RITES Limited (RITES) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm the moderator for this conference. Welcome to the conference call of RITES Limited, arranged by Concept Investor Relations, to discuss its Q3 and 9-month FY '21 results. We have with us today is Shri Rajeev Mehrotra, Chairman and Managing Director; Sri Bibhu Prasad Nayak, Director of Finance; and Shri Parmod Narang, Chief Financial Officer. [Operator Instructions] This conference is being recorded. I would now like to hand over the floor to Shri Rajeev Mehrotra, Chairman and Managing Director. Thank you, and over to you, sir.

Thank you. Good afternoon to all of you. I'm Rajeev Mehrotra, CMD of RITES Limited. I welcome you all to the investor conference call on RITES Limited Financial Results for Q3 FY '21 and 9 months of FY '21. I hope all of you and your families are keeping well. I have with me our Director of Finance, Mr. Bibhu Nayak; and CFO, Mr. Parmod Narang. RITES in the Miniratna (Category-I) Schedule 'A' public enterprise of the Government of India and a leading player in transport competency and engineering sector in India, having diversified services and geographical reach. Now I'll briefly take you through the highlights of company's results of Q3 FY '21 and then we can open the floor up for questions and answers. I hope you all have been able to access the financial results presentation and press release uploaded on our website as well as stock exchanges. I covered the consolidated result search. Consolidated results for Q3 FY '21. The results of the company for the quarter remained reasonable within the challenges faced due to COVID-19. Working towards post pandemic economic growth, we have maintained focus on project execution, sustaining margins and consolidation of the order book. This quarter remained a tough quarter, but we have been able to generate revenue as well as maintain our normal level of margins. I'll now summarize the results on a consolidated basis. And as you know, almost 97% of income is coming from stand alone. So whatever I'm talking here is actually relevant for the stand-alone also, although you have details available in the presentation and these numbers are already uploaded. RITES total consolidated revenue has decreased to INR 480 crores as against INR 663 crore in Q3 FY '20. Similarly, operating revenue that is excluding other income, stands at INR 449 crore in Q3 FY '21 as against INR 620 crore in Q3 FY '20. Decrease in revenue is mainly due to export deliveries not scheduled during this quarter, in fact, which is about INR 90 crores, INR 90 crore was there in Q3 FY '20 and disruptions in supply chain and restrictions due to pandemic. EBITDA and PAT stand at INR 159 crore and INR 105 crore against INR 214 crore and INR 150 crore, respectively, in Q3 FY '20. Efficient execution and timely implementation of cost control measures helped us in maintaining margins. EBITDA and PAT margins are sustained in this quarter and stands at 33.1% and 21.9%, respectively, against 32.2% and 22.6% in Q3 FY '20. I'll cover the performance of segments on a stand-alone basis. The company achieved a revenue of INR 244 crores from consultancy business which is down by 14.3% over Q3 FY '20, but with margins remaining 45.5% as against 46.5% in Q3 FY '20. Leasing revenue stands at INR 29 crore in Q3 FY '21 and against INR 30 crore in Q3 FY '20. So the leasing income has almost reached to pre-COVID level levels with margin of 39.8% improved as against 34% in Q3 FY '20. So all the logos, which were with us have being placed in [ furnace ] now. There were no export deliveries scheduled for Q3 FY '21. However, Q4 FY '21 is expected to see export shipments beginning for Sri Lanka and Mozambique. Currency revenue during Q3 FY '21 stands at INR 159 crore, which is down by 19.2% against INR 196 crore in Q3 FY '20. Turnkey margins were maintained at 3% as against 3.1% in Q3 FY '20. REMC Limited, which is our subsidiary, revenue stands at INR 17 crore as against INR 19 crore in the previous quarter of last financial year. Similarly, profit before tax has also decreased to INR 9 crore as against INR 10 crore in Q3 FY '20. Performance of our subsidiary REMC Limited was impacted due to less traction power requirement by railway during this quarter, the power generation from the windmill has shown significant growth on year-on-year basis. Consolidated results for 9 months of FY '21. First 9 months of FY '21 have remained a challenging period for the company. We have restriction from supply chain disruptions due to pandemic adversely affected revenue and profit of the company. RITES total consolidated revenue has decreased to INR 1,356 crore as against INR 2,120 crore in 9 months of FY '20. Similarly, operating revenue, excluding other income, stands at INR 1,224 crore in 9 months of FY '21 as against INR 1,904 crore in 9 months of FY '20. EBITDA and PAT stand at INR 452 crore and INR 303 crore, respectively, in FY '20 or 9 months as against INR 719 crore and INR 489 crore, respectively, of 9 months of FY '20. However, during this 9-month period, RITES has been able to maintain the margins of its business at the normal levels, as we used to do in the past. Order book. Company's consolidated order book now stands at INR 6,534 crore as of December 31, 2020. The order book provides revenue visibility for 2 to 3 years. I believe that the emphasis on infrastructure development in the union budget of '21, '22, [ National Rail Bank ] and national infrastructure pipeline will help to drive the growth of the sector, thus providing us opportunities to achieve double-digit growth in FY '22 and beyond. Now we can open the floor up for questions and answers, and thank you very much for your kind attention.

[Operator Instructions] The first question is from the line of Rohit Natarajan from Antique Stockbroking.

Sir, my first question has more to do with the order inflow part. If I see in last 1 quarter, we had really not have more than INR 500-odd crore kind of order inflow. Where exactly are the big ticket numbers going to come? What exactly is the time line, which are those projects? If you can guide us something on that?

Well, I think whatever we performed in Q3 has almost been replenished by new orders. But yes, we -- it's a continuous process. We keep working for new orders. And it is reasonable to expect that now when the budget has been, say, a percentage of the new project line has been identified. So it's better to expect this from Q1 of, say, FY '22 onwards. More meaningful numbers should be appearing.

Sir, if you could quantitatively guide some picture, like this much to be from consultancy, which are those prospect orders?

Rohit, it's very difficult to really give a precise number, but I can give you the scenario. The way new projects are lined up here in railways or metros or highways, almost 35% increase in allocation for railways and highways and almost 20% up for metro. A significant increase than what used to be earlier, 15%, 20% increases. So naturally, this opens up a lot of opportunities for the company to try out. Consulting and exports, I think, will play a major role in '22. And we believe that it's possible to maintain a reasonable double-digit growth in FY '22 turnover.

Sure, sir. I understand that the -- [ since the start ], I understand that we have -- these numbers are not scheduled in Q3. But what could be the quantum of exports you are looking at in Q4? Because earlier, we were talking about INR 400 crores to INR 500 crores should be possible in exports in the second half. But now that picture seems to be a little bit difficult. Is that understanding right?

No, no, there is still over a couple of days or weeks here, there. What has happened? The production, which is done by production uses of railways, has a lot of subassemblies purchased from outside. So that is where the disruption actually hit the target of Q3. Most of that is now in order. So Q4, tentatively, we have actually booked a ship for February 25. First shipment or first train of 10% into Sri Lanka. Similarly, February, and we are trying to book for exports to Mozambique. So I'm very confident that February onwards, we will start shipping out. But yes, there have been delays. I still -- I'll say differently to maybe INR 400 crores we'll try to still push it higher. The production is not for booking to export, it has to actually have a bit of [ learning ]. So our effort is that to take maximum to the import and book it by March 31, most of the orders, except one component for Mozambique I'll say to give a rough number, almost INR 1,000 crores of exports are actually in the manufacturing process. So if there's still over 1 or 2, 3 weeks, the orders remain tentatively with you. And I think that's a very frank update on the export position. There was relation of subassemblies. A lot of subassemblies are involved, especially locomotives and the MUs.

Sure, sir. And finally, sir, on the consultancy and construction business, what exactly is the manpower utilization looking like because the numbers were softer relative in the quarter. Is there any quantitative number that you want to put up like 80% of the [ probation ] fee or it wasn't optimally utilized? Some picture on that?

I guess, 2 issues I would like to highlight that looking at the scenario sometime and operate itself. Whatever flexibility we had in the organization, we started reducing the job related hiring or the contract hiring. And I think that was a very timely step. So as a result, we could control the cost and ideally manpower, which you can see has been appearing in the margins maintained despite challenge. If you want exact productivity number, I -- we have put it on Slide 19 in the presentation, which is uploaded. So we ended December with total 3,005 people against last year's 3,286. So we are down by almost 281 numbers. So obviously, this cost has been controlled well, which is also visible in the operating expenses. Now coming to the consulting part, what has happened. Actually, 2 major issues. We have a good order book on consistency of INR 2,500 crores still. Two major things happened. Some inspections were delayed, whether it is rails or other capital items. There are delays and not resumed. So the expected pace of revenue in last quarter did not match up. Also, we had some order from coal connectivity projects. I'll not name the company. But then they could not acquire the land in time. They were supposed to provide land, say, by June or so. But due to pandemic, the land acquisition process also got delayed. So those projects, where the land is not there, the construction or the consultancy revenue billing does not start. So that has actually impacted the consulting revenue. And I'm sure we will recover very fast once the backlog of the issuance that's cleared maybe this quarter. Within this quarter, there should be better visibility.

The next question is from the line of Kunal Sheth from B&K Securities.

Sir, while you clarified about the performance of the consultancy. Sir, as you mentioned, that we have a good order book on the consultancy side. So to do a double-digit growth next year in consultancy, will the current order book be sufficient or we will still need some more orders to do a double-digit growth next year in consultancy, sir?

Very difficult because the orders will keep flowing. So some orders will come for pick, say, booking of revenue. To give you an example, the inspection costs of the quality assurance business is basically a 3-month cycle of order to completion. Similarly, for power management, as the rail operations pick up, will be back to the INR 40 crore, INR 45 crore type of fees, or the existing power procurement capacity. So all those things are instant conversion to revenue, but the difficulties came where we have the PMC project management consultancy engineering work for open area projects, rail connectivity, coal connectivity projects where land acquisition was delayed by a couple of months in the new orders. So that affected the consulting revenue bookings. So I think looking at the scenario of today, a growth of 10% in consultancy looks doable in '21, '22. But overall, I'm saying overall company would be targeting maybe 10% to 15% or a little more, depending upon how the pandemic -- things get controlled maybe by Q1. We are still not normal.

Sure, sir. And sir, so whatever disruptions we saw in Q3, now most of them haven't normalized. And in Q4, we will see much better recovery? Is that right understanding?

The quality assurance business execution is slightly delayed even this quarter. But having -- once the CapEx for '21, '22 increases, even the OpEx increases, we'll get a better hand on the quality assurance revenue.

So sir, this year, 9 months, consultancy is down about 14%. Any sense you would like us to give in terms of where should we end the year with?

I think -- let me not preempt the Q4 results. I have already given a hint that Q4 may also see a subdued quality assurance as the rest of the year. But rate of recovery expected on the power business also on the P&C works for rail connectivity project, which is a fairly big portfolio with this.

Sure. Sure. And sir, lastly, about the solar project in RCML, any update? There were a few tenders that were likely to be bid. So finally, now how many megawatts are going through? And what is the commitment from our side that we'll have to put in? Any clarity on that, sir?

There were some feedback from delivers, especially about the grouping of land parcel, which were classified in the tender. So we are looking at that. But irrespective of that, we have -- on first model, we have already recommended the selected party for 299 megawatts. And for the ownership, where we are RITES and railways will be putting equity. This tender is scheduled to be opened on March 17. Also the land along the railway tracks, there were some more clarifications required. So we have extended to get to March 5, '21.

Okay. Sir, now as it stands today, what is the quantum of what total size that you will be working with the consultants? And what could be the potential size that you will be working as a developer?

Okay. The size of developer first, let me cover. Where our [ degree ] is in stand-alone with railways, is only 400 megawatts. And that is in developer mode, they will put the investment on [ railment ]. So government is looking at the suggestions, which have come from developers. And some of which have been incorporated already.

Okay. Okay. And on the consultancy side, how many megawatts are we working with, sir?

Consultancy, we were almost handling 1,400 megawatts for railways. But then there was a dip and all over India retail services were curtailed. So only with set related demand, and there was almost, you can say, this revenue went down by almost 1/3. So one of the train operations was picking up, the power demand is picking up, so is our fees realization or bookings. So hopefully, by April, I think most of the operations should see a normalcy.

The next question is from the line of Saiyed Javed from Reliance Securities.

Arafat here from Reliance Securities. Again, I'm having the same question. I just want to understand what opportunity is there for you guys for next 3 to 4 years. And what kind of order inflow you're expecting similar in FY '22 and '23? If you can guide on that?

Let me first cover '21, '22. '21, '22 big CapEx is very phenomenally increased 34% for railways alone. So I think we should see a lot of activity here, then what goes from national rail plan, the book activity of new investments, aggregation of investments would continue until 2030. If railways are going to scale up their investments until 2030, I mean, it's reasonable to believe that companies like RITES who are present in not only railways and highways also and metros. Metros are out 20% increase. Then for the smaller cities, the light metro or metro new. So these things will open up opportunities for us to do consulting work. Therefore in my previous question, I said, it is reasonable to expect a 10% to 5% rebound in '21 and '22 itself.

Okay. Okay. And sir, my next question is on the margin front. What kind of revenue mix you're expecting from [ lending ] segment going ahead? Would it be significantly higher compared to consultancy? Or what kind of margin impact do we have on your lending margin?

So whatever turnkey projects as we have executed until last quarter, we have maintained our margins indicated to market between 2.5% to 3% that we have been able to maintain. There is some execution already going on. We have already started work for the new electrification lines, which we got about 4 months back for this trending and work is going on. So the billing for this should start maybe in Q2 of FY '22. So all this is lined up in such a way that without adding much manpower, people who got free from these ongoing projects would actually be then taking up the next set of projects. So I don't see much increase in the manpower from our side. But again, indicative around 20%, 25% role would be played in the revenue composition by the segment of business.

The next question is from the line of Harshit Kapadia from Elara Capital.

Just passing on turnkey project business. The revenues declined by 15%. When we look at the results of some of the EPC players have actually seen increase for them. So can you, Sir, highlight why your revenue have declined?

The projects in hand had difficulty for first 5, 6 months. So not only the electrification projects are nearing completion by March, I think most of the electrification projects would be over. So we still over whatever has remained in Q3 we hope to make up in Q4. But turnkey is not my significant portion of the total revenue.

Okay. And the ordering, sir, multiple would be now Q1, is what you anticipate, sir?

Yes. Yes. Because this year, what we have worked so far, is mostly electrification projects. There's not even a single project for doubling our timeline. And that was because of the priority they are setting for us the current year. But looking at the expansion plan in '21, '22 onwards, I think turnkey would look up next year onwards, but within the doable capacity of the company.

Okay. Which would be somewhere [indiscernible] INR 2,500 crores kind of order inflow. Is that correct?

No, no, no. Turkey only, we already have...

No, only turnkey.

We have spoken already with this. [ Turnkey ] did not materialize because of land issues in [indiscernible].

So based on the capacity concern, which company has, which we don't want to go beyond certain percentage in turnkey. So your capacity would be [ costly ], getting order inflow of INR 2,500 crores to INR 3,000 crores?

Yes, actually that's a safe upper limit, I would say. I must clarify the capacity issue. We can take more projects. But the issue is the margin is very less. So we have to deploy manpower for other high-yield projects. Those would be getting priority rather than just reserving much more for 3% margin. But we'll continue to do both.

Okay. And sir, just harping on the order inflow opportunity, the budget, you mentioned some of the opportunity nature, et cetera, et cetera. Earlier, you had commented that there was some 14 projects in next year where you had bidded for consultancy in -- similarly, can you highlight something on the metro side? As well as on DSC, some 3 new lines are being lifted. Where do you think the consultancy would be awarded? What could be the opportunity size there. And then as the modern railway project was also approved from 2 years back [indiscernible] in modern railway. Is there any development on given [indiscernible]. So if you can highlight some of the progress there.

We were actively associated in developing that Bangalore suburb work. We are still hopeful that there should be some meaningful role going forward for us. It is yet to see the execution start but we are following up that closely. The tenders for metro are all going on. One major work is going on. We've got some -- it's not a work for detail design for depots or stations that we have got an already supported to market. We are soon going to share one more. I'll not comment on this beyond this today. We soon going to share some more news. And we are working on getting more orders for metro as well as rail projects.

Anything on DSC, sir, the [indiscernible]

DSC, we have not been able to make it there. That was very aggressively which, in our opinion, we don't do pricing at that level. When we take up the work, we believe that we should be doing in all the segments, professionally and not cut corners for the clients. So we have not got it. The DSC work is...

All the 3 DSC?

One tender. It's all one tender.

One tender. And similarly, also some metro as well metro consultancy, 7, 9 and, I think, 5, 7 and 9 lines are out. There, we also participated, but not [indiscernible] there also because of aggressive bidding?

You want to say something on this? Yes, I will be citing by some others are very aggressive.

And sir, when we say aggressive pricing, how -- what kind of a differential you can anticipate, sir?

Yes, we have to maintain certain margins. Otherwise, we will not be happy if I don't maintain margin in the metro work. And doing a work that substantially aggressive pricing, whether we make profit or loss is not our way of working. And some people can do [indiscernible] pricing to enter that segment. We don't have to do that. And I'm referring to certain -- I'll not name it, but we have seen that happening. But see, maybe 1 or 2 projects people can do like that.

Okay. But it is not something which is very prevalent in the market as you pointed?

They are not work -- so rather putting our manpower to unproductive, unprofitable segments. We'll rather weather our resources for better deployment. And I said, I'll repeat just shortly going to share something.

Sorry, Mr. Kapadia. So this is the operator. I would request you to rejoin the queue. [Operator Instructions] The next question is from the line of Hardik Jain from White Stone Financial.

Sir, if I heard you correctly, I think in the last call, you mentioned that export revenue in the Q4 could be in the range of INR 550 crores to INR 600 crores because of the Sri Lanka and Mozambique. And now if I heard you correctly, you're saying that this could be around INR 400 crores this Q4 and the remaining can spill over into next quarter? Am I right?

Few weeks here and there.

Okay. Okay. And sir, there is also some bidding for -- which is to happen between -- amongst the 3 PSUs, largely 3 to 4 PSUs for railway project. So did you participate in any bid? Anything happen? Any update that you have?

Okay. And let me start with the second question being answered first. We did participate in the electrification work. And we have already reported was around INR 700 crores of work we got on tendering basis, which have already been reported to the market. And now let me explain the export related issues or delays there. First of all, the 2 orders are from different countries and on different wages. So Sri Lanka order is on broad wage which is being ready and the first train would be shipped out, hopefully on 25th, ship on 25th. There's not much issue there. There was some assemblies to subassembly supplies because Chennai had a second set of dump a few days. Some delays were saved in KBH related supplies to Mozambique because is not a routine which is being manufactured in India. So those people who are selected, they have their own delays in starting, but now things are controlled. And I think we still will try to make it INR 400 crores maybe a little bit higher, but INR 600 crores definitely looks very unlikely. But these orders may at least most still by 1 or 2 weeks because unless it is supported with bill of letting and not be able to book the revenue, even if the revenue works up. But all these orders are under progress. Construction -- manufacturing, sorry.

Okay. And sir, you mentioned that QA revenue was really slow this year. So this is largely because CapEx in this quarter was not very high?

Yes, this quarter has a subdued realization from inspection as well as certain projects, which we have in order book, but then the work would not start there because of delays in land. That's being controlled now.

Okay. And now what is QA revenue last year for this quarter, same quarter?

We are 14% down on -- 14%. You were asking only QA? QA was INR 95 lakhs.

QA was INR 95 lakhs.

Yes, 76% percent. '21 compared with '20. For quarter or 95% versus 73%, yes, for the quarter.

The next question is from the line of Chintan Sheth from Sameeksha Capital.

A couple of questions. Again, harping on the execution side. You did mention that there is in land and the QA side of challenges this quarter. But if I look at sequentially the revenue improvement of scale up, both in consultancy has been softer. Y-o-y, I understand that EBITDA may be different. But sequentially, in the second quarter year delivered a certain revenue, and we were coming out of the COVID issue we should have certainly expected a much better revenue compared to the second quarter. But that has not been the case for us. So I'm just trying to understand, most of the reasons you pointed out are external in nature and we couldn't control that and that will be -- execution is? Or is there anything internally which also led to execution -- slower execution this quarter?

No, no, let me give you an example that even if you are internally fully ready to do a job. Quality assurance has seen it for INR 45 crore in 9 months. Even if you are ready, if the client says I'm delaying this supply, I'm just postponing this by 2 months or 3 months. So that on a supply were just put on hold for a couple of weeks or months. So this has been happening for 6 months. Yes, there were disruptions. But now we face the cost being delayed by a few weeks. But this should normalize, this revenue is not lost. It will come back to us.

That I agree because our orders are at least from the range of we don't expect them to kind of at kind of grow. It will come back to us in a subsequent quarter. But the execution is very slow related to the second quarter. I think that most of the challenges when they were at the peak from Q1 and Q2, those are the peak period of COVID. And Q3 it started moving down. So we were expecting at least sequential improvement in the execution. That didn't happen. So I'm trying to understand that. And second is on the margin. Despite our execution being flat on a sequential basis, I see margin deepened consistency on a sequential basis. So if you can throw some light on what like did that?

Okay. Now the main impact in consultancy came because of 2 components. One is the quality assurance, which I explained. Second, PMC work, Project Management Consultancy. Whenever these rail connectivity, coal connectivity projects get underway. On this complete chain of land availabilities and design approval, then the suppliers and the manpower being available, the vehicles being familiar to run. So this was not normal until, say, as close as to Diwali. People were not ready to go and work on projects, right? [indiscernible] where even there report even around Diwali that if somebody has come from other state, they were required to report to the authority. So there were disruptions there. Therefore, despite being around INR 2,500 crore consulting order book, we could not execute this. Even in Q4, there would be issues like the client delays in section called by 4, 5, 6 weeks [indiscernible]to March. And there's no underlying change in the structure of business or structure of [ client ].

Yes. I understand. And on the gross growth guidance, which you gave that is double 10% to 15% overall growth. That will be a base of FY '20 or FY '21, FY '21 basis are really below -- are weak. So is it...

Very good clarification. Let me tell you, FY '21 is a vested year. It is vested year. So whatever I'm saying would be seen compared with previous years. I'm certainly not going to misguide you by saying that on this lower thing, I'll give you 15%. No way.

Yes, sir. That's what I wanted to get. Okay.

If you noted my hint, I said that out of this INR 1,400 crores, most of it is underway. So [ INR 2,00 crores ] of exports, INR 1,000 crores, that's in FY '22. That it still gives you an idea that what's going to happen.

Right. And you see the export line growth. So beyond this INR 1,400 crore, what are the pipeline we are looking at? If you can comment on that?

Yes. Yes, that actually is a very difficult question because there has not been any tenders. The tenders have started rolling out now. One of the tenders for [indiscernible] closure, but they initially asked for expression of interest, all that has been done. But calling it as an order process, I will say, only when big tender or price has been quoted, not even a single case because most of the countries are still [ suffering ]. The impact is reaching out due to the COVID. It's still troubling there. We are approaching normalcy a lot in India, but the countries where we are working, they have serious issues there.

Right. I think that was something to look international consultancy business as well.

People are not -- people are not able to go to site. It tend to affect similarly with the companies having export issues.

Mr. Chintan Sheth, I would request you to rejoin the queue, sir, for follow-up questions. The next question is from the line of Bajrang Bafna from Sunidhi Securities.

Yes. Sir, just to understand that if we see the kind of confidence that you were showing in last quarter con call in terms of growth and in terms of visibility and now what we are hearing, 15%, 20% kind of growth in FY '20 base. But if we see the kind of allocations that has come in the budget and the kind of NIP which is going to go through, and even yesterday in the parliament, even Prime Minister has spoken very strongly on the pickup in the infrastructure side, it's high time to deliver on that. And [indiscernible] are also suggesting that there'll be huge pickup on the ground in terms of projects and all. So in that kind of environment, you are very close to that machinery. And if I'm not wrong, last time, you said 20% was the growth in last 5 years when the execution was on the government side was a bit of slow and the next 5 years are going to be pretty robust. And in that environment, growing double will be a possibility. So what is the decided reason of showing some sort of low confidence as compared to last quarter? Pardon me for my ignorance, but just I sense and that is why I raised this question.

So I don't want to run into the tender of creating overoptimism. We believe in some moderate sort of scenario and delivering better than this. If these sectors give us opportunity, we will not be sitting idle and not touching them. What I have indicated 15% is, again, looking at -- disruptions may still continue for the next 2, 3 months. We are still going through connections. We are still going through regulation at the mass level. So the disruptions of COVID are not out. I'll say we are almost 75%, 80% only normal. We are not able to travel freely. So with this, I'm still counting that normalcy is expected beyond June. But once the projects come in hand, a lot of work which can be done in-house, that will give us growth. And whatever is promised in budget, there is a process to roll out the projects. So you get work by June or September, you start working on implementation. So revenue may not come in FY '21, even out of the budgeted possibility. We may get the orders, but converting that order into revenue is possible in some components. Like the quality assurance, yes, it would get converted. Like the power procurement, it will get converted immediately.

Okay. And sir, my second question is, we have a sizable cash on our balance sheet. And in the last 12 months, the interest rates have come down drastically in the economy, and there are little hopes that they'll rebound when it comes to them because there are indications they'll try their best to keep them low in the economy. So in that is the [Audio Gap] unnecessarily depressed, if it is such a huge cash build up on the balance sheet. So any purposes on that to improvise the return on that? If you could guide on that it will be really helpful.

I think there were 2 possibilities that if the cash [indiscernible] of shareholders, we turn -- we did a buyback in November. And on the investment side, I'm not commit, still. We actually have internal processes done for that. So we will definitely be looking at other possibilities to optimize the investments or returns. I share your concern.

The next question is from the line of Manoj Shah from [ Lisgo Investment. ]

Just wanted to understand that, as you said, the margins are very lower turnkey projects roughly around 3% and [indiscernible] it is around 37% share. So how do you -- your existing order book of the turnkey projects? Are these distressed contracts? Are these escalation clause? Can you comment on the pricing of it? And what's the thought process in that?

Manoj, I could not fully hear what you're asking is that on the existing turnkey order book, the margin certainty of around 3%. Is this the question?

Yes. Or basically, while bidding for a turnkey projects, are these mostly the fixed-price contracts or is it for escalation, cost escalation kind of thing?