KEC International Limited (KEC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the KEC International Limited Q1 FY '25 Earnings Conference Call. We have with us today from the management Mr. Vimal Kejriwal, Managing Director and CEO; and Mr. Rajeev Agarwal, CFO of KEC International Limited. [Operator Instructions] I now hand the conference over to Mr. Vimal Kejriwal. Thank you. And over to you, sir.

Good morning. And thank you, Steve. Good morning, everyone, and welcome to the Q1 Earnings Call of KEC. Let me begin with an update on the overall performance for the quarter and thereafter talk about each of our respective businesses and certain key strategic developments. We commenced the financial year with a robust order intake of over INR 7,600 crores, a staggering growth of 70% vis-à-vis last year despite the challenges posed by elections. Our YTD order inflows have been driven primarily by T&D, followed by Civil and renewables. Additionally, we have a substantial L1 position of over INR 9,500 crores, predominantly in the T&D business, which are expected to be awarded in the near future. Both our order intake and L1 positions in T&D have a balanced mix between India and international. We have a well-diversified and strong order book of INR 32,715 crores as on date. With this, our order book plus L1 position stands at a record level of over INR 42,000 crores. In terms of revenue, we have achieved revenues of INR 4,512 crores for the quarter, a growth of 6% vis-à-vis Q1 last year. The growth could have been higher but for the acute shortage of manpower across businesses, owing to the elections in India, and the continued pressure on the supply chain in some products. Our margins continue to demonstrate an upward trajectory with an improvement quarter-on-quarter over the last 7 quarters. We have achieved a strong growth of 20% year-on-year on EBITDA, with EBITDA margins for the quarter improving by 70 basis points, vis-à-vis Q1 FY '24, to 6.5%. During the quarter, we have successfully reduced our interest expenses by 30 basis points as a percentage of revenue, now standing at 3.4% for Q1 FY '25. We have significantly enhanced our bottom line with PBT and PAT growth of more than 2x. PBT margins have increased by 140 basis points to 2.5% vis-à-vis 1.1% last year. Our PAT stands at INR 88 crores. We continue to focus on our debt levels and balance sheet. Our net debt including acceptances stand at INR 5,596 crores, a reduction of more than INR 100 crores vis-à-vis last June despite a revenue growth of INR 2,000 crores, that is 11%, in trailing 12 months. During the quarter, we have realized further collections of over INR 160 crores in Afghanistan. We have successfully repaid INR 100 crore of [ high-cost debt ] in SAE to further reduce our debt levels. Over the past year, we have brought down the SAE debt by more than 40%, bringing the total outstanding debt down to INR 300 crores. Now coming to the specific businesses. Our T&D business has achieved revenues of INR 2,499 crores with a stellar growth of 17% vis-à-vis Q1 last year. In a significant achievement, KEC received an award by executing the maximum circuit kilometer addition transmission line in India for FY '24 from PGCIL. This esteemed award recognizes our leadership in the India T&D industry. In terms of order intake, the business continues to witness significant traction with a staggering growth of more than 2x; and new orders of INR 5,000 crores across India, Middle East, Africa, Americas, EAP and Australia. We are pleased to share that the business has secured prestigious orders from PGCIL; and both existing and new private developers in India, thereby diversifying our client base in the private developer segment. On the international front, the business has secured significant orders, especially in UAE and Africa. We continue to widen our presence in our tower supply business. During the quarter, we have secured a large tower supply order from Australia, which reflects our dedicated efforts to expand and diversify the tower sales business globally. In SAE, the business achieved revenues of INR 346 crores, a strong growth of 12%; and a positive PBT. The business continues to secure a steady inflow of orders and has a robust order book plus L1 position of over INR 2,500 crores. The business is well positioned for securing orders for supply of towers and hardware [indiscernible] projects in the Brazil's largest auction held by ANEEL last quarter. The overall tender pipeline in T&D continues to be strong in both domestic and international markets. In India, the power T&D sector is going through a very exciting time, with substantial investments being planned to enable the green energy transition agenda. In international, we continue to witness opportunities across Middle East, South Africa, CIS and the Far East. With a record order book and L1 in T&D of over INR 26,500 crores and an increase in tendering activities across regions, the business is expected to gain further momentum and contribute significantly to the company's revenues and margins going forward. Our Civil business has delivered revenues of INR 1,059 crores, a growth of 11% vis-à-vis Q1 last year. As [ conveyed about ], the growth has been impacted by the severe labor shortage during the quarter due to elections. The business has strengthened its order book with multiple orders of INR 1,000 crores in the residential building and different segments [ from the reputed clients ]. In a significant achievement, the business has secured its largest order in the residential building segment, marking its entry in Northern India. With this, KEC is now executing over 70 high-rise towers for market clients pan-India. It has strengthened its presence in key real estate hubs like Mumbai, Pune and Bengaluru, diversifying and expanding its building portfolio while exploring new geographical territories. We have strategically pivoted towards the adoption of new-age technologies and embrace agile working methods leading to execution excellence and enhanced client satisfaction levels. By integrating advanced digital tools such as building information modeling, BIM, document management systems; AI-driven business development, asset tracking and management systems; corporate management systems; and fuel monitoring system for mobile assets, we are at the forefront of technological advancements in the construction industry. The business outlook remains healthy across segments. With a robust and diversified order book of over INR 10,000 crores, we are confident that Civil will continue to be a major growth driver for us. Our railway business has achieved a revenue of INR 471 crores for the quarter, degrowing by 38%. The business is progressing well on the completion of existing projects. During the quarter, the business commissioned the automatic block signaling system for a project in Andhra Pradesh. ABS enhances railway safety, increases line capacity and improves operational efficiency. Additionally, the business is also progressing well on the implementation of Kavach system on over 750 kilometers of railway line for North Central Railway, which will further enhance safety and speed. The business has secured new orders of INR 500 crores in the conventional and emerging areas of metros. These include maiden orders for composite gauge conversion works and power supply systems for Bengaluru metro. With an order book of over INR 3,000 crores from clients across central public sector undertakings, zonal railways, metro projects, private enterprises and international government establishments, our focus remains on fast-tracking the completion of existing projects, optimizing working capital and selectively bidding for opportunities in India as well as in the international market. In Oil & Gas Pipelines, the business has delivered revenues of INR 126 crores, a growth of 21% vis-à-vis last year. The business has commenced execution of its first international project in Africa. It also received approval from Saudi Aramco for bidding for onshore oil and gas pipeline projects. The business continues to focus on building required prequalifications to expand the size of the addressable market. In the renewables business, we are pleased to share that the business has secured its largest order for a 625-megawatt peak solar PV project in Rajasthan. This has enhanced the order book of this business to over INR 1,300 crores. Apart from this, the business is also executing a 600-megawatt peak solar project in Karnataka and setting up solar projects for a leading auto ancillary company in India. Strategically, our focus is on building future growth engines in other areas of energy transition such as wind and green hydrogen. We aim to capitalize on the global shift towards green energy and transportation, supported by government's sustained commitment to promoting renewable energy. Our progress on these initiatives reaffirms our confidence that the renewable EPC business will play a significant role in our future growth. Our Cables business has achieved revenues of INR 363 crores. The business continues to maintain a sustained order book momentum across diverse segments, including T&D, railways, metro, solar and metals. We are progressing well on setting up the fully integrated manufacturing line for aluminum conductors. During the quarter, the business has secured orders for supply of power transmission conductors from government utilities and private TBCB developers. Additionally, in line with our focus on increasing exports, the business has obtained UL approvals for cable exports to the U.S., which is expected to drive growth in the future. In ESG, we continue to embed industry-leading practices across our operations in factories and project sites. As part of our strategy to make all our manufacturing plants water positive, we are pleased to announce that our Jabalpur plant recently received a water positive certificate for its efforts in promoting water conservation. With this achievement, 3 of our manufacturing plants, Butibori, Jabalpur and Vadodara, are now water positive. Now let me update you on some of our key strategic developments, which are led by the relentless thrust of the government on infrastructure development and the rising private investments to cater to the growing demand. Considering the evolving scenario, KEC needs to be prepared to seize the unfolding opportunity. Over the last few years, our cable business has achieved a significant uptick in performance as it clocked it highest-ever revenues, profitability and order intake in FY '24. Besides, we are incurring CapEx into the business, which will result in an increase in scale and size of business. Further, the cable industry is set for significant growth, projected to grow at a CAGR of 10% plus till FY '28, driven by government infrastructure investments, green energy initiatives and rising demand in real estate and industrial sectors. To capitalize on the strong performance and market potential and to bring our sharper focus to our cable business, we intend to transfer the cable business into one or more subsidiaries without any dilution of economic interest of the stakeholders. This will enable optimal capital allocation, enhanced stakeholders' value. Additionally, the strong credit profile of the cable business will enable it to secure funding at more favorable terms. We are confident that this realignment of our business will drive continued growth for the business in both revenue and profitability. Overall, our outlook remains robust across our businesses. The global EPC sector, particularly in India, promises exponential growth opportunities in the infrastructure sector. This has led to infrastructure projects and opportunities being more unique and complex, requiring us to invest in superior capabilities and heavy equipment to bring innovative solutions to play. This favorable landscape enables us to explore organic and inorganic growth avenues within our current operations and adjacent new verticals. It also requires us to make serious investments in the business. Our strategy focuses on strengthening our position in the infrastructure EPC sector while [ concentrating ] solely on EPC activities and excluding investments in development assets. In order to capitalize on the opportunity and as they arrive, considering the market conditions and other pertinent factors, we intend to raise sufficient liquidity through equity. Accordingly, we propose to have enabling resolutions to raise capital, as and when need arises, at the ensuing AGM. The Board has also approved issuance of nonconvertible debenture of INR 1,500 crores, which will be used for general business purposes without increasing our overall borrowings. In conclusion, I would like to convey that, with the highest-ever order book plus L1 of over INR 42,000 crores, combined with a substantial tender pipeline exceeding INR 1,50,000 crores, we are well positioned to deliver sustained growth in the coming quarters. Thank you. I am now open to take your questions.

[Operator Instructions] The first question is from the line of Arafat Saiyed from InCred Research.

Sir, I'm audible?

Yes. Go ahead.

Yes. So my first question is of arbitration award of INR 24 crores. So can you further explain about from PGCIL you receive -- so can you further explain on that and what terms you receive these amount?

INR 24 crores...

[indiscernible] the arbitration -- it was not very clear.

[indiscernible].

One sec. Yes, sir, my first question is on arbitration award of INR 24 crores. So can you furthermore explain about this award, in what terms you receive these and from where?

It's a small award which we received, I think, from [ Delhi Transcorp ]. It's an old arbitration which has been going on for, I think, more than a decade. And that award has come in, and so that's why it has been accounted for this quarter.

Okay. And sir, coming to next question is on, let's say, Kavach. So can you furthermore explain about what kind of opportunity you're looking in this space and where KEC stand, in terms of, let's say, KEC, we would do EPC work largely, right? So from where we are getting this technology. And what's the outlook for KEC in this space?

So Kavach has been talked about a lot. Even now, we are still waiting for some tenders to come in. Although, for some announcement that we'll have some tenders coming in, in the next couple of months, we are just keeping our fingers crossed that those tenders come in. I think the basic issue which I am seeing in these coming out is that the number of players who have the equipment are very few. And their capacities are limited, which is why if you look at even the existing orders, the execution has been pretty, I'll say, slow. And even our orders which have been going on for some time, we have been facing some issues across execution because of a small size of all the equipped manufacturers. So we have a tie-up with 1 of the 3 approved vendors and we will continue with them.

The next question is from the line of Priyankar Biswas from BNP Paribas.

So sir, my first question is pertaining to your cable business. So you are going for creating a separate subsidiary, so to bring more focus, so just wanted to have a few questions on that. So what is the growth target for you? What sort of CapEx should we expect based on that? And since you also highlighted that there may be favorable funding costs, so what can be the delta? And what is a typical ROCE of this business?

So Priyankar, the ROCE is actually more than [ 100 ] because it's -- almost operates on a negative working capital because we generally sell 30, 60 days and all that; and you buy at 180 days, et cetera. So typically we have seen that this business per se does not require too much of a capital for day-to-day operations, okay? We have been investing. I think, in the last 2 years, we would have probably invested around 50 crores, 60 crores or maybe slightly more than that. And the current year, we'll probably be investing another 100 crores in this business. So with that investment right now, we expect that in 2 years -- so last year, we did around 1,675 crores or so, okay? This year, we are expecting to grow by another 20%. And going forward, next 2 or 3 years, I think we should be growing again by the similar number, 20 crores, 25 crores, without any significant investment right now. Once we decide to -- once it is [ subsidiarized ] and then it is able to raise its own capital, et cetera, then we may decide to grow in a -- invest in a much larger manner, but today with the current investment which we have made in the aluminum conductor -- and we are also making investment in some other processes and technologies, which will require roughly around, I think, 80 crores, 90 crores of further investment during this year. We should be close to reaching a turnover of almost 2,800 crores, 2,900 crores within FY '26 or so. I think that's the way the plan is.

So sir, like given the capacity what you have, let's say, after this 100 crores that you will invest in this year. So what sort of peak revenues can you make? Because since you have got approval to export cables to U.S., so there will be additional opportunities on top of that. So what can be the peak level based on the capacities you will be putting...

So Priyankar, based on today's metal prices, we could do around 3,000 crores or so, okay? If the metal prices go up, you can do better, or if the rupee depreciates. Ultimately it's a function of the raw material costs where it is. However, we still have some healthy capacity available with us, so we'll have to see how it ends up, but I'll say broadly around 3,000 crore will be the capacity in terms of revenue after the current investment.

And sir, okay, [ if I may ] just add on. So like, if I remember, sometime back, in the transmission space-wise, there are a lot of tenders and orders that is coming through, but you were also highlighting in the past about supply chain constraints, especially transformers, and, let's say, equipment supply disruptions to Middle Eastern projects particularly. So where are we on that currently?

So the supply chain issues are still there, but they are not as bad as they were before. It's slightly easing out. Many of the players have started expanding their capacity, okay, so I think, from Q3 onwards, we do expect that a lot of additional supplies will start coming in. Q2 will still be a little bit of a challenge in terms of supplies but not as bad as last year was, okay? So that is as far as, I think, conductors. And even transformers [indiscernible] we are slowly seeing expansion happening. Middle East is an issue where the supplies were from Europe. I think now they are getting it sorted out, so I think, from Q3 onwards, we do expect that this situation should start improving significantly.

So Q3 or Q4 maybe, more or less a normalcy. Can we expect that?

Yes.

[ We'll ask you to ] come back in the queue because there are so many people...

Sure, sure, sure.

The next question is from the line of Bhoomika Nair from DAM Capital.

Sir, just continuing on the Cables side, if you can just elaborate on where our margin profile is now. When you've seen this revenue growth to be fairly robust over the next 2 years, how are you seeing the cable margins actually moving?

So Bhoomika, one of the reasons why we want to subsidiarize; and to bring bigger, greater focus is our cable margins are at least 200 to 300 basis points lower than the market, okay? We do expect that, with focus and all that, probably in the next 2 years or so, maybe 3 -- I don't know how quickly we can, but we would expect it to at least reach 9% or so, whether the market we are seeing generally is 10% to 11%. I think we have been a little bit underinvested in this business. We have started investing, so I think, in 2 years or so, we should see at least a 200 to 300 basis increase in the cable margins.

Sure. So the other two was, this quarter, the revenue growth has been relatively muted because of the elections and related issues. And 2Q being a very strong monsoon [ aspect ], do you think there is a risk to our annual guidance of a 15% kind of a revenue growth? And if not, I mean -- and you're seeing a very sharp pickup in the second half, particularly the fourth quarter. You think, given the time line of executions of our order book, this should be achievable?

100%. I don't think we have any doubt and especially if you look at the order intake which we have had, okay? I think -- I don't think we have a choice but to deliver and probably deliver more, but I don't think I want to commit right now. I don't think we are even worried about the 15% growth. That's why, in the earlier question, I did answer that supply chain woes are coming down slightly. Our own conductor manufacturing will also start. And I think slowly we are seeing some light at the end of the tunnel in terms of capacity, et cetera, so as far as 15% growth is concerned, I don't think we are worried about it, but yes, you are absolutely right that H2 will definitely see a pickup. The numbers have to go up. We are trying to see if we can give an increase in Q2, but that looks difficult with the way the monsoon is behaving, okay? But overall I don't see any risk.

Okay. Sir, just if I may squeeze in one question more, in terms of the debt profile and the working capital which has expanded. How are you seeing that kind of panning out in terms of the working capital given that [ SEC accelerated institution ] in the second half? Could there be a possible increase in the debt levels, which is why we have actually taken the enabling resolution for the QIP?

I don't think that is a way to look at it. So honestly, the Q1 debt levels are -- although they are okay, see. When you look at the revenue increase, we would have [ locked ] them to be a little bit lower. We had some delays in some receivables and all that and primarily because the government passed an interim budget. They did not approve some items. And so there was some funding blockages in some of the government projects, especially on the water side, et cetera, where allocation has now been made and we already started receiving funds, okay? And there are some other payments which -- now that projects are getting over, I think, which should come, so I don't think we are too much worried. The enabling resolution on QIP is a different ball game. I'll come to that. The NCD part was also to that purpose so that we can smoothen out our borrowing, et cetera but not to increase borrowing. As far as QIP is concerned, I think we are very clear that there are 2 purposes for which we would like to do as and when we do it. Right now it's only an enabling resolution. I don't think we have anything on the card immediately today or tomorrow, but we have basically said that we want to strengthen our balance sheet. There is a lot of discussions going on and saying that, with the margins profile which we had in the last couple of quarters -- last couple of years, we have been hoping that the margins will increase further and the balance sheet will get strengthened immediately. If that doesn't happen [ for some time ], we -- then obviously we would like to strengthen our balance sheet. The second piece, which I talked about, is you are seeing what is happening on the infra side. A huge amount of growth is happening. There are a lot of opportunities which keep on coming up. And today, we don't have the luxury of waiting for 3 months, 4 months, so -- and since we did not ever have a enabling resolution, we wanted to have an enabling resolution available with us which can cut short the time of an acquisition by maybe 60 days, 75 days or so. So that was the whole purpose. Maybe, a part of it, we may use for debt, but -- debt replacement, et cetera, but I think it's a little bit too early to talk about it right now. It's just we just wanted to arm ourselves with a resolution so, if there are opportunities, we go ahead [ up with it ].

The next question is from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on a decent quarter. Sir, my first question is on your stand-alone margin. So again, straight, 10th quarter wherein we have seen the margins coming off, adjusted for arbitration, about 4.5%. So what is still plaguing these stand-alone financials? I mean, why are we not seeing improvement here? So which are the segments where you see, continue to see the pain? And when do you think the worst will be behind us?

So Parikshit, I think there is some improvement in the standalone vis-à-vis earlier, but to me, I think probably the -- Q2 will be the last quarter where we will see some pain, because what has happened is that most of our legacy projects are in the standalone, which is why they are getting over now. And the railway business, we have been having some issues with the margins. So since railway is in India, in the India book, stand-alone books, that is why we are seeing some more problems going on, but I think worst case to us will be Q2. From Q3 onwards, I think you will start seeing standalone improving because then, the entire T&D portfolio, which you are now seeing, the execution and the supply for the newer projects will start happening. So I think we'll probably wait for 1 more quarter. Q2, obviously -- there may be some improvement, but I don't see a significant improvement in the standalone, okay? And as I was talking earlier, we are seeing a lot of orders coming in from Middle East, a lot of tower supplies. So they are part of our subsidiaries. Then you have SAE which is doing better. That is again -- so that's why you see a large part of the, I'll say, improvement getting reflected right now in the consolidated, but I think, from Q3 onwards, the scenario will change, where standalone will also start contributing.

Okay. Second question is on fund raise. So INR 4,500 crores looks to be a very big fund raise, so my questions is, in a way, like we have been [ adding about ] 15% growth. So do you think -- what this quantum of fund raise can do on growth. And we have largely been doing EPC projects. Do you think that now there's a scope wherein we can take, start taking some equity exposure with maybe financial investors and when -- wherein we need to put in some money so that can add incremental to the growth. So what will this fund do to your growth prospects, [ resetting it ] above 15%. Secondly, on -- I think you touched upon deleveraging, so partly I understand your goal towards deleveraging, but -- and thirdly, on the equity side. So if you can give some sense, like, whether we will only be an EPC company. And we'll start looking at some of these opportunities coming up in the power side on renewables side on the equity CapEx.

So Parikshit, I am very clear, on the third question, that we will continue to be an EPC company. We have no intention of becoming a development company because we've got enough opportunities, okay? There's the -- [Foreign Language], but as of today, I don't think we even have a [ risked profit ] of saying that we want to become development, so that's clearly ruled out. Secondly, Parikshit, if you look at our growth: We grew from 500 crores 20 years back to 20,000 crores today. And we are not raised at capital at all. At some point of time, we felt that maybe there's a need to raise some capital. So we are still debating it internally with our Board and with everyone else, saying that should we raise some capital to strengthen our equity or debt profile, although we are very confident of our margins coming in H2, et cetera, but we are still debating it. The third piece which you asked is on the growth profile. So clearly, right now we are on a trajectory of 15% or so. If we have to do and if we do a large -- because you're right, that the amount is large. If we have to put that money, obviously acquisitions and all will have to be large. So that -- to me it would take your growth profile to maybe 25%, 30% from the 15% immediately.

Okay. And just the last question, sir, on the 2 businesses, cable and the conductor. So I just wanted to understand. You highlighted clearly on Cables growth path but, on conductor, the CapEx which you are incurring, what kind of top line it can give in, say, 2, 3 years time. And between the 2 businesses, what will be the captive consumption? And what will be the third-party kind of sales?

So the number, Parikshit, is around 600 crores should be the turnover at full capacity; and that should come in next year. So we expect to commission it in Q3. So Q3 and Q4, we'll probably get 100 crores, 200 crores of revenue out of this business, but next year, FY '26, we'll have a full 600 crores of revenue coming in. Obviously our choice, our first preference will be to supply it to our own projects, but we don't want to be fully captive, so at least a part of it will definitely go to third party. We've already taken a couple of orders, both from utilities directly and from developers, to supply because we want to keep the product in the market also, but I don't have a number. But probably 60%, 70% would come through our own projects right now, okay? Going forward, we'll see. And if this works out well -- I mean expansion of this capacity is not a very difficult thing. 6, 8 months, 9 months, you can always add more capacity if it is required.

Okay. And on the Cables business, what will be the captive? And out of the 3,000 crores which you are targeting this year, how much is captive? How much will be third party?

So I don't know, out of 3,000 crores, what will happen, but typically we have been having around a 20% captive, okay? So [ out of the ] 1,600 crores, roughly around 300 crores, 350 crores would have been captive. And the balance captive will depend upon how much of this conductor is sold outside and all that. So to me I don't think captive will go beyond 25%. May be 30% at the most.

But in future, [ when you ever list this company ] -- I mean because now you're putting it out in a subsidiary and with improvement and when -- a targeted improvement in margins 9%. And this business may get better valuation, so do you think at some point in time you would think of separately listing it out?

Difficult to say today, okay? Difficult to say today. We'll have to see how the business pans out in a few years, okay? I would not like to say yes or no, but I think we'll have to see how it shapes up. And then depending upon the numbers that it generates and the interest that it may have, I mean -- I'll not either rule it out also, yes or no to it, but if it's something which we can -- always we look at after maybe 2 years or so. Once we reach a 3,000 crore revenue and it's sizable revenues, then we will take our call as to what is to be done.

The next question is from the line of Shrinidhi Karlekar from HSBC.

So very strong order prospects pipeline that you have with INR 1,50,000 crore. It's a jump from INR 1,30,000 crore you have had a quarter back. So would it be possible to share how it split across domestic and international? And within the domestic side, how is it across your various segments you operate in?

You needed -- what -- sorry. I could not hear you clearly.

So the breakup of order prospects pipeline of INR 1,50,000 crore...

Okay. I think roughly around 40% or 45% is in transmission, okay? And the balances are spread across civil and renewable and also part of it in Railways, but around 40%, 45% is in T&D. And in that I think roughly half of it is India and half of it is international, in the T&D piece.

And the non-T&D will be India, right?

Non-T&D is, I think, almost India, except -- yes, I think, except a little bit of renewables could be outside, but it's largely India.

Right. And sir, second question is on the order book. You have a very strong order book of almost 40,000-plus. Sir, within that, how are contractual terms both in terms of price valuation floors as well as payment terms versus the last cycle you have had?

It's difficult to give you a straight answer because we are running 300 projects and each of them has got different [ lists ]. So broadly what happens is in civil you will have a pass-through on cement and steel. That's a major cost item there. In transmission it will again depend upon contract to contract. So some of them have got a pass-through. Some of them are fixed price. In some of the Middle East countries, it's pass-through till they sign the contract. The day you sign the contract, it becomes fixed, so I'll have a -- I'll not be able to generalize it. But just to add that, wherever we have a fixed price the day we get a contract, we go ahead and hedge it. So if you want to -- if I were to make a statement: I think the metal risk today on our order book is virtually 0 as, of today, okay? We are more or less hedged fully on our metal exposure, except for steel, obviously, but steel cannot be hedged. But I think steel prices have been generally benevolent, so I am not too much worried about it today. As far as the payment terms are concerned, standard payment terms are always 10%, 80%, 10%. 10% are advanced. 80% will be progressed, milestone and all that. And 10% will be retention. Most of the clients give us a retention against our bank guarantee, but many don't do it, okay, so -- but those are the standard payment terms, 10%, 80%, 10%.

Great. And then just one on -- a similar question is on the electrical equipment that you need to procure from capital goods companies. Where you are hedged in terms of, like, back-to-back orders you place after you get order.

Sorry. What is the second part?

The electrical equipment like transformers and switchgears that you would be procuring. How are you hedged against inflation in that product category?

So typically most of them will be on back to back. Typically most of them will be on back to back. In some places where they are not in back to back, they're with the help of our supply chain. And we do provide [ firming up ] of the metals, okay, but largely they would be on back-to-back, I'll say, largely.

The next question is from the line of Riya Mehta from Aequitas Investment.

In terms of Cables, I wanted to ask like which particular SKU or which particular sector or the end use are we seeing greater demand coming from.

Solar.

So that will be power cables. And that will be [ native mostly ].

Yes, that will be -- it's almost, I'll say, 100% domestic, as far as the solar is concerned, yes. And a little bit is also now coming in from T&D also, but it's largely solar-driven demand.

Roger, got it. And in terms of conductors, we -- what would be the captive use? I think for cables you mentioned 25%, around, but for conductors, how much will be captive?

Conductors will be probably 60%, 70%, as I said earlier, okay, but that's a choice which we have. We have enough demand to consume 100%, okay, but instead just making a 100% captive product, we would still like to keep it as a market product. So we've already taken a few orders from utilities and other developers. So it will obviously depend upon how much we can get from outside for our own supplies, for our own requirement. I'll say 60%, 70% would be captive in aluminum conductor, at least now. We have enough demand for it internally.

Got it. And in terms of shortage of labor, as you mentioned earlier. So in which category are you seeing it? Are we seeing it at the very base level or at the engineer level? Or where are we seeing manpower -- or lack of supply? [ And are you seeing it through ]?

So yes, yes. So it starts with base. Base is not that bad. It's there, but it's basically people like carpenters, fitters, electricians, masons, so what we can call semiskilled or skilled. Those are the people where we are seeing problems in the civil. If you come to T&D, there's people who do [ erection. The erection gangs ] are there. So I think those are the levels. Engineers, I don't think we are seeing any issue at all. And even above India, recently we just hired -- we have added 300 fresh engineers, postgraduates and graduates to KEC, so at that level we are not seeing a problem. The problem is at the semiskilled and skilled worker level, painters, for example, yes, those people.

Got it. And the cable facility will come by in what time?

The aluminum conductor should start production in Q3.

Cables, cable...

Cables -- we have only aluminum conductors, nothing else in cables we are adding.

The next question is from the line of Amit Anwani from PL Capital.

So I wanted to understand more on...

I'm sorry to interrupt, Mr. Amit. Your voice is very low. Could you speak a bit louder...

Is it better now?

Yes, sir. Can you please use your handset while speaking?

Yes, yes, just -- better?

Yes, sir, better.

Go ahead.

Yes. Sir, I just wanted to understand more on SAE Towers. You did highlighted about the repayment and, I think, INR 300-odd crore debt still there, so just wanted to understand. What -- are we targeting further reduction? Or is the interest there now? And the order inflows and the growth target for this year for SAE Towers.

The interest cost there has come down to around 10.5% now, okay, but debt, we'll keep on reducing. Once -- as and when -- since they are making money now, they have a profit, so cash flows and all of -- is reasonably okay. So most of the debt reduction which has happened now has happened from their own cash flows. I don't think we have put in money now for over 1 year or more...

Yes, 1 year.

1 year. So we are not putting any money, so all that debt deduction which you are seeing is coming from their own cash flows. Business-wise, I think we are pretty okay with them, 10%, 12% growth. They can't grow too much because it's ultimately a manufacturing facility. So unless and until we put in more, a lot more, money; and expand their capacities -- right now we have some capacity available, so depending upon how the order flow pans out -- we will probably do a little bit more. Right now we're talking about 10% to 12% growth.

Sure. And next, sir, on the -- you did highlight it on the renewable energy business that we are seeing a significant opportunity. And we are doing capability building, so I just wanted to understand, if you could highlight, which part of the business and -- capability building is happening. And any pipeline sort of bear in mind? And seeing the competitive environment there, what kind of margins? Any more colors you could give on the renewable business strategy for us for next 1, 2 years?

Okay. So like margins typically will be 8% to 10% in this business as of today, okay? Capability build, we are trying to do across all the verticals, so for us it is solar, wind as well as green hydrogen. Solar, we already have, I'll say, decent amount of orders. We have been a little bit cautious in taking orders, but I think we are right now 2 large orders. And we'll continue to bid for more, so maybe we will pick up 1 or 2 more orders during the year. [ That's the way ]. And we are trying to build more capability on engineering, trying to see -- we had a [ solar ] manufacturing earlier in terms of the module-mounting structures and all that, so we thought we'll add something, but now with transmission being so much -- factories are completely full, so there's more capability added on the engineering and execution in solar. As far as wind is concerned, we did not have any capability, so we are trying to build capability to design, code and execute. So the -- if you look at the easy part of it, we can do it very easily. We are still trying to work with some of the OEMs and all that to see what else can be done. I think, in a couple of months, our capabilities and all should be in place in wind. Green hydrogen, I think it's still far away. We have built some capabilities. We have [ voted ] for some projects, but I think there is too much of competition right now. Everyone wants to show that [ they have ] green hydrogen projects, so they have been bidding crazy. I think it will take some time. We have hired a couple of people on the integration side because we want to be an integrator of green hydrogen rather than being a manufacturer somewhere. I think it's some time away, okay? I think that's the way I'll say our renewable will be. We will start seeing some ramp-up in the renewable revenues in the coming years, yes.

Sure. Sir, lastly, on the domestic order intake. Does -- now we are expecting that, Andhra Pradesh again, the redevelopment works will start in a big way. Does that add anything or announce a domestic pipeline for next 12, 18 months? Any thoughts you would like to give on the Andhra Pradesh opportunity for us?

So to me I think it's a good opportunity. And we are waiting and watching, okay? I think we will see what actually happens [ on the ground ], honestly, but I think you are right. It's an opportunity, so I do think that something out of that will definitely come out in the near future. Amit, I think you'll have to [indiscernible] question too, yes.

Yes, yes.

[Operator Instructions] The next question is from the line of Mahesh Bendre from LIC Mutual Funds.

Sir, you spoke about the transmission opportunity. I mean we are a premier player in this segment, so over the next 5 to 7 years, how big this opportunity looks like for us in terms of ordering.

So difficult to answer this because, when you talk to -- if you look at the national transmission policy and others and then when you look at we're almost talking about 500 gigawatts of renewable and also look at the power demand, to me -- we have always been talking about [ 70,000 crores to 80,000 crores ] between the states and central. That will be there in any case. It may grow further, the way things are happening. And if really government actually spends -- or pushes for this 500 gigawatt -- and this green -- this energy, renewable is not considering even what you require for green hydrogen. What government has been talking about is, green hydrogen, they want to do more. So difficult to say, but at least to me, 20%, 25% increase year-on-year for next 4, 5 years should not be a challenge at all.

Because, I mean, the government CapEx is around 3.5 lakh crore. That's what they are talking about by 2030. And going by the generation side, this number looks very low in terms of historically how it has been spent on transmission side and generation side.

So yes. I understand that. We are keeping our fingers crossed that this number goes up. I said this number of growth is based on what has been happening, yes, in the past; and also because of the inability of the states to fund. So I think the joker in the pack could be how much does the, do the states spend. Because today, all this is coming on intrastate. So intrastate and all that, we have not seen too much happening. In fact, if you look at our order book, our state order book would be probably 10%, 15% of our entire India order book, which needs to definitely go up because ultimately power [Foreign Language]. So I think the whole thing will happen on how the states are given money. Or they raise their own money. Or how do they do the distribution reforms and start spending money on the intrastate lines?

The next question is from the line of Jayesh Shah from Ohm Portfolio Equi Research.

Sir, am I audible?

Yes, you are.

Yes. Mr. Kejriwal, I think you've done a very impressive job on working on the margins and cash flow, given the overall constraints of the EPC business. And I think my question is similar to some of the other questions that the other participants had hinted, that if you look at the entire transmission space, the higher margins or value additions are perhaps not in the EPC but in associated areas, whether these are products or whatever components or whatever else you can do. And hence, we have seen [ oil ] companies doing so well, while KEC has kind of lagged behind in that area. I have a simple question. And I think this is a question which you may also have been grappling with that. Is there any way that you could transition from just being an EPC company to a product company? Given that the sector tailwinds are so strong, supply shortages are there. If at all KEC has to make this change, the time is now or never. How would you look at it? Because I know, as an answer to a previous question, you have said that you would like to do only EPC. You would not want to be developer, but I will still provoke you to give your thoughts here to all of us to understand better. Because we believe that KEC is capable of doing much more than just EPC.

So we -- Jayesh, we have been -- these ideas keep on coming everywhere and every time we discuss this. So if you look at our current year revenue, almost 30% of our revenue should probably come from product sales, okay? Just so -- and then not through our own projects but third party. However, we did feel that, that starts from a place where we want to be. And this is a reason why we are also moving cable into a subsidiary. Otherwise, the product sales, [ there are not probably more of ], but what we are doing is in, whatever area we have core, that is our tower manufacturing, which in a way is a product company -- it's product sales. So there we already expanded our Dubai capacity. We are expanding our Jaipur facility also. Even in SAE, both Mexico and Brazil, we have added a lot of equipments. We are expanding our hardware capacity. We are also working on backward integration of our supply chain where [indiscernible] and manufacturing, et cetera, and other pieces. We set up a PVC plant in our cable factory. I think, beyond that, we have no intention right now of moving into products. See, Jayesh. Today, you may look at it and say there are shortages or, "Your products, the product is good." Look at 2 years back, 3 years back. What was happening? The same conductor guy who today wants a 12-month delivery schedule for me used to sit [ outside my cabinet ] said, "Please [ take them until tomorrow ]," okay? So it's a question of what happens either today [Foreign Language] on products, we'll have made full investment, et cetera. Then the investment guy said, "I still remember. 2 years back, my tower factories were running at 50% capacity." So I think, as of now, we do not have any intention. [Foreign Language] nobody knows, but I think we are happy being a [indiscernible] company. And we prefer continuing with that.

The next question is from the line of Chinmay Kabra from Emkay Global Financial Services.

Sir, I just had a question regarding the order inflow guidance. So since you have already achieved approximately 30% of our initial guidance, is there any update on it going ahead? And if you could also just help us with the -- if there's any change in other guidance like revenue or margins.

So Chinmay, as of today, we have got no change in our guidance. We still stick with 25,000 crores of order intake, 15% growth in revenue and 7.5% for our EBITDA.

Got it, sir. Other than that, I wanted to know if you could provide a time line on when is the management maybe planning to go ahead with the subsidization of the cable business.

Since we have already approved it, we are right now -- the approval came only on Friday, so now we are in the process of getting our valuations and other things done, and also legal and other approvals, et cetera and looking at what is required, okay? Although, since we are planning to transfer to 100% subsidiary, it should be relatively an easy task, but give a time frame is a bit difficult. Maybe between 3 to 6 months is what we are looking for, yes.

The next question is from the line of Deepak Krishnan from Kotak Institutional Equities.

Sir, I just wanted sort of just -- [indiscernible] in terms of sort of a rating downgrade a couple of months ago from one of the rating agencies...

Deepak, we can't understand. I can't understand what you're saying. I think there's a line -- problem with the line...

Can you hear me now?

Yes, slightly better.

Yes. Go ahead.

Yes, I just wanted to understand. So you had sort of a rating downgrade a couple of months ago from one of the rating agencies, so where are we on that? Like do we think that something could kind of incrementally change towards the positive in the next couple of months? And does the capital raise or a potential capital raise have anything to do with our ratings as well?

So to me, speaking -- to get a rating upgrade [indiscernible] that takes 6 months or 9 months maybe...

[indiscernible].

Or 1 year before they revisit, yes. Clearly, if we do our capital raise, and it's first time, [ we will manage it ]. Then obviously we'll go back and we'll present to them. And we do hope that, that can happen. That is also somewhere in the back of our mind, but let's see. I don't see the upgrade happening immediately, unless we do the [indiscernible] very quickly, which is what right now not on the card. Yes, Deepak...

Mr. Deepak, does that answer your question?

Yes, sir, yes. I just got disconnected for a second. Just one follow-up: Just wanted to understand like in terms -- like we've reiterated about 7.5% EBITDA margin guidance for this year. Do we kind of see this momentum continue? And is double digit guidance in the works for FY '26 in terms of margins? How are we today in terms of thinking of that?

FY '26, we definitely expect to increase it. So if you look at our Q1 margins and then if you're talking about 7.5%, so obviously the H2 margins will definitely be better than 7.5%. Otherwise, we'll not reach an average. Whether it will be double digit or not, it's very difficult to say right now, but I do expect that it will be definitely better than the 7.5% which we have this year. Whether it will be 9%, 8.5%, 10% is a little bit difficult to quantify, but I am very sure that it will be more than what we are talking about this year.

The next question is from the line of Uttam Kumar from Axis Securities Limited.

Sir, you mentioned that you have received some INR 160 crores from Afghanistan. So what is our [ speaking ] amount currently from Afghanistan?

Yes...

Current amount. [indiscernible]?

Yes. Roughly around 200 crores or so.

200 crores, okay. And sir, you mentioned that this year you will spend some 100 crores on cable business, so what will be the CapEx for this year, FY '25, including this cable one?

What -- we are targeting around 350 crores to 400 crores.

The next question is from the line of Vaibhav Shah from JM Financial.

Sir, for the Cables business. So we did revenue of around 1,450 crores in FY '24, so what kind of number are you looking for '25 and '26? As you mentioned, that in '26 we can reach around 2,800 crores, 2,900 crores, so what would be the growth in next 2 year?

So this year, we are talking about around 15% to 20% growth for FY '25, okay? And FY '26 will be higher because our entire aluminum conductor manufacturing will be in place. I think, on an average, we'll be around 20% growth is what we should be achieving in Cables.

So '26 revenue including conductor should be around 2,800 crores, so it should double? So -- of cable revenue.

Vaibhav, I think, summarize the numbers. [ And we have ]: FY '24, we did 1,675 crores of revenue in Cables, okay? So this year, probably around 2,000 crores is what we should be looking for; and then around a -- maybe a 20% rise year-on-year for the next couple of years.

The next question is from the line of Priyankar Biswas from BNP Paribas.

Just one quick question. So I just wanted your outlook on the Middle East CapEx since, I think, in the Oil & Gas you mentioned about Aramco. And if you can also highlight like the Middle East transmission pipeline, let's say, for the next 2, 3 years.

So Priyankar, Middle East is doing very well in terms of transmission. Both -- I mean, see, it was earlier restricted to Saudi, but now we are seeing a huge amount of CapEx coming out of Abu Dhabi also. So today, these 2 countries are leading the charge; and we are very, very positive on the CapEx on both these countries. Till last year, our exposure was more concentrated on Saudi and in a way a little bit on Oman, but this year, many of the others which we announced have all come from Abu Dhabi, okay, whereas we now have large elements in Saudi also, so which will come in. So it will now balance between the 2 countries. And we are also seeing a very large pipeline of tenders both in Saudi as well as in Abu Dhabi, okay, so it's roughly -- we are pretty positive. And you will look at international T&D today. So most of the orders are coming in from the Middle East region.

Sir, if you can just elaborate on Aramco. That's what I had asked. [ Out of Oil & Gas ], you were saying that we were qualified on that.

So Aramco, I think, will take time, okay? We are in no major hurry in Oil & Gas. I think we are happy with what happens, happening in T&D. So we have started looking at that. I don't think we have bid as of now. I don't think we have an intention of bidding immediately, but we just [ took off ], and we will see what to do.

The next question is from the line of Riya Mehta from Aequitas Investments.

I will -- just wanted some further insight in terms of Kavach policies. And I think the [ allocation into mergers also ] increases, so could just give a macro outlook on the same?

See -- although, I think it's gone up by 1,000 crores or something, if I'm not wrong. The issue which I'm seeing is that there is some discussion going on, on Level 3, Level 4 -- which level -- I think they're right now on Level 2 of Kavach, so I think government has been debating that piece. That's my understanding, which is why orders have not been -- tenders have not been coming. Also that capacity has been limited. So we do expect that, in the next couple of months, a few orders will start coming in, but unless and until they approve more vendors and the capacity goes up, it looks difficult; or they sort of change the levels and start allowing international players who have this technology to come in. So a little bit difficult. I am not, honestly, seeing too much of opportunity at the moment, okay? If there's something different happens in a couple of months -- because as of today, there's no tender out, which means that, [ the next period that a ] tender comes in, the process is 3, 4, 5 months per award and all that. So I am not seeing any major revenues flowing in from Kavach. Even if it happens -- the order intake my happen, okay?

Got it. And there were articles, news articles, that were saying that the oil and gas orders which were coming in from Saudi last year, around, has slowed down a bit. And I think even [ L&T ] has a similar outlook. What kind of traction are you looking from that geography?

We are, honestly, not there in that geography for Oil & Gas. We have got approvals. We've been looking at more on the water side there other than oil and gas. What we understand from whatever, we have also read the same thing, is that they have put on hold some of the projects they don't want, although they are continuing to invest a lot. So it's not that they have stopped investing but seem to have become much more selective in their investment. Similarly, to comment to Abu Dhabi: We are seeing [indiscernible] going ahead with some significant investments in oil and gas, okay? So between the two, I think large investments are still happening but not to the extent which people were talking earlier.

The next question is from the line of Shrinidhi Karlekar from HSBC.

Sir, you alluded to very strong return profile that you have in your Cables business. And this is despite about 200 to 300 basis points lower margins versus your peers, so may I ask you to be -- elaborate how is -- in terms of asset turn profile as well as the working capital profile of this business?

So clearly it is -- if you're asking about asset turnover, I think, if you look at the numbers which we have been talking about, let's say aluminum conductor, [ I'm guessing ]: We'll invest 60 crores, and we'll get a 600 crore and all. And similar, new investment is we are talking about 80 crores, 90 crores. Again we expect a revenue of 600 crores or so. So typically when we do an expansion of an existing, in an existing facility, let's say around 7x to 8x is, has been the asset turnover. Obviously, when you set up a new facility, like what we did in [ Vadodara ] many years back, it was around 3x or 3x to 4x.

Right. And sir, how is working capital profile, sir?

Working capital as of now is negative in the sense that we are buying on credit and selling a little bit on a lower-credit period and all that, so we are not investing on that.

Okay, so there are acceptances you have on the trade payables side.

Yes, yes. Acceptances and also interest-free credit, but it's basically your [ creditors ] are more than your...

[ And so inventories ]. And how large is the receivables profile in terms of days?

For cable business [ it is coming in at around ] 75 to 80 days.

75 to 80, got it, yes.

The next question is from the line of [ Jay Jain from Beyond Capital ].

Can you throw some light on the L1 [ of your ] 41,000 crores? Which are the major orders here? And can you give a breakup of your transmission, T&D, business; and other businesses [ of this ] 41,000 crores?

So on the L1, typically we don't give breakup in details, but almost 90%, 95% is in T&D, okay, and split between India and international. In fact, international probably in L1 is more than India, okay? 41,000 crores, what breakup do you want?

Just the split between T&D, and geographical split.

So T&D will be roughly 50% of it. And the rest will be non-T&D, okay? And geographically, it would be around 74% is domestic, 74%, 75%. 25% is international.

The next question is from the line of [ Prateek Lambe ], an individual investor.

Sir, my question was on international T&D order book currently. I want to understand, sir. How is it that I can look at it, going next 2 years, in terms of strategy that KEC would have on building its international T&D business, whether in terms of executing EPC projects or the pure-supply orders? And also on the margins and the geographic region that we would be targeting mainly.

So [ Prateek ], if you'll look at our geographical spread on T&D. And I'll say, probably if you look at it, one is our what we call our neighboring countries, which would be Nepal, Bangladesh, Sri Lanka, et cetera, which is where we had a very strong presence. However, of late, we are seeing the orders coming down slightly, okay? I still remember. 3 years back, my Bangladesh revenue was more than India revenue in T&D, okay? So that's one region where we see, I'll say, a consistent flow. Maybe for us a revenue of 800,000 crores is what we are looking at. Depending upon what happens in Bangladesh, it -- the revenues can go up. Second is obviously Middle East, which is obviously our largest region. And as I was answering the earlier question, we are seeing a huge potential between both the 2 large countries of Saudi and Abu Dhabi. So those would -- that would be our biggest focus area in terms of T&D. Africa has started picking up now. I think, from -- with what had happened in COVID, where the entire funding had dried up and the funding had been diverted to more humanitarian issues, now we have slowly started seeing projects coming up. Even we had announced a large project sometime back, and we are still hopeful of getting some more. So Africa will slowly start coming back, okay, from 500 crores to maybe 1,000 crores an order. That's what we want to look at it. Then the next piece [ where we are ] is East Asia, which is basically Malaysia, Thailand, Cambodia and all those regions. Those have typically been 400 crores or 500 crores for us, and I think that's where we still expect them to stay. We are not seeing a significant bump up happening in that. The place where the increase can probably come in is the former Soviet Union, CIS regions, where we are already doing 2 projects. And we have some more tenders which are coming up. And hopefully, if the war subsides and all that, then we will see a lot more growth coming in from the former Soviet Union. That leaves out Americas, where we don't do what -- EPC. We only do tower supply. And there we are seeing a large growth happening both in Brazil, Mexico, United States; and also countries like Peru, Chile, Colombia, the South America part of it. So that's an area where -- we look at very positively and do expect that tower supplies to that region -- and to Australia is the last piece, where we are seeing some very large projects being announced are happening. So I think that's the way we are looking at it. Our international is roughly around 5,000 crores-and-odd, so I don't see it growing by 30% or 40%, but I think it should grow reasonably. That's the expectation we have because we also need to keep in mind the geopolitical risks, et cetera. So we want to keep a balanced -- between international and India.

Yes. So will the international growth be ahead of the domestic? Or how do you see that?

Sorry. What did you say, international...

Will it be ahead or more than the domestic T&D growth...

So international is growing, but India is growing much more than that, so I don't see international growth being ahead of India. Right now, the way India is growing, I clearly think that India will grow more than international. At least in absolute numbers for the next 2 years, we see India growing far ahead of international, in terms of absolute numbers. After that, the growth percentage may be similar or different. I'm not sure, but India will definitely be more than international. I can say that.

The next question is from the line of Bhoomika Nair from DAM Capital.

Sir, I just wanted to understand the Civil business. For the last couple of quarters, we've kind of stagnated in terms of the order intake, so are we seeing any improvement per se? And what is our outlook in terms of growth [ out the year ]?

So Bhoomika, Civil, if you -- what is actually happening in Civil is that, at least as far as we are concerned, we have not seen too much on private CapEx side. So what has happened is that the industrial order flow has come down, I'll say, significantly. The growth is primarily getting driven by residential as well as, to an extent, commercial. Even on government side, we have not seen a -- major what we call public spaces, like let's say hospitals and airports, et cetera. I think they have all gone slow either because of elections or whatever, so I think, now with the budget behind us, I do expect that this part will start picking up. So residential is looking very, very bullish even now, notwithstanding whatever has happened on [ capital gains ] and all that, but number of inquiries which we have on residential is very high. Industrial, we have started receiving inquiries, so I do hope that, that will pick up. The other major areas where we were there was elevated viaducts and water. So elevated viaducts, I think we are reaching, slowly reaching, a saturation point where we are not seeing too many announcements coming on elevated, but water, I think we are very, very positive with the current allocation of -- in the budget, et cetera. We do see a lot more water projects will come up. There'll be, in my -- 3 or 4 types. One is what we have, [ Jal Se Nal's Act ], which is on the rural side. Then they have one which is on AMRUT, which is on the city, bringing in more water to cities. Third one would be on the lift irrigation, which is there. So I think there are 3 major type of projects which they are talking, and we have started seeing projects coming up in all of them, so I think we will start seeing revenue, order book from water. Growth has been a -- I'll say, a little muted because we did not get the margins which you are expecting to deliver, which is why we also -- and also, [ moving, what happens ] is that, with T&D going so -- growing so much [Foreign Language], so we actually became more conservative in Civil, raised our entry barrier and increased margin levels and cash flows, et cetera, which had an impact on the order intake. I'll say it was more or less a conscious decision than by default.

Right, right. So this should kind of see a muted growth in the current year unless water kind of picks up, we'll say.

On the order intake, you may say muted, but revenue would be pretty decent because we already have the order book of more than INR 10,000 crores. So there will be a -- definitely a revenue growth.

Okay, okay. And what kind of a revenue growth we are looking at, sir, for the full year?

We are looking at around 30% growth in Civil.

The next question is from the line of Harshal Mehta from Smart Sync Services.

Am I audible?

Yes, you are, sir.

So I have one question. Pardon me for my ignorance, but in the last con call, you have mentioned that in that particular month you were doing around 100 kilometers of Kavach implementation work. And I guess that would be the month of May, if I'm not wrong, so I just wanted to know that whether -- the project that we were already having on the Kavach side, was that executed? And was any kind of revenue booked in that particular segment?

So I don't have the exact number, but we did book revenue.

[indiscernible]...

So I don't think we have the exact number. Maybe you can stick to what we said, but the project is still under execution. If I'm not wrong, around 30%, 40% or maybe [ 50% ] of the project is already executed, so I think it will be probably a quarter or 2. By the time, the project will be -- the 2 projects which we have will get [ over it ].

Okay. And any kind of split? So as far as I know, that one kilometer of this Kavach implementation work is costing around 50 lakh to the government. So any kind of breakup that you might be able to give, that what part is of our JV partner? And what is the part of our own, as in for execution work? In percentage or maybe in ratio.

So Harshal, I don't have the exact numbers, but I think broadly equipment would be probably around 70% or so. But I may be honestly wrong, but I -- from my recollection, it would be around in that range. And 30% would be on the EPC side, but it's not necessary that all the equipments come from the JV partner. I just gave the breakup between construction or -- let's say, execution versus equipments.

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

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

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