Cemindia Projects Limited (509496) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the ITD Cementation India Limited Q3 FY '20 Earnings Conference Call, hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay from ICICI Securities. Thank you, and over to you, sir.

Yes. Good morning, everyone. Thank you for joining us on the call today. Today from the management, we have with us Mr. Jayanta Basu, the Managing Director; and Mr. Prasad Patwardhan, the CFO. And now I'd like to hand it over to the management for their opening remarks. Over to you.

Thank you, Adhidev. Good morning, everyone, and thank you for joining us on this Q3 earnings call. This is Prasad Patwardhan, CFO of the company. We declared our results yesterday, and I'm sure you would have gone through the numbers and would have questions on the numbers that we have reported. A couple of other points that I would like to update everyone on is on the debt position. Our debt has reduced as compared to the previous quarter. Our consolidated debt is a little under INR 500 crores, and the net debt is about INR 440 crores. In terms of the order book, during the quarter, we have received new orders worth about INR 2,600 crores. This includes the underground tunneling project in Bangalore worth about INR 1,800 crores. We have also received one order in Myanmar from Adani worth about INR 560 crores. Overall, the order inflow in this 9 month has been about INR 5,600 crores. And in addition to that, we are L1 on another building order worth about INR 350 crores. Our order book as of December end is about INR 12,600 crores. One more positive development, which I would like to update all of you on is regarding the tunneling work at our underground metro project in Kolkata. Yesterday, the High Court heard the matter, and we're happy to inform you that we have got permission to restart the tunneling work, and we are hopeful of starting the work as early as next week. This is all that I can -- I have to share with you at this stage. I will now hand over to our MD, Mr. Basu, and then we'll take your questions.

Yes, good morning, everyone, and I'd like to highlight the key aspects of operations during the last quarter. And the first thing I look -- I'd like to appraise about the Kolkata Metro development, which Mr. Prasad has just mentioned. We have been waiting for the last 2 months for the court to give their decision, and yesterday, they have given their verdict that we can start the work. So that is a key development, and we'll be commencing the tunnel work maybe from next week. So that is one good thing. Second is, during this quarter, we have secured one international project in Myanmar, which is also one landmark achievement by our company because we have been trying for the last so many years, but this is the first time we have secured a job in Myanmar. Our customer is Adani, and it is a marine job. The job has just started. Our team is in place. If we see the work done, we have done around INR 707 crore compared to last quarter, INR 709 crore, and June quarter, INR 704 crore. So as you can see, it is flat. We expected a little bit more in this quarter. But what has happened, really, the job today, if you see, the mix of the job, most of the jobs are new. Around INR 6,000 crore job we have secured very recently, like 3 jobs in Sikkim and Bangalore Metro underground, this Myanmar marine. So all these jobs are highly technical and big-value job, but it has just received the job 2, 3 months back, even last month. So what happened, there is gestation period. So we are not able to get much revenue from this job. And for sure that from next quarter, we'll get substantial revenue from this job. That is one of the reasons the initial period, because of that, the revenue is not reported, and we could not do much in this quarter. And second aspect is, there are 2 big jobs, one is in marine and one in the underground metro at Kolkata. Because of the reason -- obvious reason, Kolkata Metro progress was not much. So though that does not affect our top line, but it affects our bottom line as well because, if there's no progress, we cannot recognize any margin from there. Second issue is Udangudi. It is doing very good and around -- we are doing 30 -- INR 25 crore to INR 30 crore job per month. By any standard of civil construction, that is a good revenue per month. But our expectation was that we would be able to start electromechanical work also. But here, our customer is a little slow in approving things, so that revenue we have not so far started getting, and I hope from next quarter, we'll get. So this is in general scenario. I'd like to take you a little bit more in detail project-by-project. As I mentioned to you, Kolkata Metro, we are starting the work from next week. Mumbai Metro, around 44% work has been completed, and the tunnel work is going absolutely okay. Kolkata, we are doing some work for metro for the Biman Bandar station. So that is also going well. For elevated sector, Nagpur Metro and Bangalore Metro, last month, Nagpur Metro 5 station has been inaugurated by our new Chief Minister and the Central Government, which is a good achievement because we were expected that bulk of the work would be completed by May this year, if you remember my last con call, and now we have already done part of the station completed, handed over. Bangalore Metro, we maintain the same statement that, by July, 3 project would be completed, and by end of this year, another -- fourth project will be completed, which part of the work is not handed over. Marine except one project, which is in Chhara, all the projects are going well, a little bit plus and minus, but Chhara is a job in Gujarat, where it is a little slow because client is not able to provide us with the drawing. Once the drawing comes, the progress will pick up. Similarly, the 2 airports of Pune and Trichy will pick up now. So basically, what I tried to mention here, all the jobs are going okay, and the new jobs, which are in initial stage, will pick up in this quarter. And we'll see that effect in this quarter result. I think from my side, that's all. Thank you. Any questions from your side?

[Operator Instructions] The first question is from the line of Mohit Kumar from IDFC Securities.

Congratulations on getting the work restarted in Kolkata. Sir, my question pertains to execution in ramp-up. Especially, sir, we had won 4 projects in Bangalore Metro in November '19. Sir, have we got the work started? And secondly, on the tunneling works in Sivok and Rangpo and plus GPRA project, which was won in Q2 FY '20 of INR 1,000-odd crore, can you just let us know whether the work has started in all the 3 projects? And how do you see the ramp-up?

Yes, that is just what I pointed out in my opening statement. Yes, 3 jobs in Sikkim, Rangpur, and 1 job in Bangalore Metro. And Bangalore Metro job we have just secured a month back. And it would take at least another 4 to 5 months' time to do some substantial progress. Now initial enabling work is going on. Sivok Rangpo also we have started. We have mobilized most of the machineries. And in one project -- I think 2 projects, we have already started the tunneling work. The last one, some -- there approach construction is going on. So in this quarter that is from January, we have done some work. February -- also February/March, the work is done fast [indiscernible].

Sir, what was the GPRA, Kasturba Nagar, New Delhi work?

That is for the CPWD. We are constructing residential complexes. There are several towers. And been building work, basically. And -- so yes, we have secured the job, again, 1.5 months back. So it is in initial stage. So I think work will be ramping up for another 2, 3 months from now.

Okay. And sir, on Udangudi, you just said that the INR 40 crore run rate you have right now and, pending some approval from the TANGEDCO, otherwise, the revenue would have ramped up by a considerable amount. Can you please let us know, sir, what would be run rate going forward in Udangudi once the client approval is in place?

It should be around -- not less than INR 50 crore, around INR 50 crore to INR 60 crore per month.

Okay. And sir, what is the outstanding order book in Udangudi?

Udangudi, I think, value we have so far done close to INR 400 crores out of INR 1,600 crores. So around INR 1,200 crores is still pending.

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

Can you hear me?

Yes, Parikshit, go ahead.

You said that INR 6,000 crores worth of jobs has still not moved into execution, and from this quarter, this will ramp up. So if I understand correctly, the balance INR 6,000 crores of work are yielding roughly around 700 per quarter -- INR 700 crores per quarter or INR 2,800 crores or INR 3,000 crores of annual kind of a number? So when the INR 6,000 crores ramps up, so does it have a similar kind of execution time line to what we are currently executing?

Yes. Basically, see, the INR 6,000 crores new -- I mean, let us make it very simple, INR 6,000 crores new and INR 6,000 crores old. INR 6,000 crores old also will shrink as it progresses. Today, if you get INR 100 crore from the INR 6,000 crore, the month coming it will be reducing INR 80 crores, INR 70 crores, like that, and this will ramp up. But basically, if you see last year this time, our work in hand was around INR 8,000 crore, if I remember. And today, it is around INR 12,000 crores plus. So naturally, there will be -- revenue will be like more when compared to last year-on-year.

Okay. But when we -- so when do we start hitting the peak revenues? I mean which quarter, typically, you would say that this entire INR 12,000 crores will start hitting the peak revenues?

Let me explain more specifically. The Myanmar job will start immediately. When I say immediately, say, from April. It is already February, so February/March. And then on the foreign job, naturally, mobilization takes time. But still from April onwards, it will produce revenue. This -- Bangalore Metro will take time because it's an underground job, and you have to do a lot of many things before you start tunnel boring work. Tunnel boring work will start from September/October this year. And from there only, you'll get substantial revenue. Otherwise, Sivok Rangpo is a 3-tunnel job. Already we have started from January. And this March quarter, you'll find that we'll get substantial revenue from this new job. So if you see the range from March to September, during this period, all these jobs will produce some more revenue.

But when could we cross that INR 1,000 crore per quarter kind of -- not per quarter, I'm saying INR 1,000 crore kind of number. In which quarter do we expect to cross that?

Probably the second quarter of next year.

Okay. Okay. Okay. Second question was on the Bangalore elevated. What kind of debt we have? Because I think if I remember correctly, last quarter, it has come down to INR 230 crores. So what will be the number now?

Well, as we speak now, we are under INR 200 crores.

Under INR 200 crores?

Yes.

And by July, how do we see this number panning out?

Well, it will definitely go down further, but it depends on the progress of the work, and we have to balance it out between the debt repayment and the use of the money for the projects. So as you have seen, in the last 1 year, the debt has gone down by nearly INR 100 crores. We've seen that trend. The debt will get -- will reduce as time goes by, but it will be difficult for me to give you the exact number in this stage.

But for the whole year as a whole, sir, it's INR 440 crores of net debt. So where do you see it stabilizing? Is it like going to increase, decrease? How do you see this number panning out?

Well, the Bangalore Metro debt will reduce. But you see, with all these new orders -- all these new orders that we have got in the current year, these are under stand-alone order book. So as the execution of these orders picks up, we'll see some increase in our debt. So the reduction in the Bangalore Metro debt may be compensated by the increase in the stand-alone debt.

Okay. Just lastly on the Kolkata Metro, sir, now the work will start in a week's time. And if I understand correctly, last quarter, you had said that initially you will have to complete the job and then later on, the final bill, you will have to claim it from the insurance the cash flow part, the amounts you have to claim. But initially, you have to pump in for the working capital or the cost you have to incur initially. So how will the accounting happen here?

The accounting will happen in the way it has been happening. I mean there is no difference. Whatever the costs we need to incur for the execution of the project, that will be incurred. Whatever bills we need to pay, we will discuss with the clients and see how to take it forward with them. But we have -- the project execution -- although the tunneling work will start next week, the work on the station buildings has been going on for the last 2, 3 months. That has not stopped.

Sir, let me also address this issue. Parikshit, if you see, this is a daily job. And we have independent setup there and an independent bank account. And from operation, whatever fund we have in bank, that is more than sufficient to ramp the job. So there is no issue.

But this excess cost will be treated as a cost, and you will be providing a cost overrun and taking hit on margins initially. And then when the money comes back, then you'll be your conservative nature. When the insurance claims, when money come back, then you'll be reversing this as gains. So is my understanding correct here?

No, your understanding is not correct, Parikshit. We already have some contingency provisions in our budget in the cost to complete on this project. We have already been reporting subdued margins on this project. So probably with the extent of upside that we may have expected on this project, that may reduce to some extent. But we don't see any hit on the margins that we have been recognizing on this project.

So no losses will accrue from this project?

No, we are not anticipating any losses on this project.

No. This I have clarified during last 2 con calls. Yes, so we'll maintain the same status, and that is a fact.

The next question is from the line of Sanjay Dam from Old Bridge Capital.

When I look at your numbers, I mean, you're winning fabulous orders, doing very good work. When I look at your quarterly execution and the interest cost, which is there in the P&L, I mean, last time you were doing 700 -- INR 750 crore or more than that versus June '16. Then your execution fell, and now you're again back to INR 700 crore of quarterly execution. And between that time and now, or even in the last 2, 3 quarters or 4 quarters or 5 quarters, when I look at your interest expense to EBITDA, it kind of has been going up. So it's been going up from 25% to 30%, 35%, 40%. This quarter, now it is 50%. So I would really appreciate if you can give some sort of a sense on what should we expect going ahead as the execution increases in the coming quarters.

Sanjay, the interest cost that we are reporting, it includes 2, 3 components. One is the interest cost on the debt that we have from the banking system. The second is the interest on the customer advances. With all these new orders coming in, we have taken customer advances, and most of the advances are interest-bearing. So the interest cost also gets [ included in there ]. The third thing that has happened, particularly in this financial year, is the new accounting standard, accounting from leases which has kicked in, Ind AS 116, and that is impacting our interest cost by about INR 2 crores, INR 3 crores per quarter. That is the reason why you are seeing some increase in our interest cost. Largely, it is on account of these 3 factors.

Yes. I mean if I look at your PBT margins, sir, over the last 6, 8, 10, 12 quarters, it has been coming down from maybe one quarter you hit 9%, that was an aberration. But roughly, in the past, you used to do 5%, 6% kind of PBT margin. That in the last 2, 3 quarters was -- I mean I'll just leave out the March '19 quarter because it was extraordinary. Otherwise, it was in the vicinity of 3%.

But this is what we have been indicating, Sanjay. In all our con calls and interactions with investors, we have been saying that our margins are going to be lower than what we have been reporting in the past.

No, sir, this quarter...

And with regard to the Bangalore Metro, we are not recognizing any margins to-date. They are really in our top line, but we are not recognizing any margin on the Bangalore Metro.

Sir, X of that, would -- what would be the PBT margin, sir?

Well, difficult to give you a number offhand. But Bangalore Metro accounts for roughly 200 -- 150 -- INR 180 crores or INR 190 crores in this quarter, on which we are not recognizing any margins.

So if I were to just take that out, then your PBT margin would still be sub-2%, sir?

No, that is -- the PBT -- PAT margin will not change. But the EBITDA percent -- the number -- the operating profit that we are reporting as a percentage of our revenue, that will certainly improve. And it is a function of our order mix and the execution mix. As Mr. Basu said at the beginning of this call, we are executing the projects which have been recently awarded. So there's a lot of work which is happening at the site level, but that is not getting translated into revenue or into margins as well at this stage. We will see that happening as the progress -- the execution of these projects picks up.

The next question is from the line of Kirthi Jain from Sundaram Mutual Fund.

Kirthi here, sir. First is on Kolkata. What is the now expected completion date of the project, sir?

Look, tunnel work will commence in the next week or so. And then as I mentioned to you before, instead of 2 machines, now we'll be using only 1 machine to complete the remaining portion of the tunnel -- both the tunnels. So to my knowledge, it would take around 7 months to 8 months time to complete the tunnel. Thereafter, it's another 1-year job for the finishing activities, station, et cetera. So that's what, maybe end of next year, December 2021.

So it will take another 20 months to complete the project, sir?

Around that. Around that.

Sir, what -- I mean, 7, 8 months, what is the thing you are trying to highlight, sir?

7, 8 months, first of all, the tunnel has to be done with the machine. Once the tunnel is done, thereafter, there's a lot of completing work has to be done after the tunneling, which is around 1-year job.

Okay. Sir, then with regard to the legacy Bangalore project, how much time it will take, sir, now with the pending order?

Bangalore, our pending order today is around INR 480 crore. And it would take up to -- there are 4 jobs, actually. So out of that, 3 jobs more or less will be completed in July this year, and the 1 job for which some portion of site is still not handed over, that will go up to December -- around December or maybe January because some portion is still not handed over. So you can say, mid- of this year to end of this year or beginning of next year, the whole job will be completed.

So by December 2020, we should be completing the work, sir?

Yes, along with a small portion of the area, which is still not handed over, that gets handed over to us now. If it gets delayed, then it will take -- according to the delay.

Okay. Sir, with regard to the margin recognition in the newer project, like the Sivok Rangpo, the Delhi buildings work, when will we start booking the margins from these contracts? You highlighted from June the works will start. When will the margin threshold category will be booked, sir?

See, our threshold limit is 10%. Once we -- 10% of the work. Once we do, then only we'll start recognizing our margin. So it is varied. For Myanmar job, I hope that the 10% limit will be possible by second quarter of next year. I think second or third quarter, we'll be able to recognize the margin. Bangalore will take some time. It may go up to third, even fourth quarter also end of that.

Okay. Okay. Sir, given that the mix in marine is improving and complex projects is improving, like, Sivok Rangpo, Myanmar job, and also the underground tunneling in Bangalore, sir, should we expect margins to improve from YTD level of 10% range?

For the jobs -- new jobs and some old jobs, yes, definitely margins will be okay later. But we have got some legacy projects also which are moving slow. So we have to see. Generally speaking, that margin, whatever you see now, it will be in that range.

As we mentioned earlier on the call, we'll see some improvement in the margins happening in the next year. But once Bangalore Metro is out of our order book, the old elevated Bangalore Metro project, we'll see margins improving thereafter.

Okay. So maybe probably from fourth quarter next year, we should see -- third, fourth quarter, we should see improvement, sir?

Yes, that's what we would hope or maybe even earlier.

Okay. Okay. Sir, like next year, can we touch the INR 4,000 crore revenue, sir? Like, sir had highlighted in the previous question to Parikshit that INR 1,000 crores we will be touching in the September quarter kind of run rate, given that, after that plenty progression can happen. So INR 4,000 crores run rate, can we take for next year, sir, as revenue thing?

Yes, with the work in hand around INR 12,000 crores plus, we expect it will be around INR 4,000 crores give or take.

Okay. Okay, sir. Sir, my next question is with regard to interest cost. Now our consol interest cost, say, were around a INR 32 crores kind of run rate quarterly. How we should expect it in the next year? Like, we should be in INR 140 crores, INR 150 crores range? Or how -- or it should be higher than that, sir?

No, we are doing about INR 30-odd crores on a quarterly basis. We don't expect the interest cost to go up significantly in this way.

So sir, like -- but BMCT share cost will go up in that INR 30 crore component when the execution picks up for doing metro project. So INR 35 crores, INR 36 crores quarterly should we expect, sir, as -- when we hit the INR 1,000 crore run rate?

No. As I said, it will not vary significantly. BMCT cost may go up. The borrowing may come down. The advances could get recovered as the project execution picks up. So it will be a mix of all these things. But we don't expect any significant variation from the -- in the interest costs.

Okay. Okay. Sir, then with regard to the CapEx plan, sir, what is the -- any broad idea we have done with regard to next year's CapEx plan, sir, how it will be, the CapEx plan?

CapEx plan, so far in this year, is around INR 65 crores, and maybe it will go up a little bit because there are some new projects like Myanmar and all. So next year, we'll try to keep it within -- around this number only, which is, say, INR 75 crores, INR 80 crores.

Okay. Okay, sir. With regard to pipeline -- I mean, order pipeline, what else is pending? Does the Mumbai -- the sewerage plant order and all, when will it start to come?

Mumbai, this has now been retendered now. So I think we are going ahead with a couple of jobs. I don't know how many, 2 or 3. I think first job's to tender submission on 20th of February. So let us see maybe as far as Mumbai is concerned. And there are many jobs in marine and metro, underground and pipeline. As you know, marine BMCT, JNPT, there are 3 tenders we have already submitted. Discussions are going on. And marine, we have submitted at Sri Lanka one big job. For that, probably maybe this month they will call for final discussion. Then we have a job in Cochin and Sea Bird at Karwar. So there are a couple of big jobs in pipeline in marine. Similarly, for the airport structures also -- airport and building also, Calcutta High Court, that is under Jalpaiguri branch of Calcutta High Court. We are already below it. We're expecting order anytime, around INR 400 crore job. Then there are 2 education institutions, IIM at Amritsar. So there are a couple of jobs in pipeline. If you see, around INR 12,000 crore plus jobs we are pursuing now in marine, buildings and on metro.

Okay. So next year, we expect, say, similar INR 5,000 crores kind of order, sir? Or...

Yes. If you see this year, this year already we have secured in 9 months INR 6,000 crore jobs compared to INR 5,000 crore last year. And definitely, INR 6,000 crores will go up because 1 job we are in L1, and naturally, we're optimistic to get a couple of more jobs, which is a big achievement, getting a job around INR 7,000 crores, INR 8,000 crores in 1 year. We'll try to maintain the same tempo as well next year.

Sir, then -- given that liquidity crunch in that, is the bidding sanity improving with some of the players also facing crunch in the underground metro. Some of the players facing crunch. Is the bidding sanity improving? And is the -- can structurally margin can improve in the, say, newer bids, which you will be taking, sir?

See, I can't comment about our competitors. Basically, what our approach is always that we try to do our best estimate after detailed study of the tender document, and then we put our price. And -- so market -- yes, you can say that there are a couple of competitors that are under them, but that's not the only criteria. Criteria is whether we are able to secure our margins. So yes, rightly said that, recently, government jobs is not going very low price. So yes, that is the trend now.

The next question is from the line of [ Sneha Goshal ] from SKS Capital.

I wanted to ask of the Kolkata project. What is the cost of the project? And how much have -- CapEx have we incurred in the project till now?

The project. you -- as of now, about INR 1,700-plus crores. And the value of work that is remaining to be included is roughly INR 500 crores.

Sorry, INR 2,500 crores?

No, no. The project value overall is about INR 1,700-plus crores, and the value of work that has been executed so far is about INR 1,200 crores.

So when can we expect the revenue coming in?

The revenues -- it is coming in even now. Although the tunneling work was stopped, the work on the station building was continuing. So the revenue is coming in every quarter. It will now pick up again once the tunneling starts maybe in a week or so.

All right. Secondly, sir, can you give the segment-wise revenue breakup?

Segment-wise revenue breakup, we'll not be able to give you at this stage. What we can share with you is the segment-wise order backlog. So our urban infra and MMRDA accounts for about 35% of our order book. Marine is about 28%. Hydro dams, tunneling and irrigation is about 20%. Building is 8%. And airports is 6%.

Okay. And sir, the thing was, you talked about the revenue booking that was not booked in this quarter. That would be seen in the next quarter. That I did not quite get clearly. Can you...

No, no, no. Whatever work we have performed in this quarter, the revenue has been booked. The question was about the increasing the level or the scale of our operations and when will these new projects start getting reported in revenue. So that is what our MD answered, and the work should be expected to pick up in the next 1 or 2 quarters. And then we'll see our top line also growing accordingly once the execution of these orders picks up.

So there was an increase in the [indiscernible] might be the cost of some projects have already been booked, but the revenue has not come yet?

No, no, no, nothing like that. Wherever the revenue is coming in, the costs have -- the related costs have all been accounted for.

The next question is from the line of Vibhor Singhal from PhillipCapital.

Sir, what would be the duration of the Adani Myanmar project?

Adani Myanmar project, 20 months.

20 months. So sir, will it be safe to assume that in the current order book, that there's a project which will probably be -- because it has not yet started, that project will probably be the one project which is going to end the last. So basically, we will exhaust or -- we should be able to probably be exhausting our entire order book of INR 12,000 crores in the next 3 years?

Yes. Less than 3 years.

Less than 3 years. So basically, given that into account that our order book is very strong at this point of time, basically, any kind of different strategy that you would want to bid -- take ahead in terms of bidding for projects that you will probably focus more on only metros and marine and not probably go too much into buildings and airports, which we haven't historically, but we've started of late because the current order book itself gives us a good revenue visibility for next 2, 3 years. So any chance that we would probably hold ourselves back from bidding for those projects? Or you're happy with the way it is going right now and will continue on the same path?

No, there we will definitely not switch from our earlier strategy. If you see there are segments which we will take only for the volume purpose, be it metro and some sort of like that. So we forgot focus on the [indiscernible] now. I'll not say late. We try to take those jobs in higher price. And the minute it should be higher price, we may not get the job. But at the same time, our focus in marine, focus in other sectors like underground, metro will remain the same.

Will remain the same. Sure, sir. And sir, in the order book, excluding the INR 6,000 crores of orders that you mentioned, which we have recently won, and on many of them the project has -- the work has yet to start, the old INR 6,000 crores of order book, any project on which we are facing any delay in execution or delay in payment?

As you know, we have got one legacy job in Andhra Pradesh, Telangana, that is [indiscernible]. That depends upon how we are getting paid by the government. So...

That's with the [ Mitaf ] JV right, sir?

Yes. [indiscernible] There is some through the payments. Otherwise, balance jobs -- 1 more job in ILFS, small job in Marine ILFS, which are -- we are not able to do anything because of IFLS last year and last 1 year. And these 2 jobs are going slow and then sometimes not doing that well. [indiscernible] follow-up.

Sure, sir. Right. Prasad, sir, if I could just basically get your opinion on the margins in this quarter. So the margins in this quarter were a little lower than last quarter as well as last year significantly. So any specific reason for that apart from contribution from Bangalore Metro?

There are 2 reasons for this. I mean, one is the new orders that we have secured. We have started mobilizing, and we will start using and then executing these projects, but till they reach the 10% threshold, there's new margin that we. That is basically -- this is what we have indicated in our earlier investor calls as well. I mean this is in line with our expectations and what we have -- what we should be -- the way we have been communicating with the investors, this is in line with that.

Sure, sir. So you mentioned 2 things, 1 is this and the other is Bangalore Metro, right?

Yes.

And given that many of the new orders we have yet to start execution, so I believe this could continue in the next quarter as well.

Yes, it should continue. Some of these orders, like the Myanmar order, not all doing, that we should start executing that by April also. But some of the other orders, like the Underground Bangalore Metro project, that may take another 6 months. It's a large project, and the modeling works we have started right now. It varies from project to project, but we should see the execution picking up from April onwards as the project execution ticks up.

Sure, sir. And just last question from my side. In this INR 6,000 crores of old order book, apart from the Bangalore and Kolkata Metro, any other project in which we are reporting lower than the company average margins?

No, I think Kolkata Metro, we're reporting lower margins.

Okay. So I'll just assume that because we're taking those provisions into account, the margins in Kolkata Metro might be a little lower than the company average?

No, no, no.

No. Okay. But other than Bangalore Metro, no other projects in the old order book. Is there any project in which we're reporting significantly lower margins than the average company average, right?

No, no, no, not only. There's no such orders.

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

So most of my questions have already been answered. Just a couple from my side. So one was, given the fact that we've already done almost 44% of our Mumbai Underground Metro now, would you be able to share your thoughts on the margin that you'll be able to have with this project now? And is the critical activity that we were waiting for to finish to be able to kind of give us a better sense on the margins. Is it done now?

Yes, the critical activity is almost on the verge of completion, as we have been mentioning in the last couple of con calls. So we expect that there will be some improvement in margins in this quarter.

Okay. Next quarter onwards, we will be able to recognize margin from this project on a full potential basis, right?

Yes, yes.

Okay, okay. And sir, on this INR 5,500 crores or INR 6,000-odd crores of numbers that we've been able to manage in terms of inflows in this year, have we kind of received mobilization advances for all of these, or a large part of this is yet to come to you? How much of these would have been -- would be the project where you would have already raised your demand for the mobilization advances? And how much more is supposed to come to us?

We have started receiving mobilization advances on this project but not the full advances, as it is per the terms of the project. So we'll get the mobilization advance also in tranches. Some of the projects, [indiscernible] we have got 3% or 3.5% or 5% of the advances, whereas, we are able to claim 10% advance, but that will come to us in stages. So we have not yet taken all the advances that we are able to -- the path is right.

But any number that you would have in place, as in how much is already coming and how much more is expected from -- at least from this INR 5,500-odd crores what is reported in 9 months?

Well in the new orders, we still need to -- we still have to get advances of about INR 300 crores, INR 350 crores.

Yes. And what will be the average cost for these?

These are all -- all the clients, they charge us at commercial rates. So it could be bank lending rates, plus 2% or thereabouts.