NCC Limited (500294) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the NCC Limited Q3 FY '25 Earnings Conference Call hosted by JM Financial Institutional Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Shah from JM Financial Institutional Securities. Thank you, and over to you, sir.

Thank you. On behalf of JM Financial, I welcome everybody to 3Q FY '25 Earnings Conference Call of NCC Limited. We have from the management today, Shri R.S. Raju, Director Projects; Shri Sanjay Pusarla, Executive Vice President, Finance and Accounts; and Shri Neerad Sharma, Head of Strategy and Investor Relations. Now I hand over the call to the management for opening remarks, which will be followed by a Q&A session. Over to you, sir.

Good evening, everyone. At the very outset, I thank each of you for taking time to attend this interactive meeting. I have with me my colleagues, Mr. R.S. Raju, Director, Projects; and Mr. Sanjay Pusarla, CFO. Today, we have declared our results for the third quarter of the financial year '25. I hope you had an opportunity to download and study the results and the investor presentation uploaded on our website and shared with the stock exchanges. Before I begin this interactive meeting, I will read out the disclaimer. The presentation may contain certain forward-looking statements concerning NCC's future business prospects and business profitability, which are subject to a number of risks and uncertainties, and the actual results could materially differ from those in such forward-looking statements. The risks and uncertainties related to these statements include, but are not limited to risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition, both domestic and international, economic growth in India and ability to attract and retain highly skilled professionals, time and cost overruns on contracts, our ability to manage operations, government policies and actions with respect to investments, fiscal deficits, regulations, geopolitical risks, interest and other fiscal costs generally prevailing in the economy. The past performance of the company may not be indicative of future performance. This interaction is broadly divided into three parts. In the first part, I will talk about a brief overview of the business environment and prospects for our company. In the second part, our CFO will give a brief about the financial performance of the company for the [ second ] (sic) [ third ] quarter. In the third part, we will attempt to answer any questions and clarifications that you might have. To give you a brief wrap-up of the Indian economy, according to the economic survey 2024, '25, the pace of the union government's capital expenditure in major infrastructure sectors was affected during first quarter of the current financial year, largely due to the model code of conduct during the general elections. Further, the unusual pattern of the last monsoon season also slowed down the progress of work. The Union Budget for FY '26 which was presented recently has continued its thrust on increasing the CapEx. The budgeted CapEx has increased by 10.1% from INR 10.0 lakh crore in FY '25, which is a revised estimate to INR 11.2 lakh crores in FY '26. The grant in -- for creation of capital asset has increased from INR 3 lakh crore in FY '25 to INR 4.3 lakh crore in FY '26. The CapEx of central public sector enterprises has increased from INR 3.8 lakh crores in FY '25 to INR 4.3 lakh crores in FY '26. Therefore, if we take all these factors into account, the total CapEx has increased from INR 17 lakh crores in FY '25 to INR 19.8 lakh crore in FY '26, which is an increase of 16.4%. On the performance of our company, we are seeing a healthy pipeline for future projects. We had a prospective project pipeline of more than INR 2.4 lakh crore. We are currently sitting at an order book of INR 55,548 crores. We take this opportunity to share with you the fact that we have decided to revise the guidance earlier shared with you. Earlier, we had shared with you an order inflow guidance of INR 20,000 crores to INR 22,000 crores, which we decided to retain. But we are revising the revenue growth downwards to around 5% and EBITDA margin around 9.25% for the current financial year. We have witnessed the slow pace of execution due to general elections and elections in some of the states. Additionally, some of our projects have seen elongated billing and payment cycles leading to slowdown in execution. Now coming back to the performance of our business divisions. In our large two divisions that is Buildings and Transportation division, we continue to see a very good traction and healthy pipeline of projects. We have an order book of INR 21,085 crores, which is about 38% of our total order book in buildings and INR 10,800 crores, which is 19% of our total order book in the Transportation division. Our Water division has an order book of INR 5,450 crores, which is about 10% of our total order book. In our Electrical T&D business, we have an order book of INR 10,633 crores as of 31st December 2014 (sic) [ 2024 ], which is about 19% of our order book. The order book in the Irrigation division is INR 4,496 crores as of December end, which is about 8% of our order book. The order book of the Mining division at the end of 9 months is INR 3,050 crores, which is about 5% of our total order book. Now I will hand over to our CFO, Mr. Sanjay Pusarla with a request to cover the detailed financial performance of the company.

Good evening to all of you. I am pleased to announce the financial results of Q3 of financial year '25. My announcement will be in the order of -- order book, revenue, profitability, debt movement and some of the important balance sheet items. To start with order book. Our order book stands at INR 55,548 crores as at the end of December 2024. You are aware that the order book at the beginning of the year is INR 57,536 crores, and orders received during the 9 months is INR 13,608 crores, of which in Q3, we received INR 8,440 crores. So we have executed INR 15,590 crores of work during the first 9 months and the order book that stands at INR 55,548 crores. Coming to the revenue on the stand-alone. Turnover reported in Q3 FY '25 is INR 4,720 crores as against turnover of INR 4,273 crores in the previous year. During the 9 months, the cumulative turnover is INR 13,947 crores as against INR 12,951 crores reported in the previous 9 months -- previous year 9 months. Coming to the consolidated. The turnover reported in Q3 FY '25 is INR 5,383 crores as against turnover of INR 5,288 crores in the previous year. During the 9 months turnover, it is INR 16,166 crores as against INR 14,411 crores reported in the previous year 9 months. Next coming to the profitability. We achieved -- at the stand-alone level. We achieved EBITDA of 8.77% for Q3 as against 10.1% of the corresponding quarter of the previous year. And for 9 months, current year, we achieved EBITDA of 9.04%, as against 8.84% in the 9 months of the previous year. Profit before tax at the stand-alone level is 5.18%, and PAT is 3.91% in the current quarter as against PBT of 6.24% and PAT of 4.46% earlier. At a consolidated level, we have achieved EBITDA of 8.25% and PBT of 5.02% and PAT of 3.59% in the current quarter, that is Q3 against EBITDA of 9.61%, PBT of 6.15% and PAT of 4.17% of the previous period. The main reason for the reduction in Q3 of FY '25 compared to FY '24 is on account of lower turnover and lower absorption -- because of lower turnover, lower absorption of fixed cost, that has resulted in lower EBITDA and lower profits. Coming to the debt movement. The debt at the beginning of the year stood at INR 1,005 crores. Our net debt after cash and cash equivalent is INR 517 crores. At the end of Q2, it stood at INR 1,733 crores and net debt of INR 1,624 crores. And at the end of Q3, that is at the end of December '24, the same was at INR 2,415 crores and net debt is INR 2,343 crores. There is an increase in debt by INR 680 crores compared to Q2. The debt-to-equity ratio stands at 0.33 at the end of Q3 as against 0.25 at the end of Q2. Coming to the working capital. Working capital at the end of Q3 stands at INR 5,488 crores, which is 32% of the turnover. In terms of working capital days, it is 95 days. This working capital days were calculated, excluding cash and margin money deposits. So coming to the debtors. Debtors outstanding at the end of Q3 has increased from INR 2,793 crores to INR 3,142 crores, and the number of days also increased from 65 days to 74 days in the current quarter. And unbilled revenue stands at INR 6,151 crores, which is 33% of the revenue for Q3 as against INR 5,221 crores, which is 29% at Q2. Coming to the mobilization advances. Mobilization advances stands at INR 1,977 crores as against INR 2,096 crores, showing a reduction in the mob advances and recovery by the clients by INR 119 crores. This is also one of the reasons where our debt levels increased. And it is standing at 4% of turnover. Of these mobilization advances, we have 78% of these advances are interest-bearing, and the average interest rate comes to 9.57%. Next coming to CapEx. We have incurred a CapEx of INR 223 crores in the current financial year as against the budgeted CapEx of INR 250 crores for regular projects. So coming to the ratios. The growth stands at 13.13 as against 14.04 at FY '24 end. Return on net worth against PBT is 13.87 as against 13.88. EPS stands at 8.70 as at the end of Q3. For March, it is 10.10. With this, I conclude the announcement of the financial results for Q3 FY '25. Thank you.

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

Sir, a couple of things. So first, just trying to -- even if we, let's say, 5% that the revenue guidance that we have reduced from 15% plus to 5%. So that also, if I broadly calculating, it means that in the fourth quarter also, we are looking at kind of a 1% kind of a degrowth. So if you can clarify that. And in terms of the margin when we are saying 9.25% for full year. So 9 months, we have 9%. So in fourth quarter, are we now again looking at 9.5% to 10% kind of a margin? And is that margin sustainable going forward?

So this margin, whatever we gave, the guidance now revised to 9.25%. As you said, we are expecting the margin should be around 9.5% in the quarter 4. So that's the reason we thought it will be around 9.25%. So this at the moment, it is sustainable.

As far as revenue growth, the first question of what you asked is the degrowth in the fourth quarter as against what we give in the guidance in fourth quarter about some minus 1% or 2% will be there in the revenue. So that -- it is close to the 5% growth in the year as a whole.

Yes. So what I'm trying to understand is that are we seeing across the board kind of a slowdown in the execution, and that's why we are now significantly lowering the number? So I understand we also don't give the guidance for FY '26 now. But on the directionally front, as now we have reduced the growth for this year. Can we see kind of a 10% kind of a range plus kind of a growth at least in the FY '26?

Mr. Shravan sir, FY '26, we have not started really working out the numbers. And what happens is by 31st March, generally, we are able to close each of the projects that we are executing, which are quite a few, about 150, 160-odd, then we are in a position to know how much is possible from each of these projects for FY '26. And generally, we work out these numbers in the month of April and May. I think once -- when we announce our annual results in the month of May, we should be in a position to talk about these -- the guidance for FY '26, this is not possibly the right time to talk about FY '26.

Now you cross the board -- across the board, now we have several projects across various states. It has not happened across all the projects the slow movement. But in some of the schemes, some of the projects only the slowness we've experienced. So it is not so for all these things. Whatever new projects we picked up in the current year, whatever projects we are going to pick up, I mean in the financial year '25, '26, the scenario again different. The trend indicates that in the last 3 years, we have continuously shown growth of around 35%. So in this year, because of the specific -- the general elections happened and also some elections in some of the states will happen, we are seeing two things now generally given the slow pace for this current year.

Okay. Got it. As a couple of data points for the balance sheet, what is left, if you can say? And also in terms of the right now, what is the value of the L1 projects? And then I will spell out the balance sheet numbers, which I need.

The L1 project in the pipeline is roughly about INR 9,000 crores to INR 10,000 crores.

Okay. Got it. And what is the retention value and the exposure in terms of the investment in JVs and associates as on December. So in September, it was INR 1,411-odd crores. So what's the value as on December? .

Investments, same -- there's no change in investments.

Also the loans and advances. So that number, INR 1,411-odd crores stands remains as same as on December also?

[indiscernible] and the loans of INR 388 crores, about INR 7 crores increase is there in the third quarter.

Okay. And retention value is how much?

It was INR 17,057 crores.

The next question comes from the line of Prithvi Raj from Unifi Capital.

So I just have a couple of questions. First question, in the opening remarks, you have made a point that in some of the projects you are seeing a delay in the payment cycle. Could you just explain a bit more on this, which are the kind of projects where you are seeing an issue on the receivable side?

It is general in nature because of these elections at the central level and the state level. When there is a change in the political parties and systems, and there is bound to be some delay in release of payments. So that is happening now. We are going through that cycle. Probably now the governments are fitted, the improvement will be expected.

And secondly, on the Maharashtra, I mean, you have a sizable exposure there. How is the ground level activity. I understand maybe last quarter, it got impacted because of elections, but are we seeing an improvement on execution in this quarter or still there are issues going on there?

I think things should pick up now. The elections are very much behind us, and there is a new government in place. So we expect things to pick up now.

And finally, on the order flows, I mean you maintained the guidance, but what kind of pipeline are you witnessing? Which are the sectors, which are the geographies where you're seeing an order flow or project tendering that's happening that gives you the confidence that you will achieve the guidance number?

Yes, I have shared at the very start, we have a prospective pipeline of projects. It is not there in one state. It across the states and across the verticals. And I'm happy to share with you this prospective pipeline of projects, the value is about INR 2.45 lakh crores. It is in all the verticals, all the 7 verticals in which we operate, and it is in almost all the states, large states at least.

The next question comes from the line of [ Jainam Jain ] from ICICI Securities.

Sir, we have guidance -- the order inflow guidance of INR 20,000 crores, but in 9 months FY '25, we have only recently contracts worth INR 13,600 crores. So are there any specific contracts in which we are expecting L1 in the coming quarter, which would help us meet the order inflow guidance for this year?

Just before this question someone was asking us about the L1 orders. We said somewhere INR 8,000 crores to INR 10,000 crores, we are in the L1 position. So we are expecting those orders to get materialized in the quarter. And that is what makes us confident to achieve the number. This is not one project or two projects. There are multiple projects. So the value would be in that range.

So sir, what are the projects included in the L1 amount? And like we expect all the LOAs to be received in Q4 FY '25?

I mean it is difficult. See, at the end of the day, it's a call of the client, when the client finally decides to award the contract is something is his call. But as we speak, we are confident and we are reasonably hopeful that these L1s should get converted into LOAs.

Okay. So what are the projects included in that amount?

I think all that we do is we share the bracket of the projects. We don't really spell out the list of all the projects because it is difficult to -- there are cases where the L1s do not really get converted into LOA. So as a matter of policy, we only talk about a specific project when LOA is received.

Okay, sir. And sir, we have seen a huge increase in debt levels in this year to INR 2,415 crores from INR 1,000 crores in FY '24. So what will be the reason for that? Also the reason for spike in working capital days?

Could you repeat your question, please? I couldn't understand. Could you please repeat your question?

Okay. Sir, we have seen a huge increase in debt level compared to previous year. So what's the reason for that?

Debt level increase, we have already explained to you that there is a slowdown in the payment mechanism because of the elections and all. That is the reason that you see the debt level has increased. At the same time, my unbilled revenue also got increased. So whatever money we are spending today, it is getting -- is waiting for the certification from the authorities. Once that is done, and now we expect that the government injected at all the places, we expect that conversion will happen, and it will help us in reducing our debt levels shortly.

The next question comes from the line of Deepak Poddar from Sapphire Capital.

I just wanted to take the debt level point forward. So you mentioned about reduction in debt levels. So what sort of debt, I mean, target we would have by FY '26, and overall FY '26 as well?

Today, I'll not be able to tell you what it can be, okay? Because we are waiting for the government to act on that. And once the payment position improves, then we'll be able to fairly estimate and come back to you.

So generally, in the construction industry, the inflows, the collections from the clients happen in the fourth quarter, particularly in the March month. So thereby, whatever debt level is there at this moment, we expect that comes down. And moreover, we have a lot of amount to receive from the clients. What we explained already that there is a slow mechanism of billing certification happening in various projects. So already, the persuasion is made with various clients across various states. Thereby, there is a good chance to collect more amount, as a result the debt from that whatever INR 2,400 crores is there, that comes down. But we can't say exactly the figure is. It maybe INR 1,500 crores or it may be INR 1,000 crores also. So at this moment, we cannot tell, but there will be some decline in the present leverage of debt that we are expecting.

INR 1,350 crores, right? That's the debt level we have?

We have the debt level today at INR 2,415 crores.

Our INR 2,415 crores is what our current gross debt levels are?

Yes. Yes.

Okay. Okay. Understood. And the point you mentioned about slowness, I mean, because of which your FY '25, I mean, we are underperforming, right? Earlier, we were quite confident of 15% kind of a growth, and now we have revised down to 5% kind of a growth?

Exactly. That is the purpose where we are restating our expectations.

Okay. But things have settled it -- settled down and you are seeing improvement at the ground in terms of activities. And -- so some comment on that would be helpful, sir.

Touch wood, today, we could see there is an improvement that is -- can be seen physically on the ground.

Okay. Okay. Okay. And just one last query on the margins. So fourth quarter, we are targeting around 9.5% kind of EBITDA margin, right, as per your guidance that you have given. So what will drive the margin improvement?

It is a general because even earlier also, we were expecting because the moment you have the turnover say at the expected level, the margin will be at the guidance level of 9.5%. This is what we are expecting in the fourth quarter. It should normalize. If it normalizes, I'll be getting a margin of 9.5%, which will help me to average it out to around 9.25%.

Okay. Okay. And also in terms of leverage, I mean, you are expecting much higher revenue in fourth quarter, right? So that will give you some advantage in terms of higher scale of your revenue, right?

Generally, what happens in the fourth quarter, in any construction industry, fourth quarter revenues are higher than all the earlier 3 quarters. So the same expectation we are having even today.

Okay. Great. And just one final thing. FY '26, anything you can -- I mean, some range you can throw some light what sort of growth range we are looking at, that would be helpful.

Neerad already explained to you that we have our budget meeting somewhere in April. And definitely, we'll come back two you with our guidance at that point of time.

The next question comes from the line of Shravan Shah from Dolat Capital.

Sir, two, three data points, our inventory and payable as on December is how much?

Inventories is INR 1,442 crores, which is almost INR 25 crores -- INR 27 crores less than September '24, okay? And coming to the payables. It is also 6,943 crores, retention payable also, right?

Yes, yes. Okay. Okay. Understood. Second, sir, in terms of the -- now in the fourth quarter in terms of the -- the CapEx of INR 223 crores we have done, so we will be doing the balance INR 25 crore, INR 27-odd crores, or it would be lower?

It is for the regular project. As and when we require, we buy it. So there are no further capital-intensive project maybe for the next 1 month. But this gap, whatever is there, that INR 27 crores, it is like any other year in a normal course, whenever there is a requirement that comes with the project that will be taken.

Okay. And for JJM projects, sir, how much now we would have executed and what is the left -- so just wanted to understand, there also there is a decent slowdown in terms of the execution?

INR 8,000 crores is at the beginning of the year, okay? And INR 3,400 crore we have executed. And balance is somewhere around INR 4,700 crores.

Got it. Got it. And sir, in terms of the employee cost also last quarter, we said there was some increment and everything was there, 8% increment was there. But even this quarter also, if I look at the employee cost also, so Q-o-Q has also -- it has gone up. So in second quarter, it was INR 189-odd crores, now INR 193 crores. So can you help us?

There are two elements for increase in the salary cost. The first one is there is an increase in the headcount. Already, we planned about 15% to 20% growth for the current year. Accordingly, we appointed the people. So we appointed the people, but the progress has not taken place, that is number one. Number two, is already in July [indiscernible] onwards, we enhanced the salaries, about 9% to 10%. These two points resulted into a higher percentage of salaries in this quarter.

The next question comes from the line of Parvez Qazi from Nuvama Group.

So a couple of questions from our side. With regards to JJM projects, have we seen any kind of payment slowdown especially considering that there will be center elections this year? Or are payments regular and in line with, let's say, what you were seeing in FY '23 or '24?

Mr. Qazi, I think during the course of attempting to answer several questions, we have tried to make this point that there has been generally an impact on across these schemes, across the states. And this project is not an exception. So we have seen this kind of impact in -- across these schemes, different projects of the government and elections have played a very important role in that.

Just to be on this point, is kind of payment slowdown, I mean, which is obviously have been across the industry. Is it restricted only to state government projects or the central government projects also seeing payment slowdown?

Mr. Qazi, in most of the infrastructure projects barring a few generally, the central government and state governments partner with each other, in most of the projects, barring possibly NHI road projects, those kind of schemes. In multitude of the infrastructure projects, both these governments partner with each other. And it is difficult to say. For us, what really matters is the final payment. Whether it is delayed by the state government or central government, the impact on us continues to be the same.

Second, on the project that we have in Andhra Pradesh, two things on the existing projects or let's say -- just forget about the payment part, but have you seen any activity in terms of new order award in Andhra Pradesh?

We have seen two kinds of activities. The first one is our clients are trying to close the projects which were awarded in the past. So that's a clear direction. That's a clear thinking that we get to see. And our client, the state government is also planning to start the process of awarding the contracts for this capital city. So we continue to see movement.

Sure. And lastly, any update on the Smart Meter project would be...

In the smart meter project. As far as the Maharashtra is concerned, earlier in our -- earlier con calls, we have told that because of the directions from the government, we slowed down. But we expect that because the government now stabilized and we are getting the clearances also from the government, we expect the projects will take off now. And as far as the Bihar project is concerned, they have already started and the installation of the meters is going on there. About 3 lakh meters we have already installed.

The next question comes from the line of Dhananjay Mishra from Sunidhi Securities.

So in terms of pipeline, you said INR 2.4 lakh crores. So any big expressway project we are expecting in this pipeline from the Maharashtra?

Mr. Mishra, it is very difficult. Whenever you talk about a very, very big prospective pipeline of projects, there would be projects from different verticals. I'm not really in a position to identify a particular project. As I shared with you, these projects are prospective pipeline of projects. So there are several projects there. So I'm not really in a position to identify a particular project.

No, I just wanted to know because some big projects are awaited in Maharashtra to be announced in the next 12 months. So whether we have included in those projects in our pipeline or it is not part of our pipeline?

They would be. They would be. Whenever big projects are announced, generally, it would be part of the prospective pipeline of projects.

Okay. And secondly, in JJM project, sir, the payment delay is because of this revised allocation for FY '24, which was down from close to INR 70,000 crores to now INR 22,000 crores. And then again, it has been increased for FY '26. So that is the major reason central government contribution not coming on time and that is the reason we are facing delay?

I think we have already answered this question that the impact has been across the schemes of the different infra projects across the state governments. So practically, we have seen the impact and aftereffects in almost all the verticals, it would not possibly be correct to identify a single project because we don't have a single project. We have a lot of projects, about 150, 160 odd projects under execution.

The next question comes from the line of Vaibhav Shah from JM Financial Institutional Securities.

Sir, how has been the recoveries in the fourth quarter so far?

What recoveries, collections you mean to say?

Collections, yes, yes.

Collections are fairly good. There is a regular flow.

We have seen an improvement on a quarter-on-quarter basis?

That we should see now because we just passed only 1.5 months, and another 1.5 month is there. We need to see. And generally, the government project, they will get funds released during the March month because by that time, their budget will get expired.

Okay. Sir, secondly, we are expecting the EBITDA margins to improve in the fourth quarter to around 9.5% levels. So going forward, while we're not giving a guidance, but is there a possibility that, there would be an improvement further as well? Or these are more sustainable levels around 9.5%?

I think we work out on that one. Here it is not one particular process to work out to tell that one. We have several divisions, and across several projects are there. And particularly in the third quarter, we have received new orders. And in fourth quarter also we are expecting several orders. And [indiscernible] at present alone are different to LOAs. So basing on consolidating the total and when we carry out the budget process, then only we're able to arrive what the EBITDA percentage for the FY '26.

Okay. And sir, another question was on -- if you look at the quarterly interest cost, it is roughly around -- on an average, INR 160-odd crores for the 9 months. So do we expect the run rate to remain similar in Q4 as well?

The similar line or a little -- we won't expect any much reduction because already 1 month, 1 week over, but we have not seen any good collections from the pending amounts.

Okay. And sir, lastly, what would be our AP exposure as of now, the net number that we share every quarter?

So AP exposure there are two parts. About the first part about capital city projects, we have pending of INR 160 crores that we expect to receive by end of March. There is a positive momentum happening and they assured to pay before the March of this current financial year. That is part one. Part two, we have around INR 400 crores to INR 450 crores exposure in the running projects, out of which we received nearly INR 230 crores in the third quarter itself. So only balance now about INR 200 crores to INR 250 crores exposure is there in the other running projects.

so currently, as of December is INR 250 crores, and we received INR 200 crores in Q3. So it reduced to INR 250 crores in December?

Totally INR 230 crores we received in Q3. But in the January month also some INR 30 crores to INR 40 crores payments we collected.

Okay. And sir, lastly, any update on the Vizag deal? So when do we expect to receive the debt amount?

As far as the investment is concerned, completely that is received. The equity is completely received. There is no due on that. And as far as the loan is concerned, about INR 315 crores is the loan amount -- INR 374 crores is the loan amount. And in the current year, we received about INR 15 crores against the interest amount. And this INR 374 crores also we are expecting to get realized in the next couple of years.

The next question comes from the line of [ Dhiraj Ram ] from Ashika Institutional Equities.

Sir, we have recently received the project related to river interlinking for Ken-Betwa. So how do we see the pipeline of the project in river interlinking? And what kind of opportunities can we expect going forward?

We understand from the various media reports that this interlinking of river is a very important project for the government of India and respective state governments. We believe the action has just started. We have a lot of road to cover. We are hopeful that we will continue to see healthy pipeline of projects in the interlinking of rivers as well.

Sir, if you can put a figure to it what kind of opportunities? What is the maximum of opportunity that we can expect in the project?

Sir, we don't really make any assessment of these kind of opportunities. At the end of the day, this is the call of the government and the respective agencies. What we try to do is to when this NIT, what we call notice for the bid is announced, we try to study the final nuances of the project, look at the risk/reward equation and then really decide whether to participate or not, depending on the technical complexity of the project, depending on the permissions which might be required, depending on the funding that might be required, then we take a view.

Understood, sir. Last question, sir, have we started the execution for this project?

Say that again, could you please repeat your question?

Have we started the execution for the Ken-Betwa project?

No, no, we have not. We have not as of now.

Okay. So we can expect it to start in Q1 FY '26?

Sorry, could you please repeat? Your voice is also not very clear. There is a lot of echo.

Sir, can you hear me now?

Yes, please tell me.

Sir, can we expect the execution to start in Q1 FY '26?

It depends on the permission, approval of the drawings, we are hopeful.

The next question comes from the line of Parth Thakkar from JM Financial.

What would be our share of smart meter orders in stand-alone...

Sorry to interrupt Parth. Could you please speak a little louder? You're not audible.

Sir, what would be the share of our smart meter orders in our stand-alone order backlog?

Somewhere around 9%.

9%, okay. And we were expecting to complete our JJM order book of INR 4,700 crores by June 2025. Are we still on track for that?

It would essentially depend on the permissions, the payments, our ability to mobilize. It would depend on a lot of parameters.

So we cannot put a particular timeline on it, can we?

We would hope to meet the guidance, but we have to wait and watch.

And last question, what would be our CapEx guidance for this whole year for the balance in 3 months?

Budget was INR 250 crores, and we have spent so far INR 223 crores. We expect that we'll be spending up to that limit.

[Operator Instructions] The next question comes from the line of Prithvi Raj from Unifi Capital.

I just have one bookkeeping question. If you look at the tax rate for 9 months, it's almost a 25, 26 percentage. Can we assume similar tax rate even for Q4?

The effective tax rate is lesser actually because we have received dividend, which is a pass-through mechanism, it is not taxable. That is the reason the effective tax rate is lesser.

He is asking for fourth quarter. [indiscernible].

I didn't get you. Even for Q4, is it going to be a similar number or will it be higher?

Similar percentage.

The next question comes from the line of [ Vishal Periwal ] from Antique Stock Broking.

One data point, in terms of smart meter order that we have, we did mention Bihar, we have executed 3 lakh-odd meters. What is the total size of it? And similarly, what is the total size of Maharashtra order?

I repeat the total order value, order value that we have received for the Bihar project is approximately INR 2,300 crores. And for the state of Maharashtra, we have received 2 smart meter projects. The approximate value of these 2 orders -- I repeat the word order value would be INR 5,700 crores.

Okay. Sir, in terms of number of meters, it will be tantamount to what, sir?

It would run into millions, multiples of millions.

Okay. Okay. Will it be fair to give some number, Bihar and Maharashtra separately?

At this stage, difficult at this stage to share any number.

Okay. Okay. Okay. And then yes, maybe one last thing. I think in terms of execution that we have seen in the pie chart that we have given, so maybe just before that. So the JJM work, is it part of irrigation, right, pie? Is it fair to understand or it's a part of water and railway?

Which one? Could you repeat the name of the project?

Yes. The JJM work that we do, is it a part of water plus railway segment in the execution -- the pie that we have given or it's a part of irrigation?

Irrigation is separate, water and railways together.

Okay. So the JJM is a part of which segment, sir?

You're asking about this Jal Jeevan project?

Correct, sir.

Since these projects have come at a time in [indiscernible] level, three divisions are executing the Jal Jeevan project. Water division mainly executing that one, plus some part of work taken over by the Building division and some part of work taken over by the Electrical divisions. Three divisions executing different parts of the state. And the turnover from the water projects are also included in the respective divisional numbers.

We will move to the next participant that is Saket Kapoor from Kapoor Company.

Sir, firstly, if you could just reiterate our Q4 execution growth. In percentage terms, sir, as you have mentioned that Q4 is generally the largest of the preceding 3 quarters. And last year, we did a revenue closer to INR 6,500 crores on a consol level. So when you were giving the growth number for the entire year, if you could just elaborate more on the same? I missed your commentary on the same.

Now in the fourth quarter, the execution would be on consol level between INR 6,000 crores to INR 6,400 crores we're expecting.

Okay. So we are giving the bank from INR 6,000 crores to INR 6,400 crores for the fourth quarter. So it will be a flattish quarter in that sense when you look at year-on-year numbers in terms of execution.

It will be similar or it will be a little less.

Okay. And sir, about the BharatNet project also, what is our current -- what is the current status on the same? And I think so we were participant in quite of the circus. So any update on the same, sir?

Mr. Kapoor, could you please repeat your question?

Sir, I was looking at our order intake from the BharatNet Phase 3. Any update on the same? What are we in terms of -- where are we in terms of the order intake from this project?

We have not received any order from them as of now. And as a matter of policy, until and unless we get a confirmed order from a client, we do not really talk about that. Because that is quite speculative in nature until and unless we receive a formal communication from the client, which hasn't happened as we speak.

Okay. And lastly, sir, for the month of January, in your press release in the opening month February 1 date, you mentioned that we did not receive any order. So if you could just articulate...

It is like this. What happened is that there was a news on the Moneycontrol about receipt of a project. Then there was an inquiry, like request from the stock exchange on what is that project, why it was not announced. Generally, as a policy, in a normal course of business, we give announcement of the projects only at the end of the month. That is the reason we did not announce it. Since they have asked us, so we had to reply to them saying that it has happened on somewhere 7th of January. So we had to reply to them saying that as this project is received, awarded to us, but we did not disclose it. As a matter of policy, we disclose it at the end of the month. Since we have already told them, we said that we have not received any other project other than this. That's how it has come.

Sorry to dwell on it, but when we read the notification, it is mentioned there, correct me there, that for the entire month of January, there was no order intake for the company. That was my point.

Because there was no other project other than this, which has been received during the month. When we give at the end of the month, the disclosure on the projects awarded, we -- to avoid confusion, it was told very clearly because we have already disclosed it earlier, it was there on the website and informed the stock exchanges. To avoid confusion, it was told that other than that, nothing has been received.

Mr. Saket, I would request you to rejoin the queue if you any more questions. The next question comes from the line of Vaibhav Shah from JM Financial Institutional Securities.

I missed a couple of data points. So you mentioned the working capital number in terms of rupees crores. So what was that as of December?

As of December -- so you wanted this December, right?

This December and September as well.

September is INR 4,987 crores, and December, it was INR 5,488 crores.

Sir, secondly, what was the retention money? Was it INR 1,757 crores, if I heard it correctly?

Yes, yes.

Okay. And sir, what was the inventory number?

Inventory is INR 1,442 crores.

Ladies and gentlemen, that brings us to the end of the question-and-answer session. I would now like to hand the conference over to Mr. Vaibhav Shah from JM Financial Institute for the closing comments.

Thank you, sir, for giving us the opportunity. Any closing remarks from your end?

Thank you very much. We appreciate your time and patience. And should you have any more questions about anything, we encourage you to get in touch with us. Thank you very much. Good night. Bye.

Thank you all.

Thank you so much.

Thank you, ladies and gentlemen. On behalf of JM Financial Institutional Securities, that concludes this conference. You may now disconnect your lines.