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

Okay, sir. And sir, regarding this Bareforder, what exactly is the status I mean where it is tough. And can we expect this to come in the order book in this current initiative? Because earlier you had guided for INR 2 lakh crore of order book and you're targeting another INR 50,000 crores. So that didn't match this INR 2 lakh crore number by the end of the season?

Of course, out of all the redevelopment project, still stuck up with the approvals. Actually, still we could not get the approval from the Apta company. I think in the third quarter, it is going to be resolved -- so we are discussing with them, hopefully, third quarter onwards, it will start. Jas 1.5 years back order, but now it has come to on track. So because with the state government in central government, of course, central also -- the redevelopment project, it is a self-sustainable project, wherein money is the main issue were to get the loan also start. Irman is required to start the project until sale takes place. So because of that market is getting delayed, hopefully, third quarter onwards Mais also going to mature.

And sir, lastly, on the REIT, as you stated in the opening remarks that you've got that you would be eligible for floating CPC read. So if you can highlight more on that, what -- which all projects will come into that and how much investment will be required refinance.

In fact, as you know, in the Buzzard finance investor announced the comment will come out with a national REIT and NBCC being the only CPA having a real estate experience. And Breglution provide that only for launching a retail sponsor should have a real estate experience. So we are the logical life of the government of India to be a sponsor of a national grid. So we are now in discussion with the deep pump. And last day itself, we have approved formation of SPV, wherein we will transfer our 3 rentable assets. 75,000 square feet of assets will transfer to SPV. And then with work with MTNL, ITI, BS an or lot many CPSs, PAM is having a meeting with lot money CPSC and we are identifying the rentable asset first. Once the rentable asset is identified, then we'll identify the how much fit-out is required to make their table. So each and every CPSC will create STV and will be the natural partner for fitting out refurbishment as well as development of those assets and to make those assets rentable was a considerable portfolio is available in those SPV, then we'll launch a national rate and will go for public -- as you're aware, the rate is always public listing. So we have started the word. Our is basically SPV creation of SPV is just a starting point.

I mean, any time line we can expect?

You know 5 or 6 fleets are there and the portfolio under those rates are in the tune of 40,000 to 50,000 CR we are in talk with CPSC because CPS assets are -- some assets have required a refurbishment, some method are required redevelopment. So right now, it is difficult to put any time line -- but as soon as we're able to generate or gather a considerable portfolio then only we can launch in national.

The next question comes from the line of [ Prem Luna ] from Astute Investment Management.

Can you hear me?

Yes, yes, please. .

Yes. Congratulations on the number on the margin, sir. I just had a few questions. So when we had the Investor Day recently, we talked of we would be willing to award almost INR 300 crores, INR 32,000 crores of projects this year awarding from NBCC, but we are seeing that in the first quarter, it is a very smaller number as of now. Are you sure that do you believe that this INR 30,000 crores can be achieved this year?

I'm very much confident. Actually, you cannot compare to quarter-to-quarter for a for because some quarters we'll get good to get the order book, sorry, award some quarter less. So still we are confident to award around INR 200 crore, INR 25,000 crores here because we have to or Supertech around INR 10,000 crores order JNK 3,500 in Phase 1. So Rajasthan Mantap, also some 3,500 crore. So it will be done during this year. That figure I am still confident will go toward.

Is there a possibility we can do more maybe 35,000, INR 20,000 because we have order book pending?

Yes, yes, yes. we are by of course, supertech got delayed. Now we got the clearance from supertech also Supreme Court. So this year, we'll go to war around INR 20,000, INR 25,000 shares easily.

Okay. Sure, sir. And I wanted to understand the use of the profit which we are generating, we have bought this on tower in the business park. When will the cash flow -- cash go out from the company, what would be the time line for that because we will be paying that amount, right?

It is construction to plan. So only budgeting some 10% we have paid -- so test the payment will be as long as soon as the structure is completed, I suppose the foundation completed, we have to pay some percentage. If it is come to third level, then some percentage level, 9 floors or similarly finishing. So it is a construction plan cash flow will go in 2 years.

Okay. So we can assume that out of the maybe INR 1,100 crores, which we are part we are seeing that we might achieve this year and maybe INR 1,300 cores, INR 1,400 crores at which we do next year, a good chunk of it would be going in this project?

Cash flow will go cash flow go is CapEx. Cash will go. And one good news for you. Last year, we purchased that on base rate that is INR 13,000 we purchase that our recently last action, the price has gone up to INR 66,000, -- that much appreciation we got already got. So in the ground for it has edged around 66,000 and the upper floor INR 55,000 to INR 500 to INR 55,000 worse it has done, whereas we purchased at the base price of INR 39,000.

Sure. Sure, sir. And also, I wanted to understand very specifically on the new colonies in Delhi, what is the status on those projects, the 150 for the neuro which we were talking about?

The 150 out of 150 colony, the current proposal is only for 5G per economy. So current, that is almost INR 50,000 crores value, it will be generated and INR 45 or INR 50,000 crores is expenditures. So wherein we'll -- presently, we choose the 5 alone. One is low the other one is androgen, [indiscernible]. So this colony will be redeveloped. So once it is readout means the waiting list of GPA will be started out. And we're going to get some marketing also the commercial point by selling commercial area we're going to cost the GPRA colonies. We're not taking colony, only colony we're going to take presently.

Okay. Sure. And the last question, which are the assets which we are thinking of putting into the REIT, which we explained in the last question. .

We had presented, we are planning to put 75,000 square feet worth of assets in our SPV, which will ultimately go to the rig once the rate is formed at later.

Sure, sir. But it would be these assets, this would be the business park tower?

Business part right now, you cannot put retail, if you want to put in a -- it has to be completed. Not under concession, you cannot put in the rent, soil. So once it is completed, then we are thinking. We are part of putting on REIT.

The next question comes from the line of from [ Kita Shah ] from Elara Capital.

What has been the key reason for the delaying project awarding the process have to already bought, but I get to be awarded to the contractors almost depending what stops and I mean what is the reason for this?

These projects are large projects, self-sustainable projects. not redevelopment exactly not put over the retenant. Of course, it is a redevelopment for J&K project it is INR 15,000 crores project. It is self-sustainable project. wherein government clearance also required. So government has to give the clearance and DPR has to be prepared, deeper, we are prepared. Now we got the approval. After 1.5 years, this project take off rather. So similarly, MAHAPREIT is a big value, INR 25,000 crores, but it is getting delayed due to various reasons. And other projects, Supertech. Supertech went to the time the agency. The builder went to Supreme Court nut. But fortunately, we could get the ad once again as per the Supreme Court. Now we will go into all the tender of Supertech also. So these are all the reasons major projects around INR 50,000 crores or order got delayed due to various reasons and various approvals. That's all. Nothing else. Otherwise, we're going to now -- pardon me, you wanted to say something?

Go ahead, go head.

That's all. Of course, government, we recently got the approval and there proactive, we have added 4 packages. So with state government, the approvals and all -- and of course, generation of funds. [indiscernible], of course, recently, we had an MOU. So that has almost 400 acres of land. They are acquired in the -- through farmers, another 450 acres going to at. One cities acquired mentally, we are Phase I started with the infrastructure development that DPR is in process. Once it is over means, then we're going to call the tender of Navina also.

So out of this INR 90,000 crores, how much do you think will be awarded this year? .

INR 20,000, INR 25,000, I has already committed minimum 20, 25,000, we will go to our during this year. .

Okay. And then balance is funding a constraint for these projects? .

Of course, seed money is the main constraint. -- but from other approvals, such approval. We have to get any project you wanted to start minor to get the environmental clearance. It will take at least 6 months. It has to be registered online Similarly, other approvals, airport clearance, mills traffic. There will be around 18 to 20 approvals you have to get, then only you can start the project.

Seed money is arranged by us or the client?

No. Some projects we are incurring, but some projects we are telling to incur by the clients. Our -- recently, we added money to resolve this issue because clients also don't have money. So to resolve this issue, recently, we added the Cofor giving stent wherever required. -- provided the government is willing to you are able to give the van guarantee, then Arcol ready to finance. In this model, already Navina we have and fund around INR 3,500 crores to acquire the land. So that process is already true.

And for projects where we have to arrange the money, are we now raising the fund or we are waiting for better clarity before we start raising funds from the financing?

GPRA, we infused our sale money. And currently, we put some money in Amrapali. That's all these 2 projects. And of course, some money to DTC. We have put some sermon BTC in small amount in Delhi transport operation. So the rest of the team, the client till is arranging retracing Board, I think now the state government is going to take the loan.

So my point is given for the new projects which are yet to start, you are not arranging the seed money probably because you're not clear on the approvals and clarity on the time line of approvals? Is that true?

Ankita, we are facilitating them to get that money either through a loan by moderating their assets or because our goal is marketing of those assets or prelaunching of the asset or launching of the asset to date fund under redevelopment stream. But we are also facilitating them. CMD as to we have an MOU with Hukalso. -- wherever and money will be required for those pose, maybe of the state government that Hutko is pitching and provide money to state government. And if state government is able to give the mortgage of the land and all this. we are facilitating them.

My only concern is given the order book looks very strong. However, approvals are significantly delayed -- and the time line is getting extended, which is impacting execution. So we will better clarity on execution ramping up over the next 9 months and which will come only if we have clarity on new project contracts awarding through the contractors coming through. So that was the whole thought process of understanding. Also, you have highlighted there is any...

I already explained you. So due to various approvals, the project got delayed, 2 reasons. One is fund. Other one is various approvals. And of course, first time we are extending this business to state government. The government way working is not quite central government. And they don't know the procedures they are in the process of learning the procedure sandal. Now we get proved and only MAHAPREIT getting delayed the sale. Rest of the development projects already, we are in the fast track, I can say.

Apart from any other clarity or a pipeline of projects where you already mentioned the GPR projects of INR 50,000 crores. Apart from that, anything else in the pipeline for this year in terms of inflows?

We are talking with various state governments and some PSUs also. We are talking with where you don't want to name the presently. Once we will get the orders, then definitely we'll come to know that. I think within the smelter next month, you're going to get some more news, don't worry.

Are the state government projects are kind of getting should you continue to focus on state government projects?

Yes. Definitely, we got cautious about No. wherever we are going in the state government, we are doing on PMC basis. We are not infusing any of our money or anything. So it is a PMC project. As long as it is a PMC project, we are safe, but the matter is only tied. So the state government is having very good land person in the prime location Unfortunately, they could not monetize properly. We are the only agency after Motiva, KidwaynNager and now 7G. Since it is a world -- 15 years old company in redevelopment -- and 1 of the unique profitable margin project that is development. So we can better utilize of fair because earlier product city has only grown lower. If you don't monetize this plan, in prime location, what is going to happen, whether it will be enclosed with someone else or it will be maximum a forest. So better monetization is the best part. So we have expertise and state government don't have money, and they need not to invest money. That is also the duty of this project. So that's why we have a good win-win situation for state government for us and lot of employment will be generated to do this, not only the employment, so we are paying almost 18% GST to extent government of India and state government. They're going to get the revenue through income tax, levers. Apart from that, they will go in to get a good number of employment generation. So better model, why we should not go to state government. So we wanted to expand our business throughout India. It is a national building construction company, why is restricted to only Delhi. This is our answer.

One last one, what will be the owner state ownership structure of the REIT that is planned?

Ankita, right now, we are in the process of formation of the SPV, where we will transfer our asset that -- and ultimately, the holding of this SPV will transfer or rate whenever it is formed. -- rate will be found by the considerable number of portfolio is gathered because we are still in discussion with various PSUs -- so once that portfolio of asset is available across a number of SPV only then we will have a national level rate. So ownership ultimately, sponsor will be and BCC only that is clear and ownership will depend on the assets put under that portfolio. If a particular SD want to put their asset that first ownership of all TV will be with that as a CPSC.And once it is transferred to RIT, that again, unit will be issued or that CPE only. but we may put some money in the form of development expenditure fitting out refurbishment out for that refurbishment or development, we may take some ownership. But rate ownership will be decided once it is formed after a numb good chunk of portfolio is available for ratable assets.

Next question comes from the line of Sumeet Rohra from Smartsun Capital Private Limited.

The thing is that your stand-alone numbers are clearly are very encouraging. But sir, the way the market is actually looking at it is that the things that you have an order book today of INR 1,27,000 crores, you have said repeatedly that you're going to get those INR 500 crore, INR 60,000 crores. So sir, the market is -- was of the view that you will end the year with about INR 2 lakh crore kind of order book. Now sir, the thing is that that order book, I mean, of INR 120,000 crores which you have today needs to be executed over the next 4 to 5 years. Now, sir, somehow, the revenue growth, okay, is basically not kind of reflecting what is actually supposed to have happen, right? Because I mean, if you're supposed to execute 20,000 over a 4-, 5-year period, your run rate has to get to INR 20 crores, INR 25,000 crores. And at some point of time, when your order book is INR 200 crore, it has to get to INR 35,000 crores. Sir, what do you think is basically kind of coming in between us because the potential for this company is enormous. I mean there's absolutely no question on that point that this company can actually be one of the best PSUs in the country. But sir, it is not translating into revenue growth because even if you see your consolidated numbers, you've vertically highlighted that, that is because of your merger or whatever that is. But the thing is that, sir, so do you think that this revenue growth is now at that point of time where you will see a sharp uptake over the next couple of years. So if I understand correctly, you said INR 1,600 crores, INR 17,000 crores revenue will basically be for current financial year and next financial year, you said will be about 21,000. So sir, do you think that there is scope to kind of outlay those numbers because your order book is clearly there. And the fact is that you have the business, which is to be executed, plus you have the sector 37D project, plus you have Meroplus you have Bombay Port places -- you don't have the work...

I'm a sorry, sir, I believe Mr. Sumeet has slipped the line.

Okay. So I'll just -- your next question then. Otherwise, I can replay both questions at the time.

We'll take the next test from Mr. [ Dachs Malhotra ] from Adrev Global.

Actually, my question is also on similar lines. So we have discussed that we have a substantial order book plus we have the 5 GPRA and other state orders coming in, amounting to 50,000, INR 60,000 crores -- and on different platforms, we have mentioned order book for this year to be INR 2 lakh crore plus. Secondly, in the first quarter, we would -- it would be really nice if you can help us understand how will the HCC merger help us while that Maharashtra project, the margins were very low. Now if we merge it with the parent NBCC and it becomes easier for consolidated for the stand-alone to we understood better. Other than that, how is that going to help us? And in Q3, we expect Graph to again slow things down for us in Delhi given the ruling from the government from November to January, the construction has to be -- so I don't see us said even achieving the INR 16,000 crores, INR 17,000 crores revenue on a consolidated basis. And given that our run rate for PAT is INR 150 crores, INR 150 in the first quarter, even if we pull it up, sir, how can we from INR 600 crores to INR 750 crores set your -- some light of confidence needed on the PAT number of INR 1,100 crores, INR 1,200 crores that we are anticipating for this year. How is that going to be a reality in which quarter will we see the real jump in Gurgaon, the real profit drivers are also coming from the next couple of years. So is it going to happen or will we sort of falter on our commitment once again?

It is going to definitely happen. We have figures. I'm not committing like that. So otherwise, I could have told I'm going to compete, execute 20,000. And saying 16,000 means a backup also and similarly, I have 1,046 means that also 1,100 means higher back up. Definitely, it will be achieved, considering all the factors, whatever you have mentioned, graph, everything we have taken into care account then only we are committing, Otherwise, simply, I can say, INR 20,000 crores on INR 27,000 is there, I'll going to compete 20,000. I'm saying 16,000 means, it will be definitely acute -- you can see last 3 years, whatever we are committed that we are going to achieve. After a gap of 4, 5 years, the company is getting excellent rating. The excellent rating measured by all the parameters whatever you have mentioned, we earned also some parameters, even negative marketing is there, but also we have tried to achieve, not only in the part in the taking care of investors. We have to do profitability, we have to do social responsibility, we have to do R&D. There are 10 number of parameters that as measured by BP and one thing I wanted to share with you, last year, we got, I think, the second PSU, Guard has a score of 8.6 score. So we are doing -- but unfortunately, you are right. So the big gates, 1 is Mhatre, Supertech and demo Case. They are all these 3 projects adding together around INR 50,000 crores over order. It has got delayed. J&T after 1.5 years, it is true. So with the way of working of state government, you also know -- so it is taking time, but definitely, it is achievable. There is no mic something like that. We're going to achieve the profit, the IMA back. Currently, I don't want to share it with you. So 1,000 profit, definitely it will come and around INR 16,000 crores as you rightly asked, the Victory and 370, that profit will come after 2 years, not now. But we have other real estate properties that, I think when a property already, we have started construction. Other property, we wanted to sell it or in the -- we're going to sell the property from that also we're going to get some money and profit also. So we have a backup, don't worry. -- committing. Still I'm committing that figure, whatever I'm saying to each.

Good to know, sir. And on the FCC, if you can shed some light, how will that merger apart how will it help us? And can we bring HCC out of the existing situation of a negative on revenue and profit?

Definitely. What happens when you purchase the TCL HCC, HCC used to do steel and price. -- and on steel plant dowel construction. Once the steel enter all the steel pack commission, then don't they have a work order, and it was literally in the face of closure are wind up stage. That time, NBCC 2018, we procured the company, we acquired the company. And today, that company is a Miniratna company. I was the CEO of that company. for 2 years, and we got Miniratna in less than 3 years. After 29 years, we got the profit. Almost 3 decades, the company was running last. So now we got our quarter during the 4-year COVID period, we got around INR 3,500 crores for order and that company is arrived and presently is a profit-making company and headquarter in Kolkata. Do you know how to work in Kolkata. So still that company is making profit. Similarly, HCC we acquired in the year 2019. Unfortunately, these 2 companies, they are quoting very low fee. -- whereas their overheads are more than whatever they are putting. The overage is around 3% to 4%, but they ported 2%. So that we have stopped why we should work on last. Let it be -- if you're not getting top line, okay, but on large, we should not work. So that's why Maharashtra started wherein we was last around INR 300 crore top line but profit-wise, not much of impact, but this I'm going to cover with my stand-alone project that is NBCC. NBCC projects, [indiscernible] all tenders. It was awarded in almost 8, 10 years back, that could not be materialized, but now we have awarded all the packages around INR 10,000 crores workouts with us. That has to be completed within 2 years. I think in less than another 18 months. So INR 560 crores or catering to get the top line from this project. Similarly, Amrapali has to be completed in 2 years. There also are going to get INR 5,000 crores to INR 6,000 crores top line. So only these 2 projects are going to get INR 10,000 crores. Similarly, Supertech will go to award JLT will go toward this whatever figure I'm saying, have back for calculation, nothing to it and still adhering these figures.

Sure, sir. Good to know. And on the long-term trajectory of the company, we are very convinced but sometimes in the quarterly run rate when we...

I fully agree. I fully agree, conversion took too much of time, but nothing to array, we'll go in to execute. -- just to read the HCL story. And I think you can imagine now it was the company. Even Tata Nana stopped their working and they put the plant in Armands did the HSL terminal story. So now it is a profit making. And one more thing I wanted to highlight you Amrapali project in 2 core Amrapali project best time, even our other contractors, big contractor came to me. I was a HR, the time I was the Executive Director of Amrapali projects. They came to me and they told sir, why can't you foreclose this project. So today, you know what is going on almost 8,000 work or clear top line we have competed our bottom line also almost 9% we are getting on that project INR8,000. And we have paid INR 2,000 crores GST to state and central government lot of employment has generated and the ones they are suffered last 8 to 12 years, they got their home, their genuine one, they got it, and we have completed that project. due to which Super Court once again interested the work of Supertech. So that is the confidence they have on NBCC. And one thing I wanted to tell you, whenever any PSU fails, Private will take over example, Air India sales Tata took over, whereas in this case, reverse a private builder failed and PSU is completing that project. So that is the turnaround story for NBCC for investors like you, confidence on us, so we are doing the job.

We have Mr. Sumeet Rohra from SmartZone Capital Private Limited to the call.

Apologies, my call as of I will in between. Yes. or so coming back to the point, so under your and Anjeev sir on the leadership, I mean, there is absolutely no question of the fact that you both will take this company to a different high. But sir, just that as you explained, in order to the last participant as well that there are a little bit of confidence in building measures, which need to be -- and you explained so much in detail. So I won't be repetitive to ask the same thing again, but I will just kind of just tell you that the potential is enormous. Your plate is full of orders, the only thing we saw which basically keeps us away from glory and from being ranked as 1 of the best public sector companies in this country is basically on the execution. So sir, if you can just get that all moving at a faster clip then I'm sure that this is headed for a totally different trajectory. So on this note, sir, I wish you all the best. Good luck and hope to see you on the next conference call, sir.

Thank you, Sumeet. [indiscernible] reasons beyond our controller, okay? Otherwise, why you should make the delay projects. We are pursuing, unfortunately, the clients, that state government, we are forcing because of that, it got delayed. Three projects after Pushkal, karo main, 3 projects that is one is Supertech. Other 1 is J&K. And third 1 is MAHAPREIT. Yes, INR 50,000 crores cover. So conversion or later, JNK. Supertech Janet tender rota, almost Panda Patparticipate a technical evaluation is going on. So once at should have come to 100 crore, thus the infrastructure lie. Now INR 3,500 crores at tender AmarapasRedy. -- we'll go in to float this month itself. So over the J&K through Japan strategy at Phase IIb Chalos. Similarly, market should have deliver. Hopefully, this quarter per Obsinate quarter. Currently, whatever figures I'm projecting airline as it will be added. Definitely, it will add it to our city, Mahakam and Ali only pertain partner current already to Cal MRAP Nemara, project using Bakar. I do not project over the figure naturally, both changes, it will be the surprise news to you rather it will be bonus, okay? -- and taking conservative figure definitely to be achieved.

Sure, sir. I wish you all the best and good luck. And I sincerely hope that -- and essentially hope that we can get those big orders because I mean for those 2.

[indiscernible] at the earliest, we were going to get PAB already approved. Why we are not in sent stock mills, we are waiting for cabinet approval as soon as we give the cabinet approval immediately will going to announce you.

We have one follow-up question from Mr. Vasudev Ganatra from Nuvama Wealth Management.

For the follow-up opportunity, sir, just one update on the Dubai operations, where are we over there?

He will answer my [indiscernible]. The operation is well on track. We have already got the developer license and -- as you already know, in the domain is there that we have already had a land partner purchased, and we are constructing housing units there around 66,000 units. All the design local authority approvals have been obtained. And recently, we have floated RFO for selection of brokers. So they will be helping us in doing the marketing and sales and promotion and all those activities. So we are very much well intact. As soon as the marketing consultant is on board, we will do the branding and the sales proposition and all those activities will take -- start taking place. and the construction tender is also most likely to be floated in the month of October. That is our planning.

There not for the questions. Now I hand over the floor to Mr. K.P. Mahadevaswamy me for his closing comments. .

Development, all major packages are under execution with approximately INR 10,000 crores of balance worth will be going to execute within QES. -- successfully sold entire Baratbusiness part only 3 to 4 months in action, just 3 in and the GP development project. And a few more projects are in the pipeline for sale, action that is including Unit Mandrea, India Mark and Africa venue apartment. Amrapali project, Phase I execution has come across multiple packages and expected to contribute significantly to revenue and bottom line that is profitability in coming quarters. JNK satellite city, INR 3,500 crores to INR 4,000 crores, tender will be uploaded very soon. Supertech project is going to our upcoming months. Main Apo Infrastructure work also going to abroad shortly. So one thing, apart from this, I wanted to share with you it HLA companies are another last almost 29 years when last, there was no recruitment is system at headquarter at Kolkata meta or company Miniroos Antapata Aero. It's not investor haplo. It is a listed company, a company car future both Bright Orga and whatever we are committing definitely our last making company go profit Kerendan, just 3 years may agetecompany capacity at. We have a good working staff also in only this 22 regular plate almost a contractual may or company turnover came on the turnaround okay, [Foreign Language] India Sarachada Kumba Safara, both on a private agency of NBCC. You have completed Amrapali, why can't you do our projects. So we're going to get some private projects in this process, those star projects have Olmeta. And recently, Seshasayee Tonkawa 2,000 compete is government on MatapuDiawa, Waha Banana aspetaLoga, Astrella me, we are expecting some business Sodimac business may have a spouses Malala, Osama is a consideration in really aware, but we are going to get that list. Thus, whatever we are committing, we'll try to honor it and we'll go in to adhere and achieve it. With this, once again, thank you, all.

Thank you so much, sir. Dear investors, if you have any further questions or require additional information. Please reach out to Mr. Bal Kishan Singla, Investor Relations NBCC. Ladies and gentlemen, this concludes your conference for today. Thank you for participation and for using the Sabas conference call service.