IL&FS Transport Networks Q4FY17 Concall Summary

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Financial Highlights

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  • The top line decreased by around 13% largely because of lower construction income
  • Overcall cost reduced by 18%, cost reduction arising out of the recognition and other operating efficiencies which led to increase in construction margin this year is around 20% 
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  • FY2017 profit before tax of Rs.195 Crores, positive PAT as per Indian GAAP but when converted into Ind-AS adjustment it is negative of Rs. 97 Crores
  • Flat revenue on consolidated basis
  • 149 Crores is the total consolidated bottom line number versus Rs. 122 Crores last year
  • Net worth has gone down from Rs. 4380 Crores to Rs. 2700 Crores, primarily because of the reclassification of preference shares as debt. The Rs.1000 Crores has been provided but right now in the opening balance sheet and it will be reversed and coming back to the company year-over-year or next three to five years’ time
  • The interest will be lower with higher principal liquidity due to the financial asset coming down and the recovery on the annuity because of maturing of the projects. However,it will be made up as new annuity projects go live which they will add to the financial income.
  • Certain entities which were earlier consolidated line by line like Jorbat-Shillong in Ind-AS are now not getting consolidated line by line as they are joint venture and are just getting added as a one-line adjustment in the profit and loss account.
  • Depreciation is huge as projects which were partly commissioned during the year in FY2016 like Moradabad Bareilly and Pune Sholapur had seen a full commissioning and full year of depreciation this year.
  • No increase in depreciation with rise of new projects, as they are toll projects and are in amortization phase
  • No decline in the construction income considering the order book in hand and also the future plans in terms of looking at very large value complex EPC projects.
  • Euro 6.6 million PAT on a Euro 175 million topline for Elsamax
  • Preference share were issued at a premium of Rs.10/- therefore the coupon is actually 50%. A portion of the preference shares is coming up for redemption this year, so they will be redeemed fully.
  • The cost of borrowing is 11.5% on a consolidated basis
  • New projects in BOT, EPC and international space like Laos and Dubai will drive the revenue and accordingly the EBITDA margin.


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  • Significant reduction in the debt in FY 18 with conclusion of InVIT and only Rs.1000 crores needed for ongoing projects. The InVIT will help to reduce debt by around Rs.3500 Crores. Moreover, projects which have been commissioned particularly, CNTL and Khed-Sinnar, have started repayment of debt
  • The standalone debt has gone up by Rs.2000 Crores because of almost 50% classification of preference shares into borrowing, which were earlier a part of networth . Secondly, debt has gone up because infused of some debt from standalone balance sheet into into SPVs to pay high cost debt.
  • Refinancing reduced the cost of borrowing by 200 to 250-basis points in interest cost of the SPV, elongated the maturity profile of the debt in line with the earning profile of the projects, which led to shorter period loans. Moreover, it helped to upstream the debt at the consolidated level. Put together on three projects, around Rs.350 Crores coming to ITNL from refinancing.
  • Rs 9000 plus 750 Cr should be the debt for FY2016 and 11,670 Cr for FY2017.
  • Consolidated debt of Rs. 31000 crores
  • Debt has also slightly increased due to Ind-AS rearrangement and tied up funding in projects which were in full stages of completion last year like KNCL, Barwa-Adda, Khed-Sinnar etc


  • The total revenue around Rs.5500 Crores is the Construction income, O&M is Rs.1073 Crores, toll revenue is Rs.666 Crores, the finance income which is annuity income is Rs.711 Crores which leads to a total revenue from operations of Rs.7984 Crores, which is against Rs.6036 Crores in the last year
  • O&M income last year was Rs.1240 Crores, toll revenue was Rs.503 Crores, finance income, which is annuity income, was Rs.805 Crores, Construction income was Rs.5411 Crores, and supervision fee was Rs.77 Crores last year, this year is Rs.24 Crores. So total revenue from operations is Rs.7, 984 Crores versus Rs.8036 Crores last year.
  • In addition to that there is other income which essentially is the interest income and dividend and sale of investments which is Rs.4917 Crores this year versus Rs.321 Crores last year. So this is a full breakup of Rs.8402 versus Rs.8356 Crores.
  • Revenue from operations, which is Rs. 7984 Crores for FY 2017 and Rs.8036 Crores for FY 2016
  • Construction margin has gone up from 30% to 35%
  • The rest of the increase is coming because of the toll revenue increase and finance income increase and then there is an increase in the other income by around 30% this year.
  • Operating expenses have gone down from Rs. 580 Crores to Rs. 556 Crores.
  • Employee benefit has gone up from Rs. 491 Crores to Rs. 522 Crores
  • International revenue was around Euro 175 million this year compared to somewhere around Euro 160 million last year
  • EBITDA margin as percentage revenue for FY2017 at a consolidated basis is 43% as against 35% last year because of the higher construction margin, in projects in completion stage and due to increase in cost efficiencies as well as the de-escalation of collection of certain cost.
  • Also, this year compared to last year there has been higher profit on sale of investment that has added to increase in the margin, also the dividend income from subsidiary has gone up this year compared to last year. Toll income has gone up by 32% compared to last year, absolute terms Rs.160 Crores, which has also added to the increased margin in the overall basis.

Toll Collection

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  •  Rs.9.55 Crores per day with traffic growth increase in the range of 5% as compared to last year, but if you take the last quarter it has shown an 8% growth.
  • The toll went up by 32% on a rupee basis but on traffic basis last quarter grew by 8% in the PCUs and for the whole year 5%.
  • Kiratpur Ner should be somewhere around Rs.75 lakhs per day, but that is on the date of commissioning, still 1.5 years away from commissioning
  • Rs. 9.5 Crore is not stake adjusted.
  • Will increase to around Rs.11.9 Crore next year and Rs. 14 Crore next to next year, after considering the 5- 7 projects on ground, which are going to get completed.
  • Traffic grew by 8% last quarter as compared to the previous quarter, an average of all assets, CAGR of 8% or 8.5%.
  • Collecting around Rs.24 – 25 lakhs per day from Barwa-Adda, however it will increase to Rs.46 to 47 lakhs per day after setting up of second toll plaza.
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  • Raised Rs.750 Crore from NCDs issuance in ITNL on March 31 at a very competitive market rate of around 9.5% which has been used to retire some of the costly debts in SPVs and infused that debt in SPV which has led to a reduction in the cost of borrowing at the group level significantly.Received all the necessary approvals and are hoping to complete the entire InVIT transaction in the quarter one of this year.
  • Issued NCDs and term loans for HREL which was around Rs. 715 Crores, MBEL (toll project) which is Rs. 1712 Crores and JRPICL of around Rs. 1730 Crores. All three projects have almost around 200-basis or little more of interest saving
  • Raised Rs. 750 crores by NCDs.


  • Order book adjusted to stake, stands at around Rs. 11,810 Crores for BOT, Rs. 541 Crores for EPC and international projects of around $257 million
  • Completed refinancing in three of our projects.
  • Out of total 35 projects, 30 road projects and 5 Non-road projects. Of the 30 road projects, 23 road projects are operational. The Total length of all the road projects stands at around 14,016 lane kilometres.
  • Commissioned three projects during the quarter, Chenani Nashri Tunnel (CNTL) achieved Commercial Operations on March 8, 2017, Khed Sinnar on January 31, 2017 and Rail Project, Rapid Metro South Extension on March 31, 2017.
  • Seven projects under construction: ROB project in Gujarat and outer ring road stretch in Jharkhand both of these are annuity projects, Amaravati-Chikhli and Fagne-Songadh both in Maharashtra awarded by NHAI are BOT (Toll) projects.
  • Some of larger projects like CNTL, RMGSL, Pune Sholapur and Moradabad Bareilly have reached their completion
  • Chennai Metro project will be completed by 2020
  • Will receive Rs.1200 Crores from Barwa-Adda and Khed-Sinnar project.
  • Down selling in both Barwa-Adda and Khed-Sinnar have drawn down significant debt portion which led to unwinding some of the receivables locked up in these SPVs.
  • Once the GST is rolled out, there wil be a fair amount of negotiations s there may be  some corrective measures definitely on ground by July when GST rolls out, because this sort of integrated collections will need a redefinition and rescoping.
  • Refinancing four more projects, Jorbat Shillong, which is a complete annuity project, Pune Sholapur, which is a toll project, with two years of maturity, RIDCOR, Rajasthan toll roads project, finally CNTL, so around Rs.8000 Crores worth of refinance to be done in this year and each of these will bring around 250 to 300 basis points interest cost reduction. Overall basis, Rs.250 Crores and Rs.350 Crores of interest cost reduction to be achieved on a full year basis.This is only because of refinance, with projects maturing and going operationalthere will be constant readjustment of the rates and reduction in the interest cost
  • Construction will be a predominant part in coming days as many projects are still in pipeline