Kalpataru Projects International Limited (KPIL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '22 Earnings Conference Call of Kalpataru Power Transmission Limited and JMC Projects hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors Limited. Thank you, and over to you, ma'am.

Thanks, Deepika. Good morning, everyone. Welcome to the Kalpataru Power Transmission and JMC Projects 1Q FY '22 Earnings Call. We have the management today being represented by Mr. Manish Mohnot, Managing Director and CEO; Mr. Amit Uplenchwar, Director of Group Strategy and Subsidiaries Operations; Mr. Ram Patodia, President, Finance and CFO; and Mr. S.K. Tripathi, Managing Director and CEO, JMC Projects. I'll now hand over the floor to Mr. Manish Mohnot for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir.

Thank you, Bhoomika. Welcome, everyone, and a very good day to all of you. I'm thankful to you for attending this earnings call of KPTL and JMC. Before I move into details of our financial performance for Q1, I will quickly share an update on our business operations and status of long-term assets. Both KPTL and JMC have reported year-on-year revenue and profitability growth despite the challenges posed by lockdown in many states due to emergence of second wave of COVID. We are able to record much better business growth compared to similar period last year. Our business continuity plans and technology-backed systems and processes have helped us to ensure execution across all our projects. The current business environment continues to remain difficult with unprecedented increase in international freight charges and rising commodity prices. Additionally, the supply chain issues are leading to pressure on margins and delays in tower and other material dispatches. However, we remain confident to navigate the volatile environment by diligently managing our cash flows, optimizing our cost and improving our working capital cycle. We have received record order inflows of INR 5,524 crores at consol level till date in financial year '22. Our business outlook for all of our businesses remain robust, and we remain confident to achieve our targeted order inflows for the full year at consol level. We made considerable progress on restructuring our road BOOT assets. We are at advanced stages of restructuring for Kurukshetra and Wainganga road assets and expect the process to get completed by end of Q2 itself. We are progressing well on completing the sale of Vindhyachal road BOOT asset and expect the sale to be completed in Q3 of the current year. The closure of Kohima-Mariani transmission was affected due to COVID. We expect deal closure in the second half of '22. We've already seen major approvals pertaining to the deal. Coming now to the financial performance first. At KPTL consol level, our consol revenue grew by 38% Y-o-Y to INR 3,204 crores on back of strong execution in T&D, B&F, water, railways and oil and gas business. Our EBITDA in absolute terms grew by 10% to INR 297 crores. Our EBITDA in the same quarter last year included INR 40 crores related to Alipurduar transmission assets, which were finally sold off. Excluding the onetime impact of this T&D SPV, EBITDA went from INR 229 crores to INR 297 crores, a growth of 30% year-on-year. Our corresponding EBITDA margin contracted by 50 basis points from 9.8% to 9.3%. Our EBITDA margin was marginally lower compared to Q1 '21, given the impact of higher commodity prices, supply chain issues and COVID-related cost. However, we remain confident to maintain double-digit margin in the range of 10% plus for the full year '22 at a consol level. Our PBT grew by 135% to INR 127 crores, and PAT grew by 179% to INR 78 crores. Our consol net debt is at INR 2,946 crores, which is a decline of INR 428 crores compared to same period last year. We recorded order inflows of over INR 5,500 crores till date at consol level and additionally have L1 position of over INR 5,000 crores. We have a strong and well-diversified order book of over INR 29,000 crores at the end of June, excluding the L1 numbers as of today. Now at stand-alone level. At KPTL, revenue grew -- revenue for Q1 grew by 9% year-on-year to INR 1,586 crores. Our T&D revenues, including Linjemontage and Fasttel, grew by around 12%. Oil and gas grew 28%, and railways grew by 23% in Q1 '22. Our Swedish subsidiary, Linjemontage, reported revenue growth of 15% to INR 312 crores with EBITDA margin in range of 7%. Our Brazil subsidiary, Fasttel, recorded revenue of INR 95 crores in Q1 '22. Our PBT grew by 15% to INR 116 crores, and PAT grew by 10% to INR 76 crores. We continue to maintain double-digit EBITDA margin of 10.2% despite increasing commodity price and rise in logistics costs. Our net debt increased to INR 1,222 crores on account of lower collections due to COVID. However, relaxations in travel restrictions and resumption of business collections have started to improve from July '22 onwards, and debt has reduced at the end of July. We are targeting to reduce our stand-alone debt substantially with the help of the inflows from sale of Kohima transmission assets, our collections on Indore projects, our focused efforts on project closures and optimizing our working capital. At KPTL, we received orders of INR 865 crores till date in financial year '22. Additionally, we have L1 of INR 2,550 crores. We have witnessed delays in tendering activities and finalizing of orders. However, we expect ordering to pick up in the next few months. Our stand-alone order book at the end of June '21 was INR 13,397 crores. At JMC stand-alone level, our revenue grew by 139%. It was driven by robust execution across all segments. JMC's EBITDA margin improved compared to last year but were impacted due to job mix, rise in material costs and COVID-related expenses. Most of the contracts in JMC have pass-through clause and will be billed to the clients by -- during the year. Our PBT and PAT improved by around 163% and 173%, respectively. Our net debt at JMC is INR 717 crores at the end of June '21. Our debt levels remain in line with business growth. However, for the year-end, we're targeting to maintain JMC debt at similar levels as at the end of March 2021, approximately INR 500 crores. At JMC, we received order inflows of INR 4,659 crores till date in financial year '22. This includes 2 large orders received in Africa. Additionally, JMC has L1 position of INR 2,500 crores, mainly in water and international B&F projects. Our JMC's order book was at an all-time high of INR 15,916 crores at the end of June '21. The performance of road BOOT projects was affected due to regional lockdowns and travel restrictions. Our average daily revenue for road assets were INR 45.5 lakhs per day in Q1 '22. Our toll collections in Kurukshetra road project continue to remain affected due to farmers' agitation. In Q1 '22, we have made an additional investment of around INR 53 crores in our road projects, taking the total investment to INR 926 crores at the end of June '21 in all our road -- 4 road projects put together. At Shubham Logistics, revenue was INR 38 crores, a growth of 15% with EBITDA of around INR 8 crores and PAT of INR 1.2 crores. As guided earlier, we'll continue to maintain profitability in Shubham Logistics. Our well-diversified current order book provides good visibility for growth in financial year '22. We are confident to deliver consol revenue in excess of 15% for full year '22, while we navigate the near-term challenges and continue our hard work to scale to double-digit margins. With that, we can open up the call for questions.

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

My first question is on the asset business. So you highlighted that WEPL and KEPL will see some kind of restructuring or finalization of terms with regards payment by this quarter. So just wondering why did you say INR 53 crores when you are near completion of restructuring? And for the rest of the year, how much lost funding will be required post the transaction?

Kandpal, it's S.K.T. here. So as we have said, WEPL and KEPL restructuring is moving ahead. But this infusion of the money is retrospective with respect to the cutoff date. And whenever the restructuring gets implemented, there will be a reversal of these investments, which the company will get, right? So our cutoff dates are about a year old or 8 months behind. And the restructuring, when it gets implemented in Q2 or Q3, out of this INR 53 crore, about INR 28 crore, there will be a reversal in the books. So this is one part. The second part is the -- our revenue has come down from INR 60 lakh per day to INR 45 lakh per day due to the COVID and the locking down of one of the toll plazas due to farmer agitation. And overall, due to the COVID, there has been revenue reduction. So that INR 60 lakh has come to INR 45 lakh. So that has an impact of about INR 15 crores. So if we take these 2 things out of INR 53 crore, that answers that how much is the tangible investment which has gone into this. And as we complete the process towards the Q2 end, some more infusion may be required depending on the traffic and how the situation unfolds on the ground. So we can't give an exact figure that how much it will be, but it should be minimal going forward if the situation improves. But if the COVID and the lockdown, they continue across those areas, particularly KEPL where one of the toll plaza is locked down from last 6, 7 months, right, so there could be further infusion required in the KEPL. Similar situation will be there in BEPL. There also, traffic has come down. But their only silver lining is that since we have done the nonbinding offer with the respective buyers, whenever the sale happens, there will be a reversal in the books.

My second question was on Kohima. So you were expecting [indiscernible] ranges out there major approval from [indiscernible] family. So why is it delayed to the second half? I mean, is the deal still [indiscernible]?

So on Kohima, as we said, I mentioned earlier also in my call for Q4, we have received major approvals. The line is fully functioning at 100% operational. There's a few approvals which are pending, a few approvals at the banking level which are pending and a few approvals from the regulatory side which are pending. We stay committed -- we continue to be committed on making sure that the deal gets completed in Q2. We have been chasing this respective deal for approval, but last few months were difficult because some of the employees in those respective organizations were not working. We're pretty confident that Q2, we should be able to close the deal. As of now, we stand committed, and it looks like we will be able to receive the inflows itself in Q2.

Okay. Just last question on the commodity inflation. So you're moving on from [indiscernible] KPTL standalone. So were there any reversals or provisions taken earlier in this quarter also to offset some of the impact of commodity prices? And also lastly, if you can touch upon the ramp-up of Fasttel. So how are the margins there and how the integration and ramp-up in Fasttel in Brazil?

Sure. So on commodities, we had taken a significant hit in Q4 on PTC losses of approximately INR 140 crores. We've not seen significant reversal out of that coming into Q1. Some reversal would have come, but commodity prices have slightly gone up. So to that extent, we still continue to hold our PTC provision in our books. So that's on commodities. As far as Fasttel is concerned, their EBITDA margins were in the range of around 3%. It was not -- around 4% to this time. And on the current order book, we're confident that they will have an EBITDA margin of 4% to 5%. We are cautious on growth in that market as of today. Our focus as of today is to make sure that we integrate the team fully. Our senior people are already at Brazil. Two or 3 of our resources are already there for the last 3, 4 months, including a senior finance resource. So our game for the current year is to make sure that, one, we integrate with them. Second, we ensure that we clearly bring out the benefits of synergy where we look at supply chain, [indiscernible] materials, all of them, and grow slowly in the current environment.

The next question is from the line of Renjith Sivaram from ICICI Securities.

Sir, if you can update on the order intake prospect for FY '22 and how much will that come from the domestic? And which of the overseas geographies we are seeing traction? And what's the scenario in [ Linjemontage ] and also the non-TLD ranges and [indiscernible]?

Sure. See, our order intake for the current year will continue to be in the range of INR 16,000-plus crores as we had targeted at the beginning year -- at the beginning of the year on a consol level. At a stand-alone level, we expect KPTL to be in the range of INR 9,000 crores and JMC to be in the range of INR 7,500 crores to INR 8,000 crores. Out of the INR 9,000 crores, we expect railways and oil and gas to be having respective order book inflows of around INR 2,000 crores each and INR 5,000 crores to come from TLD -- from TL overall. TL -- out of TL, significant portion we expect to come from TLI. TLI order book inflow target is around $400-plus million, and we're pretty confident that we should be able to get that during the year.

Okay. And regarding railways and pipeline?

So I mentioned that earlier. Railways and oil and gas, their order intake target for the current year is around INR 2,000 crores, out of which we -- as of today, we have visibility for railways. We've already got orders of INR 500-odd crores. And the pipeline, we are -- have won approximately INR 500 crores as of now.

Okay. And regarding the Kohima-Mariani, there was some issue in something CLP not getting qualified, and we have to look for some other party. So what status is that?

No. I'm not aware of any such issue on Kohima-Mariani. We are committed to doing the deal with CLP. They have got the relevant approvals from the government, including the SIPP and all the approvals. So we had that issue at ATL earlier, which was last year, and that's why we had to sell it to some other organization. But as far as KMTL is concerned, I'm not aware of any such issues. We are on track to going ahead and doing this deal with CLP.

Okay. So there is no issue in terms of CLP doing this particular transaction?

No. There are no such issues.

Okay. And so what's our target debt for this year or the net cash level or how are we looking at for KPTL now?

So we continue to stay committed to our targets of negligible debt at the year-end because we expect the cash flows out of KMTL and Indore to come significantly in the current year. So we continue to stay targeted at negligible debt closer to 0 level at KPTL stand-alone level.

Okay. And any more capital commitments which we have for Shubham or any of the subsidiaries from KPTL stand-alone? Or these -- all the subsidiaries will be able to take care of themselves?

As of today, we have no capital commitments for any of our subsidiaries, including Shubham. I think they are now moving in the right direction of profitable growth. So we do not see any capital commitments to any of the subsidiaries in the near future.

[Operator Instructions] The next question is from the line of Renu Baid from IIFL.

So my first question is, when we look at the core KPTL portfolio, we have seen increased competition coming across oil and gas pipeline and T&D market also after easing of government requirements for advances as well as [ T&D ]. So how are you looking at the competitive environment? And will that have a bearing in terms of the margin profile? Also, given the fact that you have a significant international order pipeline, now with steel prices at elevated levels, does the relative attractiveness of international T&D business significantly improve?

Okay. So Renu, I think you've been associated with this industry for long. So having competitive pressure is actually something which we have seen regularly, right? It's not something new for us. The good part is that the competitive pressure is a lot more realistic. We're not seeing unrealistic competitive pressure. So unlike those days which we have seen 7, 8 years ago where people used to bid at a 20%, 25%, 30% difference to L1, now it's a lot more realistic. And realistic competitive pressure, I think, we will continue to do well given our advantage on costs, given our focus on delivery and given our size and scale. So from a competitive pressure perspective, I'm not too much worried at least on transmission international, T&D domestic as well as oil and gas. Yes, at railways, we have seen some unprecedented competitive pressure coming from a lot of road contractors. But again, as I said, it's not something new. We've seen this 4 years ago. And you see people who really do well continue being in that business and others not being in the business over a period of time. We continue to stay focused on a profitable growth, right? That's more important for us. The one common thing for KPTL over the last 10, 15 years is making sure that we have profitable growth and making sure that we focus on working capital. So with that, I do not see much pressure coming in. And even if it comes in, I'm very clear, we will not compromise on profit for growth. That's one side. On the international front, yes, you're right, oil and gas now has seen a lot of traction. Over the last few months -- over the last quarter, we've submitted tenders in 5 or 6 countries. A few of them, we just missed it. One of them, I know we missed it with 0.5% in one of the Middle East geography. We continue to remain focused on that and really confident that in the current year, we should at least have a few international projects in oil and gas. As far as international transmission opportunities are concerned, we had some setback. All of you are aware of the World Bank debacle which happened last year. We should be getting out of it very, very soon. There's hardly any time left. And from that time onwards, our opportunity will increase a lot more. So we continue to stay bullish on internal TLI, and I'm confident that we're looking at a 15%-plus growth for that business for the current year.

Sure. So the second question would be to understand in JMC, given that there has been some weakness going to cost issues in this quarter, broadly, how should we look at the margin profile for the current year and from a next 2- to 3-year perspective also with the backdrop of improving mix and order backlog volumes?

Yes. So JMC, as we said in the beginning of the call, we will remain on a double-digit margin. This current quarter is primarily due to the job mix, which we are handling, as well as some pressure on the prices of the materials, for which the escalation will get realized in the later quarters because most of our -- 90% of our contracts are pass-through. And hence, we should not be looking this quarter in the isolation. As far as the next 2-, 3-year horizon is concerned, things look much better because of the water order book as well as the international order book. And we should be on the double-digit growth journey going ahead.

Renu, just to add to what S.K.T. said, clearly, the focus for the entire organizational on a consol level is a double-digit EBITDA margin, right, on an annualized basis. Quarterly, we would have challenges depending upon the environment, depending upon the kind of the project and a lot of other things. But on an annualized basis, both KPTL and JMC double-digit margin is given. That's something which is noncompromisable as far as the entire organization is concerned.

Right. Sir, the next question is, if you look today, JMC's order backlog has exceeded that of Kalpataru stand-alone given the diverse markets in which it's present and the high-growth categories. So as a portfolio, by when do you see JMC actually surpassing Kalpataru stand-alone in terms of revenue as well as profitability?

I would love that to happen as early as this quarter. Remember, we own 67% of JMC. So I'll be happy if it happens. But realistically, see, JMC's growth would be obviously much faster than KPTL. And we've been very, very clearly communicating that, right? JMC is growing at 20% plus. It should not be a challenge at all. So realistically, a 20%-plus growth for JMC is visible on top line. Bottom line also, they would continue to be a double-digit margin on annualized basis. So from that perspective, I don't think we need to look at the -- when will they overcome there because it's not a race kind of thing, right? It's important that each of the organizations continue to grow to their best potential. So JMC growing 20% plus is not a challenge at all. KPTL growing at 10% to 15% should not be a challenge.

And my last question, if I can ask. Given the backdrop that we have seen significant investments in the infrastructure and bid investment planned by the U.S., which of KPTL subsidiaries will be able to benefit, especially both the Brazilian as well as India? Can there be a play to benefit from those investments in the region? Or do you think it would be too early for those entities to participate?

No. I'm reasonably sure that both these entities will not be able to participate in the U.S. market, okay? I don't have any doubts in my mind. They will not be able to. So that's the growth which is something which, as of now, we would be looking at from India itself. We've been supplying towers to that part of the world over -- for the last 10 years. On a larger EPC, that's something which might take us a lot more time to get in. We continue to explore opportunities of acquiring a smaller company there, but nothing is on the radar as of now. And I don't see anything happening in the current year.

The next question is from the line of Bharat Sheth from Quest Investment.

Manish ji, first on this KPTL on the railway international. So what stage we are and how really we are evaluating going -- getting a better order?

So Bharat bhai, our philosophy for international growth is a very simple philosophy, right? We have 65-plus countries where transmission lines we have had footprint for the last 10 years, 7 years, 8 years. We are utilizing that footprints to grow all the other segments, whether it's railways, oil and gas, roads or buildings and factories. And you've seen that across the group. You've seen significant growth in international order book at JMC in the last 6 months. We have already communicated oil and gas. We've submitted 6, 7 tenders in 6, 7 countries. We've not been lucky until now, but that's the nature of our business, right? You need to be trying hard to make sure that you succeed. Even for railways, we have a similar strategy. We have shortlisted a few countries in Africa, without getting into specific detail where we are focused as of now. Also, we continue to be looking at opportunities in the neighboring countries, Bangladesh, Sri Lanka, for railway projects. I'm confident that over the next 6 to 9 months, we should be getting 1 order at least on railway in the international business.

Okay. And sir, you said a reduction in this KPTL stand-alone debt. How much are we really building in a cash inflow from the Indore project? And what is the status of that project?

So we are targeting cash inflow of approximately INR 150-plus crores in the current year as far as Indore project is concerned. Q1, we've not been able to do much primarily because of issues of COVID, right? The project is nearly completed. Except 1 building, all buildings have got OC. The last building also, we expect OC to come sometime in Q3. We expect a lot of sales to happen from this current quarter itself. And I am aware that in July itself, we have seen 6, 7 flats getting sold. So we expect cash flow of approximately -- a minimum of INR 150 crores coming in, in the current year on Indore.

Okay. Sir, and last question on this KPTL, are we really looking Linjemontage position in African market from where we have currently sanctioned our temporary imposition of this not bidding in African market? So are we really evaluating that opportunity?

No. Not at all, Bharat bhai. With KPTL, no transmission projects would be allowed to bid till October and wherever World Bank has funded opportunities available. Till October, we're not giving -- utilizing this at all. As far as Linjemontage is concerned, the focus of Linjemontage is more the Nordic market. And that is clearly what is going to drive growth for them and nothing beyond Nordic market as of today.

So I mean, in Nordic market, a lot of solar projects are coming up. And they are going very aggressively on renewable. So how one really look at, I mean, over 2, 3 years' time frame on Linjemontage position?

So you're right, a lot of renewable focus in the Nordic market will also entail a lot of opportunities on power transmission, distribution and cabling jobs, right? And we see that -- you've seen last 2 years, that business has grown by closer to 100%. From the time we acquired to where we are today, we have doubled ourselves on every aspect. We expect this business to continue growing by 15%, 20% at a minimal from the Sweden market itself. Beyond that, we continue to explore opportunities in the neighboring countries. That could be additional growth. But as of today, we'll not be able to give you a targeted number for that.

Okay. Sir, I'm now coming to this JMC. We have already order win till June, plus L1 is around INR 6,000 crores. So why we are giving a target of around INR 7,000 crore only order inflow? If you can say more thought process? Or really, we will expect to revisit post Q2?

So Bharat bhai, we will definitely relook. But at the same time, we will remain cautious in terms of the order booking, keeping the quality in mind, right? With the good order book in hand, we will be very selective going forward. And we will be more focusing on the delivery, which is paramount in this business. So yes, there is an opportunity, but we will be very selective. And hence, we'll be cautious. Yes, the INR 6,000 crore may become plus/minus another 5%, 10%, but we are not looking forward to some big lead/jump on those numbers.

So just to add to that, Bharat bhai, it's important -- and as S.K.T. rightly said, it's important to make sure that delivery catches up in the same speed. We have built a team. We're confident we will deliver. Because today, if you look at numbers, we have a 4-year visibility on order book, right? And that's not -- that's healthy in some form, but that's also challenging in some form, right? So our aim is, yes, we will continue to take good orders, as S.K.T. clearly said. But it's not that we're going to make that INR 7,000 crore become INR 15,000 crore, something like that. Plus/minus INR 1,000 crores can happen, but nothing beyond that.

And sir, on the asset side, this Kurukshetra is really problematic since last couple of quarter. Plus earlier also, some kind of agitation is always. So is there any other way we -- are we really evaluating for, I mean, whether surrendering this asset? Or if you can give some color on that?

So Bharat bhai, currently, we are pushing the restructuring, as we said in the last quarter. And it has been cleared by the lead banker. And we are looking at clearing that step first. As far as the other options are concerned, we are evaluating those options. We have not closed with those options. But first, we will focus what is really tangible in terms of reducing our cash outflow as well as bringing sanity in the numbers. So other options will be kept open, but we are currently focusing on completing one task in the hand.

The next question is from the line of Rakesh Vyas from HDFC Mutual Fund.

I have 2 questions, both related to JMC. The first one, given that we have L1 plus order book of close to INR 18,000 crore and, as you highlighted, 4 years of order book, so why are we still guiding at only 20% kind of growth? Because I believe a large number of these projects have to get executed in next 3 years' time frame. So are we being too conservative? Or are we seeing any challenges which deter us to look for a higher execution growth? That's point number one.

Right. So Rakesh, see, INR 18,500 crore order book, so I will not say that we are still being conservative. But we will be cautious, as I replied earlier, that we will be focusing more on the delivery because that is what will matter. And if the delivery is right, I'm sure order book will not be an issue even going forward, right? So we will be -- we are not looking for explosive growth of 25% and all that because it has its own pros and cons. We will be cautiously moving in the range of 15% to 20%, which is well manageable. And our verticals have a good visibility for next 5 to 7 years. So business is not going to run away anywhere. If we are there in the right time, we will catch up with the business.

And Rakesh, just to add to what S.K.T. said, a lot of our international projects have a lot of components of design and approvals, which takes 6 to 9 months, right? So effectively, a lot of our international order book, significant revenue would start from the next year, right? And that's why I think that you'll see much better growth going into the next year as compared to the current year. But yes, 20% plus is minimum.

Okay. That helps. Second is just extension to the earlier question that was asked on the asset. So essentially, given that this farmer agitation has been continuing for more than 6 months now, and I think in concession agreement, there is provision that if there is a lack of toll collection during this time frame, there is an opportunity to terminate the project, in which case, we can get our equity investment and the debt outstanding due. So I'm just trying to understand, even post the financial restructuring that we are planning, is there a possibility that we can avail this option because this window could probably be limited?

So Rakesh, you are right. And as I said earlier, we will first complete the restructuring part so that the bankers and the investors in that SPV, they are on the board. Once that part is aligned, this option, as we said, we will be evaluating. And since it will be a contractual entitlement, at the right point of time, we will look at that.

The next question is from the line of Swarnim Maheshwari from Edelweiss.

Congratulations for riding through these volatile commodity prices. Sir, 2 set of questions. First, so what's really -- what happened on the working capital side? There is a sharp jump for both Q-o-Q, Y-o-Y. So is that more related to some sort of a vendor support or there is some collection issues over there?

So Swarnim, there are no issues on collection. Slight delays because of some clients not being available across Q1. But that's been a typical trend if you look at the history for the last 5 years, excluding the previous year, right? Previous year was a COVID year. That Q1 debt always goes up by INR 200 crores, INR 300 crores, INR 400 crores because this is the quarter where we really push up payment to all the vendors and make sure that things are in line to achieve our annual target. So that's the trend. So I wouldn't say there's any -- there could be some delay in collections, but it's not that there's a significant delay in collections which have happened. We're confident that getting into Q2, this debt should start coming down. And by the end of the year, we'll be on targeted numbers of KPTL and negligible debt, and JMC is closer to INR 500-plus crores at a net debt level.

So essentially, this is vendor support?

Sorry?

Essentially, this is -- the high working capital is due to the vendor support, which should actually come down gradually.

Yes. Yes, it's also vendor support, a few other aspects. But yes, significant payment has gone to vendors.

Got it. Got it. Correct. Sir, secondly, you did mention about the KPTL targeted order intake of about INR 9,000-odd crores. So just wanted to understand, what is the total opportunity size over here, the ordering pie over here? And what is our canvas?

So the opportunity side is very different for different business running. If you ask me on the transformation domestic side, we can see tenders of approximately INR 10,000-plus crores coming over the next 6 months from a lot of SEBs and power grid, which is on the BOOT project. On the international front, the opportunity will be very different a few months from now. You are aware that till October, we have some restrictions. But after that, we believe that the opportunity is much higher. It could be Africa, which continues to be our core focus, could be much, much higher. We're talking of maybe $500 million to $600 million worth of opportunity to be bid over the next 2 quarters itself. As far as oil and gas is concerned, we're seeing a lot of traction on the domestic front also with a lot of tenders coming in from GAIL, from IOCL, from GSPC. And we're pretty confident that achieving that INR 2,000-plus crores of order inflow would not be a challenge. As far as railways are concerned, again, tenders have started coming in, both for electrification, widening as well as for metro projects. We have been slightly cautious given the competitive -- intense competition in that sector but pretty confident that we should be able to achieve that INR 300 crores to INR 2,000 crores what we have targeted.