KEC International Limited (KEC.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to KEC International Limited Q2 and FY '26 Results Conference Call. We have the management from KEC International Limited joining us today. Mr. Vimal Kejriwal, Managing Director and CEO; Mr. Rajeev Agarwal, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vimal Kejriwal. Thank you, and over to you, sir.

Thank you, Danish, and good morning, everyone, and welcome to the Q2 earnings call of KEC. Let me begin by sharing an overview of our financial performance of the quarter and H1, along with the highlights of their respective businesses. We have delivered a good performance this quarter, achieving record revenues in Q2, substantial growth in profitability and strong momentum in order intake especially in the T&D business. Our top line witnessed healthy growth with revenues of INR 6,092 crores in Q2 FY '26, reflecting an increase of 19% Y-on-Y primarily driven by a robust execution in our T&D business, both in India and international. With this, we have achieved a revenue growth of 15% for H1, which is in line with our guidance for the year. Aligned with our strategic focus that T&D segment's contribution to overall revenues increased to 65%, up from 55% in H1 last year. Our EBITDA has grown by 34% in Q2 and 27% in H1. EBITDA margins for Q2 increased by 80 basis points to 7.1%, up from 6.3% in Q2 FY '25, while H1 margins rose by 60 basis points to 7% from 6.4%. Interest expenses as a percentage of revenue have reduced by 50 basis points in both Q2 and H1 resulting in an interest cost of 2.8% for Q2 and 2.9% for H1. We have significantly enhanced our bottom line with a remarkable PBT growth of 88% in both Q2 and H1. PBT margins increased by a good 130 basis points in Q2 to 3.5%, vis-a-vis 2.2% last year and increased by 100 basis points in H1 to 3.3%, vis-a-vis 2.3% last year. We have achieved a PAT of INR 161 crores in Q2 and INR 285 crores in H1. The growth in PBT and PAT continues to outpace EBITDA. We have a clear emphasis on profitable growth, not just top line expansion. Our profitable growth continues to outpace revenue growth. In terms of order intake, we are pleased to share we have achieved a record YTD order intake of over INR 16,000 crores reflecting a healthy growth of 20% Y-on-Y. Notably, a substantial 75% of this order intake has been secured by our T&D business across India and the international markets. Additionally, we hold L1 position of INR 5,000 crores, again primarily in the T&D segment. We have a well-diversified and strong order book of over INR 39,000 crores as on date, including the L1 position, our order book and L1 stands at a record level of INR 44,000 crores. Coming to our debt levels, our net debt including acceptances stands at INR 6,480 crores as on 30th September vis-a-vis INR 5,265 in the previous September. The increase in debt level is on account of strong revenue growth, increase in strategic inventory due to benign commodity prices, delayed release of payments in water projects and spillover of certain large collections, which happened in the subsequent months. We expect the debt levels to normalize going forward. Coming to our specific businesses. Our T&D business continues to be the key growth engine in this quarter, delivering revenues of INR 4,080 crores, a remarkable growth of 44%. This stellar performance reflects our strong execution capabilities across multiple geographies. That business continues to maintain in its profitability momentum with double-digit EBITDA margins. On the order intake front, the business secured orders of INR 12,000 crores across India, Middle East, CIS and the Americas. The T&D business has expanded its geographical footprint by securing its marine order in a new country in the CIS. The business has also secured 2 landmark orders in the Middle East which improves our largest ever EPC order of over INR 3,100 crores in the UAE, our largest ever substation order of over INR 1,000 crores in Saudi Arabia. These prestigious orders in the Middle East have widened our portfolio and client base and further solidified our leadership in the region. In India, the business has secured multiple orders from various clients. We continue to build a strong presence in the promising equity segment, having backed another significant order this quarter from a private developer. We are currently executing 5 HVDC projects, including a major converter station projects spread across 3 locations and 4 transmission line projects. We have significantly increased the share of private sector orders in our India T&D order intake this year. It gives me a great pleasure to share that this year marks a significant milestone and we celebrate 15 years of SAE acquisition, a journey that has redefined our global footprint and set new benchmarks in the transmission industry. Over the years, SAE has grown not only in scale but also in capability, innovation and operational excellence. I'm delighted to share that SAE continues to perform strongly with revenues of INR 429 crores for the quarter, reflecting a robust 35% growth. In Brazil, we continue to witness good traction in hardware orders. We have further strengthened our operational capabilities through the installation of new robotic equipment at our manufacturing facility, which will enhance production capacity and improve efficiency. In Mexico, the business continues to experience steady order momentum supported by a positive outlook in the North American T&D market, further aided by the U.S. tariff and the rest of the world. Overall, SAE continues to deliver steady profitable growth backed by healthy order inflow and a robust order book plus L1 position of over INR 2,300 crores. We are making notable progress with expanding our tower manufacturing facilities. Following successful capacity enhancements at our plants in Dubai, Jaipur and Jabalpur. The expansion of our Butibori facility in Nagpur is underway and is expected to be completed by this year-end. This positions us well to meet the increasing demand for transmission infrastructure in both the domestic and international markets. The overall tender pipeline in T&D continues to be healthy in both domestic and international markets. In India, the government thrust on renewable evacuation corridors, green energy transmission and intraregional interconnections is creating a robust pipeline of opportunities. Several large intrastate projects earlier executed by state utilities have now transitioned to the TBCB Road, attracting considerable interest from private developers and utilities. This shift is opening up a new and promising market for us. On the international front, the market outlook remains highly promising. The Middle East continues to be a key growth engine with major transmission initiatives underway in Saudi Arabia, UAE and Oman. Additionally, we are pursuing opportunities across Americas, CIS and Africa. With a record order book and L1 in T&D of almost INR 29,000 crores, we are confident of delivering significant growth in this business. In Civil, we delivered revenues of INR 968 crores for the quarter. The revenues could have been higher, but for the prolonged monsoon in certain regions, labor shortages and delayed payments in the water segment. While the labor situation is gradually improving, it remains below desired levels. We continue to adopt a calibrated approach to the execution in water projects given the current payment scenario in this segment. The business continues to strengthen its order book with multiple orders of INR 3,000 crores in the Buildings and Factories vertical from reputed clients. In a key strategic achievement, we have further expanded our presence in the factory segment by securing an order for civil and structural works for a thermal power plant and thereby widened our customer base with the addition of a marquee client. The business also strengthened its footprint in the residential building segment with a repeat order from an existing marquee client. With a gradual improvement in the labor situation, steady collections from water projects and a large order book and L1 of over INR 10,000 crores, we are confident in the Civil business will see good growth in the coming quarters. The Transportation business recorded revenues of INR 425 crores for the quarter. The focus remained on timely execution of new orders and completion of ongoing projects. The quarter was marked by 2 landmark projects inaugurated by the Honorable Prime Minister, Beleghata-Hemanta metro station in Calcutta and The Vanchi Maniyachchi-Nagercoil railway doubling in Tamil Nadu, where KEC played a key role in the successful execution. The business has secured 2 more orders for the TCAS under Kavach in partnership with our JV partner. The business has successfully implemented Kavach across 482 kilometers and is currently deploying the, Kavach system on additional 2,000 route kilometers of rail network. The advanced rail protection system will significantly enhance the safety, reliability and speed of railway operations. We expect to secure additional orders in this segment. We are actively pursuing international opportunities. With an order book and L1 of over INR 3,000 crores in railways, our strategic priorities remain clear. Fast track completion of existing projects, optimize working capital and selectively bid for high-quality margin accretive opportunities in both domestic and international markets. Our Cables business has achieved healthy revenues of INR 524 crores, a solid growth of 19% year-on-year. The profitability of this business is also witnessing a gradual improvement driven by better product mix and cost optimization. Our capital investment for E-Beam and Elastomeric cables is progressing as planned, and we expect commercial production to commence by the end of this year. This plant will cater to high-performance applications across defense, automotive and railway sectors where superior durability and thermal resistance are critical. Our renewable business has achieved revenues of INR 190 crores. We are currently executing 2 large solar projects in Karnataka and Rajasthan. The 500 megawatts solar project to Karnataka is scheduled for completion this quarter and the 500 megawatts solar in Rajasthan is expected to be complete early next year. We continue to bid for select opportunities in solar, wind and BESS. The oil and gas pipeline business is well placed to secure it's 3rd international order for a pipeline laying project in the Middle East. Following sustained efforts, the business has secured prequalification from a leading Middle East utility or pipeline projects. A key milestone in our international growth journey for this business. Given the subdued domestic tender pipeline and the heightened competition, the business continues to strategically focus on expanding its global footprint. Overall, we are pleased with our consistent revenue growth, improving trajectory of our profitability and momentum in order intake. With a strong focus on execution, expanding capacity, a robust and diversified order book and L1 of over INR 44,000 crores and the current tender pipeline of over INR 1,80,000 crores, particularly in T&D and Civil, we are well positioned to deliver sustained profitable growth in the coming quarters. Thank you so much. We are now open to take questions.

[Operator Instructions] Our first question comes from the line of Mohit Kumar from ICICI Securities.

Congrats on a decent set of numbers. My first question is, sir, of course, the domestic T&D order has been pretty strong in the first half. But are you seeing the domestic T&D order prospect declining because the tariff-based competitive bidding has been lukewarm in the fiscal? Or is the opportunity remains strong because the bidding activity happened in the last couple of years and the ordering is still to be done?

I think, Mohit, you have hit the nail. Clearly, I think in the first quarter, the ordering was low. Second quarter, the ordering has picked up, okay? And we are seeing some interesting orders, which we got in the last, I'll say, a month or 2. And also, we are now seeing some ordering -- some, I'll say, finalization happening towards the South side, Kakinada and Tuticorin and all those of these things. And the other piece which I earlier -- which I mentioned in my speech is on the intrastate where many orders -- many projects which would have otherwise been executed by the state utilities have moved to TBCB. In fact, we are L1 in one of them in the recent one. And that's an area where we were not there because I would not have typically bid for intrastate projects. So more than intrastate, I think intrastate is also an interesting area. So I don't think we should see a major, I'll say, downside in ordering. Other thing is that the major orders which have been awarded, TBCB, which have been won, let's say, an HVDC in Gujarat and others, and there are large orders coming in from some private clients which are outside TBCB. We announced one of them some time back, are also due for finalization now. So I think in this quarter, you see a lot of finalization happening on TBCB plus intrastate. So I don't think we are worried or concerned about domestic order going down. No.

Understood. My second question is on this segment. What is the water segment due at the end of September '25? If I remember the number correctly, at the end of March '25, it was INR 1,000 crore odd, right? And are we still executing on the projects or the progress has been pretty slow?

So Mohit, I don't have the exact number, but I think our dues are around INR 850 crores or around INR 900 crores, INR 875 crores. Yes. So our dues are around INR 875 crores and they have generally been constant. Even in March also, they were INR 850 crores, INR 825 crores. So they would have gone up by INR 40 crores, INR 50 crores generally, which I think we should be getting it now. With the policy which we have been following is that it's almost like cash and carry. Whatever money we get, we reinvest and execute the projects. So we are not increasing the exposure in any significant manner, marginal exposures may go up or down. And we are in 2 states, Madhya Pradesh and Orissa. Madhya Pradesh is virtually, I'll say, online on all the payments. Orissa has been slow. We -- but we did start getting some payments from there for a long time. So I think we are -- are we happy? We're not happy with it. In fact, that's one the reasons why the Civil revenues have gone low or lower than the last year because we did slow down. We're expecting it to pick up. But let's see, the discussions with the Jal Jeevan mission in both center and the states has been slightly more positive than it was before, and we are seeing some trickle happening even in Orissa.

Our next question comes from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on a decent quarter. Sir, my first question is on the comment which you made earlier in the call that T&D business is tracking double-digit margin. So if I look at the numbers, so double-digit margin, the H1 revenue contribution, so EBITDA would have been about INR 722 crores from the T&D business, even at 10%. That means rest of the business has just delivered an EBITDA of INR 58 crores, which is 1.5% EBITDA margin. I'm assuming that Cables and Civil would be doing much better. So where are the major losses coming on the margin side, sir, if you can help us understand that?

I don't have the exact numbers, but you are more or less on track, okay? I think the problem which we had is more on the Civil side also because of the heavy rainfall and slowdown in some of the projects. And also, we have factored in a little bit more of water. So Civil is at significantly lower single-digit margins. So it's a combination of Civil and Railways. Cables, I don't have the exact number, but it would be more than -- it could be higher single digit, I will say, maybe 6% or something like that would be the margins. So the net margin from non-T&D would be, I don't know, close to 1% or 1.5% overall. That's the way the numbers stack up.

How does it improve from here, sir? I mean, is it just the legacy orders which are running down the profitability and now with the mix improving towards better margins? So when do we see this thing changing because at the headline level, the margins are not improving, and we are still -- looks like we are still behind the trajectory of moving towards that 8% to 9% corridor and double digits to look too far away from here now?

So, Parikshit, the headline numbers are improving. We said from 6.2%, we have gone up to 7.1%. And we are still looking at reaching our 8% for the year, which means around 8.8% to 8.9% for the balance H2. We still have almost 60% of our revenues coming in. What is changing is that we have discussed it earlier that metros, especially the Delhi Metro had been a problem with us. Those projects have been completed. One of them is awaiting Prime Minister's inauguration, which is also a reason why I have a cash flow issue because a lot of money is tied up to the formal inauguration of the line. The second one also is very close to inauguration. Once that happens, those cash flows will also come in. But the negative, which was coming from them is now getting stopped, which will add to the non-T&D margins. Also, on the Civil side, if you notice that we have announced pretty large orders, and these are at a significantly better margins and the execution from them is starting now. So clearly, we will see a bump up happening on the Civil margins. One is on the percentage margin. Also, the leverage benefit will come in because the revenues will go up, okay? So I think that is what will -- this also from cables, we do expect that there will be some improvement in the cable margin also. I think all of that put together should help us in increasing our non-T&D. Also, as you rightly said that we have legacy orders and all those orders are getting closed. Like in H1, I think we closed 7 or 8 orders in -- 7 orders in the Transportation business. So the negative from those orders beyond what we had factored is getting closed. So we do expect that we should have a better overall numbers coming in, in H2.

Okay. My second question is on net working capital now, sir. I mean we have a very high share of international, now almost 36% contribution coming from international revenues, which typically have low working capital. So despite that, why is the net working capital getting still elevated? And we have seen peers who have high international order book, there has been contraction in NWC days. But in our case, order book is also at 45% international. So we would have received some advances. So despite that, why NWC seems to be so high?

So Parikshit, a large amount of advances is yet to come in, okay? We have announced some very large orders in the last 2 months, and those advances will come in now. And the impact of that would be clearly visible in the Q3 numbers. I think the difference is that if you compare the major competitors and all that, most of them have done very poorly in Middle East, okay? We have a very large order book and a large revenue coming out of Saudi, where unfortunately, there is a 20% retention, okay? And these orders had come in from the last 2, I think, 2 years or 2.5 years. And now we have started heading for completion of many of these orders. So from now onwards, you will see a sort of a cyclical thing where advances will come in, old orders retentions will get paid, new order retentions will keep on happening. So we do expect that with the closure of the current lot of projects, I think 7 or 8 projects we are planning to complete and close this financial year in Saudi, that will release a lot of retention. So that's -- so that is why we are slightly different from other people in the international piece. Obviously, the margins in Saudi are better, which is why we are talking about overall double-digit margin in T&D. The second piece, I already talked about a little bit of -- on the water side. Third piece, which has not got covered is also I did allude to it in a benign commodity prices, especially in our Cable business as well as in our Transmission business, the steel prices, especially steel has been at a lower level, [ INR 4,000 to INR 5,000 ] below what we had factored in earlier, which has resulted in keeping some stock with us, and it has paid us up well. So our inventories for the year would have gone up by INR 250 crores, INR 300 crores as compared to what was there, and it is a very conscious decision. So that is something which has added to the net working. And I think the last point which we have been discussing has been that if you look at our last Q4 revenues, and there was a significant increase in that revenue. So typically, most of our purchase at 180 days. And so a large amount of liabilities got paid off in around August, September. So when you look at the net working capital, what has happened is that at some places, the AR has gone up. In other places, the payables have come down actually. So it has been a sort of, I'll say, a double whammy, if you can use that word, where AR is going up and APs have been coming down, which will get normalized. So are we worried? Yes, we are worried that the number is beyond what we had expected. We still wanted to go to [ INR 5,000 ]. But the good part of it, Parikshit, is if you have seen our interest numbers, our interest cost has gone down by 50 basis points where the entire benefit of leverage of 19% revenue increase has come in. So if you even look at the 19% increase and with a typical 140 days or 130 days of net working capital, so some part of the working capital increase is also attributed to the higher revenue. I hope I have clarified it.

Just last question, sir. So now we are almost near the lifetime high debt. And also, I've seen in your cash flows, there are some entries on bad debts of INR 93 crores and ForEx gains of INR 83 crores. So just a clarification on this too. And whether -- how does one look at debt from now from here on? Is it the peak we have reached and that will directionally go down or like still there's headroom before we correct the debt?

I don't think we are looking at increasing our debt beyond this, not in our list. And as far as -- I don't know what -- Rajeev, you have bad debt? Anyway, I think just to clarify that I think we have had a significant ECL provision, okay, during the quarter as well as H1. In fact, our overall ECL provision is now at almost a lifetime of INR 475 crores, okay? That's an expected credit loss provision, which we are providing as per agreed format with our auditors and which is that number which you are looking at. We hardly have any significant bad debt write-off, okay?

I was referring to cash flow, sir, that was INR 92 crores for the half year. And there was -- I think this was ECL provisioning only and INR 83 crores of ForEx gains. In the cash flow there was INR 90 crores for the half year. But I ethers I think this was a provision and INR 83 crores of ForEx gains were showcased so...

Maybe you would like to check with Abhishek on much more details, but think...

But on the debt, you are now sure that is the peak debt. I mean now you're not looking at like...

We expect that to be our peak debt. I think it started to come down. In the 3 or 4 larger -- large payments, which we had been discussing. Afghanistan, we have received a large money, but there was some chunk which was supposed to come from one of the lenders, which we were hoping and there was discussion that should come in. But I think it has got delayed by some reasons. So I think now they have moved it to Q4. So Q4, a large chunk would come in from there. I think -- plus we have got some very large advances on the order releases, which we announced, which will also come in hopefully within this month. And there are some other payments, as I said, from Saudi retention, et cetera. So I think the debts will -- debt will come in control. Plus I talked about DMRC commissioning, et cetera. So that will release a lot of cash for us.

Our next question comes from the line of Sumit Kishore from Axis Capital.

It's a very strong performance in T&D, but once again, non-T&D led by Civil has been weak. You have mentioned some of the explanations. With a decline of 14% in revenues from Civil in the first half, how should we look at this settling on a full year basis? So how is second half going to be? That is the first question. And just a follow-up from the previous question. from 138 days of net working capital where you are now, how do you see this normalizing by the end of the fiscal in terms of number of days of sale?

So, Sumit, as far as Civil is concerned, we do expect that there will be a growth of overall 10% to 12%, 15% maybe for the year. We did around INR 4,400 crores last year. So we should be around INR 5,000 crores hopefully for the year, okay? And as I said earlier, the negative has basically happened because there's a very, very poor -- I'll say, not poor. We did not take any new orders on the infra side. So the entire metro revenues is now not there. Out of 4 projects, 3 have been completed. So the revenue flow has come down. But we have announced some very large B&F orders and those orders execution has started now. So we are clear that we will be able to make up for this shortfall. And I think we are around INR 1,800 crores to INR 1,900 crores of revenue for the first half. So second half, we will be able to easily reach close to INR 5,000 crores.

But that would mean that you would do nearly INR 3,000 crores of revenue in Civil in the second half and which would be a steep growth on a year-on-year basis. And given the margin profile of Civil is meaningfully lower, is it going to hurt your prospects of crossing 8.5% margin in second half, which is required to get to even 8% on a full year basis?

Yes. So Sumit, what is also happening is that in the last 6 months, as I said, the metro projects have got almost closed where the margin profile was very poor relatively, okay? That's one thing. Also, some of the older projects have been getting closed and the newer projects with an order quarter what we have, the quality of margins in the newer projects is much higher -- so much higher, sorry. So what will happen is that whatever revenues we now start getting into Civil would be at an enhanced margin levels, which is why we have been talking about overall at least 8% margin for the full year for the entire business. Otherwise, I already mentioned that T&D is more than double digits. So we are factoring in the lower margins from these businesses when we talk about an 8% number.

Yes, this is very clear. Net working capital, 138 days, would it go below last year on normalizing? Or would it still be on the higher side?

I think we do expect it to be at a similar level [ 118, 120 ]. Yes. So I think we should be at least at that level. That's what we are expecting, yes.

Sir, just one bookkeeping question. when you give the T&D order book and the fiscal year-to-date inflow, could you just give us an indication of the split between international and domestic for T&D? So that we understand how much is domestic?

I don't know the exact numbers, but I think it was around INR 12,000 crores and INR 4,000 crores roughly. I don't know the exact, maybe Abhishek can give you later on, but I think it was almost INR 16,000 crores for the year order intake. So broadly around INR 12,000 crores international and INR 4,000 crores India.

So that is very clear, but in the INR 12,000 crores within T&D, would international be also largely coming from -- how much would be T&D international?

That is international T&D only, INR 16,000 crores. when I say INR 12,000 crores, that's international T&D.

Our next question comes from the line of Vaibhav Shah from JM Financial.

Sir, you mentioned on the Afghanistan payment, you have received some part and the major part to come in 4Q. So could you elaborate on the value?

Yes, Rajeev.

So that was basically out of the Afghanistan payment, there were 3 institutions which were involved in total funding of 5 projects. So 3 have been more or less closed. World Bank and US aid has paid us some money. So far, we have already recovered close to about INR 450 crores. ADB payments are pending. The projects have been canceled and bank guarantees have been returned to us. They are processing our payment. Total payment outstanding with ADB is roughly about $30 million. So we expect a majority chunk should get in the quarter 4, as Vimal mentioned. Although actually, we were expecting that payment to come in Q2 or Q3, but for some reason, it has been delayed. We expect this payment to come in Q4. But there is no doubt in terms of the payment recovery. ADB has confirmed in writing that they are processing the payment and they will release the payment shortly.

So apart from ADB, there are no pending receivables from Afghanistan?

Afghanistan, There is no other payment other than ADB, except that now we have started the project with the World Bank, so that payment will also start flowing in regularly.

Okay. Sir, secondly, what would be your CapEx for '26 and '27?

So typically, we have been spending around INR 250 crores, INR 300 crores of CapEx. So I think that's where we should be. This year, it may be higher than that because of our cable expansion and the factory expansion. This year, maybe with all the 3 factory expansions and the cable, this year we may touch around INR 400 crores. Okay. Typically, otherwise, we have normally been spending around INR 250 crores, INR 300 crores.

Okay. Sir, lastly, our interest cost is around INR 170-odd crores for Q2. So can we see a reduction in terms of actual interest costs in second half? Or it would be at similar levels on a quarterly basis?

There should be some reduction, maybe INR 20 crores, INR 25 crores in quarter 2 -- sorry, quarter 3 and quarter 4. So we are expecting the total interest cost that we are expecting, as we guided earlier, is roughly about 2.5% of our revenues. So we continue to maintain a guidance of 2.5% of our revenue. So we can see a reduction of maybe INR 25 crores, INR 30 odd crores. The overall interest cost that we paid last year.

And sir, on the Civil business, as you mentioned that certain higher-margin orders are coming in the execution, and we will see a sharp uptick in the second half. So that momentum will continue in '27, '28 as well and margins also should improve from current 5-odd percent levels?

I think they should definitely improve. I think we are very confident about next year, et cetera, because see 2, 3 things have changed. One is we have generally stepped out of some of the infra projects where we are seeing historically now margins being low. Secondly, we have basically increased the minimum size of our order intake. So overheads are getting better. So if you look at the last 4 or 5 orders on Civil, almost all of them are at least INR 400 crores each. So -- and they are definitely at a better margin. Also, I think the other piece is the capability build has been significant in the Civil business. So we do expect better execution and hence, maintaining margins at the quoted levels. So we do expect that next year, the Civil business will grow by at least 15% to 20%, okay? And at I'll say, higher single-digit margins.

Sir, which are the main 2 or 3 verticals which you are targeting in, sir?

Civil, basically, one is obviously residential, which is now becoming a very large number for us. Second is factories. Third would be data centers. And fourth would be also -- and fourth would be water pipelines outside India.

So no metro for now, largely?

Metro, let me put it this way, nothing aggressive, okay? We have not bid any metro for a long time. We may just bid in for the shape of being in the market for some time, nothing -- not at normal margins, okay? Also, we have been looking at underground. We're still looking at it. Okay? It's still far away, but that's an area where the margins have been better in, but obviously, there's a huge amount of CapEx. So we are still thinking of what needs to be done on the underground piece of it.

Okay. And sir, one last data point, what would be our JJM order backlog right now? .

Yes. Around INR 1,600 crores. But largely in Orissa -- INR 1000 crores in Orissa and INR 600 crores would be in MP..

Our next question comes from the line of Subramaniam Yadav from SBI Life Insurance.

Sir, just wanted to understand what would be your debt by end of this year?

We are expecting it to be around INR 5,000 crores.

INR 5,000 crores. And sir, you have mentioned that there has been some delay in collection in Q2 and we have received that in October. If you can highlight what was the amount and which sector does it belong to?

I don't have the exact number, but some payments were they instead of coming in the September end, they came in the first quarter week of October. So those are happening. But it's not significant, but yes, there was overflow, I'll say almost INR 400 crores, INR 500 crores, which happened in the first -- second week of October.

Okay. So we can see some reduction in Q3 because of this collection?

Yes. Definitely, there will be some reduction in Q3 and balance in Q4. When I say INR 5,000 crores, it will be done that way.

Okay. And sir, apart from this water collection, which we are looking at, because that stays roughly around INR 870-odd crores, which is more or less similar if you look at from the start of the year. Which other sector is contributing to this pain, apart from water?

I think, the major sector would be the metro sector in Civil, okay, where considering the past performance of earlier contractors, the significant back ending of payments is there. And as I said, out of our 4 projects, 3 are completed. One is ready for commissioning any day. The second one also is 75% ready for commissioning. So -- and the third one should get commissioned, the Chennai one in January. So those are very large back-ended payments. So once they get commissioned, you do receive a large amount of money, almost INR 200 crores, INR 300 crores of cash flow would flow in from the commercialization of these projects or ROD, as you call them, okay? And then we had announced some very large projects, order intake in Saudi. So those cash flows would also come in and from retention in Saudi.