KEC International Limited (KEC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the KEC International Limited Q3 FY '21 Conference Call. We have with us today from the management, Mr. Vimal Kejriwal, Managing Director and CEO; and Mr. Rajeev Agarwal, Chief Financial Officer. [Operator Instructions] Please note this conference is being recorded. I now hand the conference over to Mr. Vimal Kejriwal. Managing Director and CEO. Thank you, and over to you, sir.

Thank you, Vikram. Good morning to all of you. I welcome you all to the Q3 earnings call of KEC. I hope that you and your family are safe and healthy during these difficult times. Let me start with an update on the overall performance for the quarter and then after, talk about each of the respective businesses. We have achieved revenues of INR 3,289 crores for the quarter with a growth of 7% vis-à-vis Q3 last year despite a challenging environment. The growth has been led by a robust execution in our Railway and Civil businesses. The growth could have been higher, but for the intermittent COVID challenges faced at some international locations, especially Brazil and the impact on our 3 ongoing projects in DMRC, RRTS due to environmental NGT issues and the farmers agitation, which created a huge pressure on the cement and steel availability, further accentuated by the shortage of steel in the market. We are ahead of schedule in many of our projects. Considering the sharp increase in commodity prices, such as steel, aluminum and zinc, we have taken a conscious call not to continue fast-tracking executions in some of these fast-track projects till the prices stabilize, although we have started seeing a reversal of the price trend in the last few days and availability of -- especially of steel has started improving. Notwithstanding this, considering our current order book and L1 position, we are very confident of a good growth in Q4 and also for the full year. Despite the intermittent COVID challenges, we have delivered an EBITDA margin of 9.1% for the quarter. The margins have been marginally impacted due to cost time escalations in Brazil amidst the pandemic along with an overall increase in commodity prices globally. We have achieved a PBT margin of 6% and PAT margin of 4.4% for the quarter, aided by a significant reduction in interest cost and optimization of the tax cost. Our YTD order inflows stand at INR 6,827 crores, which is largely contributed by core T&D business, especially in the international market. We are pleased with our order -- good order inflows in the international T&D market. If we add the L1s which we have, then the L1 plus the order intake for the year are actually higher than L1s and the order intake for a similar period. If you just go by the order intake, order intake is lower, but if you add the L1 and you compare with the last corresponding 9 months, then we are better off. We also have a very strong order book of close to INR 18,000 crores as on date, along with an L1 portion of INR 6,000 crores plus, contributed equally by our T&D and non-T&D business. Our net debt as on December 31, 2020, stands at INR 2,644 crores, which is largely in line with our targeted average borrowing levels of INR 2,500 crores for the year. With concerted efforts, we have brought down our interest cost consistently over the last few quarters, both in absolute terms as well as percentage to sales. Our interest cost for the quarter as a percentage of sales have been brought down to 2%, which is a reduction of 60 basis points vis-à-vis last year and a reduction of 19% in absolute terms. Now coming to the specific businesses. Our core T&D business has witnessed a progressive ramp-up across all project sites in domestic as well as international locations. There have been intermittent challenges due to COVID in some of the projects in international locations in the form of delay in approval of visas, work permits and stringent quarantine guidelines. These have caused a lag in the start-up execution of some projects. The overall tender pipeline continues to be strong in international T&D, especially in SAARC, Middle East and Africa. In case of domestic T&D, the revised bidding of Green Energy Corridor projects Phase 2, tenders have been concluded for most of the schemes for this month. The bidding for the balance schemes and process of award is expected to be concluded in the next few weeks. The reverse auctions among the developers for the first few packages has already been concluded. We are well placed with quite a few packages with the winning developers, and we expect to start receiving the EPC orders very shortly. I am pleased to share that our recently acquired transmission tower manufacturing facility in Dubai has been commissioned in Q3. We have already announced our first few supply orders secured from other EPCs. We also received approval from some of our existing international clients for tower supplies. In SAE Brazil, the pandemic seemed to be under control in Q2 with the gradual decline in number of cases. However, it is again threaten with the rise in number of cases in Q3 amidst fear of a second wave underway in that country. This has led to a severe shortage of raw materials, thereby delaying execution of the EPC as well as tower supply projects. Further, the steep depreciation of Brazilian real over the last year has also impacted the revenues post transmission this year. These challenges have also resulted in a significant time cost escalations, which have impacted the margins severely. In spite of all the challenges, we have successfully energized 1 EPC project in December '20 and work on the new EPC project that was secured sometime back has already commenced. We expect to complete the 2 old EPC projects in Q1, Q2 next year. As far as SL project is concerned, I'm pleased to share that the favorable order from CERC for transfer of ownership has been received, and the project is expected to restart within this quarter. Our Railway business continues its high-growth trajectory as it clocked the revenue of over INR 800 crores for the second consecutive quarter with a robust growth of 44% vis-à-vis Q3 last year. In line with the growth strategy, the business continues to expand its portfolio in the technologically enabled emerging growth areas of metros, DFCC and high-speed trains. I'm happy to share that we have already secured orders, aggregating to approximately INR 500 crores from these new growth areas, including orders for metro electrification works from DMRC, ballastless track work for Kochi Metro, signaling a telecommunication work for DFCC and construction of a depot-cum-workshop for the Delhi-Meerut RRTS corridor. These orders have enabled in transitioning the Railway business from a conventional EPC player to a technology player. Further, the business has expanded its client portfolio by securing its first private order on a composite doubling project, which includes track linking, signaling and telecommunication and overhead electrification works. The railway tender pipeline continues to remain robust with a blend of conventional, technologically enabled emerging areas as well as international opportunities. Though the pipeline is robust, we are still witnessing a delay in awards as the tenders under evaluation has scaled up to over 4,000 -- INR 6,000 crores currently. With the continued thrust on execution and an order book plus L1 of approximately INR 7,000 crores, we remain confident that railways will continue its growth trajectory. Our Civil business continues to demonstrate exemplary performance as it registered a robust revenue growth of over 3x vis-à-vis Q3 last year. The business continues to make good progress in entering new and strategic growth areas. After our first orders in the FGD and warehouse segment secured in H1, we have now secured breakthrough orders in the fast-growing chemical and water pipeline segments. We have also secured repeat orders in the cement and residential segment and our L1 in the first order in the public spaces segment. In addition to these areas, we continue to look for opportunities in data centers, oil and gas pipelines, hydrocarbon and urban infra segments. With the robust order book plus L1 of INR 3,500 crores, we are confident that this business will continue to be one of the key growth drivers for us going forward. In cables, after a muted H1, the business has rebounded strongly with a revenue growth of over 20% this quarter vis-à-vis Q3 last year. The business is progressing well on the development of additional new products and is on track to commercialize a few new railway products in Q4. Further, with the capacity of railway catenary, conductor and signaling cables have been augmented in Q3, we expect a good growth of the business through these new products and expanded capacity going forward. The profitability of this business, however, has been under pressure due to steep rise in the raw material prices, such as XLPE, PVC, et cetera. I'm also happy to share that over the last few years, the cable business has been instrumental in bolstering the supply chain of our Railway business through backward integration, leading to enhanced certainty of supplies and better control over cost and quality. We have commenced supply of railway cable products in the market, for which we are seeing a good demand. In solar, we are on track with the execution of the 20-megawatt carport project for a reputed automobile manufacturer. The first section of the carport has been commissioned already. We have also secured an order for a 13.6-megawatt rooftop solar project from a corporate client for its various plants. The execution of the existing smart city and defense projects in smart infra are on track. Additionally, the business is well placed in a new project for constructing and integrated command and control center and installing other smart city components. With a robust order book plus L1 of more than INR 24,000 crores, we are confident of concluding the year with a good performance. Thank you very much. I'm happy to take your questions now.

[Operator Instructions] We've a first question from the line of Ravi Swaminathan from Spark Capital.

My first question is with respect to order inflow. As to what would be the kind of order inflow growth that we can expect next year, given the kind of pipeline that we have? In FY '22, what would be the kind of order inflow growth? And what is the kind of quantum of orders which are there in the Green Energy Corridor orders?

So Green Energy Corridor, as I mentioned, the first few auctions have already happened. And the winners are yet to be officially announced, but we obviously know who the winners are, and fortunately, for us, we have had tie-ups with -- in some of the packages. So as I mentioned that as soon as the winners are officially notified by REC, which is normally a week or 10 days from the auction since the auctions are just going on and one of them has just got concluded yesterday, the next one is the next week. So my best guess is that in the next 10, 15 days, we should start receiving the EPC orders. And that's on the time line. As far as we are concerned, my view is that as EPC will probably get anywhere between INR 1,500 crores, INR 2,000 crores, I don't know, at least -- or let's say, very broadly between INR 1,000 crores to INR 2,000 crores of orders should come to us from this segment. Yes. So that's on the Green Energy Corridor. Order book for next year is difficult to say right now, but I can say that as of today, even today, we have another INR 30,000 crores of tenders to be bid apart from INR 30,000 crores, which we have already bid, okay? So we see a pretty good tender pipeline. If you ask me an idealistic figure, ideally, I would love to have an order book of -- order intake of almost INR 18,000 crores -- INR 17,000 crores, INR 18,000 crores of order intake, okay? That's what, I would love to take it. But as of now, it is very difficult to hazard what would be the order intake for next year.

Yes. Got it. Got it. Got it. And in terms of margins. So basically, margins have been at around 9% over the past few quarters, largely attributed to the commodity prices. If commodities, say, stay at the same place, what could be the kind of margin trajectory that we can have? Can we go back to 10%? Is there enough room for that?

So Ravi, there are 2 things. One is the commodity price impact has come for KEC generally only on this quarter. That also towards the end of the quarter. So the basic impact on margin has been on account of the problems, which we are facing in Brazil. Had Brazil problems not been there -- standalone case, see, we are in double-digit margins in any case. So that is what we have to keep in mind. So we do expect that Brazil problems would probably get over by, let's say, Q1 or so, okay? So that's on that part. Commodity prices, if they continue in the same format, then we do have a challenge because the prices have really shot up beyond whatever, like steel has gone up 52, 53 although, as I said, the prices have started coming down and now that government has allowed the use of secondary steel in place of primary steel. We have already seen at least in the secondary steel market a INR 3,000 to INR 4,000 correction. Primary steel also started coming down, but the availability has gone up. The other good part is aluminum has started coming down. So our estimate is that the metal prices will start coming down, if not, in Q1, definitely in Q2 with the onset of monsoon. But as I said, we have started seeing a more benign trend in all the commodities and also on availability. Difficult to guess today on what is going to be the impact. But as I said, primarily, the impact is more on the SAE. Then today, the reason for 9% is not that much of the metal prices today. Tomorrow, it may be, but not today.

Got it, sir, got it. And my final question is with respect to working capital, sir. So it has increased quarter-on-quarter a bit from 132 days to 144 days. Should we read too much into this or it would be stabilized?

No, I don't think you should read too much in it. There are 2 broad reasons for it. One is obviously with the metal prices going up, we had done some stocking, et cetera. So you'll find that the inventory levels have gone up generally across the business. And secondly, 1 or 2 of our large customers had some issues in payments during the last 2 weeks of December, which now they are paying. So to me, I think it's more of a temporary and a strategic blip, nothing to read as it. And the other part, which you've to understand, Ravi, is that with interest cost going down, we have been becoming a little bit more liberal with our inventory stocking and other things and payments, et cetera. So that's the reason. So we are actually keeping in mind the overall interest cost rather than the overall working capital. We are not very strict with the working capital as much as the interest cost. Thanks, Ravi, I think there are a lot of people there.

We have next question from the line of Swarnim Maheshwari from Edelweiss.

Congratulations for a decent performance in the challenging environment. Sir, 2 set of questions. First, in your opening remarks, you mentioned about that there was some cost overruns in a couple of Brazil projects. So what's really the drag like? And what the execution status on these projects? When are they expected to get completed?

So Swarnim, if you look at Brazil, what has happened is the President and the country refused to recognize COVID as a national problem. Somebody said it's like a cough and sneeze, it will go away. So because of that, the government has not given any contractual release on any contracts to anyone. It's not even considerable as a force majeure in Brazil. Because of -- what is happening is that you do not have any contractual relief on the time delays, on the costs which have been incurred in COVID, unlike in India and other countries, where governments declared it as a force majeure, they gave you time relief, they made payments to you. A lot of things have happened. In Brazil, all that is expected to be absorbed by the contractor. Obviously, we are negotiating with the client, and we have already seen some claims coming in, but that's one primary reason. The second reason is because of the COVID and just before COVID, if you remember there was a Vale Dam burst, because of which the availability of steel and the prices of steel and the logistic cost have really hit the roof. Even this quarter, again, the steel producers have been asking for a significant increase in the prices. So these 2 factors have come and hit. One is the execution cycle and also the cost of the projects. Now we had 3 historic projects, which have been going on for some time. Now as I mentioned in the last call, one of them was supposed to be completed, that has got completed in the first week of December and has been handed over to the customer and has been charged. The other 2 projects, we expect that one of them will get completed in Q1 and the second one by early Q2. So by early Q2, the older projects will be over. We now have 1 -- 3 projects, which we've already announced, which we've signed up. There will be one more where we are close to signing a contract, which is in our L1. Work on one of them has already begun a couple of months back. The 2 projects will start by March, April or so. And the fourth one will also start in Q1. So I think we expect to start seeing normalizing of operations in Q1 in Brazil. But obviously, there would be some negative impact continued till that time. I think from Q2 onwards, we should start seeing sort of normal results coming out of Brazil.

Okay. Right, sir. And sir, the other thing was that, again, you mentioned that there were 3 big sites in India and -- which had some NGT issues. So are these really big projects? And have these been resolved? Or this is -- like this can also linger on for another quarter or 2? How is the situation over there?

So we have got 3 metro-cum-RRTS projects in the city of Delhi, okay? So one of them is facing some problem on account of the shifting of trees, like what we have in Mumbai in Aarey and all that. There was some issue going on. I think that issue is not that severe. It should get resolved. Then I also mentioned environment it is, the typical Delhi of December, November with smog and the stubble burning and all that. So the clients were saying that we need to be very careful with what is happening on the sites with Delhi environment inspections and all that. So clearly, the work had slightly slowed down with the stringent requirements of the Delhi Municipal Corporation and all that. I think more than the other problem, which we are still facing in Delhi, over the last 3 days the sites were closed because of the Republic day and the Kisan Andolan, which was happening. We had a serious issue constraint on the supply of cement and steel, which were blocked. Most of the borders were blocked. So material coming into Delhi was because our yards and all that are in the city of Delhi, okay? So of late, we are seeing some easing of, but what I tried to say over there was that our revenues and all could have been better had this not happened, okay? But I don't think we are worried about a significant impact. I think the NGT issue on tree cutting and all that is under resolution. It's a matter of time that it gets resolved. Environment issue is now no longer there with the smog and all getting cleared and all that. So the projects would be -- normally would be back to a fast-track execution. But they are getting -- normal execution is going on, let's be very clear. It's not that execution has slowed down significantly. But the fast-track planning, which we were going on, had slowed down for the last couple of months.

We have next question from the line of Priyankar Biswas from Nomura.

Sir, my first question is regarding this T&D ex of Brazil. So what I see is that the execution levels are broadly similar to the second quarter levels. I mean if we adjust the Brazil out of it. So are we facing ramp-up issues in India? Or is it abroad? And what are the issues we are facing on the ramp-up? And if you can just highlight, are there any logistics constraints we are facing because there has been a sharp increase in ocean freights as well? So if you can elaborate on that.

So Priyankar, India, we are not facing ramp-up issues. India -- if you have been noticing my last few calls, India T&D has not been growing very well. That's one portion of our business, which had not been growing because the India T&D market by itself has been pretty slow. Now fortunately, with these orders of Green Energy Corridor and with the SL problem hopefully getting now resolved, we will see a significant ramp-up happening in India T&D from Q1 or even maybe from March. So I'll not say India T&D is facing any problem on ramping up. It's just the order book itself, which is [ slower ]. But if you look at by itself India T&D, with whatever orders we had, this quarter, we did very well. The problem which we are facing is the international side, especially on Africa and a little bit on the Middle East because of the large restrictions, which we are having on account of COVID in sending people. If you look at our order intake, a large number of orders have come from the international market. And of late because of COVID and all that, we've had some delays in mobilizing people, sending people, et cetera, which has basically caused, I'll say, a little bit of a delay in the international revenue ex SAARC. SAARC is doing very well, and the major increase that you see in freight and all that, logistic costs, is because our dispatches, especially to Bangladesh, Afghanistan and all these countries have gone up significantly during the quarter, which is why there is an increase in the [indiscernible]. As of today, I don't see, let's say, large impact of any freight increase costs. Yes, the costs are going up, but nothing to reflect significantly.

Okay. Sir, that I understand. So that's fine. Sir, second question, if I may. So can you just give me a broad ballpark idea like how much of your order book, let's say, would be of a fixed-price contract nature? The reason I'm asking is in the last 1 month of the third quarter, we have seen the steel prices rising up. And you had also discussed about availability and those issues. So if -- even after this correction also, it's still quite high versus the average of 3Q levels. So were it to persist there -- so I was just trying to assess how much of a margin impact we can still face, let's say, in the fourth quarter?

So I -- difficult to give a number because why I'm saying that even if the order book -- let's say, broadly, I'll say international T&D, broadly, I'll say, excluding some countries in SAARC and all that, Bangladesh and all that we have a price variation, most of the orders in international T&D would be on the fixed price. So that is a number -- maybe Abhishek can give a number to you. But what you have to understand is out of that, if it generally takes steel, when we take T&D, and I'm just giving you a general number. When we generally take steel today, steel around -- is normally around 15%, 16% of our T&D order. So if you take a very broad look and say that, okay, I have today out of my INR 18,000 crores -- let's say, if I have INR 10,000 crores of T&D order, I'm just giving a number or INR 9,000 crores, out of that 16% would be broadly steel. Those all are the sort of numbers, which you can look at. The other thing you have to look at is that all this steel and all that will have to go over a period of 6 months, 9 months or maybe even 12 months, which is why I said at the start of my address that in many of the projects where we were originally fast tracking, we are now thinking of going a little bit slow because now we are seeing the steel prices coming down. How much impact it would have? It's right now very difficult to say. Very difficult to say. But to me, as I said, the absolute number is not very high, okay? The absolute number of steel. And if you want to take a very broad number over the year, if you look at my total, we'd probably consume around 4 lakh tonnes of steel overall for the year, of which maybe 25% or 30% or something could be on this. But -- and of that, a large part, if you take our Railway business, Railway entire business has got price variation. Bangladesh, most of the tenders have got price variation. So there are many projects, which will have a clear price variation. So right now, very difficult to quantify what is happening. We also have a decent amount of stock in our hand. But there would be some impact, okay? How much? To me, it's very difficult right now to quantify.

But sir, so what I was trying to understand is, let's say, now the prices, let's say, moderate over time. So in that case, probably you can then ramp up your international execution like where there are -- where you have fixed-price contracts, then maybe then you can fast track at that time, is this the philosophy?

So to us, the philosophy is that the project has to be executed in time. So based on the time lines, the project will get executed. If the prices are favorable, then we will even do the fast-tracking as we have been doing in the past. If the prices are not favorable, then we will not fast track, but we will do on the normal project time line. So no project will get delayed because of a price rise. That's not the way we operate. We will definitely keep on executing projects. But you will keep on juggling between the projects depending on the speed, what is required, what are the costs and all that. Yes.

We have next question from the line of Bhoomika Nair from DAM Capital.

Just a continuation of this raw material price hike, and in terms of why you spoke about the current order backlog where there should be price variations, et cetera, but for the L1, where we're yet to finalize and get to get the awarded, and that's a fairly large number of INR 6,000 crores, which will get largely awarded between Q4 and Q1. There, how are we hedging our raw materials and steel, et cetera, to make sure that our margin profile doesn't get hit?

So I think some, I'll say, decent part of the L1 has a price variation clause, a decent part of it. Like we have a couple of orders in Brazil, which we have renegotiated. We have orders in SAARC, which have, what we call, a price variation. Then we have got some orders in civil, including water pipelines and others, which have got price variation. So I don't think we have got too many orders in L1, which are at a fixed price. So I don't think we are so much worried. And I think the other thing is that what will also happen is that the rupee has been fairly stable, which may be negative for international. But when you look at the orders in India and all where we are L1, where we have to supply conductor, et cetera, where we had assumed a fairly depreciated rupee rate. That rupee rate is now at INR 72.9 or INR 73 and all that. So a part of the commodity losses would also get hedged on account of a stronger rupee for the -- for projects where there is also a conductor supply. So in all, there could be some minor impact, but I don't think there could be a major impact. See, as far as hedging is concerned, it is today, very difficult to go and hedge at these prices. And if you're not sure of getting the award. So let's say, if I go and hedge today and then for some reason the award doesn't happen and the prices come down, then you'll be stuck at a higher price also. So generally, we will not hedge in such unless we are very sure that this L1 will get converted into an order book. So -- and steel per se as a commodity has been a bit difficult to hedge. So steel generally remains unhedged, to be very honest. Base metals get hedged. Steel will get hedged to the extent we have physical inventory.

So as we go ahead, would it be fair to say that this working capital, as you said, strategically, we've been a little relaxed or built up a little bit of some inventory. Will that get normalized as we move ahead, say, 3, 4 months ahead from now?

Normally, [Foreign Language] Most of the clients tend to, especially the government clients like RVNL, Railways, Power Grid all tend to pay up in the last quarter in any case. So every quarter, we have seen that March numbers always go down. So I don't -- I think the March numbers should be much better than the December numbers, notwithstanding what we're talking about inventory increase and all that. And my suggestion -- my view is that now that the prices have started coming down, I think the inventory buildup would not be required. That's our view today, but maybe it changes in the -- after some time. So working capital will get normalized. And also on the interest cost, I think we are clearly seeing that interests are not going up right now, okay? They have stopped coming down, but I don't see them going up immediately.

Okay. Okay. Sir, the other question was in terms of T&D, as you said that this quarter, we will get some of the finalization of the TBCB orders. But as you know heading into FY '22, what is the pipeline in terms of tendering? And where are the orders coming from in T&D, both in domestic from either TBCB or [ ACBs ] and in terms of international. So if you can throw some light on ordering activity for next year.

So ordering will basically happen from TBCB only. There's a large package announced in Bihar now, Katihar region and all that. That's another big package, which has come out, which will go under TBCB apart from this Green Energy Corridor, which is getting finalized. Then there are some orders coming out in the southern side of the country, Tamil Nadu, Karnataka, Kerala, they are large orders, which are in the pipeline. Rajasthan has got some orders coming out. So those are the areas where we are seeing in PGCIL as well as [ SAB ]. But also some orders coming out in the private sector, especially in around Mumbai city because of the blackouts and all which have happened. Some very large tenders have been shooted by Adani, Tatas and all that in the private sector. So that is India. SAARC, there are very large tenders. So for me, that's where it will come out apart from, obviously, Middle East and rest of Africa. So I think T&D, we see -- if you look at the numbers which I have right now I've got almost INR 18,000 crores, INR 19,000 crores of likely tenders in the next 6 months in the T&D area.

[Operator Instructions] We have next question from the line of Sreemant Dudhoria from Unifi Capital.

A couple of questions. Firstly, as you highlighted, you are in spite of the 9-month performance is still looking for a growth for the full year driven by the quarter 4 execution. Now given that the commodities are still at an elevated level and a variety of commodities, not just steel, aluminum, cement. Do we expect this growth at the profitability level in the quarter 4? That's the first question.

So I think our expectation is that we will grow decently, definitely double digit in Q4, no question about it. So I don't think we are worried about growth. The second piece is profitably, yes. I don't think our margins will touch double digit for this quarter -- or this year. But there will be a significant growth of revenue in this quarter. And I think that will give us some leverage benefits. So I think we should hopefully be able to maintain our margins for this -- for the year.

Got it, sir. And the second question is in the overall order book and the L1 mix, could you help us identify -- help us with the number of how much is contributed from the SAARC nations because you said that the orders from these countries have a variable clause? Can you help us with that percentage number?

I don't have the exact number, but it's somewhere around INR 1,200 crores or INR 1,300 crores or something. Between INR 1,000 crores, INR 1,500 crores. I think it's closer to INR 1,200 crores, to INR 1,300 crores. Abhishek can give you the exact number, but it's definitely above INR 1,000 crores.

We have next question from the line of Sanjay Doshi from Nippon India Mutual Fund.

Just a couple of questions. One is on the Civil business, sir, if you can help us appreciate how are we progressing on expanding the reach because it's a very large business as such and various different subsegments? So how was the progress in terms of, say, new verticals? And how do we see this business 2, 3 years down the line? And on the same lines, what is our targeted profitability for Civil and Railways, maybe, say, next 2 years? If you can just help out on that, sir.

So Sanjay, on profitability, this quarter was the first time when actually Railways touched double-digit numbers. We have been hovering around the double digit, but this quarter, Railways actually crossed double-digit. We do hope that they can maintain that streak in Q4 also. Civil is gradually improving its numbers. It is now in high teens. It's still not on double digit on the margins. But I think it is slowly inching towards that, okay? So margin, I think, very clearly, our targets have always been that you need to be in double digit once you reach a particular level of maturity in the business. So we do expect that Civil should also head towards double digit on the margins. As far as revenue growth is concerned in Civil, this quarter was exceptional because last quarter was poor. So we had a 300%, 3x growth of last quarter Q-on-Q in Civil. During the quarter, we have received orders, as I mentioned earlier. In the chemical industry, we got our first order. we got our first order in water pipeline. Repeat order from cement -- we also got the order from one of our largest cement manufacturing company in India. And clearly, we are seeing huge traction coming up in some of the industrial segments, whether it is cement, whether it is metals, chemicals. I think 3 sectors, I can see very clearly, in the industrial side. In urban infra, when I say urban infra it's largely metros. We are right now executing 5 projects, and all 5 of them are doing very well, both on revenue as well as on margin front, okay? We should also get one more project in urban infra. And we are also L1 in our first airport project. So I think on the Civil side, we are doing very well. Our first data center is under construction, and that also is progressing well. So the areas where we are looking at is public spaces, urban infra, which is largely metros and some pieces of public spaces and industrial. Residential, we have been getting orders, but we are not very bullish. We're not expanding residential like anything. Most of expansion is going to happen in industrial and in these verticals. And as far as the growth is concerned, I think Civil should definitely have at least a 50% growth next year or whatever we do this year, 50% growth is definitely, if not more, on the cards for Civil next year.

Good to know about railways, double digit. And from your comment, I think I can appreciate that the learnings on Civil has been much better as compared to Railways. All the best, sir.

Thanks, Sanjay.

We have next question from the line of Ashutosh Garud from Ocean Dial Asset Management.

Yes. Hello?

Hello.

Yes. I just wanted to understand…

Sir, I'm sorry to interrupt. This is the operator. Please use the handset, sir. We're not able to hear very clearly.

Can you hear me now?

Yes. Thank you.

Yes. So just wanted to understand -- from a near-term perspective, we do understand that there are some executional issues internationally and commodity pressures in the near term. But going ahead, let's say, from Q1, Q2 onwards, would you be comfortable in getting back to that 15% growth? I know Q1, Q2 base is lower from a revenue perspective. Last year, Q1, Q2 were abnormally low, let's say. But on an overall growth trajectory from a revenue perspective, you would be back to 15% growth and 10%, 10.5% margins, how confident you are? And from which quarter do you see this normalcy coming in your business?

So Ashutosh, in spite of the problems which we are seeing on some of the execution and all that, I think we are very clear that even from -- even in Q4, we should have a decent growth. And I do hope that we should be able to achieve a double-digit growth for the whole -- current year also FY '21, although we are right now at 6% for the 9 months. I do expect that a fairly good growth in Q4, which should overall increase our growth for the whole year. FY '22, clearly, as you rightly said -- Q1 was for us was bad, not Q2. Q2, we had a 16% growth, even in the FY '21. So Q2 was a normal quarter for us in FY '21. So similarly, we do expect FY '22 also to be normal. Whether we'll achieve 10% or 15%, today, it's difficult to say. We still have restrictions and all that. But I think with our current order book of an L1 of more than INR 24,000 crores or INR 25,000 crores, I do not see a challenge in having a double-digit growth next year. I don't see a challenge at all in having a double-digit growth. Whether it starts from Q1 -- Q1 in any case will be double digit because Q1 last year was a degrowth. So I don't see -- whether we'll reach 15% or not, I don't think I want to commit it today. But I think I can stick my neck out and say that we should clearly have a double-digit growth next year. Margins, whether we'll be able to cross 10% or not, again, I think is a little bit of a function of the metals. If metals continue at the present levels, 10% may or may not be achievable. I'm honestly not sure. I can't commit on that. I think we are right now around 9%. Let's see how the metals do. I don't want to commit myself today because the metals have gone up abnormally high. Although as I said, we are seeing a benign trend and we expect it to come down. But today, it's difficult for me to see what will happen. Maybe after a month or 2 months when you see the long-term trend come -- setting back into the metals, we'll be able to commit better on the margins. But I think the present level of margins should be sustainable. The other thing what we'll also have is that if we have a 10% to 15% or whatever number of growth we have next year, then we will definitely have the benefits of leverage. Also cost reductions are happening. Interest cost is going down. So I think we have to also see the fact that all this would result in a beneficial number at the PBT level, if not at the EBITDA levels.

And sir, also some color on how the competition is shaping up for you, especially post-COVID times? Has the competition [indiscernible]

Sorry, I couldn't hear your question, Ashutosh.

I'm saying I also wanted to…

Sir, I'm sorry to interrupt. We're not able to hear you. Could you please use the handset while asking your question.

Yes. Can you hear me now?

Yes, yes, yes.

I also wanted to know how the competition is shaping up in post-COVID times domestically?

So competition had gone down in Q1 and Q2, because of various reasons and problems in bank finance and other things and all that. In Q3, I don't know if you recollect government had relaxed guidelines on what we call bank guarantee requirements and tender security, et cetera, because of which, we are seeing a lot of small players now coming back with inadequate banking facilities. What will happen if they win the project is anybody's guess. At a much more serious player level, I think we are seeing some of the larger players becoming very hungry for taking orders. So to me, the competitive intensity in India, especially on T&D has gone up, okay? And on the smaller value railway contracts of, say, INR 100 crores, INR 200 crores and those values, we are seeing intensity going up. But if you take above INR 500 crores and all that, generally, the competitive intensity will be pretty low, 2 players, 3 players, max, let's say, 4 players, that way. And even on large T&D, the competitive intensity is less. But if you take at INR 100 crores, INR 200 crores, INR 300 crores, we are seeing the competitive intensity going up in India.

We have next question from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on the decent set of numbers. My question was that within your segments, so excluding T&D, so which other segments, I mean, in over 2, 3 years, do you think would become quite sizable maybe to the extent that they are as big as the T&D segment? What efforts you are making towards achieving that?

So Parikshit, generally, I can say that Railways is becoming pretty large. So Railways in India is already bigger than India T&D. So clearly, next 2 years, we'll see Railways doing very well in terms of revenue and margin. Civil is already growing very well, but obviously, the volumes are still small. So let's say, after 2 years or so, we will start seeing -- even now Civil should be contributing, let's say, around 10% of our revenues, next year it will contribute more than 10%. Railways are already reaching 25% or so or 30% of our revenues. So this quarter, we had 45% non-T&D. I think going forward, it will cross 50% the way it is growing. But I think the good part is T&D international, we're getting a lot of orders. So I think it's a tug of war going on what happens between the businesses. But Civil and Railways are growing much more than other businesses.

Sir, within Railways now, so on your own balance sheet, so what could be the size of a single order, which you have qualified now so you have PQ?

Difficult to answer that, Parikshit, because what we are seeing is that for -- in Railways, there are at least 20 subsegments, and each subsegment has a different qualification. So it's very, very difficult for me to give an answer to. I have bid for, I'll say, projects of -- the largest project, which I've got on my own, has been INR 1,000 crores. So depending upon if it's an OHE project, I can bid for any size. If it's a civil project, maybe INR 200 crores, INR 300 crores, INR 400 crores, and we are just finishing some large civil projects and railways. Once they are complete, then I think our civil qualification will also go up. Our metro wire ducts are getting progressing well. So we should be able to bid for some of the railway bridges and wire ducts. So I think it's going on. Similarly in telecommunication, we have for some -- we have particular size. Each segment has got a different number. Difficult to give you a specific number.

My question was more because, sir, if you are looking at growth in these segments and larger growth coming in from these segments, then we also should have like prequalification to that extent that the average order size also grows and that will give us some benefit and margin benefit as well. So that was -- so do you think in 2 years' time frame, you should be in a position where you'll be qualified independently for larger sized orders like INR 1,500 crores or INR 2,000 crores? Do you see that happening in the next 2 years?

So again, I'm repeating, Parikshit, it will depend upon what area it comes. If it's coming electrification, I can do any amount of order. If it is a pure-play civil, I will not be able to qualify for the INR 1,500 crore order. I'll give examples. Today, bullet train -- for bullet train, they have come out with new tenders. L&T has won some large tenders, but there are other smaller tenders, which are there. So some of them are INR 2,000 crores, INR 1,500 crore and all that. Even now when I'm bidding for some of the metro, civil and all that, I need a partner. So it depends. Once I finish some of my orders, maybe next year, we should be able to qualify, but let me tell you one thing. Getting a JV partner in railways and civil and all has not been a major challenge. So even if we don't qualify on our own for large projects, I think there are very few projects, which we have not been able to bid because I don't have the qualification. So I don't see that as a challenge.

And same thing is applicable to civil part also, right, your civil segment?

Absolutely.

[Operator Instructions] We have next question from the line of [ Simran Bhatia ] from SMC Global Securities.

Sir, I have a couple of questions. Just first is that is the EBITDA margins of 9.1% has been bottomed out? Or it will be -- are you seeing a little bit further deterioration in the EBITDA margin going forward? And secondly, what is your call on the interest reduction because you're doing fantabulous -- doing excellently from the past 2 or 3 quarters? And my third question is, what is that -- you have stated in your earlier remarks that delay in the orders, what is that delaying the orders from the government or itself, if you can throw some light on that. That's all.

So the delay in the orders are on tenders, which have been opened but not awarded. There are tenders where, let's say, we are L1 for a long time. But for whatever reason, either the government doesn't have fund or the private sectors postponed that. So there have been, I'll say, unduly long delay in award of some of the projects. I know at least 1 or 2 projects where we have been L1 for 1 year now. And we don't understand why they have not been awarded. So that was one item, when I said that when the order book was L1, we have a reasonable number. There have been some delays. But we are now slowly seeing awards happening. And hopefully, for the government project, I think, with the budget on the 1st, lot of allocations should happen for new projects, and we will see some of the award happening. Regarding margin, I do hope that the bottom out -- bottoming has happened. We don't expect the margins to go below the current levels provided the metals still don't go up. This quarter is -- Q4 is going to be a challenging quarter, but I do expect that we should be able to maintain our these numbers, hopefully, with the help of the size, the leverage. This quarter, normally, Q4 is normally around 40% of our revenues every year. And if you are able to maintain that trend of having a 40% revenue coming in Q4, we should be able to do a good growth. And then we should get the benefits of leveraging for this quarter as well as that will impact the full year. We'll keep our fingers crossed on the margins. Yes. And on the interest front, I will ask Rajeev, who is there on the call, to give you a reply. Rajeev?

Yes, Vimal. So basically, [ Simran ], interest front, I think since the Q4 revenue is going to be higher. So we expect that interest cost as a percentage still will further go down. But for the year as a whole, we expect interest cost will be around 2% level. Because if you look at the 9-month period, 9-month period, the interest cost has been 2.3% or so. So it will come down to around 2% for the year as a whole.

We have next question from the line of Kunal Sheth from B&K Securities.

I just wanted to know our non-T&D share has gone up to 40% now in the 9-month period. So is it largely because of the slowdown in the T&D? And where do we see the share of non-T&D in the next 3, 4 years?

So Kunal, 2 things have happened. One is T&D absolutely has not grown because of degrowth in SAE. So that is one reason that T&D remains at virtually the similar level or maybe slightly below last year. And second is, you have seen railway and civil growing. Railways grew by 44% and civil has grown 3x. So both these factors, T&D not growing and other businesses growing have contributed for this. Going forward, I clearly see that this trend will continue because railway is continuing to grow in the same manner. I think next year, again, we'll have at least a 20% growth in railways, and as I was saying, at least a 50% growth in civil. So with that sort of growth happening and clearly, T&D cannot grow at 50% in these numbers. So the ratio of non-T&D will definitely grow. My view is that it will at least become 50% in the next year.

Okay. But sir, this 50%, do you expect it to sustain because as you rightly said, with T&D dominating double-digit order flow growth for us will be fast in a way?

Yes, but T&D, others have not got that many orders, which we'll get. Our L1 also has railways and all that. So I'm not too much worried about it. T&D is definitely growing. But what I'm saying is that the percentage of growth in civil and railways is significantly higher. So it will definitely -- my view is that non-T&D will be become 50%.

Yes. Yes. Sir, but will it sustain there for the next few years or?

It will. It will definitely sustain because what will happen is that with the railway volumes growing, the railway growth percentage will come down. But for civil, it is still at a much lower number. So civil -- but civil will continue to grow at 40%, 50%, at least for the next -- this year, next year, at least 2 years, I can definitely see civil growing at least 50%. So I think with this growth and the railway growing at 20%, 25%, I think the growth in these 2 businesses will clearly outstrip the growth in transmission. So I do feel that the non-T&D share will definitely get sustained at least for the next 2 years.

We have next question from the line of Vipin Goel from ICICI Securities.

Sir, on the railway order book side, just to harp upon that bit. Although we understand there are a lot of segments within that, but broadly if I had to break it down between the electrification orders and the nonelectrification orders, what could that be? That is one. And then on the margin side also within 2 segments, if you can give a color on that, that will be helpful.

So I don't have the exact breakup, but broadly, my understanding is that 1/3 of the railway order book is from OHE. 1/3 would be OHE, 1/3 would be in the composite section and balance would be on the, what we call, the metro section. Metro civil and noncivil put together because there is one metro civil project also, which is in the railways business. So I think I'll broadly say they are 1/3, 1/3. 1/3 OHE, 1/3 composite and 1/3 metros. Margin is difficult to say. We don't give section-wise margins and all that. So difficult to give up -- and I don't have it also and difficult to give.

Okay. Okay. All right. I just to -- like just a broad idea we can get on that whether the electrification orders are higher margin than the metro orders? Or is it just on the product -- the project mix. It won't be…

They won't make a difference because it is all basically project to project. It won't make a major difference. So maybe you can take a uniform margin on all the orders.

Okay. Okay. All right. And then, sir, just last one on the ForEx gain or loss, anything that we had on this quarter, if you can give that number.

Rajeev, do you want to answer this?

Yes, Vimal. So basically, what is happening, Vipin, is that last year, we changed our policy of doing the ForEx accounting as a hedge accounting. Earlier, you would have seen that a large fluctuation or variation was happening on quarter-on-quarter basis, depending on the currency movement. So last year, we decided to adopt the hedge accounting. And what happens in the hedge accounting, basically, whatever revenue debt is yet to come in so you take it to the -- whatever the hedging we are doing, that movement of the currencies goes into the reserve account and gets accounted for as a part of revenue. So most of the hedging gain this time is being accounted for as a part of revenue. Apart from that, whatever the balance sheet items are there, there is a small gain or loss, which gets accounted for in the profit and loss account as a separate accounting. So this quarter, there was a gain of roughly about INR 7 crores, INR 8 crores for the balance sheet item, which were hedged during the period. But most of gain has been going as a revenue in the balance sheet.

We have next question from the line of Varun Ginodia from AMBIT Capital.

Congratulations on decent set of numbers. My question is on the interest cost side. So do you see more room for interest cost as a percentage of revenue to go down from these levels? Or should we see them stabilize at 1.9%, 2% kind of levels going forward? And secondly, on the absolute debt levels, do we have any levers to get down that number from INR 2,500 crores range that we are hovering around. So do we have any levers to get that absolute numbers also go down in next couple of years. So any thoughts there would be appreciated?

Rajeev?

Yes, Vimal. So basically, as far as the interest cost as a percentage to sale, I think it all depends on where the interest rate movement happens in the coming quarters. Our view is that interest rates probably has bottomed out in India. And let's say, the further going down on the interest rates may not be feasible, considering the large borrowing program of the government and as the economy starts picking up now. As far as the borrowing part is concerned, borrowing, definitely, we have the intention to bring it down further. And -- but we also have to consider that we are expecting double-digit growth in the business to happen -- to return from the next year onwards. So maybe 10%, 15% growth on year-to-year will happen. So that, I don't think that -- with the EPC industry, working capital is the main requirement, it's the component. From -- with the 15% kind of a growth that we will be targeting, it will be difficult to bring down the debt level from the current INR 2,500 crores or so. But nevertheless, the efforts are always there to have a free cash flow and a positive cash flow, which will help us to reduce or optimize, I would say, rather optimize the working capital borrowing further going forward. But by and large, you can consider that 2% -- 1.8% to 2% kind of an interest rate should be sustainable.

We have next question from the line of Saket Kapoor from Kapoor Company.

[Foreign Language] Sir, firstly sir, about this water pipeline part, sir, is it our first maiden foray into the segment, sir, that is in the DIP that we are acting as an EPC project, DI pipe link?

Yes, this is the first foray. I think we did some very small projects a few years back. But on the current size and all what we are doing for the drinking water, this is our first foray.

And it is in the state of Madhya Pradesh, sir, where exactly? And what is the volume or size?

I don't want to give the individual number, but it is in the state of Orissa.

In the state of Orissa. Sir, now with the -- to our CFO. Sir, the ForEx has played always a role contributing in the P&L. Sir, has there any change in the accounting policy? I missed the earlier comment from the CFO, sir. [Foreign Language]

Rajeev?

So in this quarter, Saket, the ForEx impact, as I mentioned, is about INR 7 crore to INR 8 crore gain that we have booked for the quarter. Basically, we have changed the policy. As I mentioned to the previous participant also, that we have changed our policy of accounting for the ForEx gains and losses. We are now -- we have adopted the hedge accounting. So what happens in the hedge accounting, the revenue which has not accrued, that whatever gains or losses are there on that account, that goes in the balance sheet result and gets accounted for as a revenue as and when the revenue is accounted for on those ForEx item, which you have hedged in the market. So the -- whatever gains or losses are there on the hedge accounting goes as a part of the revenue. So you don't see a lot of volatility in the balance sheet because even after hedging, so the currency movement does affect your profit and loss account. To avoid those volatilities, we have adopted the hedge accounting.

But this has been adopted, Rajeev, some time back, not this quarter.

No, not this quarter. This was adopted last year. In fact, last year's second half, we adopted this.

Yes. Right. Sir, you told about this deal issue affecting our numbers. So sir, the consolidated result wherein we have seen the employee benefit and the other expenses and not matching with the increase in revenue, are we going to stay for the next quarter also and things will only be in order from the Brazil part from the first quarter of business financial year. This is what...

Employee benefits [Foreign Language]. But the fact is right that in Brazil and all that, you normally don't do subcontracting. You hire all the workers on your roll. So because of that, [Foreign Language]

[Foreign Language]

[Foreign Language]

Okay. Cable segment, large point, sir. Cable segment, how is that going to perform?

So cable has been doing, I'd say, reasonably okay in terms of sales, especially on the railways side, okay? But otherwise, [Foreign Language] because metal has gone up so much, aluminum, [Foreign Language] especially on the industrial sector. [Foreign Language] All of them have shot up significantly. [Foreign Language]

We have next question from the line of Renu Baid from IIFL.

I have a few questions. A, broadly, as in we did speak about execution headwinds are now improving, things back on track. So broadly, can one say that in PQ whatever had been through under T&D as we look towards fourth quarter and the next few quarters, execution should now start to get back to normal and growth should be there? Or we think there could be some headwinds in some of the business segments as well?

Yes. As far as execution is concerned, Renu, what we have said is that Q4 will definitely be a good quarter. And based on that growth, that Q4, we do expect that we should do at least a double-digit growth in this -- the whole year, I'm saying. And similarly, I think with our order book at what level it is, I don't see that we should be doing less than double digit again next year also. So headwinds are there, but headwinds are there in some places, some countries, some projects. We are doing 220 projects today. So 4, 5, 7, 8 projects having headwinds will not have a significant impact. It does have an impact. So from double digit, you have come down to 7% growth. Had we not seen a headwind, we would have probably had a double-digit growth. It's not something which will move the needle too much. There is some movement, but not significant enough for me to get very worried.

Right. And second, on the margins, I know it's been discussed earlier as well. But broadly, when one looks at that despite all the headwinds, just probably last 9 months, margins have been stuck at 9% level, partially due to COVID-related impact in other segments. But increasingly within investor, there's also a concern that Civil segment especially metro cooling down margins as projects move in advanced stage of execution, so if you can try and share some inputs in terms of how have been the profitability and the pace of execution on the civil projects? And in your view, by when should we look or target at least 10%, 10.5% margins back for the business?

So let me -- as far as the metro projects are concerned, we are doing right now 5 metro projects. All the 5 are ahead of schedule. And all the 5 are doing better than the tender margins. And when I say better than tender margins, all of them are without taking into account any claims which we may have later on. There are time extension claims. There are COVID claims. There are various scope change claims and all that, which, as a policy, we don't account for till we have the claims accepted and cash in our bag. So I -- honestly, as of today, I do not see any reason why the profitability of our civil metro projects will go down. We are very confident of what is happening on the civil metro projects. And I think we are very happy with the progress. And maybe we should put up some photographs somewhere and maybe I will send across some photographs on what we are doing. So I think we are very happy with that. Coming back to your second question on margins. So to me, I think the margins have got pulled down. One is obviously because of a little bit on the commodity side, but mainly, it has been the impact of SAE. If you reduce -- if you take out SAE, we are already -- we are more than double. We are in double digit in any case for -- if you look at the standalone, we are more than 10%, significantly higher than 10%. As I said that, I think the SAE issues will continue for next 2 quarters or so. We're trying to resolve them. But we now have new orders. So it will now depend upon how quickly the impact of metals can get absorbed or they come down and all that and how quickly we can move to double digit. Whether it would be Q1, Q2, it's very difficult to answer right now because metals have been moving very, very erratically. So to me, it's a little bit difficult to answer when we'll reach back to 10%, 10.5% and all that. Our aim is to reach as soon as possible. But maybe we'll have to wait for a couple of quarters to reach there.

Okay. Okay. And sir, lastly, as in when we were looking through some of the projects, which have been opened up recently, as in we have also emerged -- maybe not L1, but we have L2 orders, large orders from Chennai Metro. And if the customer pull -- as in award only 1 contract to a player, then probably we might win INR 1,000 crore of order in that segment as well. So in terms of the company's preparedness to execute a large-sized metro projects across cities, how is the bandwidth as well as the order inflow outlook in the Civil segment for us?

So just to clarify on the Chennai Metro, as per the terms of the tender 1 bidder can get only 1 job. So since L1 is one party in both the lots, if the client goes strictly by the terms of the contract, we should get one job. But since it's not clear, we are not even taking it in our L1. So when we say INR 24,000 crores, that doesn't include these projects, number one. And number two, if you look at our existing 2 DMRC projects, both are close to INR 1,000 crores. So doing a INR 1,000 crore project, we are already doing one in railway, we are doing one INR 1,500 crore project in T&D in Bangladesh. So -- and we are doing one INR 900 crore project in Oman. So I think doing large projects of INR 900 crores, INR 1,000 crores is not something which worries us. Capability build in this sector is not difficult. Let me put it this way. There were -- if you remember, even now there are 7 or 8 players who keep on bidding for some of these projects. So internal capability has been built, but hiring capability in this sector is relatively easy.

Right. It was more specific because Chennai is regionally not a very easy market to work for EPC contracts as they have their own setup issues.

So let me clarify. Even today -- as of today, when we are talking, I've got 3 large T&D projects in the city of Chennai. I am doing one project, which is, I think, close to INR 800 crores in the city of Chennai after having finished one. We are doing another 2 projects. So I'm right now doing 3 projects of T&D in the city of Chennai. So I think that doesn't worry me. We are clear of the issues we are facing. But as I said that we're working in Chennai. So I'm not worried about -- we know how to tackle Chennai.

Got it. So broadly for the Civil segment abroad -- as in 2 to 3-year growth targets are broadly intact of growing this business at more than 30%, 35% CAGR?

100%. Very clear. They should grow more than that, not 30%, 35%.

I think, yes, next year, obviously, it will be significantly larger. Thereafter, 30%, 35%, 40% CAGR, whatever the numbers pan out.

Let us see. We want to do better than that. Let's see. We'll keep our fingers crossed.

We have the last question from the line of Swarnim Maheshwari from Edelweiss Securities.

Sir, just one question. So you did mention about your T&D ordering pipeline of about INR 20,000-odd crores. If you can just tell us how does the canvas look like for our overall -- on the overall basis, including the railways, civils and the other business?

So railways with the orders -- tenders, which we have made and what we have today, we have got around, I'll say, INR 12,000 crores or INR 13,000 crores of orders -- tenders in pipeline. And similar number is for civil. So anywhere between INR 10,000 crores to INR 12,000 crores of tenders, which have been bid or are being bid. That's our number.

Right. So overall, about, say, INR 45,000 crores to INR 50,000 crores this year ordering pipeline for the next 6 to 12 months?

Tender quoted plus tender to be quoted roughly at around INR 60,000 crores [Foreign Language] Nonquoted, to be quoted and all that put together are around INR 60,000 crores.

Perfect. And I'm sure that tenders to be quoted, the bids, the call for the bids is already on. Isn't it?

Absolutely. No, I'll not say all of them are on, but there are many of them, which we know that will come. Most of them are on. But there are some where we know that they are going to come now. Like, as I said, a scheme has been announced by REC [Foreign Language]. So we know that this bidding will happen now. So some of them where we know that it will happen are also there in this number. But largely, I'll say out of the INR 60,000 crores, probably, I'll say, INR 50,000 crores have already been announced, bids are there in the market.

Ladies and gentlemen, that was the last question. I'd now like to hand the conference over to Mr. Vimal Kejriwal for closing comments. Over to you, sir.

Thank you, everyone, for your continued interest. Thank you so much.

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