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Sanghvi Movers Ltd

| Q2 & H1 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤10th Nov 25

Summary : Sanghvi Movers reported strong H1 FY26 growth, driven by robust demand and strategic expansion into Saudi Arabia, despite some operational delays and competitive pressures.

Management Perspective positive : Management expressed pleasure with strong momentum, execution resilience, and confidence in delivering sustained performance. They highlighted successful KSA expansion, robust order books, and strategic initiatives like Elevate 2030.

Concall Report Analysis & Insights

Business Overview

  1. Q2 FY26 total income from operations grew 35% year-on-year to INR210 crores.
  2. H1 FY26 revenue increased 57% year-on-year to INR483 crores, driven by infrastructure and renewable energy demand.
  3. Q2 FY26 EBITDA was INR88 crores (42% margin), up 9% year-on-year; PAT rose 24% to INR36 crores.
  4. Average capacity utilization for Q2 FY26 was 70%, with a blended yield of 2.04% per month.
  5. The company maintains a strong balance sheet with net debt of INR440 crores and a debt-equity ratio of 0.36x.

Future Growth Prospects

  1. Elevate 2030, a 5-year strategic roadmap, focuses on global expansion and portfolio diversification.
  2. Operations commenced in Saudi Arabia in Q2 FY26, with over 30 cranes deployed and 100% utilization.
  3. Saudi Arabia offers a significant market opportunity, with an estimated $800 million to $1 billion annual crane rental market.
  4. The company has a robust inquiry pipeline exceeding INR2,000 crores in India and $50 million in KSA for the next 24 months.
  5. India's renewable energy, cement, steel, and infrastructure sectors show strong growth tailwinds for FY26 and beyond.

Management Insights

  1. Management is pleased with strong momentum and execution resilience, supported by a robust order book.
  2. The company is taking an aggressive stance on capex, with INR629 crores planned for FY26.
  3. Elevate 2030 pillars include customer-centricity, global expansion, product diversification, and digital scalability.
  4. New C-suite leadership has been appointed to drive the company's strategic vision.
  5. Management is confident in sustaining the FY26 top-line growth guidance of 25% to 30%.

Signs of Skepticism

  1. Management declined to provide specific financial targets (ROCE, revenue) for the Elevate 2030 strategy.
  2. The company stopped providing a segmental breakup of the order book (crane rental vs. EPC) due to Board directives.
  3. Management refrained from giving forward guidance on blended EBITDA margins for the group.

Risk Factors

  1. Approximately 10-15% of the order book may spill over into FY27 due to monsoon delays and site issues.
  2. Competitive pressure in the crane rental market may limit yield improvement despite increased utilization.
  3. Operating costs in Saudi Arabia are higher than in India, potentially impacting EBITDA margins.
  4. The company imports all capex equipment, primarily from Germany and China.

Good To Know

  1. The company incurred INR140 crores in capex during H1 FY26, with a total FY26 plan of INR629 crores.
  2. The renewable business has been carved out into a wholly-owned subsidiary, Sangreen Future Private Renewables.
  3. The current gross block stands at INR2,750 crores.
  4. The company continues to dispose of obsolete cranes as a continuous process.
  5. E&Y has been engaged to interact with the investor and financial community.

Key Drivers

  1. Saudi Arabia expansion drives new growth.
  2. Robust order book ensures future revenue.
  3. Strong demand in key Indian sectors.
  4. Strategic capex boosts capacity.

Key Analyst Discussions

Competitive Environment

  1. Analysts asked about the competitive landscape in Saudi Arabia and how it differs from India.
  2. Questions were raised about the company's ability to maintain yields amidst competitive pressure.

Financial Highlights

  1. Analysts questioned the lower Q2 utilization (70%) compared to Q1 (80%) and previous guidance (75-80%).
  2. Questions were raised about the significant increase in trade receivables and potential delays in collection.
  3. Analysts sought clarification on the depreciation impact of the increased capex for FY26 and FY27.
  4. Questions were asked about the current gross block and the ongoing program of selling obsolete cranes.
  5. Analysts inquired about the target blended EBITDA margins for FY26, which management declined to provide.

Product Composition

  1. Analysts requested a breakup of the order book between crane rental and EPC, which management declined.
  2. Questions were asked about expected margins for the EPC side of the business.

Strategic Considerations

  1. Analysts inquired about specific financial goals and targets for the Elevate 2030 strategic vision.
  2. Questions focused on the investment appetite and capex plans for Saudi Arabia over the next 3 years.
  3. Analysts asked about the business metrics and ROCE differences between Indian and Saudi Arabian operations.
  4. Questions were raised about the break-even timeline and order book for Saudi operations.
Sanghvi Movers Ltd (SANGHVIMOV) Concall Report Analysis & Insights | Dhanarthi