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

Ladies and gentlemen, good day, and welcome to NBCC (India) Limited Q3 FY '25 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Nidhi Shah from ICICI Securities Limited. Thank you, and over to you, ma'am.

Good morning. On behalf of ICICI Securities, I welcome you all to the Q3 FY '25 earnings call of NBCC India Limited. Today, we have with us from the management, Shri K.P. Mahadevaswamy, Managing Director; Shri Saleem Ahmad Director Projects; Dr. Suman Kumar, Director, Commercial; Shri Anjeev Kumar Jain, Director of Finance; Shri [ M.B. Singhal ], Executive Director, Finance; Shri Balkishan Singla, Investor Relations. We will begin with opening remarks from the management followed by Q&A. Thank you, and over to you, sir.

Good morning, everyone. On behalf of NBCC team, I extend a warm welcome to you and appreciate your presence in today's earnings call for third quarter ended 31 December 2024. We are happy to share with you all that NBCC has secured excellent MoU rating for the financial year '23-'24 after 5 years based on Department of PE, DPE, appraisal with 98.5 marks, highest in the NBCC history. For quarter 3, our stand-alone operation and execution, we have achieved a total operating income of INR 2,048 crores, reflecting 7% year-on-year increase. Additionally, our PAT stands INR 129 crores, making 37% year-on-year growth. For 9 months, we have achieved a total operating income of INR 5,540 crores with 10% year-on-year increase, and PAT stands INR 339 crores, making a 40% year-on-year growth. For 9 months consolidated performance, NBCC has achieved a total operating income of INR 7,430 crores, reflecting a 16% year-on-year increase with INR 375 crores PAT, marking a 37% year-on-year growth. We are very happy to share that NBCC being a pioneer in delivering home in stressed real estate projects and giving relief thousands of stress homebuyers in the country. In the month of January, NBCC has awarded around INR 9,137 crores work in Amrapali Phase 2 of different packages, which makes one of its highest ever work awarded in NBCC history in a very short period. You will also appreciate NBCC efforts in marketing, sales and real estate as we have successfully sold 1,233 units in Aspire Golf Homes of Amrapali through an open e-action, generating a total sale value of INR 3,216 crores, which is very significant sale and will help in executing the projects. And work on these Amrapali Phase 2 projects are going on fast track. As we are all aware that NBCC has secured lots of new business in the last few quarters and however, in last 3, 4 months, we have focused more in execution and show our commitment towards completion of these projects. In this regard, as on 10 February, we have awarded INR 13,500 crores of new tenders on stand-alone basis and INR 16,000 crores on consolidated level, which increases our running projects tally. Business secured. As on 10 February 2025, NBCC has secured historical amount of business in current financial year, that is INR 39,600 crores on stand-alone basis and INR 47,150 crores on a consolidated basis. This is one of the highest ever business secured in any financial year and still, we have 2 more months to go. The name of few important large projects secured in quarter 3 with pride and greater responsibility after delivering successful Amrapali projects in the last quarter, NBCC has assigned INR 9,445 crores of [indiscernible] real estate projects or Supertech 16 projects; redevelopment work at Goa INR 1,726 crores, development of 10-acre institution plot, Noida sector-62 [indiscernible] INR 600 crores; BIS Headquarters Delhi Central Laboratory, [indiscernible] National Institute and Training, Noida, for INR 500 crores; Sahkari Awas Nirman Evam Vitt Nigam Ltd, UP, for INR 3,500 crores secured in the month of January. Business secured by NBCC. During this year, NBCC has secured Super-Specialty Cardiology Hospital in [indiscernible] INR 650 crores; construction of ESIC Hospital at Manesar Gurgaon at Faridabad, INR 1,300 crores. Amrapali project. In 9 months, Amrapali project has contributed INR 908 crores in the top line. Out of 38,000 housing units, 25,000 units are already completed. Redevelopment projects. In 9 months, GPRA has contributed INR 1,600 crores in the top line, up by 39%. Nauroji Nagar project inaugurated by Honorable Prime Minister in the month of January 2025. It was very pride moment for NBCC family. Netaji Nagar, the first phase of project valued INR 1,450 crores is currently underway and is 85% completed. Additionally, 2 more tenders worth INR 2,000 crores are in pipeline for contractor appointment. Sarojini Nagar, this is a large project and work in more than 9 phases with a worth of INR 6,900 crores are going on, which are on different stages of execution and the tender floated for the project valuing INR 2,400 crores. Real estate. So far during this year, we have sold more than INR 389 crores and INR 100 crores to INR 150 crores, we can add more in the current year. In quarter 3 itself, we have sold INR 220 crores. It is very significant number for the real estate sales. Thank you. Now the forum is open for question and answers.

[Operator Instructions]. The first question is from the line of Dixit Doshi from Whitestone Financial Advisors.

My first question is regarding the order book. So as of today, what would be our order book? And out of that order book, how much value of the work has already been awarded by us to our contractors?

The order book as stand-alone only INR 81,958 crores and consolidated, it is more than INR 1 lakh crores. And already, the new projects stand-alone around INR 28,617 crores; consolidated level, INR 32,620 crores.

Okay. And let's say, how much more order book we are targeting in near future, let's say, even in Q4 or next year, what kind of -- because this year was phenomenal in terms of order intake. So what kind of order intake we are expecting for next year?

Next year, at least minimum INR 25,000 crores.

Okay. On a consol basis. Okay. Now looking at the kind of order book we already have and the kind of orders we are targeting, where do you see the growth for next 2, 3 years? I mean, obviously, we are currently growing at 10%, 15% kind of rate, but can this go up to 25%, 30% because order book is not a constraint now anymore for NBCC?

Definitely, at least minimum 25% to 35% increase will be there because we have to complete all the projects 3 to 4 years. So definitely, it will increase our top line as well as bottom line.

So you expect from next year onwards, 25% plus growth.

Yes, definitely, definitely, minimum.

And margins will broadly remain in the current range or you expect that to go up or down anything?

Margin also increase 0.5% to 1% at least because our overheads are fixed. And as soon as we're crossing our turnover, so it will increase the profit. And we are doing redevelopment projects and Amrapali projects wherein we are getting 8% to 9% PMC charge.

Okay. And in terms of real estate, so how much, let's say, ready unsold inventory we have? And post that, what kind of real estate we will be left with?

Around only INR 290 crores is balance. So we have some land parcel also that we're going to construct and will improve our margin also.

Okay. So INR 290 crores. And after that, how much would be the total land bank we will be having?

Around INR 600 crores -- INR 700 crores.

INR 700 crores. So INR 700 crores in terms like when we will construct and sell, that can generate INR 700 crores...

No. Current land value is INR 700 crores. Construction and selling, we'll be reaching INR 8,000 crores.

INR 8,000 crores. Okay. So land value is INR 700 crores?

Yes, yes.

The next question is from the line of [ Sumeet Rohra ] from Smartsun Capital Private Limited.

I have to tell you, sir, your performance has been very good, very encouraging in an environment which is as subdued as today. So very well done to you and your team. Sir, just a few things I wanted to touch with you on. So sir, firstly, now that you mentioned that now our order book is now well above INR 1 lakh crore. So sir, what is the execution time line in this? If my understanding is correct, then it's about 4 to 5 years. Is that correct, sir?

Yes, yes. Some projects 3 year only. Amrapali projects, 3 years. Supertech projects also we have committed within 3 years. Some projects -- because redevelopment, you have to develop -- you have to generate the funds wherein we require some more time. Otherwise, for PMC projects, nowadays, we are awarding all the contracts less than 2 years or maximum 2 years only.

So basically, sir, I mean, so is my understanding correct that you will see a very sharp growth in revenues basically, I mean, maybe next financial year and the following years, I mean, we could actually now be seeing very sharp growth in revenue and profit?

Yes, definitely. As I earlier told, at least 20% to 25% minimum growth we are expecting in coming years.

Okay. That's very encouraging. And sir, secondly, you've seen -- as you highlighted in your opening remarks, you have seen a very high amount of order inflow versus the last few years. So can we now assume that INR 50,000 crores could be the new norm for order inflows every year, sir? Is that correct?

That I cannot commit you, but at least INR 25,000 crores is definitely we are going to get.

Okay. And sir, I mean, one project of ours has been struggling in the past, which is the Ghitorni land which we have. So is there sir, I mean, any development on that front? I mean, you plan to develop that? Is there any movement on that front, sir?

Yes, yes. We have our Ghitorni land parcel. So there is some issue with the state government. I think hopefully this year it will be going to resolve. Next year onwards, we are going to start the construction on this Ghitorni plant. That is 32-acre land parcel we have adjoining Ghitorni Metro stations. So that can generate around my top line…

So land is basically owned by us, correct? So land is owned by us.

[indiscernible] 32-acre land, currently we have a book value of only INR 2 crores.

I see. Okay. And sir, so what's the FSI over there? So assuming that it's a 32-acre land parcel which you have, so effectively, what's the FSI over there today?

As per master plan, around 2.

Okay. So basically, I mean, you will have well upward of about 2 million square foot to develop over there?

Yes, yes.

Okay. And sir, so basically, the only money which you will incur in that is the cost of construction because -- and the balance you will basically see straight away will be realized to us. Is that correct?

It will directly increase my bottom line as well as top line because construction, we need only INR 5,000 to INR 6,000 per square feet, whereas selling price currently minimum is INR 20,000. So there will be a INR 15,000 profit per square feet.

[Operator Instructions] The next question is from the line of [ Akshay Patil from NBCC ].

Congrats to you and your team for the fantastic results. Basically, I wanted to know the real estate projection for the next financial year, how much it will be contributing to our total overall revenue and profitability.

Revenue around INR 290 crores. Profit will be -- INR 290 crores as revenue, profit 25% to 30%, you can take on 25% to 30%.

For the next full financial year, I'm asking.

Next full financial year, I'm talking. INR 290 crores on top line. We have only INR 290 crores of inventory with us that has to be sell out in the next year. And we have some 600, 700 acre-- sorry, 700 worth of land parcel. That revenue will come after handing over. During construction, it won't come to our top line.

Okay. Sir, last con call, we have talked about the Ghitorni contributing at least INR 4,000 crores to INR 5,000 crores to profitability. So can you highlight more on that?

That's what, there is some issue with the state government. I think by this year-end, we will go to resolve that issue. Once the issue is clear, then we're going to start the construction on Ghitorni parcel. So it will take 2 to 3 years construction period. Once the construction is over, after completion only, we can book the revenue in our books. We will get the cash inflow, but the turnover will be while we hand over the projects. So it will take 2 years at least.

Okay. Sir, are there any large-sized projects you are eyeing right now like Supertech or Amrapali, which are more than INR 10,000 crores?

We are expecting the new business. I could not catch your next question.

Yes, I'm asking, are you...

Then I'll reply to your answer. So after successful completion of redevelopment projects in Delhi, so now we are focusing the redevelopment projects across India in various state governments. So we are talking with Rajasthan government, Chhattisgarh government, they have huge land parcel. So there also, they want redevelopment model. It is a self-sustainable model. So the talks are going on. Next year, we're going to get -- I think, 1 or 2 states, will going to mature these projects. And similarly, a lot of PSUs, public sector is undertaking having huge land parcel, there also, we are fetching. So hopefully, next year, it will be fruitful from state government as well as PSU.

Okay. Sir, one more thing. What are your targets? We have talked about INR 25,000 crores top line and INR 2,500 crores bottom line target. So when you are going to achieve this?

Next 3, 4 years.

Next 3 years.

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

The first question is on the INR 1 lakh crores of consolidated order book that we have, how much of that portion would be the split between PMC and redevelopment, if you can give?

62% PMC, 38% on redevelopment model.

Okay, sir. And for this year, for FY '25 now, what is the revenue and EBITDA and PAT margins that we are targeting?

This year, '24-'25?

Yes.

At consolidated level, around INR 12,000 crores to INR 13,000 crores; EBITDA 5% to 6%; PAT will be 5% to 7%.

Okay. And you said on the 5% to 6% EBITDA margin, we can grow another 0.5% to 1% improvement in next year for FY '26. Is that correct?

Definitely, yes, sir.

Okay. And sir, so like we have already won INR 16,000 crores of projects in, let's say, this 9, 10 months. So for the balance, Feb and March, do we have any target number in mind for order inflows?

Around INR 3,000 crores in pipeline.

Okay. INR 3,000 crores. So total then we'll be ending by about INR 19,000 crores for FY '25 and '26, INR 25,000 crores.

Yes.

Okay. And sir, for the same numbers if you can give for order awarding as well, what we are looking for the next 2 months and in FY '26?

Next 2 months, around INR 3,000 crores order will go to -- not INR 2000 crores, INR 6,000 crores, we are going to award by March. INR 6,000 crores to INR 7,000 crores, we are going to award. Redevelopment projects, 4 projects, already opened the tenders and 1 Amrapali project. So around INR 7,000 crores, we are going to award within March.

Okay. And sir, for the FY '26.

'26 order award?

Yes.

Around INR 20,000 crores. Supertech INR 10,000 crores, and other projects will be there, that will be around INR 20,000 crores.

Okay, sir. And sir, the next question is on Supertech only. So if you can just give some more details what has exactly...

Not only Supertech, Jammu & Kashmir, Goa Government, state Government redevelopment as well [indiscernible]. So minimum INR 20,000 crores to INR 25,000 crores next year, will go in to awards.

Okay, sir. And sir, I was asking on Supertech, if you can give some more details like what is our scope exactly and what is the revenue potential for us for the project and some more details on that project?

It is similar to Amrapali only, wherein we are PMC agency and around 50,000 household buyers are there. So we want to sell around 10,000 units unsold in inventory. By doing this, around 9,600 turnover in the top line and the bottom line is 8% PMC we are getting.

Okay, sir. And this also then you are planning to complete in the next 3 years?

Yes. 1 to 3 years. Some projects we are targeting only within 1 year, some projects 1 to 2 years. The rest of the projects 3 years wherein [indiscernible].

Okay. And sir, in this Sarojini Nagar and Netaji Nagar, have we sold anything till now in these 2 projects?

Sarojini Nagar already downtown, we sell it out. The bulk sale already happened. Nauroji Nagar 100% sold out in the office spaces. In Sarojini Nagar, of course, now we will go into sale after this award of tenders. So during this year and next year onwards, there will be a sale in Sarojini Nagar Commercial complex opposite to World Trade Center and a few restaurants and rooftop restaurant is there and service apartment, we have to sell the service apartment.

Okay. So what is the sales potential that we are targeting over here?

Around sale will be -- balance is around INR 15,000 crores to INR 16,000 crores sale balance in Sarojini Nagar as well as Netaji Nagar.

Okay. And sir, this downtown that we sold in Sarojini Nagar, what is the exact value that we have realized?

Around INR 1,400 crores.

INR 1,400 crores. Okay, sir. And sir, just to reconfirm, in these 9 months, we sold INR 300 crores of real estate. Is that right? And for Q4, we are targeting another INR 100 crores to INR 120 crores?

Yes, sales, exactly.

Okay. And sir, just bookkeeping questions. What is the seed money that we have and interest on that and the cash balance in our books?

Seed money so far, we have infused INR 500 crores with Amrapali, and interest INR 32 crores right now.

Apart from seed money, there is some interest is also from [indiscernible]. So approximately, both together INR 650 crores is there. And what is your second question?

The cash balance.

Balance on stand-alone basis is INR 525 crores. And on a consolidated basis, it is INR 961 crores.

The next question is from the line of Viraj Mithani from Jupiter Financial.

Congratulations, sir, on outstanding good numbers. Sir, my question was what is the guidance you give for this year and the next year, that was not clear, in terms of sales -- guidance for this year in terms of sales and net profit margin and for the next year as well?

EBITDA 6% to 6.5% and PAT, around 5.5% to 6%.

And revenue would be?

Revenue will be next year -- you're asking for next year?

Current year and the next year as well. So 5.5%, is that current?

Current year, INR 12,000 crores to INR 13,000 crores next year, INR 15,000 crores to INR 16,000 crores minimum.

[Operator Instructions]. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

Yes. A couple of clarifications. First, you mentioned that out of this INR 1 lakh crores, the redevelopment project is around 28%, right?

No, no. Redevelopment 38% PMC around 60%.

Okay, 38%. So broadly, what I'm understanding is that this 60% PMC project, there the time line for execution is around 3 to 4 years maximum. And this redevelopment, obviously, it is on a self-sustainable model. So it may be slightly higher, right?

Yes, exactly.

Okay. And one more clarification. Earlier some participant has asked about the land bank where you have mentioned a 32-acre land. Could you just again mention which land bank is this?

It is Ghitorni land parcel with NBCC and the book value is only INR 2 crores for 32 acres. It is in South Delhi and then into Ghitorni Metro station, in Delhi only. It is in Delhi only.

Okay. And when you mentioned earlier that we have a INR 700 crore land bank and the revenue potential could be INR 8,000 crores, you have included this land in that?

No, no, no. This land excluded. That land is in Jaipur, Kerala, Coimbatore, Ghaziabad, [indiscernible], Faridabad, Patna.

Ghitorni Land is not included in that.

Potential of INR 8,000 crores, we have included Ghitorni also. As far as inventory of land bank is concerned, it is INR 700 crores. And this Ghitorni land is our property, plant and equipment, that is of INR 2 crores. But taken together, the value we can unlock is INR 8,000 crores approximately over the period of 3 to 4 years.

Okay. So this INR 8,000 crores land potential is including the...

Including Ghitorni.

After construction.

The next question is from the line of Pankaj Kumar from Kotak Securities.

My question pertains to the stand-alone revenue where we have seen the PMC segment single-digit kind of growth. So if you can highlight the key reasons behind the slower execution in this quarter?

In stand-alone, around 54% PMC.

PMC, we have seen only 1.2% growth in this quarter. So if you can give us the reason what led to the slowdown in the execution.

I could not catch your question...

Yes. My question is on the PMC segment where we have seen 1.2% growth in the revenue in this quarter. So we have booked INR 1,800 crores stand-alone revenue and that grew 1.2%. So what is the execution in this quarter, if you can highlight please.

Already, we have achieved -- because actually last quarter due to NGT ban imposing on Delhi, our major projects are Amrapali and [indiscernible] GPRA, so these 2 projects this year severely hit by the NGT. That's why the growth is very less, whereas...

8% to 10% growth.

Otherwise, 8% to 10% minimum increase will be there.

In PMC, there is a growth of 1.2%, you rightly told. And because in this quarter, the third quarter is mostly impacted by the [indiscernible] in Delhi and NCR area, there is a pollution…

Ban on construction.

So that's why if you see our growth comparing to, that is a good growth.

We want to achieve more.

If you can see our 9 months now, it is 6% approximately. So [indiscernible] consideration, there is 6% growth on PMC front.

So for the full year, what kind of revenues that we are looking at on the stand-alone basis, you said on consol INR 12,000 crores, what is the number that we are looking at, sir?

Around INR 9,200 crores stand-alone...

INR 9,200 crores. Okay. So roughly, we can expect around INR 4,000 crores plus kind of numbers in the Q4. [indiscernible] that's what I'm...

Because last 1.5 months, there was a ban on construction in Delhi and NCR, even Noida also. So next quarter, we'll be going to achieve INR 4,000 crores.

Okay. And what is the stand-alone awarding target for the current year and the next year?

Current year stand-alone, already awarded INR 13,000 crores. So balance INR 1,600 crores, we are going to assign.

[indiscernible].

INR 13,000 crores already we have awarded on stand-alone. Another INR 3,000 crores we are going to award during this financial year.

And how about the next year? That's the last question.

Next year, INR 20,000 crores at least.

[Operator Instructions] The next question is from the line of [indiscernible]. As there is no response from the participant, we'll move to the next question, which is from the line of [ Akshay Patil from NBCC ].

My question is for Director Commercial, Suman Kumar. So sir, actually, last time you mentioned about Ghitorni and everything. So I want to know out of the INR 8,000 crores sale value, how much percentage of PAT we can get from that?

You are talking about the top line from the Ghitorni land?

Yes. Ghitorni top line, you have said INR 4,000 crores to INR 5,000 crores bottom line, I want to know.

Here, the bottom line will be around 30% to 40%.

30% to 40%. In other land parcels, what will be the contribution to the bottom line percentage in percentage terms?

It will be around 20% to 25%.

In Ghitorni, it is 40%, whereas in others, we will get 25% to 30%. Am I right?

Yes. Right, sir.

[Operator Instructions] The next question is from the line of [ Sumeet Rohra ] from Smartsun Capital Private Limited.

Yes, sir, I mean just some thought comes to mind. I mean this is the first time after 27 years wherein you've got a different state government, which is with the center. So do you think that -- and since our business is predominantly based more in Delhi, so do you think that now kind of redevelopment of colonies, et cetera, can actually pick up pace now? I mean, if you can share some thoughts on that?

Definitely because redevelopment model is a self-sustainable model, wherein government is not investing any money. Rather we are giving surplus money. And all the cities including state governments, they have a huge land parcel or old colonies in deteriorated condition. They are unable to spend for a huge amount for repair and all. So nowadays, one by one, state government is coming to give the work on redevelopment model. So NBCC is having the USP. The NBCC is the only PSU, can do redevelopment. In fact, in Delhi, we are generating money and giving -- given to security. Security is not doing any marketing. They are just doing the construction work. So there will be a lot of potential for NBCC and definitely coming years will be very bright for NBCC, I can say.

Just to add one thing, with the state of Garden of Delhi, you may see a faster execution in our order book.

So basically, sir, I mean, since Chairman sir touched upon the point of housing colony, et cetera. So do you see this has a potential for large orders coming to us now?

Already discussion is going on. So many pipeline projects are there. I don't want to disclose in this current -- in the meeting. Yes, definitely, that's why I told you minimum INR 25,000 crores to INR 30,000 crores work order in the pipeline only. So that will come in coming years. Presently, I don't want to disclose the name and all.

[Operator Instructions]. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

Just one last thing on this Ghitorni land. So all the approvals are in place? Or is there any litigation or something?

22 acres, there is no dispute. The dispute only lies with only 10 acres. So after clearance of this, we are going to start taking approval and all. Presently, 22 acres under our custody only.

No. But so till the time the dispute on the 10-acre doesn't settle, we are not planning anything on 22 acres.

We are planning.

We are planning. So something can come in FY '26, we will start…

Yes. Definitely. The cash can come, but the top line and bottom will come once we are under way.

At the time of handover. But we can start some project over there this year.

Yes, yes, definitely, definitely. Next year, we are going to start.

[Operator Instructions] As there are no further questions from the participants, I will now hand the conference over to the management for closing comments.

So thank you so much for interest in NBCC. Just I want to highlight the -- summarize a few things before final closing. NBCC has awarded highest ever work in NBCC history in the form of Amrapali Phase 2 within 1 month, and it will increase our running project list significantly as well as my top line, bottom line. NBCC has secured historical amount of business in current financial year, highest ever in the NBCC history and 2 more months are still to go. Received Supertech real estate project and will be revenue contributor in near future with higher margin. Successfully sold 1,233 residential units at Aspire Golf Homes through an e-auction generating sale value of INR 3,216 crores. In real estate quarter 3 itself, we have sold INR 220 crores. It is a very significant number. And last, MoU excellent rating '23-'24 with 98.5 marks. This is the achievement. These are all the highlights of our last quarter. Once again, thank you very much.

Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. For any further query or information, please reach out to Mr. Balkishan Singla, Investor Relations. Thank you very much, ladies and gentlemen. You may now disconnect your lines.

Thank you.