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

Ladies and gentlemen, good day, and welcome to Capacit'e Infraprojects Limited Q2 and H1 FY '25 Earnings Conference Call. [Operator Instructions] Before we begin, a brief disclaimer. The presentations which Capacit'e Infraprojects Limited has uploaded on the stock exchange and their website, including the discussions during this call, contains or may contain certain forward-looking statements concerning Capacit'e Infraprojects Limited business prospects and profitability which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward-looking statements. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rohit Katyal, Executive Chairman, Capacit'e Infra. Thank you, and over to you, sir.

Good morning, everyone. On behalf of Capacit'e, I welcome everyone to the Q2 and H1 FY '25 Earnings Conference Call of the company. Joining me on this call is Mr. Rajesh Das, CFO; Mr. Nishith Pujary, President, Accounts and Taxation; Alok Mehrotra, Executive Director of Finance, along with Marathon Capital, our IR team. I hope everyone has had an opportunity to look at our results. The presentation and press release have been uploaded on the stock exchanges and our company's website. Our company has commenced the year on a positive note achieving 28% year-on-year revenue growth from operations during H1 FY '25 along with significant improvement in margins. The back-to-back strong quarterly performance sets the tone for the second half of the year, wherein we anticipate further operational improvements. With central elections and monsoons behind us, we are witnessing further uptick in execution across our project sites. The improved execution has helped us in better absorption of this fixed costs, thereby leading to improved profitability. Over the past few years, we have successfully optimized our project portfolio, resulting in significant expansion of order size, reduction in projects under execution, increased revenue contribution per project, enhanced management efficiencies leading to improvement in margin profile. On the order book front, we are witnessing significant traction both from private and public sector. We have so far been awarded projects worth INR 1,500 crores excluding BDD addition of INR 858 crores during the current fiscal, and are confident of achieving and surpassing our guided order book addition for FY '25. We have entered a high-growth phase, supported by a diversified order book from esteemed clients across public and private sector. Leveraging our robust financial position and execution expertise, we are poised to establish new performance standards. Coming to the consolidated performance highlights for H1 FY '25. Revenue from operations for H1 FY '25 stood at INR 1,088 crores, up by 28% as compared to INR 852 crores in H1 FY '24. EBITDA for H1 FY '25 stood at INR 217 crores, up by 42% as compared to INR 153 crores in H1 FY '24. EBITDA margin for H1 FY '25 stood at 19.7% as compared to 17.6% in H1 FY '24. EBIT for H1 FY '25 stood at INR 173 crores up by 71% as compared to INR 101 crores in H1 FY '24. EBIT margin for H1 FY '25 stood at 16.1% as compared to 11.6% in H1 FY '24. PAT for H1 FY '25 stood at INR 98 crores, up by 153%, as compared to INR 39 crores in H1 FY '24. PAT margin for H1 FY '25 stood at 8.9% as compared to 4.5% in H1 FY '24. I now turn to the consolidated performance highlights for Q2 FY '25. Revenue from operations for Q2 FY '25 stood at INR 518 crores, up 23%, as compared to INR 422 crores in Q2 FY '24. EBITDA for Q2 FY '25 stood at INR 101 crores, up by 30%, as compared to INR 77 crores in Q2 FY '24. EBITDA margin for Q2 FY '24 stood at 19.3% as compared to 17.7% in Q2 FY '24. EBIT for Q2 FY '25 stood at INR 79 crores, up 60% as compared to INR 50 crores in Q2 FY '24. EBIT margins for Q2 FY '25 stood at 15.2% as compared to 11.4% in Q2 FY '24. PAT of Q2 FY '25 stood at INR 45 crores, up by 126% as compared to INR 20 crores in Q2 FY '24. PAT margin for Q2 FY '25 stood at 8.6% as compared to 4.5% in Q2 FY '24. Gross debt stood at INR 343 crores as on 30th September as compared to INR 343 crores as of March 31, '24, with gross debt-to-equity at 0.21x. Order book on stand-alone basis stood at INR 9,203 crores as on September 30, '24. Public sector accounts were 73% while private sector accounts were 27% of the total order book. I now open the floor for questions, please.

[Operator Instructions] The first question is from the line of Nirvana Laha from Badrinath Holdings.

Am I audible?

Yes.

Sir, congrats on another great quarter. Sir, my question is a little strategic in nature. So if I look at your execution history from FY '18 to FY '24, obviously earlier you used to be 80%, 90% private order book, and now you are about 75% government order book. Sir, you've explained that you do the design part in government projects and you are able to earn 200 bps higher margin in these projects. But sir, if I look at the working capital, it used to be less than 100 days pre-COVID. Now it is touching 200 days. So at a return on capital level, sir, we are either at the same level or maybe even lower, plus there are liquidity risks of nonfund-based limits, et cetera. So I know you've answered this before, but I would again like to hear your thoughts on how do you plan to keep the balance between private and government? Is there any intention to bring it back to 50-50? Or are you comfortable at these levels?

Good question. So the point is that you have to look at the whole year performance to come at any conclusion as far as the working capital is concerned. If you look at the quarter 1, there was basically a reduction in the net working capital by 1-3, 13 days. This quarter, some of our payments got shifted into October because of elections which were going on. However, now with the elections getting over by November 23, we see a very strong collection in quarter 3 happening that is evident from the INR 200-plus crores collection done in October already. And therefore, you will see a reduction in net working capital in quarter 3 with further improvement in quarter 4. We stand committed to the 100-day level by the year-end. This I have repeated earlier also. However, the internal targets continue to remain at 90 days, but we are very confident of achieving 100 days net working capital by the end of the current fiscal. And that will only improve going forward. You see that you mentioned COVID and COVID taught us that overdependence on any one whether private or public is not warranted. It is very dynamic in nature. We continue to bid for both private sector and government sector. Our last major order has happened from private sector, again, therefore, tilting or improving the balance of order book slightly in favor of private sector. So there is nothing called 50-50. We will continue to bid for projects in both private and public. Quality of plan continues to be the most important parameter while taking an order book. And third, liquidity issues cannot arise. The retention amount over the last 1 year on an absolute basis on increased top line has reduced to INR 135 crores from INR 170 crores last financial year. The company is sitting on more than INR 250 crores of unutilized bank guarantee limits, and therefore, we do not see any issue of collecting our retentions or advances, which will happen substantially in the current quarter, given the new order wins due to nonavailability of non-fund-based limits. I hope to have covered all your points. Thank you.

Sir, on the Signatureglobal order, first of all, congratulations on bagging such a large order. When can we see the execution part? And how do you see it ramping up?

So the execution of this order will start in quarter 4 of the current fiscal. And given the completion period, it should peak at about INR 25 crores to INR 30 crores per month. This order is in two phases. Phase 1 will start from first quarter and phase 2 may start from the second quarter of the next fiscal.

And sir, if I look at...

I stand corrected, fourth quarter and the first quarter.

Sir, if I look at your FY '24 annual report, we had taken INR 112 crores receivables write-off. I assume this has to do with clients, which face difficulties during COVID. If you can call that out, please, because I am not aware of the history, which clients and what projects are they pertaining to. And if there are any other receivables on our book currently which are at risk of such write-offs? I understand that you've already taken possession of some assets that you intend to sell. So if you can just give some idea about all these aspects. What is happening to the assets held for sale plus how much more receivables can be expected to slip to us taking possession of such asset and the write-offs happened from which clients?

So the write-offs predominantly close to INR 80 crores, INR 90 crores, were for the Radius Group. And these write-offs are not only -- because Radius was in joint venture somewhere with Sumer, somewhere with DNB -- sorry, DB Realty and elsewhere. So coming to the fact that it's not only last financial year, the company has followed an aggressive provisioning policy subsequent to the COVID year. And we have provided for more than INR 180 crores of expected credit losses, which means that we are not left with any surprises which I reconfirmed -- reaffirmed in the last quarter as well. And therefore, we do not expect the PAT to be impacted by any untoward provisioning happening from slow-moving debtors or bad debt and/or additional provisioning. That's point number one. Point number two, the company's aggressive collection drive, which is more of legal in nature at various forums, whether RERA, whether it is at NCLT or High Court, has ensured that the company is today holding assets in excess of INR 200 crores market value as against a total collection of about INR 115 crores. We expect this realization from fixed assets over and above our collection normal targets from our debtors to happen over the next 7 quarters to 8 quarters. Now what will this mean? This will mean that about INR 100 crores of debtors or debt levels will fall in the balance sheet. Number two, the bottom line will strengthen by close to INR 80 crores, INR 85 crores. And number three, the gross debt of the company will fall apart from whatever it was from the operational profit by about INR 200 crores from these collections. Hope that I've explained it.

Last question, sir. Has the sale already started? Or which quarter do you anticipate this sale starting, sir?

We are waiting for the NOC for State Bank of India. Pending the NOC, sales of about INR 17 crores have already happened. We expect sales of close to INR 80 crores by March '25 and the realization in the subsequent quarter. But as I told you, please don't hold me responsible, these are internal targets, you will see the complete realization hopefully within 7 to 8 quarters, but INR 85 crores is the target for the current financial year.

The next question is from the line of Aditi from RSPN Ventures.

Just taking forward the question from the previous participant, with respect to provision of impairment, so in this quarter as well, other expenses have increased quarter-on-quarter. So is there any part of that impairment included in this quarter's numbers as well?

There is no impairment, madam. There is a policy of expected credit loss, which every company follows. And that is exactly this, expected credit loss, or what we know as ECL, is a policy which is approved by the auditors and also by the audit committee of the company and the company follows that policy, which means that there is a certain provisioning on the working capital. That is work in process. There is certain provisioning on the retention and there is certain provisioning on the debtors. So this is a normal thing. Again, if you look at the other expenses, the total expenses have to be looked into as a percentage because the revenue of quarter 2 is lesser than quarter 1, obviously, because of the monsoons that we lost 22 days. You will have to look at the full year, where we believe that the company will improve as a percentage to top line basically on all expenditure parameters. So further, when you are looking at provisioning, you'll also have to look at other income when the provisioning happens. So when you take a net of it, it's a much improved positioning.

Got it. And I have few other questions. So one is the cash on hand. Essentially, that has dipped in the first half. So is there anything a reason to that?

Madam, you please see that there is an increase in the -- temporary increase in the debtor, where the amount sitting in WIP is moving towards certified bills. That collection has just shifted by 10 days coming into quarter 3 of the current financial year. So the cash position will be back to what it was by the end of Q3. Nothing to read into that.

Okay. And the EBIT margins have been really great in the first half. So is that sustainable? Or do we see some moderation going forward?

No. With the current order book super improved, we do believe that this will continue at least for the next 4 quarters until and unless there is something untoward, which happens to the industry which we don't expect.

Got it. And sir, last question. There was a status quo on the project that you were bidding for around INR 700 crores. So any update on that?

Let the elections get over, madam. We believe that at the moment, all the orders from government in the Maharashtra state are at status quo. So once the elections are over, we will then pursue for that. At the moment, at least for the current month, we'll be targeting only the private sector. And the private sector negotiations are on, and we should be waiting for some good information.

The next question is from the line of Parvez Qazi from Nuvama Group.

My first question is regarding order intake. I believe you've given a guidance of about INR 3,000 crores of order intake in FY '25. So does this still stand or you're going to revise that number?

So Parvez, we continue with the target of INR 3,000 crores. I think there is a scope of improving in actuals. But you have seen that we have been very choosy in picking up the orders because anything which we do today will have an impact, whether positive or negative, 2 years down the line. So we are very, very particular. Not to forget that MHADA has to still add about INR 3,000 crores to INR 4,000 crores of order book to the overall order book of the company. So the company will be cautious in picking up orders. But excluding MHADA, INR 3,000 crores is something, which we definitely see as happening in the current financial year.

Sure. And for our two big projects, which is MHADA and CIDCO, would be great to get a status of the project in terms of what is the work front available as of now and -- or the execution run rate now? And where do you expect to see it going ahead?

So the execution run rate for October for CIDCO was close to INR 50 crores. We expect that to go to INR 65 crores by December and INR 75 crores by January per month. The total land available is INR 2,400 crores across 6 locations, which means that we have to still bill about INR 1,500 crores on certified mechanism on these 6 locations, which has to happen by March of '26 in totality. The seventh location is identified. However, once it is received, it shall be promptly informed to you. As concerning MHADA, we have received land for 5 towers of sale component, which are close to 90 stories in height or 305 meters. Apart from that, we have 14 towers on the rehab portion of 40 stories. And we expect another 8 towers to be released by December of the current quarter, that is quarter 3. So we do believe that the execution will continue as per capacity as a subcontract as close to INR 20 crores per month. However, that will increase to about INR 25 crores to INR 28 crores in the quarter 4, and it should increase significantly to cross more than INR 100 crores per quarter from the next financial year.

The next question is from the line of Ram from Cycas Investment Advisors.

Am I audible?

Yes, sir.

Congratulations on the quarter. I just have one question. Given the recent discussions around the economic environment, particularly around economics, slowdown in government spending on infra projects, which has been highlighted in various media reports and all, I wanted to get your perspective on this. With your significant exposure in public sector projects, can you share whether you're observing any tangible impact on project approvals or payments or execution time lines from the government, sir?

I haven't read any such article. However having said that, the government spending that INR 1,100,000 crore stands at the highest. You are seeing a big traction in the public or private sector as well with 40% increase quarter-on-quarter in the registrations of apartments, okay? And point number three is, you will see a significant spend on the industry level, that is factory side, going forward. I agree, on the contrary, anticipate shortage of quality contractors from quarter 4 of the current fiscal. So I don't see any slowdown. On the contrary, the project pipeline is full. All building construction companies, they are sitting on record order books, including our company. So I don't see any such thing happening. Yes, winters are here. You will see NGT coming into play in highly polluted areas like Delhi, NCR. You will have some set temporary shortfall. How much that impacts revenue is anyone's guess. So I wouldn't like to give a speculative answer on that front. But yes on overall, we see serious traction both in public sector and by private sector spend, all, in residential and in institution buildings, like hospitals and so on.

The next question is from the line of Rajesh Jain from R.K. Capital.

I have 3 questions. So I recently started tracking your company, and I was going through some of the very old calls of 2018 and '19, much before pre-COVID, just after your listing. So I understand that today, you have an order book of approximately around INR 10,000 crores, and you have guided for 25% growth for the next 2, 3 years. But back then also, in 2018 and '19, even much before COVID, you had an order book of INR 8,000 crores and you've guided for the same, 25% growth for 2, 3 years. But what actually panned out was only 1 year of growth and then subsequent degrowth. So what has changed? And I mean, in the current scenario, how confident you are that the history will not repeat that the growth will not be achieved? Can you just throw some light on that?

Good question. So you have to first track the company from 2013 until 2019, '20, which has seen a compounded annual growth of excess of 35%, 40%. So first jolt was in the COVID year. And thereafter there was recovery but not to the extent to match with March 2020, all right? That's number one. Number two, order book was INR 8,000 crores or more. However, in that order book, MHADA was nonoperational at that moment in time, which is operational now. CIDCO for the first 1.5 years was nonoperational. So though the order book was INR 9,000 crores, the revenue was coming from only INR 3,500 crores or INR 4,000 crores business. So that explains the reason why the growth is now happening over the last 3.5 or 4 quarters simply because the order book is operational and the company is driving substantial revenue from these 2 big ticket size orders. Point number three, the INR 8,000 crores order book was spread across maybe 50 projects. And now the INR 10,000 crores is spread about maybe 22, 23 projects, thereby giving the company an opportunity to bag another 7 or 8 projects, having a minimum revenue of INR 10 crores per month per project, and therefore, then taking it to the growth projections that we have given to you. So summary of all this is that we are more than confident in achieving whatever targets we have lined out.

Okay. That's great to know, sir. So that means you have to keep tracking the operational order book. So in your current order book, is there anything which is not operational?

Everything is operational. Only 1 location of CIDCO 7th location is balanced to be received. Apart from that, everything is operational.

Okay. And what is the value of that, which is not operational?

About INR 2,000 crores.

Okay. That's great. Sir, just two more questions. Again, one related to the history and then one related to accounting norms. So in the past, what I came to know from my circle is that you had a lot of issues related to delayed payments of salaries and delayed execution of projects, even those which are operational. I mean, I don't know how much of that is true. So I just wanted to hear from you how much of that is true. And whether any of that project delays or salary delays issues persist today? Or is there any risk of that coming back?

There are too many questions. Number one, whatever the company did, also during the difficult times, it worked within the cash flows which were received per quarter. Subsequent to that, the company raised close to INR 350 crores through preferential QIP and infusion by the promoters. So therefore, any cash flow issues, whoever has told, is a matter of maybe long past and any which ways the company has, along with its amazing team, confronted it very, very well. So I do not know who has given you this feedback, which I can only call hearsay. However, to sum up, we do believe that the current traction of improvement in revenues, bottom line, and today, the company has a permanent workforce of more than 1,800 strong staff, 80% from the engineering background, 20% from support commercial, and more than 1,400 technicians to support the revenue guidance of 25% growth year-on-year. So I believe that the cash flow issues, which you are referring to, were definitely due to the INR 200 crores, which I just mentioned a short while ago, which was stuck with the private sector. The company today successfully has converted them into real estate assets and now is going from liquidation of the same over the next 7 to 8 quarters, which means the company can only improve the cash flow by over INR 200 crores apart from whatever margins it realizes from operations.

Sir, today, are there no salary delays or project delays today?

Sir, who told you there are salary delays? Please give me one reason.

No, I'm just asking you. Sir, today...

I just told you, there are no salary delays. There are no project delays. All projects are within the stipulated time lines original or amended by the client. So the answer is, there are no delays, number one, on payment of any statutory levy and/or salaries, and there are no delays in project execution.

Okay, sir. That's very reassuring. And my last question is on accounting norms in your business because we are into the -- you're a contractor who execute projects for the other builders for the real estate companies. As far as those real estate companies go, like Godrej or DLF or other housing companies, their presales number flow to revenue as per the accounting norms after project completion and after OC is received, as per my understanding. So in your business, is there any accounting norms for the remaining to flow to books based on certain percentage of completion method? And if yes, then can you elaborate on that, just for my understanding?

So we are not a real estate company, first of all. And we follow POCM method as per Ind AS 116 -- 115, 116. So the point is that revenues are recognized accordingly, and we will continue to follow this accounting norm, which is followed by all construction companies across.

[Operator Instructions] The next question is from the line of Akshat from Flute Aura Enterprises Private Limited.

So I have a couple of questions. First question is, are we seeing any slowdown because of the Maharashtra elections in our construction activity? And my second question is on the employee expenses. So there is a rise sequentially. So any specific reason for that?

So slowdown will happen during elections from order inflow perspective on the public sector side pertaining to the state where the elections are happening. So elections are happening now in Maharashtra, there's a code of conduct in place. And obviously, during code of conduct, which only ceases after the elections are fully over, there will not be any new orders which could flow in with government into any company. That's number one. Your second question was, the employee cost has increased by INR 7 crores over the last quarter. This is primarily due to increase in employee strength, new joinees which I mean to say, and obviously, the increments which have happened. And this will be on an overall year basis as a percentage lower to the top line, as a percentage, as a total to last financial year.

The next question is from the line of Akshit Mehta from Seven Rivers Holding.

Sir, two major questions I had is, one is, what is the total amount of bank guarantees and LCs that we currently have on -- that is currently given? I mean, not just the unused ones, but the total amount that we currently have?

Your question is how much bank guarantees have we already issued?

Yes.

So total bank guarantees issued currently to the clients are INR 729 crores within the consortium. And about...

Within the consortium is INR 347 crores.

So including consortium and project specific for CIDCO and MHADA, the total guarantees issued is INR 730 crores.

Okay. Of which INR 250 crores you are saying is currently still free or unused that we can use for future projects, right?

Absolutely.

And another question I had is with the unbilled revenue or the revenue that we have given to certification, that number is increasing quite sharply over the last couple of years. Any kind of reason for that?

Your voice is not clear. I have not understood your question, please.

It should be better now.

Yes.

So my question was that our unbilled revenue, which is -- or the revenue that we have for certification, that has been increasing quite a lot over the last couple of years. So any specific reason that we are seeing that increase in number and what it could be going in the future?

So please, if you compare, the WIP was INR 889 crores, which was work done not billed, bills submitted, all that put together was INR 889 crores on a top line of close to INR 450 crores last financial year. Okay, that is INR 900 crores on a much higher top line. Number two, the uncertified bills continued to be at INR 434 crores, even though there has been an increase in the top line. And this overall stagnancy will now show reduction. So there was an increase earlier, then there was two quarters of stagnancy and now you will see reduction over the quarter 3 and quarter 4 and the subsequent quarters going forward. So the overall target is to get this number over the next 4 to 5 quarters to approximately INR 900 crores, which would be the comparable to the number what you are comparing with.

Okay. So we want to get that to 2 years back what the number was?

Absolutely, because there is no reason. We have started the POCM method about 3 years ago. There was a temporary increase in debt. And I will not say that it was not a big increase. Yes, it was substantially big increase. However, if you see, that amount has now stagnated even though the top line has improved significantly. Going forward, the top line is bound to increase. At the same time, you will have contracted as assets reduction -- or contraction in the contract assets in a phase wise manner to bring it back to INR 900 crores over the next 3 to 4 quarters.

The next question is from the line of Dhananjay Mishra from Sunidhi Securities.

Congrats on a very great quarter. Sir, my question is with respect to the 7th side of CIDCO, you said that you had delivered. So I mean, what is your status in terms of brand and all...

CIDCO 7th side, the environmental has already been received. Earlier there was an issue of the CRZ rules, which was only 50 meters permitting. That got relaxed to 100 meters. So we are pursuing with the client. And we hope that the 7th location will be given sooner than later in the current financial year itself. And that is the current status of CIDCO 7th location.

Okay. So land and everything is clear. There's no...

Sorry?

There is no occupation of illegal...

No, no. All these lands belong to the government. There is no problem from a land perspective. It's that the government also wants that the lottery system or allotment system to simultaneously start along with execution at the new locations.

And you said that we have now INR 1,500 crores unexecuted part of this location, right?

Absolutely.

And then current monthly billing is about INR 50 crores, which will increase to INR 80, INR 90 crores in next 3, 4 months?

Yes. .

So next year, can we assume that out of INR 1,500 crores, for FY '26, we will be doing close to INR 1,000 crores from CIDCO project itself?

That is the asking.

Okay. And can you repeat the MHADA monthly run rate as of now? I didn't hear.

So MHADA, at the moment, we are doing about INR 20 crores per month. We will continue to do that in quarter 3. We expect that to improve to INR 25 crores, INR 28 crores in quarter 4. And then it can improve to INR 100 crores from next financial year per quarter. It all depends on the availability of new buildings. However, given the traction, we are quite hopeful that this is going to translate into order book, executable order book.

This is our share of...

One thing, we are not taking -- we are not consolidating the revenue at the LLP level, okay, because we own 35% of that. Tata Projects consolidates that. However, we will book our share of profit, which hopefully should start from next financial year and should be substantial.

So as of now, I mean, it is not showing in the P&L, right, in the current quarter?

No, no, no. I mean, that was shown, your revenue would have been INR 600 crores. So we are not showing the revenue at the LLP level. We are showing the revenue only at the subcontractor level.

Okay. So we will only take profit from those projects as a JV profit?

I would like to reiterate that we will be entitled to book our share of subcontract, which will be at the end of the project close to INR 5,000 crores. And we will be entitled for our 35% project at the LLP level, that is the joint venture level. So these are the two things, which our company will recognize.

Okay. And second question in terms of upcoming opportunity, so apart from residential segment, are we looking in other sectors like railway or other government projects into construction segment?

So we are not very happy with the RLDA type of projects because of the negative cash flow and the skewed payment terms, which are mentioned over there. And therefore, we have -- though we qualify for all the projects, we have desisted from participating in RLDA projects, number one. Number two, we are not only bidding for residential. Nearly 15% comes from hospital that is health care. We have executed 2 malls over the last 4 years. We have executed commercial buildings like Oberoi Commerz III, which has been handed over to the client. So there is a mix of residential, commercial, retail and health care coming a part of our portfolio. Currently, all the projects are mixed-use projects, including the one we will be executing for Signatureglobal. So these bigger projects basically are not only residential, but they are mixed. So you will have some portion of retail, you will have some portion of non-tower area and then the residential plan. Apart from this, you are aware that the company has been executing data centers. We have successfully completed the Delta factory at Krishnagiri, and the company is actively pursuing opportunities in the factory side, which have a better financial closure. The clients are maybe one level higher than the developers, which we work for. And that now we're having the qualifications to do that augurs well for the company. So you will be basically therefore operating in 4 segments: residential, commercial, institutional, which would include data centers, and the fourth would be factories. So very exciting times. Please wait for quarter 4.

And lastly, can you give major orders apart from CIDCO, which are contributing to our revenue as of now?

All. So Raymond's is contributing INR 20 crores per month. MHADA is contributing nearly INR 18 crores, INR 20 crores per month. You have CIDCO, which is now contributing in excess of INR 45 crores to INR 50 crores a month. You have JJ, which is contributing in excess of INR 10 crores a month. You have Bhagwati Hospital, which is contributing more than INR 10 crores per month. You will soon have Bhandup hospital, which will start contributing more than INR 12 crores, INR 15 crores per month. You will have M3M contributing close to INR 7 crores, but is expected to go to INR 15 crores from December onwards, so all the projects. Basically, the idea of taking limited projects is that we do not want to have any project in the portfolio which gives less than INR 10 crores per month. And once that happens, only then will you see the growth of the 25%, 30% on a higher base. And that is what exactly we are focused on.

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

Just a few questions. So firstly, on the order book, is the INR 858 crores, which you mentioned in the opening remarks included or not included?

Not included.

Okay. So that is -- so overall order book should be INR 10,000 crores, if you include that approximately?

Approximately, yes.

Okay. And you said by the end of this year, so another INR 1,500 crores from non-MHADA and possibly another INR 3,000 crore of MHADA orders will get included?

No, no. I would like to correct you. INR 3,000 crores non-MHADA will definitely happen. MHADA, as and when we get the locations to start the construction, that will be added automatically, and we will inform you in that quarter. But MHADA is close to INR 2,300 crores now, all right? And we just have to execute more than, I think, INR 1,400 crores, INR 1,500 crores out of that. So that is substantial for the next 2 years. However, at the LLP level, both Tata Projects and Capacit'e are putting all efforts to get the entire portfolio of the project execution in that. And we are quite hopeful that by quarter 2 of next fiscal, that should be happening. So let's wait for the elections to get over and then take it forward from there.

Okay. And just continuing on MHADA, you said something you're not consolidating at this point of time. Can you just clarify that once again, what will you consolidate and starting when?

See, we will not be consolidating the top line at MHADA at the LLP level, which will be implementing -- sorry, which is the executing authority for MHADA, okay? That revenue is not consolidated in our numbers as our numbers would increase by nearly 25%, 30%, okay? We are only taking the revenue, which we are executing as a subcontractor. What we will add as a line item will be the profit, our share of 35% profit of the LLP into our books -- stand-alone books going forward as and when the profits start accruing in the LLP.

Okay. Understood. And when do you expect that to happen or start to happen?

So there are certain, I think, minimum turnover guidelines of Tata Projects. I believe that is about close to INR 1,500 crores or so. Once that threshold is breached, the profitability will start to accrue immediately there.

Understood. And second question was, you said you have an inventory -- sorry, you have receivables as assets close to about INR 200 crores, which you will monetize.

Yes.

Why is SBI's permission required to monetize?

Because some of these properties are mortgaged with the consortium of banks all right, and therefore, we will be requiring their NOC. Verbally, they have given us a go ahead, but it has gone as a proposal to their competent authorities. And we'll be therefore requiring that NOC for certain of the sale of the properties, especially the Bangalore properties, all right? Certain properties which are slated for sale in quarter 4 of the current fiscal will not require their permission but we are taking a blanket approval and that all the funds will then, from the sale of the properties, will flow into the lead bank, which is State Bank of India.

Okay. And all of that in your balance sheet is currently reflected in other long-term assets, right?

No. About INR 90 crores is not reflecting only. That's already been written off. I just explained to you, out of INR 210 crores, what is reflecting in the books is close to INR 100 crores, all right? Once that INR 100 crores come, it will impact two things. It will impact the debtors going down and the asset held for sale. These two will go down. So one is the asset will fall, the gross block. The second thing is that our debtors will fall. Third thing is that balance, which is not appearing in the books, will hit your profitability positively.

Understood. And just one last question. In your order book, what portion of projects are currently under execution in NCR, which will see impact, let's say, over the next 2 months at least?

So we have M3M, which is going on in Noida. So far, there are no restrictions, but you can never guess, so there are no restrictions on construction. There is restriction on some vehicles, which has come in at the moment. There is restriction on the sand, but we don't buy sand. So we will have to ensure that our concrete manufacturers have sufficient quantity to negate that impact. And M3M, as I told you, we will start billing from quarter 4 of the current fiscal. So I don't see any meaningful impact, maybe INR 15 crores, INR 20 crores for the quarter at best.

And nothing on DLF as well because the construction has...

That is over.

Okay. Understood. And just one last question. Any issues we have seen on employee availability at all?

Employee?

Employee availability?

Availability. That's always a challenge to get good people, so that will continue until the time we do business, isn't it, Anupam? The point is that it is across industries, it's nothing specific to us. The challenge is to retain workmen, and we are amongst the first few companies in the construction industry, building construction industry, we have adopted a 15-day payment cycle successfully over the last 3 months, which has made a significant improvement in we being able to retain labor contractors, and we hope that, that will continue. So you have to do things which are innovative in nature to ensure that the labor availability, especially the trained labor availability, doesn't become a challenge, therefore, an impediment to your growth.

The next question is from the line of Jayesh Gandhi from Harshad Gandhi Securities.

First of all, congratulations on good numbers.

Sorry to interrupt you, sir. I would request you to please use your handset.

Madam, I'm using my handset. First off all, congratulations on good set of numbers. Am I audible, sir?

Yes, please go on.

Okay. Sir, my question is on order book position. If I look at your order book to sales ratio, in the past 3, 4 years, it is coming off. And currently, I mean FY '24, it shows as 4.7%. I'm guessing even on September, if you take probably, it would be at a similar level. So is it our conscious decision to do that? Or are we choosy for margins? Or is there a competitive pressure? Can you just throw some light on that?

Sir, if you see our order book, it is in line with our competition and the industry. We can -- earlier, there were times where the order book was 6x, but the execution period was 5 years. Today if the execution period on an average is coming down, then your order book cannot increase abnormally because you need to execute the order book as well. So we are -- our policy is that we need to take orders in a particular financial year. Let's say, if the order target is INR 3,000 crores in FY '26. -- sorry, FY '25, then the target for execution is similar to the order intake in the next financial year. So that is the policy which we follow. And obviously, as I just told you, to the earlier question, our policy is that whatever orders we intake, we should have an opportunity to bill at least INR 10 crores per month. Otherwise, the risk-reward ratio is not very conducive for the company. Point number three, choosy, yes, we are. There is ample opportunity. There is no reason to go and just pickup orders and then cry over spilled milk for 2 years down the line. So yes, we will be choosy. Even if we are choosy, there has enough opportunity available both in public, private and in the factory side of things.

Okay, I get it. And so then can I conclude by saying that we will be somewhere between 4.5% only in future as well?

It could be 5%, it could be 3.5%. But on an absolute basis, we will only continue to grow.

[Operator Instructions] The next question is from the line of Abhishree Bang from JHP Securities Private Limited.

Am I audible?

Yes.

Sir, first of all, congratulations on good Q2 performance. I just want to know could you please share your receivable numbers with a breakup between debtors, unbilled revenue, retention money and mobilization advance for that matter?

Madam, these are too many questions and very detailed. You can please send me a mail to our investor relations, and they will provide whatever data we are permitted to provide in whatever detail you want. So whatever is permissible, they will definitely provide it to you. But such a detail now, for example, it is there in our financials, in the balance sheet already mentioned. However, the breakup can be provided at the movement then can be studied by you.

Okay. So I just want to know whether all of this data could be provided? Like are you -- because sorry to say, but IR team of our company, they are not willing to provide it on a quarterly basis for the public information. And we only have access to get this information on an annual basis. So either you...

What we will do is, we will set up your conference with our IR team. You can discuss with them. I am sure that whatever is permissible under the LODR guidelines, they will have no hesitation. And that's what Capacit'e has been following since inception. So we are very transparent. Whatever data you want and is permissible under SEBI LODR guidelines, we definitely will provide that to you. That I can assure you.

The next question is from the line of Khadija Mantri from Capri Global.

I have two questions. One is, in Q3, do we expect the execution to be impacted because of election and whether we will -- or we will have a good growth on Y-o-Y basis as well?

Please expect execution to grow. Elections have no impact on execution of existing projects. They only have an impact on government inflow of orders of the state where the elections are happening. So I don't see any reason. For elections having any impact whatsoever on the top line of the company, the growth will continue.

Okay, sir. And sir, the next question is, this INR 1,200 crore order that you received from Signatureglobal, it is part of the INR 1,500 crores order inflow that we have talked about till in year-to-date? Or is it over and above that?

No, it is a part of the INR 1,500 crores year-to-date order inflow. And we are targeting another INR 1,500 crores over the next 5 months, the current fiscal.

And sir, in this project, the scope of the work for that remains the same as the previous project? Or is it something different that we would be doing in this project?

No. All private sector projects, whether we do, L&T does, more often than not we try to do only shell and core. And we will be doing only shell and core works for the residential tower, non-tower and the retail area. So this is the scope, it'll remain the same. But yes, as you are seeing that the sizes of the projects especially in Delhi NCR area increasing manifold. So earlier, the average sizes would be INR 250 crores, INR 300 crores, which has now suddenly shot up to in excess of INR 800 crores, INR 1,000 crores. Apart from that size difference, we don't see any other scope change as of now.

The next question is from the line of Amit Agicha from H. G. Hawa?

Am I audible?

Yes, sir.

Congratulations to the whole team for good set of quarter numbers. My question is with respect to like, are there any plans to diversify into new geographies or segments beyond the current focus?

Sir, we, before COVID, were in 7 top cities of the country. Again, we have increased over the last 1.5 years back. We are in Mumbai. We will be in Pune whenever the opportunity comes, but yes, we are there. We are in Mumbai MMR, which is considered as one geography. We are in Delhi NCR, which is considered as a second geography. We are in Gandhinagar, Gujarat, which is the third geography. We are actively looking at Hyderabad and bidding in projects over there. That's the fourth geography. And we will look at projects specific, especially relating to factories, wherever such project comes. However, the quality of the client will be of paramount importance.

The next question is from the line of Rajesh Jain from RK Capital.

I just want to understand, on the raw material pricing, if the raw material prices increase, then will you have to absorb the entire cost or some of it is passed through in your contracts?

In private sector, it's full pass-through. In the government sector, all projects have price variation clauses, which is commonly known as escalation clauses, which cover up for price increases, all right, whether it is material or labor. So this is the protection which any contractor keeps when bidding for government projects and/or private sector projects. So answering your question, that we have adequate cover for increase in prices. If the prices decrease, obviously, money will -- the client will take away that decrease. So as I have repeated in the past, our orders are not speculative in nature.

Okay. So this pass-through and the escalation -- pass-through in the private sector and the escalation clauses in the government sector, this is a delay of like 1 quarter, 2 quarter? How does that work?

It is not a delay. It is at the end of each quarter. So basically, whatever work we did in quarter 2 will get billable in quarter 3. So to that extent, there is an overlap. But then that is only an overlap of 1 quarter, which continues then.

Thank you. As there are no further questions. I would now like to hand the conference over to Mr. Rohit Katyal for closing comments.

I would like to thank all of you for joining us on this call today. We hope we have been able to answer your queries. Please feel free to reach out to our IR team for any clarifications or feedback. Thank you, and have a good day.

On behalf of Capacit'e Infraprojects Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.