NBCC (India) Limited (534309) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to NBCC (India) Limited Q1 FY '23 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Modi from ICICI Securities. Thank you, and over to you, sir.

Thank you, Jahnavi. Good afternoon, everybody. On behalf of ICICI Securities, I welcome you all to the Q1 FY '23 Earnings Call of NBCC (India) Limited. From the management, we've got Mr. P.K. Gupta, Chairman and Managing Director; Mrs. B.K. Sokhey, Director of Finance; Mr. Rajendra Chaudhari, Chief Executive Engineering; Mrs. Reshma Dudani, Executive Director Engineering NBCC; and Mr. Pradeep Sharma, GM, Engineering. We will start the call with a brief opening remarks followed by Q&A. I will now hand over the call to Mr. Gupta. Thank you, and over to you, sir, all the best.

Good afternoon, and welcome to all the participants in this investor conference of NBCC after the results of first quarter of financial year '22, '23. Your company is able to achieve INR 1,853 crores total income on consolidated level and INR 105 crores PBT at consolidated level, which is 31% and 112% higher, respectively, in comparison to previous year's respective quarter results in comparison to the results of '21, '22. However, NBCC has made a provision for expected loss of INR 110 crores in NBCC green view Sector-37D, in Gurgaon. So we have booked the entire expected loss in this project except any future uncertainties. So results are, net profit is close to 0, after booking a loss, which is an exceptional items. As on date, our order book position is stand-alone order book is INR 46,480 crores. We have deleted some which are not expected to continue. And consolidated order book is INR 56,000 crores. Ongoing work in consolidated orders are INR 20,235 crores, and out of which NBCC is having around INR 16,153 crores, going well. We have secured a stand-alone business of INR 420 crores in first quarter. The works are Puducherry Smart City INR 314 crores, Aligarh Smart City INR 50 crores and National Cooperative Union of India INR 33 crores. On consolidated level, we have secured a business of INR 660 crores, out of which HSCC has secured a work of hospital in Mauritius at INR 107 crores and HSCL has secured 2 works, 1 is sports academy at Jajpur INR 45 crores and IISER, Kolkata INR 40 crores. We have awarded the tender for INR 1,340 crores on stand-alone basis and INR 1,517 crores on consolidated basis. And tenders in pipeline, which are under the various stages of [ Award ] are INR 1,507 crores. Now I'll briefly tell about our 2 flagship major projects. One is Amrapali and other is 7 GPRA redevelopment project. In Amrapali projects, we are going very well. We have been able to take a loan of INR 1,500 crores from a consortium of bank which has expedited the progress of this project. We have completed around 3,400 flats in various projects, out of which INR 1,600 -- total 1,600 flats have already been handed over to homebuyers. And we plan to complete 8,500 flats by October 2022. Of course, services for these flats will take some more time. But otherwise 8,500 flats will be completed. Regarding 7 GPRA redevelopment project. In Nauroji Nagar, we have been able to sell total [ INR 4,500 crores ] worth of property till now, out of which INR 341 crores worth of property has been sold in quarter 1 of financial year '22, '23. In Nauroji Nagar project, the work is going on very well and 52% of the work has been completed. And in Netaji Nagar, our 1 contract is going on of the value of which is INR 1,356 crores. Sarojini Nagar, we have 3 projects going on. The total value of INR 1,650 crores. Recently, we have launched the sale of Sarojini Nagar commercial, which is near to metro station of Sarojini Nagar. And we have been able to sell property worth INR 24 crores. So we expect to sell the property in this project very quickly. This is a commercial high street market. And this is parallel to Sarojini Nagar and Sarojini Nagar market is already very congested, we hope to sell this property soon. For major projects, the business that is in pipeline is the construction of defense land parcels in Delhi, modernization of government of India [indiscernible] and redevelopment work in various locations. So this is all about my opening remarks. So the investors are welcome to ask the question.

[Operator Instructions] The first question is from the line of Rohit from Antique Stock Broking.

So you said that your stand-alone order backlog is close to INR 46,000 crores. What was the quantum of order cancellation in this quarter, which projects are there?

You see, we had some projects which are not materializing like State Guest House at Visakhapatnam INR 133 crores and redevelopment company of Jaipur joint venture with Jaipur, Rajasthan government INR 495 crores. Likewise, IT park Jammu & Kashmir INR 92 crores and monetization of RINL real estate properties, assets, Visakhapatnam INR 58 crores. Likewise, so we had very -- we had possibility of getting net rent is -- in this quarter, we have deleted these works. And that is why...

So all put together what is the amount?

Pardon?

All put together, this canceled projects, what is the amount?

It is around INR 3,000 crores.

Sir, is it fair to understand that this is -- or by not giving anybody in cost plus model PMC model?

Yes. Some of them were PMC and some of them -- major are PMC.

Okay. Second thing is that, sir, you highlighted out that the tendering stage is almost like INR 1,500 crores we are planning to order. This year, our target is if the last call is anything to go by, you were looking at INR 8,000 awarding, what seems to be the number over there and how -- where we're in a track to achieve it?

We will be -- you see the presently the tenders to be awarded in progress of INR 1,507 crores. And we will be -- likewise, we'll be for the year, will be around INR 8,000 crores.

Sure. Sir, and the second question is on margin spot. Sir, we have seen provision -- I mean, this 3-point kind of EBITDA margin that we have reported, is there any provision write-back or any such provision made? What is that amount looking like?

Write-back is INR 4 crores, which is a reversal of ECL provisions.

Okay. Sir, final question from my side is on the other income. How much of the other income is -- and nearly an accounting income? Or what is the cash realization against it -- can you explain about that?

This is the other income consist of INR 46 crores, out of which interest -- larger part is the interest received from the [ FDR ] and money interest on the seed money which will be given to the [indiscernible] for redevelopment projects. So in this quarter, where the [ FDR ] interest have been received in full, the seed money interest in this quarter has not been received in the cash. But so far we have received around INR 250 crores of the total interest view.

Sir, what was the total interest booked so far to date, I mean, from this particular project?

On the seed money, we have booked INR 450 crores out of which INR 250 crores have been received on the interest portion. [ INR 220 crores ] is still due on the part of this interest.

[Operator Instructions] We have a question from the line of Anshuman Ashit from ICICI Securities.

Sir, what is the cash that we have in our hands currently at the end of June?

Yes. On a standalone basis, we are having the INR 2,100 crores of cash and bank balance as on 30th of June, 2022.

And sir, for the current year FY '23, what is our revenue and margin expectations, both on stand-alone and consolidated level?

The EBITDA portion will remain the same. But the overall margin, the EBITDA we have shown. EBITDA margin is 3.56% in this quarter, it will remain around the same and the PBT margin is 6.89% before the [ exceptional ] items, we are not expecting any further loss on 37D. So PBT margin will remain around 7% and EBITDA margin will remain around 3.5% to 4% in the coming quarter.

Both on the stand-alone and consolidated?

On the stand-alone basis.

And for the consol?

Consol will more or less remain same, see the major portion is on the [ NBCC ] stand-alone basis. So there is hardly any decrease on part of it.

Okay. Just the revenue guidance of INR 8,000 crores, that is for the consol level?

Yes. INR 8,500 is on a consolidated basis, we expect INR 7,000 crores on a stand-alone basis in this year.

And sir, do we have any projects outside of India also currently that we are executing, if you can throw some light on that?

We are executing in Maldives. Maldives, we are executing. Dubai has been completed. We are also going to have a project in [indiscernible] with a [ $13 million ] project for construction of building. And then there is another project which is almost final of Burundi, another building of Burundi and 3 other projects where we have been shortlisted for project as a project management consortium. Land, there is another place for [indiscernible].

Okay. And we'll be awarding most of this in the current fiscal year?

Yes. In the current fiscal, we will be getting this award.

[Operator Instructions] The next question is from the line of Meet Parikh from Anand Rathi.

I just wanted to ask regarding the Amrapali, how many flats have been handed over? And how many you intend to hand over in the current fiscal? That will be my first question.

We have handed over 1,600 flats till now. And total 3,400 flats have been completed. And the handing over is pending due to various reasons, like the known payment or finance by the homebuyers or such similar issue and [ 8,500 ] flats, we are planning to complete by October, except the services part. So total 12,000 flats will be completed. So these 12,000 hopefully will be able to hand over by the end of fiscal year.

By end of?

In this fiscal year, we should be able to hand over 12,000 flats.

12,000 flats. Okay. So have you handed over around 600 flats during the quarter because last quarter was 1,000 flats. And this is 1,600 at the end of this quarter.

Yes. Total 1,600 we have handed over.

Okay, sir. And sir, on the funding of the project it hasn't been completed with the consortium of the banks?

Yes. Initially, from SBICAP, we got a funding of around INR 600 crores. Then for the rest of the projects, we have tied up with a consortium of 6 banks, public sector banks for an amount of INR 1,500 crores. This amount should be sufficient, and we have started the sale of the flats also, and the sale is going out very nicely. So all this combined should be able to meet the financial requirements of the project.

So how much fund have the funds has been released till date from the consortium of banks?

From the consortium of banks, I don't have the exact amount, but whatever are the requirement of the project, they are releasing without any delay.

Okay, sir, no problem, no problem. Sir, on this Nauroji Nagar, what is the status on that Nauroji, Netaji and Sarojini Nagar project?

Nauroji Nagar, we have been able to sell INR 4,500 worth crores of properties, out of which INR 341 crores of property has been sold in the current financial year. And the project is about 52% complete and that section is going on with full speed.

Okay. And the other 2 projects, sir?

Other 2 -- we -- in fact 5 contracts are in operation in 7 GPRA volume. One is in Netaji Nagar and 3 are in Sarojini Nagar. In Sarojini Nagar, we have 2 residential projects which are coming up and 1 commercial project. And for this commercial project, also, we have started the sale recently.

Yes. So apart from that, you had last time said that we have a capital -- captive real estate of around INR 700 crores. And you -- and also, you plan to monetize the land in Alwar of around INR 150 crores -- the inventory in the next few years. So any progress on that? Any guidance?

Yes, the occupation of certificate of -- this was standing for some reason, Alwar that's likely to be received shortly. And immediately after that, we will start that sale of Alwar.

So when do you expect it to receive the occupation certificate?

Within August, we should be able to get it.

Okay, sir. Okay. Okay. And sir, just I missed out on 2 numbers, if you can give it to me. One is the stand-alone order book at the end of the quarter? And the consolidated order book.

INR 46,500 crore.

INR 46,500 crores is the stand-alone. And the consolidated sir?