PNC Infratech Limited ($PNCINFRA)

Ladies and gentlemen, good day, and welcome to PNC Infratech Limited Q4 FY '26 Earnings Conference Call hosted by AMBIT Capital Private Limited. [Operator Instructions] Please note that this conference is being recorded. Please note, 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 are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sudeep Bora from AMBIT Capital. Thank you, and over to you.

Good afternoon, ladies and gentlemen. On behalf of AMBIT Capital, I'm pleased to welcome you all on the PNC Infratech Limited Q4 FY '26 Earnings Conference Call. We have with us the Managing Director of the company, Mr. Yogesh Jain, along with the senior management team. We will begin with the opening remarks from the management, followed by interactive Q&A 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. Today, I have with me Mr. T.R. Rao, Director, Infra; and Mr. Pankaj Agarwal, Vice President, Finance and Accounts; and Strategic Growth Advisors, our Investor Relations Advisors. The financial results and investor presentation have been uploaded on the stock exchanges and company's website for your reference. I would first like to share the key development across the industry with you, followed by operational updates of the company and highlights of financial performance during the quarter and full year ended 31st March 2026, post which we will be happy to answer your questions. Financial year '26 witnessed a mixed outcome for the highway sector. While awarding activity continued to be subdued during the year, execution activities remained satisfactory for the given order backlog with NHI constructing over 5,300 kilometers of national highway during the year. Awarding activity by National Highway Authority of India stood at 3,124 kilometer aggregate length, more than 30% below the targeted length of 4,500 kilometers. The subdued awarding activity over the past 3 years largely caused by persistent delay in acquisition of land, extended project appraisal and approval time lines and delay in finalizing of viable and bankable project structure under DBF40 tool model. Union budget for financial year '27 reflects the government commitment to faster infrastructure development. Capital expenditure for the road sector has been budgeted at approximately INR 2.9 trillion for financial year '27, representing an increase of around 8% over the previous year. With increased focus on expressway access control greenfield alignment, including 4- and 6-lane economic corridors, the expansion in lane kilometers is expected to remain healthy, reflecting government's continued emphasis on building larger and more extensively highway infrastructure network in the coming years. Against this backdrop, we remain hopeful that project approval and land acquisition process will accelerate, resulting in improved awarding momentum, which will translate into wider bidding opportunities and a stronger pipeline for the key players in highway sector, particularly in fund-based mandates such as HAM and BOT toll. New opportunities have been rapidly emerging across core infrastructure segment, including renewable energy and storage, power transmission, water supply and irrigation and other sectors. India's target of achieving 500 gigawatt non-project fuel capacity by 2030, coupled with critical requirement of battery energy storage system to bridge the gap between intermittent renewable energy generation and country's rapidly growing peak power demand, provides a large number of sustained business opportunity in this sector. India's power transmission sector is entering a high-growth phase, driven by the rapid expansion of renewable energy and acute need of augmentation and strengthening of national grid. Both central and state governments are heavily investing in new intra and interstate transmission networks and grid modernization projects, including setting up of large number of high-capacity substations across geographies. Water infrastructure segment in both drinking water and irrigation spaces continue to provide significant opportunities on both EPC and PPP modes; supported by government flagship Jal Jeevan Mission, which has been extended till 2028 and water resource management projects being initiated by states. With emerging opportunities across railways, metro rail, airports, ports, logistics, mining, road-based and urban development sectors, India's infrastructure opportunities landscape is set to expand in a big way beyond traditional roads and highway sectors. Opportunities in these diverse sectors are expected to generate a sustained project pipeline over the coming years for infrastructure companies with healthy financials strong execution capabilities and a proven track record. Towards the end of financial year '26, geopolitical tension in the West Asia led to volatility in global crude oil price and logistic cost, resulting in higher input costs, particularly bitumen, fuel and logistics. Ministry of Road Transport and Highways introduced cost escalation compensation mechanism for national highways project executed on EPC, HAM, PBMC modes payable from 1st April 2026 and reduced price adjustment cycle from 3 months to 1 month to address the adverse impact due to steep increase in bitumen prices. These measures are expected to provide some relief margin pressures faced by the highway construction and development firms to a certain extent. Now coming to the recent updates on the company. In March '26, the company successfully completed the sale of its equity stake in PNC Challakere Highway Private Limited to Vertis Infrastructure Trust. This transaction marked the completion of the final tranche of the strategic divestment of 12 assets announced in January '24. In April '26, the company emerged as the lowest bidder for two HAM projects of National Highway Authority of India in Uttar Pradesh with a combined bid project cost of INR 3,483 crores. In May '26, the company was declared in the L1 bidder for an EPC project of Lucknow Development Authority for the construction of 4-lane flyover on bank of Gomti River in Lucknow. The quoted bid value for the project is around INR 2,200 crores. In May '26, company received a letter of acceptance from Uttar Pradesh State Bridge Corporation Limited for an EPC bridge project of value INR 559 crores, INR 559 crores in joint venture. In May '26, company received provisional completion PCOD for Prayagraj Kaushambi [indiscernible] HAM project of MoRTH. The project was clear fit for commercial operation effective from 31st March '26. On 12 May 2026, the company entered into a onetime settlement agreement with NHAI regarding Agra Bypass EPC project arbitration award under the Vivad-se-Vishwas III scheme for an amount of INR 235 crores payable by NHAI to the company. Moving on to the operational and financial performance of the company. The company's 15 fund-based project portfolio comprising 1 BOT toll project, 2 BOT annuity project and 14 HAM projects. Aggregate bid project cost of 14 HAM project is over INR 17,200 crores. Out of total 14 HAM projects, five projects achieved PCOD and COD, six projects are under construction, one project of MPRDC achieved financial closure, two projects in which company stands L1 bidder. LOI are expected shortly. Total equity investment requirement for the HAM project is INR 1,623 crores, excluding two HAM projects for which LOA are yet to be received. Till March '26, company already infused INR 1,081 crores and the remaining equity of INR 542 crores to be invested over the next 2 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 moving on to our order book. Company's unexecuted order book stands at over INR 22,000 crores, which includes the value of newly secured two HAM projects and two EPC bridge projects. Highway contract contributes 62% of total unexecuted order book, while water, canal, area development, railway and airport contract contributes around 25% and coal mining contracts contribute 13%. Now I would present the results for the quarter and year ended March 31, 2023. Stand-alone revenue for the -- now moving on to our order book. Company's unexecuted order book stands at over INR 22,000 crores, which includes the value of newly secured two HAM projects and two EPC bridge projects. Highway contributes 62% of total unexecuted order book, while water, canal area development, railway and airport contract contribute around 25% and coal mining contract contribute 13%. Now I would present the results of the quarter and year ended March 31, 2026. Stand-alone revenue for the fourth quarter of financial year '26 is INR 1,458 crores and EBITDA for the fourth quarter of '26 is INR 175 crores. Stand-alone EBITDA margin for the fourth quarter is 12.02%. Stand alone profit for the fourth quarter of financial year '26 is INR 100 crores. Stand-alone PAT margin for the quarter is 6.9%. Stand alone revenue for the financial year '26 is INR 4,633 crores. EBITDA for financial year '26 is INR 583 crores. EBITDA margin for financial year '26 is 12.58%. Profit for the financial year '26 is INR 344 crores. Stand alone PAT margin for financial year '26 is 7.43%. Now moving on to the consol results. Consolidated revenue for the fourth quarter financial year '26 is INR 1,167 crores. Consol EBITDA for fourth quarter of financial year '26 stood at INR 277 crores. The EBITDA margin for quarter 4 financial year '26 is 17.14%. PAT for fourth quarter is INR 108 crores. PAT for fourth quarter is 6.6%. Consol revenue for financial year '26 is INR 5,368 crores. Consol EBITDA is INR 1,137 crores. EBITDA margin for financial year '26 is 21.1%. Consol PAT for financial year '26 is INR 832 crores. The PAT margin for financial year '26 is 15.4%. On a stand-alone basis, our net worth as on 31st March '26 is INR 5,811 crores, whereas stand-alone debt from banks and financial institutions and intercorporate deposit is INR 741 crores. This translates to net debt to equity 0.13x. Total cash and bank balance, including current investment is INR 1,068 crores as we have net surplus of INR 327 crores as on 31st March 2026. On a consol basis, our net worth as on 31st March '26 is INR 6,813 crores, whereas total debt is INR 5,151 crores. This translates to net debt to equity of 0.76x. The total cash and bank balance, including current investment is INR 2,856 crores. With this, we now open the floor for question and answer.

[Operator Instructions] We take our first question from the line of Shravan Shah from Dolat Capital.

Sir, couple of questions. So sir, first, broadly on the guidance part. So obviously, the FY '26 in Q4 was slightly lower versus what we were expecting INR 350 crores, INR 400-odd crores kind of a lower number. And we were looking at 25% kind of a growth for FY '27 at stand-alone. So just wanted to know now given the order inflow is also there and how one can look at the revenue growth for FY '27? And even possibly based on the current order book, how one can look at the FY '28 also and then the EBITDA margin also?

See, the revenue what we achieved in FY '26 because as you know that four of our projects got delayed execution, three of NHAI projects and one of MPRDC projects of having more than INR 4,400 crores, for which we executed our concession agreements way back in July '23 and March '24. That has resulted in lower turnover in FY '26 than what we expected. And going by this turnover of INR 4,633 crores. So we are looking for a guidance-- we are proposing a guidance of around 30% for FY '27 and -- which will be around INR 6,000 crores top line. And then for FY '28 from there, we are looking at another 25% guidance for FY '28. So that will roughly translate to INR 7,500 crores. The EBITDA will continue to be around 12% for both -- for FY '27. So we'll see the -- what would be the EBITDA in FY '28 going forward given the geopolitical tensions and the volatility in commodity prices.

Yes. So that -- just to touch on that. So at least for in Q1 or maybe in Q2, we will -- do we see a kind of a risk on the margin? And if yes, how much -- whatever the price increase has happened, the crude related and then the steel and everything. So do we see anything? And structurally also, obviously, we have escalation clause, but given the kind of a sharp increase, how much one can look at kind of a risk to the margin?

See, certainly, we cannot design -- we cannot deny that there would not be any margin pressure. Certainly, there will be pressure on our margins given the current scenario. But as you said that Ministry of Road Transport and NHAI both came out with the compensation mechanism to cover the steep escalation in the prices of bitumen directly with the base rate from the 1st April, which should be mitigating some of the price rise to a certain extent, which will give some relief to the margin pressure. But certainly, there will be margin pressure would be there. But going forward, once these tensions are subdued and there is a stability in the commodity market, so we -- in the Q3 and Q4, we should be able to achieve the healthy margins. And overall, in FY '27, so we're looking still we are hopeful of achieving 12% EBITDA.

Yes. Great. And sir, now on the inflow front, so 2 aspects. So what I understand is INR 3,975 crores that we have already won till now in FY '27 plus INR 2,000 crores solar that we have not included. So if I include that also, so it is kind of INR 5,000 -- INR 6,000 crores is already there with us now. So how much more are we looking at to bag in this year? And at the same time, how much projects or the value of projects that we have bidded and bid is yet to be opened?

See, we are expecting an overall new order book of around INR 15,000 crores in FY '27, out of which we got INR 3,957 new orders in highway sector. And as you said, if you consider, again, order book from the renewable energy, so it will be around INR 6,000 crores, so INR 9,000 crores to INR 10,000 crores further orders we are expecting in FY '27. And regarding the bids what we had submitted, we submitted 15 EPC bids and 1 HAM bid, which is around INR 14,000 crores, which are to be opened. The price bids are yet to be opened maybe before end of this month and some bids will be opened during the month of June. So we are expecting some projects from the INR 16,000 -- INR 14,000 crores where we already submitted bids.

Okay. And lastly, sir, a couple of balance sheet data points, if you can share. The retention money, unbilled revenue, mobilization advance, HAM debtors, water debtors?

Retention money is INR 264 crores. Mobilization advance is INR 155 crores. Total debtors is INR 1,660 crores. Out of that, HAM debtors is INR 372 crores. And water debtor is INR 868 crores.

And unbilled revenue would be how much, sir?

Unbilled revenue is INR 475 crores on 31st March '26.

And then this equity, INR 542 crores, so this, I hope does not include the 2 HAM project equity. What would be the broader one can take a 14% of the BPC that way? And this INR 542 crores, how much we will be investing FY '27 and '28 and also the solar INR 400-odd crores that we need to invest, how much in '27 and '28?

Out of INR 542 crores, around INR 350 crores will be infused in current financial year '27. And the balance will be in financial year '28.

Okay. And for solar, sir?

Solar...

BSS, I mean.

BSS [indiscernible]. Actually, the total equity requirement we have told earlier was INR 400 crores. Out of that, approx INR 120 crores will be infused in this financial year.

And good to see the breakup of the order book project-wise in the presentation.

We'll take our next question from the line of Jainam Shah from Equirus Securities.

Hope I am audible?

Yes, please go ahead.

Sir, the first question will be on the order inflow guidance. So we have guided for INR 15,000 crores of order book, out of which INR 4,000-odd number that we have already received, balance for INR 11,000 crores, which specific segments you will be targeting? Do we have anything in mind like roads will be this much, rest of the segment would be this much? Anything on that part?

60% to 70%, we are still targeting from the highway sector because NHAI has declared that they're coming out with a large number of highway projects, both on HAM and as well as BOT toll apart from the EPC. So 60% to 70% we are targeting from the highway sector and the remaining we are targeting from the non-highway sector.

Okay. And sir, the BOT toll that you told about, so we will be keen to bid for the BOT toll project as a direct contractor or it would be subcontractor to some entity who would have bidded directly?

No, no.

We are bidding directly.

We'll be bidding directly as we are meeting the qualification criteria. But of course, we'll -- subject to thorough due diligence, including detailed staffing studies and viability analysis, we'll see because the NHA is still working on the structure and very recently also they changed some of the parameters. So today, also some discussion is going on in one of the BOT projects NHA proposed to bid. So we'll see, but it will be direct bidding.

Got it. Sir, one thing on the top line. So if you see we are targeting 30% and 25% growth for next 2 years, which will be leading to, let's say, INR 7,000 crores plus revenue for us, which was the case for us in, let's say, a few years back '23 and '24 as well. However after reaching to that revenue somewhat even a few of the infrastructure company who is mainly into the road generally faces the pressure from the order inflow and then there has been a decline, which we have seen as well and other companies as well. So how do we see other sectors you can say ramping up for us, the qualification criteria? And going forward, how do we see road as a total order book? And of course, the NHAI pipeline and the overall awarding has been dip over the last few years. So how do we see our company beyond, let's say, INR 7,000 crores of top line, which we will achieve over the next 2 years?

See, NHAI will continue to be our focus client. because see, once this kind of -- there has been a very unhealthy competition over the last 2 to 3 years, coupled with the low awarding activity by NHAI. So these two affected the -- our order inflow during the past 2, 2.5 years. And consequently, the revenue also because there have been no major orders during the last 3 years from NHAI. So it affected our revenue also. But see, other sectors are emerging. A lot of projects are coming in railways and also transmission and renewable energy, including energy storage and also some projects are coming from area development and other things. We are looking at them, and we are pursuing those opportunities also. So that's why we said that around 30% to 35% we are expecting the new orders from these things as we are pursuing these opportunities actively. Certainly, that's why we have given around 30% for the FY '27 order book and then going forward, 25% that is for FY '28. But certainly, once this current geopolitical tensions are subsided, we'll relocate at it, and we'll share with you maybe sometime in the beginning of H2.

Got it, sir. Sir, on the margin part, of course, our majority of the revenue for this last year was from the road segment. Going forward, let's say, other segments are going to have a better inflows and our focus will be also on that along with the roads. So do we have any you can say because we'll be new to those segments? Will it get -- will it impact our overall margins at the stand-alone level or we continue to maintain 12% margin guidance? Because in roads, we have been doing it since long, the sectors would be new to us. So will there be any risk of the margin with new segments contributing more and more to the revenue?

See, we don't see any kind of a cross subsidy kind of a thing in margin perspective. As you know that earlier we were targeting a margin of 13% to 13.5% EBITDA margin in our portfolio. Now it is the guidance what we are sharing with you is around 12%. Considering all the factors...

See, I'm continuing from where I left. See, considering all the factors, we don't see because we are diversifying into other sectors that will impact the margins of the roads and highway sector. So we should be able to achieve a margin of 12% EBITDA, even with the kind of mix we are foreseeing roads and non-roads sectors.

Got it, sir. Sir, just last thing from my side. On the competition part, you told that because of the lower awarding along with the competition, the order inflow has been muted. Are we seeing any change in the trend from the competition for NHAI and projects or the same thing has been continuing for, let's say, latest projects, which you would have won frequently?

See, what we expect, what we see the competition in the EPC segment will continue to be very sharp and very, I would say, kind of a competition will be there in EPC. But NHAI, if you see the NHAI is, they came out with a list of projects they proposed to bid out over the next 1 year. So majority of them are HAM and BOT toll, where we are seeing the lesser competition in compared to EPC. So since we are in a position to invest into these projects, either HAM or BOT toll with our healthy balance sheet and our investable capacity, so we look forward to have a lesser competition in the HAM projects, that too particularly the larger HAM projects. So recently, we won this INR 1,700 crores worth of two projects because there, you see the number of bids are reduced compared to earlier bidding or earlier projects which were bid out. So going forward, we see lesser competition in HAM segment as well as BOT toll compared to EPC and the smaller size projects.

Next question is from the line of Jyoti Gupta from Ashika Institutional Equities.

Am I audible?

Yes. Go ahead.

Now we've seen some diversification strategy in your company where you've entered into mining services, solar and other adjacencies. What kind of return thresholds are being targeted in these segments? In mining services, in particular, what is the CapEx commitment and expected asset turns that you're expecting? And are there any plans to enter transmission, urban infrastructure or any other kind of infra, maybe defense opportunities that you're actually looking forward to?

The total CapEx required for this coal mining project was estimated INR 350 crores, out of which we have already infused -- made the CapEx around INR 250 crores in current financial year '26.

What are the expected asset turn, sir?

come again.

I just said what is the expected asset turns from this CapEx commitment, what you're investing?

We are investing in the plant and machinery around INR 350 crores.

Okay. I would rephrase it. You are entering into different sectors like mining services, solar and other adjacencies. What kind of return thresholds are being targeted in these segments?

See, before mining and before solar, we had entered into water sector in a big way 5 years before. As you know, the [indiscernible] drinking water supply project under Jal Jeevan Mission with an overall value of more than INR 6,800 crores, we entered into this segment 5 years before, Jal Jeevan Mission. And concurrently, that time, we also entered into irrigation project of around INR 1,100 crores in Andhra Pradesh. So we diversified into these sectors half decade before, and we could still able to maintain the margins reasonably around that percentage what we have been doing from earlier times. So there is no major impact on the margin. And with coal also where we got around INR 3,000 crores because we have been doing the capital for mining projects from the beginning to meet our aggregate requirement. So we have enough kind of experience and expertise in mining activities. So in the coal as well as the solar, so the margins would be around -- it will be [indiscernible] to the margin that we have been securing in road sector. So overall, there won't be any major impact on the overall margin. So we should be able to get the similar returns in these two sectors also, including highways, what we have been getting and water sector.

We'll take our next question from the line of Vaibhav Shah from JM Financial.

Yes. Sir, on solar project, when do we expect to start the work?

See solar, maybe will be physical execution will be starting from Q3, the third quarter of this year. We -- as you know the land we have already identified and we entered into some kind of arrangement with the aggregators. And the connectivity also we received priciple approval. We are expecting final approval also in 1.5 to 2 months' time. Going forward, then we'll enter into power purchase agreement with the NHPC, then we'll start physical execution starting the initial [indiscernible] and followed by construction.

So what revenue are we targeting in '27 and '28?

We are targeting around INR 600 crores in FY '27 and remaining amount -- solar, INR 600 crores. INR 600 crores and INR 1,400 crores in FY '28.

Okay. Sir, on JJM, how have been the payments? Have you seen any improvement in first quarter? And what revenue are we targeting in '27, '28?

See, they issue some payments they released because the state government released from their side and to be able to get around INR 300 crores payment during the current financial year. And we are also expecting some more payments maybe before end of the quarter, June 30. And FY '27, we are targeting INR 750 crores revenue with hope that the government will release more and more funds for this project, both centers.

Sir, what would be the cash in PNC Infra Holdings as of now?

The cash balance in PNC Infra holding is around INR 1,100 crores.

Okay. Including current investments?

Including current investment.

Yes. Okay. And sir, on the AD side, so we have received 2 new HAMs and also AD spending for older HAM. So we were targeting to get AD in 1Q '27. So are we on track now for Western Bhopal?

Western Bhopal, we are expecting AD before the end of the Q2, I would say, before end of September, 30th September, and we should be able to commence the physical execution in Q3.

So what has been the reason for so much delay in the appointed date for that project?

See, the original alignment, they faced some serious hindrances and impediments in the original alignment because of the land acquisition issues and the other environmental issues. So they changed the alignment. Because of the change of alignment, it took prolonged time. So now the things are settled, government has approved the new alignment and the project. So certainly, we'll be executing some kind of agreement and appointed date is expected before end of the second quarter. So the commencement physical execution will begin during the current financial year, say, in the third quarter of FY '27.

Okay. Sir, lastly, on interest cost, it has raised sharply to INR 30 crores in Q4. So how do you see it going forward?

Interest cost has increased in Q4 due to two reasons. One is the utilization of working capital. And the second is the interest on term loan of loan which is taken for the machine financing.

[indiscernible] expect going forward in FY '27?

FY '27, we see that the interest cost will be reduced INR 3 crores to INR 4 crores from the current quarter.

Next question is from the line of Archit Agrawal from Step Trade Capital.

So my question is [indiscernible] execution pace been slow despite the strong order...

See, as I mentioned, see, the order book of the INR 4,404 projects, 4 HAM projects, 3 of NHAI and 1 of MPRDC, though it's a part of the order book, 25% of the order book, we could not commence these projects until, I would say, October, November of this year. And one of the projects still we had to get the appointed date, that is the MPRDC projects. Delay in commencement of these projects resulted in the lesser turnover, though we got the order book. And other things, for example, coal, we have a 5 years of horizon for the coal, the order what we got. So we got the 5 years' time for the coal projects, whatever is the order book, it will spread over next 5 years. And the solar also, we are in the development phase. So that is there. But going forward, definitely, this execution will be geared up. As you said that we are expecting 30% top line growth in FY '27 and thereby another 25% top line growth in FY '28.

Okay. And what will be the margin guidance for FY '27 and '28?

FY '27, the margin guidance is 12% EBITDA, around 12%. FY '28 -- going forward, we'll share with you because the current volatility in the commodity prices and then consequent increase in our input cost. So we'll not able to tell. But it should be around 12% in FY '28 also should the things be normalized going forward.

And what are the key reason of sharp EBITDA margin compression from 19% it was in FY '25 -- and now it's about 12% to 13% this year?

See, FY '25, we received more than INR 400 crores payment towards the arbitration awards published in our favor through settlement under Vivad-se-Vishwas II. And also, we received INR 50 crore plus bonus from one of the projects we completed for MSRDC that is Nagpur-Mumbai Expressway Package 4. So because that reflected in the higher turnover in FY '25...

We'll take our next question from the line of Sarvesh Gupta from Maximal Capital PMS.

So sir, first question is that last year, when we had given the guidance for FY '26, initially, we were assuming 15%, 20% growth, then it was subsequently downgraded to 5%, and we ended the year with a 20% down in terms of revenues. So basically, giving any guidance is very difficult because the approvals and all were pending and you could not get that in time and execution was hampered massively. So sir, this year, when I look at your guidance of INR 6,000 crores, I mean, if you can break it up between, let's say, all the projects that you are doing where you don't have any approval pending. So what is that clean sort of revenue where the execution is just pending? What is that out of that INR 6,000 crores? And what is the amount that you are penciling in where you are still waiting for various approvals, et cetera? And if they don't come, then this INR 6,000 crores will be under question mark.

6,000 crores guidance we have given, very consciously, we are giving a INR 6,000 crores guidance. Of course, last year, there was certain uncertainty about the delay in the appointed date for the already awarded projects. But this INR 6,000 crores guidance, what we are giving based on the projects which have been duly awarded to us, we are not considering any new projects that we are going to secure during the remaining 10 months period of the current financial year, then one thing. Second thing also, this guidance is largely based on the projects where the appointed date has already been declared and also then projects are going up. For example, the large projects of 3 HAM projects, which are going on and earlier 2 more HAM projects of NHAI that's also in progress. And we got 2 major projects from MSRDC on Jalna Nanded Expressway and also Pune Ring Road. Those projects are also going on in full swing. So considering all these aspects, whatever guidance we are giving this year is on a firm orders as well as the projects which are going without any pending of anything. Of course, only one project that is the Western Bhopal, we should need to get appointed date and the rest of the projects are okay. So unlike last year, we don't foresee any major hurdles or any unforeseeable things that will come into achieving our order. So we should be able to get. I agree, last year, we were a bit optimistic when we have given order guidance in the initial year, but later, we faced these difficulties. And there was a prolonged delay in the declaration of appointed date for the NHAI HAM projects due to land acquisition issues and delay in the Western Bhopal bypass project.

So sir, this year, this Western Bhopal and then this solar project where you are penciling in INR 600 crores. So what is pending, sir, here? So one is appointed date is pending. So when -- how much are you penciling in for Bhopal this year? And for solar project of INR 600 crores also, I think you have not yet started, right? So what is pending there and when it will start?

See, our INR 6,000 crores, what we are projecting now with the guidance of 30%, we have taken very minimal value of work around INR 100 crores for the Bhopal Bypass project. Though we are expecting the physical execution will commence in the Q3. That is one aspect. And the second thing in case of solar, out of INR 2,000 crores of the order what we are expecting from the solar, only 30% we have considered in the current financial year. As we had said earlier -- solar the land acquisition and the land position is in advanced stage. We identified the land and also finalized the initial kind of arrangement with the aggregators and all. We are expecting minimum 30% physical position of the land before execution of PPA. Then going forward, then initially, the procurement will be there, which will be high-cost items procurement will be there. So we are hopeful of getting INR 600 crores from the solar project this year, EPC. Even as a fallback kind of a thing because there are other projects, we have not taken any project work done from the 2 new HAM projects, what we secured from NHAI. So if we're able to achieve the appointed date during the current financial year, we'll get some revenue from these 2 new HAM projects in Uttar Pradesh, what we secured recently. So going by some kind of a fallback arrangement we are having, so we should be able to achieve INR 6,000 crores comfortably.

And sir, on this margin issue, so like earlier, we had mostly HAM projects from NHAI where generally it is considered that margins are better and payment terms are better. delays are less in terms of release and fund and everything. Now if I look at your order book, it is more geared towards all state government projects where the fund that we receive from the state governments can also be under question mark and margins also, we don't have that enough history. So how do you look at that, sir, both margin risk and the fund release risk itself?

See, state government -- see, if you see the highway sector, the state government project is only one project from MPRDC. If you go by the MPRDC's past history, they're able to make payments. And this also only 40% payment they have to make during the construction phase being a HAM project. Remaining 60% will come in the form of annuities and interest over the balance payments. So we don't see any major challenge in securing payment from MPRDC for the state project -- this state highway project. All the remaining highway projects are of this Government of India's NHA and MoRTH. And 2 more state projects are there from MSRDC. Since beginning, we have been getting the payments regularly. So there also. Package are EPC. Yes. Both packages are EPC. Here, there is no investment risk. And also, we are getting payments regularly for the work done what we are progressively doing the work.

At least 12% EBITDA margin.

Sarvesh I request you to join back the queue.

Concluding 12% EBITDA margin, overall 12% EBITDA margin, we should be able to achieve.

[Operator Instructions] Next question is from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on a decent quarter. So my first question is, now the commodity prices have gone up. So bitumen, which is a large part of the cost and associated inputs are on the fuel cost. So when the SPVs give us the EPC project, so how are we protected on margin? Are these fixed price contracts like if we get a HAM in SPV. So when it comes to EPC to up, is it a fixed price or it is a variable price? So how do we adjust for commodity inflation in that?

Also. See, it's on a back-to-back basis. Whatever SPV is getting the price index multiple, which covers both WPA increase as well as the CPI increase, which will largely cover other things. That will be on a back-to-back basis. Similarly, where the bitumen price is now, they are directly compensating between the base price as well as the price in that particular month. of execution, that will be also passed on to EPC from SPV on a back-to-back basis.

Whatever the SPV gets as inflation from NHAI is passed to you back to back. So that is what you are saying, right?

Yes, yes, yes, yes. This is a part of the EPC contracts, what we executed between SPV under the EPC contract.

Okay. Second question is, what is the pending payment from the Vertis Infra now? I think out of the INR 2,500 crores, INR 1,700 crores, how much we have received and how much is pending?

What is we have received all the things except I think...

We have received the entire payment.

Speaker 12 Okay. And what will be the road map for the monetization of the next set of assets beyond the 12 assets? So how are we looking to monetize the projects where we have achieved PCOD or COD...

Wait and watch.

Wait and watch.

So we'll certainly let you know once we reach out any kind of framework mechanism to how to monetize these projects. So we are evaluating multiple options. So certainly we'll share with you.

Nothing with Vertis. I mean, beyond the 12 assets which we have monetized with Vertis, I mean, now we are -- for other assets, we are looking for different investors?

No, it's really premature to say anything. So please wait as Managing Director said. Please wait because just now, we have got only out of ongoing 14 assets, including 2 [indiscernible] We are also evaluating.

Yes, we are evaluating. And only 5 assets only got the PCOD.

Next question is from the line of Sudeep Bora from AMBIT Capital.

Sir, I wanted to know about the Varanasi Kolkata packages. So like we got the ADs in September, October. And you said in your remarks that the progress has been slow in these packages. So like what is the outlook on this currently? And like how much revenue are we seeing in FY '27 from these 3 packages?

After commencement of these packages during the month of October, physical execution, we achieved INR 336 crores revenue from these three packages during FY '26. 36 crores we already achieved. And going forward, in FY '27, we are looking at around INR 1,600 crores to INR 1,800 crores revenue from these packages.

Okay. So there's no like no obstruction or delays right now.

There is no obstructions. All 3 packages are going smoothly. We are executing so in full swing. So we don't foresee anything -- any major obstruction or anything as of now. So we should be able to complete these 3 packages within the stipulated time of 24 months.

Okay. And regarding the Pune Ring Road and Jalaand0, I think one of them was having some issues. So is it sorted? What is the outlook for '27?

See, these issues, both Jalna-Nanded and Pune Ring Rad, what are the issues initially having some land acquisition issues by then last year for Jalna-Nanded, we encountered a very prolonged monsoon, very intense and record-breaking monsoon in Jala-Nanded. Now all these issues are behind us. So we should also be able to achieve good kind of a turnover from these 2 projects. also around -- we are targeting around INR 1,500 crores to INR 1,600 crores in FY '27 from these 2 projects. And we don't foresee any major issue in these things.

Okay. And sir, about the Haryana Orbital rail.. So that is getting stretched since a long time. It's sitting in our order book since long. So any update on that?

See, in the Haryana Orbital rail, there are certain issues of a land acquisition because it's falling in Aravalli range and other thing. And also, whenever there is restrictions imposed in the construction activity in NCR to curb the pollution. So these restrictions are also -- we are also facing these restrictions in construction activities that is there. Nonetheless, we have completed more than INR 400 crores work, which is more than 53% of the work we already completed. Now balance around INR 360 crores work is there. So we are expecting that this balance work will be completed in FY '27 as well as in FY '28. -- the execution is slow than what we expected, but we are eligible for the necessary extension.

Okay. So remaining work you are expecting to get completed by FY '28?

Yes... FY '28.

Okay. Okay. And sir, about the mining project, like have we started like -- I know we have started with the initial work, but the major revenue flow that would come from which year? And how much are we expecting in, say, '27 and '28?

See, in the mining, we started this thing, the execution and mining activities we started. We achieved around INR 68 crores turnover during FY '26, the year what we completed. And we are expecting another INR 400 crores turnover in FY '27 and FY '28, we are expecting around INR 600 -- so because we got a 5 years' time for this entire thing of INR 2,956 crores. So we should able to get a decent progress in the beyond FY '28 also. And we should be able to complete the entire scope within the time.

Next question is from the line of Vasudev from Nuvama.

Sir, I just want to know our progress on the Andhra irrigation project, where are we over there?

See, irrigation project, see, we received some payments around INR 300 crores from the government of Andhra Pradesh after initially, we could not receive any payment we received. And till 31st March, we achieved INR 380 crores -- INR 80 crores worth of work done we completed. And remaining work done is around INR 700 crores. So this year, we are targeting around INR 200 crores work in FY '27 And also then this further progress and all will depend upon the receipt of payments from the government of Andhra Pradesh. We are hopeful that being a priority project, they should be able to release. And we got time up to September '26, they have given extension and now we have applied for another 2 years up to September '28.

Okay. Sure, sir. And can you just help me with the toll collection numbers and just a bookkeeping question on CapEx that we did in FY '26 and our target for FY '27?

Just the number of toll FBI in quarter 4 financial year '26 is...

I'm sorry, Vas, can you use your handset mode, please? Your audio is not very clear.

The management is answering the question. Yes, sir.

The toll of Highways is INR 13.3 crores in this quarter. And for [indiscernible] INR 32 crores. And for GIDC Narela project is INR 2.65 crores.

Okay. Sure, sir. And just on the CapEx part?

CapEx for financial year '27, we are targeting INR 150...

Next question is from the line of Bhavin Modi from Anand Rathi.

Sir, my first question is with respect to the MDO. Sir, you spoke that you have clocked in the revenue of INR 68 crores in FY '26 and INR 400 crores in FY '27 is the plant, right? So sir, is this the EPC revenue or the mining fees that you are speaking about?

It's the EPC revenue. It's nothing is mining fee. This is the item rate-based contract. whatever revenue we are expecting, that is from the EPC revenue only. So we are expecting around INR 35 crores on an average per month. So we are expecting around INR 400 crores revenue in the FY -- and going forward, around INR 50 crores per month to INR 600 crores in FY... [indiscernible]It's not. It's not [indiscernible] investment no investment is involved. It's a pure EPC work on an [indiscernible] basis. .

So sir, there will be no separate creation of the SPV, right, generally, which happens in the MDO model.

No, no, no. It's on the company's balance sheet only.

Understood. Sir, second question is with respect to the BSS thing. So you mentioned the order book of INR 2,000 crores. So this is a pure EPC? Or does it also include the procurement of bought out components?

No, no. See, there's nothing -- any EPC kind of a thing is there. But it's a TBCB kind of model, we'll be getting charge for the power we transferred into the grid and through gas and directly. And EPC will be the byproduct to be what we'll be routing through the project through our parent company. So...

But suppose whatever the bought-out components are there, like, for example, transformers or something, so that will be directly purchased by the SPV or will it be purchased through the [indiscernible] EPC company?

As of now, we're looking at it, it will be purchased by the PNC being an EPC contractor.

And then it will be passed to the SPV, right?

Yes, yes, yes.

And sir, the last question, now that the bitumen prices have skyrocketed. So do you see NHAI already with the tenders that they have floated, -- so are they going to revise the authority cost either by corrigendum or through retendering? So anything -- are you looking at -- have you seen anything -- any discussion ongoing for that, especially for the tender?

We are expecting a revision of this authority cost because as of now, the compensation mechanism, what they have introduced is only for 3 months from 1st of April for the ongoing projects. So the projects which they are going to bid out from right now, from the current point, it could be either cost should be revised. Otherwise, this kind of compensation mechanism should further continue. Okay. So won't this elongate the tendering process? Or do you see -- would be through a simple corrigendum? How do you see it? It will be a simple corrigendum. Earlier also, they revised the estimated cost to tenders through Addenduma and corrigendum. So this will be also will happen like that only.

Next question is from the line of Parth Thakkar from JM Financial.

When can we expect the AD for the 2 new HAM projects...

Which project?

The 2 new HAM that we received L1.

See, once we get the letter of award and then followed by execution of concession agreement, we have a 5 months' time for the financial closure. Similarly, NHAI also will have a 5 months' time to fulfill their conditions precedent. So take everything by thing, we are expecting appointed date declaration in Q4 of the current financial year...

Have we submitted.. And have we submitted bids for any of the BOT projects? And if yes, what would be the size?

No. As of now, we have not submitted any bid for any of the BOT toll projects. We are evaluating the opportunities, the BOT toll projects, which have been floated by NHAI.

Okay. Last question, sir. What would be our outstanding receivables from the Canal project ?

Canal project out [indiscernible]

Outstanding in Canal project is around INR 300 crores.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments. Over to you, sir. Sir, any closing comments from you?

Yes, yes. Thank you, everyone, for your active participation in our earnings call. Should you have any 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. Thank you very much.

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