NCC Limited (500294) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q1 FY '22 Earnings Conference Call of NCC Limited hosted by Centrum Broking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Shah from Centrum Broking. Thank you and over to you, sir.

Yes. Thanks, Rutuja. On behalf of Centrum Broking, I welcome everyone to the Q1 FY '22 Earnings Conference Call of NCC Limited. Today, we have from the management Mr. Y. D. Murthy, Executive Vice President, Finance; Mr. K. K. Rao, Executive Vice President, Finance and Accounts; and Mr. K. Durga Prasad, Joint General Manager, Finance. We will begin with opening remarks from the management, after which, we'll have the Q&A session. So over to you, sir. Over to you, Mr. Murthy.

Thank you, Ashish. Good afternoon to all the participants. I am Y. D. Murthy, Executive Vice President from the company. And we will take you through the first quarter results of the company. Initially, I will make a few comments and then we will discuss the first quarter results. First of all, as you know, the economy is in an uptick and things are definitely improving for the economy. And definitely, they are improving for the construction industry also. And if you make a comparison of Q1 FY '21 and Q2 FY '22, both the quarters, there was a pandemic and the economy was badly impacted. In fact, in April 2020, there was a general complete lockdown. The supply chain was disrupted because the national highways were closed. So we really suffered. And therefore, in Q1 FY '21, the economy shrunk by about 23.9%, and the biggest contributor to that shrinkage was the construction industry, which reported about 50% shrinkage in Q1 FY '21. That is very abnormal. We also reported about 40%, 42% decline in term of our -- in the first quarter of last year. Whereas in the current year, that problem is not there. The supply chain is not broken. The highways are absolutely ready, and the raw material supply is there. And also, in Q1 FY '21, the clients have told us to stop the work at project site, particularly in the month of April and May, until the lockdown is lifted, which means what? At the project site, even if I have the raw material, even if I have the manpower, I will not be able to execute the projects because the client has told me not to execute the project. It's as simple as that. Whereas in Q1 FY '22, that problem is not there. The supply chain is intact and also the migration of labor was also relatively less. But in the current year, in the first quarter, we had sporadic cases of COVID-19 coming to some of the project sites, but we have taken remedial measures to see that the problem is contained well in time, and that has helped us very nicely. And as far as the order booking is concerned, despite COVID-19, last year, we had bagged about INR 19,000 crores of fresh orders. That is demonstrated government desire to kickstart the economy by calling for a lot of tendering of our development of physical infrastructure. And we being one of the frontline companies, we were able to take advantage of that. In fact, last year, we have exceeded the guidance as far as order booking is concerned because we got about INR 19,000 crores of orders. Now the tempo is likely to continue in the current year also. In the -- already in the first 4 months of the current year, we bagged about INR 4,000 crores of orders. But the issue of giving guidance for FY '22 was discussed in our Board. And because of the uncertainty and also the third wave of COVID expected in the month of August and also September, the Board has felt that we cannot give any guidance as far as the top line and as far as the order book or order accretion for FY '22 are concerned. So that is the situation as far as guidance is concerned. But we are sitting on a good order book of nearly INR 39,000 crores, and most of the orders are under execution. We have got a strong execution teams taking care of -- completing the projects that will help us. And I am quite sure, though I cannot give a number because of the Board direction, FY '22 should be far better than FY '21 in terms of top line and in terms of bottom line. As far as the macro environment is concerned, for FY '22, we are looking at this Jal Jeevan Mission as a first area for us. You must be aware, the central government has made it a national project. Supply of potable drinking water to all the citizens in all the states and all the villages and also the last mile connectivity. The Jal Jeevan is a central government-sponsored project and that is being likely to be implemented across the country. In fact, Telangana was the first state to start Mission Bhagiratha and complete the project. Now that is going to be replicated across the country with the help of the central government. We bagged, already you may be aware, some orders in the state of Uttar Pradesh, about INR 6,200 crores, under Jal Jeevan Mission. And now other states have started calling for tenders. Recently Madhya Pradesh has floated the tenders. Likewise, Maharashtra is also planning. So we will participate there also. So as far as FY '22 is concerned, because we have done the Mission Bhagiratha project in the state of Telangana earlier, and we have got a strong execution team in our water vertical -- water and environmental divisions, we are confident that we will be able to bag similar orders in other states also as we go forward. So for the current year, we are looking at the affordable housing projects and also the Jal Jeevan Mission to be drivers of growth, drivers of order book as far as NCC is concerned. Added to that, perhaps you will be aware, we have bought a strong mandate and a strong leadership position in the verticals of buildings, water pipelines and road projects. In fact, these 3 verticals put together constitute about 75% to 80% of our order book as well as the top line of the company. We'll have a leadership position in all these verticals. Particularly in buildings, INR 1,000 crores and above, we are able to bag substantial orders. We are doing about 4 medical campuses for All India Institute of Medical Sciences in various locations. And also, we are doing 2 airport projects, one in the Lucknow Airport and the Patna Airport, of the Airports Authority of India. We are doing some defense projects, 2 packages we have got from the Indian Navy for the Seabird Karwar project in Karnataka that is also going on well. Now the Central Vista project in New Delhi, the Parliament mix -- and buildings are about INR 19,000 crores worth of building projects are like to be called for tendering. We will definitely participate in those orders also and try our luck there. And we are quite active in the metro projects. We are doing 2 packages in Pune, 1 or 2 package in Nagpur, 1 package in Bombay. Earlier, we completed 1 package in Chennai and 1 package we are doing right now in Bangalore City. So the metro is also a very good sustained area. Payment cycle is good, and we have got strong execution capabilities in the metro projects also. Likewise, in roads, we are doing the Nagpur-Mumbai Expressway, about INR 2,850 crores package, given to us by MSRDC. I'm glad to inform you that the project is progressing well despite COVID-19. We were able to complete almost 90% of the project and the government has mandated various agencies to give a cushion of about 6 months for completion of the projects. And if that is granted, there is a good possibility we may get a bonus also in that project. So roads, we are looking at positively. We are excited with the expressways. Earlier we have done the Nagpur-Mumbai Expressway successfully and got a bonus -- sorry, the Agra-Lucknow Expressway. Now we are doing the Nagpur-Mumbai Expressway. Here also, we are targeting the bonus. And also, we are looking at hybrid annuity projects. We started bidding for them. So current year also, these 3 verticals, that is buildings, roads and water pipelines, will form the backbone of the company, and a substantial order acquisition we are expecting in this segment also. As far as the payment cycle is concerned, things have improved. The central government agencies, many of them are AAA-rated companies. And once the work is done and duly certified, payments are coming in time. In fact, the Finance Ministry has also directed government agencies to see that the payments are released to contractors provided the work is done and duly certified. So that they call wheels of the economy keeps moving. That is also helping us in many ways. But we have some difficulties as far as the state government projects are concerned, mainly because there are some delays in payment of bills with state government agencies, mainly because of COVID too, and their focus has shifted to welfare measures and health care measures and payments to contractors are in the back burner. But we are struggling and pushing their minds seeing that payments obviously. There are some delays, but payments are coming there also. As far as liquidity is concerned, company is well placed. We are able to comfortably navigate the difficult times. We have not defaulted in covering lending consortium banks. All the payments are made on time. The LC payments and also interest payments and also term loan installment payments to really settlement of finance shares. We have taken the COVID loan given by our consortium banks at a concessional rate as mandated by Reserve Bank of India, and that also helped us. And liquidity-wise, we are comfortably placed. And also many of our projects, more or less advance are being released by the clients. That is also helping us to see that our cash flow is well maintained. As far as the interest rates are concerned, we were able to successfully bring down the blended cost of borrowing to below 9%. And many banks have passed on the benefit of policy rate reduction by the Reserve Bank to companies like us, particularly because of our long-term relations with the banks and also because of our rating and our track record of honoring all our commitments without any difficulty. So we don't see any difficulty on those lines. As far as bank guarantees are concerned, again, there is some good improvement. The Finance Ministry last year has given a relief to construction companies by permitting the reduction in the performance guarantee value on a pro rata basis linked to the progress of the project. If the project is completed 50%, the performance guarantee value can come down by 50%. That was a big relief to companies like us. And during the last 15 months, we were able to bring back about INR 1,000 crores of bank guarantees from various clients. So those guarantee limits are available to us for our future projects. Either relaxations given by the Finance Ministry because of COVID-19, the performance guarantee requirement has been brought down from 10% to about 3%. And also, they have dispensed with it providing bid bonds at the time of bidding for the projects. All these measures are helping the company to see that enough bank guarantee limits are available for the new projects for bidding and taking up the projects. Our bankers also have sanctioned additional financial assistance in the State Bank of India, Karnataka Bank and some other banks in the consortium of sanction. Now we are comfortably placed as far as the bank guarantee limits are concerned, as far as the LC limits are concerned, as far as the fundraise requirement is concerned. So company is definitely on a good growth path. A lot of opportunities are available. We are -- we started bidding for the high-speed rail projects also. We have tied up with another construction company as our partner. And together, we are bidding for bigger packages of INR 10,000 crores and above for the high-speed rail projects. And we are confident that some projects will definitely come to us. So these are the broad picture I wanted to give as far as the construction business is concerned and the company's positioning in the construction industry is concerned. Now I request my colleague, Mr. Krishna Rao, to talk about the first quarter results.

Yes. Very good evening to you all. Thank you, sir. To begin with the order book summaries like this, orders on hand at the beginning of the quarter, INR 37,928 crores. New orders received during the quarter, INR 3,171 crores. Works executed during the quarter INR 2,013 crores and the closing order book as at the end of the quarter is INR 39,087 crores. The turnover part, the company achieved a turnover of INR 1,912 crores, including other income in the first quarter as against INR 1,211.41 crores in the corresponding quarter of the previous year. As a result, the increase in turnover is 58% year-on-year basis. The company has reported EBIDTA of INR 199.68 crores and a net profit of INR 51.68 crores as against INR 115.63 crores and INR 16.93 crores reported, respectively, in the corresponding previous year. The turnover numbers on a consolidated basis are the turnover during the quarter is INR 2,083.21 crores as against INR 1,328.71 crores, resulting the increase in turnover of 57% on a consolidated basis. The company has reported EBIDTA of INR 211.25 crores and a net profit of INR 49.95 crores attributable to shareholders as against INR 124.82 crores and INR 15.68 crores, respectively, in the corresponding previous year. Now we will analyze the expenditure. Salaries and allowances during the quarter -- first quarter of 2021, many new projects have started. Operations are going at full level. And the salaries and allowances compared to the corresponding quarter, INR 9 crores, is increased, which is primarily on account of increase in head count. And administrative costs is more by INR 15 crores because, in the previous quarter, there were restrictions in the movement. Many states lockdown has imposed. Now it is not there and people are moving around to the projects and continuously the operations are on. Apart from it, there is a provision of INR 6 crores in the year, and CSR we have spent INR 2 crores. These are with regard to the administrative. And interest during the quarter, there is a INR 12 crores reduction compared to previous quarter. This is primarily the repayment of the loan, number one, and reduction in the interest rate. That is what my colleague mentioned. With these, we are going to stand at EBIDTA level for the first quarter, 10.6% as against 9.8% of the corresponding previous quarter of the year. Now the EBIDTA level at the consolidated level are 10.2% and 9.6% of the corresponding previous quarter of the year. Now we will take up the order book division-wise. Building division at the beginning of the quarter, INR 21,157 crores. It represents 56%. And the closure is INR 22,183 crores. That represents 57%. Roads beginning INR 1,954 crores and at the end of the quarter, INR 1,532 crores. Water and environment, INR 7,078 crores, at the closure of the quarter, INR 7,980 crores. And electrical, irrigation, mining and other divisions, it remains no change, mostly. The closing order status at electrical is INR 2,215 crores; irrigation INR 2,406 crores; mining INR 2,528 crores and others altogether INR 229 crores with this closing order book INR 39,087 crores. Now the receivables, the debtors outstanding at the end of the quarter is INR 2,600 crores. And the debtors collection period is 125 days as against 134 days of the corresponding previous quarter. Now the CapEx for the year, we have the capital budget of INR 250 crores and for Q1 INR 38 crores. With a debt position at the end of the quarter, we have for the stand-alone, at the end of the quarter, INR 1,936 crores. There is a reduction of INR 147 crores -- there is an increase because of the utilization of the working capital loan. And on a stand-alone basis, the debt -- on a consolidated basis, the debt closing stands at INR 2,135 crores, an increase of INR 73 crores compared to previous quarter. And the loan rate of interest, there is a reduction to the tune of 0.43%. And AP orders, including the AP new orders, we have as at the end of the quarter, INR 5,214 crores. And the receivables, there is receivables -- reduction in the receivable to the tune of INR 18 crores and retention money to the tune of INR 6 crores. So the receivables stands, at the end of the quarter, INR 233 crores. And BGs, there is a reduction in the BGs. As against INR 914 crores, we have INR 856 crores. We were able to collect more than INR 54 crores. And balance sheet investment with regard to the investment, there is a reduction to the tune of INR 16 crores. We were able to -- we were good disinvest. And trade receivables, there is a decrease to the tune of INR 47 crores. Retention money, there is an increase to the tune of INR 8 crores. Unbilled revenue increased INR 217 crores. And cash and cash equivalent, there is a decrease to the tune of INR 123 crores. Margin money, there is an increase to the tune of INR 57 crores where we are participating into the more tenders. And with regard to the borrowing, there is utilization of working capital. It is more by INR 208 crores. And other borrowings, loans and the equipment term loans, there is a reduction to the tune of INR 62 crores. Mobilization advance, there is an increase to the tune of INR 114 crores. With this, I wish to conclude from my end. Now I will request my colleague to take forward. Thank you.

Yes, one second. One or two points to add to what our colleague has told about the results. The subsidiary companies and the JCEs of NCC has reported a turnover of INR 172 crores and a profit of INR 2.2 crores in the first quarter of the current year. The subsidiaries in Oman and Dubai put together reported a turnover of INR 2.9 crores and a loss of INR 3.14 crores. As you know, we are winding up our business in the [ Dallas ] region. This is the last time they are showing some turnover. Other than that, only the residual works and the closure of the business there is happening. The other one is NCC Urban. They reported a turnover of INR 10.74 crores, our real estate subsidiary in India and a loss of INR 1.51 crores. NCC Infrastructure Holdings, our holding company for BOT projects, reported a turnover of INR 1.12 crores and a loss of INR 0.54 crores. OB Infrastructure, INR 14.85 crores turnover and a profit of INR 4.39 crores. Pachhwara Coal Mining, a turnover of INR 129.5 crores and a profit of INR 3.79 crores. So the total from all the subsidiaries and the associated companies put together, the turnover is INR 171.52 crores. And the PAT is about INR 2.2 crores. So this is taken into the consolidated balance sheet of the company, of which we have already given the details. As far as the finance cost is concerned, my colleague has already mentioned, the finance costs have come down by about INR 12 crores compared to the first quarter of the previous year. Likewise, in the last year also, the finance cost has come down by about INR 60 crores for the year as a whole, FY '21. So we are putting a lot of efforts to see that the costs are cut as much as possible. And the details of the finance cost, that is about INR 103.72 crores that we have incurred in the first quarter, comprise of interest on term loan INR 6.39 crores, interest on cash credit and WCDL INR 36.58 crores, interest on mobilization advance INR 28 crores, interest on others INR 1.72 crores, the BG commission INR 46.9 crores, LC commission INR 2.86 crores and bank and other finance charges INR 1.12 crores. The total for the quarter is INR 103.72 crores. As compared to first quarter of last year, it is less by about INR 12 crores. Debt we have already covered. Now loans and advances to our group companies has come down to about INR 295 crores. Investment in associates is about INR 998.54 crores. That's comprised of our equity investments. And group exposure is about INR 1,284 crores. It is more or less at the -- see, by the end of first quarter last year is about INR 1,472 crores. It has come down by about INR 150 crores. That is mainly because of repayment of debt by NCC Urban to the parent company and also conversion of debt into equity in the books of NCC Urban pertaining to parent company. Cash and bank balances INR 373 crores is there. Inventories, raw material is about INR 511.9 crores and property development cost is about INR 15 crores. Total inventory is about INR 527 crores. Trade receivables we have already covered. Depreciation is about INR 45 crores and consolidated is INR 45.91 crores. Stand-alone depreciation is -- one second.

INR 44 crores.

Yes, yes, INR 44 crores -- INR 44.7 crores as compared to previous quarter -- first quarter previously INR 43.5 crores. Interest income is -- sorry, other income is -- difference of other income, that is INR 13.31 crores. And that is -- sorry, other income, INR 19.29 crores. Out of that interest income is INR 13.31 crores. Then miscellaneous income is INR 4.62 crores. Rental income is INR 0.3 crores. Profit on sale of fixed asset is INR 0.23 crores. So these are the details that we wanted to share with the investors. [Operator Instructions] Now we can open the session for a discussion.

[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital Markets.

Sir, you have already said that we are not giving the revenue guidance and order inflow also. But in terms of the EBIDTA margin, last time we have spoke about 11.5% kind of in this are normalized. So how do we now look at for full year EBIDTA margin absolutely? And secondly, in the stand alone debt, which has increased close to INR 150-odd crore versus March. So how do we look at for the full year debt level?

Yes. First, EBIDTA margin, FY '21, we reported EBIDTA margin of 11.8% as compared to 12.5% in the previous financial year, 31st March 2020. As far as the current year is concerned, in the first quarter, we reported EBIDTA of 10.55%, which is slightly better than 9.8% reported in the first quarter of the previous year, but it is less than the total EBIDTA margin of 11.8% reported for the year as a whole. That is understandable because of the pandemic and because of the -- we took a beating because of the commodity prices have gone up quite high. We actually lost about 1% in our gross profit margin levels. So the 10.55% for the first quarter current year is understandable. But for the year as a whole, we are targeting EBIDTA of 11.75% to 12%. As reported last year, we are confident we'll be able to bounce back as far as the EBIDTA margins are concerned. And also, the PAT levels also has improved nicely in the first quarter of this year as compared to first quarter of last year. And the PAT margin also improved. First quarter of last year, they were 1.4%, now is about 2.7%. We are expecting further increases in the PAT margin, and we are confident for the year as a whole a PAT margin of 3.5% to 4% can be achieved. Now what's the other question, please?

Sir, I was asking in terms of the stand-alone debt, which has increased to now INR 1,936-odd crores. So how do we look at it and at the same time in terms of the interest cost, which has actually reduced? So for the full year -- for this quarter, it is already INR 103-odd crores. Can we look at around INR 400 crores, INR 420 crores, INR 410 crores or it will be closer to the last year of INR 460-odd crores?

Yes. Last year, the finance cost is about INR 457.78 crores. This year, first quarter is INR 103 crores. We are confident year as a whole the finance cost should be between, say, INR 430 crores to INR 450 crores for the current financial year and also a reduction of debt. See, various elements are there in this. We are trying to do our best to see that the debt levels have reduced. Last year, we reported a debt/equity of 0.3:1, which is one of the best in the industry. But in the first quarter, some increase is there in the debt, mainly because of the utilization of the working capital limits of the banking system. That is in turn because of some delay in payments by various government agencies, particularly the state government agencies. In our electrical division, payments were delayed in the state of UP and Jharkhand and that created some difficulty, but the debt levels have gone up. But we believe it is confirming in nature. And going forward, if you see the year-end debt, for example, in 2020, our debt reported at the end of the financial year 2020 was INR 1,910 crores. Last year, that is FY '21, it is INR 1,788.9 crores. That is a reduction in debt by about INR 130 crores, INR 140 crores compared to the previous year. Similar thing, we are targeting -- okay, '20 it has gone up to INR 2,050 crores because of the pandemic and all those things are there. But current year, we are confident we will be able to come back to that March '21 level of debt, let's say, about INR 1,780 crore or so. In fact, there is a possibility there could be a further reduction in debt to a level of, let's say, INR 1,500 to INR 1,600 crores. We are trying to monitor some of our assets. And if that materializes in the current financial year, that will help us to bring down the debt levels further.

The next question is from the line of Mohit Kumar from DAM Capital.

Congratulation on good order accretion in the quarter and in the July especially. So my first question, what -- at the end of June '21, the 25% -- out of 100% of order book work on the 25% has not started. Has there been any increase or decline in that number? And the work -- and the related question is work on the UP JJM or the recognition of the UP JJM revenue. Will they start in the second half?

See, as far as the 25% you are talking about, one thing. UP, we bagged about INR 6,200 crores of Jal Jeevan Mission projects in December, but that work is yet to start. That is one thing that is delaying it. Other than that, whatever projects as you say in the month of February, March '21 -- FY '21, those orders for us to mobilize the stock versus project site and further clients to give us notice to proceed, et cetera, handing over the project site and all. It will take at least 3 to 4 months. So because of that also, the works would not have commenced. That is a normal practice, nothing to worry about that. But once the work starts, the exhibitions will pick up faster and pick up. That is the point I want to make. What is the other one you asked?

No, sir. My question is answered, sir, mostly. So secondly, sir, any update on your INR 2.3 billion dues stuck on the AP projects and on the real estate monetization of NCC Vizag Urban?

Yes. As far as AP is concerned, we already told you the figures, particularly the receivables and all that. We've got payment of about INR 400 crores from the government of AP agencies during the last 15 months, that is full year of last year and 3 months of current year. Also the number of bank guarantees have come back. And we have proactively taken up the matter with the government agencies in AP. And we requested them to adjust the mobilization advance available lying with us against the payment of bills. That also has helped us to bring down the outstanding by about INR 250 crores or so. Now the residual bills to be paid, there are some delays. We are also taking up the matter with the government agencies. In fact, we were recently in Vijaywada discussing the matter with the top people in all these organizations. They, in turn, bought the government approval to borrow about INR 3,000 crores with the government guarantee. The government has given a GO. In fact, they gave us a copy of the GO and they are in the process of tying up the debt predominantly to see that the outstanding bills of contractors like us are paid and also the outstanding work is also completed. So we are expecting good progress in that direction in the current financial year.

The next question is from the line of Parikshit Kandpal from HDFC Securities.

My first question is on -- you said that you are winding up the international operations. So this probably was the last quarter of revenue. So how much of cash inflows are -- we can expect from the winding up of these operations?

Durga Prasad, can you answer this question, please?

Yes, sir. So I mean -- and again, internal operations, there are 2 things. One is Oman entity, another one is Mauritius. So the Oman operations, we are completing the pending order works, about INR 17 crores. So...

Mr. Durga Prasad, our Associate Director, Mr. R. S. Raju is here. He will be able to brief a little. One moment, please.

My question was -- so it's Parikshit here, sir. My question was how much of inflows can happen to NCC by winding up the international operation. So whatever is the pending receivable, collection, if you can give a ballpark number, how much we can expect proceeds from winding of the operations?

As far as the operations are concerned, in Oman, all the contracts we completed. In Qatar, one project is there. It takes another 4 to 5 months to close. On a residual amount, about INR 20 crores, INR 25 crores is there to complete. So as far as the operations are concerned, our -- only the final bills and somewhere some claims are there. Those amounts are [ south of real hedge ]. So that, again -- the size of the amounts pending as on the date is about -- INR 290 crores are there. So this INR 290 crores, more than 50% of the amount will be get realized by December '22, and the balance -- some claims are there. That they're scheduling to realize in '22, '23. So there are only 2 aspects. One is completion of the operations. That is over. Another one is delay of this one and the fixed assets also 90% of the assets whatever is there they sold there. And the bank loans are concerned, all the loans are clear, except the big discounting briefs, which get cleared on receipt of the corresponding bills. So the -- international also -- may also repatriating some of the amounts to parent company on month-on-month basis since there is no further requirement too. So our delays of these amounts, the company planning to send the amount about INR 100 crores in the year '21, '22. So that is their plan of action.

Okay. And the second question was on the irrigation project. So just this tussle which is going on between the central government and the state government and -- so has the work stopped altogether as per the central advice or the works are continuing, if you can just update on the status of the irrigation projects.

In Oman?

No, no, sir. Irrigation projects in AP and in Telangana. So whether the projects continue or they have been stopped as per the central government advice?

In the AP?

Yes, yes. So for the irrigation projects.

In the AP, only the projects which are related to the capital city projects, they are not running. We have stopped those things. Only we are looking for the segment of the government. And government is also working on that one, basing on our persuasion. And we understand that some of the projects in the capital city -- they revised those projects, and they may ask to carry or to complete certain things, but the clarity has not yet come. So they made descope some projects to close and some projects they may close as it is. So like that are there as far as the capital city projects are concerned. And to continue those projects, the department are also pursuing for the visit and they're trying for the loans. And the loan tie-up, they want to first make and then give the clearance to carry the works. As far as APTIDCO projects are concerned, so whatever we have done on that one, majority of the payment they release and some balance payments are all there. And as and when they are asking partly we are doing on that one, APTIDCO projects. Other than those projects, but rest of the products wherever are there, they are going, but not at the higher level, but at lower level the projects are carrying basing on their payments and basing on the budget allocation.

Just one more point on this. As far as the capital city is concerned, we are doing the associated building project, about INR 470 crores or so that is going to be canceled because the administrative part is being shifted to Visakhapatnam. In that we have done about 10% to 15% of the work, and that is likely to be canceled. That is descoped already. The client has to settle our bills. The other one, we are doing the MLA Quarters because Amaravati is going to be the legislative capital of the state. That building work is going on. That government also told us to complete that project. Already 75%, 80% work has been completed and that also will be completed soon.

The next question is from the line of Vibhor Singhal from PhillipCapital.

Congrats on the strong performance in this difficult time. Sir, 2 questions from my side. So one, I think, Shravan has asked before basically what is the time line that we are looking for the Jal Jeevan Mission projects? As you mentioned that we have not yet started on those execution on those projects. So by when do we think that the execution will start and revenue will start flowing into those projects? And secondly, you mentioned about the bullet train projects. Sir, as we understand, I think the earlier packages which were all to be awarded in Gujarat have all been taken up by L&T and the remaining packages which are there in are in the state of Maharashtra. There, I think there is not good enough support from the state government in terms of land acquisition and other clearances. So if you could just tell us what is the status of those packages in Maharashtra, and what is the clarity given to you by that department in terms of when these projects could come up for bidding?

There are some more packages likely to be called for tendering in Gujarat, and we'll definitely participate there. As far as Maharashtra is concerned, there is no clarity. Unless the state government acquires the land and makes it available to the project company for execution, we'll have to wait and see. You're right. All the 3 previous project packages have gone to L&T, but we are definitely in the race as far as high-speed rail projects are concerned. What is the other question?

First question on the Jal Jeevan Mission projects. When do you think the...

Jal Jeevan, actually we have to develop a detailed project report, submit it to the government agency who is authorized to approve the project, usually the district collector of somebody. And once that is approved, they will give us a go ahead and give us the mobilization advance with a bank guarantee as security and all. And the entire process they have given us out of limit of about 18 months. There are now -- district-wise, we are taking it up. The project reports are getting ready. It got delayed somewhat by about 2, 3 months. But very shortly, we are expecting their approval for go ahead in 1 or 2 districts. Once it is approved, we have to complete it within the period of 3 months -- 3 years. So the project is there, but it's likely to take off now.

So sir, when can we expect revenue to start coming? That is the first Q3 of revenue to start coming in -- from this project.

Maybe in a month or so.

In a month or so?

Yes, yes.

The next question is from the line of Prem Khurana from Anand Rathi.

Sir, two questions. One was I think in your opening remark you spoke about the interest on hybrid and the so -- but when I look at them in the commentary that you generally give us is eventually the idea is to find a client conserve cash, which is why I think you're planning to exit all your international ventures. And the idea is to kind of sell some of them [indiscernible] real estate as well, which clearly comes to imply that you're looking at cash flows. I mean given this backdrop, why at this time you are planning to kind of get into hybrid because hybrid -- you would be required -- I mean I understand the kind of investment that would go would not be comparable to the number that we used to have with BOT too, but it still would require to kind of infuse money. So if you could help us understand this thing...

Yes. I got your question. Let me answer that. Given a choice, we prefer cash contracts as far as the road segment is concerned. We have shown our propensity to bag the expressways, et cetera. And also, we have demonstrated our capability to execute them fast and pick up. That will continue. But because the hybrid annuity is also comparatively looking better compared to BOT projects and a large number of hybrid annuity projects are coming. And we also would like to test the waters, have a foothold in the hybrid annuity project business. And we have got a strong balance sheet and have good links with the banking system in terms of tie-up of debt, et cetera, of that SPV. So we are looking at hybrid annuity also as a possible destination. But our focus will remain on cash contracts as far as the road projects are concerned. And maybe we will take up hardly 1 or 2 hybrid annuity projects. And our balance sheet will support that without much difficulty.

And so what kind of IRR would you target I mean if you want to try and get into this pitch? Any number...

That is difficult to say at this stage. Let the project come, then I can share with you because there's O&M also involved in that. We are also looking for a partner to participate on the equity side right from the beginning. We can agree the IRR and things like that. So I cannot discuss about that at this point in time.

Sure. And last quarter, you'd given the breakup -- receivables breakup for AP in terms of, I mean, the running orders and stuck orders. Possible to share that number? And also, if you could share cash and bank balance as of 30th June on a stand-alone basis.

Yes. AP projects outstanding, receivables, my colleague, Durga Prasad, will explain to you. Please go ahead.

Yes. As far as receivables are concerned for running projects as of 30th June, INR 174.54 crores. Capital city project INR 58.87 crores. So total net receivable is INR 233.41 crores. So as far as unbilled revenue, work in progress is concerned, for running projects, it is INR 215.10 crores. Capital cities projects INR 122.39 crores. So total work in progress our unbilled revenue it is INR 337.49 crores. So receivables plus WIP put together is INR 570.90 crores. So in addition, our retention money -- receivable is INR 278 crores.

Your next question is from the line of [ Zakir Nasir from Nasir Investments ].

Sir, congrats on a reasonable set of numbers considering the bad theme. Sir, you have not given any guidance, but could we assume that the first quarter is not a full potential quarter? And in regards to work, can clients asking you to start work? July have they reversed their earlier stance and the work has started?

Yes. Work has started. Definitely, we'll have an advantage because we are starting the year with a good order book of nearly INR 39,000 crores and we have got strong execution capabilities. Definitely, FY '22 should be far better than FY '21 as far as top line is concerned, as far as bottom line is concerned. But I cannot give a number because the Board has decided to not to give any guidance. My gut feeling is at a personal level, easily 20% to 25% top line growth in FY '22 can be achieved as compared to FY '21.

Fantastic, sir. That would take you across INR 10,000 crores.

The next question is from the line of Ankita Shah from Elara Capital.

Sir, basically, my question was on the interest expense. You guided for INR 450 crore of number for this year also, which is almost like flattish as compared to last year. This is despite you've been highlighting the reduction in the interest expense and the bank guarantee and bank commission charges. Also, you are guiding for a lower leverage and reduction in debt. So why not reduction in interest expense?