Welspun Enterprises Limited ($WELENT)

Ladies and gentlemen, good day, and welcome to the Welspun Enterprises Limited Q4 FY '26 Earnings Conference Call, hosted by 360 One Capital Markets Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sailesh Raja from 360 One Capital Markets Private Limited. Thank you, and over to you, sir.

Yes. Thanks, Sagar. Good afternoon, everyone, and thank you for joining Welspun Enterprise Limited Q4 and FY '26 earnings conference call. I would now like to invite Mr. Sandeep to introduce the management team members who have joined us on this call following which we will begin the Q&A session. Over to you Mr. Sandeep.

Good afternoon, everyone. This is Hardik Dhebar here. I'm President Finance at Welspun Enterprise and CFO, [indiscernible] Engines Limited. First of all, thank you, everyone, for taking the time out today and joining us on this quarterly and annual call. It's pleasing to say that we have had a good quarter and overall a good year to begin with. And to take you through the journey of FY '26, I have the entire senior management of Welspun Enterprise headed by Mr. Sandeep Garg, who is the Managing Director; Mr. Saurin Patel, who heads the Engineered Water Vertical and is the Managing Director at Welspun, Michigan; Mr. Abhishek Chaudhary, CEO of the Transport business and looks at digitalization and other initiatives for Welspun Enterprise. And my colleague, Mr. Lalit Jain, the Chief Financial Officer at Welspun Enterprise. With this, I hand over the call Mr. Sandeep Garp to make his opening remarks and take you through the journey of Welspun Enterprises in FY '26.

Thank you, Hardik. Good afternoon, everyone, and thank you for joining us today. It is a pleasure to connect with you again and share our progress for Q4 and FY '26. Before I start my address, I would want to say that during the address, we may be making some forward-looking statements. Please note our safe harbor clause in respect of the same. I'm pleased to share that your company has received a letter of award for the Pune Shirur elevated road project with a total cost of approximately INR 7,300 crores. While our transportation CEO, Mr. Abhishek Chaudhary, will discuss the profits in greater detail during his address, I would like to highlight that this win represents an important milestone for us. It not only strengthens our presence in the road infrastructure segment, but also reaffirms our ability to secure and execute large, technically complex projects along with building a diversified and high-quality infrastructure portfolio. With the award of this project, along with the addition of Pandharpur water treatment project, we have added over INR 10,000 crores to our order book during the year, which is in line with the guidance given at the beginning of FY '26. As a result, our consolidated order book now stands at approximately INR 20,000 crores, providing a steady revenue visibility ahead. Coming to our financial performance, we delivered a healthy performance during the quarter. Consolidated revenue grew at 14% year-on-year to INR 1,199 crores. Our consolidated EBITDA grew at 31% year-on-year to INR 272 crores on account of our disciplined execution and focus on operational efficiency. For FY '26, consolidated revenue stood at INR 3,615 crores, in line with our revenue guidance of INR 3,600 crores. EBITDA grew 16% year-on-year, while EBITDA margins for the year stood at 22%, exceeding our guided range of 18% to 20%. Our balance sheet continues to remain strong with consolidated cash of approximately INR 1,700 crores. This [indiscernible] the ability to pursue growth opportunities while staying prudent on capital allocation. Mr. Lalit Jain, our CFO, will shortly present a detailed overview of our financial performance. For FY '26, WMEL reported a revenue of INR 874 crores, registering a robust 31% growth over the previous year with a stable 21% EBITDA margin. The performance across both the quarter and the full year was driven by strong execution momentum and sustained progress across key verticals. Mr. Saurin Patel, Managing Director of WMEL and Head of Integrated Motor Vehicle will share further insights regarding the subsidiaries' performance and broader developments across water infrastructure business during [indiscernible]. I'm pleased to share that along with our business growth, we have continued to strengthen our organizational culture and governance framework. During the FY '26, we took meaningful steps towards building a stronger performance-driven organization through enhanced accountability and focused performance management practices. These efforts led to a 4% year-on-year reduction in attrition. We continue to invest in talent development, succession planning and leadership readiness, further improving organizational agility and developing bench strength. Our diversity ratio also improved from 6.3% in FY '25 to 7.9% in FY '26. All these efforts have been recognized externally with the company being certified as a Great Place To Work for the second time, reflecting the strength of our culture and our core light values, learning, innovation, trust, transparency and endurance. I would also like to briefly highlight the recognition received by the company, Welspun Enterprises Limited and Welspun Michigan Engineers Limited, continue to be acknowledged for their consistent performance, strong execution capabilities and adherence to quality standards. Amongst others, some of the notable awards include Best Construction Metrology of the Year award and the Build India Awards for the Aunta-Simaria growth project, a bridge over Ganga River. Innovative Climate Action Award at India Climate Samman 2026 by [indiscernible] Markets Association of India. Best turnover of [indiscernible] by Indian Institute of Trenchless Technology for trenchless excellence awards. Best leadership in HSC excellence for Welspun Michigan as a company. These recognitions further motivate us to enhance our operational efficiencies, take more challenges and improve upon our own standards. Coming to the outlook, backed by the consolidated order book of approximately INR 20,000 crores, a strong bid pipeline and our disciplined approach towards risk management, capital allocation and returns, we remain well positioned to deliver our medium-term revenue targets. Prolong disturbance in geopolitical situations and disruptions in global supply chain could create certain near-term cost and execution challenges, we remain confident in the resilience of our business model and execution capabilities. With this, I would like to conclude my opening remarks and invite Saurin Patel, Head Integrated Water Vertical and MD of Welspun Michigan to take you through the Water Business and Welspun Engineers Limited updates. Over to you, Saurin.

Thank you, Sandeep, and good afternoon, everyone. It's a pleasure to interact once again with you. As always, I will take you through the key developments in our water business, project update, financial performance of our subsidiary and the outlook for the business. At the outset, it gives me pleasure to state that in less than a decade, our water business has evolved into a meaningful and value-accretive verticals for Welspun Enterprise, backed by scale, execution capability and improving visibility of long-term revenues. We are currently executing multiple EPC projects of wearing diversity and complexity. Starting with the Dharavi waste water treatment facility, 480 MLD, a first-of-its-kind multilevel plant designed to address urban space constraints. This project is progressing well with physical completion of around 65%. It was recently reviewed by the newly appointed BMC Commissioner in April, which reflects the importance and scale of the project. We are targeting commissioning by July 2027, followed by [indiscernible] O&M phase, providing long-term revenue visibility. On the UP Jal Jeevan Mission projects, we have achieved progress of approximately 80% and expect the completion in FY '27. At the [indiscernible] MLD water treatment plant, excavation works are currently in progress. The civil contractor has been fully mobilized and have commenced PCC and rock anchoring works. The overall project progress stands at approximately 20%, and the project remains on schedule for completion by June 2029. The recently awarded Pandharpur 910 MLD water treatment plant is in the early stages of execution. Mobilization is underway, advances have been received. Key preclearances are in progress and initial billing has already commenced this quarter. On the Dharavi [indiscernible] project, we are awaiting the final high court clearance. Post-which, the shaft work is likely to commence. We are currently executing 3 segmental tunnel borring machine projects in Mumbai, targeted for completion in FY '27. In the rehabilitation segment, the use of innovative geopolymer lining technology for 17 kilometers of Mumbai [indiscernible] is progressing well and remains on track for completion in FY '27. In Vadodara, the 2.5-meter -- 2.5 kilometer reinforce polymer and mega drum train project is been completed nearly a year ahead of schedule, aimed at mitigating severe water flooding in the areas affected. On Smart Ops, our wastewater initiative, within just 24 months of launching it, we have successfully delivered several notable projects focused on the cleaning of lakes, rivers and kunds and are currently executing 2 sewage treatment plants, 1 in Mathura and the other in Orissa. Let me now turn to the financial performance of the subsidiary, Welspun Michigan Engineers Limited. WMEL delivered a well-rounded performance both for the quarter and for the full year. For quarter 4 FY '26, revenue grew 32% year-on-year to INR 351 crores compared to INR 265 crores in the corresponding quarter last year. EBITDA increased 43% year-on-year to INR 72 crores from INR 50.5 crores in quarter 4 of [indiscernible]. Consequently, EBITDA margins expanded by about 100 basis points to 20% in quarter 4 FY '26 compared to 19% in quarter 4 FY '25. On a full year basis, revenue grew 31% year-on-year to INR 874 crores in FY '26 compared to INR 668 crores in FY '25. EBITDA increased 29% year-on-year to INR 185 crores from INR 143 crores in FY '25 while EBITDA margins remained resilient at 21%. In terms of revenue composition, rehabilitation projects have seen strong cash and now contribute approximately 28% of FY '26 revenues, improving from 17% in FY '25. Going forward, WMEL will continue to focus on 3 key segments: funnels, prefabrication and pumping projects, each offering a strong pipeline and scalable opportunity. It is targeting a CAGR growth of over 25% over the next 3 years. On the overall water business, our order book, including tunnels and O&M stand at around INR 14,000 crores, providing a strong multiyear revenue visibility. Supported by a robust bid pipeline across water and wastewater treatment, large-scale water supply systems and tunneling, we remain as Welspun Enterprise is well positioned to capitalize on the sector, expanding opportunities and drive sustainable long-term value create. With that, I will now hand over to Abhishek, who will take you through the Transport segment performance in greater detail.

Thank you, Saurin, and good afternoon, everyone. We appreciate your continued participation and interest in our company. As always, I'll briefly take you through the progress across our transportation portfolio, key product milestones and subsequently provide an update on our digital transformation initiatives. Let me begin with our transportation portfolio. Execution across our projects remains stable, reflecting our continued focus on disciplined delivery and operational efficiency. For the Aunta-Simaria projects in Bihar, we have received the first annuity payment and in line with our disciplined capital recycling and asset price strategy, we are in advanced stages of monetizing businesses. This is expected to further strengthen our balance sheet and enhance capital efficiency. With respect to Varanasi-Aurangabad road project, progress remains steady with project completion targeted for Q1 FY '27. Execution on the SNRP projects in the state of Tamil Nadu and Puducherry is also progressing well and is expected to be completed in Q2 FY '27. As communicated earlier, we have received the level of award for Pune-Shirur Elevated Road project. The project involves the development of slickline, partially elevated highway corridor on National Highway 753F, covering the booming to Shirur stretch in Maharashtra, spanning approximately 53.4 kilometers including nearly 36 kilometers of elevated corridor, the project reflects both the scale and technical complexity that [indiscernible] with our core execution capabilities, which was earlier demonstrated through projects like Aunta-Simaria. The Pune-Shirur project will be executed under design, build, finance, operate and transfer, which is DB-1 model with a total project cost of approximately INR 7,300 crores. The concession period is 29 years, which comprises of 4 years of construction followed by 25 years of tolling rights. Strategically, this project strengthens our transportation portfolio and deepens our presence in one of Maharashtra's fastest-growing infrastructure corridor. The project further strengthens long-term revenue visibility while reinforcing our position in complex transportation infrastructure. The project is expected to enhance connectivity across key urban and industrial hubs including Naguli, [indiscernible] by easing congestion, reducing travel time between Pune and Shirur and thus improving freight movement efficiencies. Over the long term, the corridor is expected to support industrial growth, improve logistic efficiency, reduced transportation costs and create enormous employment opportunity, aligning well within our strategy of developing infrastructure assets that deliver sustainable economic and social value. With this addition, our transportation order book stands at approximately INR 6,000 crores including the EPC value of Pune-Shirur, providing healthy execution visibility over the medium term. Going forward, within the transportation vertical, we will continue to focus selectively on technically complex road projects, elevated corridors, tunnels and projects under EPC and BOT models, where our execution and engineering capability provides a clear competitive advantage. Overall, we remain focused on disciplined execution, timely monetization, prudent capital allocation and strengthening the quality and visibility of our transportation infrastructure portfolio. Let me now briefly touch upon our digital transformation initiative. Digital transformation is increasingly becoming an integral part of our operations across all business verticals, namely transportation, water, tunneling. These initiatives span the entire project life cycle as well as the key support functions with the objective of building a future-ready and operationally agile organization. Our focus is on leveraging technology to improve execution efficiencies, streamline governance, enhance productivity and build scalable operational capabilities. Key initiatives include the implementation of 3D, 4D, 5D, building information modeling for our Dharavi sewage treatment plant and Bhandup water treatment projects, which will also be replicated for the newly [indiscernible] treatment projects and Pune-Shirur. We have launched an RFI application at the bhandup site to enable real-time reporting and monitoring of the project progress. As communicated earlier, we have also successfully migrated to S4 HANA, SAP 4HANA, creating a strong and more integrated digital backbone for the organization. In addition, we recently rolled out an e-governance platform to promote paperless operations, expedite approvals and create a centralized digital depository of records and documentation. We are also developing AI-driven crews for quality management, safety monitoring and real-time execution tracking at the project sites. Further, we are working on an AI-enabled platform for the operation, management and maintenance of tunnel boring machines to improve our operational productivity and efficiency. Over the coming phases, we will migrate towards a unified enterprise architecture, where all applications will be hosted on a single integrated platform, enabling improved visibility and process efficiency across the organization. At the same time, our supply chain ecosystem is being digitized through strengthened processes [indiscernible] accelerated procurement cycle, improve supplier management and enhance overall efficiencies. Overall, these initiatives are helping us built stronger execution capabilities, improving efficiencies and create a scalable platform for long-term sustainable growth. With that, I would now like to hand it over to Mr. Lalit Jain, our Chief Financial Officer. Over to you, Lalit.

Thank you, Abhishek. Good afternoon, everyone, and thank you for joining us today. I will briefly walk you through our financial performance for Q4 and FY '26, along with some key business highlights. Starting with Q4 FY '26, we reported console revenue of INR 1,199 crores, reflecting a healthy year-on-year growth of 14%, driven by strong execution across our projects. Consol EBITDA for the quarter grew by 31% year-on-year to INR 272 crores, compared to INR 207 crores in Q4 FY '25. The improvement was supported by better operating efficiencies and continued cost optimization initiatives. Consequently, EBITDA margin expanded to 22% during the quarter, compared to 19.3% in the corresponding period last year. Profit after tax for Q4 FY '26 stood at INR 163 crores, posting a strong drop of 54% year-on-year. Now moving to full year performance. I am pleased to share that we achieved our revenue guidance for FY '26. Against our guidance of INR 3,600 crores, we delivered a revenue of INR 3,615 crores, aided by strong execution during the fourth quarter. While overall revenue declined marginally by 2% year-on-year. Profit improved meaningfully during the year. Console EBITDA increased by 16% year-on-year to INR 845 crores, while EBITDA margin expanded by 350 basis points to 22%. This improvement reflects our continued focus on execution, efficiency, better project mix and disciplined cost management. Profit after tax for financial year increased by 11% on year-on-year basis to INR 393 crores. Now coming to segmental performance, [indiscernible] segment revenue delivered strong growth of 37% year-on-year, supported by healthy execution momentum and improved project needs. The Water segment revenue witnessed a margin declined by 3%, primarily due to slower execution in the UPJJM project. Revenue from the Transportation segment declined by 17% year-on-year, mainly on account of project completion and delays in the awarding of Pune-Shirur project. Now turning to the balance sheet. We continue to maintain a strong financial position supported by robust order book of INR 20,000 crores and a healthy balance sheet. As of 31st March 2026, our network stood at [indiscernible] crores. We also maintained a strong cash balance of INR 1,728 crores with net debt remaining low at INR 43 crores. During the year, revised our outlook from stable to positive while reaffirming our long-term regime of [indiscernible] and short-term getting of [indiscernible]. Additionally AAA for the incremental working capital limit of INR 400 crores, further validating the strength of our financial profile. Going ahead with the strong order book, healthy liquidity position and continued focus on [indiscernible] execution, we remain confident of delivering sustainable growth and long-term education. With that, I would now like to hand over the call back to the host. Thank you.

[Operator Instructions] Your first question comes from the line of Sanjay Shah from KSA Securities.

I sincerely appreciate the opening remarks from all the division head and very helpful, very helpful. Sir, my question was regarding Pune-Shirur. Can you highlight upon the expected project IRR, equity commitment, monetization, time line, rolling economics, et cetera.

It's a very detailed question. Thank you for the interest in the company and really appreciate that. Be as Abhishek addressed the time lines of the project is 4 years of construction, and 25 years of tolling thereafter. Now coming to the equity IRR, we -- as we've always planned for equity IRR and upwards of 18% as a basic governance, we are targeting similar returns on this project. For a detailed conversation, I would request you to get in touch with our team, the IR team or CFO for them to take you through every detail.

My next question is regarding, can management share the expected monetization time line for [indiscernible] Samaria, SNRP and future good projects?

So as an asset-light model principle, we are targeting to monetize the Aunta-Simaria project for which we have received the first annuity within H1 FY '27, subject to getting the right valuation for it. We are -- we will be targeting to similarly monetize the [indiscernible] project. So once it is complete, and we have received the first annuity, so it may go into the FY '28. As a principle, we stay committed to asset monetization at an appropriate time so that we can create value for the stakeholders at the right value as well as [indiscernible] term equity quickly for future growth.

Sir, so my last question was on Smart Ops. How do management see revenue potential, margin profile, scalability over the next 3 to 5 years?

We are very positive about the Smart Ops. We are taking strides to establish the technology in all spheres that it can deliver value. We have already established in the state of [indiscernible] and waterbody clearance, the retrofit of the stipes is currently in progress as well as establishing [indiscernible] drain. So this is where we are currently focusing. The next focus will move into the industrial space as well as stand-alone sewage plants of a particular size and scale. We are -- we believe that it's a very good technology to support a quick deployment of treating the waste water and it is practically small footprint and quick deployment technology. So we believe that there are multiple usages of the technology to run forward going forward in the next couple of years.

The next question comes from the line of Sarvesh Gupta from Maximal Capital.

So sir, first question is on the revenue outlook for FY '27, so if we look in the last 4 years of our company, we had like 2, 2 years where the revenues broadly remained similar, and then we had a step-up jump. So while you have a medium-term guidance of 15% to 20%, but given that this year, we did not grow our revenue as such. So can we expect 25% to 30% growth in FY '27?

So our guidance will stay to 15%, 20% as we have always maintained and we will continue to maintain. We shall target higher growth for sure. But given the headwinds that we are facing in terms of supply chain disruptions, as well as in terms of the labor situation, given the various challenges, I would not want to give any guidance beyond the range that we have already specified.

Okay. And secondly, sir, on the fundraising proposal, which was mentioned in the results release. So now we recently raised INR 500 crores and for, I think, qualifying for the adjusted network criteria, et cetera. So now this INR 1,000 crore fund raise is -- has been announced. So given that we already have a very cash balance sheet and then there is a lot of monetization we are targeting, so somehow it looks like these constant fundraises are creating a very lopsided balance sheet with a lot of cash and very little debt. So how do we look about on this particular point?

Thank you for raising this question. Let me clarify, first of all, this is just an enabling approval. As of now, I can clarify, there is no proposal to raise this fund as we see the normal business on board. This is more to prepare the business for any opportunity that may come in and which may need liquidity over and above what is currently forecasted. You're absolutely right, and I would want to correct that we have a preferential warrants of INR 1,000 crores out of this INR 250 crores has been received. We are in a position to call up for INR 750 crores over a period of 18 months from the start of the warrant period. So we have that liquidity, and we do have assets to liquidate. In terms of the Aunta-Simaria, we have 51% of [indiscernible], and we hopefully will complete the project of [indiscernible], in this financial year, which should be available for the next year. So right now, in a normal business scenario, we do not anticipate any further fund raise. This is purely an enabling a request which will -- which is from a point of view of preparing the organization, should the opportunities be larger than what we have anticipated on our future forecast.

Understood, sir. And on WMEL, sir, so this has -- so we've spent 2, 3 years here and now company is performing well, and we have a 60% odd stake. So is there any plan to also utilize some of the cash we have to sort of take out the minority interest there?

So we would be very happy to consolidate further on the balance sheet, provided the existing shareholders would want to sell. However, I don't -- I don't think that they are right now very eager to sell. They are -- they have been confident that we are going to create larger values on the platform, so and they're holding on to it. But should there be an opportunity, we would be definitely looking at it if it is available at the right price.

Okay. And on Pune project, so when do we expect to commence the construction and what kind of revenue booking can be done here or this expenditure that can be done here -- in this financial year?

Thank you for this question. I'm Abhishek. Regarding this project, as you are aware, this is a DBFO project, which means that we are supposed to do the financial closure for which we have a time limit of around 6 months. So during the 6 months period, we will be undertaking the development activities, which is with regard to the utility shifting with regard to sitting up of casting yards, et cetera, et cetera. We plan to have our financial closure probably in the month of October or November, leases, which, as appointed date will be declared. So we'll be left with close to around 4 months of real execution, which can contribute to the top line of FY '27. So we expect some there in the range of, say, INR 500 crores to INR 600 crores, which will be contributed during this year by initial route.

Your next question comes from the line of Radha from Motilal Oswal.

Congratulations on very good results. Sir, in the last call, you had highlighted that FY '26 revenue base is low, hence, the company is expected to grow FY '27, revenue by 20%. However, if we delve into the individual project schedules, it is [indiscernible] you need on a large orders in within the next few months to be able to start execution in the second half. Are we on track for the same?

So thank you, Radha, for a very deep analysis of our business. And yes, you are right that we are going to be looking for order booking. As you know, these are large contracts. So saying that we will be able to target it in the next 2 months or 3 months is a matter which I would not want to sell on. But there is a clear focus on adding order book, and we expect the order book to be added somewhere around INR 8,000 crores to INR 10,000 crores in FY '27. And we would want to add as soon as is possible. We are working towards it. Hopefully, we will be able to do it within this H1, which is sufficient for us to meet our guided target of 15% to 20% growth. And to give you an idea that the uncovered portion of our revenue from the guidance is close to 8% to 10% only, which is uncovered and we are reasonably confident that we should be able to cover it in H1, so as to meet the guidance.

Understood. Secondly, in the Pune project was received in last quarter, and you are expecting the execution will start happening from the 4 months of this year. So that means between receiving the project and the execution, there is a large gap, so about 3 quarters. So even if you receive the project in -- project in first half, so is it still fair to assume that execution can start in the second half of the year? Or will it be taken forward for FY '28?

So Radha, the point that I think partially was addressed by Abhishek that during the development or phase between now and the start of physical road building, we will be doing little shiftings. We'll be doing certain establishments. We are entitled to do a lot of clearing, et cetera, et cetera. So it is not that we will not be recognizing revenues totally in this period of 6 months. But the ramp-up will take place post the appointed date is the point that Abhishek wanted to mention. Similar situation will unfold for the projects that we get for after -- in this year. The assumption that you are making in the question to my best of my mind is that if we were to get only a BOT project, BOT projects generally start shedding in the revenue about 6 months to 9 months after the award. However, if those are EPC or other model forms of contract agreement, the revenue recognition starts earlier. So we -- the projects that we are targeting are also in the EPC space. So we are reasonably confident that we will be able to meet the guidance of 15% to 20% growth of revenue. I hope I've answered your question.

Yes, yes, very clear. The second question, sir, regarding in your opening remarks, you mentioned that near term, there is cost and inflation challenges due to geopolitical issues. So since the company is having entirely domestic business and also complete passive cost [indiscernible] in the customer, I request you to please elaborate a little bit more on this aspect?

So Radha, it is true that most of our contracts have the WPI CPI-linked escalation provisions. However, the -- and it is also true that the government is trying to respond to the challenges, which are happening because of the geopolitical situation in the world by coming up with the -- as you may be aware, the Ministry of Road Transport has come up with the clear office guidelines that [indiscernible] will be on actuals rather than based on WPI CPI. They are also -- they have also come up with a clear statement that they will be paying for even the hybrid annuity model on a monthly basis rather than on a milestone linked basis. The Finance Ministry has come up with force mature provisions, which are helpful. Hopefully, those will be adopted by the other ministries. So I think on an overall basis, the government is working towards easing of the pain. However, you cannot -- it will be prudent on our part as a conservative company to caution that there could be a small medium term or near term impacts, which we are more than confident that we will be able to overcome and we are -- the balance sheet is resilient. And that is why we are, despite our EBITDA margins being in the ranges of 22.5% for FY '26, we are giving a guidance of only 18% plus. We are acutely aware of all this, and we factored all this into our guidance so that there is no shock that can come in hear some issues notwithstanding.

The next question comes from the line of Vaibhav Shah from JM Financial.

Sir, what would be the EPC value of Pune-Shirur project?

Thank you, Vaibhav, it is approximately INR 5,400 crores for as an EPC cost of the project.

Okay. And sir, you mentioned that this year we will do closer to INR 500 crores to INR 600 crores of revenue from the project. So next year, can we see closer to around INR 1,800 crores kind of revenue, INR 1800 crores to INR 2,000 crores of revenue from the project?

We are giving a guidance of FY '27. However, if the discussion is about Pune-Shirur's long term, how it will unfold, I would request Vaibhav you have interaction with the IR CFO, who will take you through from us all the details on the Pune-Shirur. I hope that works for you.

Yes, sure. And then lastly is landside for the project. So we are confident of starting the [indiscernible] 0 by November or December?

So the good part of this project is that it is, as Abhishek mentioned, which is primarily 35 kilometers of elevated structure, which is on the median or which is supposed to be built on the medium of existing road project, which caters to almost like 70% of the cost of the project or more than that. So that front is available right now right there. So the only land acquisition, which is very required is mostly for tolling and the access to the elevated sections and very little land acquisition otherwise is required. So there is a very, very little land acquisition requirement as an overall on the project. So we are reasonably confident that we will be able to not only start the project in time, but we will be able to complete the project on time.

Okay. Sir, what will be your investment in the All Indian business so far?

It's about INR 500 crores at this point in time.

These are our share?

Yes.

[Operator Instructions] Your next question comes from the line of Bhavik Shah from Invexa Capital.

First question is -- like what is the guidance for, say, Welspun Michigan for this year? Like how much do we expect the growth to be and the margins there? And what is the gross order book, say, from Welspun Enterprises to Welspun Michigan?

So this is Saurin. We expect our revenue basis to be growing at a rate of 20%. We have said CAGR of 25% over the next couple of years, but 20% is what we are predicting for the FY '27 season.

Okay. So -- and our gross order book is how much from Welspun Enterprises?

So if the question is, if I get you correctly, Bhavik, the question is what is the portion of the contract interstate between WEL and WMEL. So there is about INR 1,100 crores -- between INR 1,000 crores and INR 1,100 crores is the interstate party transaction [indiscernible]. Is that the question?

That was it, right, right. And if I heard the guidance correctly, the EBITDA margin guidance has been lower to 18%?

We guided 18% plus, and that's the guidance that we would give. We are actively aware of the supply chain disruptions. We do not want to over guide. The plus can be anything. So I would only want to say that.

How much of the investment pending in SNRP project in this year, FY '27?

We are fully invested in that project.

Okay. So no investment?

Not for the equity.

Next question comes from the line of Anand [indiscernible].

Congrats on the great set of results. So my first question is regarding the Transport division. By the end of financial year '25, we had an outstanding order backlog of near INR 2,950 crores. Some 3 projects of [indiscernible] in Varanasi. After our execution in financial year '26, the balance stands at around INR 500 crores. Can you give the breakup of this INR 500 crores between SNRP and Varanasi? And also, we just added the [indiscernible] project. I mean, usually it takes around 6 months time to start executing. So do you expect that will be a drop in revenue from the transportation in the current year '27?

So you're right, there could be a marginal drop in the overall segmental revenue for this year. However, this is -- this supposes that there are no additional projects that are taking in into the revenue. So as was covered by the -- in the address by CFO on a segmental basis, there is a transportation vertical, which has seen a degrowth this year as well. However, we don't see any substantial change now in the segmental revenue region.

Can you need a breakup of this INR 500 crores unexecuted order [indiscernible] SRNP and Varanasi?

So Varanasi is about INR 50 crores, INR 60 crores and about INR 500 crores to INR 550 crores is between the [indiscernible].

And my second question is regarding the [indiscernible] project. However, it's expected executable EPC already around [indiscernible]. So what will drive the top line growth in FY '27 compared to FY '26 revenue of INR 1,240 crores. And how much order execution are we expecting from [indiscernible]?

I think I'm not able to correlate your numbers in the question. Our order book as of integrated water stand at about INR 14,000 crore, which includes the INR 5,000 crores of O&M. So it will take about INR 9,000 crores of outstanding orders. So we are reasonably confident of meeting our guidance on the transport -- on the water vertical to be able to achieve the desired revenue.

So how much are we expecting from [indiscernible] water projects?

I would request that if we need to go project by project, so you please get in touch with the IR or CFO. They will be very happy to take you through.

The next question comes from the line of Vignesh Iyer from Sequent Investments.

Sir, my question is more on the contract we already have [indiscernible] wanted to understand how does the raw material escalation impact us? And I want to understand more on the line how much percentage of the explanation can be pass it on if you could share your views on that?

So to give you [indiscernible] illustrative and not definitive that I want to respond to. Most of our contracts are covered by an increase of -- which is based on WPI CPI formula, and which by and large, over all inflations, which are under normal circumstances. Now these are not normal circumstances. The government is coming up with certain specific release, as I said earlier, like in case of the [indiscernible] relief on bitumen. So we expect that most of the cost increase on these projects where we have these escalation provisions, we should be able to transfer the cost to the authority. The only difference is on the BOT projects, the BOT projects do not have an escalation provision. However, we maintain enough contingencies or on the cost escalation, and we are confident that our provisions at this point in time are more than sufficient to tide over any such near-term challenge.

So if this to look at this guidance of 18% EBITDA for the full year, would it be fair to say that [indiscernible] subject to this problem and [indiscernible] where we resolving, we will be ending this year with a very strong number, and that might take the blended number to 18%? Would it be the correct way to raise it?

My guidance is 18% plus. If everything were to happen, this plus can be as close to the current number that is possible, and it will be -- ships are down, it could be whatever number. So we are -- the guidance is 18% plus. However, the projects in a normal circumstances are capable of delivering better EBITDA t.

Your next question comes from the line of Prateek Bhandari from Art Ventures.

Can you specify the margin trajectory that you're targeting for Welspun Michigan?

So I mean -- interest of time, I will take this question. It has been consistently with EBITDA of 21% to 22%, and we expect it to remain in that range or better.

And you also mentioned that you are currently having a strong bid pipeline. Can throw some more light as to what is the size of the current bid pipeline? And which segments this pipeline is from -- this will give a better sense?

So are you talking about WEL level? Or?

At the company level, WEL standalone?

At WEL, we see a lot of opportunities coming in the water transmission space. We are also looking at certain opportunities of large-scale treatment in water. We see a lot of opportunities in transport on BOT as well as complex projects in the space of structures and tunneling, which will be the target for the company to look after. Now if you were to give us -- ask me the top of the canvas, all put together the [indiscernible] most likely in the range of about INR 2 lakh crores for the FY '27. However, we are -- as you know, we are aim and shoot bidders. We are not going to be bidding for all of them. We have -- we are going to target the projects, which meet our revenue as well as our return expectations, which is a matter of confidentiality, and I may not be able to share with you.

All right. And just 1 last question. You have given order inflow guidance to the tune of INR 8,000 crores to INR 10,000 crores for FY '27. Is that correct?

That is correct, Prateek.

Your next question comes from [indiscernible] from AV Fincorp.

All my questions have been answered.

The next question comes from [indiscernible] Investments.

So I just had one broad question. The highway pickup like [indiscernible] disbursement in segment were quite soft, right? So how do you see them picking up in FY '27?

So the NHAI order book has seen the [ FY 2016 ], not as high as was in the earlier years. So there is a lot of pent-up situation wherein the orders need to go out from [indiscernible]. We believe that those will come forth in the year ahead. We also are looking at a lot of desire and need in these states to enhance the infrastructure. And since we are willing to play the BOT project scenario with our strong balance sheet and our execution capabilities. So we see a lot of opportunities unfolding going forward in the transportation segment as well. And as I said, we are going to focus on complex projects, which allow us to create a differentiated offering at a company level. I hope I've answered your question.

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

Thank you. I thank you all for joining us today. To sum up, I would like to reiterate that we remain committed to creating long-term value for our stakeholders with a continued focus on improving return on equity and return on capital employed. We hope we have addressed all your queries. Should you have any further questions or feedback, please feel free to reach out to our CFO or the Investor Relations team. Thank you, and good day.

Thank you. On behalf of 360 One Capital Markets Private Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.