Ashoka Buildcon Limited (ASHOKA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Ashoka Buildcon Q1 FY '21 Earnings Conference Call, hosted by Prabhudas Lilladher Private Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Viral Shah from Prabhudas Lilladher Private Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. I welcome all the participants to the 1Q FY '21 results conference call of Ashoka Buildcon. We have with us Mr. Satish Parakh, Managing Director of the company; Mr. Paresh Mehta, Chief Financial Officer of the company. We will commence the call with the opening remarks from Mr. Parakh to get an overview on company's performance, which will be followed by a Q&A. Now I request Mr. Parakh to begin with his opening remarks. Over to you, sir, and thank you.

Good afternoon, everyone. We welcome you all to earnings conference call for the quarter ended June 30, 2020. I have with me on the call Mr. Paresh Mehta, our Chief Financial Officer. We hope that all of you are staying safe and healthy during these unprecedented times. To start with, I'll initially brief you on the industry updates, followed by company's performance during the quarter gone by. The global economy is witnessing challenges arising due to COVID-19 pandemic. The road infrastructure is not isolated. The pandemic, the ensuing lockdown has adversely impacted sector, primarily attributed to halting of construction activities across the country, lack of availability of labor, stoppage of toll collection, amongst others. However, with the relaxation in lockdown restrictions, the construction activities have resumed at major project sites while following social distancing norms and health and hygiene measures. The operations are ramping up gradually across the sector. Economic activity has started to pick up pace, with toll collections also beginning to limp back to normalcy. Toll revenues across the sector has gradually revised to reach around 80%, 85% levels of pre-COVID levels, led by improving commercial traffic. Currently, the sector is facing multiple headwinds in terms of lower execution, increased liabilities, liquidity crunch and many other. The construction, highway saw a close to 40% deep in construction in terms of lean kilometers compared to corresponding period of last year. Kilometers per day last fiscal with national highway construction slowed down to 21 kilometers per day in the present fiscal till the end of July. Historically, Q4 of every year and particularly the months of March and April are the months of highest order activity. When various government departments try to achieve their full year target, the pandemic and the ensuing lockdowns in these months impacted the order activity significantly. The increasing concerns on the account of change in government's focus from road construction has been clarified by the Ministry by setting up an ambitious target of 60 kilometers per day highway construction by honorable Road Transport and Highway Minister, Mr. Nitin Gadkari. Furthermore, NHAI has recently announced to set a target of awarding 4,500 kilometers of national highway in FY '21. This creates future visibility towards enhancing our order book. The government proactively came up with a slew of measures to provide required impetus to the sector during the current challenging phase. To highlight a few, with the aim to boost the investment from private sector and BOT projects, the revised model construction agreement has been proposed. The order for highway projects will be issued by only post 90% of the land acquisition to avoid any disputes at a later stage. Also the revenue assessment of BOT projects will be done after 5 years. This will enable readjustment of the construction period during the drastic change in toll collections. We believe this shall make the BOT projects lucrative during the -- going forward. As liquidity remains a major concern for the industry, the Ministry had recently commented that banks have promised to support the infrastructure sector. Also Ministry of Road Transport and Highways and the NHAI have adopted faster payment mechanisms and shifted from milestone net payments to a monthly payment mode to provide much required liquidity for the sectors which are reeling under cash crunch. This will help infrastructure developers in retaining their order book growth and momentum in execution. Now coming to the company's performance during the quarter. Given the execution loss during COVID-19 lockdown, followed by limited labor availability, the overall construction activity has been muted in the first quarter and the impact of which is reflected in the financial results during the quarter gone by. During these difficult times, our focus continues on improving operating efficiency, adopting stringent cost control measures and safeguarding our profitability. We have intensified our focus on improving our construction activity, resulting in much faster recovery in operating activity. Presently, we are operating around 85% operational efficiency. Also, remobilization of labor has been faster than expected, and we have achieved around 90% to 95% of our labor strength back at our sites. We expect to reach pre-COVID levels in near term. On BOT projects, we have reached approximately 90% pre-COVID toll collections. We expect the same to reach back to normalcy with overall revival of economy. Central government's various slew of measures, like loan moratorium, releasing due payments within stipulated time frame, releasing pro rata bank guarantees for the value of the extent of project work completed, reduction in interest rates, allowing grace period for payments on government duties and taxes to provide overall liquidity to the sector. We have made a detailed assessment of our liquidity position and do not foresee any challenges in managing our working capital requirements and servicing the debt. Now coming to the order book. The company's total order book on 30th June 2020 stands at INR 8,617 crores. The breakup of the order book is as follows: Road projects compromise (sic) [ comprise ] around INR 6,923 crores, which is 80.3% of the total order book. Among the road projects' order book, HAM projects are to the tune of INR 4,680 crores and EPC projects are INR 2,243 crores. Power T&D and others comprise around INR 769 crores, which is 8.9% of the total order book. Railways contribute around INR 867 crores, which is 10.1% of the total balance order book. And CGD is around INR 59 crores. That is all from my side. I would now request Paresh Mehta to present the financial performance of Q1 FY '21.

Thank you, sir. Good afternoon, everyone. The results presentation and the press release for the quarter have been uploaded on the stock exchanges and on the company's website. I believe you all may have gone through the same. Now I will present the financial results for quarter ended 30th June 2020. As all of us are aware, the lockdown that has imposed to contain the spread of COVID-19 pandemic has adversely affected the company's operations and the financial results of the quarter ended 30th June 2020. Hence, the results of this quarter are not comparable with corresponding quarter last year's or comparative quarters of previous years. Starting with the consolidated results, the total income of Q1 FY '21 stands at INR 793 crores. The EBITDA stood at INR 278 crores in Q1 '21, with a margin of 35.1%. Coming to the standalone numbers, the total income for Q1 FY '20 stands at INR 621 crores, EBITDA for the quarter was at INR 130 crores and EBITDA margin was at 21%. The higher margin is mainly on account of few projects reaching completion stage, releasing contingency provisioning, considered at the start of the project and higher other incomes, which included insurance claims received of around INR 500 crores -- or INR 5 crores. The company reported profit after tax of INR 69 crores in Q1 FY '21. PAT margin stood at 11%. During Q1 FY '21, BOT division recorded a toll collection of INR 133 crores. Total consolidated debt as on 30th June 2020 is at INR 5,581 crores, of which project debt is INR 5,342 crores, including INR 150 crores of NCDs at ACL level. The standalone debt is INR 238 crores, which comprises of INR 211 crores of equipment loans and INR 27 crores of working capital loans. With this, we now open the floor for question, answers. Thank you.

[Operator Instructions] The first question is from the line of Mohit Kumar from IDFC Securities.

Congratulations on a good set of numbers given the COVID situation. Sir, given the -- sir, we -- as you mentioned that the labor availability has improved and the execution has ramped up, is there some kind of guidance you can give for FY '21? And if you are not giving any reason, why sir?

So we have to see that -- yes, please, sir.

This year, we -- please go ahead.

We have to see the year by. Presently, things appear to be moving on track. We are going back on normalcy. So keeping in view the turnover loss in the first quarter, and this quarter being as it is a lower performance quarter, we will try to catch up in the second half and try to achieve at least 1x of the last year's turnover, minimum that much, and keep a higher target of 1.1x.

Understood, sir. And sir, how is the ramp-up of the execution in various order like Bundelkhand and especially the newer HAM project? Have you got this site handed over? Is it ramping up nicely? Bundelkhand, I believe is happening pretty fast, right?

Yes, these are fast-moving projects, Bundelkhand and Vadodara Mumbai Expressway.

The new HAM project, sir, new one the Kandi Ramsanpalle and the Tumkur-Shivamogga Package III?

Yes, Shivamogga I and II have started. III and IV, we are yet to take a point at it, which we expect to take around October, sometime in October. We will get appointed date for Shivamogga part III and IV.

Understood, sir. And last question, sir, on the toll collection, is it fair to say that we are with our collection have reached to INR 2.4 crore on a daily basis?

Yes. Yes. So they are almost at 90% odd collection on an overall basis. So your number is close to that. And we have -- we believe that as the economy totally revise, the expected toll collection with some growth should pick up in the coming quarters.

[Operator Instructions] The next question is from the line of Vijayakumar from Spark Capital.

So my first question is on the cumulative cash outgo over the next 2 years, say, in FY '22 and '23, in the assets. So if you can give the cash outgo that you have estimated for, say, equity and interest and, say, debt repayment, if you can give that for '22 and '23 for the assets?

So on the asset side for the HAM projects, we have already -- till date we have already invested INR 56 crores. And during the balance part of the year, we will be approximately spending INR 225 crores in the existing HAM projects. And in the next year, that is '21/'22, we'll end up spending approximately INR 160 crores.

And how about the interest overall for all the assets for '22 and '23? And also debt repayment?

That probably we could come off-line. I don't have those numbers directly. So approximately, we have a debt of around INR 5,500 crores. So approximately an outlay of INR 550 crores are on the existing debt and another debt pickup of around, say, INR 1,000 crores. So around INR 600 crores of interest payment would be there on all projects, including HAM projects.

Understood. I'll probably get in touch with you off-line to get the granularity. Essentially, I'm trying to find out if the internal accruals from the assets, is it enough to fund the cash outgo for the next 2 years, sir. That's the objective.

Yes. Okay.

The next question is from the line of Vibhor Singhal from PhillipCapital.

Sir, just 2 questions from my side. Sir, in terms of the HAM project, you mentioned that we have already taken the -- we already see that COD for Kharar-Ludhiana last month -- in the month of April. So basically, what is the status on the remaining work that is pending in Kharar-Ludhiana because I can see around INR 196 crores of work left in the order book? And also on the Anandapuram projects, when do we expect the COD to be complete?

So the Anandapuram is the next project which is coming for PCOD in this -- in the next month. So that's where we will achieve. And the balance -- other 5 projects we are expecting in the next year after October.

Okay. So what I meant to mention is sir, when are we expecting the COD for Anandapuram project? I mean what is the...

It should come by September end.

September end?

Yes. Yes.

And both these projects for Kharar-Ludhiana and Anandapuram, the remaining work that is left in these projects around INR 196 crores and INR 159 crores, we should be able to complete it this year itself. Do you foresee that?

Before 31st March.

Before 31st March?

Yes.

Sure, sir. Sir, my last question is on the debt side. The debt has actually come down, if you see from Q4 to Q1 level at a standalone level that I'm talking of. So just wanted to get your perspective on that, has this quarter seen a decent cash flow and payments by the government bodies? And how is the kind of payment cycle as of now? Are we seeing any delays by any of the government bodies, either on the Power T&D segment or in the Road segment for say?

Except for a couple of -- say 1 or 2 employers, I think so. NHAI definitely has been very prompt in making payments. So we have now -- and with the policies they have come up with monthly billing and intermittent 10% payment in the grant release has definitely helped the cash flow of the company. So our debt, which has typically was around INR 399 crores on a standalone as of 31st March has gone to INR 237 crores, is basically cash utilized from cash balances as of 31st March and reduction in payment of CP and the refund of term loans of equipment, achieving the repayment schedule of term loans. So we have not claimed any moratorium for our equipment loans. We have paid them on time.

Right, sir. And sir, any delay in payment from any other Power T&D order, UP, Jharkhand or Bihar or Maharashtra?

So not really much. Maybe on UP, there's a slow, but that lag is there for quite some time, more than -- it's not related to COVID. So I think that it will get resolved -- they get resolved over a period of time. So slightly lumpy payments, but then they come in 2, 3 months' time.

Sure, sir. Sir, just lastly, if I can just squeeze in. You mentioned in your opening remarks about the way the new model concession agreement is being shaped up and the overall BOT projects are good and build trying to make them more attractive. So are we open to begin for BOT projects in near future if it suits our investment criteria?

Yes, we selectively look at projects. If we really find they're attractive projects, then we do participate.

The next question is from the line of Ashish Shah from Centrum Broking.

Sir, my first question is on the numbers for the quarter as such. So we have seen some bit of improvement in the gross margins for the quarter as well as the -- we've been able to cut a lot of expenditure on the other expenses side. So just wanted to understand how much of this is sustainable and the benefit will continue in the coming quarters? Or we can -- or we'll probably revert to a normal level in the quarters to come because given the level of execution, the margins actually were very strong at about 14.5%.

Yes. So basically, definitely from activity perspective, there was lower activity, a lot of admin expenses have been controlled and reduced also because of lower activity, which will probably increase as turnover increases. So our guidance on the EBITDA margin will continue to be remaining on 12.5% to 13%. As already spoken earlier, that margins are looking higher in this quarter basically because of 2 reasons. One is other incomes which are higher by INR 5 crores on account of insurance and INR 5 crores also -- an additional INR 5 crores on account of restructuring of equipment loan in one of our portfolios and also on the turnover side because of certain projects which are coming to a fag end, there have been release in the contingency reserve which we had provided for like Kharar and Ranastalam.

Okay. Sir, can you elaborate on this restructuring of the equipment loan. I wasn't very clear on that.

So it was more of a -- we had a loan from [ Sri ] as -- for equipment loan of around INR 65 crores, which was taken over by ICICI Bank from [ Sri. ] In the course of their taking over, they have increased the interest. So interest on that INR 65 crores was around, say, 4%, which was taken over by ICICI with -- at a lower value with a higher interest rate. [ NTV-wise, ] it doesn't impact us. But from an accounting-wise, for the quarter, there is a reduction in the loan amount of INR 5 crores.

Sure. Sure. Sure. Sir, also in terms of the FC, the financial closure for Tumkur-Shivamogga III, IV and Kandi Ramsanpalle, so where are we on that? Are we -- have we completely closed on the financial side? Are we just waiting for the appointed dates? Or if financial closure is still pending?

So the financial closure of all the 3 are still pending. For the Kandi project, we have already received sanctions and we are in the documentation stage. And for the TS III and TS IV, we are in the process of getting the sanctions in place. They're already with the bankers in the last leg. Due to the COVID situation, the way the meetings are happening at the banker's end also slightly slow. So otherwise, in normal course, we would have achieved that sometime back. But we believe that we'll achieve it in the next 1.5 months' time.

By October, the financial closure should be done?

Right.

And the -- what is the land status in all of these 3?

Pardon, sir?

What is the land status, sir, land available for TS III, IV and Kandi?

So Kandi, the land position is substantially good. On the...

TS III is also good. And TS IV, we have just 50% land. So TS IV really needs to make up. Otherwise, TS III has a good amount of land, more than 80% available. And Kandi also has more than 80%.

Got it. Sir, lastly, what is the net debt number? Sir, we know the gross debt, but you can help with the cash balance or the net debt number, whichever way?

So the net debt number on the standalone could be approximately...

If you have the cash balance, you can just give that...

Net INR 63 crores only. And on the...

INR 63 crores, sir?

We have a debt of -- standalone debt of INR 238 crores and cash balance of INR 179 crores. So that's probably INR 63 crores. And on the consol, the net debt position would be approximately INR 5,075 crores. Our total debt of INR 5,580 crores and less cash and bank balance of INR 505 crores.

The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities.

A couple of questions from my side. So just wanted to get it correct, we have increased about INR 56 crore equity in Q1. Did I get the number right?

Correct.

Sir, what was the breakup of revenue between different segments this quarter?

On the segment side, on the road sector, we had approximately INR 475 crores of turnover. On the Power side, around INR 35 crores. On the Railways, around INR 37 crores.

In terms of order intake, what are we targeting this year? And I mean, what could be the broad breakup amongst various segments that we have?

So road sector, we should be able to easily bag around INR 3,000 crores to INR 4,000 crores of orders. And then Railways, we are expecting around INR 1,000 crores, INR 1,200 crores. Power, we are not very optimistic of any substantial incoming orders. So overall, we should do around INR 4,000 crores to INR 5,000 crores.

[Operator Instructions] The next question is from the line of Shivang Joshi from Prabhudas Lilladher.

Sir, I wanted to understand whether we have taken moratorium at the SPV level as well?

Yes. At the -- so at the standalone level, we have not taken any moratorium. So we continue to reach all our debts to the way they are. On the SPV level, we have taken moratorium for the principal amount. The interest amount to the extent possible we are paying. Otherwise, it has to be paid in the next H2. So on the principal amount, except for Jaora project, we have opted for moratorium.

Okay. And since moratorium will be getting over in August and since our toll levels are already reached, so we are comfortable for paying the principal portion as well from the next month?

No. For a -- correction, the moratorium for principal is for -- so the total loan period gets extended, except for moratorium. As far as interest is concerned, it is only a deferment. So interest will be serviced through the cash flows of the toll revenue.

Okay. Further, sir, wanted to get an update on whether the SBI Macquarie renegotiations have restarted since the toll revenues are already at 90% pre-COVID level?

Yes. So as far as the SBI Macquarie exit or monetization of asset process was going on, definitely, the potential bidder which was there in March, he is still on hold. So they have probably kept on hold all investments for at least up to August end. But in the meanwhile, we've also started talking to other investors who are there in the foray in the past to have a relook, and they are probably looking at giving an offer anytime in the coming month.

In the coming month?

Yes. Yes.

[Operator Instructions] The next question is from the line of Mohit Kumar from IDFC Securities.

Sir, firstly, on the receivables, we had a decent amount of receivables from the T&D sector. Are you seeing any kind of liquidation plan, given that their situations, I think, the margin are improving with the new liquidity scheme?

So the receivables continue to be -- they've improved a bit, but they continue to be at the similar level. So these are all receivables from the recent billings done in the last 4 months. So that is the payment cycle how it works. So I think we are quite confident that the receivables will get paid off.

What is number right now on the T&D?

From the T&D and Railway put together, it would be approximately INR 600-odd crores -- INR 650 crores, including retention and SE.

Okay. Understood, sir. Secondly, sir, on the Railways side, are you seeing a larger traction in terms of order activity?

Yes. Basically, RVNL and core are showing up a lot of opportunities. So definitely, we hope we'll be able to participate in that certain tenders.

So how was it the last 4 months? Was it dull in the last 4 months and expect a pickup in the next stage, sir?

No, the bidding was a bit almost everybody, including Railways. So we've already participated in 3 bids. We're expecting results. Roads also, we've participated more than around 300 kilometers. So we're expecting some of the results in coming weeks.

The next question is from the line of Mayank Vaswani, individual investor.

Sir, my first question is, sir, on the compensation for the impact of COVID. What would you think is the -- if you could possibly quantify the compensation that you would receive both on the tolling side as well as the construction business? And if you could just walk us through the accounting treatment for the same?

So what we expect in the NHAI circular is that they have presently only given the benefit of extension of the concession period. So it's like whatever 22 days we have lost will be added to the concession period. So there's no cash compensation. Definitely, we are trying to ask for a compensation on the expenses incurred, but till date, they have not confirmed anything on that side. So that is slightly a gray area. On the accounting side, what we have typically done is we have not recognized any toll revenue for 22 days, though there is an extension of -- the expected extension of the toll concession period by 22 days plus some other days due to the lower collection in the balance -- in the month of April, May and June. So that revenue is not recognized. We are recognizing toll revenue as actual what is collected in the quarter. And the amortization is based on the extended concession period of the project.

Right. So that number has been adjusted accordingly, sir, the amortization number?

Correct. Right.

Right. Sir, second question, I'm sorry, I missed possibly some of the quantification in your opening remarks. Sir, you had split up the other income into insurance, restructuring of term loan for equipment and release of some contingency provision. Now for the -- sir, I think the breakup, your total other income for the quarter is INR 31 crore on a consolidated basis. So I believe you mentioned INR 5 crore for the term loan equipment restructuring. So could you split up the balance, INR 26 crores, sir?

And insurance will be approximately INR 5 crores. And approximately, interest rate -- interest around INR 17 crores, interest earnings from associates and bank FDs.

Right. And the balance would be the contingency provision, would that be about, I think, INR 4 crores?

That is not part of the other income. That is more from part of the EBITDA.

Okay. Okay. Okay. Understood. And sir, just 1 last housekeeping question, if I may. There is a note in your accounts which says that the financials have been prepared on the basis of the uncertainties under the quarter and the impact of the pandemic in the future may be different from those estimated. I mean this seems like a general note, sir, but is there any specific assumption that you would be able to flag out which possibly may be revisited in the future once we get a better handle on the impact of the pandemic?

At this moment, we cannot identify anything. What we have typically done is in our budgets we have provided for any impact of COVID in the coming 8 to 10 months, that expenditure we have provided for, so that when the work gets executed and if increased cost is part of the provisioning in the budget. But otherwise, there is no -- we -- it's a provision created. We probably will have to wait for another 2 quarters to see whether the pandemic has still more an impact on the profitability. Otherwise, those reserves created could get released after, say, 3 to 4 -- 2 to 3 quarters.

[Operator Instructions] The next question is from the line of Jiten Rushi from Axis Capital.

Sir, on the equity front, sir, as you said, you've invested INR 56 crore in Q1. So can you just give us the total equity requirement you invested so far? And how much likely to be invested in the next 2 to 3 years for HAM projects?

So as I said, the total equity invested in all the HAM projects, including the -- our annuity projects at ABL level is approximately INR 700 crores, of which if you reduce the investments made at ABL standalone projects, which are smaller annuity projects of INR 140 crores, the total investment is around INR 560 crores.

INR 560 crores for HAM projects?

Right.

And balance requirement would be how much?

And balance, as I said, is INR 225 crores in the balance period and INR 150 crores in '21/ '22 for the existing HAM projects, so around INR 375 crores.

INR 150 crores. Okay. Okay. Okay. And sir, on the ACL portfolio with the Macquarie, what is the -- that is the equity and the debt portion, can you give us the breakup as on date, as of June?

At the ACL level, the total equity is approximately to the tune of around INR 1,860 crores and debt is -- the NCD, which we have borrowed at ACL of INR 150 crores.

Sir, I'm asking about the SBI Macquarie portfolio, what is the EV of that portfolio of 7 assets so equity invested and the outstanding debt?

Okay. Okay. So that would be approximately around -- yes, I think it's -- it should be INR 5,500 crores of debt plus equity value of INR 1,800 crores.

Including loss funding, right, sir?

Including loss funding, no, then that should be another, say, INR 800 crores, loss funding or any other asset. So amount funded by ABL, the total value is around INR 8,100 crore, enterprise value.

This is a value of the ACL assets with the SBI Macquarie, right, sir? INR 8,100 crore, if I may ask you again? I'm sorry, I'm asking you the same question, but..

Right. Right.

Hello?

Yes. Yes.

So INR 8,100 crore is -- I think that should be the total ACL value, I believe.

Enterprise value.

I'll take it offline, no problem, sir. Sir, what is the CapEx requirement this year and mobilization advance and retention outstanding as of June?

So CapEx requirement for the balance period is approximately INR 70-odd crores. We'll have to see how the CapEx will actually pan out depending on how work picks up, but the budgeted is approximately INR 70 crores.

And sir, mobilizing advances and retention outstanding, if you can provide the number, please?

Approximately, the mobilization advance would be to the tune of 400 -- INR 360 crores, including other advances also.

Okay. The retention would be how much, sir?

Retention would be approximately INR 196 crores.

And sir, on the arbitration front, last quarter, you had said that we have got some claims outstanding of INR 550 crore in 4 projects. So we had approached the reconciliation committee. So any outcomes so far, sir?

No outcomes. We have approached NHAI and reconciliation process with the committee they have appointed now, so reconciliation would start now in this month.

So construction expected in probably next 2 to 3 months?

Yes, they take at least 2, 3 months to reach that number.

Okay. Sir, last question on that revenue -- that loan restructuring you're talking about, sir. We have booked INR 5 crores in the other income, right, sir, because of the restructuring of equipment loan?

Correct.

The next question is from the line of Subhadip Mitra from JM Financial.

Firstly, I just wanted to get a sense on this release and contingency reserve, which you're saying is part of EBITDA, can you just quantify what this amount is?

Could not get you. What was that, sir?

I'm saying the contingency reserve release which you are saying is part of EBITDA, what will be that amount?

It's not really quantified. It's more of the total budget of each project. So we cannot really quantify -- not quantified, so anything in the range of 2% to 3% of it, 2% around of the turnover.

2% of 1Q turnover, am I correct in understanding that?

Yes, 2% approximately of the Q1.

Yes, Q1 overall turnover. That's how we look at it or only the BOT part?

Overall, you can look at it.

Overall. Okay. Okay. Understood. And secondly, just a macro question, this is on -- by when do you see the NHAI ordering or the award process accelerating because we understand that the tendering process has been actively on. However, I think NHAI's own process of raising money for something like the Mumbai-Delhi corridor, et cetera, seem to be getting delayed. So do you sense some delays because of the funding constraints on the NHAI side? Or do you see things really picking up now?

See, whatever they have decided around 4,500 kilometers of award, that certainly looks happening because 3,200 is already announced. So out of that 1,400 kilometers bidding is already done, 1,800 is which we are likely to see up to September. In H1 itself, they are closing more than 3,000 kilometers.

Okay. So this will be bidding for 3,000 kilometers which should get completed by 1H itself, that's what you meant?

Yes. In H1 itself, we will be completing the bidding of 3,000 kilometers, which includes NHAI, MoRTH and NHIDCL.

Understood. And sir, what is the gross mix that you're seeing between, say, an HAM and EPC in this basket?

See, what we have seen is -- HAM is a little more than EPC, around 60% is HAM projects and 40% still EPC projects are coming up.

Understood. Understood. And you don't foresee any big constraints or version from the banking industry for new HAM projects, is it?

So on the funding for HAM projects, definitely, the challenges are there in the sector. And because of the reduction of the number of bankers also because of the merger, that challenge continues. So the better place, we continue to have bankers chasing them. But that challenge is going to be there. But I think so depending on NHAI's annuity guarantee, I think they still keep on funding.

The next question is from the line of Ankita Shah from Elara Capital.

Sir, I wanted to check, sir, is there any risk to funding of Delhi-Mumbai Expressway project given NIIF has parted ways with NHAI to fund and support the project? And any risk to our projects also that we are doing on this stretch?

No, I don't think. The project which we are executing, there is absolutely payment has been made.

So then what's the plan of NHAI to fund this project because it was understood that NIIF would be supporting this project?

I'm not able to comment on this.

Okay. So as of now, there is no issue in payments on this stretch?

As of now, absolutely no issues.

Okay. And sir, secondly, what are the margins that we make in Railway projects, typically the ones that we get from RVIL?

They continue to be in the range of, say, 9% to 10%.

The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities.

Sir, 2 questions. One, did we incur any CapEx in Q1? And the second, was there any toll hike on any of the projects that we received in Q1?

No significant CapEx in Q1. And as far as toll hike is concerned, not in Q1. Whatever happened was as of 1st April. So all NHAI projects except for Bhandara and Durg, where the toll hike is in 1st September, they have received increment in the toll rates by almost -- in the range of 3.5% and on the Jaora project of 7%.

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

Thank you very much. We thank all the participants for joining on this call. If you have any further queries, we are open for any clarifications. You may connect with us directly or through our Investor Relations, Stellar Investor Relations. Thank you. We wish you all good health.

Thank you. Thank you all the participants.

Thank you. Mr. Shah, would you like to have any closing comments?

No. Thank you all the participants for participating in the call. And I, once again, thank the management for giving us an opportunity to host the call. Thank you. Thank you, sir, and thank you, everyone.

Thank you, Viral.

Thank you, sir.

On behalf of Prabhudas Lilladher, that concludes today's conference call. Thank you for joining us, and you may now disconnect your lines.