RITES Limited (RITES) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Margaret, the moderator for this conference. Welcome to the conference call of RITES Limited hosted by Concept Investor Relations to discuss its Q3 and 9 months FY '22 results. We have with us today, Shri Rahul Mithal, Chairman and Managing Director; Shri Gopi Sureshkumar Varadarajan, Director, Projects; Shri Anil Vij, Director, Technical; and Shri Bibhu Prasad Nayak, Director, Finance. [Operator Instructions] Please note that this conference is being recorded. [Operator Instructions] I now hand the conference over to Shri Rahul Mithal, Chairman and Managing Director. Thank you, and over to you, sir.

Thank you. Good morning, everybody. Let me begin with the safe harbor statement. The presentation which we have uploaded on our website yesterday and all discussions during the call today may have some forward-looking statements. These statements are considering the environment we see as of today and obviously carry a risk in terms of uncertainty, because of which the actual results could be different. And we do not undertake to update those statements periodically. So having said that, you've seen our results on the uploaded on the website and on our social media account, and these results are encouraging. While the trend of growth has continued, there is -- it's in line with the predictions that -- and the outlook that we gave in the -- at the end of quarter 2 that we are targeting to reach the baseline levels of pre-COVID '19/'20. And in that line, the -- all our parameters are progressing in that direction. And we are quite confident that with this trend, the Q4 and this year is a complete year, we would be able to touch the pre-COVID levels of '19/'20. With these opening comments, I hand over to the participants for their questions.

[Operator Instructions] The first question is from the line of Shreyans Mehta, an individual investor.

Sir, one request from my end. I mean it, could you please have at least 2 questions per participant? I mean, generally, we have a follow-up question. So it's better we clarify it at that point in time rather than waiting in the queue. So that's a suggestion from my side. Now coming to the question, sir, if you see our export order book, we are roughly at around INR 600, INR 650-odd crores, which is pending. And given that we'll be executing it in fourth quarter and next year probably for 1Q. So is it fair to assume that will be fulfilling this other than this entire order book will be over by, say, FY '23? And if so, I mean, how do you foresee the FY '22 -- I'm sorry, FY '23 revenue and EBITDA margins playing out?

So very valid point regarding the exports. We have a balance order book of about INR 675 crores in exports. And as you've seen, we've touched a total cumulative of INR 700 crores in 9 months. We foresee that in the quarter 4, we should be realizing another about INR 250 crores, INR 275-odd crores, which leaves us with a balance of about INR 400 crores for FY '22/'23. Now with the trend of the shipments going on, I foresee that this should last still somewhere about middle of '22/'23. Having said that, the exports, as you know, are a long lead line of business, and we are aggressively now with the various international countries all over opening up, we are in touch with a number of countries and trying to fructify into a finite order. But yes, it has a lead time even after getting the order. So I foresee that, that the fresh orders as they mature in the coming months, the revenue realization would start coming in by maybe end of '22/'23. However, that concern of yours regarding the impact on the top line and the margins will be more than taken care of our current order book, which is around about INR 5,100 crores, as you've seen. And out of that, about INR 2,200 crores is on consultancy and INR 2,000 crores is on turnkey, which are progressing very well. And we are more than confident that the gap, if any, in the few months for the export segment will be more than taken care of by these 2 segments.

So just to clarify, sir, even assuming that we get some orders from exports, [ that will come ] under execution by, say, 4Q next year, but I mean, we might see some, I mean, growth in execution, but how will the operating margins, because turnkey will be comparatively lower margin business as what export is?

So as I said, you're right in saying that turnkey has lesser margins in export. But consultancy wing has got definitely a much higher margins than export. So as I said, since we have a strong order book of about INR 2,200 crores as of now itself, and we are continuously getting orders. In the last quarter itself, we got fresh orders total of INR 300 crores. So we are more than confident that we will be able to maintain both the top line and bottom line at least at the FY '21/'22 level and aim for higher as the quarters progress.

[Operator Instructions] The next question is from the line of Lokesh Manik from Vallum Capital.

Am I audible?

Yes. Yes, very clear.

Yes, sir. Sir, the first question was on the consultancy order book. So it's -- pardon me, if I'm wrong, this looks like the first quarter where we'll not be able to add orders in the consultancy segment, given that last quarter, the outstanding order book was close to INR 2,500 crores, and today, we are at INR 2,200 crores. So -- and so this was just a concern at my end, if you can address that, how do we see growth coming here? That was one. And second, sir, in the last 2 calls, you had also given your vision in terms of driving the organization more from an IT perspective. So any progress and any update on that front, if you can share would be great, sir.

So the first part of your question regarding the consultancy, while you can see, as I said, a breakup of about INR 2,200 crores in consultancy. We have got fresh orders of a total of INR 300 crores in the last quarter, and a large portion of that is consultancy also. So orders have been coming in and a number of them are in the pipeline, which will mature in the coming Q4 as well as the next Q1. The -- so the second question regarding the IT. As I mentioned after the last quarter, we have been aggressively working on making IT as a major revenue earning vertical of us rather than basically a service vertical and a small amount of revenue. So a lot of [Technical Difficulty] are being explored, including partnerships with various perspective, the people who can complement our domain strength so that we can aggressively take part both in consultancy as well as execution projects of IT, both in domestic market as well as the outside market. So you will be definitely seeing some progress in the coming quarters in the revenue realization from our IT vertical.

Okay. Sir, just a clarification. This opens up a new stream of -- so this opens up a new market for us or it complements the existing markets and helps us gain more market share?

IT can be seen as complementing my existing verticals per se because we have a very strong urban engineering and sustainability vertical, and between city planning and smart city planning. So as you can understand, IT is the underlying current and underlying thread, which binds all my smart city planning, my logistic planning, port planning. So IT would be supplementing all this as well as maybe some independent IT consultancy works also.

The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

A couple of questions. One, in terms of turnkey, what would be the execution time line for this INR 2,100 crores order book?

So the turnkey projects normally take about, on an average, about 3 years to about 4 years because they involve issues like land acquisition, contracting and things like that. As I mentioned, if you remember, in my last quarter 2 call, the second phase of most of the turnkey projects have now started post the second wave of COVID. And now the quarter 3, they are progressing very well as the restrictions are getting relaxed. And by quarter 4 and Q1 of next FY, they will start incurring more and more revenue. So these -- as I see happening, the existing order itself of about 2 to 3 years, and in any case, fresh orders would keep getting added.

Okay. And in terms of margins in the turnkey, earlier, we were guiding at around 3% to 4% margin. But this quarter, it was hardly anything we have earned it. So any comment on there? Is it because of the input price increase or why there was no profit?

No, no, no. It is not because of any cost increase. See turnkey is a low-margin area. Normally, it's in the range of about 2%, 2.5%. But as I said, because the second phase of most of our turnkey projects have started getting executed in the last few months, the revenue realization of this will start coming in, in the coming months, as I indicated even in the Q2, that by end of Q4 and early Q1, this will start coming in. However, as you see, because the costs already started getting incurred, so you would see a temporary dip in the margin for Q3 per se, but it would even out in the coming quarters.

[Operator Instructions] The next question is from the line of Arafat Saiyed from Reliance Securities.

Sir, my first question is again on prospect opportunities would you like to see in the next couple of years. And how would RITES will benefit from them? If you can [ provide broad view ] on that.

So interesting question, and this is what we would like to share with you that. You see, we are in a big way, diversifying into a number of areas, which will consolidate our existing lines of business. So we, in fact, from the 1st January of this year, we've transformed to green, we're transforming to green in all our activities, whether it is the DPRs or the consultancy. So we are -- we started a consolidated and enhanced a new vertical called urban engineering and sustainability. So this is a very interesting area. We have already got lots of projects here. We've entered into partnerships in with some known entities where we are targeting the new areas of renewables, this carbon reduction and all the new areas, which has come out of the new policy, especially after the COP26. So this is another big area where we foresee a lot of growth in the coming years. Another big area is the metro. So metros, we have already been doing both domestic, about 11, 12 states. And now internationally also, we did recently the Mauritius Metro. We are going ahead with the Phase 2 of that. We recently got the order last month for the Bahrain Metro consultancy. And along with partnerships, we are aggressively bidding for both domestic and international metro projects. So this is, again, another area where I see a lot of growth for us in the coming years. So these new age areas, and I mentioned IT sometime back, smart city planning. I foresee a lot of growth to complement our existing lines of business.

Yes. Next question, if you remember last week, budget has outlined major CapEx on -- CapEx story...

We request you to come back in the queue for your second question. Thank you.

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

Sir, just wanted, first on a clarification. You mentioned that we would be reaching a pre-COVID level in FY '22 of [ FY '20 ] numbers. If I'm making that as my base and if you suggesting that the Q4 number may see a revenue decline, now that you have also highlighted the export revenue to be around 2.5 -- INR 250 crores to [ INR 275 crores ], so either consultancy or turnkey construction business may see a decline. Is that something a clear understanding? So need a clarification on that.

No. I wouldn't put it that way. As you see, our baseline target is to reach the pre-COVID levels. And as of 9 months ending, if you compare all the parameters, whether it is the operating revenue, we are in the range of INR 1,800 crores; whether it's the core EBITDA, we are in the range of INR 450 crores; whether it's the core EBITDA margins, we are about 24.6%. So that the point is that we are on track to our target of reaching the '19/'20 pre-COVID levels. The actual revenue mix or the individual contributors in Q4 may vary depending on the state of the each of the segment projects. But as an overall, we are targeting to reach both the top and bottom lines of the '19/'20 levels at least.

Okay, fair enough, sir. The second question is on the...

Sorry to interrupt you Mr. Kapadia, I'd request you to rejoin the queue for a second question [Operator Instructions] The next question is from the line of [ Umang Shah from Shavit Capital. ]

Sir, if you could give the total debtors outstanding as of December '21 and the Sri Lanka exposure out of the same, that would be great.

Yes. I have Mr. Nayak, my Director of Finance, he will give the details of the debtors. You have it right away? Just a minute, he will give you the figure.

Sure. Sure.

And the Sri Lanka project is progressing well. Both the Mozambique and Sri Lanka export project is progressing well. As I said, about INR 675 crores is the total export balance, both combined, and I foresee it to be coming up till the Q2 of next year.

Sir, the fiscal situation in Sri Lanka is quite bad right now. So...

We are not -- we are well on track. So Mr. Nayak will give you the debtors figure.

The trade receivable as of 31st December stands at INR 607 crores. And most of the receivables from Sri Lanka, we have already realized. And part of the export realization from Mozambique also we have realized.

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

I joined late on the call, if you can -- hello?

I can hear you.

Yes, sorry. Sorry. So if you can highlight the pipeline on orders because we recognize around INR 900 crores of orders this quarter. So how should we look at order pipeline going ahead? And any guidance on the order inflows part, if you can share? And second is on the consultancy, if I may, the run rate is still very slow. If you look at sequential growth, it's flat in the consultancy revenue side. If you can guide on that part, why we are taking a little bit longer time to recover in the consultancy? That's all.

So the orders we got in the current quarters are INR 300 crores and which makes it a total cumulative of INR 1,630 crore orders that we've got in this FY as against INR 1,841 crores, which we got in the entire financial year last year. So it shows that we are well on track. We have even -- within 9 months, we've got orders comparable to the range of the entire year last year. So we are well on track on a number of areas, as I said, including the new diversified areas, which we are aggressively pursuing are well on track. And for the existing order book, INR 5,100 crores, INR 2,200 crores is in consultancy, INR 2,000-odd is around about in turnkey and about INR 675 crores is in exported. So this is quite a solid order book. And as I said, this will only grow both in terms of the mix as well as in the coming quarters. And your concern regarding consultancy, I don't think it's supported by numbers because the consultancy has been growing and has been growing well. The margins that have been also comparable, in fact, to the '19/'20 levels. So our core consultancy margins, which were in the range of about 43% last in '19/'20, they are in the same range. So the margins of consultancy and the progress has been doing quite well.

The next question is from the line of Jainam Shah from Equirus Securities.

Sir, firstly, I wanted to just get a clarification about this onetime expense of this inventory provisioning. So I guess, it will be related to the export segment results, right, because it is part of inventory like [ INR 15 crore ] expense?

Yes. So this is an unfortunate incident, one of our locomotives, which we were exporting to Mozambique got damaged at the port. So we've made a provision as a good accounting practice for the entire cost. We've started the insurance claim proceedings. And as this insurance claim matures, we will hopefully get some kind of set off in that. So that's the [ inventory ].

So basically, if you see the consultancy margin it is at around 39%, whereas historically, it is ranging between 45% to 50%. This is the only quarter where this has fallen below the 40%. Even during last quarter, it was at 43%. And before that, it was ranging between 45% to 50%. So any specific reason to that, like we are -- just like turnkey the revenue will be recognized going forward? Or is it because of cost optimization. So what will be your guidance for the upcoming years? Will it be ranging below 40% or it will be back to 45% to 50%?

No. I think as I clarify that the 9-month ending consultancy margin as of this year is 42.3%, which is comparable to the 43% of '19/'20 level. So I think it's fair to assume that this is the level which we've been operating it. This is a level which we will normally come to operate on in the coming quarters.

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

Am I audible?

Yes, go ahead.

Yes, sir. I just needed one clarification. So you mentioned that we are targeting to reach the pre-COVID level. So that comment for this year was pertaining to the consultancy segment or the overall revenue that we were talking about?

No, no, overall. So as I mentioned and I clarified with figures, as you see, our operating revenue is 18 12, which is comparable to the operating revenue 18 48, 9-month ending '19/'20. Our core EBITDA is also in the same range, about INR 450 crores. Our core EBITDA margins are in the same way, 24.6%. So that's what I said, we are on track at the pre-COVID levels of '19/'20. And as a company as a whole, we are working on not 2021 as any base, and we are working as '19/'20 as a base to reach at least that level and try and see how far ahead we can go of that.

Sure. Sir, and the related question is pertaining to consultancy. I mean from whatever base we end up at this year, what should be a steady state number one should assume for the next 3, 4 years in terms of consultancy given that we are working with various new avenues to broaden our end markets?

See, consultancy out of the INR 1,800 crores, which is there in 9 months, the consultancy revenue has been about INR 700 crores. So that is roughly about 1/3 of the total. And we would continue to be in that range. In fact, we will be -- as you correctly said, definitely, with the new areas coming up, which we are trying to target, I foresee a growth in the consultancy rather than stagnating at that level. There are a lot of exciting opportunities. The new budget has thrown up a lot of opportunities. INR 5 lakh crores of the allocation is in areas which is of interest to us, whether it is railways, roadways, Jal Shakti or the Housing and Urban Affairs Ministry. So the consultancy out of the existing order book of INR 2,200 crores is, in any case, going to grow. And whatever gap, if any, a few months, which may be there because exports are a long lead revenue realization segment, will be more than taken care of both maybe consultancy and the turnkey in the coming FY.

[Operator Instructions] The next question is from the line of [ Prashant Gopal ] from Spark Fund Managers India Private Limited.

So there is a reference to the company reviewing a few orders from the book due to nonstarter status. So is that cleanup complete? Or will it happen again next quarter? And one 1 more. So the order pickup is not in sync with the Government of India spend on railways. Is there any lead or lag to that?

So this is a normal continuous exercise, which we keep doing, reviewing our ongoing orders, which maybe are nonstarters in terms of not realizing revenue for a substantial period of time for various reason. It could be across segments. So this is a continuous good accounting exercise practice that we do. And we've done that in this quarter. And obviously, immediately having done this right away in this quarter, I don't foresee it happening in a major way, while it's a continuous exercise, but in a major way not to happen in the coming quarters. However, as far as your second question is concerned, I don't foresee your apprehension in terms of our revenues or profits not in sync with the railway's allocation. We are doing a lot of work across the railway segment both whether it is for Indian Railways as a client, whether it is in turnkey, consultancy or in exports, we are also doing a lot of railway projects in various steel [Technical Difficulty] fields or imports. So this is a continuous process. It is that we are going to consolidate in the coming years in our existing lines of business so that we can see more areas of growth besides our conventional lines of revenue.

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

Continuing on this order inflow that you mentioned in the order book. So INR 300 crores orders that you received, it is from which segment? And second, this order book that -- or probably orders that have got canceled from which segment it is canceled?

So INR 300 crores is across -- in the same ratio roughly. Our entire -- if you have been analyzing our figures, broadly our turnkey does about 25% to 30%. Our consultancy does about 35-odd percent. Our export does 35-odd percent. But yes, this INR 300 crores doesn't have any fresh export order. So it is split between consultancy and turnkey. We are getting, in fact, the tilt is towards consultancy. We've got a lot of consultancy orders in this, and this adds up to the INR 1,630 crores orders, which we've got in the coming -- in the 9 months of this year. What was the second supplementary thing which you asked?

Yes. So in this -- the order book we have seen, it has gone down. So this order cancellation is from which segment?

No. So this is -- as I mentioned in the answer to the previous question, this is a continuous exercise covering all orders -- covering all the segments. It is not any particular segment per se. It is a continuous exercise across all segments, but it is primarily tilted towards the turnkey because you see by turnkey projects per se in their nature of orders and revenue realization have issues like land acquisition, have issues like contracting, then certain contracts maybe run into arbitration. So those kinds of issues come up a little more in turnkey. So as a part of this continuous regular exercise, normally, this trend is -- a review is more in the turnkey area. Consultancy and exports normally don't result into short closing of orders. Turnkey orders also result in short closing because the client would have may be ordered for x amount of work and after execution may find that this is enough and they short close the order with a reduced scope of work.

The next question is from the line of Shreyans Mehta from Equirus Securities.

Sir, just wanted an update on the CapEx for 9-month, what we've done, what is for Q4? And what is for FY '23? And if possible, if we can have a break up in terms of how much for REMCL for corporate office and stuff?

So our CapEx target for this year is about INR 100 crores. We have done a cumulative of INR 98 crores already. We are primarily not -- we are primarily an asset-light company. We're a consultancy company by design by structure. So our CapEx expenditures are not very large. And REMCL is a separate subsidiary. So in any case, our CapEx total is INR 98 crores. And we have already reached most of the CapEx targeted for this year. I don't foresee any big CapEx coming forth in the coming FY also.

Sure. Because earlier, we had some CapEx lined up for our corporate offices as well as for REMCL. So just wanted to clarify on the same.

As I said those are very minimal CapEx. We are not really a CapEx company -- we're an asset-light company. As I said INR 100 crores, we have more or less reached. And I don't see any big FY '22, '23 CapEx targets or CapEx expenditure, major CapEx expenditures.

Okay. Nothing towards the solar as well, right?

As I said, I clarified very clearly that I don't see any major CapEx plan for FY '22, '23.

The next question is from the line of Uttam Kumar Srimal from Axis Securities.

Sir, what kind of revenue you are envisaging for REMCL Limited in FY '23?

So I must say that REMCL has done extremely well. If you see the figures, in the 9 months ending December Q3, we've already touched INR 70 crores as the revenue and PAT of INR 33 crores, which is comparable to nearly the full year of pre-COVID levels '19/'20. '19/'20, the revenue operations was INR 78 crores and the PAT was INR 35 crores. So in 9 months, we are comparable to that. So I see REMCL growing in a healthy way. And with this trend, I foresee surpassing '19/'20 levels in a big way and also in the coming FY '22, '23.

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

Just wanted to check, sir, on the employee front, our strategy has been that we have lowered a number of employees, and we are looking at people working more on deputation. But if you look at last year as in the first 9 months, the employee cost has risen substantially. So is there a change in strategy over here or are you getting more work in future, so we are already taking more employees on the [indiscernible] understanding on that?

So in fact, your figures seem to be slightly. If you see the revenue per employee or the operational profit for employee, we have been -- are -- we have been on an upward trend. In fact, to give you the actuals, in the 2021 and the 9 months ending, we were the profit -- operational profit per employee was only INR 9 lakhs, where in this year, we've already touched INR 15.4 lakhs, which is even more than the pre-COVID level of 9 months, which was only INR 15 lakhs. Even the revenue per employee in the 9 months ending this year is INR 65 lakhs per employee, which in the pre-COVID levels, 9 months was INR 63 lakhs per employee. So we are constantly working and this mix of regular deputation, and this is a constant mix, which is based on the need base and the kind of orders and the projects we get. But yes, as an overall picture, we have, both in terms of the revenue, operational revenue per employee as well as the operational profit per employee we have already gone ahead of the pre-COVID levels also, and we will continue to maintain this trend in the coming quarters and the coming FY.

The next question is from the line of Rohan Advant from Multi-Act Equity.

So just wanted an update on whether the quality assurance would be covered under the October railway board circular regarding opening up of tendering to private competition?

I would -- I'm not very sure of what -- how it pans out. Yes, the circular says, in general, whether it pans out in the coming months to apply to QA time will only tell. As of now, we are more than equipped to, we have already got a lot of orders in a number of places on competitive basis for our QA wing. And we are more than confident that with our expertise and our experience and also our competitive edge in the financial portion of our bid, we will take this as more as an opportunity rather than as a challenge. So we will be more than confident to as it pans out to tackle as it comes.

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

Just continuing with the previous participant, you mentioned that CapEx in FY '23 will be negligible since you're consultancy. So this CapEx -- when you said CapEx, it includes both your investments and CapEx, right?

So it is primarily CapEx, right? And CapEx also includes if you do some major investment into your subsidiary. That is the per se definition of CapEx for the holding company. And as of now, I -- the general principle of a consultancy company, and you've seen our past CapEx figures also, they have been in the range of about INR 80 crores, INR 100 crores only. So that is what I mean by not a very large CapEx.

Okay. So then solar plant, that proposal that we used to communicate to the investors in previous quarters, like 1,000 megawatt, 1,300, then it was like a bit of change in also. So there is no major CapEx that is happening on that part?

So as of now, that -- it is still in work in progress, and we'll see how it pans out, how much it entails CapEx for us. And by the end of this FY, we would be able to then give you a clarity on the CapEx plan for FY '22/'23. Having said that, as a general -- why I reiterated and again reiterate, as a general guideline, we are not really a very CapEx-intensive company. So these -- even if -- as you see the past trend, this is a very minimal amount of CapEx figure in the overall CapEx expenditure across companies.

No, I think that's a pretty commendable reason is like we have consultancy and we are not like loading up our balance sheet. So that will be taken positively by the investors if we are going in that direction.

The next question is from the line of Uttam Kumar Srimal from Axis Securities.

Sir, we had a turnkey orders of [ INR 2,081 crores ]. So what kind of revenue we are foreseeing in FY '22 from turnkey segment itself?

So if you see, again, as I mentioned, turnkey contributes roughly about 25% to -- traditionally, if you see over sustained period of time, in a longer period, say, maybe 6 months or a year, because if you see a particular quarter, maybe, as I said in Q3 or Q2, revenue realization of turnkey was less. But as a whole the turnkey normally contributes about 25% to 30% of our top line, and with this INR 2,100 crores of the order book, I see that it's a substantial. You can -- and having given a guidance that we will reach at least our '19/'20 levels in '21/'22 and grow further in '22/'23, it would be in that range of the total top line. Turnkey would contribute to that.

The next question is from the line of Jainam Shah from Equirus Securities.

So basically, if you see our export revenue in last 4 to 5 years, so it was ranging between that INR 200 crores or somewhere. In FY '21, we were not able to record major revenue because of this COVID pandemic and these shipment issues. And if we see the upcoming year, I think, that we'll be executing somewhere around INR 400 crores from current export order in FY '23, and there is no major order on hand in our books and if you see the past then there is no major order -- major export revenue in our overall revenue per se. And if we take the like this consultancy at around INR 1,000 crores or INR 1,100 crores and this turnkey is around INR 700 crores, INR 800 crores or INR 1,000 crores. So our revenue from the FY '22 level will be in the similar range for FY '23? And if you just talk about the margin and export margin, which is contributing at around 25% as against the increasing share of this turnkey segment would be hurting our overall EBITDA margin? Is this understanding correct?

So first, let me go step by step. So you asked 2, 3 things linked to each other. First is that export, we've done the highest ever in the 9 months. You've touched INR 700 crores. So this year, with the balance Q4, as I said earlier, another about INR 250 crores, INR 275-odd crores, we would touch the highest in the recent few years. Yes, the balance, about INR 400-odd crores would spill over to the next year. And also, we are aggressively working on a number of fronts on export leads in various countries. As I said, because of the all now international travel and countries opening up, we have been having a lot of interaction. I'm sure that in the coming months, we should be able to get some export orders of fresh. But as you correctly said, by their basic design, export segment is a long-lead segment. From the time the order matures till the time the revenue realization happens, it is a long lead. So having said that, however, with our INR 2,200 crores of consultancy in our order book of INR 5,100 crores, the gap, if any, in the FY '22/'23 will be more than made up by the consultancy and the INR 2,100 crores order book of turnkey. The consultancy wing by itself has a much higher margin than the export wing. So whatever gap, if any, in few months, which would be there from revenue realization from the export wing would be more than taken care of by the revenues and the margins by the consultancy segment. So as an overall in '22/'23, we are aiming to target the '21/'22 levels of revenues and margins, at least and aim to at least improve as the quarters pan by.

Okay. Okay. Sir, but if we see the overall range of turnkey...

Sorry to interrupt Mr. Shah, may I request you to rejoin the queue for follow-up question. [Operator Instructions] The next question is from the line of Parimal Mithani from Credential Investments.

Sir, I just wanted to do, you mentioned in your con call, the opportunity being presented by the budget. If you can address, what sort of opportunity ties for us. And how do you see the company in the next few year [indiscernible] better for, since the CapEx of the -- government is already around the CapEx?

Yes, thank you. So this is -- these are very interesting and exciting times for us, especially this post budget. We did an in-depth analysis of the opportunities for us, and we found that there is an allocation of around INR 5 lakh crores for few major ministries, which are of interest to us. Out of that, about INR 2 lakh crores is for the Ministry of Roads and Highways, which includes now you must have heard the new ropeway plan, which is under the Ministry of Road. So we do a lot of work in ropeways, have been doing. So I see this as another big opportunity. About INR 1.5 lakh crores is in the railway segment, which is our traditional line of business in any case. And interestingly, there's about 85 lakhs -- INR 85,000 crores in the Jal Shakti Ministry and about INR 80,000 crores in the Ministry of Housing and Urban Affairs. Now both these sectors, we've been doing a lot of work, and we are aggressively consolidating these verticals, whether it is smart city plans, mobility plans, the traffic studies. So recently, we got the order for the Chandigarh tricity for the smart city plan for Chandigarh, then Jal Shakti, we are doing a lot of work in water segment, renewables or water recycling. So I see a lot of opportunities in the coming years, especially in these new age verticals besides our traditional lines of business.

And sir, this is mainly across consultancy that you see or it's across -- including turnkey also sir into that?

Both. So we -- you've seen in our past trend in the year, we have a healthy mix of turnkey and consultancy. And we will continue on a case-to-case basis to target both consultancy and turnkey in all these sectors.

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

On the follow-up question on the opportunity. Any opportunity in the large size segment that we have been talking about on the DFC, on the high-speed rail, semi high-speed trains and the 2 suburban railway upgradation that has been planned? Any color on that would be really helpful.

So in fact, we are already doing a lot of work with DFC. We have a running contract with DFC. We are doing a lot of work with them. We got last year -- if you must be following us, you must be aware, we got an order from Haryana Orbital. So we're doing that. And in that, with more and more and this model being encouraged by the government in various states, these orbital railways, light railways, suburban railways, including high-speed and semi high-speed, we've got the consultancy project for that. So we are doing a lot of work in that. In fact, recently, we got the order for the Transaction Advisory for the Bangalore suburban railway project also. So we see a lot of opportunities in the coming months and years in these areas as more and more states delve into these areas of orbital railways or short-lead suburban railways.

And how's the competition landscape in the consultancy portion of the business? Has it increased? Or is it remains stagnant or...

Well, that's a very general question. Competition is always there, and we are always ready for competition with our past and our domain strength and our policy of being -- partnering wherever it is required on a case-to-case basis on complementing our bench strength and our domain strength for aggressively bidding for new areas also, we have been working. You must be following us in the last month or so, we've had a number of partnerships and MoUs across various sectors. So with this, the -- I think I take this competition as a good, healthy sign for us to improve even further.

The next question is from the line of Sanjay Doshi from Nippon India.

I have a more focus on the overseas business, sir. One is your export business has been quite volatile. As you mentioned, it's a good long-lead time to get business. But do you see, I mean, the kind of effort you have made in coming out, what standardized and more customized products for different markets and entering new markets, so can this become a very sustainable annual INR 500 crores, INR 700 crores, kind of revenue on a 3, 4-year basis?

Yes. In fact, as I mentioned, as in the last few months, the international, the travel and the interaction is opening up more. We have got a lot of interest from various countries. And there, in fact, the customization model of ours like we did for Mozambique, it's being -- it's got a lot of response even during the IREE held recently, we got a lot of positive response from various overseas clients. So as you correctly mentioned, in the export segment revenue, there is a certain lead time. So in some quarters, it may see dips in terms of revenue realization, in some quarters or maybe half yearly, it may see an upswing when the revenue actually gets realized after shipment. But on a sustained basis, yes, if seen over a longer period of time. I see the export business to grow in a substantial way, more so with the success of this customized gauge which you've done and commissioned and it's been running very well in Mozambique.

The next question is from the line of Viraj Mithani from Jupiter Financial.

Yes. Am I audible?

Yes, go ahead. We can hear you.

Yes, sir. Congratulations first on the good set of numbers. I have one question, sir. Now we are broadly -- if you talk about '20 levels, we were at INR 2,500 crore of revenue. And if I had to ask you, say, next say, 3, 4 years, what growth rate we can foresee, like since you're saying there's so much of the opportunities. Just a general ballpark figure would be okay. I don't want exact figures. Your sense on the growth rate in next coming 3 to 4, 5 years.

So as I said that this year, we will reach '19/'20. And then '22/'23, as I mentioned, there would be maybe a certain dip on a quarter for some export revenue, which we will make up with the consultancy and turnkey. But on a general long term, we see a very healthy growth. So I don't want to speculate. But whatever you feel is the healthy rate of growth, we will be -- I can only say, with this aggressive diversification in new age areas that we are doing, and we are getting a lot of positive response in areas of sustainability, environment, recyclable, renewable energy, smart city planning. You can see in the coming quarters, you will see definitely a more bigger growth trajectory, but it will not be fair to me to restrict to either a very high number or a very low number for a 3- to 5-year, because that will be speculative. Let me -- let our work speak for itself in the coming months, and you'll see the more and more new area orders coming on.

So it would be fair to assume double-digit growth rate on top and bottom line?

As I said, I wouldn't like to speculate. As these are just speculation numbers.

Okay. Sir, and my one more question. What is our cash in the balance sheet, our own cash would be, sir?

So you're asking a second question, but just to -- in case, our cash on hand as of Q3 ending is INR 800 crores.

INR 800 crores.

Yes.

The next question is from the line of [ Umang Shah from Shavit Capital. ]

Sir, previously, we've had some problems with respect to collecting receivables from Mozambique. So when they're exporting right now, how do we make sure that we don't have any receivables issue?

I think the issue has been sorted out quite well. And now both in -- both our export realization both from Mozambique and Sri Lanka is well on track. All those nitty gritties have been sorted out. And I don't foresee any major hold up in the trade receivables from our export expense.

And sir, how much credit period, do we give them?

Pardon me?

How much credit period do we give to these buyers?

That varies from contract to contract. I wouldn't like to make a generalized statement. It varies from order to order.

The next question is from the line of Lokesh Manik from Vallum Capital.

Sir, just one question. The recent MoUs that you have done, what is the revenue opportunity that you see from these contracts for the revenue. Could you share some guidance.

No. So each of the MOUs, which we've done recently have been very well thought of and fit into our master plan and our strategy for long-term growth. And our basic strategy of future ready and trying to do not just more of the same, but much more of the new. So each of these MOUs, whether it is BEML for metros where we are doing -- we're going to aggressively bid for a number of domestic and international projects, whether it is with [indiscernible] for consultancy, whether it is with IIT Roorkee, CSIR or AITD, all of these are going to mature into revenues definitely in the coming months, because each one of them, whether they have a certain sector in which they operate on, they will complement our strength, whether it is in the consultancy, whether it is in the export, whether it is in the turnkey and each one of our partnerships and MOUs have been strategically thought of in the overall game plan forward.

Right. And those will be long-term in nature, sir?

Obviously, MOUs and agreements are based on a long-term horizon. However, they vary -- the time period varies from case-to-case for each MOU depending on the comfort level of both the partners.

Okay. Because those are not project-specific MOUs?

Sorry?

These are not project-specific MOUs? These are long-term in nature.

MOUs or memorandums of understanding to be jointly complementing each other's strength and taking part in opportunities, both domestic and international.

As there are no further questions, I now hand the conference over to the management for closing comments.

I thank each of the participants for their questions and the entire management is here with me and the entire Board. We again assure you that the trend, as you've seen in Q3, we will be -- we are committed to maintain this in the coming quarter. And I'm sure that with the opening up of the economy and the restrictions, we are definitely going to capitalize on the opportunities which come up, especially including the opportunities, which, as I said, have been thrown up in the current budget also. Thank you.

Thank you all for being a part of this conference call. If you need any further information or clarification, please send an e-mail to [email protected]. Ladies and gentlemen, this concludes your conference call for today. Thank you for using Chorus Call conferencing service. You may disconnect your lines now. Thank you, and have a pleasant day.