Cemindia Projects Limited (509496) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the ITD Cementation India Limited Q4 FY '20 Results 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. On behalf of ICICI Securities, I'd like to thank everyone for joining us on the call today. From the management today, we have with us Mr. Jayanta Basu, the Managing Director; and Mr. Prasad Patwardhan, the Chief Financial Officer. I would now like to hand it over to the management for their opening remarks.

Thank you, Adhidev, and a very good morning to all of you. We declared our results the day before yesterday. I'm sure you would have had a chance to look at the numbers. I will briefly summarize our financial performance before we commence with your questions. During the quarter ending March '20, we have reported a consolidated income of INR 740 crores as compared to INR 707 crores in the previous quarter and INR 590 crores 1 year back. Our EBITDA before exceptional item is about 12.7% as compared to 10%, 10-plus percent...

Sorry to interrupt, sir. Sir, your audio is running a little soft.

Okay. I'll hold the phone closer to my -- yes, I'll hold the phone closer. Yes, can you hear me now?

Yes, sir.

Yes. So I will repeat this. For this quarter, we have reported income on a consolidated basis of INR 740 crores as compared to INR 707 crores in the quarter ending December and INR 590 crores in the quarter ending March '19. Our EBITDA before exceptional item is about INR 12.8 crores (sic) [ 12.8% ] this quarter as compared to 10.16% last -- previous quarter and marginal EBITDA of about 1.4% in the quarter ending March '19. In this quarter, there's an exceptional item. We have written off our dues from IL&FS worth about INR 41 crores. You would recollect that we were doing -- executing 1 marine project for IL&FS, and because of the issues which IL&FS group is facing, we had stopped the work over there, and we were talking to them for recovery of our monies due. But in view of the fact that there has been not much progress in resolving the IL&FS issues, we've chosen to write-off this amount in the current quarter. On a year-on-year basis, this year, in the year ending March '20, we have reported a top line of INR 2,861 crores as compared to INR 3,165 crores the previous financial year, which was a 15-month period. So on a like-to-like basis, we have reported an increase in total income of about 15%. In the quarter ending March '19, we had reported a loss on the Bangalore Metro project. This quarter, our performance in that sense is much better. If you look at our debt numbers, our gross debt as of March '20 is about INR 475 crores. We have a significant amount of cash in hand. Because of the lockdown imposed by the Government of India, we were not able to pool in all the collections that we recovered -- that we received from our clients in March. And so our net debt as of March is about INR 190 crores. Overall, if you look at our order book position, we are at an all-time high. Our order book as of March is about INR 11,700 crores. I'll give you the segment-wise breakup of our order book. Urban infra accounts for about 35% of our order book; the Marine segment accounts for about 25% of our order book; hydro, dams and tunneling accounts for about 21% of our order book; Buildings is about 8.5%; and Airports is about 6.5%. In addition to this, we are lowest on a couple of orders worth about INR 650 crores. That is all from my side to start with. I will now hand over to Mr. Basu for his opening comments, and then we'll take your questions. Thank you.

Thank you, Prasad, and good morning to all. I wish that everybody is safe. I hope that we remain safe. I pray for that situation, and COVID situation has -- the new financial year has just begun 2 months back, but it has come with the COVID, which is very unprecedented, never faced before. Basically, if we see our operational performance, last year was okay, except the IL&FS, which has to -- we had to take the hit. So I'll take you through the major projects what we have executed last year and still going on one by one. In urban and MRTS sector, Bangalore Metro, we have almost completed 80% of the job, and the remaining job would be completed by end of this year, except 1 project, which will go up to mid of next year. And then Mumbai Metro is going pretty well, except the effect of COVID, last 2 months, we are not able to progress, but we have almost achieved around INR 800 crore turnover, which is around 50%. Kolkata Metro, as you know, we had problem a couple of months back. But after the court order, we resumed the work in February, mid of February, and it was going well. Due to COVID, temporarily, it is under suspension. We have completed around 75% of the work in Kolkata Metro. Nagpur Metro is in verge of completion, around 95% of work has been completed. By end of this year, we should be able to route off Nagpur Metro. These are the major -- marine -- sorry, metro sector. And 1 more job we have secured in Bangalore Metro, the underground, which has just started. And so we'll see after a couple of months that will pick up. In Marine, as usual, Udangudi is top contributor last year also, and it is going okay. 24% job has been completed so far. Haldia is in verge of completion. By next quarter, I think we'll be able to complete the job. We secured 1 overseas job in Myanmar. It is -- Myanmar is not that much affected because of COVID because whatever people have gone from India and labor have gone from India, they remained there. So we could resume the work there. And so far, it is okay. And in the Airport sector, Trichy and Pune, as usual, because of COVID, work is affected now. But till March, we have done around 15% to 18% of the job. In addition to that, as you know that we secured 3 contracts in North of Sikkim -- North of Bengal from IRCON. The job has started there, temporarily now under suspension because of the COVID. And this is more or less the situation of the major job. And today, as -- because COVID scenario has put the plaque to everywhere, but we are slowly coming out of that. And I hope that from August onwards, normalcy -- or we'll see that August, September onwards, normalcy will come. This is in actual about the operation. If you have any questions, we'll be happy to take that.

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

Congratulation on good set of numbers. Sir...

Sorry to interrupt Mr. Kumar. Sir, we're not able to hear you clearly.

Yes. Is it better?

No, sir, your voice is sounding very soft.

Okay, okay. Is it better now?

A little better, sir.

Congratulations on good set of numbers. Sir, my question is, first, the last -- on your last conference call, you had mentioned that we'll be able to achieve INR 1,000 crore of revenue given that we have won a large -- fair share of -- fair number of orders in the FY '20. So when do you think this INR 1,000 crore be achievable given the COVID situation? And how is Q1 -- how do we see Q1 revenues panning out across the projects?

Okay. I think -- yes, okay. The first question was your INR 1,000 crore revenue in second quarter of this year. That was what we have told during last con call. But as -- because you know, because of the COVID, 2 quarters, almost all of the company will see there is a shift of 2 quarters. And so naturally, it may happen in third or fourth quarter, not in the second quarter. And what was the second question?

Sir, what is [indiscernible] for this quarter, can you comment on the quarters going into Q1 and Q2 and the revenue you expect?

Q1, Q2, as usual, in the month of -- when the COVID lockdown started on 23rd of April -- sorry, 23rd of March, that has got very negligible effect on the last year and last quarter. But definitely, in this quarter, first quarter and second quarter, it will have significant effect. And we'll see that there is a reduction in revenue as well cash, everything. So that is the situation today, and we're hopeful that by -- from August onwards, things will be better.

Second, sir, the pipeline of orders that we were planning to get, something that we're looking for BCT, this Bharat Container Terminal in JNPT and other Mumbai sewerage. Sir, is there any update that you can provide on all these orders? Is there something happening?

Yes. One good thing -- actually, 2 good things. One is that we are sitting on a good amount of order, which is close to INR 1,200 crores -- INR 12,000 crores. But in addition to that, there are a plenty of jobs in pipeline. As you rightly mentioned that JNPT, which is a big -- 3 contracts are there, which we have already submitted our offer. But as you know, because of COVID also, they are going little slow. And I think that it may take another couple of months for them to finalize the contract with whomsoever they fix, find the competitive bidding. Secondly, the sewer work, this is at -- sewage, this Mumbai, there are, I think, 5 jobs. Tender is out. So we are working on that, and let us see how it goes.

Last question is [indiscernible] question. Sir, the other current liability has gone up substantially. Is there something to read in there?

I'm sorry, Mohit, can you repeat the question?

Sir, the other current liability, which was INR 400 crore at the end of Q2 FY '20 has gone up to INR 729 crore by the end of fiscal year?

See, basically, this includes -- yes, basically, this current -- other current liability includes the advances that we received from our customers. The unadjusted amount is reported under other current liabilities. So all these orders that were awarded to us in the last year, we have been able to take the first tranche of the mobilization advances on all these projects. So that is getting reflected in other current liabilities.

And this is the reason cash gone up, am I right?

I'm sorry, I couldn't hear you clearly.

This is the reason cash has gone up? Is that right, sir?

Yes. Yes.

Yes, that's correct.

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

Congratulations on good set of numbers. Sir, last time in the call, we had said that 2 projects -- 3 projects were slow. So one, we have already taken this write-off. Then second one is that irrigation project and the fourth (sic) [ third ] project in Mumbai suburbs. So what is an update on those 2 projects? Have they resumed? And is there any chance of any write-off in those projects, if you can just highlight on them?

Parikshit, there is no chance of any write-offs. Those projects are slow, but it is going because we are receiving payment every month, even -- there are 2 projects, as I said, 1 irrigation project at Pranhita in Andhra, where even every month, last month also, we got substantial amount of payment. So -- and work is going on there, a little slow, but work is going on. In Karanja...

Yes, in Karanja?

In Karanja also, they -- the work we have stopped maybe 1 year or so, but today, they have been paying us and so the outstanding balance has come down a lot. So there is no chance that we'll be writing off anything in these projects. And we hope that once the COVID situation is over, the work will resume.

Okay. And sir, this write-off, which you have taken in this IL&FS project. So you will pursue it -- the payments on the new buyer. So whenever the new buyer gets finalized, you -- so you've taken accounting write-off, but as of now, it's not that you -- you will continue to pursue this, right?

Definitely, definitely, yes.

Okay. Now sir, in this Q4, out of the total INR 11,000 crores or INR 12,000 crores of order book, so how much of the order backlog was revenue generating? So this revenue of INR 700-odd crores would have been contributed for like what percentage of the order book? Sir, I want to know the order book which is still not contributing to the revenues for 4Q?

Yes. Basically, the job we have taken in north of Bengal, Sikkim, they were in the verge of starting that job -- operation. But just because of COVID, we couldn't start. So we are seeing hardly any progress is coming from those projects, which will definitely come from the third quarter onwards. And another job in Delhi also, that large job of INR 1,100 crores, CPWD, that is also affected because of this COVID. So those things are -- which we expected to start generating revenue in the month of, say, May or June, will push to September onwards.

And even the underground Metro, Bangalore Metro, would have not contributed anything, right, in Q4?

No, no, no. Bangalore Metro, hardly any contribution in Q4.

Put together, sir, almost like INR 5,000 crores to INR 6,000 crores of order backlog not have contributed anything, right, to the revenues?

Yes. If you see -- if I go -- be very specific, the IRCON job in north of Bengal will be around INR 1,600 crore; Bangalore Metro INR 1,700 crore; and maybe Delhi is another 1,000 -- so you're right, around INR 5,000 crores to INR 6,000 crores job hasn't contributed anything in Q4.

Okay. And you are accruing the cost already in the P&L, so there would have been whatever little bit cost that is already coming in the P&L on these projects.

Yes, yes.

And second question is on labor availability, sir. So I know we have a concentration in urban areas, so be it in Bengaluru or Delhi or Mumbai, even Kolkata, even some of our interior sites are also getting impacted like this north of Bengal sites. Sir, what would be the labor availability at these sites? Have you seen trends of, again, the reverse migration started happening in these projects? Can you give some color on that?

Yes. The COVID -- the effect of COVID is exodus of labor. There is a direct impact on us. Just if you see the statistics, in the month of March, before the COVID, we had got around 18,000 labor all over India. In the May, it has come down to around 8,500, so less than 50%. And this has happened because reverse migration of the labor. And today, the scenario is that if they -- even if they want to come back also, the facilities are very scarce. So they don't have a train, they don't -- they cannot come back. And we are trying to -- trying our best, but I think normalcy will come only in the month of August, second half of August.

So in the first half, you'll be operating at a revenue efficiency of somewhere around 50% of the normal levels of the quarter?

I think it will be slightly more than that. It will be now -- not bad as 30%. It will be...

No, 50%. I'm saying 50%, sir.

Yes, yes, yes. Around that 50%, 55%.

And then second half, we will start going back to the normal levels of 100% kind of, like INR 1,000 crores from third quarter onwards, like around that number from third and fourth quarter?

Yes, third quarter also will be affected because after monsoon and the labor comes back, but I think the normalcy 100% will come back only in the fourth quarter. That is our prediction so far at least from whatever we have seen.

Okay. Just lastly, Prasad Sir, if you can give what is the current breakeven cost per month? I mean -- or whatever is the fixed cost per month, if you can give us, fixed cost per month?

Fixed cost per month would be in the range of INR 40 crores, INR 45 crores. So that is the fixed cost because mainly it is labor, it is salaries, and it is the standing cost for the facilities that we have taken on lease for our casting yard or for the residence of our employees, our offices, plant and equipment, overhauling costs, et cetera. So that would be in the range of INR 40 crores to INR 45 crores.

On interest costs, you have taken moratorium on working capital?

No. We have not opted for the moratorium. We have not opted for the moratorium.

So around INR 30 crores -- INR 10 crores per quarter -- per month will also be the interest cost around that?

There may not be INR 10 crores because the interest cost that gets reported in our financials includes the interest on client advances also. And it includes guarantee, and -- the pure cost on our debt may not be to that extent of INR 10 crores, it may be about INR 4 crores or INR 5 crores.

The next question is from the line of Ashish Shah from Centrum Broking.

Sir, as regards to the disruption which has been caused by COVID, now for some highway contracts, NHAI and all, we know the mechanism that they are adopting. But for our set of clients, which can be private or various agencies and Metro, so what are the clients saying about compensating for the impact of disruption? What are the kind of discussions that we've had on the same?

Yes. In the long run, I cannot say now, but the short term of what we have seen so far, during the COVID lockdown period, whatever labor wages we have paid to the laborers, that has become -- they are compensating that in, particularly, Metro, like Nagpur Metro, Bangalore Metro, that we have seen. That is number one. Number two, most of the client has accepted for giving extension of time to the extent the work has been affected. And they are even proposing us -- proposing to release some sort of bank guarantees to the extent the work has been completed. So these are the 3 direct effects we can see now. In terms of compensation of the cost, that will be something which we have to see later on how it goes.

Okay. Sir, any initial assessment we have based on whatever we have seen, whether the margins which we would have bid for in the contracts, would that have suffered because of this? Or the fixed cost impact is the only impact that we are seeing? I mean whatever monthly fixed cost we are incurring, apart from that, the margin on the contracts per se are not going to get disturbed. And what's your view on that, sir?

There will be some effect, but I don't see it will be much because fixed cost, what Mr. Prasad has said, apart from that, whatever fixed costs that are [ filed ], we are trying to control them. We're already having a lot of strategies on how to minimize the fixed cost. We are trying to release the rentals, plant and machineries and so on and so forth. So well, because we are quite conscious about what is going to happen, I don't think that there will be much effect on our margins because of this COVID.

Sure. And sir, could you give the -- what are the non-fund limits that we are utilizing currently and the mobilization advances as of March '20?

Ashish, the non-fund-based limits in ITD, we have about INR 3,300 crores of non-fund-based limits. And our utilization is about 80%, 85% of that.

Okay. And...

What was the second question you asked?

The total mobilization advances, sir.

The total mobilization advances outstanding as of in the balance sheet would be in the range of INR 350 crores, INR 400 crores.

Right. And all of this will be interest-bearing?

Yes, yes. Most of it is -- yes, it would be interest-bearing, yes.

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

Prasad sir, just a couple of bookkeeping things. What would be our gross debt at the end of this financial year?

Gross debt will be about INR 475 crores.

INR 475 crores.

INR 475 crores.

Yes, INR 475 crores, sir. This has come down significantly [indiscernible] that we had. Sir, any ballpark number that you would say that you are targeting for this year? Or it would be too difficult to call in this kind of an environment?

Vibhor, you know what sort of situation we are going through right now. I mean it's difficult for me to give you any number unless we get clarity on how this COVID situation is going to unfold and how our projects -- project execution will pick up thereafter. So I would not like to give you any indication of what the debt number would be, maybe next -- this year-end.

Fair enough. I completely understand the situation. Also sir, in this quarter, our EBITDA margins were significantly strong. So was there any kind of write-back of any provisions that we took for COVID which we had executed earlier? Anything extraordinary in these margins that -- in this quarter that we need to follow up?

No, no, no. Nothing material or significant. Typically, there's some excess or short provisions which we write-off or write-back, but there's nothing of significance or material that I need to -- that I can share with you.

Sure, sir. Sir, lastly, from the balance sheet side, basically, if I see the current assets, so the current assets of the company have increased significantly from around INR 179 crores to INR 875 crores. So would you be able to just -- I mean the ballpark guide -- to guide us from where this number has risen so significantly?

Sorry, can you come back on the numbers? What were the numbers you mentioned?

At the consol level, other current assets as reported in the filing to the exchange, INR 179 crores has become INR 875 crores.

Okay. See, the current assets includes our unbilled work in progress. It includes our receivables from the -- for the work that we have performed. So that has gone up a bit this year as compared to the previous year. But otherwise, there's nothing extraordinary or nothing exceptional that is being reported as a current asset here. If you see our cash and bank balances, they have also gone up a bit in this period.

Right, sir. So that's what my thing was sir. INR 179 crores to INR 875 crores is like a INR 700 crore jump in the asset side. So I mean what would it reflect? I mean, is this unbilled revenue of around INR 700 crores?

No, no, no. INR 700 crores -- no, I'm sorry, I'm not able to understand where is this figure, INR 179 crores?

Sir, consolidated statement that we have filed to the exchanges.

Okay. You're looking at the other -- the figure of other current assets?

Yes, sir, exactly. Other current assets.

Yes, yes, that includes unbilled work in progress.

Okay. The INR 700 crores...

No, no. I'll explain to you. This unbilled work in progress last year was reported under other financial assets. You see just 1 line above it. It is a classification difference in the accounting side. So last year, it was reported under other financial assets. And unbilled worked in progress has been reported under other current assets in this year. That is the only difference. So if you take these 2 numbers together, there's not a significant increase.

Right. In fact, my next question was that why have other financial assets come down. So put together, they...

Yes. Put together, they are more or less -- there's not much of a difference between them. It is just a reporting. In terms of the accounting standard, that is how it has got reported.

Fair enough. And other current liabilities that increased that we mentioned anyways that is because of the mobilization advances.

That is largely because of the mobilization advances that we have taken during the year.

The next question is from the line of [ Vipul Shah from Sumangal Investments ].

Sir, I just want to know whether this IL&FS write-off is fully done with? Or we'll see it in subsequent quarters as well?

No, no, no. It has been fully written off. Whatever was sitting in our books as due from IL&FS, it has completely been written off.

And sir, secondly, what about this Kolkata Metro? Have things settled down? Means all the problems about this rehabilitation and costs related to that, they are likely to resurface in any subsequent quarters or that is also done with?

Well, we -- in February itself, we received permission from the High Court of Calcutta to restart the work. I think we received the permission on 11th of February, and around 18th of February, we started the tunneling work. Now the work was stopped subsequently only because of the lockdown on account of COVID that was announced by the government. So we are hoping to restart the work again by the end of this month. So all the issues are behind us now. We have already received the permission. The station building work has also been -- substantially been completed. So we don't see any issue over there. We should be able to start the work by the end of this month.

No, no. What about costs? Any further write-offs related to it will come in subsequent quarters? That is my question, sir.

No. In fact, even earlier, we have not written off anything on account of the Kolkata Metro incident. It was an exceptional issue, which came up. And it was not because of any ignorance or anything lacking on our part while constructing the project. So it is not related to any lethargy or anything that we have not done. There is no loss that we have booked on this project even when the work was stopped last year. So there is not going to be any additional cost. Whatever cost is going to be incurred, that will be recovered through the insurance claims, and we have cost provisions in the budget of that project, which will take care of any additional cost that may arise in the project. So it is not impacting the margins of the project in any manner whatsoever.

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

Sir, my question was related to the unbilled revenues and retention money as on March '20. Can you just highlight the amount, please?

See, unbilled work in progress on a consolidated basis is about INR 700 crores. And the retention money outstanding, I don't have the exact number, but I think it is about INR 180-odd crores.

Okay. And sir, the employee cost, we have seen, has fallen down significantly in this quarter. So any reason why we are seeing such fall in the employee cost? Because the run rate was around INR 90 crores, INR 95 crores, it has come down to INR 76 crores, INR 77 crores. So what was the reason for that, sir?

No, no. That is because of some write-offs -- write-backs that we have done...

Sir, employee cost, I'm asking about.

Yes. Some excess provision for the earlier period. We make some provisions for bonus payment or incentive payment to the labor. And if the actual payout is less than that, then the differential gets written back. So there's nothing exception. This write-back has been done in the March quarter. That is why you see the reported figure is lower than what it was in the December quarter.

So the run rate might change going forward, again, we can see some provisions coming back and the cost will go up to around 90 level -- INR 90 crores level, sir?

Well, how much it will go up to remains to be seen because there has been all this labor disruption, et cetera, that will also impact the way we booked our employee-related costs. But in -- conceptually, I've given you my reply on the differential in the employee cost this -- in the quarter ending March.

And sir, on the profit from associate has improved significantly. So what has changed? Have we started booking margins in the projects, which we were not booking, like Mumbai Metro? And what is the revenue contribution from these projects in this quarter?

No. Mumbai Metro does -- the revenue of Mumbai Metro project doesn't get consolidated in our results. So Mumbai Metro is not getting reported here. Yes, the margin from the Mumbai Metro project and other joint venture projects are also getting reported. So yes, there has been some improvement in the margins of the Mumbai Metro project, and those have been accounted for this year.

And sir, what could be the margin you have started accounting for in Mumbai Metro?

Well, I won't be able to tell you the margin that we are reporting offhand. Maybe we can speak about that...

So we can see some similar -- probably once normalcy, we can see a similar number of profit and -- from associates going forward, on normalcy, I would say?

Well, these are 3, 4 different projects that we are accounting. There is Kolkata Metro, which had -- went through some difficult situation last year; and Mumbai Metro, which we are executing. So it is a mix of 3, 4 projects. Offhand, I won't be able to tell you whether the margin profile will remain the same or it will improve. Yes, Mumbai Metro margins are expected to improve, but whether it will happen in this quarter or over the duration of the remaining period of the project, that remains to be seen.

And sir, on the CapEx, what are the CapEx you're planning to do in '21 and '22? And how much CapEx you have done in FY '20?

In FY '20, we have done, on a consolidated basis, roughly INR 120 crores of CapEx. This year also we have planned some CapEx for all these new orders that we have secured. We'll have to see how it goes now because we are going to be focusing on conserving our cash flows as well. But wherever we need to invest for execution of these projects that we have secured, we'll be doing that. Offhand, I will not be able to give you a number. It may be in the range of INR 70 crores, INR 80 crores, but we are revisiting these numbers again, and it will not be possible to give you the exact number at this stage.

And sir, last question on the margin front, we have seen some improvement in margins on the consol level during this quarter. So do we see any margin improvement going forward in the 11% to 12% range kind of, what we used to do in the past?

Well, our MD, Mr. Basu, had addressed this question just a few minutes back. So I mean, there's nothing more that I can add on this.

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

So first question was for Mr. Basu. I mean if you could help us understand how does your bidding strategy change given the fact that there is this uncertainty because of COVID, I mean, in terms of labor, even in terms of, I mean, whether you'll get to a second round corona or not. So how do you approach the new orders? I mean would it change your margin expectations when you're bidding for these projects because of these uncertainties that you will have to take care of going forward?

Yes. I don't think much changes, but one thing has to come now. There has to be some additional expenses we may incur in the project because of COVID. A lot of restrictions will be imposed during work. Maybe some night work will not be allowed. People have to work in a safe manner. So those costs will come. So naturally, our bidding price will be a little bit more than what it used to be earlier. That is the only changes that I can see.

And how about contingency that you used to build earlier? Will -- that would remain the same? Or would that change now?

Contingency, if you take care of the COVID, there is nothing more than what it was there. So basically, you have to take care of the COVID situation and costs related to that, yes.

And just to continue on this, I mean, how is the decision -- how has your experience been with the decision-making process because, I mean, not exactly right, but then when I look at Calcutta High Court project, I mean, it came to us last quarter, but it is still reflecting as L1. So does that mean the decision-making process has gone a little slow or is it a one-off, wherein, I mean, there is a client specification, which is why the project was delayed, and otherwise, the authorities have been kind of fairly good in terms of decision-making process? And also, if you could share your thoughts on -- I mean last quarter, you spoke about some opportunities in Sri Lanka as well?

Well, that is a one-off project. We cannot generalize everything based on the Calcutta High Court. But we expect that, that also will come very soon. We are talking to the client. And secondly, there are a couple of other jobs. I think one more job, we have the L1, which we'll expect the order by next week. So there are 2 sides of this. And I don't think that decision-making process has slowed down. There are a plenty of jobs in pipeline. And tenders are happening. Even clients are pressurizing us to put the tender on time. So those things are happening. Sri Lanka, unfortunately, that job has been shelved off, and they will probably go for retendering. Because of what reason, I don't know.

Okay. Sure. Sure. And then just 1 small clarification, the sewage project that you spoke about Mumbai. These are 5 packages or there were supposed to be 6?

I think total 6 packages.

Okay. So tenders have been quoted only for 5 for the time being, like, am I right?

Yes.

We will move on to the next question that is from the line of Alok Deora from Yes Securities.

Sir, just a couple of questions. One was, you mentioned about the increasing cost, which you will be factoring in for the new projects, which you will be bidding for. So how about the existing projects, sir? I mean, even in those projects, the costs would go up, right, because of the safety and precautions, which you need to take additionally? So how would that be compensated? Or would that be a hit on the margins?

Well, as I said, that it will definitely have some effect on the margin. But as we said before, that we are quite conscious about that. We are trying to cut costs in other areas, like fixed cost and all, and some of the costs also will be compensated by the client. So in -- generally speaking, there won't be much effect on the existing jobs because of COVID.

Right. And sir, one more question. Like we have seen in case of some other agencies where they have extended the time period for projects because of the time lost here, so how it has been for our projects in Marine and Metro? Whether we have got some time extension? Or how are -- how we have been compensated for the loss of execution?

As I said before, that there will be some extension of time given by the client for maybe 2 months, 3 months, 4 months, depending upon the situation of their particular project. So that is on. And regarding cost compensation, so far, we could achieve only the labor wages which we have paid during this lockdown period. That client is quite generous enough to pay it to us, particularly Metro client. And other things, any other cost compensation, that -- the dialogue is going on. That will unfold only after some time.

So this labor compensation, we have already received for the Metro projects.

Yes, particularly Nagpur and Bangalore Metro.

The next question is from the line of [ Ayush Sharma ] from -- an individual investor.

Sir, my question is regarding -- with the current uncertainty crisis, I know it is very difficult to do a prediction. But just wanted to understand your views on going forward, what sort of opportunities you might look into in this particular sector?

Well, overall opportunity, as I say, I mean, it is quite a long list. And there is no dearth of job. There are plenty of tenderings happening now. And national -- there is a national infra pipeline, that -- the big announcement by the Government of India. And those things are being still pursued. I mean there is no stoppage on that.

The next question is from the line of Aman Sonthalia from AK Securities.

Sir, sorry, I've joined the conference late. Just wanted to know that the company will be able to maintain the margin which we had -- get in the fourth quarter in a normal scenario?

Yes. In the normal scenario, we hope to be able to maintain this margin. But because of this COVID issue, we are going to see some impact on maybe 1 or 2 quarters. And once normalcy is achieved again, we hope to come back to the same margin profile.

And sir, the turnover is very much same in your -- uniformally in the all 4 quarters? Or it comes down a bit in the monsoon period?

Generally, in the monsoon period, we have seen -- over the years, we have seen that the turnover tends to be a bit lower in the July to September quarter.

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

Sir with regards to the JNPT orders, so you said that 3 orders that we have submitted -- the 3 bids we have submitted for 3 orders, and in next couple of months, it will get finalized. Sir, can you give us some color on what is the size, approximate size of these bids? And how many bidders would be there?

Well, put together, it will be around -- there are INR 3,500 crores to INR 4,000 crores, all the 3 packages. And as usual, the -- there are other bidders like L&T, Afcons, and I think, one more.

Okay. So these -- so earlier in the past, we have taken -- I mean, because in the private sector, typically the contracts never -- sometimes don't go on L1 basis. So they are again negotiated and maybe someone at a higher bid also gets paid. So what's your view on these projects? Will they basically be on L1 or can be getting privately negotiated? Because the earlier part you have done, so will ITD have any preference there?

So we cannot comment, but the only thing we know that this company has worked with us. We worked together for a long time. So it depends upon them. Basically, that is not the important factor today. Factor is the timing. Because of COVID issue, they are also struggling to have their operation going on. So everything would be unfolding after the -- maybe August or September.

Okay. Sir, most likely, they will go ahead and open. The deadline is not -- I mean, there is less chance -- like less likely that they again may postpone it -- say, this project may get postponed by a year or so?

No, no, no. They also have to have a time line to be achieved because of -- they have an agreement with JNPT. I mean they will get some 3, 4 months extension of time, that much.

Okay. Okay. So just on the bid prospects, how big is the pipeline if you can quantify in terms of like total overall bid pipeline will be how big, leaving these projects where you've already submitted the bid, I mean, Marine one, you already submitted INR 3,000 crores to INR 4,000 crores worth of bids. And besides that, how is the bid pipeline looking? Just to understand how is the government focused on ordering and...

Put together, I was just ballpark finding out, it is around INR 24,000 crores to INR 25,000 crores bids are in pipeline. Some of them already we have -- we are working. We have -- some of them, we have already put our tender. Some, PQ stage. I mean, this is a short term, I'm talking about.

And this will largely be comprising of which segments? There's 2, 3 big segments, I mean, like Marine will be how much in this? And if you can just highlight which are the key segments in this?

Yes, the TBM, TBM like NCRTC, Delhi Metro, RVNL, it would be around INR 10,000 crores to INR 12,000 crores; and elevated sector will be around INR 5,000 crores to INR 7,000 crores; and Marine would be around INR 5,000 crores to INR 6,000 crores.

INR 5,000 crores to INR 6,000 crores. And we won't be bidding in the elevated segment, right? So I think we have stopped -- as a strategy, we have stopped bidding for elevated metro, right?

Elevated, there are 2 kind of elevated, as I mentioned before. One is for the metro, one is for the elevated road. There are a plenty of elevated roads, and definitely, we'll bid for them.

Okay. So you will be bidding for elevated. Prasad sir, on this Bengaluru project, how much will be the residual debt left because project is almost 80% complete. So out of the total debt of what, INR 275 crores, how much will be the debt sitting on the Bengaluru project?

I think around INR 160 crores. Prasad?

Yes, around INR 160 crores.

So it has reduced a bit from the last quarter.

Yes.

Okay. And sir, lastly on the Kolkata Metro. Sir, anything finalized the insurance claims with the company's insurance company?

Yes, series of discussions are going on. I think 3, 4 round of discussion has happened. So we have submitted our clarifications, and it's ongoing. It's ongoing, yes.

The next question is from the line of Umesh Matkar from Sushil Financial Services.

My question was regarding on labor. You just mentioned that the availability of labor is down to 50%. So going forward, how the company is dealing with? Are we going to recruit labor so that we have enough labor for execution of the projects? That is the first question.

Yes. Basically, the labor, those who have left, they have to come back. And now they are -- because of restriction in movement and quarantine, even if they come back, they have to be in quarantine for 14, 15 days. So we don't see that things will improve radically. But definitely, they are also interested to come back because they are losing their earning. And we're also interested to take them back because we have to draw -- I mean, generate our revenue. So the offer -- I mean, the efforts are on. I think by end of August, things will be normal. Till such time, we have to bear with this situation.

Okay. And second question is because of this labor shortage, are we going slow on bidding for new projects? Or this is -- there is no dependency on labor availability?

No, no, no. See, any bidding projects means, that will be another 5, 6 months down the line. So this has got no connection with the bidding.

[Operator Instructions] The next question is from the line of Aman Sonthalia from AK Securities.

Sir, you have mentioned in the conference that normalcy will be in the fourth quarter of this accounting year. So sir, once the labor comes back in the month of August, can we expect a better third quarter?

Yes. Normalcy means normally what we used to do before, that same situation will come only in the third -- or fourth quarter. So third quarter will be a bit of mix. So it will be better than second quarter, of course, but it will not be 100%, yes.

Okay. And sir, what about the second quarter? Whether it will be better than the first quarter?

Slightly better, of course, yes.

Not much?

Not much. Because of monsoon and labor still not able to come back, and the first quarter is almost over. So I don't see much improvement. A little bit, not much.

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

I have just 1 question. I wanted to understand in light of the restrictions that are coming in and the tight scenario that has been followed and is expected to follow for the next couple of months, do you see significant impairment of midsized companies in the construction line and enabling us to find a relatively better bridging space or the relative competitive intensity coming down as we go ahead for the next 6 to 8 months?

Well, there will be definitely different scenario in which you have to work. And I think everybody has to live in a different situation now. And this gives us opportunity to even find the better method, smarter method to go ahead, and that is how we are looking for, and we are discussing within our team. So we'll be able to handle that. And I think we'll be coming out with a smarter method to work in future.

Do you feel this is some kind of a slight tailwind in our favor because we are slightly better off than most of the average companies around, maybe in the top 10 of the better companies. So maybe this could work as some kind of a tailwind for us in the bidding line -- bidding pipeline as we -- as they emerge?

Should be, yes.

Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Adhidev Chattopadhyay for his closing comments.

Yes. On behalf of ICICI Securities, I'd like to thank everyone for joining us on the call today. I'd now like to hand it back to the management for their closing remarks.

Thank you, Adhidev, for arranging this conference call. And I would like to thank everyone for being on this call, and I hope we have been able to address your questions. These are difficult times for all of us, and I hope all of you will stay safe and all -- everything returns to normalcy as soon as possible. Thank you so much you.

Thank you. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you, again.