KEC International Limited (KEC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the KEC International Limited Q3 FY '20 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Vimal Kejriwal. Thank you. And over to you, sir.

Thank you. Good evening to all of you. I welcome you all to the Q3 earnings call of KEC. And my apologies for delaying the call as the Board meeting lasted longer than what we were expecting. Our revenues for the quarter at INR 3,073 crores have grown by around 16% vis--vis Q3 FY '19 with an EBITDA of INR 319 crores and a margin of 10.4%. PBT has grown at 19% Y-o-Y, with PBT margins improving from 6.4% to 6.6%, with improvement in interest cost in absolute terms as well as a percentage to sales. PAT has grown by 29% Y-o-Y, with PAT margin improving to 4.7% vis--vis 4.2%. We have declared an interim dividend of 170% of the face value at INR 3.40 per share on a face value of INR 2, a total outflow of around INR 105 crores, including dividend distribution tax. YTD order inflows have touched INR 9,820 crores. Our order book as on 31st December is at INR 22,011 crores with an L1 position of around INR 2,500 crores. The L1 is majorly from the T&D business. T&D revenues, including SAE continue the growth traction at 21.5%, majorly backed by the international and SAE Brazil EPC execution. T&D tendering pipeline, especially power grid, continues to be under pressure. However, we are witnessing a resurgence in the Middle East tendering activity. Railways continued to grow with a revenue of INR 600 crores plus for the quarter. We are on track for a full year railway revenue of around INR 2,700 crores. At the exit of this year, we expect the railways margins to improve to double-digit with the new inflows from overhead electrification as well as composite and ROB/RUB jobs, we have the rail order book at INR 6,860 crores now. Our civil business has not grown as anticipated and faced headwinds on account of generally prevailing muted industrial CapEx cycle in India and challenges faced by the realty sector. However, we have now seen some flow of orders in industrial and real estate segments recently. Defense segment is also picking up momentum. Civil order book has now scaled up significantly to INR 2,400 crores plus with Delhi Metro and Kochi Metro orders. Execution of Delhi and Kochi Metros has commenced and is progressing well. Significant revenue contribution from the metro projects is expected from the next year start and maybe some part in this quarter also. Cable business has witnessed revenue slowdown due to lower order intake and impact of commodity prices. Execution of existing order book for both solar and smart infra is on track. We have a few L1 positions in solar and smart infra businesses, respectively. Total borrowings plus interest-bearing acceptances have reduced significantly by INR 684 crores over 31st December 2018 despite a 16% revenue growth on account of improved NWC days. This has enabled a reduction in interest costs for Q3 FY '20 in absolute terms of approximately 5%. Interest as a percentage of sales has reduced from 3.2% to 2.6% in this quarter. Saudi receivable position has normalized with no overdue position as on date. We have received approximately INR 680 crores from Saudi until date. Based on the 9-month revenue growth of 16% and the current execution traction in the order book, we maintain our revenue and EBITDA margin guidance for the current year FY '20. Thank you very much. We now move to Q&A.

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

Congratulations on good results. Sir, my first question, within the T&D, when we saw a healthy growth this quarter, what was the growth performance of the domestic and the international bucket within the T&D mix, if you look at it? And how should we look at growth going forward, given that this year has already been challenging and inflows has been a bit tight in the current financial year on the T&D side?

So Renu, I don't have the exact numbers, but T&D India has been relatively flat, okay? For 9 months, there has been a growth. I don't have the exact number of growth. This quarter was pretty challenging for T&D. One was because of the extended monsoon. And secondly, we had some delays in the delivery of some of the substation equipment. So Q3, per se, has been a little bit challenging for the India T&D business.

Sure. And sir, aligned with the India T&D portfolio, one of your other co-partner in the private sector TBCB player, essentially, Essel, [ GT&D ] has apparently booked some ECL provisioning on the pending receivables. So do you foresee that some kind of it could come to our books as well? Or probably the change in ownership of the asset should be done by March and we could probably escape this kind of provisioning and the project might see movement coming back?

Renu, our understanding with the lenders and Essel and other interested stakeholders has been that the project should start in the month of March, okay? We understand that most of the required approvals are in place. And I think -- see unfortunately like all the companies involved are listed companies. So I don't want to make too much comments on that. But the understanding what we have with our auditors also is very clear that, if there is no substantial progress by March or so, they will start looking at making some provisions. But if you ask me as a confidence level, I think our confidence level is pretty high right now that the project should restart within March, that's the understanding we have from all the stakeholders. Even if it doesn't start, but I think by -- within this quarter, there would be a clear closure of the issues, and we should have a live project.

Sure. Which is more comforting on that side. And second question is, if we look on the borrowing cost, obviously, this quarter, we have seen an improvement. But given that, we have now a higher mix of foreign debt. So in moving towards fourth quarter and the next year, should we expect our overall net interest to borrowings to substantially reduce? And how does the broad philosophy of the company here be in terms of going forward, moderating or reducing debt, if incremental business has not been as working capital-intensive from rail and EPC -- civil EPC side?

So I don't agree that it has not been working capital-intensive, but I think we have been able to do a little bit...

Less intensive, yes.

We've been able to do a little bit good job on the debtors, where we have been able to reduce the DSOs and the net working capital. Because railway as well as metro and all that are, that way, intensive. Maybe not as intensive as T&D, but they are. Our view and why we have increased foreign currency debt is that, as I was saying, our international business has done very well. We have probably maybe something like 30% growth rate in the international. So our dollar receivables and all have been going up. So instead of doing a normal hedging and all that, I think we realized that the arbitrage opportunity between rupee debt and international debt is probably higher than the forward premium which we get, so which is why we decided to do it that way, okay? So the net impact, any case, if I had not done a foreign currency borrowing, then my EBITDA would have been higher because then I would have sold some dollars and that foreign currency would've come up. I think we are pretty happy with what we are doing on the debt side. That's why if you look at year-on-year, the debt has come down significantly December to December.

Correct. And sir, my -- I've just one last question. If you can elaborate -- for the benefit of the audience, if you can elaborate a little more about the company's strategy on the civil part of the portfolio. We've been into building and factory segment, then to residential space and now scaling up the portfolio on the metro civil side. So how are we looking at this business from a 2- to 4-year standpoint? And now what are the kind of risk-mitigation measures you've ensured so that the business remains profitable and grow sustainably?

Renu, if you want to look at our overall strategic numbers, which we want to do in civil is we think that we are 2 or 3 years behind our railway business growth. So the way our railway business has grown, we are looking at civil as a very large opportunity, okay? It's a large white space. There are a lot of areas there which we can look at and get into. Unfortunately or fortunately, competition has come down with -- for whatever reasons it is. So we started with industrial. We did -- we have done 1 or 2 residential. I don't think we are focused on doing too many residentials, maybe 2 or 3 or 4 buildings in a year, okay? That will give us INR 200 crores, INR 250 crores of revenue, if I'm not mistaken. Industrial, unfortunately, has done very badly this year because there's no industrial demand. There are hardly any new factories coming up. But in the last 1 or -- I think 1 month, we have got a few orders, a couple of them have been announced, a couple of them are lying in my L1 and all. We are looking at some of the other related areas, which could be oil and gas and all that. We recently announced a defense project. We've got one defense project. We are L1 in another of defense civil project, okay? Clearly, we're looking at also oil and gas business, which could be outside battery, OSBL; it could be pipeline; it could be other related issues. And I think the last one is what we are talking about metro. So infra, I think we are looking very seriously at the metro civil business. So to me, there are 4 -- 4 or 5 areas which we are looking at and maybe in 3 or 4 years, it should become a INR 4,000 crore business. That's what we are looking at, at civil.

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

Congrats on good set of numbers, given the challenging environment. Sir, if you can help us with what is happening in this Green Energy Corridor. When do we -- when can we expect good ordering happening from that? What is the outlook on that?

So on the Green Energy, a few of the orders have already happened. We have got, I think, 1, 2 -- I think, 3 or 4 orders we have got. Whatever we have announced in this year on Power Grid are most of -- I think all of them are Green Energy only. We are L1 in 1 or 2 of the private sector. But unfortunately, the private sector ordering has got a little bit delayed on the Gujarat site. Rajasthan site has been ordered, okay? So the other order should come out in next maybe 10, 15, 20 days because the lines have to be done in 15 months now, I think by next March.

Okay. And is there any delay in terms of ordering in that? Or is it going as per what we had planned?

I think there is some delay because earlier, the lines were supposed to be completed by November of this year. Now I've seen some CERC petitions and all that where they're talking about finishing it by March. So there has been some delay in these awards -- in these line completion and consequently the awards.

Okay. And sir, when we analyze the railway budget, the allocation towards electrification for next year has reduced. So is that something which we should be worried about because that was one area which was growing at a handsome rate for us?

Whatever we could understand is that they have postponed the completion program, I think, by 2 years, okay? Earlier, they had a very, very aggressive program, saying by 2022, we'll finish everything, okay, which I think was physically not doable. They all realized that. So now I think the ministry has sort of converted the reality into numbers also. Instead of 2022, they are saying now we'll finish by 2024. I don't see that impacting the revenues.

Okay. But in terms of order intake, will it be a bit slower next year compared to what we had seen currently this year?

Well, in Q2, there was a slowdown in the ordering and all that. Q3, I think we saw decent, and now they have announced a lot of tenders, okay? So although those orders may not be placed in Q4, but I'm pretty sure that in Q1, there will be a lot of ordering happening because tenders have now been announced. But these tenders are due in February and March, first week, second week. So I don't see most of them being awarded by 31st March, okay? But they would be bid by that time. So I think in Q1, all these awards will happen. Unfortunately, for me, with a close to INR 7,000 crore order book, I am actually happy that even if the orders get delayed slightly here or there, it will not impact my growth plans.

Okay. And sir, finally, on the SEB side, how is the overall outlook? And which are the -- some of the SEBs where you are seeing some traction?

So SEBs, I think the traction continues in Tamil Nadu and Karnataka. We are seeing something -- some small things just coming up in West Bengal, Orissa. Rajasthan has just announced some large projects. They're not yet in the tender stage, but they have announced saying that they will do a lot of projects. Gujarat has been coming up. So Gujarat, Rajasthan, West Bengal are the new ones; and I will say, Orissa.

Okay. So you -- so can we assume that this -- because the Power Grid is clearly slowing down. Even in the CapEx for the next year also, we are seeing a muted number. So can we still expect the domestic order intake to pick up because of this traction from these SEBs?

Honestly, looks very difficult right now. But also I want you to understand is that I think they've announced some new TBCB jobs, some INR 34,000 crores of new Green Energy Corridor-II and all have been announced, okay? A few of the tenders are now coming up. So it would actually depend upon how quickly this entire INR 34,000 crores piece gets ordered. SEBs will continue. SEBs, we do around INR 1,500 crores, INR 2,000 crores of revenue every year. So I see that continuing. But the PGCIL part either has to be replaced by the private sector or PGCIL has to win these new jobs, okay? So I can see that there is some push in the ministry to do these jobs early because they've already been delayed because of a fight between whether they will be given to PGCIL or on the TBCB. Now that I think a large part of that issue is getting resolved. So it would depend upon when these get tendered out and how much we will also get.

The next question is from the line of Niteen Dharmawat from Aurum Capital.

Sir, what is the total consolidated debt now? And what is the projection that we have for the next quarter?

Currently, we are at about, net debt of close to about INR 2,400 crore.

And in next quarter?

Next quarter, also, we are expecting to be slightly lower than this number. So -- because we expect collection -- good collections to come in into Q4, probably we should be maybe a couple of INR 100 crores lower than the current number.

The next question is from the line of Saket Kapoor from Kapoor Company.

Sir, firstly, sir, [Foreign Language] how has ForEx played for this quarter, sir? ForEx gain or loss?

FX gain has been positive.

INR 25 crores for this...

Around INR 25 crores for the quarter.

We have gained INR 25 crores?

Yes, yes, yes.

Okay. And what was the figure for the September quarter, sir?

I think it was more or less the same...

More or less same?

[Foreign Language]

Okay. And sir, there has not been a -- the currency has not been -- but how has these gains been generated [Foreign Language]?

It's a forward system. When you have orders and all that, you will do a net-net [ in that ]. So it's normally coming from forward sales, number one. Number two is also because you're getting at a higher price the realization, et cetera, premium -- which has a premium.

So when we are taking the net profit, we should exclude this figure as it is nonrecurring in nature going forward?

It is your choice, Saket, but it is recurring. Every year, we have been showing these sort of numbers, okay? With a foreign, overseas income of 50%, foreign currency, it will always be there if you do it properly. I don't think it is right to exclude it from the income...

It is a part of the tendering...

Part of -- it's already -- when we do our tendering also, we do -- these sort of foreign exchange gains will happen because our contracts are for 3 years, 2 years and all that. To me, it is part of the normal profit.

But it can also be on the reverse side also, if the currency behaves better?

[Foreign Language] that will still [indiscernible]. So that -- this is like a normal any other risk, which you have in the tender.

But only thing, Saket, I would like to say that with the current foreign exchange, ForEx policies that we have been following, we have been generally making profits out of this foreign currency hedge position and which is now regularly getting factored into our tender costing. So that way it is a normal profit for us.

And now coming to the cable part of the story this time, sir, what was the reason, sir, for the lower turnover? And what is the outlook, sir, going forward?

I think we have 2 reasons. One was, very clearly, the metal prices have gone down and they are still down. So metal, copper -- sorry, cables is a cost-plus business always. So that is a reason. Secondly, we had some small floods in Baroda and all that. So we had to -- that impacted some production piece also.

What was the utilization level if you take cable as a whole for...

It's around 80%.

And this will improve going forward for this quarter?

We expect it to improve because we have started manufacturing a lot of products for our railway business, okay? And since we also have in-house consumption available, certainly -- will definitely improve.

And looking into this, that INR 1.5 lakh crore figure, I think the official date for the transmission sector in that INR 105 lakh crore in total infrastructure spending over a period of 5, 6 years, [Foreign Language] Sir, what kind of price are we eyeing in this [Foreign Language] What catapult for KEC as a company is looking when this figure of INR 1.5 lakh crores -- even 60%, 70% of this come into a reality, what kind of growth trajectory can we map into that going forward? And how well are we prepared to take advantage of the same?

It's very difficult to link the transmission results directly with INR 105 crore and all that. INR 105 crore is a mix of different things. To me, what we've been talking with the CERC, CEA and everyone else has been is that on the transmission side, we expect the expenditure around INR 40,000 crores, INR 45,000 crores per annum, as against INR 60 crores, INR 70 crores, which we have been talking earlier. Now INR 45,000 crores [Foreign Language], it would be a slightly different mix of that. So that's how I look at the broad numbers. [Foreign Language] okay? And right now, I'm not seeing it grow significantly on the T&D piece today, okay? But tomorrow, if INR 34,000 comes or if the big solar plant comes in Leh, Ladakh and other things, which the government is talking, and I think you need to understand one thing is that we have not had growth in the power generation in the last few years. It's a matter of time that the power demand catches up and you start again doing generation. So [Foreign Language]. The other thing what is there also is that with your power for all and with power in every house and push of EV and railway electrification and all that, some way or the other, you will have to build new lines to cater to all this demand also. So I think today, the government has not taken a very detailed view on this, but it's a matter of time that many of the lines associated with these things will also come up. [Foreign Language]

The next question is from the line of Amber Singhania from Asian Markets Securities.

Just a couple of things. One, as we have got this Delhi Metro order, a large order of INR 2,000-plus crores, and the difference between L1 and L2 was significantly higher. Sir, historically, we have seen that most of the players have never made money in Delhi Metro projects. How do we see it and -- because it's relatively a newer sector for us also, what is our thought process? And what kind of margins and other things we are anticipating in these kind of projects as such? Because historical track record of many players are not very great in Delhi Metro execution on that part.

Amber, a couple of points. One is I do not know from where you got a figure of very high differences, okay? 2% to 3% are normal differences in large tenders, okay? That's number one. Number two, both tenders which we have won are significantly different because we are the, I think, one of the very few tenders which have been awarded over the DMRC estimates, okay? Until now, whatever you're talking, all those projects, most of them have been awarded at significant discount to the estimates. So I think you have to understand one thing is that people -- and at least we have learned a lot from what others are doing or what others have not done, okay? I think we are, right now, pretty confident. We have incurred a lot of costs already -- committed a lot of cost. And I think right now, we are doing 4 projects in the metros. And I think all 4, right now, we are ahead -- much ahead of our projected numbers, okay? And the third piece is that, clearly, we will not take INR 2,000-odd crores of business to lower our numbers. So when we are taking businesses like this, they will be at standard margins. The margins will take 1 year or 2 years to reach those levels. But we are very clearly not seeing metro as trying to destroy my margin levels, okay? We are very confident of what we are doing on the numbers and on the margin in metros. I don't want to give specific numbers, but I think let me just assure you that we are pretty okay with the margins.

Sir, secondly, if you can just give some color about the bidding pipeline overall in both the segments, railway as well as Power Grid India. I'm sorry, if I missed earlier, what is the near-term bidding pipeline asset or any major large project, if you can highlight on that?

Even before, there is a huge amount of pipeline, both in conventional railway, which will be on OHE, new lines, et cetera. Recently, they have announced a lot of projects. So railways, I don't think on the conventional side. Plus now that we also bid for the metro electrical part and the track laying and the signal, S&T, power systems. So all of it, we are bidding. So clearly, I don't think on the railway side, we are worried about the pipeline. T&D. I think the worry is mainly on the Power Grid side, where we are not seeing too many things happening. States, I think enough jobs are coming. I just named some of the states where they are coming. Internationally, I think Middle East is doing very well, okay? Paris, Malaysia, Thailand and all that are doing well. Africa is now seeing up. Now we are seeing some jobs coming up. But Africa has been slightly, I'll say, a little bit less than what we would have loved it to do. Mexico is doing well on tendering now on EPC. So overall, I'd say, railways, we are very happy. T&D, we -- I'll not say, we are very happy, but I think it's -- I'll say it's decent. We would have been happier if it would have been more than this, but it's okay.

Okay. And lastly, sir, if you can just reiterate the guidance for order inflow, revenue and margin both for FY '20 and '21?

So margins, we have been saying between 10% to 10.5%. We're already around 10.4%. So I think we should be ending closer to 10.5% rather than 10% in terms of margins. Revenue, we are at 16% roughly. So I think we will continue the same in Q4 also, okay? Order book is a bit dicey today. I honestly -- we have got orders of close to INR 10,000 crores. We have L1 of INR 2,500 crores. So we are just hoping that we should touch our last year's number of INR 14,000 crores, okay?

Okay. Similarly -- next year also similarly, sir?

Yes, on the order inflows, yes.

[Operator Instructions] The next question is from the line of Bhoomika Nair from IDFC.

Sir, just wanted to understand SAE a little better. We've seen a very good execution in the 9-month period, but order inflows have been quite muted, which has resulted in a depletion of order backlog out there. So how is the new order pipeline looking? There were a couple of EPC projects, which were there. So if you can give some color out there?

So Bhoomika, you have been charitable on the order inflow, it has been poor, okay? So let's be very clear. We had a poor order intake. Revenue, we did very well. I think we have almost a 40% growth, mainly with the 3 EPC projects which we are doing, okay? We have some L1 positions. I think the problem what we are seeing in SAE is that we have got -- we have signed a couple of deals. EPC is to go ahead. We are, again, like last year, waiting their approvals to start work. If that happens and if they're able to start work properly, then I think we should be able to sort of match what we have done this year. I'm not seeing growth happening in SAE next year because we already did a 40% growth this year, okay? Order intake has generally been poor because last year, because of the election, they skipped one auction. There will be one -- there's only one auction, which happened in December. Now they have announced 2 auctions: one for May, June and one for December. The ordering for the earlier auctions is now right now going on. We have some active negotiations going on. And I think in the middle, Sterlite came and sold 1 or 2 auctions, where we were the contractor. So those projects are now getting reassigned to the new owners, and I think work will start there. Similarly, also on the other projects which we have with Sterlite, again, there's been some talk of going and selling 1 or 2 of them. So there's been some delay. And because of that, I think there's some uncertainty in the entire market also as to who will buy, who will also do. So there has been a general delay in ordering. I think the other thing, what happened last year in Brazil was that with the dam burst with Vale, there have been a lot of cost increases happening in the country. Because of which, I think most of the EPC -- most of the developers have been holding back the ordering to wait for the price levels to stabilize because right now steel and transportation have gone up like a rocket. We are slowly seeing the pricing coming down. So I think that's why some of the developers have been going slow on closing the EPC orders. And you know that in Brazil, they give you 5 years to complete the projects. So I don't see any terrible hurry also with this. So I think next year we probably have a flattish year in SAE.

Okay. So I mean it was looking like there might be actually a decline next year. So you think we should be able to actually hold on to the revenue line?

I was hoping that they go flattish but decline [Foreign Language] but it will not be [Foreign Language] okay? But we've also added a few machines there. So I think from the tower side, we should get more revenues and all that, which is why I think that we should be able to maintain the revenues, okay, max maybe 5% or something.

Okay. Sir, just on the other part was metro. You spoke about the orders being quite profitable. So would it be comparable to our current margin profile of double digit? Because the order profile is now moving towards railways and civil to a large extent, which is largely metros. So railways, you mentioned, it is -- it has reached double digit, but how would metro orders be comparable relatively?

So today, the metro orders are not in double digits, okay? But I think we have been able to get some good deals right now in cement and steel. And God willing, if the same thing continues when the execution is going on, I -- we may touch double digits, okay, on the margin side. Today, it looks like a fair chance that we may touch.

Okay. Okay. But my point, I...

Because we are very close to that. So whether you touch double digit or you are 100 basis points below them or not, I don't think we are talking about doing 4%, 5% as others have been talking about [Foreign Language].

The next question is from the line of Ashutosh Mehta from Edelweiss.

This is Swarnim. 2 questions, sir. Firstly, when I look at the staff cost, it's actually higher by about 43% and 10% Y-o-Y and Q-o-Q, respectively. So are we scaling up our employee base to take care of the rising infra mix that we are targeting?

So I think the major reason for the employee cost has been Brazil EPC, where we are doing 3 projects together. And there, unfortunately, the way it is that you have to hire the employees on your own. So that's how the staff costs got reflected, number one. Number two is that we had been in a lot of those international projects, again, where, in general, in entire Africa and other regions, you have to take the people on your rolls because you don't get the qualified people there. So that's a -- and I think the third one would be railways, where with the amount of work which we have, we have hired, I think, close to 600 people or so?

Yes.

We have hired close to 600 people in railways this year. So there are 3 major reasons why the costs have gone up.

Fair enough, sir. So would it be a correct understanding that once the share of the Brazilian EPC goes down, I believe at least that proportion should go down as well?

100%. You're right.

Got it. Okay, sir. Secondly, on this -- you did give a broader outlook on the civil part, how you're targeting. Just specifically, on the margins trajectory, so would this be a correct understanding that it will actually follow just like railways -- what happened in the railways business, starting from 6.5% to 7% to converging to about 10% kind of a margin over the next 3 to 4 years' period?

I think that is right because our internal guidelines are very clear that if your business is not doing 10%, we'll not do the business, okay? Whether we achieve in 3 years or 4 years is something should depend upon each business, how do we draw the strategy and all that. But the long-term view in the company is very clear that if we're doing a business, we should be having a substantial, decent revenue, I'll say, and also going forward, a margin of at least 10%.

Fair enough. So scalability and 10% revenue, that is the benchmark?

Yes, yes, yes.

The next question is from the line of Priyankar Biswas from Nomura Securities.

Congratulations for the numbers that you have in the quarter. So my first question is on the cable. So you had said that due to floods and, of course, on a cost-plus basis, you had certain issues. So what would have been the potential margin impact we have been at the cable segment level of this impact?

I don't think there's a significant margin impact. In fact, our overall margin this year on cable has been higher than last year, okay? What we discussed was on the revenue impacts and why the revenue has not -- has shown some de-growth. That's the reason why we explained. I think on margin, we are better off than last year.

So margins would have improved, you are saying?

Have improved this year.

And sir, the question like, we were discussing about the signaling CapEx for railways. So what is the status of those? I mean when do we get to hear about the signaling tenders possibly?

Honestly, no idea. But there was one. I think one tender has been quoted, ETCS-2. One tender has been quoted. I have not seen anything happening on that. I think the -- as I said, last time the debate going on railways, what technology they want, whether they want ETCS-2 or ETCS-3. So I think -- I don't think railways have been able to overcome that piece of -- on the technology side. So I have not seen many tenders of signaling. All that are coming are small ones of ETCS-1 and all that. Advanced signaling, I've not seen, no.

Okay. And sir, the final question from my side. Can you give me an idea of, let's say, in the domestic T&D market, since what we understand is a lot of the players are facing financial stress, so how would your market shares would have moved, let's say, in the SEBs that you were present and, of course, PGCIL like from a year back? So maybe market share gain, some color on that?

So SEBs where -- we don't work in too many of them, but Tamil Nadu, Karnataka, West Bengal, I think we would have a share of 20%, 25% in all of them, okay? Power Grid, we have not got too many jobs. I think we have one around INR 500 crores -- INR 550 crores of jobs, okay? So Power Grid has been lower this year as compared to the earlier years.

The next question is from the line of Prithvi Raj from Unifi Capital.

My questions have been answered.

The next question is from the line of Saket Kapoor from Kapoor Company.

Sir, at that -- last week, when you were commenting about a 14% growth in revenue, sir, generally, the fourth quarter is the largest of all. So we can presume 14% revenue growth on what we did for fourth quarter last year?

[Foreign Language] overall, we've been talking about a 15% growth for the year. [Foreign Language] over last quarter maybe. Otherwise, we'd not be able to achieve a 15% growth.

Right. And is the interim dividend a part because of this dividend distribution tax going away and it's being taxed at the hand of recipient? Or it would be better cash flow menu that we are coming with until even this time?

For me, I think these issues which we'll not be able to -- but it's not necessarily that. What you have to understand is, I said that we have got INR 600 crores of Saudi revenue -- Saudi cash flows which came in, which come in the form of dividend, we already have a huge dividend distribution tax credit available to me because of the Saudi income, okay? So more to do with what we receive than what we have paid.

Sir, you were telling that railway performance was not -- the way you were expecting the railway intake will be there and the growth will be there had not happened. So what are the main hurdles that you are facing getting orders from the railway part?

I didn't say that I have hurdles in getting orders. What I had said was that there were less tenders happening in Q2 and all that. Election [Foreign Language], obviously, all the political campaign. So rebidding there, railways took a lot more time than normal. So we lost, let's say, Q1, Q2 railway tendering pipeline, okay? So that pipeline is now coming back. So that's why we have got orders of almost INR 3,100 or something like that in railways already this year. And there's a huge pipeline now. What I had said was that this pipeline may not get order by 31st March. They will get tender, okay? [Foreign Language] Q1 next year [Foreign Language] but I expect them to be released in Q1. [Foreign Language] okay?

I didn't get your last point, sir. [Foreign Language]

Tendering issue [Foreign Language] railways, okay?

Right. But the pain is on the T&D part. I mean our dependence on the state utilities and -- sorry, on Power Grid and all [Foreign Language] this is what the message you gave?

Yes, I gave that message. But I also gave a message that international is looking up, okay? Brazil. So I think overall, T&D has grown this year. And we do expect that we'll grow next year also. Whether the rate of the growth will be again 20% like this year or 10% next year, I cannot comment right now, okay? But there will definitely be growth next year also.

Right. Sir, 2 small points. Sir, smart metering is also...

[Operator Instructions] The next question is from the line of Rakesh Roy from Indsec Securities.

Sir, I have 2 questions. First question is, can you explain the scope of work we are looking in defense and oil and gas sector?

Sorry, come again?

Sir, scope of work we are looking in defense and oil and gas sector.

Defense, right now, we have been looking at civil defense. So we have got some orders on building some defense buildings, et cetera, okay? So that is that -- what is that we're looking at right now. There have been some other items which we have not yet got the orders. So I don't want to give it out right now, but they are on more -- higher technological grounds than just buildings, okay? Once we get the orders formally, we'll announce that, okay? Oil and gas, we have been looking at 2 or 3 different things. One is obviously the pipeline [ spec ], which could be a crude pipeline product, gas or even a water pipeline for a refinery, okay? So that's one part of it. The second is the OSBL portion, which will be outside battery limits. You can do tankages. You can do a lot of infra development, a lot of other things which are there apart from the process units. So right now, we are not looking at doing process unit, but minus process units, okay? There's a lot of -- we have a lot of work in there which we are -- which we are basically looking at, okay?

Right, sir. And sir, my next question, sir. Are we in station development task, railway station development because today, I'm reading somewhere that government is going to tender nearby INR 50,000 crores for station development?

So I think the amount is INR 40,000 crores is what they have announced as the budget for -- a figure for station redevelopment.

Yes, sir.

The problem in that is that models are pretty confused. Sometimes they come on -- sometimes they come on a development model. So that's a bit of an issue. We have already bid for a few projects which were on a pure EPC model. Unfortunately, we have not won any one of them. But if there are EPC models, then to me it's a simple civil job, okay? We have been bidding, and we will continue to bid. But we are not touching the ones where they are on a development model, where you have to build them and then sell and then get your money.

[Operator Instructions] The next question is from the line of Darshan Mehta from AMBIT Capital.

Sir, there have been some news flows which talk about KEC bidding for running passenger trains. So can you throw some light on that area? Like what is our strategy and something on that line, sir?

We are not going to bid for passenger trains, okay? Railway board had called a meeting of some contractors [Foreign Language]. We are not bidding in this, no.

The next question is from the line of Saket Kapoor from Kapoor Company.

Sir, in the smart metering space, we are also seeing a lot of traction, sir. So any way our company can fall in place in this gradual change in the smart metering part? Any way we are interested?

We are not there in the last mile connection work. So smart meters, we don't touch. We have done this work earlier, lost share, a negative impact, and most of the larger players have also lost that. So we are far away from that business.

Right. Right, sir. And in the civil part, sir, you were explaining earlier that defense colonies and a lot of what you would be -- you have been interested in, and you will be going to do also. So what share of the pie -- work can we look forward? And out of their order book position, how much is depending on the defense?

Defense [Foreign Language] because [Foreign Language]. So nobody knows actually how much money defense is spending on these contracts, okay? Number one. Number two, we have just started doing -- we are still doing very small ones, okay? [Foreign Language] Ultimately, our target is that we get a bigger job, but today [Foreign Language] order book [Foreign Language].

Right, sir. So metro work also, we are doing the civil part only? [Foreign Language]

[Foreign Language] we have got 4 orders of civil. We have been bidding for electrification, laying of tracks, power system, et cetera, et cetera. I don't have order right now. I think it's a matter of time that we'll get order in the other pieces also, okay?

And sir, we are competing then -- the railway authority -- RIETs and all are also participating in it, they are independent of?

Sorry, come again?

Is RIET -- R-I-E-T, is RIET a competitor in this segment then in the railway part?

RIET?

We have to compete with them -- yes, RIET, RIET, RIET, yes.

RIET is a client for us, okay?

Okay. Okay, then we are [ doing work ].

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Vimal Kejriwal for closing comments.

Thank you very much for your continued interest in KEC. Thank you.

Thank you very much, sir. Ladies and gentlemen, on behalf of KEC International Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.