PNC Infratech Limited (PNCINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Q3 FY '23 Earnings Conference Call of PNC Infratech Limited hosted by Axis Capital Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. Now I hand over the conference to Mr. Jiten Rushi from Axis Capital Limited. Thank you, and over to you, sir.

Thank you, Ish. Good evening, ladies and gentlemen. On behalf of Axis Capital, I'm pleased to welcome you all the PNC Infratech Limited Q3 FY '23 Earnings Conference Call. We have with us the management team of PNC Infratech, represented by Mr. Yogesh Kumar Jain, Managing Director; Mr. B. Sawhney, Chief Financial Officer; and Mr. D. K. Maheshwari, Vice President, Finance. We also have with us the Investor Relations team of Strategic Growth Advisors. We will begin with the opening remarks from the management, followed by interactive question-and-answer session. Thank you, and over to you, sir.

Good afternoon, everyone. On behalf of PNC Infratech Limited, I extend a warm welcome to everyone for joining us today on this call. I have with me Mr. T. R. Rao, Director, Infra; Mr. Bhupinder Sawhney, CFO; Mr. D. K. Maheshwari, VP, Finance; and our Investor Relations advisors. We have uploaded the financial results and Investor Presentation on the stock exchange as well as company website for your reference. Initially, I would like to mention key updates in the industry, including the announced Union Budget for the financial year '23-'24, followed by key operational developments of the company and highlights of financial performance during quarter 3 and 9 months of financial year '23 post which we will be happy to respond to your questions. Now I would like to take a moment to talk about the key updates in the industry. As per the MoRTH data till the end of December '22, 7,263 kilometers length of highway awarded, a rise of around 18% over the same period in [indiscernible]. As far as construction of highway is concerned, 5,774 kilometer length of highway constructed till December '22, as against the target of 12,000 kilometer for the entire year financially year '23. [indiscernible] highway execution hampered in many regions of the country due to prolonged monsoon that extended until the third week of October '22. It is expected that the pace of construction will pick up during quarter 4 of financial year '23. In the Union Budget, government continued its focus on infrastructure development across the core sectors. Government announced a hike in capital expenditure for overall spending on infrastructure development by 33% to INR 10 lakh crore for financial year '24. This will be around 3.3% of the GDP. Government allocated INR 2.7 lakh crores for highway expense for financial year '24, a yearly growth of 24% over the revised allocation of INR 2.17 lakh crores in financial year. Allocation to NHAI increased to INR 1.62 lakh crores from last year revised allocation of INR 1.42 lakh crore, a hike of 14% year-to-year. Government allocated INR 97,278 crores to the Ministry of Jal Shakti, up nearly by 14%, 31% from last year allocation of INR 69,053 crores. Allocation to Jal Jeevan Mission has also been increased nearly by 27% year-on-year to INR 69,654 crores. With the higher allocation of the above sectors, more business opportunities are expected in financial year '24. Now coming to key updates of the company during the third quarter of financial year '23, the company achieved financial closures by the respective due dates for all 7 HAM projects for which construction agreement signed during the first half of current financial. Out of the 7 HAM projects appointed dates received for 5 projects starting from November 10, '22 till February 1, 2023. Appointed dates for remaining 2 HAM projects, Mathura [ Package-IV ] and Sonauli-Gorakhpur are expected before the end of current financial year. During the quarter, company received INR 3.6 crores towards an arbitration award processed in its rework from military engineering services, Government of India in construction content, namely reservicing of runway and allied works at [indiscernible]. We are happy to share that CARE Ratings has upgraded the company's long-term bank facilities to AA+ with a stable outlook from CARE AA and reaffirmed the company's short-term bank facilities to CARE A1+. Credit rating of 2 subsidiaries have been upgraded, Khajuraho Highways Private Limited has been upgraded to CARE AA with stable outlook. PNC [ Unnao ] Highways Private Limited has been upgraded to AA+ from A+. Company continuing pursuit to strengthen the balance sheet, coupled with prudent financial management and rating upgrade constantly. Now I will share operational and financial performance of the company. At present the company had a total of 23 funds based on various PPP formats, including BOT toll, BOT Annuity. Out of these 53 projects, we have 18 hand projects with a total bid project cost of INR 24,590 crores. We achieved COD and PCOD of 5 HAM projects, 13 projects are under construction. In terms of equity investment, total requirement for all the 18 HAM project is approximate INR 2,440 crores out of which, we have already included INR 1,176 crores till December 2022, and the payment will be included over the next years. The internal accruals debt would be generated over the next 2, 3 years should be sufficient to fund the total equity requirement. Now moving on to our order book; our unexecuted order book on December 31, '22 is over INR 17,800 crores. That includes EPC value of all the 7 HAM, new HAM projects. Out of total order book of over INR 17,800 crores the Roads and Highways sector is around 65% and water and canal project is around 35%. In Rural Drinking Water Projects under [indiscernible], the company had booked a revenue of INR 615 crores till December '22, which includes INR 108 crores revenue book during the previous financial year. During the 9 months of financial year '23 total INR 507 crores revenue was booked from Phase I and Phase 2nd of water supply project. We expect a total revenue of around INR 900 crores in financial year '23 from the Water Sector project. As the government signs cover agreement of approved -- projects for acquisition, we expect balance executable work would be around INR 3,000 crores at the end of financial year '23 and cover agreement for all remaining schemes are expected to be signed during the next financial year. Now I will present the standalone and consol results for the third quarter of financial year '23 and 9 months ended December 31, 2022. The standalone revenue for third quarter of financial year '23 is INR 1,627 crores, which is higher by 7% year-to-year. EBITDA for the third quarter is INR 208 crores, which is higher by 26% year-to-year. Profit for the third quarter of financial year '23 is INR 129 crores with a growth of 59% on year-to-year basis. Consol revenue of quarter 3 financial year '23 is INR 1,803 crores as compared to INR 1,722 crores in quarter 3 of financial year '22 with a growth of 5%. Consol EBITDA for the third quarter of financial year '23 is INR 345 crore, which is higher by 6% as compared to INR 325 crores for the third quarter of the corresponding quarter of last year. Consol PAT for quarter 3 financial year '23 is INR 140 crores as compared to INR 83 crores in quarter 3 financial year '22 with a growth of 68%. The standalone revenue for 9 months of financial year '23 is INR 4,946 crores, which is higher by 13% as compared to INR 4,388 crores in 9 months of financial year '22. EBITDA for 9 months of financial year '23 is INR 673 crore, which is higher by 20% as compared to INR 563 crores for 9 months of financial year '22. PAT for 9 months is INR 427 crores as compared to INR 310 crores in 9 months of financial year '22, with a growth of 38% on year-to-year basis. Consol revenue for 9 months of financial year '23 is INR 5,621 crores as compared to INR 4,982 crores in 9 months of financial year '22 with a growth of 13%. Consol EBITDA for 9 months of financial year '23 is INR 1,189 crores, which is higher by 13% as compared to INR 1,054 crores for the corresponding period of last year. Consol PAT for 9 months of financial year '23 is INR 512 crores as compared to INR 333 crores in 9 months of financial year '22 with a growth of 54%. As on December 31,'22, our net working cycle is 82 days, and our [indiscernible] days has improved to 67 days and on December 31, '22 from 74 days as on March 31, '22. Our net worth on a standalone business is INR 3,752 crores as on December 31, 2022, whereas total standalone debt is INR 150 crores of which is equipment finance debt. As on December 31, 2022, we do not have any working capital loan. The total cash and bank balance as on December 31, '22 is INR 365 crores. We have a net cash of INR 215 crores. This translates to net debt to equity of 0.04x. On a consol basis, our net worth is in INR 4,125 crores, whereas total debt is INR 5,700 crores as on December 31, '22. The total cash and bank payments, including current investments is INR 1,100 crores. This translates to net debt to equity of 1.4x. With this, we now open the floor for question and answer.

[indiscernible] We have our first question from the line of Shravan Shah of Dolat Capital.

Sir, just to recheck the guidance in terms of the revenue, EBITDA margin and then [indiscernible] order input front. So for this year and the next year revenue guidance and EBITDA margin.

This year in FY '23, we are expecting the [indiscernible] 13.3% to 13.5%, sir.

Okay. And revenue guidance for this year?

10% as compared to FY '22 growth.

For FY '24?

In the range of 10% to 15% as compared to FY '23.

Okay. And the similar 13.5% margin is -- one can see for FY '24 also?

Overall, yes.

Yes. Sir, now major [indiscernible] road players. So though there is a significant tender pipeline is there so just wanted to recheck in terms of the order inflow. So we were looking at INR 8,000 crores to INR 10,000 crores for this year and next INR 10,000 crores. So -- how much we are planning to build in before March and how much water are we expecting?

There are more than 100 projects or energy already -- MHA and Ministry of a value more than INR 110 lakh crores. So these bids are expected to be received before March 31st. There is a very robust pipeline is there. So we have selected certain projects. Majority of these projects are selected for bidding. So we'll be bidding these projects. And still, we are hopeful of getting INR 8,000 to INR 10,000 of new order book before end of the current financial year. Hello?

[Operator Instructions] The next question is from the line of Nikhil Abhyankar of DAM Capital.

So you can hear me?

Yes, we can hear you.

Congrats on a good set of numbers. So sir, now that we have received appointment date for 5 projects and only remaining for 2 projects, what is the executable order book right now?

It is 17,800 as of December 31.

17,800.

Sir, what will be the value of these projects? Somewhere around INR 15,000 crores?

No, no. Actually, it is the 65% of the 17,800 would be the highways and 35% would be from water and irrigation. And these even projects should be around INR 8,000 crores.

Yes, 7 projects INR 8,700 crores.

Okay. So what will be the executable value of order book right now?

The entire order book is executable.

So then -- I was asking this question in regard of only 10% to 15% revenue growth for next year. So can we expect to beat that guidance going forward?

See, we can't speculate of now how things will unfold, but we are expecting 15% growth. Always we aspire for the bidding but as of now, we don't want to see anything more than 15%.

Okay. And sir, any update on the monetization front?

Already we have informed in the last call that highest priority given to the motorization of [indiscernible] project of the company. In the first slot, total 12 projects selected or motorization, including 11 [indiscernible] and one BOT toll project. 12 projects would have a total debt around INR 6,800 crores and total equity of around INR 1,550 crores. Strategic Adviser retained for running the monetization process due diligence 3 HAM projects under the [indiscernible] potential investor. For remaining 9 projects, NDA, we have already planned with 7 potential investors who showed interest in the portfolio and [indiscernible] under process. We will keep you updated on the progress as we have moving forward.

So should we expect the closure in this financial year?

As there are out of 3 projects, they have already visited -- on the site, maybe we may highlight.

We may execute [indiscernible] before end of financial.

FY '24, it should be finalized.

The next question comes from the line of Ashish Shah of Centrum Broking Limited.

Sir, first question is on the new 7 HAM assets. Sir, when I look at the financially closed cost, the EPC that is higher than the BPC that we had originally built for last year. Generally, financially closed cost is a little lower than the BPC. So can you help us with the escalated BPC, I mean how -- because obviously, there would have been some escalation also. So I'm just trying to think how different is the EPC from the escalated BPC?

Our EPC is inclusive of GST, right?

[indiscernible] a major impact of 18%.

Okay. So -- sorry, so you're saying the TPC is inclusive of the GST, which is applicable on the EPC project value whereas the BPC did not include that?

Yes, because as of current policy what we need to quote BPC is exclusive of the applicable GST.

Correct. Sir, earlier in the FY '21 HAM, this thing was not there, is it?

Yes. Earlier in between, actually, there were 4, 5 models before 2017, completely changing, then for a certain period they included GST, then certain period not again, they included, so this has happened. But currently, all BPC are exclusive of GST component.

Sure. Sir, the other thing continuing with the same as that for the TPC, which you have given, let's say, for all the assets put together, you have something like INR 9,400 crores of TPC. So what would be the equity proportion out of this -- out of this INR 9,400 crores TPC, what is the equity proportion?

Actually, all the 7 projects, we have finalized the financial closure 82-18. 82% debt an 18% equity. As regard to TPC, TPC we have to reduce the [indiscernible] 40%. The remaining 50% [indiscernible] in all the present projects.

Okay. So the proportion of equity is around 18%. [indiscernible]. Sir, the other thing is on the JJM projects. There -- so we did say that we'll have an opening backlog of INR 3,000 crores, which will be DPR approved for next financial year. Now what is the revenue that we expect for next year? Earlier, we had said around INR 2,500 crores of revenue we can expect from the JJM projects in FY '24. So what would be your guidance?

We are accepting around INR 2,000 crore revenue for next year.

Okay. But sir, why this reduction? And are we not expecting any incremental projects to also get approved in FY '24?

See, Ashish ji, incremental projects are getting approved. But what is happening, these projects initially after low value things need to be executed initially and like solar instrumentation as well as the over-head tank with new technology and all, they are back-ended. So incremental thing is there, but this INR 2,000 crores, the experience what we got in the current financial year. So we are expecting around INR 2,000 crores execution. We'll definitely try to execute more and more but as of now, our guidance is INR 2,000 crores.

Right. And sir, last question again on this is that by when do we expect the entire JJM scope that we have to be approved in terms of DPR and available for execution?

See by the end of FY '25, we expect more than 95% of -- around 90% of the JJM scope by the end of FY '25. So only some residual payments will be left for FY '26.

So you're saying whatever JJM order book you have by FY '25, all the revenue will be -- it will entirely be executed by and large by '25.

Yes, about 90%, yes.

About 90%.

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

First question is a clarification. Do we have enough orders on Jal Jeevan Mission side, in the sense of order opportunities? Are there enough tenders available in the market now? And anything in the UP?

See, now total there are 5 phases. Out of 5 we have 4 phases already [indiscernible] there is one phase is still left. So that we are looking forward to having some opportunities there in the -- that phase of the project. But the bids are not floated yet. So we'll come to know what would be the bid cost and what kind of opportunity maybe in next 2 to 3 weeks.

Just on the UP, sir, anything apart from the UP which you are trying to bid?

So as of now, we are not looking at but going forward if some opportunities comes up in other states [indiscernible] those opportunities is yet to pursue or not.

And on the NHA opportunity side, do we have -- what kind of pipeline which is available in the state of Uttar Pradesh -- a ballpark number?

As of now we are not calculated, but as we said, there are more than INR 1 lakh crore worth of projects are available to be before March 31. 100 projects of almost INR 10,000 crores. We have not executed it as we said about Uttar Pradesh, but there is a substantial amount of projects are there in the state of Uttar Pradesh.

And sir, lastly, sir, on the margin side, are we seeing a reduction in prices, commodity prices, which should help the margin going forward?

There is no such increase in the [indiscernible]. No doubt this quarter, it was 12.8%, but that is only because of the area of the fairly increment we have given during this quarter, about INR 10 crore or otherwise it is 13.4% EBITDA margin.

Okay. My question was -- can I expect the margins to improve 30 basis points, 40 basis points going forward if you see for Q4 and as we enter FY '24? How do you think the?

So it should be around that 13.5% should able to maintain around that figure.

Including JJM execution, right?

The next question comes from the line of Noel Vaz, Union Asset Management.

Yes, I just want to just clarify one thing. So you [indiscernible] mentioned that we have water projects of about INR 7,400 crores. So I presume by saying it's a 95% completion.

Can you speak loudly, we are not hearing.

Is it better now?

Yes. Comparatively better.

Yes. So we -- in the order book as mentioned, we have about INR 7,400 crores from water and canal projects. So I presume that when you say 95% completion by FY '25, you are talking about this particular portion of the order book, right?

No, no, no. We didn't say that we have INR 10,200 crores, canal we have.

Sir, if you will see my presentation -- so there, water, canal is INR 7,400 crores outstanding as of December 31.

Okay. That is okay -- second thing is that when we mentioned is just a clarification, and you see 8,000 to 10,000 new order flows by the end of FY '23. This is a net increase, right? This is not just [indiscernible].

Yes, it's a net increase only. So 8,000 to 10,000 additional order book we are talking about.

The next question comes from the line of Ash Shah from Elara Capital.

So first question is can you just take the revenue breakup for this quarter between road, irrigation and JJM projects?

Yes. You want the project-wise or?

Industry-wise.

Water, it was INR 67 crores. And this Canal project is INR 31 crores, remaining in the road sector.

Okay. Also, can you give the breakup of between the canal project and water, JJM project on the order book front as of December 31?

[indiscernible] Canal is INR 993 crores up and water project is INR 6,420.

INR 6,420 crores and Canal is INR 993 crores. Okay. And a follow-up on this question. So canal project, I mean, last week, spot was that from January to June only, we can work. Otherwise, you cannot go for the rest of the year. So when can we complete this INR 993 crores worth of project?

See, we have time up to 2025 because you see the water, they are releasing water more than what we expected. So we may get some kind of extension for the project. So we should be able to complete [indiscernible].

How much are we expecting for calendar year '23 like for this period Jan to June revenue?

Calendar year '23 we'll be doing around INR 150 crores to INR 200 crores - INR 200 crores work during the calendar year '23.

Okay. Just last question. On the monetization front, you said that we are planning for [indiscernible] projects under execution. So is only one party buying all these 12 assets or we are selling it to different parties.

Different investor interested.

There are 7 investors.

Till now we have signed an NDA with the 7 investors. We have shown their interest.

Yes, it might be when the one investor may take all the projects because however 7 investors are shown for the entire portfolio to get end.

Okay. So we are open to sell all the assets to one investor as well.

Yes, yes.

The next question comes from the line of Sandeep Dixit of ?rjav Partners.

Sir, just wanted to clarification, I'm not sure that I heard the numbers correctly. Did you say that margins will be in the range of 21% to 21.5% going forward?

No, no, no. See, EBITDA margin, we said around.

In the range of 13.5%. 13.5% EBITDA margin.

13.5%, yes.

So I mean, if I look at the numbers, historically comment, you were -- your EBITDA margins were in the range of the high 20s. Has something structurally changed?

No, no. That EBITDA was it on a consol basis, but [indiscernible] standalone basis EBITDA margin.

Sir, can you help me with the consol number, sir, because I got confused because of that. What would be the guidance for the consol margins?

Consol margin in 9 months 21.05%.

It'd be around same thing going forward.

Currently, is it?

Yes. Yes.

Okay. Sir, the other question I had was, you indicated the 10% Y-o-Y revenue growth. Is that for standalone as well or is it [indiscernible]?

It is standalone.

And would you have a guidance of consolidated?

See, what happened in some of the projects, like OMP projects got completed during the [indiscernible].

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

Sir, a couple of data points for fourth quarter, how much equity are we planning to put and for FY '24 and '25?

Actually, in the fourth quarter, we are expecting INR 125 crore equity to be included. And FY '24, around INR 450 crores to INR 500 crore, FY '24.

And FY '25?

INR 350 crores to INR 400 crores.

INR 300 crores, INR 400 crores. Okay. Got it. A couple of, sir, data points on the balance sheet front. So inventory, trade receivables, trade payables, retention money, unbilled revenue, mobilization advance and [indiscernible]?

Mobilizing advance is INR 388 crores on page number 22. And retention is INR 134 crores. What is next?

Unbilled revenue, inventory receivable and trade payable.

Trade receivable, so I think it is mentioned in the balance sheet also -- it is INR 1,197 crores trade receivable.

Okay. 1,197 crores And out of that [indiscernible] is?

[indiscernible] is INR 606 crores.

INR 606 crores, inventory is?

INR 745 crores of inventory total.

Okay. And trade payable? Sir, trade payable, creditors.

INR 410 crores.

INR 410 crores, and unbilled revenue?

INR 115 crores, which is a part of the inventory.

INR 115 crores. Okay. And now the project-wise order book, sir, so starting with the smaller one [indiscernible]?

Bhojpur is only INR 7 crores?

Bhojpur or Koliwar? Chakeri to Allahabad?

INR 139 crores.

INR 139 crores. Challakere-Hariyur?

INR 419 crores.

INR 419 crores. Okay. Lucknow Ring Road Package 1? Sorry, sir?

INR 240 crores.

Jagdishpur-Faizabad?

INR 310 crores.

INR 310 crores. Aligarh-Kanpur Package 5?

INR 400 crores.

INR 400 crores. Unnao-Lalganj?

INR 620 crores.

INR 620 crores. [indiscernible]?

INR 430 crores.

INR 430 crores. Delhi-Vadodara Package 29.

INR 150 crores.

INR 150 crores. Package 31.

INR 220 crores.

INR 220 crores. Sir, this Gaju Village-Devinagar Bypass, what's the EPC value in order book? No, Mathura, sir, you have already give INR 788 crores. I'm talking Gaju Village-Devinagar Bypass Package 1C.

INR 650 crores. That is also Mathura.

INR 650 crores. And sir, you mentioned the irrigation project INR 993 crores. But last quarter you mentioned INR 896, so has there -- there is a significant INR 100 crore kind of increase in scope?

Yes, yes they have increased to INR 1,128 crore from INR 1,000 crores.

Okay. INR 1,120 crores. Okay. Okay. Got it. Lastly, in terms of the CapEx, how much we have done and what we are looking for this year, next year?

In December, we have taken INR 37 crores. We are expecting in the range of -- up to INR 100 crores for FY '23.

Okay. INR 37 crores we have done 9 months. Okay so we are close to INR 66 crores we are expecting in this quarter?

Yes.

And the next year also the similar INR 100 crore plus range?

It should be INR 120.

Okay. Got it. And in terms of the fund-based limit how much we have utilized, I think the limit should be the same INR 1,000 crore and INR 5,000 crores in terms of the utilize how much?

INR 1,000 crores, we are not utilized. And there is a fund-based limit -- utilization and INR 5,000 crores from INR 2,700 crores something we had utilized INR 2,585 crores.

INR 2,585 crores. Okay. INR 2,585 crores. So it has reduced. And in terms of the debt level, how do we see by end of March?

March, debt should be, you want standalone?

Standalone, only standalone.

It should be around INR 200 crores. That will be for the standalone only.

Okay. Okay. Got it. And just to clarify, this quarter is INR 3.6 crores arbitration booking revenue is entirely part of the EBITDA. There is no expense against that. And also in terms of the bonus last time, we mentioned that we were expecting some INR 15-odd-crore of bonus for Aligarh-Moradabad in this quarter, fourth quarter. So have we received or are likely to be received in this quarter?

In revenue, it has included only INR 40 lakh in some part in the interest income.

Okay. And Aligarh-Moradabad INR 15 crore bonus are we getting in this fourth quarter?

We are expecting.

Okay. So the amount would be the INR 15 crore -- and apart from that, any other bonus or previously, we were looking at Mumbai-Nagpur where clarity was not there and Delhi-Vadodara package 2931. So are we expecting a broad range and when are we expecting to receive.

See, you take the [indiscernible] still the -- it is status quo. There's no clarity the [indiscernible]. In BAV29, see, we are expecting some kind of a bonus completed before 17th of April. Similarly, [indiscernible] we should complete it before in May 17, then there also will get some kind of bonus. So going forward, we'll be able to see this.

The next question is from the line of Jiten Rushi from Axis Capital Limited.

Just one thing I want to understand that you said in the usually to somebody else that EPC doesn't include GST, but TPC include GST. So when we get grant from any side, that will be 40% net of GST or it will be 40% total of the TPC?

40% of TPC. That is 40% of TPC.

Basically, that doesn't include GST. And sir, when you get on EPC, probably will be?

That is 40% of TPC plus GST.

Okay, plus GST, okay. So basically, when you are investing, you're getting debt, including GST and you're investing equity also including GST. That is what I understand, correct, sir? So in this quarter, you said that there is increase in employee cost because of the INR 10 crore additional payment. Was my understanding correct or am I missing something?

Actually, we are giving the increment, annual implement, we declared in the month of October and November, and we have given the area from January to October in this quarter. That is why you will see that my EBITDA margin slightly a little bit down as compared to last quarter.

So what is that -- that total amount is INR 10 crores, right, sir?

Otherwise, my EBITDA margin range of 35% to 34%.

So we -- okay, so that is something which we do every third quarter. That is a phenomena, right? Got it, sir. Sir, can you give the toll collection number, sir?

Toll collection in Kanpur Highway is INR 20.5 crores. In Bareli INR 14.9 crores, Raebareli-Jaunpur to INR 32.16. NP Highway INR 9.27 crores.

Sir, which asset out of this, you're looking to sell in [indiscernible] side, the one asset you said?

Only one project of Bareli [indiscernible] otherwise, NP Highway Kanpur Highway is going to be completed in '25.

Raebareli project. So that also Raebareli we are not looking.

NP Highway, Kanpur Highway.

Yes, but sir Raebareli we are not looking because it's a NOT project? Okay. And sir, as you said there is an increase of INR 100 crores in the Canal project. So -- but the execution has been muted so far. So this will pick up probably this year. That is what you're trying to say because of the water, which has been heavy water flow for the canal project, as you said initially, right, sir?

Yes, yes. Actually, we are effectively are able to do work for 5 months only in a year. So this is even -- initially, we start also able to do 8 months, but effectively we are doing only 5 months [indiscernible].

So basically sir, we have done almost INR 400 crores, INR 430 crores revenue from water and irrigation in first 9 months, and with your opening remarks you said INR 900 crores revenue in FY '23. So basically significant revenue in Q2 we are expecting, as you said currently.

Yes. See the INR 900 crores [indiscernible] drinking water sector, out of which already INR 500 crores, or INR 507 crores we have done. That is from rural drinking water sector and remaining around INR 400 crores we'll be doing in the Q3. This is the exclusive of canal.

Okay. So basically 9 months, you have done INR 507 crores in the quarter. And now you balance INR 400 crores in Q4. So what is the canal revenue, sir? The 9 months and expected in Q4?

The 9 month canal revenue INR 114 crore.

Okay. In Q4, we can do something.

Yes. Yes, Q4 we'll be doing around [ 24 ] we'll be doing in Q4 because just now we started the work after receiving the water.

Okay. That's it from my side. And sir, one last question, sorry. You said order [indiscernible]. So you were seeing some other projects also excluding roads. So anything excluding road we are expecting in the INR 8,000 to INR 10,000 or this is purely roads, highways.

Essentially highway and Express ways but in case the government bids for the water project under Phase 4. So some really some order book we are expecting from that. But that [indiscernible] and other things.

The size of Phase 5, sir, what is the size of Phase 5?

Of Phase 5 already awarded. Now only Phase 4 spending.

What is the size?

See the total under Phase 4 is around INR 10,000 crores worth of projects are there.

And this is a last leg from UP?

Yes, yes, this is the last leg of JJM in the state of Uttar Pradesh.

And then any plans to go in other states?

We'll certainly evaluate the opportunities.

The next question comes from the line of Vasudev from Nuvama Group.

Most of my questions are answered. Just I wanted to know the thoughts on the competitive entity in road space.

See, as progressing competition is high, as all will know see we have another INR 110 lakh crores worth of projects. So what we expect competition would be model because some of the players already got for [indiscernible]. And we expect that there will be enough cake for everybody. So we are expecting around INR 8,000 crores of new order book from this INR 1.1 lakh crores is floated with NHAI and [indiscernible].

The next question comes from the line of Vishal Periwal from IDBI Capital.

And first of all, I think congratulations sir on maintaining the margins. I mean vis-a-vis like how the peers are -- I mean, they are coming up with the results. But my question is more on the execution side, sir. I think initial commentary was [ JMM ] allocation increase, ministry road allocation has increased. We are having an order book, but why I think our guidance still remains in the range of 10% for this year, which again means like probably a muted growth in quarter 4 and next year will be 10% to 15%. So is there any approvals, which are pending, what are the equity concerns, I'm just trying to correlate with the macro and how we are riding sir?

Actually, in the current financial year FY '23, though we expected more than 10%, this year very uncharacteristically, the monsoon has extended. See monsoon has extended even the third week of October at many of our project sites, some of our water sites like [indiscernible] inundated totally, and even our roads was also affected badly. So we never expected because normally monsoon recedes in the month of September, but this year monsoon. So in fact, our Q3, we expected more revenue, but we settled at INR 1,600 crores something. So that is the reason in the current financial year, we are talking about 10% growth versus the previous financial year. So next year, 15%. Going forward, we'll see how the approvals are forthcoming and the 2 projects still appointed dates are to be declared how this progress will pick up in this thing and how monsoon will behave in the next year. So these are the factors. So as of now, we are setting it at 15% growth over FY '23.

Okay, okay. And then second, this was more of a data point. What has been the inflow for us in 9 months now? Order inflow for us in 9 months this year?

9 months we couldn't get any new orders in the 9 months. Even compared to normally, it is a trend in [ MSA ]. So in the fourth quarter only the maximum number of projects are bid out in the fourth quarter. As I said, INR 110 lakh crores worth of projects are there for bidding in the fourth quarter. Yes, yes, we are expecting up to INR 10,000 crores in the current quarter.

Okay. Pardon me for my [indiscernible]. And the last one is on the equity you mentioned that you plan to increase over the next 2 years. Can you give a breakup in '24 and '25?

'24 in the range of INR 400 crore to INR 500 crore. And in FY '25, INR 350 crores to INR 400 crores.

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

Sir, just one question from my side. What was the toll collection in Kanpur-Ayodhya project and the Eastern Peripheral Expressway project this quarter?

Kanpur-Ayodhya already completed on October 1. So there was no collection in this quarter.

And Eastern Peripheral Expressway Highway went on till November, right?

Yes. It has completed -- closed on November 10 and till October and November 10, it is around INR 49 crores.

Sure. And one question to Yogesh ji. I mean, do we expect that the prequalification norms to road projects will get changed anytime soon or whatever is has been going on for last 2 years, these things are going to continue now?

So we are expecting from last 3 months. So we will see what will happen. We can't say accurate.

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

So I think it was spoken a lot about the way it is we've been able to make progress with our thinking was the supply orders in terms of execution. Could you please talk about, I mean, how has our experience been in terms of payments like volume particularly the part of the order backlog now? So are we receiving our payments in time.

The water -- drinking water thing, payments are -- is reasonable. But the only issue is that we need to build for each scheme, [indiscernible] -- so the billing at a base level, is very burdensome. So if you are doing a work in 1,000 Gram Panchayat you have to write 1,000 bills every month. So that is taking time consuming. Post that, there is [indiscernible] is taking time. But payments we are getting regularly. Only thing that the preparation, submission and certification is taking time.

Okay. Okay. So when I look at our trade receivable for the quarter, right, I mean, INR 1,197-odd-crores you said INR 600-odd-crores for higher price. So balance INR 600 crores, how would this be split between, let's say, our road EPC and the water EPC canal as well as, JJM put together?

Yes, this is inclusive of everything, canal, water and other EPC projects.

That split between road, water would you have that number readily available?

Water is -- only the billing which we have done in the last -- in the month of December, it is around INR 114 crores.

Okay. Sure. And in terms of -- how many schemes are approved by now? And how many more are we expecting to get approved in this quarter in Q4?

Around 1,200 schemes approved out of, say, 2,700, 1,200 schemes approved for a value of around INR 2,700 crores as of now. And as of December 31, and they are progressively approving. So we expect all the schemes will be approved before June 30 of this year.

Okay. So entire INR 7,000-odd-crores that we have is?

Actually it is not coming INR 7,000 crores, around INR 6,000 crores because they are combining some schemes because [indiscernible] overall costs and other cost per household within the norms fixed by Jal Jeevan Mission so it could be around INR 6,500 crores. So the schemes are expected to be approved before middle of this year, calendar year.

Sure. And I mean in terms of [indiscernible] growth has become big for us, and we're gradually seeing even our water gain some size now. Generally, it tends to take us some time to be able to kind of stabilize or operating any new segment that you get into opportunity, I mean, to be able to find any [indiscernible] also takes some time. So have you started looking at any newer segments to decide roads and water, railways or metros or anything of that sort?

We are looking at, see where we find some synergies, definitely, we are looking at projects. But as of now, firmly you can't say, but our focus will continue to remain on highways.

Sure. And just one last one from my side. I think so on the monetization part, I think earlier, we were looking to monetize 6 hybrid annuities, one BOT toll and one BOT annuity and it seems there has changed right now you're looking at 11 HAM and one BOT to. So BOT annuities you are not planning to go with the transaction. And would the -- I mean, the prospective buyer be the same, I mean, which were there earlier for these 8 assets that we had or these are all new 7 new prospective buyers. So I also try and understand and relate -- I mean, the process starts afresh or it is as it essentially continues from the last quarter?

No, it is fresh because the composition of the portfolio is now different. And [indiscernible] comprising 5 already completed and 6 under construction and one BOT toll. This time, we have not included BOT annuity project so these all are there. And [indiscernible] shown their interest and we signed NDAs with them. Out of that, a couple of players for [indiscernible] also, but majority of them are removed.

And when you say, I mean, of the 11 HAM, 2 HAM plus 1 BOT toll is at advanced stage, would you be able to share how much is the equity between these there invested?

In all the 12 projects, equity around INR 1,500 crores and around debt around INR 6,800 crores. [indiscernible] Yes. 3 HAM projects is around INR 700 crore debt and equity INR 360 crores.

We have a question from the line of Jiten Rushi from Axis Capital.

One last question on the claims, which you said INR 3.65 crores. So we -- if you said [indiscernible] revenue and balance is in interest, so that doesn't fit into the numbers, sir. So sir, can we say either we can again [indiscernible].

It is INR 2 crores is the amount that is INR 2 crores is a claim amount and INR 1.66 crores the interest. Total INR 3.66 crores we got, INR 2 crores is the claim amount and INR 1.66 crores is the interest for that.

So basically the interest reported in Q3 is INR 116 crores. In that, this INR 1.6 crores is that? And in revenue, we can assume INR 2 crores, right, sir?

Actually, in this quarter, we have booked the revenue only INR 40 lakh. Earlier already we have book around INR 1.50 crores earlier period.

That was when, sir?

See, this project was completed way back in 2016 -- finance bill and other due payments. So these revenues were booked earlier and only the additional revenue, incremental revenue of INR 40 lakhs will go and also the interest.

So basically INR 40 lakhs in revenue, INR 1.6 crores and INR 1.5 crores already earlier looking better. Operator, any further questions?

No, there are no further questions at this time.

Okay. Sir, any closing remarks from your side?

Yes, yes. Thank you, everyone, for your participation in our earnings call. In case of further queries, you can get in touch with the Strategic Growth Advisors, our investor relation advisors or feel free to get in touch with us. Thank you very much.

Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.