Dhruv Consultancy Services Limited — Investor Meet, 18-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

Financial Performance: In Q2 FY25, Dhruv Consultancy Services Limited posted total revenue of ₹32.92 crore, reflecting a robust year-over-year growth of 42.88%. The EBITDA was ₹3.95 crore, yielding a solid EBITDA margin of 12%. Profit after tax (PAT) stood at ₹1.89 crore, corresponding to a PAT margin of 5.73%. The diluted EPS was reported at ₹1.77. For H1 FY25, total revenue reached ₹52.93 crore, marking an impressive year-on-year growth of 53.19%. EBITDA was ₹6.77 crore, with an improved EBITDA margin of 12.79%, while PAT was ₹2.76 crore, maintaining a PAT margin of 5.22%.

Future Outlook and Growth Drivers: Management emphasized a strong commitment to international expansion, with 145 project bids across African and Southeast Asian markets, including securing the first order in Mozambique valued at $5 lakh. The company aims to enhance its domestic order book significantly by submitting bids worth ₹1,500 crore and targeting a financial order book of ₹800-1,000 crore, inclusive of international projects.

Order Book and Operational Updates: The current domestic order book stands at ₹347 crore, expected to sustain over the next 2-3 years. New contract wins include a ₹5.7 crore high-speed corridor project in Gujarat and a ₹4.74 crore NHAI project for the Aligarh-Palwal highway.

Analyst Q&A Insights: Analysts inquired about EPS growth and the return on new capital investments. Management expressed confidence in doubling the business due to new equipment purchases, enhanced bidding capabilities, and ranked positioning among the top five consultants in India. They expect a significant impact on profitability from improved technical scores and moving into higher-margin international contracts.

Strategic Focus Areas: Management's tone exhibited strong optimism driven by improved operational efficiency, increased equipment procurement, and expanding client bases into private and international markets. The focus on harnessing high technical scores for competitive bidding signals a bullish outlook for future growth.

Investor Insight: With solid financial performance and strategic initiatives aimed at enhancing profitability and market position, there appears to be a favorable potential for growth. Considering the financial health and proactive management approach, a 'buy' position is suggested, emphasizing the company’s strengthening order book and international ambitions.