Welspun Enterprises Limited (WELENT) Earnings Call Transcript & Summary

On behalf of DAM Capital, I welcome you to the Q3 FY '21 earnings call for Welspun Enterprises. From the management side, we have with us Mr. Sandeep Garg, Managing Director and CEO; and Mr. Akhil Jindal, Group CFO and Head of Strategy. We will start with an update from the management for the past quarter and then proceed to the Q&A session. Over to you, sir.

Thank you, Mohit. Good morning, everyone. Good day, ladies and gentlemen. On behalf of Welspun Enterprises Limited, I welcome you all for the Q3 FY '21 results con call. I hope that you, your family and colleagues are well, and are continuing to take necessary safety measures. On this call, from the management side, we have myself and Mr. Akhil Jindal. I believe you would have already gone through the financial results published yesterday. Before we go into the details of this quarter, let me quickly start with key recent developments. First, we have received orders worth INR 1,100 crores in EPC segment by UP State Water and Sanitization Mission, Namami Gange and Rural Water Supply Department. Second, our Gagalheri-Saharanpur-Yamunanagar, GSY HAM project worth INR 1,352 crores received PCOD during the last quarter. Meanwhile, we at Welspun are taking extreme precaution and higher standards of hygiene and safety, having practiced by our staff across all our locations and in order to create awareness and protect our employees. Additional efforts have been implemented to make sure that our workforce remains safe. We are following the additional guidelines as per the center and the respective state and government, so with respect to office attendance policies for our employees for their safety and well-being. I would now want to cover the operational performance. Our revenue in Q3 FY '21 is down 17% year-on-year. This is primarily due to 2 reasons: one, the NGT ban and the farmers' agitation impacting our Mukarba Chowk – Panipat Road project. The NGT ban is now removed. And secondly, due to the forest land -- forest clarences of files for the Amravati project. May I -- I want to clarify, I would want to clarify that the land acquisition is not the issue for Amravati project. It is the permission to enter into the forest area, which is pending, which is holding down substantial work front. In spite of our revenue going down, our operating EBITDA margin is at 11.4%, up by 23 basis points year-on-year. So operationally, we are trying to be as efficient as we can be. Our revenue in 9 months FY '21 is down by 31% year-on-year basis, primarily because of the losses that -- or the loss of revenue that we incurred in the Q1 of FY '21. You will recall that the -- in the Q1 of FY '21, we lost a revenue equivalent to about INR 350 crores. I would also want to say that this farmers agitation continues to adversely impact us, and it shall impact our revenue projections for FY '21 because one of our major road projects that is the Mukarba Chowk – Panipat is right at the epicenter of this agitation. The impact of forest clearances on Amravati project will be known once the forest clears the file, which are currently pending in the Mantralaya of Maharashtra State. I would want to now move on and talk about some good news. So I would want to inform you that we have a recent inflow of an order of EPC in our water segment. With this, our foray into water segment has now started yielding results. And we have contracted -- we have been awarded a contract of INR 1,100 crores. The award is through the joint venture led by Welspun Enterprises, where we are 74% owner. And our joint venture partner Kaveri Infraprojects Limited, Hyderabad, is owning 26%. This joint venture with Kaveri is empaneled by the UP authorities for next 2 years for award of contracts on EPC basis. The above contract of 1,099 villages, includes survey; design; preparation of DPR; construction, commissioning and operation and maintenance for 10 years of rural water supply. I would want to clarify this, our forecast of INR 1,100 crores excludes the O&M period of 10 years. This is only the EPC contract. I would also want to inform that this empanelment is being -- is for 2 years, and this is the first tranche of order. We expect more to come in following days. Now I would want to update about the road part portfolio. As you know, our current HAM portfolio stands at 7 projects with a total value of approximately INR 10,000 crores. In addition, we have a BOT project of about INR 2,100 crores. So the total portfolio of road stands at INR 12,000 crores as of now. The current order book unexecuted along with this EPC order stands at approximately INR 5,350 crores. I would now want to brief the specifics on each road projects. First, I would want to cover Delhi-Meerut Expressway Package 1. Happy to inform that the fifth annuity of -- which was receivable in January 21 has already been received on the stipulated date. Second project I would want to brief is Chutmalpur-Ganeshpur & Roorkee-Chutmalpur-Gagalheri, CGRG. You would recall that we had received the PCOD for same on 5th of August 2020, and the first annuity is due in February 2021. We would be applying for the same on an appointed -- on the targeted rate. The third project is Gagalheri-Saharanpur-Yamunanagar. As I have told that we received the PCOD of the same in the last quarter on 31st of October 2020, and the first annuity will be due in April 2021. Coming to the ongoing under construction road projects, I would want to cover the Package AM2 or Maharashtra-Amravati project from PWD of Maharashtra. The physical progress of the project is about 78% at the end of Q3 FY '21. The payment from Maharashtra PWD pertaining to the third milestone that is 50% has been received, except for taxes. We have also built this fourth milestone, which is due at 75%. We are targeting to achieve the PCOD in the current financial year for this project. The next project that I would want to cover is Chikhali-Tarsod. The physical progress of this project is about 74% at the end of Q3 FY '21. And we are likely to achieve the PCOD for this project during the current financial year. So just I want to recap that these 5 projects, you will have a completion or operational projects that the current financial year-end. So out of total 7 projects, 5 projects will become operational, valued at about INR 6,200 crores from the portfolio of INR 12,000 crores. Coming to the balance portfolio, I would want to now cover the Aunta-Simaria. As you would recall, this is primarily a road project with approaches of about 8 kilometers. The work completed at the end of December 2020 is about 23%. The project has faced some delays due to large value change order, which will be an EPC contract on this project of approximately INR 350 crores, which is under discussion with NHAI. The project is impacted because of this change order impacting almost 30% of the work front available. And we expect that this resolution of this change order should come within this financial year. We have received the first payment of first milestone, as you would recall, which was due at 10%. The second project that I would want to brief is Sattanathapuram-Nagapattinam or SNRP project. The appointed date for this project was received on 5th of October 2020. This a 4-lane road, which was as per the bid, but the bid had 6-lane structure, which have now been changed to 4-lane. The current availability of the land under the 3G is 89%, and the balance land is in advanced stage of acquisition by NHAI. I'm also happy to inform that there was a High Court ruling about environmental clearance for this road project, which was in favor of the local people. However, NHAI educated the matter in Supreme Court, and Supreme Court has given a verdict on 19th of January 2021, which clearly states that there is no requirement of obtaining the environmental clearance, which was a condition on the appointed date that had been given by the NHAI. So the appointment date of this contract is now fully clear, and we are ready to proceed with the work. We are also happy to inform that the first installment of advance has also been received from NHAI for this project in December 2020. The last project that I would want to brief about -- in the road sector is Mukarba Chowk – Panipat toll project, which is a tolling project or a BOT project. Just to recap, we became a concessioner of the project through our harmonious substitution group. The original project cost of this toll asset is INR 2,122 crores, out of which INR 1,593 crores is the balance to be incurred when we took over. At the end of Q3 FY '21, the physical progress stands at about 67%, and it is our endeavor to achieve the COD of this -- for this project in H1 of FY '22. It is -- I would also want to inform that we have received change on orders on this project amounting to INR 270 crores for construction of additional structures due to the change in conditions on the recent development plans of NHAI in that area. This is an EPC contract for us in addition to the BOT project. Coming to the infra-road water project, we have Dewas Water project, which is a supply of water to the industrial area of Dewas. The commercial operation of this commenced on 30th of April 2019. For the 9 months, the revenue stands at the INR 7.5 crores, and the EBITDA is INR 3.8 crores. Coming to oil and gas, I would want to brief you about the 3 areas where some action is going on. One is the Kutch block or what we call GK-1. The ONGC has got an extension to submit its field of revenue plan because of the COVID situation. And the plan is currently under preparation by ONGC. So there is no significant development there. The significant development is on the Mumbai block where we entered into Phase 2, and we had started drilling with effect from December '20, and our geological findings are in accordance with what we expected to meet till date. Following this drilling plan of Mumbai block, we will move to the discovered small field block B9, which is a joining block to the major block, and we will be drilling its first well post completion of the well that we are drilling in the Mumbai block. Just to recap, the overall GIIP for these 3 blocks is about 0.93 Tcf, trillion cubic feet on a 100% basis. The EUR is expected to be about 70% of this GIIP. Going to the outlook, I would want to inform you that currently, there are 3 open bids on road HAM projects that valued at about INR 3,700 crores. And in water segment, there are 4 bids of STPs valued at about INR 12,000 crores, which are yet to open. In terms of the auto pipeline, currently, there are around 54 HAM projects of NHAI with a total value of approximately INR 50,000 crores. The company will selectively be targeting to participate bidding on a few of these projects while preserving its threshold return expectation. In addition to these 54 HAM projects, there are 46 EPC projects of NHAI valued at about INR 36,100 crores. And on these EPC projects, we will be bidding selectively on a few of them. As you may be aware, we bidded for 2 EPC projects in the last quarter. And on one of the projects, we were opened L2 out of the more than 10 bidders. So we see that on a selective basis, there may be an opportunity for us. Apart from NHAI, we are also evaluating certain road HAM projects and BOT projects of in-states and municipal agencies, where we believe we have safety of our investment and our revenues are protected. As usual, we will -- the company will continue to explore inorganic growth opportunities through a measured evaluation of risk return in the parameters. We will continue to be -- to pursue an asset-light model while focusing on operational excellence and prudent risk management. With this, I would want to hand over the call to Mr. Akhil Jindal for financial highlights.

Yes, good morning, everyone. You would have got a chance to go through the financial numbers. I will just start with the basic number. Our revenue was INR 407 crores in the third quarter. Our operating EBITDA though a little down was at -- it was a little down than our last year on a 15% Y-o-Y basis. But it's totally at around INR 47 crores. And our operating EBITDA at 11.4%, which is a little higher than the last year, which was 11.2% in the Q3 FY '20. Our cash stands at INR 34 crores in Q3 FY '21. Obviously, all of these numbers have got some impact -- some impact because of the NGT issue and the farmer agitation, as Sandeep mentioned. So we believe that many of those numbers would be a spillover from one quarter to another, and perhaps for the next quarter and the following quarters would be a lot better than this quarter. I just want to tell you that we have also been very financially prudent in terms of the cash flows and our own balance sheet. So till date, we have invested close to INR 1,449 crores in the road segment and INR 271 crores in the oil and gas segment. So almost INR 1,700 crores of investment we have made between the road and the oil and gas over the last few years. As of date, our cash balance stood at around -- and these are the numbers I'm quoting as on December 31. So the December 31 cash balance stood at INR 198 crores. So I mean, you can say, INR 200 crores roughly. And going forward, our equity requirements in HAM and BOT projects is around INR 274 crores. So you can imagine that we are fully funded, more or less for all the HAM and the BOT assets. In addition, we have got oil and gas assets investment of INR 89 crores, and we are making significant progress on the oil and gas side, as Sandeep mentioned in the beginning. So we are more or less fully covered. In addition, we have utilized our short-term loan only to the extent of INR 99 crores against a limit of INR 300 crores. So if the need be, we can utilize our short-term limits of CC, CP, WCTL of around INR 300 crores. And in totality, they are adequately supported by the net current assets. And we have no challenge in terms of our funding of our balance portfolio. Let me also tell you that while we are talking, we are also looking at some divestment. And once the divestment starts, as we are reaching to the state, where 4 of our projects are almost complete. I mean 3 CODs and PCODs we have announced. The fourth one likely to be complete within a few months. So with 4 projects, our portfolio would be attractive enough for people to really have a serious look at it. And to that extent, we would be looking at the locking of value through recycling of capital. And I believe that the company's prudence has also enabled the rating to be AA family, which very few infrastructure companies in the country enjoy, I know for reality for sure. But other than that, not many companies enjoy this kind of rating. So we have been very, very financially cautious and prudent, both in our bidding as well as in our spending. And that's the result why we are able to finance almost INR 12,000 crores worth of projects without necessarily borrowing or exposing our balance sheet. Our debt equity ratios are very comfortable. We have an equity base of almost INR 2,000 crores against a debt of around INR 500 crores, which is including short term, long term, everything. And to that extent, our debt equities are also very well under control. So with this, I believe the prudence on the capital will continue, and we would be selectively bidding -- really selectively raising funds. I want to also tell you how the market views our credit rating and the cost of borrowing. The recent CP that we have done, the 99 -- INR 98 crores of short term, as I mentioned to you, the recent CPs that we have done had been done at a rate, which is as low as 5.1%. So this is something which many, many -- few companies in the country are able to enjoy this kind of a rate. And it is clearly reflective of what our financial credence is in the market. So I think with this, I close my opening comments. If any questions are there, I would open this for the Q&A, and we would be happy to answer each of your questions. We are supported here with our -- both finance team as well as our operation team. So we would endeavor to answer all of your questions on the call. Should any question remain unanswered, you can always get in touch with our IR team, and we would also make sure that each of your questions get answered promptly. Thank you, and we can open this -- open this floor for the Q&A now. Thank you.

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

Sir, my first question is more on the Mukarba Chowk project. I see -- if I hear it correctly, you have said that it's 67% progress. Sequentially, if I recollect, it was 53% last quarter and now that's 14 percentage point jump here in terms of progress. So that means the farmer agitation has not exactly impacted this execution, may impact the Q4 performance. Is that the right understanding?

Rohit, it is not entirely correct. The target revenue that we had from the project was about INR 300 crores plus. We could reach only about INR 200 crores. So we have a loss of INR 100 crores in the last quarter, and it continues to impact us in this quarter as well.

Okay. Got you. Sir, and... [Technical Difficulty]

Mr. Rohit, your audio is breaking. We are unable to hear you clearly.

So now can you hear me?

Yes.

So earlier, we were targeting PCOD by H1 FY '22. So what exactly is the situation over there, that time line, including this 2 lane additional change of scope that you have received?

So the additional change of scope is an EPC contract, Rohit. So that will be treated as an EPC contract. It will impact our tolling, et cetera. However, the -- our forecast for PCOD and COD in H1 FY '22 remains unchanged, assuming that farmer agitation will get resolved in next few -- we should be able to make up in the next quarter because they are fully mobilized to judiciously complete this one.

Sure. Sir, some more portion on the road side, especially, you said on the bids that are close to 34-odd billion amount. Is there any L1 indication at this point in time that you have? Or do you want to guide something on the EPC pipeline that you have?

I think, Rohit, it will be premature. We have bid for -- all I can say is, we have bid for 3 projects on hand, which are still not open. So we cannot predict what will happen as an L1 bidder. So whoever is that one bidder for that [indiscernible]. In terms of quarter, we have 4 open bids valued at about INR 12,000 crores. And we expect the results of the same because those are design builds, the results of the same to be declared within this quarter.

Sure, sir. Finally, on the cash position, I understand it has deteriorated sequentially. But is there a working capital somewhere being blocked that is the receivables are yet to realize, payment, collection issues that has happened?

No, I think it's business as usual. I'm not seeing anything material. Obviously, there could be some collection minus delays which are regular in business for this EPC nature. But other than that, I don't see anything. And we are, in fact, as Sandeep mentioned, NHAI is very prompt in making the payments. We are getting all our annuity dues. We are also getting all our milestone payments dues as we covered in our earlier comment. So I don't think there is major impact. Yes, I can think of a little delay on the PWD side from the Maharashtra HAM project. But those are business as usual. I'm not saying it's any alarming or anything. And you would realize that we have not utilized our working capital limits to its fullest extent. We have, as I mentioned to you, almost INR 300 crores of fund base limits, while we have only utilized INR 98-odd crores of those limits. So I think it's business as usual. I mean nothing alarming comes to my mind.

[Operator Instructions] The next question is from the line of Nirav Shah from GeeCee Holdings.

Just a few questions. Firstly, I mean, I believe there would be no revenue contribution from the Tamil Nadu project in Q3. So any unbuilt portion over there? And what is are likely guidance considering the -- I mean, execution challenges at 2 projects? And probably the guidance for Q4 or FY '21?

The SNRP projects has not contributed in the Q3 '20 in significant manner in the revenue. But we expect that revenue to start in Q4 for -- from SNRP projects for sure. The -- sorry, could you repeat your question?

Yes. So now what will be the guidance for the full year in terms of execution? And is execution at SNRP project smooth? Or are we facing any challenges over there as well? Or if you can just tell us?

So I think the guidance, I would be a bit cautious here because of the farmer agitation and things happening. I would want to only say that the revenue projections that we had told will get adversely impacted. Once this farmer agitation clears up, we would know exactly how the FY '21 is going to be at the end. But there is definitely going to be a negative impact.

I think his question is more SNRP, what are these?

So SNRP -- in terms of SNRP, I think, we have very little turnover projections at this point in time. It's amounting to about INR 50-odd crores.

Okay. Okay. And the second question is, in your opening remarks, you mentioned that for another package under the same scheme in UP, you can expect something in the coming weeks or the next week in terms of awarding of second package. If you can just elaborate on that comment.

I would want to clarify, Nirav. I said in the coming days, not weeks, but it could be -- We are empaneled for 2 years. So the order books can follow between now and 2 years anytime. They are at liberty, the client is at liberty to award between now and 2 years. So we -- depending upon their cash flow management, they would continue to award. So this is the first tranche. And we expect, at least, we had initially applied for about 1,750 villages, which is about INR 1,750 crores HAM projects. The client is entitled to not only award us those INR 1,750 crores -- 1,750 villages, but additional villages as per the qualifications that we have got. So this could expand beyond to 1,750 villages as well under the provisions of the contract.

So we are the preferred contractor of this?

There is no preferred contractor. There are multiple contractors who have been empaneled. We are amongst -- one of them with required technical capability to execute the works. So there are about 10, 12 contractors who've been empaneled. It's a large value exposure. To give you an idea there -- right now, they're talking about 70,000 villages that need to be completed in next few years, out of which currently, the awards are for about 22,000 villages. So out of which we have got about 11,00.

Okay. And this is out of the 4, I mean, the 4 -- these are 4 additional projects where the bids are open?

So the 4 projects, the -- right now, the technical bids have been opened, which are currently under consideration, evaluation of the authority. We expect that the technical evaluations, we have been prequalified for these packages, 3 out of the 4, we have already prequalified. The fourth prequalification is being currently evaluated by the client. And once the prequalification is done, then will be in the packet B or the design and engineering packages are open, which have opened for us of 3 projects out of these. And once the technical evaluation is complete, which we expect by February end, the commercial or the bid -- financial bid will be opened. And the stated position of the client is that they would want to award it by March 2021.

So how many bidders have been technically qualified for these?

So the 3 bids which we have been technically qualified, the first bid is Versova, which is the smallest, there are 4 players who bidded, which is Welspun along with [indiscernible] . There is a company called RInfra. There is a company called [indiscernible] Engineers and there is another Mahalaxmi Infra with [ RVS ]. So there 4 players. For the other 3, there are 3 players, which is Dharavi, Ghatkopar and Worli. In addition to us, in Dharavi, there are Adani and Shapoorji Pallonji. In Ghatkopar, in addition to us, there is Adani and GVPR. In Worli, there is, in addition to us, Larsen & Toubro and Shapoorji Pallonji. So this is the kind of competition that we are seeing. And in this, there is a provision that one party can win no more than one contract. So each party will get only one contract and no more because these are large value contracts. So -- the client has stipulated that no party will get more than one contract.

Average values would be around INR 3,000 crores to INR 4,000 crores?

Yes, approximately. So the values are ranging between some INR 1,600 crores to INR 4,000 crores. Versova is INR 1,600 crores and the balance are in the range of INR 3,000 crores to INR 4,000 crores.

Sir, the final question is on our oil and gas portfolio. By when we will initiate the first selling of crude or gas equivalent?

So the way things are, Nirav, in oil and gas is, right now, it is called what is the Mumbai Block is the exploration well. Based on that, we will conduct certain studies to establish the reserves because we have the benefit of 2 wells, which have been done by ONGC on the same channel that we are targeting. So based on that, we will arrive at the resources. Post that, we will do a field development plan, which will be approved by DGH. And once the field development plan is approved, we will go ahead and execute, and then the first cash will be out. However, our intent is to try and see, we can get to sell RPI, if there is right economic value given, then we would want to first explore the possibility of selling this reserve to somebody else who has a larger interest in oil and gas than us.

Got it. But in case that doesn't happen. I mean if that doesn't happen, can we see anything -- any revenue contribution in FY '22?

No. It will -- see the -- the way the things will work out is, it will take about 4 to 6 weeks -- months to establish the reserves. That will take about 8 months, thereafter for a field development plan to be developed, which will take another 3, 4 months for approval. And then it will take about 1.5 to 2 years to actually execute the initial work of field development plan. So we are talking somewhere in the vicinity of 3 years before the first gas is out.

[Operator Instructions] The next question is from the line of Mohit Kumar.

Congratulation for a good set of numbers, given the challenging environment. Sir, my question is on the Mumbai sewerage treatment plant. I think they've -- I believe there are 4 to 5 packages. Sir, this is basically on design, build, operate basis. So there's no capital commitment from our side. Am I right in saying that? And why the competition is too low in this -- which is just clearly a large order?

Yes. Good question. First of all, yes, these are EPC contracts. So there will be no capital contribution on the project. Why the competition is so low? It is because this is -- these are very large volume sewerage treatment plants. The technical qualification criteria is pretty steep because these are very technically challenging projects. Not very many people have those qualifications. And since these projects are kind of also have O&M phase, which is long-term O&M phase. So a lot of people possibly do not have the wherewithal to continue with the projects for so long. That is the reason possibly the competition is low. However, getting 3 bids for such large contracts is a need, is, I think, a very good effort on the part of MCGM because, to my mind, in India similar work has never happened. So this is -- MCGM is one of the most foremost or very prominent in managing this sewerage. For them to take this large value contracts and get the people to commit to such large value contracts for a long term is in itself a very big effort. So I think that's the reason. And they are mindful that only they want serious players. They don't want players who will bid for something and then continue to drag the projects. They are mandated under the -- by the NGT and the laws of the court to deal with the sewerage issue in the Mumbai. So they are mindful that they want competition -- they want people who are not only going to take these orders, but also execute the orders in the earliest fashion. So that's what my take on it is. I am -- it's my personal take. It may not be what the take of others is, but this is my personal view.

Secondly, on this, sir, UP Namami Gange, UP Water and Sanitation Mission project or Jal Jeevan Mission project. Sir, the time line, I believe, is only 21 months to execute this project. Does it mean that we are looking at a very large contribution for FY '23 -- FY '22? And is any guidance we can give for FY '22 year EPC side -- business?

So you're right. You are right that these are going to be very quickly executed projects. So yes, it is going to contribute in FY '22 and '23 in a large value on the water segment side. So -- the overall schedule for these projects is that once these are -- the villages are identified, we will create a DPR, which we have to submit within 6 -- submit it and approve within next 6 months. And thereafter, we have 18 months to complete the project. So in the next 24 months, all this turnover will be consummated for sure.

And sir, what is the kind of order which is still pending from the UP side to get finalized for FY '22? And have they given any indication for doing for more project in FY '23 bidding out?

So as I said, this empanelment is for 2 years. So they -- I don't foresee them to empanel new players for next 2 years. And the current situation is that out of the 70,000 villages that are being targeted by UP alone on this -- under this scheme, current orders have covered about 22,000-odd villages. So there is going to be almost 2/3 of -- or equivalent to 2/3 of -- this is -- this current award represents only 1/3 of the total award that they are going to go ahead and do this -- this empanelment if they have to achieve what is their objective. So I expect substantial orders to come through going forward. However, this is a future statement, I cannot be affirmative about it. But our expectation is that this will be -- this will unfold a lot many orders going forward.

Understood, sir. Understood. Sir, last year, you said BOT project which you are doing in Panjab, at the Mukarba Chowk. Sir, is it -- given this farmer strike, I believe, this could be a force majeure event. So are we -- have you approached NHAI for some kind of compensation, extension or concession? Or is it too early right now?

So we have already notified NHAI of the force majeure. So the force majeures have been on behalf of the NGT ban as well as the farmer and other issues. So we are trying to protect the company from our perspective of time. In terms of the compensation, yes, the compensation will come in by the extension of tolling period and the construction period. So we expect that it will not be financially adverse to the company. We expect that the revenues will get rolled over to the next quarters and the tolling period will get extended equivalent.

The next question is from the line of Ajay Gupta from JM Financial.

Last quarter, you had given a guidance for the company to get orders worth approximately INR 5,000 crores for this financial year, which was post you taking over the INR 2,100 crores project. I want to know if you still continue with the guidance? And what is it looking like?

Yes, we are continuing with the guidance.

You are continuing. And the other question is that, it's a cause of concern for a lot of investors that we deal with that in the last 1.5 years, the company has not been able to successfully even get a single new road project through the bidding process. Could you throw some light on it -- like at least almost close to 75 to 100 projects, which have -- other companies have bought L1, and there is not a single project that you've been able to qualify as L1 or get a new project through the bidding process. Could you please throw light what has been going wrong? And what measures are you taking to rectify or to get orders because otherwise, it seems trouble.

So Ajay, good question, and I would want to address that. I don't think anything is going wrong. First of all, I want to correct it. It is -- we are a prudent company. We want to -- we do not want to create an order book wherein we are not interested in the bottom line for the project. So we are very prudent risk managers, we believe that we do not need to book orders to continue to churn the revenue. We are protected for almost 2 years of our revenue at this point in time. And we are confident with the orders that we believe we will get in this year that we will be protected for almost 3 years of that revenue. Whether we get the orders through a bidding process or through inorganic does not change our equation. We are very mindful that we are becoming like a go-to company when people are not in a position to deliver what they've already won, and they do take a lot of substantial haircut on take and we get these contracts, which we are happy with. So to be, I want to be very clear that to be winning a bid is not necessary for me what is important is to keep the sales to order book ratio healthy. And whether I get it through a secondary acquisition or to through a bidding process I am agnostic to it.

Okay. And the second question from my side. The next question is that Mr. Sandeep Garg had given a guidance of 4,000 -- of doubling turnovers 2 years back -- 1.5 years back when the stock was at INR 200. And a lot of our investors bought into that story that the turnover will double to INR 4,000 crores. The languishing growth is hardly 10%. When do you think the company will be able to do a 100% growth jump like committed -- like you said on TV and on various other media platforms? Or that is not reality now.

So I think, Ajay, Sandeep Garg has said, you're right, that guidance depending upon the current forecast that we had. However, the -- if you look at the HAM projects have seen a very intense competition, just to give you an idea. Most of the projects are right now going under the forecast of NHAI price. And there is no point of just generating the revenue with the bottom line is not keeping pace. So our -- as I said, we are a very prudent company. We believe that we have -- we are a custodian of wealth of people. So we need to be mindful of the returns that we are going to give to the people that have invested into us.

So that should have also been kept in mind while giving the guidance, right? I mean I'm sorry for...

No, no. I think you are absolutely right as...

Because investors have lost money from INR 200, the stock is languishing at some INR 80. And we as brokers get the brunt of it, I'm sorry, but -- And going forward, where do you see next year?

No, there's nothing to be sorry about it, firstly, Ajay. As an investor call, I think, it's prudent to have those discussions, open discussions. Please do not feel sorry about it. And -- yes, see -- you -- as we say, all future related answers are based on the current forecast that we have. Now if you ask for a forecast, then you need to be appreciated that in December circumstance will change, then we will, at the first possible opportune time, be able to address that it is not likely to be true. As I said very clearly that my guidance for the last quarter itself will not stand because in light of the current challenging environment that we are seeing. So any -- and this may -- this is something that I would want to say to all my investors and the analysts that if the future forecast is given it is given based on the current information available of the market and of the competition. So if the environment changes, there is no method that we can continue with the guidance. Otherwise, we will not be nimble footed, if you just chase the order top line, we would have invested all our money, and we would have been in debt and there would be no profit margins at the bottom of it. So I want to be very capital allocation sensitive. So when we allocate capital, we are very sensitive that the capital has to yield a result. Otherwise, there's no point in just booking the order. And in the same light, as I said, I refused to give a forecast for the FY '21. And in the same light, I would request not to seek any guidance for FY '22 until and unless there is a predictability which is available, which is a trying circumstance. We both know -- we all know that nobody could have forecasted the kind of scenarios that we have seen, pandemic, the farmer agitation, lot of issues, which have impacted us. So these are things which are not within the control of the management. The only thing that the management can do is keep you informed about this. I hope I've answered the question.

The next question is from the line of [ Ketan ] as an individual investor.

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Ladies and gentlemen, that was the last question for today. I now have the conference over to the management for their closing comments. Thank you, and over to you.

Thank you, everyone. And I really appreciate your participating in this investor call and telling us your concerns as well. I would want to say that this has been an interesting quarter. We have dealt with the issues, which hitherto we had not dealt with very effectively. I can assure you that the Welspun Enterprise will continue its journey of operational excellence on an approximate INR 12,000 crores worth of portfolio enrolled. We will remain focused on value unlocking through recycling of the capital. And I thank you for your questions. And if there are any further queries, you may please get in touch with our investor relationship team. We'll be happy to respond to your questions. Thanks, and good day.

Thank you.