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Dhruv Consultancy Services Ltd

| Q2 FY26 Earnings Conference Call

NEUTRAL SENTIMENT

Report Source

⬤17th Nov 25

Summary : Dhruv Consultancy Services is diversifying into new infrastructure sectors and geographies, leveraging technology for efficiency, despite recent revenue dips and past debarment issues.

Management Perspective positive : Management expressed optimism about India's infrastructure opportunities. They anticipate a good jump in the order book in Q3. They are confident in sustaining growth momentum in H2 FY'26.

Concall Report Analysis & Insights

Business Overview

  1. Established in 2003, headquartered in Navi Mumbai, India.
  2. Leading infrastructure consultancy offering end-to-end solutions.
  3. Services include design, construction supervision, project management, audits.
  4. Completed over 250 projects for major government clients.
  5. Team of over 400 professionals, 75% qualified engineers.

Future Growth Prospects

  1. Empanelled as ATCC Class-1 Consultant for 3 years.
  2. Empanelled by MSIDC for INR36,000 crores road DPRs.
  3. Strategic entry into aviation sector with MADC project.
  4. Empanelled by Odisha Bridge for road/bridge supervision, expanding East India reach.
  5. Targeting 30-35% EBITDA margin in new sectors like aviation and railways.

Management Insights

  1. Focus shifted to new sectors and geographies to increase EBITDA margin.
  2. Current unexecuted order book is INR200 crores, to be completed in 2.5-3 years.
  3. INR250 crores of tenders are currently bidded, results awaited.
  4. Q3 and Q4 FY'26 are expected to show improved performance.
  5. Implementing Building Information Modeling (BIM) and AI for efficiency.

Signs of Skepticism

  1. Management cannot comment on specific revenue growth projections due to SEBI guidelines.
  2. International project progress has been slow due to global economic conditions.
  3. Bid win rate abroad is currently low at 1%, though scaling to 5-10% is targeted.
  4. Debtor days increased, attributed to lower certification and land acquisition issues.

Risk Factors

  1. Q2 FY'26 consolidated revenue fell 40% year-on-year.
  2. EBITDA margins marginally reduced in H1 FY'26.
  3. Order book flow was slow due to elections in Q1 and Q2.
  4. Past debarment order from NHAI temporarily halted new project bids.
  5. Debtor days increased to around 100 days due to lower work certification.

Good To Know

  1. Company is expanding client base beyond central government to state governments.
  2. Diversifying into metros, railways, airports, and urban infrastructure sectors.
  3. Expanding globally with projects in Mozambique, Ghana, Zambia, Tanzania, and Cambodia.
  4. Utilizing an internal ERP system with real-time dashboards for project management.
  5. Attrition rate is 3-4%, significantly lower than the industry average of 20%.

Key Drivers

  1. New empanelments boost eligibility.
  2. Diversifying into new sectors.
  3. Strong government infra investments.
  4. Expanding international presence.

Key Analyst Discussions

Competitive Environment

  1. Company is among India's top 5 infrastructure consultants.
  2. Low attrition rate of 3-4% compared to industry 20%.
  3. Focus on sectoral and geographical expansion to enhance competitiveness.
  4. Bidding larger ticket size projects with good EBITDA margins.
  5. Strong JV partners sought for international projects.

Market Trends & Consumer Behavior

  1. Optimistic about India's infrastructure ecosystem due to government investments.
  2. Union Budget emphasizes railways, metros, and airport sectors.
  3. State governments are initiating larger infrastructure projects.
  4. Global economic slowness impacted international project timelines.
  5. New airport construction across India presents significant opportunities.

Financial Highlights

  1. H1 FY'26 EBITDA margins were around 14%, expected to improve.
  2. Q2 FY'26 revenue was INR19.40 crores, net profit INR1.01 crores.
  3. Half-yearly revenue INR40.80 crores, net profit INR2.60 crores.
  4. Current unexecuted order book is INR200 crores, for 2.5-3 years.
  5. INR250 crores worth of tenders are bidded, results awaited.

Product Composition

  1. Supervision and O&M contribute 40% of revenue.
  2. Construction supervision contributes 40% of revenue.
  3. DPR projects account for the remaining 20% of revenue.
  4. 80% of revenue comes from PMC projects due to longer tenure.
  5. PMC projects offer good cash flow management with monthly payments.

Strategic Considerations

  1. Aiming to become a multi-sectoral and multinational company.
  2. Expanding into railways, metros, and airport infrastructure.
  3. Implementing BIM and AI for faster designs and project efficiency.
  4. Targeting INR1,000 crores order book by 2030.
  5. Developing 3D, 5D, and 6D models for infrastructure projects.