NCC Limited (500294) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the NCC Limited Q3 FY 2021/'22 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from DAM Capital. Thank you, and over to you, sir.

Thank you, Veeka. On behalf of DAM Capital, I welcome you all to the Q3 FY '22 Earnings Conference Call of NCC Limited. Today, we have from the management, Mr. Y.D. Murthy, Executive Vice President; Mr. Krishna Rao, Executive Vice President, Finance and Accounts; Mr. P.V. Vijay Kumar, Vice President Finance; Mr. K. Durga Prasad, Joint General Manager, Finance. Without much delay, I will hand over the call to the management for the opening remarks, which is followed by Q&A session. Over to you, sir.

Thank you, Mohit. Good evening to all the participants. And also, I welcome my colleagues who are in this conference call off to the management side. I will make some opening remarks and advise you what has happened in the third quarter of FY '22. Before that, I would like to scan the macro environment and tell the opportunities that are unfolding for a company like NCC. As you all know, the budget for FY '23 was presented by the Finance Minister on 1st February 2022. And it is a growth in the development-oriented budget with a special emphasis on public capital investment in infrastructure. The -- our capital allocation has gone up by about 35.4% for the next year, that is FY '23, to a level of about INR 7.5 lakh crores from a level of INR 5.5 lakh crores in the current financial year. That is almost 2.9% of the GDP. And so the government is focusing a lot on infrastructure development not only to kickstart the economy, but also to create substantial job opportunities and also good demand for downstream industries like cement, steel and other manufacturing industries. The Finance Minister was on record saying that in FY '23, the road construction activity will be of the order of 25,000 kilometers as compared to about 10,000 or 11,000 kilometers in the current financial year. That is a big jump as far as road construction is concerned. Likewise, she also announced 4 multimodal logistic parks, 100 cargo terminals and Ropeway Project. They call it the Parvatmala. So all these measures by the government will support the economy and see that Indian economy will go into a growth trajectory and reach that $5 trillion target in the next few years or so. They are also talking of the [ holy trinity ], the holy, important things for next year. That is one is NIP, that is national infrastructure pipeline. Number two is the [indiscernible]. Number three is the enhanced CapEx in FY '23. All these 3 put together are expected to take the infrastructure business of the country will be of higher orbit of growth in FY '23. For example, for road transport, they have allocated about INR 1.9 lakh crores in the budget, out of which INR 1.34 lakh crores will be given to National Highway Authority in FY '23, thereby, the debt level of National Highway Authority are likely to come down substantially. Also, certain measures were announced by the Finance Minister are to address the difficulties being faced by construction companies. She has mentioned that the insurance companies will be allowed to provide surety bonds, bid bonds for construction activity. [indiscernible] insurance regulatory authority has been mandated to look into these aspects. They have formed an expert committee under the recommendation of the committee who have been already approved by the insurance regulatory authority. Now the surety bond business will be taken up by general insurance companies. They are working over the modalities. But in short, what it means is construction companies will have either avenue of bank guarantees or bid bonds available to them in order to take care of bidding for various projects. As you know, we had a lot of difficulty in terms of bid bonds and bank guarantees, mainly because banks have not very willingly coming forward to support construction activity. But now either avenue -- either window is being opened, which is a very good thing for construction companies like us. And also, the government has mandated the construction contractor -- bills, the running bills, should be settled in 10 days. And if it is not done in 10 days, at least 75% will be paid on the 10th day, and the balance after the issues are resolved. This is also a very good step in the right direction, mainly because most of the construction companies suffered a lot because of a delay in payments with various government agencies. This will improve our liquidity and our cash flow immensely if we implement it properly. It is a central government directive. So most of the central government agencies will implement them definitely. But at state level, what is going to happen, one has to wait and see. But at least definitely, this is a step in the right direction. And also because of COVID, they have limited the reduction in the performance guarantee up to 3% of the project value as compared to 10% and, in some cases, 5% uniformly up to December 2021. And now government has extended that for 1 more year, which means for the next 12 months, the performance where guarantee requirement will be only 3% of the project cost. So these are all very good measures. And as you know, NCC is a front-line company, well-diversified order book, having a foothold in almost every sector of the construction business. So we are nicely poised in terms of going -- a higher orbit of growth as far as FY '23 is concerned. As far as current year is concerned, as you know, the Indian economy is likely to grow by about 9%, whereas we are likely to report a top line growth of at least 25% to 30%, which is very commendable despite a Phase 3 of the COVID and also Phase 2 in the first quarter of the current financial year. So our thought processes of company is having a strong balance sheet. Image cycle has improved. Bank guarantee limits are also available. [Foreign Language]

No. Sir, you are. Please proceed.

Yes. Okay. Thank you. So these are all big positives. And also, we started building for bigger projects like the bullet train packages. Each package is of the size of INR 10,000 crores, INR 15,000 crores, in some cases, even INR 20,000 crores. And for that kind of projects, we require bank guarantee limits in good measure. And if surety bonds are made available by insurance companies, we will tap that resource also if necessary. And we are comfortably placed in terms of funding for our projects. Recently, we have concluded a joint documentation for a total limit of INR 13,200 crores, out of which about INR 10,000 crores is the bank guarantee limits, about INR 1,000 crores in the LC limits and the balance, INR 2,200 crores, is the working capital limits given to us by our consortium of banks. So we are on a higher orbit of growth. We are at a sweet spot in terms of taking the opportunities going forward I thought I'll share with you in my opening remarks. And now I request my colleague, Mr. Krishna Rao, who incidentally is the CFO of the company, to tell you about the third quarter performance of the company. Over to Krishna Rao.

Good evening to you all. To add some more opportunities opened up by the Finance Minister to the infra industry, [indiscernible] that is INR 60,000 crores have been allocated towards 3.8 household of crores and households for all under the [ PM ] [indiscernible], 18 lakh houses once allocated is INR 38,000 crores and PM development [indiscernible] INR 1,500 crores for the [indiscernible] have been allocated. These are somewhere, which NCC is going to have business opportunities. Now I wish to briefly explain about the order book. Order book at the beginning of the financial year is INR 37,938 crores. Orders received during 9 months is INR 9,638 crores. [ Work ] executed during 9 months is INR 7,356 crores. Order book stands at the end of the December, INR 40,210 crores. Now I wish to give the numbers division-wise. Building division at the beginning of the financial year stands at INR 21,157 crores, represents 56%. And the closing is INR 24,510 crores, that is 61%. Road stands at INR 51,954 crores, that is 5%. Closing at INR 1,999 crores, that is 3%. Water and railways at the beginning, it was 19%. At closing is 20% with INR 8,052 crores. Analytical division is at 7% after the closing order book of INR 2,676 crores. And irrigation stands at 3% to INR 1,296 crores. Marketing division closing order book is INR 2,335 crores. And all orders together [ 2 29 ] working to INR 40,210 crores. Now I will take up for the third quarter the operating performance. We have achieved a revenue of [ INR 2,794 crores ] compared to corresponding previous year quarter of INR 1,943 crores with a growth of [ 40% ]. And gross profit, we have achieved for the quarter INR 463 crores as against INR 377 crores in the corresponding quarter. EBITDA we have achieved INR 293 crores with a growth of 22%. PBT, we have achieved INR 130 crores, and the growth is 15% compared to corresponding previous year quarter. PAT of INR 91 crores. The PAT, we have achieved INR 91 crores after providing INR 20 crores for our impairment of the investment of the one of the international companies. Now I'll take up the 9 months performance. 9 months revenue is INR 6,859 crores as against INR 4,733 crores with a growth of [ 45% ]. Gross profit [ we have achieved ] INR [ 1,203 ] crores in 9 months as against the INR 950 crores. Growth achieved is 27%. EBITDA is INR 729 crores as against INR 565 crores. Growth is 39%. PBT INR 330 crores with 73% growth. So that for 9 months, it was INR 47 crores, growth of 69%. And there are certain peculiar specific nature corresponding previous year, 2 issues are there. One is that claims, claims we have accounted in the previous year. It was the tune of INR 120 crores. And a tax credit of INR 32 crores we have taken based on the assessment for 2018/'19. Now that the finance cost on a stand-alone basis. There is an increase of INR 10 crores despite the growth of [ 40% ] compared to the previous corresponding quarter. And this, we have achieved -- there is a reduction in interest costs. Mobilization, we have received INR 200 crores more during the quarter. And mobilization advance interest is more by INR 4 crores compared to corresponding previous quarter. And for meeting the increase in the business requirement for LCs and the business basis, commission is more by INR 5 crores. This is -- so total INR 10 crores. And salaries and allowances is more compared to corresponding quarter by INR 22 crores. These are the primary -- there is increase in number of headcount, number one, and increase in the salaries on account of that of the increments. Administration is a normal INR 11 crores increase for meeting the business requirement. And I will take up the 9 months. One moment, please. The finance cost for 9 months is -- there is a reduction by INR 4 crores. This is primarily low interest on the loans despite the more utilization of the working capital. And interest on mobilization and bank charges is more by INR 5 crores. Rate of interest for 9 months stands at 8.79%. And on a consolidated basis, the performance for the quarter is a revenue INR 3,033 crores with a growth of 41% compared to INR 2,151 crores of the corresponding previous year. And gross profit, we have achieved INR 464 crores, a growth of 13%. And EBITDA INR 276 crores, and we have achieved a growth of 8% as against INR 256 crores. Our PBT, INR 126 crores, growth of 2%. And the PAT is INR 76 crores with a growth of 7%. And at the end of our 9 months, revenue achieved is INR 7,717 crores. We have achieved a turnover growth of 48%, and the gross profit INR 1,262 crores as against INR 1,041 crores. Growth achieved is 21%. EBITDA, INR 754 crores for the 9 months consolidated, a growth of 23%. PBT INR 352 crores, and we have achieved a growth of 67% and the PAT INR 240 crores, a growth of 59%. For the exceptional, only one exceptional in 9 months is we have received additional area for the Jubilee Hills Landmark, whereby we have recognized income at INR 34 crores, but it's only that exceptional during this 9 months that is in Q2 of the current year. And the subsidiary companies and the giantly controlled the company's turnover vis-a-vis [indiscernible]. NCC International, we have received arbitration award. And based on that arbitration award, we have reversed certain [ AP ] to the tune of INR 34 crores. And the loss achieved in that company is INR 44 crores. Urban infrastructure turnover is INR 89 crores, and the PAT of INR 8 crores. [indiscernible] infrastructure turnover of INR 14 crores and PAT of INR 5 crores. Pachhwara Coal Mining turnover of [ INR 249 crores ], a PAT of INR 7 crores. After [ elimination ] of the consolidation adjustments, the total turnover stands at [indiscernible] INR 9 crores with a loss of INR 7 crores as against the corresponding quarter of turnover of [ INR 298 crores ] and a PAT of INR 8 crores. And similarly, for the performance for 9 months of all these 5 companies stands at NCC International the reversal stands at turnover 31% [indiscernible] reversal. And the loss of INR 50 crores, NCC Urban infrastructure to INR 68 crores turnover and PAT of INR 22 crores profit. For the infrastructure, INR 43 crores turnover and PAT profit of INR 13 crores. Pachhwara Coal Mining [ INR 607 crores ] turnover and PAT of 18. As a result of [ eliminating ] the consolidation adjustment, [ INR 858 crores ] turnover and PAT of INR 13 crores as against the corresponding 9 months turnover of [ INR 491 crores ] and PAT of INR 19 crores. Now we will take up the receivables. The receivables stands at INR 2,560 crores. [ Debt ] collection period stands at [ 104 ] days as against 134 days as of March '21. Now the debt funds movement. Debt at the beginning of the quarter as of 1st October is [ INR 2,012 crores ]. We have taken [ visionary ] loan to the tune of [indiscernible] crores. And repaid working capital visionary long term, et cetera, to the tune of INR 77 crores. The net -- there is a reduction of the loan to the tune of INR 66 crores. And as a result, the debt position stands at end of December, INR 2,036 crores. For 3 months, we were able to reduce the debt INR 66 crores for 9 months. For meeting the business requirement, we have utilized more working capital. That is working capital limit gone up by [ INR 247 crores ]. And for consolidation, again, there is a reduction of the debt by INR 87 crores during the quarter. Maybe we have that the -- maybe there is a false sign. We were able to collect [ INR 126 crores ] from April to [indiscernible]. And in particular, in Q4, we have -- we were able to realize INR 35 crores. And bank guarantees, there is a reduction compared to April by [ INR 151 crores ]. This is the status. These are all from my end, and I request my colleague to take forward further.

[Operator Instructions] We have a first question from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on a good quarter. My first question is the total order book of INR 30,000 crores. How much is the Jal Jeevan Mission project? And what has been the total execution in the JJM project for 9 months and the third quarter FY '22?

Mr. Durga Prasad, will you answer that question?

Yes, total orders from Jal Jeevan is INR 9,900 crores and the turnover achieved so far is INR 851 crores. Because of that, the submission of the [ DPR ], so there was a delay. Now the progress is at full swing, we will be able to achieve good turnover Q4 and next year onwards.

So how much is the January turnover you're expecting to do for next year in this project, sir? What is the duration of this order book? And how much we are budgeting to execute next year in FY '23 from this?

If the budget [ asset sale ] to take place once we were able to complete, probably, we will be able to give the -- more numbers, but around of INR 5,000 crores, probably, we may plan, but not necessarily.

And for 9 months, we have done INR 851 crores from this order book of INR 9,900 crores?

That is only in the last 1, 1.5 months, sir, because of the inordinate delay from the government side in finalization of the DPR.

So you're saying in the third quarter, you have executed INR 851 crores of revenue from this order book of INR 9,900 crores?

Yes.

Okay. So now the execution seems to be picking up. So this is the kind of run rate we should be able to maintain, sir, the INR 9,900 crores which you have achieved in the last quarter now?

We expect.

Okay. Sir, the second question is [ insurance in the first quarter FY '20 ] call, you had mentioned that about INR 290 crores worth of payments should come in from winding up of the international operations. And we were expecting to realize 50% of that, about INR 150-odd crores by December '22 and invest in FY '22. So any update on have we received that amount? If you can update on interwinding down of international operations and what's the status of receivables and payment streams from there?

Sir, will you be able to take that?

Yes, Durga Prasad, can you take that?

Parikshit, I mean we are -- if I end up completing a minor order, minor variance order in Oman. So we'll be completing it in this quarter. Then completing defect liability period, settling the other claims, receivables and disposing of assets, et cetera, at project sites and will be taken up next financial year. So whatever we estimated current year, we will postpone till FY '23. So winding up, completely exiting international business, et cetera, takes place in FY '23. So we'll wait for some of them.

Just one more on the real estate deal, which we are expecting to release from the sale of the land. So has it come in? And if you can quantify how much amount has come in. And lastly, if you can also talk about AP order book, what is the current order book there? And how -- are the orders moving or they are still slow moving? So these were my last questions.

So yes, as far as NCC Vizag Urban is concerned, though, management hadn't -- I mean, some inflows during the current financial year. So that also didn't take place. So there are some -- I mean the investor could not mobilize the resources in time. So that is slightly delayed. So what we estimated [ the same things ] are getting postponed. So this also will be realized in FY '23 only. So we'll come back to you when we have a plan and during next call. So management is working on it.

But there is a positive development in the sense that we have paid the revenue share to AP Housing Board as per the consultant's report. And also we've got the land registered in our name. Now it's a freehold land, 97.8 acres of land is in our name. And the land value has gone up substantially in Vizag. The current market value of the property is not less than INR 500 crores to INR 600 crores. Now we are looking at how to monetize that. Maybe we'll look at bringing investor into the company and take up the development. One big development is the land has become freehold, and it is registered in our name, and we are the legal owners of the property.

What happens to the previous lessor then? I mean is the deal still on or it's now over that...

Deal is in [indiscernible]. That's why we are telling. We are discussing with other like-minded investors, but it will take some time. But the positive development is the land has become freehold.

Okay. Sure, sir. And just on the AP order book, if you can comment how much is the order book and whether it is normally under execution or there's some delays on execution there due to payment issues.

Yes. Yes. The AP order, excluding the new projects, is only INR 1,155 crores. And considering the new projects, the total order book as of the end of December is INR 4,389 crores.

And sir, what is the revenue for 9 months on AP orders -- AP order book?

I mean it's only 9 months, we [ executed ] about INR 210 crores. So we are -- I mean we -- as you are aware, AP [indiscernible] projects, et cetera, slow moving. So we are more concentrating on funded projects like [indiscernible], and as you're all aware, so state government is focusing more on [indiscernible], et cetera, and the COVID emergency. Still, they are not focusing on CapEx spending and all. So we expect we also will start focusing on that, spending CapEx, releasing volumes, et cetera, in FY '23. However, as our CFO told, we have realized about INR 126 crore during 9 months of FY '22. So we are further confident of realizing our spending.

[Operator Instructions] Your next question is from the line of Shravan Shah from Dolat Capital Market.

Sir, the first question, when we said that we are still guiding 25%, 30% for this year, so if I just do the math for fourth quarter, it seems it is just a flattish. So is it so, are some of the projects still not moving, that's why? Or is it the minimum we can expect some growth in the fourth quarter? And at the same time, in terms of the margin previously, we were talking about 11%, 11.25% for full year. But till 9 months, we have received -- we have done only 10.7%. So will the margin -- are we reducing margin guidance there?

Yes. As far as the top line is concerned, we have given -- there was no guidance to the Board, but we have indicated that we are looking at a 25% top line growth in FY '22. That is to reach a level of about INR 9,200 crores on a stand-alone basis. Now we already reached about INR 6,700 crores on stand-alone and about INR 7,700 crores on a consolidated basis. And the fourth quarter numbers should also be strong as compared to the third quarter numbers. So definitely, the stand-alone turnover for FY '22 will be in the region of INR 9,800 crores to INR 10,000 crores, which is definitely more than 30% growth on a stand-alone basis. As far as the margins are concerned, as you know, the commodity prices have gone up very high. We all suffered. Many construction companies are also reporting lower EBITDA margins. We believe it is going to be temporary in nature. In the first 9 months of the current year, we reported EBITDA margin of 10.8% compared to more than 11% in the previous year. But going forward, the commodity prices are going to soften, and that will definitely help us to improve the EBITDA margins in the next year, that is FY '23.

Okay, sir. Sir, the next phase is related to in terms of the inflows. So previously, we were looking at close to INR 14,000 crores. So we have received INR 9,600 crores. So are any L1 orders? And what's likely still -- as you mentioned, in terms of the budget more CapEx is given. So is it possible that still we can reach to INR 14,000 crores kind of inflow number this year? And I also need some of the balance sheet numbers in terms of the retention money, inventories, payable, loans and advances, investments. So that's it from my side.

Krishna Rao, can you give...

Yes. Yes, yes, yes. The loans and advances...

Yes, sir.

One moment.

Before that, you were asking about the order book?

Yes, order inflows.

[indiscernible] in 9 months. Definitely, some more order accretion is expected in the current year -- current quarter, that is fourth quarter. The -- though we have not got many substantial orders so far in the first quarter -- first month of the fourth quarter, but some more orders are expected in this month and the next month. We are confident we will be able to reach the targeted level of INR 14,000 crores by the end of the current financial year. The other question, Krishna will answer.

Yes. The loans and advances is INR 1,190 crores, and the retention money is INR 2,024 crores. What is the next question, please?

So I needed the loans and advances and investment in the group company. So you said INR 1,190 crores is the combined number of both loans and advances and investment.

Yes. The total group company loans and advances and investments together stands at INR 1,400 crores.

Has the number gone up versus the last -- I can see only INR 1,270-odd crores. So it has gone up INR 100 crores plus in the last 1 quarter?

Yes. Yes, proceed, sir.

We have given a loan of INR 100 crores to NCC Vizag Urban for payment towards the revenue share to the government agencies. That's why the loans and the advances to the group companies has gone up here in the third quarter, but we believe it is only temporary in nature. In fact, we are actually expecting NCC Vizag Urban to repay the loan taken through the parent company in this quarter itself.

Okay. Sir, other numbers, sir, inventory, payables? And how much CapEx [ until now ] we have done and we were looking at INR 250-odd crore full year. So what's the number there?

The inventory is INR 622 crores, and the CapEx is INR 35 crores for the quarter.

So INR 146 crores for 9 months period.

For 9 months, yes.

Budget is about INR 250 crores.

Okay. And payable number, sir?

Yes. You mean trade payable?

Yes. Yes, trade payable, sir.

Trade payable is INR 3,700 crores.

INR 3,700 crores?

Yes. Payment to suppliers is INR 1,239 crores, subcontract of INR 774 crores, trade payables expense is INR 916 crores, origination money payable is INR 778 crores. Total is INR 3,708 (sic) [ 3,707 ] crores.

Okay. And then mobilization advance, you said it would be around INR 1,850 crores.

Yes. Mobilization advance INR 1,845 crores.

Retention money is INR 2,080 crores.

[Operator Instructions] We have next question from the line of Ashish Shah from Centrum Broking.

My first question is again on the Vizag land sale. So we just said that the property -- the revenue share was supported by us, but the registration in our name as a freehold land, was that money paid by us or by the investor? And what will happen to that? Because now if the deal is kept in advance, then what happens to that money, sir?

The registration money is also paid by us. All these monies -- actually, we are looking at an alternate investor, though the door is not completely closed with the original investor. In fact, he was driving the deal. He was close to the state government. He was able to get us the Cabinet approval, et cetera, to convert with a land into a freehold land, development land to freehold land. That is a big positive for us. The unwinding of this whole transaction is likely to happen in this quarter.

So sir, from a cash flow perspective, can one think that you get the money which you have paid for the registration and the revenue share? And then the deal value, as you had indicated, probably, it remains in that range, right, INR 300-plus crores. I mean is that how you think about that?

Yes, yes, absolutely.

So basically, we are talking about a INR 300-plus crores roughly or INR 200 crores, so something like a INR 500 crores all in all as a cash, which will come back from December 31?

It is not INR 200 crores. Including registration, it is about INR 170 crores and plus the INR 325 crores that we were targeting earlier. So all that will come back to us, maybe partly in this quarter and balance in the first quarter of the next financial year.

Sure. Sir, my next question is on the JJM. We indicated a very good turnover of INR 850 crores in the quarter. I see that, obviously, the debtor number has remained flattish on a quarter-on-quarter basis. So have you got paid for this -- the revenue or how things [ have happened ]? So basically, have we got paid for this kind of [ first seed ] turnover that we've done in JJM?

Krishna Rao?

Yes, yes. Collections have really gone up during Q3 and including the Telangana and the AP also. And as a result, we were able to reduce the debt outstanding to 94 days from that of 134 days.

Sure. So specifically for JJM, if you can indicate whether you've got partly or substantially paid for the revenue then? Or that is still to be paid?

Sorry, which one?

JJM, the [ UP ] Jal Jeevan Mission.

Jal Jeevan Mission, sir. UP budget.

Yes. Jal Jeevan Mission, the realization is expected in Q4 partly, and the balance is going to be in '22, '23. You see, Jal Jeevan is sponsored by the central government. 50% of the project cost is borne by them. They have made to take in the admission mode. And they're implementing across the country potable drinking water to every household in every state, in every village, et cetera. So payment cycle should not be much of a problem. As we were explaining in the beginning, there was a delay in execution to take up, mainly because they have got an elaborate process of DPR preparation, DPR approval and giving mobilization advance district-wise and allowing us to start the work in that particular district. So almost 8, 9 months' time has been lost. But now the speed and pickup is there. Execution is there. We are confident even the payments will also be coming.

Sir, just a last question. Any more losses expected from the international with respect to this kind of a loss that we saw for an arbitration order, et cetera? So is there any more that can come as we close the business?

Number that is expected, total operations are [ closed only ]. The realization expecting back in the next 3 quarters, we will be able to get back our total operations are over.

You said you will be able to gain back something. So what is the amount that you're looking to get back, sir?

Around INR 110 crores we have to get back this quarter. To Q3, we are expecting the same. Repatriate only the procedural aspects we need to take due care for which we have already applied to RBA.

We have next question from the line of Vibhor Single from PhillipCapital.

Congrats on a great execution again. Sir, 2 questions from my side. One is that given that we do not expect the Vizag land deal to maybe close this year, and plus, we have given around INR 100 crores to the Vizag subsidiary also, what do you expect the stand-alone debt to be at the end of the financial year? Right now, we are at INR 2,000 crores. And earlier, we had expected that we might end the year at INR 1,800 crores. Do you think INR 1,800 crores is still possible? Another INR 200 crores of reduction in that is possible in Q4?

Yes. That is what we are looking at. And normally, what happens is the payment cycle improves in the fourth quarter, particularly in the month of March, because most of the government agencies, because their budget allocation for the year is coming to a close, they want to utilize the budget in full. And we get very substantial payments, particularly between March 15 to March 31. So those flows are available to us, going to be available to us. And that will park in our loan accounts to the banks. Despite INR 2,000 crore of outstanding debt at this point in time, that is at the end of the third quarter, we are confident. For the year as a whole, the stand-alone debt will be around INR 1,800 crores only.

Got it, sir. Heartening to hear that. Sir, secondly, sir, if I look at look at our numbers, our consolidated PAT is at around INR 84 crores as compared to the around INR 105 crores of PAT at the -- I'm sorry, around -- I mean if I remove the adjustment, then we're looking at around INR 105 crores of PAT on a stand-alone level. Generally, we are not reporting much subsidiary losses over stand-alone, and consol PAT are -- profit are almost the same. So any specific reason? The INR 20 crore impairment that we have taken in the stand-alone level is an exception, is that coming at above EBITDA level in these consol numbers?

No. We see our international operations reported losses. That is one reason. In the third quarter, about INR 43.4 crores of loss we have reported. NCC Urban has reported a profit of INR 8 crores. And our NCC Infra also reported a loss of INR 1.55 crores. So all these put together, it has resulted in a loss of the subsidiary company's operations. That's why the consolidated profit is less than the stand-alone profit.

You mentioned INR 43 crores of loss in the [ total question ].

In Oman and Dubai put together, yes, in the third quarter.

Okay. In Oman and Dubai?

Yes, yes, yes.

And sir, as I think Ashish just asked, any more losses that we expect from these subsidiaries in the coming quarters? Or are we done with the losses that we [indiscernible]?

See, as far as international business is concerned, it is coming to a close, and we are confident we have got enough [indiscernible] enough payments are coming from the government agencies like final bill settlement, retail share money payment, et cetera. So we are very confident of whatever monies that we have invested in both the international subsidiaries. I will come back to us in the next 12 months. And we are not initiating any further losses in the international business. But as far as the domestic business is concerned, because some of the projects are long gestation projects, they may report some losses for some time. Though OB Infra has reported a profit this year, in the third quarter, they have reported about INR 5 crores of profit, we hope that it will continue. Pachhwara Coal is also doing well. They have reported a profit of about INR 7.3 crores in the third quarter that is likely to continue. So I don't think there is going to be any further loss in other businesses. And more importantly, NCC Urban also is consolidating its operations. They are likely to report good profits in the fourth quarter as well.

Got it, sir. Sir, lastly, any view that you can provide on some of the large orders? So I mean bullet train you mentioned, but I think most of the packages that we bid for, we were not able to basically be declared as L1, and most of the orders actually went to an [indiscernible]. So on a similar front, I think we are also looking at [ central list ] orders. So what are the kind of orders that we are looking at? And a related question, sir, recently, [indiscernible] projects was announced on [ BOT ] basis. Given that we have done expressly work in the state of [indiscernible] before, if you were given an opportunity -- or are we exploring the opportunity to work maybe as a subcontractor to Adani or Adani Group or maybe some of the group [indiscernible] or that demonstrate [ known offer ]?

First of all, bullet train we are not successful, I agree. We have got a good partner also with that. But recently, we bagged the big order of about INR 2,167 crores for the Bangalore Metro projects connecting to the international airport. About 3 packages we are doing in Bangalore. So that kind of orders are definitely available, and we keep bidding. Some we win, some we may not. We cannot say that. As far as BOT is concerned, we are very careful, as you know. We are focusing more on cash contracts, particularly in the road projects like the Nagpur-Mumbai Expressway where our package is almost complete despite pandemic. Despite the stoppage of work at various locations, we were able to complete the project in time. And definitely, we are also looking for a bonus. So those kind of projects we are interested in. [indiscernible] Expressway, I cannot comment on that because that is a BOT project. So we didn't participate because that is our corporate policy. But hybrid [ entity price ], definitely, we started bidding. Only it's a matter of time before we get some projects.

Right. [indiscernible] my question was the bids have already been done on a BOT basis by [ Adani and Adani Group ].

No. I cannot comment on that at this stage.

We have next question from the line of Rohit Natarajan from Antique Stock Broking.

So my first question is more to do with the AP refusals portion. Can you give us receivables unbilled and retention money from AP [indiscernible]?

Yes. Durga Prasad?

Yes. Rohit, unbilled revenue is INR 368 crores. And...

Receivables and retention money?

Receivables, INR 412 crores. Retention money, INR 248 crores.

Okay. Sir, if I'm not mistaken, this amount was a little bit lower last quarter, but there is no progress, it seems. This is for the legacy orders or there are some ongoing projects to add?

No, no. These are all legacy orders only.

Okay. So there is no progress essentially?

No. We -- I mean there is slowly -- this includes old orders where -- which are funded by ADB. See, those funding agencies, they are releasing funds to AP government. The AP government has to give its margin, and then they also release the funds. There are some delays from the government side. We expect AP government to release all these deals in the current month or by the end of March. So I mean last 9 months, we have received over INR 126 crores from AP clients. So we are continuing [ pursuing demand ].

Sure. My next question is more to do with the kind of order backlog that you have where this normalization is largely done. A lot of projects are on stream. Next year, if you are looking at -- I know there is no official guidance that can -- I mean will not be coming through. But still for the kind of order backlog that we have and the run rate that we have, INR 12,000 crores to INR 15,000 crores looks possible. And if that is the kind of number execution, if you have in mind, what kind of working capital buffers are we looking at? Currently, the working capital utilization limit is -- I mean last quarter, we had yearly exhaustion of the working capital. And now we are talking about increasing the working capital. So what exactly is the [indiscernible]?

See, we are -- we have to finalize our business plans for FY '23. So it is difficult for me to do any numbers for the working capital and also for the turnover unless we -- of our [indiscernible] elaborate business plan based on the closing order book of the current financial year and the expected orders in the next financial year, et cetera, et cetera. We do it in a very systematic manner presented to the Board. And based on that, we will come to the investors in terms of top line growth and the bottom line growth for next financial year. So my request is you have to wait for some time. But going by the general trend and going by the -- first being given by the government for development of physical infrastructure and construction companies are definitely going to be benefited by this, it will not be surprising if we can report a 15% to 20% top line growth compared to current financial year.

Fully appreciate that part, sir. If you could help me with the working capacity utilization limits as of now, that would probably be a good indicator to see what the growth you can...

Sure, working capital, we always keep a cushion of INR 300 crores to INR 400 crores in our cash credit accounts where the limits are set up by the banks. That, we'll use it as an emergency as and when required. Even now also, for example, we have got INR 2,200 crores of working capital limits, but actual utilization is only INR 1,800 crores. That means there is a headroom of about INR 400 crores available to us, if required. So that kind of cushion is likely to be there. And also, you also to keep in mind, whenever I get a new order, I'm getting about 10% as mobilization advance from the client. So that is also going to help me in terms of having enough liquidity for executing the project.

The non-fund-based limits, historically, you had close to INR 9,000 crore or maybe INR 8,000 crore, and you had a good utilization over there as well like INR 10,000-odd crore was utilized. What number is the situation over there?

I think you have missed my opening remarks. Now we have about INR 10,000 crores of bank guarantee limits, a INR 1,000 crores of healthy limits and INR 2,200 crores of fund-based limits. The total size of the consortium is INR 13,200 crores. As far as bank guarantees are concerned, out of INR 10,000 crores of limits available to us, we are having headroom of about INR 2,500 crores to INR 3,000 crores at this point in time.

We have next question from the line of Prem Khurana from Anand Rathi.

Sorry to hop on the Vizag issue again. So just so I understand -- I mean, I understand the earlier deals and events. But does that mean, I mean, you would look for a new buyer or there could also be a situation wherein you could enter into a JV arrangement and then develop and then get the money in place the way that we did it for our Hyderabad wherein you enter into a JV and you would get to have your share of the area over a period of time?

We are exploring all the possibilities. We prefer to have an investor who can buy us out. That will be our first preference. But at this point in time, as I was telling the positive development being the land is registered in our name. Now NCC Vizag Urban planning to raise a loan of nearly INR 200 crores to INR 250 crores. And if that money is received at NCC Vizag Urban level, they will repay the debt taken on the parent company, that is NCC. So as far as NCC is concerned, the exposure to group companies will come down to that extent. And that most probably is likely to happen before the end of the current financial year.

Got it. And [indiscernible] they'll be monitoring because NCC Urban won't have money to be able to pay interest at least for the time -- in the time when you get to find some investment...

No, no. I cannot talk about it right now. All those things will work out. The lender will also look into the aspect, and then only will we fund it, is it not? All the 2 will take care.

Okay. And sir, in terms of AP exposure, I mean, the number that Durga Prasad gave, this is a gross number, right? I mean there will be some mobilization advances, also availability. So what could that number be, I mean, as of...

Mobilization advances is INR 127 crores.

Sorry, how much?

INR 127 crores.

INR 127 crores. And I think last quarter, we spoke -- I mean we were talking about, I mean, AP [indiscernible] NCC had secured some approvals of borrowing limits, right, INR 6,000-odd crores and INR 3,000 crores, I mean, have they been able to kind of manage this fundraising and which they were supposed to make our payments? Or is it still, I mean, in progress?

Yes. So they are discussing with various lenders, and lenders also have taken our information and project reports, et cetera, from the government. So they are evaluating the proposals. And as far as AP [indiscernible] of the loans before March, we are also eagerly looking towards [indiscernible]. Once it is done, all our dues will be cleared, and we can come [indiscernible] also. So they are working on [indiscernible] all working.

Sure, sir. And could you please help me with the cash and bank balance number as of December 31, please? And that's it from my side.

We have been talking for the last 1 hour. And now we'll take only 2 more questions from the participants.

Sir, cash, cash and bank balance on the balance sheet.

INR 37.5 crores.

Sorry, how much? I mean there is some disturbance.

INR 37.5 crores. Cash and bank balance, including margin money for bank guarantees.

So we take the last question from the line of Parvez Akhtar Qazi.

Sir, just one question for my side. What is the impairment that you took this quarter and this was [indiscernible]?

What is that? Come again. It's not clear.

What was the impairment -- quantum of impairment that we took this quarter and it was a bit [indiscernible]?

Krishna Rao, can you...

It is INR 20 crores towards NCC International [indiscernible]. Upon request of the arbitration award, that is where -- that is what we have concluded and the impairment has been taken care.

Thank you. We will close.

Thank you very much, sir. Ladies and gentlemen, that was the last question. I'd now like to hand the conference over to Mr. Mohit Kumar from DAM Capital for closing comments. Over to you, sir.

Thank you, everyone, for participating in. Thanks to the management for giving us the opportunity. Would you like to, sir, give a closing remark before we close the call?

Yes, yes. We thank DAM Capital and Mohit and his team for hosting this conference call. And we also thank all the participants for their enthusiastic participation and a lot of questioning. If any participant is not able to have a chance to ask the questions, we request him to contact us, either Mr. Durga Prasad or myself, or you can send a mail to us. We will be glad to answer your questions. With this, I will close the call, and I thank everybody once again. Thank you. Thank you, Mr. Vikram, and thank you, Mr. Mohit.

Thank you very much, sir. Thank you, gentlemen.

Thank you all participants.

Thank you very much. So ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining with us, and you may now disconnect your lines.