G R Infraprojects Limited (GRINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the GR Infraprojects Limited Q1 FY '25 Earnings Conference Call hosted by HDFC Securities. This conference call may contain forward-looking statements about the company, which are based on the belief, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Parikshit Kandpal. Thank you, and over to you, sir.

Thank you, Deepika. Good afternoon, everyone. Today, we have on this call, Mr. Ajendra Kumar Agarwal, the Managing Director of GR Infraprojects. We also have Mr. Anand Rathi, who is the Group CFO of the company. So without taking any further time, I would now like to hand over the call to Mr. Ajendra Kumar Agarwal for his opening comment. Thank you, sir, and over to you.

Thank you, Parikshitji. Ladies and gentlemen, a very good afternoon. Welcome to conference call to discuss the operational and financial year performance of GR Infraprojects Limited for the first quarter of financial year 2025. Joining me is our CFO, Mr. Anand Rathi. I will now take you through the key highlights of the quarter and developments in the infrastructure sector as part of Union Budget 2024, '25. Revenue in first quarter of 2025 stood at INR 1,897 crores with an EBITDA margin of 13%. The revenue declined by 12% in comparison to corresponding period in the previous financial year, whereas the EBITDA margin reduced by 14.6% to 13%. As on date, the company has 29 projects on hand. Spending across highways, railways, metro, rope way transmissions, tunnel, hydro and multi-model logistic park. 22 of these projects are ongoing, and we are awaiting appointed dates for the balance which are expected by Q2 and Q3 this year. In addition, we emerge as the lowest bidder for 2 EPC road projects in Maharashtra, for which letter of award is expected by end of Q2 or early Q3 this year. The overall value of order book as on 30th June stands at INR 19,075 crores, which includes the 2 EPC road projects with L1 status in Maharashtra. Almost 200 bps with value of over INR 260,000 crores are currently in pipeline, across amounting to INR 15,318 crores towards highway railway, metro -- sorry, pipeline across the various sector I mentioned earlier, the company has so far submitted 16 bps amounting of INR 15,318 crores towards highways, railway, metro and transmission sector. In the current financial year, these bids are expected to be open soon. And in the meantime, we are working on submitting other bids as and when they are called. Moving on the sector highlights and infrastructure development in India. The union budget presented last month aligns perfectly with our internal capabilities and aspiration. It reflects the government's commitment to infrastructure development and economic growth, reasoning with our strategic direction. The government has allocated over [ INR 110,000 ] crore for infrastructure this year. Road Transport and Highway has been allocated INR 278,000 crore. Railway has been allocated INR 265,000 crore. Logistics and supply chain sector has been allocated INR 200,000 crore. Metrorail has been allocated INR 24,900 crore. NHAI has also announced a pipeline of 53 projects worth about INR 200,000 crores through the BOT mode in the next 3 to 5 years. The revised modeled concession agreement announced by NHAI provides significant risk mitigation and make it investment-friendly. NHAI has already invited bids for 13 projects under the BOT mode and more bids are expected in this second quarter. This underscores a commitment to rapid growth and present a substantial opportunity for the company. Our expertise in delivering large-scale projects on time, position us to benefit significantly from these developments. As mentioned earlier, the company is targeting order pipeline worth INR 259,000 crores across high, railway, metro, rope way, transmission, tunnel, hydro, multi-modal logistics pork. We aim to add a decent share to our order book in financial year '24, '25 and take the company back to double-digit growth in financial year '26. At GR Infraprojects Limited, we will continue our strategy of diversifying our portfolio and size these opportunity -- opportunities, thereby contributing to society and [ Nesson ] building. I'm confident in our strategic direction and our ability to succeed in new markets, our strong team and focus on project delivery will continue to drive our success. Now, I will hand over to Mr. Anand Rathi for an update on our financial position. Thank you.

Thank you. Also, let me take all partners of this call through the financial highlights of the quarter for the quarter ending June 30, 2024. Our stand-alone revenue from operations decreased by almost INR 256 crores from INR 2,152 crore to INR 1,897 crores in the quarter ended June 2024 compared to the quarter ended June 2023. This decrease was primarily on account of lowering of our order backlog as well as delay in getting the appointed dates in the new HAM projects. As a consequence, consolidated revenue from operation also decreased by INR 448 crores, a decrease of almost 18% from INR 2,478 crores to -- in quarter ended June 23 to INR 2,030 crores in quarter ended June 2024. A stand-alone EBITDA margin has decreased to 13% in the quarter ended June 2024 from 14.62% in quarter ending June 2023. This decrease is primarily on account of decrease in operating revenue, as mentioned above. EBITDA margin at the group level also decreased to 18% in the quarter ending June 2024 from 24.51% in the quarter ended June 2023. Our PET margin at stand-alone level after excluding net of taxes, exceptional losses, decreased by 5.9% to INR 196 crores in the quarter ended June 2024 as compared to INR 208 crores in quarter ending June 2023. Similarly, our PET margin at a consolidated level after issuing net of taxes on exceptional losses, decreased by 35.5% to INR 199.8 crores in quarter ending June 2024 as compared to INR 310 crores in quarter ending June 2023. Our stand-alone network stands at INR 7,350 crores at the end of quarter ending June 2024, which was INR 7,196 crores at the end of year -- fiscal year March 2024. Net worth at consol level is INR 7,760 crores at the end of quarter ending June 2024, which was INR 7,602 crores at the end of fiscal March 2024. Our total [ external ] borrowing outstanding at the end of quarter ending June '24 is INR 840 crores, which includes certain borrowing of INR 200 crores, with debt-to-equity ratio of 0.11x. Total consolidated borrowings outstanding at the end of quarter ending June '24 is around INR 4,528 crore with debt to equity of 0.58x. During the quarter, company has made addition to the fixed asset amounted to INR 22.6 crores net block of property, plant and equipment intangible assets is INR 1,328 crores at the end of current quarter. Investment in our subsidiary company in the form of loans and equities is INR 1,835 crores at the end of June 2024. Balance Promoter Content is required to be made for our operational HAM projects or under construction HAM projects put together, of which we are expecting contribution of INR 600 crores in this year. Our working capital days at the end of current quarter is 122 days as compared to 112 days at the end of fiscal 2024. This increase is primarily on account of increase in SPV debtors. Trade receivable at the standalone basis, [ INR 2,174 crores ] which includes INR 1,903 crores of -- from SPV at the end of current quarter, trade receivable at the consolidated level are INR 285 crores at the end of current quarter. Inventories are at INR 697 crores at the end of current quarter as compared to INR 768 crores at the fiscal -- at the year ended March 2024. Our unbilled revenue at the end of -- at the standalone basis is INR 651 crores at the end of current quarter, which was and that unbuild revenue at the consolidated level is around INR 94 crores at the end of current quarter. I sincerely thanks all our stakeholders, including employees, business partners, vendor, banker, auditor for their full added support in our corporate journey. On behalf of G R Infraprojects Limited, I thank everyone for attending this earning call. Thank you very much. May I request the moderator to open the floor for question and answer, please. Thank you.

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

Sir, just a data point. What was the trade receivable you mentioned at standalone? And what was the HAM data?

Trade receivable at standalone level is INR 2,174 crores, which includes SPV data at INR 1,903 crores.

INR 1,903 crores.

Yes.

Okay. And payable was how much as on June?

Payable is around INR 840 crore -- or INR 850 crores.

INR 850 crores. Okay. And this total equity to be infused now is how much or INR 600 crores or you said to be invested in FY '24.

Current year, we are expecting INR 600 crores, but totally, which is required for the ongoing projects is around INR 2,000 crores.

Okay. INR 2,000 crores is required to be invested. So sir, our basic broad just in terms of the guidance, just so last time we said a flat revenue growth for this year. And for next year, FY '26, 15% to 20%. So is there any change in that spend?

No, I believe so because we just started -- just started in the current year, and we believe that we'll be getting more projects. And as more projects have been announced where the government also are now coming -- government also coming into power, we believe that we'll be getting our expected orders over the next 3 to 6 months. And it will be -- actually we aim to achieve almost 50% to 20% growth for next basically fiscal. And current year, of course, it's a flattish maybe 5% here and there.

Okay. 5%, you're saying it can be a positive.

Maybe positive, maybe -- I mean, so 5% plus or minus, but it is almost -- what we I mean because we are waiting because so far, we have been declared L/1 for EPC projects not yet started. If we are able to start, maybe we'll be -- we may get 5% kind of growth as well for the current year.

Okay. Sir, total order inflow for now, for full year, how much we are expecting, or including this INR 4,400-odd crores that L/1 we have.

Total [Foreign Language] INR 15,000 crores [Foreign Language] we are already L/1. Approximately INR 20,000 crores for the current we are targeting.

Sir, INR 20,000 crores total we are targeting for full year, you are saying?

Yes, yes.

Okay. Full year. [Foreign Language] broadly INR 5,000-odd crore, INR 6,000 crores?

INR 5,000 crores to 7,000 crores.

Okay, INR 5,000 crores to 7,000 crores non-road [Foreign Language] And margin of 13% [Foreign Language] 13% can be achievable?

13% or even more than if we are -- again, if we are back on this track of more than double-digit growth. Then probably we can again come back to 15% kind of margin, 14%, 15%, because we are not utilizing our capacity to its full extent. We are under utilized. So [Foreign Language] that's the case. I mean in the current quarter, we are already down, right? So if we are back on track, it will be 13% is maintainable.

Okay. And [Foreign Language] the value is how much, sir?

Value, it's almost INR 7,000 crores.

[Foreign Language].

[Foreign Language].

[Foreign Language].

It's already ongoing.

[Foreign Language] by Q3, everything will be executable.

Q3 [Foreign Language] we are expecting [Foreign Language] we are expecting balance all would be executable. So maybe [Foreign Language] then everything would be what we believe on their execution.

Okay. But lastly, other income [Foreign Language] anything specific in that? And will this INR 108 crores kind of a quarterly other income run rate can continue? [Foreign Language]?

[Foreign Language] dividend we have received almost to the tune of INR 60 crore [Foreign Language], which we expect will be continuing for the every quarter in this kind of range, right? [Foreign Language] otherwise, earlier, we used to get interest on our investment, but now we'll be getting dividend or interest, whatever, which is [indiscernible] distributed value.

Okay. INR 60 crores every quarter is kind of a predictable dividend income.

INR 50 crores to INR 60 crores you can expect.

[Operator Instructions] The next question is from the line of Mohit Kumar from ICICI Securities.

My question is on the tender pipeline for NHAI. So how this have been -- have you seen any accretion in tender pipeline, especially post election?

So pipeline I mean for last, I would say, 8 to 9 months, we have been -- the pipeline was visible. But somehow those projects were getting extended, right, because of whatever situation, which was fueling in the country, right? Now government is back again into action. You might have heard of the news that the cabinet approval -- cabinet has given the approval for 8, 9 projects, almost INR 50,000 crores of I think NHAI is again back into Axon. Maybe another end, the minister is also -- you might have heard him saying that he will be awarding INR 3 lakh crore of projects next 3 to 9 months or 6 to 9 months like this. So we believe that because the government is already in place, and there is -- budget has also been allocated. I believe that NHAI will be coming into action very fast.

But the earlier understanding was that the Cabinet has to approve the enhanced project cost of Bharatmala Pariyojana. It looks like the government is looking to give the approval project-wise, is that understanding correct?

You can say, maybe some sort of correction is required may not be project wise -- maybe corridor wise like in 8 to 9 projects, they've especially given the apple for corridors, right? So yes, of course, and Bharatmala Pariyojana probably they may not continue, but yes, what I also understand from various sources is that probably that the Ministry or the government, government, especially that cabinet committee would be giving approval to the corridor-wise project or something like this?

Understood. My last question on this, sir. You have said that you've submitted bids cost 16 projects amounting to INR 15,318 crores, is it possible to break up this titer and non-road sector?

So road is, I think, around INR 10,000 crores. In balance is basically in power transmission and railways and so road is almost INR 10,000 crores [indiscernible] those numbers... Out of INR 15,000 crore, road is almost INR 13,000 to INR 14,000 crores, balance is railway, 1 project of railway. No, no. Sorry, let me come back, right?

Sir, my last question excusing. So which are the assets you're looking to transfer to InvIT in the next 9 months? How many assets?

This is the project which is already operational for last one year is Aligarh Kanpur, which we have already got the approval and we are waiting for NHAI approval. Approval for NHAI is basically in terms of NOC for change of shareholding and all that, which we have already moved in with NHAI. And as -- in fact, we are having one more project, which is operational, just got of this current year only in the month of April or I would 31st March also available. That would be the next project. And we will be getting 4 more projects getting COD in the current year. So it may not be in the current year, we'll be able to transfer to, but yes, next year we'll be able to transfer to see more. 3 or 4, projects more.

Yes, 2 in next year have 2, right, sir? 2 in this year, right sir?

Yes.

[Operator Instructions] The next question is from the line of Anupam Gupta IIFL Securities.

Sir, just 1 question. So of the existing order book, what quantum is under execution at this point of time and you said 7 projects are awaiting AD but what is the quantum of those projects?

See, under execution is almost INR 8,500 crores, which is under execution, right? -- and INR 7,000 crores for which afforded date is at INR 4,200-odd crores would L1 instructors.

That's right. And the appointed dates awaited, when do you expect the INR 70 crores, let's say, if you look at next 2, 3 quarters, what proportion do you expect to start in the next 2, 3 quarters?

INR 5,000 crore, INR 5,500 crore will be expecting by end of Q3, right? And for next 1 to 2,000 will be mostly -- I mean, we are -- from open will be getting by Q4.

Okay. So basically then, let's say, if you take this, then what is the guidance, if I don't know, we I missed it. What is the revenue guidance that you're looking at from for this year then?

So last quarter also, we have given the guidance that we'll be keeping our -- I mean, we'll be getting our revenue flattish for the current year unless until we get some more EPC projects, which can be started at early dates, right? So then probably we can have the growth of 5% otherwise, it's more or less like this.

Okay. And whatever you are targeting this year, INR 22,000 crores ideally should largely contribute ideally next year, right, given the time lines, which are already given.

EPC, we can probably cross some revenue from those projects, if you -- it goes for those are EPC, otherwise if we have more sort of [indiscernible] then certainty, we will be getting revenue next year.

Okay. And just 1 last question. So when you are taking these projects in non-road sector, which is railways and [indiscernible] and all of these segments. Will these segments also give you similar 14% margins? Or will it be -- so NRI and margin? I'm not talking about the operating leverage, which you get because you grow a double bit, but [indiscernible] bid margins is what similar to roads or lower than loans?

See, we have recently diversified into transmission, right? So there probably we are making up stronger day by day. So what we believe is for transmission, we'll be having this kind of margin, 12% to 13% or 15% kind of maybe from next year and then we are getting more projects. Railway, we are very much comfortable with 13%, 14% kind of EBITDA margin, right? And [ growth ] pay, we are also comparable 34% of EBITDA margin. So -- and we are directing into tunneling as well. So again, this option we started last year only, right? So maybe the next 2 years, we'll be getting this kind of margin. We are from beliefs that we'll be having this kind of margin in these sectors.

The next question is from the line of Nidhi Shah from ICICI Securities.

Yes, -- so firstly, on the other income on the service and listed but what is the reason for the increase of the other income this quarter, as we can see or that the previous 4-quarter has been nearly half of the 1 that we posted this quarter in the stand-alone.

Yes. So in other income, more than 50% or, I would say, 55% -- I mean 50%, 60% of that component we are getting from with the dividend distribution or interest distribution, right? So earlier, we used to get our standard interest those projects, right? While it was not transferred to InvIT at that point of time. And this time, we are getting some higher interest or dividend, right? So that's the basic reason. Our dividend income, which we believe is the next whole year, we'll be getting in.

Okay. So can we assume that right now, it's a little over INR 100 crores can you assume INR 450 crores to INR 500 crores coming from this full year.

I think, if we can safely assume that we'll be getting INR 200 crore or INR 225 crore particular range, right? And balance maybe unbred also for INR 300 crore to INR 350 crore would be, I think just the good range.

300 to 350.

Yes.

Okay. Okay. So that was on the income -- the other question that I had is, as you mentioned and I think just the previous question is that if you have any recent any EBT project that you have open soon, then this would be 5% growth. Do you see anything in your pipeline as of now something that we're possibly targeting? What is the -- do you see any probability of that happening anytime soon?

That pipeline in getting -- I mean, so you're talking about pipeline, right?

Yes. Especially for the ones that we can probably start this year, those projects.

This year depends on how -- I mean, if you are getting EPC we will be bidding for EPC, right? We will be bidding for EPC, we'll be bidding for HAM, we will be bidding for DOT. So if we are able to get more EPC, we will be stop executing those currently itself, that is how -- I mean industry behaves, right? And probably we can have growth of 5% at least. And if you are getting more projects BOT-HAM mode, then probably this year would be flattish or plus minus 5%.

So in your understanding, are those projects -- those EPC projects on the horizon right now. Is there something -- is there any projects that you would probably name with any rupee amount that are probably, say, something that you would be targeting this year.

Total INR 250,000 crores, when INR 260,000 pipeline, there is a EPC of around INR 80,000 crores, INR 85,000 crores of projects, which are under, EPC mode, right? So we'll be targeting those projects as well. But at what time and when that annexure will be coming with the bids for those EPC and when will be getting that also, I mean, so right now, it's very difficult to say. We'll be able to start whatever EPC projects get in the current year. This is where we get L1 status or whatever award is being given to us.

And my last question, absolutely would be on the on the BOT projects, how are you planning to do the bidding reset? Would you want to do any financial allowances with somebody else? Or is this being independently bidding for these projects?

See, we can independently bid that project would -- generally that both projects, which I have been so far announced that we can do independently. We can explore other options as well. So right now, I think, it's very difficult to comment on this. But yes, even if we -- I mean we can explore what will be the best suitable mechanism or the framework, which will be -- depending on that, basically, the [ system dilution ] will be take our call forward. But yes, we can bid on independent business as well. So there is no challenge.

Right. So from my understanding, then there is there's no right strategy you're looking at project-wise?

Sorry, come again?

My understanding is that you will be looking at your bidding strategy project wise, and there is nothing that is as of now that every project will be done .

Not yet fixed but that strategy has to be -- it is yet to be formed, right? It is not yet finalized.

The next question is from the line of Chirag Singhal from First Water Fund.

So just a couple of questions on the guidance. So first of all, you mentioned that you are expecting a flattish top line for this year. Would it be also same for the OPM. So last year, I think we did somewhere around 14% on a stand-alone basis. So are you expecting a similar OPM number for this year?

Sorry. I didn't get your question right?

I wanted to check with you on the OPM operating EBITDA margin. Last year, we did somewhere around 14%.

So EBITDA margin you're talking about, right?

Yes. Yes.

EBITDA margins, because if we are, let's say, we'll be getting 5%, 10% growth, certainly, we'll be having EBITDA margin more than 14%. Because we are not growing, we're not able to utilize our capacity. So that's the challenge which we are facing year-on-year. So we're not able to recur our expenses to fix sort of expenses. And hence, our margin is basically 12.6% or something like that. So we are expecting that margin would be in the range of 12% to 13%.

Okay. Understood. And sorry if I miss the order inflow items. So what is the order inflow target for this year based on the betting platform?

So this year, we are targeting some INR 20,000 crores of or INR 20,000 crores of order book, where we have already been declared L1 for INR 4,000-odd crores, right? So next -- I mean, balance in current financial year, our balance target is around INR 16,000 crores. which we are targeting from rope sector, railway and metros and then tunneling right, and optical fiber, all these sectors we are targeting ropeways. As of now, as we already mentioned that almost, there are 12 bits already been submitted, right? And amounting to INR 10,000 crores is already -- in a bid evaluation stage. Out of that road is almost INR 7,500 crores and the railway is around INR 1,800 crores. And metro is around INR 1,000 crores.

Okay. And coming to the next year's revenue guidance. So with this order inflow that you are looking at for this year, like what is the revenue guidance for the coming year?

Coming year will be around -- I mean, we'll be having more of 10%, I mean it would be kind of double digits. Okay, but earlier, I think you were expecting a higher growth number, right, for FY '26 because -- we are expecting 15% to 20%, but depending on at what time of -- what time of the projects we are getting more EPC and more -- I mean if we are getting more EPC towards the end of year? Or is we're getting EPC in the current year, right, depending on what kind of -- what mix of order book we'll be getting it and when? Probably we can grow even more than 15%, 15% to 20%. But even if, let's say, we are able to secure INR 20,000 crores, then also we'll be getting almost 10% or more than 10% is that double-digit growth will be achieved in next year.

Okay. Just to understand from a strategic perspective, like if we compare ourselves with other Infra companies, all the companies have been reporting high-teens growth, whether it's in the top line or in the bottom line, they have been able to sustain the margins also. Earlier, I think, what we mentioned is that you were not able to get orders because they were not at the margins that you were looking at, but the other companies who have secured the orders, they have been able to grow their top line as well as bottom line and able to maintain the margins, so far. So just to understand as to what has went wrong in the past then, how do you plan to, let's say, to streamline things in terms of at least grow at the industry pace because in FY '26 also said planning only -- if you're looking at only 10% odd growth, then there is nothing exciting in terms of growth, right? FY '25, we're almost flat. '24 was not so great for us and '26, also, we are looking at like 10% odd growth, whereas most of the players are looking at something around 15% to 20% growth even on a higher base of FY '25. So I'm just trying to understand from you what went wrong from a strategic point of view? And how do you plan that this kind of [ next ] the growth doesn't repeat going forward, especially when the industry is doing so well.

Maybe I'm not very confident of who is growing at, but what I believe is that they're looking at the competition, right, which is available -- I mean which is present in the current market condition. If you're not able to get this kind of margin, probably you will not be going for this growth, I mean, will not be changing the growth without -- so if I'm getting only 5%, 7% kind of EBITDA margin, certainly, I'll not grow, because the risk, which we'll be carrying while getting projects that will be much, much higher than what the benefit which should be acting to us, right? So -- and for that reason only, we have been diversifying. We are trying to get out of and we are trying to test other sectors as well, right? So -- and when we are moving to other sectors, there also, we don't want to be very aggressive on day 1. We want to test the water first. We want to do 1 or 2 projects in that particular sector then understand the dynamics of that particular segment. So that we have to have more understanding. And then probably we can be more confident in taking more and more projects. And so that's our strategy, basically. That's how we have been working, maybe.

Out of the 20...

Yes, sorry.

Sir, out of the INR 20,000-odd crores of order inflow that you're looking at, how much is expected from the road and how much you expected from non-roads?

The non-road, we are expecting INR 5,000 crore to INR 7,000 crore. That will be from non-road sector. Balance would be coming from road sector -- but yes, of course, so far, we have -- I mean, we have witnessed that there's a huge competition prevailing in the road sector and which is not actually leaving a good margin for us. So we may not be willing to generally compromise on quality and all that. So it's -- I would say it's a company to company call. I don't -- I mean because I'm not [ preview ] to others company data, but yes, that's our situation.

The next question is from the line of Alok Deora from Motilal Oswal.

Most of the questions are answered. Just wanted to understand FY '26, we are giving a target of nearly 10% growth, 10% to 15%.

Yes. I would say, the range is broader 10% to 20% depending on at what time we'll be getting orders and under what format, right? Absolutely, we can grow by 20%.

Sure. And sir, this project or this MSRDC projects appointed date is the growth also contingent on the time we received our appointed date of this because -- so when you give say 20%, is it assuming that this sort of appointed date comes by end of October or something? [Technical Difficulty].

Ladies and gentlemen, the lines of the management has got disconnected. Please stay connect, while we reconnect the management. Thank you. Ladies and gentlemen, thank you for patiently holding. We now have the line for the management reconnected. Over to you, sir.

I think Alok question was there.

Yes, sir. He is in the question queue.

Sir, I was asking about the MSRDC project. So when you say 20% growth is assuming that this appointed date comes by...

Yes, yes, yes. So we are assuming we'll be getting that LOA and appointed date declared at the latest by Q3, right?

Okay. Okay. So if there is any delay, then this number could be lower...

Yes. But then again, depending on because what other projects which is being in the pipeline will be targeting, right?

Right. And sir, I just wanted to understand this, I mean if you look at YTD, NHAI has not given any, any quantity of projects, I mean, it's only some 50 to 100-kilometer projective awarded till now, primarily because of election, period and stuff. So how optimistic are you on the NHI side, because a lot of players are not having the order book now, they will be targeting the project. So especially on the EPC side, how confident are you of backing the projects from NHI.

EPC probably we have to wait a little, because if there are more projects who are targeting and so far, they haven't got any projects in their hand, right? There would be -- there would be more competition on day 1. Probably we'll be waiting for the right time to target EPC, but will continue to be -- are bidding basically for the EPC mode as well, right? And what we believe is that there are more projects they would be awarding under HAM as well as BOT. So there, we are very much comfortable. And even HAM as well, I mean we have to basically in a bit and was more under until the next. Once it starts flowing into the market, right, then only we'll get some 8 bps to 10 bps would be coming up, then we'll be getting the sense of the market. How and where the competition is moving, right? So -- and we believe that in BOT projects, there have not been much competition in the BOT. So yes, of course, over the period of next 3 to 4 months, that all situation would be clear.

Right. So sir, the probability, the growth on '26 could be more towards the 10%, 15%, right? I mean even if you get HAM project by, say, January or February, then your projects won't start materially contributing in FY '26, right? The growth -- I mean, most likely will be in the lower end of the guided number, right?

See, actually, generally, what we believe this is a pipeline where NHAI, I mean, INR 250,000 crore, there are so many projects other than NHAI, I mean, from a state, which is coming up, right, for being. And depending on -- I mean, the comfort which we'll be having on the state, we'll be participating tagetting those EPC projects as well. So there also, we are hopeful that we'll be getting some EPC projects in -- like as we got the project for MSRDC will be targeting other state as well and it will be getting the EPC projects in those state then only -- I believe that will again back on the growth of 15-plus kind of percent. And at what time they would be market, yes, of course, I mean, that actually would be a deciding factor for me -- for my next year's growth, basically.

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

Sir, my first question would be on the BOT projects. So if you bid for the projects independently, so what would be our qualification and prequalification in terms of project size.

I think projects unless until there is a specific qualification required from technical side will be eligible even for INR 6,000, INR 7,000 crores of BOT projects. So that's not a big issue for us.

Basically, independently bid 2 to 3 projects at a time, probably you can have just a bigger freight?

Yes, yes. I mean, we can -- I mean, see, our target is INR 20,000 crores certainly will not go beyond that. That will not be having 100% target fulfilled for BOT only.

Sir, the reason which you said from the InvIT, we can expect around INR 225 crores this year. But for the next year, you are saying INR 300 crore to INR 350 crore. Is my understanding correct?

Next year, -- it's very difficult to say for.

So this INR 300 crores, INR 350 crore, you said for this year or this was for which year?

No, no, no. So including this InvIT dividend, I'm telling that other income would be in this range.

The full year number of cost.

Because current quarter, it is INR 100-plus crores of other income, and it is, if we are multiplying by 4 then we have more than INR 400 crore, INR 450 crores, right? So what we expect that may not be -- I mean, what I believe is that we'll be consistently getting certain income from InvIT right? But then other income other than InvIT dividends that may vary. I mean that may be sometimes high, sometimes low. So overall, other income would be in this kind of range.

And sir, this bid pipeline is outstanding right now, you said in the opening remark of INR 15,318 crores can give a recap in terms of the highway EPC projects or of it is with you available ready?

See Highway EPC is around INR 80,000 crores, INR 85,000 crores, highway HAM projects is around INR 70,000, INR 75,000 crores, right?

No, no. Sir, I'm talking about these 16 bid which you have submitted a INR 15,318 crores.

Okay. 16 bid, which is already we have submitted, right?

Yes, yes.

So EPC is around INR 2,000 crores, HAM is around INR 5,500 crores. Railway and Metro is totaling around INR 2,500 crores.

Anything on TMB side?

TMB, again, there is not much, is INR 400 crores, right? This is already in the pipeline. We've already submitted.

I think, the EPC is INR 2,000 crore, HAM is INR 5,500, Railway and Metro both put together INR 2,500 crores and INR 400 crore for is TMB.

Yes.

And sir, obviously, we were also giving insight on the [ INR 2.6 trillion ] pipeline in which you said almost INR 80,000 crores is the EPC part from NHAI. So what would be the other breakup if at all possible to share?

EPC would be INR 80,000 crore, INR 85,000 crore, HAM would be INR 70,000 crore, INR 75,000 crore then their project under hydro -- hydropower, I mean tunneling under hydropower than optical fiber, again, INR 40,000 crore of INR 35,000 crore or optical fiber will be having tunneling in my projects of pipeline to around INR 24,000 crores, right? Then the [indiscernible] INR 20,000 crores.

INR 20,000 crores.

20,000, 21,000 power transmission, railway is around 11,000. So it's a mix of, yes, and we'll be targeting.

Tunnel was for hydropower is how many you said? INR 30,000 crores, right?

Tunnel and hydro, I mean both, I mean, we generally clubbed it, that would be around INR 60,000 crores.

Tunnel hydro and optical fiber tunnels both put to INR 60,000 crore.

Optical fiber is different. It's laying our optical by cable. This time we are targeting, which is again around INR 35,000 crores of target projects.

I'll repeat funds for the clarification, INR 80,000 crore, INR 85,000 crore EPC; INR 70,000 crore, INR 75,000 crore HAM; tunnel hydro project INR 60,000 crore; and optical fiber, project is INR 35,000 crore, Power T&D is INR 20,000 crore, railway is [ INR 11,000 crores ] balance [indiscernible].

Yes.

And anything on road paved, sir?

Road paved around INR 2,500 crore INR 3,000 crore, right?

Sir, last question from my side. On the MSRDC project, obviously, we have already won 2 projects, there are no projects which are likely to come. So do you have any number on which more project and any other states which you are highlighting what kind of EPC pipeline is there from these states?

See, right now, I may not be able to comment upon this because we'll be targeting a more projects for MSRDC then we'll be targeting other state as well because in 1 or 2 states where we are not comfortable and then looking towards, I mean, analyzing the finance of the state and the funding pattern of that particular state or the projects, right? This is that we will be taking a call on those states.

Are we targeting Amravati city project for Andhra Pradesh any updates on that, if you are targeting on that [indiscernible].

Not so far. Not so far.

The next question is from the line of Prem Khurana from Anand Rathi Shares and Stock Brokers.

Sir, my first question was with respect to the assets that we intend to transfer. So you -- I mean, you've already taken board approval for earlier Kanpur lean or and ideas to kind of progressively transfer more. Would you be able to share your thoughts on how would the structure be this time around. I mean the first is that we transferred we took units against the country iteration, right? So would this -- for the incremental assets that you transfer, would you be willing to go to take InvIT units or you could also seek cash payments?

It would be 100% going forward, it will be on the cash transaction.

Going forward cash transactions. Okay. And I mean, given the fact that you will get to a cash, I mean, how would the valuation I mean I understand it would be based on asset to...

The reason it could be at arms length only will be -- it's more kind of negotiation, more kind of involvement of third-party as well because then -- and with -- and what would be sitting together to evaluate the O&M piece also that we have next 14, 15 years, they have to take or I mean they have to be conscious in types of -- in terms of taking call on when they're exporting 15 years, right? So it would be vetted by some third-party consultant, right? So it would be kind of at arms length dealing.

No, no, no. Arms length I understand what I want to understand there is an asset, I mean hypothetically speaking. And you have 2 options, 1 in I mean they are willing to give you InvIT units in the second is cash. I mean, theoretically speaking, is it fair to assume that if it is cash, the valuation would be slightly lower than the InvIT units because you're getting a hard cash now versus the money coming to you over a period of time.

No, no, no. So units -- I mean, see, units is already listed, right? It's getting credit on daily basis. I can set it off. I mean because of certain reasons, because it was pre-IPO. So there is a lock-in of 1 year. Otherwise, I can immediately sell it in the market, right? The reason that we are not requiring any cash on our balance sheet and hence, we opted for this route. So, I don't think, because of cash or unit, there would be any difference in terms of price.

Okay. And second was on the [ same ] side, is it possible to share the status. I mean since the bids were I mean in terms of the bids that we've given ahead of the base cost estimate, I mean, there was this perception that there will be some negotiations. So would you be able to confirm or I mean give us some sense why we're taking.

They called for some negotiation. They have taken our comments as well. And that process is going on. So yes, I mean, we are also not used to that kind of processes, right, is generally the way -- I mean, if we have bidded and we declared L1, generally we get the projects from we get the award from NHAI, right? Yes. In this particularly MSRD [ MSRDC ] particularly, they are again coming up for negotiation and all that. So we have been called. We have offered our comments, right?

So -- just 1 last 1 the MSRDC only, I mean, what will be the effective cost for the mobilization advance and if you decide to seek mobilization, what would be the effective cost?

You are talking about interest?

Yes, interest. And let's say MSRDC.

It's [indiscernible] plus something, but I don't remember exactly because so far, we haven't [indiscernible] plus maybe 1% or 2%, 2% -- but generally, we have been not drawing this mobile as accounts for the last so many years. So as of now, I'm not remembering it. Right now, I'm not having in NDA, right?

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

Sir, on the CapEx front, how much we have done in Q1 and for full year, how much we are looking at?

So far, we have done INR 21 crores something kind of CapEx for the Q1 and current year, for the whole year, we are not targeting more than INR 150 crores.

INR 150 crore, but the next year once the -- we will be looking at more 10% to 20% kind of a revenue growth, then the capital is...

No, no, but that can be done from our existing machines and whatever machinery we are having right now with us, which is getting -- which is underlies, right?

Okay. But this INR 150 crores also have previously, you mentioned about the INR 100 crores, INR 150 crores was for office building. So just INR 150 crore also.

How fast we will be building that office that INR 150 crore would be INR 200 crore or INR 150 crore like this. But yes, INR 100 crore, INR 150 crores would be going towards our office building, which may stead over the period of next 1 to 2 years.

Okay. Okay. Got it. And on this MSRDC, just 1 thing. So let's say, I don't know the you will share in terms of the negotiation, what the government is looking at, but is there any kind of benchmarking, let's say, if they are asking for, let's say, 10% or 15% lower than you may also think of to cancel the projects?

Yes, yes. It has to be complete calculative call, onlast year.

So right now in terms of the range in terms of how the government is looking at in terms of, obviously, when negotiation is happening, obviously, they are looking at a lower value. So what kind of a number in terms of the percentage broader and what they are looking at? And from your side, how let's say, if it is 5%, you are comfortable if it is more than 10% reduction, then will you go for a cancellation or a 50% -- 15% reduction, then you go for a cancellation?

So it would be just like that I'll be disclosing my price to you. It's very difficult to answer this question.

Or let's say, in the other way in terms of the margin, let's say, if the margin is lower than 10%, then we will go for a cancellation?

Certainly, certainly.

Okay. Okay. Great. And sir, lastly, just because the range for the FY '26 in terms of the revenue is obviously much higher. It depends on the -- how much value of EPC projects and also the timing of that is also important. So broadly, whatever the existing order book is there, can you help in terms of break it down in terms of the revenue because that is already there? This -- so one is where the appetite is not available, INR 7,000 crore, which we are looking at by Q3 and Q4 would be there. So out of this INR 7,000 crores, how much we will be getting the revenue in FY '26 and balance, which is already ongoing INR 8,500-odd crores, whatever, so out of that, how much are we looking at balance would be available for FY '26 in terms of the revenue. So just trying to understand what extra revenue are we looking at from the new orders, so that primarily should be from the EPC revenue because HAM, if we can get, it would be just the last quarter of FY '26 where we will be getting HAM revenue from the new projects that we are going to win. So that -- just trying to understand that.

So yes, I mean, for INR 7,000 crores, where [indiscernible], we can safely expect around 30%, 35% of its order book is amount converting into revenue for next year.

Okay. And the -- right now, the executable INR 8,500 crores, that definitely will be over by FY '26?

Yes, yes.

Ladies and gentlemen, that was the last question from Mr. Shravan. I would now like to hand over the conference to the management for the closing comments.

Yes. Thank you, Deepika. Thank you very much. Thank you. I would like to once again thank you all the investors, participants whosoever has given their full unwavering support to us in our corporate journey. And we believe that we'll be back again on the same growth path as we did in past and we'll deliver our best with your support. Thank you very much.

Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.