Kore Digital Limited (KDL) Earnings Call Transcript
June 12, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the Kore Digital Limited Q4 FY '25 Earnings Conference Call hosted by Kirin Advisors Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ganesh from Kirin Advisors Private Limited. Thank you, and over to you, sir.
Yes. Good evening, everyone. On behalf of Kirin Advisors, I welcome you all to the conference call of Kore Digital Limited. From the management team, we have Mr. Ravindra Doshi, Managing Director of the company. Please note that this call is scheduled to run approximately 35 to 40 minutes. If you are unable to answer any questions during the call, please don't hesitate to reach out to us at research@kiranadvisors.com. We will be highly coordinate with the management team to arrange further discussions. And with that, now I hand over the call to Mr. Ravindra Doshi. Over to you, sir.
Yes. I welcome all investors. And specifically, thanks to my team, they have achieved a very high and prestigious target. And this is in a row second year, we have done well, and we hope we will keep doing well. Now before we start, I want to address a couple of things. First is our lead manager, First Overseas Limited was investigated by SEBI and all, but we have not received any communication regarding First Overseas till date. So we can easily assume that First Overseas matter is not connected to us. And secondly, last quarter, we have shown some negative growth, which is because of we have written off certain bad debts, which were running on the balance sheet since the last 5 years. And most of the business is segregated as per business to different subsidiaries. We have reported the same thing. So now Mr. Ganesh can take all the questions.
[Operator Instructions] The first question is from the line of Akash Israni, an individual investor.
[Foreign Language] Congratulations on the great set of numbers. And I just wanted to check with you in terms of [Foreign Language] for 2026. FY '25 has been very good. 2026, we were looking at somewhere around INR 800 crores to INR 1,000 crores, and we are good in terms of moving forward in terms of those revenue projections. Is that correct?
That is right. Slightly, there is a delay in opening of Samruddhi Highway. So we are 6 months behind the schedule. But I am still hopeful that we have many other things in pipeline. And with that, we will be able to achieve the target because all these wars and geopolitical problems, slight plus/minus INR 100 crores, INR 150 crores is possible.
Okay. That's not a big issue. In fact, that was a big issue like 2 years ago, we were at that...
Still we are sure we will double the revenue minimum.
Right, right. So I think 10% to 20% here and there is not a big issue. In fact, we're already growing by 100% or more than 100%. So in terms of the trajectory, I just wanted to check with you from a long-term perspective. How is going to be our trajectory from '26 to '27, right? I'm not talking about many years down the line, but just 1 year down the line, how would be our trajectory? If [Technical Difficulty] in '26 -- and then we would start getting more and more revenue as we [ lead up ] more and more, right? So would we still grow by...
At least next 5 years, yes. We are doing lots of things other than pure telecom, we are doing many things, which will bring you fantastic revenue.
[Foreign Language].
[Foreign Language]. And that is where if we are able to succeed, INR 10,000 crores is just peanuts and we are in pipeline. We are doing some products in next 2, 3 days, it will be sent for approval. And because we are using Deep-Tech metal 3D printing, precision is not an issue. Composition is not an issue. [Foreign Language]. Now because it is defense, I cannot go into detail. [Foreign Language]. But we are in pipeline, and we are very much there. [Foreign Language]. So we have 4, 5 tenders coming for the telecom and roads. So that is there. Plus this defense development is there with the recent Pakistan war. Procurement has increased actually tremendously. And there is some opportunity. We have got very good associations, very senior retired officers with us, very senior, the ones -- those who have worked on these projects, all 5 technologies which were projected as a reason for our winning. Our new advisers and consultants have worked on it physically. So this is something really, really big. We have to keep fingers crossed because it is different. Once it comes through, it will be announced. So projection we can do very safely. I can tell you that INR 600 crores to INR 700 crores is guaranteed. Rest is on luck because if geopolitical and all other things are proper, then we will reach the projection. So I think I have answered.
Yes, sir. In fact [Foreign Language] the core business and I completely appreciate you being open and candid about the defense part. But if you come back to the core business, our core business [Foreign Language] INR 600 crores, INR 700 [Foreign Language] in this core business itself, are there any verticals which will help us expand further? As you said, we are looking at growing 100% year-on-year after that as well. So in core verticals [Foreign Language] achieve this?
Other than core business, we are just doing the Defense one.
[Foreign Language] which will make us to pay [ INR 1,400 ] next year after that and then [ INR 3,000 ] after that, right? [Foreign Language].
I've got the question. I'll answer. We have 3, 4 big tenders coming for the core business, Telecom and Construction. That is core business as of now. Entire revenue, everything is coming from that only. So Samruddhi is there, Samruddhi is going to give us INR 600 to INR 1,000 current year. But next year, there will be 2, 3 more Samruddhi in pipeline. We have those routes already tendered out and construction has started. Mumbai-Delhi is one. So those are possibilities and we have very strong presence with those government agencies. So I'm just telling you that I will be doing more. This is basic is always there with us. There is lots of expansion in team, lots of expansion in machinery, everything. So it is slightly slow. It may not go as per my investors' expectation every year, 100%. But yes, for next 2 years, 100%, I can guarantee. After that, it may be 50%, but 50% is also big.
It is, it is, certainly.
Because geopolitics is one thing, political conditions in India is one, then because as of now, it is running only in Maharashtra, but then once I touch Mumbai-Delhi, then it will run across 3, 4 states. And those -- every state has their own unique issues, positives and negatives both. So, execution speed as of now, I'm not able to predict, but I don't foresee any serious problems, which will decline our performance.
The next question is from the line of Hardik Gandhi from HMG Share and Securities.
Congratulations on a set of numbers. So I just saw that we had made certain -- we started a few subsidiaries, companies and everything. I just wanted to know what was the purpose for that? And what are we going to use them for?
Let me explain. I have already explained in previous 2 con calls, but still no issue. If you have a question, I'll answer it. See, basically, our business runs in 2, 3 different models. One is, we only take the order, complete it and deliver, forget. Second is we take permissions from government, construct and sell it off. And third is we take the permission, we own the project and we take revenue long term, 15 to 20, 25 years we get paid. So that is the lease model. So these 3 models are always confused by all authorities, not one. So, to avoid confusion and ease of accounting and explanation, we have done this. So 3 parts are there, 3 parts are done. One more subsidiary is coming that will be handling the Defense production, it is in pipeline. By end of year, you will see -- March, you will see the results from that also.
Correct, sir. Sir, the second question is regarding our investment in fixed assets. I think so you spent approximately INR 55 crores to INR 60 crores in new equipment or -- so just wanted to know what was the -- did we buy new machinery? Did we invest in the Defense thing or where...
No, it is for purchase of machines and purchase of right of way. Because my network is my asset. And there was a huge objection from our investors that you are not capitalizing the asset. So that is why we have started. We have learned and we have started. So machineries are -- yes, definitely, we have bought the machine. Without machines, we cannot do this kind of growth.
Correct. Sir, one last thing, sorry, but I think so from the last 3 con calls quarters, we've been hearing that we will be getting new projects. We've also applied for tender and we are [sure] to get them. I do understand our majority growth in the revenue is coming from contracting for other contractors, correct? But other than Samruddhi Highway, we don't have any other major contracts. So when can we expect some concrete things on this front? Or are we going to continue to be a subcontractor for other projects?
December.
Okay. Understood, sir. And this will be again similar to...
This is a lean time for our business because most of the construction activities are not permitted during the monsoon. So this is the time when we participate in tenders and hopefully, we'll be successful. We are participating in 5 tenders, at least 1 will be successful. So that will bring additional and future...
So the quantum will be similar to Samruddhi Highway or smaller or?
No, no. Most of them are smaller. Samruddhi is a unique project all over India. If they launch another project like this, it will take 4 to 5 years for me to enter because unless the entire project is complete, we cannot lay telecom line. Yes, we will get...
Just one last bifurcation of the INR 300 crores, how much is from the telecom and how much is the road EPC business?
Sir, as a typical, normally telecom will be about 90% and rest will be from roads. About 25% to 30% only comes from telecom because telecom is something -- unless I complete it, it will not be sold. I'll give you an example from Samruddhi. At least I have to connect Mumbai and Shirdi to make first money from it. So it is -- the telecom is something we construct, we complete and then only we sell. And then only money also...
How much more [ time ] is spending for -- do you think you will connect Mumbai to Shirdi?
Sir, by December only.
But given the monsoon and everything, are we...
No, no. already stop work notice has come. So [indiscernible], we have our contracts and everything, but then the speed decreases greatly. So that is there, but then we will have money in pocket by December for this stretch.
The next question is from the line of Krishnendu Banerjee, an individual investor.
I'm from Kolkata. And for a long time, I am following you. And one day, I called you also. But my question is one that the trade payable is about INR 100 crores above. So that trade payable from where it is coming? Because I'm asking this question because day by day trade receivable is increasing. That's why...
I'm not able to understand you. Can you repeat it, please?
Your trade receivable is day by day increasing. So why it is affecting? And another question is how many days...
See, basically, when work is increasing, assets are increasing, then debt are also increasing. There is nothing new about it. And then this is 0 debt company. So funding is done from debt only, from my vendors only.
Okay. But one more question is, sir, Samruddhi Highway project, how much days will be there to complete and get the revenue in this financial year?
No. It will take 2 years.
It will take 2 years. How much will -- yes, but last con call you told that something new is coming and you just give a suspense. I cannot reveal like that only in March or May end. [Foreign Language].
You have to understand the Samruddhi as a project first. My basic work to do the trenching, lay the [dirt], do the banking and all earth work and other things. Apart from that, this project is having permission for telecom poles all across 700 kilometers. So -- and my company is not doing that. So for that, we have joined hands with Crest Digital. So they will be doing it. So that is the news, which I have already given.
Okay. But you are telling that...
There is a company specializing in small cell and IBS, in-building system. Those things too we have joined hands with them for getting it done.
Okay, sir. Okay, sir. Understood, sir. Sir, one more thing. I'm just confirming that you tell that INR 600 crores to INR 700 crores in this revenue will come in this financial year, correct?
Yes. You're right.
But last 2 to 3 con call, you were just predicting that INR 1,000 crores can be touched that will be now how much percentage you will give for monsoon, early monsoon and all?
Sir, the problem is not with the early monsoon or anything. The problem is with the opening of Samruddhi Highway, which is delayed by 6 months. So my entire project is delayed by 6 months. I have reduced my projection only for that period, which is overflow.
As far as Ind-Pakistan war, it's delayed.
Because government has delayed the opening.
Okay, sir. Understood, sir.
Yes. Because see, you have to understand, [Banarjee], the telecom lines cannot be laid unless road start because if construction is going on, they will destroy my line. So once construction stops and road starts, then only my line can be laid in that sector. So 76 kilometers, out of that 10 we have completed and 8 is a tunnel. So, 18 kilometers are taken care. Balance, we'll have to push through and connect it to the Mumbai -- Mumbai lines. And only then this is useful. Otherwise, it is useless.
So, it will get in the next financial year? So it is like...
Some overflow will be there. That is what I'm projecting.
Okay. So now you just follow that INR 600 crores and INR 700 crores in this financial year...
INR 600 crores, INR 70 crores I'm comfortable. I have no issue with that. I can commit.
Okay. Actually sir, last 2, 3 con call, I'm just surprised that this company is growing too much, but now only by -- unfortunately, it's happened. Okay.
Sir, it is very painful to grow at this speed. We are getting new proper staffing, doing that, and then multiple accounting, consolidating them and everything, and we are not accounting type. We are the technical type. So it is very difficult for me and my team. Because I take one accountant and he tells me this is the problem, then I have to ask the accountant, what is this. So sometime...
One more thing, sorry for disturb. One more thing that you are telling that for Defense sector. Now Defense is booming, on booming, okay, fine. And some countries wants to export. So, what will be your future prediction or your vision in Defense?
I'd love to do INR 100,000 crores in Defense. When I say I mean it, please take it. It will not be completely in this company because there are so many other things. We will be entering into some very good strategic alliances with international manufacturers and make it compliant to make in India and all those things. But everything is just -- what should I say, in a planning stage. Concrete, once it is there, then it will come. Once my...
Okay. It can take the orders and all. When it will come? Which financial year?
This year, you will see some orders. This financial year.
From which month? Last February -- March?
[Foreign Language]. Prediction is very difficult. It will be there. But I know we have a breakthrough and we are in very advanced stage of producing the required spares. So let us keep fingers crossed. By this month and also, you will get some news if it is there. But we don't know this Defense is very, very difficult predicting anything. [Foreign Language] So we'll not do that. But yes, we are in a very advanced stage.
The next question is from the line of Pratik Bagadia, an individual investor.
Congratulations on great set of numbers. Sir, my question is what kind of margins are we talking about for the current financial year?
About 8% to 10%.
PAT margins?
Yes.
Okay. Fantastic. And sir, my second question is, in case if we get the Defense clearance very soon, will we be requiring any CapEx needs?
Sir, we will do that at that time. Yes, we will be needing. But right now, I'm not flooded with cash and immediate, there is no need. Once I get the Defense project, along with that, I will get INR 100 crores funding also [Foreign Language] . On top of that, if I need anything, definitely, market is there, my investors are there. I'll come to you.
Fantastic, sir. I mean that is something that we would like to hear from you that we are getting in a very growth -- high-growth trajectory. So my last question is, in the beginning of the con call, you mentioned about some bad debts. So are we done with the bad debts? Or are you expecting a few more?
This is a line where we keep getting small, small, small things, and we have to keep writing it out, because mostly, we deal with the labor contractors of different, different, different technical skill level. But yes, they are labor contractors. And at times, advance is given and things get -- don't come back. So yes, this is part of this. It is part of business.
So approximately what percentage of revenue would that be?
About half.
Sorry?
0.5.
0.5%. Okay, that's very low.
The next question is from the line of Rajesh Pathak from Finserv Financial.
[Foreign Language] Congratulations to everybody on the call. [Foreign Language].
[Foreign Language] Third, RailTel. RailTel is on. And the fourth is Crest Digitel. Crest Digitel is in pipeline, [Foreign Language] we are surveying [Foreign Language].
Mumbai Metro?
Mumbai Metro, we are not successful in tender. [Foreign Language] And all telecom companies have started creating lots and lots of fuss, [Foreign Language]. So that is as of now is not in pipeline.
[Foreign Language]
[Foreign Language] .
The next question is from the line of Ayan Das Gupta, an individual investor.
So first of all, congratulations for the great results. So the question that I have is like nothing specific to your operations or anything because all of those things are outstanding. I just wanted to know like do you have any legal team in action because I have a few queries because on online in some online portals like Twitter and all these places. There are certain group of like market manipulators who are calling your company completely fraud and they're giving very wrong baseless allegations. So what is happening is amongst the investor community, it is creating panic and people are very reluctant to invest in Kore Digital? So do you have a legal team in place? And will you be willing to take legal actions against this like financial miscreants giving allegations against your company?
[Mr. Das Gupta], my company is rooted in earth, okay? My network is normally 1 meter, 1.5 meters below the surface. And once I put the network, that stays there for 25 years. I have -- earlier also, I have actually asked my investors. Please come and see.
Obviously, sir. Like people like us who are invested, so we have no problem...
[Foreign Language] It is better to ignore. Running after them is not and then they specifically don't use exact words [Foreign Language]. It is not that my legal team has not looked into. [Foreign Language]. I know one company, I don't remember the name. That is also in Defense production and very high-end company. I know the promoters personally because we are in the similar field. They talk 1,000 things wrong about them, you don't even know what is the project. You become analysts, you claim to be Hindenberg and all b***. And what they are, they are just trouble maker. They take some money from one of the competitor and they start. And there are some people who could not make money. They wanted to manipulate, they could not do. So they keep doing it. What is wrong? Sir, earlier only Mr. Pradeep was there, chartered accountant, right? It is very simple. If you want to check whether the company is right or not, the names are given, subsidiaries and company's name, company's GST number and things are there, you can go and check. Purchase and sell whether they are right or not. It is a matter of a few minutes. Any chartered accountant with good contact can see through all the data, what I am claiming and whether it is same or not, whether tax is paid or not. It is very, very easy to verify. Investors, if they believe, then I would like to have a better investor only. Sorry. I did not say that.
Means actually they are not existing investor. We people have no issue. That's why we have...
They have no shares of company, nothing.
These people who are giving these allegations, they don't hold any stock of Kore Digital. But the thing is they want other people also not to invest, and that is why on online platforms, they are writing a lot of negative things. They're calling you fraud, they're calling the entire company. So that is why I was thinking just to put this to rest, like if your company can take little legal action or maybe send a notice?
See, when they did it first time, I tried, I sent a notice. My cyber crime had actually issued them someone, person simply ran away. And X account was in the name of some peon. Actually team went from here to Delhi. But that guy said, I don't know anything. And it is in his ID and other things used. Now these kind of people, if we go after them, then we'll be wasting a lot of time. But this growth is very difficult for us. And ignoring is the best thing. I was also very, very -- I mean highly annoyed, wanted to take action, then some senior people from the market only told me, Doshi ji, don't do that. After time is over, these people will vanish simply. And this thing is going on.
You can take action if you want. And apart from that, like the results are great. And the closing cash balance [Foreign Language] last financial year at INR 40 crores. And this year, it has come down to INR 2 crores. So do you have any capital raise plans or something like any QIP or any preferential?
In future?
This financial year...
Right. No, right now, it's not needed. On March, we did not get the expected payment, but we are flooded with cash as of now. I have just -- Vodafone has paid me INR 20 crores. We will do definitely, but we should have utilization. What I'll do with funds? [Foreign Language] Is not the right thing. [Foreign Language] And they don't like to keep idle money. So I will come. And price is also not good. Let price improve. Get some new projects, whatever is in pipeline, we will definitely come.
The next question is from the line of Abhishek Sahu.
[Foreign Language] Everything was smooth.
[Foreign Language]
[Foreign Language]
I am more interested, more keen on growing in Defense because it is a huge market. And what we are doing is unique. Once orders start, it will be a flood gate. Next 10 years, we will have no time even to breathe, PA condition. Just wait for the break to [Foreign Language] And I'll be posting in the next 4, 5 days. [Foreign Language], which we are producing in IIT Mumbai. I will be posting video soon. [Foreign Language]
Sir, just one last suggestion. I think a lot of companies have started doing this [Foreign Language] if you can share photos [Foreign Language] you also shared updates on...
[Foreign Language] at times my team doesn't get time to eat entire day. And Samruddhi is such a horrible place [Foreign Language] Everything has to be carried. [Foreign Language] I'll see that my videos are posted.
Very nice, sir. And final thing, I just hope Chaitanya will join you as your next of succession planning....
I've only one son. He has no choice. I have no choice.
Ladies and gentlemen, due to time constraints, this was the last question for today's conference call. I now hand the conference over to Mr. Ganesh for closing comments.
Thank you, everyone, for joining the conference call of Kore Digital Limited. If you have any queries, you can write us at research@kirinadvisors.com. Once again, thank you, everyone, for joining the conference.
Thank you, everyone. Bye. Have a good time.
Thank you. On behalf of Kirin Advisors Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
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