Ahluwalia Contracts (India) Limited (532811) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '25 Earnings Conference Call of Ahluwalia Contracts India Limited hosted by AMBIT Capital. [Operator Instructions] I now hand the conference over to Ms. Margaret Mishra from AMBIT Capital. Thank you, and over to you, ma'am.

Good afternoon. On behalf of AMBIT Capital, I thank the management of Ahluwalia Contracts India Limited for the opportunity to host your Q3 FY '25 Earnings Call. We have the following members of management with us today. Mr. Shobhit Uppal, Deputy Managing Director; Mr. Vikas Ahluwalia, Director; and Mr. Satbeer Singh, Chief Financial Officer. I will now hand over the call to the management, Mr. Shobhit Uppal, Deputy Managing Director to walk us through the quarter. Thank you all, and over to you, sir.

Thank you, Margaret. Good evening, everybody. Ahluwalia Contracts India Limited, an EPC company, has announced the financial results for Q3 FY '25. During Q3 FY '25, the company has achieved a turnover of INR 951.95 crores and a PAT of INR 49.39 crores in comparison to a turnover of INR 1,026.47 crores and a PAT of INR 70.66 crores during Q3 FY '24. The company has registered a negative growth of 7.26% and 30.10% in turnover and PAT, respectively, during Q3 FY '25 in comparison to the corresponding quarter Q3 FY '24. EPS of the company for Q3 FY '25 is INR 7.37 as compared to INR 10.55 in Q3 FY '24. During Q3 FY '25, the company's EBITDA margin is 8.86% as compared to 10.90% and PAT margin of 5.11% as compared to 6.82% in the corresponding period of the last financial year. During the 9 months of FY '25, the company has achieved a turnover of INR 2,882.79 crores and a PAT of INR 118.35 crores in comparison to a turnover of INR 2,691.64 crores and a PAT of INR 175.69 crores during the corresponding 9 months of FY '24. EPS of the company for 9 months FY '25 is INR 17.67 as compared to INR 26.23 during the 9 months of FY '24. During 9 months FY '25, the company's EBITDA margin is 7.57% as compared to 10.56% and PAT margin of 4.05% as compared to 6.47% in the corresponding period. Net order book of the company as on 31/12/2024 is INR 16,258.44 crores to be executed in the next 3 years. Total order inflow during FY '25 is INR 7,794.37 crores. We are ready to take questions now. Thank you.

[Operator Instructions] the first question is from the line of Shravan Shah from Dolat Capital.

Sir, a couple of questions. So obviously, first, on guidance front. So 9 months, we have done 7.1% revenue growth. So we were looking at a 15% kind of a number for this year. So how one can look at the full year or maybe the fourth quarter, if you can help us how one can look at the fourth quarter growth and also at the same time for next financial year, how one can look at -- because we were looking at 20%, can we now start looking at 25% kind of a number?

Shravan, while the order book continues to be very healthy as far as this quarter and this financial year is concerned, we've been hit as along with our other peers by the NGT ban in Delhi, 33% of our order book now comes from the NCR region. And what I had mentioned in my last call also that we had expected that the NGT ban would hit us, but we had not expected that they would hit us so badly. That is the reason for sort of degrowth. I had said that we would -- I've given a guidance of about 10% growth. We should be around that -- we would be about 8.5%, 9%. Fourth quarter is always the best quarter in terms of performance. As far as the guidance for the next year is concerned, it would be about 15%.

Sir, I understand that this quarter or this year is a lower number. But next year, I think last time we have talked about close to [ 24-odd ] percent. And now we are seeing 15%. So are we seeing a slowdown in the execution or the other big projects still have not picked up as expected?

In fact, we feel -- and this is -- I'm reiterating what I said last time that next year, we would be 15% plus. Order book is healthy, and the slow-moving orders also are behind us now or our larger projects like TSMT, the design issues should be behind us by the end of this last quarter. And from April, we should be logging a steady turnover even in some of our larger projects. So I think we are looking quite good to have not only a 15% plus growth and also a double-digit margin, what I had projected last time, but that will happen in FY '26.

Yes. So coming to the margins, so in the fourth quarter also, can we look at the double-digit kind of a margin?

Fourth quarter, we are expecting growth in the margin. But we must keep in mind that January also has been badly hit on account of NGT. It is only now that the work has started in real earnest in February. In fact, the ban got lifted around the 3rd or the 4th of February. So the first month of the last quarter has also been affected, but the margins will definitely be better. And we feel that the top line at the end of the year would have grown by about 8.5%, 9%.

So next year also, on the max side, we are looking at 10%. Are we -- is there a possibility that we can even cross 10.5% cost or maybe close to 11%. Is that a possibility?

We may. If you compare our results, if you compare the quarter-on-quarter results of Ahluwalia with our peers, if you leave L&T aside, we are the only company other than Larsen & Toubro, where our EBITDA margin has grown quarter-on-quarter. We've grown at 15%, whereas in most of the other construction companies, there has been a degrowth in the EBITDA margin. Our net profit has grown by 28%, right? So we are hopeful that the last quarter will be good. And next year, our margins should increase.

Got it. And on the -- are we L1 in any of projects? And in the fourth quarter, how much more order inflow can we look at and for FY '26?

We've quoted for a few government projects and a few private projects. They are -- the government projects, the bids have yet not been opened. So we can't comment whether we are L1 or not L1 or where we stand. And we are actively negotiating with a couple of private sector clients for finalization. So yes, there will be some order inflows. I can't peg a number, but there will be some inflows in this quarter.

For next year?

So next year, our order inflow this year has been close to -- I think it stands at about INR 7,800 crores. So next year, we are looking at a similar number.

Got it. Lastly, for balance sheet numbers, if you can -- Satbeer Singh sir can help, inventory receivable, payable, gross debt, cash, retention money, mobilization advance and unbilled revenue.

Just cash position, INR 246 crores and bank balance is INR 489 crores. Retention, INR 351 crores. Mobilization INR 621 crores. Unbilled revenue, INR 572 crores. Inventory, INR 324 crores, including INR 36 crore real estate inventory. [indiscernible] of INR 772 crores and trade payables is INR 882 crores.

The next question is from the line of Mohit Kumar from ICICI Securities.

Sir, first question is what are the levers available to us to ensure that the margins will be case next year? Why am I asking this question? Because the NGT issue and the GRAP issue in Delhi will be a regular future now, right, every year?

Yes. So specifically talking about levers, I assume you're asking not for the industry per se, you're asking for us. Now as I said, some of our larger projects, CSMT being the bigger one or the biggest one, the design issues are now slowly getting behind us. And by the end of this quarter, we are seeing now that most of the approvals from the client would be in place. So we would be taking off as far our execution on that project is concerned. Secondly, most of our slow-moving projects would have finished by the end of this quarter. Thirdly, all the expenses, if you see -- if you do a deep dive on our numbers, our staff expenses are high. They've gone up to nearly 9% on account of the NGT ban and the slow-moving orders. But now when the projects will pick up, this number as a percentage will come down. What I'm trying to say is we are well stocked in terms of order book, we are well stocked in terms of staff and now the turnover will go up and the margins will increase. As regards NGT, now with BJP being the ruling party in the entire NCR, we are hoping that there would be measures, concrete measures put in place which would reduce the disturbance on account of NGT. While we don't expect it to go away, but this year was exceptionally bad in terms of the Supreme Court stepping in the work happening and stopping in fits and starts. We think that this would not be repeated next year. The industry is also coming together, making representations to the various governments. Now the government at the center and the state being the same, we are hopeful that the industry voices will be heard and the work may not be impeded as much during the period from October till January.

Understood, sir. My second question is, sir, is there a cost escalation because of NGT issue? Or is it purely the loss of revenue? And are there any recourse available for us in this contract?

Look, NGT, though it's been going on for the last few years, it's not something which had been taken very seriously by our clients or by the government authorities. It's only this year that the various stakeholders have started to sit together and try and find out ways and means to combat it. So some clients of ours have started compensating for the labor, which has been idle during this period, primarily from the point of view to prevent the labor from going back home. So these are some measures -- there are measures which various stakeholders are thinking of. That's why I said maybe before the winter season sets in next year, there would be more concrete and granular measures in place, which would help us combat this problem in a better fashion. But escalations, as far as this delay is concerned, other than the general escalation clause, there are no other specific escalation clauses.

The next question is from the line of Rajat from iThought PMS.

Sir, how is the labor availability now?

Labor continues to be in short supply. And that is a phenomena which is something that, again, as I said, the stakeholders have started to sit together and see how they can combat this. Maybe by more standardization, maybe by more mechanization. But it's not a problem that is going to go away in the short term. This is something which the government will have to look at. They will have to look at upskilling the labor. They will have to look at making this profession more attractive so that more people come in from their hometowns to work in the large cities, Tier 1 and Tier 2 cities. But it's a problem which is here to stay.

And sir, our labor cost is up a lot despite [indiscernible] I mean, is this labor shortage as well as idle labor, both put together? And is that the reason why our labor cost is up more than the revenue, right?

The primary reason for the labor cost being up, I wouldn't say it's labor shortage. The primary reason is on account of NGT. As I mentioned in my opening remarks and in answer to the first question that 33% of our order book is now in the NCR region, which has been very badly affected due to NGT. So the idle labor has also contributed to our labor percentage going up.

Sir, our finance cost is also up more than the -- basically as a percentage of sales has gone up.

So finance cost is -- it's not gone up quite a bit, but it's on account of the -- primarily on account of the mobilization advance, which is interest bearing. And again, due to one project, which is the CSMT, where the work has been very less and the mobilization recoveries consequently have also been less. So that has contributed to this minor uptick in the interest cost or the finance cost.

Sir, do you imagine next year again, our margins would take a hit because of again the [indiscernible]?

No, I did -- if you heard my answer to your predecessor's question, the margins -- we are very, very confident the margins will go up because, as I said, the slow-moving projects are behind us, our larger projects are now taking off and all the extra expenses that we had done in anticipation of these projects taking off. We don't see any addition to those expenses. And obviously, the NGT, we are hoping that period, October to January next year, would also be handled in a much better fashion by all the stakeholders, including the government.

And what is the cash flow from operations for the 9 months?

Sorry, come again?

Cash flow from operations for 9 months?

I think so that is not available right now. But that cash position I have told already, INR 246 crores and bank balances of INR 488 crores.

Broadly [indiscernible]. And in terms of the -- we are expecting -- I think in the last call, we said we are expecting -- for FY '26, we were expecting inflows of INR 5,000 crores to INR 6,000 crores. However, in today's call, you are saying there will be same level of inflow this year, which means we are in a way being more bullish on the next year. So what is driving that bullishness [indiscernible] you will [indiscernible]?

As I said, this year, we have had an inflow of about INR 7,800 crores and maybe a few hundred crores in the last quarter. And we think that this run rate should continue or this inflow run rate should continue in the next year because we don't see any slowdown on the private sector side. And government also, I guess, with the budget behind us and now the focus on the next round of elections, Bihar, where elections will be held in the end of this year, towards the end of this year, there's going to be a focus on infrastructure growth there, which we can see that. And since we are present there, we are present in Assam, we are seeing activity, the growth continuing. So we feel our order inflow would be on similar lines.

So you expect private mix to be substantially higher next year in the inflows compared to this year?

Yes. We hope to maintain -- or we are -- our plan is to strategically maintain an equitable distribution between the public and the private sector. This is what I've been mentioning for the last 3 investor calls, and we've got there. We are at about -- I think we have equally divided between the 2 sectors now. We would maintain a 50-50 ratio.

The next question is from the line of Amit Khetan from Laburnum Capital.

So my first question is -- our scale of individual projects have gone up over the last few years. And most of our projects are now like, at least the major ones, are over INR 1,000 crores. Just wanted to understand, do the larger projects come with better margins and/or working capital terms? Or would they be similar to the smaller projects?

That's an interesting question. Conventional logic says that the larger projects should come with better margins. And that's what -- but in the short term, the projects because not only -- because they're becoming larger, they are also becoming more complex. The time lines are getting shrunk. And the skill set or the skill levels in the labor force on which we continue to remain dependent to a large scale is dwindling. So it's a bit of a tightrope walk. In the long run, yes, the margins on the larger scale projects, we feel, would be higher. But in the short term, I think that will not be the case. That has not been the case, and that will not be the case going forward. The government, as I said earlier, being a major stakeholder in infrastructure development, will have to step in as far as the skill upgradation measures are concerned and standardization measures are concerned. Once that happens, then of course, the margins will be higher. Have I been able to answer your question?

Yes, yes. And working capital would be similar?

No. Working capital requirements are much more now because obviously, mechanization is much more -- the projects are becoming taller, as I said, more complex. More projects are now EPC projects. Even the private sector is trying to embrace the EPC model or trying to at least look at it. So mechanization costs are higher. Staffing costs are going higher as you can see from the numbers of our balance sheet in these 9 months. So yes, it's more working capital intensive which, again, in the long run, would make the entry barrier higher. So it may lead to -- it will lead to, not may, better margins for established larger players.

Understood, understood, understood. And secondly, we have a significant order book right now compared to the scale of our current revenues. As we scale up and execute these orders, what sort of organizational changes do you foresee that you will require?

The changes in the organization had already started. In fact, I have been continuously mentioning in all our investor calls that Ahluwalia is nimble footed and they had embarked on a -- or we had embarked on a digital transformation drive 3 to 4 years ago, which is helmed by our Director, Mr. Vikas Ahluwalia. And as a part of that exercise, we are now well into SAP implementation. We're going live in a month or so. And this comes with a slew of other measures where the company is now more data driven. There are more analytics. So this had been started 3 to 4 years ago. And going forward, we would be using AI also to look at various areas of operation. And the results are there for us to see now also. As I mentioned earlier, our profit and EBITDA margins have gone up as compared to the last quarter of this financial year. And then we are investing in training and upskilling of our existing staff. There is a succession planning being done for every level. New talent is being groomed. So these are some of the measures that we have undertaken.

Got it. Got it. And last question would be, what would be our fixed rate versus variable rate proportion? And related to that, in case of variable rate contracts, is labor also -- are there clauses for escalation of labor cost as well? Or is that only for material costs?

So there are different cost escalation formulae which are there in different contracts. In the government contracts, most of the contracts have the wholesale price index and the labor index -- minimum wage index based on which the escalation is paid. Almost all our government contracts, the escalation clause is there other than one project that we are executing for NBCC, which is a fixed price contract, which is also nearing completion. As far as the private contracts go, all volatile materials like cement, steel, raw materials like aggregate, sand, blocks, most of the private clients now have started putting in base rates, based on which the cost escalation or de-escalation is a pass-through to the client on a lot of -- maybe to put a ballpark figure, 50% of contracts, the labor escalation is also paid. 50% it is not paid. Private sector I'm talking about.

Got it. So it would be 100% for the government and 50% for private?

Yes. You can say that. But the volatile materials are covered.

Got it. Got it. And what would be our current mix of variable versus fixed in the order book?

13% [indiscernible].

So 87% variable and 13% fixed price.

The next question is from the line of Vaibhav Shah from JM Financial.

Sir, firstly, on the margin side. So we said that next year could be a double-digit margin. So could it be very closer to 10% or we can even expect somewhere around 10.5%, 11% as well?

I think it should exceed 10%.

Okay. And sir, secondly, for Q4, we have mentioned that the entire year growth would be somewhere around 9-odd percent. So it impacted around 15-odd percent growth in Q4. So what will lead to this uptick in the fourth quarter given that June -- Jan also has been impacted by NGT?

So what we have seen starting February, there has been a considerable upswing in our production across projects in NCR, right? And as I mentioned, some of the clients paid for us to hold our labor on site even when the projects were closed. So we could just hit the ground running on third or fourth of February when the NGT ban was lifted. So we are seeing that -- or we feel that if we extrapolate our work now in the first week of February or from third till 10, we feel that the revenue will go up considerably as compared to the last quarter, which would lead to a better margin.

So Q4 also would be not double-digit margin, it should be between 9% to 10%.

Should be, yes. It should be about 10%.

And sir, secondly, on the -- some few bigger projects. So when do we expect to start the work on Gems and Jewellery? Earlier, you were targeting somewhere around June.

Yes, we are expecting that they will give us a notice to proceed in the next 1 to 2 months.

So any ballpark?

I mentioned that starting the next financial year, work on Gems and Jewellery. Gems and Jewellery, the actual work on the ground will begin because we have to start designing also that will -- so maybe towards the end of first quarter, actual work on the ground will begin. But in April, work on CSMT will be going on in real earnest. We would be working on a number of buildings there parallelly. And it would be a substantial uptick on the monthly progress out of CSMT. Sorry, you said something?

Yes. So earlier, we were targeting closer to INR 300 crores of revenue for FY '25 from CSMT. So that looks a bit difficult given...

No, that will not happen. We are looking at anywhere between INR 80 crores to INR 100 crores. That is something which has set us back in terms of our revenue guidance for FY '25.

Sir, INR 80 crores to INR 100 crores in Q4, right?

Yes. No, no. In Q4, as far as CSMT is concerned -- in the quarter, about INR 80 crores to INR 100 crores in Q4.

And for FY '26?

FY '26, we are looking at about INR 600 to INR 700 crores -- about INR 750 crores.

And a similar figure for Gems and Jewellery Park for '26 and '27, at least for '26?

Gems and Jewellery Park should be lesser. As I said, the first 2 to 3 months would go in designing and approvals. And then it will take off. So maybe it will be about INR 500 crores.

So do we expect a similar -- maybe could it happen that similar issues may come up in design and that can lead to maybe a delay in execution like we saw in CSMT for Gems and Jewellery? Or you are confident that it will proceed on pace?

Look, there can be delays, but not to the extent that we've experienced in CSMT. CSMT is a much more complicated project. It's a live station. B, it is helmed by a nodal agency, which is comparatively new as compared to more established PMCs like NBCC and CPWD. Thirdly, the Gems and Jewellery Park project is not as complex. These are basically large sheds or offices where the Gems and Jewellery workers have to work, though it's bigger in scale, but it's not as complicated. So we foresee fewer problems there.

And lastly, on the interest cost, it should be a similar number in Q4 as well at around INR 14 crores, INR 15-odd crores.

Yes.

The next question is from the line of Shravan Shah from Dolat Capital.

Sir, our gross rate would be the similar INR 10-odd crores?

Working capital [indiscernible] is INR 5.93 crores and in total, including term loan is INR 11 crores.

So INR 13-odd crores working capital plus INR 11 crores long-term debt?

Yes.

Okay. So close to INR 24-odd crores. Okay. Got in. And in 9-months...

Total INR 11 crores.

Total is INR 11 crores.

Okay. Got it. And in 9 months, how much CapEx we have done and in the fourth quarter, how much are...

Total in 9 months, INR 154 crores.

INR 154 crores. And in the fourth quarter, how much we are looking at?

Our guidance is INR 175 crores.

Okay. Sir, next year also, can we see the similar kind of CapEx?

No, it will be lesser. It will not be as much. As I said, projects, CSMT, DLF, all the other larger projects, the CapEx -- which will take off now, the CapEx has already been done. So I think it should be about INR 125 crores.

Got it. And yes, sir, you mentioned that you have bidded for a couple of government projects and also having the discussion with the private. So any ballpark number in terms of the -- how many projects and the broader value combined put together everything?

Shravan, it will be very difficult because as I said, the government project bids have yet not been opened. So we don't even know where we stand. On the private sector side, the opening is not in the public domain and the decision is not necessarily L1. So negotiations or discussions are happening. It will be very difficult for me to say right now or give an indication right now.

No, no, I was just trying to understand both put together government, private in terms of -- will it be the value that we have bidded from our side would be INR 1,000 or INR 2,000-odd crores kind of a number?

In terms of the projects that we bid, it should be about -- I think it should be easily about INR 4,000 crores.

Okay. And then in terms of...

Maybe even INR 5,000 crores. Yes, I think from the top of my head, the projects that have been bid till now and not decided would be close to INR 5,500 crores.

Got it. And then further in terms of -- by March, how much more are we looking at considering will it be also INR 4,000 crore, INR 5,000-odd crores that are looking to bid?

At least INR 3,000 crores.

Okay. Got it. And sir, this -- both the airport one, there also the execution, when...

Started. Both projects, the execution has started. In fact, I think at Varanasi, we've already clocked about INR 40 crores. At Darbhanga, we've clocked about INR 20 crores.

Okay. And then even the Signature Global Business Park also -- there also the execution has started?

Not totally. The client has to hand over the towers to us after excavation. So they barely handed over 10% of the site to us. So that's why I'm saying that all this -- starting from the next financial year or the first quarter of next financial year, all these projects will take off.

So that's what actually I was trying to understand. So if the -- almost all the projects will start kicking in, we should be having close even more than a 20% kind of a growth next year, but you are restricting yourself to 15% plus.

You know me, we are always conservative. Otherwise, you hold us accountable. No, that's why I'm confident that our margins will also go up, and we will be having double-digit margins next year. We can already see the results, though there has been quarter-to-quarter -- corresponding quarter-to-quarter degrowth. But if we compare to the last quarter of this financial year, we are extremely bullish. We can see that our margins have increased significantly.

Yes. And sir, the last installment of MR INR 56-odd crores that have been received.

Yes, it's being received, yes.

The next question is from the line of [indiscernible] Jain, an individual investor.

Sir, one question we had on CSMT was, there was some newspaper reports that end of December, they mentioned a 15% completion of the project, and they're quoting some railway authorities. Now obviously, that is very different from the revenues that we have booked, right? So what would be the difference between how the railway thinks of project completion versus how much we book in terms of revenues?

So let me answer that, Shobhit. You see what is happening is that because now the designs are getting finalized, so a lot of -- this is Vikas here. So a lot of fabrication work of structural steel is happening, which is, say about 40% is off-site and 60% is on-site. So if you consider that, which is actually the work not done, which has not been built yet, a while to start billing it. So if you take that figure and 15% work done also in their definition means that a lot of area has been taken up, which is now -- we're doing the ground preparation like removing the age-old services, 100-year-old services, which are running under the station. So that work is taking a lot of time. And like we've been saying from day 1, within the next 4, 5 months, the design is taking a lot of time because it is a very complex system, complex, complex. You are integrating a new building with a 100-year-old infrastructure. So that is what we are doing [indiscernible] sort of structured steel -- nearly 5,000 to 6,000 metric tons of structured steel is under fabrication or fabricated and it's aside. So those numbers, if you go by. I can't say 15%, but yes, there is a considerable amount of work which is going on.

And to add to what Vikas has said, 15% would tantamount to about INR 270-odd crores. If you take out the GST value, the project value is about INR 1,800 crores. It will tantamount to INR 270-odd crores. And we've already built -- acknowledged and agreed build figure with the client is close to INR 150 crores, INR 160 crores. And the rest of, say, INR 100-odd crores, what Vikas has said, is work done, but unbuilt because a lot of fabrication has already happened. So yes, so this is -- so maybe when they say 15%, this is sort of an intangible number. When they say 15%, they may be taking work in progress or stock into account.

Right, I understand that. My second question is, maybe [indiscernible] can answer this. From a revenue recognition point of view, let's say, we have completed 5% of the value of the work at a site. Do we recognize revenue to the extent of 5%? Or is there a minimum threshold we wait for before the revenues are booked?

No. The revenue is booked when the client passes the bill.

What work has been executed that also includes -- revenue includes also unbilled revenue also.

But that happens as and when whatever work is completed, right? There's no minimum threshold, let's say, we'll start recognizing only at a certain milestone or a certain percentage completion. Even 1% and client approves, we book revenues...

No, no, He's not asking about escalation. Please repeat your question.

What happens in the EPC contract, there is a stage-wise payment. No the stage has to come.

No then it can be [indiscernible] also.

I see. Okay. So if the stage is after, say, 5%, then you book only at 5%. If the stage is at 1%, then revenues are booked when that 1% stage is completed, right? That's the way to understand?

No. It's not a stage-only work. There's a mathematical formula to this. So for that you need to come down to the office, we can...

And sir, lastly, in the subcontracting cost, if we compare this quarter to the last 2 quarters and there is some particular reduction there as a percentage of revenues. Does this have anything to do with availability of labor or any other metrics because it's counterintuitive that cases of labor shortage, subcontracting has come off a little bit.

Sorry, your question was not very clearly audible at our end. Could you repeat it, please?

Sir, on subcontracting costs, right? Now if I look at the previous 2 quarters, we were at about 31%, 32% of revenues. This quarter, we are at about 28% -- a little over 28%. So what would explain this slight reduction versus the first 2 quarters, especially in the light of shortage of labor continuing?

Basically, the subcontracting cost is coming out 31%. It's not basically, you can say in the technical term subcontracting. It also includes manpower supply and also labor contract. That's why that is amount [indiscernible].

He is saying, why has it reduced?

Subcontracting -- this keeps -- subcontracting, petty contracting, labor supply, this keeps on interchanging depending on the nature of the work. So in one quarter, if the subcontracting number is, say, 31%, as you said, then some subcontracting in contractors parlance is work which includes material also, right? Say, for instance, we've outsourced lift installation or escalator installation or aircon works, right? This is with material. So in the preceding quarter, maybe such works, outsourced works with material may have been slightly higher. So this number needs to be actually looked at in conjunction with the labor supply and with the material. That is why this figure...

I think we should [indiscernible] in our case.

The next question is from the line of [indiscernible] Jain from Avendus Spark.

Sir, my first question is on the NGT ban. Since when was the ban implemented?

It started in end October, November around Diwali time. That is the time that the air quality index starts worsening in Delhi and NCR. And it has gone on until as late as the first week of February. And this time, because Supreme Court also got involved, the ban was introduced, revoked, introduced, it happened in fits and starts. So there have been multiple stoppages from, say, end of October until about February 1st week.

Otherwise, what would have been an end date, like now [indiscernible].

It is now dependent totally on the air pollution, the air quality index. As per the GRAP guidelines, there are different thresholds when different levels of GRAP guidelines kick in. So it's more or less automatic. When the AQI, say, crosses a certain level, one level of restrictions come in. It crosses, it jumps up further. Another level, more stringent restrictions kick in. So when it crosses 300, the entire construction machinery comes to a standstill. The supply chain comes to a standstill because the trucks cannot enter NCR region. So -- and then once these guidelines are sort of revoked, then there is a logjam of trucks or materials at the borders. So it takes time for the pace to pick up again. Are you understanding? Have I sort of clarified?.

Yes. Yes. Just to compare last year, when was it like over -- the ban, just to compare?

Yes. Just to compare what -- this year, because there were -- if you see the number of stoppages, starts and restarts are far more. So it's sort of the effect on the supply chain all around has been much worse, so to say. While the end-to-end duration may have been the same. But overall, the impact on construction work at ground as well as the supply chain has been far worse.

Understood. So my next question is on the number of projects bid -- the value of projects bid, you just mentioned around INR 5,000 crores. Sir, any flavor on what type of segment -- which segment is this, is this residential, commercial or any such flavor would be helpful..

All. Residential, commercial, health care and hospitals. Yes, health care.

So it's across all of those segments.

Yes.

Sir, my last question is on -- are you seeing any slowdown in payments from states?

Not really. As I mentioned in the investor call at the end of the last quarter, I think the slow moving payment, this thing, Bengal, our government projects are over. Bihar, we are seeing an improvement since the BJP and JDU government has come to power and Assam continues to be okay for us because same government is there at the center and the state. So that is where we are.

So no material change from...

No. No.

The next question is from the line of Vasudev Ganatra from Nuvama Wealth.

Sir. So can you give us what's the status of the DLF Harbor project and the Tata Memorial project?

DLF project is now well underway. And prior to -- it had taken off prior to the NGT ban coming into play. But post the ban that DLF is one of the clients where they've compensated the labor for staying back. So when the ban was revoked and the work started, I think, on the third of February, we hit the ground running. And in this month, we've already done close to 4,000 cubic meters of concrete there. So that project is -- we see that seeing ourselves clock a healthy run rate there in the rest of this quarter as well as next financial year. We've done a total billing there already in excess of INR 200 crores. And which was the other project that you asked about?

Tata Memorial.

INR 110 crores has been executed so far.

Tata Memorial, INR 110 crores has been executed.

Okay, sir. And sir, for next year, what is the kind of bid pipeline that we are looking to bid, like which segments and if you can quantify that?

Residential, health care, commercial and total pipeline should be in the region of about INR 25,000 crores.

The next question is from the line of [indiscernible] from JM Financial.

Of mobilization advance of INR 620-odd crores, what would be the interest-bearing portion?

43%.

And what was the mobilization advance as of September?

INR 621 crores.

As of September?

As of September. Okay.

I didn't get you.

You're asking absolute number?

Mobilization advance as of September.

This is INR 542 crores.

Okay. Sir, so we see -- do we expect this number to reduce next year? Or it should be in similar range?

It should be in the similar range. Going forward, as I said, we are increasing our private sector order book. There, the mobilization is interest-free. So the company policy is to take that as far as wherever there is interest-bearing advance, we would try and work without the advances. Say, for instance, the 2 airport projects, we have not availed of the advance. We are funding it from internal accruals. So going forward, we are working to reducing the finance costs, which is primarily on account of interest-bearing mobilization advance.

And sir, the recent bids that you have won on the residential side of INR 1,100 crores each from the DE-LUXE DXP and second that of composite steel structural works. So those bids when do we expect to start?

So those projects, as I said, will take off in the next financial year. While some little work has started on the ground. But as I mentioned in answer to an earlier question, DXP, Signature Global, the work fronts, which the client has to hand over to us has not been done, barely 5% to 10%. So they are a little slow off the blocks. We think they will start in the next financial year.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you so much, everybody, for your insightful comments and questions and I look forward to seeing you again at the end of this financial year, our next investor call. Thank you so much. Bye.

On behalf of Ahluwalia Contracts India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.