Ceinsys Tech Ltd Q4 FY2025 Concall Summary

Key Takeaways

• Revenue mix transformed in one year: Technology solutions surged 3.5x to ₹213 crore, now 51% of turnover vs 24% last year, while employee cost ratio improved 500 bps.
• Order book decline is definitional, not real: The ₹190 crore drop disappears when Allygrow contracts are added back; like-for-like order book is ₹1,327 crore, broadly in line with December.
• Vidarbha river-linking project is live but weather-sensitive: 88+ people deployed, aerial survey flying 150–175 sq km/day, but the late award pushes work into the rainy season, which may affect survey and soil testing.
• Leadership reset underway: A new CEO arrives by year-end, the outgoing CEO surrendered his ESOPs to the successor, and a US-focused CEO designate was appointed to drive international revenue.
• What to watch next quarter: Whether the two large bids aggregating >₹280 crore convert within the next month, Vidarbha Q1 revenue delivery against the earlier ~₹150 crore expectation, and progress on the two M&A targets.

Revenue Transformation

• Technology solutions became the majority business: Execution of technology solutions projects rose from ₹60 crore to ₹213 crore during FY25, a 3.5x increase, lifting its share of total turnover from 24% to 51% and reflecting a deliberate strategic pivot toward higher-value digital work.
• Employee efficiency improved sharply: Employee cost as a percentage of revenue declined to 30% from 35% the previous year, while turnover per employee rose to ₹0.33 crore from ₹0.23 crore, driven by operational efficiency initiatives that enabled handling higher volumes more effectively.
• Geospatial growth came from water, IoT and enterprise: The geospatial business saw strong growth driven by increased focus on water projects, IoT deployments and enterprise solutions.
• Margin profile favors the mix shift: Technology solutions carry better margins than geospatial services overall, and management's stated focus is to keep increasing the technology share, which should support margin improvement as the mix evolves.
• Quarterly margin swings are milestone-driven: Margin compression in technology this quarter came from one or two projects where a milestone achieved had lower EBITDA margins; geospatial margins expanded in the same quarter, a reversal from the prior period, both driven by the timing of milestone-based revenue recognition. Annual numbers give a better sense of the underlying trend.

Prashant Kamat: "The technology and geospatial is not divided at a project level, it cannot be. Each project will have a portion of a technology element and a portion of a geospatial element."

Order Book & Bid Pipeline

• The headline decline is a classification change: The order book fell from ₹1,390 crore in December to ₹1,197 crore in March because the earlier figure included Allygrow annual contracts of ~₹130 crore while the new figure excludes them. On a like-for-like basis, adding Allygrow back gives ₹1,327 crore, broadly in line with the prior quarter.
• Mobility order book sits outside the reported figure: The ₹1,197 crore order book only captures geospatial work; the mobility business carries a separate order book of ~₹140 crore that was never included in the consolidated number discussed on prior calls.
• Consumption exceeded new additions this quarter: New orders added during Q4 were less than the ~₹190 crore of order book consumed, but management stated this is not an indication of a dearth of opportunities.
• Two large bids could convert soon: The current bid pipeline stands at ~₹355 crore, with two large projects aggregating more than ₹280 crore expected to be decided within the next month or so.
• Quarterly order book target is ₹300–₹400 crore: Management's typical target is to achieve ₹300–₹400 crore worth of order book every quarter, depending on available opportunities.
• Target states are the usual geospatial spenders: Maharashtra, Uttar Pradesh, Madhya Pradesh, Gujarat, Rajasthan, and other states with capability and vision for geospatial platforms covering water, 3D city and urban development.

Kaushik Khona: "So in the order book, we have, earlier, when we talked about the order book, we are talking of only the geospatial order book. And we have order book around INR 140 crore for the mobility business, which we had not counted even at the time of which was mentioned during the call."

Vidarbha River-Linking Project

• Work commenced February 1 after a two-month government delay: The letter of allotment was granted on January 13, following an award announced in November but held up by formalities; work began from February 1 with 88+ people deployed.
• Aerial survey progressing at pace: The first link of aerial lidar survey is mostly completed, with flying at 150–175 sq km per day; flying is expected to be completed by May 31 and data processing by June 30, with progress tracking to the project charter with no delay so far.
• Rainy season is the wildcard: Because the order was received late, the approaching rainy season may affect survey and soil testing work, a risk management has discussed with the government and flagged as a caution.
• Q1 revenue hopes are tempered: An earlier forecast of ~₹150 crore in the first quarter was referenced, and management hopes to achieve it, but declined to give futuristic numbers given the weather risk and will update at the next investor call.

Prashant Kamat: "Because we have received order late, there are also and we have discussed this with government, there are also possibilities of compounding delays because with the rainy season coming up, the work will be affected in terms of survey and soil testing and all of that for API. Just a word of caution there."

Receivables & Unbilled Revenue

• Unbilled revenue dominates the receivables balance: Of the ₹253 crore trade receivables, ₹135 crore is unbilled revenue representing execution not yet billable due to milestone timing; debtors have actually come down versus the previous year, and the debtor-to-turnover ratio is in line or better year-on-year.
• Collections are flowing: ₹88 crore of total receivables was received in March; no overdue amounts from the Maharashtra government as of March 31; further amounts were received in April and May.
• Unbilled revenue is structural, not a problem: The unbilled pool comprises 7–8 major projects; the majority will be rectified before Q2 or Q3, but as the company grows, new projects and milestones will create new unbilled revenue, so the absolute level may not decline even as older amounts convert.

Leadership & Governance Changes

• New CEO arriving by year-end: A new CEO is expected by the end of this year, and the outgoing CEO Prashant Kamat voluntarily surrendered approximately 2 lakh ESOPs because it would be unfair for an exiting CEO to retain them when a successor is coming.
• CEO designate appointed for international push: Mr. K.P. Surej, earlier CEO of the wholly owned US subsidiary TA, was appointed as Additional Director and CEO designate, a move management described as futuristic to grow international revenue and establish leadership presence in those markets.
• Outgoing CEO's role is undefined: Prashant Kamat has not formally defined his post-transition role; he will stay as an advisor and likely remain on the Board, but the decision rests with the incoming CEO.
• Board strengthened with US deal-making experience: Mr. Vanish Moorthy was appointed as Additional Director, bringing over 25 years of experience leading major outsourcing deals for Fortune 500 companies and serving as a strategic consultant through Prime Enter Incorporated.
• Allygrow amalgamation completed: The 100% subsidiary was amalgamated with effect from April 1, 2024 per an NCLT order; it was already consolidated, so the merger streamlines reporting without changing the financial picture.

Prashant Kamat: "Rightfully, they should go to the new CEO, not the CEO which is exiting. That's why you saw those all the notes and the ESOP numbers."

Growth Levers & Strategic Bets

• International technology solutions push is underway: One large contract has already been signed in the international market for technology solutions, with small execution started; multiple initiatives are in motion to take technology solutions to international markets, and the pipeline and contracts are expected to expand during FY26, with numbers becoming visible as the year unfolds.
• US business development investment scaled: The company added resources for business development in the US, investing ~₹12 crore expensed in the P&L for FY25.
• Two M&A targets in advanced diligence: Due diligence and procedures are expected to be completed by April–May, with headway expected in the next one or two months.
• In-house AI/ML already improving geospatial margins: AI/ML development for geospatial is already being used internally to reduce effort and improve margins; at some point, separate revenue segmentation from AI may be reported, but management considers that premature now.
• Data center plans deprioritized: The data center opportunity is being put on the back burner; management does not want to defocus from existing segments where more orders and business are being pursued.
• Jal Jeevan Mission budget reduction is not a threat: The reported reduction is relative to a proposed allocation that was 4x the prior year; even if the company secured every available opportunity, it would be hardly 7–8% of the JJM budget, so management sees no reason for concern.

Prashant Kamat: "The fact that we want to grow international revenue, we need a presence in those markets and we need to show those leadership moments in those markets."

Guidance & Commitments

Key Metrics