RITES Limited (RITES) Q3 FY2026 Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Karthikeyan, moderator for this conference. Welcome to the conference call of RITES Limited to discuss its Q3 FY '26 results. We have with us today Mr. Rahul Mithal, Chairman and Managing Director; Dr. Deepak Tripathi, Director Technical and Director, Projects, Additional Charge; and Mr. Krishna Gopal Agarwal, Director, Finance and Chief Financial Officer. [Operator Instructions] Please note this conference is being recorded. [Operator Instructions]. Now I would like to hand over the floor to Mr. Rahul Mithal, Chairman and Managing Director, RITES Limited. Thank you, and over to you, sir.

Thank you. Morning, everyone. Let me start with giving the safe harbor statement. The presentation and the press release, which we uploaded on our website and exchanges yesterday and discussions during the call today may have some forward-looking statements. These statements consider 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. Let me give you an overall assessment of Q3, and then I'll leave the floor open for questions. So our assessment is that we are very frankly on a roll. Our performance in Q3 is completely in line in a steady and focused manner in all the points and the road map, which we had identified when I had given my commentary at the end of H1. So whether you take the first item in terms of maintaining 1 order a day, yes, we got 140-plus orders totaling to about INR 1,140 crores, an average of 1.5 orders a day. One export -- we said we'll target export order a quarter. We've got 2 this quarter, totaling to about INR 350 crores. targeting a INR 10,000 crore order book. Yes, we are already moving ahead. We are at an all-time high of INR 9,262 crores and definitely the way Q4 is also going, we should be able to try and touch INR 10,000 crores by about Q1. Four, a continuous sequential growth. So whether it's the operating revenue or the EBITDA, there's a sequential growth of about 10%. And five, maintaining red lines of 20% EBITDA margin and 15% PAT margins. So we are about 24% and 18%. So whether it is order inflow or execution of the young order book, as I said, we are on a roll, and we are poised to definitely achieve what we had given a guidance of a double-digit growth on an FY-to-FY basis as we really step on the gas in Q4. So those are my opening comments, and I leave the floor open for specific questions.

[Operator Instructions]. The first question comes from the line of [ Rehan Syed from Trinetra Asset Management ].

So I want to understand, Rahul, your segmental performance. So sir, you have seen that consultancy margins remain very healthy at 35.4%, but turnkey margins are significantly lower at 1.3%. So as turnkey now constitutes 49% of the total order book, so what structural changes are being made to ensure that the overall consolidated PBT margin doesn't compress as the project scale up? This is my first question.

Yes. So as you see, our -- we have a blended revenue mix. And as you correctly said, there are 2 extremes of the margin. And we also have an export and leasing stream of revenue, which is somewhere midway. So what we try and do now that we have a healthy order book, which is a good mix of all the streams of revenue, we definitely laid down a strategy in every quarter and definitely on an HY-to-HY or a complete FY basis that we push the levers on the mix of the orders. We are executing today as we speak, more than 700-plus live orders across the country and beyond. So as I said, we definitely fine-tune that and iterate it continuously in the quarter so that the red lines of 20% EBITDA margins, we are definitely able to maintain.

Next question comes from the line of Raghav Maheswari from KamayaKya Wealth Management Private Limited.

Sir, my first question will be around the export margin, sir. On this quarter, we are seeing, as stated on the PPT, approximately 13.5% of margin you have highlighted. So sir, my question is where do we -- since we have now begun ramping up exports and we are seeing the order inflow for exports as well. So where do we see these margins stabilizing for export orders? And sir, also what kind of hindrances do you see going forward from here for the overall business?

So in terms of export stream of revenue, you see, these orders, as I have highlighted earlier, were in the first time, most of these orders were on a global tender competitive basis. So bulk of these orders are also 2 major orders are on competitive basis in our last 5 decades, the first time. So definitely, the margins are tighter than the hitherto margins of -- historical margins of export. And the levels that you see now are now as the last 2 quarters, Q2 and Q3 export shipment and revenue booking has started. These are the levels of margin in which -- in this range, it will settle down on a quarterly or a half yearly basis. And in terms of constraints in export business, the -- it's not really a constraint. It is that now more and more we are -- we had realized this about 2 years back and revisited the entire export and international consultancy strategy that now for substantial growth in our RITES Videsh business, we have to get orders on a global competitive basis and not just rely on the line of credit funded projects. So we are now, in fact, we have ended quarter 3 with an all-time high order book of our international business, which is at about INR 2,150 crores, which includes the export of about INR 1,700 crores and the other infrastructure consultancy and execution, et cetera. So our RITES Videsh, while it's not really a constraint. But yes, that's a watch out which we will do to keep on trying to reinvent ourselves so that we get more and more international orders.

Sir, because of the exports order revenue booking, is it safe to assume that we'll see a significant top-line expansion in Q1 of FY '27 onwards?

Yes, for sure. So whether it is export or whether it is the turnkey orders, as I pointed out, a bulk of our order, about 60% of our order book, nearly 2/3 is very young. It's about a year or so old, whether these are the fresh export orders or fresh turnkey or even consultancy orders. So that's why the target that sequentially we will definitely continue growing in terms of top and bottom-line. This is what we have seen Q3 versus Q2, and that trend will continue moving forward, both in terms of top and bottom-lines.

The next question comes from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited.

Sir, I have a question regarding our export business only. So as you have mentioned, we are at INR 1,700 crore order book as of Q3. I think last month, we received $20 million order from Mozambique. So that is not included in this. So our order book would be INR 1,900 crores approximately as of today.

Yes, very correct. This is INR 1,700 crores as of 31st December. This order of about INR 180-odd crores, has come in Q4 in January. So that's not included in INR 1,700 crores.

Okay. And so if I see, so this INR 1,900 crore, let's say, what would be the execution time line for this? And you mentioned that now since these are we are doing -- getting these orders through competitive bidding, so that earlier with what we used to do, say, 25% kind of margin in export, now I think this 12% to 13% would be more sustainable. Is it fair to understand?

Yes, your assessment is very correct. And in terms of time lines, you see this is a mixture of locomotives and coaches orders, mix of different orders. On an average, they have an execution time lines of about 2 to 3 years, depending on locomotives, sometimes have larger time line. But on an average, I would say anything between 2 to 3 years. And you're correct, that this is the level of margins, which will stabilize over a period of time since most of them, including this most recent order of Mozambique, which we got in Q4, that's also on a competitive basis.

And in terms of turnkey projects, so last year, our revenue was INR 800 crores.

I'll request you to come back in queue for a follow-up.

The next question comes from the line of Shreyans Mehta from Equirus.

Sir, you guided for closer to 15% PAT margin, whereas if I look at the 9-month number, we are closer to, say, upwards of 18%, 19%. So is it that we are guiding conservatively or probably we would see some margin deterioration going forward?

Shreyans, you see, the quarter 3 has given good margin because the mix and revenue, if you see carefully, it's more of consultancy and export vis-a-vis turnkey. So what I had said was that 15% is our red line in terms of PAT margins and 20% is our red line in terms of EBITDA margin. So it will be fair, not really realistic to take 1 quarter to be an indicator. But yes, definitely, it will be above 15% and above 20% on an average 6 monthly on an annual basis.

Got it, sir. And sir, how should we look at export contribution in FY '27?

So export, the good order book, it's now INR 1,700 crores as of 31st December and another about INR 180-odd crores, which we got this quarter. So I mean, in January. So I think, as I mentioned, about 2 to 3 years execution time, you could see an average out. Definitely, now there's no looking back every quarter. That gap that we had of about 2 years of literally 0, pulling down the overall top and bottom-line, now every quarter, you would only see an upward swing.

Next question comes from the line of [ Manan Poladia from MKP Securities ].

One question on the order book side. We've seen that there's a big delta quarter-to-quarter if you look at competition and nomination, I think it's jumped from 56% to 61%. Just curious if you can give some color on like why the big jump and should we expect it to be the same? Secondly, just some color on what specific projects are you still getting under nomination considering the competition in the consultancy space as well?

So, you see, in fact, the fresh order inflow in competitive business is literally more than 2/3 or roughly 70% plus. That breakup of 61% is basically the existing order book breakup. It is the breakup of the order book of 61%, 39%. But in terms of fresh order inflow, it is literally about 2/3 or about 70% odd. So most of the orders we are getting, whether it is across sector, whether it's domestic or international, are on, including, as I said, this recent export order also are on competitive basis. By nomination would mean primarily maybe a few orders which are there under in, say, in some MOU or in terms of some agreement either with some PSU or some central or state government. And that too primarily in terms of, let's say, our skill, which has been there and working with them for long. Those are some of the agreements which we still managed to get return nomination. But primarily, I would say that most of our trend, every quarter, the fresh inflow contribution of competition in fresh order inflow is getting higher.

Right. But would you say that the nomination orders that you're getting are significantly higher margin than your competition orders? Or would that not be that big of difference?

No, not really. In fact, to the contrary, what has happened is that even the few orders that we are getting on nomination because of the bulk of the orders and the margins being lower in competition -- competitive orders, even those clients are revisiting the nomination and the agreements, et cetera, and having hard-nosed negotiations to lower the margins. So that's why whether it's a competition or a nomination, the overall scenario is that now you have to work on a broad higher competition, tough lower margins kind of scenario.

[Operator Instructions] Next question comes from the line of Viraj Mithani from Jupiter Financial.

My question is you mentioned the word disruptive growth in the result. What does -- can you give some color on that? That's a very strong word to mention.

Yes, Viraj, and we say it with a full sense of responsibility that FY '27 is going to be a year of disruptive growth. You see, as you've been watching and many of your colleagues and peers have been watching our performance and every quarter, the road map, which we have been saying, you see, '23, '24, '25 was a year of consolidation. It was a year of bottom growth. I mean the bottom of the barrel and then we consolidated, revisited, started getting orders. '25-'26, I had forecast will be a year of growth vis-a-vis '24-'25. So we are aiming for a double-digit growth. But since as you see, the order book has been an all-time high and growing steadily. And these orders are now started generating revenue in every quarter sequentially, whether they are export orders or whether they are turnkey orders or consultancy orders. So definitely, we are poised now to extract the maximum from these orders. And that's why Q4, Q1 onwards, even more Q2, Q3 has been higher than Q2 in all parameters. So that's why we see FY '27 being pitched as a year of disruptive growth. And I repeat that, that is because that is -- in all parameters, we see firing on all cylinders to be able to make good the slide that we had and especially in '24-'25.

Sir, does it mean it'll be going upwards of 20% in terms of revenue?

Well, it's maybe premature and kind of speculative to give numbers right now. But definitely, I mean, you can see the way things are moving on all our order book, 4 streams of revenue that we will definitely aspire to be not just a year of growth, but a year of disruptive growth.

So the quality assurance business is back, sir? Can we assume that?

Yes, it's definitely back. It's coming back to the levels that it was where it was that we had hit the bottom on '23-'24, where the competition had just kicked in. So this year, we are trying to -- after a gap of 1.5 years, after revisiting and restructuring the entire business, we are coming back to that level when we got the bottom of the barrel in '23-'24.

Next question comes from the line of Parimal Mithani.

Sir, I just would like to know in RMCL business with Indian Railways electrification coming almost 99% completion, how do you see the business going ahead? Because I think we reported good numbers in RMCL. And for the first time, we have order book in RMCL.

Yes. So good thing about RMCL is that, yes, while it is definitely banking on the increased electrification and the increased traffic, so it is getting increased consultancy and that is contributing to the revenue and the profitability. It's been doing very well, sequentially growing, Y-o-Y growing, operating at about 50% plus PAT margins. The other thing is also that it is working -- it has again finalized another 1,000-megawatt RTC tender, which is the third one. So now we have done about 2,500 total, 3 tenders totaling to 2,500. And each of these tenders that we finalize requires a huge amount of effort, and we get the consultancy fee from that. So that's another thing which got finalized in quarter 3, a 1,000-megawatt RTC round-the-clock tender, so which also gave us consultancy fee. RMCL is also now doing exploring and already started getting orders of consultancy in other streams of renewable energy provide -- building up on its experience of 10-plus years. It is also now exploring avenues for international consultancy in renewables. So all the 4 fronts, RMCL is growing. That's why you can see a growth in both the revenue, profitability and the order book.

Sir, this INR 120 crores is for the consultancy part of the business of RMCL, which is in the pending...

It is a combination of all complete.

The next question comes from the line of Yash Jain, an individual investor.

Sir, I just wanted to know more about the competition in the consultancy segment. So is there any specific sector where we are facing a lot of competition or any sector which we have backed out to save margins?

You see, we have 13 different verticals. So all areas of infrastructure, except oil and natural gas. And each of these sectors have different levels of competition, different category and different types of competitors, some international, some domestic. Some international competitors were set up shop here. And definitely, depending on the competition size, the levels of margins of competition are different in different verticals. So it's not that we have stepped out of any of the verticals. We are getting orders in each of these verticals. That's what gives us -- we got 143 orders in quarter 3 at a strike rate of 1.5 orders per day. So yes, only thing that we are very clear is that we don't compromise beyond a point in our bidding to be able to overall have very, very tight margins because I said our overall blend, we have targeted of keeping 20% plus EBITDA margins.

The next question comes from the line of Anand B. from Ksema Wealth Private Limited.

So regarding the execution tenure of these export orders, first is the Mozambique order of locomotives and there are a couple of other orders from Ntokoto Rail Holdings, African Rail Company and Talis Logistics in South Africa. Can you just tell me the status of the execution of these orders?

Yes. Anand, so as far as the Mozambique order is concerned, it was about 10 coach -- 10 locomotives, out of which 2 got shipped out in quarter 2, 2 in quarter 3. And that is the uniqueness of the export business that the revenue gets booked only when the shipping bill is made. So even if the locomotive is made, which is the port, but we recognize the revenue when actually the shipping bill is made. So 2 plus 2, 4 have gone out of these 10. And we are hoping and targeting that at least a minimum of 4 more should definitely go in quarter 4. So these are on track, and we expect to complete the order of 10 locomotives ideally definitely latest by Q1, if not by end of Q4 or early Q1. And the other orders are there. One is the most recent order of 5 locomotives, which we got. That was an order for Mozambique. The other orders which we have got, a series of orders, those are for the in-service locomotives, which is the in-service diesel locomotives, which are spare in Indian Railways due to electrification. We are converting them to the Cape Gauge, which is a smaller gauge in Africa, about 11 countries. And we have got orders, different orders totaling to about 30 locomotives. This is a developmental first -- it's an initiative we have got the designs approved. The manufacturing of the first 2 locomotives has started. And definitely, we should be able to move them in the early FY of '26, '27. And once these 2 go and run the proving trials there. The production of the balance locomotives will be much quicker because these are the first 2 converted locomotives from Broad Gauge to Cape Gauge that will be shipped out.

Okay. You mentioned you expected to complete within FY '26 in your presentation in the -- in your, this thing, previous quarter. So will you still stick to that time line or?

No. As I said, this is for the Mozambique 10 locomotives new order. We are still targeting. As I said, 4 have gone, at least 4 more definitely in quarter 4. The last 2 -- because they go in lots of 2. The shipment happens in the lots of 2. So maybe we will try and pull it up to end of quarter 4, but it may slide to quarter 1 latest in terms of actual shipment, et cetera.

I was referring to the rest of the other export orders, the Ntokoto Rail Holdings, African Rail and Talis Logistics.

That's what I said. Those locomotives are all -- out of our 30 locomotives are different orders. They are all in-service locomotives converted from Broad Gauge to Cape Gauge. And the first 2 of those are under production, and they will definitely be shipped out by early '26, '27, the first quarter. And once they reach there and they go through the proving prototype approval -- proving trials, they run there and get the go-ahead from the African railways, then the balance would be shipped out. Subsequently, the production will start.

We have the next question from the line of Vishal Periwal from PL Capital.

Sir, on our turnkey segment, I think we have been reporting good order inflow and order book buildup is also there. But in terms of execution, I mean, like not seeing a similar sort of optimism. So can you give some color where exactly things are? Are the slow-moving orders which are impacting the execution out there? Any color that you can provide, sir?

Yes. You see, this turnkey order book of about INR 4,500 crores, about 65% of it is about a year now, a year old. And as I had indicated in last H1, quarter 2, that we -- these are now in the stages where all the designs have been approved, the execution agencies are in place and the execution at the ground level will start. And we will see a sequential growth. And that's what if you see Q3 vis-a-vis Q2, there's an upward tick of about INR 60 crores in turnkey execution. And now most of them -- most of these are now in the situation where moving forward, Q4, you will see definitely a double-digit uptick vis-a-vis Q3, et cetera. So all of these turnkey orders because most of these have a time frame of about 3 to 4 years. And by the end of first year onwards, by the 12 to 18th month period, that's when they actually start booking revenue in terms of actual physical execution and the revenue realization happening. So the upward tick of about INR 60-odd crores has already happened Q3 vis-a-vis Q2. And every sequential quarter, there will be a substantial growth in contribution from the turnkey segment.

Sure, sir. That's helpful. And I think you did mention a good year in FY '27. So is it fair to say probably the good -- I mean, like in terms of execution, it will start from quarter 4 onwards because you did mention turnkey will have good numbers also and others are still following. So is that fair to say quarter 4 onwards will have a decent jump in the revenue growth?

Yes, yes, definitely. So quarter 4, whether it is the export execution or the turnkey execution, quarter 4, we are poised to be much higher than quarter 3. So that our overall FY '26 is definitely on a double-digit -- aiming to have a double-digit growth in revenue vis-a-vis FY '26. So FY -- sorry, vis-a-vis FY '25 and definitely, quarter 4 being more than quarter 3, that gives us the confidence that sequentially this growth will see FY '27 being definitely of a much higher level of growth vis-a-vis FY '26.

The next question comes from the line of Uttam Srimal from Axis Securities Limited.

Sir, if you see, in 9 months as far as export is concerned, so we have done a revenue of INR 126 crores. So now, sir, what would be our guidance for quarter 4 in terms of export revenue? And further, sir, once we ramp-up this export revenue, so can we -- can our margins will also be increased from 13.4% to 15% once -- or there will be some operating leverage benefit once we ramp-up the export orders going forward?

So in terms of quarter 4 revenue, you see this 9 months, this revenue, which has been there is about 4 locomotives, about INR 120-odd crores. And as I said, definitely, we will be able to ship out 4 more locomotives in quarter 4. So at least a step-up of another about INR 120 crores minimum export revenue should be there in quarter 4. And we are also moving forward, we will see the other locomotives and the Bangladesh coach order in the coming quarters, in the coming FY should definitely start execution and contributing to revenue. As far as the margin question you asked regarding the export stream of revenue, especially which is around about 13%. This as I have said that most of these orders are on a competitive basis. And this is the broad range where on an annual or a half yearly basis, the export margins would settle down. A particular quarter may not be a right indication, but this is a broad range where on an average basis, the export margins would settle down.

Next we have a follow-up question from Manan Poladia from MKP Securities.

Sir, my question with respect to your turnkey business. Clearly, our execution has picked up this quarter and like you're saying next quarter as well. Curious if we will close somewhere around the INR 600 crores, INR 650 crores mark this year. And if you could guide a range for the next year as well as the PBIT margin, I think that would be great, sir.

So in terms of turnkey, the indication, what we are seeing in terms of execution of the INR 4,500 crore order book, is that, as you saw, we are aiming for at least a double-digit growth in turnkey in Q4 vis-a-vis Q3, and we will try and touch the last year overall annual levels of turnkey contribution. Because you see, if you compare with last year, in certain quarters, the turnkey revenues were high because those were the contribution from the earlier older orders. And now in Q3, Q4 onwards, the contribution of turnkey revenues from the new younger orders. So on an annual basis, this would be the comparison. But moving forward, Q4, Q1 and Q2, et cetera, every quarter, the contribution from the turnkey segment should gradually definitely have a sequential -- we target about a sequential growth of about double digit. In terms of overall margin, the -- yes, the turnkey has a lowest contribution margin. But as I said, then we strategically in every quarter, plan the various -- execution of the various streams of revenue so that an overall mix of ideal margin of about 20%, we are able to ensure.

Right. Just a quick follow-up on that. I think last couple of quarters since we had a higher mix of consultancy, our margins have trended closer to the 23%, 24% mark than the guided range. Next year, since we see turnkey going back up, 20% is the number that we should take?

Yes, for sure. That's why I've been saying that on an annual basis, our red line is 20% EBITDA margins. And we will maintain, try and definitely maintain that on a half yearly on an annual basis with balance between all streams of revenue, export, consultancy, turnkey, et cetera.

Next question comes from the line of Shreyans Mehta from Equirus.

Sir, my question is pertaining to our consultancy segment. So if you see in terms of order book or revenues, it's largely in that 3% to 5% growth range. So any plans to scale this up, say, at least what export orders are, probably that 10% to 15% mark over the next, say, 2 to 3 years. How should one look at the consultancy segment in terms of order book and revenues?

Shreyans, you see, in consultancy, that is the sector where the highest level of competition is there in terms of fresh order inflow. So if I say that 70% odd today is the ratio overall in our fresh order inflows in a competitive basis, the larger percentage is in terms of the consultancy orders. And that's why you see a smaller bump in terms of the revenue growth or the profitability, the profit -- actual profit growth. But having said that, since we are constantly trying to get more and more orders at a strike rate, as I said, of 1-plus order a day. And the consultancy order book is growing. Yes, you're correct that it is at a rate of about 5-odd percent. But definitely, it will -- we are trying that, and we feel that as we expand more and more, including international orders, we had a number of bids in international orders also, we feel that we will aim to try and touch 10-odd percent in terms of growth in consultancy.

Got it. And sir, if I can just add one more question. To previous participant, you said next year, we'll be giving out a few -- rolling out a few export orders and the first batch would be on a trial basis. So what will be the time lag between when we get the confirmation. So what I'm trying to understand is, could there be a case where we are taking more time and because of that, our revenues from exports could be postponed towards FY '28?

Not really because the now strategically, the INR 1,700 crore order book that we have in export plus the INR 180-odd crore, which we recently got in January, so about INR 1,900-odd crore. That also has the coach -- Bangladesh coach order of about INR 900 crores, which definitely the shipment will start in the coming FY. So it's a varied mix, plus this Mozambique order, which we have got, this is of new locomotives, which is similar to the locomotives, which we are currently exporting the old order of 10 locomotives. So there is a mix of all types of stock in our export order book. So we are definitely going to be able to not get bogged down by -- if by chance there is any delay in one -- this approval of this particular type of new developmental order. I don't see -- so that is the key strategy that dip that you saw about 2 years back successively for about 2 years in export revenue contribution. I don't foresee happening -- that happening again now.

Next, we have a follow-up question from Parimal Mithani from Prudential Investments.

So in terms of the budget, there has been increased allocation in terms of neighboring countries in terms of capital assets by Ministry of [ indiscernible ]. Do you think it will benefit us in the long run since we have presence in all these areas?

Yes, definitely. In fact, all the allocations, whether it is in the infra domestic sectors, highways, railways, MRTS, city development, urban infra, ports, waterways and international, all these areas, these freight corridor, these high-speed corridors, the mineral corridors, each one of these has already our presence. And in fact, in our international business, which we call RITES Videsh, at quarter 3 end, we have an order book of INR 2,150 crores, which includes the INR 1,700 crores of export, so which is an all-time high ever, which is the highest ever RITES Videsh order book, which RITES has had. So this is an uptick in our international business also. So whether it is the domestic or the international, all aspects in this budget allocation are definitely going to be useful for us, and we'll go to leverage that.

Next, we have a follow-up question from Viraj Mithani from Jupiter Financial.

Yes, sir, I wanted to ask that do we still maintain the 1 plus as the order target a day?

Yes. Viraj, we have maintained that steadily. In fact, quarter 3, we have got 143 orders, which is a strike rate of 1.5. So now successively for about 7, now 8 quarter, we have been able to maintain a strike rate of 1 order a calendar day.

And sir, do we maintain -- intend to maintain our dividend policy 95% payout going forward also?

Yes, for sure. We maintained that in Q3. And as I have been reiterating in every quarter, our business strategy is very clear and transparent, and we don't like to bring any surprises. So our broad policy of giving a high dividend payout would definitely be maintained.

Next question comes from the line of Harshit Kapadia from Elara.

Good set of numbers, sir. Good to see growth coming back and margins also sustaining. Congrats on that. Just a few -- one question from my side. On the consultancy side, sir, could you break the revenue in terms of how much has been from the QA and non-QA in terms of consultancy? That's one question.

Thank you. You see, I can only tell you broad numbers in QA. QA, the levels which we were at '23-'24, the year when the competition -- competitive orders struck in, and there were 4 players besides -- I mean, 3 more besides us. This year, the way 9 months have gone, we will, and the way we have planned Q4, we will definitely, after the entire reinventing the whole business, taking on new clients, varied clients, including some international order, we will come back to that level after the first time in terms of the revenue where we started in '23-'24. So that's a huge, huge recovery. Obviously, the bottom-line contribution from QA will not be there, but we will definitely come back to that level. And by next year, you will see a double-digit growth in terms of the QA contribution to my consultancy.

Next, we have a follow-up question from Yash Jain, an individual investor.

Can you just throw some light on the working capital requirements in the export segment, especially after the competitive orders we are getting?

There is hardly any working capital requirement. Most of it we covered by advance also. Our orders are structured like that. And it is very, very minimal. And in fact, it's a very staggered requirement. So that's why we -- that's very minimal and insignificant.

Next follow-up question comes from Anand B. from Ksema Wealth.

So can you just tell me what would be your expected breakup in terms of revenue breakup between consultancy -- especially from turnkey export and leasing for FY '27, FY '28, anything on that?

So the FY '27 a breakup of between all the segments right now would be too, I mean, speculative to be able to give you. But definitely, on an average basis, you see our business strategy has been that consultancy and export because export also we count as a kind of a type of consultancy business. And that's what our -- we are a consultancy company. So consultancy and export combined would definitely be in the range of about 70-odd percent, which has been our broad business strategy. And on an annual basis, if you look at quarter basis, sometimes they tend to get deviated from that because of the, one particular stream contributing more. So on an annual basis, consultancy plus export would contribute about 70-odd percent. And the balance leasing and about 5-odd percent and the balance of about turnkey. So that's broadly what is our business strategy, which we try to achieve on an annual basis.

Next question is a follow-up question from Raghav Maheswari from KamayaKya Wealth Management Private Limited.

Sir, just one small question. So we have a good order book, all time high order book of around 9 --- over INR 9,000 crores. I just wanted to understand how much of the order book we are booking like in terms of revenue. How much of the revenue booking in terms of percentage for, let's say, for each quarter? So like in terms of percentage if you can guide.

No, it's not really -- you see, this order is a combination of 4 streams of revenue, which we have of our business. So consultancy is INR 2,750 crore, export is INR 1,700 crore, turnkey is INR 4,500 crore and balance leasing and RMCL is about INR 300 crore. So each one of these, and these total add up to about INR 700 crore plus orders, which total up to this INR 9,262 crore. Now each of these orders, they have definitely different time frames like in consultancy, some are studies, which could be a 6-month, 9-month study. Some are project management consultancy, which are a percentage of the infrastructure getting created. So they have a time frame of about 3 to 3.5 years. And export, again, as I said, have about 2 to 2.5 years. Leasing, again, some are long-term leasing contracts, some are about 2-year leasing contracts. So to put one number as an average would be not given a correct picture. But what you should definitely see is the overall revenue trend and overall revenue 9 months, if you compare vis-a-vis Y-o-Y, in terms of profitability, there's about a 10% growth. And that's what the guidance we will try and see FY-to-FY to see a top-line and EBITDA trying to reach at least a double-digit minimum.

Next, we have a follow-up question from Harshit Kapadia from Elara.

I just wanted to check on the turnkey construction side. Since, sir, from last 3 quarters, the revenue continuously declining only and our order book is increasing. So where are we in that cycle where we will see the growth coming? Will it be Q4? Or do you think it will be next year?

So Harshit, in terms of the total turnkey, yes, it is declining. But in terms -- because you see, as I said, many of these orders were the last piece of the earlier order book. And the new order book of about 65% of INR 4,500 crores is about a year or plus old. And if you see these orders have now started giving contribution. So if you see sequentially, there's a growth in INR 60 crores in turnkey. So it would not give a correct picture if you compare Y-o-Y. If you compare sequentially, there's a growth in turnkey in INR 60 crores as these young orders have started giving revenue. And definitely, Q4 will be definitely minimum 10% higher than Q3 in terms of turnkey. So every passing quarter, these turnkey projects now are in those time frames between the 12- to 18-month time frame where the work has started on the ground level and the revenue booking has started. So every quarter, sequentially, you will see a growth in the turnkey contribution. The realistic picture will be to see a sequential growth because the Y-o-Y will not really give a very clear picture in terms of comparison. That was an older order book finishing, and this is a new order book kicking in.

The next question comes from Vishal Periwal from PL Capital.

Sir, even on the turnkey segment, sir, even if you do quarter-on-quarter 10% sort of growth, I think year-on-year things still will be weak. I think they will decline 5%, 6%. So probably it looks like I know the execution is picking up, but the real, I mean, the benefit of execution could happen in quarter 1 of next year. That's fair to understand?

Yes, you're correct. Your assessment is very correct because Y-o-Y is not -- will not -- definitely it will be down. If you compare FY '26 with FY '25, it will be definitely down. As I said, because there is a gap a few quarters between the old order book winding up and the new order book kicking in. So that will definitely -- but as I said, the aim is to increase sequentially as much as possible so that when you compare maybe H2 this year with H1 and H2 next year, those would give you a better comparison in terms of sequential growth.

Sure, sir. And maybe one last thing. On the Bangladesh order, whatever is happening country-to-country level, I mean, relationships and all, so does this have any bearing in terms of our order execution secondary recovery of the once that dispatches has already commenced? So any color that you can provide and that will be helpful to us in the market.

No. I think our order is safe. One is in terms of it's an EIB-funded order. We have already received the advance, the 6 type of coaches, which are there, 4 types of coaches, the prototypes have already got approved and the production of the prototypes have started. We are targeting the first rate definitely by early next FY. So this 200 coaches, which is about 10-odd rigs, these are on track. And we don't see -- we are in very close -- the Bangladesh railways is in very urgent need of these coaches and the funding is in place. As I said, the advance has already come in. So I don't see any challenge whether in terms of executing this order or getting our money.

The next is a follow-up question from Anand B. from Ksema Wealth Private Limited.

And just a follow-up from the previous question that analyst asked about the Bangladesh order. So you mentioned in the presentation, it will be executed in 2029 only. So since there's no urgent need of coaches, so we stick to that time line on execution in 2029 only. So there will be no revenue realizations in next year or anything of that sort?

No, no. Let me clarify. The Bangladesh order is 200 coaches and the first rake of 20 coaches, we are definitely targeting to ship out in early next FY. So the execution of the Bangladesh order should definitely start from this coming FY '27.

Okay. So early FY '27, the first 20 coaches and then rest of the next couple of years going forward like that?

Yes. So normally, we will be sending in rakes of 20 coaches each. So as I said, the first rake of 20 coaches we are trying to -- definitely things are on track. As I said, the prototype approvals have happened and now the production is going to start in a bulk way with the prototype also getting more fine-tuned. So as I said, the early FY '26-'27, the first rake should start moving out. And subsequently, the other rakes in 20 coaches each.

Okay. And you're targeting towards the 2029 where the entire 200 coaches will be executed by that time line?

Yes, yes. Outer limit if that's the contractual requirement FY '29. But as I said, we will try and see to optimize and maximize, expedite it to the extent possible. That's the outer limit as per the contractual agreement.

Next is a follow-up question from Harshit Kapadia from Elara.

Sir, just wanted to check, sir, I know you have spoken about the railway in a positive way. But if you look at some data points like the increase in the construction of new lines as well as doubling of lines. In terms of value, we have seen a very decent growth as being anywhere between 10% to 20%. But in terms of kilometers, we have seen a decline. Okay. In terms of -- so just wanted to check, is it right to assess maybe not from FY '27 perspective, but probably we have reached a stage where number of kilometer addition every year will not be that substantial. It's just that value is higher because of maybe commodities have rallied to that extent. So probably maybe we are nearing an end to the real construction cycle. Is that a right, fair assessment according to you?

I don't agree with your assessment. If you see the kind of the 7 high-speed corridors, the East-West freight corridor, the mineral corridors, each of these are the huge amounts of large kilometrage. So each one of them, and for us as a consultant, which has been associated with such corridors in the past, whether it is the DFCs, whether it is the current high-speed 2 corridors, which we are doing the DPR, et cetera. So we see each one of these as a huge opportunity for all our various activities that we do in terms of study -- alignment studies, PMC et cetera.

Okay. And sir, on the 7 high-speed DPR corridors which have been announced, have we done all 7 of them? Or are we involved in any one of them, sir?

Currently, we are doing 2, DPRs for 2, which have been -- which are in process for some time now.

As there are no further questions, I would like to hand over the call to the management for their closing comments.

Thank you all, and thank you for the avid interest and the questions, which I got. As I say always that it's a learning experience from my team and me also. As based on your questions, we revisit our strategies and see what better we can do. As I said, we are -- the way -- it has been a satisfying quarter in terms of being able to move in a steady and focused manner in all the areas which we had, all the milestone and all the strategic points that we had laid down at the beginning of the FY, and we had reiterated at the end of H1. So we are poised to leverage and build up on that in Q4. And I assure you that we are, as I said, firing on all cylinders, to be able to definitely surpass the previous FY and also create the sufficient ground for next FY to be a year of disruptive growth. Thank you.

Thank you, sir. Thank you all for being a part of the conference call. If you need any further information or clarification, please e-mail at [email protected]. Ladies and gentlemen, this concludes your conference for today. Thank you.