PNC Infratech Limited (PNCINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the PNC Infratech Q1 FY '25 Earnings Conference Call, hosted by Antique Stock Broking. [Operator Instructions] Please note, this conference may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Periwal from Antique Stock Broking. Thank you, and over to you, sir.

Yes. Thanks, Davin. Good afternoon, everyone. I'm pleased to welcome you all for the PNC Infratech First Quarter FY '25 Earnings Call. We have with us today our management, Managing Director of PNC, Mr. Yogesh Kumar Jain, along with the senior management team. And I also would like to thank [indiscernible] for giving us this opportunity to host their call. As usual, we'll have brief from the management on the gone-by quarter, and then we'll open the line for Q&A. Yes. 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. D. K. Agarwal, CFO; Mr. D. K. Maheshwari, Senior Vice President Finance; and Strategic Growth Advisers, our Investor Relations advisers. We have uploaded the financial status, results and investor presentation on the stock exchange and company's website for your reference. Initially, I would like to mention key updates of the industry, followed by operational development of the company and highlights of our financial performance during the first quarter of financial year 2025, post which we will be happy to answer your questions. In the first quarter of current financial year, roads and highway sector witnessed muted progress due to several factors, including the general elections, early onset of monsoon at certain geographies and delay in declaration of appointed dates due to delay in acquisition and position of vacant land and -- for construction of already awarded projects. Reflecting the above subdued situation, only 1,934 kilometer aggregate length of highways constructed during the first quarter of current financial year compared to 2,250 kilometer [ constructed ] during the corresponding period of last financial year. The construction progress during the second quarter of current financial year is also getting affected significantly due to a very active monsoon and continuous rains across the country. Given the condition, construction activities are expected to pick up only during the third quarter of current financial year. The recent Union Budget for financial year '25 demonstrates that the government is focused on India's infrastructure development across core sections, including highways, railways and airports by making substantial budgetary allocation for transportation sector as a whole. The Finance Ministry maintained the allocation for NHAI at INR 1.68 lakh crore, while retaining the highway sector's overall outlay at INR 2.78 lakh crores for financial year 2025. Recently, the Union cabinet has approved the 8 high-speed road corridors, aggregating a length of 936 kilometers with total estimated cost of over INR 50,000 crores. These road corridors will improve connectivity and logistic efficiency. Out of the total cost, INR 30,000 crores worth of projects are expected to be awarded on BOT toll model and remaining on HAM and EPC modes. To improve road users' convenience and provide a barrier-free travel experience on national highways, MoRTH and NHAI jointly, through IHMCL, commenced the implementation of Global Navigation Satellite System-based Electronic Toll Collection, which will enhance tolling efficiency to the global standard. During the first quarter, following subsidiaries of the company are in receipt of total INR 515 crores from NHAI under the Vivad se Vishwas II scheme. INR 117 crores towards arbitration award by PNC Raebareli Highways Private Limited, INR 398 crores towards arbitration award by PNC Kanpur Highways Limited. On 28 May 2024, company received an early completion bonus of INR 56 crores for an EPC project executed in Maharashtra. Both are accounted for in the quarter 1 of financial year '25 financials. During the first quarter, the company's subsidiary, MP Highways Private Limited, received 2.8 years extension of concession period for Gwalior-Bhind toll project on account of shortfall in actual traffic versus the target traffic. On the project development side, the company's subsidiary Meerut-Haridwar Highways Private Limited achieved provisional completion certificate for Meerut-Najibabad HAM project on 4 May 2024. Out of the company's 28 fund-based projects, 3 are BOT toll projects, 2 are BOT Annuity projects and 23 are HAM projects. Aggregate bid project cost of 23 projects is over INR 30,000 crores, which is one of the largest highway HAM project portfolio in the country. Out of the total 23 HAM projects, company achieved PCOD and COD for 10 projects, 9 projects are under construction, 3 projects achieved financial closure and appointed date yet to be declared. For 1 project, financial document for a term loan INR 677 crores executed and submitted to the authority well before the stipulated due date of 4 August '24. Total equity investment requirement for 23 HAM project is INR 3,092 crores. As of June '24, company already invested INR 2,079 crores, and remaining equity of INR 1,013 crores is to be invested over the next 2 to 3 years. The internal accruals that would be generated over the next 2 to 3 years should be adequate to meet the above equity investment requirement. Now, we will move on to our order book. As of 30th June '24, the company unexecuted order book stands at INR 14,100 crores. [Technical Difficulty]

Ladies and gentlemen, the management line seems to have disconnected. Please stay with us while we reconnect with the management. Ladies and gentlemen, we thank you for your patience. We have now reconnected with the management. Over to you, sir.

Now moving on to our order book. As of 30 June '24, company's unexecuted order book stands at INR 14,100 crores, which does not include the contract value of 2 EPC contracts, recently secured for an aggregate value of INR 4,994 crores. Upon inclusion of these 2 EPC projects, our unexecuted order book would be over INR 19,000, which is 2.5x over financial year '24 revenue. Out the unexecuted order book of over INR 19,000 crores, highway and expressway contract contributed around 82%, while water project contribute around 18%. During the first quarter of financial year '25, the company had booked a total revenue of INR 289 crores in the drinking water segment. Now I will present the results for the quarter ended June 30, 2024. Revenue for the first quarter of financial year '25 is INR 1,744 crores. EBITDA for first quarter is INR 593 crores, which is higher by 142% as compared to INR 245 crores in the first quarter of financial year '24. The EBITDA margin for the first quarter of financial year '25 is 34%. Profit after tax for the first quarter of financial year '25 is INR 421 crores as compared to INR 157 crores in the first quarter of financial year '24, with a growth of 169% on a year-to-year basis. PAT margin for the first quarter of financial year '24 is 24.1%. Consolidated revenue for the first quarter of financial year '25 is INR 2,168 crores as compared to INR 2,092 crores in first quarter of financial year '24, with a growth of 4%. Consolidated EBITDA for the first quarter of financial year '25 is INR 969 crores as compared to INR 436 crores in the first quarter of financial year '24, with a growth of 122%. The EBITDA margin for the first quarter of financial year '25 is 44.7%. Consolidated PAT for first quarter of financial year 2025 is INR 575 crores as compared to INR 181 crores in first quarter of financial year '24, with a growth of 218%. The PAT margin for the first quarter of financial year '25 is 26.5%. On the stand-alone balance sheet side, as on 30th June '24, our net working capital cycle is 121 days. Our net worth on a stand-alone basis is INR 5,203 crores as on 30 June '24, whereas total stand-alone debt is INR 389 crores. The total cash and bank balance as on 30 June '24 is INR 486 crores. We have a net surplus of INR 97 crores. This translates to net debt to equity of 0.07x. On consolidated basis, our net worth is INR 5,761 crores, whereas total debt is INR 8,258 crores as on 30 June '24. The total cash and bank balance, including current investment is INR 1,501 crore. This translates to net debt to equity of 1.43x. With this, we now open the floor for question-and-answer. Thank you.

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

Sir, just a clarification on this entire arbitration and the bonus, the entire amount directly goes to the EBITDA. There is no expense related to that before EBITDA.

Yes, there is no expenses on this arbitration and bonus, sir.

Okay. Now sir, given that, if I remove this in terms of the core revenue, which is kind of on the low rate, 29% kind of decline, 30% and we are looking at 10% growth on this revenue in FY '25, so the ask rate is significantly higher. So how do we now see the revenue and also the EBITDA margin? Are we been maintaining the same 12%, 12.5% for FY '25?

Yes. This first quarter growth has been affected due to some unprecedented activities, unprecedented conditions. Some of them are expected like general elections. But like the summer has been very severe, and extreme heat also affected our progress and the way, early onset of monsoon. And more importantly, the projects which we secured during FY '23 March could not be commenced due to delays in declaration of appointed date on account of delay in land acquisition. So this is a multiplicity of factors, general elections, early onset of monsoon and the excessive heat during the summer, then the delay in declaration of appointed dates. And also particularly in case of the water sector, there has been delay in the release of payments due to lack of budgetary allocations during the period of [ vote ] on account of budget time. So there's -- all these things had a complex and -- complexity. So it's reduced our first quarter revenue. So still, we will be trying to expedite it. But the second quarter also, because now, again, the act -- when monsoon has been very active and widespread, so we expect a similar kind of situation during the second quarter also. The situation is challenging, given the conditions, and some of them are expected things, so the guidance for the FY '25 would not be what we expected earlier, would be at flat or maybe around 10% [ downwards ].

Sorry, sir, you said flat to minus 10%, you are saying?

Minus 10%.

Minus 10%?

Yes. [ That is ] for FY '25.

Okay. Got it. And the margins remains the same at 12%, 12.5%?

Yes. Yes. EBITDA margin would be around 12.5%.

Okay. And now it's given [Technical Difficulty] we were looking at order inflow of...

Your line is not very clear.

Is it better now?

Not really, sir.

Are you able to hear me?

Yes, much better, sir.

This is -- we'll tell you. We already secured INR 5,000 crores worth of new orders during the current financial year. And we expect to secure another 8,000 to 10,000. So it will be around between 13,000 to 15,000 new orders during the FY '25.

Okay. Got it. So now, let's say, this year, if we are doing minus 10% on the [Technical Difficulty] '26, how do we look at FY '26?

FY '26 guidance would be around 15%. So we expect 15% because the projects which we are expecting -- we are expecting here quite a few projects appointed date during the current financial year, even during the second quarter. So the progress will be [ picked up ]. I think this low [ growth ] effect, we will have around 15% [ plus ] during the FY '26.

Got it. And sir, now, for date of [ appointments ] and the appointed dates for all the Varanasi-Ranchi-Kolkata package, Ranchi and Bhopal bypass, [Technical Difficulty] status and also project-wise order book and the balance sheet numbers, if you can share?

See, first is the appointed date, we'll share with you, Western Bhopal bypass of [ MBRDC ] project, which is a HAM project, and Varanasi-Kolkata package 6, that is also HAM project, and there is one bridge project in Gwalior, which is UP MPPWD project; so appointed dates for all these three projects we expect in the first week of October, as land is expected to be processed before end of September, the required land more than 80%. So these three projects, we expect appointed dates in the first week of October. And the revenue, maybe initial revenues would be booked during the Q3 of the current financial year.

Okay. And package 2 and 3, Varanasi-Kolkata?

Package 2 and 3, there are challenges in land acquisition and possession. So that may take some more time. So we'll update during the next -- our meeting and interaction. So as of now, the land acquisition has been slow. So I'm not able to tell now what will be the appointed date for these two packages.

Okay. Now the balancing numbers, inventory, trade payable and then the debtors also in terms of the breakup of debtors, HAM, water and EPC debtors.

Trade payable is INR 700 crores.

INR 700 crores. Inventory?

Inventory? INR 750 crores.

And total debtors is?

Total debtors is INR 2,212 crores.

INR 2,212 crores. Out of that, how much is HAM debtors and water debtors?

EPC contract around INR 1,394 crores, EPCs. And HAM debtors is INR 818 crores.

INR 818 crores. And [ water ] would be how much?

Sorry to interrupt, but your line is not very clear. Your audio is not coming through clearly, sir. May I request you to please establish a better connection and rejoin the queue, sir?

I can hear clearly. Sir, if you can hear me, what's the water debtors and mobilization and retention money?

Water debtors is INR 1,040 crores.

INR 1,040 crores. And mobilization and retention money?

Mobilization advance is INR 385 crores, and retention is INR 143 crores.

INR 143 crores. And if possible, project-wise order book, if you can share. So Hardoi and [ Gaju Village ] package, how much?

We request to please rejoin the queue for these follow-up questions. We request you all to please reestablish a better connection. The next question is from the line of Jainam Jain from ICICI Securities. [Operator Instructions]

Congrats on a great result. So I have a couple of questions. Firstly, starting with the EBITDA margin. So we have seen an amazing spike in the EBITDA margins to 34% in the standalone financial segment. So I would like to understand, like what was the specific reason for such increase in EBITDA margins? And what's the expected -- and is this an increase of EBITDA margin expected to continue for the entire FY '25?

So the 34% inclusive of INR 435 crores amount received on account of arbitration and bonus in this quarter. Otherwise, the EBITDA margin will be maintained around 12.5%.

Okay, sir. And sir, what is to beta pipeline which the company has been expected in this FY '25?

The pipeline, as I mentioned, so we expect another INR 8,000 crores to INR 10,000 crores new orders during the FY '25. Already, we secured around INR 5,000 crores new orders. So total cumulative be around 13,000 crores to 15,000 new orders.

Sorry, I didn't got the amount. It's 8000 to...

INR 8,000 crores to INR 10,000 crores.

Okay, okay. And sir, I wanted to have an update on the asset monetization and divestment plan which the company has been planning.

With regard to monetization, after execution security purchase agreement, there was a condition precedent, mainly NOC from change in ownership from lenders and NHAI. The NOC from the majority of the lenders or first tranche of assets have already been received, and others are expected by end of second quarter, as regard the NOC from lender. And as regards the NOC from NHAI, the financial consultants of NHAI reviewed the NOC application, and observation made by them have already been clarified and compiled. With -- [ PVI ] and RO had also recommended of 7 projects out of 10, and sent to HO for file approvals. We are expecting that in 1 or 2 months, it should be processed in head office.

Okay. So all the asset monetization and divestment plan will be completed in coming 1 to 2 months. Is that correct? Is that understanding correct?

It should be [Technical Difficulty] in case we receive the NOC from NHAI.

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

Sir, can you hear me?

Yes.

Sir, my first question is on -- so the issue which we faced recently in June, so what is the status now on the bidding? So are we allowed to bid now? Is there any punitive action taken in terms of restricting us or bidding for some time or debarring us for some time? Any update on that issue?

So no, this -- no punitive action has been taken by NHAI. We don't foresee anything in the near future. So we are able to bid, and we are hopeful that we'll continue to able to bid on these projects.

Okay. So -- but has any of our bids been opened till now? Have you submitted any bids, are those bids being opened? Or -- so any update if you can give us?

Yes, bids are being opened. Last week also, 3 of our bids got opened. And also, some of the bids we submitted, around 18 bids are there, that will be opened.

Okay. So my second question is on -- I think Maheshwari earlier highlighted that 7 out of 7 projects have been, I think, advised for NOC by NHAI consultants. So does it, in any way, impact our Jhansi projects where this issue has happened? So do you think those projects may right now, be on hold in terms of monetization? Or do you think that it can still get NOC and projects will proceed normally towards the execution of monetization?

No, we don't expect anything as the issue. And also see, for the other listeners, also want to share, the matter being [ subsidies ], we don't want to share further details in the matter. But whatever the update status is there in the matter, we already intimated to the exchanges. Our intimation is dated 9th of August and 19th of August -- 9th of June, 19th of June and the 9th of August. These intimations are available in the public domain. So don't want to share further details on the matter as of now.

Okay. And just the last question is around the diversification. So now, I mean, we are facing growth challenges because of last year has not been a good year for ordering for a sector as a whole, and also for the company. So this year, we have a big order intake guidance of 13,000, 14,000, and we also achieved something. So first, whether on a MSRDC project, any update you have heard? Because there are a median news of these -- the Pune award are being reevaluated for award. So any update -- I mean, when do you expect the appointed date to come in? And also on diversification, if you can help understand beyond water -- and what are we not seeing in orders coming in? So how do you think that this pipeline will grow from non-road segments? So which segments you're looking to diversify?

First thing is in case of the MSRDC projects that we recently secured, we expect the letter of award will be issued before end of this month. And the second thing with regard to diversification, so another sector, what crore sector we are focusing upon is the railways because again, just a few days before, Union Cabinet has approved INR 25,000 crores of new railway projects. So already, we are there. We are working on one railway project, HORC, Haryana Orbital Rail Corporation's project in Gurgaon. So we are looking at that. That is one of the sectors where we'll be focusing upon diversify and to foray into...

[Operator Instructions] The next question comes from the line of Vaibhav Shah from JM Financial.

Sir, what kind of revenue are we targeting from the JJM projects for FY '25, given the weaker execution in first quarter?

See, as I mentioned, there's -- the progress was not substantially affected during the Q1, and that trend would continue to be in Q2 also because many of our scheme locations are inundated due to heavy rainfall. So nevertheless, we are expecting around INR 1,500 crores during the FY '25 as the revenue for the water sector.

And payments have improved in the second quarter for the water segment?

Yes. See, now the full year budget is approved, so the funds, we expect the funds coming from the government of India, 50% of the project cost. And the remaining 50% matching grant also is expected timely from the state government. So we expect that whatever our outstanding payments are there, it would be cleared before the end of the second quarter. And thereafter, the funds flow and the payments would be normal.

Okay. And sir, remainder would be done in FY '26, should be completed, water?

Yes. FY '26 basically, complete the water sector -- projects what we've secured.

Okay. And sir, in your initial remarks, you mentioned that the execution should be weak in the second quarter as well. So that is the case for the entire portfolio or only for water? So the revenue would be somewhere around INR [ 1,300 ] crores only on a total basis?

See, what happens, when compared to highway, water, the -- in case of monsoon continues to be active and widespread. The water gets more affected, water projects because these projects are in isolated locations, spread. And also then pipelining and other things gets affected when compared to highways, et cetera. So water will be more affected. But highway also, the asset would be -- certain affect would be there on the highway sector also in terms of progress.

But do we expect a quarter-on-quarter increase in terms of revenue for second quarter, overall revenue?

Yes, yes.

And sir, lastly, what was the CapEx in the first quarter? And for the year, what are you guiding?

CapEx last year was INR 46 crores. But this year, we are expecting around INR 80 crores to INR 100 crores.

And what was done in first quarter?

Only INR 3 crores.

We have the next question from the line of Anupam Gupta from IIFL Securities.

So you said 15% group in FY '26, after a 10% decline in FY '25, although you have a reasonably large order book at this point of time and you're expecting another INR 13,000 crores -- another INR 8,000 crores of order inflows in this year. So ideally, FY '26 should be higher unless there is something -- some slowdown which you're expecting. So any clarity on that?

See, this 15%, what we said, is the minimum because the project got -- we start during the FY '25, initial stages will be low value, what will be there. So it will be ramping up during the FY '25. But hopefully, it's a minimum number of what we are expecting, but it could go up to 20% upside within FY '25 -- FY '26.

And can you just give a breakup of the equity investment, which is balance for FY '25, '26, '27?

Actually, out of the INR 3,092 crores equity required for [ completing ] the projects, we have already infused INR 2,079 crores till June. And remaining INR 1,013 crore is required in FY '25, around INR 500 crores -- INR 587 crores; FY '26 INR 290 crores and FY '27 is INR 140 crores.

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

So first, would be great if you could give us the toll collection number for the various projects.

Toll collection, MP Highways INR 6.5 crores, Kanpur Highways INR 24.8 crores, Narela INR 26.6 crore, Bareilly Almora INR 16.5 crore and Raebareli INR 32.16 crore.

Sure. The second question is, I mean, you expected that we expect the NOC from NHAI and lender, et cetera, in the next 1, 2 months. So by when do we expect the entire asset monetization process to get completed and to receive these funds from the buyer?

So there are two phases in this entire transaction. We are expecting first phase will be completed by December. And by end of the financial year '25, funds should come of first tranche.

Okay. And for the second tranche...

And after around, say, September '25.

Okay. Fund should come by September '25.

Of second tranche.

Last question. What is the status of the Andhra Canal project? I'm assuming currently it is monsoon, so maybe work would have been stopped. But for the year as a whole, what is the kind of execution that we expect there, especially after the change in the government?

See canal project, as you said, now work stopped because the water is flowing in the both main canal as well as branch canal. So as we've seen -- witnessed last 2 to 3 years, so work could be commenced either in the month of December or January. So the current financial year we'd be able to do around INR 60 crores to INR 75 crores worth, if we start in the month of December. And also, the -- since this -- particularly, this cross be very vital for the Rajasthan -- Rayalaseema drought relief, we don't expect that the new government will have a different stance. So we'll continue with the project. So we're able to execute further. Here, we want to share, whatever amount is outstanding from the -- towards the work done, so we received INR 60 crores last week. So we expect to receive further funds from the new government. So -- and then as we receive the funds, then we'll continue with the work.

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

Sir, I hope my voice is clear now.

Yes. Very much clear.

So the outstanding order book of this irrigation project remains the same, INR 932 crores?

Yes.

Okay. And what is the outstanding order book of Hardoi and Gaju Village?

Hardoi is INR 137 crores.

Gaju Village-Devinagar Package 1C?

1C is INR 100 crores.

INR 100 crores. And Haryana Orbital Rail?

INR 720 crores, 7-2-0.

7-2-0. Okay. And small one now, Lalganj, Meerut-Nazibabad, has it completed or still some order book is there?

Lalganj, hardly INR 20 crores remaining. INR 28 crores Meerut-Nazibabad.

Okay. And Challakere-Hariyur?

That is INR 90 crores.

Sorry, INR 90 crores?

9-0, yes.

Okay. Got it. And sir, in terms of the working capital, obviously, primarily debtors, which has increased; so what do we see by end of this year in terms of the working capital days?

Working capital days should be around 100 days because at this time, it has increased from 102 to 221 because of the increase in the debtors. It should be subsequently realized, irrespective either of water or HAM projects.

Okay. Got it. And is there anything further in terms of arbitration claim or bonus that are likely to be there in the remaining 3 quarters?

We don't expect any arbitration -- realization of any arbitration award during the next 3 -- during the 3 quarters. In terms of bonus, we completed [ AKP5 filing ] in now [ Lalganj ] a few months ahead of the schedule. So we've been receiving bonus during the current financial year. We still have progress. These will be HAM projects. But since HAM projects, bonus is not as large as EPC projects, will be a minimal. As of now, readily, we don't have figures. But it will be minimal, [ bonuses ] we'll be receiving from Unnao-Lalganj and AKP5.

Okay. And sir, till now, how many value of projects that we have bidded and where bid has not yet opened?

We have bided 18 projects for a total value of -- estimated value of INR 17,700 crores, financial -- price [ bids ] of which are yet to be opened.

And this largely will be in the road and that too HAM?

Yes. You can say 50% HAM and 50% EPC.

Okay. And for BOT toll, are we looking to bid any of the BOT toll projects?

See, we are evaluating the opportunities, BOT toll projects. We will take a call, and accordingly, we'll see whether we are [ will bid ] or not.

[Operator Instructions] The next question is from the line of Vishal Periwal from Antique Stock Broking.

Yes, One is on our revenue guidance that we have changed. So this is primarily coming from roads or from the water side?

The revenue guidance is really a combined thing. Whatever revenue would be coming, that should be coming from both the things. And the majority from the highways. As we said, the order book, if you see the order book, more than 80% is from highway and less than 20% from the water sector. So the revenue also in the same ratio.

Okay, okay. Sir, I know actually, the quarter 1 was showing a little bit of weakness in water, but that is expected to pick up. And then that's what basically you're saying?

Yes, that's expected to pick up during the second half of the current financial year, and the ratio will be maintained.

Okay. Got it. And then second, just the increase in the CapEx vis-a-vis FY '24 of INR 40 crores to INR 80 crores to INR 100 crores this year, so any particular line item where exactly we are seeing this opportunity where the CapEx is getting infused? Any broad that you would like to share?

Actually, after this award of the [ MPR ], Maharashtra Road Development, the projects are of INR 5,000 crores. So there, we require some CapEx. And additionally, Varanasi-Kolkata, that project we require some new CapEx. So that is why we have completed around INR 80 crores, INR 100 crores, maybe lower than this.

Okay, okay. Got it. And then I think I missed on that MSRDC project that you mentioned. So, when is the outcome expected on this? I think you did briefly mentioned. I just missed, if you could just clarify.

The letters of award are expected before end of this current month.

We are expecting turnover in third quarter.

From third quarter onwards.

Okay. And maybe one last -- two things from my side, and then I'll come back in the queue. For this asset monetization, I think -- just correct me, I mean, earlier we were expecting everything to get concluded by '25 -- FY '25. Anything that you'd like to share for the slight delay that we are seeing? Or this is a procedural thing that we are seeing for this asset monetization for us, the conclusion of it?

That is only procedural situation, NOC from NHAI and NOC from lender. Major condition precedent out there.

Next question is from the line of Vaibhav Shah from JM Financial.

Sir, we indicated that the Phase 1 should be completed by December and money should come by March. So the Phase 1 earlier, we had mentioned that it includes 6 HAMs and 1 BOT. And the valuation for that is around INR 1,789 crores. So that remains the same, the mix of Phase I assets?

Yes, yes.

Okay. Okay. And sir, what kind of -- so you mentioned that we'll be starting the execution for MSRDC projects in third quarter. But what kind of revenue can be factored for FY '25 from the two packages?

See, these two projects are being a greenfield project, initially, the items involved be [Technical Difficulty]. So there won't be any high value, once it will be be executed in initial [ period ], this one. So we expect a minimum of around INR 200 crores to INR 400 crores kind of turnover revenue from these two projects in the current financial year. It could be more also, depending upon the situation.

But in FY '26, roughly 45% to 50% you would be executing, right?

Yes. May not be 50%, but it will be around 40%.

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Yogesh Jain from PNC Infratech for closing comments. Over to you, sir.

Thank you. Thank you, everyone, for your participation in our Earnings Call. In case of further queries, you may get in touch with the Strategic Growth Advisors, our Investor Relations advisers, or feel free to get in touch with us.

Sir, sorry, to interrupt, but we do have one last minute entry into the question queue. Would you like to take that, sir?

Yes.

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

Sir, my question would be on upcoming bid pipeline. So obviously, you have about 18 projects, which you are bidded for. But what kind of bid pipeline you see in railways and highways, which you look to participate in the next 6 to 8 months?

The NHAI has floated tenders and NIT for more than 100 projects, around 30 projects on EPC and more than 70 projects on a HAM basis. The total value of these projects will be more than 120 lakh crores -- INR [ 12.3 ] crores. So we expect -- we are evaluating all the opportunities. So between these projects next maybe, say, 5 to 8 months.

So this will include BOT toll also?

BOT toll, this is excluding BOT toll. BOT toll, aslo there are some -- around 10 projects are there. There also, we are evaluating the [ viability ] and other aspects. So there, we will be judicially taking a call, so, to pursue these projects.

And railways, sir, any thoughts process on railways?

Railways also we are looking. Clearly, we are looking at the sector because recently, as I mentioned, INR 25,000 crores of new projects was announced by the cabinet.

Yes. We are bidding railway project.

We are bidding railway project. One bid is already -- we submitted a bid, which is under evaluation, and the price bid is yet to be opened.

And sir, on the water segment, obviously, we were supposed to participate in other states, which you were talking in the last quarter. So this quarter, I think we are not speaking on the water segment. So this would -- is it safe to understand that we will not be taking any more water projects going forward?

No, no. Certainly, we'll be bidding water projects. As of now [Technical Difficulty] new water projects supported by any of the states now. I think now the -- everybody is waiting for the budgetary allocations and other things. So now since general elections are over, so we expect new projects will come up in other states. And certainly, we look forward to bid for these projects, if they find...

So in the [ midst ] of next inflow of what you said, INR 8,000 crores to INR 10,000 crores, what kind of inflows you're expecting in terms of non-roads in it? Or it will be purely roads?

We see that this thing -- whatever, it will be a hypothetical kind of a thing. So we'll see going forward what kind of opportunities are coming in the other sectors other than roads. Then that will be...

The last question on the Q2 number. As you said the revenue would still remain subdued or it could decline year-on-year in Q2 also because of heavy monsoon. Is my understanding correct?

Yes, the revenue would be subdued -- continue to be subdued in Q2 also because of the intense monsoon.

Thank you. Sir, there are no further questions at this time.

Okay. Thank you.

Thank you very much.

Thank you. On behalf of Antique Stock Broking, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.