SPML Infra Limited (SPMLINFRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the SPML Infra Limited Q4 and FY '25 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Pranay Premkumar from Adfactors PR, Investor Relations team. Thank you, and over to you, Mr. Pranay Premkumar.

Good evening, everyone. From the senior management, we have with us Mr. Manoj Digga, Executive Director and Chief Financial Officer; and Mr. Vikas Sharma, Vice President, Finance and Accounts. Before we begin the conference call, I would like to mention that some of the statements made during the course of today's call may be forward-looking in nature, including those related to the future financial and operating performances, benefits and synergies of the company's strategies, future opportunities and growth of the market of the company's services. Further, I would like to mention that some of the statements made in today's conference may involve risks and uncertainties. Thank you, and over to you, Mr. Manoj Digga.

Thanks, Pranay. Good afternoon, and thank you for joining the conference call of our fourth quarter and full year financial year '25 financial result of SPML Infra Limited. I'll give you a brief overview of the industry trend, business update, and then I will walk you through the company's financial performance. Regarding the global Indian economy and business momentum, while the global economic environment remains uncertain, recent political development in the country have further added to the complexity. In such volatility situation, the importance of stable infrastructure and essential services become even more critical. India's economy continue to show underlying strength, supported by solid fundamentals and long-term policy focus. Even amid evolving challenges, the government commitment to the infrastructure development remains firm, particularly in the core sectors such as water, energy and public services. The water sector, in particularly, is seeing sustained attention through national mission like Jal Jeevan Mission aimed at ensuring access to certain drinking water for all rural households with over 15.64 crore homes already covered the extended time line till 2028. We see this as a vital long-term opportunity for water infrastructure development companies, including ours. Parallelly, the power sector is witnessing significant growth opportunity, and we are expecting a sizable business in BESS segment as well as substation business, both in volume and capital expenditure as government has set up an ambition target of achieving 500 gigawatt of renewable power generation by 2030. We are tremendous prospect -- we see tremendous prospect for us to grow both in water and power sector, which are the focus area of the company. Business operation as SPML Infra, we remain focused on contributing to these essential national priorities. Our expertise in developing large-scale water and energy infrastructure place us in a strong position to support the government push for universal -- unviral water and energy access for all. The government proposed capital expenditure of almost INR 12 lakh crore through various schemes in water and power infrastructure development. We are setting up the battery energy storage system production plant, which is expected to play a pivot role in India's transition to clean and sustainable energy. This will enhance our profitability, visibility and competitiveness in BESS manufacturing and will support government vision of Viksit Bharat. India's energy storage market is set for strong growth driven by the 500 gigawatt non-fossil fuel capacity target by 2030. As per the National Electricity Plan 2023, storage demand is prospected to reach 236 gigawatt by financial year 2031, '32, with the market size of USD 57 billion, which is expected to reach an incredible level of USD 443 million (sic) [ USD 443 billion ] by 2047. Recently, SPML has entered into an exclusive agreement with Energy Vault, a U.S.-based global leader in sustainable energy storage system and technology. Partnership will accelerate the development of advanced battery energy storage system in India through technology transfer of their B-VAULT BESS and license of VaultOS EMS software, localized manufacturing and deployment will strengthen Indian energy infrastructure, enhance grid stability and support greater generation of renewable energy, contributing to the availability of reliable, affordable and clean power across the country. I'm also pleased to share that the Maharashtra Industrial Development Corporation Committee has decided to offer us the land of our BESS manufacturing facility in Maharashtra. Once the land is allotted, we expect the construction to begin in full swing and phase-wise commissioning of the plant by March 2026 or by early financial year '26-'27. Coming to the water business. The last financial year project awards across the infrastructure space were impacted due to delay in approval of -- approval and funding. The Jal Jeevan Mission was extended up to 2028 in the union budget, but the formal fund allocation to the state government is still awaited. This delay is affecting the water sector and impacting the timing of the new project awarded, including for SPML Infra. However, from Q1 financial year '26 onwards, we are seeing the improvement in the activity as central and state government has resumed the bidding process. With several water projects being awarded, we are optimistic about strengthening our order pipeline and enhancing profitability in near-terms. A notable win during the year was the Konar irrigation project awarded by the Water Resources Development of Jharkhand valued at INR 617.98 crores. This project aims to enhance irrigation facility across nearly 12,599 hectares of farmland in Hazaribagh, Bokaro and Giridih district, contributing meaningfully to the agriculture development in the region. We are pleased to say that we have recently secured an order value of approximately INR 258 crores in consortium from the Chennai Metropolitan Water Supply and Sewerage Board, our stake is 26% in that. As on 31st March 2025, our order book size has reached approximately INR 3,000 crores, and we are in order under L1 stood at INR 2,571 crores. We are expecting this order in Q1 and Q2 in tranches. We are pleased our bid for -- pleased for the bidding tender worth more than INR 9,000 crores across India. Focusing on fully funded high margin projects, company is contributing with the approach of focus on bottom line instead of top line growth. We will now move towards the Q4 financial year performance. On a quarter-to-quarter basis, revenue remained steady at INR 201 crores. EBITDA was stable at INR 22.5 crores, maintained an 11% margin. PAT grew by 13.5% to INR 12 crores. For full year financial year '25, our total turnover reported at INR 824 crores in financial year '25 versus INR 13.31 crores in financial year '24. EBITDA grew by 26% to INR 98 crores from INR 77.6 crores financial year '24. Our PAT for the full year increased to the INR 49 crores, resulting in year-on-year growth of 1.5x. The EPS reported INR 7.83 versus INR 3.98 in financial year '24. The financial for the year ended 31st March 2024 reflects the various effects of restructuring and the gain of VSV. Hence, the figures are almost noncomparable on year-on-year basis. As of 31st March '25, we have repaid INR 219 crores, [ INR 219 crores ] out of the total INR 700 crores owed to NARCL inclusive of interest, bringing the outstanding balance to INR 410 crores with arbitration award worth INR 636 crores already in hand, including interest up to 31st March 2025. We are confident of repaying the remaining debt well ahead of the agreed time line. We continue to maintain a strong balance sheet with adequate liquidity due to promoter commitment of approximately INR 350 crores in last 2 years, giving us the flexibility to pursue growth in both core segments. As discussed in our previous call, the temporary slowdown witnessed during the year and quarter was primarily due to external factors such as general election and transitional delay in the extension of Jal Jeevan Mission, which was approved in the budget. The said, we are encouraged by the market improvement in the business environment. Momentum is clearly picking up, and we are confident that a significant portion of our L1 position will convert into confirmed order during Q1 and Q2 of financial year '26. This will meaningfully boost execution and drive strong revenue growth in the coming quarter. With this, I would like to open the floor for questions. Thank you.

[Operator Instructions] The first question comes from Raman KV with Sequent Investment.

Yes. Sir, can you just repeat the current order book numbers? And also how much amount of the debt that we repaid during this year?

The current order book we have is INR 3,000 crores, that is 31st March 2025. And we have the order basically where we are L1, already L1, which was INR 2,700 crores, out of which INR 250 crores we have announced today. So we are still L1 of INR 2,571 crores that we are targeting because now the Jal Jeevan Mission renewal and individual state-wise documentation has started. So we are expecting the orders which are there in our hand where we are Q1 -- within Q1 and Q2 in tranches. And the new orders are continuously coming. So whenever it will be L1 and converted, we will keep on announcing.

And sir, with respect to the debt, how much did we repay during the year?

How much in the year, Pardon?

During this year, how much debt did we repay?

How much we will bid?

No, no. How much debt did you repaid during this year?

This year, we have -- out of our -- when we took from the NARCL, we did the resolution at INR 700 crores. Out of roughly around INR 290 crores we have already paid. And rest of the debt is almost connected with the arbitration award. Whenever the arbitration award has to come -- will come, we will share one portion of the arbitration awards towards the payment of this debt. And from the cash flow, it's almost nothing. In the whole year, I have to pay only INR 4 crores.

Okay, sir. So how much of the arbitration award are we talking about as of now in the pipeline?

If you see the total arbitration award, this INR 700 crores was the inclusive of interest. So my liability is restricted along with the interest of INR 700 crores. We have the arbitration award, which are at the various level, various court. One of the arbitration award is at the Supreme Court level also. The total arbitration award, we have INR 636 crores, where we have accumulated the interest up to 31st March 2025. This award will keep on increasing along with the interest. And the proceeds of this award will be utilized for the payment of our NARCL dues. So against our liability of INR 410 crores, till date, we have the INR 636 crores award in hand and further roughly around INR 4,600 crores of arbitration claim [Technical difficulty]

Sir, my final question is with respect to the guidance. So we have INR 3,000 crores of order book. What is the execution time line for this order book? And going forward, how much margin are we expecting?

If you see, this order book has 2 type. One is the order book out of this INR 3,000 crore order, roughly around INR 2,400 crores of order is the old order where we have -- where we will execute in next 2 years, 2 to 3 years. And there, the margin is slightly low. We have the last order of Konar of INR 618 crores, where the margin is around 15%. So there, we have a high margin order. As I have told you, going forward, our focus is not on the top line. Our focus is on the bottom line. And as discussed earlier, any order which we are targeting going forward will have the margin more than 10%. We will -- it is between 10% to 15%. If that is not there, we will not take the order. So new order all will be [ 10%. ]

So basically, the orders wherein you are L1 like INR 2,571 crores, those all orders are around 10% margin orders, right?

This is more than 10%.

So sir, for FY '26, what is your guidance on the full year basis, like how much PAT growth are you expecting or how much revenue growth?

Basically, you got the figure that we have roughly around [ INR 2,500 crore ] order, which is the slightly lower margin order where we will have a 4% to 5% margin. Konar, we will have 15%. We will get say around 2% plus. And we are expecting the order to be executed in next 3 years. So you make the calculation how much margin will...

The next question comes from Prathamesh Dhiwar with Tiger Assets.

Yes. Sir, just wanted to know regarding our long-term vision. So let's say, in coming 3 years, what sort of business mix are we looking at? How much percentage of top line can we expect from BESS? And how much can we expect from other businesses like water?

If you see historically, basically, power is our -- historically our ore sector. And historically, SPML has roughly around 25% into the power and 75% into the water. Gradually, last 2 years because the water volume has increased substantially and power -- and government focus is also mainly into these 2 sectors and government focus was less into the power. Our water volume has increased. So with the BESS opportunity and BESS commitment of the government, we are expecting that our power EPC business will grow up going forward. And maybe it can go to around 50%, 50% going forward when we have our BESS facility fully set up, which will be by March '26 or by early '26, '27.

Okay. And sir, so right now, we are not participating in any BESS orders, right?

No, no, we are participating. It's -- BESS is our EPC business. BESS is what transmission line where we have our expertise, the government has made it compulsory for every power -- this renewable power to have 10% facility of BESS. If you see in China, they have 40% of BESS facility. In India, the government has made compulsory of 10%. So any transmission line at the moment, we have to set up 10% of BESS facility. So we are the pioneer into the construction of the transmission line. BESS is a part of that. So whenever the transmission line will get, we will get the order of BESS also.

Got it, sir. Sir, any numbers you would like to give, like how much order can we expect from BESS segment in the coming...

BESS, we are participating because like the water, BESS tenders are also coming very -- a lot of orders are coming. So once the -- we are participating into the various tenders, once the tender we will win, we'll keep informing to the stock exchange.

The next question comes from [ Subhash B ] with Value Investments.

Sir, am I audible?

You are audible, sir.

Okay. So out of the INR 618 crore order that you won in Jharkhand, what is the SPML share in that? Because that is also JV -- I think...

We have taken the execution of 100% here.

100%. Because I saw in the announcement along with another -- I mean I saw another name during the announcement with us...

JV partner was -- but now we are executing 100% ourselves.

Okay. Fine. So -- and also today, you announced an order, right, about INR 250 crores, I guess, right? Yes. But in that, I think 26% only belongs to SPML.

We are executing 26%.

Okay. So when you said that you are L1 on worth of INR 2,700 crores of order, so out of this order, like how much percent is SPML share?

If you see INR 2,500 crores, it is consisting of 4 orders, one INR 400 crores -- INR 1,500 crores, we are [ 51-51, ] INR 501 crores, we are own 100%, INR 385 crores, we are own 100% and INR 207 crores, we are 90%-10%. So we are 90%, one joint venture is 10%.

Yes. So out of INR 2,700 crores, how much crores will be yours?

It will be roughly around INR 1,800 crores.

Okay. So my next question is about the BESS. In the presentation, I see that 500 megawatt per hour will be executed in the next 12 months, and you are planning to execute around 30 to 40 gigawatts over 10 years. So when you say next 12 months, right, like when is it starting from when can we count as next 12 months for this 500 megawatt? And also along with that, what is the revenue per megawatt for these BESS projects? And also, are you sharing any revenue with Vault because they are sharing their technology or the OS with you guys, right? So how is the deal plan? Like is there any revenue sharing model?

This -- we are the only company who has its own. We have purchased from Energy Vault. So we don't have to share any revenue. For royalty, we have to pay a certain amount for which they keep on doing the research and development. And that research and development, we will also get the benefit of that. U.S. is famous for their research and development. So that is there. It's our own purchase. So nothing we have to share on the revenue side to the Energy Vault for the technology. That is number one. Number 2, we started the land, as I mentioned, we got the land in Maharashtra in Pune. We have allotted -- the NMDC has earmarked land for us. We are setting up the plant, and we are expecting that to be completed by March '26 or early financial year '26, '27. Once that will complete, then battery pack manufacturing, we will do our own. But without that also, in the BESS as an EPC player, we will continue to do that. Now the orders everywhere it is floating, we are participating into the order. So how much we will win, how much we will keep on communicating like we are participating into water, we are going to participate into the BESS tender also. It's basically -- it's government focus into the energy. The government is targeting to have the energy volume of we have told you energy volume. Government is targeting -- government is targeting for the energy volume, which they have given into the National Electricity Plan that by 2030, 500 gigawatt, 236 gigawatt storage demand is projected to reach 236 gigawatt by 2031, '32 with the market size of USD 57 billion, and that is targeting to roughly around USD 443 billion in 2047. So that's the plan. And if that is the plan, then roughly around -- if you see the market size of INR 25 lakh crore plus business is there in India, which has to be developed in the battery energy storage system and all the manufacturer or EPC player into the battery will get benefited, including us.

Right. I agreed on -- I mean, because they are also making it mandatory even for the renewable energy projects to have at least 10% BESS. So when you said 500 megawatt hour, right, like whatever you have mentioned in the presentation, so is this the EPC segment that you are targeting or the battery manufacturing that you mentioned, this 500 megawatt or does it include both of them when you say 500 megawatt hour?

No, this is the volume is the BESS volume. Now the BESS volume, the major portion is the battery pack, roughly around 40% cost is the battery pack, then it is a container and then there is a various element as the EPC player. We are manufacturing the battery pack. That is the plant we are setting up. So this will be a backward component manufacturing of BESS unit. So whenever -- even at this moment, if we have to supply the container, we can buy the battery pack from any Chinese companies or any U.S. company or Vietnam companies. We can buy that. With our technology, we can mix and we can set up the EPC plant. But when we have our own battery pack manufacturing unit, our profit margin will enhance, our visibility will enhance. Our control on the quality will enhance.

Got it. Okay. So this will be completed. I mean -- but you are saying that the EPC projects, you already have an order pipeline, right? Can you -- I mean, do you have the number? Like what...

EPC project is there. Battery there we have bidded for NTPC. We have bidded for various other companies, that...

Do you have the value of the order pipeline?

We -- at the moment, we -- the order which we have bidded. I will update you.

Okay, sure. Yes, I can connect with Pranay later for that question. Okay. And what -- so under the EPC projects of BESS, what could be the margins? Because for water project, it is clear you have mentioned that you will target only about 10% to 15%. But for BESS, what could be the margins that we could see in the future?

As we told, it's a bottom line company. It's not a top line company. Whether it is a water or whether it is a BESS 10% margin, less than 10% margin, we are not focusing. And with our manufacturing sector or component manufacturing sector, we are expecting margin of 15% plus.

[Operator Instructions] The next question comes from [ Arnav Shah ] with Lakes Capital.

So first question would be under unexecuted order book, how much comes under the legacy book and fresh order wins? If you could just shed some light there? And how much time will it take to execute them?

Basically, if you say, technically, the major 2 orders we have earned in the last 3 years, but the fresh order you can take, which is Konar of INR 650 crores, which we have taken in last year, rest you can consider as a legacy.

Okay, sir. One question would be in the next 2, 3 years, what would be the ratio of revenue from water business to BESS, if I could.

As I informed earlier also, historically, we are 75% water and 25% power. Last few years because the water focus of government -- power focus of government has reduced. So we reached to around 90%, 95% into the water and 5% into the power. Going forward with the BESS, we may reach to 50-50 into the water.

The next question comes from Mahek from KML.

I just wanted to know which are the states in which we have ongoing projects and which are the states in which we have participated in fresh tender?

Can you repeat? Can you repeat Mahek again?

I wanted to know in which of the states we have an ongoing project?

We are targeting basically Rajasthan. It's a water than anything which is related to water, we will keep on doing. So water is -- Rajasthan is our focus area. Gujarat is our focus area. MP, a lot of tenders are coming, UP, Bihar, we are targeting into Jharkhand. We are targeting into Maharashtra. These are the states which are focused, even Orissa, which -- these are the states we are focusing into the water business. Power business is wherever it's a power renewable energy in NTPC, we are targeting into that.

Okay. And what is the current size of the -- of your O&M order book? And how do we plan to grow this business?

As I told, basically, if you consider at the moment on 31st March '25, we have the INR 3,000 crore order book, which is there, which we are executing. Roughly around INR 250 crores today, we have received where 25% is ours. We have the L1 of roughly around INR 2,500 crores, which is there. And every month, we are keep on bidding into the various tenders, which are floated for the water and power. So this year, our target is including our L1, at least INR 5,000 crores, we should be targeting.

The next question comes from Subhash B with Value Investments.

So my rest of the questions were -- you said that you may purchase -- I mean you purchased the software from Vault and you're not sharing any revenue, right? So what was the purchase amount for this software?

We have bought it for USD 4 million.

Got it. Okay. And also, you said INR 2,400 crores is the old order book, and this will be executed in 2 to 3 years. And for the future, I heard that you are targeting like INR 2,000 crores per year order, right, in water infra. So are you planning -- I mean, how are you planning to accelerate the execution time line? And also, if you could give the revenue guidance for FY '26, like maybe in percentage-wise, when compared to FY '25, what could be the revenue growth that we could see in the future?

This time line as we learned, that is our learning from the past 43 years that focus to the limited projects and focus into the timely completion of the projects. So that's our target. That's our goal into this year. Depending upon the orders, like Jharkhand order is 30 months. So the few orders in which we are L1 is going to come or where the order we have to execute in 20 months. So it depends upon the order to order, how much time it is required for the execution into the project. So that's the key factor. So whenever -- whatever order we take, if it is 3 years, we are executing in 3 years, if it is 2 years, but average size you can take that any project require the 3 years to complete. And that's the advantage into the EPC business also because if I get the Konar order of 1 year, then at least I'm securing my 3 years turnover because this project is to be executed in 3 years and every year, roughly around INR 200 crores of turnover we are going to execute, barring 10% here and there. The same way, if I'm getting the INR 2,500 crores new order into the current financial year in Q1 and Q2, that giving me the clarity of next 3 years of a certain amount of turnover and profitability. So advantage of the EPC business, whenever you secure the order, you are not securing the profitability and turnover of that year, rather you are securing the profitability and turnover during the course of the execution of the order. So that's the advantage of the EPC company. Any order which we are going to take, average size, you can take 3 years, which is required to be completed into the project. Turnover and the profitability also shares around that time.

Okay, sir. And what about the guidance for FY '26, the revenue guidance?

Let's few more order to come and then we'll give you the guidance next time.

Okay. I mean I'm asking only because you already have sufficient order book, right, like almost INR 3,000 crores.

We should have -- basically, if you ask me, again, it's both the top line and bottom line should have the growth of around 50%. That should be the target, that should happen. But that depends on how much order and when we are going to execute the order. It would have been better last year also if the Jal Jeevan Mission could have been better. But this year, we are targeting 50% top line and 50% bottom line at least.

Okay. That's great to hear. And also about the BESS project question that I asked before, I forgot to follow up on the question. So I also asked what is the per megawatt hour revenue that you would get from BESS project in EPC?

Basically, the thumb rule, which is actually the battery and every cost is coming down. But if you take the current thumb rule is 1 gigawatt equal to INR 2,000, that is the -- if it is 100 gigawatt, then roughly around -- that is the market rate, which is a tender which is participating, 1 gigawatt into INR 2,000.

1 gigawatt is INR 2,000 crores, you mean?

INR 2,000.

Just INR 2,000.

No, no. I'll come back to you on this.

Yes. Okay. And also, I asked you about the order pipeline, right, in the value terms. And also, along with that, if you could also give me information megawatt hour size, like the order pipeline, let's say, for example, you say that you have INR 2,000 crore order pipeline. And along with that, can you also mention the megawatt hour order pipeline as well? Let's say that you have bid for 500 megawatts this time or 1 gigawatt. If you could give that information also, that would be helpful.

On the BESS side. On the BESS?

Yes, on the BESS, correct.

Okay. So you can connect with Kapil, I'll give all this information or you connect me in a day or 2 with me, I'll provide you all the information.

Okay. Pranay, right? Pranay is the relations...

No, you can connect to Kapil, who is our Investor Relations, you can connect with me also.

[Operator Instructions] The next question comes from Maitri Shah with Sapphire Capital.

Yes. Am I audible?

Yes.

You are audible.

Yes. So my first question was you mentioned that we have a INR 2,400 crores older orders and then INR 650 crores new orders. So what kind of blended margins are we expecting for FY '26?

You can take basically the new order, as I told you, any new order more than 10%, that is the minimum target, which we take, without which we don't participate into that. And old order, you can take altogether around 5%.

And these are the PAT margins or the EBITDA margins?

In our case, it is a PBT, EBITDA. Basically, in our case, there is no finance cost and there is no interest cost because our -- I don't have to pay any interest, INR 700 crores is inclusive of interest. So I don't have to pay anything. So the interest EBITDA is our almost PAT, and we don't have much depreciation. So EBITDA is almost equal to our PBT.

Okay. So the other income that we have, what does that includes?

What is there like the total INR 700 crores what we have to pay that is inclusive of interest. So to make it Ind AS requirement, which is the accounting standard requirement, we have to keep it discounting. And every year, one portion comes to the profit and loss account as the interest cost, which is coming into the finance cost, if you find that there is a INR 40 crores, which is there in our books, that is mainly because of the Ind AS adjustment. And the same way, if you see the other income, we have the -- NARCL has given us the 2 option. One is the INR 700 crores in 7 years, 8 years and INR 967 crores in 10 years. Now we have opted for 7 years -- 8 years, and we have paid also INR 300 crores. This INR 267 crore difference of both the option, we are charging into -- we are taking into the books of accounts in every year. So you will find the interest cost and other income is nullifying to that extent. And rest of the other income is the interest income.

Okay. The second thing I wanted to ask was you're setting up a manufacturing for the battery pack. So what sort of CapEx are we looking for that?

Come again [Foreign Language].

Battery pack, we're setting up a manufacturing capacity. So what is like the capacity we are targeting and the CapEx for it as well?

We are 2.5 gigawatt manufacturing unit of BESS we are setting up battery packing unit. And we -- the total CapEx is INR 175 crores. First, we are taking into the 2 phases, first phase of INR 125 crores, which is fully funding through the equity.

And this manufacturing will be operational in the first Q FY '27, right?

We are targeting in 31st March, but it may slip to the first quarter next year.

And how fast do we think we'll reach like the optimum capacity for this manufacturing plant?

How far...

Will reach like the full capacity of production.

The full capacity, you can take -- it will take a year because BESS, the advantage what we have is the technology which we have purchased because we have a very, very proven technology. So once that technology is there, then all other plant or the other activity is the EPC only. So we are expecting next year, we reach to the 75% to 80% capacity.

And what sort of revenue can that manufacturing plant generate at like full capacity?

It depends upon INR 1,000 crores to INR 1,500 crores, but that will come. How the pricing will be, how much activity, what are the components we have to do, but it should be near to that.

So we'll be using this captively for our own EPS projects will be also selling them to other companies?

It is for other company because we don't have renewable energy. So whichever company has the renewable energy, there -- for them, we have to manufacture -- we have to do this as an EPC business, and we supply to them by doing the BESS facility creation, out of which we are utilizing our battery pack for construction of the BESS facility, containers.

Yes. So we'll be using our battery packs for our EPC projects, right?

That's correct.

The next question comes from Ankit Soni with [ Sharekhan. ]

Just wanted to get an idea on what would be the order pipeline? I know you would have mentioned it. Just want me to repeat it. And second thing is, how would you differentiate into the power projects and BESS and maybe water projects? So order pipeline in the 3 categories?

No. It's -- both are EPC business. For us, every project is whether we take into the water and whether we take into the power. It's the EPC, one particular project. This can be the piping. This can be the distribution. This can be sewerage. This can be the BESS. This can be transmission line without BESS. So every project has one requirement. Every project has one scope, and we execute the work as per that scope. So like the water, our focus area is to the bulk water. So bulk water and irrigation. That is our focus area. Bulk water like setting up the piping, et cetera. But we do the distribution also. We do the sewerage also. But our focus at this moment is the bulk. BESS also, we have the container, which we will manufacture which will put into any transmission line, which is required by any renewable energy for distribution and management of their power sector, power unit. So both the units, whenever based on the order, we will manufacture as an EPC business.

Okay. But is there any chance we can quantify the order pipeline? How much is the order pipeline for BESS particularly, BESS, EPC basically?

Every month.

Sorry?

Approximately -- every month, approximately INR 10,000 crores of water business, which keep on coming into the different state. So in a year, roughly around INR 1 lakh crores of business, more than INR 1 lakh crore business into the river -- water bulk, water distribution, water sewerage, agriculture and then river linking, et cetera, these orders keep on coming. Most of the -- because of our 43 years old company, we are qualifying almost in all. So there is a huge water opportunity. Our target, we have taken INR 2,000 crores to INR 5,000 crores only into the water business with a selected water projects. So that is our target. BESS also, you will find a similar turnover of targeted order roughly around [ INR 1 lakh to INR 150,000. ] There also, our target will be INR 1,500 crores to INR 2,000 crores. So the business and our requirement is -- the size of business is very high commensurate to our requirement, our target. So we, as I told you, focus on limited project, execute that project very efficiently and focus into the bottom line.

Got it, sir. So that, I would also -- yes, yes, please carry on.

Order size, there is no dearth. There is no dearth of order in water and there is no dearth of order in power.

Okay. Got it. So that would also be most coinciding with your guidance of around 50% from the power and 50% from the water going forward?

That is our target because once we have our BESS unit, manufacturing unit set up, our focus and visibility and our control on our quality and cost will improve substantially. So we can be a bit more aggressive and with more -- this confidence, we can bid off that. So that's our target. Once that happens, then our power business volume will keep on increasing. This year and maybe this year, our water business will be slightly high compared to the power -- more high compared to the power. Next year onward, you will find that the power business will also keep on increasing along with the water business.

Understood, sir. Just one last question. What would -- how is the competitive intensity in the BESS segment? Can you please highlight on that front?

BESS, it is a very growing sector and very opportunate sector where all the -- a lot of manufacturing units are coming, a lot of units are coming for setting up the facility. All the EPC companies also focusing into the BESS facility. But it's a game of our technology. Here, we can say that we -- till date, we have the advantage compared to the other manufacturer because of our U.S. technology, and we are the only company which has its own technology, rest all depends on the Chinese technology and various other technology, which is not that proven and which is not because we have a lot of additional feature, this E-VAULT (sic) [ B-VAULT ] technology. B-VAULT technologies are giving various additional feature of AC and DC, which gives the maintenance and the productivity is much higher compared to the Chinese technology. That's the advantage we have. And that advantage will carry us to give some leverage, some leeway into the other manufacturers, but it's a competitive business. Wherever the government investment is there, all the EPC companies focus are there.

The next question comes from Prathamesh Dhiwar with Tiger Assets.

Sir, just I missed it earlier. How much CapEx are we doing in BESS? And how are we going to fund it?

The total CapEx, which we are targeting is INR 175 crores in 2 phases. First phase of INR 125 crores, we are funding from our equity. As I told you, INR 350 crores we raised from the market in last 1, 1.5 years. Part of that money is going to be utilized for the BESS.

Got it. And I think utilization, we can clock around INR 1,500 crores to INR 2,000 crores, right, from BESS segment?

Which one?

I think you [ had a question ] on peak utilization of BESS plant, we can clock around INR 1,500 crores.

It should be more than INR 1,000 crores to INR 2,500 crores in the next few years. You will find the ramp-up of the capacity.

[Operator Instructions] I now hand the conference over to Mr. Manoj Digga for closing comments.

Thank you all for giving us your valuable time despite a challenging last year. We are encouraged by the momentum seen in Q1. With fresh tender now floating in and a strong order book pipeline, we remain optimistic about the opportunities ahead. The current order book, along with the future L1 order and successful bid from our targeted tenders provide the company with secured future profitability and turnover. This significantly reduced the uncertainty around the future financial outlook. While we remain watchful of the evolving global and economic landscape, we believe that our focus on critical sector like water and clean energy, combined with a strong execution track record and prudent financial management will support substantial growth in financial year '26 and beyond. Thank you.

Thank you. On behalf of SPML Infra Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.