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

Ladies and gentlemen, good day, and welcome to Q2 FY '24 Earnings Conference Call of H.G. Infra Engineering Limited 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, Yashasvi. Good afternoon, everybody, and welcome to H.G. Infra Engineering Limited earnings call to discuss the Q2 and H1 FY '24 results. We have on the call Mr. Harendra Singh, Chairman and Managing Director; 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 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. So good afternoon, ladies and gentlemen. A very warm welcome to the H1 FY '24 and Q2 FY '24 Earnings Conference Call of H.G. Infra Engineering Limited. We welcome you all here to share the highlights of our quarterly and half yearly performance, achievements and our vision for the future. I hope all of you have had the opportunity to review the investor presentation and financial results, which have been made available on the exchange. As we all know that NHAI tendering has been in the slow lane till September '23. The major reason behind lagging numbers is because of the prolonged and uncertain monsoon across the country, that is for the execution as well. It has now recently picked up due to certain changes in the bidding process and internal conditioning of the department. Next 4, 5 months will be vital for the sector due to upcoming central and state elections, as known to each one of us. We are working on our strategy for priorities to overcome these challenges, and we are optimistic that bidding will definitely accelerate in coming months. Let me share some thoughts on the opportunities in other sectors as we wish to diversify our order in all other mentioned sectors. In railway sector, PM Narendra Modi-ji, on August 6, 2023, launched Amrit Bharat Station Scheme to transform and revitalize 1,309 railway stations across the nation. It aims to transform railway stations into modern, well-equipped hubs. We have already bidded 2 tenders amounting to INR 1,000 crores, and we are working on 3 new tenders of about INR 1,200 crores in this scheme for the financial year FY '23-'24. We have also bidded 14 projects costing INR 6,500 crores on various authorities like Indian Railways, RVNL, et cetera, in railway sector. The results of these bidded projects are yet awaited. In this financial year, we are planning to bid about 15 more bids of INR 8,000 crores in this sector. In metro sector, we are eligible to bid for elevated metro and RRTS project that includes Orbital Railway as well and have started bidding for various metro projects. We are also exploring possibility to bid underground metro rail projects in association with other organizations. This sector remains in our focus in upcoming months. Awarding in water sector was quite slow during 6 months because of the state elections in few of the states. We are expecting momentum in this segment in coming months. I would like to assure our shareholders, all the financial partners and other stakeholders that company is prudent and vigilant to ramp up the growth story and persistent to grab the upcoming opportunities in the near future. Let me start the journey of this quarter and give you the glimpse of operational highlights first. For quarter ended September 2023, our order book stands at INR 10,678 crores, which have established our presence across 11 states, with the EPC segment comprising 51% of our entire project and HAM segment constituting the remaining 49%. Now the updates on the ongoing projects of EPC. The execution progress on various EPC project is as follows: the Ganga Expressway project has achieved approximately 29.3% completion. The project is running well in the time as per the contractual time lines. In Delhi UER project, we are around 78.8%. That is the financial progress and expected to get complete in December '23. The Neelmangala-Tumkur project of NHAI is progressing well and has reached an execution of 15.6%. The progress on various HAM projects is also running as per the planned schedule. The update is that all 3 Raipur-Visakhapatnam packages of Odisha, OD5 and 6 and Andhra AP P1 are progressing well. And we are around 50% completion in these projects, and we would be completing 2 out of these 3 projects before quarter 1 FY '25, that is by June '25 -- June '24, sorry. In Khammam-Devarapalle project Package 1, we have achieved 20.9% completion; [ Package 2 ], it has reached up to 28.1% completion. In case of Rewari Bypass, we have received PCOD dated 25th May 2023, that was on 9th Oct of 2023. This project will be monetized in the second tranche. For our new Karnal Ring Road HAM project, financial closure has been declared on 29th August '23, and we have received the appointed date of Karnal on 31st August '23. Till now, we have executed 5.3% of the work in this project. As you know, we have set our footprints in current order book with diversification to railways and metro. I would like to touch upon the progress of these projects as well. We have completed 26.6% of DMRC Metro project. Execution of this project is going well on track as per the contract time lines. We have received appointed date of RVNL's rail project on 24th May 2023. Now post rainy season, the project is progressing well as per the scheduled time lines. The LOA of Kanpur Railway Station project has been received on 5th June 2023. And very recently, the appointed date is also declared. The source and machine mobilization in this project is already completed. And the progress is going to be very well in this quarter as well as from the last quarter of this year. Let me now share other significant updates for H1 FY '24. The PCOD of Mancherial project received on 26th July '23, that was with effect from 30th December 2022. For Varanasi-Ranchi-Kolkata Package 10 and 13, financial sanction -- final sanction from lenders, like HDFC and Axis, has been received and the documents for the financial closure will be submitted to NHAI in this month. Coming to the financial highlights of this quarter. At the stand-alone level, our overall revenue in H1 FY '24 was INR 2,140.8 crores. That is an increase of 17.8% year-on-year compared to INR 1,817.7 crores in H2 FY '23. EBITDA stood at INR 343.2 crores in H1 FY '24, resulting in the EBITDA margin at around 16% as compared to INR 283.2 crores at 15.6% margin in H1 FY '23. PAT in H1 FY '24 was at INR 180 crores with 8% -- 8.4% profit margin as compared to INR 162.3 crores at 8.9% margin at H1 FY '23. In Q2 FY '24, the stand-alone revenue reached at INR 869.5 crores, indicating a notable 15.6% year-on-year growth from INR 752.1 crores recorded in quarter 2 FY '23. The stand-alone EBITDA for quarter 2 FY '24 was INR 138.4 crores, reflecting a year-on-year growth of 14.6%. The PAT margin for quarter 2 FY '24 stood at INR 61.7 crores and 7.1% as compared to INR 64.6 crores that was 8.6% last year. Regarding the company's debt position on a stand-alone basis, the gross of debt amounting to INR 597.3 crores, which includes a working capital debt of INR 157.1 crores, term loan and current maturities along with the trade limit totaling INR 359.4 crores and NCD of INR 80.8 crores. The increase in debt in this quarter was due to excess utilization of working capital limits on account of less execution of -- at projects due to prolonged and erratic monsoon conditions. Earlier, the company has mobilized all the resources as per the planning of the execution at all the projects, however, we are optimistic to reduce the debt in the coming quarters with improved receivables. Moving on to the consolidated numbers. Revenue of H1 FY '24 surged to INR 2,305.7 crores, an increase of 21.2% year-on-year compared to INR 1,901.6 crores in H2 FY '23. EBITDA stood at INR 500.9 crores, resulting in EBITDA margin of 21.7% growth as compared to INR 360.1 crores and 18.9% margin at H1 FY '23. PAT in H1 FY '24 was INR 246.5 crores, which is 10% -- 10.7% profit margin as compared to INR 191.4 crores at 10.1% margin in H1 FY '23. During Q2 FY '24, the consolidated revenue surged to INR 954.5 crores, marking a 20% year-on-year growth compared to INR 795.7 crores recorded in Q2 FY '23. At the consolidated level, the EBITDA for Q2 FY '24 was INR 220.2 crores, displaying a robust year-on-year growth rate of 36.7%. The PAT margin for Q2 FY '24 consolidated stood at 10.1%, resulting in a PAT of INR 96.1 crores compared to INR 81.8 crores in Q2 FY '23. This represents a significant growth of 17.3% in PAT on a year-on-year basis. Regarding the company's debt position at the consolidated level, the gross debt amounting to INR 2,029.2, that was on 30th September 2023. The total equity requirement for the planned HAM project is INR 1,606.2 as on FY -- for the '26, that was next 3 years. As of September '23, INR 777.7 crores has already been infused, and there is a projection of infusion for the year at INR 395.3 crores. Progress update on the monetization of 4 assets. So during the last quarter, we have signed a share purchase agreement with Highway Infrastructure Trust backed by KKR for sale of 4 HAM projects. This is certainly one of the most coveted transaction for us. For first tranche of existing 3 SPVs, we have received all NHAI and lender's approval for change of control. We have completed and submitted all the condition precedents required for the successful closure of this first tranche. We are expecting to close the production during the month of November '23. Before I end my speech, let me assure you that we will achieve our expected numbers with 20%-plus upside in the revenue that will bring momentum in the order inflow with new projects in the tune of INR 5,000 crores to INR 6,000 crores to be added this year, considerably from road and other diversified sectors. We have started preparatory works of analyzing and costing, other bidding elements and undergoing preliminary discussions with various clients in solar and metro sector to propel our way forward. We are working minutely in our operational efficiency and executional capabilities to add every penny in our EBITDA and PAT margin. Digital transformation remains on our priority cards from automation in our plant and machinery, operations and other verticals, which will add a lot of value in our financial indicators with seamless and transparent real-time working environment. That's all from my side. We can now open the floor for the question and answers. Thank you.

[Operator Instructions] We have our first question from the line of Shravan Shah from Dolat Capital.

Sir, first on the order inflow. So in your opening remarks, you have talked about INR 5,000 crores to INR 6,000 crores order inflow versus originally, when we started the year, we were looking at INR 9,000-odd crores kind of an inflow. So just trying to understand why we are having a low confidence. And also, is there a possibility this INR 5,000 crores to INR 6,000 crores may further reduce to INR 3,000 crores to INR 4,000 crores for this year? And at the same time, also, if you can repeat the value of projects that you have bidded, that would be helpful.

Yes, sure. I think the order inflow, which, say, it's almost 7 months completed. So now we are having 5 months during the year. So definitely, it was a very slow pace, which never has been in the historical past at NHAI. But because of some consolidation, some kind of a project appraisal, now the things are moving very fast, as they have indicated. And as in 2047, this Gati Shakti and every, say, scheme is giving very promising note of highway and awarding. We believe that's now 6,000, but at least if 3,000-plus kilometers being awarded and about, say, the 2,000 to 2,500 kilometers in the last 4 months. Out of that, we expect that definitely, we have lowered our numbers by this number, which should be bare minimum for the year. And we are hoping that it can be 8,000, but we are keeping it at a low level about 6,000 crores. This is one part of any change. The second is MSRDC where the RFQ result have been delayed. We expect that they are going to be say awarded by January, February; earlier it was almost October, November. But then again, there are also, say, almost INR 45,000-odd crores of projects to be awarded, we expect from them as well. Apart from this diversified sector, as we have already started bidding and evaluation in metro, which can be underground, we have bidded for, say, railway projects around INR 6,500 crores. We have already done with 2 railway stations bidded. So we are looking into INR 8,000 crores of railway bids and RVNL, which are upcoming in the upcoming months. So that is how we have a certain bids already done, but this awarding, the results we have not yet declared. So with that, we are keeping about INR 5,000 crores to INR 6,000 crores, which for this particular year with only 4, 5 months balance.

Okay. Got it. So 2 aspects: first, whatever, let's say, we get the lower order inflow this year, are you confident to compensate for the next year? So on a broader sense, how much one can look at in terms of the order inflow for FY '25?

Yes, for sure, I think whatever is -- would be the shortfall for the year, we will try to compensate for the next year as well, but only because of few -- let's say, 5-odd states going into election this year and then looking into this central election up in next May. So by that time, we would be in a position that entire thing would be consolidated in the quarter 2 onwards for next year. We expect that we would be adding not less than INR 10,000 crores to INR 12,000-odd crores, which is a deficit of this particular year being added next year.

Okay. Okay, great. So -- and in terms of the revenue, also now, we are looking at 20% growth this year versus 25%. So that is in terms of -- that will also will get compensated in the next year because broadly, in annual report, we were -- or we have talked about INR 10,000 crores revenue by FY '27. So that is a kind of a 23% CAGR. So on a sustainable basis, can that be achievable?

So we talked about -- in the annual report, we talked about that by, say, next 5 years, we were looking to change this revenue to INR 10,000 crores; to be very specific, from roughly current about 17% to 18%, let me be, say, clear on that. So one thing is that for this year, we were looking at about, say, INR 5,400 crores, and this is roughly 21%, 22%. We are almost on track because we have done about 17% year-on-year done. And we believe that what -- always latter half of the year is very good for our kind of infrastructure, where highways, and all monsoon activities or festival activities doesn't hamper in our progress. So with that, quarter 3 and quarter 4, we expect that we will be touching upon the same number, some 20% to 21%.

Okay. And in terms of the breakup of the revenue segment-wise, what last time we had talked about, INR 1,800 crores from HAM and INR 850 crores from EPC, Ganga Expressway, INR 2,000 crores, and the new HAM, all this. So that more or less remains the same, marginal decline across all the 4, 5 segments?

Yes, almost all the same, like Ganga Expressway, we initially have projected the INR 2,100 crores awarded for the year, INR 2,100 crores, INR 2,200 crores. So again, during the remaining part of 6 months, we are looking at INR 1,350 crores coming from Ganga Expressway. And all 6 HAM projects, so the all 6 HAM projects, would be giving about INR 1,250-odd crores. So major chunk is coming from these Odisha, Andhra and Khammam-Devarapalle and Karnal. The project already is with us. And then metro and other sector like railway, we will be adding, say, just further INR 50-odd crore to be done. Tumkur EPCs then one NTPC small project is there which is about INR 150-odd crore value. So these are all -- and UER will be completed and Mancherial, Rewari, the balance small work portion which is going on will be completed. A few work of Maharashtra, say, more projects were going on, but a small part of that will be completed. We are not looking at the appointed date of Jharkhand Package 13, which we expect that by January, February, but we have not founded that progress in the year. So roughly, the total number is coming as the same, which we have projected earlier.

And the appointed date for Package 13 and Package 10 is now when we are expecting?

Package 13, we are expecting by January, they would be giving the appointed date. And Package 10 would be delayed by another 2 months by, say, April, we are expecting because there are a few forest permissions which we have not obtained.

Okay. And lastly, a couple of data points on the equity breakup to be invested in '24, '25, '26 and the retention money, mobilization advance, unbilled revenue as on September?

See for the year, we have kept INR 395 crores to be invested. For the next year, it would be INR 270 crores, and only INR 163 crores balance for FY '26 for the projects which we are operating on HAM basis. So this is one part. You have asked about the mobilization advance. The mobilization advance is including the material advance. This, I think, INR 335 crores. So what else you asked?

Unbilled revenue and retention money.

Unbilled revenue is about INR 755 crores. And debtor, including retention, retention is INR 172 crores and debtor is INR 550 crores.

Okay. And the debt you mentioned -- the CapEx, it actually has increased INR 129-odd crores, and we were looking at INR 100 crores. So for full year, how much now we can look at the CapEx and the debt we have mentioned that we will be reducing? So previously, we have talked about INR 425 crores, INR 450 crores. So what's the new number?

So that, in any case, would be in the same range, about INR 425 crores to INR 450 crores. So whatever repayment is going to be there for the second half of the year is very high. And you can see because we already paid one tranche of NCD, and the second tranche will be paid by March -- rather December. So looking into that, say, whatever CapEx which was supposed to be done for all these projects have been done. Hardly, there is any CapEx which is to be done for the year than the prior, balance portion of the year, so INR 120 crores to INR 125 crores. So it's the major part going into capital work in progress is related to shutters, say, for metro, for RVNL, for Kanpur Railway Station and even Raipur-Visakhapatnam where the limited portion was being constructed. So there, I think, INR 40-odd crores being invested into shutters and cranes and launchers.

[Operator Instructions] We'll take the next question from the line of Mangesh Bhadang from Centrum Broking.

Sir, my question is regarding the monetization. So I think we are looking to sell or transfer 4 HAM assets to the InvIT. Out of that, you have received the approvals for 3. So just wanted to understand, will we go ahead with the transfer of these 3 assets first or we'll wait for the fourth one? And what are the time lines for actual cash flow to come from this?

See, these are 4 projects which we have already entered and signed the SPK (sic) [ SPV ] with KKR. And in this particular 3 projects which we already got the PCOD and COD, they are the ones who are going to be first transferred first, where all the entire NOC are in place. So everything has been done. We are expecting that the fund is -- would be coming in, in our account within this month only. And the fourth one, where the PCOD which we got on 25th of May, say, post 25th of November, we would be applying 6 months down. We would be applying to NHAI and our lenders for the further NOC proposals. And within -- by the end of this year, we expect that amount for that particular fourth project also would be transacted in our account.

We have our next question from the line of Veenit Pasad from Investec.

Sir, I have a couple of questions. One is, what has been the reason for increase in unbilled [ revenue ]? If you look at last few years or 24-odd months, consistently that number has increased. It was closer to INR 250 crores, INR 270 crores at the end of '21. And gradually, it has shot up to almost INR 730 crores to INR 740 crores. So what has been the reason for this increase? Number one. And number two, sir, what gives you confidence that NHAI ordering will pick up significantly? Is it a case that the pipeline is extremely healthy? If that is the case, how much worth of projects are under the pipeline as of now?

Your first question was regarding this unbilled revenue, which has now gone up very high. Say, earlier in 2 years back, it was about INR 200 crores -- INR 300 crores. So very significant reason for there is one part is in this Ganga Expressway project. We were having the milestone payment, which were not actually where what is the physical progress and the financial progress. So physical progress in this particular portion -- project is always a 2% to 3% gap into that, this one number is INR 4,400 crores. Out of INR 4,400 crores, INR 150-odd crores always are -- well, INR 300 crore, INR 200 crore always lying unbilled. But definitely, it's a matter of only every month, we complete one milestone and then this portion being released. But this is a continuity of that unbilled, which has been significantly gone high. But definitely, an NHAI projects they are -- because in UER, we have gone through all the structure-related projects. There, again, some milestone payments are not giving us. SPV, again, some portion has gone very high because we have started execution in many of the projects. We have started execution. But then again, we are not, say, targeting and getting the certification from SPV even. And this is now -- but it's a very time-gap arrangement. This is going to be stable, somewhere around INR 500 crores by quarter 3 because in many of the projects, old projects, NHAI and more projects where certain receivables are unbilled, where the consolidation and certain say claims were actually being in the claims unbilled. But they are likely to be released in quarter 3 and quarter 4. By quarter 4, we expect it would be in a range of about INR 500 crores, not beyond that. And the second question was NHAI. NHAI is definitely having a strong bidding pipeline, which at the end of this financial year in March '23, they were having almost INR 60,000-odd crores of projects at that point of time to be awarded and then could not be awarded because of certain reasons. Now those INR 60 crores and another INR 40 crores, INR 45 crores, INR 45,000 crores of orders, they are expecting to award by the end of this year as they have guided. And we are expecting that definitely around 2,500-odd to 3,000-odd kilometers, we are already on the bidding pipeline, that would be all awarded.

[Operator Instructions] We have our question from the line of Jiten Rushi from Axis Capital.

Sir, my first question would be on the monetization. So sir in terms of the proceeds, what would be in terms of value we are expecting the proceeds from the first 3 projects and the last project in total, sir?

The first one is INR 405 crores, so all 3 HAM projects. The remaining portion would be in the Rewari Bypass, that is the fourth project. That is INR 531 crore, that's minus INR 405 crore, roughly about INR 127 crores.

Okay. Sir, what are -- the equity which we have invested, as mentioned in the presentation, that will not change, right, sir?

So obviously, INR 343 crores, to be very specific, was the original number. That remains the same.

Okay. And sir, on the debtors, so can you give a breakup between the SPV debtors and Ganga Expressway?

Yes, of course, this unbilled, we have already explained in Ganga Expressway this is INR 150-odd crores in Adani Ganga Expressway unbilled. NHAI is about INR 180 crores. SPVs are INR 270 crores. And railway and metro, they are INR 58 crores. And that's about what I've already done that -- explained about it that we are having certain Ministry projects, Ministry-funded projects and certain NHAI consolation projects, which are INR 150-odd-crores into that. So they all would be stable. As I -- and the debtors and retention altogether is INR 721 crores. So out of major portion is definitely Ganga Expressway. NHAI is INR 145 crores, SPV is INR 225 crores and others stood at about INR 133 crores. Adani's Ganga Expressway project is INR 220 crores, which we have received. And every month, we are getting the payment. It's not that it's being stuck for, say, a longer period. So within 45 days, we are getting the payment. But due to higher range of execution, this is the figure.

And sir, [ the lapped one ], the PCOD which you mentioned for Mancherial was which date, sir? December something, you said, sir right, sir?

This was 30th December 2022. But the letter, we received very recently.

30th December 2022. Okay, okay, you said letter we received now. Okay. And sir, in terms of your revenue guidance, probably this year, you have said almost INR 5,400 is achievable, plus or minus here and there. But what about '25 and '26? Because, sir, now what we see is the inflow guidance is coming down. So we'll have to catch up on the inflow in the first quarter or first half of FY '25. So what kind of revenue growth have we seen in '25 now?

See the budget which we are already operating, expect for Karnal, [ Kanpur ] Railway Station or even RVNL. So most of the projects are going to be completed next year in FY '25, it should be. So the orders were -- order backlog was INR 10,600. And if we are going to execute some 36 -- 38 -- rather INR 3,400 crores during the year, later part of the year, so with that, almost the balance would be in the range of INR 7,500 or, say, even more than that. So probably INR 8,000. So with that INR 7,500 and if order we are looking to add INR 5,000 crores, INR 6,000 crores, so the number would be coming almost the same as we started this year. So with that, the orders which we are having that execution were Odisha, Andhra, all SPVs, except for Karnal, and Ganga Expressway even they all would be completed in FY '25. So that way, I think INR 6,000 crores is going to be executed or rather INR 5,500-plus crores is going to be executed in these -- from that portion only.

That is less than INR 5,500 crores revenue from the existing order backlog, if I understand.

So it's a matter of only getting new orders required in the tune of INR 12,000 crores. That is where we restrict ourself to INR 5,000 crores to INR 6,000 crores this year.

So basically INR 6,000 crores is upper end. Okay, got you. Okay, so that's it from my side. All the best, and wish you a happy Diwali to you and your team, sir.

We have our next question from the line of Vaibhav Shah from JM Financial.

Sir, just to reiterate, our revenue guidance would be around INR 5,400 crores for FY '24?

Yes.

And what could be our margin guidance for the year?

Margin roughly would be the same. As you have seen that in -- this is a monsoon month also, we could maintain the same margins. That would be roughly the same, 15.5% to 16%.

Okay. And sir, you mentioned about some claims in the unbilled portion. So what are those claims relate to?

So basically, they are not those kind of a claims. The claims, we actually quantify or taken to our accounts, so only those claims which are legitimate U.S. variations and somewhere. We do not take those opportunity claims, time overrun, idling costs into our account. We always take those things very separately. So these are very small -- almost 12 projects that we completed right from 2016 to '20. So those are the projects we have some kind of a pending, say, variations, approval. And so those are the -- this is the amount coming from those 10 to 12 projects.

And what could be the amount?

It's INR 115 crores.

Okay. And sir, was there any reduction in scope in any orders during the second quarter?

No, there's no reduction as such.

Okay. Because when we reduced the -- take the difference of order backlog, then we can't reach the revenue. There is some gap of INR 50 crore, INR 60 crore...

I think hardly, there is INR 50 crores to INR 60 crores of a gap where because in a few HAM this Maharashtra projects, 3 projects were there, where the supplementary agreement was executed for the balance portion of the work where the land was not handed over to us in '20 when the completion was given. But then now if supplementary agreement being, say, likely to be exhausted, so they have reduced that number into the supplement -- from the supplement agreement, this is INR 100-odd crores. So this is a shortfall, I think.

So the backlog for Maharashtra and Rajasthan would be what amount as of September?

Today, I think if you see from backlog from Maharashtra and Rajasthan, it's roughly about INR 72 crores.

We have our next question from the line of Ash Shah from Elara Capital.

So I have 2 questions. The first one with the recent construction ban in Delhi NCR. And we have got 2 main projects out there, one in the metro segment and one in the UER one. So are we going to see any -- are these projects going to be affected in any manner for this quarter or something, if possible?

I believe, I think because we are -- they are the projects where there is very high priority, PM office is monitoring these projects, linear projects, rather, I'm talking about especially UER. As of yesterday, well, we were discussing that a special permission is going to be given for at least for this particular project, UER. And metro, of course, they are looking at some waivers because in these projects, hardly, there is any pollution, as they have guided that pollution the department is going to give us a special relaxation for these projects.

Okay. And second one would be, do we have any arbitration claims against NHAI or any other government body, if you could provide some color on that?

No, we don't have any, say, claim. It was a very small claim with Agra Development Authority, just INR 10 crores. Out of that, we have already provided INR 6 crores in out of unbilled. So -- and in the consolation, also, we are running with -- say, consolation is going for 4 projects of NHAI. Old projects -- in 2018, we completed those projects, but very small amount, which hardly is INR 22 crores, all 4 projects. In the Maharashtra also, it's only a matter of small amount of consolation being done for [indiscernible].

Also, could you provide the revenue breakup segment-wise, roads, metros and railways for Q2 FY '24, if possible?

You're asking for Q2, what we have done?

Yes, the revenue breakup.

Revenue, you see, the Ganga Expressway, Mancherial which is Adani project, we did INR 290 crores. In NHAI EPC, it was INR 188 crores and SPV it is INR 303 crores on a very, say, broad line. Metro and railway, it is almost INR 52 crores.

[Operator Instructions] We'll take our next question from the line of Uttam Kumar Srimal from Axis Securities.

Sir, you have bidded for a few railway projects. So what kind of margin profile will be there in this project, if awarded?

In railway projects, we are keeping our margin for our -- at the bidding level at about, say, 14%.

Around 14%?

Yes.

Okay. Okay. And sir, how is the competitive intensity currently in both HAM and EPC, if you can elaborate on that?

The competition, definitely, as we have seen last year, this year, not many bids have been called and opened. But definitely in HAM, it is a bit easier. EPC is very, say, very aggressive. But then again, I think 25-odd bidders -- 20- to 25-odd bidders were normally being seen in EPC. In HAM, it is coming around 7 to 10 bidders.

Okay. And sir, in case of water projects, you were also expecting a margin profile in the range of 14% to 15%?

Sorry?

Water projects -- in case of water projects...?

Sure, sure. We are keeping our margins for these diversified sector projects. It can be water, metro or rail, about, say, 12% to 15% range.

And all these diversification projects, how much this will constitute in terms of revenue because currently, I think it's around 80% is coming from road, over 90%. So this diversified sector will constitute at least 20%, 25% of revenue model here?

For the year, we are keeping that at least 10% of the total turnover would be coming from these metro and railway projects, which we already have started 3 projects. And say, by the 3 years -- 2 years down the line, rather, in '25, '26, we are looking at about 20% of the total order execution would be from this sector. And by that year, '26, we are looking at about 25% order backlog should be from these sectors other than roads.

Okay, okay. And sir, depreciation has increased in this quarter. So what is the reason? And this run rate will continue for the whole year?

Definitely, this will be continued for the whole year. As you have seen in last year, we added about INR 235-odd crores of CapEx, which is a new and some, say, all shutters last year. This year also, 6 months, we have added, say, this almost INR 25-odd crores of shuttering being added. So the shuttering will usually depreciate faster, and that is the reason because in the entire project, within 3 years' duration, we usually depreciate all the entire shutters.

Okay, sir. That's all from my side, and happy Diwali.

Yes, thank you. But then again, I think just see that depreciation and interest cost is going to be almost in the similar line. Hardly, there will be a change of about 0.25%, if you see last year to this year at the end of this year. This time, it has seen on the higher side.

[Operator Instructions] We'll take our next question from the line of Devang Shah from AC Mehta Investment Intermediates Limited.

Sir, I have 2 questions. First is, sir, what is your execution time line for such kind of road project or the railway project? Because earlier in a con call transcript, I have read that 24 months to 36 months. So whatever the order book you are comprising both of road and railway or metro, just give us the segregation, sir, what is the execution time line of all 3?

It is roughly the same. I think as you are also saying that 24 months is the minimum time line for highway. Or even for -- if you are seeing Kanpur railway station it is 36 months; RVNL railway project is 30 months; metro usually is 30 months; so water also is having 36 months. So these are just 2 to 3 years of time.

Okay, sir. And one more question, sir. We have seen in a recent quarter, in a stand-alone number, there is a decline in our PAT margin due to rise in our interest cost. So moving forward, sir, by considering the fact that you are also using the asset monetization of HAM projects that you have mentioned, will it be margin is going to further touch the earlier level that we have seen somewhere close to 8.6% or something? I'm talking about the PAT margin stand-alone basis.

Of course, I think PAT margin would be coming to the same range because of the -- you see the employee cost has been all-time high for the quarter because all the projects being mobilized, but the execution was not that range. So that is one reason for that. But then again, finance cost and depreciation put together, we would be, by end of this year, finance cost would be in the same range as we were doing earlier. It was coming at about 1.4%. This year, we will be in a range of 1.1%, 1.25% of the total turnover, which we are going to execute.

Okay. So moving forward, do you feel that it is going to improve from here on, PAT margin?

Yes, quite correct.

We have our next question from the line of Darshit from RoboCapital.

So I just wanted to know that, do we see the previous, say, 18%, 19% of margins coming back anytime soon, probably in FY '26, '27?

Are you talking about margins or -- at the company level?

Yes, the company level, yes.

Yes, it would be almost in the similar range, 15.5%, 16%. As we are doing in the last 4 quarters, we have delivered that margin. And we would be almost maintaining that discipline.

Okay. So for the medium term, we are going to maintain this?

Yes.

And some view or medium-term view on order book and order inflow you have in place.

Order inflow, definitely, as we have earlier discussed during the call year one that in during the year, we are expecting to add at least INR 5,000 crores to INR 6,000-odd crores of orders, the highways and other sectors. We are -- and then the execution, which we believe that we would be almost doing 20% plus from the last year.

Okay. But for -- like for the medium term, say FY '26 -- '25, '26, '27?

Sure. I think for '26 and '27, with the government focus on infrastructure, especially highway again in thrust, and we have seen all other sectors, their budget allocation has gone -- has been all-time high in railways and most of the sectors. So we believe that everything, because of the election time, we are expecting -- just keeping a caution that we may not have these many orders. But then '25 and '26, the other years, we believe that we would be adding at least INR 10,000 crores to INR 12,000 crores of orders for next year and beyond that in the next year.

[Operator Instructions] We'll take our next question from the line of Sarvesh Gupta from Maximal Capital.

Sir, one question on the Ganga Expressway. Now see, that was a very sizable sort of an order which came our way, and that helped us grow both the order book as well as the revenue profile. Now going forward, as such a large project gets run off from our -- runs off from our revenue profile as well as order book, do we think that overall revenue growth, et cetera, will taper down because we don't have any such large order either in pipeline or maybe expect to win in the coming years?

Your concern is very valid. So basically, with the recent projects being executed where UER in Delhi, there are about 8 kilometers of elevated portion being done, almost similar to Gurgaon Sohna with viaducts being constructed in Odisha project, almost 8, 9 kilometers. So this gives us, say, qualification and capacity to build for the huge-sized projects like it's being called, if you see high-speed network corridors to be developed for railways, where the dedicated like bullet train is being developed. So in that, the range of projects are big-sized projects. We believe that we would be putting up in a race to bid those projects, say, with as a small entity or as well as from JV. And that is only, I think, what you are saying, INR 4,500 crores of orders. It cannot be from any, say, one single 5-project of a very high magnitude. We are looking at to this sector. And then in Karnal also, we are looking with some joint ventures, with joint venture alliance. We are also looking into the sector.

Understood. And secondly, sir, on the order inflows till date for this year, of course, the pipe -- I mean the NHAI ordering has been small. But we have been seeing -- at least the peers have been able to manage to get something even in the last 7, 8 months, while for us, it has been almost negligible in terms of what we have been able to win in this 7, 8 months. So how do you explain that sort of a market share loss in the orders won till date for this year vis-à-vis your peers?

Probably, let's say, we bidded, say, 2 pillars, but the margins which we are expecting we should get were not there. So we have lost almost 7, 8 projects even for NHAI awarded. But then again, this is not a very, say, many numbers of projects being bidded and awarded. So we are expecting this momentum or this tempo is going to be right now November onwards, we're going to be all-time high. And as we have seen last 6 months, almost negligible. That's where our -- we believe that we would be getting the same as we have guided that we can have, say, INR 5,000 crores to INR 6,000 crores of orders. And then again, as MSRDC RFQ results has been delayed, that is, again, the potential is there with almost individual order size is about [ INR 7,500 crores ] individual project.

Understood, sir. And on depreciation and interest, so what I understood was that in the absolute amount, it will remain the same now. So as you scale your revenues in H2, your overall PAT margins would increase. But going forward, let's say, in FY '25, how do you see these 2 items moving? Because this quarter, in this half year, we have seen that these 2 line items below EBITDA has sort of hurt our P&L percentages. So for FY '25, then from that base of end of FY '24, how do you see them moving up?

The depreciation view, we have added almost a really high CapEx last year and this year also, INR 128 crores, INR 130 crores, and this is going to end up roughly around INR 150 crores with net of our CapEx rather. So what is the reason behind all of that? 5 years, 6 years back when we added all machines and the technology of the machine is being upgraded, so taking out or phasing out the old machines and replenishing and getting new equipment with the BS VI and BS IV technology and fuel efficiencies there, so this is one reason that you can see the all-time high depreciation going this time. But then again, '25, '26, it would be all eased out to a normalcy that in that range depreciation and interest put together would be in the range of 3.5%.

Understood, sir. And lastly, maybe I missed it, but FY '24, you said around...

May I request you to join back the queue, please?

Yes, just one last question. So FY '24, you are saying INR 5,400 crore of revenue guidance. In FY '25, sir, what is the guidance?

Roughly, we are keeping a number about, say, INR 6,200 crores, INR 6,000 crores to INR 6,200 crores.

We have our next question from the line of Vishal Periwal from IDBI Capital.

I think in terms of bid, you did mention on the railway where you're eyeing. So apart from that, is there any other sector in the road, non-road side where we are bidding or any bid that is a matter?

Say, road sector, there are 6 bids that we already have done. There's Chambal Expressway, which we already had bidded. And one project also is there. I think that is in the state of Chhattisgarh where the results are yet to be declared.

No, no, sir, what I'm trying to understand is like in roads, definitely, there are submitting bid. And railway, again, we have already shared the opportunity of roughly INR 8,000-odd crores. But apart from these 2 sectors, any other sector where we have bidded or we are eyeing an order inflow for us?

No, we are expecting that we will be bidding for metro where we have already had qualified with this recent completion of these projects. So that is where I think we will be bidding. And we are looking into some tunnel opportunities in a few, say, Northeast, there's the state of Himachal and with DRO. So this year, we are looking into them.

Okay. And then when we say metro, it is over and above this INR 8,000 crore opportunity, which you mentioned the railway that's on top of it, right?

That's probably -- yes, we are looking for this.

Okay, okay. And sir, in the non-road side, when we are bidding a couple of projects that is there in order book also, so these are bidded on our own or they are in JV with any partners?

Which projects?

The non-road orders that we have in the order book they are...

See the -- as on date, all orders are with sole entity. H.G. has already bagged those orders without the JV. And in the future, I think as we are looking some water projects where we are not qualifying -- 100% not qualified into that. Even for tunnels, we are not qualified. So any for these big-sized projects of a metro even we are not qualified. So we would be looking into these opportunities where the joint venture alliance would be done.

[Operator Instructions] We'll take the next question from the line of Shravan Shah from Dolat Capital.

Sir, just to again clarifying on the numbers. So in station redevelopment, you mentioned, we have bided INR 1,000 crore projects and plans to bid 3 more station redevelopment projects worth INR 1,200 crores.

Yes, correct.

So the INR 1,000 crores we bidded 2 projects, which are these railway stations?

One is Gorakhpur and one is in South.

Okay. And INR 14,600 crores also in initial remarks we said, so that we are planning to bid on the INR 8,000 crores, also the number that we are planning to bid, so the INR 8,000 crores these are road sector where we are planning to bid? And what is this INR 14,600 crores? So that is including everything that we are planning to bid?

No, no. No, that's not included of anything. Highway, we -- I have not touched upon as a number. Highway, definitely, as we were discussing upon, is INR 45,000 crores of highway bidding opportunity at MSRDC. INR 60,000-something crores bidding opportunity at NHAI. So this is what we are looking into to be bidded for the -- during the year.

Okay. And non road, we are further planning to bid for INR 8,000-odd crores?

Correct.

Okay, okay. Okay, got it. And then on the working capital, sir, so our core cash conversion days, we have seen actually, it has reduced and 31 days came to the March level. So will it remain the same or it will further inch up?

No. I think the net working capital cycle would remain almost 35 days, which, say, in between the intermediate intervals, it always requires the working capital. Even you see the bank limit is being used. Now again, it is coming to the same stable. That 35 days ideally would be the range of working capital.

Okay. And when we will receive this monetization among this November for 3 projects? So in terms of the gain, which will be booking, so one is, how much is the gain that we will be booking? And in terms of the tax statement, how that the -- will it be a 20% tax, capital gain tax kind of a thing? So how it will work out?

So we are working on it. Definitely, it's not that big number because it's almost years from we started investing equity. So whatever gain is there, there are 2 kinds. We have one into SPV. So one is for the equity invested by H.G. So they are the 2 numbers, but that is not a very big, say, number.

Okay. So on stand-alone level, it will not be a major number?

Yes, yes.

As there are no further questions, I would now like to hand the conference over to management for closing comments. Over to you, sir.

Yes, thank you, Sana. Thanks, everyone, for bringing their expertise and experience around the table. We appreciate everyone joining us today on the call and hope that we have addressed all your questions. If you have any further inquiries, please do not hesitate to reach out to our IR adviser, Go India Advisors. And thank you for your participation. Happy Diwali.

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