Ashoka Buildcon Limited (ASHOKA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Ashoka Buildcon Q4 FY '21 Earnings Call hosted by DAM Capital Advisors Limited. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from DAM Capital Advisors Limited. Thank you, and over to you, sir.

Thank you, Malika. On behalf of DAM Capital, we welcome you all to the Q4 FY '21 Earnings Conference Call for Ashoka Buildcon. We have from the management side, Mr. Satish Parakh, Managing Director; Mr. Paresh Mehta, the Chief Financial Officer. We'll start with brief update, followed by Q&A. Over to you, sir.

Yes. Thank you, Mohit. Good afternoon, everyone. We welcome you all to our earnings conference call for the quarter and year ended March 31, 2021. I have with me on the call Mr. Paresh Mehta, our CFO. To start with, I'll initially brief you on industry updates, followed by company's performance during the year gone by. As we all know, the road construction industry has encountered numerous challenges, most notably in terms of workforce availability. As a result of COVID-19-related disruption at the start of financial year 2021, despite the pandemic-led disruptions, the pace of highway construction touches a record of 36.4 kilometers per day in fiscal 2021. Thanks to the slew of industry-friendly measures directed by the government as well as continuation of liquidity boosting measures and relaxation of loans for the bidders. This exudes confidence that the current fiscal target of 40 kilometers per day of highways construction set by the government will be accomplished. Furthermore, the government has set a target of INR 15 lakh crores in road construction in the next 2 years. Underlining government transfer infrastructure development as part of economic growth. NHAI expects to award projects worth around INR 2.25 lakh crores, indicating a higher order inflow going forward. On toll collection front, with a modest rebound in economic activity, toll collections began to pick up in H2 of FY '21, surpassing pre-COVID levels. But the second wave of COVID-19 has had a negative impact on toll collection across India. Despite the lack of statewide stringent lockdown, or toll suspension regional restrictions implemented in various states, combined with increased fee and negatively affected the movement in the month of April and May. We are seeing gradual recovery in toll collections as the number of COVID cases are decreasing. The lockout restriction is relaxed. However, for the full year 2022 toll collection likely to witness a double-digit growth or lower base of FY '21. Now coming on company's performance. Despite the challenging year, we were able to maintain our momentum and efficiency, resulting in a complete recovery in execution following the difficult first quarter. We were able to recover the difficulty in last 2 quarters and delivered performance in line with last fiscal are resultant of our unwavering commitment. The pace of execution across all projects are faring well. However, we witnessed the impact of second wave of COVID-19 in the month of April and May, with labor efficiency dropping by around 30%, which is presently improving as general situation improves. In terms of order book, we have won projects of worth INR 1,949 crores in the current quarter, which includes an order from Gujarat Rail Infrastructure Development Corporation were INR 283 crores for gauge conversion, total length of 38 kilometers in Ahmedabad division of Western Railway. We also won USD 140 million, approximately INR 1,018 crores order from FDC, a state-owned company of government of Republic of Maldives for construction of 2,000 social housing units on EPC basis in Hulhumale, Republic of Maldives. And we also won an NHAI project in Punjab worth INR 648 crores where we emerged as a lowest bidder. The project centers development of 6 laning of IT city Chowk to Kurali Chandigarh road with design length of 31.23 kilometers in the state of Punjab on EPC mode. This is under Bharatmala Pariyojana Package-II. The company's total order book as on date stands at INR 10,117 crores against INR 8,167 crores on 31st March 2021. Breakup of this road projects comprise around INR 6,183 crores, which is 76% of order book. Among road projects order book, HAM project roads are to the tune of INR 3,471 crores, and EPC projects are around INR 2,712 crores. Power T&D and other comprises of INR 1,376 crores, which is 17% of the total order book. Railways contributed around INR 537 crores, which is 7% of the total balance order book. CGD business comprises around INR 71 crores. Other key developments of the company, the company has entered into share purchase agreement with India Infrastructure Fund for purchase of 49% stake held by IIF and subsidiaries in Ashoka Highway Bhandara Limited, along with 0 interest shareholders loan for an aggregate consideration of INR 34 crores. Post completion of this transaction, the company along with its subsidiary Ashoka Concessions Limited would hold 100% stake in Ashoka Highways Bhandara Limited. The completion of the transaction is subject to receipt of approvals from NHAI and if required from lenders. This is all from my side. I would now request Mr. Paresh Mehta to present the financial performance of Q4 FY '21. Thank you.

Thank you, sir. Good afternoon, everyone. The result presentation and 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 would present the financial results for the quarter and year ended March 31, 2021. Starting with the consolidated results, the total income of Q4 FY '21 grew by 11% year-on-year to INR 1,780 crores as compared to INR 1,609 crores in Q4 FY '20. EBITDA stood at INR 525 crores in Q4 FY '21 with a margin of 30%. Profit after tax is at INR 153 crores in Q4 FY '21. PAT margin is at around 8.6%. Now coming to the standalone numbers. The total income for Q4 FY '20 stands at -- stands at INR 1,434 crores as compared to INR 1,289 crores in the corresponding quarter last fiscal, registered growth of 11%. EBITDA for the quarter was at INR 248 crores with EBITDA margin of 17.3%. The company reported profit after tax of INR 149 crores in Q4 FY '21 with a margin of 10.4%. During Q4 FY '21, BOT division recorded a toll collection of INR 262 crores, recording a growth of 18% year-on-year as against INR 222 crores in Q4 FY '20. For FY '21, toll collection totally was at INR 880 crores as compared to INR 900 crores in FY '20. Total consolidated debt as on March 31, 2021, stood at INR 6,157 crores, of which, project debt is INR 5,795 crores, including INR 150 crores of NCDs at ACL level. The standalone debt is INR 362 crores, which comprises of INR 157 crores of equipment loans and INR 205 crores of working capital loans. We would also like to inform that the CGD arm of the company, achieved financial closure for its debt -- for its projects for a total debt of INR 543 crores and an equivalent equity of INR 291 crores for the project. With this, we now open the floor for question and answers. Thank you.

[Operator Instructions] The first question is from the line of Meet Vora from DAM Capital.

So I had 2 questions. First one is, what will be the equity requirements for FY '22, '23 for HAM projects?

So for FY '21, '22, equity requirement would be INR 176 crores. And for FY '22, '23, INR 141 crores, totaling to INR 317 crores for our HAM projects.

Understood, sir. And the second question was regarding our BOT projects. So where are we in terms of closing the deal to exit our BOT projects?

So the portfolio of projects, which ACL has of BOT as well as annuity and HAM projects, they are under process for monetization with the ultimate aim of giving an exit to Macquarie, which is our shareholder at ACL level. So the process adopted is the potential investors are looking at SPVs to pick up. So there is diligence process going on, which is almost at a stage of completion. And we are also discussing on certain assets, and we are also discussing on the share purchase agreement on those -- for those assets. So this, we believe, should crystallize -- the SPA should crystalize within -- in the coming quarter.

The next question is from the line of Seetharaman from Spark Capital.

Can you give an idea about the bid pipeline and when it is expected to start, given the current disruptions on the bidding side also from the government?

From next quarter onwards, I mean Q2 onward, we will see bidding at NHAI happening. There are already announced bids of around INR 70,000 crores and other states also would start now bidding like UP and Tamil Nadu and all other states. So I think Q2, Q3 you will see a good amount of bidding.

Okay. And what is the order inflow expected across segments by Ashoka?

We are expecting like Q1, we have won around INR 2,000 crores. And going ahead, INR 4,000 crores to INR 5,000 crores should be achievable.

So totally INR 7,000 crores on the road side alone or it's...

This is a mix of road and others.

Okay. And what will be the -- proportion will be approximately?

Proportion exactly what we said, but normally 60% to 70% is roads and 30% to 40% orders we are expecting from other sectors like power.

Okay. And how do you see the impact of competition on the EPC bids, HAM bids. And also on the -- what is the impact of the commodity price rise that you are seeing in your books?

Yes. See, there is an impact of lowering down the qualification. So aggression is there in the industry, particularly at National Highway level. And competition is there, but I think there will be a huge opportunity of INR 2.25 lakh crores, which NHAI and MoRTH are planning to bid out. So again, we will see some reasonable competition going ahead as far as these 2 authorities are concerned. There is a reasonable competition even at states. And this competition is there in HAM as well as in EPC.

Okay. And the average number of people participating in HAM and EPC?

Depending upon the size of the project, they vary. If the size of the project is below INR 800 crores, we see a lot of competition. If it is beyond like INR 1,500 crores, INR 1,600 crores, we see around 10, 12 competitors. If it is below INR 1,000 crores, the competition number is almost 15, 20 numbers.

Okay. This is for EPC?

This for EPC, and for HAM it is around 6 to 8 bidders for larger projects, 10, 12 bidders for smaller projects.

Okay. And on the commodity side, the question that I asked?

Since there is an element of pass-through escalation, certain impact is there, but it is not a significant impact looking at the project sizes.

Okay. And what is the -- on EBITDA level, what would be the change, I mean can you give some sort of an indication?

It will all depend -- if I bid today, which is at peak of the market, then there may not be any significant impact.

No, on the existing projects?

But people who have bidded earlier -- in our order book, we are not seeing much of the impact.

The next question is from the line of Vibhor Singhal from Phillip Capital.

Congratulations on the resilient performance this year. So a few questions from my side. So standing that as we are in almost end of June. So we are right now at the end of second quarter -- on the first quarter itself. So just wanted to check with you, as you mentioned that the labor had dropped by around 50% due to the second wave of COVID. Where are we right now in terms of labor availability? Has it come back and where are we in terms of the execution capacity. So at what levels are we executing at current level -- currently in June as we are...

See, whatever effect was there in April, May, so efficiency is around 70%. Now it has gone around 90% to 95%.

Okay. And the labor also the migration has that reversed? Or there's still some portion of labor...

Labor has come back and hence we are able to match around 90% to 95%.

Sure, sir. And sir, in that backdrop, given that this COVID impacted year also, we were able to basically report a kind of flat top line on a Y-o-Y basis. What is the kind of top line that we're looking this year? Any sort of guidance in terms of either the growth or absolute number of top line that we are looking at?

This year, we should grow by at least 20%, 25% easily we should grow, depending upon how we back the orders.

Yes.

Right. So 20%, 25% for top line growth is what we are looking at?

Yes.

Right. And sir, to support that, if I look at our order book right now, even if we include the INR 2,000 crores of orders that we have received is standing at an order book of around INR 10,000 crores...

Right. Right.

We will still have 2.5x book to sale. So do you feel comfortable with that kind of an order book for 20%, 25% growth given that there are 2 HAM projects, which are awaiting financial closure and which might take more time to start execution? What is the road map to that kind of a growth given that our order book is slightly on a weaker side?

We think we can still target for 25% of growth, 22%, 25% at least easily achievable because going ahead also, Q2, Q3 we'll see some orders coming in. And this you mentioned, which have not done FC that definitely will happen in a month or 1.5.

Okay. So actually that was the next question. So we're expecting the financial closure for -- sorry sir.

Yes. Work will start in Q3 and Q4, yes.

Q3, Q4. Sure. And just one last book keeping question from Paresh, sir. So the equity requirement that you mentioned does not include the 2 HAM projects which are under financial closure, right?

No, it includes that. It includes the 2 HAM projects, so the Bettadahalli Shivamogga as well as the Banwara Bettadahalli.

So, if I look at our presentation -- so in our presentation, what we say is that our total equity requirement for the HAM portfolio is around INR 1,336 crores, and we have invested around INR 775 crores.

Yes. Right. So this includes -- to clarify, this includes PIM. If you see the statement, it includes also the PIM, which is to the extent retained at the SPV level. So it is around INR 200 crores for all these projects put together.

Okay. Right. So, 175 -- okay. Including PIM, that would be -- the number that you gave was INR 200 crores?

Yes, yes.

The next question is from the line of Jiten Rushi from Axis Capital.

Congratulations on good set of numbers. Sir, the first question is on the revenue breakup between roads, railways, power, T&D and CGD business of Q4 and comparable by last year and FY '20 from past year?

So I just give you the breakup of the road and power and rail and CGD for year-on-year. So for the year, we did road turnover of INR 2,884 crores against INR 2,974 crores last year. On the power side, INR 2,218 crores against INR 474 crores last year. On the railway side, INR 373 crores against INR 210 crores last year. CGD was INR 40 crores against INR 32 crores last year. And then other businesses of INR 181 crores, against INR 69 crores of last year.

Q4?

Okay, Q4 would be INR 1,031 crores on road against INR 918 crores last year. INR 73 crores on power against INR 137 crores last year.

INR 73 crores, right, this quarter?

Yes, yes. Railways, INR 162 crores over INR 89 crores last year. CGD INR 10 crores over INR 14 crores last year. And other sectors, INR 67 crores over INR 39 crores last year.

And sir, on the numbers of mobilization advances, unbilled revenue retention? And what is the loans advances outstanding to subsidiaries as in March?

I didn't get you, sir. What was that?

Sir, can you -- the March ending numbers for mobilization advances, unbilled revenue retentions and loans advances outstanding to subsidiaries. Can you give us the number, sir?

Yes. So total receivables was INR 1,016 crores, against which the -- over and above which the retention and old amounts was around INR 480 crores. And on the unbilled portion was INR 460 crores. Mobilization advance was to the tune of INR 290 crores.

So basically, receivable was INR 1,016 crores, retention INR 480, unbilled INR 460 crores, and mobilization INR 290 crores, right?

Yes, yes.

And sir, can you give us some breakup in terms of roads, railways or power T&D?

On a net-net basis, including receivables hold advances or unbilled all considered together, road exposure was INR 562 crores. Power was around INR 223 crores. Railway was INR 111 crores. Other sectors was INR 195 crores. CGD was INR 36 crores.

And sir, on the Tumkur-Shivamogga as you said, the 2 packages are expected to get the financial closure in mediation. So what is the land status in both the projects and have we achieved, have seen any of this because we were in discussion last quarter to achieve FC in the Package-III and AD expected?

[Operator Instructions]

Yes. Satish, tell me.

The land is around 92% and Package III closure is happening in maybe another 15 days' time. Well, we have already submitted to NHAI, but due to COVID, there was no due diligence done at their end. So now we'll -- we're expecting within the 15 days' time. Package IV, we have around 61% of land available, which they promised within a month's time, they would be around 80%. And there also then we can proceed with financial closure. And maybe in next quarter, we'll be able to achieve that.

So Package III, we should get the AD by July and IV by end of Q2, right?

Sure.

[Operator Instructions] The next question is from the line of Ashish Shah from Centrum Broking.

[indiscernible]

[Operator Instructions] The next question is from the line of Subhadip Mitra from JM Financial Services.

So my questions pertain to how do you see the EBITDA margin sustaining over the next couple of years?

So EBITDA margins in the last year except for Q3, having in the range of 14% on the construction without other income, 14.5%. So these have been basically resultant of projects coming to an end and EC has been being reversed for receivables on power front, which have contributed to the margins, which are generally our recommended margins of 12.5% more by 2%. So these are basically reasons of certain revision in margins, ECL provisions being diverse. Some impact of PIM on achieving milestone or renewable, so PIM being passed on to the EPC contractor on achievement of milestones and reversal of any COVID contingencies. So based on these grounds, our expected margins in coming quarters also would be in the range of 12%, 12.5%.

Okay. So sustainable margin number that you're looking at is about 12%, 12.5% over FY '22, '23?

Yes. That is before other incomes, that is construction margins.

Secondly, with regard to the order inflow that you're targeting in the current year, and you did mention that there is a good tender pipeline from NHAI. So would you be focusing more on HAM or EPC or any preference?

So there is no specific -- selection is from the ease of working and availability of land acquisition and available of raw material in those areas, and how much strength of working. So whether it is HAM, whether it is EPC, it will all depend upon particular statures.

Okay. Understood. And sir, lastly, just harping back on the BOT sale with the Macquarie part, is there any visibility in terms of by when you would like to target completing this transaction given it has been pending for long? And at least my understanding is until this transaction doesn't classify, it may even impair your consolidated debt equity and the ability to bid for [ morale ] and correct me if I'm wrong.

So on the deal perspective, we're definitely working very keenly on the deal and the potential investors are also quite very keen. So we do expect to close the deal, most of the assets to be monetized by Q3 -- Q2 or Q3. That is the target. But from a perspective of whether it will -- these are all -- most of the projects are invested projects, and there is cash flow available with the company for taking up new HAM projects. So we believe that -- there will not be challenges on further taking our projects on the balance sheet of ABL.

[Operator Instructions] The next question is from the line of Ashish Shah from Centrum Broking.

Sir. Issued in second time on the Kharar Ludhiana project whether the balance order book is going to be descope now? Or is this going to be executed about INR 109 odd crores.

So there are -- so part of it could be descoped fully, smaller amount, 26, and balance it would be executed as and when land is handed over.

So I think the number, it is [indiscernible]

[Operator Instructions].

Yes. Sir, just repeat the amount you said that could be descoped?

Approximately I think INR 26 crores.

Also what is the status of the smart infra projects in Kerala that we have? Is that on track or this kind of slowed down?

Ashish, could you repeat?

Yes. I was checking on the smart infra project that we have in Kerala, where are we on that project?

Yes, we are executing the major most damage on KFON. So KFON is delayed due to COVID. So we've got an extension and balance works of around INR 100 crores will be executed this year.

Okay. Sure. And just last thing, can you just once again come back on the number for the equity invested in the ACL portfolio. I know we would have discussed this number in the past, just to get us aligned with the March '21 numbers. What is the total equity invested? How much of that is invested by Ashoka and by Macquarie. If you can you give that number?

So As far as the HAM projects are concerned, total invested -- total equity to be invested is around INR 176 crores for '21, '22 and '22, '23 INR 141 crores, that is INR 317 crores total to be invested. On all these HAM projects or annuity projects, which we have, we have totally invested INR 841 crores and INR 372 crores yet to be invested, of which INR 140 crores is pertaining to projects under ABL. So INR 700 crores for ECL projects, plus INR 317 crores to be invested, total INR 1,017 crores. If you ask the total investment of ACL in these projects, including its own funding around INR 3,100 crores has been totally invested, of which INR 800 crore has been invested by Macquarie and INR 2,300 crores invested by Ashoka Buildcon.

So INR 2,300 crores is ABL's total investment in the ACL portfolio?

Yes.

And this is inclusive -- and this is inclusive of the -- any support loans or outstanding loans that we would have seen?

Yes, all kinds of support loans as well as CCDs.

The next question is from the line of Prem Khurana from Anand Rathi.

So first question was on this asset monetization that we've been working on. And I think in your response to one of the earlier questions, it sounded as if I mean you're looking at a piecemeal transaction rather than going for a single buyer. So am I right in my reading? Or is it a single buyer that you plan to deal with and not do multiple transactions? Because you said, I mean, there are multiple buyers involved and they're doing due diligence and there could be multiple SPAs. So would it be done asset by asset or this is the entire portfolio is going to go to a single buyer?

See, we can get to know only at the end of the transition. But to give you an assurance, it's not very multiple buyers and a couple of buyers only looking at it and -- but asset by asset.

Couple of buyers, okay. So sure -- so there could be -- yes, there could be multiple SPAs, but then, I mean, the count, I mean, in terms of buyers would not be that big a number.

Yes, yes.

Okay. And sir, also, if you could share your thoughts on international Maldives order because I think we've done one project and it was done long back, and in between, we didn't do much in international geography and then we've taken this project again back to of this size. So if you could help us understand, I mean, one is how do you see the margin profile a little bit different from the way we work in India? Because as far as INO and most of these international orders, tend to be fixed price in nature? And are there any more in the pipeline in international geographies that you're looking at in terms of adding new -- more projects in either Maldives or some of the other geographies that you're targeting?

Yes. So after the first completion, we have also started second phase. These are smaller value. And then this is the third project, which we have backed in Maldives. And margin wise, we are similar to what we make in India.

So 12% to 12.5%?

Yes, we are participating and evaluating -- participating in the geographies like Africa.

Okay. Any number if you would -- I mean that you could share in terms of what is the bid pipeline? And what is our target or what is our appetite from international geographies in terms of the order addition on a yearly basis or as a percentage of the order backlog that you ideally were going to have from these international geographies?

We are not sure. We being a new player in these geographies. We are still evaluating like which geographies, which countries to approach, how to close and how much to close all this under evaluation.

Sure, sure. And Paresh, sir, I think on this PIM that you spoke about, I always thought the orders that you get to have SPV, these tend to be fixed price and fixed time orders. So how do we pass on this PIM benefit to the stand-alone entities?

So how do -- the situations of the PIM passing through to is only situations where it is over -- so the -- so there is a PIM budget at the SPV level, which SPV retains. So that is cap intact. And due to delays in execution because of not liability of land or because of delay in awarding an appointed date. The fixed price typically cannot remain. So that -- the impact of fixed price is done only with the impact of additional PIM only receivable from NHAI, over and above the PIM of -- budgeted PIM of the SPV.

Sure. And just one last, if I may, please. I mean what was the total equity infusion during the quarter?

During the fourth quarter, approximately hardly anything, INR 40-odd crores, sir.

Okay. Because when I look at the cash flow statement, it seems like we've invested almost around INR 280-odd crores. And last quarter, when we spoke, I mean, you had given us a number of almost around INR 87-odd crores, which is why I was wondering, I mean, why would this jump be there because cash flow statement shows some other number and, I mean if I add this INR 40 crores to the INR 87-odd crores that you gave us the last time, it works to be around INR 127 crores. So am I missing something there?

285 and...

So when I look at the cash flow statement...

Loan repaid also of the subsidiaries. So INR 285 crores and INR 123 crores, net.

Okay. INR 123 crores is what we managed to -- okay. Sure. Okay. And just -- I mean, on Jaora-Nayagaon, there was this issue with one of the feeder stretches. I mean it was under construction, which is why we were not getting the kind of traffic that we used to get at Jaora-Nayagaon. So has that been taken care of and?

So the project, which is to the north of the Jaora-Nayagaon stretch continues to be under construction. They also were -- their construction also held up -- was held up due to COVID and other reasons. So we still continue to face that impact on the stretch, but I believe within 3 to 4 months' time or 6 months' time, they should be able to get the work done.

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

Couple of questions from my side. First, I mean, if you could tell us what is the kind of CapEx that we are looking to do for FY '22? And what is it that we did in Q4?

So last year, we -- the CapEx was only to the tune of around INR 27.6 crores. Coming this year, we probably would be in the range of INR 50 crores to INR 60 crores for FY '21, '22.

Sure. And for the CGD...

It could have been change as the projects which come in. So new projects, yes.

On the CGD business, what is the incremental equity that we need to improve?

So INR 291 crores is the total equity to be funded for the project over the period of another 4, 3 years. Of which we have already funded INR 130 crores. So INR 162 crores -- INR 150 crores to be funded maybe after almost 1.5 to 2 years' time. Before that debt will be drawn now because most of the work which has been done today is based on equity. Now debt has been tied up. So debt will be down for the next 2 years before any further equities to be funded.

And you mentioned a figure of, I think, INR 543 crores for the debt. Is that correct?

Yes, correct, INR 543 crores of -- that is the total proposed debt.

Sure. In terms of payment cycle, I mean, how are things over the last couple of months, especially after the second wave? And how do you see things going ahead?

Parvez, could not hear the last line. Could you just go again?

So I was talking about the payment cycle, especially during April and May when there was a second wave, that maybe kind of delay [indiscernible]. And how do we see the payment cycle going ahead?

So as far as NHAI is concerned, NHAI continues the -- this support system. So they have been up to June, and they continue to -- they have a circular continue to fund the projects on a monthly basis also. On the state fund other than Uttar Pradesh and Jharkhand where we have few certain jobs and certain exposures, there is a challenge, I think they will come out only 2 to 3 months' time, that takes some time. But other states are quite comfortable. We have had a lot of recoveries from Bihar also. So I think the payment cycle would be comfortable, except for certain teething problems in Uttar Pradesh and Jharkhand.

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

Sir, just wanted to understand the NTPC solar project, we have seen the increase in the cost [indiscernible]. So this is because of the increase in the solar model and PVs silicon prices? Or why there is increase in the cost? And is it a fixed price, how it will be structured, sir?

Could you just repeat the last part of your question?

So the NTPC project, which we have received, we have seen increase in the project cost from INR 503 crores to INR 625 crores. So just wanted to understand the reason behind the increase in the project costs. This is due to the increase in the solar module prices. That is the main reason why there is increase?

Increase in the project costs.

So last -- in Q3, the order backlog was INR 503 crores and in Q4 it is INR 625 crores.

Paresh, could you clarify?

One second, I'll just come back.

Just the excluded, I guess.

Yes. There's something more added in that NTPC...

No reason for any addition.

The basic NTPC contract costs remain same.

Okay. But this is a fixed price contract or how it is like? And whether it has started now?

Yes, it started now. It's a fixed price contract, and it is INR 503 crores. I don't know the exact figure...

I don't know sir. It's in the order backlog. Anyway, so we'll take it offline.

There are 2 GSS orders clubbed into NTPC, things at the noninflation is not full. That's another INR 120 crores added in that column.

Okay. So there was a new inflows in Q4 in the power segment in Rajasthan?

Correct.

Correct.

The solar projects are fixed price. So any impact because of the increase in the solar model prices or something like that?

Yes.

On the margin?

In terms of prices, there is some impact, but we feel going ahead, we will be able to fit within our contingencies.

And sir, any loss funding this year? And any expected next year, sir?

Couldn't understand, what was that?

Sir. Loss funding done in any of our B-O-T toll assets in FY '21 and any additional loss funding which we are expected to do in FY '22?

Yes, major as we continue -- the Sambalpur continues to need support of around INR 35-odd crores per year. So that will continue to be there.

Okay. So basically, we did INR 35 crores in '21 and '22 also we'll do INR 35 crores?

Yes, yes.

And sir, any -- can you highlight on the fund limit and nonfund limit and utilization levels, sir?

So our funded limits are CC limits of INR 330 crores, which we are generally utilizing around 35% to 40% only, I mean and on average. So it would come up and down. And then they are over and above these funded limits, we have other funded limits of INR 200 crores of CP limits as well as supply chain finance limits of INR 125 crores. On the nonfund based, we have almost INR 3,000 crores of nonfund base of which approximately 60%, 65% of -- 60% is utilized balances...

And sir, on the -- this CCD project, as you said, you have achieved the debt tie-up for INR 543 crores and we have to invest further equity of INR 160 crores. So sir, the INR 160 crore of equity will be coming 50% from our partner, right?

Right. Correct.

And sir, debt tie-up has been done with which bank, sir. And the interest rate?

Debt tie-up has been done by -- with PNB and HDFC at the cost of 8.75%.

The next question is from the line of Anupam Gupta from IIFL.

Sir, just one question. Why you -- why was the Bhandara project bought by you? What was the logic behind that?

So see, basically, in order to facilitate, which we are in the process of monitoring assets, so all buyers are typically looking at buying the 100% stakes in the SPVs. From that perspective, we had targeted at one of the price fees to take 100%. So that is easier to then sell the total project.

Okay. But is it like individual [ SPVs ] that we bought? Or are you still -- is the portfolio together, how will that be?

So the basic -- as I said before, the basic interest is in picking individual assets, which you find from the potential buyers.

Okay. So there is a possibility that a few assets are left behind with you. That is also a possibility?

Could be, yes.

The next question is from the line of Harsheel Kothari, an Individual Investor.

So my point is, what is the reason behind the change in stance of regarding previously, we were thinking of monetizing it directly at ACL level. And now we are thinking no very individual asset by asset. So what is the reason behind it?

It's more from the perspective of the buyers' interest, what they want to -- what they are interested in and what kind of risk profile they want to buy into, whether they buy into ACL as such as a company or at the SPV risk level. So it's more of a perception of the buyer, and we were open to that.

The next question is from the line of Meet Vora from DAM Capital.

Yes, just had a follow-up on the EBITDA margin. So if you exclude other income, our EBITDA margin is at 14.5% this quarter. So is there any one-off in EBITDA? Because a normal run rate, we are riding at 12%, 12.5%. So I just wanted to understand on that.

As I said, on the year-end transition and there were certain revision in margins in certain projects -- certain due to -- in power project because amounts were stuck, there were ECL created, which was reversed because our receipt of payments on the power projects. Also, there were certain achievement of certain milestones and reasonability of PIM being realized by the HAM projects more than the budgeted PIM that was passed on to APL provided for ABL. And whatever COVID provisions we had contingency we have created in the last year were reversed in this year. So all put together were the reasons for margin crystallization of 14.5%. But otherwise, at the project level, generally, our targets are for 12%, 12.5%. So any releasing contingencies or certain events, which give higher margins are the reason for higher margins. Otherwise, 12.5% is generally guided EBITDA margins.

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

Question on the financial results of Ashoka Concessions. So there -- we see there has been an impairment of INR 110 crores. And last year, there was an impairment of INR 155 crores. But that kind of impairment, we don't see in our standalone or consolidated numbers. So if you can just throw some light on how is that account -- how does that accounting work, where we don't see those impairments be reflected in our earnings?

So in ACL, our impairment is based on SPVs evaluation. So some assets may be impaired and some assets may be doing well. So based on each asset, which is impaired, we need to provide for in ACL. But when we go at ABL at our upper level, it's an investment in ACL. So then we look at a consolidated number of pluses and minuses in ACL and then compare. So that does not have any impact. So there are assets which are not impaired are doing better. So their value is positive and over and above the 155 plus 110 provision created. That's the reason there is no impairment at the ABL level.

But that would mean that there are some assets of ABL whose value has been revised upwards. And which is why those can negate the impairments, but otherwise I'm still not clear why...

Exactly. Yes, yes. So suppose an asset is, on the books for, say, INR 200 crores, and another asset is at another INR 200 crores. One is revised to INR 150 crores. Other FMV is INR 250 crores. So overall, there is no impact in when we total up to INR 250 crores plus INR 150 crores is INR 400 crores and INR 200 crore plus INR 200 crores is INR 400 crores. So from that perspective, there is no impairment at the grand parent level sort of. And at serious level, what happens is these impairments get knocked off because they do not get carry forward.

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

My question is again on the NTPC solar project. just to get a little bit of deeper understanding given that these are fixed price contracts and we have seen a sharp spurt in the module prices. And my understanding is that by...

[Operator Instructions]

Yes. Is this better now. Am I audible now? So my question is pertaining to the solar contracts. And there given that we have seen a spurt in the module prices and the fact that by March '22, we will be seeing CCD becoming applicable. Do you really see a larger risk going ahead?

Yes. So being fixed price contract, we do keep contingency while bidding. So as of now, yes, prices are very steep. But going forward, we feel that this may come down. I did not place any orders for these modules. And due to COVID, there is an extension of around 6 months in the time lines. So we have sufficient time to decide on when to buy.

Understood. So by when are we mandated to deliver these modules of this project as per the contract, what is the time line?

The total time line for this contract is 24 months.

24 months starting January? I'm sorry, if you can just help me on that?

Start time was January. But due to COVID, we are getting around 5 months of extension.

Understood. Understood. And lastly, are you looking to expand on the solar EPC business? What are your thoughts on that?

Yes, we are participating in other bids. This is EPC business, so absolutely for now we get an opportunity, we are participating.

The next question is from the line of Parikshit Kandpal from HDFC Securities.

So my first question is on the -- sorry, I joined the call a little late on the monetization. So will the HAM monetization happen before the total asset monetization, any sense on that?

[Operator Instructions]

I would request to repeat. So what you're saying is?

So given that second wave of COVID and potentially targets coming in, so are there prospective investors delaying any decision making on taking on the old projects? And does it imply that the HAM asset monetization happened earlier than this old assets gets monetized?

No, no. So the whole portfolio has been looked at in -- at the same time. So depending on where the closure happens, any project, which is completed for the due diligence could achieve SPA stage and so -- So there's no specific reason the toll projects will get delayed or the HAM projects will get earlier. So it will all depend on how the investors wants to go ahead with acquiring the assets.

Okay. And second point, which you made earlier in the call that, they will look at assets specific and the acquisition of FPS. So when do we see these actually kicking off and maybe started -- we start signing on next year, so any time lines on that now?

We are already under discussion on the SPA as well as the final stage of GD, so for a few assets. So that should be happening within -- in this quarter's time, I mean -- sorry, coming quarters.

The month of September, so basically July and September quarter?

Definitely midway September quarter.

So something concrete will basically come out by September. So -- and because we are targeting I think money is coming in that September, October quarter. So inflows will happen most probably in this financial year before December? Or are you looking at the fourth quarter of FY '22?

We are targeting this quarter -- this financial year financial flow to happen.

Okay. Just on the -- so this affordable housing projects which you have picked up. So any thoughts there, so are you looking to do more projects because I understand there are some more that's coming up. So first of all, whether -- I mean there are not enough opportunities in India and we have already done projects there in Maldives this is just because we are picking up some more orders because we had some presence there earlier. So just to understand the rationale of bidding outside of India when there is opportunity India itself presents a huge opportunities on the building side?

Yes. So this is an independent vertical, which you're looking for opportunities outside India. India definitely is going to throw up a lot of opportunities. So anywhere our 80% to 90% of book is going to be India. But since our presence is there in Maldives and we are also exploring Africa. And our strategy always has been to start with smaller projects and then scale up.

So in this international market, so what kind of opportunities are you going to basically look at across segments or specific to certain sectors, if you can just highlight on the strategy and [indiscernible]?

Opportunity.

So, roads, buildings?

Road, it could be power, it could be railways. So we're looking at what our EPC wherever it makes sense definitely we'll participate and bid.

Okay. And these will be largely multinational funded projects which you will be eyeing or?

These are mostly exit bank-funded projects.

As there are no further questions, I would now like to hand the conference over to Mr. Mohit Kumar from DAM Capital Advisors Limited for closing comments.

Yes. Thank you all for joining in. Thank you, sir, for giving us a chance to host the call. Do you have any comment to make, sir before we close this?

Yes. So I mean, we thank all the participants for having joined the call and taking out the time. If you have any further queries, you may get in touch with us or our IR relationship agency Stellar Investor Relations. That's all from my side.

Thank you, everyone.

Thank you.

Thank you.

Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.