This article first appeared on GuruFocus .
Release Date: November 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Hindustan Construction Co Ltd ( BOM:500185 ) is celebrating its centenary year, marking 100 years of operations with significant contributions to India's infrastructure.
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The company has a diversified order book valued at 13,152 crores, spread across various sectors and geographies.
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Hindustan Construction Co Ltd ( BOM:500185 ) has secured new orders worth 2,770 crores, including projects like the Patna Metro and Hindalco Group's aluminum smelter expansion.
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The company is actively working on reducing its debt, with significant prepayments made and more planned, alongside a rights issue aimed at further deleveraging.
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Operational progress is strong, with key projects like the Mumbai Metro and VishnugarPikoti hydroelectric project advancing well.
Negative Points
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The company's standalone turnover decreased to 958 crores from 1,200 crores the previous year, attributed to project completions and a transition to new orders.
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There is a slowdown in order intake, with some bids under evaluation and others being re-tendered, affecting immediate growth prospects.
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The rights issue, while aimed at deleveraging, poses a risk if undersubscribed, although promoters have committed to ensuring its success.
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Interest expenses remain a concern, though efforts are underway to reduce them through debt prepayment and rights issue proceeds.
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The company's order book growth target of 20-25% CAGR over the next few years is ambitious, given the current challenges in order acquisition and execution.
Q & A Highlights
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Warning! GuruFocus has detected 4 Warning Signs with BOM:500185.
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Q: If the rights issue is undersubscribed, are the promoters planning to underwrite the undersubscribed portion? A: Yes, the promoters have taken responsibility to ensure the success of the rights issue and will cover any undersubscription. (Unidentified_2)
Q: Is there any progress on the government's plan for new nuclear power plants? A: Talks are ongoing, but significant progress on the ground is yet to be seen. HCC has historically built around 60% of India's nuclear capacity and is involved in a few ongoing projects. (Unidentified_5)
Q: When do you expect the interest amount to come down for better profitability? A: Interest expenses have already started decreasing due to deleveraging efforts. By March 31st, we expect a further reduction of 1,000 to 1,200 crores in debt, which will significantly lower interest expenses. (Unidentified_2 and Unidentified_6)
Q: What is the status of the L1 position and the conversion of orders? A: The current L1 position is 840 crores, ongoing from a hydropower project. Some previous L1 positions are under client decision-making processes, and we have been conservative in reporting these. (Unidentified_5 and Unidentified_6)
Q: What is the company's strategy regarding the order book and future growth? A: HCC targets an order intake of over 10,000 crores for the year. The company is focusing on high-margin projects and maintaining fiscal discipline. The goal is to double turnover in the next three years, with a focus on larger projects. (Unidentified_5 and Unidentified_6)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
