88 days) remain at this level?
Net working capital is expected to stabilize between 90"“100 days, with efforts to improve further through operational efficiency and inventory management.

Dhruv Agarwal: Are increased long-term borrowings for capacity expansion, and will more debt be needed?
Current borrowings funded debottlenecking and optimization. Future capex (Rs.200 crore in FY25) will combine internal accruals and debt, though exact debt plans are undecided.

Dhruv Agarwal: When will new capacity be operational, and what peak revenue is expected post-expansion?
Capacity will reach 375,000 tons by FY25-end (partial Q3/Q4 commissioning). Revenue growth guidance remains 25% CAGR over FY24's Rs.3,282 crore base. Further expansions are planned for FY26.

Dhruv Agarwal: Will exports dominate order inflows given 65% of the bidding pipeline is international?
Domestic orders (75% of FY24 inflows) are prioritized due to faster execution, while international projects have longer cycles. FY25 expects a 75:25 domestic-export order mix.

Deepak Purswani: What was BSNL's FY24 revenue and FY25 outlook?
BSNL contributed Rs.1,000 crore in FY24, with Rs.700 crore expected in FY25.

Deepak Purswani: What is the FY25 margin and interest cost outlook?
Consolidated EBITDA margins aim for 10%+ in FY25. Interest costs (4.7% of FY24 revenue) target 4.4"“4.5% via improved credit ratings and working capital.

Balasubramanian: What is the telecom tower demand outlook?
Growth is driven by 5G rollouts, BSNL/Vodafone expansions, and India's rural electrification. Skipper holds 15"“20% market share in telecom towers.

Darshil Jhaveri: What is the order execution timeline and win rate?
Orders are executed over 2"“2.5 years. Blended win rate is 25"“30%, varying by market. Revenue growth may exceed 25% guidance given strong pipelines.

Rishi Kothari: How are global markets shifting from Chinese suppliers?
Geopolitical "China+1" strategies favor Indian manufacturers. Skipper's engineering strength and testing capabilities attract global clients, especially in North America, Africa, and Asia-Pacific.

Saket Kapoor: What are EPC margin trends and funding plans?
EPC margins benefit from fixed-price contracts. FY25 capex of Rs.200 crore will use internal accruals/debt. Blended interest cost is ~9%, with reductions expected via operational efficiency.

Ashish Ajit Golechha: What is the global T&D outlook and polymer margin target?
Global T&D investments may hit $6 trillion by 2030. Polymer aims for double-digit margins through volume growth (32,000 tons in FY24, +30% YoY) and stable input costs.

Vignesh Iyer: What is the telecom/T&D order book split?
87% of Rs.6,215 crore order book is domestic (53% T&D, 34% non-T&D). Telecom accounts for <10% of the bidding pipeline.

Prathmesh Salunkhe: What are Skipper's market shares?
15"“20% in telecom towers and T&D, 1"“2% in polymer pipes.

Gunjan Kabra: How do bidding dynamics and project cost splits work?
5"“6 competitors per bid. Transmission projects allocate ~30% to towers, 30"“35% to conductors. Win rates depend on design, testing, and regional factors beyond pricing.

Vignesh Iyer: Why is inventory at Rs.1,200 crore?
Inventory days improved to 135 (vs. 170 in FY23). Further optimization is planned, aligning with 25% revenue growth.

Ankit Babel: What interest cost and margin are expected at Rs.5,000 crore revenue?
Interest costs may drop below 4% of sales by FY26. EBITDA margins could reach 10.5% with scale and execution efficiency.

Dhruv Agarwal: What is polymer capacity utilization, and will elections impact orders?
Polymer utilization is 55%, targeting 75% by FY25-end. Elections may briefly slow orders, but FY25 inflows remain robust. Infrastructure revenue (10% of total) will stay 15"“20% long-term.