GPT Infraprojects Limited (533761) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and a very warm welcome to the GPT Infraprojects Limited Q1 FY '22 Conference Call. [Operator Instructions] I'm now glad to hand the conference over to Mr. Atul Tantia, Executive Director and CFO of GPT Infraprojects. Thank you, and over to you, sir.

Thank you. Good morning, everyone, and a warm welcome to GPT Infraprojects Limited Earnings Conference Call for the First Quarter of Fiscal 2022. The presentation for this quarter has been uploaded on the website of the stock exchanges as well as our website. We hope that you have had a chance to go through the same. Our Investor Relations Advisors, Stellar IR, is also available on the call. As we are meeting on this call, within a very short duration of a month -- of almost 45 days from our last call of fourth quarter FY '21 results, we will run you through a quick snapshot of the quarter. The second wave of COVID that hit the country in the months of April and May saw strong proliferation of cases across the country. While the pace was alarming, thankfully, it peaked quickly, and hopefully, the worst is behind us. While the health care systems continue to face the brunt of the second wave, the economic activity did not seem to be disrupted as much as it was in the first wave. Operationally, for GPT, too, we continue to work at most of our project sites as well as our manufacturing facilities with little to no disruption. As we have updated you, the government's focus on CapEx has led to a significant higher outlay for the sectors that we operate in fiscal 2021. With the second wave, the focus of the government ministries was diverted to health care and rightfully so. As a result, the ordering activity in the first quarter was muted, but we were able to successfully get incremental orders of INR 159 crores in Q1 FY '22. The stellar growth in our order book in the previous fiscal, backed by the order intake of almost INR 930 crores has helped us weather this small blip in ordering activity, and our current order book stands at almost INR 18.6 billion, which is almost 3x FY '21 revenues. Now let me take you through the key highlights for the company's operational and financial performance during the quarter gone by. On the execution front, most of our infrastructure projects progressed well, barring some slowing down of activity as a result of the second wave of COVID-19 in the beginning of the quarter. On the Concrete Sleeper side, too, execution of our key order, that is DFCC order and in the UP facilities, was much higher compared to last year. Our Namibian operations also continued to operate at an all-time high capacity utilization, with good cash flow and dividends to their respective shareholders. However, the operations in South Africa are currently witnessing disruptions, due to the combination of the new COVID-19 containment measures as well as recent civil unrest in the country. We are carefully monitoring the situation and hope that this will be resolved soon. Overall, our consolidated revenues for the past quarter, that is Q1 FY '22, posted a growth of approximately 46% year-on-year, with Infrastructure segment posting a growth of 63% year-on-year and Concrete Sleeper segment at 8% year-on-year. In terms of segmental contribution, the proportion of Concrete Sleeper lowered from 23% in Q1 FY '21 to 16% in Q1 FY '22 due to disruptions in South Africa, while delivery, specifically in DFCC contracts, remained high. On our margins and profitability, we continue to focus on strong discipline on cost and our continued focus on strengthening the company's operating leverage has borne fruits and led to an increase in the operating profitability. The bidding discipline that we maintain while bidding for new contracts continues to be the primary factor for stability in the EBITDA margins for the company in the range of 13% to 15%. Our consolidated EBITDA for Q1 FY '22 grew 11% year-on-year to INR 198 million, although EBITDA margin fell through from the unusually high margin recorded in Q1 FY '21. When compared sequentially, it has increased by almost 400 basis points year-on-year to 16% from our typical range of 13% to 15%. The profit after tax share of associated and minority interest has grown by 170% year-on-year to INR 4.5 crores in Q1 FY '22 versus INR 1.7 crores in Q1 FY '21, largely on the back of improved execution, operating leverage, lower depreciation and interest costs. The PAT margin has remained largely stable. We are also happy to report that there have been positive developments on the matter relating to the ongoing dispute resolution between our subsidiary and NHAI. As we have updated you in the last conference call, the company has opted for the consideration of the dispute through a consideration of committee of independent experts as per Part III of the Arbitration and Conciliation (Amendment) Act, 2015. We are confident of an amicable resolution of this matter in the current fiscal would -- could lead to enhanced liquidity for the company. Coming to our balance sheet. We are pleased to report that our operating and liquidity position continues to improve. As we have mentioned on our earlier calls, we have been optimizing our working capital in addition to pairing some of our long-term debt. In the quarter gone by, we have seen an improvement in our working capital days and believe that we are under the cup of a virtuous cycle of lowering working capital days and strong cash flow. We also expect a release of some long overdue outstanding from various clients, which was at INR 49 crores in March 2019 and reduced INR 25 crores in March 2020 and despite COVID, reduced further to INR 20.8 crores last year, and it is further expected to reduce by INR 4 crores to INR 5 crores this year. In addition, outstanding tax refunds are also being processed by various departments, which will lead to easing out the cash flows for the company. Overall, we do not foresee any challenges with meeting our debt obligations or liquidity for the business. This has led to improvement in the current ratio from 1.05 in FY '20 to 1.2 in FY '21 and 1.25 as on June 2021. Lastly, let me share you with you key highlights of some of the key contracts under execution for the current fiscal. Some of our key projects under execution include the Ghazipur order worth almost INR 378 crores from RVNL, which is running smoothly with a quarterly run rate of almost INR 30 crores to INR 35 crores, and its closure is expected over the next 18 months. In addition, the Dhaulpur contract with RVNL, which saw an incremental order inflow this quarter, is also running very smoothly. When both these contracts are completed, it still -- which will allow -- underscores us -- these contracts are completed, it will allow us to bid for single contracts of INR 1,000 crores, underscoring our execution capabilities in the Infrastructure segment. In the Concrete Sleeper segment, the GMR order worth almost INR 250 crores continues to progress well, and cash flows from the same are expected to ease the working capital requirements going further. We have calibrated our operations to ensure that any disruptions are not only temporary, but also we can resume quickly, and as a result, we believe we are in a strong position. Given our track record on project execution capabilities, a robust order book, strong cash flows and improving working capital position and mostly, most important robust growth prospects. We believe that GPT Infraprojects is entering a virtuous cycle of growth and is well set for the next phase. That is all from my side. I will now request the moderator to open the call for any question and answers. Thank you.

[Operator Instructions] First question is from the line of Viral Shah from Prabhudas Lilladher.

Yes. So sir, my first question is, sir, in terms of order book vicinity, could you elaborate more on the railway, how the order book pipeline stands at? And what are the verticals where we are seeing a good traction in terms of order book? That is my first question. And second question is on labor availability, sir. What is the labor availability as on date in the month of June versus what was the execution done first -- in the first quarter? So these are 2 first questions to start with, sir.

So in terms of order availability and pipeline, like I said, this quarter, we have seen incremental order inflow of almost INR 159 crores. So last full year, we saw incremental order improved of almost INR 930 crores. We are -- obviously due to the relaxed bidding requirements till December, there is a lot of competition. And we are bidding for contracts wherein we have higher experience, very good competency, so that we preserve our hurdle rate of EBITDA of 13% to 14%. And we believe that we should be able to bag new orders in this financial year of a similar quantum of what we bagged last year. So that would enable us to have a higher order book at the end of the financial year FY '22 compared to what we were at the end of financial year FY '21. So FY '21, we were at almost INR 18.3 billion. And I think that at the end of FY '22, we expect to be almost at INR 20 billion in terms of closing order book. In terms of labor availability, so labor availability was poor again in March -- in April and May. But I think second -- but June onwards, the labor availability has improved. And since then, there have not been too much of disruptions in terms of availability of labor, which is also speaking on our execution. So our execution has been stronger compared to what we had done in last year first quarter. So last year, first quarter, we had -- it is a growth of almost 46% compared to last year. So labor availability is not an issue as such, as we speak.

Fair enough, sir. Sir, in terms of guidance, I would like to get some guidance in terms of revenue as well as for EBITDA for FY '22. And if you take out 3 to 5 years view, where do you see the company in terms of growth going forward?

So this year, people are expecting another third wave to come. So it is very difficult to give a guidance for the full year because I think that we will be only able to give that in the second quarter when we do a half year earnings call, I would not want to do a guidance -- give a guidance unless there is somewhat visibility whether the third wave will come or not. I hope...

Fair enough, sir. That's fine. Sir, from a visibility point of view, since we have been guiding a good amount of orders, last year was a good order inflow, this year also will be a good order inflow. And I believe that average execution for the order will be 2.5 to 3 years. So don't you feel that from a 3-year or a 5-year perspective, the growth visibility, the CAGR run rate in terms of revenue on PAT can be stronger and it can be...

CAGR, I think that we should hit high teens to close to 20% in terms of revenue growth. And obviously, PAT will be disproportionate because of operational efficiencies and lower interest as well as depreciation. So in terms of revenue, I think we will be at almost close to -- in higher teens to close to 20% CAGR growth.

[Operator Instructions] The next question is from the line of Ritesh Parikh from Barclays.

Congratulations on good set of numbers. I would like to have some light on the how is the ordering tendering we are seeing and the competition intensity in the current context?

So like I said in my reply to the previous question -- previous question as well, due to the relaxed requirement in terms of the bidding criteria, the -- and the earnest money for the bids, ordering activity is -- in terms of competition is quite high because -- I think there's a lot of background noise. So there is -- there are a number of bidders who are participating in each bid, which is quite high, and that relaxation is there till December of this year. Suppose that the relaxation -- once the relaxation is withdrawn, the competition should come down. However, we are mindful of our hurdle rate, and we are bidding for contracts where -- which meet our core competencies and wherein we can achieve our hurdle rate of EBITDA so that we don't compromise on the margins.

Okay. That's helpful. Second is in the opening remarks, you talked about the arbitration with NHAI, we have gone for -- to appeal to the committee. Sir, can you throw some more light on it? How is the process? And how much time does it typically take for the reconciliation process as such?

So we have one conciliation committee hearing has already happened. Second one is scheduled this week. So as per the standard operating procedure of NHAI, this typically takes 6 months.

[Operator Instructions] The next question is from the line of Aarif Hussain from ProfitMart Securities.

Can you please throw some light on working capital days in quarter 1 of FY '22? If you can please give the exact number of working capital days?

So working capital days, we can get back to you. We can't give you a number off hand because Q1 -- we do give that in our presentation on a half yearly and an annual basis. So Q1, we don't give that number out. And Q3 also, we don't. However, if you can send an e-mail off-line to Stellar or Ms. Pooja Agarwal, either of them will reply to you on a one-to-one basis.

[Operator Instructions] The next question is from the line of [ Mihir Desai ] from [ Desai Investments ].

So my first question would be on the macro front [indiscernible] on demand.

Sorry, your voice got...

How many orders coming in from here, sir?

[ Mihir ], your voice is breaking. If you can just speak on the handset, it would be helpful.

Better now?

Yes.

Sir, on the macro front, I just wanted to understand, railway sector is seeing a lot of demand. And so what is the order you see coming in from this sector? And the things developing on ground level, if you could throw some color on this?

So like I said, railway has always been building new infrastructure because they want to improve the speed on the railway track. They want to improve the freight traffic. And also, they want to do high-speed corridors. So on railway also, envisaging 3 freight corridors post the completion of these 2 corridors of the Western and the Eastern corridors, which are on the verge of completion in the next 1 or 2 years. And with the new railway minister in place, obviously, there's a larger focus on new contracts that will come out. We expect to be -- we are one of the few bidders who has -- or companies who has done mega bridges for railways. So we have done double-decker bridge over Ganga and Patna, done a bridge over Kosi, North Bihar. We also done bridges over Bhagirathi, Ganga and Chambal, various bridges in the country. So we expect that ordering activity should be quite healthy in this current fiscal as well. And this year, we should either meet or kind of exceed the last year's order inflow of INR 930 crores. Yes. So did I answer your question or something else?

[indiscernible] on my line. So yes, good answer. And sir, just a follow-up on this. Do you expect [indiscernible] this year? Or...

Sorry, your voice is breaking.

[ Mihir ], I'm sorry, you're breaking up. So I would just request you to maybe disconnect and reconnect and come back in the queue. In the meanwhile, we'll move to the next question from the line of [ Pradeep Chaudhary ] from [ Saamarthya Capital ].

See, you mentioned about INR 530 crores. I missed because there was some disconnection. So what is this INR 530 crores in terms of railways?

I didn't mention any INR 530 crores. I said INR 930 crores was the order inflow last year. I mentioned that total order inflow, we expect this year to be either meeting the INR 930 crores we did last year or better than that.

Okay. Could you throw some light on your activities with railways since you have a long relationship with them? Are there any other areas that you may be looking at?

We are doing -- like I said in my previous reply as well, we're doing -- for railways, we are doing bridges. We are doing supply of concrete sleepers. We are doing track laying works. We are doing metro contracts. So these are typically the areas that we are currently doing. Obviously, we have to -- in any infrastructure contract, we have to have done the work in the past. So you have to have credentials to do similar work. So we will need to build on our strength and bid for contracts wherein we meet the qualification criteria and are able to bag contracts in those segments as mostly.

And for metro contracts, what scope of business you do?

Metro, we are doing elevated viaducts. We are doing station buildings, primarily track laying.

And would it be possible to share that out of the railways, how much is the rail metro contracts?

Of the current order book of INR 18.6 billion that we have, I would say, about 8% would be metro.

8% would be metro. And in times to come, in the next 2 to 3 years, where do you see this figure?

I think that a lot of Indian cities are getting metros. So this figure should go to about 15-odd percent.

15-odd percent.

But again, with the caveat that we do bid for contracts, but we are very, very mindful of our margins. Some of the metro contracts do not meet our hurdle rates. So sometimes, we do not get them. But I think that we are continuously bidding for contracts within our hurdle rate of EBITDA of 13% to 14%. So if we are able to bag contracts in that range, we are more than happy.

And in metro space, do you have some other scope also that you would be entering into?

Like I said, track laying, elevated viaducts, station building, that is something that we can do -- what we are doing rather. And obviously, smaller tunnels, we can do. Larger tunnels, we have to take collaborations for -- or joint ventures for.

Okay. And since a lot of railway stations are getting changed or -- so are you participating in that also?

Those are mostly real estate plays. Those are not EPC or core EPC contracts. They are mostly real estate plays, so you have to build hotels, malls and station redevelopment along those lines, like recently was inaugurated by the Honorable Prime Minister in Gujarat.

So you really do not go with the civil part of it or infrastructure part of it?

We do civil and infrastructure, but we don't do real estate.

No, I understand you don't real estate. But if say some other organization has taken the contract, then do you participate to do the...

We don't typically do a subcontract for another private company.

[Operator Instructions] The next question is from the line of Sadanand Shetty from TruEquity Advisors.

Atul, can you talk about the 2 contracts that will now start in high-speed JV with the [ DR Infra ]? Is that the competition is intensifying in that space? Our general assumption is that you are one of the best in terms of margin and execution. In both, you are either 3 or 2. Can you talk about it?

No. I can, but at the end of the day, the -- how EPC contracts are finalized in India is that it is L1 which gets the contracts, and the respective 2 orders, we were, like you said, L2 and L3. So you're right that competition is heating up. And we are always mindful of our margin of 13% to 15% -- or 13% to 14% honestly. So we don't like to bid for contracts below that because we always believe that especially in the times right now wherein steel prices are quite high. If you tend to compromise on your margin, you can burn your fingers pretty quickly. So I mean, I'm sure that the respective companies who have got the contract have done their calculations and justifications. And maybe there is something that we have missed out. And our team does check what we have missed out, but apparently, we have not. So maybe their hurdle rates are lower than us. That's all I can say.

Okay. If you see some of the participants, it seems they are new player. Is that true, like KEC, Sam and -- KEC, Sam India? Are they...

KEC is not a new player. KEC is an old player.

In bridges, in...

No, KEC is doing bridges. They have done -- in the last 3 years, they have done some bridges. But at the end of the day, they have got the contracts like you're saying in a joint venture. So I'm sure that they have done the calculation. It is a large company, so they have -- I'm sure they've done the calculation.

Sure. You talked about station building. Is that the main area you are looking at? Is it what the government is actually opening tenders for station building work is? Or it's something pure [ EPC ] work that you are looking at?

No, station building, I talked about only in terms of metro contracts. I mean, there are composite contracts along with the elevated corridors. We are not doing the station buildings which are being given for the -- by the Indian railways per se for the redevelopment of the stations.

Right. You talked about profit going higher than the revenue. For that, your margin should expand, right?

Margins will expand, means at EBITDA level, it may expand by 50 to 100 basis points. But below EBITDA, you also have depreciation and interest, which will not flow or which will rather -- which should not grow. So as a percentage, it will come down. So that is why PBT and PAT will improve.

[Operator Instructions] The next question is from the line of [ Mihir Desai ] from [ Desai Investments ].

Sir, I have a few questions on Africa business that you had mentioned that Africa sleeper business is facing some headwinds. So do you expect this to change anytime soon? Or you are going to change our strategy in Africa?

No. So Africa, we have 2 facilities, 1 in South Africa, 1 in Namibia. So I'll speak first about Namibia because Namibia is operating at an all-time high capacity utilization. And in the current quarter, I mean, Q2, we have also received a dividend from the associate in Namibia. And the cash flows and the dividend in the Namibian operations are quite healthy. And like I said, they're operating at an all-time high there. In terms -- so there is no issue in terms of the Namibian operations. That is an associate for us. We are 37% shareholder there. In terms of South Africa, some of you might have seen in the news recently in the last 2 months. There have been some civil unrest in that country partly because of some political unrest, partly because of some lockdowns because of the COVID impact. So the operations in the South African subsidiary have been disrupted in the last -- since June. And however, having said that, in the last week or so, the things have stabilized there and cooled off, so -- and because of the local community confidence building measures. So we expect that from the first of -- in the next 15 to 20 days, the operations will again restart there because there was a lot of labor unrest and all that. So that all is being again -- confidence building measures are again being redone, so that issue is no longer there. So South Africa, we should see resumption of in terms of the production and all that in the next 15 to 20 days.

Understood. Sir, a follow-up on this, if you could share the utilization level of Namibian facility?

So Namibia, we have a capacity of almost 200,000 sleepers per year. This year, we do close to 160,000, 165,000, which is almost 80% to 82%.

Okay. So now a few questions on order book. Sir, can you please throw some light or elaborate on the new orders of INR 159 crores, which we have guided in quarter 1?

So those orders, like I said, are incremental orders. So we are doing a contract for our P&L in -- between Mathura and Jhansi, some bridges over Chambal and a couple of other bridges there in a single contract. So in that, we have received some incremental orders of almost INR 150 crores, which are on bridges in the -- near Agra. So most of the order inflow has been from that contract. Incremental order inflow is from that existing contract.

Okay. And sir, what would be the execution period of these projects?

All -- the entire order book is to be executed over the next 2, 2.5 years.

Okay. Sure, 2, 2.5 years. Sure, sir. If I have any further -- sir, and lastly, on COVID, I just wanted to ask, definitely, it is not in our hand to predict anything regarding the third wave. But if the third wave comes, like what is our strategy? Or have we built some war chest? Or sir, I just wanted to understand from your end.

So, a, the company has taken a policy, and they have already vaccinated all its employees and labors, so I think that gives the employees and the labors a lot of confidence; b, obviously, war chest as such is not required because obviously, work is going on everywhere now. Everyone has realized that they need to live with COVID. So with all the safety precautions and any advisory from the government that needs to be followed in terms of local lockdowns or if any, so means there might be some minor disruptions here and there. We don't anticipate a major disruption in the third wave.

Okay. Sure. And lastly, on the EBITDA margin, sir, what would be the sustainable EBITDA margin which we can consider for coming years, like '22 and '23?

14% is something that is a sustainable margin we think, and that historically, we have been close to 14%. And that is something that is sustainable, and that is what we strive for.

[Operator Instructions] Next question is from the line of [ Shruti Sharma ], an individual investor.

I just have 2 questions. First, if you can share what is the debt position as on 30th June 2021? And what would be the cost of debt for the company?

So means funded limit is about INR 220 crores at an average cost of almost 10%.

And what will be the utilization level, sir?

Utilization will be about 92% to 93%.

Okay, sir. Okay. And sir, second question, sir, you mentioned in the opening remarks that we are expecting the arbitration award of around INR 30 crores. So...

I've not given a number on the arbitration award, sorry.

Sir, I think I must have read it somewhere. So I just wanted to understand if like this will come in this fiscal or, I mean, maybe the next fiscal. When do we expect that?

So the arbitration award in our favor is INR 61 crores. As I said in my opening remarks, the subsidiary has operated for a conciliation with NHAI. Already, there are -- there has been one meeting of the conciliation committee, and the second meeting is expected this week. We expect the matter to be resolved in the next 6 months. And so what amount we will get, that it depends on the negotiations in the conciliation committee. And if we are able to do an amicable settlement, obviously, we will strive for that.

[Operator Instructions] The next question is from the line of [ Mohit Bansal ] from [ Ajinkya MPL ].

Congratulations on the very good set of numbers. Sir, I've been on the call since the beginning, and I've been tracking the company. So you're protecting your EBITDA margins, and this is a high ROCE company now and the cost of debt is also reducing. But what we've been observing is, sir, that the numbers -- or the numbers are not growing in terms of the top line. So I wanted to know the management view, sir, on how the company can reach from a INR 1,000 crores kind of execution to -- I mean, what are the targets? I mean, let's say, 3-, 5-year or a 10-year target? I know it's the wrong question to ask in con call, quarterly con call, but still we wanted to understand the management view on this.

Thanks, [ Mohit ], for the question. Like I said in one of my previous replies, we expect the revenue CAGR to be high teens to close to 20%. So it is -- for this financial year, I would not like to give a guidance because of the COVID issues. However, we think that in the second quarter conference call, we will be able to have some clarity on COVID and give a guidance. But in the long term, we expect a CAGR growth of the high teens to close to 20%.

So the question is the size, sir. You see this company growing to a INR 5,000 crore, INR 6,000 crore order book and execution of INR 2,000 crore, INR 3,000 crore per annum protecting these margins that we have.

So we are -- like I also repeatedly said in previous calls as well, we are very mindful of the hurdle rate of EBITDA. We don't want to compromise on that because in an EPC company, we think that, that is very important. So the growth in the revenue will be at a similar margin level.

Okay. And sir, one more question. The South Africa business, is it an important business for us? Or I mean, it's a very small business, although it's a high-margin business. But what is the outlook of the company on that business?

It is -- for example, in Namibia, the operations, we are receiving dividend and royalty of almost -- this year, we expect almost INR 5 crores to INR 6 crores of dividend and royalty to come from the Namibian operations. So I think that, that is a good annuity kind of cash flow that the company or the -- is receiving from this associated in Namibia. In terms of South Africa, barring the disruptions over the last 30 days and which is expected to, again, get streamlined in the next 20 to 25 days, South Africa has also been giving good cash flow and dividend to the company over the last now more than 12 years. So I think that, that is a business which is giving good margins and good returns. It's a high -- like you said, a high-margin business. Top line might be small, but margin is quite high.

Okay. Yes. So we understand that business is good. But in terms of growing that business abroad or maybe divesting that as well, any color on that?

No, I don't think that divestment is on the horizon for that business. In terms of growing that business abroad, obviously, the last 15, 20 months because of COVID and travel restrictions thereon, there hasn't been any movement on that front. Our team is always in talks with various other railways to grow that business. Having said that, in Africa, unless you are able to travel and meet the persons physically, it is very difficult to do these kind of discussions on a Zoom or a con call. So whenever the travel restrictions are eased out, obviously, we are reaching out to countries in the African continent so that we are able to get new contracts.

Okay, okay. And sir, my last question is on the cost of debt. Do you see a possibility of reduction in the cost of debt for us?

So compared to last year, cost of debt has come down by almost 125 basis points. And this year, on the overall debt, I think that we should -- I mean, overall finance cost compared to INR 39 crores last year, we expect a INR 5 crores to INR 6 crores reduction on the overall finance cost.

How much, sir?

Pardon?

What is the expected reduction in the cost of debt?

About overall finance cost, last year was about INR 39 crores. This year, we expect it to reduce by INR 5 crores to INR 6 crores.

[Operator Instructions] Next question is from the line of [ Ravi Kumar ], an individual investor.

Sorry, I joined lately, and my question might have already covered. I just would like to know what is the current debt level and what would be the going-forward scenario.

So the current debt level is, the funded, I mean -- fund-based limit is almost INR 220 crores. We are repaying close to INR 10 crores to INR 15 crores every year. And if the conciliation with NHAI does happen, that would again be a significant reduction in the debt. And the cost of debt has also come down, like I said in my previous reply. So this year, we expect the finance cost to come down by INR 5 crores to INR 6 crores.

And would you be able to give the interest rate?

Average cost of debt is almost 10%.

The next question is from the line of [ Pradeep Chaudhary ] from [ Saamarthya Capital ].

I would really like to know -- rather, I'm very curious to know, what was your expectation from Africa business when you started? What is the situation now? And where do you see in the next 5 to 10 years?

Sure. So when we started South Africa in 2008, at that time, we had expected to do about, say, 150,000 sleepers every year, which would translate into revenue of almost INR 37 crores to INR 40 crores, which we did even last year. And our total investment in that business in South Africa currently is about INR 8 crores to INR 9 crores. So against an investment of INR 8 crores to INR 9 crores, we were doing a revenue of almost close to INR 40 crores at an EBITDA level of 25%. So at an EBITDA of INR 10 crores, we were doing that kind of business. However, in the last 12 years, we have seen the revenue jump to close to INR 60 crores. Last year, due to COVID, obviously, the revenue had come down. This year, the last 1 month, the impact again of COVID is again there. We expect that next year, hopefully, the COVID situation not being there, we should be doing a business of almost INR 60 crores in Africa at an EBITDA level of almost 25% in South Africa. In Namibia, we have -- our investment level is what, close to -- sorry, I'm just calculating on the top of my head. It's close to INR 2 crores right now. And like I said in my previous reply, we are getting INR 4 crores to INR 5 crores in terms of dividend and royalty every year. So we are doing 2x of our investment every year and which is much better than what we had expected when we started the business in 2010, '11.

And what are the growth prospects? Or because when you enter into a geography like Africa, you certainly have a very long-term view. That is why you attempt because they are risky as well as a lot of opportunities are there. So could you throw some light on the next 5 to 10 years, how do you look at maybe going into some more countries or even in the existing countries, the relationships you already have? So you have other products also to offer them or other activities to offer them. So where do you see yourself in 5 to 10 years?

So in Namibia, we are the only concrete super manufacturer. So -- and their requirement is also not that high. So we will remain to be the only player in that country. In South Africa, we are 1 of the 2 -- or 1 of the 3 players, sorry, I should say, right now. So we have grown the business from, like I said, to 150,000 to almost at a peak of almost 270,000 sleepers per annum. Both these countries, the product that we do supply both these countries, the business cannot grow per se individually in those 2 countries. We are venturing for other neighboring countries in the SADC region as well as in Eastern Africa, wherein we are trying for new contracts, especially in the countries that are politically and stable countries. So obviously, the business in Africa is -- will grow, if you have a long-term view. We started in 2005, '06 in Mozambique. We completed that contract over the next 6 years there. Then we did -- then we got the contract in South Africa in 2008 and then in Namibia in 2010, '11. You have to have a long-term view on Africa, and I think that we do have that. I think that we'll be able to better -- we are already bettering the returns on the investment that we have done in Africa.

And still, if you could throw some light next 5 years, how you're really looking at in expanding not in the current geographies or countries, but these 10 to 12 years would have really introduced you to other countries also.

So they have introduced us to other countries. Like I said, we already bid for a couple of new facilities in other countries as well. And like I said on my previous reply as well in Africa, unless you can do physical meetings, it's very difficult to convert these proposals into contracts. And we expect that as and when the COVID restrictions are eased out, that is something that our team would be able to go and discuss and close proposals.

That was the last question in queue. I now hand the conference over to Mr. Atul Tantia, Executive Director and CFO, for his closing comments.

Thank you, everyone, for your participation in our Q1 FY '22 earnings conference call. In case of further queries, you may get in touch with our IR team, Stellar Investor Relations, or feel free to get in touch with us directly. I wish that all of you take care and stay safe. Thank you. Have a good day.

Thank you. Ladies and gentlemen, on behalf of GPT Infraprojects Limited, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your lines.