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

Ladies and gentlemen, good day, and welcome to NBCC (India) Limited Q4 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being. I now hand the conference over to Mr. Mohit Kumar. Thank you, and over to you, sir.

Thank you. Good afternoon. On behalf of ICICI Securities, I welcome you all to Q4 FY '24 and FY '24 Earnings Conference Call of NBCC Limited. We're happy to host the management of NBCC Limited. From the management side, we have Shri. K.P. Mahadevaswamy, Chairman-cum-Managing Director; Shrimati. B.K. Sokhey, Director, Finance; Shri. Saleem Ahmad, Director, Projects; Shri. Rajendra Chaudhari, Senior Executive Director, Engineering; and Shrimati. Reshma Dudani, Executive Director, Engineering. And also, we have Investor Relations, Balkishan Singla with us. So without much delay, now I'll hand over the call to the management to give initial remark on results and current business outlook, followed by which we'll open the floor for Q&A. Over to you, sir.

Good afternoon to everyone. On behalf of my team, entire NBCC family, I extend a warm welcome to you all and appreciate your presence in today's earnings call for fourth quarter ended 31st March, 2024. Financial year '23-'24 was very successful year for NBCC for various reasons. I would like to share some of the notable achievement of NBCC as we have registered historical performance during the year '23-'24. All-time high revenues. NBCC registered historical total revenue from the operation INR 10,433 crores in the financial year '23-'24 with an increment of 18% on consolidated level year-on-year basis. Significant increase in profitability. NBCC has also achieved significant jump in profitability and registered one of the highest PBT that is INR 559 crores surges 50% on consolidated level year-on-year. Record new business secured. NBCC has secured record new business around INR 23,500 crores secured during the year '23-'24, which was more than 250%. Successful inventory sales. Sold majority balance inventory in World Trade Center New Delhi was at about INR 6,480 crores in comparison with INR 2,074 crores in the financial year '22-'23. It is all-time high real estate sale in redevelopment projects. Update regarding Amrapali Project. Amrapali Project has contributed very significant amount in NBCC top line growth, that is INR 1,800 crores turnover. NBCC along with the Aspire team has achieved sale of 6,300 units in Amrapali Project with total sale value of around INR 3,650 crores. I'm happy to share that out of 38,000 units, 20,000 units are completed, and we are committed to provide remaining houses on or before 31st March 2025, which demonstrates NBCC's capability to solve the country's complex problems and contribute towards nation building. In Amrapali, additional FAR projects, our 2 tenders worth of INR 4,000 crores are in process and to be awarded at the earliest. Regarding redevelopment of 7 GPRA. Three GPRA has contributed around INR 1,900 crores in the top line. And in upcoming years, this number will increase significantly. Netaji Nagar. Project first phase is going on with projects worth of INR 1,500 crores, which has been almost 65% completed. Sarojini Nagar. This is a large project and worth of more than 10 phases is going on with project worth of INR 6,600 crores. Regarding real estate projects, NBCC is putting dedicated efforts in this direction to reach maximum potential buyer and increase the sales volume. We are able to sell INR 192 crores of NBCC real estate in comparison of INR 44 crores last financial year. Work awarded. Project tender out of around INR 10,000 crores has been awarded during the year '23-'24. Some of the major projects inaugurated by last year. The inauguration of IIM Sambalpur by Honorable Prime Minister. Honorable President of India inaugurated NBCC built wooden replica of historic flag post at the Honorable President House in Rashtrapati Nilayam Hyderabad. This is the tallest wooden flag post in India. NBCC has provided an agri infrastructure with the signing of MOU with construction of world's largest grain storage using innovative building technology with an approximate value of around INR 1,500 crores. Honorable President of India also inaugurated NBCC built Kaushal Bhawan. Shri. Amit Shah, Honorable Union Minister, Home Minister, Cooperation inaugurated office building at World Trade Center. Major opportunities and focus areas in the upcoming months. Opportunity in housing sector. Opportunity in this sector are very huge, and we are in talks with various government agencies, including state governments for housing urban development. Land monetization. Government agencies, including PSUs have lot of land parcels across India, which are not generating any revenue to the owners. NBCC has been assessing these opportunities and started feasibility of 2 land parcels across pan India for phasing these large opportunities. NBCC has signed MOU with BHEL for land monetization and also secured first redevelopment projects outside Delhi, that is Kerala State Housing Board project worth of INR 2,000 crores. After a successful journey of redevelopment business model, NBCC is also having some large-sized projects in this segment upcoming on specifically government colonies of redevelopment. Encash Amrapali project experience, expertise in NBCC's examining feasibility of a few more real life projects in Delhi and NCR, Mumbai region where homebuyers are facing such big problems primarily. On similar lining, NBCC has developed Amrapali housing project worth of INR 4,000 crores in Chhattisgarh and Kerala. Overseas focus. We already set up concrete foot in overseas, particularly African countries, Maldives, Mauritius. The Social Housing work in full swing in Maldives. We are hoping that we tap some business in Africa, Arabian countries in coming months. NBCC is planning to start real estate venture in Dubai through fully-owned subsidiary in Dubai. NBCC real estate work. We are also reaching out Tier 2 cities for upcoming real estate projects and executed the sale of it with the existed inventory. Diversification. We are also taking some steps to diversify NBCC business, other areas like highway, railways, Metro and renewable energy. Thank you for your continued support and association. I want to express my gratitude for your time and attention today. The achievement of NBCC in the financial year '23-'24 serves as a testament to our dedication and commitment to excellence. I personally believe these achievements are just starting and will provide a strong foundation for us for better performance in upcoming years. As we move forward, we remain committed in our pursuit of growth and contributing to the development of our nation. Thank you once again, and we look forward to your continued support and engagement in our journey ahead. Now the forum is open for question and answers.

[Operator Instructions] The first question is from the line of [ Atul ], an individual investor.

Firstly, congratulations for your, I mean, good results, I can say. And my question is 2 questions. So one is can you give me the sense of what is your expected, I mean, top line and bottom line for next financial year? And what you are looking how to -- I mean, sustain this growth, what you I mean achieved in this financial year. Is it possible for next 2, 3 years? Or there is some problem what you can see?

Next year target is our target top line is around INR 12,500 crores to INR 13,000 crores. And the PAT will be around 5.5% to 6%. So we don't have any problem because we have already in our end workload of around INR 62,000 crores at consolidated level. So there is no issue. Only we have to execute the work in time. So I think the next year target will be INR 12,500 crores to INR 13,000 crores we can achieve easily.

Okay. And you are -- I mean, you are firm on your previous guidance of INR 20,000 crores or INR 25,000 crores top line during '27-'28?

'27-'28, yes.

Okay. And there is no, I mean, adverse effect on these, just a normal question. It's not a -- with this government change, is there any issue or not on your performance?

Because we have in our hand, all the work order we have in our hand, I don't think so any issue with the change in government.

Okay. So what is your -- right now, what is your order book, right now?

INR 62,000 crores at consolidated level.

Consolidated. And I mean do you have any plan to grow, I mean, your business outlook for next year, like better than INR 15,000 crores, INR 20,000 crores order book? Or it will be like the same what you achieved in this year?

It will be at least minimum INR 22,000 crores, INR 25,000 crores next year business.

The next question is from the line of Vasudev from Nuvama.

Congratulations for a great set of numbers. So sir, in the previous question you have said that our consolidated order book is INR 62,000 crores. So will it be possible to give a split between the PMC and the redevelopment business?

PMC is around 66% and redevelopment is around 34%.

Okay. Sure, sir. And sir out of the INR 62,000 crores, how much of our order book is currently under execution?

Around INR 20,000 crores already in running projects.

Okay, INR 30,000 crores (sic) [ INR 20,000 crores ]. And sir just one clarification, you said that revenues were looking at INR 12,500 crores to INR 13,000 crores. So this is on consolidated basis, right?

Yes.

And so then what is your EBITDA stand-alone?

Stand-alone, around, INR 10,000 crores.

Okay. Awesome. So then on consolidated basis, what are the EBITDA margins that we're looking at?

5.75% to 6% at consolidated level.

Okay. Sorry, sir. This was -- this is the EBITDA margin which you're talking about, 5.75% to 6%. And what about the PAT margins then?

PAT margin, around 5.25% to 6%.

Okay. Okay. Got it. And sir, On the order intake in order awarding, so we awarded INR 10,000 crores this year. So how much are we expecting next year? And no other inflows that you're expecting next year?

Next year inflow order will be around INR 25,000 crores. And we're go into award around INR 12,000 crores to INR 15,000 crores in the coming year, we'll go into award the work.

Okay. Then sir, just a few more questions from my side. On 7 GPRA Colony so what is the unsold inventory pending in these projects?

Almost -- World Trade Center, we have sold almost 98%. Only another -- some 80,000 square feet is unsold. So that I think we're going to sold during this month, June month. And we have Sarojini Nagar bulk sale. So that we'll also -- we have completed that project. We have got the NOC also from Fire Department. So now we have to get the Occupancy Certificate. Once Occupancy Certificate is received, means immediately we'll going to sell it off. So the inventory is only around INR 1,400 crores, only balance with us, almost INR 12,000 crores inventory we sell it out.

Okay. And this Nauroji Nagar, what is the unsold inventory which is now just pending for this 80,000 square feet?

80,000 square feet only.

So what will be the value for this?

Around INR 240 crores -- INR 300 crores.

Okay. And sir, on the Amrapali Project, now what is our pending order book, unexecuted portion?

INR 1,800 crores is pending to be executed. And we got additional FAR, the future FAR INR 10,000 crores are orders. So the appointment of consultant already over, now we're going to call a tender for execution.

Okay. And so earlier you mentioned that we'll be looking toward INR 4,000 crores. Is that number correct?

From -- we're going award. INR 4,000 crores is what we're going to award in Amrapali. Out of which I think we're going to generate around INR 1,000, INR 1,200 crores we're going to execute in Amrapali during this year.

Okay, sir. And sir, on the land bank. So I just want to ask what is the land bank that we currently have on NBCC books right now? And what are the monetization plans for this land?

We have around 39 acre land in our books, valuing of INR 652 crores, out of which we have land parcel in Jaipur, Coimbatore and some land parcel in Ghaziabad also. Recently, we have called consultant tendering for Jaipur and contractor -- one package we already called for the commercial property appointment of contractor also. So that we're going to take care in the next year.

Okay. What is the sales value, expected sales value from this land that we have?

This land around, you can say INR 1,000 crores, INR 1,200 crores, including land value.

Including the land value. Okay. And sir, just last 2 more questions. So we sold about INR 192 crores of real estate this year. So what is the target for next year? And how much is our unsold inventory then?

Next year, target will be around INR 300 crores. Unsold inventory is, I think, INR 450 crores.

And just last one on how much is the seed money which is pending and the interest on that?

Actually, seed money, we have received the seed money from the MOHUA to the extent of INR 908 crores. Now seed money with the Amrapali Project is pending to the extent of INR 350 crores. Plus, there are some AIIMS works where the INR 97 crores is also lying. And the interest amounting to INR 219 crores is now -- is pending to be received, yes, from MOHUA as well as from the AIIMS client.

[Operator Instructions] The next question is from the line of Nikhil Abhyankar from ICICI Securities.

Sir, can you mentioned the split between the PMC and Redevelopment of our total order book?

PMC around 66%, and Redevelopment around 34%.

34%. Okay. And sir, you mentioned earlier that you are looking to improve your margins by almost around 1% or something. So what exactly will drive this increase in EBITDA margins, if I may understand?

Main, we are getting the redevelopment project at Amrapali and 7 GPRA, there we are getting 8% PMC, some 1% marketing fee. So that is the main reason we are getting increase in fees. And at the same time, we are selling our real estate inventory where our profit margin will be around 20% to 25%. So that is the reason last year, our EBITDA was 4.47%, previous year, '22-'23, and we achieved last year 5.48%. There is an increase of 1% EBITDA. The reason is we executed more real estate projects and we sell some INR 192 crores real estate projects also.

Understood. So we are not expecting any increase in margins for the PMC business?

Definitely, we are trying to get some more business in the PMC only. Of course, if it is not redevelopment, we are expecting some workload form BHEL, SAIL, a lot of PSUs having the land bank and even Jammu Kashmir, Srinagar, they have 415 acre land parcel. After this Code of Conduct, I think we are going to get that order. So we are hoping so many land parcels across India, not in Delhi. So of course Delhi also we're trying to get 2 more projects in Delhi.

Okay. And sir, if I can ask on the subsidiary part, so how much is the revenue EBITDA and PAT for HSCC and Hindustan Steelworks?

HSCC, last year around INR 1,500 crores turnover got from HSCC; and the HSCL, INR 800 crores. So this year, I think we are expecting from HSCC INR 1,600 crores to INR 1,800 crores, and around INR 900 crores to INR 1,000 crores from HSCL. And we have one more subsidiary, that is NSL, from there we got INR 280 crores.

INR 280 crores this year?

This year. Next year, around INR 300 crores we'll expect from NSL.

[Operator Instructions] The next question is from the line of Vasudev from Nuvama.

Sir, just 1 more question. What is the total value that is sold in the WTC project till date, total sales till date?

Around INR 12,000 crores. Already sold INR 12,000 crores.

Sir Nauroji Nagar is INR 12,000 crores. And even for Sarojini Nagar till date, we have sold INR 12,000 crores.

Nauroji Nagar, INR 12,000 crores. Sarojini Nagar, only -- we sell it only around INR 50 crores, INR 60 crores only. So the balance is around INR 13,000 crores -- INR 1,300 crores.

[Operator Instructions] The next question is from the line of [ Shivam ], an individual investor.

Congrats for a good set of numbers. Sir, I just want to -- I just missed on your revenue numbers that you shared for the next fiscal year. Can you just repeat that?

Pardon me?