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

Ladies and gentlemen, good day, and welcome to the H.G. Infra Engineering Limited Q4 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, ma'am.

Thank you, Faisan. Good afternoon, everybody, and welcome to H.G. Infra Engineering Limited Earnings Call to discuss the Q4 and 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 be, therefore, viewed in conjunction with the risk 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 time. And over to you, sir.

Thank you, Sana. Good afternoon, ladies and gentlemen. Welcome, everyone, to the Q4 and FY '23 earnings call. I hope you all is well and have got the chance to view the investors presentation and the results that were uploaded on the exchanges. I'm pleased to announce that, by the grace of God, this year has been phenomenal for us. Rise on diversification of our order book by securing 3 nongrowth projects this year, followed by a successfully entering into a share purchase agreement for monetizing of our 4 HAM projects, which would further strengthen our balance sheet. Furthermore, we have strengthened our position in the highway and road sector with 2 successful HAM projects in Q4 FY '23. The company has established outstanding performance in FY '23 across all areas. Let me start with the yearly financial performance of the company. In FY '23, the standalone overall revenue was INR 4,419 crores, which increased by 22.2% Y-o-Y from INR 3,614 crores in FY '22. The EBITDA for FY '23 was INR 710 crores, showing a year-on-year growth of 21.5%, with an EBITDA margin of 15.1%. The PAT margins for FY '23 was 9.5%, and the profit after tax for the period FY '23 is INR [ 422 ] crores, which is an increase of INR [ 39 ] crores FY '22. Before I move on to the operational and detailed financial numbers of the company, let me share a few updates on the infrastructure sector to establish the business opportunities in the years to come. Talking of roads, the central government intends to accelerate the construction of roads in FY '24 with the awarding of new projects of 12,000 to 12,500 odd kilometers this year. Along with focus on the project completion ahead of general action is expected to boost execution in FY '24. More targets to build 45 kilometers of roadways in the year of FY '24. This implies construction of around 16,000 kilometers of road in a year, which will be on the [ quartile. ] Most plans to initiate the second phase of [ Barangaroo ]. And railways, again, the capital expenditure in the railway sector has been consistently increasing over the past 4 years and is expected to reach a projected amount of INR 2.5 lakh in FY '23. The government is aiming to upgrade the redevelopment of 275-odd stations privately in [ busy mode ] under the [ indiscernible] scheme. The government has allocated a budget of INR 98,000 crores for the monetization and expansion of airports over the next 5 years. Of this budget, INR 60,000 crores will be used to announce the existing airport while INR 38,000 crore has been set aside for the development of new greenfield labels. The world's fastest-growing aviation market teams to boost the number of airports to 220 by 2025 from the current 148. It will involve greenfield projects, new terminals and makeover of the existing airports. The water again were the [ huge ] mission is quite impressive. With increased budgetary allocation, the priority is being supported by the government of India to provide safe water to the rural households. We, as a company, see abundant business opportunities to client and look forward to get some more projects in [ front, too. ] Now I would like to share the official updates on order book project execution and other significant events. As of FY '23, our order book has reached INR 12,595 crores. There is a bit correction in the investor presentation. We have corrected there are 2 projects which are having the GFC. So it is INR 12,595 crores, with an order inflow of INR 8,650 crores during the year. We have established our footprint in 11-state with the EPC segment accounting for 55% and the HAM segment accounting for 45%. We would further like to grow our order book in this financial year, majorly from road and [ rail ] segment, but we would like to further expand our presence in other sectors too, including water, railways and other opportunities. During the year, we have secured 3 HAM projects and 3 nonroad projects, which I would like to mention, apart from the Karnal. The Karnal, Ring Road project, there is a project in the state of Haryana was INR 997 crores; 2 HAM projects in Varanasi-Ranchi-Kolkata highway and [indiscernible] in the state of Jharkhand, was INR 925 crores and INR 1,303 crores, respectively. [ Delhi Metro ] EPC project valued at INR 412 crores at [ EPC. ] Our regional new rail or line project in Bilaspur the rail line in Himachal Pradesh, that is INR 466 crores. That is again in EPC. North Central Railway has awarded a new project [ registration ] in the state of Uttar Pradesh. That is INR 655 crores. That in on GST. I will now touch upon the progress of ongoing projects. So EPC projects with regards to Ganga Expressway we have articulated the project, around 9%. The [ rebar ] expansion road project [indiscernible] in Delhi, execution is around 53%. In the [ Beawar Masuda ] project that is EPC and HI, the execution stood at 8.4%. The execution progress of [ Delhi Vadodara ] material project is at 94.4%, where we have already received the PCOD in the month of December. Delhi Package 9 execution at 97.4%. We have already applied for PCOD already recently. HAM projects, the execution of Raipur-Visakhapatnam 5 and 6 are at 33.4% and 38.3%, respectively. They are moving quite well for the schedule. The execution status of Raipur-Visakhapatnam is 38.8%. The execution status of Khammam-Devarapalle 6% and 15%, respectively. The [ Rewari Pena ] Package 4 is already 94% completion. We already applied the PCOD. We have received completion certificate during the year was -- we received the completion certificate for the NHA DV Package 8; DV Package 4; [indiscernible] project; [indiscernible] projects; and 2 small projects, namely the Kundal-Jhadol and Bhawi-Khimsar. I just want to say significant milestone, which we just reached. That is monetization of 4 projects. Since last few months, we were continuously under discussion with the prospective investors to monetize our initial 4 HAM projects. That is [indiscernible]. So it's a pleasure to inform you that, finally, we have signed share purchase agreement with [ IV Infratil Trust, ] which is supported by [ KCR ]. In the first week of May only, where NGs will be selling 100% stake in all these 4 wholly subsidiaries. The enterprise value for the project completion is INR 1,394 crores, having an equity value of INR 531 crores. The valuation of the deal is around 1.5x to book, which is higher than 1.3 to 1.4 expected and guided by the management earlier. Equity and debt commitment for all 4 projects are INR 343 crores and INR 996 crores, respectively. While that projection will be completed in 2 transit, worst times will be -- you see initial hampered, whereas we already achieved the completion. And two, it will be included -- that is include projects for which final completion approval is expected by September. Completion of the sale of the [ location of first tranche, ] which will happen after the satisfaction of the condition precedent, set up in the share purchase agreement, which includes authority, third-party and other regulatory approvals and certain contractual commitments. We believe this deal at a strong valuation will be going to strengthen the balance sheet of the company and will help the company to release capital for future growth. Diversification of order book, along with monetization of HAM projects, can give more positive figures for the company in the future. Now I'd like to invite Rajeev Mishra, our CFO, to highlight the quarter and last year's financial performance of the company.

Thank you, sir. Let me give you the key updates on the financials. In FY '23, the stand-alone overall revenue was INR 4,419 crores, which increased by 22.2% year-on-year growth from INR 3,515 crore in FY '22. At control level, revenue was INR 4,622 crores as compared to INR 3,751 in FY '22 with year growth of 23.2%. At federal level, EBITDA for FY '23 was [ INR 710 ] crores, with Y-o-Y because of 21.5% against -- and consolidated EBITDA was INR 800 crores versus year growth of 26.1%. The FX margins for FY '23, at stand-alone level was 9.5%, enterprise for the period FY '23 was INR 431 crores. We have reached INR 33 crores in FY '22. At consol level, the pack was INR 493 crores versus INR 380 crores in FY '22 with Y-o-Y growth of 29.8%. On a stand-alone basis, the gross debt of the company was INR 504 crores, which included working capital debt of [indiscernible] and current authorities and the trade limits of INR 368 crores and NCE of INR 97 crores. At the consol level, the gross debt was INR 1,907 crores, which included a project debt of INR 1,403 crores. The company continues to remain -- maintain the order book ratio of 2.9x. For all the HAM projects, the total equity anticipated in FY '23 stood at INR 1,612 crores. Out of this, an investment of INR 736 crores has been done as of March 23. And a projection of investing for the project, INR 440 crores, which is anticipated in the incoming financial year FY '24. Coming to the quarterly financial performance. On a stand-alone basis, in quarter 4, the company achieved a stand-alone top line of INR 1,470 crores vis-a-vis INR 1,026 crores. In terms of the EBITDA, the company achieved INR 238 crores with an EBITDA margin of 16.2% for the third quarter. The profit before tax for Q4 FY '23 amounted to INR 200 crores, representing growth of 6.8% Y-o-Y. The PAT also rose to INR 140 crores, indicating a Y-o-Y growth of 2.1%. On the consol basis, the company has achieved a revenue of INR 1,535 crores compared to Q4 of last year. Regarding the EBITDA, the company recorded INR 297 crores with EBITDA margin of 19.3%. Furthermore, the profit before tax for Q4 FY '23 is INR 231 crore. NPAT also an increase of INR 17 crores, electing a growth of 64.4%. We are happy to share that the company's performance over the last 5 years has been exceptionally good, with a 5-year CAGR for revenue of 26%, EBITDA 28%, NPAT 30%. The ROC, NRE increased to 30% and 24% respectively. The company has worked, dedicated to reach the net working capital cycle to 23 days in FY '23 as compared to 46 days in FY '19. I would like to hand over the call to Mr. Harendra Singh for further -- for our future guidance and the business opportunities.

Thank you, Rajeev. Let me enlighten the forum for the week ahead. HG has laid the groundwork for expansion faced by our business that are linked in operational efficiency and effectiveness, cost optimization and timely project execution, the company anticipates securing orders worth INR 8,000 to INR 9,000 crores in FY 2024 to maintain the book-to-bill ratio of more than 2.5x. Furthermore, there is a strong NHA bid of around 1 lakh, INR 10,000 crores, which is in pipeline this year. The other sectors, the new projects in railways, we can expect the INR 15,000 crores, so we believe we already target for in that. And they are all yet to be delayed, which gives us a huge opportunity to scale our business and order book. We continue to stress the significance of diversification and as evidenced by our recent order wins for 3 nonroad projects. We aim to have 20% to 25% of our order book comprising all or project in the next 2, 3 years. The floor is now open for question and answer. Thank you.

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

Congratulations on a consistent performance and a very, very strong track record. Sir, my question is, sir, on the guidance for FY '24. Can you please provide us what you expect the revenue in the margin for FY '24 and the order inflow?

We have just touched upon, but we are expecting about INR 800 crores to INR 900 crores of order, which, again, you can just break it out. The INR 5,000-odd crores of HAM projects, we continually will be targeting to look upon this year. INR 1,500-odd crore of EPC projects from HAM and other project. Now let's talk about, say, INR 2,000-odd crores likely to -- we are targeting for this other than one sector. As far as the leadership is concerned, I can go into the breakup of the total orders at hand. We are already seeing the orders of 5 HAM projects at INR 3,000 crores of order, of which we are expecting to execute INR 1,800 crores during the year. The NHA EPC project that is majorly 2, 1 is the Varanasi highway project and second is the Kanpur project, where we expect that during the year, we would be doing INR 850-odd crores of execution. And the Ganga Expressway project around, we are expecting some INR 2,000 crores of execution. We are at around INR 3,900-odd crores at [ Khammam Package 1 ]. And this INR 400 crores of execution, we are expecting from 3 of the rail -- non-highway project [Delhi Metro]. And under execution is from the small metro works. So taking together, it's coming out, it's about 20% to 22% year-on-year -- rather 23%.

Second question is on the monetization. If I remember correctly, I think you are getting INR 5.3 -- INR 530 crore for investment of around INR 300-odd crores. Is the number right?

It's INR 343 crores, to be very specific.

Okay. Understood. Sir, for the tending of road for the FY '23, I think was priced on the lower side. Like the HAM proportion was much higher. You did mention that INR 1.1 crore order is in the pipeline. Is this tender, as of now, open for bidding in the sense of bidding, and you expect this number to increase as we complete FY '24? And how about that HAM proportion in the same pipeline?

So what you are talking -- I think you were talking about the bidding pipeline of NHA.

Yes, yes.

It has been indicated as already been given the guidance from NHA and Ministry that they are all looking for working with much size of orders, almost about 4,000 to 5,000 kilometers from NHA and balances on board.

And my question was on the number looks to be slightly lower for the industry.

So what do you want to...

No, my question was you say the 1.1 million number, is it -- I think it's on the lower side. You used to do 1.5 million, 1.6 million.

Actually, we have intimated at is what we will be aiming upon to. We are not considering those projects for where we will actually geographically we would not be interested for. Last year, we bidded for almost INR 72,000 crores of order from NHA. So this year, we are looking at about INR 100,000 crores to be paid for all NHA execution.

[Operator Instructions] The next question is from the line of Parikshit Kandpal from HDFC Securities.

Congratulations. [indiscernible].

Mr. Kandpal, your audio is muffled from your line. Please use the handset mode.

Congratulations on the monetization of these 4 HAM assets and an exceptional year in terms of execution. So my first question is on the diversification. So we got 3 projects this year on the railways and metro. So did we bid for any water project? Because a lot of our competitors have got water projects, and we have been planning -- strategizing to bid for water projects? If you can just tell us how much was the bid we put in the water segment in FY '23 and what are the plans for FY '24.

Thank you very much for your provision, Parikshit. And this year, we bid it for a project for water in the state of MP. But definitely, we could not do any of the projects because our estimation, which we actually have calculated, we told amount [ out of range. ] So there, it's not bad, but we are not pursuing this particular opportunity. This is a huge potential in this particular nearby states like MP and even UP and Rajasthan. In Rajasthan, of course, there were many bidding, say, bids were about to be awarded for water. But I think very recently, it has been determined the subsequent part of this financial year, we are on selection. So we are keeping a very -- watch on this opportunity, and we will be doing so.

Okay. The second question is on the HAM portfolio in terms of out of 12 HAMs, 4 are being monetized. The balance, 8 HAMs, do you have any kind of understanding in future, whether they'll have a ROFO on our assets or we'll retain the option of storing it out with other partners as well? So how has the strategy been working out there in terms of future monetization in the portfolio?

See, the understanding has been really serious. Ultimately, it had to be a good association from any of your partners. They are having the backup of their fund management, and we are having the backup of our DNA EPC. So this is our understanding where we are actually looking beyond that in performance. Whatever we continue to develop or construct, we would be looking at it. But definitely, it all depends upon the typical division, other factors, which really matter, where the valuation is also there. But we believe that the strong relationship is going to be continuing in the future.

And do we still extend this relationship beyond road side, maybe PVC or power sector in present or in other segments?

Very recently, it has been concluded for a highway, but they have shown the interest in the company that we can look and look beyond even wherever you would be interested in other sectors. Other than the private sector even. But I cannot comment right now.

Okay. And just the last question to Rajeev, if you can give break up of also the 12 HAM projects, already run balance at each project. What is the total investment in it? What is the balance requirement over the next -- until FY '20, if you can give us.

As the total requirement of all these in equity was [ INR 1,619 ] crore out of which we invested -- sorry, INR 735 crore, we have invested in until March. And our projects, almost INR 440 we have to invest in FY '24. And for the remaining, we have already considered the positions of INR 359 crore, which is required in FY '25 for the projects, which are all the execution in projects.

Sir, you said INR 440 crore in FY '24 and INR 359 crore in FY '25?

Yes. That is required.

Okay. INR 359 crore for FY '25, INR 440 crore FY '24. And balance in FY '26, right?

INR 76-odd crores.

INR 76-odd crores. Okay, sir. Wish you all the best, and again, congratulations on the great deal, which you have closed.

[Operator Instructions] Next question is from the line of Jiten Rushi from Axis Capital.

Sir, my question is on the project of this Khammam-Devarapalle Package 1 and 2. So this quarter in Q4, we haven't seen any execution, and also for a significant acquisition. So any reason what is happening on these projects, sir?

Sure. I think in -- you're talking about on the Khammam-Devarapalle Package 1 and 2. The execution in quarter 4 of this particular is around INR 21 crore and INR 48 crore, respectively, in 1 and 2. This is, again, because in this project, there has been quite a big variation, which is actually encountered because of Khammam elevation department, their output. So almost 50% of the land has been affected. Because of that, there are certain approval is likely to come from NHA, whether they are going for this variation or not. So this is why I think the execution has been at a slower pace, but I don't believe that it is going to have effect for much over time. It's going to be resolved very soon, and we will be taking back to the normal trend of test management, which we will be looking at. There has been a small variation, which is likely to be there because it is in 2 phases for service being constructed for the first phase, and the second phase, is the main category to be constructed. So the service for as well, they are looking at the combination where whatever we complete in the service it can be finally because it's clearly certain there's an approval, which is likely to come from NHA.

One and 2, you said that the variation approval will come but could there be on the higher side?

There are 2 kind of variation. One is the usage of, in this particular way anti-PC has already been called. We call the bids, invited the tenders for transposition of the project. But we also are bidding, that we have bid for material projects. But for sure, I think all the variations are on positive points.

When can we expect the variation vision to pick up in the...

It is already -- it's not that reason is not going on at all. Still everything is going on, moving off well on the -- as per the milestone, we will be achieving that.

INR 21 crore and the revenue...

No, no. Total built revenue during the year because we didn't -- it's all built revenue.

And so even this should start positively as you said, the variation will be completing soon.

Yes, yes.

Okay. And sir, on EBITDA and the gross margin, we have seen significant improvement. So any reason for this improvement this quarter, do you think about because of...

Very -- it's a normal trend. It's not that anything which is actually added into this margin. It's a very small center you can see the range of where employee cost and the cost of model being used. So the OPM has increased, the EBITDA has shown the improvement that in...

So the margin guidance, the income price, what's the EBITDA margin guidance for next couple of years?

Significantly, as we expect out of these projects, which we already started signing, we would be starting execution roughly around the range of 15%.

15%. So going forward, we can see some decline in margin because of the mix.

Decline, no. It's 15%.

15%. From a CapEx front, you have done a significant CapEx this year. We can highlight almost gross figure almost INR 340 crore. So any take or view on going forward?

Yes, this year, I think you can see the increase in the term loan because of that only, the subsection of INR 224 crore term loan being added during the year. The margin balance is INR 333 crores of downloads. There is hardly any increase in the -- et cetera. Has been increased because we have added to INR 299 crores of gross block, which is a majority of that portion is the construction equipment, which we added. The phasing out of the old construction equipment, where there already there is some life, which we have considered as for -- and the second was the upgradation of all these segments has been done strategically. So the year on now just looking to the subsequent year, we would be happy enough that order -- just for any of the ordering resolution of 20% growth for the company. It should be somewhere around INR 100-odd crores will be added for next 3 years.

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

Congratulations on the best performance and on the monetization number and project. Sir, broader questions have been answered. A couple of things just to understand, first, please, on the -- have we beat any of the projects where the bidding had to be open?

Yes, we are -- the results are yet to be opened. There are 2 projects of the [ rail ] and one more of an NHA project; one more for most projects; and 3 projects of railways, which are yet to be opened.

So this 6 projects, how much and the railway projects?

Altogether, it's about INR 8,000 crores, all 6, 7 are a small amount of INR 300 crores to INR 500 crores. So total INR 8,000 crore.

Okay, okay. Got it. Second is on the recently won projects of 300, Tumkur Central railway and [ Delhi-Vadodara ] in terms of the content date, what is the expected deadline?

For the last project, we have assigned the date of 31st of May, the letter for the 31st of May, we are signing the agreement. And this is one I think for completion, of course. I think that is going to be not more than 23 months because it will take all possible commissions from the authority, where we regularly using major utility, electrical.

Okay. So maybe by July, August we will get that trade to come to the central administration.

Probably, as of now.

Sorry?

Yes, I don't know anything like that only.

And then for 3 projects, Karnal and [ Bhilwara ]?

Karnal, [ Tumkur ] availability as of now is around 90%. And the crop, which is now being harvested. We are taking the position of the land. As soon as we complete the land position by June end, we believe that -- end by June or on July, we would be taking the project by that time.

And for Bhilwara, in 13 of October, November or December?

Of course, I think the post monsoon only. In any case because the land compensation is being -- and we believe that it is significantly going to improve once the harvesting has already been done. By October, November, we believe that likely there with the results, when it will be declared.

Okay. Just a couple of data points in terms of the retention money, mobilization advance and unbilled revenue as on March?

Unbilled revenue, which is your last point, which has been increased for this financial year because next developments have been there. The relation is market approved, if you are talking about the unbilled revenue, which we'll now see something to be very specific. So this is how INR 150-odd is HAM only. INR 170-odd crore, which is until in [ UER ] and delivered an early project. Other projects also now there are changes there. We have a INR 170-odd crore we know is there. But now there is a variation being passed. We have the construction, which was at a different stage. Now they are relaxed the payment at not at every 2 meters, while they relax the payments. So that is how I think within this quarter only we would be getting significant decrease in the unbilled because they will be paying us right on the -- not at that stage, prior to that stage.

Sorry, sir, just to clarify, unbilled revenue total is INR 610 crores retention money. How much mobilization advance?

INR 580 crores to be very specific. And out of INR 580 crores, given that the HAM project, it's another INR 150 crores. NHAI EPC Project is INR 165-odd crores. One major amount is there like the reserve NHAI has is Ganga Expressway project, it is INR 170 crores, where it is going to be reduced drastically down because they are now relaxed the stage payments for all the 3 contractors like we and Patel and ITD.

Okay. And retention money and mobilization advance, sir?

Retention money total, debtor balance is -- what you are talking is what is the debtor balance?

No, sir, as on December, it was INR 190-odd crores retention money. So what's the figure for March?

No. I think the debtor is INR 735 crores and INR 111 crore is retention.

[Operator Instructions] The next question from the line of Prem Khurana from Anand Rathi.

Congratulations for closing the transaction for highways and that too at a pretty good valuation. Sir, just -- I mean somewhere in your remarks, I mean you said...

Please be louder.

Yes, sure. Am I audible now?

Yes.

I think initially, I mean, in reply to one of the questions, I mean, you said you are expecting some number from INR 1,800-odd crores from 5 hybrid annuities of INR 3,000-odd crores with a balanced potential and you gave us the breakup of some of these other projects. What I realized is, I mean, eventually, you have not considered any contribution from these 3 hybrid that you've secured recently. So why would that be the case? I mean because I mean, just now you said you would be able to have ADs in place?

We've already taken -- I think I just forgot about it. INR 500 crores of execution we have taken from these HAM projects, the newly awarded HAM projects, INR 500 crores.

Okay. Sure. So which essentially would imply and you're looking at more than 23% kind of growth for the year? I mean on a Y-o-Y basis?

Roughly it is around 23%, that's it.

Okay. Sure, sure. Second question was, if you could talk about competitive intensity, why I ask this is essentially you said I mean you bid for almost INR 72,000-odd crores of projects in FY '23 on NHAI side. But we could have only 3 projects worth around INR 3,000-odd crores, which is even less than 5% conversion ratio. So how do you see the conversion ratio is going to work for us, I mean, in FY '24? I mean we were looking at around INR 5,000 crores of orders on hybrid and INR 1,500-odd crores on EPC side from NHAI. Do you see competitive intensity to go down now? Or it will remain there and you will have to bid for more to be able to get your numbers in place?

So we believe that I think with the new this compulsion or BBB rated company, they would be only allowed to bid for HAM project that is there, and there are many projects which for many other mediocre companies, they are having those projects where the -- say, good amount of execution has to be done. So we believe that way I think nowadays we are seeing the trend of about 5 to 7 bidders. Earlier it was 10 to 12 bidders in all the HAM projects. But EPC, for sure, we are putting our fingers crossed, but we are expecting that at least from INR 1,000 crores to INR 3,00-odd crores. So it can be from even Maharashtra State Road Corporation where they have also called certain EPC projects. So we are looking at those projects as well from EPC lines, not only NHAI, MoRTH, some state projects as well, especially Maharashtra.

The next question is from the line of Nikhil Abhyankar from ICICI Securities.

Yes. Congrats on a good set of numbers. I've got 2 questions. So first is on the margin. Sir, is it the case that you have given the margin guidance conservatively, given the cost prices are coming -- the input pressures are coming down? So is there any chance as we go along the year, you might -- our operating margins might surprise us on the upside?

I think that whatever you are saying the price escalation clause is either ways, maybe positive or negative. If the prices are going down, then definitely the price escalation, which you would be getting would be equivalent to that. So earlier what has happened is because of the steep rise in the commodity of steel, especially steel and crude, it has happened where the dip in the margins, which we have seen in the past 1.5 years. But now it is almost, I believe that 15% to 10.25%, that is a decent range, which we've been looking upon for our all under execution projects.

Okay. And sir, the other question is on -- last year, there was a lot of talk about government reducing the grants to 20%. So is there any word on that from the Ministry?

No. As of now, I think they have not given any signal that that's going to be reduced, but they have actually touched upon the lenders as well as concessional interest across the entire fraternity that how it will look like. They always give positive responses. Definitely it is going to cool down the margin, that is the competition. So that is how -- we believe, I think nothing has happened as of now. That was the first clause this and second was net worth criteria, but nothing has happened as of now.

And are we pushing from our end to bring the grants down so that the...

There are, say, various series of these kind of meetings and discussions where they and we together at the NHBF forum, the National Highway Builders Federation, they are all looking to have a conducive arrangement where the projects being done with quality with standards within the time line, and that is their intention also, and we also are looking into that. But I don't know how it is -- how long it is going to take.

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