Cemindia Projects Limited (509496) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm Pelcia, moderator for the conference call. Welcome to ITD Cementation Q3 FY '24 Results Conference Call. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Mr. Nikhil Abhyankar from ICICI Securities Limited. Thank you, and over to you, sir.

Thank you, Pelcia. Good afternoon to everyone. On behalf of ICICI Securities, I welcome you all to the Q3 FY '24 Earnings Call of ITD Cementation India Limited. Today, we are pleased to host the management of the company, which is represented by Mr. Jayanta Basu, Managing Director; and Mr. Prasad Patwardhan, CFO of the company. Without much delay, I'll hand over the call to the management for their opening remarks, which will be followed by Q&A. Thank you, and over to you, sir.

Thank you, Nikhil. Good morning, everyone, and thank you for joining us on this Q3 FY '24 results con call. This is Prasad Patwardhan, CFO of the company. Before I begin, I would like to remind everyone of our standard disclaimer that this call may contain certain forward-looking statements and business prospects of the company, which are subject to a number of risks and uncertainties, and the actual results may differ materially from those made in these -- in such statements. I will start with the financial performance of the company during the quarter and subsequently, our MD, Mr. Basu, will take you through the operational performance. We are happy to report a very healthy financial performance in this quarter. Total operating income for the quarter was INR 2,017 crores as against INR 1,327 crores, which represents a growth of 52% year-on-year. EBITDA was INR 220 crores in the quarter as against INR 118 crores a year back, resulting in a growth of 87%. EBITDA margin stood at 10.9% as against 8.9% a year ago. Profit after tax was INR 79 crores during the quarter as against INR 37 crores a year back, representing a growth of 113%. Our balance sheet and leverage of the balance sheet continues to be at subdued levels. Our net debt to equity is about 0.3x. We have secured orders worth about INR 1,300 crores during this quarter. If you look at our 9-month performance, our total operating income was INR 5,460 crores as against INR 3,460 crores a year back, which represents a growth of about 58%. In the 9-month period, we have exceeded our turnover that we achieved in the previous financial year. So we have exceeded the entire previous year's performance in terms of top line. Our EBITDA for the 9-month period was INR 567 crores as against INR 315 crores a year back, a growth of 80%. And PAT came in at INR 185 crores for the 9-month period as against INR 87 crores, which again represents a growth of 112%. That's all from my side at the moment. I'll now hand over to Mr. Basu for his initial comments, and then we'll take your questions.

Yes, Prasad, thank you, and good afternoon to all. Thank you for joining this con call. As we have seen and noted that our Q3 performance was significantly better compared to what used to do a few years back at INR 2,000 crore revenue we have achieved. At the same time, bottom line also is quite healthy. And we expect to maintain this sort of revenue and the growth coming forward. We're able to manage the cash flow also very well. Debt to equity ratio is under control. We have almost secured INR 6,000 crores plus job in this year. And there are few more are in pipeline. In terms of execution, I'd like to highlight one point here. We have got around 50, say, 50 to 53 projects going on. Out of that, our work in hand is around INR 20,000 crore plus. But if you see 10 projects, that itself contribute more than INR 15,000 crores of work in hand. So that is the beauty of doing bigger work. If we monitor 10 projects very closely, 80% of the project control we can have. And these big projects are Chennai Metro underground, Bangalore Metro on verge of completion and tunnel at Sikkim also doing well. Ganga Expressway, a large contribution comes from Ganga Expressway. Udangudi marine job. I'm happy to say that 2 critical items that is ship unloader, which was ordered to a Chinese company has reached site yesterday. With that, we have almost completed the job. We have started a navy job for Indian Navy at Project Varsha, that is near Vizag port. Seabird, another navy job is on verge of completion. And rest of the job in marine is going pretty well. In building sector also, Thal Sena Bhawan, that is army headquarters, took off very well. Customers are very happy. We are doing Sikkim University. Recently, we have completed Trichy airport. You must have noticed that PM has inaugurated it 3 months back and Pune Airport also has been completed. The executions are quite under control, and there are good jobs in pipeline. So that's all from my side, and we'll request you whatever questions you have, we'll be happy to answer them. Thank you.

[Operator Instructions] First question comes from Deep Mehta from Bank of India Mutual Fund.

Congratulations for a very robust set of numbers. A couple of questions from my side. First is, what is the contribution of legacy low-margin orders in this quarter in overall revenue?

The legacy orders are mostly more or less out of the system now. There are a few residual work that is pending on the projects. But the largest contribution is coming through from the newer projects that were awarded to us maybe last year or last couple of years. So the contribution of legacy orders now is significantly lower and probably it is out of the system now.

Okay. And now with these legacy orders being more or less over, do we expect similar margin trajectory for this year as well as next year?

Well, we have seen an improvement in our operating margins. The EBITDA margins have been improving during the year. And our endeavor is to keep performing the way we have performed during the year. And hopefully, we'll see an improvement in the margin going forward.

Sure, sir. That is very helpful. And my second question is regarding bid pipeline. What is the bid pipeline currently? And how should we look at it going ahead?

Well, I think we have around mix of all the jobs. If you take around INR 12,000 crores plus jobs in bid pipeline, they're tender submitted or tender to be submitted. So they're a mix of some marine jobs and few of the jobs belongs to water, industrial structure and building. There are around INR 13,000 crore jobs in the pipeline, yes.

Sure, sir. That is very helpful. And last question, what is the CapEx target for us for this year as well as next year?

Our CapEx was a little bit more last year because of a few jobs where we had to invest big amount on plant and machinery. This year, CapEx target will be around INR 200 crores plus, say INR 200 crores to INR 250 crores.

And for next year?

It will remain almost in the same range, not much.

Next question comes from Sunil Kothari from Unique PMS.

Congratulations for such a good performance. Sir, one question is on, our execution capability during the last 3 years has gone up from, say, 2021 December, '22 December, then '23 December. We're executing almost from INR 800 crores to now reach INR 2,000 crores. So looking at the opportunity available, the way you choose your orders, you don't want to increase substantially your order book, and that's why you are remaining at same INR 20,000 crores order book December '22 and now '23 also. So quality of orders and quality of our execution capabilities, if you can talk a little bit more on this aspect will be really helpful.

Okay. See, work in hand depends upon not only how much work we have secured, it depends upon how much we are able to do per month. You have rightly said that earlier we used to do INR 700 crores, now INR 2,000 crores. That means we are consuming the work in hand very fast. That is the reason why the work in hand looks like in flat. It is really not flat. In real terms it is much more. If we have done INR 700 crores in a quarter, then work in hand today would be much more than INR 20,000 crores. That is one aspect. And second aspect is that earlier, we had got few legacy jobs, which is over now. So that was also contributing to work in hand. But as you have rightly said, we should really target for some more jobs. We are a little selective now. There is no point going for everything. So we are comfortable with the work in hand or whatever in the pipeline considering our execution capability.

Sir, will you be choosing the work because our capability is more in marine, port-related work, under -- tunneling work underground, all these things. And there are enough opportunity available for next 2, 3 years?

Yes, opportunities are there, but still we will be very choosy because marine job, of course, we'll go for all out. Tunnel job, it depends upon the terrain. If it is in Himalayan range, we'll have less appetite. If it is Southern India, yes, we'll go for that. And of course, there are competition as well. So airport, underground metro, marine and few overseas jobs that will be our focus now going forward.

Right, sir. Sir, last question is with this INR 200 crores type of CapEx, given our opportunity and size of orders, if we increase our execution substantially, if we want to increase the way you are targeting some whatever growth rate of 20%, 25%. This will be -- the CapEx will be enough or we will require something to do, say, quarterly run rate of INR 3,000 crores, annual rate of INR 12,000 crores, INR 13,000 crores size of the business, this capability manual -- I mean, manpower, technical capability and machines are enough or this INR 200 crores is good enough to support that?

Yes, if you see one by one, first of all, manpower. Manpower, we have got enough knowledge. Number wise, is another thing, another thing is the quality. So we have got quality team. That won't be a problem for us to manage. Workforce is always challenging in Indian scenario, so we are trying to migrate to the more sub-mechanism work so that we rely less on the labor force. And third is of CapEx. The CapEx sometimes what happens nowadays because a lot of modern technique has come, people are more educated, lot many good plant and machinery you get on rent. There is no point buying a costly machine and use it for a year or less than year and wait for future business because those are available in market and you can hire internationally. So we have to make a balance. And I hope that INR 200 crores, INR 250 crores should be enough considering the rental plant.

Next question comes from Dhananjay Mishra from Sunidhi Securities & Finance Limited.

Congratulations on a very excellent set of numbers. Sir, now we have quite good growth and good high base in terms of revenue and we are...

Hello?

And we are -- hello, am I audible?

Yes, now are you audible. Can you please repeat the question?

Yes, so we are talking about 25% growth next year, which will be around -- we'll be reaching close to INR 9,500 crores kind of turnover. And we have -- current bid pipeline is INR 12,000 crores. And being an election year, do you think we will be able to maintain INR 10,000 crores to INR 12,000 crores of order inflow for this year just to maintain the momentum of growth? What is your take on that?

Yes. I mean rightly said, this we are doing day in, day out. We are doing such exercise what are the opportunity. And mostly that we try to increase our geographical footprint in the segment where we are strong, like marine and underground metro. The moment you increase your geographical footprint, your opportunities are also more. It is a routine work, I think. And I don't think that the growth of 20%, 25% in terms of bidding and getting job is a problem.

Okay. So you are maintaining this year's guidance of INR 9,000 crores order inflow?

This year means up to '24, '25, yes, INR 9,000 crores.

For FY '24, you are saying we have done close to INR 6,100 crores till date. So FY '24 will be around INR 8,000 crores?

Yes. See, hardly another -- not even 2 months, 1.5 months. So some of the orders, if it get mature, it will be around INR 8,000 crores or little less than INR 8,000 crores, or maybe a little more than INR 8,000 crores. It depends upon the order.

Next year, you are guiding for how much in terms of order inflow?

Around INR 10,000 crores, INR 8,000 crores to INR 10,000 crores.

Next question comes from [ Nihar Shah from Crown Capital ].

Sir, just one small question on the revenue side. This year, we are expecting to cross INR 7,000 crores, right, in revenue?

Yes.

Next question comes from [ Shrey Gandhi from Mangal Keshav Financial Services ].

Yes. So basically, my question would be regarding the quarter 4. Like quarter 4 what kind of revenue growth rate you are expecting? Because see historically, I've seen in quarter 4, like it has -- now revenue has grown by around 20% to 30%. Can we expect the same growth rate for quarter 4 also?

Actually, we have already done quite good in quarter 3. So what we used to do in quarter 4, we have achieved in quarter 3. So quarter 4 will be almost same like quarter 3.

It will be same like quarter 3. And margins you have told you'll be hunting double-digit margin, last time you had given the guidance. So you have been maintaining 10% margin around, 10.3%, so can we expect the same margin to go ahead or some improvement like by around 200 basis points going forward or [indiscernible] going forward?

I don't expect growth in margin. Margin will be almost whatever we have achieved in quarter 3 in that range.

It will stay like around 10% around.

Yes.

Next question comes from Vignesh Iyer from Sequent Investments.

Sir, congratulations on a strong set of numbers. Sir, my question is on the interest paid part of our line item. So we have paid around INR 58 crores interest in this quarter as compared to INR 52 crores last quarter. So just to get -- just have an understanding what is our borrowings as on 31st December? And what is the way forward? How -- I mean, how -- what would be the ramp-up in the interest payment as we keep on scaling the execution?

Well, the gross debt on our balance sheet as of 31st December is about INR 860 crores. We do not expect any major variation in the debt number in this quarter. It should be around the same level, maybe a little bit 5% up or down.

And what is our cost of debt?

Well, cost of debt is around 10%, 10.5% of the bank debt. And this interest cost also includes the guarantees -- the payments to the banks for the guarantees and letters of credit. And it also includes the interest on the mobilization advances that we get from our customers.

Okay. So if I read it right, so as we keep on scaling this revenue, more or less on the proportion to it, the interest will keep on scaling, right?

Well, I would expect that to be, but it depends on the mix. One is the rate of interest which the banks charge for the borrowing or on the guarantees and LCs. The second aspect is the interest on the customer advances. So that also is more or less linked to market. So these 2 factors impact the interest cost [ that we do ].

Okay. But sir, historically if I see, okay, like around 2013, '14, '15, so we have been to a point where interest outlay has been very high, okay? So I wanted to understand what is the steps that this management is taking to ensure on that part where interest outlay is less. I mean we are doing excellent EBITDA as of now but that is not much transforming into the PAT levels, right?

No. If you see our profitability has improved significantly in this year, and I would not be able to comment right now on what happened in 2013 or '14. But if you see our balance sheet, the debt on our balance sheet is significantly within manageable levels. We are not overleveraged. There is growth in our operations. So I mean -- I really don't understand your question. The debt is at a manageable level.

Next question comes from [ Mehul Mehta from Nuvama Wealth ].

Congratulations on great set of numbers. My first question is, sir, you have been guiding for a focus on entry barrier businesses say, underground metro, marine as well as tunneling kind of. And if I look at say, December '22 end, our order book was comprising about 67% from these businesses, which has increased to about 73%. So going forward, can we expect maybe this double-digit margins, which we have achieved, going forward exceeding even that?

Okay, true that these businesses are -- we are good in these. You have to also understand that no business perpetually gives equal results. Now underground metro also will be crowded soon. So the competitions will be there. So whatever margin we have achieved last year, coming years budget will be less if you have to win the job. So that is one factor. So that is why we are planning to go elsewhere like abroad marine job so that we can -- we are able to maintain the margin.

All right. Got it, sir. And in terms of -- Mr. Patwardhan, regarding working capital cycle, is there any change for -- as compared to September '23 to December '23, or it remains in the similar line?

Actually, the net working capital in terms of number of days has improved in this quarter as compared to the previous quarter. So the change is...

So can you mention that? I mean, in terms of numerical, how is that like?

I don't have the exact numbers right now, but it's around 80, 85 days. And hopefully, our endeavor is to maintain it at the same level or improve it if possible.

That should be maintained, all right. And debt is about INR 865 crores, you mentioned, right, as of December '23 end?

That's the gross debt.

Next question comes from Rajesh Kumar Rathi from Right Shopping Private Limited.

Congratulations for a good set of numbers. My worry is, again, regarding the order intake. Order intake of late has not been as great as a lot of other infra companies. So can you elaborate a little more on that? Although I understand that you guys are a little choosy, but still the order -- total orders are not increasing as much. So can you please explain?

Yes, we are constantly working. Sometimes the silence should all you see. The moment if we get an order of INR 2,000 crores, INR 3,000 crores at a time, suddenly you will find the number has changed. It is not that every month we are getting at the equal rate. It comes once in 3 months, a big number, it is like that. So we are constantly working on that comparing that how much should be the order intake and what will be the revenue next year. So we are quite aware about the situation.

So you are still optimistic about the whole thing?

Yes, yes, yes.

[Operator Instructions] Next question comes from Nikhil Abhyankar from ICICI Securities.

I wanted to get the clarity on what -- which you mentioned that we might also look up at marine jobs overseas. So which exact markets will you be looking at? And what kind of opportunities are available out there?

There are 3 areas. One is Bangladesh, as because the election is over, and they have a long list of marine work in pipeline around Chittagong port. So that is one area we are focusing. 2 jobs in Middle East. We have submitted our offer. And one job in West Africa. All are marine jobs.

All are marine jobs. And sir, on the domestic front, a lot of companies have -- are increasing their CapEx on port development. So any opportunities over there?

You mean to say that new ports are coming...

Greenfield expansions, yes. Yes, greenfield expansions.

Yes, as it JSW, JSPL. So yes, we are there, always we are there. Yes.

And also just a final word on recently, I mean, a year back, government had announced container terminal in the Nicobar Islands so that might be a very big opportunity for us. So do you think it might take off anytime soon within next 1 or 2 years?

See, work going on at government level, but I think it will take some time because feasibility study, and it is almost 1,000 kilometers away from Andaman mainland. So it is not going to be very easy but yes, government is working behind that, yes.

Next question comes from [ Abhishek Dixit from Hem Securities ].

Congratulations for the great set of numbers. Sir, my question is regarding around 2 months ago with our news channel, we had guided for INR 7,500 crores revenue guidance. So are we sticking to that?

Yes.

Okay, sir. And sir, for 20% to 25% growth in the FY '25 also?

Yes. Around that, yes.

Next question comes from [ Vipulkumar Shah from Sumangal Investment ].

Sir, one of our peers continuously reports 14% to 15% EBITDA margin. So our margins are 10%. And previously, it was around 8%. So what is preventing us to reach those type of margins, whereas they are also doing almost same type of work?

Well, I cannot compare with other company. See, the business model is different and we had some legacy jobs as you must be knowing. So that has daunted our margin till now. We really aspire to do margin of that kind. Let us hope for the best. Let us see.

So I think one of the previous participant had also asked about legacy projects. So what is the quantum of the legacy orders which is left? If you can quantify in terms of hundreds of crores? How much work is left for these legacy orders?

So today, it is nothing, I mean virtually 0 almost.

Today it is 0?

Yes.

Yes, so still in this -- so in this quarter also, there is a -- if our peer is reporting a margin of 400, 500 basis points more than us so it's a little difficult to understand why we cannot report.

No, I disagree with you. You may be comparing with some 1 or 2 company, but you have to see general in construction space, I think 10%, 11% is quite standard. So I don't want to comment on others. But I don't think that you can expect 14%, 15% EBITDA consistently going forward. It is difficult, very difficult.

Next question comes from Kaushik Poddar from KB Capital Markets Private Limited.

See, you have an exposure to a leading group when they were in a problem because of some reports and all those things, your stock price had come down very sharply. So when will that orders get executed completely? The one in Sri Lanka as well as the road project.

Road project almost by end of the year or beginning of next year should be completed.

Okay. And the Sri Lankan project?

Sri Lanka project mid of next year, 2025 June, July.

Okay. Okay. They're on schedule, I mean in the sense that there's nothing delayed...

Yes, all of them are on schedule. We are getting well paid. There is absolutely no problem.

And are you guiding for a 15%, 20% growth next year?

Yes.

Okay. And see, the government's CapEx has come down. The growth of CapEx projected for the next financial year is down to 10% from 25%, 30% last year. So because of that, do you see any kind of order slowdown?

No. As far as we are concerned, I don't think that will affect us.

Next question comes from [ Sunil Bhojwani ], an Individual Investor.

Congratulations on the good set of numbers. Sir, I just want to know, in international work, do we have better margins? Or is it similar to domestic?

International business should fetch you better margins than domestic. That is the idea for going outside.

So going forward, if we secure more orders from international, there is scope of improvement in margin. And on a medium term, say, 1 to 2 years basis, we see further scope of margin improvement from yours since legacy orders are now out of -- are mostly completed?

Yes, there are 3 things here. One is that, as I mentioned, legacy orders are no more there. So that is a good thing. And if we get international business, we can make better margin. That is a good thing. But at the same time, the bulk of the revenue, which comes from Indian market, the competitions will grow, more competitors will be qualified. So if you have to bid and get the job, your margin will be a little lower than what it is to be.

So you mean to say, sir, our medium-term margins can go lower but not. Is that what you're trying to...

Yes. I mean -- see, if we have to maintain around double digit, it won't be possible going forward with the Indian domestic business because competitions will be more. That we have to compensate by some job in overseas, it's like that.

So on a consolidated basis, double-digit margins is not sustainable?

It's sustainable, we have to continuously make a strategy. But if you are remaining only one segment in one geographical area, then naturally margin has to come down. Because today -- if you see 4 years back, we are only 3 players in underground. Today, at least, there are 7, 8 players. Next year, it will be 10, 12 players. So more the number of players, the margin will come down. That is a business.

But all players must be catering to different categories, right? I mean sub-INR 1,000 crores project or sub-INR 500 crores project or above INR 2,000 crores project. So in that way, I think you would have -- be having a few competitors.

So it is then today a job of INR 1,000 crore plus [Foreign Language] you will get around 6, 7 competitors. I mean that would decrease. At this point, you have to discuss in detail how to go for it...

So you will try and maintain these double-digit margins as much as possible. But in case there is more competition, the margins might face a little pressure. Is that what I can deduce from what you are saying?

Yes, yes, you are right. Absolutely right.

Okay. And secondly, sir, what is the kind of order pipeline, the bid pipeline as of date? And what would be the success rate out of that as per your assumption?

Order pipeline will be around INR 13,000 crores plus, and ballpark, our success rate is 20% statistically.

20%. Okay. And the new orders will only start flowing in post elections and government -- new government, right?

Yes, you are right. You are right.

Okay. But if I have to take your outlook for the next 2 or 3 years, what would you say in terms of the business and the scope of work coming in and the outlook?

Well, whatever work we have, that will cater for this year or up to 2025, '26 middle of that. So we have to secure some jobs but the opportunity what we have and what is our capability, I can see that 20% growth we'll be able to maintain coming 2, 3 years top line.

Next question comes from [ Kunal Patodia ], an Individual Investor.

Fantastic results, the best ever performance, congratulations for that. My question is regarding arbitration awards. Last quarter con call, you guided that we are expecting some inflow. So has that -- have we received that award, the money is in? Or do we expect any new awards inflow in this current quarter?

Few arbitration award we have. Some of them have been challenged to the court and some of them will get sought out through new scheme called Vivad se Vishwas. But during this quarter, we have not received any inflow. We hope that, yes, some time something will happen. But as you know that this particular things goes very slow in our country. But we have got some positive side from 3 or 4 projects as well today.

Sir, my second question is, as you've seen that new participants are now eligible to bid and the competition is increasing, sir, aren't we also improving our eligibility for bigger and better orders like INR 2,000 crores, INR 3000-plus-crore orders?

Yes, you will see, historically, we used to joint venture with our partner, that is our promoter to get qualified. And now we are able to do by ourselves, most of the job, including underground metro and the airport. Now going forward, there will be bigger jobs and in some of the job definitely, we have to partner outside expat agencies and the work is in progress.

Right, sir. So whenever the shipping terminal in Andaman will come, do you think we'll be eligible to bid for those projects?

Yes, yes, we will eligible. I mean, they will make us eligible to participate in that.

Perfectly fine. Sir, my last question is, in the overseas orders that you mentioned, the bids that we have submitted and you gave a guidance that the margins will be improved better. So will it be 15% plus margins in these orders? Or are we still expecting the same margins that we get in our marine jobs in India or Bangladesh?

It is difficult for me to say for future job absolute number in terms of percentage. It will be better that much I can tell, Kunal.

Next question comes from [ Nirvana Laha ], an Individual Investor.

Congratulations Mr. Basu and Mr. Patwardhan for delivering on what you've been promising. Congrats for that. My question is that, how much can you tell me the CapEx that we have done for 9 months? And based on the kind of CapEx you indicated for next year, I think you mentioned INR 200 crores, INR 250 crores. Mr. Patwardhan, can you help us with the depreciation number, the expected depreciation for next year?

Well, we have done CapEx of INR 200-plus crores in this year. And regarding the next year, I think Mr. Basu answered one of those questions earlier. Our depreciation charge for the quarter is about INR 56 crores.

Yes. And going forward, would it be possible to help us model that? How that will evolve?

Well, it will be difficult for me to give any indication because in the last couple of years, we have done a lot of CapEx. There will be some CapEx going forward as well. And the depreciation typically depends on the useful life of the asset and different assets have different life cycles. So it will be difficult for me to give you an estimate of the depreciation. But historically, we have seen it is around 2%, 2.5%, 3% of our revenue. Maybe for your modeling purpose, you can take that number into account.

2.5% to 3%. Okay. And what is our net debt position today? And by end of FY '25 where do you expect that to be?

Our net debt as of December is INR 400-plus crores. And as I mentioned earlier, we don't expect the debt to go up significantly going forward. So I guess it could be at the same level. While I can't give you an exact number at this stage, we expect it to be at similar levels as of March '24 as well.

And -- okay. And 1 year forward, it's not possible for you to project that?

It will not be possible to give you any number.

And with the improved performance on margins and balance sheet being very strong with good pipeline, are you expecting a credit rating upgrade any time soon?

Well, we are working with our credit rating agency. We are talking to them. And hopefully, we should have some good news on this front maybe once we complete -- conclude our discussions with the rating agency.

And at what time frame do you think that is expected, the news?

Well, I won't be able to comment on that right now. We need to discuss that with the rating agencies. It will be premature for me to comment on that right now.

Sure. So Mr. Basu, we are very strong in marine. I wanted you to tell us a little bit more about the competitive dynamics in marine both for jobs in the SAARC region, India and also for the jobs that you're completing with outside. So can you give us some picture of how it looks like in terms of competition?

Competition in India, if you have 2 kinds of jobs, which are more than INR 500 crores and more than that INR 1,500 crores, INR 2,000 crores. In that range, I think there are hardly 3 or maximum 4 competitor we have. I mean below INR 500 crores, INR 400 crores, there will be another 2, 3 more. Below INR 100 crores there will be plenty. So that is a number of competition in marine in India. Abroad, there are foreign players mostly Japanese and Korean. They don't come for any job, which is less than INR 5,000 crores to INR 6,000 crores. So that is the opportunity you're looking for whereas too small jobs, abroad there are small players. In between that layer, there is nobody, nobody much. So we're trying to get into that.

And you said that margins are higher in these international projects. But obviously, there will be some risk, like political risk will be there. And of course, price escalation risk, et cetera, will be there. So is your parent experience in the geographies that you mentioned, Middle East, West Africa? And what -- how do you think about the risk adjusted margin in these geographies?

So when I say margin, that is, of course, after having considering the risk factor. So normally, we definitely take help of our parent wherever we go, the places where they are working or they have worked before. Otherwise, we engage some good consultant out of speak for somebody to study in detail. Because you know work is 50%. Another 50% is something else. So that needs to be understood properly if we will submit our bid.

Yes. And does ITD have experience in Middle East or in West Africa?

Yes, yes, they have got experience in Middle East, East Africa and of course, Southeast Asia.

Okay. Okay. And one final question from my side, Mr. Basu. So I will name one competitor. I didn't want to do it, but I don't know how else to frame the competition. So you can understand my underlying question and answer accordingly. So if I look at somebody like an Ahluwalia, they are doing similar kind of margins, but the balance sheet cash flow seems to be a little better. So they are mostly into building construction on land, whereas you guys are more experts in marine. So can you help us compare these 2 segments in terms of marine, is it like more onerous in terms of more interest to be paid, more BBs to be encashed? And is it more balance sheet heavy to work in marine compared to buildings? And how are you thinking about this mix of marine versus building?

You see, the whole thing depends upon the culture of the company. For the last 100 years, we have been mostly in the foundation engineering till 1990 or early -- after 1990. So we have a culture of doing heavy civil work, mostly foundation oriented. Last 20, 25 years, we have started going to airport, metro and now we have mastered them. And now even also, we are doing the building also. So I'll not be able to comment on that particular aspect. The balance sheet also depends upon what are the jobs we had for last 20, 25 years or 15 years. So we are coming out of some bad jobs. We have almost -- all the bad jobs are behind us. Hopefully, balance sheet also will improve. And you cannot compare directly to the building and marine because building work is done in a manner where you will require more manpower, more labor, less plant oriented job. But marine is different. So it depends upon the company's culture, what was the history, how they have built up, all these things. Yes.

We have a follow-up question from Sunil Kothari from Unique PMS.

Sir, one thing just wanted to understand is, what is our core strength on a cost structure, which makes us competitive in international market? Because we have to buy raw material, so many local contractors. So cost structure for us and for Japanese or Korean will be similar. So where we are stronger in terms of cost?

Yes, you have rightly said the material cost is same for any company, either Indian or foreigner or whatever. It mostly depends upon the operation cost like temporary work, temporary structures, supporting structure where we can do with much cheaper price and there -- where we can be competitive as compared to international players. Yes.

And sir, engineering part of the -- any project we must be doing in India, where we must be competitive, that is also one of the factors?

Yes, that's what I said. Engineering, there are 2 kinds. If you do EPC, you do engineering for permanent work. So there we are quite good in marine and we saved -- tried to save some money there. And some job, which is designed by the client, still there is opportunity to improve in the costing if you do temporary work design properly and we have got all the things available with us for many years. So those kind of things have helped to costing. Yes.

Sir, last question to Mr. Prasad Patwardhan. Sir, any onetime expense or income in this quarter, which is not related to normal business of operation?

No, no, there's nothing like that in that quarterly results.

We have a follow-up question from [ Abhishek Dixit from Hem Securities ].

So sir, in the recent budget session, government has focused more on the expansion of the existing airport and development of new airports and metros and Namo Bharat. So on the ground level, are we seeing more opportunities in the aviation sector and despite the competition also in the sector?

Yes. Aviation, there are great opportunities and we are almost -- we are very much there. As you know Pune airport, Trichy airport we have completed. Ahmedabad airport, we are doing. And there's a list of around 20 airports. The tender will be out after election one by one. So there are opportunity, you're right.

Okay. So -- but this will be after election?

Yes. I think code of conduct and all such things after election only they will we take off.

We have a follow-up question from [ Mehul Mehta from Nuvama Wealth ].

Can you please share in terms of contribution to revenue for quarter as well as 9 months from major projects like Ganga Expressway, Chennai Metro, Indian Navy kind of thing?

We will be only able to share with you the project-wise numbers...

But broadly, I think last quarter, it was disclosed. So maybe if you can, broad number...

Okay. Let me try. Let me try. See 20% of the jobs as I say, 10 projects, they have contributed 80% of the margin. So these 10 projects are Ganga Expressway...

Sorry, can you repeat? Sorry, I'm not getting, sorry.

There are 10 projects out of 50, which have contributed 80% of our revenue. And these 10 projects are Ganga Expressway, Chennai Metro, Bangalore Metro, Project Seabird Navy, Colombo, Shimla to Nagpur and 1 or 2 more, around 10 projects.

So this is for the quarter as well as 9 months should be similar kind of.

Yes, almost same, same, same.

And in terms of other income, there is substantial increase. Is there any nonrecurring income item for the quarter?

It is largely from income on fixed deposits or some tax refund that we were able to get. There is some interest that we got on the tax refunds as well.

So there is nothing nonrecurring. You are saying like fixed deposit income and sort of thing. Okay. Now sorry to bother Mr. Basu again, but there have been questions regarding peers. So I was looking at one of the peers where our margins are quite comparable like-to-like. But in terms of when I look at employee costs and other expenses as a percentage, which is on the higher level for us as a percentage of revenue. So is that, that we are provisioning for future growth? And to that extent, there can be operating leverage, which can help us going forward in terms of expanding margin?

So you are right, there are some expected credit loss sort of things are there. But you see the manpower cost, if you check our previous quarter or previous year, it is coming down. Earlier it used to be around 11%. It has come down to 9.5% and going forward it will further come down. So it depends upon not only the delta cost, it depends upon what revenue you are getting out of that fixed manpower cost. So we are improving. That is for sure.

So going forward, we can expect even further reducing this percentage of revenue.

That would be the last question for the day. Now I hand over the floor to management for closing comments.

Thank you, everyone for a very intense and deep discussion on our results for this quarter. We appreciate the interest that you have shown in our company. We look forward to interacting with you again next quarter. Thank you very much.

Thank you. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a good day.