H.G. Infra Engineering Limited (HGINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H.G. Infra Engineering Q2 FY '23 Earnings Conference Call hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Sana Kapoor from Go India Advisors. Thank you, and over to you.

Thank you, Inba. Good morning, everybody, and welcome to H.G. Infra Engineering Limited earnings call to discuss the Q2 and H1 FY '23 results. We have on the call Mr. Harendra Singh, Chairman and Managing Director; Mr. [ Arvind Khandelwal ], President, Strategy; and Mr. Rajeev Mishra, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must therefore be viewed in conjunction with the risks that the company faces. May I now request Mr. Harendra Singh to take us through the company's business outlook and performance subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.

Yes. Thank you, Sana. Good morning, ladies and gentlemen. Thank you for joining us on Q2 and H1 FY '23 earnings call today. Hope you all are in high spirits and keeping fine. I trust that you would have looked at the earnings presentation uploaded on the exchanges and company's website. And as you would have seen from our presentation, this has been another good quarter for the company and that is despite being a weak quarter across the sector due to the prolonged monsoons. As a listed company, over the last 5 years, we have ensured that all our efforts are in a direction which create superior shareholder value, and we will continue to focus on building sustainable long-term value on them -- for them. Our strong focus is always on growing bottom line, maintaining strong balance sheet and selection of high-quality projects to outline our order book. Let me give you some update on the infrastructure sector first. Taking on to road, as you can see that coming to the NHAI tendering status, NHAI has set full year target of 6,500 kilometers of road projects to be awarded this year, which is a bit slow in the first half of this financial year, which is likely to pick up in the second half of this year, which gives us the opportunity for bringing new projects and further strengthening of our order book as a priority sector. Railways as well, there are a lot of development in the railways, which are announced in the recent past. The -- a total of 1,253 railway stations that have been identified for development under the Adarsh railway development scheme. That is modernization of railway station. As many as 199 stations are likely to be awarded this year. So we have bidded for a few and we are paced -- likely to build many in this sector. Apart from this, other track doubling and high-speed network corridors are all there, which are to be developed and enter DPR stage. Water is again our priority focus, which we, again, are looking at to bid and the JJM in Rajasthan, UP and MP state. All these developments will give a lot of opportunity to us to enter into these segment and diversify our business beyond groups. Let me first start with quarterly financial performance. So during the quarter, we reported a revenue of INR 752.1 crore. At stand-alone level, just the revenue for the corresponding period last year stood at INR 753.2 crores. The EBITDA stood at INR 120.8 crores in Q2 FY '23 and EBITDA margin stood at 15.1% in Q2 FY '23. The EBITDA margin stood moreover at the same level with last year despite increase in the cost of materials, but our drive with better operational efficiencies, strong execution capability has been leading with the cost in margins. Profit before tax for Q2 FY '23 stood at INR 86.24 crores and profit after tax for the same period at INR 64.6 crores. Now coming to the half yearly financial performance at a stand-alone level. Our total revenue for H1 FY '23 stood at INR 1,817.74 crores, an increase of 9.05% year-on-year as compared to INR 1,666.81 crores in H1 FY '22. EBITDA stood at to be INR 283.20 crores as compared to INR 275.80 crores same period last year. EBITDA margin at H1 FY '23 stood at 15.6% and PAT stood at INR 162.3 crore for H1 FY '23 as compared to INR 158.80 crores during the same period last year. And PAT margin for H1 FY '23 stood at 8.9%. Our total gross debt as on 30th September 2022, stood at INR 392.2 crores at stand-alone levels. This includes working capital debt of INR 42.4 crores and term loans plus current maturities of INR 349.8 crores. That also includes payable under MSME trade receivables, and INR 66.6 crores, and NCD of INR 97 crores. Our total gross debt at consol level stood at INR 1,425.3 crores, which includes project debt of INR 1,033.1 crores. I will now briefly cover key updates on our operational highlights of prominent projects. Our total earnings secured order book stood at INR 10,851 crores as on 30th September which with our presence in 9 states of the country, and it is well diversified with 54% of the EPC projects and 36% HAM projects. We are pleased to inform you that we have recently received the appointed date at 3 November 2022 for our most prestigious Ganga Expressway project, where almost 94%-plus land is available, and we have started the execution on this project. Coming to the progress of other major EPC projects, In Delhi-Vadodara Package 8, we are inching toward the completion of the project as we have made good progress and have completed around 92%. We expect the project to be completed in this quarter, say, quarter 3. In Delhi-Vadodara Package 9, where we have completed around 81%, we expect the project to be completed by February '23. In the Mancherial project of Adani, we have completed around 72% and applied from PCOD, which is likely to be received in November '22, and the project is expected -- and that project is expected to be completed by -- in Q4. In UER Package 1, Karala-Kanjhawala for Delhi, we have completed 27.4% of the work, which is running as per the scheduled time lines. In Neelmangala-Tumkur project, we have mobilized our resources at project sites and execution work has been done post the appointed date, which has been -- which is 25 August 2022. Coming to our HAM project under execution, which are also progressing well as per the schedule time line. In the Rewari bypass HAM project, we have completed around 86%, and we are moving ahead for project completion as per the schedule time line. In Raipur-Visakhapatnam AP 1 corridor, we have completed 13% of the project further in 2 HAM projects of Raipur-Visakhapatnam that are the Odisha Packages 5 and 6. We have completed about 8.4% and 12%, respectively. In Khammam-Devarapalle Package 1 and 2, we have received our appointed date on 30th September 2022 for KD Package 2 and post our financial closure declared on 15 September 2022 for KD Package, the appointed date is likely to be declared very soon. We have started the project execution on these projects post all these developments. Almost 80%-plus land is available in these 2 projects. For all HAM projects, we have a total equity requirement of INR 1,137 crores that is projected till FY '25. Out of this total amount, we have already invested INR 609.54 crore as of 30th September 2022. And we project to invest some INR 200 crores in the beginning part of this financial year. It is important to update the other significant developments of projects and at the organizational level. We have received the completion certificate for Gurgaon-Sohna HAM project in September. That's where we received the PCOD date at 25th of February 2022. Also for the Narnaul Bypass, we received the COD letter from the authorities where the completion was -- PCOD was with the platform of 11th of March 2022. At this point, I feel immensely proud and glad to share that we have been awarded as the fastest-growing construction company in medium sector. In October 2022, at the Construction World Global Awards 2022, this is our financial indicators of last minus 5 years, which shows our strong presence and determination in this sector. Well, our guidance on the bidding outlook and the business opportunity. We are very positive on the sector outlook and opportunities in the second half of this financial year as covered in my opening remarks that tendering is expected to show a strong figure, which gives us the opportunity for winning new projects and further standing of our order book. We are all aware that government is taking numerous initiatives in various infrastructure development programs, including the national infrastructure pipeline, the Gati Shakti program that will give thrust to this sector and ample opportunities for the players like us. We at H.G. are readying ourselves for the next level of growth through various steps. Like in last quarter, we have initiated various in-house initiatives to strengthen our executional capabilities and enrich our system and processes, the new synergies in our thought process with external environmental like vendor meet, annual operational meet with the project and top management interaction and with stakeholders. This will help us to build a robust business model, having a complete integration in operations, along with a large fleet of in-house equipment and skilled human resource. Our strong focus is on operational efficiency, cost optimization and strong project execution skills that give us the confidence to close this financial year close to our earlier stated guidelines with 25% growth year-on-year and EBITDA margin close to 60%-plus as compared to last year. Our key focus ahead will be on winning selective projects that complement our order book and ensure efficiencies. Our goal is to achieve additional guiding numbers of INR 4,000 crores to INR 5,000 crores new order inflow in this financial year. Now I would like the moderator to open the floor for question and answer. Thank you.

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

Sir, first, coming on the guidance front. So you mentioned in your opening remark a 25% growth. So does that mean we are looking at INR 4,500 crores revenue versus earlier guidance of INR 5,000 crores? And now are we confident to achieve this INR 4,500 crores? Or is there also a possibility to slightly even further lower number by the year-end?

See, as it is all evident that this year, the monsoon has early arrival to prolonged monsoon and entire country has experienced good rain. But this is the first factor which has affected the progress during the quarter 2. And again, if you see to the appointed date which likely was supposed to be of the Ganga Expressway in September, sometime in September, which has been delayed by 1.5 months as per our expectations, affecting the progress. So this has impacted almost INR 150-odd crores of progress altogether in quarter 2. But again, as we are very clear on it, the appointed dates of almost all the projects are in hand and execution in all the projects. So with that, we don't see much of a challenge this quarter 2. Definitely in quarter 3, quarter 4, whatever is possible, we would be likely to cope up with that. And for 25%-plus means around INR 4,600 crores, around INR 4,600 crores we will be reaching this year. And with the major execution, which we have looked into, would be coming in quarter 3 and quarter 4 will be from Raipur Vishakhapatnam, all 3 packages of HAM and Ganga Expressway, of course, would be the one which are -- will be the major contributor in terms of quarter 3. Then UER package, again, we did INR 183 crores in last quarter and delivered the Package 8 and 9. We again did INR 181 crores in last quarter. Around INR 300 crores is left in Delhi-Vadodara Packages and again, INR 900-odd crores left in UER package. There again, our most execution is at the very good trend. We have INR 200 crores of execution expected in quarter 3 and INR 200-plus crores in quarter 4. So this now gives us a fair outlook that we would be reaching the INR 4,600 crores level.

So broadly, we did INR 1,800-odd crores. So to reach INR 4,600 crores, we need INR 2,800-odd crore. So around INR 1,300 crores, INR 1,400 crores run rate would be required in third and fourth quarter. So that can be doable. And also for the FY '24 previously, we were looking at INR 6,000-odd crores revenue. So what's the new number? And in terms of the margin, when we say 16%-plus. So that is for entire full year of FY '23, or in the second half, we are looking at 16%-plus margin?

The trend of margin has now been restored that again, we can say last say, almost 4, 5 quarters, we were dealing with pressure of the commodity price. Now it is all back on track, the 16%-plus margins, which will all be visible low. At quarter 3 and quarter 4 altogether INR 2,800 crores, definitely in quarter 3 we always see that the quarter 4 comes at about, say, 35% to, let's say, 35%. So there, we are very clear about it, that quarter 4 would be really a big number. But ultimately in quarter 3 and 4, it could be coming at INR 2,800 crore, roughly.

And for the next year, FY '24?

Next year, definitely, we will be on same track as we have already seen at about 22%, 25% year-on-year. That is it, which you can see the INR 4,600 crores if we add some 22% to that as it's coming at around for INR 5,800 crores to INR 6,000 crores.

Okay, okay. And on the order inflow, last time when we said we will be looking at close to INR 3,000 crores to INR 3,500 crores from HAM and INR 1,000 to INR 1,500 crores from the other JJM and NHAI EPC, so that remains the same? Or are we now looking at more delivery orders than the NHAI EPC orders?

Of course, as already addressed in the opening remarks that in railway remodeling, there's a new concept coming in on the EPC mode from railway. And there we have already bidded 3 of the stations, those we could not pay on those projects earlier on. But now we again believe that EPC of NHAI or EPC of railways or any EPC of water together, would come at about, say, INR 1,500 and balance INR 3,500-odd crores will be coming from HAM.

And then any of the projects in terms of the value size apart from drill wave, where we have bidded and what's the value and where we have bidded when likely the results are to come?

We are already some INR 15,000-odd crores of project bidded in INR 11,000 crores in NHAI and some INR 4,000 crores in our railway and railway stations and the water where I think there were about 8 bids which are yet to be opened.

Okay. On the equity front, just you mentioned INR 200 crores this second half also in FY '24 and '25, how much we'll be needing then in terms of the monetization. We were previously looking at 4 HAM projects. So any progress? When can we see the announcement from that front?

The total equity requirement for, say, FY '24 and '25 after this INR 200 crores as already INR 1,137 crores. Out of this, INR 600 crores we already invested and some INR 200 would be invested in the later half of the year. So the balance would be in '24 and '25 hardly it is coming at about INR 190 crores in '24 and balance in '25.

Mr. Shah, may we request you to return to the queue, there are several participants waiting for their turn. [Operator Instructions] The next question is from the line of Mohit Kumar from DAM Capital.

Congratulations on a very, very good order book, sir. Sir, I have 2 questions. First is, how the road bidding pipeline looking like from NHAI side? Till date, I think the bidding has a pretty lukewarm. And do you have any -- and are we seeing a higher portion of HAM in the pipeline?

See, almost it was expected in first half of this year, not much of the bidding activity, which has been experienced in the last few years. But as we already guided, I think it's 6,000-plus kilometers to be awarded by NHAI this year. They were looking at a few modifications into the cash support from NHAI from 40% to 20%, which is in that -- at the advanced stage of discussion. But by that time, I think now we have seen that almost they are around 60-odd bid which are to be, say, bidded or to be awarded within this quarter 3. So this is a clarity that now in NHAI again with all majorly into HAM. EPC are not many, but definitely a few of the people, BOTs.

Okay. Understood, sir. So expect the H2, the order you are bidding to pick up substantially. Is that right, sir?

Yes.

And second question, sir, on the railway side. I think you gave a detailed outlook on the opportunities. Are you looking at railway station redevelopment work? And does it mean that we need to build some capabilities and investment in the resources?

Well, I think you can see the revenue of the redevelopment work like station building, terminal building. It doesn't require much of a CapEx. It's a major of the procurement and the labor-oriented labor and the work. But these are good works, which we believe they are the steel frame structure work, which gives us a possibility and opportunity that we may go for any of the 1 or 2 stations.

Mr. Mohit Kumar, may we request you to return to the queue, please. [Operator Instructions] We'll take a next question from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on a decent quarter, especially tight control on the balance sheet and working capital. My first question is, what is the total order inflows for financial year-to-date? And for the next year, how are you looking to replace this large order of Ganga Expressway because that's one bulky order which is coming? Will it be a tough task to exceed this year's order inflows?

For sure, I think which initially, as we expected INR 9,000-plus crores to be added during the year with INR 4,500 crore orders already there. We are now were at ease. But now again, as usually happens in years, that around INR 3,000 crores to INR 4,000 crores of orders of NHAI, HAM or EPC, usually being added in the last 2 years' trend. So this is our prime focus, that with a good, say, any of the orders having bearing good profit. That is the first focus. And then again, beyond the road, beyond highways, which we again, in railways, we have already bidded 5 of the place that has a really new track or a doubling of those things. And high-speed networks, which are DPR at advanced stage, which likely to come in later half of this year or next year. Again, it would be the likely opportunities in railway other than the railway remodeling of the stations. And again, in water, we have already bidded some 3 of the projects. So we look forward back in quarter 3 and quarter 4. So altogether, we would be looking into the mix balance of all the 3, 4 sectors.

Okay. The second question is on the monetization plan. Now we have already invested INR 600 crores. We have projects where we have achieved funds, there's COD. So what's the time line for monetization? And how much of -- how many projects or value of the book, value of equity you're looking to monetize?

Again, I think it is almost 2, 3 quarters, it was a standstill that is really, say, has been initiated at, again, a very aggressive pace in quarter 2 of this year. So we are now having 3 particular proposals going on side by side. And we are working on it. And most likely, by end of this year, the deal would be concluded and we are there, we are getting a good response from the investors. Because they are all waiting and we also are waiting for the entire completion of which we have completed in 2 of the projects where the COD is received. And just one project where a small portion is left out already in November '21, we received the Rewari Ateli. With that, the entire completion of the project is done and very soon we will be completing the Rewari bypass. With this small work projects, almost INR 350-odd crores of equity, which we are looking that at least we should have a decent step up about 40%, that is about 12%-plus are the discounting number.

You're saying by 40% premier to your INR 350 crores in equity investment is what you are looking at, at 12% discount rate?

Correct.

We will take our next question from the line of Ashish Shah from Centrum Broking.

Sir, I know you've given an overall guidance for the execution for the year but just wanted to understand that a couple of projects like OD-5, OD-6, we haven't seen a great lot of progress in the first half. I mean after the appointed dates have been received sometime in end of May. So what is the reason why the pickup has been a little on the slower side?

See, this monsoon again in north and south, it behaves differently, okay? So you can see in this eastern half where the entire corridor is lying, AP and OD-5, 6, there were -- not much of the progress is visible. It's hardly in all these 3 projects, this is hardly about, say, INR 150-odd crores is the progress during the quarter, which not would have been much better. But now we are there, they have mobilized. We have having the entire resources waiting for the monsoon withdrawal and that has now been restored and we would be coming back to the track. We will be progressing very good, progressing these projects in quarter 3 and quarter 4.

Okay, So any number you'd like to put, let's say, by the end of the year, in OD-5, OD-6 and AP-1.

All 3 corridors in Raipur Vishakhapatnam, we would be doing INR 325-odd crores at quarter 3 and around INR 350-odd crore bid in quarter 4.

Sure. And..

We are around INR 2,700 crores with balanced work as on 30th September.

Okay. Sure. Also, on Ganga Expressway, how is the ramp-up likely? How much do you expect to execute by this financial year-end and how much you're looking at next financial year?

Earlier, it was expected about INR 1,000 crores of execution during the financial year. But now just say, we would be looking at INR 700 crores because of almost delay of about 1.5 months or 2 months' delay. So that is one reason. And again, if you see that in North, the fog an winter rains do affect these kinds of projects, which earlier when you started, then I think that the artwork and the relevant, it hampers a lot. In any case, we were INR 300 odd crores, which is likely to be where INR 5,000 crores gone out is likely to be going down to INR 4,600 crores exactly, and that is a big reason.

So INR 700 crores this year and next year, what would be the number, sir?

Next year, definitely, we will be looking at about INR 2,000 crores of execution coming out from the Ganga Expressway.

We'll take the next question from the line of Jiten Rushi from Axis Capital.

My first question, when I was reconciling the revenue based on our order backlog opening and closing order backlog. So the revenue change to be INR 656 crores. So I think our reported number, it is short by INR 96 crores. So any other revenue other than the execution you've booked in the quarter, sir?

What you are saying that the amount which you have seen is different INR 750-odd crores.

Again, the reconciliation is...

The big number is coming from price variation as well.

It's price variation and sir, and any really utility shifting on something like that?

It's a minor number, not a big number. INR 15, INR 20 crores is coming from the utility shifting and INR 10 crores, INR 12 crores coming as O&M revenue. And a major number is about 8% to 10% is coming from price variation and [indiscernible].

And sir, on the bookkeeping side, can you just highlight the outstanding mobilization advance unbilled revenue retention money? And if you can give us the breakup of debtors, if it is possible, sir, as on September?

Yes, sure. I think it has been reduced by INR 337 crores which you see altogether because of debtor including retention. Okay, INR 373 crores at June 30, now it's gone down to INR 536 crores. So it has a bit of an increase in the contractor set because it is unbilled because major portion is in the Ganga Expressway and DV-89 which is approaching completion. This is, again, a significant number is there, which is certain over likely to be there in quarter 3 only on this. And a bit of HAM project and development in Maharashtra and Sakinaki projects shares. So altogether, this is an increase in INR 100 crore on contract as it is likely to come down again to the same range we have always do 300 to 350-odd crores. But debtors would not be -- doing anything major surprises would be coming in as we are now having INR 350 crores up debtor.

The question has been incomplete. So let me get the answer, please.

If this is regarding the debtor regarding...

I just didn't get the number. What is the outstanding unbilled number? And what is outstanding mobilizing advances and what is outstanding, sir?

So unbilled number is INR 458 crores deal where the major I already given, that project is charged major, which again is going to drop down to INR 350 crore, not beyond that. Whether it's still on the project nearing completion and the HAM projects again where we have completed, we have certain [indiscernible] we have committed. I think it has been increased by INR 50-odd crore. And again, we -- again, I am coming to that, that there is INR 60 crores increase in the order book, which is [ INR 347 crores ].

And retention, sir?

Retention is almost the same.

That is what?

INR 175 crores.

[Operator Instructions] The next question is from the line of Romil Jain from Electrum PMS.

Yes. Sir, actually, I just missed, I could not hear properly. What is the equity requirement for current year and '24 and '25?

Current year balance is INR 200 crores for the better part of this year, and next year, it is coming at around INR 190 crores. Say of INR 1,137 crores, we have already invested in INR 610 crores.

Okay. And '25 number?

Balance is coming in '25 hardly is coming at from around INR 100 crores.

Okay. Okay. Got it. And sir, one question on the competition. So as you mentioned, most of the projects are HAM -- from NHAI. So how is the competitive intensity in the last couple of months? And do we see some kind of pressure in the competitive intensity?

No. EPC is not yet improved, but definitely HAM, the major shift has been there. I think now the number of players are getting lesser and lesser. And with that, again the percentage where the discounts were passed on, now we have seen a bit of a premium over rate.

For the upcoming projects?

Upcoming projects from the recent past, we have seen a few of the risks, the margins [indiscernible] are a bit better compared to winter. As earlier now has been improved.

Okay. But any specific reason why it has been improved? I mean, there are players who are not able to bid or capital issues are there?

Actually, not a big reason, but definitely, you can consider that a major initial say, about 20 to 25 bidders were there, which was a small, midsized company. They are having enough of the appetite orders in hand. They are not participating much now.

We'll take our next question from the line of Nikhil Abhyankar from DAM Capital.

I'm really sorry I had joined the call late. So have you mentioned your guidance for FY '23, the revenue, EBITDA margin and the order inflow?

I already kind of repeated. It's about INR 4,600 crores and EBITDA up to 15%-plus, somewhere in that range.

Okay. And why, sir? INR 9,000 crore to INR 10,000 crores?

Order we already received is INR 4500 crores, where the INR 4,500 crores would be likely to be added during the year in roads and other sectors.

Understood. No problem. And you also mentioned that you are looking at railway station orders. So would like to know that whether the margin profile on these projects will be the same as our current margin?

We are keeping our intent clear that we would be not going for further sales to lower margins or any of the other sectors even.

[Operator Instructions] The next question is from the line of Sarvesh Gupta from Maximal Capital.

One question is on these large projects like Ganga Expressway, which you have in your order book. So do you expect the margins to be in similar range? Or do you see any efficiencies or do you see because these are very large orders that you have got, you see some sort of a lowering of margins?

No, probably I can understand your question. Say in any case, this 150 kilometer is obviously a huge magnitude, INR 4,500 crores. Tying to Raipur Vishakhapatnam package, again, about INR 3,000 crores. So this gives the cluster-based approach, where the margins definitely, operation efficiences are much better. The margin would be good. No doubt that it was -- there was a bit of a shrinkage in the earlier quarters. Now we are coming back to the track. 15%-plus margin would be there.

Understood. And secondly, in railways, while we've been trying to enter these 2 segments, railways, water, but we haven't yet got any significant sort of order which will move...

No, I think it doesn't say -- is that we need to be very -- thrust has to be there. But no doubt, we are having a clarity of that, but we should not be compromising looking -- the margin compromises are there. So we are on track. We would be getting the orders. In any case, as we are looking for 10% to 15% this year for the other sector.

And in railways, specifically, sir, some of the other EPC players have burned their hands badly in terms of track laying and many other activities...

There is a big change in the execution pattern. As you can see in last few years in NHAI also, earlier the land was not there. Project with us over time -- time over run was there, 4 to 5 years' completion. Now it is coming at 2 years, 2.5, 3 years. So again, the big change is coming there in the railway as well. With this Gati Shakti monitoring program, it happens like that, the things have been monitored very closely.

In HAM, we are expecting around INR 350 crores release this year. Is that right? And what is the expectation...

What I'm saying if the deal is going to be completed this year. The fund may or may not come this year, but definitely as the deal concludes in this financial year, within 6 months we will be getting the funds.

Can -- just 1 second, this is the continuation of the same question. So the next 18 months, what are we expecting of the overall equity release from the HAM projects?

Release?

Release, sir. I mean the HAM monetization, what are we expecting the equity amount to be monetized for this 18 months, let's say, this 6 months and next 12 months of the next financial year.

This is INR 350 crores of total equity, all for the 4 projects, which are in proposal for monetization. So where exactly we are looking at 40% over the equity deployed. But again, we can expect in next year, 18 months, again, from now.

Our next question is from the line of Jiten Parmar from Aurum Capital.

Yes. My question is basically on the consolidated margins, we did 19% last year. Are we on track to maintain that or better that for this year? And what is the outlook for next year?

Currently, for the first half of this year, it is at 18.9%. You are talking of the consolidated margin?

Right.

So it would be in the range of about 19% to 20%. That would be the same range.

And for next year also, you are guiding the same?

Probably it may increase a bit with the entire monetization and a few things at SPV level where I think the bonus and few expenses are incurred, but the revenue is not yet realized.

Okay. My second question is on the order inflow. So I think you answered that, but I couldn't get it clearly. For half 2, you are saying that you should get order inflow of around INR 4,500 crores. Just want to make sure of that, is that right?

Yes. Definitely, we are looking at it about INR 3,200 crores, INR 3,500 crores coming from HAM projects of NHAI and other than that, EPC NHAI or, say, in other sectors.

Our next question is from Shravan Shah from Dolat Capital.

Yes. Sir, Khammam-Devarapalle Package 1 appointed date will be expected by?

That is by 10th of November -- sorry, the 10th of November, JMS has been already signed. And within next few days, we will be getting the appointed date.

Okay. So before this month end, sir, we will be having the appointed date?

Yes, for sure.

Yes. Second is in terms of the CapEx for this 1H, we have done INR 149-odd crore. Previously, we were looking at even a sale of the equipment at INR 135-odd crore for this year?

I can give a clarity on the breakup of the CapEx, which has been done and that is likely to be done. So this is INR 434 crore of CapEx out of the INR 18 crores. Earlier this capital work in progress, which is there, it is camp development, which earlier on was our expense, categorized as our expense. Now it is capital work in progress to be depreciated within, say, 2, 3 years of the duration of the contract. So that is how the number looks today. That is now INR 91 crores of CapEx already done. INR 25 crores of land and building are there. And INR 30 crores of camp is there. So total INR 150-odd crores of CapEx done. Another, say, some INR 45-odd crores would be done in this year, INR 45 crores is likely to be received for the disposal of the old assets.

Okay. Okay. Okay. Got it. And in terms of the debt level, which is INR 392-odd crore. So by March end, we will be seeing some reduction from here on?

Yes, INR 350 crores to INR 400 crores, that is the likely number which would be there.

Okay. Okay. And lastly, on the -- we were expected to get the INR 26 crore bonus in the second quarter.

This gain is at a competitive authority approval level and in quarter 3, we will be getting.

So we will be getting INR 26 crores in the third quarter? And is there any other projects that we'll be getting a bonus in fourth quarter?

No, as of now, there's no possibility.

Our next question is from Jiten Rushi from Axis Capital.

In the railway bids, you said you'll be bidding for the railway lining projects and also on the station redevelopment projects. Sir, these projects, are we qualified or we shall be bidding in joint ventures?

So mostly, we are qualified in metro and this side of our projects. And if in case of an atypical requirement, qualification requirement, we are -- already we are tied up and we would be doing for those interesting projects. Most of the projects are bidded as a single entity.

So what is the size till which we can bid as an independent entity?

It's almost at a level of INR 1,000 crores or even INR 1,400 crores, we are eligible for those projects.

Is it 1,500?

Yes. I think we are not getting many projects, which size is over INR 800 crores or INR 1,000 crores, but we are eligible.

And so water project, obviously, will go in joint venture...

That is with a partner, yes.

And sir, on the escalation part. So these projects are mostly commodity-driven projects. So these projects will include escalation, right, sir?

Every project is having this slight escalation clause.

So that should not be the challenge for us.

Correct.

And sir, on the margin front, obviously, you've given that H2 should be better in terms of EBITDA margin. But sir, going forward, you said that there are large ticket projects like you are executing like the Raipur project, the Sitarganj, Adani project. So in that, we are seeing like a 15%-odd margin. So do we see that going forward margin overall should come down to 15%, 15.5% against 16%, 16.5%, which you say?

I don't see now or work with the commodity prices always has cooled down and now it was at a stagnation stage. So whatever build we have done with 1.5 years back, now we are getting the equivalent price escalation for that as well a similar number. We don't expect that 15%-plus margin would be, say, the big question in coming months or coming years.

Sir, in the revenue terms, you said INR 2,000 crores we expect from the Ganga Expressway in FY '24. So what kind of revenue you're expecting from the Raipur package and the PV 1 and 2 in FY '24, sir?

If you can just look into the breakup of that, whichever project where we are like targeted to complete by June '24 -- sorry, May '24 rather. So then in any case, the most significant portion would be completed in FY '24.

Next question, you said that you're expecting a revenue of INR 5,800 crores to INR 6,000 crore...

At least, that would be coming at about, say, INR 1,300 to INR 1,400 of revenue all 3 packages on Raipur Vishakhapatnam in FY '24.

And on the Khammam-Devarapalle Package 1 and 2, how much do we expect in the UER? And how much do we expecting in FY '24?

So probably with the entire order book, which is at about INR 10,800-odd crore, which is supposed to be completed by the time of this year in FY '24, in November '24. So with that, you can very well understand. The majority of the project where we would be targeting within the similar time line where the land is not a challenge and where other challenges are not there. We believe we are, according to contract, we are also prepared to execute on time.

We'll take our next question from the line of Prem Khurana from Anand Rathi Shares.

Sir, my question was with respect to hybrid annuity, and we already have 2 which are operational now and we've started receiving annuities as well. So one was I wanted to understand if are receiving our annuities in time. Second is essentially given the fact that both these are such an operational -- so have you been able to manage refinancing of these assets? I mean has the interest rate come down? And what's the spread now that you're able to make with this? And just to continue on this, I mean, you spoke about some 40-odd percent premium that you expect once you want to sell these assets, right? So is that a hurdle trait? I mean if -- let's say, I mean, there's a buyer who doesn't agree to 40%, would you be willing to settle for a little lower number or not?

In the first part there, you are saying that the entire -- this project which we have completed COD, we are getting the right annuity right on time, number one. The operation costs and maintenance costs, which we are incurring with sales, very below what we are getting from NHAI that is not in control. The number which has been integrated as the premium which we are likely to get on the equity investment, which is coming from -- because of that only. Because of the interest rate, which most of these assets, which we are having this is around -- it's almost 7.4% rather, 7.4%. So with that, I think it an advantage to us that we are in the cash flow of SPV level, a decent one. And then this number which you are saying, that 40% reach we are looking at, definitely 30% to 40% has been indicated by them and there is possible negotiation which is going well.

And the payments would come in 2 tranches, right? I mean, you'll get to a first 49% and then another 51%. The first 2, as I can understand, you already spent 6 months of which so you'll be able to have it, but then the third and the fourth, you would have to wait for some time, right?

Obviously, I think this will gradually -- it's a process, it is a 1-year process almost.

Sure. And would you be able to help me with the receivables from IRB and Adani?

Yes. Adani, there is not a big balance receivable as a better of hardly INR 60-something crores, which we received pretty regularly -- which we are receiving regularly. And IRB, I can update upon it. We basically, at the start of this financial year -- this quarter. So we were having some debtors, I can't give you the stage. So we were having the INR 306 crores. There was debtors and retention in unbilled, all 3 together the start of this quarter. Now it's coming down, and we have received INR 133 crores in quarter. We have received some INR 40 crores post also in the quarter. And now that is coming at roughly in a potential major portion INR 32 crores which is not yet due and indicates the 2-year GST period. INR 58 crores out of INR 58 crores debtors, we have received INR 40 crores and INR 30 crores of unbilled, which is likely to be billed within this [indiscernible] under production. So mostly on track.

Sure, sir. Okay. And for Ganga, the CapEx is already taken care of, right? Or there is some more which is...

I think the CapEx which we have done and the CapEx, which is likely to be done, which again is going to be out with the disposal plan, which we are going to dispose.

[Operator Instructions] The next question is from the line of Uttam Kumar Srimal from Axis Securities.

Sir, this quarter, our employee costs and other expenses have increased. So can you please throw some light on that?

See, the mobilization in all the big size and all the projects have been a bit delayed and which we received very recently. So with that, I think the manpower cost in those other projects is being reflected as an expense in this quarter 2. Number two, as a percentage, this is all high, which you see the execution of tender and it only have been coming back to the same percentage as we have been in most of the last few years.

Okay. And sir, you said that competitive intensity has reduced. Earlier, there were 20, 25 players. So now at this juncture, how many players are bidding for a particular HAM project?

No. See, what I'm saying in HAM, there has been reduced. And EPC, it's not that. EPC is almost sending a similar number of players, which are...

No, I'm asking about HAM only.

Earlier, it was going at about 13, 15 numbers. Now it's coming down again to, say, 8 to 10. So that is a significant reduction.

Our next question is from the line of Franklin Moraes from Equentis Wealth Advisory.

So you had alluded to the fact that you had some monsoon impact for the quarter. So has this impact spilled over for this quarter as well and in Q3?

Has earlier been asked that. In any case, if we are looking at about INR 2,800 crores of execution, they have a balance part of this year. So quarter 4 would be the highest one. And in quarter 2 because you can see in the whole Odisha, Andhra, Bangalore, nearby all the areas Telangana, because monsoon withdrawal has been some time, say, 15th or 20th of October. So a bit of a proportion being affected, but now again, we are -- the execution is all well tracked. We are doing almost INR 15 crores to INR 16 crores of execution a day now. So we would be completing -- significantly, it will be coming at a good number, a decent number in this quarter 3. Year-on-year growth is confirmed.

Okay, okay. And last 4 to 5 years, we have seen EBITDA margin improvement also from 15% to 16%-plus, this is a steady improvement. So one is, is it a function of your internal efficiencies? Or is it a function of the product mix? And going forward, maybe for the next 3, 4 years, can we expect margins to improve going forward as well? Or are they likely to be stable?

Now I think it's even stable at the 16% to 17% so that we have already -- this is the next reason, is it can be the size, project magnitude, operational efficiencies being improved, certain modification to the operational model is there, execution strategy is there. So this is how I think look like coming years also, we would be making that number.

Okay. And in the last 5 years, what was the reason for the improvement? Internal efficiency?

No, I think the commodity price, which were really damaged for a few quarters. They're going down as low as 15%, now coming back to 16%. So that is the major reason now.

Next question is from the line of Mudit Jain from Hem Securities.

My question was regarding that on the margin front. Our stand-alone margin last year was around 16% and the consolidated margin is around 19%. The concerting revenue difference is not very much between stand-alone and consolidated revenue. What's contributing to this additional margin, so can you just throw some light on that?

The consolidation of our books is only really because of SCV. And SCV, there is not much of an expense, only the revenue and the profit is top line, bottom line is coming almost at a similar range.

That was the last question. I now hand over the floor back to the management for closing comments.

Thank you all for your time today for attending this investor call. I hope all your queries were answered satisfactorily. In case you have any follow-up queries, please feel free to reach to our IR advisers, that is Go India Advisors. And I'm wishing you all a very good weekend. Thank you.

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