RITES Limited (RITES) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the RITES Limited Q4 FY '22 and FY '22 Earnings Conference Call hosted by Elara Securities India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Harshit Kapadia from Elara Securities India Private Limited. Thank you, and over to you, sir.

Thank you, Vivien. A very good morning to everyone. On behalf of Elara Securities, we welcome you all to Q4 FY '22 Earnings Conference Call of RITES Limited. I take this opportunity to welcome the management of RITES Limited, represented by Shri Rahul Mithal, Chairman and Managing Director; Shri Gopi Sureshkumar Varadarajan, Director Projects; Shri Anil Vij, Director, Technical; and Shri B.P. Nayak, Director Finance. Beginning the call with a brief overview by the management, after which the Q&A session will start. I'll now hand over the call to Rahul, sir, for his opening remarks. Over to you, sir.

Yes. Good morning, everybody. Bright morning and very interesting and very exciting results for us. So 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. Having gone through that, let me give you a brief overview of the key features of our results, which you must have seen. We have committed and we have aimed for coming back to our pre-COVID levels of '19, '20, and we are quite pleased that we have been able to reach an operating revenue, an all-time high of INR 2,575 crores, which is a 40% growth since last year and about 7% growth since the pre-COVID levels, both in terms of the top line and the bottom line, the core EBITDA. Another interesting thing is that we have reached an all-time high of exports, both in goods and services. The export of rolling stock is in the range of about INR 960-odd crores, an all-time record. Our international consultancy is about INR 110 crores, which is again an all-time high. So we are -- this is a very encouraging sign for us. Another very interesting thing is that we have been getting a lot of orders across the spectrum of our core areas of operation, whether it is the metros, whether it is the highways or whether it is the railway infra, both in domestic as well as in the international sector. We recently got an order from Ghana for about INR 100-odd crores for the railway system in Ghana for the highway system of about [ INR 25 crores ], in the metro system for Bahrain for about INR 1.5 crores, in Bangalore Metro for about INR 20 crores. So the company is growing and is consolidating on its basic mantra of multi-sectoral consultancy. So with those opening comments, I would leave the floor open for questions.

[Operator Instructions] The first question is from the line of Shreyans Mehta from Equirus Securities?

Congratulations on a great set of numbers. Sir, if you could, help me out with the breakup of the current order book.

Yes. So we have an order book of about INR 5,000 crores, [ INR 2,200 ] crores are on turnkey projects, about INR 2,000 crores are on consultancy, which includes the inspection. We have about a balance of about INR 450 crores for the export, the 2 orders which are currently going on, Sri Lanka and Mozambique, and we have a leasing order of about INR 128 crores.

INR 128 crores. Sir, my question pertains to -- the second question pertains to our outlook for FY '23, given that now we just have INR 450-odd crores of order book, how do you foresee FY '23 panning out?

So in terms of the top line, while we will definitely aim for consolidating on the operating revenue, which we got for '21, '22, yes, but there is a challenge in terms of the current order of exports, which around INR 350-odd, INR 400 crores will finish by quarter 2. So we will make it up with the turnkey revenue. We are pursuing for fresh export orders, but by the time they mature and the revenue starts coming in at maybe by the end of the year. So the aim is to reach -- I mean, definitely improve on the top line, which we got for the last year. However, because of the mix being changed from the export, vis-a-vis more of the top line coming from turnkey, we will have definitely a little effect impact on the margins. Because turnkey, as you know, are lesser margins compared to export.

Correct. Correct. Correct. So sir, if you could throw some highlights how much will turnkey contribute in terms of the revenues in FY '23? Because still, we are not seeing much in terms of execution out here. It's in the range of INR 2,000-odd crores.

So the revenue for turnkey for '21, '22 was about INR 450 crores. And as I said, the INR 2,200 crores balance of turnkey, I foresee a large chunk of at least about INR 900 crores to INR 1,000 crores minimum coming from this as we move forward. Let's see how each quarter goes. But the point is that INR 2,575 crores, we will definitely try to better. And we will try to make up from the turnkey side for the top line for the gap in the export for few quarters.

Got it. Got it. Got it. So because I mean, if I do a simple math, that roughly INR 450 crores coming from exports, INR 1,000-odd crores from turnkey. So we are roughly at, INR 1,500 crores. And then roughly around, say, in terms of contribution from consultancy which is in the range of say around INR 1,000-odd crores.

I think you can do your analysis yourself. I've answered your question. I think we can move on to the next question.

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

First question is on your export order of Sri Lanka. I just want to get an update on that, what's happening over there? You received your money on time or any update on that?

Yes. So Sri Lanka, we've completed recently the last consignment also. And we are in touch with the authorities there. I don't foresee any problem in getting our revenue. It may be delayed by a few months here and there, but in this financial year, I think we should be able to get all our revenue.

Sir, any receivable pending from there?

Yes. Well, obviously, the last consignment which has gone recently that we will get over a period of time, but we will definitely get it.

The next question is from the line of Sanjay Doshi from Nippon India Mutual Fund?

Congratulations on a good FY '22, where we overachieved our targets of pre-COVID levels. Sir, I just wanted your thoughts on how one should look at this company from a medium-term perspective and not focus a lot on a quarter or a year, because the kind of opportunity one can see on consultancy, especially overseas and whether exports. So if you look at from a 4-, 5-year perspective also, do you think the company should be able to target double-digit growth with a stable margin profile?

So I'm glad, very interesting question, and you've got it right. Because we have got such a mix of revenue streams and each having a wide range in the margin that to focus on a particular quarter doesn't really give the full picture. So if you see on an annual basis or a 2-year or a 3-year or a 5-year perspective, yes, we -- now with the consultancy revenue also coming back to pre-COVID level on about INR 700 crores. And international consultancy, we've touched the all-time high of about INR 110 crores this year. So I think -- and we're getting a lot of leads. We bid for a number of international consultancy projects. I see we consolidating our place in the consultancy [ ecosphere ] both in the domestic and the international fields across the key sectors of metro, highway, railways and, of course, we're getting a lot of new opportunities in the green sector, the ESG sector. We've got a lot of expertise in that. We have been doing a lot of work. We started a new sustainability vertical a few months back to focus and collate all our resources to target this particular area. And this is again going to be another area which is going to add in a big way in our consultancy, top and bottom line, both domestic and international.

So with your permission, just a follow-up on the comment that you made. While our overseas consultancy is only INR 100 crores, while domestic is around INR 700 crores and growing, where do you see overseas consultancy maturing for a company like RITES given that you've just started international, and this is the best margin profile business for us. So that's why I'm asking that?

No, I'm glad you asked that because this is going to be a very key focus area. We've started foraying into international consultancy in an aggressive way. In the past few months, we've already started seeing results. As I said, a few orders have come in the last few months itself, whether it is Bahrain, whether it's Ghana, Nigeria. So while each of these -- some of these projects are low value because some consultancy about INR 100 crores, some are few -- [ INR 2 crores to INR 5 crores ]. But I foresee this jump from about INR 60 crores, INR 70 crores in the previous year to INR 110 crores in 1 year. Going forward, we're going to see a big, big jump in this. But give it some time because these orders take time to mature. We're aggressively bidding everywhere in a number of countries, but I see it coming in a big way. So I wouldn't like to speculate on any number, but you can see the jump itself in the last 1 year. And considering that trend, you can take it forward.

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

Congrats on a good set of numbers. On consultancy coming back pretty strong, that's good news for us. And I congratulate the management for that. But how do we see this trend continuing for coming years? Because, as you mentioned in the opening remarks, where margin will likely to get impacted because of skewing towards turnkey away from exports in FY '23. Will we try to bridge it up with increasing our contribution from consultancy to kind of offset some of the margin impact in the coming years? What kind of growth we should build in for consultancy?

So let me first put it in perspective. This temporary dip in the mix between turnkey and the contribution from Expotech export tech is only primarily for a few quarters in this FY. It's not for the coming year. It's just a stop gap for the time the revenue from Expotech starts maturing by latter part of this FY or early next FY. However, we are very, very conscious, as I've been mentioning in my previous interactions, that we are primarily a consultancy organization. And for us, whether it's the core EBITDA margin or the bottom line margin, these are sacrosanct. And we will be very, very particular about those, and we will try and maintain them. So whatever are the offset, in fact, because of the turnkey on the margins, we will definitely make it up from the consultancy margin. However, consultancy business domestically has become very, very more competitive. So there are pressure on margin. And that's why international consultancy, which gives us even a better margin, is going to be a very major focus area. So a mix of all this will help me ensure that we keep our bottom line and our core EBITDA margin safe.

And what kind of growth we can expect, the [ traditional ] 10%, 12% growth, which we were doing earlier pre-COVID, that one can expect at least?

Yes. As I said, definitely, the top line INR 2,575 crores, we will definitely aim to better it. The bottom line, will -- definitely all targets, whether it is the top line, bottom line, the core EBITDA margin and the PAT margin. We are -- our targets -- it's early days, only been 1, 1.5 months but definitely, this FY, we are aiming to better our '19 -- '21/'22 performance.

[Operator Instructions] The next question is from the line of Dixit Doshi from Whitestone Finance.

A couple of questions. Firstly, you mentioned that the latest -- what we have executed for Sri Lanka, the payments are pending. So how much would be the absolute amount?

So the last set of coaches has gone in quarter 4 and the roughly about INR 100 crores is balance from Sri Lanka, which will come. I mean I don't foresee any problem because there's a process of commissioning those coaches as part of the contractual agreement. So by the time these coaches get offloaded and commissioned, there seems to be no roadblock in getting these payments. We've done enough headway at the appropriate levels, and we've got assurances that these payments will come because these are physically delivered there, and that's why there seems to be no problem. Problem would have been if the delivery would have got stuck up. But now since they have all reached, all the orders are completed, so payment is not going to get held up?

Yes. But how much is the receivable?

I said about INR 100-odd crores?

Okay. Only INR 100 crores.

Yes, that's it. So that's the last slot, which has recently gone.

Okay. Okay. And now my second question is regarding the export orders we are trying in different countries. So whenever we will get the order, how much time it will take to start execution because it has a lead time?

Yes. So that's very correct, your assessment. So rolling stock are 4 types. We are exporting all kinds of 4 types of rolling stock, whether it has locomotives or coaches or DEMU coaches or wagons. Now all have a different lead time. Locomotives would have the longest. The normal coaches and the wagons would have the shortest. The DEMU coaches, since they have a [indiscernible] arrangement, they have a midway lead time. So anything varying from 3 to 6 months to about 9 months or maximum a year for -- because certain locomotives, if they are for a [indiscernible] gauge country like Mozambique, they require a little more developmental time because the vendors are lesser. So as I said, varying from the kind of product. But we are hopeful that we should be able to start realizing some revenue from new orders by maybe Q4 or early Q1.

Okay. So you're expecting some orders in next couple of quarters?

Definitely.

Okay. And just roughly, are they large orders or the kind of Sri Lanka we had or they might be small orders?

I wouldn't like to speculate right now as soon as we could be following a number of leads. As soon as any of them matures, we'll be informing the exchange.

The next question is from the line of [ Gaurav Jagera ] an individual investor.

I would like to have your view on our international export products. How do you see going forward? How much growth can we expect from this segment?

Our forays in the last few months after the world travel and economy started opening up again has shown a lot of encouraging signs across continent. The interesting thing is we are getting leads not only from the erstwhile customers of African continent and Southeast Asian countries. We are getting a lot of leads from Latin American countries and Central Asian, Central Europe countries also. And we are targeting export of not only railway rolling stock. We are also targeting export of -- we've tied up for metros. We are getting some interesting leads about metro rolling stock. We are also getting -- exploring the various avenues to try and pilot the export of our Vande Bharat because a lot of countries have shown interest in that. So across the sector, we are getting interesting leads of export, and I see a growth, as I said, to speculate on any number, unless it fructifies into an order, it would not be correct. But by latter part of this financial year, you would certainly see some orders coming up.

Great. Very good. And just a follow-up on this, sir, since you mentioned the ESG segment in the overseas market, what's your view on it? Like how do you see it panning out?

So I think the second question, you can come back in a queue, to be fair to other participants. This is not a related question.

[Operator Instructions] The next question is from the line of Chintan Sheth from Sameeksha Capital.

I hope I'm audible again. So on some bookkeeping questions on other expenses. The other OpEx, if I look at, has kind of increased, bumped up for past couple of quarters, INR 55 crores in Q3 and INR 47 crores this quarter. Anything -- any one-off or higher provisioning, which we did in this, if you can throw some light on that?

So few of the expenses have grown up because one is certain employee expenses went up because the [ DA ] was opened up, there was a higher -- we made much higher profits. And so our bonus was higher, not leaving cash encashment because of normal year coming up or restrictions are opening up. So FY '21, '22, the employee expenses have gone up. And then the -- in terms of other expenses, certain provision we made for a damaged locomotive, which was about INR 13 crores. Then there were also expenses in terms of some depreciation expenses, certain -- those have gone up because of the certain locomotive lead, which we have on lease. They have reached their age of the rehab. So these are certain broad big chunk expenses, which have gone up in our expenses?

INR 13 crore provision came this quarter or put together [indiscernible]?

No, I'm talking about the overall.

Overall for the year. Okay.

[Operator Instructions] The next question from the line of Shikha Doshi from Axis Securities.

My question is, could you give a guidance for your CapEx target for the coming quarter for FY '23, '24?

So CapEx, we have done about INR 140 crores in '21, '22. And we would remain in that range. We are targeting somewhere about INR 150 crores to INR 200 crores, not more than that. Primarily, we are reiterating we're not a very CapEx-heavy organization. Our focus is on limiting CapEx to only key areas. And that also, this is slightly higher this year because we are planning to set up some major labs for centralized inspection from an equipment for new age inspections and lab analysis. We are also planning to invest some in our IT upgradation. So in terms of CapEx, it is roughly going to be in the range of over INR 150 crores to INR 200 crores.

The next question is from the line of Anurag Patil from [ Roha AMC. ]

Sir, if you can elaborate on the CapEx of the solar side and the leasing segment, that would be helpful.

So we are not planning any CapEx on the solar area. We have been -- I think I've been clarifying that for the past few quarters. And the second part, what did you say? CapEx on?

Leasing segment.

Yes. So leasing, we already have about 65 locomotives. I don't foresee any major CapEx investment in the leasing area. We've got a good fleet, and we're going to handle the existing business as well as the growth with rationalization of use of these locomotives.

[Operator Instructions] The next question is from the line of Parimal Mithani from Credential Investments.

Congratulations on a wonderful set of numbers and for a good dividend as well. I just wanted to know, in terms of consultancy business, how do you see forward [indiscernible]? And so in terms of the National Rail Plan, which you talked about, what is the opportunity size for us [indiscernible]?

Opportunity in -- sorry, last question?

The National Rail plan.

The National Rail plan. So the first point in terms of consultancy, as I mentioned earlier, the consultancy, both in domestic area, once having reached the pre-COVID level, I see a growth going into a number of areas are -- especially in metro, we are getting a lot of good orders, both domestic and international. We're also getting a lot of good orders and consultancy in the highway area. Airports, we are getting lot of orders. And we are aggressively now growing and pitching for growth in consultancy in the sustainability area. So whether it is the smart city planning or city plan, mobility plan, we are in the sustainability vertical that we've started. We have got, as an MSI, as a master system integrator, where we are merging the mobility plan, the sustainability, as well as the IT. All of them, we are merging together and giving a solution to clients. And that has been taken very positively. So I see a lot of growth for us in that area with our expertise. Also, as I mentioned earlier, a lot of growth aggressively being targeted for international consultancy, which has already seen a number of orders coming in the last few months.

And sir, National Rail Plan [indiscernible].

Yes. So in the National Rail Plan, there are a number of areas which are planned, whether it is port connectivity, steel plant connectivity, coal connectivity. All these areas are being targeted by us. We already have a number of both consultancy, PMC, DPR, as well as turnkey projects in coal connectivity areas, in steel plants, consultancy projects in ports, airports. So with the NRP having so much of allocation and being pushed, we are going to capitalize further on that, including things like the Jal Jeevan Plan and we're also getting a lot of leads in the Jal Jeevan area also?

And sir, if I can just ask one more question?

Yes. Is it related? Then go ahead. Otherwise, you can come back.

Sorry, it's not related. It's a different thing. In terms of payout.

You can kindly come back in the queue.

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

Just wanted to get your thoughts on overseas consultancy business. How is our approach in capturing those markets? Are we qualifying on our own credentials or are we partnering with global consultants for these? If you can just highlight that part?

So it's a mix and match, depending on the client, depending on the country and depending on the sector. We have got a few orders in the last few months, both as stand-alone, as well as in partnership. To give you 2 recent examples, the Ghana order we got in partnership, which was about INR 100 crores for our portion, that was a railway consultancy project. The Ghana Highway project is about INR 25 crores, which was our -- also in partnership. But in a number of cases, we've got it on our own, like Nigeria, the highway, the Bahrain Metro, we've got it on our own also. So we follow an approach of -- depending, as I said, on the sector, the client, the requirement, the country. We are open to partnerships. We have been partnering, as you must have seen in our declaration to the exchange, with the best of the consultancy organizations, whether it is [ SMEC ] or -- a number of uncertainty organizations across the sectors, and we will continue to partner with them.

[Operator Instructions] The next question is from the line of Viraj Mithani from Jupiter Financial.

My question is on the green consultancy? And can you give some color on green consultancy and as well as on [ RMPL ]? That is what the question is.

So in terms of green consultancy, we have been traditionally doing a number of studies for the consultancy projects or whether it is the SIA, the EIA, the solid waste management, the water management and things like that. So that has -- those have been, as I mentioned, consolidated under one sustainability vertical rather than stand-alone consultancy. Now they are -- and we have been doing smart city planning, city planning, mobility plan. So now there, we are pitching it as one product, depending on the clients' requirements. If I do a city plan for you, it is a green city plan. It has incorporates all the elements of green also rather than having a stand-alone consultancy. Similarly, in all our DPR, which we are doing even for construction work, whether it is building construction works or it's the highway construction work, we are incorporating our green. So every DPR now, since we declared a policy of transforming to green as going to be a major thrust, all our DPRs are now green. All aspects of green are incorporated in them.

Okay. And what are the growth prospects in that would be, sir? Can I get some color on that?

The growth prospects are tremendous. You've seen the areas available, the opportunities available. The government also, the COP26 has been pushing in this area. So we will be targeting a disruptive growth in this area. You can see the figures as they come over the coming quarters.

And sir, color on RMPL?

I think you can come back.

[Operator Instructions] The next question is from the line of Danesh Mistry from Investor First Advisors.

So I had the question related to our export sales. So one is that, I remember earlier sometime last year, we were exporting a few locos to Sri Lanka and things like that. So is that -- are those orders through with Sri Lanka or is there any pending? And second is can you just comment on the export sales margin. Last year, same quarter, we had done a EBIT of about INR 30 crores on a top line of INR 95 crores. And this year, we've done about INR 36 crores EBIT on a INR 250 crores top line. So some sense on that, is there any difference in the type of ordering, which we haven't got the export sales?

So in terms of the Sri Lanka orders, the last lot of coaches and DEMUs sets have gone. So as of now, all the orders are completed. And as I mentioned a little while earlier, the commissioning of these and the payment of about INR 100-odd crores will come in the next coming few months. As far as the comparison of margins, which you did of last year vis-a-vis this year of particular export, you see export has normally margins in the range about 25%, 30-odd percent. So comparing one quarter with another quarter for particular export revenue vis-a-vis the contribution of that may not give a holistic picture because the costs which get booked and the revenue which materializes for that particular product, which has got exported may have a time lag of a few months. So on an overall basis, if you compare the export margins from the year and there was -- because like '21, '22, there was -- as I said, we did the highest ever export of INR 960-odd crores. 2021, there was hardly any exports. So comparison would be better with '19/'20 and the previous years. That is when you would be able to get an appreciable comparison of the export margins as it stands as of now vis-a-vis what it was earlier.

Got it, sir. Got it. And sir, if you don't mind me, what is our order book? I just missed that.

The order book is INR 5,000 crores. Out of that, about INR 400 crores is balance on export.

On export. And in consultancy, sir?

Consultancy is about INR 2,000 crores.

[Operator Instructions] The next question is from the line of Chintan Sheth from Sameeksha Capital?

Sir, on the railway procurement, right now, recently, we saw announcement of one of the entity getting INR 7,000-odd crores of wagon order and previously also another entity got INR 4,000 crores, INR 5,000 crores orders. So this coach inspection business will definitely get benefited from it or we are facing competition there as well?

No, inspection business will definitely grow. Competition is there in every sector, whether it is in the inspection or whether it is consultancy. But with our credentials and experience of inspection, whether it is inspection of rolling stock or whether it's inspection of rail supply or a number of products that are [indiscernible] with about more than 40 years of experience, it's a well-established business of ours. And we are building up on that on our experience, so that we are ready with the changing requirements. In fact, as I mentioned in my CapEx expenditure some time back that we are also planning to upgrade our inspection labs also with the latest state-of-the-art equipment so that -- already a few of our labs, we've got an NABL accredited. And whatever further equipment is required to have in-house detailed inspection facilities, we are spending some money on that to be able to do it in this FY.

So that will be positive, right? The traction is getting started from the railway procurement.

Definitely. It will be -- we leverage the opportunities of this growth in orders for railway rolling stock.

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

Sir, only a color on our subsidiary REMCL in terms of growth numbers and the prospects going ahead.

Great. So REMCL has done fantastically well this time, the highest ever revenue of INR 93 crores, and it's up from INR 68 crores last year. It's got a profit of INR 45 crores, which is a good bottom line margin of about 50%. REMCL is doing great work in terms of not only supplies of traction to the Indian Railways Power for traction. Also the 26-megawatt wind power plant at Jaisalmer that has shown its all-time high. In fact, the revenue for this particular plant increased an all-time high from INR 16 crores last year to INR 21 crores this year. Machine availability was an all-time high. So this plant is doing very well. REMCL is also majorly in part with the Ministry of Railways for its net zero plan. It's playing a very active role in the way forward for all renewable energy plans for the Indian railways. So REMCL has got a very big growth trajectory. It's already shown its result in this year and it's going to further grow in this FY in the coming years also.

The next question is from the line of Anurag PatIl from [ Roha AMC ].

Sir, lately, you have been consolidating the operations in the IT segment also. So can you throw some light on what kind of revenue we can see in the next coming 2, 3 years from this segment?

Yes. So this has been a new strategic thrust area. We partnered with TCS a few months back. And we are exploring a number of opportunities. Primarily, there will be IT-based applications, which will be part of the product that I had mentioned some time back, which I'm offering to my clients. If I'm offering smart city product to my client, I'll be in MSI, a master systems integrator, which will have all IT-based application based on that. For example, if I'm right now doing a consultancy for the tri-city of Chandigarh, the smart city, the mobility plans. We're doing a consultancy for the mobility plans for the Guwahati City. So all IT-based applications, which can be supplementing my product which I offer to my clients will be a part and parcel of my consultancy. So that will be itself a major contribution to my consultancy revenue. And with the partnership of TCS, we are exploring a number of opportunities both in consolidated products as well as few independent IT application products also.

The next question is from the line of Parimal Mithani from Prudential Investments.

So I'd just like to get a number on the quality assurance business for the -- in the consultancy part of the current year.

Yes. So the -- in terms of the QA business, the revenue has been -- and, again, reached the pre-COVID level, it's about INR 325 crores, which is up from INR 129 crores -- sorry, from INR 299 crores last year. So it's a steady growth in the QA business. The profit also has been INR 214 crores, which is up from INR 172 crores last year. So margins are safe, QA is working. The growth is good. However, as I mentioned that QA we are also further aggressively being -- giving [ inputs ] to diversify to be able to be ready for the new age areas and to be able to take the competition in this area ahead on.

And sir, last thing in terms of [indiscernible].

Mr. Mithani, kindly get back in the queue for further questions. [Operator Instructions] The next question is from the line of Rakesh Vyas from HDFC Mutual Fund.

Just wanted to understand this consultancy order book of close to INR 2,000-odd crores. What is the time frame in which this needs to be executed, if you can just throw some light?

So you see consultancy business as different types of orders. Some are the initial DPR, [ TFR ], some are the PMC consultancy, which are in sync with the turnkey projects. So if a turnkey project goes on an average from about 2.5 to 3 years also, something could go from 2 years to 4 years. So depending on the nature of the consultancy order, the revenue of consultancy comes sometime anything ranging from 6 to 10 months to something ranging from about 2 to 3 years. So that's the average as I said will depend on the type of the order of consultancy.

So just a follow-up on this, sir, on this INR 2,000-odd crores, if it is possible to break up between long-term consultancy project and short-term, that will help.

I think that is because every project, every consultancy order is unique in its own way. So it's very difficult to compartmentalize it. But yes, we keep a tab very closely. So as to if there are some border line consultancy orders, which are midway between short-term and long-term, and we feel that they need to be pushed to expedite our revenue realization and also consultancy giving us better margin. we keep a tab on it and try to push it in every quarter.

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

My question is on what kind of opportunity you are looking in metro railways, if you can quantify that, that will be great.

Great. So metro, we are getting 2 very good types of leads and already maturing into orders, both domestic and international. So we have a strong legacy of working in metros. About more than 25-odd domestic metros we have done, 2,000 kilometers plus of metro work we have done in India already. Internationally, we are the engineering design consultant for the Mauritius Metro. The Phase 2 of Mauritius Metro 2A just got commissioned a month back, you must have seen it in the media. The balance leg of the entire leg of the Mauritius Metro is targeted to be completed by this year. So in terms of metro, we have a very strong vertical. And we are also getting a lot of new orders in metro, whether it is the PMC, we got an order for about INR 20-odd crores from the Bangalore Metro a few months back. We got the metro consultancy work in Bahrain for a DPR work. So metro, I see a lot of growth both in terms of the initial feasibility, the DPR, the engineering consultancy. And now having tied up with BEML, we are also pitching in a big way for entire one packet solution, both in terms of design, rolling stock supply by BEML, and O&M by us because we have an O&M experience here running more than 20-odd mini railway systems and coal field and steel plant. So with that, we are offering in a number of cases, an entire package deal. So metro is going to be a big growth area for us in the coming years.

The next question is from the line of Rakesh Vyas from HDFC Mutual Fund.

One last question that I have was on the turnkey project business. Essentially, we have almost INR 2,200 crores of order book. And last year, the revenue recognition has been fairly muted. Any challenges that you are seeing in ramping up this? I understand you've already highlighted -- you expect this to prove significantly in FY '23. But if you can throw some light as to if there are any bottlenecks out there, which needs to get ironed out? And secondly, related to this as well as impact of the high raw material inflation that we are seeing generally across the board. Is it going to have any material impact on our expected margins?

As far as the turnkey projects are concerned, the revenue was definitely muted, about INR 460-odd crores in FY '21, '22. These were projects which were at the initial stages. And now they are -- with all restrictions also opening up, the turnkey projects are very much on track. And I mentioned as correctly said that I see this to be a significant contribution to my top line. I don't foresee any major challenges or any roadblocks. Minor issues here and there are always there at project site, but there's no major roadblocks foresee taking these forward. And the second part, related question, I'm sorry I missed that.

The potential impact of the raw material inflation that we are seeing generally across the board, any impact that you might foresee on the margins?

I don't foresee much of an impact there because all our orders are already built in that. So I don't see an appreciable impact on the raw material cost per se on the inflation of the raw material cost in terms of the margins.

[Operator Instructions] The next question is from the line of Viraj Mithani from Jupiter Financial?

So what will be our own cash in the company?

Sorry?

What will be our own cash in the company cash, our own balance in the company? Our own cash balance?

Cash balance was about INR 900 crores. I can -- my Director of Finance, Mr. Nayak, is there. He can give the details. Yes, so Nayak.

Yes. It is around INR 950 crores.

And that is all our own or the client funds also in that?

No, that does not include the client fund.

Does include the client fund. The question related to that is that the interest on the client on this by giving back to the client.

It is given back to the client.

The next question is from the line of Harshit Kapadia from Elara Securities?

Thank you for the opportunity and congratulations to a good set of results for FY '22. So just my question is, first, on the wagon manufacturing recently, a huge tender was being given by the Indian Railways. Had RITES participated in the tender? And is there a possibility that RITES would be looking where we already have a JV with SAIL to increase our production there? If you can comment on that?

Yes. So we have -- as you are aware, correctly, we have a 50-50 JV with the SAIL at Kulti. We have an assured offtake order, so we didn't bid for this. And our production has also started having an upswing. We have done more than 450-odd wagons this year. We are targeting definitely major growth in terms of the 22% 23%. We already have orders. And we are also trying to see what other products we can take besides railway wagon. Let's see how it -- we will see explore the opportunities utilizing this facility even for other products. We've recently entered into a vendor registration with Tata Steel for fabrication of their heavy engineering structures, which we are going to also plan to do at that facility.

[Operator Instructions] The next question is from the line of Chintan Sheth from Sameeksha Capital. .

Sir, one bookkeeping question on customer advance as on March '22 on our books?

What is the question specific? I mean, we didn't get the question.

Balance sheet item, customer advances on our books as on March '22?

One second, I'll ask my [indiscernible].

The prime fund with us available is INR 2,600 crores roughly.

No, no. In the liability side, sir, what is our client advances we have received, it will be similar to client fund or it will be different?

It is similar to the client fund, around INR 2,600 crores.

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

Sir, follow-up question on the domestic consultancy. So we have seen the order book on domestic consultancy has been coming down over the last 1.5 years. Just want to understand, is it because of the competitive intensity, which has increased in certain sectors of the operation in the consultancy. Is that the primary reason? Or there are too many opportunities. Hence, we are not becoming aggressive the way competition is becoming to get more orders. So what would be your view on this?

No. I think your assessment in terms of the first point is very clear. See, we are very clear. We have seen a trend in the domestic consultancy area of a number of players pitching in with very, very low margins and low costs and low bids. So we are very clear. We gave a certain quality of consultancy and we've made it very clear. We are not going to compromise on the quality and bid for some kind of unworkable figures. So in terms of maybe the you'll find a certain total numbers of figure going down. But in terms of consultancy margins, we are very clear we'll maintain a certain appreciable level. And I think with now the 2 quarters showing a lot of encouraging signs. In fact, in the last few months itself, the consultancy orders have again started picking up. So you can see this figure going up in the coming quarters. We have made a number of bids in very, very core consultancy areas, which are our strength, but we will maintain a certain level of quality while aggressively bidding for these.

Fair enough. Just a follow-up on the international consultancy. So you had given us a sense. Now are these projects which you are bidding for on the international side are funded by the Indian government? Or is it like World Bank funded or ADB funded, so we are secured with payments as well?

No, no. In fact, this is the interesting and that is the thing which we are pitching aggressively. We are pitching and bidding competitively for international consultancy across countries, across sectors, across funding mechanisms. So it could be funded by the local government there. It could be funded by an international multilateral funding bank. It could be funded under the line of credit. So we have a mixture of all these kinds of consultancy orders, and that is what keeps our revenue secured across the orders which we have in place. As I mentioned in last few months, 3 or 4 immediate orders for consultancy we have got across countries, across sectors and across funding mechanisms.

Thank you. Ladies and gentlemen, that was the last question. I'll now hand the conference over to the management for closing comments.

Thank you very much. I thank all my investors and all stakeholders for the confidence that they have shown in our company, we have -- we are quite pleased and excited about the fact that we have been able to, in fact, improve our pre-COVID level performance, both in top and bottom line by about 7% to 8%. And with all in the challenges, we are ready and we are committed to take this forward in the coming FY also. We are future ready and our mantra has always been and will always be not much, not just more of the same, but much more of the new. Thank you.

Thank you. On behalf of Elara Securities India Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Thank you, everyone.