PSP Projects Limited — Investor Meet, 11-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** In Q3FY25, PSP Projects reported revenue of ₹623 crore, marking an 11% decrease year-over-year but an 8% increase quarter-over-quarter. For 9MFY25, total revenue was ₹1,813 crore, consistent with the previous year’s performance. The EBITDA dropped significantly to ₹35 crore from ₹71 crore YoY, leading to an EBITDA margin contraction from 10.25% to 5.67%. Net profit fell sharply by 81.4% to ₹6 crore, resulting in a PAT margin of 1%. Additional expenses associated with UP projects contributed to this decline, alongside higher employee costs due to annual appraisals.

**Future Outlook and Growth Drivers:** Management expressed confidence in growth stemming from a partnership with Adani Infra, which is expected to enhance order visibility significantly. With a reduced guidance of ₹3,500 crore in order inflows for FY25, upcoming projects are anticipated to materialize, including an estimated ₹2,000 crore from the Adani Group.

**Order Book and Operational Updates:** The current outstanding order book stands at ₹6,417 crore, reflecting a YoY increase of 44%. Notable projects awarded recently include significant residential and educational developments. Management noted that project timelines were impacted earlier but are now progressing, with construction activities ramping up.

**Analyst Q&A Insights:** Analysts focused on revenue and profitability, inquiring about margin expectations and future order inflows. Management clarified that despite recent setbacks, margins are projected to stabilize around 9-10%. Concerns regarding the UP projects highlighted additional costs, and management maintained optimism regarding future revenue contributions from Adani.

**Market or Regulatory Updates:** Discussions included upcoming infrastructure allocations in government budgets, potentially driving demand for construction services.

**Strategic Focus Areas:** PSP's strategy leans towards mechanization and efficiency improvement, with ongoing discussions about adopting innovative construction methodologies. This shift aims to reduce labor dependency and enhance project execution capabilities.

**Investor Insight:** Given the current financial performance and strategic focus on leveraging partnerships for growth, the outlook suggests a cautious stance aligning with a potential 'hold' position, contingent on successful execution of the ramped-up projects and stable order inflows.