Dilip Buildcon Limited (DBL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Dilip Buildcon Limited Q2 and H1 FY '25 Post-Earnings Conference Call hosted by S-Ancial Technologies. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Jill Chandrani from S-ANCIAL Technologies. Thank you, and over to you, ma'am.

Thank you, Neha. Good morning, everyone. Welcome to Dilip Buildcon Limited Q2 and H1 FY '25 Earnings Conference Call. From the management, we have with us today Mr. Devendra Jain, Managing Director and CEO; Mr. Rohan Suryavanshi, Head, Strategy and Planning; and Mr. Sanjay Kumar Bansal, Chief Financial Officer. Before we begin this call, let me mention the standard disclaimer. The presentation that we have uploaded on stock exchange, including the interaction in this call contains or may contain some forward-looking statements concerning our business prospects and profitability, which are subject to some uncertainties and actual results could differ from those. Now I request the management to take us through the key remarks, after which we can open the floor for question-and-answer session. Now I hand over the call to Mr. Rohan Suryavanshi for his opening remarks. Thank you, and over to you, sir.

Thank you, Jill. On behalf of Dilip Buildcon Limited, I welcome all the participants in our Q2 and H1 FY '25 results con call. The results and presentation have been uploaded on the stock exchange and I hope all of you had a chance to look at it. At the outset, I would like to share some industry updates, and then I'll touch upon the company. So the infrastructure awarding activity in recent months has seen some deceleration. However, we anticipate a pickup in the near future, fueled by several initiatives like the PM Gati Shakti. Ministry of Road Transport and Highways has outlined a remarkable goal for FY '25. In the Union Budget 2025, the government has high aspirations for the infrastructure sector with a view to making it a powerhouse in our economy. Road and highway transport was allocated INR 2.78 lakh crores. And despite a slow start this fiscal year due to election season and model code of conduct and the various ministries getting set up in place, MORTH is committed to finalizing these contracts as confirmed by the Honorable Union Minister. The Honorable Minister has stated that India will achieve the highest ever highway construction level this fiscal year. So we remain optimistic. As of August 2024, around 700 kilometers of projects were awarded, while 2,700 kilometers of national highways have been completed. Although this is slower than last year's pace, we expect a significant uptrend as awarding activities regain momentum. Another noteworthy development is more ambitious INR 1 trillion investment in 74 new highway tunnels spanning 273 kilometers. Notably, 35 kilometer -- 35 tunnels covering 49 kilometers have already been completed and this sustained focus on tunneling is poised to unlock further growth opportunities for our company. In other infrastructure news, in FY '25, Indian Railways has allocated INR 1.74 trillion for infrastructure facility upgrades and safety enhancements. Similarly, Coal India Limited is advancing 119 projects, adding 896 million tonnes in annual capacity with INR 1.33 lakh crores using advanced technology for productivity and sustainable mining. Even from an outsider perspective, according to Morgan Stanley, investments in India's infrastructure are projected to grow at an impressive 15.3% CAGR over the next 5 years, amounting to an estimated USD 1.5 trillion in cumulative spending. This investment wave will significantly boost India's growth trajectory, reinforcing its position as an emerging global economic powerhouse. Now coming to the sector and the company. During the quarter under review, ordering activity was weak across all sectors which was expected because of elections but now it is expected to pick up going forward. Just like in the past years, quarter 3 and quarter 4 specifically gets heavy ordering. On the back of our strong order pipeline and our presence across all infra segments, we are expecting a good order flow in the next few months. Currently, over INR 1 lakh crores of NHAI and MORTH orders are already floated and expected to open in this financial year. In this, there is about 70% HAM and 30% EPC. Besides these rolled orders, company is also looking at opportunities in other sectors, where we are evaluating orders of INR 90,000 crores. I'm happy to announce that we got our first breakthrough in optical fiber laying business by securing first order of BSNL in partnership with STL of about INR 1,625 crores. In this order, our share is about 70%. Also to update, as we mentioned last time, there were certain challenges in the JJM project money coming through. We still continue to face those challenges, even though it is on an improvement trajectory, but the situation has still persisted in this current quarter as well. We're expecting more improvement in relief from the next quarter -- this quarter and next onwards. Now in continuation of our vision of DBL 2.0, I'm happy to report that our long-term revenue business is growing at a fast pace. This plan envisages predictable free cash flows, improving return ratios and 0 debt on a stand-alone basis. So when you look at DBL going forward, you will have to look at the consolidated numbers to get a better perspective. Even in this quarter, we have achieved the highest ever quarterly PAT on a consolidated basis. Our focus is to keep increasing this. But in the same breath, if I have to give you guidance on the stand-alone revenue for this year, given that the order inflow has been weak till now, we are expecting a degrowth of around 10% in FY '25. The EBITDA margins are still created to be in the 11%, 12% as we had indicated earlier. However, the consolidated margin will be higher than last year. Let me reiterate that, that the consolidated margin will be higher than last year. The debt reduction guidance on a stand-alone basis for this year may change slightly because of lower revenue and lower order inflow but it will still be reduced from the past year debt. So the key takeaway here is that DBL is focused on being a net debt zero company as we had indicated earlier, even if the timing is postponed by 6 months or so. But our target still remains the same. Now coming to our investment portfolio of HAM assets. I'm happy to inform that recently, we have concluded -- fully concluded the Shrem InvIT deal with transfer of 51% equity stake in the last project. With this, our entire deal with Shrem is concluded, and we will continue to do the O&M of their assets for the life duration of those assets. This provides us with long-term assured revenue stream and this O&M revenue stream, which keeps -- will keep on increasing as our own InvIT asset pool keeps getting larger in size. To talk about our own InvIT as well and to give you update on that deal with Alpha, we are progressing as per the plan. Till now, we have transferred 26% stake in 7 assets out of a total deal of 18 assets. These 7 assets have received COD and the annuity has started. One more asset will receive COD in this month, post which it will also be transferred to Alpha and eventually to the InvIT. This will conclude the first tranche of Alpha deal. Our InvIT formation process is also progressing well. We have received SEBI approval for forming public InvIT. Now coming to our coal business. Our coal MDO business is on an accelerated execution path. I'm very happy to report that we have achieved production of 10.2 million metric tonnes in the first half of the year as compared to our target of 22 million metric tonnes for the full year. We are also confident and on track to beat this target by at least 10% to 15%, meaning we will end up doing this year with almost about 25 million metric tonnes of coal production. Now with this update, I would like to hand over the call to our CFO for the financial overview. Thank you.

Thank you, Rohanji. Good morning, everyone. I welcome all our stakeholders to our earnings call for the quarter ended 30th September 2024. Let me present the stand-alone and consolidated results of Dilip Buildcon Limited for the quarter and half year ended 30th September 2024. On stand-alone basis, on Y-o-Y basis, revenue decreased by 10.3% to INR 2,177 crores against INR 2,427 crores in quarter 2 FY '24. The EBITDA decreased by 24% in quarter 2 FY '25 against INR 294 crores EBITDA in quarter 2 FY '24. Profit after tax increased by about 8% in quarter 2 FY '25 to INR 129 crores against INR 120 crores in quarter 2 FY '24. Now let me update on the consolidated performance of Dilip Buildcon. The revenue on Y-o-Y basis decreased by 13.6% to INR 2,461 crores in quarter 2 FY '25 against the revenue of INR 2,849 crores in quarter 2 FY '24. The EBITDA increased by about 47% in quarter 2 FY '25 to INR 500 crores from INR 340 crores in quarter 2 FY '24. And this is mainly due to better performance of our MDO business and completed 6 HAM projects at the end of 30th September 2024. The profit after tax has also increased by 263% to INR 266 crores in quarter 2 FY '25 against INR 73 crores in quarter 2 FY '24. The consolidated performance for half year basis Y-o-Y. So the revenue decreased by about 3% in H1 FY '25 to INR 5,595 crores from INR 5,769 crores in H1 FY '24. The EBITDA increased by 33% to INR 977 crores in H1 FY '25 versus INR 734 crores in H1 FY '24. The profit after tax increased by 374% in H1 FY '25 to INR 406 crores from INR 85 crores in H1 FY '24. This increase in profit after tax by 374% is mainly due to the better performance of MDO business, completed 6 HAM projects and exceptional items of INR 158 crores. Thank you all. And now we can open the floor for questions and answers.

[Operator Instructions] The first question is from the line of Kunal Ochiramani from Kitara Capital.

I just wanted to ask, like you told you are evaluating some orders of INR 90,000 crores in other sectors. We are well diversified. How to look at your company at 5 years perspective as to how will we gauge the order book and as our realizations or, let's say, the conversion is going down this year, there's a dip in revenue this year. How do you see it in next year and next year up?

Kunal ji, great question. When we're looking at DBL 5 years down the line, how should we envisage as a company. So I think there are two sort of distinct ways that you'll have to look at the company. One is DBL as a short-term revenue and DBL on the long-term revenue basis that I mentioned. The short-term revenue will be the EPC projects that we do. These are typically 2 to 4 years time line projects. And this DBL will continue to do because of all the inherent engineering and execution capabilities that we have built over the last few years. We have our own equipment bank, our own people in all the credentials and an experience of having worked in all around 22 states now. So we will be continuing to do work in all those states in all the sectors that we are already doing. And we may also add some more depending on what new opportunities are presented by the government in the country at that point of time. So we'll continue to do because at the end of the day, the trick or I guess, the biggest thing of doing any infra project is the execution capability and where we are very confident of being able to manage all those nuances of project very well. So that will be one part of the DBL that will continue to keep doing. The second pie, which we mentioned and which will set us apart in the sector and in this area is that we are focusing on a long-term revenue business model as well. So there will be an increasing share in both our revenue and more than that, our bottom line from the long-term business. These businesses, the 2 pillars of those business will be -- one will be the coal business, where 4 or 5 years, 5 years down the line, we will be possibly the second largest maybe after Adani in terms of the coal production that we'll do because we'll be doing almost 60 million metric tonne of coal production by that time. Currently, in this year, we will do about 25 million metric tonne. But at that time, we'll be doing about 60 million metric tonne of coal production, which will give us a clear revenue of about [ INR 3,500 crores to INR 5,000 crores ] of revenue coming from that sector. So that -- and this is without accounting for new projects that we are already bidding for. I'm just talking about the current order that we already have. So when I say the 60 million metric tonne of coal production, this accounts or amounts to almost 10% of the Coal India current production. So that is the scale of operations that DBL will be sort of doing that. And as we add more mines to it, this will keep on increasing. The second bit of this long-term revenue pie will be our InvIT business, the one that we are setting up with Alpha. The 18 projects that we've already committed there already gives us about equity valuation of our 74% that we'll be holding of about somewhere in the range of INR 4,000 crores, which will give us INR 400 crores, INR 450 crores of cash flow every year. This in the next 5 years will also increase because we will add more HAM projects of our own. Also, the InvIT will be procuring more assets from market. So our revenue from that will also keep on increasing. So if I look at a 5-year down the plan, my two large sort of fixed businesses alone will be throwing out an EBITDA of more than INR 1,500 crores easily, like when I'm talking about the coal and just this InvIT business. Besides that, whatever revenue we do on the stand-alone basis will, again, let's say, if you're doing like some INR 8,000 crores, INR 10,000 crores of revenue, let's assume at the same current ratio. Again, if you imagine 10%, 12% of EBITDA, it will again throw out that additionally. So we will have not only increased that bottom line, but we would also have very predictable and assured long-term cash flows, which in this sector and this industry is difficult to find. So our learning after COVID was we want to build an institution where there are long-term predictable cash flows and we can continue growing that business year after year. So that was the idea of -- and that's where we see ourselves in 5 years from now.

As to how we see as the company is when we value or when we see our coal business and InvIT business is fairly estimable that we can estimate and we can arrive at a value or we can -- we have some visibility on the business. Can you comment something on EPC side as to how will our order book grow or some internal estimates you guys see that at least 10% or some ballpark number you have in mind?

So DBL in the past was obviously known for a faster growth rate where we were also investing a lot in our -- both our bank facilities and also investing in equipment. Going forward, as we have indicated, we are targeting a growth of 5% to 10%. So that is the growth rate that we'll continue to target. Now when it comes to a 5-year plan around what are the businesses, that question is better asked to the government because they are the ones who planned out. They have laid out a vision. If you look at the last 10 years of this government, they have kept on increasing the infrastructure budget year-on-year. When in 2014, the total infrastructure budget was about INR 2.5 lakh crores or somewhere in that ballpark. Last year, it was about INR 10 lakh crores sorry INR 11 lakh crores. This financial was INR 11 lakh something crores. So this pie will keep on increasing. And as this pie keeps increasing, our business should keep on increasing as we have also gone into different sectors. So that's how it will look, sir.

[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.

Sir, just a couple of questions on one of your construction part. You have explained very well on the MDO and InvIT part. So first is this BSNL order, so what would be the 70% EPC value, excluding GST for us?

Shravan, the total order value is INR 1,625 crores, and we have 70%, about 75% work basically allocated to us. And this value is basically construction. And thereafter around 7 years, there is an O&M also. So there will be additional revenue from O&M also, which is not included in INR 1,625 crores.

Okay. So here also the 18% GST is there?

Yes. this is exclusive GST, sir. This number that you see, INR 1,625 crores is excluding GST.

Excluding GST and the O&M value, which is about INR 925 crores or something, INR 975 crores.

So about INR 1,000 crores of O&M will also come.

Okay. And sir, you have mentioned that is including the GST, INR 1,625 crores is including GST.

I don't think sir it's including GST, but we'll...

No issues. So...

Our [indiscernible] part is 70% in the execution and the O&M. So O&M is also INR 975 crores above the INR 1,625 crores.

Okay. Got it. So now broadly in terms of order inflow for this year, so you have highlighted even INR 90,000 crores tenders you are evaluating. So if you can also help us in terms of sector-wise breakup, which are the segments and also road also, if you can help us what's the pipeline and what we are looking at. So net-net, INR 1,100 crores plus this INR 1,200-odd crores, so kind of a INR 2,300 crores kind of order inflow that we have already received. So how much more we will be looking at for this year. So INR 15,000 crores, INR 16,000 crores last time we said that we are looking at in terms of inflow. And also just to clarify, out of this, are we also including the MDO mining inflow that we normally take for 3-year kind of a revenue. So that is also included in this whatever the full year order inflow we are looking at?

Sir, when we speak about new order inflow, when we mentioned INR 15,000 crores to INR 16,000 crores, that is only -- that means the new order that we are targeting this year. It doesn't include what have already we won, number one. Number two, the target remains to be in that zone only that INR 15,000 crores, INR 16,000 crores that we mentioned. I obviously can't give you a breakup of all the sectors like or a piece-by-piece breakup of all the sectors that -- like how you're expecting. But the current sectors that we're working in, these orders are in all those sectors and we are looking at those orders. So that's the key takeaway. Unlike -- I mean, even in the past, we've never given like a detailed breakup of each sector this thing. The road sector we do mention, the other sectors we give you an overarching picture and that we are bidding for these projects. So that's what we've tried to do here also.

Okay. And now in terms of the debt reduction, so just to get more clarity, so which has increased close to INR 700 crores plus in 1H at a gross level. So how one can look at in FY -- from now onwards, how much more reduction we are looking at by March end? And in terms of the net debt free by FY '26, so that remains intact?

Shravan ji, the debt is primarily increased because of the working capital changes, especially the delayed receivable from JJM projects and the accumulation of the GST and TDS credit and we have faster paid to creditors. So in all, we have basically invested in working capital around INR 700 crores and corresponding debt has increased. In terms of debt reduction, Rohan ji already detailed in his speech. Rohan ji, please.

Shravan ji, we -- like I mentioned in the speech as well, our target still remains to reduce debt. While we will be able to achieve the earlier number that we have done or not remains to be seen. We are optimistic. But even though if we rationalize it a little bit to take a prudent sort of look at things, we will reduce the number of debt, the amount of total debt will be lower than last year's debt. So that is for sure, we are aiming. Even though it might not reduce to the level that we earlier thought it will. And primarily is because we didn't get the orders that we thought we will, which would have culminated into revenue and improved our margins. Number two, when you get new orders, you also get the mobilization advance, which culminates into changes in -- of the older projects where mobilization advance is getting cut. So there is always a sweet spot, which continues going there. So that's why.

And Sharanji, let me add to Rohan ji, what Rohan ji said. So this is a temporary phenomenon. The old -- our debt-free company, the [ estimates ] are fintech. So what we envisage in past, the company will be debt-free on the similar lines.

So net debt free -- so will it -- now are we saying that we can be a net debt free by even FY '27 and may not be in FY '26?

Yes, yes, sir. It's not FY '26, FY '27. So like '27 is where we will do it. So that's why I said, there is a postponement of this trajectory that we had started on because of things which are outside our control, the lower order sort of inflow that came in and all of that and revenue that got hit. But the trajectory still remains the same. There is no plan to sort of change this or do anything else. The trajectory you will see here onward happening.

Okay. Okay. And what was the DBL Infra debt? Was it the similar INR 650-odd crores as on September?

Yes. So the net debt at Infra -- DBL Infra asset level is INR 645 crores.

Okay. Got it. And so broadly, in terms of the -- whatever the -- we are looking at INR 400 crores, INR 450-odd crores inflow to the -- as a dividend and plus interest and everything. So how much broadly -- so this 1H have we -- how much we have received at a stand-alone level? And if possible, how much more we are looking at in the second half and then maybe FY '26, if you can help us there?

So Shravan ji, the total inflow, what is projected to be received from the overall unit holding in [indiscernible] around INR 95 crores. Out of that, around INR 45 crores has been received, and it is in 60-40 ratio, 60% in DBL and 40% in Infra debt.

Okay. Okay. Got it. And then this Alpha Alternative will start from FY '26 onwards only?

Yes.

Okay. Got it. And just to recheck in terms of the CapEx, just of INR 46 crores we have done. So for full year at stand-alone level, how much we can look at?

Shravan ji, the total CapEx in FY '24, '25 would be around INR 150 crores. So total INR 116 crores is already incurred.

Okay. Okay. Got it. And sir, when we say now we got the SEBI approval for [indiscernible], so does that mean that it will be listed on the stock exchanges?

This is trust approval and the lawyers and the bankers are creating the document. So it will be filed once ready. So our plan to launch the InvIT will remain intact.

Yes, it will be listed on the exchanges, sir.

So maybe 6 months down the line, one can look at this will be listed?

Yes, 6 months or so, sir.

The next question is from the line of Deepak Purswani from SVAN investments.

Sir, just wanted to check it out on two questions. Firstly, on the net debt front, we mentioned it has got delayed by 1 year and we are looking at net debt free by FY '27. What is the expectation by end of FY '25 at the current juncture now? Earlier, we were saying it would be around INR 1,000-odd crores. How should we see this year, we would be closing it out?

So Deepak ji, the net debt at end of '24 was INR 1,515 crores. Today, the debt has increased because of the delayed receivable. We are expecting some relaxation. So there will be a reduction in FY '25 end, but we can't promise a higher number, but it will be definitely reduced from the level which we had on 31st March 2024.

Okay. And secondly, it's good to see there is a sharp ramp-up in the MDO business. I think volume on the overall basis has increased to 10.3%, which is close to last year volume in the first half itself. If you can also share the revenues and EBITDA, how much has been the total revenue from the MDO business in the first half? And what has been the EBITDA?

Deepak Ji, we don't share the entity to entity EBITDA. So I detailed out in my presentation. The increase in consol performance is because of these factors, the MDO business and the completed and projected.

Okay. And in terms of the further ramp-up in the production of MDO, how should we look into the full year as a whole now currently? And what should be the expectation over the next 2 years for the MDO business?

So MDO, there are two MDOs, CRML and Pachhwara. Pachhwara, there is a fixed production of 7 million tonnes, we will be achieving this year. And this 7 million tonne will continue for 55 years. So the performance, what we will do this year will continue for the next 54 years. In terms of CRML, this year, originally, we have indicated target by 15 million tonnes. And as Rohan ji detailed out in his presentation, we will increase this production by 10% to 15%, meaning 17 million, 18 million tonnes this year. So in total, it is 24 million, 25 million tonnes this year, MDO business. And next year, it will rise by another 10 million tonnes. So -- and in FY '28, we will be doing 60 million tonnes, as Rohan ji said.

The next question is from Narendra from RoboCapital.

I am I audible?

You are audible.

So sir, earlier, you had -- if I'm not wrong, you had guided for a INR 15,000 crore kind of order inflow. So are we still expecting that...

Yes, we have guided for an order inflow of INR 15,000 crores just last year -- I mean for this financial year.

Sorry, sir, I did not get you, sorry.

You're saying we have guided for a INR 15,000 crore order inflow, right? That's what you ask, sir? Yes, we have guided for that.

So are we still on track? Or do we see some softness?

Yes, we are optimistic on that number because there's still -- the larger orders have not sort of been bidded out and we are bidding for them. So we are already sort of working on those orders. Like I mentioned, there's almost a INR 2 lakh crore order pipeline that DBL is currently evaluating. So we are fairly optimistic that we should be in that range. And out of that INR 15,000 crores, we've already won orders about INR 3,000 crores till now. There's INR 12,000 more crores that we need to win.

Okay. Okay. Great, sir. And on the margin front, sir, there was some softness this quarter. So was it due to the seasonal nature or what was the reason? And are we optimistic for that 11%, 12% kind of margin?

Yes, the margins were soft because of seasonality and also because of lower execution. However, we have guided towards an 11%, 12% margin only for the year, keeping in mind some of these things. So that is how you should look at the year on a stand-alone basis.

Okay. Okay, sir. And would it be possible to give a light on the margins in the MDO project that you are doing? What would be the ballpark number for margins there?

Sir, we don't share margin sector by sector. We look -- we only share like company margins.

So if I am not wrong, you mentioned that you will be getting around INR 1,500 crores of EBITDA from these long-term projects, right, the InvIT and the MDO project, right? You did mention that.

Yes. So that those -- we've mentioned those 3 -- like the 2 items, the inflow from InvIT and the MDO business.

[Operator Instructions] The next question is from the line of Vaibhav Shah from JM Financial Limited.

Sir, so you guided for a 10% decline in terms of revenue for FY '25. So given the lower base now, so can FY '26 see a better growth or it should be in the range of, say, 5% to 10-odd percent?

Yes, sir, obviously, it will see because we will have the orders that we have guided for. So once that execution starts, there will be a ramp-up in revenue.

So any particular guidance from your end in terms of revenue growth?

Sir, I think to give you a better perspective on that will be when end of the year, we are sitting with the order book and where we are exactly, we'll give you a better precise number rather than shooting in the dark right now with still expecting for orders.

Okay. And over the longer term, say, 2 to 3 years, our margins should be in the range of 11% to 12%?

Yes, sir. Easily, it will be in that 12% and all, it will be easily there. Though we should look at the consol numbers going forward, like we mentioned, because all of it will not be captured on the stand-alone, the margins that the company will be making. So we should start also paying closer attention to the consol numbers as we go forward, sir.

The next question is from the line of Saket Kapoor from Kapoor & Company.

Sir, firstly, if you could explain to us the BharatNet project, which we have back in consortium with Sterlite, what is our scope of work here? And for the O&M part also, the proportionate of 70-30 holds good?

The scope of work there is the trenching and laying of the cables. That is what we'll be doing in execution. And it's the maintenance of the same in O&M.

Sir, I missed your point. Come again, please.

Sir, it's the trenching and laying of cables and the O&M of it.

Okay. And in the O&M also the INR 925 crores, 70-30 ratio prevail similarly?

Yes, yes, sir.

Okay. But taking into account the realm of things and the space where we are, what drew us to this [ INR 1,200 crores ], INR 1,500 crores, INR 1,800 crores order in a totally different field altogether. All those are I think we bidded for 8 of the packages, but we were awarded one. So if you could just give us some color on the experience and we have garnered from this type of participating in the project? And how does it make that significance for us to diverge into these businesses or these line of operations?

Sir, obviously, we had bid together, we and STL had bid for all the packages. Unfortunately, we were not -- we did not win more. So our idea was to obviously do a bigger portion of this. Now coming to what is the work and expertise. This is a very simple job compared to a road business or any other infrastructure business that we do, whether it is metro or tunneling, all of it is far more engineering-wise, more complex. This is a simple trenching, digging up of a hole and then laying that. So we already have the equipment for that and manpower. So it's a very simple job that we'll be doing and this kind of stuff we already do on our road projects and all. So it's a very simple sort of project execution where we already have all the equipment and people. So that's why we were doing it along with this...

Sir, when we look at being one of the MDO operator for the coal mine part, what is the -- how many players have been garnered that project? Or are we simply operating the mine?

So I didn't understand the question, sir.

Sir, I was trying to understand whether in the coal mine part also, there are a lot of players operating in as MDO or are we the sole people?

Sir, there are people in the coal business as well. They are very separate than what we see in the road business. There are a separate set of players in the coal MDO business. And because it has a different set of challenges. So there is decent competition there as well.

Sir, I didn't get the point. Sir, I was asking that as an MDO operator for the mines where we are operating and we are also alluding to the fact that going ahead, we will be the second largest MDO operator for coal mines in India after Adani. So in this project also, we are garnering the total output for our client as a single person or here also, we have formed a consortium and we are sharing a part of it?

So we said we have two MDOs, one 50 million tonne every year and 7 million tonnes every year. This makes to 57 million tonnes. So today, we have two principles only. PSPCL Pachwara and MCL for CRML project. So with these two, we will be achieving about 60 million tonnes. And there are other set of MDO players in market like Adani and others. So there are a few people working in MDO segment as well.

Okay. And sir, what explains the increase in capital work in progress at standalone number also? And if you could give the breakup for the consol part also, capital work in progress.

So in terms of capital work in progress in consol, for stand-alone basis, it is INR 80 crores. This is part of our INR 150 crores total CapEx this year at a stand-alone level. And in the SPVs, the HAM SPVs, the capital work in progress is HAM capital work in progress. And one part of MDO. So in CRML, we have capital work in progress for the project CapEx, which is already approved by the authorities.

Okay. And lastly, sir, we have also heard from BSNL in fact, that one of the tender participant has even approached the court to challenge the tender process, having unfair practices. So are we aware of this? This is a notification from BharatNet from BSNL itself dated yesterday, 13 November.

So we are not aware about any objection made by any participant in the tenders.

The next question is from the line of Rishikesh from RoboCapital.

Sir, in the last call, we had shared that we were going to receive around INR 477 crores from Alpha during this year. But it looks like the time lines have been shifted to FY '26 and FY '27. I would like to know -- is there any possibility for these cash flows to go beyond FY '27 as well? Or are we fully confident that we will receive these cash flows in the set time lines?

So let me correct basically. The last year -- last quarter presentation, INR 477 crores was shown from the 8 assets. So balance 5 assets we have shared, INR 477 crores will be received. Out of that, only INR 61 crores is pending, you refer the line on Page #28, only from 8 assets. And the another line is added for the another 10 assets, 26%, which is INR 450 crores -- INR 550 crores. So that 10 asset is still not complete. So once the asset will complete, this INR 550 crores is additional to the INR 477 crores. So out of INR 477 crores, only INR 61 crores is pending. Others already received.

Okay. So we are saying that around INR 400 crores has been received basically?

Yes.

The next follow-up question is from the line of Shravan Shah from Dolat Capital.

Sir, I just wanted to check when we are saying our net debt, even if we are saying some reduction will be there on Y-o-Y basis. So that seems close INR 800 crores kind of a reduction that we are looking at in the second half of this financial year. So can you help us how this will be done?

So one is basically we are expecting the unlocking the working capital, what we invested in first half. So it is basically the JJM projects and the TDS and the income tax refund. So basically, the original position will be restated by 31st March 2025 and further reduction from the operational cash flows. So we said from the FY '24 level, there will be slightly reduction as of 31st March 2025.

Okay. Got it. So in terms of the 1H in terms of stand-alone, the finance cost is close to INR 242-odd crores, so INR 120 crores, INR 122 crores quarterly. So at least for next 2 quarters, the similar run rate will be there?

So Shravan ji, I would say a little bit relaxed from the first half, not very significantly down. But yes, it will be in the range where we are in H1.

Okay. Okay. And sir, in terms of the inventory days, so obviously, we are trying to reduce, but do we see that any material reduction is possible even in next 1, 2 years?

Shravan ji, we are working for each and every balance sheet item. So yes, there will be reduction in working capital days going forward. I can't tell you whether it will be in inventory or debtor. But yes, there will be net debt -- net working capital debt will be reduced by some extent.

[Operator Instructions] The next follow-up question is from the line of Saket Kapoor from Kapoor and Company.

Sir, for the margin profile for the BharatNet project, can you explain to us how the margins will look like?

We try and bid all projects on a similar margin profile. So what we have indicated towards this project will also have that kind of margin profile.

So this 11% to 12% EBITDA margin is what we are eyeing even for the BharatNet business?

Yes. Yes.

Okay, sir. And sir, since you yourself mentioned that we have bid in consortium with Sterlite with for all the projects. So is this margin profile the key reason for so many people participating for these packages? Or what has led to you garnering only one of the same and not getting further even though your partner is -- has an expertise in laying off OFC cable?

Sir, we are also evaluating, but that is live. When you bid for a lot of projects, even on the NHAI road side, we end up winning 5%, 6% of the project that we bid for. So similarly here also, we had bid for enough, but we didn't get -- so it's just hard luck, tough luck. It's the nature of L1 business, and that's how it kind of works. Either you work on your margin profile or you reduce your margins and then you can get more orders.

Okay. Sir, you have also spoken about delay in receivables. So which entity -- government entity has delayed in releasing the funds? And in which projects?

Jal Jeevan mission projects, the central government has not released their share to the states, which is why there is a delay. So -- and this is across many states. In fact, all states where JJM projects are moving, the central government has not released its part. Only the state government have been doing their part, which is why there is a buildup of sort of these receivables from the government in these projects. And this is across for all players across all states.

And what are the reasons the government have highlighted for this noncompliance from their end? Are we not getting any milestones?

Yes, there's an increase in budget, but you are asking the wrong person that question. I think you should be asking the government that question, what are the reasons? I only know that there is an increase in budget, which is why they are sort of evaluating how to -- and resort of stating the budget and getting more approvals there. That's the reason that I know. If there are more things that are happening in the background, I am not privy to that. But you should definitely reach out to the government and ask them why has there been a delay in the payments.

Okay. And sir, lastly, on the Amrit 2 scheme also, wherein the river linking projects have also been -- have been showcased. So what is -- in your bid pipeline, do you have the river linking project of the central government under the Amrit 2 also, wherein we are participating or we are keen to bid for?

Sir, whenever these projects come and they fit into our project profile, so if they fit into our project profile and the kind of projects that we look at, then we'll obviously bid for them. That's all I can say on that matter right now.

Okay. So we have not exactly bid as of now for [indiscernible] projects?

No, sir, we have not.

Thank you. Ladies and gentlemen, we'll take this as the last question. I now hand the conference over to Mr. Rohan Suryavanshi for closing comments.

I thank all the participants to come and ask all the questions that they had. We are -- if anyone could not get their questions answered, please feel free to reach out to our IR or our team, and we'll be happy to give you more information on that. I look forward to seeing you guys in the next quarter, the next year. I wish you all a great new year, and I hope all of you had a phenomenal Diwali. Thank you all from everyone here at the DBL team.

Thank you. On behalf of Dilip Buildcon Limited, that concludes this conference. Thank you for joining us and you may now disconnect your line.