Dilip Buildcon Limited (DBL) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I'm Pavan, moderator for the conference call. Welcome to Q4 FY '21 Earnings Call for Dilip Buildcon Conference. We have with us today, Mr. Jiten Rushi from Axis Capital. [Operator Instructions] Please note that this conference is recorded. I now would like to hand over the floor to Mr. Jiten Rushi. Thank you, and over to you, sir.

Thank you, Pavan. Good evening, everyone. On behalf of Axis Capital, I would like to welcome for the earnings conference call for the fourth quarter and full year FY '21 of Dilip Buildcon. From the management, we have Mr. Devendra Jain, Executive Director and CEO; Mr. Rohan Suryavanshi, Head of Strategy and Planning; Mr. Radhey Shyam Garg, CFO; and Investor Relations team from [indiscernible]. We thank the management for giving us this opportunity. The call shall begin with opening remarks from the management, followed by question-and-answer session. Thank you, and over to you, sir.

Thank you, Jiten. Thank you, everyone, for joining us today. I hope you and your loved ones are safe during these trying times. First and foremost, on behalf of the whole DBL team, I'd like to extend a warm welcome to all our partners and investors on this conference call for the quarter and financial year ending 31st March 2021. For the entire world, FY '21 has been a challenging year in more ways than one. It is best represented as a year of trial for all sections of the society and the economy. The magnitude and the volatility of COVID-19 has shaped the contours of a new normal. We are going through a crisis, which is unprecedented. No living person would have seen anything like this. Though the second wave of coronavirus pandemic in India seems to be subsiding, we are far away from normal. We are seeing a severe health emergency that has also become a humanitarian crisis. Even though government organizations and ordinary people have tried to do their best, these are difficult times for humanity. For us at DBL, the priority was to take care of our people and to help to the maximum extent possible. All those people are working with us and around us. See, however, even before the financial year 2021 began, there was a nationwide lockdown, and the country's economy has come to a grinding halt. This adds severe impact on broader economic activity in the first quarter of the previous financial year. However, the resilience was at display after the initial shock and the country recovered gradually starting quarter 2 and quarter 3. The situation continued to improve with each passing quarter, owing to swift decision-making and proactive support from both the government and the Central Bank. After the most severe economic decline occurred in Q1 of FY '21, followed by a minor contraction in quarter 2 because of loss of momentum, there was a recovery in quarter 3 and quarter 4, which was quite robust. In fact, the pickup in Indian economy in the second half of FY '21 was better than the most optimistic as forecast made in the first half of FY '21. But after a more -- after an encouraging and optimistic picture in January and February, things have again become challenging, because of the scale and intensity of the second wave. And both global and local rating agencies have started reducing the GDP growth forecast for India for FY '22. Under these extraordinary circumstances, we have advanced on a path of sustainable growth on the back of a positive change in culture, more significant purposes among our employees and a strong focus on performance. Our purpose has helped us stay strong despite challenges in this current environment. However, we would like to add that, currently, the headwinds are strong for the economy and the business environment for our industry remains unpredictable and hence challenging, despite some much needed respite on coronavirus pandemic and better availability of medical supplies across the nation. It will be too early to say when we'll see the return to normalcy. In addition, there are also concerns around if and when there will be a third wave. We're doing the best we can, and we will strive for sustainability in all aspects of our business. We have robust risk management factors and time-tested business continuity frameworks in place. But because of the uncertainty in volatility in the macro environment, it is very difficult to predict how the financial year '22 will look like. Having said that, we have made a great presentation for all of you guys. I'd like to just run you by that so that we can go page-by-page. I'm sure you guys have had the chance to look at it. I'm just going to run through the highlights of the company for the quarter and the year through that. Starting with Page 4. I'm very pleased to announce that the company had won 15 projects worth INR 21,000 crores plus in this year. We entered 3 new territories, namely Bihar, Uttarakhand and Puducherry. We completed 4 projects before or on time. We were able to get revenue growth even amongst all the COVID challenges. And most importantly, we're very proud to say that, right now, we're sitting on the largest and the most diversified order book in the history of DBL. Going to Page 5, next page. What were the highlights for the quarter? I'm very happy to report that we have improved our working capital cycle significantly. I'm also very happy to report that the debt reduction happened by almost INR 300 crores. There was revenue growth compared to last year, same quarter. We won new 6 HAM projects worth almost INR 7,000 crores. And finally, there was an improvement in profitability. If we go forward to the next page, it's a list of the projects that we won during the financial year '21. It's the sector-wide composition, the geography-wide composition and contract type, dividing between EPC and HAM. So it's almost about 50-50 kind of between EPC and HAM that we won, as you can see. And it's a very diversified order book, while roads are only 59% and the other industries addressed 41%. Page 7, next page, is just the list of all the projects that we won. Page 8 are the projects that we have completed during FY '21. Page 9 is basically a snapshot of our current order book by different divisions, where road constitutes about 51% and the other businesses constitute about 49% of the total INR 27,000 crores plus order book. The next slide basically shows how the company has diversified over the years from almost 90% inroads in FY '18 to now only about 51% in FY '21, becoming a truly diversified infrastructure player. Slide 11 is basically how the order book has grown over the last few years. As you can see, we are sitting at the highest order book that we've ever had in this year. 12 is basically a breakdown of client-wise between national and state. The 70% of the order book is from the central government, 30% is from state government. Next page, basically breakup of our order book geography-wise and contract types. Moving on. Coming to Page 15, our financial results for the quarter. I'm very happy to report that there is a 17% increase in our top line from about INR 2,500 crores to now INR 2,900 crores plus. EBITDA has also increased by 9% from about INR 420 crores to about INR 460 crores plus. And finally, profit after tax has also increased about -- from -- about 14% from INR 116 crores to INR 133 crores. Next page, a summary of full year financials. Even in a very challenging year, where at the start of the year, we were unsure how the year will predict and we were all thinking it will de-growth, we managed to grow about 2.5% from last year, while EBITDA is down by 7% and PAT by 24% because of lockdown. Moving to Page 17 is just a detailed breakup of our results quarterly and yearly. Page 18, our stand-alone profit and loss for the quarter, what I've already explained. If you go forward, the full year P&L. Important to point out that finance costs have decreased by 4% year-on-year and depreciation has also decreased by 4% year-on-year. A quick snapshot of our balance sheet on the next page. Page 21, after that, a snapshot of our cash flow. Most important here is the company generated net operating cash flow of almost INR 700 crores during the financial year. If you go to the next page, 22, a snapshot of our net working capital days, quarterly, for the last 4 years. If you will see, currently, our net working capital day came down to 82 days, which is a decrease of 22 days from last quarter and it decreased by 8 days from a year [ ago ]. That's the biggest point that we manage to do that. If you go to page -- next page, a breakup of our net debt-to-equity ratio over the last few years, how it's continuously kept on falling. Very happy to report that we are below last year's net debt to equity, even though this year revenues were hit, even though we had to take [indiscernible] lines and all. Net debt reduced by almost INR 300 crores. Next page, snapshot of our income tax policies. If I move forward, then we have our consolidated profit and loss for the year, when you want to go through. Then the divestment of our road assets, as we explained last time as well. The company is looking at a consideration about INR 2,000 crores from the divestment of its 12 HAM assets and the breakup of how that money we're expecting to come. The next page is a tracker of our equity for our HAM and coal projects for anyone to peruse through how it will be required over the next few years. We've already invested almost about INR 1,500 crores in our asset still now, and going forward, how it's going to look. Important thing to point out, I guess, here is from the money that we're expecting from our sale of [indiscernible] assets this year and versus what we need to put in will narrow about level up. Going forward, updates on our projects, our hybrid projects, hybrid annuity projects. After that, how our outstanding EPC projects, a list of our other projects areas, whether it's airports, bridges, tunnel, metro, all of that. So basically, that is -- that's all from our side of the company. We open the floor now to Q&A.

[Operator Instructions] So the first question comes from Mr. Mohit Kumar from DAM Capital.

Decent set of numbers and very, very strong performance as far as order inflow is concerned and also for raising the money through [indiscernible]. So my first question is, of course, you guided that FY '22, you believe it's too early to -- for any guidance. But what is the life of the order book currently? Contractually, if everything goes fine, what is the expected revenue, which we can do in FY '22? If you can throw some color, it will be helpful.

Thank you, Mohit. Like you rightly said, it is quite early to predict what kind of revenue growth will have given the challenges in the external macro environment. What we, as a company and to support that we should, at least, be getting a 10%, 15% growth in this financial year. Now all of this is obviously subject to whether there are any more unforeseen lockdowns or curfews and the impact it might have. New strikes right now, because of this, we saw a reduction of labor from our sites. People were fearful. And it was just an overall, I guess, anxiety that people had with their families living so far away and separate. So even though we tried to explain to people, and we were -- we tried to make things comfortable for them, make sure that there were enough medical facilities on site, quarantine centers and everything. Yet, all of that, given there are still disruptions in labor and material supply. So it's while its early it, but like I said, we are looking at a 10% to 15% kind of growth. What was the second question that you had, sir? One was around growth? A life of order book, sorry. The life of order book, we are expecting, this order book should be about 3 years. So we have of forward-looking 3-year sort of order book currently, 2.5 to 3.

Understood. My second question is on this out of INR 21,000 crore order, which you won last year, do we have -- how many of the orders would have received the appointed date and some work would have started? I do understand that the HAM which you won in last quarter, 3, 4, 5, that could take some time. If you can just paint -- just put some color on that?

So except the HAM projects that we won of late, more or less, all the other projects, we have received appointed date, from what my knowledge told me right. More or less, all the projects. These new projects that we won recently, they will be due sometime in October or so.

What [indiscernible] status of all these ATM projects, sir, of the 4 which are won in Bangalore [indiscernible]?

So these are part of the 6 projects that we won recently, right? So these projects will be seeing appointed date coming around October. Besides these 6 projects that we won recently in this last quarter, the projects that we had won before that, like I mentioned, out of the 21, the others that we won, more or less, all of them have appointed date.

The next question comes from Mr. Shravan Shah from Dolat Capital.

Sir, can you hear me?

Yes, yes, we can.

Yes, so sir, I was first trying to understand that you said it is difficult to say how does things stand out but broadly still you are saying 10% to 15% revenue growth. So how till now April, May, in terms of the workforce, how much have you seen or broadly average, April, May versus fourth quarter? How much reduction has happened? And how much it can impact in terms of the execution for this first quarter? And at the same time, in terms of the rising input cost, particularly steel, so how do we see this first quarter, particularly margin? How much more impact can it be 100, 200 bps? Or will it be much lower on the EBITDA margin?

So [Foreign Language] second situation here. I say that 65% to 70% workforce spend will come [Foreign Language]. They can be [Foreign Language] workforce, but not LOE. Broadly, we can say on a work impacted or purchase [indiscernible] impacted it. But now the coming [ signal ] is really [indiscernible] many infrastructure investing, our business will be COVID success by the months of the year. And again, COVID is going on in [indiscernible], 60%, 70% loan here is revenue per impact of the 20%, 30% revenue impact to organic [indiscernible] profit impact to [indiscernible] over Q1.

But any -- let me put it another way. Total, the construction cost right now that we have, how much would be the steel would be accounting? So let's say, operating expenses for this quarter was 2,358. Out of that, steel would be broadly 10%, 20%, 25%, just to trying to get a sense.

[indiscernible] taking it to diversified order book may still [indiscernible] is very difficult. We are costing them some metro [indiscernible] 60% of that. [indiscernible] I think making it the 20% or a 12% of that. So yes, data [indiscernible] metal component was impacted.

Okay. Okay. Sir, in terms of the CapEx, how much now we are looking at and mobilization advance return some money and unbilled revenue as on March?

So your answer to first question is we are expecting [indiscernible] crores of CapEx, which will be the investment CapEx in the financial year FY '20. And mobilization advance as on 31st March 2022 is INR 970 crores. And then what are the [indiscernible] retention money, which is around INR 750 crores on March '21. And uncertified revenue is in the range of, I think, INR 550 crores based on 31st March 2020.

Okay. And broadly, in terms of -- let's say the things are as it is and it will start improving after 1, 2, 3 months. So in terms of the working capital and the debt level, any idea, will it remain the same or some improvement still can be expected?

So working capital, if you will see, 82 days working capital in the year and we were always told that is the ideal situation. So we will be keeping the working capital cycle and [indiscernible]. So the answer to second question is the reduction in the debt, it will be more than INR 500 crores reduction as of 31st March 2022.

So this is primarily -- this is we are talking about on the gross debt level, INR 500 crores?

So gross debt will convert into the net debt also because over this cash and then balances [indiscernible] are in the range of around INR 280 crores to INR 300 crores.

So suppose the QIP of INR 500 crores, how much we have already reduced the gross debt?

We have reduced the gross debt by -- entirely by INR 500 crores in the gross debt, but there will be some, some we will receive some cash flow will be there from the overall, operating cash flow will be there. Then there will be some equity investment and equity inflows. So in that totality, I'm saying there will be more than INR 500 crores debt reduction as on 31st March '22.

Okay. And then where are in terms of the monetization of the HAM, anything, Devendra, sir, where are we? And when we can see the actual final news?

So when we will deal [Foreign Language] due to COVID [Foreign Language]. We are expecting from that monetization amount, INR 900 crores [Foreign Language] financial year [Foreign Language] in the next financial year.

Okay. And sir, lastly, in the -- are we L1 in any of the -- or have we bidded and still not open so or [indiscernible], which other sector sort of broadly in terms of how much more inflow are we looking at? That would be helpful. That would be my last question.

[Foreign Language].

So in terms of the broad number, how much more are we looking at for this year in terms of the inflow?

We are expecting INR 10,000 crores to INR 12,000 crores order inflow in full financial year and mostly we are expecting from the Q3 and Q4 [Foreign Language].

Yes, yes, I understand. So is maybe of now, HAM, [Foreign Language]?

Again, last year, January, INR 22,000 crores the order book [indiscernible] 60% from the other sectors. So now we have the 7, 8 sector for the bidding. Probably right now, the bidding [Foreign Language] more or less, get a percentage [Foreign Language] 50%, 50% [Foreign Language] HAM or EPC project. So I as I could, it's a combination of [Foreign Language].

So the next question comes from Priyankar Biswas from Nomura Securities.

Rohan and Devendra Jain, so my first question is regarding -- it seems that in this quarter, other expenses are a bit on the higher side. I mean like almost 2x normal quarterly run rate. So is there some one-off or something this time?

There is a 1 CSR expenses included this, whatever we spent for the last, for the 3 or 4 years, we incur all expenditures, so around INR 42 crores to INR 45 crores is included in other expenses.

So INR 40 crores. So the true number should be actually the -- whatever is there minus the INR 40 crores, right? So sustainable number?

Correct, correct, correct.

So my next question is regarding this Pachhwara coal mine. So what I understand is this litigation with the earlier owners and the Punjab State Board is going on for quite some time. So what is the status of that? And let's say, when can we really start to see some movement on that particular contract?

[Foreign Language] is still the same again. In the last quarter, COVID [Foreign Language] properly. Supreme Court made hearings [Foreign Language]. Again, due to COVID, Supreme Court news [indiscernible].

[indiscernible] Only pending is the final hearing.

As there is almost up close, [indiscernible]. I have a little final hearing, then probably, what the domain and the whole [indiscernible]?

[Foreign Language]. Supreme Court [indiscernible] projects [Foreign Language]. For your last question, [indiscernible].

[Foreign Language] cash flow expectations [Foreign Language] ultimately, final free cash flow generated [Foreign Language] is upset. Over the next 2, 3 years, I could estimate the ballpark idea [Foreign Language]?

[Foreign Language] ballpark idea. There are steel prices or raw material prices increase over the EBITDA margin towards a slightly lower [Foreign Language] operating cash flow after working capital. I expect the working capital of 32 days and keeping the EBITDA margin on 16%. We'll be generating the cash flow of around INR 200 crores to INR 300 crores of operating cash flow.

Okay. But you have [indiscernible] contracts may was a pass-throughs here, right? Was it the commodities [indiscernible] properly reflect in terms of formula the steel [Foreign Language]?

Ben, there are 2 things in this, okay. First thing, whenever there is a continuous increasement, there is a not sudden increase, then there is a pass-through and we get the 70% to 80% and remaining 20%, we embed in the bidding. Okay. Now coming to the sudden increase, there is always an impact of the sudden increase because there are the prices is looking at getting reflected in the WTI or all this index. Okay. So like -- it still has increased by around 30%, 35%, cement is around 25%, the 2 million increased by 70% and fuel is around 25% to 30%. So these sudden jumps are not fully covered in the tender. Okay. So there is EBITDA impact due to this.

[Operator Instructions] So the next question comes from Mr. Mohit Kumar from DAM Capital.

Sir, maybe on the Bangalore [Foreign Language]?

Bangalore, Chennai, experts say [Foreign Language]. And in [Foreign Language]. Fortunately, last 2 years [Foreign Language] 60%, 70% in [Foreign Language]. So we are expecting that on-time [indiscernible] for all 6 projects.

After having the last year [indiscernible] mining project last year. I think [Foreign Language]?

[Foreign Language] almost 1 year but we will start the mining edge for the defined schedule.

[Foreign Language]. Sir, are we -- is it a segment we believe in, given everything, you believe that the ordering will happen in this country at [Foreign Language]?

[Foreign Language] diversify [Foreign Language].

Sir, ordering be strong, like the government already budget may copy strongly [Foreign Language]. Not only have they said -- key directly CapEx volume [Foreign Language], but even states go indirectly CapEx correctly -- government have said additionally, I think, around INR 2 lakh crores CapEx [indiscernible]. So ordering into itself, for sure, actually. [Foreign Language] so government -- the national government [Foreign Language] ordering [Foreign Language] ordering. On the second year [Foreign Language] last year. So already ordering jump here, increase here. [Foreign Language] already indication as you're currently ordering a cheap robust idea across sectors. So we have no reason to suspect otherwise. [Foreign Language]. So we are very important. [Foreign Language]. At least for the next 2 years, we are very confident. Both -- this year will be good and the year after that will be even bigger.

And sir, are you open to further [ MD&A opportunities ]? Do you -- are you thinking of [indiscernible] to do anymore?

Absolutely. Absolutely. [Foreign Language]. Always. We will build [Foreign Language].

The next question we have is from Mr. Jiten Rushi from Axis Capital.

Sir, a few questions from my side. So on the revenue guidance, obviously, you were talking about 15% growth. So are we maintaining the same guidance? Or there could be some pickup this year because of this extended lockdown in Q1?

Again, it's in -- the order book is [Foreign Language] 20% growth [Foreign Language] project. But our [Foreign Language]. Otherwise, the company's order book is paid for the 15% to 20% growth. So we still -- our guidance is still budget, quarter-to-quarter begin this last year [Foreign Language] start with the downward [Foreign Language]. So similarly, our guidance is same, 15% to 20% guidance. [Foreign Language] order book [Foreign Language].

Okay. [Foreign Language] INR 100 crores [Foreign Language]?

INR 50 crores to INR 100 crores. [Foreign Language] is only the replacement CapEx [Foreign Language] INR 50 crores to INR 100 crores. [Foreign Language].

[Foreign Language] extended because of this lockdown?

I mean [Foreign Language] COVID, Supreme Court [Foreign Language].

Okay. And sir, any -- are we looking for the new [ MD&A contracts ] this year? Or we are fine with these 2 contracts here? [Foreign Language] this year, are focusing on the CRL, which is a bigger contract, right?

[Foreign Language]. So always, we are eager and we are hungry for the new projects and [indiscernible] project [Foreign Language].

Okay. Sir, the last question, bonus received, anything this year or this quarter?

Yes. So INR 4 crores this quarter and INR 12 crores for the full financial year.

[Operator Instructions] So the next question we have is from Mr. Kiran Sebastian from Franklin Templeton.

I just wanted an update on the divestment of the next tranche of assets. What is the time line? Are you seeing any delays?

So sir, obviously, because of COVID, it has impacted movement and all, and we were also busy. But the deal, like I had been mentioned earlier, this is in the final stages only. And we are expecting that it should close within the next 1 or 2 months. But -- yes. So that's where we think as of now.

Right. And just one more question on the mining contracts you have won. Execution is on track or are you facing any delays at this time?

Sir, mining question -- mining, you mean the recent tender that we won?

Yes, yes. Not [Foreign Language].

Yes. We are currently [Foreign Language]. We are going to sign the agreement on 2nd June and looking forward at in [Foreign Language] or most likely, we are not done.

The next question comes from Mr. Parikshit Kandpal from HDFC Securities.

Hello? Can you hear me?

Yes, sir, we can hear you.

Sir, congratulations on a good performance in this volatile time. So -- and a very strong guidance for next year. So my first question is basically on this, what is the total mobilization advance, which is now that -- as of March '21?

It is INR 971 crores as of 31st March 2021.

And what will be the pending amount which we can avail now in the order book?

There are the -- projects are there for which we will receive the mobilization advance when we get the appointed debt or there are 1 or 2 projects also for which we will receive the mobilization in Q1 or Q2.

Okay. Next question is on the debt. So how much of the total debt? And how much will be the debt that's outstanding?

Generally, the -- right now, it will be difficult to tell that, how much will be debt. But once -- you can ask me off-line, we will give it to you.

Okay. Sure. Sure. Now the second question -- third question was on inventory. So under this quarter met inventory [indiscernible], which is like a big number, we've reduced the inventory. So any guidance from now further from this INR 2,600 crores levels or 82 days? So how do we see the inventory coming down? Or would it move further lower? Or it's like more or less they will not be of INR 2,600 crores?

[Foreign Language] but inventory has increased from 2,600 -- 26-odd crores, INR 2,600 crores to INR 3,000 crores. And the reason for this is actually the increase in the prices, the moving average price for an interrelation has increased. Second thing, now as we have told in the working capital cycle, we are at the optimum level of 80, 82 days. So we will be maintaining that capital cycle of 80, 82 days. And of course, our endeavor is always to reduce the inventory, so we will improve that.

Okay. So just last question on the Cube deal. So what stage are we of closing them? And just the uptick as the final negotiation inventory segment from that?

So Cube deal, see, we are almost at the last stage. So this financial year, we are going to achieve COD for the projects. And as soon as we achieve the COD, we'll start getting the money. So we also have presented once lightly what is the expected consideration for that.

Okay. And just last thing, sir, fund and nonfund will [ skip my or an uplink the ] [Foreign Language]?

Sorry. Please, can you repeat the question once again?

Fund and nonfund base limit, sir, here? And what is the utilization of the line?

Some, of course, [ off-line there ], but the utilization is around 80% to 85%.

The next question is from Ms. Teena Virmani from Kotak Securities.

I missed out on the payment from Cube Highways. How much are we expecting in this financial year to come through from Cube-B? Because I believe this is linked to the completion of the project.

See, this financial year, the amount will be roughly somewhere more than INR 550-odd crores.

INR 550 crores? Okay.

In and around INR 550 crores to INR 600 crores, somewhere between INR 550 crores to INR 600 crores, because the final valuation is dependent on certain variables, which will exist as on the date of the COD of the respective projects. And the -- and balance remaining amount will be received in the following financial year, that is '22, '23.

How much would that be, sir?

That will be in the range of INR 100 crores. Rate of the money is going to come in the current financial year.

Okay. And there was some pending payment from Shrem deal of around INR 80 crores, INR 85 crores. Has it been received?

Yes, everything has been received. So Shrem deal is closed in totality now. So by March, we had received the entire payment.

Okay. Okay, sir. Yes, that's it from me. And just last multiple questions, what is the absolute gross debt number for FY '21, including the current maturity?

Gross debt number is -- on 31st of March '21 is INR 3,400 crores.

INR 3,400 crores. And this has come down after the QIP issue by INR 500 crores?

Oh, QIP issue will be the -- this impact will be visible in the June quarter because this is after the March '21 year. We have received the money [ after April '21 ].

And over and above, you are planning to reduce it further by INR 500 crores?

In the totality, we have told that we will reduce the debt by more than INR 500 crores, including the QIP. So it will be in the range of some -- more than INR 500 crores.

Okay. Okay. Got it, sir. So only -- between INR 500 crores to INR 600 crores reduction, including both QIP plus the planned reduction during the year, that is what you are trying to say?

And just right now, we're not giving the range of INR 500 crores to INR 600 crores. It will be more than INR 500 crores. It all depends on how the financial year panned out, what will be the revenue growth and what will be the EBITDA margin. So right now, giving the exact number will be very difficult, but it will be more than exactly -- it will be more than INR 500 crores.

So the next question comes from Mr. Mohit Kumar from DAM Capital.

[Foreign Language], so I think we can expect contribution of INR 400 crores per year starting from this fiscal year?

Sir, can you repeat the question?

[Foreign Language] December '19, correct? And we start here again, INR 20 crores. So we can expect INR 400 crores kind of contribution in FY '22 onwards?

No, no. Already, we have done the 30%, 35% [Foreign Language] revenue steady more or less INR 400 crores revenue for FY '22, [Foreign Language]. I'm not addressing -- what is your question? [Foreign Language].

No, no. I'm just trying to figure out because we got the elevated in December '19, we started Jan '20. So [Foreign Language]?

[Foreign Language] ammonium nitrate [Foreign Language] India, last year, Philippines [Foreign Language] 20%, 20%, [Foreign Language] exclusive [Foreign Language] full payment revenue, full [Foreign Language].

Okay. Also, [Foreign Language]?

[Foreign Language] defined [Foreign Language]. [Foreign Language] market [Foreign Language] learning process [Foreign Language] for the [Foreign Language]. Ultimately, [Foreign Language] of [ 50 million ] [Foreign Language].

Related question here, are you open to doing MDO for private companies? You have won a number of contracts in FY '21.

No private contract with private agencies.

The next question comes from Mr. Prem Khurana from Anand Rathi.

Most of my questions have already been answered. Just one from my side. So I think I want to understand this Cube transition a little better because I think there was a committed [indiscernible] to be there in this transaction. And the INR 700-odd crores is the number that you've given earlier was based on certain assumptions. And since then, we've seen some adverse movement in bank rate. The spread has gone [indiscernible]. So fair to assume that you would have to sit across the table to negotiate the transaction again and the valuation could also change because of the change in the way the bank rate has moved?

No. See, there is no renegotiation of the transaction. First, I would like to clarify that. The transaction is well structured. And the -- it is not a fixed IRR transaction. So the discounting rate, et cetera, is again linked to a variable. So the moment in back rate is duly hedged with the corresponding movement in the discounting rate also. So that's what the deal is full-fledged in place, and there is no possibility of any kind of renegotiation on that.

Okay. And is that a binding agreement?

Yes, it's a binding agreement.

So the next question comes from Mr. Rohit Natarajan from Antique Stock Broking.

This is Natarajan, Rohit. Sir, I have 2 questions. One on the impact due to COVID, this quarter especially. Most of the states are in lockdown. So we -- I mean, we are also fully impacted. Is it 100% shutdown from operation in that aspect? Are we optimal operation in some areas?

[Foreign Language] 65% to 70% of our charter [Foreign Language] impacted is only 25% to 30%, not 100%.

Okay. And also one more question on the financial situation. Like now that government has introduced this [indiscernible], so do you see there will be improvement in our finance numbers in the coming financial year? Will there be a help in terms of numbers?

[Foreign Language] financial number [Foreign Language]. [Foreign Language] very, very new question for me.

The next question comes from Mr. Rohit Natarajan from Antique Stock Broking. Sir, there is no response. Shall we move on to the next question, sir?

Yes.

Yes, sir. So the next question we have is from Mr. Shravan Shah from Dolat Capital.

Sir, can you -- are you able to hear me?

Yes, yes. We are able to hear you.

Sir, just wanted a clarification. Shrem deal, as you said, it is over. Just wanted to know in terms of the asset side and liability side, where and how much amount is still there? And when it will be out of the balance sheet?

[Foreign Language] because step transfer has not taken place, we have received the entire consideration. If you want to understand where it is showing in the balance sheet and the liability side, you can call me, I will take it off-line because this is the financial [indiscernible].

But just a broad number, how much are sitting on the asset and liability side, particularly for the Shrem deal in terms of...

So it has been already shown as a noncurrent asset held for sale in the asset side and [indiscernible]...

No, no. I'm talking about the number, how much number is there? So next year, the number will not be there.

It is in the range of INR 250 crores to INR 300 crores. It is shown in the balance sheet page itself.

Okay. And next year, by FY '22, this will be out of balance sheet?

Yes. In the first half itself, it will all -- will get knocked off because we will be able to transfer all steps.

The next question is from Mr. Manish Goyal from Enam Holdings.

I just wanted to clarify on 2 things. First, on the Q4 other expenses you mentioned, CSR-related expense of INR 40 crores?

It is -- if we will go INR 45 crores.

So is it that this particular quarter in this year that this number is higher and...

Yes, yes. This is the exceptional expenditure for this quarter. This is not the usual thing. So usual things are the INR 10 crores to INR 12 crores per annum.

Okay. So this INR 45 crores has come in this quarter itself and which is reflected for the entire year as well?

Yes, yes, INR 45 crores plus INR 10 crores of the provision of the doubtful debts also has hit to the other expenses in this quarter, which is not the usual expenditure.

Okay. Okay. And Devendra, you were mentioning about debt repayment of at least INR 900 crores, that was factoring the QIP funds, which we have issued plus the cash flows and then adjusted for whatever equity requirements we would have. Now if the -- if you are looking at INR 500 crores to INR 550 crores of inflow from the Shrem deal, which has already been finalized earlier, then in that case, there is a possibility that we can see a higher debt repayment?

So you are saying Shrem deal or I think mistakenly...

Cube deal. Sorry. Cube deal, Cube.

So Manish, if you will see our divestment received in the FY '22, it will be INR 900 crores approximately. And after that, it could be [ INR 1,100 crores ]. And if you will see our equity commitment, we have put one slide on the equity commitment. So it is all on around INR 800 crores, INR 850 crores will be our equipment -- equity commitment for the 12-year HAM projects, then 5 [indiscernible] '20 and 6 [indiscernible] in '21. So [indiscernible] also.

Okay. Okay. Okay. Got it. Fine.

And to clarify, INR 500 crores is the best-case scenario that will be the minimum debt reduction as on 31st March '22.

[Operator Instructions] So we have received a question from Mr. Shravan Shah from Dolat Capital.

Sir, currently, what is our interest rate? And in the postrepayment of this, is there any reduction -- or some minor reduction in the interest rate? And broadly, in terms of currently this quarter, we were earning around INR 150 crores finance cost. So how much I understand that we receive the money, you have been [indiscernible]. But let's say, from the second quarter onwards, broader, how much are kind of a reduction on a yearly basis, INR 50 crores or INR 500 crores, 10% kind of a reduction? So on fourth quarter, it would be INR 12 crores, INR 13 crores? Or will it be more? Or all things remain the same?

So broadly, to answer your question, if you are correct, it will be in the range of INR 40 crores to INR 50 crores, if you're taking the INR 500 crore debt reduction. If it will be higher debt reduction, then, of course, there will be the lower interest cost [indiscernible]. But again, you will have to see that our finance cost also includes the BG commission bank charges, which is the -- our business increases get also experience. So corresponding increase sometimes -- corresponding this decrease sometimes partly offset by the increase in the BG commission and gain charges.

So currently, on the pure date, how much interest right now we are having? And broadly in INR 586 crores interest finance cost for this year, how much is the floor interest and the other BG and other [ banks ]?

So I'm just giving you our effective interest rate we interested is 9% to 9.25% for the full financial year. Earlier, it used to be 10%, so we got the benefit for the reduction on the bank rate.

Okay. And out of total INR 586 crores finance cost for full year, how much would be the pure interest cost? And how much would be the other?

Right now, it is not readily available with me. So if you will call me, I will give it to you.

[Operator Instructions] So the next question we have received from Mr. Parikshit Kandpal from HDFC Securities.

So my question is on the new HAM projects, which you have [ done. And so any plans of renew it in any of these platforms, which we are looking at so either in Cube or the other platform, which you are looking at? ] So probably it's too early to say anything on that? Or [ have I just started -- thoughts ] on these projects?

[Foreign Language]...

I'm sorry, sir. So please go ahead, sir.

So it should be -- too early to say something, but we are working on it.

Okay. [Foreign Language]?

[Foreign Language] more than INR 200 crores of billing contribution.

Okay. And sir, [Foreign Language]?

Already, we have INR 4,100 crores [Foreign Language].

Okay. [Foreign Language], how are you planning for that?

[Foreign Language] greenfield, [Foreign Language].

Okay, sir. And sir, margins, sir. Any outlook around margins? You have mentioned [ 16%, 17% ] [indiscernible]. Sorry, I missed the earlier part of the call.

Earlier [Foreign Language] quarter-to-quarter [Foreign Language] COVID impact [Foreign Language] margin [Foreign Language].

[Foreign Language] at least 14% [Foreign Language] Full year, sir?

[Foreign Language].

Thank you very much, sir. There are no further questions. I now hand over the floor to Mr. Jiten Rushi for closing comments. Over to you, sir.

Thank you, Pavan. We thank all the investors to participating -- for participating in the call. Now I hand over to management to -- for closing remarks. Sir, any closing remarks on your side?

Yes. Thank you very much, everyone, for coming on our call and asking all the questions. And in case any of you have any other questions, feel free to reach out to our IR team or internal finance team, and they'll be happy to answer any queries. Thank you again for your time.

Thank you very much, sir. Ladies and gentlemen, this concludes your conference call for today. Thank you for your participation and for using [indiscernible] Conference Call Service. You may all disconnect your lines now. Thank you, and have a pleasant evening.