KEC International Limited (KEC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the KEC International Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. From the management today, we have Mr. Vimal Kejriwal, MD and CEO; and Mr. Rajeev Aggarwal, CFO. I now hand the conference over to Mr. Vimal Kejriwal. Thank you. And over to you, sir.

Thank you, Alaric. Good morning, everyone, and welcome to the KEC International's Q1 Earnings Conference Call. Let me begin by sharing an overview of the operating environment, followed by our performance during the quarter and business-wise updates. In the Middle East, our Dubai manufacturing facility and the execution of all ongoing projects continue to operate near normal on the ground. The region accounts for approximately 25% of our overall order book and L1 position. While tendering activity remains strong across the region, we are witnessing some delays in the finalization and award of new orders. Cash flows remain stable, and we continue to be optimistic about the medium- to long-term outlook, supported by sustained investments in grid expansion, regional interconnections, grid resilience, renewable energy integration and reconstruction initiatives. While on-ground execution continues across our sites, we continue to face challenges on the supply chain and logistics. Shipments, especially from Europe, China and India to the GCC countries, which have come to a standstill earlier have gradually resumed, albeit with some delays. This has resulted in slower execution on certain projects on the supply side. Freight costs, including war-related surcharges, insurances, et cetera, remain elevated, though they are expected to moderate over the coming weeks. This also had a cascading increase on logistics, fuel and power costs, also in the manufacturing facilities in India. We are working closely with our supply chain partners to minimize these disruptions and are also engaging with our customers to recover these additional costs. Procurement or project execution may get deferred until customer alignment is achieved on recovery of the additional costs, resulting in revenue margin timing impact. These challenges impacted execution during Q1 and are expected to have a spillover effect on Q2 also. Coming to Q1 performance. Despite a challenging operating environment, we delivered a resilient performance by maintaining revenues, strengthening our order book, reducing debt and continuing to build a healthy pipeline for future growth. We delivered revenues at INR 5,024 crores, marginally higher than Q1 last year. We have delivered a PBT of INR 90 crores with PBT margins of 1.8%, and our PAT stands at INR 73 crores. Our performance could have been better, but for the continued geopolitical disruption in the Middle East, shortage of labor and calibrated execution of water projects owing to delays in payments. The labor situation has started improving from June '26 onwards. Delay in legal closure of disputes or settlement of claims in transportation and metro projects also impacted the profitability. On the order intake front, we secured new orders of over INR 6,300 crores across T&D, civil, renewables, cable and conductors and transportation business. Additionally, we have an L1 position of almost INR 3,000 crores, predominantly in the T&D business, which are expected to be awarded in the near future. We have a diversified and strong order book of INR 37,697 crores as on date. Including the L1 position, our order book and L1 stands at over INR 40,000 crores. On the debt front, net debt, including acceptances, have been reduced by over INR 150 crores to INR 6,568 crores in June '26 from March '26, supported by free cash flow generation. This reduction in debt has also translated in a lower absolute interest cost compared to Q4 '26. The debt could have been further reduced, but for the delay in realizing significant collection from Afghanistan, which we now expect to materialize in Q2, as well as higher inventory levels due to delayed dispatches from Dubai factory as well as some raw materials storage amidst ongoing Middle East disruptions. On specific businesses, T&D, the business achieved revenues of INR 3,217 crores, higher than last year. The revenues could have been better, but for the supply chain constraints in Middle East. On the order intake front, the business secured orders of INR 3,600 crores across India, Middle East, Africa and the Americas. In India, we secured repeat orders from leading private developers, including a significant order in the rapidly growing HVDC segment. We continue to witness a robust opportunity pipeline in this space. We have already participated in multiple packages in the Barmer, Rajasthan, HVDC scheme and expect additional schemes to be floated during the course of the year. We have also secured a first transmission line order for evacuation of power to a data center in Western India from a private developer. This order marks an important milestone for the T&D business in supporting the power infrastructure needs of the growing data center segment. We are also engaged in discussions with other data center developers for similar opportunities. In addition to PGCIL and other private developers, we have started bidding for 3 new developers during the quarter. In international, we are witnessing a gradual revival in the African market, reflected in the recent win of a significant transmission line order that further strengthens our presence in the region. We have also expanded our power supply business by securing a substantial order in the Middle East, opening up a sizable new market beyond our presence in the Americas, Australia and Europe. In SAE, the business achieved revenues of INR 450 crores, a strong growth of 25% year-on-year. We continue to witness strong momentum in order flows, with new orders of over INR 1,650 crores for the supply of towers, hardware, poles and engineering services across the U.S., Mexico and Brazil, an increase of nearly 4x compared to last year. These orders include the largest ever tower supply order from the U.S., reflecting the growing momentum in the American T&D market. With these orders, the order book and L1 position has been scaled up to a record level of over INR 3,800 crores. In line with our strategy of diversifying our product portfolio and expanding into new markets, we continue to make encouraging progress. In Brazil, we successfully executed our first pilot order for mining structures, opening up opportunities beyond the power transmission sector. In Mexico, we expanded our international footprint by securing an order for the supply of structures for a solar project outside Mexico. On the manufacturing front, following the successful capacity enhancements at our facilities in Dubai, Jaipur and Jabalpur, we completed the expansion of our Butibori facility in Nagpur in Q1. With this, our global manufacturing capacity has increased to 483,800 metric tonnes. These capacity additions further strengthen our manufacturing capabilities and position us well to cater to the growing demand for transmission infrastructure across both domestic and international markets. The overall tender pipeline in T&D continues to remain robust across both domestic and the international markets. In India, the sector continues to offer a strong multi-year growth opportunity, driven by rising power demand, accelerated renewable energy capacity addition, grid modernization and the increasing need to address grid congestion through expansion and strengthening of the transmission network. With a robust tender pipeline, we see significant multi-year opportunities ahead and remain well positioned to capitalize on this growth. The international T&D market continues to present a strong growth outlook, supported by robust transmission investments across the Middle East, recovery in Africa, expanding opportunities in Americas, CIS and the SAARC regions and increasing infrastructure demand driven by renewable energy integration and the AI-led data center book. Our diversified global position positions us well to capitalize on these opportunities. With a healthy order book and L1 in T&D of over INR 25,000 crores, we are confident of delivering significant growth in the T&D business. In civil, we delivered revenues of INR 993 crores for the quarter, a growth of 6% year-on-year. While execution has progressed across multiple sites, growth was slightly lower owing to the labor shortages arising from the election period and the delays in customer payments in the water segment. During the quarter, we successfully commissioned the Bheden water supply project in Orissa, which was inaugurated by the Honorable Prime Minister, Shri Narendra Modi. This landmark project will provide safe and reliable drinking water to 166 villages through 58,000 household tap connections, creating a meaningful social impact. During the quarter, the business secured multiple orders/L1 of over INR 1,400 crores in the buildings and factories vertical from reputed clients. The civil business has widened its presence in the automobile segment, with an order from one of the India's leading automobile manufacturers, adding a marquee client to its portfolio. The business continues to strengthen its presence in the high-rise residential segment, expanding its customer base with a prestigious order in Northern India. It is also well positioned to secure another order from a repeat customer, reflecting our strong execution capabilities and customer confidence. With these wins, KEC is now constructing approximately 80 high-rise buildings for marquee clients across the country. Our geographic footprint extends with a strong presence in markets such as Mumbai, Gurugram, Pune, Goa, Bangalore, Hyderabad and Kolkata. During the quarter, we further strengthened our civil leadership capabilities through onboarding of senior talent. Looking ahead, with the labor situation gradually normalizing, a sharp focus on execution of a robust order book and L1 of over INR 10,000 crores, we are confident that the civil business is well positioned to deliver healthy growth over the coming quarters. Our transportation business has achieved a revenue of INR 259 crores for the quarter. The business continues to focus on execution of the new orders and completion of ongoing projects. During the quarter, the Honorable Chief Minister of Maharashtra inaugurated the Mumbai Metro Line 2B section between Mandale and Diamond Garden, where KEC executed the ballastless track works. The business has also secured new orders over INR 250 crores in the technologically advanced Automatic Block Signaling segment. The business has successfully implemented Kavach across 667 route kilometers and is currently executing deployments across an additional 1,780 RKM of the railway network and over 3,000 locos. We continue to actively pursue opportunities in Kavach, technologically advanced metro systems and tunnel ventilation projects. Going forward, our focus remains on accelerating project closures, improving working capital efficiency and selectively pursuing high-value domestic and international opportunities to drive profitable growth. Our cables and conductor business has achieved a revenue of over INR 600 crores, a stellar growth of 57% year-on-year, driven by robust demand across the infrastructure, power transmission and industrial segments. We also continue to witness steady inflow of orders for supply of both cables and conductors. On the new product front, elastomeric cables are slated to commence production in this quarter, followed by the commissioning of the E-Beam plant in the next quarter. These investments are expected to strengthen our specialty product portfolio, improve our product mix and support long-term margin expansion. In the renewables business, we secured new orders of INR 800 crores from an existing customer during the quarter. These include prestigious projects in both the wind and solar segments. We are now executing solar and wind energy projects with a cumulative capacity of over 600 megawatts. In addition, the 1 gigawatt solar projects for IRCON in Karnataka and NTPC in Rajasthan commissioned recently, are operating successfully at the rated capacity. The outlook for the renewable business remains highly encouraging, driven by sustained investments in clean energy, grid modernization and the increasing focus on reliable and dispatchable power solutions. We continue to engage with leading wind OEMs for strategic partnerships to strengthen our presence in the wind segment. With our expanding execution capability and growing project portfolio, both across wind and solar, we are confident that the renewable business will become a significant contributor to KEC's long-term growth. In the oil and gas pipeline business, we have initiated the merger of our wholly owned subsidiary, KEC Spur Infrastructure with KEC International. Post the merger, the oil and gas pipeline portfolio will be integrated into our civil hydrocarbon segment, enabling a more unified approach towards hydrocarbon projects. Going forward, we see significant opportunities to expand our hydrocarbon business across both domestic and international markets. In conclusion, our performance during the quarter reflects the resilience of our diversified geographical portfolio. While we continue to face certain near-term challenges, we believe these are largely transitory. With supply chains gradually normalizing, labor availability improving, a strong order book and L1 position of over INR 40,000 crores, a robust tender pipeline exceeding INR 2 lakh crores and encouraging opportunities across both domestic and international markets, we remain confident of delivering stronger execution and improved financial performance over the remaining quarters of the year. Thank you. We are now open to take questions.

[Operator Instructions] The first question comes from the line of Vaibhav Shah with JM Financial.

Yes. Sir, firstly, on the stand-alone performance, we saw EBITDA margin decline to almost 4-odd percent for Q1 and PAT was negligible. So, what was the reason for that at stand-alone level?

Vaibhav, as you have seen our numbers, so T&D obviously is at a higher margin and railways and civil has been negative and that is in the stand-alone. T&D is -- a large part of our T&D is also in the consol piece, which is the major reason why the stand-alone is showing a much lower number as compared to the consol.

Okay. So, you expect the T&D to pick up from Q2 onwards or it should be in the second half?

There should be some pickup happening in Q2. I think the problem in Q2 is T&D in India is there because of very heavy rainfall, especially in Gujarat, where most of our projects are right now concentrated. But clearly, Q2 will definitely be better on stand-alone.

Okay. Sir, secondly, you mentioned about the stock receivables in Afghanistan and JJM. So, what is the quantum of receivables from Afghanistan and JJM? And can you split the JJM receivables in both MP and Orissa? And how do you see the inflows coming in?

I don't have the split numbers, but the total receivables should be around INR 800 crores to INR 900 crores, of which around INR 400 crores to INR 500 crores are sort of overdue, okay? Balance are pending certification, et cetera. So if things happen, we should be -- we have been talking with everyone, including the state governments and the central governments and the assurances that the funds are now been released. So, we will keep our fingers crossed. In fact, in the month of July and August till date, we have received around INR 110 crores or so between the 2 states. I don't have the exact amount. The dues are equally split between Orissa and MP. As far as Afghanistan is concerned, we have around roughly INR 300 crores of money, which is due for payment for some time, and it has to come from ADB. We have been getting repeated assurances that we should get the money. It was supposed to come in Q1. Now, they have told us Q2. So, I think it's a matter of time. I think if we are lucky, let me put it, that we should get it in Q2 itself. Otherwise, definitely Q3. And that's a large amount, INR 300 crores without any outflow against it. So, that will help us in improving our debt situation, which did improve a little bit in this quarter.

Sir, lastly you mentioned that in the previous call that we are targeting 120 days by September and 110 days by March in terms of overall working capital. So if we receive this INR 300 crores from Afghanistan and another INR 300 crores, INR 400 crores from JJM, then also we -- to achieve that target, we need another improvement as well. So, what could be that lever to reach towards...

These 2 should be decent -- will help us decently. Also, I did mention that we had a higher inventory level in Q1. One is partly in our Dubai factories because there was some balancing equipment, et cetera, which did not reach there, which have now reached. So that is one. Secondly, in our cable business also with all the uncertainty on the plastic side, et cetera, we had increased our raw material, et cetera, and finished goods also. So, now they are getting going. So, I think maybe around INR 200 crores, INR 250 crores should get sort of released from the working capital side without the debtors also. So, I think we are pretty okay with the numbers what we are talking about.

Okay. Okay. Sir, lastly, on interest cost, we have seen some reduction on a Q-o-Q basis. So incrementally, this should be the run rate on a quarterly basis for the entire year?

No, it should be much less than that. This quarter, we had 3.3%, largely because a lot of cash came in, in the end of the quarter. So while the absolute borrowings went down by the quarter end, I think in April, May, it was elevated. So, our expectation is that against the 3.3%, which we did, we should be around 2.3% or so for the whole year. Our total debt should -- interest should be around INR 600-odd crores. That's our expectation.

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

My first question is in relation to your 25% order book in Middle East. Could you speak about the composition of this order book, the challenges that you faced in terms of execution? So excluding Middle East, what would have been your revenue growth? Just trying to understand the impact here.

So Sumit, 25% order book is broadly, I'll say, equally divided between Saudi and UAE, so that's the basic. So, when you say 25%, it's almost INR 10,000 crores, so INR 5,000 crores each between the 2 countries, okay, very broadly. Maybe 1% or 2% here and there, okay? That's one part of it. On challenges, we are not seeing anything significant on the ground. So, project executions are going on. I think in the last 4 months, we have commissioned 3 or 4 projects during these 4 months and a lot more is happening. I think the problem is twofold. One is the logistics costs have gone up. Fuel costs have gone up. So, local operating costs have gone up significantly, which is reflected in the margins. We have been in touch with the client, et cetera. Let us see what happens. But since the costs are being incurred, they're getting booked immediately. That's one part of it. The second part is on the supplies. So typically, 25%, 30% of our revenues come from supplies or items. So, we are seeing a significant challenge on the shipping side with the ports under attack or so. So, vessels from China, Europe and even from India are difficult to get. And then also the rates have gone up. So, whatever is impacting the quality of revenue, we have been deferring it for some time. Hopefully, the situation is slowly normalizing. So it should come back maybe by the end of this quarter or so. We'll keep our fingers crossed on that. So the major impact is not on the physical execution, but towards the supplies, which go into the projects.

Okay. So essentially, revenue growth, excluding Middle East would also have been flattish, just like we have seen on a year-on-year basis for KEC at consolidated level?

So, I think the revenue growth was slightly, I'll say, impacted in India T&D and also civil because of labor in the civil side. India T&D, I think we are still seeing a huge headwind in terms of ROWs, whether it is Rajasthan, whether it is Gujarat. I think these are 2 major states where we are operating majorly because all the renewable projects are there. So, most of our projects are in that side. So that's one issue. I think slowly, slowly, it is getting resolved. Gujarat has come out with a new scheme where they have increased it twice or thrice of market value. So, I hope that we will start seeing a lot more movement on the India T&D side.

Okay. Okay. On the FY '26 call, you had indicated an expectation to grow 12% to 15% in revenue terms, order inflow of INR 300 million and you had not given any specific margin guidance. Would you like to revisit your guidance for the fiscal?

I think we are okay with the guidance. I think only on the revenue side, we were 12% to 15%. So it will depend upon what happens in the war. I think maybe 0.5% or 1% here and there, but I don't think there's anything major for us to worry because we have an order book of INR 40,000 crores. So Q3, Q4 typically are good for execution. So, I think right now, we are pretty okay with our guidance.

Okay. And finally, in your civil segment, how much is water as a percentage of your order book now? And...

Yes. Go ahead.

Yes. And basically, with the headwinds or working capital challenges, what is the outlook on execution there? And particularly, within civil, I think you had expressed the expectation of INR 80 billion of order inflow in FY '27. How much of that would be particularly from water?

We have not taken anything from water, first of all. Secondly, I think on the order book we are roughly around INR 1,200 crores or INR 1,300 crores in water. So that would be, let's say, 13%, 14% of our order book. I think for the balance numbers, I think we are pretty okay. We have got a large pipeline of -- tender pipeline for civil. So, we are not too much worried. There is enough and more work happening, especially on the residential and the commercial piece of it and continue to work a lot of inquiries from the metals and mining. I don't think we are seeing too much on other sectors, but at least on this sector, there's continuous inquiries coming on.

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

Congratulations on a decent quarter in a tough environment. Sir, my first question is on the stand-alone revenues and the profitability. So if I do simple math, it's almost close to about INR 3,900 crores of revenues and you've reported 4% EBITDA. Historically, this business had 10% margin. But assuming if we take even 8% normalized margin, so it's INR 311 crores or INR 300-odd crores EBITDA. So, we have a shortfall for almost INR 150 crores. So, roughly, this loss is coming from which segment within the book -- order book?

Difficult to quantify which exactly, but it's primarily coming from our transportation and civil business. That's where the shortfall is coming. T&D is doing reasonably well, I would say.

But civil, sir, we were approaching high single-digit margins. So, what's happening in civil now? Why civil has turned negative?

I think -- no, no, it has not turned negative. I think the issue what we have been discussing is that we have got a few old metro projects and all that. I can give you an example. I've got 4 metro projects, 2 in DMRC, 2 in Chennai Metro. One of the DMRC project was commissioned some time back. The second one is ready for commissioning since, I think, last June, okay? The client has not taken over. Chennai Metro, the same thing. The project -- one of them is ready for commissioning for, I don't know, how many months now. And it's not been commissioned for whatever reason because somebody is not available or I don't know what's happening. And because of that, what happens is that you -- the client will not take over, you are supposed to maintain. So virtually, you end up spending almost INR 10 crores per month on each project. Now, all these are going in the expense account. You will make a claim and all that. [Foreign Language] So that's where it is continuing. And I think it's a saga, which is, I don't know what to say about it. Hopefully, we are now hearing that they will get commissioned, and they are stuck for commissioning because the second part is not getting ready or something else has happened and all that. So, that's where this is happening. When you say that we are going towards a higher margin, it's a fact on all the new orders are all profitable, and we are pretty okay with them. It's a question of as soon as we are able to close the tap on these orders, we will start seeing a turnaround.

When we talk about the line of sight, so I mean, Q1 is INR 150 crores of shortfall. If I analyze, it's almost INR 600 crores on stand-alone. So, where does it end? I mean, what is the order backlog right now from all the troublesome projects, which are underfunded or maybe loss-making. So, what is the pending cost to completion, I mean, or maybe extra costs which you need to cover up? So if one has to look at which quarter down the line we'll turn profitable, move towards 8%, 9% stand-alone margins, so if you can give some color on that will be helpful.

Difficult to give it today. And on the second part or the first part on the order book, these are not in the order book because they are all completed projects. They don't have any backlog of orders, except one CMRL project, which will get completed in maybe next 6 months, where we may have an order book of INR 100 crores, INR 150 crores or so. Rest of all are not -- as I said, they are completed, ready to hand over, everything is done. So, they are not in the order book. I'll not be able to give you exact numbers. But I do think that this quarter also, Q2 also would remain in a similar line, maybe 50 basis points here or there. But that's the way at least Q2 will be there. Q3, Q4 would depend upon what happens also in West Asia because most of the projects of West Asia, many of them are in my standalone.

The other part is the one thing, which is there on the civil side and the transportation side. Now secondly, challenges which are coming up on the freight and the commodity side, so steel, aluminum and so prices are going up. So is there a case wherein the T&D business, which is supposed to be high margins now start seeing headwinds on the margins because of all this conflict and they'll start reporting lower margins and directionally, our aspiration to reach high single-digit margin gets pushed out maybe by a year or a couple of years?

T&D, I am not seeing too much of a challenge on a double-digit margin, okay? We have, I think, enough cushions available. A lot of them are hedged already. So, I don't think we are too much worried about it, okay? T&D, I think we are okay. Steel and all that, what has happened is that the costs have come down again, especially on the plates, et cetera, angles. Aluminum, yes, we have some exposure, but I think we have enough time to look at it. Are we worried? No, I don't think we are significantly worried about, maybe 50 basis points here and there. But our view is that T&D would probably continue to be in double digit or maybe very close to double digit going forward.

And what about the other segments, civil, transportation and others, if you can give some color on the margins?

They are still negative, okay? So, that's where the overall numbers are under pressure.

Any guesstimate sir, from which quarter do you think the margins turnaround will start happening? I mean if you have to give, someone has to hold you and give a call then which quarter we'll see the turnaround happening? So will it happen in FY '27 or we look at maybe towards FY '28, start of FY '28 where the margin turnaround will start happening?

No, I think the margins will keep on inching up. Where and how they attempt to reach? I have no numbers to give you today, okay? But do we think we'll get into double digit and all in FY '27? Not possible?

'28, high single digit starting '28?

See, high single digit in '28 should be possible. Yes.

Sure, sir. Those were my questions. My biggest worry is on the margin side now because that impacts the...

I thought your biggest worry was on working capital, which you are not asking.

Yes. So eventually, CFO leads to working capital and then how working capital gets impacted, so it flows down from profitability. But anyway, I mean, that's a challenge right now I'm not able to grapple with.

The next question comes from the line of Jainam Jain with DAM Capital.

Sir, I wanted to understand how do we see the opportunity in data center EPC business in terms of competition, margins? And what is the right to win in that segment?

Jainam, it's a difficult business in the sense that what we are seeing is that although there are large opportunities being there, but traditionally, we are seeing developers breaking up the orders into various smaller sections, slicing it into different ways. Very, very few, I'll say, hyperscalers are there who are willing to give orders for your civil as well as MEP and altogether. Typically, most of them break it up on the high, low. And so we are not seeing large orders coming in from most of the clients. A few exceptions are there. Right to win for us is, is that we can do civil as well as we can do MEP together, and that's what is being fixed. So, I think hopefully, we will see some wins happening on data centers maybe next quarter. The market is large, but as I said that there's too much of -- too many players with small, I'll say, ticket sizes, which is creating a problem overall. But for me, the interesting part in the data center is more coming on my T&D side, where we are seeing inquiries coming in where the data center may get built in 15 to 18 months, but then the lines and the power supply, et cetera, are becoming challenged in some places, which is why we announced that we've got a private order now. We are seeing developers like U.S. also resorting to having their own connectivity, et cetera. So, I think that is also very interesting.

Okay. So, we have been pursuing the opportunities in the U.S. for the U.S. data center as well, especially in the T&D segment?

I'm not pursuing for the U.S., but we got some large orders and a lot of inquiries are there, which are from also private developers in U.S. who are supplying to data centers.

Okay. And sir, how about the competition? How is it panning out?

In which area?

In this data center business.

Data center [Foreign Language] It is very fragmented. It's region-wise and all that. Each region has got different players. So difficult to say who are there. But otherwise, if you look at the bigger players, it would be people like Tata Projects and L&T, et cetera.

Okay. And sir, what would be the civil TAM if we have to compare it? So right now, we have got the order in the T&D space, right, for data center? How about the civil segment for data centers?

So right now, we don't have a single order in data centers or we have finished 5 data centers in the last couple of years. We have bid for a few of them, which is why I said that hopefully, by next quarter, we should at least have a few orders in the civil side on the data centers.

But sir, if you have to quantify, I mean, per mega or if it is available on a per megawatt basis.

Typically, our size would be around INR 10 crores per megawatt or something like that.

Okay, sir.

[Foreign Language] Because, Jainam, what happens is every developer gives in a different format. So it's difficult to put numbers. Each tender has got a different number.

Okay. Sir, my last question is in the Jal Jeevan Mission, right? So what is the pending order book currently? And how much receivables are stuck over there, sir, now?

We have order book of roughly around INR 1,300 crores or so pending. Gross debtors would be around INR 800 crores, INR 900 crores. I think INR 400 crores or something are due for payment. So we hope that, that will come in.

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

First question, you did highlight about the delays in conversion. So just wanted to understand is it more so with the domestic market or the export market, particularly Middle East? And second, you have highlighted INR 2 lakh crore pipeline, I think INR 1 lakh crores for T&D and INR 1 lakh for non-T&D. So within 1 lakh of T&D, how much you're really factoring in from the Middle East market? And third, what is the expected inflow now amid whatever is happening because we are already 4, 5 months in the financial year? For full year, what is the expectation of inflows?

So Amit, when we talked about delay in conversion, it was primarily the West Asia market, primarily, okay? We have bid quite a few projects in Saudi and UAE and Oman. In fact, we are L1 in a few of them. But the conversion is taking its time. It's not that it's unduly delayed, but it is taking time, okay? But the tender pipeline is there. In fact, now also we just saw some new tenders getting announced even yesterday also in the Middle East. So I think we are not worried about it because tenders are getting announced even now. So there has been some talks saying will there be scaling down? I don't think there is a scaling down because continuously projects are coming up. So to me, that is the basic thing as far as West Asia is concerned. As far as order, I'll say, when you look at the order intake when we had said INR 30,000 or so, roughly, I'll say 60%, 65% would be from the T&D market and I think international is around INR 9,000,-INR 10,000, right?

INR 9,000.

Yes. So I think our international expectation was that we will be between INR 9,000 to INR 10,000 in terms of order intake. So a significant part of it would obviously come from West Asia.

Right. Second, on the cable business, you have done very strong and probably few quarters the performance has been quite strong. So what's the capacity now? And with elastomeric, are you seeing more growth happening? Are you seeing more CapEx lined up in cables because we are seeing other fair play cables or connector players have still been front loading the capacity. That is one. And second, any thought on the exports of cables also to the U.S. market? And what are the margins which you are currently making in the cables business?

So typically, our exports have been roughly around, I'll say, INR 200 crores last year, okay? And we obviously want to expand the same, okay? So with the specialty cables coming up, I think by Q4, we should have an increase happening in our export market. I don't think we have very large CapEx programs. We normally have been spending around INR 75 crores, INR 80 crores or maybe INR 100 crores in cables every year. Last 3 years, we have spent INR 300 crores. A large CapEx will happen if we decide to expand our EHV, which we have been looking at it. So once we see the demand stabilizing, maybe we will put in a larger CapEx. Not immediately, could be next year or something, but I think it's still on the drawing board. Otherwise, INR 50 crores, INR 75 crores, we keep on spending. So we may add some -- we will definitely, I think, add some capacity on our aluminum conductor side, more specialized products on HTLS, et cetera. That's the way we are looking at cables. The margins have been okay. I think they are around 5% right now, almost 200 basis points, still below the market. With the specialty cables coming up, I think the margin will start inching up. That's the expectation.

Right. So what's the capacity or probably the peak revenue you can do with the fixed asset you have?

I don't have the capacity in terms of kilometers and all that, but I think we can do around INR 3,000 crores with the current assets without any more CapEx.

Right. Sir, lastly, what was the deferment, I would say, or probably you were not able to book in revenue because of the Middle East conflict? And the overall expectation now in terms of the full year growth and, yes, so I think this will help.

So Amit, full year, we are still saying what we had said last quarter, around 12% to 15% growth should be feasible today. But at least I think the number would be around INR 300 crores or so for the quarter.

Right. And is it like -- so that is also probably dragging the growth this year? Or this is something which is recoverable in the subsequent quarter for this?

No, it will definitely be recovered. This is not a product sale that it is lost. It's an EPC number. So whatever has not happened in this quarter and what did not happen in Q4 also, ultimately, all of that should happen, which is why in spite of having a flat quarter this year -- this quarter, we are still saying that we will maintain our growth.