#SPMLINFRA #SPML - Review of SPML Infra's Q4 and FY'25 earnings call transcript. They are pivoting effectively and show significant future potential.
SPML Infra operates in two core sectors: water and power infrastructure, both critical national priorities with substantial government capital expenditure of almost Rs. 12 lakh crore. Historically, their business leaned heavily towards water (75-95%), but they are strategically rebalancing to a 50-50 mix between water and power.
Key highlights from the call:
- Strong Market Position & Strategic Focus: The water sector benefits from the extended Jal Jeevan Mission until 2028, a long-term opportunity. The power sector is experiencing tremendous growth, especially in Battery Energy Storage Systems (BESS), driven by India’s ambitious target of 500 GW renewable power by 2030 and a mandate for 10% BESS facilities with renewable projects.
- Innovative BESS Venture: SPML Infra is setting up a BESS production plant in Maharashtra, with land already allotted. This facility, requiring a CAPEX of Rs. 175 crore (first phase Rs. 125 crore fully equity-funded by promoters), is expected to be operational by March 2026 or early FY 2026-27. They have an exclusive agreement with US-based Energy Vault for technology transfer, providing a crucial competitive edge with superior B-Vault technology over Chinese alternatives. This manufacturing unit could generate Rs. 1,000-1,500 crore in revenue at full capacity.
- Robust Order Book & Profitability Focus: As of 31st March 2025, their order book stands at Rs. 3,000 crore, with an additional Rs. 2,571 crore in L1 orders expected to convert in Q1 and Q2 FY'26. Importantly, management is now focused on bottom-line growth and high-margin projects, targeting minimum 10% EBITDA margins on all new orders.
- Improved Financial Health & Outlook: For FY'25, total turnover was Rs. 824 crore, EBITDA grew 26% to Rs. 98 crore, and PAT increased 1.5x to Rs. 49 crore. They have significantly repaid debt to NARCL (Rs. 290 crore out of Rs. 700 crore), with outstanding balance of Rs. 410 crore, and confidence in full repayment supported by existing and prospective arbitration awards (Rs. 636 crore in hand, Rs. 4,500 crore in claims). The company is targeting a 50% growth in both topline and bottom-line for FY'26.
Given their strategic shift, technological advantage, healthy order book, and improving financial discipline, SPML Infra is well-positioned for substantial growth.
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