Power Mech Projects Limited (POWERMECH) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Power Mech Projects Limited Q2 FY '22 Earnings Conference Call hosted by Nirmal Bang Equities Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Bhandari from Nirmal Bang Equities. Thank you, and over to you, sir.

Thank you, Inba. Nirmal Bang Equities welcomes you all to the Q2 FY '22 Results Conference Call of Power Mech Projects Limited. The management is represented by Mr. S.K. Ramaiah, Director, Business Development; Mr. J. Satish, Chief Financial Officer; Mr. S. Rohit, Vice President, BD and Operations. I now hand over the call to the management for their opening remarks, post which we can take questions from participants. Over to you, sir.

Yes. Thank you, Mayank. And good afternoon, everyone, and thank you very much for joining the earnings conference call for the quarter and half year ended 30th September 2021. Before I begin, I would like to wish you a happy new year and hope that you and your family are keeping safe. Along with me, I have Mr. Sajja Rohit, Vice President, Development -- Business Development and Operations, son of Mr. Kishore Babu, CMD; Mr. S.K. Ramaiah, Director, Business Development; and SGA, our Investor Relations advisers. I hope you have had the chance to view the investor presentation and financial results. And also, you can view this on the stock exchange and even on our company's website. Recent month started on the back of winning large O&M orders, totaling around [ INR 775 crores ], strengthening our order book in O&M and booking revenues for widening in comprehensive O&M space, in addition to MDO order for 25 years' worth of INR 9,294 crores, which can support to generate higher margins with sustainable revenue for a longer period. While quarter 1 FY '22 was affected due to adverse impact from second wave, quarter 2 saw the situation improving drastically, with the ramp-up in vaccination numbers across the country and even at our sites. We continued to follow all necessary guidelines to safe guard our employees at all our sites as well as ensuring that construction and maintenance operations are running smoothly. To update you with the quarter's development before we open up floor for your question-and-answer session. The reported total income for quarter 2 FY '22 is INR 544 crores and the EBITDA is INR 63 crores, and reported PAT is around INR 27 crores, whereas quarter 2 of last financial year, the total income was INR 347 crores, reported EBITDA was negative by INR 40 crores and the PAT was negative by INR 52 crores (sic) [ INR 55 crores ] net of minority interest. The revenue mix for quarter 2 is as follows. Erection business has contributed INR 106 crores; Civil, around INR 223 crores; Operation & Maintenance, close to INR 188 crores; and the Electrical business added close INR 23 crores; and other income close to INR 5 crores. In the same quarter in the previous year, the mechanical business contributed INR 88 crores, whereas Civil, we did around INR 101 crores; Operation & Maintenance contributed INR 146 crores; and Electrical business contributed close to INR 11 crores. This performance has been in line with our projected numbers, keeping in mind the heavy rainfall in several regions and each in line with predetermined estimates. In addition to the quarterly performance meeting estimate, we would like to highlight the annual guidance given earlier still continues to be on track and will be met on all parameters. This is further expected to solidify on the foundation of a strong order book, recent order wins and a healthy pipeline of orders identified by our business development team. The overall target for the year remains intact and the execution level for quarter 3 and quarter 4 for the year will continue to be higher compared to quarter 1 and quarter 2, like any previous year in the journey of 22 years. As said in the previous call as well, Power Mech has risen to the fore and developed a high bandwidth in terms of infrastructure and capability to execute crucial projects in the range of INR 600 crores to INR 850 crores per quarter, and the credentials earned over time enabled us to bid for and execute projects on its own merit and capabilities without partnering with large players. This saving in royalty costs would benefit the margins going forward and be a true reflection of the effort put over the past few years. Margin profile expected to go up gradually in midterm, increase in O&M competency will help in increasing margins to a great extent. In addition, once the MDO project gets operational, operating margins are expected to go up further. Talking about finance costs. They have been steadily decreasing as a result of lot of measures being taken by the management in terms of debt utilization as compared to previous quarters. Overall, the utilization of debt for this period, quarter 2 FY '22, is comparatively low, though the closing net debt is higher by around INR 28 crores compared to 31st March 2021, on account of support to new projects like U.P. water project, Tuticorin O&M project, mobilization, et cetera. However, average utilization for the period is a bit lower. And coming to the receivable cycle, it is ranging between 70 days and 75 days, excluding BHEL. And with BHEL, it is around 80 days plus. Improvement is further expected in the working capital cycle with a change in the business mix and the customer mix. More interestingly, the monthly collection continues to be very healthy, in the range of INR 190 crores to INR 230 crores per month. And this is expected to further go up post quarter 3. The company has generated positive cash flow from operations during the first half, which is around INR 22 crores, and we are expecting this trend to continue further. The order backlog for the company stands at INR 6,515 crores as on 30th September 2021, and for backlog as on today, including the projects in L1 status of around INR 547 crores that stands at INR 8,337 crores, excluding the MDO Project, which, if included, it makes around INR 17,631 crores. Thus, even at a modest execution rate, now that the monsoon season is over, we are poised -- we are expecting the growth momentum to continue and more than deliver on our set targets and outlines. This forms a strong base for our confidence going forward with a good liquidity position, healthy order book, measures in place to manage projects in the uncertain environment. I request Mr. Sajja Rohit to add to more developments. Mr. Rohit?

Hello? I hope I am audible. Thank you. Thanks a lot, Mr. Satish. And thanks a lot for also highlighting a few aspects of business development activities we have done over the last 2 quarters. I will just add to whatever you said...

Sorry to interrupt, Mr. Rohit, if you're on a speaker mode, can you switch it to handset, please, and speak? Your voice is sounding a bit muffled, sir.

I'm not on speaker mode. I'm using the handset.

Okay. This is a little better.

A little better? Okay. So by the starting -- beginning of this financial year, we already had an order booking of around -- orders to be executed of around INR 7,300 crores. And in the first 2 quarters, we have bagged orders worth around INR 2,300 crores. And we -- our previous trend suggests that we'll be booking -- our target for this year is around INR 4,400 crores to INR 5,000 crores of healthy order book that will help us maintain our EBITDA margins if not increase our EBITDA margins a little bit. So we are targeting around INR 2,550 crores or more in the next 2 quarters in Q3 and Q4. So this is a little bit about an overview of the business development. And we are also targeting a few new sectors. So we are already present in the power and O&M sectors. So we have already taken up our first non-power sectors with O&M project with IOC in Haldia, and we are expecting a few more orders there. And we see this as one other industry that's going to -- that you'll be hearing more often going forward because we see a lot of potential in this industry. And apart from non-power sector and O&M, we are also focusing a lot on the overseas business.

I'm sorry to interrupt, sir, the voice is not very clear. We will disconnect and reconnect you. [Operator Instructions] Ladies and gentlemen, sorry to keep you waiting. We have the line for Mr. S. Rohit connected. Sir, you may go ahead, please.

Thanks for reconnecting. So I was talking about the guidance for the overseas business. So we also see a lot of potential for both the power sector O&M and non-power sector O&M in GCC and Africa and that's where we are really focusing on. We believe it's going to be one of the [indiscernible] next 5 to 7 years. We can -- there's still a lot of scope for us to grab market opportunities here. That's pretty much it from my side. I'm handing it over to Satish again.

Yes. Mayank, you can take it forward for the question-and-answer session.

[Operator Instructions]

Mr. Ramaiah. Sir, are you there?

Yes. Mr. Ramaiah is there, sir.

Yes. Sir, can you just add on this opportunities pipeline?

Mr. Ramaiah? Sir, would you like to add a few opening remarks?

Yes. Ramaiah here. Thanks, Rohit and Satish and Nirmal Bang team and the participants. A few updates on what has been told by Satish and Rohit is, I think the main aspect which has been is that there have been new territories and new customers which have added to the organization's profile. And then there is a lot of upstream on the O&M scope of the work, which has gone up by almost 36%. And the present backlog of INR 8,337 crores, it bodes well for the organization's growth in the next 2 quarters and also the next year. And as far as the broad breakup of this -- order breakup is there, the domestic segment cost is about 88% based on September backlog, INR 5,737 crores. And as on today, November, this backlog has also improved substantially to INR 7,552 crores. And the power sector business continues to be there because of the O&M and the many jobs we are doing in the infra and civil side and other -- mechanical side and other things. It is -- as on today, it is around INR 5,359 crores, 64%, and the non-power side is INR 2,977 crores. I think all this combination of the businesses, what has happened is that the key things which have happened in the current year has been the major from Singareni, which happened in the first quarter; the Adani Road Project, which has happened recently, at INR 646 crores; and then Udangudi, we are L1 there, INR 345 crores for the civil works. There is a major breakthrough in 2x600-megawatt Coastal Energen Private Limited, a 5-year O&M contract, INR 391 crores. And the new entry what we have made is in NMDC with the 2 jobs worth INR 146 crores. And another breakthrough what we got in EPC segment is Talabira in continuation to the Kurmitar, what we took last year, about INR 80 crores. And then the first time we have entered in a bigger way in the FGD segment at Kahalgaon civil and structural work for 4x210-megawatt FGD package INR 112 crores. And then about 15 to 16 O&M repair jobs have been taken in the first quarter of about INR 34 crores. And then a major breakthrough in the desalination plant O&M jobs in the export sector. I think these are the positive things which have happened. And as far as the operation -- as far as the manpower is concerned, it has come back to the normal. In fact, what was the peak down of 8,000 has come to almost 13,500 in the construction labor is concerned. And O&M is fully manned with over 11,600 people. And the rest of the -- around 10,500 belongs to the Power Mech group, both in the domestic sector and international sector. Today, the total headcount of temporary workers, permanent staff, engineer, supervisors and [indiscernible] exceeds about 30,000. That means the resource management has been augmented, and it is catering to the new expansions and the new segment of the business. And that is a key aspect of the growth, which we can look into. And one more -- a few things what I can say is that on the O&M, particularly, today, we have substantially made inroads into the IPP sector and also the public sector, government sector. In government sector, perhaps, as we earlier explained, NTPC, we are doing 5 jobs and the Singareni jobs which have been added recently. Now the focus will be to continue to see what is the balance we can do in the IPP sector and more focus on the public sector because the total installed base in the public sector is substantial. Therefore, 149,000 megawatt installed base, that is a segment which has to be tapped. And then the opportunities, as Rohit was telling, in non-power sector, we have to look at the infrastructure side, aligned in line with the National Infrastructure Pipeline on the various infrastructure and then in oil and gas sector, refinery sector. And then new segment, what we added in the mining sector and also iron ore and coal handling plants on a turnkey basis. And the opportunities, which are definitely going to come up because of the investments coming in the petrochemicals and then fertilizers. And then steel plants. Steel plants also, a lot of growth is there. We have already started the business a couple of years back. We have to look at more opportunities there. Therefore, as on today, we are tracking about 25,000 crores of jobs in different segments in erection, non-power, civil, infrastructure, electrical, exports, O&M, then water systems also. Water system is another important thing because drinking water scheme for everybody. And that is -- we're already there doing about 1,200 crores of jobs. Therefore, this is where we have to carry forward. And some of the new initiatives, what we have taken on the EPC, should see how we are going to perform. That is a new beginning for the organization and also tying up with some of the leading engineering companies in the country. Thank you very much.

Thank you. Sir, may we open the line for questions now?

Please, madam.

[Operator Instructions] We have the first question from the line of Faisal Hawa from H.G. Hawa & Company.

Sir, during the last 2 to 3 months of crisis for coal, did we see a lot of pressure from Coal India Limited to really evacuate the coal urgently? Do you feel that this could lead to more privatization or outsourcing of coal mines and there could be more orders for our company going forward? And second, sir, which are the other [ sectors do you feel ] that a lot of orders would come in? Are we doing something for railways also?

Yes. I think that is correct also because coal is a base fuel and a [ base to our station ], and continues to play a role in spite of the lot of pressure going to be -- to treat coal as a dirty coal -- as a dirty fuel. But it is [ base fuel ] in this country. And even the recent COP26 Glasgow meeting also, India has not given any concessions on the coal this one. Therefore, the pressure will be there for availability of coal in the private sector. In fact, many of the private players have already taken. We have executed -- recently we have taken a job from Adani at Talabira. That is a small -- in association with thyssenkrupp. And our guesstimate is that Coal India is also doing mine side. Mine side, there is a lot of opportunities in mechanization of the plant. Only 25% of the coal mined by Coal India is mechanized. Balance 75% is not mechanized. They are looking at it. And the new mines are also being developed by the private players also. There will be 2 types of opportunities: only is the mine side coal handling and then the coal handling in the end user side. So the estimation is that about 25,000 crores to 40,000 crores of opportunities should be available, not only on the coal side, but in similar facilities in the iron ore and mineral process also.

So how are we tying up with NMDC, sir, on the iron ore side?

Pardon?

On the iron ore side, what is the nature of our tie-up with NMDC?

No, NMDC, we are doing -- 2 jobs we have taken up. That is in Kirandul. That is mainly the civil works on the expansion what they are doing in the iron ore beneficiation and then crushing and screening unit. That is what we have done. We have also done the -- we are in the process of bidding and evaluating the offers of around INR 800 crores and INR 900 crores with NMDC for the Bacheli plant. And that type of iron ore beneficiation and then other minerals, these type of plants are expected to be future. And we are having a tie-up with thyssenkrupp on one side and with another company FLSmidth, we have got 2 tie-ups. And we have to see how to see how to use these tie-ups for the future opportunity.

And sir, about the railways, are we looking at other infrastructure opportunities that they are going to come up? Any other new verticals?

Infrastructure, as I told you, we are tracking nearly 20 -- total -- out of the total 25,000 megawatts, the infrastructure segment is substantial in civil non-power of about 11,000 crores, which is a combination of the water system there, then drinking water system there, sewage treatment plants, then roads and then railways. Railways, we are already there in the electrical side and also electrification side and also doing the railway track doubling and other jobs. Therefore, we have got references now and railway's expansions continue to be there. Their investment, as you know, it is exceeding INR 1 lakh crore per annum. And the other opportunities in the infrastructure mainly is funded -- mainly propelled by the NIP, National Infrastructure Pipeline. That is going to be there. Therefore, we have seen the success like Adani, we have taken INR 650 crores of jobs recently in Telangana. That type of opportunities will be there. And we are tracking this totally around INR 11,000 crores in infrastructure.

[Operator Instructions] Our next question is from the line of Rajnath Yadav from Choice Equity Broking.

congratulations for reporting relatively better set of numbers for the quarter. I have a couple of questions. The first one is related to the MDO project. So my query is basically how the equity funding will be done? And what will be the mode of funding for other CapEx related to these projects? And so -- and second question is on the execution rate guidance, which was provided in the earlier quarter conference call. So how confident is the company in achieving those levels, especially for the rest of the year?

Yes, yes. This is Satish here. See, this MDO project is now in the approval and the planning stage. So probably by next 8 to 9 months, we're expecting that clearance will be there. And this is expected to be developed over a period of 2.5 years to 3 years. So the funding -- the main source will be, of course, the internal accruals because the way we have set up our growth plan, number one, and as the final bills and [indiscernible], which we are expecting to come over a period of time. We are envisaging equity of close to INR 100 crores for this project over a period of 3 years. And of that, 74% will be by infused by Power Mech and 26% by our technical partner. [ INR 74 crores ], we have mapped from our internal accruals. Of course, if we need to look for some external options, we will always look. But as of now, the plan is well set to infuse [indiscernible] for the next 3 years. And in terms of the guidance what we have given, we are absolutely on track. As we said, the execution, the bandwidth for any quarter is well set, INR 550 crores to INR 850 crores. And you would have seen that last quarter of FY '21, the quarter 4 itself, we demonstrated INR 750 crores of top line. And we planned INR 600 crores for the first quarter and we did INR 620 crores. And for the second quarter, we set a target of INR 550, INR 560 crores, and we were very close to that number. And quarter 2, quarter 3, the target what we have set is well in control. So we are very confident that the overall guidance what we have given, it is on track.

Okay. And sir, one query related to MDO. Sir, you said that total equity funding will be INR 100 crores, and it will be deployed over 3 years and company's stake is 74%.

As per the plan. That's true.

But if I go one quarter back, and I believe in the -- if I'm not wrong, in the earlier conference call, it was said that total CapEx will be around INR 280 crores, and of that, INR 80 crores will be for equity funding and rest will be for the CapEx related to this project. So my only concern is that how the residual amount, that is, the CapEx amount will be funded. Because most of the CFO will be cash -- operating cash flow will be deployed as an equity funding and for CapEx for the existing projects. So how much will be left for this -- how much will be left for the CapEx for this project from the internal accruals and how well we are positioned to get finance -- outside finance?

Yes. See, the total project cost, it will vary, INR 250 crores to INR 300 crores over a period of 3 -- 2.5 to 3 years. So the INR 100 crores is the equity component, which we are planning for next 2.5 years. Now as of now, this is only CapEx project, where we need to look for some investment. So this may be well within our internal accruals. When we grow, okay, we look for some other projects we need to look into. But as of now, this is the only project what we have on hand from an investment perspective.

Sir, I'm not able to get it clearly. Once again, I just wanted to ask how much of the debt funding will be -- means how much of the funding will be from internal and from outside fund. If you can elaborate this.

Yes. See, what I'm trying to say, sir, the total development for this project, which is 2.5 years, we need to infuse 1 equity and the second is the external debt [indiscernible] INR 100 crores plus INR 220 crores. That would be the total CapEx, okay, over the period 2.5 to 3 years. So the INR 100 crores of equity, that's a combination of Power Mech and the JV partner, of that 74% will be from the Power Mech side and the 26% share will be from the JV partner.

Our next question is from the line of Abhishek Poddar from HDFC Mutual Fund.

Sir, are you also bidding for renewable projects now?

No. Renewable projects, yes, maybe as a sort of tie-up through Adani or agencies like that. On our own, we are not doing it. But we will look at the opportunities as and when it comes. But we have to look at these things as a future.

Okay. So at present, you are not bidding or you have not bid at present, sir?

No, we have given some sort of a support bid to -- as an initial thing to Adani people. We have to see how it takes shape.

Okay. And this will be solar and...

Yes, yes.

Okay. And what would be the plan going ahead? Would you continue to give support?

See, that is a question of investment. Then we have to take the role of a developer like what we have taken in the case of MDO. Therefore, similar role we have to take up. That has to be -- as a business policy we have to decide on that.

Okay. Sorry, I'm not clear. So you want to be a developer here, you're saying?

Yes. In this case, we have to...

Sir, can I pitch in? Ramaiah sir, can I pitch in quickly for this -- yes. So to answer your question precisely, yes, we are looking for opportunities from the renewable sector. And we did bid for a couple of projects, and they weren't [indiscernible] wanted to execute them. We couldn't compete with the already incumbent players. So we just had to cede to competition. But we are -- yes, we are looking for opportunities in the renewables sector, primarily solar energy for now. So either as a developer or -- we don't want to enter the EPC space in this business. It's either as a developer or we want to build own office [indiscernible], something like that. I hope I am clear.

What kind of equity participation and hurdle rates are you looking at here in this sector?

Probably, Satish sir, can you pitch in to answer this question?

Of course, the hurdle rate, which is in the range of minimum 16% to 18%, that is what our expectation. And basically, anything around INR 100 crores, INR 120 crores. Yes.

Okay. So any amount of total exposure that you have in mind if you go there?

Now we are exploring multiple. Given a good chance, probably we will look into. So the maximum, the equity side at any time, max of INR 120 crores. Beyond that, we are not looking now. So we have to work a reverse formula how much the funding is possible and INR 120 crores outlook from outside. That is what we are looking at.

So INR 120 crores is like your share of the JV?

You're right, sir. You're right.

And we would be, like, the minority partner in that JV?

Yes.

Okay. Sir, regarding the margins, if I look at pre-COVID, you were in the range of 12% to 13%. And we have recovered, but still we are at 10%, 11%. What is the outlook there?

The margins, yes, as you rightly pointed, the margin profile used to be 12%, 12.5%, 13%, historical. Now we are at 11%, 11.5%. So the COVID cost still continues to be there because we have, directly or indirectly, 20,000 employees [indiscernible]. So some of the safety-related cost is still around 0.2%, 0.3%, which straightly go towards safety-related costs that we cannot ignore. Maybe another 6 months, we can see that, that cost comes down, number one. Number two, some of the projects, as I mentioned in previous call, like -- because of the change in the business mix and the supply component has slightly gone up because of the [indiscernible]. And recently the steel prices have gone up. Of course, our contribution -- our mix is hardly 20%, 25% of the total component. So there is small impact of cost 0.2%, 0.3% because of this material component. So we are seeing that -- probably maybe next 6 months or maybe 9 months going forward, we'll see some improvement in the margin profile. One is minimizing the safety-related cost and now the steel price. So all the bids whatever we are submitting, they are factoring the revised cost. And number three, most important factor is like the royalty, which we were losing for railways project, steel, petrochemical, some of the projects where we were not having the credentials, now we have built enough credentials. That will straightly save us 2% to 3% at EBITDA level. Now the new project whatever we are quoting [indiscernible] JV partner will all really help us to push the margin profile.

And this 2% to 3% benefit of royalty, this will start to come in 2, 3 quarters' time?

Yes. We see that maybe 6 to 9 months forward the margin profile, we'll see that it's improving.

Okay. Sir, last time, in the previous call, you had given a guidance of order inflows of close to INR 4,500 crores. How -- what is the update there? And also on the execution, any total execution? How much do we expect this year and next year?

The order target, we have kept it close to INR 4,500 crores. Okay. Now up-to-date, including the L1 of INR 550 crores, close to INR 2,200 crores already in place. Now the way the projects and the bidding -- the projects in pipeline, taking into consideration INR 3,500 crores to INR 4,000 crores, it looks to be very comfortable. If at all there is a spillover, maybe in April, another INR 500 crores maybe get spilled over. But it looks like the order target close to INR 3,500 crores to INR 4,000 crores is quite possible, number one. Number two, the execution, if you take the conversion to be certain backlog, it used to be 40% to 42% in a year. So if you take even 36% to 38% conversion to my opening order book, close to INR 2,600 crores we should be able to comfortably achieve this year. Maybe INR 3,000 crores plus next year is quite comfortable. Because by the time we add INR 3,500 crores to INR 4,000 crores, the backlog will cross INR 8,500 crores. If I take a conversion of even 35%, 36%, it's quite a comfortable number. Crossing INR 3,000 crores is quite possible.

Okay. So next year, you're saying it will be INR 3,000 crores or a little higher than that. And that does not include MDO because that is under development for 2 years?

Yes. So now the order book what we have got is like on hand and the projects which are in pipeline [indiscernible] is quite comfortable.

All right. And just last question. Any guidance on the working capital, how it is going -- has changed and how it is going to change for the end of the year? And on your debt side, how that will change?

So working capital, if you see, the net current days is coming down. It was almost like 195 days until 31st March 2021 that has come down to close to 170. Mainly the receivables, which is like 70 to 75 days, but if you add BHEL, it is coming to 90 days plus. So we are seeing a reduction of 10 days -- 10 to 15 days in this period because the mix is going to change, number one. Number two, the pie of BHEL is coming down. So this 70, 75 days with BHEL of 90 days may come down to 80 or maybe 78 days. That is what we're expecting. And debt side, we are closely monitoring the debt utilization. At any point of time, it's around INR 480 crores, INR 490 crores of debt. That is what is the utilization now. Maybe the plan is to bring down by another INR 40 crores or INR 50 crores by year end. That is what we are working every time to liquidate close to INR 8 crore, INR 9 crores on average every month. So that will help us to bring down the debt level.

Okay. Sir, could you please repeat the BHEL outstanding? How much is it by -- in September, BHEL outstanding, sorry?

Around INR 130 crores to INR 140 crores.

Okay. That's the retention money or total outstanding?

Total, total, including BHEL, Maitree project.

Okay. INR 140 crores is the total outstanding, including retention?

If you take retention, that will add another -- put together, it will be close to INR 200 crores plus because the project -- because once the project is completed [indiscernible] warranty, so at any point of time, some component of retention will be there and BHEL used to be the predominant player in our [indiscernible]. This has come down to 16% to 18%, but if you would see 1, 2 years back, it used to be almost like 22%, 23%. So that component will be there, and you'll see that this number is coming down every year.

Right. And the age of this INR 200 crores is 90 days, roughly?

Yes, sir. Yes, sir. Comparatively higher compared to other customers, but it will be because we have not seen any threats or issues as far as BHEL is concerned because we have been working with them for almost [ 20 years ]. So there is a slight delay, but still a bit healthy.

Okay. Sir, how is the movement in the quarter for BHEL debtors?

Sorry, sir, can you repeat?

I'm saying that between June and September, how has the outstanding to BHEL moved?

It's today's status, sir, whatever I have told. So it used to be 100 days. Now it has come down to 90, okay? And with the closure of the domestic projects. Because Maitree is a fast-track project, with the closure of the domestic projects, that may slightly come down to 80 or 75 days also gradually by year-end.

We'll take our next question from the line of Rishikesh Oza from RoboCapital.

Sir, my question was [indiscernible]. So given that we can be maintaining around 200, 250 a month kind of run rate, so fair to say Q3 will be more than 600 [indiscernible]...

Mr. Oza, I'm sorry, if you're on a hands-free mode, could you please hold the microphone closer to you? Your voice is kind of fluctuating, sir.

Hello, am I audible now?

Yes, sir, please go ahead.

Sir, I was saying on the execution levels, we are maintaining -- you are saying that we are maintaining around 200 to 250 a month, okay, so fair to say Q3 will be crossing more than 600 easily and Q4 should resemble to Q4 of FY '21?

You're right, sir. Definitely Q3 should contribute a larger number, and Q4, if you compare any quarter in our 20 years journey, it always used to be a nice quarter because there is always a pressure from the customer side also. So we see both the numbers slightly at higher side. So that's where we are confident that the overall target still remains intact, okay, there will be no change.

Okay. And also, sir, [indiscernible]...

Mr. Oza, I'm sorry, we are not able to hear you very clearly.

Okay. Is it better?

Yes.

Okay. Sir, on FY '23 execution levels of INR 3,000, isn't it a bit conservative. Like, given our execution levels of [indiscernible] historic levels of 40%, [indiscernible] around like more than [ INR 3,600 ] crores levels?

Sir, see, the -- you would have seen the communication from Power Mech management always like what we can achieve minimum because the conversion to my opening order book is always used to be 40% plus, and I have taken a conversion of hardly 34%. And there is every possibility that we can even push it to 40%, but the number what we are saying is INR 3,000 crores plus each quarter comfortable. There is every [ possibility ].

Okay. And also a clarification, sir, when will our MDO revenue start flowing into the P&L?

It will start coming from FY '24, sir, because small revenue we'll see coming from '24 onwards.

Okay. And what margins are we going to see...

Because it's a CapEx nature, the EBITDA will be on an average 18% to 22%.

We'll take our next question from the line of Mayank Bhandari from Nirmal Bang.

Yes. Sir, I just wanted to understand, firstly, how is the situation in Bangladesh. So we were expecting quite a lot of projects from there, like, the capacity expansion is slated to happen and gas and coal-fired plants will come up. So how is the situation there? Can you throw some light or are we expecting more orders there? And how is the execution of Maitree projects happening? How much is left there?

Rohit, can you address this? Hello? Hello?

It looks like Mr. S. Rohit's line is disconnected. We request you to please remain connected while we try to rejoin him to the call.

Mayank, can you repeat once again question, please? I could not make out.

Sir, basically, I wanted to understand the opportunity bucket in the Bangladesh, particularly, as well as what is the status of the Maitree project?

Okay. Ramaiah here. Satish, let me see what I can -- explain that. You see, Bangladesh is going to be bullish as far as the investments are concerned in power sector, both on the coal side and gas side because their plan for the end of the decade is from present 21,000 to 30,000 megawatts. And we have completed Bhola 225 megawatts. Earlier, we have done Bheramara that is also 385 megawatts. Our presence is there. In Maitree, we have done 37% of the work so far out of INR 855 crores. And this year, our planned turnover is around INR 250 crores. Therefore, there is going to be investments from a variety of EPC players, both from India and maybe Japanese and other people. We have been following all these themes, and we are quite bullish on our presence in Bangladesh for the next couple of years.

[Operator Instructions] We have a question from the line of Anurag Patil from Roha Asset Managers.

Sir, out of our order book, excluding MDO, what percentage will be the fixed order contract?

I think about 50-50, you can say.

50%?

Because some of the recent projects, what we have taken the infrastructure, they're all with a price variation clauses are applicable. Then most of the BHEL projects are on firm price, what we are doing it. And some of the private jobs, what we are doing, is also on the firm price, but in Adani recently, what we have taken [ INR 650 crores ], that is with a price variation for the road job.

Okay. And sir, the commodity price has shot up again from the current level, so do you see any major impact on the margins going ahead?

Yes. To some extent, we have covered up. In the case of Dolvi, we have almost completed the investment cycle, our working capital, almost projects are committed in. The 2 jobs what we have taken recently from Adani, one is Kurmitar, about INR 202 cores, there will be some impact. To some extent we can cover it up. And then the other job what we have taken fully covers up the latest steel prices. And the major impact will be where we do pure steel work, structural work, there, there can be some impact. But in the case of civil work, more or less, we have covered up the impacts whatever the rises which have taken place recently in all the new jobs. That we have to manage it how to cover it up. Maybe after some time, we will approach the customer where there are issues.

Okay, sir. And just one clarification. On FY '22 revenue guidance, I just missed the number. Can you just repeat?

Sir, we were targeting close to INR 2,600 crores.

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the floor back to Mr. Mayank Bhandari for closing comments. Over to you, sir.

Yes, on behalf of Nirmal Bang Equities, I would like to thank the management for giving us valuable insight. And do you have any closing comments, sir?

Yes, that's all, Mayank. Thank you very much.

Thank you.

Thank you, members of the management. Ladies and gentlemen, on behalf of Nirmal Bang Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.