Capacit'e Infraprojects Limited (CAPACITE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q4 FY '21 Earnings Conference Call for Capacit'e Infraprojects Limited hosted by Yes Securities. The conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that the conference is being recorded. I now hand the conference over to Mr. Alok Deora from Yes Securities. Thank you, and over to you, sir.

Thank you, Aisha. Good morning, everyone, and welcome to the Q4 and FY '21 earnings conference call of Capacit'e Infraprojects. Today, we will have with us from the management, Mr. Rohit Katyal, Executive Director and Chief Financial Officer; and Mr. Nishith Pujary, Head of Accounts. We will start the call with opening remarks from the management followed by Q&A session. I will now hand over the call to Mr. Rohit Katyal from the management. Thank you, and over to you, sir.

Good morning, everyone. A very warm welcome to our Q4 FY '20 earnings conference call. Along with me, I have Mr. Nishith Pujary, Head of Accounts and Audit. I hope everyone has had an opportunity to look at the results. The presentation and press release have been uploaded on the stock exchanges and on our company's website. Before I take you all through the operational and financial performance, I would like to highlight a few points. FY '21 was challenging for everyone in the wake of the pandemic. Once the unlocking process was initiated from the third quarter of FY '21, both the residential and office markets showed promising signs of revival. We believe the creation of infrastructure like data centers, health care, hospitals will give a serious boost to factories and building sectors. With business activity gaining momentum and Indian economy looking for a rebound in FY '22, and especially the positive revival of the real estate sector, we expect strong traction on residential, health care and commercial fund. We are confident that the order book target for the current financial year is definitely achievable. Our business operations and sites have remained intact and fully operational throughout the quarter gone by, while some of the disruptions were placed towards the end of March '21 due to the second wave of COVID. As the government allowed construction activities to continue in the lockdown period, our sites have, by and large, remained operational. We look forward towards the growth phase in FY '22. We continue to keep health and safety of our employees and workmen as our first priority during the lockdown and have also conducted vaccination drives for them. Further, we have identified key focus area for our growth on the following aspects: focus on execution of our current order book as well as the current book -- order book, it gives us visibility with recognizing healthy revenues; efficiently manage our working capital cycle; focus on quality of cash flows; stringent cost-control measures. Focus on above 4 areas will lead to increase in our ROCE. Now allow me to give you an overview of our operational performance during the quarter. The total order backlog, excluding MHADA, on 31st March '21, stood at INR 8,720 crores. Residential segment constitutes 22% of the order book; commercial and institutional, 18%; and mixed use, 60%. Our order book from the public sector stood at INR 5,440 crores, which was 62% of the total order book, whereas on the private sector, it stood at INR 3,280 crores. In Q4 FY '21, the company was able to recognize healthy revenues and witnessed significant cash collections amounting to INR 412 crores in the quarter gone by, indicating strong collection efficiency. Strong cash collection has also resulted in lower PCL provisioning in Q4, thus increasing our EBITDA margins. Our continuous focus on client quality and cash flow monitoring has certainly strengthened our business model, especially in these challenging times. On the stand-alone performance for FY -- Q4 FY '21. The total income for Q4 FY '21 is INR 381 crores as compared to INR 311 crores in Q3 FY '21, significant growth of 22.5% Q-on-Q, whereas a growth of 21.8% in the same period last year. EBITDA for Q4 FY '21 is INR 78.5 crores as compared to EBITDA of INR 59.59 crore in Q3 FY '21, registering a growth of 31% Q-on-Q, whereas growth was 47.4% over Q4 FY '20 EBITDA. The margins of EBITDA in Q4 FY '21 were around 20.6%. Margins were higher due to adoption of cost-rationalization measures, lower ECL provision and reversal of provision of earlier quarters to the tune of INR 9 crores. PAT for Q4 FY '21 were INR 24.4 crores as compared to INR 15.2 crores in Q3 FY '21 and INR 3.8 crores in Q4 FY '20. Cash PAT for Q4 FY '21 was INR 53.1 crore as compared to INR 39.4 crores in Q3 FY '21. Debt stood at comfortable levels with gross debt at INR 286.1 crore, witnessing a sharp reduction of INR 125.7 crores from Q2 FY '21. Our net debt remains stable at INR 129.9 crore as compared to INR 126.7 crore in Q2 FY '21 with net debt equity ratio at the end of March 31 standing at 0.41x. With this, I now leave the floor open for questions.

[Operator Instructions] The first question is from the line of Nagraj Chandrasekar from Laburnum.

Congrats on a very strong quarter and strong cash collections especially. I wanted to understand, as we start executing our order book and ramping up revenues to this INR 400 crore and beyond quarterly run rate and, hopefully, getting past the INR 2,000 crore run rate by end of '22, how will our working capital and debt move over the year? And what should be the CapEx in the -- both the MHADA and the non-MHADA part of the business?

So I don't see any major impact on the debt part of it because we are a construction company. And if the client quality is good and your collection remains what has been exhibited over the last 2 quarters especially, leaving the pandemic aside, then we don't see any reason for increase in the debt levels from where it currently is. Okay, there can be a INR 15 crore, INR 20 crore blip in 1 quarter and reduction in the subsequent quarter. That's one part of the question. Second part of the question is on the working capital. So working capital, as I informed in the last quarter conference call, we believe that we shall be at the pre-COVID level, that is December '19 -- December FY '20 level, by December of the current financial year. And we should be at the pre-IL&FS difficult situation by March '22. So on the working capital front also, we are seeing significant improvement. We expect that improvement to continue from quarter 2 onwards because we have seen some disruption due to the second wave of COVID in the quarter 1. But however, we do believe that from quarter 2, it will stabilize and improve thereon.

What has just been the largest quarter mix in working capital and the release in working capital from collections you've seen in the last 2 quarters? What have been the main sort of types of customers or categories of customers as we're seeing this bump up?

We haven't seen a bump up in any significant change at debtor levels. Debtor level, all the clients are extremely good, and they have been releasing payments on time. Because as explained earlier, the COVID -- post COVID period, the supply chain management and the credit level -- credit levels have changed forever. So the credit levels which were available maybe after -- before the onset of the first wave of pandemic is no longer available. So the luxury of giving any excessive credit to any client does not arise. On the contrary, if you see other debtor levels, they are falling by literally INR 100 crores.

Yes. That's true. And on CapEx?

On the CapEx part, there is no investment on the books of Capacit'e from MHADA project. However CIDCO project totally entails an investment of INR 75 crores to INR 90 crores plus/minus 5%, and that is spread over the next 2 financial -- current year and the next financial year.

And just on the order pipeline and the actual orders in '21, obviously, you're starting off with a very large order book and the challenges this year. But how does that look like? Or are you happy with what you have now and will focus more on very good-quality projects and wrapping up with a INR 2,500 crores, INR 3,000 crores sort of revenue run rate?

The strategy remains the same, what we -- I had elaborated during my previous investor conference call. We will be focused on our existing clients. Any new client addition in the private sector will be solely -- and only if they are better than the current lot of clients, number one. Number two, given the visibility of what client announcements are coming out, let's leave the first quarter alone because of the first 2 months of pandemic, second wave. But I do believe that we should be able to achieve the current year's target, which we had given last time.

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

Yes. Can you tell me what is the receivables, including retention and unbilled revenues, please?

It's INR 366.2 crores.

Okay. Okay. This is including unbilled revenues?

Unbilled [indiscernible]...

Unbilled is...

INR 81 crores.

INR 81 crores.

INR 448 crores.

The total would go to INR 448 crores. And in that also, as against March of '20, there is a substantial reduction of nearly close to...

INR 50 crores.

INR 50 crores.

Come again, sorry? The last one?

As against March '20, the reduction stands at INR 150 crores.

Okay. Okay. The total, INR 448 crores. Okay.

Correct.

Okay. What is the inventory, including work in progress?

See, now the inventory, which you now [ treat with ] other financial assets, in totality, stands at...

INR 418 crores.

INR 418 crores, which includes work done not billed, inventory, work in process, complete. This is as against FY '20?

Yes. INR 456 crores.

Total?

Total INR 456 crores.

As against INR 456 crores in FY '20. So thereby, there was a reduction at both level: at debtor's level, there's a reduction in the financial FX level. Most importantly, you have to look at the balance sheet. The balance sheet side has reduced as compared to last financial year.

Okay. Okay. Right. Can you -- or do you -- I mean [ can you remember ] what is the bid pipeline that you are seeing? And also what is the split between real estate, health care and commercial?

Sorry, sir, please come again. I am not following your question.

What is the -- I mean what is the bid pipeline that you're [ reviewing ] currently that you foresee? And what is the split that we can see on the real estate, health care and commercial in this particular bid pipeline for Capacit'e?

Sir, this pipeline as far the entire market size is concerned, is very, very huge. It is -- it still remains at close to INR 46,000 crores, as mentioned last time. But this capacity has an extremely strong order backlog. We have decided to focus on certain projects. And with that, we have approximately 14 hospital projects which we are currently working on. Apart from that, there will be affordable housing segment and high-rises. So this entirely to our sensibility at the moment is close to INR 7,000 crores. And given our track record, which was close to approximately 25% to 27%, we should be able to achieve our target for the current financial year.

Okay. Your bid pipeline is currently -- you're telling, it's around INR 7,000 crores that you are seeing.

INR 46,000 crores. Off of that, we have identified for the next quarter and half bid pipeline, which Capacit'e will be focusing on, will be about INR 7,000 crores.

Okay. INR 7,000 crores. Right, right, right. Okay, okay, okay. And what -- currently, what is the percentage of the construction cost split between cement, steel and diesel? And how do you -- and...

I don't...

What is impact -- yes sorry?

The cost of consumption, that is all materials together.

Yes. Cement, steel and diesel part -- how...

We don't take diesel. Let me complete, please. The total percentage is 45 average for materials, which includes steel, cement, concrete, lube, oil, everything. The subcontractor and the labor contractor cost is 20.5%. And other construction expenses will be close to 5%, 5.5%. These are indicative. They were changed by a couple of percentage points quarter-on-quarter. But however, if you compare on a yearly basis, they are [indiscernible] constant.

Okay. Okay. And what is the impact of the commodity price rates on our margins?

We have 100% pass-through.

Okay. Okay. And on the deposits pledged for credit facilities and margin money, arranged bank guarantee and LC?

The total fixed deposit position...

Come again. Sorry.

But I'll give you the total fixed deposit position. Please give me a second. It should be close to INR 230 crores.

Okay, okay, okay. Yes, sure. And on the credit facilities and margin one?

So out of this, we provide margins money. And we believe that close to INR 40 crores around 31st of March was unencumbered, which was not against margin moneys. Margin money is as a percentage to bank guarantee and LC rate between 10% to 15%.

The next question is from the line of Rajesh [indiscernible] from Nippon India Mutual Fund. Since there is no response, I have muted the line. The next question is from the line of Mohit Kumar from DAM Capital.

Yes. Two questions, sir. So are you seeing any new inquiry, residential-based, especially in Mumbai region? Do you expect the order inflow from prior to initial to be materially up? Is it -- does your 20 billion, which you're targeting for next quarter and half includes private residential?

Yes. It does include private residential. And we see repeat orders from existing clients. That is what our focus is at the moment. Number two, we do see a serious traction in the health care side from the government, and they will be building close to 5 to 6 hospitals over the next 1 quarter.

Sir, these 5 to 6 hospitals you're talking about, they are prominently located in MMR region. Am I right?

Yes. That's right.

Okay. Secondly, sir, what was CIDCO contribution in revenues in FY '21? And what is the time line? And third is that are we -- do we have complete pass-through for all the projects? Is there any [ veritable ] risk of the raw material input implementation?

So the contribution of CIDCO from quarter 4 was INR 43-point-odd crores. You can send a mail, and we will be happy to give you exact details. The overall revenue contribution of CIDCO for the whole year was close to INR 140 crores to INR 150 crores for last FY '21. That's one part of your question. Second part on the commodity price variations. On the private sector side, all commodities, including steel, cement and concrete, are 100% passed through, which means that if there is a price increase, the client will bear it. The price decreases, the client will take away. Similarly, for CIDCO project, there is a 100% pass-through for steel and cement as for fuel. For other items in CIDCO, it is [ indirect-linked ]. Coming to MCGM, it is [ indirect-linked ]. At the moment, we are covering the entire increase on a cumulative basis as far as commodities are concerned. [ PWT ] has an in-built buffer of INR 12 crores towards commodity risk. However, the project has to be executed over 3 years. And therefore, we do not see any significant downside at the moment in time, taking into track the last 15 years of steel commodity movement. So basically, all our projects are passed through. Whichever is not passed through, it is already budgeted. So we do not see any impact due to commodity fluctuation as far as our order book goes. I hope that answers your question.

The next question from the line of Varun [indiscernible] from [indiscernible].

Yes. Congratulation on very strong operating performance. Sir, you said that CIDCO contributed about INR 46 crores in terms of revenue in this quarter. So when do we see run rate -- monthly run rate when you used to talking about INR 70 to INR 80 crore from CIDCO or annually, we can do about INR 1,000 crore from CIDCO?

I had given this last time also. We were expecting the revenues to increase to INR 30 crores from this quarter. However, there has been the second wave, and therefore, we see that it should move to INR 30 crores per month from July onwards. It should top up to INR 50 crores from the third quarter and INR 70 crores from quarter 4. So there can be a shift of a couple of months, but broadly, the projections remain the same. You can multiply and come to the figure.

You are saying that from INR 70 crores run rate will be from Q4 FY '22?

Sorry?

The INR 70 crore monthly run rate will be from Q4 FY '22?

I repeat INR 50 crores run rate will be from quarter 3. INR 70 crores will be from quarter 4.

So in FY '23 only, there will be significant contribution from CIDCO, right?

Sir, we have a commitment of doing INR 2,000 crores of revenue with our various clients in the current financial year. And out of that, CIDCO will be contributing INR 700 crores, which we have given an indication in the last quarter's conference call, sir.

Okay. And what is our nonfund-based limit? And can you elaborate in terms of annual interest cost? What is the bank charges in that?

We have a total nonfund-based limits of close to INR 1,500 crores. On an average, the bank guarantee commission is 1.5%. On LC front, we have INR 150 crores, which has charges of approximately 1% for opening. And we have INR 240 crores currently as total fund-based limits, which include short-term, long-term, [ both ], including term loan, where average borrowing cost between 8% to 9.5%.

Okay. And lastly, sir, what was the -- how is this yearly hospital project is doing?

Billing of INR 28 crores and payment of INR 28 crores has been received as of March, all right? And the work at the moment is in progress at the project site. So we had estimated close to INR 150 crores or thereabouts in the whole financial year. For the moment, we believe it is achievable.

And when we expect this MHADA would get converted in an actual order in terms of...

MHADA, it is an actual order. MHADA, the design has changed. I have given the details of the rehab buildings going from 22 to 40 stories. The approvals have been received. IOD/CC has been granted by the client because it is in the scope of the client. We are starting with a new design. The entire filing, which is load-bearing filing from next week onwards.

The next question is from the line of Riddhesh Gandhi from Discovery Capital.

Just have a quick strategic question. At the time of the IPO, we were kind of focused on private orders, and the rationale we have given was that they are based on quality of our service as opposed to on -- actually L1 and the tenders. And over the years, we've sort of evolved into where the larger proportion of our book is the public orders. So how should we think about the rationale of the change in strategy and the reason you've been pivoted to a government-focused model?

During IPO, we were only a 5-year-old company. And when you are 5 years or below that, you do not have an option of bidding for government projects because government projects have certain entry barriers. As private sector is concerned, it is your performance which the clients take into consideration. Therefore, government -- on an absolute basis, government indeed is one of the biggest spender as far as factories -- or, sorry, as far as buildings are concerned, including health care. So it was never the idea that we have to ignore that sector. What we had mentioned is that like we have a focus on quality clients on the private sector side, the focus of the public sector also will be on quality clients. And therefore, if you look at our clientele in the published sector also, we have been able to maintain our debtor cycle of nearly 30 to 33 days, which is low. And therefore, coming to the mix, whether it is 60% temporarily, it could go to maybe 59% by this quarter end or it could fall further in next quarter. Focus will be on quality clients, debtor collection and maintaining the cash flows so that the broad parameters and key indicators of the balance sheet are not challenged.

Got it. But so then effectively, the equity IRR we look at on a project basis in private that the public when we are bidding is approximately the same. And if you could also highlight the kind of competitive intensity we are seeing in the public projects because, obviously, those are all based on L1.

See, we have to understand that Capacit'e is not bidding for the INR 150 crores or INR 200 crores projects where the competitive intensity is very, very high. Number two, 3 out of our 4 projects in government are design and build, where engineering is in our scope. And if you look at the competition at that level, it's only among the top 4, 5 players in the country. So we -- once it is you are doing design engineering projects, there is no difference on the margin front. And that is what is visible from what our performance has been over the last 1 year with the first 2 quarters.

And so the equity IRR expectations are similar in line for public and for private? Or is private a little more lucrative?

There is no IRR in cash contracts. The IRR on equity is at the company level. It has shown improvement in the fourth quarter. And therefore, you should not look at the IRR of a project because we are not doing [indiscernible]. We only provide long-term working capital at the company level, and the entire working capital is made up of our equity and the debt and what [indiscernible] for our clients.

So actually, I mean it's actually -- I mean what would be the exact criteria we use in pricing? Do we -- if we aren't looking at equity IRR, then we look at what? Actually a margin -- EBITDA margin?

We look at cash profit.

The next question is from the line of Deepak Poddar from Sapphire Capital.

Yes. Sir, just wanted to understand, on the depreciation part, how is the depreciation going forward?

Can you please repeat the question? Your voice is not clear.

Okay. How do you see depreciation going forward? Depreciation?

The depreciation has 2 parts. One is for the core assets. That is close to INR 9 crores to INR 11 crores over the last 1 year. We believe that the levels will remain quite constant. You can take it between INR 10 crores to INR 11.5 crores. The remainder of it is the site amortization on the asset side, all right, which basically will be around another INR 60 crores on the whole year basis last year -- because this is directly proportional to the sales booked, last year, it was INR 42.52 crores. But going forward, it should be close to INR 60 crores, INR 65 cores.

So about INR 105 crores, like...

Give and take INR 5 crores here and there.

And since you mentioned about the commodity prices that we have 100% pass-through, so EBITDA margin like 17.5% to 18.5% that we had been talking about, so that's the main impact or is that going to change?

We have given a projection of 16.5%. We maintain that. If there is an upside, we should all be happy about it.

The next question is from the line of Umang Parekh from JHP Securities.

As Capacit'e now executes better, like it heads towards achieving target of -- revenue target of INR 2,000 crores, how do we see the finance cost moving ahead? Because I'm looking this quarter of Q4 FY '21, the finance cost was at around INR 18.99 crores. And it was at nearly the similar levels at last Q4 FY '20 despite of debt being -- gross has been reduced by INR 125 crores. So any comment or guidance on that?

The debt of INR 125 crore reduction is from Q2 of last financial year. INR 125 crores has been brought down, okay? So obviously, during the COVID period when the debt has gone to INR 414 crores, on the whole year basis, you have seen a certain upside on the finance cost. You need to compare the whole finance cost for the full financial year. For FY '20, the finance cost was INR 64.52 crores, which went to INR 70.25 crores in the current financial year as -- sorry, in FY '21. If you account for the increase in revenue, we do believe that as a percentage, it will fall. On overall basis, we do not see any increase in the finance cost for the full year on absolute basis.

Okay. So can we expect a relative decrease in finance cost if you're targeting...

I hope so. I hope so. Because if we have -- we also have a target book in the order intakes. So if we have order intakes, there will be -- that will entail outflow of bank guarantees. And therefore, the commissions will get added. So at the moment, if no order were added, hypothetically speaking, then definitely, you will see a decent reduction in the finance cost on full year basis, on an absolute basis, okay? But if orders are added, that much guarantee commissions will get come into play.

Next question is from the line of from Anupam Gupta from IIFL.

So the question was basically on the CIDCO project side. If you can just give an update on the various project site, what's happening at each? And maybe on the largest site where you are still waiting for some land commissions to come in. Just give an update on the overall progress and what proportion is under execution? What is left to be started?

So Anupam, we have received -- we had received earlier 6 out of the 7 locations. The seventh location, alternative land, [ Nawari ], has been received. Our designing portion for that segment has been completed. So we expect the work over there to start -- it was to start immediately, but because of COVID second wave, we expect that to start from next quarter onwards. So we believe that we will be executing close to nearly INR 3,600 crores worth of overall order book and simultaneously from next quarter and onwards. At the moment, as I already said, the target is to have INR 30 crores from 1 -- for 1 -- for quarter 2, take it to INR 50 crores for quarter 3 and INR 70 crores from quarter 4 onwards.

Right. And just continuing there, is the [indiscernible] execution on the 100% line? Or is the truck terminal still pending to be handed over?

The truck terminal earlier, 50% was handed over. Filing was going on. Another 25% has been handed over. Filing is going in that area also. And the remainder, 25%, we do not see the challenge because it is available with [indiscernible] [ book ].

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

Yes. Congratulations on a decent comeback within this quarter and overall improvement in the balance sheet. So my first question is on the pipeline of the projects beyond INR 2,000 crores guidance [ of projects ] which you have given. If you can highlight some of the other projects in all India, this is where you are still looking to bid. Or largely, this is where you will be focusing only on MMR in terms of [ bid pricing ].

The first question was just asked, but I have got more details now. So on the health care side, we are seeing close to INR 12,114 crores as the bidding pipeline over the next 2 quarters. Before that, I would like to say the overall bid pipeline where we qualify is an excess of INR 45,000 crores. However, within that INR 45,000 crores, we are looking at public at INR 11,434 crores in the private sector. We are looking at health care projects of INR 12,114 crores. And we have also -- had some joint ventures for certain international projects, but we shall discuss that later. So if you add this up, it's close to about INR 23,000 crores.

Sir, so sorry. On this -- what is the international product? Is it like in India? Or are you looking at abroad?

No, no. International is abroad.

What kind of projects are these? And what is the funding?

Housing, hospitals, same projects.

Okay. Sir, recently there was announcement...

It will be through [ bilateral ] agencies. Obviously, we will not compromise on the cash flow perspective.

But when there are nice opportunities in India only, why are you looking to go internationally? So what is the rationale behind it?

The rationale is simple. There is -- we are getting an opportunity where the competition is among the top-tier players. That basically gives us a better opportunity to get pricing, better pricing. So the point is, in our overall bid pipeline of INR 46,000 crores, out of which INR 23,000 crores has been identified within India, bidding INR 4,000 crores or INR 2,000 crores doesn't change our strategy. The strategy is and will remain quality clients, all right? Within India also, our focus, as I mentioned last time, will be limited to the geographies where we are present. So there is no change in strategy. Quality of the client is a principal strategy on which we are working, and that will not be changed.

Okay. So just coming back to the CIDCO. Now you are going to see this is almost getting a 2-year old project now, September '19. Now you're almost reaching there. Have you seen some pickup, COVID-based [indiscernible] impact. But within that, more on the working capital side, do you think that with so much of advancement on this project may be about close to INR 400 crores plus, do you think this project will require sustained capital from the [ Capacit'e ] side to execute it? Or this will work on working capital? So much lower than the company levels of like 60 -- 60-odd days, 60 to 70-odd days. Will it work -- operate at much lower working capital levels and free up cash flows for the company?

So positive advances from this project were interest-free, INR 330 crores and not INR 400 crores, out of which INR 25 crores has been already reduced on the execution already done, all right? From the cash flow that's evident, we have mentioned it earlier also. On the working capital side, it is a self-liquidating, self-financing project. On the CapEx side, we may require some term loans. We will take the decision as and when the equipment have to be purchased.

But you won't be requiring working capital loans for this project, right?

No, we will not. Except [indiscernible] will be requiring working capital first.

But what happened with the 4 [ tranche ] of mobilization? One, is it -- [ I seem to remember ] INR 20 crores, INR 25-odd crores still pending to be availed on this project, right?

Yes. That's right. But the point is that we have to start to work at all the project sites. And technically, we have not been able to start work on the large project site. So have shown the situation with all the other 3 contractors. So the large kinds of advance has not been claimed as yet. And April and May have not been [ started ].

Okay. Sir, in the unbilled revenue, what will be the contribution of unbilled revenue or work in progress on inventory? So on this project of CIDCO, how much in that amount be out of the total of inventory or unbilled or in work in progress?

[ INR 49 crores ] on CIDCO and close to INR 15 crores from J J Hospital. So if you look at the entire financial assets of INR 403 crores...

INR 418 crores.

INR 418 crores, I'm sorry. Nearly INR 100 crores is coming from these 3 government projects, which are sizable in nature.

Okay. And just lastly, sir, on -- this project was to be funded by CIDCO and also from the auction of the properties or the [ last 3 at least ] projects. So do you think any delay which will happen later because of the COVID that [indiscernible] delay, so on the funding side of this project, so how do you see happening of panning out for you? If you could just touch upon that.

We believe that CIDCO has sufficient funds to pay for the current financial year. Obviously, we do not have the exact source of that and cannot be discussed or disclosed. Secondly, we also understand the line of credit of close to $1 billion is being made ready to execute the project on a fast-track basis because the government has lost nearly 14 to 15 months due to COVID and COVID-related issues, all right? The contract has also faced the challenge of labor reduction. So now once it starts, the government would like each location to be completed as soon as possible, and that is not restricted to us. It's basically across all clients and private and public growth.

So you weren't able to ramp up the labor here to the levels which you -- the project is progressing, so is there any shortage here still in terms of getting back the labor?

So we don't see CIDCO as a separate -- it's within the company as far as Capacit'e is concerned. The impact started from 20th or 21st of March. It was slower -- it was a lower impact in April where the manpower reduction has gone to 25%. It peaked to 40% in May. However, we have seen an influx of 1,825 workmen in the last 1 week, and we hope to come back to pre -- to the March status by 20th of June current month.

In 20th June, you will be normal in terms of labor force at your sites?

I hope there is no further surprises. We have all been struck by so many surprises, commenting becomes very difficult. But that's the idea.

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

Yes. So I'm not sure if you have answered this earlier, but what is the kind of revenue that we have expected from the MHADA order in FY '22?

Parvez, I will require about -- the Tata and Capacit'e teams are sitting together. We believe that 4 buildings will be starting, 2 immediately and 2 over the next 2 to 3 months. These are all 40 stories. So the quantities have changed drastically. Please give us a week. I will tell Amit to mail the details to you, which will be more logical rather than me giving you an answer, which will not stand the test of the next 1 week.

Sure. And just last question, what is the kind of overall CapEx that we [ will charge ] in FY '22?

So we have completed the CapEx on the private sector side, except for the central tower of Piramal, which has been done in the current financial year, okay? Apart from that, we are looking at -- I'm talking about the existing order book. New order book is not included in this. Apart from this, as I said, INR 75 crores to INR 80 crores will be the CapEx for CIDCO spread mostly in this year and some spillover for the next financial year.

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

Sir, my question was regarding the revenue. Obviously, on the CIDCO you have given the guidance. But sir, on the overall side, do we see a number of INR 1,500 crores, INR 1,600 crores in FY '20, including CIDCO? Because CIDCO, probably, we can see INR 500 crores to INR 600 crores, if I'm not wrong, this year based on your guidance.

What I'm trying -- we had given a guidance, and we were very, very confident of the INR 2,000-plus crores. However, there's too much uncertainty. And therefore, we are just trying to see how we can ramp up the operations in the next 9 months, all right? Obviously, there has been time sites have not shut, though the labor reduction was there, and that will impact the quarter 1. No doubt about it. I believe it would impact everyone. But it has -- the impact is not as severe as it was last year, both on the labor front and on the revenue front. But we hope that with the COVID cases coming down, labor movement being very strong from first week of June, we do believe that there is an opportunity to relook at the revenues and then come out with a firm number. So while we do not want to change any target, but the only worry is that there should not be a third wave, fourth wave or whatever you may call it because that suddenly -- we'll go back by a couple of months. It would be premature to give any number. The operations team has been told to look into the fast-moving projects, create an excess revenues in the remaining 9 months so that we can pleasantly surprise after and everyone around us and all the stakeholders.

So sir, any insight like you said J J can do INR 150 crores and CIDCO can do x number. So any other projects which can do a lot -- you can contribute largely in this year in terms of revenue?

Sir, all projects, at the moment, have the potential to give INR 10 crore plus. So at the [indiscernible] works at MCGM have started, we believe that from July or latest August onwards, we should see a INR 10-plus crores revenue from there. [indiscernible] for J J Hospital, similar situation will be there. For [indiscernible], our order book is close to INR 1,700 crores. We are committed to build INR 35 crores to INR 40 crores there. Raymond is currently at a INR 14 core billing cycle. CIDCO, I have already mentioned. So I just told you that we will have to rework our strategy given the losses -- or loss of revenue, which was unforeseen in quarter 1 of the current fiscal, to see how best we can pull back and go to our desired revenue levels because the reduction in overheads, the reduction in cost, whatever we have done over the last 6 months, will only show benefit if the revenue increases. So it is the benefit of the company and all its stakeholders to relook at that strategy.

Sir, on the unbilled side, you said unbilled revenue of J J is INR 15 crores, and overall is INR 100 crores in 3 projects. So I missed on CIDCO and the other government project. Can you just help me with the numbers, sir?

Sir, this is a very long list because it will have about a...

No. No. Just CIDCO. If you can tell me CIDCO, it's fine, sir.

So what I suggest is that Amit , my chief will send you a mail so that you can have a look at it. If you have any questions, we will be very happy to answer.

Sure. And sir, on the bidding of INR 23,000 crores, that is INR 11,433 crores is public and private, if my understanding is correct, right, sir, and balance is health care?

Absolutely. Absolutely.

And sir, just one last question. Just on the expenses, that obviously, you've seen some significant reduction in expenses. As you said, there was a reduction in ECL provision and some write-backs. So sir, what could be the future run rate, whether this would continue with lower ECL and your operating expenses would be manageable? How we can -- can you just throw some light on that, sir?

See, given our size of the balance sheet to total current ECL stands at INR 50 crores, all right? There were certain provisions which were made for the whole of the year to see what COVID surprises could spring up. But since the last year has been completed, those ECL provisions have been reversed, thereby resulting in additional income and that amount appearing in that -- total other income side of INR 12.06 crores, all right? That's number one. Going forward, we do believe that we have a good client category. With no further surprises, we do believe that over the next 2 years, the ECL will come down. It cannot be looked at quarter-on-quarter basis, it has to be looked at...

Yes. Overall.

Yes.

Yes. So this INR 9 crore is in other income, right?

Yes, yes, yes.

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

What is 14 hospital projects in the pipeline that you mentioned? Is it from private sector or from [indiscernible] and then from which states are these 14 hospital projects?

We are talking about government, semi-government or corporations. With the hospital projects, none of them belong to private sector.

Okay. Governments and semi-government. Okay. And how do you -- I mean how do you -- what is the level of -- the impact on 1Q execution because of this COVID and with the total labor availability itself that we can -- if you can get some sort of a ballpark figure I can [indiscernible].

And on your assessment, as I told you, the impact started from 20th of March. So it was quite small, maybe INR 25 crores, INR 30 crores in the last financial year. In April, the total labor shortage was 25%. It peaked to shortage of 40% in May at the peak. And as we speak, we have seen an inflow of excess of 1,800 workmen in first week of June. And we believe, given the trend, which is -- and the influx which is happening, that we should be at the March mid-level by 20th of June 2021. The assessment of impact on a whole year basis is understudied. We are seeing what revenue can we add in the coming quarters to negate this impact. So at the moment, it is not ready. Maybe in the next 15 days, if you connect with our IR team or Amit, we will be able to give you a detailed answer.

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

Sir, the first question was essentially on the inflows that we had in [ FY '21 ]. I think essentially, there was only one new order that we could add or rather it was a repeat order from the existing client. So just want to understand, I mean last year was very slow for us in terms of order addition. Is it that even will slow in terms of adding new orders because we were sitting on [ highly ] order backlog, which is that there was no desperate need to kind of go and bid for new projects? Or is it that any way of bidding, but then somehow, we were not able to announce -- make it a success because some of these other people were kind of eventually a little more competitive or aggressive in terms of bidding? Because as I've seen, I think awarding was not that a bad number in FY '21.

You have answered the question yourself. We are sitting on a huge order book, and we were all struck by COVID. There was practically no revenue in the first 6 months because of the geographies where we were, were impacted the most. Their revenue data started in quarter 3 and better in quarter 4, all right? We have promised that you will see growth in quarter 4. That is what we have shown. Now the backlog remains at INR 8,750 crores, excluding MHADA. And MHADA, our share is INR 4,300 crores. So as it is, the order book is very strong, but we have internally set a target of upward of INR 2,000 crores for the order intake, and we believe we are well in track on that. So -- but having said this, the order book does give us a comfort of not going and rushing for orders which are not in our interest, also which are not in our geography. So the focus on geographical concentration will continue. And obviously, for the takeup and repetition for the nth time, the quality of clients is most predominant.

Is there any goal for these international orders because now we've decided to kind of go international? Fair to assume your margin expectation will be slightly higher because generally, what we've seen with international orders, you don't get to have pass-through structure most of these -- most of the times, they tend to be kind of fixed priced in nature. So eventually, I mean your margin expectation, given the fact that you don't have that cushion, which is available in India, would that make you kind of target little extra in terms of margins?

So you have to see that in India, also, there are contracts with fixed price. There are contracts with escalation dependent on RBI indices, which is published by the Office of Economic Adviser, and there are 100% pass-through contracts. Now it's on the prerogative of a company, whether it would like to take any contract which is open-ended. When I mean open-ended, then it means that there is no price revision to us. No sensible contractor today will go and pay for a fixed-price contract until and unless they are able to charge or provide with themselves a decent amount to capture the price variation. What this cycle of variation has shown is that the prices have gone as high as INR 51,000, which, in the last cycle, let's say, 4 years ago, at that INR 45,000 per metric ton. So at the moment, whoever is bidding, is bidding at the top of the cycle. These things are -- it is not possible to answer this question over a con call. This needs a more understanding of the overall market scenario. What we are saying is wherever the competitive intensity works in our favor, we will give a look at it. And if there is no variation to us, then we will not opt for it.

Sure. Sure. And just one last bookkeeping question from my side. So when I look at our balance sheet for March '21, there's this other financial assets of almost around INR 560-odd crores. And when I compare it with last year figure and look at the annual report, when I get to see, I mean, this INR 560-odd crores, this would largely comprise the unbilled revenue then bills due for certification. And the number is almost the same. So which essentially -- and is it fair to assume that the number would have remained the same, I think, which is why it's still the same on an overall basis? And if that is the case, I mean it's INR 530, 540-odd crore of unbilled and billed due for certification and the trade receivables around INR 285 crores and then long-term trade receivable of another INR 181 crores. The number seems to be too high when compared to the revenues that you've that this program works -- are you almost around INR 560 crores plus INR 280 crores, INR 840 crores and another INR 80 crores of long term. So I understand, I mean, this is including retention. But still, I mean INR 900,000 crores be a number on a revenue base of INR 900 crores for the full year looks to be on the higher side. So if you could help me better understand this, please?

Sir, please consolidate the INR 380 crore revenue done in the quarter 4 rather than comparing last year where the first 6 months more worked through. Therefore, when you are comparing the system, please -- you just mentioned the right figures. The total uncertified portion has reduced from INR 151.49 crores in March '20 to INR 81.36 crores in March '21, significant improvement. But this has increased from INR 356.06 crores to INR 418.15 crores, only [ reducing ] CIDCO and J J, where the activities have increased, all right? On an overall basis, we still continue at 4 -- INR 541 crores [indiscernible] as against INR 539.11 crores. Or increased -- and this is what I said in my earlier answer, we believe that by December end, we should be at the pre-COVID, that is December 20, FY '19/'20, December quarter level. And by March, we are targeting to be at pre-IL&FS [ better ] quarter -- level.

Sure. Sir, just one last. I mean if I may. What is the total retention amount, including current as well as the long-term -- or noncurrent balance?

INR 3.17 crores. On the full year basis, it has reduced by INR 13 crores.

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

Sir just on the AP affordable housing projects. So are we interested in bidding for -- in those orders, which is I think INR 15,000-odd crores is only about INR 28,000 crores, which is at the moment -- so if we can just touch upon those.

Extremely sorry. I haven't followed your question. It's not very clear, your voice.

Sir, I was talking about the AP affordable housing projects, which can be the [indiscernible] can happen. Free [indiscernible] of about INR 28,000 crores. So are you looking to bid for those projects?

We will look at bidding for all projects which are in our domain expertise and in our geographies of our interest. As I said that the company wouldn't like to take any risk beyond what the order book it has and the geographies where it is present, at least for the next 4 to 6 quarters.

Okay. Sir, can you -- you said that the creditors, the change which happened. The credit has moved to cash and credit and became permanent. So any cases on the client side? Are you seeing a reduction in the payment days or payment period happening there, so which could positively impact on our working capital? Because one side, you are getting constrained on the current liability, and on the other side is the current asset payment doesn't change. The time lines haven't changed when you're looking for a more expanded kind of a working capital cycle. So if you can just touch upon that.

So the collection has been -- the total year collection has been INR 1,050-odd crores, all right? March quarter saw a collection of nearly INR 400-plus crores. So appointed that obviously, debt levels cannot go down and creditor level cannot go down without -- sorry, I would like to rephrase my answer. The debt -- the creator levels cannot go down if the debtor levels cannot go down. So it is a concurrent function. On the contrary, the debtors have fallen to the level where we have been able to repay bank debt and also reduce the creditors. So we -- therefore, I just mentioned, the quality of the client is of paramount importance, and we expect to do the same going forward.

So in the newer projects where you're talking to clients on the private side, we are seeing trends on the payment period will get reduced. So client which was earlier paying 90 days or 100 days may now agree to pay maybe a little faster than 60 days or 70 days. So you think directionally, you are seeing compression on the overall credit period which you extend to your plan?

The debtor levels are actually on a very, very good levels already. Now the focus is to reduce the uncertified portion, which we have been able to manage to bring down from INR 159 crores last year -- sorry, INR 151 crores last year to INR 81 crores in -- last year FY '22, INR 81 crores in FY '21. Now the focus is to increase the billing and reduce the bid, convert it into sales. So the first thing was reduce the debtor level, reduce the size of balance sheet. Second was reduce the uncertified bill and now with less -- hopefully, with COVID behind us, from July onwards, start converting bid into sales and, therefore, reduce the overall net working capital to 56 days or thereabouts by 31st March 2022.

Okay. So this has been much -- I mean a very high component of our current assets. So do you see that clients now making -- extending better advances to you to overcome and fund a part of this [indiscernible], which has been substantial portion of our current assets?

Sir, out of this entire with INR 80 crores of CIDCO where the advances [indiscernible]. Similarly, from the private sector, the advances are close to INR 140 crores to INR 150 crores. So basically, the base is being funded by the clients, partially and partially through working capital.

Okay. So if can cannot [indiscernible] CIDCO and one about INR 180 crores in advances -- INR 150 crores in advances from the private clients.

Sir, I have answered this question 4 or 5 times. What I suggest is that our IR team will send you or maybe if you can send give us your e-mail ID, Amit will provide the details to you. It is broken up into 4 or 5, which will give you the movement, all right? And then we can discuss and further elaborate how going on where we would like to achieve over the next 4 to 5 quarters.

That was the last question. I would now like to hand the conference over to the management for closing comments.

Thank you, everyone, for joining the call. We hope we have been able to answer your queries. For any further information, we request you to get in touch with SGA, our Investor Relation advisers. Thank you. Be safe. And look forward to catching up in the next quarter. Bye-bye.

Thank you. On behalf of Yes Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.