AVP Infracon Limited (AVPINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H1 FY '26 Results Conference Call of AVP Infracon Limited, hosted by Kirin Advisors Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ganesh. Thank you, and over to you, sir.

Thank you, and good afternoon, everyone. On behalf of Kirin Advisors, I welcome you all to the conference call of AVP Infracon Limited. From the management team, we have Mr. Prasanna, Chairman and Managing Director; and Ms. Priyanka, Company Secretary. With this, now I hand over the call to Mr. Prasanna. Over to you, sir.

Very good afternoon, everyone, and thank you for joining us. On behalf of AVP Infracon Limited, I extend a warm welcome to all the participants to our H1 FY '26 earnings call. I'm joined today by Ms. Priyanka Singh, our Company Secretary and Compliance Officer. I just wanted to begin this with a brief introduction. AVP Infracon Limited was founded in 2009 with a mission to build high-quality infrastructure that supports India's growth. Over the years, we have established ourselves across highways, bridges, flyovers, irrigation and other development backed by engineering precision, timely execution and a strong culture of quality. We have completed several important projects. Among the important projects what we have completed, we have NH works -- NHAI works, the state government works. On the execution side, we continue to work on large and complex projects. As of now, the ongoing projects such as the 4 laning of Thirukoilur-Asanur Road, which is valued at INR 86.5 crores. The strengthening of Trichy-Thanjavur NHAI road which is valued at INR 30.3 crores, likewise. Let me now turn to our financial and operational performance for H1. This has been a particularly strong period for AVP, marked by sustained execution momentum and the benefits of the work we have put in over recent years. H1 FY '26 stands out as the strongest half year in our company's history. Our revenue grew by 79% year-on-year to INR 195.7 crores. EBITDA increased 87% and stood at INR 44.7 crores with margins improving to 22.9%. Net profit rose to INR 23.2 crores, an 82% increase over last year. This performance reflects disciplined bidding, strong on-ground execution and the growing contribution from our expanding order pipeline. On the operational front, H1 was extremely active. We secured new orders of around INR 124 crores across highways, bridges and industrial infrastructure. Key wins include a INR 39 crore performance-based maintenance contract, a INR 16 crore ROB, road over -- railway overbridge project on the Singanallur and Peelamedu stretch. A INR 33 crore industrial infrastructure project for the Mappedu Multimodal Logistic Park from Reliance and the strengthening of NH83 from NHA worth INR 10.6 crores, which is an additional work on the ongoing Trichy, Thanjavur NH. We also received a INR 24.6 crore contract for infrastructure creation at the SIPCOT industrial Park in Manapparai. As of 30th September 2025, our unexecuted order book stands at around INR 475 crores approx and our bid pipeline remains strongly at around INR 1,500 crores to INR 2,000 crores. This gives us clear execution visibility for the next 18 to 24 months. And we expect a strong ramp-up in the second half. I'm also pleased to share that we have started H2 on a strong note. In early November, we secured new orders totaling INR 78.75 crores across highways and Industrial Infrastructure segment. We have received L1 status for a major INR 57.57 crore widening and strengthening project of Tiruvannamalai Thiyagadurgam Road. We secured a INR 12.77 crore order from Reliance Mappedu Multimodal Logistics Park for internal road and infrastructure development. We also received an INR 8.41 crore order for RCC drain and OSDL works in the same logistics park, which are all added to the existing work, which have been awarded from Reliance. Together, these early wins in H2 reinforce the momentum carried forward from the first half. We have also issued INR 40 crores of convertible warrants with the promoter group subscribing to 75% of the issue, a strong endorsements of AVP's long-term strategy and potential. Before I move to the outlook, let me touch on the broader industry environment. India continues to see one of its strongest infrastructure cycles, supported by a government CapEx outlay of over INR 11.2 lakh crores for FY '26, around 3.1% of the GDP. Highway construction has remained robust and investment in logistics, multimodal transport and industrial corridors continue to rise. This environment is supportive for an EPC company like us and the shift towards larger and more integrated infrastructure projects plays to AVP's strengths. Looking ahead, our priorities are clear. We look to widen our business horizon, which currently faces concentration loss by expanding beyond Tamil Nadu. That remains our major focus area. And we target to achieve 25% to 30% revenue from other states in the next financial year. Maintaining strong margins and disciplined working capital management will continue to guide our execution as we scale. The solar EPC division introduced earlier this year is being developed as a meaningful long-term growth vertical capable of participating in larger opportunities. From FY '27 onwards, we plan to selectively enter private and industrial infrastructure projects, which will further diversify our portfolio and strengthen our revenue mix. To conclude, H1 FY '26 has been a milestone period for AVP Infracon. We have strong financial momentum, a strengthened balance sheet and a healthy order pipeline. We do have a favorable industry backdrop. With this foundation, we are confident of delivering a strong performance in the second half and continue our growth journey. Thank you once again for joining us. We will now open the floor for questions. Glad to answer you all.

[Operator Instructions] The first question comes from the line of Smit Jain from KTech Family Office.

I just want -- firstly, congratulations on the great set of numbers. I wanted a couple of clarifications, right? So although we've doubled down on the revenue bit vis-a-vis the first half of last year, if I remember correctly, in the last con call -- on the last call that we had, you had mentioned that we're targeting the full year -- I mean, we are targeting a revenue of INR 550 crores to INR 650 crores for the entire year, right? And that is going to be spread across both our verticals, Solar EPC and road vertical, wherein road vertical would be INR 550 crores or INR 500 crores to INR 550 crores and INR 50 INR 100 crores is going to be on the Solar EPC vertical. We've done INR 200 crores in the first half. So are we saying that we are targeting a revenue of INR 400 crores in the second half? Like is that possible? Or is that what we're targeting?

Thanks for your wishes, first of all. And to make this clear, always H1 is 40% of what we do in the H2, minimum 35% to 40% of what we do in H2. We are very clear in that INR 500 crores, what we have given the guideline, stand-alone basis INR 500 crores and anything above -- over and above that will be happier. And this solar and other -- I mean, consolidation with other subsidiaries, we are targeting at another INR 50 crores to INR 100 crores. So this is our target. This remains the same, and it is not taken back or reduced at any point of time.

Okay. Fair enough. The second question I had in line with this was that our stand-alone revenue for this half is INR 190 crores and consol is INR 195 crores, right? And I'm assuming the PEB and the solar EPC is into a different subsidiary, right, both these verticals. So we've only clocked revenues worth INR 5 crores in this first half. And what -- I mean, I just wanted to get a flavor on what sort of orders, what sort of target -- I mean, target you mentioned, but what sort of orders, what sort of work are we going to complete in the second half with respect to these 2 verticals?

The PEBs, we are not taking it to any subsidiaries. We are doing it in the main company only. Pre-engineered buildings are sticking on to the main company and when compared, this solar is concerned, this is actually, we have started in the first half only and we have not made any order, I mean, any sales on the bigger side. So, we are doing low on this. And we have confirmed order for around 15 megawatt, which we have applied for all the approvals, as you know, the approvals take time. Once this approval is done, we'll start the execution. We are targeting the fourth quarter billing, maximum we'll do it by fourth quarter. And if some delays happen, it will go to the first Q1 of the next thing. But the execution will be starting positively in the 1st -- January 1, that will be in the Q4.

Okay. So what we're saying is the INR 500 crores stand-alone is something that we already have an order book for, visibility for. And for the consol level INR 100 crores that we're targeting, right, INR 50 crores to INR 100 crores. Currently, we are waiting for the approvals to come in. Post that, we'll start the billing and the execution work, right?

Yes, yes, correct, correct. We have -- we have the orders. Once these approvals are in place, we need government approval for the establishment of solar parks and something. And we have applied for the same. Once it is done, then we will be in a position to mention when this project will be delivered and something. So we are on target on that. And we will -- this -- actually, we -- during the last con call only, we have increased this guidance of the solar. We have not mentioned anything before that. And only based on the order what we have confirmed. This is from a customer, regular customer of ours, and we are moving hand-in-hand for the approvals. So once this approval is obtained, we'll be making an announcement about order procurement and we'll start the work also.

Fair enough. And just to understand what we are doing on the PEB front, right? I'm assuming that is also a fairly new vertical that we have started. And PEB itself is picking up really fast in India. So how big is the opportunity? What sort of planned vision do we have for that vertical? And I suppose you can give some flavor with respect to the kind of interaction you are having with customers, will allow us to bake in some notes going forward?

See, pre-engineered buildings, this sector, we are very fresh in this, and we have started doing this analysis last quarter, and we are in the initial phases only. I don't expect much of buildings -- much of revenue from PEB structures this year. We are anticipating on a longer run, we are anticipating something in the next financial year. One-off, we have some -- these buildings and other things, we have now taken an order -- fresh order from Reliance, which will be executed in this. Apart from this, the other orders, what we are planning will be executed in the next financial year only. I don't foresee any orders that will be executed and completed and built in this H2 from pre-engineered buildings.

Okay. Fair enough. And the last question that I had was with respect to our business model. So currently, it is predominantly road EPC, bridge EPC that we are doing. And just to understand, going forward, what exactly is our focus going to be at it? Because I'm sure with Tamil Nadu, the entire infra space, the infra story in Tamil Nadu is really huge, right? I was attending a con call yesterday with an EPC company, which is also into -- which is into water works in Tamil Nadu. They were also very bullish. So I just wanted to understand, going forward, is it just that will be restricted to the road and bridge story, EPC story? Or is it that we want to expand our product portfolio service offerings also? And if yes, then what sort of sectors or segments are we looking at?

At the moment, we are core road and bridge player. And now we have started diversifying into pre-engineered buildings and solar. Once we get settled down in this and once we start this flow like a river, which there will not be any interference or hindrances, which takes a slow pace for running, then we will target at something at the next thing. We want to go baby steps. We don't want to run all the time and get into any trap. So we are targeting at growing -- at the moment, we are targeting at this pre-engineered building and solar EPCs apart from what is our bread and butter. So after this is getting good, then we will think about other things.

Fair enough. But like within our bread butter, are you seeing like -- what sort of traction are you seeing on the demand front? Like is there enough scope for us to continue growing at the pace that we've been able to in our bread and butter segment? Or you feel that there is some slowdown or there is going to be some saturation after a point, and we'll have to look at other revenues. Just wanted to understand on that lens.

So 2 lanes will become 4 lanes, 4 lanes will become 6 lanes, 6 lanes will become 8 lanes. This is an expanding industry where you will not see any downfall or something. Even if I'm not getting any PEB orders or solar orders, I can sustain very well with what we do in the roads and bridges. This is the industry which will keep on growing, growing and growing. Only thing is we'll be doing the same thing what we are doing. We need expertise in managing the cash flow and managing the managing the machineries. If we are good at it, we'll do -- we can do wonders in this. Nothing...

The geographic diversification, like are we currently also looking at other places apart from Tamil Nadu or?

We are looking. We are looking to expand beyond Tamil Nadu. We are looking. We have applied for 2, 3 tenders, which unfortunately, we were not L1. And as I said, when I have earlier told in my con calls also, when you want -- when someone asked me, you want a healthier order book or a healthier P&L? I want a healthier margin. So we are very conservative in bidding. If I would have gone 2%, 3% less, I would have had an order book of around INR 1,000 crores to INR 1,500 crores in my kitty by now. But I do not want to do that. See, we are here to do business. We are here to make money. We are here for the welfare of the company, employees, stakeholders, everyone. We are not for any boosting our order book and showing big order book and making loss somewhere. So that is the reason we did not go out of the box and bid anywhere. We are bidding conservatively. We lost smaller margin only. Anyhow, we had a good lesson and we studied what -- where we lost and all. We are working on it, and we will try to increase in those segments.

The next question comes from the line of Pranav Pal from Prudent Equity.

So I had a few questions. You kind of -- I audible, right?

Yes. Yes, please proceed.

Yes. So you kind of back -- double backed on that INR 550 crores to INR 600 crore guidance, right? So -- and you've just got orders, and I'm assuming these orders take time for the execution to really start. So that INR 400 crore additional revenue in H2 seems kind of unachievable. So what are your comments on that? How do you plan to achieve that?

Sir, I have always mentioned about this. We have -- these numbers what we have done is already for H1. And after that, H1, we have almost a month and a half past and we have done quite a lot of billing. And we have some work in progress, which will be billed everything. So the work in progress, which we have not built during the H1, we have built during this 2 months, and we have work which has to be executed and all. So this -- what unexecuted order book, what we are mentioning, we have quite a lot of opportunity. We are self-sufficient to complete this and close this order book. See, we have already completed almost approximately INR 200 crores. And we have last 2 months, we have built around INR 70 crores to INR 80 crores. So we have around INR 230 crores, which we have around INR 400 crores of unexecuted order book, which will be completed in March. So that there is no chance of dropping back in this. So INR 500 crores plus -- INR 500 crores plus what we have already given guidance will be done. Apart from that what we are getting is from solar industry. If you have attended the last con call, we have mentioned that the guidance was given for INR 500 crores from the stand-alone. Apart from that, what we have given is for the consolidation.

I think I missed it. How much have you booked until now in H2?

No, sir, once again, we are actually -- I wanted to -- sir, one second, we are not supposed to disclose the figures actually. I wanted to stop you there. Please don't disclose any figures for H2. We will be doing some sort of disclosure maybe quarterly. Sir, we can do that in NSE. But right now, in this call, I'm sorry, we cannot do that.

I think -- okay. And additionally, you said that to maintain the numbers that you said, you need an order book of around INR 750 crores to INR 1,000 crores and also to maintain a book-to-bill ratio of 1:2. So I'm struggling to understand how FY '27 will look like?

Sir, we are bidding close to INR 2,000 crores to INR 2,500 worth of tenders, which are in pipeline. So we are expecting at least 25% of what we are bidding to be in our favor. So this will turn out to be in our favor before the month of March or before the year ends. So that will be sufficient for us to operate for the next year. And we will have tenders coming up continuously. So we -- as I mentioned earlier, we don't have much of order book in my order bank or something like that. And we have shorter-term order book, so 1 year to 18 months. So we keep executing. And once we close some orders, then fresh orders keep coming. So this is not an issue about the longer run.

Because like until now in FY '26, like since the year has started, the order run rate is only INR 202 crores. So yes, that gives me like -- okay. And like is there additional L1 orders that are yet to be filed for?

Yes, we have some orders to be published. Once we have received this L1 status, we will be announcing that.

The next question comes from the line of Samrat Shah, an individual investor.

Sir, am I audible?

Yes, sir, very much.

Sir, first of all, congratulations for a fantastic set of numbers and a great result. And also about the margins that you have improved. Most of my questions have been answered. I had a few questions like regarding the margins. With the increase in revenue, and you just mentioned that you don't compromise on just for the sake of bidding. You like to maintain your margins. So if there is an increase in revenue, is there a possibility of improvement in margins with the economies of scale coming into play?

Always there will be -- when the top line grows drastically, the bottom line will be vice versa. Bottom line will be reducing only. See, when we are targeting some geographical expansion or something, there may be some decline in what we are getting in our home ground. When we move out of states and participate in a new territory, we'll not be getting the comfort of working in what we are getting in our hometown or our home state. So those things were the possibility of what we were considering and we were quoting. So I don't think there will be increase in any profit margins much above than this. So we are working on to sustain those margins.

Okay, sir. And one more question regarding the solar EPC vertical that we are going to enter. So what kind of percentage share are you looking for solar EPC and going forward, like in the, say, next 2 years, in a regular business of roads, bridges and highways and solar EPC, what would be the percentage contribution in both?

Sir, we are in the initial stages of the solar business. So we are targeting somewhere around -- instead of talking about the percentage of top line share from infra and EPC, road infra and solar EPC, I'll just say that we are targeting somewhere around -- in the next year, we are targeting a minimum of around INR 150 crores to INR 200 crores top line from solar EPC. So this is what we have planned. So we are working towards that.

Right, sir. And one more thing, sir. I really like the way that you honestly admitted that you had participated in a few tenders and which did not go into your way. And you have learned a lesson, like, for future. It is a great thing to know that -- because it is difficult to admit something like this in a con call. So I would like to congratulate you for that as well, sir. And all the best for the coming quarters.

The next question comes from the line of [ Ajinkya ], an individual investor.

Hope you remember me. First of all, congratulations for the great set of numbers. As I know you are a very honest person, that's why I am a long-term shareholder of your company. Despite I'm not gaining anything since last 1 year. Still, still, still, I believe in you, sir. I have only 2 questions, sir. The first question that it is irritating since you mentioned in last con call -- last investor call, sir, that is the big dilution you are doing in EPS or via QIP and warrants. So what is the plan for it, sir? Why we are raising such high amount, likewise, INR 150 crores via QIP and warrants, sir?

Thank you. Thanks for the trust you have in me. And yes, Priyanka, you can please answer this one.

Sir, actually, as far as this QIP is concerned, we just wanted to take a blanket approval for INR 110 crores, it's not INR 150 crores. So we were planning to do a blanket approval, but we are not raising the funds altogether. I just want to clarify on that. And sir, warrants, sir, has put in -- actually, this is maximum promoters, sir has only put the warrant amount. And as far as QIP is concerned, sir, we are going for around, I think, INR 50 crores, INR 60 crores we are just raising and raising because, sir, the company is growing. Our top line is growing. We are having a lot of work orders coming up. We are doing a lot of bidding, which is going to take place. That's the reason we have decided for around INR 50 crores, INR 60 crores only fund raise. And again, they're going to do it in tranches also, sir. So it's not that they're going to do it in one shot. And we are also ensuring that whatever QIP, whoever investors are coming in, we are looking for an association for a long term. We are definitely not looking for investors who's going to be there for a short period of time. We are looking for somewhere 6 months and 1 year time. So that also we are taking care of. And that is one of the reasons why we are still in this process, and we have not just, like, raised the funds till now. So this is it, sir. You'll be assured of it, sir. Even if we are going for QIP, it's just a blanket approval, and we are being very choosy about investors who are coming in, ensuring that they are going to be long -- in association with the company.

That was the very big concern that I was having, sir. And I know, sir, whatever you give the guidance, 100%, 101%, I'm confident more than you that you will achieve it. Sir, I just want you to clarify that for next year, are we targeting for INR 750 crores of guidance?

Yes, sir. Definitely, we are targeting somewhere around INR 700 crores to INR 750 crores we are targeting.

Okay, sir. Okay. And last question, sir. Are we going to publish quarterly results, sir?

Once this QIP happens, we are bound to abide by the main board conditions, everything. So once this happens, if it happens, we are bound to do that, and we will be doing that. Even if we are not -- if not, we are not publishing, we'll be giving an update at least to the investors.

So in fact, we have been doing it for the last 2 quarters, we have been keeping updating our investors about at least the percentage of -- approx percentage of revenue growth that we have been achieving. So that also we are doing it, sir, for the last 2 quarters.

The next question comes from the line of [ Umang ], an individual investor.

First of all, good set of numbers, really appreciative. Sir, I have just a follow-up question. Most of the questions have been answered. I have questions regarding working capital. Sir, top line is good. Everything is good in terms of margin is also good. But what is my concern is working capital days have been shooting up upwards. And in the recent cash flow statement also, trade receivables have been shooting upwards only. So I just want to know specific reasons. Is there any lack of efficiency in collection regarding in trade receivables or anything from your side? Because in past quarters also or half yearly results also, operating cash flow from operating activities is consistently negative. So any specific reason can you guide for?

Sir, I'll reply to this. Sir, first, I'll just do it point-wise. First of all, this time, our operating cash flow is a positive one. Stand-alone is around INR 10 crores and the consolidation is INR 17 crores. Secondly, sir, your concern for trade receivables, I just want to clarify right now, we are having a balance of INR 85 crores, major reason because in the month of September alone, sir, we did approx INR 70 crores of billing. And we, as an EPC contractor, have a collection period of 90 to 120 days, but it's not for everyone. Sometimes we do have a collection period within 60 days also. The main reason is INR 85 crores being in the balance for trade receivable is because around INR 70 crores we did the billing in the month of September. And sir, other reason, the working capital going high is not because of the trade receivable or trade payables because trade payables is standing at INR 20 crores right now, which, again, I'm telling you with confidence that sir, if you go and check any website, any companies, they will not have such a low trade creditors. We are making the payment of creditors on time. In fact, we are giving them a lot of trade advances. And of course, we are also -- we are getting good discounts from them and all. We are enjoying that. So that's the reason our PAT margin is also intact. That is also one of the reasons. So the main concern over here is for inventory. Sir, in inventory, we are having around INR 81 crores, INR 82 crores. In INR 81 crores, INR 82 crores, sir, around INR 65 crores to INR 70 crores is the unbilled revenue. So for all EPC companies, we do have unbilled revenue, sir. And most of the companies show this unbilled revenue in their revenue itself, but we don't do that. What we follow is what exactly billing we have done, we show it in our revenue and unbilled revenue forms a part of inventory, which eventually within 2, 3 months, we actually bill it. And this is why this working capital is a little high, sir. And definitely, it's because this working capital is a little high and we do need funds. That's why we are going for QIP since the company is also growing. But other than that, debtors and creditors are actually in a good position, sir.

Ma'am, I have just one follow-up question regarding that. In last con call, which was in May, you mentioned about factoring or bill discounting options. you were exploring in some trade receivable category, if I'm not wrong. So I just want to know whether it is working or not working in favor of your company?

We have not started this factoring, trade factoring for us till now for bills receivable, mainly because, sir, it is all state government projects which we are doing, all government projects, state government and central government. So billing collection is not a problem for us, sir. But then there is a particular time which we need to collect and we have our receivable days between 90 to 120. So since our billing for the month of September itself was around INR 70 crores, so that's the reason why this receivables is standing at around INR 85 crores, sir.

Because sometimes when I see your debt profile also, it is very good. No questions about it. But seeing your debt piling up, I have questions regarding interest -- rising interest burden on the company. So any specific reason you are doing QIP for reduction of debt or only working capital reduction?

Sir, we have -- since the company is growing, we do have bank coming up to us for the CC limit and availing debt and all. We are still eligible for that, but we are actually not going through that debt line and we are thinking of going through this equity. So that this burden of this finance cost and all is also not too much for us. So we are trying to come into a position where debt and equity ratio is actually fine, and we are trying to strike a chord between that. So that is how it is since we are a growing company, we'll definitely need funds. There's no doubt about it. But definitely, we are not going for any more further debt. Whatever debt we are having is currently that. And whatever debt you are seeing in the balance sheet is not alone this working capital debt. It actually has a part of directors' money also, which was given to company. Part of it is a term loan, which we take it for equipment and machinery because if you see, we have a -- it's a capital-intensive market, and we have most of our machinery, which is owned by the company itself. So that is what -- and we have -- when we have compared also that owing a machinery is much better than going for higher purchase, we saw that owing is anyways better as some of -- in terms of performance, in terms of cost effectiveness, everything. So that is why our company is majorly like 90%, 95% of assets are all owned by us. So what debt you are seeing is not alone for CC limit and all. It includes everything. And definitely, we are not going further for debt raise. That is why we are actually going through equity raise.

The next question comes from the line of Paras Chheda from Purpleone Vertex Ventures.

First of all, congratulations, sir, a very strong set of results, and you've been delivering quite as per sort of expectations and projections that you said. Sir, just 2 queries -- a couple of queries which I have. One is what is our current order book level, sir?

It stands at INR 475 crores unexecuted order book.

And so that for now and some additional would be sufficient to execute that INR 500 crores stand-alone and whatever additional little bit from the EPC business?

That's correct.

Okay. And sir, for FY '27, on the stand-alone what we are aiming at INR 700 crores or INR 750 crores in that region. Would that be achievable with the -- I mean, order wins, which we were discussing a while ago, I think some. So the kind of order win that will be required for that, would you be confident of that, sir?

Sir, 100%, sir, I'm into this business for the past 16 years. We have never fell short of any orders at any point of time. We just have this order book suffice for this year and the next quarter, what we'll be executing. And whatever orders we are winning in this current half yearly and the next -- I mean currently in the first Q1, that will definitely help us to finish FY '27 of what we have targeted. So getting this order book will not be actually every one -- every investor will are having this -- I fear that the order books are less even every time when someone is asking about the order book, I've been telling the same only. Whenever -- see, we are not winning any order that's in the size of INR 1,000 crores, INR 500 crores or something like that. The thing is we win small orders, we win the size of the board, we can execute and that is adding quietly to our portfolio, and we are executing whatever is necessary, and we are always good to go with that.

Right. It's just that, sir, because a lot of these orders come quietly to you and most of these are not disclosed to the market. And therefore, there remains a little bit of that anxiety amongst the investors said that maybe the order win is probably limited to achieve our target. But if you're confident, then you've been in business for long, so we'll go by that maybe. And sir, in terms of operating margin, so far, you've held it very, very well. That -- and of course, I do understand you have lost a little bit of business to maintain our margins, which is also very good. So you -- the next year projection, you still maintain reasonably healthy margins of 20% plus? EBITDA margin?

So this EBITDA, what we are doing, we are confident of maintaining that. So we are working towards that only. We have a strong financial team, which works for this and we give targets for the completion. Every week, we monitor the progress as well as what has been the budget and what has been the expenditure. And if is something falling short, we have calls and we take up those and we maintain all these things. So this is -- see, it's something like what we have -- I have learned from [indiscernible] and all, I have seen their follow-up. They don't go to a field, but they sit in the office and they run the business only with Excel -- Microsoft Excel. So this is something which is now the way of business what we have been turning into. And we are doing good at it. We are doing good follow-ups for the execution team and the management team, we are having good backup call every week. So we are maintaining -- we are very much strong in maintaining this profit margins.

So then the government, of course, the intention is clear in terms of the spending, et cetera, on infra. I mean on ground do you see, is there any sort of the paucity of tenders or limited tenders be sorted out in respect of the government intent to spend more. But in general, on ground, is there healthy demand, I mean, in terms of tenders, et cetera, and even going forward? Or is there a little bit of a lull for now?

The demand for works as always in the rise. So every infrastructure, this is just the second sector after defense. I always tell that on the border roads whatever India spends on the borders and the defense sector it is almost equally spent on infrastructure. So this...

There is paucity of demand and maybe even at our margins.

Pardon?

So there is a paucity of, let's say, tender demand for us, let's say, and -- or offers for us, let's put it that way, and probably at our margins. I mean there is enough work.

Yes, yes, government has come up with very stringent conditions, the HAM more projects and which we are not doing actually at the moment. HAM projects earlier, the net worth of the company is calculated only once. Even a company with INR 100 crores net worth can participate in 10 works. But nowadays, to bring -- to give the works equally to all the companies, what if we have taken work and net worth is INR 100 crores and that prequalification for that tender is INR 70 crores, INR 70 crores is nullified and you will have a net worth of INR 30 crores only available for you to participate in tenders. In this way, the much of the companies, they cannot take 4 or 5 works and have it in the bank and all. Now the order book for every HAM companies also will start declining. So it will have a standard size of order book, and that will be good for a growing company like us to participate in many book. So will not be short of any projects.

Right. Sir, just wanted to say that, I mean, since we'll be dealing most of our contracts will be with the government or the central public sector undertaking. The cash flows or the payments from them are reasonably on time?

Yes, sir. The payments are very reasonably on time. There is not delay in any of the plant.

I guess, 90 to 120 days is what we are putting at. Okay. And sir, just last question on my end, just the bookkeeping items. If there is a broad breakup available of other current assets and noncurrent assets. They've gone up a little bit sharply. Just wanted to understand a broad breakup or the reason for that jump?

So we have many -- Yes, please, Priyanka. Yes.

Other current asset is basically the TDS and GST, this input credit, like the TDS, TCS receivable and GST, ITC and all. So the main reason for it being so high is because in the September month itself, we had a lot of billing, which actually we had to clear it in the month of October. So 30th September, it is high. Again, in October when we made the payment, it got knocked off and it is now in normal only. In fact, sir, if you see the other current liabilities also, that is also higher because again, the GST payable and DDS payable is higher, sir. So that is the reason this was higher. And as far as the other noncurrent asset is concerned, we had -- since we got new orders and all, this is for the EMD, which we had to pay them, sir, so that EMD that security deposit. And also we enjoy CC limit overdraft limit from banks. So we have to put FD at collateral. So that is the reason other noncurrent asset is high.

And I can see through there is a very, very well-managed financials also. And I hope if you just manage good orders and some of them in time, I think we'll be doing quite well over the next couple of days. But I mean, financially, we are very, very -- I would just suggest from my end that as you've been doing that, just to keep an eye on the debt-to-equity ratio as far as possible.

[Operator Instructions] The next question comes from the line of Smit Jain from KTech Family Office.

Just 2 questions, right? One is a subjective one. I wanted your commentary on it. Next year is an election year in Tamil Nadu, right? And what we've seen, what our usual experience has been that during an election year, EPC companies are the companies which are more -- I mean, it affected the most, right, because there's lesser workflow. The payments are usually stuck by the state governments. So how do you anticipate going into an election year next year in Tamil Nadu from an operational workflow standpoint, I just wanted to get a sense on that.

Sir, normally, this election year, what you mentioned is it will be a little bit slow. But what will happen in our case is normally all EPC companies, we will be facing a slowdown in the Q1 once after this financial year completes and all the revalidation of the funds and the budget preparation, either if it is going to be a central government or state government, whatever it is, it has to be done. And there will be a break in -- there will be a slowdown in operations in the month of April and May. So this is -- luckily, we -- Tamil Nadu people are having the elections during those times. So we'll be having the election with May. So positively, we will be having our code of conduct from the month of March and April and May will be a slowdown for us. Definitely, it will be slowdown. But the slowdown will be in the announcement of new tenders or issuing of fresh work orders or something like that. But whatever growth we have, we can -- we are at liberty to execute the works and there will not be any slowdown in those things. And obviously, there will be a strain in some working capital during those times. So we have to manage. We have to plan in such a way that it is not spalling our Q1 results that we have to plan that. It is always Q1 light. Our industry is always Q1 light. So we'll be managing in such a way that we don't face that challenge. But after June, after the new government is formed, they will be with full of zeal and enthusiasm to go for new infrastructure works and so that will be managed very well in the Q2. So that would be a problem. So this is the scenario we have been seeing for the past several years.

Fair enough. And secondly, I mean, you've been very transparent that you don't want to take low-margin orders rather than you want to work on quality work orders, right? Solar EPC is a very commoditized business wherein we've seen that the margins are not only low, but like currently, there is a lot of competition also. So as a segment, are you like betting high or betting big on this segment? And why are we wanting to get into a segment which is inherently a low-margin business, right?

Sir, I understand that the solar EPC business, we have competition, and this is not an industry where we get the same margin where we get in the road EPC or other things. So -- but we need some -- we thought we need some diversification also. We need some top line increase in our company. So we need to do good numbers -- and even at a cost of 1% or 2% lesser bottom line, we are ready to do that. But at the same time, that will not -- that we see at any point of time, we are not going to dissolve anything in the bottom line of the main company or the EPC company or EPC. So we just wanted to have an addition to what we are doing. So that was the call taken by us.

Fair enough. And do we participate in state orders, state government orders or central government orders is what we apply for like in terms of tenders?

Tenders for the rural PC company, we participate in both state as well as central government as well as public sector, everything. And when it comes to solar, we are concentrating 100% on private orders. We are not going for any government tenders.

The next question comes from the line of [ Rajindra Passi ], an individual investor.

Sir, first of all, heartly congratulations to you on the great set of numbers, be it revenue, be it the bottom line for the working capital as well as receivables and debt. I guess we have managed everything really well and we were able to bring those really good numbers. So congratulations on that part. I have like 2 questions from you. First, the amount of money that we are going to raise by QIP. So what will be the of the use of that money? Like will it be mainly for the working capital or some part of it will go into CapEx? How we are going to use that money? And when -- by when can we plan to or do we have a plan in place to bring in the QIP? Like will it be in H2? Or are we planning it in FY '27?

No, this is -- we are planning in H2 only. We are -- with the quantum, we have not -- we have been doing the homework. We are getting a blanket approval for INR 110 crores, but it is not that we are doing entire INR 110 crores. We are planning to raise somewhere between INR 50 crores to INR 60 crores at the first tranche. And this is entirely going into the working capital. As you know that we are getting -- we almost have almost all the machines. If we are even going to buy some new machines, we'll get a better rate of interest loans for the machinery. So we prefer having all these for the working capital.

Okay. And sir, the second question would be like we have INR 180 crores of debt as of now on our balance sheet. So what is the current rate of interest on this debt on an average...

It is from 8.25% to 9.25%, 9.5% for both working capital as well as the term loan for the plant and equipment and everything.

Okay. I guess that's a great rate of interest. The last question would be, sir, like we are working on the solar EPC side as well. And someone earlier from me have already mentioned basically that it's a cut road sector and the margins are not very great now. So have we looked into like moving into, let's say, other sector such as transmission -- EPC transmission side so that, that is -- at least in my understanding, that is a very good sector, which may have, let's say, 4 to 5 years of very good earning potential up until maybe FY '32 or FY '33. So are we looking into other sectors as well because I think that will also align somewhat with our work.

No, sir, we have not thought anything about that. We have not given any thought about that till now. We are concentrating on these core areas. We want some concrete presence in these areas, then we will plan for any expansion or diversification or further going into other sectors or something like that. We just not want to touch every areas as of now. What we have touched, we want to make it concrete revenue-generating sectors, then we'll plan about that.

The next question comes from the line of [ Ajinkya], an individual investor.

My questions are answered, madam.

So as there are no further questions, I would now like to hand the conference over to Mr. Ganesh for closing comments.

Thank you, everyone, for joining the conference call of AVP Infracon Limited. If you have any further queries, you can write us at [email protected]. Once again, thank you, everyone, for joining the conference.

This brings the conference call to an end. On behalf of Kirin Advisors Private Limited, we thank you all for joining us, and you may now disconnect your lines. Thank you.

Thank you, everyone.