KNR Constructions Limited (532942) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to KNR Constructions Limited Q1 FY '21 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note this conference is being recorded. I now hand the conference over to Mr. S. Vaikuntanathan, Vice President, Finance, KNR Constructions Limited. Thank you, and over to you, sir.

Good afternoon, friends. I welcome you all on our earnings call for the quarter ended June 30, 2020. Along with me, I have Mr. K. Jalandhar Reddy, Executive Director; Mr. K. Venkatram Rao, General Manager of Finance & Accounts and Strategic Growth Advisers, our Investor Relations adviser; and our Senior VP, Mr. Ramana. Let me begin with -- by giving you all brief on the key industrial updates and then will discuss the company's performance. In the post COVID-19 period, infrastructure is 1 of the few sectors that is likely to do well going ahead. The trust to jump-start the economy would have to come from government-driven expenditures, considering that private investment, construction led demand and the exports are all likely to remain weak. Construction of infrastructure could enable the resumption of capital goods production, provide employment opportunities and driven private sector confidence. This will be INR 130 trillion natural infrastructure pipeline built on Infrastructure Mission 2025 was announced in the pre-COVID period in December 2019. The NIP integrated multi-sector infrastructural projects, with the goal of becoming a USD 5 trillion economy and improve overall quality of life. The post COVID-19 world, the success of the NIP will be dependent on the instrument capital, innovative funding model and greater technological integration. This would not only provide a timely stimulus for turning the tide on industrial activities as well as improve national competitiveness. National Highway Authority of India has digitally transferred itself moving to online projects management workflows and adopting advanced analytics. India's [Audio Gap] USD 5 trillion economy rests on the completion of critical infrastructure under NIP. As a part of NIP's annual expenditure for FY '21 was envisaged at INR 19.5 trillion and a similar number of FY '22 as well. Given the sudden shock to the economy and the results in the necessary pressures, there is likely to be a strong reap realization of resources. CapEx from the state government is expected to decline, and that's from central government to increase. Government has currently prioritizing projects based on 3 parameters, firstly those projects who separately work which is forward and commencing the same could be done effortlessly. Secondly, for those projects where age of the land is readily available or have a few financial closure. And this comment of execution would be relatively easier and finally for those projects, which would help improve economic production relating to consumption of growth. The outgoing pandemic post the industry to press the fast button. The unprecedented crisis has also presented us with an opportunity to revisit how we continue, design, regulate, build and operate particular infrastructure in our country. With post COVID, reprioritization on strong implementation building infrastructure holds the key to reviving economy and getting back on the growth agenda. NHAI awarding, amidst the lockdown there was a land in awarding of projects by NHAI in the month of April and May 2020, which has picked up in June 2020. NHAI orders, the current biddings stage for worth INR 50,000 crores, that is 50% in HAM and 50% in AIIB. Till July, NHAI has awarded project of about 460 kilometers against the annual target of 4,500 kilometers for FY '21 vis-à-vis a target of 3,211 kilometers in financial year '20. NHAI has restarted awarding of BOT projects after about 3 years. Construction across national highways is picking up. It rebounded to 637-kilometer in May from just 210 kilometers in April. And the key construction months are lost in lockdown and labor migration continues to happen. Normalcy returned only after the monsoon. Overall, the construction industry is bracing for a 10% to 13% decline in highway construction on year this fiscal. Toll operations. With COVID-19 pandemic induced lockdowns and virtually outer moment of people and goods in April and May, but cups are being lifted. According to the recent CRISIL report, the traffic on national highways is bouncing back with electronic toll collections, reaching nearly 73% of pre COVID lockdown level with lifting of cups. The overall ramp-up of -- in toll collections has been faster than initially envisaged. The trends are encouraging so far and this -- and sustained for more than 2 months, indicating that it is not only due to pent-up demand. Now coming to the key updates of the company. During the quarter, we have achieved financial portion of our current HAM project that is Oddanchatram to Madathukulam on May 22, 2020, which is all 5 HAM projects have achieved financial voucher. Of this 5 HAM projects, 4 projects have received appointed date and construction activities have already been started. The percentage of physical programs as on June 30, 2020 for these HAM -- 4 HAM projects is as follows: Chittor to Mallavaram is 27.6%, Ramsanpalle to Mangloor, 51.5%. Trichy to Trichy, 43%. Magadi to Somwarpeth is 9.3%. We expect to receive the appointed date for Palani by first week of September. The total equity requirement for all the 5 HAM projects is INR 624.28 crores of which we have already invested INR 223.49 crores as on June 30, 2020. The balance equity will be invested over a period of 3 years with an investment of INR 250 crores in balance at the end of FY '21, INR 110 crores in FY '22 and remaining INR 40.79 crores in FY '23. You can refer Slide #22 of our investor presentation for details on each HAM projects. Our deal to divest 3 HAM projects that is Trichy to Kallagam, Chittor to Mallavaram and Ramsanpalle to Mangloor is on track. As per the agreement, we will completely sell these 3 HAM projects after COD plus 2 years, which will help us to free up our equity for new projects. Our discussion with Cube for sale of 100% stake in KNR Walayar Tollways Pvt. Ltd. for an enterprise value of INR 529 crores are in the final discussions of negotiations, we expect to close the transaction and receive the money in the next couple of months. The toll collection on BOT toll project has been impacted for 19 days in the month of April 2020, as the toll collection resumed from April 20 as per direction of NHAI. Post the assumption of total collection of April 20, 2020, the average collections per day were severely impacted due to continuing nationwide lockdown. The toll collection for our Walayar project was INR 7 crores for Q1 financial year '21. Whereas for our Bihar project, that is Muzaffarpur-Barauni Project, the collection has been INR 10.25 crores. We have removed this fourth manager class as per the concession agreement and are in discussions with NHAI for eligible compensations. Coming to the project contribution. The execution of our EPC as well as the HAM projects were impacted in the initial days of lockdown. Once the lockdown restrictions were released, we saw a gradual improvement in pace of execution at all our project sites. Currently, the execution has been slowed due to ongoing monsoon season, monsoon season. However, based on the labor and raw material availability, we see our project execution gradually moving towards optimum level by next quarter barring any further disruptions. Coming to our order book position. As on June 30, 2020, we have an order book of INR 7,209 crores of which irrigation project constitutes 54%, and balance 46% is roads post EPC and captive HAM projects. Client wise, 69% of our order book is from third-party clients and balance 31% is from captive HAM projects. Our third-party order book, our noncaptive order book which accounts 69% of the total order book is skewed between state government contracts with 45%, whereas 5% from central government and the balance 19% of order book is from other private players. Our order book as of June 30 does not include EPC component of Palani HAM projects as we have not yet received upon that day, including the EPC component, Palani, which is of INR 640 crores. Our order book would have -- would be INR 7,849 crores. Based on our start lister project and the bidding pipeline for the current financial year, we are targeting a further order inflow of around INR 2,000 crores this financial year. Now I would request Mr. K. Venkatram Rao, our GM to present the results for the quarter ended June 30, 2020.

Thank you, sir. I hope that you have gone through our results and the presentation that we have circulated and uploaded on our website. I would now present the stand-alone results for the quarter ended June 30, 2020. The total revenue for the quarter grew by 3% to INR 479 crores in Q1 FY '20 from INR 465 crores in Q1 FY '20. Our EBITDA for Q1 FY '21 grew by 5% to INR 94 crores as compared to INR 90 crores in Q1 FY '20. The EBITDA margin saw a moderate growth up 30 basis points to 19.7% in Q1 FY '21. Net profit for the quarter was INR 440 crores as compared to INR 48 crores, largely due to higher effective rate of tax for Q1 FY '21. A quick summary for consolidated performance is as follows: our Q1 FY '21 consolidated revenue stood at INR 523 crores as compared to INR 531 crores in Q1 FY '20. Consolidated EBITDA for Q1 FY '20 was INR 130 crores as compared to INR 116 crores in Q1 FY '20, year-on-year growth of 12%. EBITDA margin grew by 310 basis points to 24.9% from 21.8% in Q1 FY '20. Net profit stood at INR 42 crores as compared to INR 45 crores a year earlier. With this, we'll now open the floor for question and answers.

[Operator Instructions] We have our first question from the line of Mohit Kumar from IDFC Securities.

Yes. Sir, congratulations on a good set of numbers. Sir, my first question is on execution. While the execution of Q1 was pretty good. I was trying to figure out how the executions have ramped up in June and July? And how do we see panning out in next 7 to 8 months? And secondly, on the irrigation, whatever orders we got in the Q1? Have you started execution of those projects?

So actually, the Q2 part concerned, the execution is a little bit geared up. But due to rains and all, as this is the rainy season, the lockdown is there but however, the 1 good news is that we are able to bring back some part of labor from Bihar, Jharkhand and even from UP. So I think it's a good news let's say started coming. In another 1, 2 months, I think, around 80%, 85% of the people will be present on the site and then we will be able to do quite a good job in coming -- I can't say, but this quarter is not a very, very good figure, but definitely, we will do quite better going before Q3 At least, I can assure about 80% efficiency in Q3. And if at all, there is a vaccine and then these are online, then we will try to achieve the 100% progress. Litigation concerns, sir? Yes.

No. No, as far as, say 100%, 80%, is it -- will it jump start to last year -- compared to last year or this -- if you can elaborate a little bit here?

No, no, no, efficiency on the site. Efficiency on the site is different than from the figures or what I talk is different. See the main thing is that, however, are traded in the various areas, like spring area and bar bending, scaffolding and all that, most of the migrant labor are employed and build. There, we have -- around today, if you speak about around 60% of the spend, what we require is present. So going forward, if it is another 1, 2 months, if we are able to improve it by 80%, 85%, then that is going to be in order. Again, if it comes to the track, the operators of the equipments and all also -- there also 60%, 65% from the local areas. But 40%, 45% from migrant people only. So there also, we have some strategies. So the equipment is also [Audio Gap]

So I mean to say in that...

Circumstances. And sir, it was about the irrigation new project, really, it's under mobilization front. And recently, the agreements got over. So definitely, we can start in upcoming 1, 2 months' time. As you know, that the loan tying up between the bank is under progress. So [Audio Gap] as far the partner is concerned resources says that within 2 months they are going to conclude the bank's deal. So then after that, we are at full site.

And sir, 1 last question, sir, what is state of land acquisition of Oddanchatram to Madathukulam or Palani? So what is the status? And when do you expect the appointed dates to be provided?

Yes, sir. It's almost 72% by 15th of August, sir. As I was there on August 15th in the Tamil Nadu itself. And 70% -- 72%, it is there. Now another 8% is expected to be by this month end, sir. So month end, if they're able to deliver, I think I've been told that the Pala has been deposited with the amount and then now they are being the checks also. So I think 80% if it is coming by this month end we have to take the appointed date by this month end itself.

We have next question from the line of Akash Damani from Edelweiss Financial Services.

Sir, my first question is on this new irrigation projects. What sort of EBITDA margins are we expecting compared to our road construction projects?

Sir, actually -- naturally, the irrigation has around, say, 18% to 20% EBITDA margins, but know that payments are also a little bit delayed. So really, it is working out in between 16% and 17%, sometimes even below 16%, 15% also. It depends on how good they pay.

Okay. And sir, what is the incremental CapEx expected to be incurred for these new irrigation projects?

Sir, actually, right now, whatever the equipment we have, that we would like to utilize and I think this year, I mean to say, up to January, we may not have to incur much CapEx on this. But as you know that pump house project is involved in that. So certain trains and certain equipments which are required, then it will be procured in month of January, sir. And really the figures are right now not with me but we will come out with the figure soon, sir.

Okay, sure. And, sir, if you could...

And the decline of the pump house is not finalized, so we are unable to assess from the equipments assessment.

Okay. And sir, if you could give us an update on status of receivables from Telangana government as of today or as of now?

Around sir, INR 540 crores is outstanding, sir as of now. Recently, they are doing the process of paying it. The -- I think our bill is admitted to the department, admitted by department and it is entered in the system for the payment queue. So they say that another couple of weeks, we shall be paid. But it means, they have going to be -- but I'm saying a couple of weeks because it happens sometimes.

Okay. But we don't receive anything this quarter, right?

No, actually there after February we've not received.

Okay. Okay. Sure.

Before we move -- and actually, sir, there, the payments were lined up and budgets were made by the state government because of this COVID, there are a lot of diversion of funds that happened for COVID management, so it has been delayed, sir.

We have next question from the line of Kalpit Narvekar from Allianz Global Investors.

Congratulations on a good set of results, sir. I had 1 question. In the last earnings call, you had mentioned that NHAI ordering might gain some traction in July, August. So has that come true? And what are the sort of orders aspect that you see? Are you in the L1 returns or any orders recently are in?

So, actually frankly speaking, we have submitted almost 7 tenders, whose result is, they were to come out in -- by this month end or first week of the next month. So really -- and we are in process of submitting another 10 more bids, sir, in coming this month, I think, another 2, 3 bids are there, but 7, 8 bids are there on the September month. Yes, September month.

Sir, what would be the cumulative order value?

Sir, actually each are around INR 1,500 crores, INR 1,200 crores all that sort of the sizes, each size is different, but more than INR 1,000 crores all are. Few are -- 3, 4 are there with ticket size of INR 500 crores, INR 600 crores also.

Okay. So sir, you're -- so considering the number of bids will be made INR 2,000 crores target for this year. Are you targeting majorly mostly from rural now, right? So it seems achievable, right?

Of course, because now what is happening here, sir, that all HAM projects which have undertaken by us almost 3 HAM project were in progress during the last year. They are all falling above 60%, 50% level, sir. So hopefully, by March, we would be maximum completing that and going for CODs on those ones. So now we are eager to acquire 3 more projects, which are up about INR 1,000 crores scale.

Okay. And sir...

So that is right now the target what we have, sir.

Sir, has the competitive scenario in these projects change anywhere in the NHAI?

Pardon, sir.

Sir, as the competitive scenario change in these projects are -- is the number of bidders sort of increased or decreased out? Or is it similar compared to last year?

Sir, I could not hear.

Hello, am I audible sir?

Yes, yes, yes. Sir, please. Now I can hear you.

So my question is basically, in these new orders that you're targeting, has the competitive scenario within these energy orders, has it changed? Any material change on that front? Has the number of bidders increased or anything? Or people are bidding more aggressively or anything of that sort?

Yes, sir. Aggression is there. More of aggression is there now. And number of bidders also have gone up and newcomers, there is a newcomer, there in the entry, sir.

We have next question from the line of Shravan Shah from Dolat Capital.

First of all, congratulations on good set of numbers, sir. Sir, coming to the -- yes. Sir, coming to this tender, sir, we are talking. So you said 7 tenders that yet to be open. So is there any HAM project out of that, that we have bidded and yet to open?

Yes, sir, HAM projects only. I think we have submitted 3 Kerala tenders and that some state government tenders are there are, 3. Tamil Nadu state government tenders are there. And 1 more Tamil Nadu HAM project was there.

Okay. So this -- and all of this would be INR 1000 crores plus each?

Actually, sir, the Tamil Nadu, 2 projects are at around INR 500 crores price, sir. 2 projects in Tamil Nadu state government project. And 1 big -- all others are of -- almost 5 projects are about INR 1,000 crores, above INR 1,000 crores.

Okay. Okay. Okay. And is there any change in terms of the terms and condition in the Tamil Nadu HAM project or state HAM project?

Actually, they are now loading us with the -- utility shifting is also as a part of contract. Earlier, the view is under separate this thing, separate payment days to issue and it is out of contract. But now they made it as a part of contract. So even that part -- utility which was -- utility shifting becomes the debt equity part.

Okay. Okay. And in 40-60 EPC HAM that ratio is the same and then the O&M also, you need to bid a separate O&M or O&M is linked to the BPP?

Yes, sir. So, everything is as same as earlier contracts as well. There's no big change. Other than that the new document which is going to come up I think there have been -- we have been asked to issue our advisers, and there is a meeting it can happen in any time. The NHBF has given us the impact in or there is a request whoever has any observation will change that you want to have, that could be -- if it is meaningful, they want us to represent to them. And we are also being part of National Highway Builders Federation. We will also try to participate in the tender, sir. Sorry, not in the tender, I mean to say, in the meeting, which is held by the management, let's say.

So this is primarily for the bank rate, the difference right now the -- which as bank rate has came down. So to monetize our further assets. So that is the main focus that we will be pushing our quarter on what other suggestion that we will be present?

Exactly. You have all the information, exactly.

Sir, I need some couple of balance sheet numbers in terms of mobilization advance and retention money and the gross rate and cash.

Venkat, go ahead.

Yes, sir. Mobilization advance, actually, that is INR 102 crores what we received from the client. And retention money receivables is INR 163 crores. And gross debt as our June 30 stand-alone basis, it is INR 334 crores. And consolidated debt, actually, it is INR 1,048 crores.

Okay. Okay. And have you received any of the release of the bank guarantee related to the whatever the changes the government has done in terms of the performance or whatever we have done. So have you released any bank guarantee?

We have -- actually, the retention money...

The projects have been released, sir.

Sorry, sir?

Certain projects have been released. Like in Hubli, they have released a retention on money bank guarantee in the ratio or whatever, they have -- we have completed the work and many other places, also they are in a process of release, yet to be released.

Okay. Okay. Okay. And then in Kerala project, we are expecting in next 2 to 3 months, it would be -- the deal would be done. That's what our expectation?

Yes, sir, the solid negotiations that are happening because of the COVID, there have been certain impacts, which they are bringing on to the screen. And whose detailed calculations and detailed understanding is being done. I think we are in just closing these issues. So I think another couple of months, we can expect these 2 deals to go through, sir. But it is -- right now, it is very precisive to say anything, but till we hope it around 90%, we are going with this.

That's it from my side. I have a couple of more questions. I will be in queue. Thank you and all the best.

Thanks, Shravan.

We have next question from the line of Niteen Dharmawat from Aurum Capital.

A couple of questions. You mentioned about payments from the Telangana government, I wanted to know about NHAI, what is the situation? The target receiving that they made or there are some delays over there? If so, how much is the delay? If you can provide some details about that? And second is about the consolidated debt? What is the consolidated debt now?

Venkat, go ahead.

Yes. Sir, this consolidated debt is INR 1,048 crores, 1-0-4-8, as of June 30. And as far as the payment from the NHAI is definitely, there is no issue. It is payments, it is prompt only and recently, under Atmanirbhar package, the NHAI has told that what are the grants to be received, they will give a monthly installment basis. So on that basis, we have for Tirumala project and Trichy project, we got unproportionately basis only. So as far as NHAI is concerned, sir, there is no delay in the payment from the NHAI.

We have next question from the line of Venkatesh Balasubramaniam from Tokio Marine Asset Management.

Yes. You mentioned that you are expecting around INR 2,000 crores of orders in the remaining 9 months of the year. Can you please tell us what was the order inflow in the first quarter for the current year?

So current year sir...

Yes, go ahead.

These 2 irrigation projects we got sir, in the current year. So INR 2,300 crores order book has added in this Q1. And balance 9 months, we are expecting some INR 2,000 crores of order book.

I think, we are L1 in INR 2,000 crores.

Okay. Did I just hear you're already L1 in INR 2,000 crores of orders?

No, no, sir. We are targeting to achieve INR 2,000 crores orders in the next 9 months.

Okay. Okay, fine. Now given that the biggest problem quarter, which was the first quarter when you had the lockdown problem. And now you have some visibility and how things are panning out in the monsoons, and you are expecting that by the start of the third quarter, 85% of the labor would be back in action. What kind of revenues and margins can you do for the full year?

Actually, it depends on the -- the main thing what we can execute out of these new irrigation projects, which we have received, sir. Actually, the major thing, the -- what we have is around INR 2,500 crores worth of contracts or deals. If we are able to do quite a good number from these 2 projects. Definitely, we will come to a good conclusion. Whatever the projections which we have given, I think we will try to touch last year and do better also. But the main thing is now we have been asked to hold down these projects because banks -- the loan tying up between loan processing between state government and the department -- irrigation department is -- Government of Telangana is being under progress. So we have been asked to stop it -- stop the projects from -- not to rehab the -- not to progress the project for 2 months. So if they give us permission to progress, I think, at least INR 300 crores, INR 400 crores, we would like to execute out of these projects also, which is an add-on and otherwise, if we touch the last year figure, it would be a great thing for us. That's what I mean to say. Yes.

Okay. So basically, what you have commented -- communicating is you should definitely do INR 2,250 crores kind of number, but it could be another INR 200 crores, INR 300 crores, depending on how the execution on the irrigation projects go?

Yes, sir. Somewhere around, like that, we have -- I think in future we do better, we are able to do better than things are good.

Okay. And what about margin?

Major, we are also facing certain problems here. It is not an outbreak to say that. What is happening in Tamil Nadu we are working, 1, 2 cases they are finding COVID positive, entire they are doing the lockdown on project site itself for 15 days. Certain areas, they are reacting very weird. Or I can say that due to that, we may have a little bit if and but, but we will try to push the pace, sir.

Okay. And what about margins? I mean, last year, margins were extremely high at 21.7%. So will we come close to that number? Or you are expecting some kind of contraction in the current year?

It depends actually what is happening, sir, now the diesel prices have steeply gone up and steel prices, cement prices are also not under control. So here it's quite difficult to say when the last year figures were all these the cement, diesel and all other steel, cement prices were in control. That time we could achieve those figures, but here, we can't commit the same whole figures, sir.

Okay. Sir, last question, what was your cash flows from operations in the first quarter of current year? And how would it compare to the first quarter of last year, cash flow from operations for a stand-alone entity?

Okay. Venkat, go ahead.

Yes. So sir, what cash flow from?

What was your cash flow from operations in the first quarter of the current year? And how much was it the first quarter of last year?

Sir, this detail we will work out, and we'll give you separately, sir.

We have next question from the line of Vibhor Singhal from PhillipCapital.

And congrats on a great set of numbers. Sir, few questions from my side. I don't know if you have mentioned this in your opening remarks, maybe I missed that. So as we are standing today, in the mid of August, what would be our total execution level in terms of, let's say, what percentage of capacity are we executing at this point of time? And also what would be the labor availability across the sites on an average for the company?

So if you -- if I think about the irrigation project that if we have, say around 90% strength for the day shift, but night shift completely off because of this migrant labor that is more -- mostly because of the truck operators and Toyota operators and all were absent out of the period. But I think we -- as the irrigation project is concerned, we are able to achieve around say 70% efficiency here.

And roads?

Then if we go to the highway part, around 60%, we are able to do these projects efficiently. And the laborer also around 55% to 60% because the laborers who are there during lockdown period and for 3 months, they have left and new laborer will come. So the old labor were replaced by new labors and a little more by this month end, we are likely to receive a few more laborer in number in each project site. So we are arranging separate buses because they should not interact with the public transportation and end up getting the COVID and then there's quite a direct environment supported by us also. So we're taking utmost care to bring them here even after that, they are taking a week time that means they're hesitant to come on place and all that. But still, we are able to manage around say 55% to 60% labor expense is there now. Because of the rains -- rainy season only the efficiencies are also falling, otherwise, it's okay, sir.

Sure, sir. Secondly, sir, on the balance sheet side, as we still have around INR 500 crores of receivables from Telangana government. And we also saw that in this quarter, our debt has increased by around INR 120 crores. So do you believe -- do you see that because of maybe as you mentioned that some payment delays from government bodies, the debt might go up further in this year? Or do you think the debt will come down in the next 2 to 3 quarters?

Correctly, out of -- debt of around INR 330 crores, what happen, 1 of the disbursement in SPV that we got in the first week of July, around INR 124 crores, INR 125 crores. So if you see as on date is around only INR 230 crores only, just as on today. Whatever the level, they are in the March, the same is there as on today. So whatever 1 disbursement, actually we got delayed, actually. So that's why debt was there in that quarter. But definitely, after receiving up these receivables from the Government of Department -- Government of Telangana Department, the debt is going to be further reduced, sir.

Okay. Sure. So you believe debt can come down from current levels by March next year.

Yes, yes. Sir, definitely, based on this payment cycle from the Government of Telangana, sir.

Sure, sir. Sir, my last question is basically on the order book and our strategy going ahead. So in the last 2 years, I mean, because of the recent 4 of irrigation orders that we have done, we are now 54% of the order book is almost in irrigation now. Now that you are also waiting for be it around 15 projects in the road segment. Sir, going forward, do you want to maintain this 50-50 kind of a ratio in the order book? Or do you think that this irrigation just happened to come altogether, and that is why we got a booster. And we will continue to focus only on road segment as our primary segment?

Yes. Sir, actually, as I said, it is right, because now the projects are there, and we could bring the project, means our bids were successful. So thankfully, we got these projects. Or otherwise, actually sir, the main problem in Telangana project is they don't give you any mobilized in advance. More than 60%, 70% of the bidders who are not willing to come because, okay, there is a payment problem. There is a -- not even they are giving the advance. So people are not showing the interest, that's why, I think, we are able to have some good margin also here, and then we are taking a little bit risk also. We are acquiring ourselves to a little bit risk. But sir, I think going forward, there are not ample many projects that are available for the upcoming future. But if we can -- if at all, the reverse interlinking program is being taken up by state government or defenses, definitely, we are -- there in the right place with that experience to do the whole term. So we particularly hope, the highway project [Technical Difficulty] so that's our basic business.

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

So I hope that -- so again, coming back to this irrigation projects. Now as you had highlighted that these are state government projects and, of course, payment issues are there as well. So like what do you expect like the working capital levels to be like going forward? And what is the status of the financial closure for these projects? Like are the banks willing to come forward have the government departments at this juncture as we speak, has enough money to actually go forward with the payments. So what do you see the situation is?

Sir actually, working capital level is concerned, we are really geared up once we can say. But due to delay in Telangana projects, as of course, I can say that we have some issues rating around. But actually, frankly speaking, the margins are also good. So we are likely to continue working on it. And because of this COVID only, this much delay is there. Otherwise, we are not expecting much delay on this. So however, we have taken certain small loans, and we are paying them back also. And moreover, the state government concerned only Telangana state has this problem, but none other states has any other problem. We are working in Tamil Nadu, Karnataka and all we have no issues. So working capital concerned, we should not be facing any problem in coming 1, 2 years, sir. At least for this year, I can say.

But pardon me...

I think, we are geared this cycle whatever the outstanding is around INR 500-plus crores is outstanding from Telangana government. If it is paid in this month end -- by this month end also, we will be comfortably running the show, sir without any hassle.

But sir, for the other state projects, like, let's say, the Karnataka ones and this, so there is an element of multilevel funding like the KSHIP project is ADB funded. But in this case, there is no such element, right?

Actually, sir, the new order is what the bank tie up, but that is -- that's what I told you in the beginning that they're trying to tie up the banks and say government arguments between our executing the loan government between them. So that is happening. So once that is there in place, there should not be any problem. And the ongoing was -- which there is in that KP Sagar. KP Sagar is completed. And when it comes to the Mallanna Sagar. Mallanna Sagar is almost 60 -- 65% it is completed, sir. I think another -- by this October, November end, we will be completing the project also. And the outstanding there, we have a big thing, but I think as they have promised to pay this by this couple of week, so I think there will not be any problem. The problem will be on the one-time projects, sir. The one-time project is also under progress, but we will watch and go on it. Because if the new projects are starting up, entire equipment we can divert there and we'll have a right to stop that project also for some time unless they are in the payment and do it.

Okay. So if the payment situation and, let's say, the financial tie-up, let's say, takes a bit longer, then you won't risk your working capital. So maybe you can slow down the execution then. Is the understanding correct?

Yes, sir. Actually, see, sir, what happens if this loan is tied up in this power flow -- the pump house project and the canal project, then the equipment also -- we have a point where we actually can deliver my equipment and do some work here, so that I can get the payment. And that Palamuru Lift Irrigation, it is -- belong is that -- Vattem project belongs to the Palamuru Lift Irrigation. So Palamuru project -- they are not much giving importance, I think. But they asked us to do the work since the Vattem project is under priority, what I have been told. So it's not any problems. After COVID, I think, we will not have problems. That's what I'm thinking.

We have next question from the line of Ravi Naredi from Naredi Investments.

Sir, any new more claim to be received in near future in next 3 months from NHAI?

Claims -- sir, actually, the claims are under process. I can't say right now, but there is some -- settlements are going on with NHAI and KNR -- and KNR where we may get certain claims in this year, but can't say when we get, sir.

Okay. And sir, we already sell 2 toll road, Walayar or Muzaffanagar (sic) [ Muzaffarpur ] Barauni again, but you are telling the deal will be final this year. So I could not understand what is going on.

Sir, actually the Walayar-Vadakkancherry concerned, there is 2 highways we are in discussion with, and final negotiation between both the parties, like KNR and Cube, is under progress. So because of the COVID and all there has been certain impact. And due to raise in the insurance cost -- project insurance cost there has been certain negotiations which they've put forward. So all these we are under discussion. And we would -- if we are able to close this -- all these by month end, I think in a couple of months we will be able to sell the project, sir.

But this is only Walayar only, not Muzaffanagar (sic) [ Muzaffarpur ] to Barauni, right?

The other one, the Muzaffarpur-Barauni that -- it has got augmentation issue in coming 3, 4, 5 years. I really can't say what -- when it is going to happen, but there is an augmentation issue. So none of the buyers are interested to come forward because soon after they will land into augmentation and the valuations and all they're not sure of. The time period kept is very small for that. That's the problem.

We have next question from the line of Jiten Rushi from Axis Capital.

Congratulations on a good set of numbers. Sir, my first question would be on the order backlog breakup for the irrigation projects. We have around INR 3,870 crore of irrigation projects. Can you please give us a breakup of the order backlog like KP Sagar, Yedula, then this Palamuru, if the 2 you now comment on irrigation projects -- the recently won 2 projects. If you can just give us the breakup of order backlog.

Yes, yes, yes, sir. For KP Sagar, sir, it is INR 84 crore, sir. For Yedula, it is INR 12 crores. And for Mallanna Sagar, it is INR 518 crores, sir. For Vattem, it is INR 847 crores. And 1 of the...

One JV project is also there?

JV project INR 77 crores of that.

And balance is for the 2 new projects. That is?

Yes, INR 1,600 crores and INR 695 crores.

Sir, last time, you said INR 417 crores, INR 417 crores.

Yes, sir. Actually, initially, we thought that 60% only work we will execute, but now we have discussed with the JVs and now entire 100% portion now we are executing, sir.

And sir, if you see about Telangana, so Telangana, I think, we have not booked any revenue this quarter, looking at the order backlog. So what is the unbilled portion and the outstanding receivable portion from the Telangana? I think it should be more than INR 540 crore, right, sir?

Yes, sir. Actually [Foreign Language] as in total, you can say that total receivables actually from the Telangana government as of June, it is INR 526 crores. And after that, actually, we have done some work, but which is not certified. That is around INR 180 crores. So put together, if we see, around INR 680 crores is the receivables plus work certified and work done but not build is there of around INR 680 crores, sir, as on date.

Sir just INR 680 crores includes receivable, how much, sir?

Receivable of INR 127 crores, sir.

INR 120 crores and balance is unbilled revenue?

Unbilled revenue is INR 440 crores, sir. And around INR 180 crores of the work done but not certified.

Not certified?

Yes.

So that's a big number, actually. Sir, anyways, sir, can you give me the retention money, cash and bank balance, receivables as on June and on total unbilled revenues as on June, sir?

So this retention money INR 163 crores actually, sir.

Retention is INR 163 crores, okay.

Yes. Cash balance is of around INR 16 crores, sir, actually as on 30th June.

And Unbilled total?

Total unbilled is INR 441 crores. These are irrigation income.

These are total irrigation only? No, nothing from rural...

Major of unbilled is from irrigation only because balance other HAM projects and road projects there we have done the work. And there is no unbilled portion like that.

Okay. Okay. Okay, sir. And sir, in terms of execution, Reddy sir was talking about -- saying that we can do INR 200 crores, INR 300 crores of execution from the newer irrigation projects. So that is something which you're talking about this year, if at all, the financial tie-up happens on time? Or else if financial tie-up doesn't happen, then we will not be able to book INR 200 crores to INR 300 crores revenue from 2 irrigation project this year, right sir? Is the understanding correct, sir?

Yes. Yes, sir.

Yes. Correct, sir.

Yes. Correct.

And sir, on the debt level, so are you looking to -- for any additional borrowings because now we're looking to invest equities and if you win more HAM project and looking at the Telangana situation, the payments can get delayed if at all, we hope that it should come on time. Is there any debt levels which are looking to go up in next couple of months or this next quarter like?

Sir, actually, we are not really expecting any debt level to be booked because the reason is these are the -- what are the receivables we have to receive from the government of Telangana. For that, actually, we are pushing hard. And we expect that at least within 1 month, this quarter, we should receive the money. And other than this, this Cube deal is also under final discussion. So we expect that when these 2 events will happen, then whatever the equity requirement of around INR 250 crores in this balance period, it will suffice. So we are really not seeing any debt is going to be popped up in the balance sheet.

And sir -- and the depreciation. What is the run rate expected? Because this quarter, the depreciation was down steeply sequentially. So what is the run rate expected, sir, depreciation because usually for irrigation work we have higher rate of depreciation in terms of execution, so?

Yes. Sir, definitely, sir, part of the irrigation project depreciation knows that what are the -- right now, we have around INR 75 crores of net block of -- in the irrigation projects only, sir. So -- and this year, we are not expecting any capital addition. So there may be around INR 100 crores or INR 120 crores will be the CapEx for this year. And Q1, we have incurred only INR 15 crores of the CapEx. So this year, we expect that depreciation could be in a range of around INR 40 crores per quarter. Around INR 150 crores to INR 160 crores will be the maximum depreciation for this year, sir.

So INR 100 crores to INR 120 crores CapEx you said for road projects, the new projects you are received?

Road projects and even some irrigation project, if we have to buy some cranes, like that, sir, is telling. So all put together, we are not going to increase much CapEx in this year, sir.

Okay. Sir, this INR 75 crores, what is the gross block for that, sir?

INR 75 crores gross block.

INR 75 crores gross block. You said net block is INR 75 crores. Gross block is how much, sir?

Gross block is around INR 300 crores, sir.

INR 300 crores is INR 75 crores net block and INR 300 crores is gross block.

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

Congratulation on very good set of numbers. Sir, my question is, this quarter, what was the irrigation revenue in the mix?

Sir, around INR 108 crores, sir, actually we did revenue in this quarter.

And what was the revenue in June '19 quarter, sir, on irrigation?

June '19 is around INR 57 crores only, sir. This quarter, we did around 23%, sir, actually, this quarter. And corresponding to last quarter, it was only 13%, sir.

Sir, still, I'm not able to understand because the 50% -- 50%, 55% labor, you have been able to surpass last year's number. And even if I say the irrigation is not a major contributor. So when you are saying that 80% labor when it becomes in next couple of months, we'll still be at an efficiency of 80%, 85%. So can you explain why despite like 1 month, almost 1.5 month of operation shut we were able to surpass last year of revenue despite irrigation not contributing a very big amount?

Sir, actually, what happened, as you see that old orders have been already completed. So there is no revenue from that Polachi-Coimbatore and then Coimbatore flyover, which is completed. And then the irrigation projects also, 2 of them are already completed. Like KP Sagar is completed.

No, no, sir, my question -- Reddy, sir, my question is [Foreign Language]

Yes, sir. I'm answering -- I'm in a process of answering your question, sir. Okay. So you shoot your operation then I will -- some more, yes. Yes, sir?

I'm saying [Foreign Language] execution despite 1.5 months of operations being shut is more than last year's execution. And even when I was trying to see the mix of irrigation and roads, so irrigation [Foreign Language] contribution, INR 50 crores, it has gone up by INR 50 crores, I understand, but not that meaningfully gone up, despite it having higher labor. Roads [Foreign Language] labor was less. Still we have been able to do very good number on roads. So what contributed? So why -- how is the execution much better than last year? I'm trying to understand that.

Actually, there's nothing more than nothing good or anything here. Here is that -- why the figures have come up means the number of orders are increased, one thing, and a few projects which have got completed in the last quarter so whose revenues which were unbooked or unbilled and certain miscellaneous items which were not billed because of uncompletion, noncompletion, all that got paid. It's not that actually, sir -- that Polachi-Coimbatore, there was -- last bill we got quite a good sum. So kind of that 2 projects or 3 projects have been completed in that particular quarter, so which has contributed good revenues, sir.

Sir, addition to just this GHMC work actually, sir. We around INR 40 crores work in this quarter. [ To what extent ] actually we have not envisaged we are going to do this much of work in this quarter because due to lockdown and there is no traffic, so government -- state government has pushed hard. And almost INR 40 crores of work actually we did in 1 quarter actually. So this has contributed actually a lot, what we have not expected from.

Okay. Okay, Venkat, my second question is you said that the debtors is INR 127 crores, unbilled is INR 441 crores and work in progress is INR 180 crores, right?

Yes, that is INR 180 crores. Yes. That is up to other, what I'm talking, as on date actually, up to July end.

So this is -- in this, how much of debtors will be -- in the debtors, how much will be NHAI debtors? Out of INR 127 crores how much would be the NHAI debtors? And how much would be unbilled out of INR 441 crores NHAI unbilled?

Actually, sir, out of INR 475 crores of debtors as of 30th June, INR 127 crores debtors relating to irrigation. So balance INR 348 crores debtors, which is other than basically irrigation debtors. So out of INR 348 crores, around INR 200 crores is the debtors from Tirumala. That money we got in actually -- around INR 125 crores we got in the first week of July. So out of INR 348 crores, INR 200 crores debt is pertaining to 1 project, Tirumala, and some other SPV like Somwarpet and things that we got. So out of INR 348 crores, around INR 180 crores -- the money we received actually in the first week of July. So right now, as of -- other than irrigation, actually, there is no much challenges in debtors, other than irrigation.

Irrigation is totally INR 750 crores of exposure on the balance sheet as of now. So INR 127 crores...

Around INR 650 crores, yes. Receivables as of date, around INR 680 crores, yes.

And Reddy sir said that we are expecting a couple of weeks' time. How much of payments we are expecting on the INR 680 crores?

Around INR 440 crores, sir.

Okay. INR 440 crores you are expecting. So, okay. Well, just 1 more question, which I have is that AP government has now showing intent of picking up development works. Recently, they have also planned to roll out irrigation projects. Plus sir, Jagan Reddy has come on record and said that he is looking at revival of the capital projects. So what is your view, whether you will bid for those projects in AP, if you can give some sense on that?

Pardon? Pardon, sir. I couldn't hear that.

Sir recently, in the Andhra Pradesh, CM, Mr. Jaganmohan Reddy, has said that he is looking to -- now looking to start -- restart all the stuck projects and making some payment to keep the contractors for the stuck project. Even I think on the irrigation side, there was -- they were looking to revise some of the projects where the central government has asked them to -- Telangana to make a DPR and for the time being stop the projects on irrigation. So I was just asking, how do you view the opportunity of the order intake or the bid award opportunity in the Andhra Pradesh? Because till now, we have stayed away from the state projects from AP. So we have NHAI projects there. We have bid there. But I wanted to know how do you see that AP ordering opportunity panning out for you? Whether you will bid for those projects?

Yes. Actually, AP is -- as long as the project is concerned, we would like to bid. But at what model will effect and as we compete like we compete in NHAI or not, that is to be decided. Definitely, I would like to go for meeting this time, but I would like to also factor in the delays of payments there. So that's 1 of my concerns. Otherwise, we are open to do it, sir.

Sir, has the central government told the Telangana government to stop the irrigation project and prepare a DPR and then look at proceeding? So is this correct? Will it impact any of our projects in Telangana?

Sir actually, what happens. These people are again started fighting back on that saying that -- central government says this year-end, last year-end, and there have been certain observations from the estimate side and all that. And there has been disputes between Telangana and Andhra Pradesh state for water fight. So these all work there is the central government to take up. But I think ongoing, we have asked them, whether is it going to impact our ongoing project? No. They said, you go on with the existing projects. We do not have any problem on that.

Okay. Okay. Just lastly, on the Cube deal, sir, how much do you think approximately range -- I know it's difficult to quantify. So will it come down by 10%, 20%? So how much of discounts we'll be passing on approximate range you can give?

Sir, actually, it is premature to say anything, sir. But I think they were coming in 2, 3 areas, they are coming for negotiation There is 1 area is that there is a sudden increase in the insurance -- project insurance. The maintenance for insurances have gone up. One thing they are coming up with. Second thing that there is a revenue shortage during the COVID period and lockdown periods. So for that, they have some past production which they want to do first. So we should see whichever like this that proper calculation, so we are also open. If it is really a loss, okay, rather I'm there. I would like to have -- I will have to continue with the losses. So as of now, whatever losses which are there that we would likely properly calculate and take the impact of that in our books and then leave the project. So that is under stage of discussion sir.

Okay. But intent is to exit the project. Our intent is to move away from the project. It will take some...

Yes, sir. We are positive towards that. If they are very unreasonable, we cannot do anything, but if they are reasonable enough, then we will be okay to go with this.

[Operator Instructions] We have next question from the line of Alok Deora from Yes Securities.

Congratulations on a great set of numbers. Just a couple of questions. One is, sir, the debtor days has been rising since the last several quarters, and now we have taken some more irrigation projects. So where do we see this heading? Because you're also mentioning that debtor is quite challenging, while we're getting higher margins. But where do we see the debtor position ending up?

Actually, as you know that, before this COVID things were almost okay. I can't say that they are okay. There was delays, but not more than 90 days delays was there earlier. But due to COVID, actually, the funds have got diverted, what everybody is paying. So definitely there is a disturbance in Telangana government's payments only, sir. And except this, I think everything is in order. And even now they have taken up to pay the balance bill, at least now whatever that we have submitted last month bills are -- up to last month bills whatever we have submitted they are ready to pay in a couple of REITs. And they have taken into system to pay them. So once they pay, I think it should be okay. We -- I don't think it will get further worsen. So that's what we are expecting, sir.

But sir, have you...

And the new projects which are already tied up with the banks and it's only documentation that has to happen between the state government and the bank. So that's going to be in order what I am thinking.

Okay. So have you received any payments post June? Like in this 1.5 months?

No, no, sir. Actually last payment was done in -- during the February, sir. And March we were supposed to be paid with quite a good sum. But the COVID has ruined our situation.

Yes. Because sir -- because of the changing mix, I think the debtor days has been rising. So just if we are...

Yes. Sir, actually, in our track record we never had such situation. But this time we are facing this really.

And sir, 1 more question. So what's the competitive intensity on the road EPC segment? How do you see that shaping up?

Sir, actually road EPC, there are very less number of tenders which have been now announced, sir, in which every bid is around 15 to 16 meters? So the intensity is quite high, sir.

Sure. So we had participated in some of these?

Yes. Actually, sir, generally, we tried participating. We have very well participated in EPC bid. 1 or 2 we have participated also.

Okay.

And actually in certain areas where the Gujarat and all topics on the Expressways because [Technical Difficulty] is highly crowded and our cost was not [Technical Difficulty] initial cost is going up out of competition. So we did a couple of bids but we didn't get bid, sir. We thought we will not win the bid, and that's why we have stopped. But upcoming is that all that MP, Maharashtra and all other states we would like to bid even for that Expressways, sir.

We have next question from the line of Rohit Natarajan from Antique Stockbroking.

Congratulations on a good set of numbers, sir. Sir, my first question is to understand the labor availability in the road projects because what I'm given to understand is you have close to INR 3,000-odd crore -- 3,000 laborers at site. And out of that, maybe close to 80% is actually machining and remaining 20% is where the migrant labor situation is where -- comes into play. So 80% is not an issue for you. Ideally, you should have 80% worker availability. But the figures that you're talking about is 60% labor availability. So I'm just trying to reconcile what that number looks like. And how is the labor availability particularly over there?

Actually, sir, I was saying that the 60% level is as of today. We have received new set of labor, but the old set of labor who are at least 25% to 30%, 40% labor, who were there in the project during the COVID period also -- that I mean lockdown period also. They -- once these new people have come, they left. So there has been plus, minus and something. That's why it has fallen to 60% levels. Otherwise, as you said, it would have gone up by 80% also. But I think another [Technical Difficulty] be having -- September first week when we must be having good set of labor numbers in the each site. We have been organizing almost 30, 30 number, almost 200, 250 members, and we are organizing by this month end itself. So definitely, they come -- if they come, then things are going to improve. We are even organizing some buses, almost 7, 8 buses we are organizing for them. And if this thing is successful and further if we do another attempt, definitely, we should be having enough labor on site.

Sure, sir. My second question is more to do with fund availability at Telangana government. Sir, there are certain news where CM KCR has said, that funds will be consolidated and the immediate priority is to do the works on Palamuru-Rangareddy, Sitarama and Sammakka barrage. So Kaleshwaram Lift Irrigation is not in the picture. Is that the way we should read it?

Really, we are not understanding what is this political set of statements are going with. But really, sir, we have been asked to work and we are working. And as long as we are paid, we are okay with doing it. But as you know, maybe I am also doubting myself. The new set of projects, which we have received, we have been asked to stop for 2, 3 months unless the loan tie up is done between state government and banks. So maybe they have cited that reason only, but nothing else they have said.

We have next question from the line of Binod Modi from Reliance Securities.

My question basically pertains to your margins, sir. You said in your statement that it would be difficult for you or kind of challenging to you in terms of maintaining last year's of margin, especially with the fact that you were saying because of sharp rise in cement, bitumen as well as other input costs it would be difficult for you to last year's of margin to maintain. So does it essentially mean that our irrigation projects -- these projects do not carry any sort of passthrough, sir?

Actually, sir, everything has a pass-through. But when it comes to the cement deal, there is a very -- the component in WPI for cement and steel is very less. And if there is a raise in cement, if there is a raise about INR 1,000 in a tonne, it gets reflected only INR 400 or something. Around 60% is off from the [indiscernible]. So that's where we have impact. Even steel is same like that. And I think as to the POL and all, and they multiply it with 10%. But in fact, inquiring, I would say, sometimes 12% to 15%, we are talking. So that differential we'll be losing.

Okay. Got it. So essentially, it's the cement prices, which affect a lot because cement -- I understand cement, I think, it takes a lot in terms of consumption for irrigation projects. So I think prices of -- movement of cement prices matters a lot for the margin. That is what you wanted to say compared to other inputs?

I'm really not worried much on the state government projects. I'm really worried much on national highway projects. Because the revenue contribution from national highways is almost 60%. So there I'll have issues. And all that, WPI problems also come there only.

Okay. Okay. And with the kind of irrigation projects that you have added in recent months or so, of course, your CapEx would be significantly higher in FY '22, if not in FY '21. So can you give me a broad ballpark number for CapEx for FY '22, sir? It would be helpful.

Actually, sir -- actually, the FY -- this year concerned, we are not having much CapEx requirement, but upcoming years we will be able to -- once -- actually, the major CapEx has to be done on the irrigation project, which is the pump house project, sir. So that pump house project designs are not come up, sir. We were in the process of getting the designs approved. And once the designs are in place, then definitely what size of cranes we'll be requiring, what size of gantries we'll be requiring, what sort of railing equipments we'll be requiring, those are going to be decided, sir. And the -- we would also be requiring telescopic booms and all that. So these requirements only -- the capacities only get finalized during -- once we get the designs and all, sir. So definitely, we are waiting for that to happen. As it's a new era for us, that pump house project is a very new era for us. So we do not have complete detail with us to work out and tell you exactly the target, sir.

We have next question from the line of Prem Khurana from Anand Rathi.

Most of my questions have already been answered. Just 2, if I may. So 1 was, I think, over the last 2 quarters, what we've seen is eventually for our hybrid annuity projects, for instance, in this quarter, for Chittor, Mallavaram, our estimated equity number has gone up and grant is down by a similar number. And I think we saw this with Ramsanpalle, Mangloor as well. So what would explain this, I mean, lowering of grant and equity going? I mean second related to this would be eventually, so when Cube invest money, assuming I mean you let them invest money -- I understand, I mean, you don't want them to invest money now because you want to have your IRS in place. But if they were to invest money, 49%, would that 49% -- would that be calculated on a new raised equity? Or it will still be the old equity numbers that you'd given us at the time of that deal?

Sir, because of what happened in similar project, the same thing has happened in Ramsanpalle also because 1 of the lenders, actually, they are -- because this project has been funded by HDFC Bank. And after that, they have down sell to different lenders. One of the lenders condition that they may -- they won't consider that inflation -- the project inflation multiples in the source of finance. So what they told that, actually, whatever the inflation portion in the grant actually, it should be excluded, and it will be passed through to the EPC contractor. So corresponding, we have reduced the grant and increased the equity component. And now whatever the inflation is coming from the NHAI, it will be passed to the EPC contractor. So with that content that there won't be a small change in the financial model, what we did. With that, actually, there is no change. Now whatever the inflation is coming, it is passed to the EPC contractor. That is one. And second, as for in this respect of the 2 -- whatever, the 3 project we have -- we are in the process of selling, that the sale will happen on COD date. But definitely, we have already formalized the valuation method actually. So we will plug on this figure in that -- there, and we will arrive the value. So as of now, because we've done valuation based on the old model and now a real valuation -- because balance was -- it depends upon the balance completion cost that we will arrive only on the COD date. So once -- on COD date, we will plug these figures, and we will come out with valuation.

Okay. And sir, second question on this quarter, the tax rate is almost around 30-odd percent. So what could be the number for the full year?

Sir, because this year, sir, actually, what -- this quarter also, there is only 12%. This API project contributed only 12% in our revenue and balance, 88% in the non-API project. In future, I think this trend will go up. So this year, we may end with this same around effective tax rate of 30% actually.

Sure. But would that mean you would...

If we utilize the entire MAT credit. And next year onwards, we will go to new tax raising.

We have next question from the line of Vijayakumar from Spark Capital.

Sir, in your opening remarks, you have sounded positive over the long term because you expect government expenditure to increase in the infrastructure space, possible for roads also. So are you seeing from your interaction with the Ministry of Roads or Ministry of Finance or even with NHAI any concrete evidence of this happening? Or is it only a hope?

Hello? Sir, I could not hear. Can you repeat the question, sir?

So are you able to hear me now properly?

Sir, hello?

Is it audible now?

Yes, sir. Now it is.

Okay. So yes. So I was referring to your opening remarks where you sounded positive on government CapEx in infra space increasing. So I'm asking whether there is any concrete evidence from your interaction with Ministry of Roads or Ministry of Finance or with NHAI now that indicates that this likely to happen. Or is it only a hope?

Sir, right now, it is a hope, sir. We have himself belief that the incremental or the infrastructure sector could go intro stretch with the overall scenario and revenue circulation and environment generation, everything would happen. So he wants to give good thrust on that. So right now it's a hope. I'm not able to interact with any individuals because I'm unable to go to Delhi. Because if you want to go to Delhi, you have to go through flight or something. Then now flights are not suggested to go because of the COVID. So really...

Understood. I'll ask -- yes, I'll go ahead with your point.

Are not -- whatever answer to the point I have above, then I'm able to talk to them. Otherwise, I'm unable to.

Understood. So another way of looking at it is, of course, NHAI does land acquisition every year. And of course, 30% of its expenditure every year goes into land acquisition. So whether that is, again, have picked up materially in the last 1 or 2 months? Do you know anything like that?

Sir, actually, the both -- they are driving very hard -- that would be very hard for the land acquisition. But in a way, they are doing -- it's okay, sir. Now there is a bit incremental progress is there in land acquisition. But I can say -- quite I can say that it will not sufficient, whatever efforts [Technical Difficulty]. And we are also giving NHAI -- NHAI is also now announcing the tender after 80% of the land availability. So these are likely improving...

So this 4,500 -- understood. So what I'm asking is this 4,500 kilometers of target for FY '21, so you are telling most of it would be tendered only with 80% land in possession. Is that the right way of understanding?

So yes, sir. At this time we can say so.

Okay. And...

Maybe third quarter onwards, we may be improving a bit around. We have to see really that the COVID is really a botheration act for us. One of our site is closed for 15 days as we have been reported 1 single case. And few are [Technical Difficulty] saying in a mass gathering, so they have closed down entire our [Technical Difficulty]. So if these are repeating like this, definitely, there is a minus side. Otherwise, things are okay with us.

So coming to this bank funding. So in the past, bank financial closures have been a big hindrance for timely execution of HAM projects. Again, there too, are you seeing any positive commentary and view from banks that this year, whenever projects are awarded, it will be financially closed on time? Or is it going to be similar to earlier experience?

Actually, I'm hearing positive news for us. But banks are also I think -- they have not increased their appetite, what I hear. So they are also selective what I have been told.

Okay. Final question. You had mentioned we had booked revenues related to projects which were completed last quarter and some miscellaneous income in this quarter. What would that number be?

Venkat should have the details. But in detail, we can get you...

Separately, I will provide you.

Ladies and gentlemen, due to time constraint, that was the last question. I'd now like to hand the conference over to Mr. S. Vaikuntanathan for closing comments. Sir, please go ahead.

Thank you, everyone, for participation -- for the participation in our earnings call. In case of other queries, you may get in touch with Strategic Growth Advisors, our Investor Relation adviser, or feel free to get in touch with us. Thank you very much.

Thank you very much, sir.

Thank you very much, sir.

Thank you, sir. Ladies and gentlemen, on behalf of KNR Constructions, that concludes this conference call. Thank you for joining with us, and you may now disconnect your lines.