AVP Infracon Limited ($AVPINFRA)

Ladies and gentlemen, good day, and welcome to AVP Infracon Limited H2 FY '26 and FY '26 Earnings Conference Call hosted by Atlas Capital. We have with us the management today represented by Mr. Prasanna D, Chairman, Managing Director, CEO; Ms. Priyanka Singh, CS and Compliance Officer; and Mr. Rutul Shah from Atlas Capital, Company's Investor Relations Adviser. [Operator Instructions] Please note that this conference is being recorded. Since there are no opening remarks, we will begin the question-and-answer session.

[Operator Instructions] We take our first question from the line of Raghav from R21 Ventures.

Okay. So my first question is regarding the PAT and EBITDA margins. So looking at the financials, we have observed that PAT and EBITDA have been compressed by around 1% or 2%. So can you brief about what were the key drivers behind this compression.

Sir, actually, there are 3, 4 factors this time which has affected the -- and to begin with, you all know that because of the geopolitical or and all, so bitumen prices went up, it happened only for the 1 month, but that also took a toll -- so -- and other than that, we were actually planning to go for QIP in the month of September, October. But because of these prices and all share prices fell. So promoters decided not to dilute shares -- so in order to get -- achieve this around 440 CRO turnover -- they have -- actually, we have gone to banks and other -- we have taken debt of things to ensure that the turnover is there. So finance costs also went a little high compared to last financial year. Other than that, these 2 are the factors. But other than that, I want to just say that because in the month of March, maximum billing is done for us than March -- and this time, we have a high unbilled revenue, unbilled revenue of around INR 75 crores, INR 80 crores, which we couldn't build -- so the problem is that in accounts that you have to follow a accrual system. So we have to book all the expenses. But since this unbilled revenue was not built, it was not part of sales. So for that also for higher until revenue also a fact margin fell down a little. So these are all the factors basically which had come and do picture for this patent EBITDA to fall down.

Okay. Okay. Got it. Sir, following to this, so what is the realistic sustainable tax margin you are looking for in the future?

So we will be trying to maintain this because I think this is the, I think, worst scenario that we have faced. So we are trying that 9%, 10% of PAT will always be maintained. I hope MRs are also actually a brief to it. Sir, do you have anything to add on to this?

Yes. Good morning, everyone. Thanks for attending our earnings call. I just want to add a few words in this regard. When we were maintaining a PAT of around 11.5% or around 11.7% or something like that. We were always questioned about how our PAT margins are so higher when compared to the peers. Now actually, what happens is there are certain factors that was adding on to all margin levels. these margin levels when we are expanding drastically see when our concentration is on a smaller circle and for a smaller top line this PAT margins are always maintainable. When we are expanding or there is some dilution on the PAT level, but that is not allowing or something like that. Even then 10% of what we have achieved is not a low PAT margin when compared to our peers, if you could compare with all the peers in the industry. And this we assured that this will be maintained and we are trying our best to regain our PAT of around 1% or 11.5 or tires. Since these are all the things which which our -- I mean we unforeseen circumstances or unforeseen incidents, whatever has happened, which could not we predicted of which could not be -- I mean, what you've got to anticipate we would have anticipated this, we would have done some how works and done something, something like price escalation or price increase to point of 1% or 2% or maybe even 5% is anticipated in the industry. But when the price of around or happened in the raw material in the vitamin, which is a major consumption of rolling which will definitely have it. I don't know whether the -- all the other people, how they are mitigating this, but this is the fact which have happened to us, and we are trying our best to get that resolved in the next half year year. And also adding to this we are expanding brutally. And this expansion will have 1% or 2% hit on the profit, which have already disclosed in the earlier calls also,

Sir, also, can you just throw some light on this competitive bidding as well because bidding has been very competitive now about when we come into this NCI building also, the price has been -- now it is getting when we need to get some work we have the go much competitive. Now the prices are something very competitive in the market. and people are ready to go for higher price bidding also. We are very much conservative in this. I've always been conservative and I'll try to be conservative -- and we are -- in fact, if we are increasing this profit margin to detect, we will be able to get further orders also. So we are just working on that, and we'll get back to you in the next 12 months call about all this.

Okay. So following up to what you have said, like you have mentioned that there has been increase in the raw material and raw material prices. So how well are your contracts protected from this volatility in the input costs and raw material costs? And is there any -- are there any charges that protects you from this molar for example, there are price addition clauses. So are there any similar kind of close that protect you.

Yes. There are price escalation in process based upon the tender and based upon the nature of work. So there are some works which if we are bidding the tender, which is lesser than a year that was not covered in basis conditions. Only if the duration of the work is more than 12 months, that is 13 months and more price escalation will be there. And that also there are things price escalation will be applied. Previously, price escalations are applied only on the final build not every bill will be applied. We have to work and produce running a contract and this price escalation will be calculated and provided to us in the final bill only. So in this time, also when we were doing some work, price escalations version were not provided -- and in state government works, there is only a cap of 5% variation in price escalation. After that price escalation of 5% -- more than 4%, 5%, it has to go for a revised administrative sanction, which will take some time for the sanction to come. So there is a challenge I mean there is a greater chance for us to get that price escalation, but it will take some time. That will not happen immediately due to which the cash flow will be affected and not pretty much in the marginals.

Next question is from the line of Murtuza from Pinpoint x Capital.

Am I audible?

Very much.

Yes. Yes. opportunity starting with just I wanted to understand that earlier we were guiding for roughly 500 -- so the key reason for the shortfall is it just the billing cycle? Or is it there some order execution delays or something else?

So we have achieved INR 500 crores practically. But theoretically, when it comes to the books we could not book it. See, we have done INR 440 crores, and our unbilled revenue stands crores this INR 70 crores, which normally when you see that, always, Q4 will be very much high or high on our side. But this is due to this certain scenarios where we could not complete the works entirely, we could not achieve that milestone because that -- it is all due to these external factors like the price increase of this vitamin and nonavailability of vitamin. Vitamin was very -- it was available was vacs in the last month. normally, if it would have been done, the margins in our milestones would have been achieved and this building would have happened. So these billings could not be done. Well, actually, what we thought this year, we wanted to close our unbilled revenue and work in progress at lesser than INR 20 crores, but this did not work out and just took it all in the. So on an average, we have done INR 500 crores, which could not be built up. Right, sir. So we can say that execution of 500 was done. It was just the billing cycle, which -- because of which we are not to be able to see that number?

Yes, absolutely correct. And sir, coming up regarding the order book reported unexecuted order book for the year and guidance for FY '27, what sort of inflow are we expecting for FY '27?

So FY '27, we are sticking on to our guidance of INR 700 crores. For that, we have to -- we are doing our best to raise fund raise, either through equity or later through equity and debt -- this is really planned and I've been telling hinting about the INR 700 crores from last year itself. And this, we will definitely achieve this. Not every year, we'll fall short of. This is the first time we have fallen short of guidance, and this guidance this will be is the next earnings call.

Right. And sir, regarding the order book, what is it currently, what's the current unexecuted order book out of.

It's roughly around INR 500 crores. there around INR 500 crores. We are started being also after the elections are over and after the things that the tenders are coming up, and we will start building, and we'll try to increase our order book to a place where we'll be able to achieve in the next year and we'll have a sufficient order book to face the consequent years also.

And sir, what is roughly the big pipeline that we have already.

No, we don't have anything -- any big -- only on 2 tenders we have participated in is in pipeline, all or in all other said, we are going to participate in investment. The tenders have been floated, and we are participating in this month. coming month .

Okay. And sir, what was the revenue split between Pamela and the other case for FY '26.

So as of now, we don't have any orders outside Damalado. I don't want to comment anything before we get confirmed orders in our hand. We are bidding out the Tamil Nadu. If everything goes well, we will start our work outside also. But as of now, we don't have any tenders positive in our hand out team.

Okay. And sir, and regarding the split in the revenue that we had already done in FY '26. So was there any revenue that came in outside.

No, sir, nothing. Is all in fact Damato only. No revenue has been a tile, we have not gone out of Tomago.

Okay. Understood, sir. And sir, -- and regarding -- can you give some commentary regarding the finance costs and borrowings? Are we getting some visibility on just wanted to understand better on the grade aspect because the finance cost has slightly into the spend. So just wanted to understand the trajectory going ahead towards or sorry, so sir.

Okay. Sir, actually, you know that we will be -- we are actually planning to go for this equity raise soon. So once this share market is a little better and now and prices are better, most probably, I think by half yearly, once we declare as well post that, we will be going for equity raise. So once this equity raise is done, whatever funds we have taken as debt also as of now, 1,2 funds are there, which is like a bridge funding for us. So we were just waiting for this equity raise. Once we do that, we will make sure that a chunk of debt what we are having right now, we pay it off because anyway, it is like a bridge fund for us and it looks like short term for us. So with that, I think our finance costs will also come down.

Okay. That is -- we're expecting post funds will be in better Yes. And lastly, I just wanted to understand a little bit regarding saying several elections in Q1. So in terms of execution, was there any impact or major impact or No, there is no such impact in the difference in government information or something like that execution are going on as as such.

There is no any difference between the previous thing on now the current scenario also.

Understood. Understood. So just a request from -- for the coming results at orally. We appreciate really appreciate if we could start with the investor presentation as well. Would really appreciate if we can start with that initiative as well. Otherwise, very much for the detailed responses.

Yes, I'll take up this. Normally, we do this with the investor presentation. that this time, we could not do that for various reasons. So we'll do that and you can share our main to Rutul, be good to share with the investor presentation as well.

Next question is from the line of Mukesh Panjwani from Securities.

Am I audible.

Yes. Yes.

Sir, going ahead, would we be able to give the quarterly update as you have earlier also talked about it? Would it be possible?

Sir, actually, we are in talks with our auditors for this IndAS systems there. We -- once we are through that, the migration may happen, we'll try for this. But as all of our investors are asking about this, we are taking a thought about this, and we will definitely try to do that, sir.

Okay. And sir, my only question is regarding that conversion cycle as we know that it is going up year-on-year. So what we are doing to bring it under control and especially our inventory days are also going up year-on-year. So can you throw some light on that?

Sir, inventory release are higher because of unbilled revenues since we are not following IndAS so whatever sales we are showing is actually the bill sales. Once we start following INDAS, and will become a part of revenue itself. So inventory days will ultimately come down because our inventory is somewhere in the range from INR 15 crores to INR 20 crores are actually not more than that. So once this unwell becomes part of sales, the cycle will also be better and I think inventory days will also come down, so -- so it's like ...

Yes, when we would be following that. sir, actually.

Sir, I wanted to do it in this financial year. But sir, as you know, once we back for India, the last 2 financial years has to be reinstated and everything has to be done. So we fell short of time this time. But I'm sure we have already -- we are speaking to our auditors. So we'll start the process soon, sir. So we'll convert it into India this time.

Okay. And in this case, our debtor days will increase, would that be the case?

The debtor days increased because during the selection or the receivables now that got delayed a little what we were supposed to receive at the late First thing. And secondly, more than that is in the month of Fan March, we had a very high billing sir. And a data days are anyway somewhere between 90 to 120 days, depending on the project. So in the month of average bill somewhere, I think, around INR 50 crores, and in the month of March, we did INR 75 crores or INR 78 crores we did so. So this high billing is because of that only, which in the first quarter itself, we have started getting the receivables. So that won't be a problem extent. Okay.

More than 1/3 of our trade receivables are received on this days itself. We have around INR 40 crores in the trade receivables in the stand-alone, but we have received around INR 55 crores to INR 60 crores in the month of April and May till date. -- that is not an alarming factor. Yes. That is not an alarming factor when we think because, see, when we wait for the receivables to come down, we cannot just like that hold our operations. These receivables it takes time. And we expect that these receivables will be high because of these elections because people have the tendency not to take to get funds from the finance and how I have it in the accounts for this either highway department or PWD department. They do not want to have it in their department. And at the end of the 31st March, they do not surrender the same. So they take a lesser amount of funds from the finance department, and they won't exhaust whatever it is they have received. And this election year, it was -- it will be always like this. And after elections also, the government formation, it all took so much time. And definitely, even before that also when this revalidation happen, funds were in place, and we are getting funds on a regular basis. So that was not a point to be afraid of or something like that.

Got it. Got it. And sir, now can you throw some light on the borrowing part like right now, the debt is -- the total borrowing amount is INR 234 crores on a consol basis. So going ahead, how do you see like would it be in the same range or we have the goal to reduce it by the end of FY '27?

Yes, we are planning to reduce the debt service. We need some funds to keep the ball rolling. So we have taken some debt. It has taken at all on the top line. sorry, bottom line because of this finance cost. But something we need from, so we have taken this. Even if someone want to most us ask me about this pledging of shares, this pledging of shares by 1 of the directors is done for the volume of INR 10 crores. The entire INR 10 crores have been pumped to the system alone. And it has not been as come as a director's loan. And it has not taken for any personal use or some other purpose. So this is what we -- when the market is not giving gout like that abandon my company, right? I have to work some takes why have to work some way and I have to do that. And more, adding to this debt side, I have subscribed for a warrant of INR 30 crores, in which I have already done INR 7.5 crores. So I'm monetizing the balance INR 22.5 crores. So that I'll infuse the same. I'm not worried about the share price or something. I know the share prices will come up any more than what I have subscribed for the rent. So I'm not worried about that. And I am definitely going for this subscription of barns at the earliest in the first -- positively in the first half year at. So that my debt level will also increase. I can repay some debt with that. Or as I may use that from a working capital or something, which will be helpful for the company. So I'm monetizing that funds, and I'll be getting it as soon as possible to do that same also.

So the plan will be released in this year themselves?

Absolutely, it will be released.

Okay. Sir, actually, just to add on something since we don't have the shed, people will be thinking that we are having too much debt on if you just concentrate on stand-alone. So our total debt is coming somewhere INR 206 crores in stand-alone. I didn't give us all bifurcation on this. Out of this INR 206 crores we have INR 140 crores limit with our banks. And we have around INR 15 crores to INR 18 crores we are having from the promoters itself. Unsecured ancestry loan from the promoter itself the balance of around INR 48 crores, INR 50 crores is nothing but the term loan, which we do for our machinery and vehicles. Since we are an asset heavy asset industry, we own our own fleets and all that INR 48 crores, INR 50 crores is like a term loan sir, which we have taken from the mass because you guided at a very cheaper rate compared to blocking your funds and cash flow and buying it it is always better to go for a term loan and take it from bank. Out of this INR 48 crores, INR 50 crores, I think INR 32 crores are any of the short term, which we are writing like we will be paying it in this financial year. So if you see the broadest at 150 CC limit around INR 50 crores, INR 51 crores of term loan out of this INR 32 is short term. and INR 15 crores is from the promoters, which they have put in in the company. So this is actually the bifurcation.

Got it. SP1 But then now like we are targeting around INR 700 crores of revenue this year. So how we are going to manage like like it would be difficult to reduce the debt if we have such a big target because the working capital would be required for that.

So regulatory working capital will be required. With the increase in the -- our top line. So our CC limits also we can increase -- and parallelly, we are also going for our equity raise also. And the warrants balance amount also promoters will be putting in because maximum is for 3 only we have subscribed for warrants. So I think that everything like this, I think it is pretty good and we are pretty confident that we'll be able to achieve what we are targeting.

Next question is from the line of from MC Analyst.

Okay. So sir, my first question was regarding the margins. So consider for this year that we are targeting a top line of INR 700 -- so what kind of margins would we be comfortable in which you think that we can confidently achieve. I'm not targeting the -- I'm not saying that we should be targeting to 11% or 12%. But where it should lie for this year because the bitumen prices are still by and it may remain high for, let's say, for the next 6 months or maybe for NCR.

So we are in a stage that we just want to target to maintain at this 10% minimum and to not to comment or commit anything about 10% because of this geopolitical tensions. So about 10% would be achievable as to what we have -- I mean, we have worked out our -- whatever we are calculating this 10% would be workable.

Okay. So you mean even with the price hike in the tent as well as our debt level as -- so paying taxes and everything 10% should still be a.

10% will be definitely -- it will be there. 10% will be applicable as the escalation clauses, the government has come up with some notifications and also this -- because of the geopolitical tension, this government has net has come up with a circular for this escalation clauses, how the things have to be followed and also these are all positive things, and that will definitely be hold.

Okay. Okay. The second question, I guess, you mentioned that in our balance sheet, the receivables were at INR 150 crores and now we have almost INR 55 crores to INR 60 crores years. So we are at INR 100 crores as a right? What is the sir? From the receivables side, sir? I think they were at 160 fears towards the end of March. And as you mentioned to a question earlier that we have received 55 to 60 out of those INR 150 crores within April Correct. Correct. Okay, sir. And -- the third question would be regarding the bidding pipeline and on our order book side. So when can we expect like the new orders coming in towards our side basically?

The tenders across Tamini be started now 2 or 3 NGA projects are floated and all the other tenders would start floating only from the month of June or something. So we can expect something in the first half of Q2. Okay. And do you think the same margins can be maintained in those new tenders as well?

What will happen is the prices of this increased prices of the vitamin will be taken into the estimate while preparing.

So any tenders which are floated from now. This will have the new cost implemented into this. So that will not be a problem. Again, whatever price increase will be implemented in making the estimates and that will not have an impact on the profit margins.

Got it, sir. That's good to hear then. The last question would be from the foundry side. Sir, as you know, that the stock price is really down as of now. So -- and it may take some time to come back up and we may be in a situation where we can't raise the funds as of now right? So given that scenario, do you think that we can sustain for next 6 months or 1 year if the fund raise does not happen with that and will that.

On the funny side, I'll say that we know to build roads, but we don't want to build this balance sheet. I have learned that building a balance sheet is more hard it is a way to do things. People look at only balance sheet and not about efforts and results of the company actually -- so they just want -- they want center. The Eni company cannot down Russell, and all the company will not be giving positive results day after day. There may be shortfall there may be -- if there is a dip only, there will be a rise. So this -- the investors should have in mind, but don't know what are all the mindset of all the investors. And again, when coming to your point, what I say is even if the fund raise is not happening, we are on the hunt to make any debt rice, actually. -- because maybe the debt level increases, maybe the bottom line will be decreasing because of this finance cost or something. But at the same time, our target will be the same. We have to rein what we are planning is, we have the receiver with the help of equity or the help of debt. So we are planning in some way -- so we are planning in some way or other. If equity is not happening, we'll go at it. But I hope that Investors will have some confidence in the company and will bring back the prices for us to go for the equity raise?

And are we still looking to raise it in the range of INR 160 to INR 170 as we guided earlier like the stock price should be at 160 to 170.

Yes, yes, minimum of that is does it, sir. not on the question. Diluting at this current price is not good for me again. This I did it 2 years ago. I cannot do the same in after 2 years.

I get better, and I am in support of that, but we should not be raising at least on this price range because we have come so far within this I will instead buy back myself. Definitely, we should do that, sir. Definitely, you should do that. One request from my side would be that given that we have all these discussions, right? So as the earlier investors have also asked for that, if we can provide a PPT with all these details like the current debt breakdown in terms of city limits and term loans and everything like what we are planning, I think that will be helpful for everyone.

We are working on that. We have a detailed PPT presentation getting ready. It could not be done today. That is the reason you do not have the investor presentation ready. It will be presented to you very shortly. For all the investors who wanted this to take it, please just drop a mail to company or Rutul, we will get done to you at the earliest. I would say they're uploaded to the exchange so that it could be available to everyone who was to -- that sounds good also, we'll do that, sir.

Next question is from the line of Murtuza from Pinpoint x Capital. Sir, I just had a handful of questions more -- just wanted to understand better regarding the CapEx we have done this year? And what kind of CapEx are we planning for the coming year?

Priyanka, can you hear me with this.

Yes. Sir, actually, CapEx, I think we are having enough of fleets and Minato asset as of now. Even if we expand and we are looking at in for a turnover of -- so we can actually shop our assets from 1 side to another. And as of now, we don't have any requirement for CapEx. But again, then it is difficult to say anything regarding again which location we are going to get what site and all, if at all required, we will go. And whenever we go for any CapEx, we always go through term loans, it is easy for us also that rate of interest is very -- it's very low compared to giving the entire cash flow and backing a cash flow of buying an asset. So as of now, we don't have any plans. We are enough whatever fleet we are having, whatever assets we are having. But again, it is all depending upon in the future which project we are getting in which locations since you know we are actually planning to expand also out of Tamil Nadu. If at all, we think that we need a set over there or we will buy it or else we will hire the machineries then and there. So as of now, no plans for CapEx, sir.

Understood roughly, if you have a ballpark feature for the CapEx done in FY '26.

Sorry, sir, CapEx standards, what figure you want?

The CapEx done in the year, which has ended FY '26? So we -- I think we took out the INR 25 crores we are not mistaken. What to capital.

And another question I wanted to ask was regarding our employee costs. So this year has roughly increased in proportion with our revenue, roughly 50-odd percent. And so I just wanted to understand, as we're targeting for around roughly INR 700 crores, which is roughly 40-odd-percent -- so will we see the same increase in our employee -- or will there be some sort of a picking in over here? Like that we'll be able to do more revenue per imply? Or will we have to approach increase the number of employees.

The headcount on has to be increased contact increase. If you are increasing our projects, team to be instated totally. We cannot do to 2 simultaneous projects with 1 team. So we need a fresh team also to be increased. So we will be having the head of operations for each project and newly recruited engineers or something like that, we'll shape and keep increasing our team. team has to be increased at any cost.

So will it be in pace with the increase in revenue?

Yes, yes, yes. Definitely. when revenue increases, you have to keep your team increases. See, the number of projects thing for executing a project worth of INR 50 crores or INR 100 crores, we need around 15 to 20 members of team. If you are going for another INR 100 crores, another 20 number of teams should be increase or something.

Fair enough, sir, understood. And then lastly...

Will I just want to add on in this that whatever increase in employee costs you are seeing -- it is all because we have hired people for our project sites and all. There is no increase in promoter salary in any way. I just wanted to add that thing, sir.

Understand -- and I would really appreciate it if we could get some commentary regarding our EB vertical that is pre-engineering and regarding our solar EPC subsidiary that we were planning. I just wanted to understand what the status is currently as of now? And what sort of outlook are we looking from it? I just wanted to understand that better. see, solar EPC, we have obtained a first order, and we we have just started our works and being the government change has happened there is some changes in the approval scenario you're getting.

So we'll be getting the approvals as soon as possible. I could not commit anything on the time line, but we will start this year. This year, we are looking some good orders in solar EPC also. Regearing building, we are at the entry level. We are bidding our best -- but since we are very new to this, and we don't have any much of print qualification or as we have not done bigger buildings or something like that. It is pretty tough to get into big-sized tickets. So now we are targeting a smaller thing to build our qualification on, and we are bidding tightly so that we will be getting some entry into that segment this year. But it is not fruitful until now. So we are still on the run only for that.

Understood, sir. So we have an actual team readily available for PEB. It's just that as of now, we don't have any orders at hand.

Yes. We are executing on order as of now. This is the first order being given to us. And we are looking for us some breakthrough in a short time.

Next question is from the line of Paras Sheda from Purple and Vertex Ventures LNP.

Joined in late. So apologies if some of the questions get repeated. But sir, just first on the receivables bit, out of this INR 160 crores receivables that were outstanding how much have we collected in April and May? And how much is expected to be collected by Q1 end?

So out of that INR 160 crores, INR 120 crores is from the stand-alone sorry, 140 from the stand-alone Out of INR 150, we have done around INR 55 crores to INR 60 crores, not exact value I could say, INR 55 crores to INR 60 crores we have done till date. And in this control thing another INR 5 crores or something we have received -- so this is what happened until now. So we are very much below that 120 days receivables cycle, we'll be able to receive the entire INR 160 crores into our books.

Yes, sorry. Yes. I was saying that our locks are INR 160 crores, INR 60 crores we have already received is what you're saying? Yes, yes. by the industry how much more do we expect to come out of this in? About Okay. Sorry -- by the end of June respect to further collection is able is not we are not able to hear you clearly. Can you hear me now? Yes. Can you hear me now? Yes, yes, yes. I think out of this 160 me, we've collected INR 60 crores. Now there is June month also left for Q1. frankly, how much can we collect in these ones?

So that cannot be committed anything. I'll connect to INR 200 crores or INR 300 crores whatever it is. We are just on the one. We'll be -- even if we may collect even the or something maybe trending or set. But everything is falling on time and there is no lag in anything. Is this all happening on time only. We have some time line for this receipt also. So this is happening on time because election and all these scenarios, there is some slight lag in there, but that is not that much alarming as to our knowledge, by whether we have seen 3 or 4 elections crossed and this time is no exception. And there is some inevitable dates, but it is not that much.

Okay. So then given that -- when do you expect this cash flow from operations to turn positive? I mean, because this year was negative and probably due to milestone billing delays, maybe I would say, -- so do you expect to get cash flow positive in terms of operations this year, FY '27? Or it will still.

So our trade receivables is around INR 160 crores. And our payables, if you see, it is around INR 20 crores. Yes. This mismatch see INR 140 crores of our profit, I mean how our funds are with others. When we are paying people on time to just to keep our business good, we are doing it, we have much of creditors and much of supplier credits. We can make easily this cash flow positive. But this cash flow negative, I think we are mitigating. First half, really, we have done it. And the first half was probably been cash flow positive only. And because of this, we have drained leads in every rupee to make the payments for all our suppliers and all finance banking, everything. We did not have anything just to have a Bandalan, -- we just want to make on-time payment for most of this and we do not want to file in that -- so that is what's making things is cash flow negative. We are trying to make it possible in the next financial year. The same question, you will not be able to you may not ask me in the next financial year earnings call.

I just want to say that conservatively, let us not comment that we will be 100% sure that it will be positive. Sir, always, our mission has been that company can at least run properly and since we are having a good relation with the supplier, so we ensure that it is supplier we pay advance or we pay on time. Sir, I can tell you for sure, 1 thing that a company having almost INR 440 crores, INR 450 crores of turnover, we'll never have a creditor has now what our company is having.

So sorry, let may come into this one. you can continue to grow, and I'll come back to that in terms of revenue guidance, et cetera, but that growth is coming from balance sheet expansion. It is not coming from cash flows that are generated internally from the business? See you can pay your vendors on time, that is a good practice. But the point is unless and until your receivables are on time, you are trying to fund the growth out of either debt or equity. And equity will become equally harder unless Intel will become cash flow positive and debt eventually at some point -- and the next question was about that. At some point, you will hit a ceiling in terms of how much debt you should sit on with the kind of receivables that you keep growing up? So there has to be some sort of sustainable business model. Where is the receivables also come on time, at least within a certain period of time. And then you've got payables also. So you've got to match the cash flow. You can't find your receivables every time by debt.

No, I'm sorry to interrupt. So when we have some agreement with the government, there is a time line for the government to pay the bills for us. It's not that we can take -- I mean we have to submit the bill and get the payment the next day. But there is -- this is not the case when we are taking materials from suppliers. We don't find much of credit. There are periods when we used to get 6 months credit also there won't be enough takers for the materials. -- wherein they asked just to buy the materials from them, give them whenever it is possible. But now the demand for all the reach and every material in the construction industry is on the rise. So they demand the immediate payment. In that case, if we are not paying them immediately or if we are not paying them upfront or if we don't pay on time, there is always a second thought about supplying materials to us. So I cannot take that risk right I have to run my show. I cannot wait for 90 days for my receivables to come and then kind of come and then pay the supplier and then take the material, then on my cycle will not be there. In that case, we need to go for other debt or something. It will not be the same thing. Operational cash flow will be negative in all the ways. But we are trying all the view when we get some payments in now, we have received some payments out of that. And whatever -- if we take the balance sheet, if you just add April and May to that you see that -- now it would have been in positive or at least the operating cash flow would have been not INR 18 crores. I mean it would have come down drastically. This is now what happens. We cannot just because in the construction industry, every each and every contractor or each and every person who is aiming for billing will do their billing in the last quarter. So there is a huge demand in the last quarter. And those -- there will not be any credits in place even when we were having -- we are taking Indian or vitamin from Indian Oil Corporation were in has given INR 7,500 discount, and it was stopped in the month of March because of this availability and because of this higher price when there is a demand, there is no need for them to give that discount. -- overnight, they stop that discount. But overnight, we cannot stop our 1 rig. We have to get down to the work. We have to keep the system flowing. So INR 7,500 crore as I understood, but this is not the first year we've been cash flow negative.

I understand this year has been quite volatile in terms of construction material demand also. But for the last 3 years from FY '24, our cash flow from operations have been negative.

So some in FY '25, I just want to clarify 1 thing in FY '25 we went negative in cash flow. And the major reason was because we had a chunk of creditors, which we have to repay, and we repaid INR 33 crores of credit FY '25 -- that was the main reason why our cash flow was negative in FY coming back or.

Sorry, I'm talking about cash flow from operations. I'm talking about the working capital Sir, how -- sir, 1 second. Sir, if you have the balance sheet in front of you, you are telling me payment of creditors is a financing thing and not an operational thing.

Short-term borrowing guys you're talking about, the short-term borrowings and I'm talking only and only about payment to creditors. If you have the -- that is what we have in.

Yes, that is a working capital in, correct?

That is what I'm telling. If you have our financials in front of you, I'm not having it right now, but for financial year -- as far as I remember, INR 9 crores was a negative balance in mid-3 we are cleared in that financial year. So Cash flow from operating activity in March 25 was INR 16 crores negative.

Right? And your payables was INR 30 crores at that time. But I'm talking about financial year '25.

If you don't have a share your e-mail idea, I'll share it with you, financial operations of cash flow was a negative for us in which we have repaid around 22 to 30 far to our creditors, so. If you want, I can send my financials to you, sir. why we're getting so excited I'm looking you are miscoding and you're giving a number, which is not to, sir, this is a call where every investors are listening -- and that is why I'm telling you we don't have the facts in front of you that you on this was negative cash flow from operations in financial year '25. I'm -- can you say are not a.

No, it's not a debate. I just wanted to that not as an investor in the company. So I have no other that it's not that sir. wherever, whatever you have any doubts, I just any Yes, I'm just discussing that from an operating public platform only, okay? We can reorganize the number. That is fine. The broader point simple is that however much you like it or don't like hearing date, the angle has been that the cash flow operations has been negative. You see I'm also an investor. I also equally worried. So -- there is no discussion in terms of I'm highlighting wrong numbers, et cetera. I think the all the entire community of the investors on this call can tell me whether the last 3 years have been cash flow negative or not in terms of operating 3 years last 3 years FY '24, FY '25 Cash flow from operations have negative am I mistaking -- you are not misstating the fact, but the numbers you're quoting a the number Okay. You may be right -- you may be right in the INR 9 crores number, you may be right with your INR 9 crores number. Let's put it that also. I'm open to that as well, right? -- what I'm talking about, generally speaking, is the sustainable business model practice. I'm also an investor in the company also equally worried. So we are just highlighting something that you should be looking at. The final fine tune numbers, we can discuss separately, that's fine. If you're operationally positive, any which ways it's good for us.

We do not claim that we are operationally positive for the past 3 years. For a growing company like this, you cannot expect 100% operationally positive things. We are trying our level best to we need to operationally positive. We have done that in H1. We just wanted to maintain this year if -- but this year, we do this debtor high data and low creditor, we could not achieve this. If we would have received maybe around INR 40 crores or INR 50 crores extra, we would have made -- I mean, we would have been in a cash flow positive situation. This is all inevitable. If you want cash flow positive, then my top line would have been lesser than -- if we have to see anything has to be sacrificed or something to be attentive -- we are not aimed to achieve everything right. We -- what I am looking after is I want the top line to grow. I want the bottom line not to decline. And then I want the company to grow. I want -- I mean, creditors to be ply on time. I want the banks to be barnevern this is all I'm concerned. -- end of the end of the day after March 31st only, I will just say whether it is what is happening in -- this operating cash flow negative or operating cash flow positive or all the statement I'm hearing for the past 2 months only. I am of the mantra that I should do business, pay my suppliers on time pay my workers on time. This is all the mantra. I know, and I have learned I am working on it. If that is making me -- I have done my best to pump in all my A to Z money to the company, and we are taking loans, we have also pledged our shares and put that INR 10 crores also into the company. Everything we are doing it for the growth of the company alone. We are not just looking this company that I'm taking my part on this. whatever salary of INR 10 lakh or INR 12 lakh is not sufficient for me to stay happy at my home. I want this company to grow big. I want this company to tenders. This is how I have been brought up, and this is how I am doing things. So this operational cash flow things, I humbly accept your definitely a point in, and we will work on that. But in case -- I mean if this is to be brought to be brought to operationally cash flow positive on cost of something else, I'm against that again.

Sir, I fully appreciate, acknowledge the efforts that as promoter family and your commitment to the company. I see everything -- so there's no point, I completely agree with every other thing. I'm just trying to highlight. So just to grow as of at the moment. So the next question is there, we are growing and which is very good, right? So now we are probably -- we are stuck with raising equity for now, right? And the short-term borrowings have gone up. I presume the long term is anyway close to flat, let's put it that way. Now my question is that what kind of debt to equity are we comfortable? I think up to this debt to equity, I'm okay taking further leverage if I want to continue to grow? Because what I'm trying to highlight is that yes, the growth, definitely, every investor wants to see growth, correct? But that growth, the cash flows to fund that growth is not coming from the business. It is coming either from debt or if at some point quite equity will come in. Now since we are in a situation where probably equity will not be the case. It will be debt. So my question is at what level of debt to equity are we comfortable going up to? So currently we have got INR 43 crores long-term borrowing and short-term borrowing is INR 192 crores. And my understanding, sorry, I joined the call late, so I heard just that probably for FY '27, we are looking at about INR 700 crores of top line, if that is correct on consol, right? So that's quite a good growth that we are targeting. Now to achieve that kind of growth, what kind of short-term borrowings or long-term borrowings, are we looking at a net debt-to-equity ratio. That is the only question, sir.

Sorry, if I may ask, we have hit this public forum and we have entered into this capital market when my top line was INR 100 crores, it was in the INR 100 crore budget, and we have taken the IPO money of around INR 53 crores. Okay. our investment at that time were roughly around INR 25 crores to INR 30 crores or somewhere in that page. Okay. We have grown 4x -- and do you think that INR 50 crores of equity would have been suffice for us or whatever investor would be service for us for this growth without taking any debt?

You've taken growth. I'm not saying no. are, you've grown well. I think now when you grow a.

What my answer is, either the growth has to be either the growth has to be supported in the form of equity or in the form of debt. There is no point in taking equity or diluting at this price level, we are going for debt -- if I'm falling short of my guidance of INR 500 crores, if I'm even lower when I explained that this is the reason, then also there is a question horizon, why the company is falling short, Company is not walking the talk. And if we wanted to grow at this point also, then questions are arising why you are taking too much of debt. So there should be some proper there would be some problem understanding in the system either you see, you see out to catch the bus, you should run. If you cannot run a test should go up, you can not set at a place and you want to catch the bus.

Sir, we are with you. I'm just trying to say as oppose you have targeted a growth, which I also support you, sir. You have to look at some growth. I agree. Now my question is, what level of debt-to-equity ratio are you comfortable going up okay? But this is the ratio that -- because banks also, at some point, will think up to what you down really -- what level are you ready to go through is my question, sir.

We'll try to keep it below 1.5. But again, if equity raise is not happening because of the share market, it might go up that also we are not commenting, but we'll always try to keep it below 1.5. Right now, it is 1.23 for us. We'll keep it below 1.5.

So anyhow I'm going to subscribe my environment, that will also reduce this -- the ratio will be reduced. If I subscribe by warrant and converted the share that will also reduce this debt equity ratio.

So if I -- without offending sir, are you sort of prepared to subscribe to your warrants completely, which were at INR 200, you will probably exercise that at some point 200% or INR 200. Understood. So that shows your commitment to the company. Clearly,

I know Mashal will not be the same when we entered is INR 75, and we went on to INR 265. So again, starting from INR 25, you been INR 75, it's not going to be the same again. We will go back to the place where we left off, and we will go much beyond that. I have the commitment in the company, and I believe in my team and people, so we can do wonders with this.

I know. Understood, sir. Understood. Sir, just 1 thing, just to reiterate your FY '27 guidance is about INR 700 crores. Is that correct, sir?

You want to write it on a bond paper and give I'll write it and give it to you. No, no, I was I joined in late on a lighter note, I am telling you in Sands will do that. the overhead. So I said, okay, I just wanted to confirm. -- if that's the number. For FY '27. Yes, sir.

Sir, I mean, typically, what's the order book as of now,?

It's around INR 500 crores.

And just last thing, I mean from my end. And I know this is anyway not the optimal time for equity rate -- so what my understanding is, at least, hopefully, as you've committed, that probably will go ahead with the warrants exercising. So that brings in some bit of equity into the system. And at some point, let's say, if the equity market probably doesn't support us, any alternative funding plans do you have other than the higher debt that will go up to? I mean any other idea that has come across or something? Any plans?

We don't have any such plans as of launch. We are looking for this debt funding as of now. So equity, we are planning definitely once these markets get better, we are dependent on either of these to or we are also in talks with some people for the NCD options. So if that is going to be NCD better prices, we are doing at that, that is also not so possible when some market -- some prices somehow if it increases, we are looking for CCD options also. These are all the options we have opened on this. So my consultants are working on this. They will be giving us some better results than this. And the operating margins, the EBITDA margins are about 18% to 20% is workable? Given the fuel price effect, everything? Yes, yes, it will be sustainable, and it will be alterable.

Next question is from the line of Hiren Modi from Balkrishna Family Office. Since there is no response, we'll move on to the next question from the line of Rajinder Pasi from NP Analyst.

Yes. again -- just on your Sir, 1 question would be, in the previous year, we had a lot of orders, but those were like smaller orders in the range of INR 30 crores to INR 50 crores. And towards the end of the last financial year, in March, we bought INR 100 crores order in which I guess it was in a joint entered we had, I guess, 74% or 75% so ownership on that. So going forward, can we look at some big ticket orders, let's say, INR 150 crores to INR 200 crores what's of order for that we can grow our order book to a substantial amount that going forward, we can have a meaningful growth even for the subsequent year. Let's say, if we are doing INR 700 crores for this year, we may be targeting for INR 850 crores to INR 900 crores for next year as well and since -- so for that, we need to grow our order book substantially. So any thoughts on that part from your end?

So, we are targeting at orders of INR 100 crores size only note -- so even though the collar orders, which are nearby vicinity, we are we are getting it. And I mean we are begging for that. We are targeting a code book of INR 100 crores and only -- this order, which we have mentioned of INR 100 crores, 75% ownership is just for bidding purpose, we have done that. And the entire 100% of work will be executed by us only. So this -- all the profit and losses will be towards us, and it will be a minor 2% or what you call royalty charges for that 24% of their share. So we'll be doing that also by us. Will be at to that 1. So 75% of anti INR 100 crores. So we are targeting at something in this range alone. So we -- for some technical collaboration, we are taking this JV things.

Got it. But -- what is the maximum technical order, we are capital like that we fall in that record. Is it 100.

We can do around INR 300 crores, sir. But there are this it was bridges. So wherein we need some particular quantity exercises to be executed before, where we were short of. So we have a that reason only, we have been the major stakeholder of 74%. And being a minimum stakeholder should be 26%, we have added 26%.

Okay. But as of now, we are looking to target 100 PR orders, right? That's right.

Yes. maximum is around 40 years to 50 years and minimum, we are targeting at something. Okay.

And -- but our internal plans on the order book side, like, where do we see our order book towards the end of this year? Or how much orders are we looking for in FY '27, the new order.

Apart from the current unexecuted order book, we have been executed -- I mean we're expecting around INR 500 crores plus this year also. So anything between INR 500 crores and INR 1,000 crores, we are trying to have it in our order book, it is.

Got it, sir. And my other question would be regarding our bank limit from the fund-based limits as well as non-fund like what are the total numbers and what is the current utilization on that end?

Yes. Cranes. Sorry, I didn't get your question, sir. Can you repeat?

Priyankaji, can you provide me the bank fund-based limit as well as the nonfund-based limit.

Yes, sure. Sure, sir. So sir, fund based, we are having INR 140 crores and nonfund base in the form of BGLC, it is around INR 85 crores.

So -- and have we utilized them completely or what is the.

No, no, sir. Sir, we are actually nowadays, government has started taking surety bond we always prefer surety bond over the BGLC. So we have not utilized it around I think INR 15 crores, INR 20 crores are utilized. So the rest are all unutilized.

And what about the fund base will it -- has that all been equaled.

Yes, yes. That is all -- we have utilized INR 140 crores.

Okay. And -- are we in discussion with the banks to increase it or to have a bigger limit.

Sir, as that turnover will increase, we will definitely balance will be open to increase that limit also for us. And as you know, that the rate of interest is also very much it's around 8.5% to 9% only. So any time we go for debt, our first choice will be at limited self -- so I'm sure that as top line is increasing, sir, we also -- I think I made an announcement that our company got 1 notch higher also in credit a we are BBB- from BB+, BBB -- sorry, from BBB+ right now. So I think keeping in mind all the factors, I'm sure bank is okay, if we increase our DC limit. And other than that, also, sir, we are having some schemes coming up from the government in form of scheme or something new has come up. So even if we are eligible for that, we will apply for that as well as soon.

Got it. But these -- so these new themes are regarding -- the current geopolitical situation or we are there to say basically.

Sir, about the scheme, you are talking? -- the 1 that you mentioned, I guess, some kind of bonds and then good news semis you're talking about right now? No, sir, I'm sorry, I didn't get you were talking about the scheme are you talking about.

No. My question was, given the current political situation, right, the geopolitical situation. Are we seeing some extra support from the government as well as the NPA during this time? Or how we think at from that end?

Let me MHA has come up with some schemes like, okay, this escalation factors they have given some sort of relief and other things like some sort of schemes have come up for the billings also. So the earlier when the billing cycle was high and the escalations will be calculated on the final bill or something like that. Now they have introduced something like they have given an instruction to all the regional offices to calculate escalations on the running account basis so that it will be easier for the contractor. These are all the basic things and nothing else.

Got it, sir. So is the price actually can happen, then that is going to be catered within the current bill.

Yes, yes. It will be taken in the current Yes, yes.

Next question is from the line of Hiren Modi from Balkrishna Family Office.

I'd like to congratulate the management for a good set of results. And to you and ma'am, very patiently, you're answering in very good detail to each and every is there. I was thoroughly listening everything, sir. And I understand totally that in this industry, sometimes the billing gets carried on and maybe the target of INR 500 crores is not hit directly, but it is there. So I just wanted to make a point where you yourself have answered that, that when you started with INR 100 crores, you are very much clear to pay your suppliers on time to commit your business and your workforce and everyone to bundling in every way. But now the investor fertility has been added in this journey. So sir, you also told that you are good in building the roads, but you are trying to learn to be good in the balance sheet. So I certainly have paid in you, sir, that coming ahead, we will be up to best market in this balance sheet and also everything will be very much clear for the investors also and that would be helpful for our share price also, sir. So my first question is, sir, regarding what is the time frame that we have kept for the equity fund raise maybe by the quarter 2? Or what is the time frame?

So thanks for the appreciation and I accept all your reviews, and it's good to hear from an investor about things about the equity raise, we are planning something before Q2, end of Q2 to happen, sir.

Okay. Okay. So that means I should take it that if it happens before Q2, it's good or also go for the alternate routes, right, sir?

Yes, sir, we are was arranging for some bridge funds, even if it is going to happen in Q2, we will be paying back our debt paying back of funds what we have taken. But we are not stopping anything for this equity, right? But if it happens, investor gets the confidence about the company and if they increase the share price or something and if we get it as early as possible, company will grow well and definitely will to do good -- and good on whatever we have committed or something like that.

Okay. And sir, regarding moving out of Tamil Nadu. So what are we doing something over there in that area? Have you appointed certain specific targeted team that they can work out for the tenders and the related as the way the Amravati project is going to come in a huge way. Just an example I'm talking about, sir. So are we working somewhere to move out of Tamiladu, maybe out of the INR 700 crores that we are targeting, how much portion that you are thinking should be out of Tamilnadu is you can throw light on this.

We are targeting to go out of Tamil Nadu, we wanted to enter other markets also. But whatever INR 700 crores, what we have committed is 100% within Tamil Nadu. -- within less I don't have any reach as of now. We started bidding cheamunaro 2, 3 months ago, maybe around 6 months ago. and we are conservative in our bidding. I am always conservative, and we could not get Lonati many things. And we are still building and we are still looking for good projects to come up. And we just do not want to take a hit on our first or second project in in other states. So we just wanted to have a clean entry. And definitely, this year, we are hopefully positive of getting in the other states.

Okay, I will unreconciled I will expect that we grow 10x a year.

Next question is from the line of Aman Adatia of Private Investor.

Actually, I have follow-up questions from my side. I want to ask about cash flow only. Sir, our OC operating cash flow from the last 3 years, 3 to 4 years was around minus negative INR 50 crores. And now a cumulative profit PAT gone around more than INR 100 crores. So the GAAP between was INR 150 crores to INR 160 crores of working capital. Okay. So this is only a follow-up question. What is the immediate liquidity coverage ratio of our company. I mean what -- what is the company's cash flow plan.

Would that you asking that what company are taking as measured to ensure that the cash flow is proper? Are you asking for that?

So actually, you mentioned that INR 55 crores to INR 60 crores is -- will be -- is already received from data plus a INR 30 crores of commitment from the promoters of warrant exercising comes to around INR 90 crores numbers. And now a short-term borrowing era is around INR 170 crores to INR 175 crores. So what are we planning or what are we taking measures to address that gap?

Sir, first of all, warrant what you're talking about will be done in a Phase I we have time until March '27. So we will be doing it in Phase way first thing. Sir, second thing, as far as the short-term borrowings is applicable sir, out of this INR 172 crores, Cimit is INR 140 crores, which is also a part of short-term borrowing, correct, sir. So that said, we don't have to repay the entire INR 140 crores. It comes as renewal every year. So every year when we go for renewal, we iterate enhancement or we get the same level. So since our top line was increasing, banks have given us this thing from INR 75 crroes we got into INR 140 crores last financial year. this financial year also, we are expecting that bank will see our the top line we are going. Banks will definitely give us some sort of enhancement in CC limit. So the shorter more, you're talking about INR 172 crores out of which INR 140 crores limit -- the remaining is actually term-loan, which we have taken for our vehicle and machinery, which we are going to repay in this financial year. This is what short-term borrowing is all about so.

So madam, 1 follow-up question. What is your contractual or operating mechanism to bring down working capital days or days sales outstanding below 90 days in FY '27. I mean can you.

Sir, in our industry, sir, data base is 90 to 120. It's like a common factor for any EPC contractor depending on the projects that you are taking. So that data base, we cannot help so that is the thing something that the entire industry follows. And as far as inventory days, then inventory rates will come down, I think this working capital cycle will be better. It is because we are not making the unbarrevenue a part of sales. That is why inventory days are so high. once we start following Ind AS, this inventory rates will become a part of revenue -- I mean, the unbilled revenue, you will see a change in the working capital cycle. It will not be this much high. So in this financial year, we are working on it. We spoke to our auditors. -- we are shifting into India, sir, after that, you will not see this much of a gap in working capital?

So actually, I was listening to that engaging conversation -- so the question was around that only. What are we planning? Or what are we taking measures to address that cash flow issue only. Don't you think that it will be as promoter has addressed that we won't be dilute PIP at current prices. And you also mentioned that due to stock market volatility, we won't dilute at current level. But at certain point of time, if there is a cash finance going forward for the company, don't you think it will be somewhat of value destruction for existing shareholders can you address it?

Sir, I just want to request to something. I want you to stand in the shoes of promoter and look at as your own company and just answer my 1 simple thing. If you were a promoter, sir, you had issued an when it is coming to valuating your shares, will you do that at a price of INR 75, INR 80. I don't think so anybody will do that. And sir, the share market share prices is something which is not in the hands of management. We are trying our best to maintain the PAT margin. We are trying our best to increase the top line and achieve what we are actually telling. But if you come for dilution of share, sir, I don't think, sir, tomorrow, I'm telling you is promoter to take this decision and started diluting it so low price. Investors will comment on the question as said -- on what -- on basis of what are we diluting it at so lower price? So if you see it is actually not both in promoter value at so low crisis, that is the reason we are waiting for prices to be up, and we are confident that maybe this is because of some geopolitical reason or for whatever reason, it is -- the prices are low. I'm sure it will go high. And also I want to add on that as the 3 years will be completed in an SE by next year March. So March financial '27 will be migrating to main board as well. So prices will definitely go up, sir. So entire prices are little if it's not better, I don't think diluting it so lower price will be a good call for anyone.

See, actually, what promoter also mentioned that in commitment ectin warrants at INR 200. So it's also a commitment. But -- and also 1 -- another thing that promoter mentioned that they are doing everything possible to pay in advance to suppliers also. That is also a commendable thing. But we as a company, we need to look our finances also. See, I'm not telling that company is going to face situation. I'm just asking an honorable question that if at a certain point of time, you are on a cash crunch I'm not telling or asking you to give me a ballpark number. I want to just understand the trajectory the company is going to follow.

So we at all have to face that cash fronts and all will make sure that the receivables are there within this cycle of what we are maintaining. And also, we might go for be discounting of data, which we have not done until now. we might look into other options as well. But as of now, we are confident that the market will be better. We are confident that we'll be raising some equity by half yearly and our debt will also come down. And because we have taken some bridge funding. So once we raise that equity, the debt will also come down plus warrant or is going to subscribe once a warrant is there and the equity rises, so debt-to-equity ratio will also come down. So these are something which we are confident. But other than that, if it is not happening because of some for some unforeseen circumstances, and we will be open to discounting our bills also. That also we can do it so.

See, as a management, you are committing or you are guiding for INR 700 crores of top line. that's not -- I'm not going to doubt that, but you also net incremental funds. So in market also for incremental revenue, you need to borrow extra funds also. I understand my point in going ahead, you will face situation in bottom line part of P&L also. Will you agree to me?

And I don't I don't get your question. Can you just repeat, sir, please?

Sir, I'm just talking about raising finance cost going ahead. If you are committing up going INR 700 crores of numbers, you read extra funding definitely. And you also told that going forward, QIP also in line. So if QIP is not coming, then you have to raise extra funds via debt -- so finance cost will definitely rise. So the net margin of 10%, I doubt will it be sustainable or will it be going down?

Sir, that is my point. this debt funding, what we raised will substantially the increase and the financial costs will be substantially increased, but that will be substantially increased in line with the top line expanding. So that whatever funds we are adding, whatever debt we have taken is for the value of what we have obtained so there only be much in dip-in bottom line as you observed. And I don't think there will not be any dip in the bottom.

[Operator Instructions] The next question is from the line of Paras Sheda from Purpan Vertex Ventures LLP.

Sir, just 1 query or rather 1 observation, I just wanted to point out, sir. And continuing from the previous gentlemen's perspective. And sir, in March 23, our consolidated revenue was about INR 115 crores. in March '26, we have grown to INR 441 crores, right? So there is 3, 4x jump in the revenue. Now let's come to the balance sheets. The trade payables in March '23 were about INR 42 crores right? And even in March 26, our paid payables is INR 43 crores. Now there has been 4x jump in the revenue, right, to INR 440 crores, where the trade payables absolute quantum remains about INR 42 crores to INR 43 crores, that was planned, which is a good practice, let's put it that way. Our trade receivables have grown from INR 11 crores -- so what -- I think the previous gentlemen and also I'm trying to imply it, yes, the accessibility to debt maybe there, you are showing good comment in terms of bringing in equity at cecal that is fair enough, sir. But at some point, these payables also at some vendors also you'll have to expect from them as well that if you've grown 4x your absolute rate payable still remains flat, whereas your receivables grow from INR 11 crores to INR 160 crores. Obviously, you're funding that working capital from either debt or equity and in markets where equity is not excessive, you will have to be forced to go to debt how much can you grow just on the back of debt and equity without balancing the business -- and trying to say at the vendors also need to come in here and you take some credit period from them as well because you are seeing growth, and they in turn will also witness growth through you -- at some point, they should also participate in this because the interest cost is gone up on the company and the PAT margin will suffer. And for you to grow at any point in time, you will just be dependent on external capital which may or may not be available and it will be always subject to the external environment, whereas if we manage to balance the business in some way where it is sustainable.

Sir, you question on in buffer?

Yes. So once you balance the -- or you try and attempt to balance the business you will be able to come in a situation where your day on external capital is reduced and your PAT margins also do not suffer. So it's a point to rethink about your entire working capital management, sir, in terms of growing -- I mean, the growth of the business is fine. But I think the growth is coming at a different level of risk, if you extrapolate this another 2, 3 years, 5 years down the line, let's say, if you want to grow from INR 440 crores to about INR 1,000 crores of revenue. And if you continue to maintain trade payables about INR 40 crores to INR 50 crores odd, imagine the kind of trade receivables that you'll have to fund from either debt or equity, and that comes only from debt or equity and equity also will be subject to market conditions. So it will be predominantly debt. The business model, it's will be sustainable, sir. If you understand what we are trying to highlight here.

Let me just finish 1 thing, sir. Paris, just have 1 request to you since it is something which all investors are listening. Can you please not quote wrong figures again and again. Sir supplier trade payable for us right now is not INR 50 crores, for trade payables right now for us is INR 20 crores. In financial year '25 our trade payable was standing from the INR 16 crores, where we had a top line of INR 272 crores. In financial year '26, we're having a top line of INR 420 crores stand-alone and that trade paper standalone, I'm talking you, is around INR 20 crores, sir. It is not INR 40 crores, INR 50 crores.

Fair enough. So -- okay. So let's go with your numbers. Okay, pro -- now I am to tell me your revenue has grown 4x, right, over the last 3, 4 years, correct? Now how much has the trade payables grown with your numbers, going by our numbers?

So that's what I'm trying to say that a trade payable has not grown that much exactly exact what we're going today. I understood your point. You just want at a different point Yes, yes, yes.

Yes. I just wanted you to take support of creditors rather than going rather than for Yes, I understood that your point is taken. But it is not bad you see to get credits of the size of what we are looking for. Industry is growing in such a phase that people who pay for us take the product first. So we just wanted that discount what we are getting. And we are making payments after 60 days or 90 days. Again, our PAT margin will come down -- and again, this thing. So only we have opted for this design. When I could take INR 40 crores of debt for INR 116 crores of top line in 2023, we have changed this entire -- I mean the entire scenario and now we have brought down the credit level, and we are doing this. And whatever you have now given us well, let us take this point, we'll also sit with our finance team. We will calculate something is doable in this from it, we'll definitely work on that also.

Yes, I'm just trying to say that if you get an extra credit period from a creditor -- to that extent, short-term borrowing stress will be reduced. So it's just about rebalancing the business a little bit, even if that means some percentage points of margin here and the case eventually, we are keeping our trade payables happy, the creditor is happy less, right? I mean, broadly, when you're continuing to grow with the trade receivables, you're funding the entire working capital from your debt borrowing. And therefore, at every point in time, will be subject to external capital availability or growth -- and most of that will come from that, sir. I understood, sir.

I understood your point is taken. Definitely a discussion on this, and we will try to a long way towards improving the financials of the company.

This structural change will take some time maybe -- but it will go a long way towards the sustainability of the business model, sir?

Understood, sir. Understood, sir. Point -- that was the only open I wanted to on.

Next question is from the line of Dipan as an individual investor. Sorry, audio is not clear.

How do you see the receivables going ahead, what would be the credit stabilizing or coming wall is not clear, sir. Can you just please. Yes. So I was just wondering about the earth trajectory going forward. Yes, sir, please. Go ahead,. So I was just asking about the receivable trajectory going forward. How do we see FY '27 replicable lining up getting risk.

How are we looking at this trade receivables since it is so high. So how is it that we are going to in forward like how we are going to take care of this receivable. Sir, I just want to say that receivable is high because of this election. We were a little high on the trade receivables. And again, as Soren has mentioned, we did receive around INR 40 crores, INR 45 crores already out of that. So next financial year, I don't think this will be this much high because we always get difference it's all state and central government to get it on time only. But sir, that 90, 120 days cycle will also -- will always be there since this is what the trend of the industry trend is that we cannot push or go beyond on that, sir. But of course, this receivable won't be this much of high, so that is for sure.

Next question is from the line of Rajin Pasi from NP Analyst.

Yes. So what I was saying, my question is also on the similar lines, which the earlier investor was asking. So regarding on the receivables side, so what is the general segment or your sector trend, like as a percentage of revenue, where should we look at from the receivable side? If we -- let's say, if we are doing INR 1,000 crore revenue, what should be our ideal receivable numbers in that case? -- so that we can get an idea on where our peers are and where we are.

So it's not about the top line of the company. See, normally, what happens is we do much of billing in a -- you are aware of that. Q4 billing will be high. And this will be very much grow 90 days to 120 days. So we are trying to be at maximum so that this -- there will be much support from the department and people also to kind of cover the financial expenses. So that is what happens in this EPC contracts. So most of our billings happen in a majority of the building happens in Q4. That is where we we get this problem. And we are trying to mitigate this and -- but at the same time, I cannot reduce my quantum of building in Q4 because Q4 is a good season to work actually. There will not be much of rain, there will not be much of other inferences. So that is the reason where -- when we can execute the work on future -- and what you are asking about the percentage of percentage of revenue, which can be taken into -- I mean, what do you call taken into solution underling concentration for the data base deter how high data or whatever it is for a company performing INR 1,000 crores we can take at least INR 200 crores to INR 250 crores, that can be INR 250 crores at least to be in this unbilled revenue or detrade receivables. Something like INR 1,000 crores company, it can be INR 200 crores.

Next question is from the line of Jayesh an Individual Investor.

Sir, I have been following the company since launch of IPO, okay? -- every time everything goes happy. Just this time, what I can see in the results is that the other expenses there, which is huge. Almost has got double if I'm not wrong, other direct expenses. So can you please put a light on that, like exactly what is other direct expenses? Why it has huge spike into it?

No, no, the other direct expenses he's asking about.

So is this ponded expense that is asking about, actually.

Yes. that has now very high. It was around INR 127 crores last year, and this year, it is around INR 155 crores. There is not much it has grown intact with the top line growth only.

Madam, do we have many people on the queue?

Yes, sir. We still have a few in the queue. Okay. If not, we could allow them to go for the second question or third question also that's my request. If there is not much of questions we can ask them to go with this again a question instead of breaking them. The next question is from the line of Hiren Modi from Balkrishna Family Office.

Yes, please go ahead. Yes. So as we have guided for INR 700 crores, and we are having a INR 500 crores of order book on hand, I was just reading towards the bitumen prices, the way it has investigated and the way it is nearly covered. And 1 of the quality is VG4 that is being used and then roads and everywhere. And now as the way the crude has been getting imported from much of the part from Russia and that crude doesn't give that its a VG1 and 30 that is what I was reading about. So my concern about the company is that the West Asia crude is important for bitumen, the quality of bitumen that we acquire. And the way the prices are escalating -- and I don't foresee that the West Asia contract getting resolved anytime soon, maybe maybe next 3 months or what I don't know. Sir, how are we going to mitigate this problem, the INR 500 crores that we are having how much is getting affected by this bitumen price in this -- that is a part, sir? And part 2 is how we are going to mitigate this the orders that they are going to get new orders that we are going to tender into at what price, how it will be, sir please?

So luckily, out of the INR 500 crores, we have around INR 300 crores to INR 350 crores of concrete involved in this, not much of bitumen involved. Petromanas way lesser than 10 to 20 -- maybe around 20% of our entire work on. So that will save us big in this year? And also what you are talking about is correct? And see this -- there are some problems in the extraction of this crew -- and the demand is on the rise, the demand for the crude is on the rise. But when I am speaking with this Indian Oil Corporation officials, they have made alternate plans and they are getting some products. And now they have come up with some other options also. So they have some products which are getting it from other places and they are expecting it in the other refineries. So which is matching the requirement, and that is also workable. Now what being the condition and this is is a problem problematic thing. What the NSA and other state obviation are now on the talks to get it done with VG3 G3 and G4 are not much of difference. So they are planning to have the conditions and not restricted to V40 and they may implement and then they revise the estimate based on that. This is also on tax. So positively, VG3 implemented, which is that it will not be a problem at all. So we are getting Russian crore easily that.

Okay. And sir, whatever the new tenders will be there right now? I was just looking towards the pepper that is showing that every contractor is increasing its cost by maybe 1.5x. So it would be easy for us to get those tenders and how it will be, sir? Just for our target of INR 700 crores, that is minus intention grid.

Getting an order book is not a tough game at all. We can get, say, if I'm reducing my margins and if I'm bidding it at a lower cost, I'll be able to get how many numbers can I get. But we are very much sticking onto the passengeprofit percentage what we want, and we are bidding at that level. And there are people who are bidding right away can do -- I don't know what they do to maintain that cost or profit margin. And there are some on -- see, there are people who are showing to in this industry. So they are not bothered about anything. They just want to show it met growing 2% to 3%. I don't know what profit they are getting? And are they just showing 2% to 3% and getting 10% or not. But there are people who are bidding at very lower cost. But I don't go for that -- so what we have decided is instead of bidding for 10 tenders and getting 2 tenders, we have decided to go big for 100 tenders so that the probability will be much on the higher side. So we have recruited a special team in the last 2 months so that they keep on working in all the tenders which are positive for us, which will be good enough for us to execute. So once this standard -- the things which are workable, we bid for a bit across all the tenders. So that will be a higher probability of getting the works. So there will not be any problem in getting the work orders also.

Okay. And sir, any plans to get ourselves diversified a little bit maybe in sewage or as you were talking about solar also means the way the geopolitics is turning post Trump era, the things are very bare it is unstable, and it is setting a new norm where you cannot be clear about how the commodities and EBIT price will be -- so are we trying to safeguard somewhere in our margins, in our business where things won't affect much. So any plans or something to add certain area apart from the road.

Yes, we are planning to -- we have already done some buildings also. So we are trying to get into this water board and other CVs treatment client, as you mentioned, we have done 1 small project in that. So we are also looking to enter into these but not at the aggressive phase. We are trying to reach 1 by one, so that how it works, we will plan to withholding that -- those things. And solar is turning to be positive. This year, we will do good and solar also.

Because every challenge grows us. If you have a student to say is that it grows at it teaches us something. So maybe something we are getting to learn from this particular crisis and where we can see we've got a company and we can grow hand in hand, sir.

That is what Yes, yes. That I understand, sir, that is always good to have a plan B yes. again, so for the future.

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

Yes. So last time I was asking a question, but it was -- I was removed from the queue. So sir, I was asking that other direct expense is almost 50% increased, like there is a sharp increase in other large expense. So I'm not sure like if you are looking at that exact point. So increased 15% from VS. Okay. So if you will see last H1, okay? So it was INR 85 crores. okay? And this quarter, I can see it is INR 154 crores. So it is almost close to 40%, 45% hike.

Sir, our direct expenses includes mainly the subcontract expense since in the first half of the financials are billing was actually maximum in the second half, so -- so accordingly, in that ratio, the subcontract expense also increased since the billing in the second half was higher than the first, that is the reason you can see that change actually -- and also in the month of September, I remember some contract invoices were yet to come so. So we received it, I think, in the month of October, November. So that was also 1 of the reasons why this is showing a little higher.

Okay. So if you see this -- I mean, this H2, we have received 19% operating profit margin, but it was 21% last year. I was -- I'm talking year-on-year, okay. So will you be able to come back to that 20% plus?

Sir, definitely, Sir, we are right now 19.32% actually. And I also said that while our EBITDA was lower. So we'll definitely try to if everything is prices and all is good you know like a geopolitical reason a vitamin prices went up. But I'm sure, so this time, it will be 20 and above all major.

Okay. Yes, I think that's it from my side. Just 1 last suggestion, I already have had lots of conversation on cash flow. So I would request you to please take a look at -- it will be a for us.

$0.08 The next question is from the line of Rajendra Pasi from NP Analyst.

So from the last question from where our discussion was interrupted. So my question was as a percentage of total revenue, where do we see our trade receivables and trade payables at in the future? So let's say if we are doing INR 1,000 crores revenue at a consolidated level, so at what percentage should ideally see our trade receivables as well as trade payables.

At the top line of INR 1,000 crores I just wanted to take the trade payables higher as per people suggest. I just wanted to take that up and lower the trade receivables. And I will be happy if this trade receivables are maintained well below 15% of our top line, maybe around INR 150 crores or INR 200 crores, if top line is INR 1, INR 1,000 crores.

So at a macro level, we should look at at least 15% on the trade receivable side and maybe around 10% to 12% on the trade payable side, something like that. So that should be -- but we are looking for Okay, sir. Yes, that was the last question.

The next question is from the line of Dipan an Individual Investor.

So on that INR 78 crore unit, how much have you been able to quantify? That is the first question.

I don't understand, sir, out of that?

On the INR 78 crores unbilled revenue, how much have we been able to get it ratifies as the entire been certified. I don't remember the exact value. It was around INR 20 crores to INR 30 crores only we got it notified.

And this month, then we'll be able to get it certified further. So it happens like that. This month, then we'll be getting something and the next 1 will be on.

Second question is on the receivable side again, out of 140 receivables, what is the share of NHAI and what is the share of government and other private entities.

Priyanka, can you share that whatever it is? Do you have it in -- are you asking the ratio of state government and central government.

Okay. Sir, the exact percentage, I don't remember that we only maintain 60-40, so like 60% NH 40% state government like that. But if you want the exact peter, I'll just check for financial year '26 and may Okay. One more broader question, like if the election is done, are we going to see any more impact coming along? Or have you absorbed all the impacts and how things are from the election it countries back to normal status back to normal after the elections.

So I don't think there will be any impact after this. We are hopeful about this government also. This government, whatever they are addressing the public as well as business people as of now, they are positive about 0 corruption and all these things, which we look very much positive. So I think this is a -- it's a brighter environment to work in Tamanada as of now. So it's good to go always now in Temando.

Okay. One more question regarding on the last call, we discussed that in solar, we'll be expanding would be having somewhere around the revenue I could see only 2 years. Are we the solar business panning out? And what's our outlook for that for the financial year Solar, we are doing something in this financial year.

It's cooking out. And we'll be able to touch something, and we'll be able to deliver something big in this year. So we have gotten first order, and we'll be definitely executing node. And apart from that, we are on the run we see these approvals, all this will be in place now after the new government has been formed. So we don't see any bar than that. So we'll be having some good numbers with us also.

One last question. We also of expanding beyond Seminar, where are we on that? How could we see the revenue mix from the Mindanao Kamila in this financial year?

Yes, we started bidding outside Tamil Nadu also, but we have not done anything positive on this. We are not winning any tenders. So we keep on bidding -- and hopefully, this year, we will start to expand our network of tenors.

Next question is from the line of Mila an Individual Investor.

I just want to say I want to congratulate on a great set of numbers. I'm very happy to be an investor in the company with such a committed promoter group for a company growing at the space, even negative OCF or operating cash flow at times is understandable if the capital is being deployed efficiently for growth. Also have really seen concurs extending from Mana to almost 2 of them still continuing with the same energy transparency, hats off to the commitment, this is all I wanted to say.

Next question is from the line of Jayesh an individual investor.

Sir,just 1 question I wanted to ask. This do you have any defaults in the credit receivables like, for example, if there is INR 100 crores? Just an example, I'm taking. Is there any long-term receivable that is spending from client end or anyone in loss?

No, sir, no, sir. We are all government dependent. It is not at all possible in this it is all certified things and all. We don't have anything in that stage.

Okay, okay. And any private players you have.

No, no, we don't have any sale sticks.

Okay. Okay. That's it from my side. Just 1 thing, sir. What I would suggest is when share price falls, right, investors are completely blank in that at that time. So at that time, everyone is selling. So just 1 thing, if promoters can come up and highlight that something positive or anything positive for the investors that would be really helpful. Just for example, last year, for Q1, you had shared 1 tweet or some document to NSE saying that some highlights of the quarter 1 results. So at least you can provide that just for the sake of investors that just really help.

Sir, actually, when we declare a result for September and March, we don't do that. But other than that, in every quarter, we made it a point to give some sort of highlights. So this quarter also, you'll find in Q1 also, we'll highlight that, sir.

Yes, yes, that's what I was looking for.

Next question is from the line of Rajan erase from NP Analyst.

Sir, I wanted clarity on one, I would say, misconception or I'm not sure like what that is, that there have been certain tumors around link up of certain political party in Tamilnadu and our company. So if you can provide some -- throw some light on that part, like what are the goods and if you want to basically share anything on that part, I'm sure you may have also seen those kind of tumors on the social media handles.

I don't have any link with any political costs, except for 2 days, One day, I note for the state election 1 day for the central election I don't have any linkage anyone. Apart from that, any other things, there is a rumor going on in the rumor going on because my brother is a leading actor in thermal industry. So being our new CEM Vijay is actor, -- it is a room going on that I very much closely acquired with the CML, but that is not the fact. -- rather in a is closely acquired at not me. So it's a rumor only, as you highlighted. I'm not answering this. I have not mentioned about my again a leading actor in Damodar I'm not mentioning anywhere until this time, so this has to be highlighted as you have asked me, I just telling you us.

Yes, sir. That is why like there have been a lot of tumors like the business is going to go down as government has changed and things like that. So that you can at least put an end to these rumors in this official combo. So that is why I want to close it.

Next question is from the line of Ajinkya Pawar, an individual investor.

It;s lways that if you perform well, you will just get a congratulations 1 minute word, and we will -- if we don't go from all-only your parents will keep on question in your. Yes, First of all, some longer regulation. And thank you so much because I know so same we are running business, there will be a lot of problems -- and from this conversation, I get it that when investor was sticking to the 1 question that when we are growing every capital. So for capital and then just having 1 question if the stock price didn't go up, then how are we going to fund it? And that is the GM pushes. But were in business for a long time, and I know you are going to address all the problems. And just because of new I didn't sell a stock, that it was API entered when it went to 20, I didn't sell a level. And I don't worry because as I said, I have a long-term investor of not 1 year, 2 years, 3 years. down the time 5 years, whatever, we are targeting, let's say, INR 2,000 or INR 3,500 crores of target we are going to achieve it, sir. And all the best. I just wanted to say all the day. On the last investor had a very 1 good position. We'll never there's a fluctuation in the market soon. There is -- for investors, we need some kind of support. So I used to mail Manta. But last 2 months, I'm what we seen kind of mail. And I want to just say 1 thing I'm a tier in my community, there are at least 1060 members, which have invested in PBC. So last 1 year, 1.5 years, the stock price is going down. So we need some kind of function. These are the investor presentations where we get motivated. So I just have a 1 request from an that whenever we don't mail every day. We just mail when there is a fluctuation or say, 2 months or 3 months because we don't publish quarterly results. So I just have a request -- and just to be asked for small machines, are you going to plan for any -- or is there any update on your business? So just wanted a small request that she should reply or there should be some kind of mechanism we should get some kind of put back what's going inside the business. So we get motivated that's a small et you are 1 minute.

Thank you, sir, you're online. Actually, I have been receiving your main, but I am also replying to the mill, but the MD sir is bouncing back and ends is also masks in the mall. -- since I did not have your contact numbers, I'm not able to contact you. I just request you extend, please, can you also mention your contact number because every time I tried applying to have made it just got bounced back. is also marked in all the mails. We did not have any alternative number to get in touch with you, sir.

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

Thank you, Madam. It's always nice to hear from the investors. All the inputs taken, all the feedbacks taken, we will work on for the Investor Relations in we will mitigate all the problems, whatever they have given the moment we there, but I just said as -- and we accept my wishes from all the good data investors. And thanks to all of you. We'll keep meeting you again and again with many good news to come with good news to follow. Thanks again. Thanks a lot for the con call. Thanks for the hosting in this. Thank you, Mana. Thank you.

On behalf of Atlas Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.