Good evening, all. Welcome to HCC's Q4 FY 2026 results announcement. Before we start, some house rules, please. I would request after the presentation, please limit two questions at a time, and you can come back into the queue. From the management, we have our Vice Chairman and Managing Director, Mr. Arjun Dhawan, our CFO, Mr. Rahul Shukla, and our Chief Business Officer, Mr. Santosh Rai. With that, I will hand it over to Mr. Shukla. Mr. Shukla, if you can take it over, please.
Yeah. Good evening, everyone. Please go ahead.
Yeah, is it on? Hi. Good evening, everyone. I am Santosh Rai here, Chief Business Officer, and I will be taking you through this presentation. Some part of it I will be taking through, and remaining part will be taken care of by our CFO, Mr. Rahul Shukla. Let's begin. Show me next one. This works. No. There is some technical issue, just okay. As an organization, HCC completed its 100th year this January, and we are celebrating our centenary year. For the record purpose, we have done more than 4,000 km of highways, 395 km of tunneling, installed more than 60% of nuclear power capacity for the country, and around 26% of hydropower capacity in the country, and we plan to continue to do so. Here are the key performance highlights for Q4 FY 2026 and FY 2026.
The most noticeable thing is the 142% year-on-year increase in our standalone net profit to INR 206 crore in FY 2026 as compared to INR 84.9 crore in FY 2025. This is largely driven by a lot of, I can say, improvement in the operational methods, operational efficiency, cost discipline into the execution of projects, and trying to focus upon to control the cost despite all the global volatility which we have into the market. We expect to sustain these margins going forward. The next important thing for us to notice is the 38% year-on-year decrease in the debt to INR 1,995 crore, and the full impact is not reflected in this year's result. You will see on a pro forma basis that the annual interest reduction could be to the tune of INR 112 crore in FY 2027. We are not done yet.
We will continue to focus on completely de-leveraging the company and want to further reduce the debt. The objective is that we become debt-free in some relatively short-term period. That is going to the effort on the entire organization. On the numbers, standalone turnover is INR 988.7 crore in Q4 FY 2026, and for the full year FY 2026, it is INR 3,937.3 crore versus INR 1,330.2 crore in Q4 FY 2025 and INR 4,801.1 crore in FY 2025. Our standalone EBITDA margins is 18.2% in Q4 FY 2026 and 16.1% for the year FY 2026 versus 31% of Q4 FY 2025 and 19.4% in FY 2025.
In the Q4 FY 2026, we have been able to secure INR 2,290 crore of order and a total order intake of INR 5,654 crore for FY 2026. This includes an INR 1,100 crore LOA we received in April. This was a scheduled point of view. It just came in the first week of April. We are also the lowest bidder for a project on which whose hour value is around INR 840 crore. In addition to that, we expect that to get some more orders from the bids what we have already submitted. We have around INR 26,000 crore of bid under evaluation, and we are well prepared to submit bids in north of INR 43,800 crore in Q1 and Q2 FY 2027. This is the position of order backlog as of 3st March , 2026.
Transport continues to be a sector where we have our maximum order backlog, followed by hydropower, then water and nuclear and buildings. These are the geographical breakup. We continue to have projects across the country. This does not include our INR 1,100 crore of LOA, which we have received in April 2026, and L1 position of INR 840 crore. Some updates on the operational projects. Indore Metro, what you see on the slide, the FAT, that is the factory acceptance test of the machines are completed, and these machines are on their way to reach the job site. What you see on the right side is a excavation going on for our airport station, which we are planning to finish by December 2027, ahead of schedule, actually. This Patna Metro, PC-05 and PC-06, we got this job almost five months ago, and all the necessary mobilization activities are in progress.
All the GC and everybody is on board. Other preparatory activities are again in progress here. Agardanda Creek Bridge, we continue to drive the piles in the marine environment and on the land also. What you see on the screen here is a floating batching plant that is being used to cast these piers and piles, what you are seeing in the water in floating condition. Tehri PSP, all the four units are commissioned, and you can see on the picture, the commissioned powerhouse. This is the Bhivpuri Pumped Storage Project, and this is the excavation works going on for the powerhouse. On Vishnugad Pipalkoti, a significant amount of concreting has been done. Nearly 65%, 70% of the dam concreting is done, and we have also completed 9.3 km of tunneling in the HRT using our TBM. This is the Machine Hall Unit 1.
Unit 1 you can see is like 75%, 80% ready, and Machine Hall Unit 3 is under preparation. Tapovan Vishnugad, which is an NTPC project also, here things are progressing well. We are facing challenging geologies, but progress is being maintained as per the required pace. This is the FRFCF at Kalpakkam. Block 3 and block 5 and 7 are under progress, and the job is progressing well in line with the schedule what we have agreed with the department. This being our annual analyst presentation, we thought we will also take you through our take on the infrastructure sector and how it is looking like. You will notice that this year we are targeting to have an order booking of around INR 15,000 crore. That is our guidance for the year. Let me explain you the sectors we are looking at and what the situation is looking like.
We believe that India infrastructure is going to grow at tremendous pace, and this is evident from the kind of plans what the government has and the needs what are there. For example, we are currently operating 1,000 km of metro line, which has to be increased to 20,000 km of elevated tracks. We are in the progress of putting 508 km of high-speed line, which has to be increased to 4,500 km. Similarly, power PSP from 7 GW to 1,000 GW. Hydel capacity has to be increased from 50 GW to nearly 70 GW. Nuclear power from 9 GW to 1,000 GW. So are the numbers here on the screen for your road sector expansion. Port capacity expansion from 820 to 10,000 MTPA. And the number of train services which has to be increased, which will again increase the demand for infrastructure related to railway works.
Looking at hydropower, we will see what the growth is looking like in next 10 years. In FY 2025, we have around 57 GW installed, and the plan is to take it to almost 167 GW, which is almost 11% CAGR. In terms of, if I talk the opportunity lakh crore, it will be jumping from INR 0.5 lakh crore to INR 1.9 lakh crore. A lot of hydropower projects are currently in tendering, which we are seeing now, and a lot of focus right now is also on the pump storage projects. I believe the current energy crisis, which is going across the world, will also make the government and the developers look at alternatives, and PSP is going to stand out in this thing where very long gestation of readily available power can be made ready as compared to some other modes.
Here our advantage is we have built around 27% of India's hydropower, and I think we are one of the few top two, three companies which has the experience in almost all kind of hydropower projects, be it EPC, be it item rate, and have done all elements of that at various projects. These are some of the projects which we can clearly see coming up very soon. Almost INR 40,000 crore of hydropower projects, what we have put on the screen here. Similarly, some of the upcoming pump storage projects. So these two together is like almost INR 70,000 crore of opportunity on the screen, which we are going to be very actively participating into. Transportation, again, as we said, 1,000 km of operational metro has to be taken to 20,000 km, which means that lot of tier two cities will come up with this metro projects.
We are seeing a lot of traction into that. Delhi, Patna, Indore, or for that matter now Baroda is preparing, Srinagar is preparing for metro projects. We are going to have these new seven speed high corridors, which are under preparation. Rapid rail transit system, which are going to be like connecting two major cities kind of project. This project is also on the table, and a lot of such opportunities are there. We have constructed very similar structures which are required in this kind of project, be it bridges or be it surface works or tunnels. HCC is a company which has been specialist, I can say, in underground metro rail project. The first metro in the country was built by us, followed by Delhi, Chennai, Mumbai, everywhere. We have done all kind of structures which are required here.
We believe we will be able to participate on a large part of this again. Here is the list of some of the projects which are going to come. You can see nearly INR 1 lakh crore of elevated metro projects and nearly INR 37,000 crore of underground metro projects. Nuclear, I believe this is one sector where we are very, very uniquely placed because the company has built more than 60% of India's nuclear power plants. We have built the main reactor buildings. We have built plant water intake system. We have built lot of auxiliary buildings required there. We are right now also constructing some of the projects which are related to this process. For example, the fast reactor fuel cycle complex, which you saw in the presentation before.
Here the important thing is the country wants to take the production of nuclear power from 9 GW to 100 GW by 2047. This is going to be through a mix of different technologies, something like a pressurized heavy water reactor, which is, I can say, a workhorse for the country right now, followed by light water reactors, followed by Small Modular Reactors, also with the SMRs. This will definitely put together the need of people who are actually nuclear quality and nuclear safety trained. HCC here comes in a very unique position. To show you what it will look like, here are some of the upcoming opportunities very quickly, which are going to come up. On this slide, you can also see how the different technologies will be contributing to this 100 GW by 2047.
PHWR, which is the indigenous program, will continue to be the biggest one, which will be almost 46%, followed by Pressurized Water Reactors. Also, technology from France, which is EPR. That project is also coming up in Jaitapur. That will be a part of it. Here are some of the immediate opportunities which we see, like Gorakhpur 3 and 4, Kaiga 5 and 6, Chutka, Mahi Banswara. In fact, we are working on some of these opportunities already with these clients. Building an industrial sector again, I think a lot of expansion is required in steel, copper, and bauxite capacity into the country, which we believe in the next five years can lead to a CapEx of nearly INR 3 lakh crore.
You will be happy to know that we have already picked up our one order into the aluminum sector, which is about making the port shells and port superstructure, and the job is proceeding very good. This project we got as a result of our, I can say, super performance with the same client 10 years ago, wherein they have been using these structures which are built by us with no complaints, and that led us to be where we are.
We will continue to grow in this sector and will continue to acquire more such orders, which are fast turnover, quick turnaround projects. They also have element of technology which allows us to be little uniquely placed. So, this sector in steel, copper and aluminum is where we are going to play. We are also going to selectively look at buildings, which comes up with some big complexes, on a very selective basis. That is a sector also we will keep examining. Thank you. Now I hand over the presentation to our CFO, Mr. Rahul Shukla, for the financials part.
Good evening, everyone. Headline numbers have already been presented by Santosh, so these are just detailing of that. As you can see, this quarter, we have achieved a total income of INR 1,016 crore vis-à-vis INR 950 crore during last quarter. Our EBITDA has been INR 180 crore vis-à-vis INR 139 crore during previous quarter. Profit after tax has been INR 44.6 crore against INR 85.94 crore. So that is where we are. We have reduced our debt very considerably, which will be reflected in the coming financial year. Since it has been done during flag end of this year, you have not seen much impact of that. Going forward, that will start reflecting in the numbers.
On the console side, because now HCC is the main company in the group, your numbers are more or less matching with the standalone. So we are there at close to INR 1,017 crore. Not much difference from standalone. EBITDA stands at INR 170 crore, which is 17.1%. Profit after tax is INR 58.9 crore. With this, we are closing the presentation, and now we are open for question and answer.
Mr. Kapil Aggarwal , you may go ahead with your question. Please limit it to two questions at a time. Thank you. Mr. Kapil Aggarwal, are you able to hear us?
Hello.
Yes, Mr. Aggarwal. Go ahead, please.
My first question is regarding that our non-current trade receivable have escalated from INR 646 crore to INR 1,178 crore. Why such kind of spike is there?
These are receivables which when our claim gets converted into awards. In this year, we have got significant positive development in terms of received of claim to award conversion. That is why you are seeing increase in receivables there. But it is a positive thing to have.
Okay. On standalone basis, our operating cash flow is approximately INR 700 crore in this year. Going forward, how should we see it? It will be in this range or more than this only, or there is something exceptional in this year?
Our EBITDA, we have been maintaining EBITDA margins of 14%, 15%, mid-teen. We can expect to be in that range in the long term. Short term, sometimes there may be some increase and then there could be some decrease. On an average, 14%, 15% EBITDA we will be maintaining.
EBITDA I understand, but operating cash flow of INR 700 crore is a normal cash flow, we can say, going forward?
Yeah, that is normal cash flow because we have received a lot of our receivables from client, which were stuck. That is why the cash flow is there. We can expect these kind of things to keep on coming, but they may be lumpy in nature. In some quarter they will be there, in some quarter they may not be there. On an average, we are targeting for it.
Okay. In cash flow, we have shown that finance cost, we have paid INR 979 crore. Is this only the finance cost or some repayment of loan also?
We have prepaid the lender loans this quarter.
I got that, but in stand-alone cash flow statement, finance cost paid is INR 979 crore.
Yeah.
This figure, I think Yes.
Yeah. Basically, we have OCDs and NCDs. Our OCD number, when we say there is principal amount, and there are some approved coupon amount of historical accruals.
Okay.
When we pay amount, our principal amount will be small, but the historical coupon accrual will be a larger number.
Okay.
You will see that debt repayment is some INR 650 crore, but interest repayment is INR 900 odd crore, put together INR 1,500 odd crore.
Okay.
Yeah, that is why it is represented like that.
We have announced that we have transferred some arbitration award of INR 1,900 something CR to our one-off subsidiary. It is not showing any reduction in our balance sheet. How is this?
We have transferred those awards at nil value. There in balance sheet, there was some receivable and there were some liabilities. Both have been transferred to ASA. There will not be any impact in balance sheet.
But in asset side and liability side, both sides, similar kind of reduction should be there.
That is ensured.
Overall balance sheet size should be reduced.
Sorry?
Basically what has happened, some assets are there, and against that we have already received the advances for that. That is showing as a net of advance in the balance sheets.
Okay.
There is no change as such in the balance sheet.
Okay.
We have transferred both the things to them.
Done. We are having investment in HCC Infrastructure of approximately INR 1,150 crore, and it is substantially eroded. We can say net worth is substantially eroded. But why we think that it will be recoverable, like we have not written off this. So what kind of asset is in that company which gives assurance that this is recoverable or we can say this subsidiary is having such value?
Mr. Aggarwal, I will answer this question, but I will request that since we have a limit of two questions at a time.
Sure. I will come back in queue. Sure.
There are significant receivables in HCC Infrastructure which we are expecting to realize.
Okay.
This investment repayment will happen. Plus, there are significant business prospects because HCC Infrastructure has historically done very large amount of BOT project developments, and we have got capabilities, PQ, all those things. Naturally, we are aspiring to continue with that business, grow that business. So those things are in place, intact, and that's how we intend to get this ICD repaid.
Okay. Thank you. I will come back in queue. Thank you.
Thank you.
Mr. Kunal Tokas, you can go in next, please.
Hello. Am I clear?
Yes, go ahead please.
Okay. The first question is, the order bookings for FY 2026 have not been what we expected. I just wanted your revenue guidance for FY 2027. What can we expect to recognize and book?
Kunal, generally we avoid giving revenue guidances because our revenue is generally guided by order that we book. Execution has been intact, that you have seen, that when there is order, we have been executing well. As we intend to ramp up our order booking and growth, you have seen that this year we are targeting INR 15,000 crore of order intake. If that happens, we are able to achieve that, we will be at INR 26,000 crore, INR 27,000 crore kind of order booking by end of FY 2027. Once that start materializing, you will start seeing significant ramp up. However, for immediate year, we avoid giving guidances, so kindly excuse us for that.
Okay. Understood. The second question is about your L1 book being at INR 840 crore for the last two quarters, which used to be multi-thousand crore rupees. Is there a change in how you recognize your L1 book?
Sorry, Kunal. We are having only one L1 position right now. That is for a project in Kashmir, where our share is INR 840 crore.
Yeah. You have been showing INR 840 crore for the last two quarters. Right? This one in Q3-
Yeah, you are right.
...as well.
You are right. This order has not been converted yet because government, I think, the department has their own issues to be sorted out within themself in terms of some, I can say, administrative work, and that's what is delaying this conversion.
All right. Okay. Thank you very much and have a good day.
Thank you.
Mr. Shashi Kant, you can go in next, please.
You have a mouse?
Mr. Shashi Kant?
Yeah. Am I audible?
Yeah.
Yeah.
Yes, you are.
I just wanted to know about the current scenario after the SHANTI Bill passes. What is the ground development in the nuclear front?
Mr. Shashi Kant, look, there is a lot of discussions happening around. The discussions right now are largely centered between the authorities and the developers about the kind of preparations which the industry need to be prepared with, and also various rules of licensing, how the government is going to fulfill some of the condition precedents and what condition precedents developer will have to fulfill. This discussion is going on, I can say, in a good, positive way.
You must have seen reports by TERI, by other bodies, which are highlighting the kind of work which is happening in this direction. I believe, like any other new approach, this will take six to eight months for things to start getting crystallized. Having said that's on the developer side and what kind of power plants could be set under the SHANTI Act. But at the same time, there are the other programs which have already been into place, like this Mahi Banswara project or RAPP. These projects will keep going to be implemented by NPCIL directly, and we'll have those opportunities.
Okay.
Other than that, look, SMR, BSMR, this discussion is happening, and you could see some of them actually turning on the ground maybe in 18, 20 months, somewhere around that.
What is the cycle once the approvals are in place, land acquisitions are in place, and what is the normal timeline that the reactors takes to build and get operationalized and all?
If you go by the record worldwide and also in our country, a reactor which is based upon pressurized heavy water technology or a light water reactor technology, I think the average time till date has been seven to eight years. China, in some cases, I believe, has been In fact, their first EPR, which was Taishan, has taken quite lot time. But some of the other programs, they have been able to do it in six years. I will say, once everything is done, we can expect seven years, eight years as an average time. Naturally, when every learning is being put into process, some other regulatory things are further rationalized. These time cycles may come down to five to six years also.
Okay, sir. One last question. What is the on-ground scenario in the refurbishment of old plants that we have seen in Tarapur and all? What is the scenario on the ground?
Look, I think some of them. All our plants are not 700 MW. Some of them are smaller capacity, and if government plans to do an upgradation of these plants, these are very technical things. We are seeing some kind of upgradation, but I think they are on a routine basis. There is not some, I can say, fixed timeline or program to that. It is on a very selective basis what each plant will go through.
Thank you, sir. Thank you. Thanks a lot.
Mr. Rajesh Bhandari, you can go in next, please. Mr. Bhandari? Are you able to hear us, Mr. Bhandari?
Hello.
Yes, go ahead, please.
Yeah. Sir, what is our present order book?
Around INR 13,000 crore as of 31st March , 2026.
What can we expect in next three to five years, the order book and the debt?
That INR 11,000- is not there. Sorry, INR 1,100 crore is not there.
This year, we are targeting around INR 15,000 is what we have said as an order intake.
This FY 2026, 2027?
Yes.
2027 or
Sorry, go ahead.
How much, sir?
INR 15,000.
INR 15,000 this year.
Yes.
What turnover we are expecting, sir?
See, as Mr. Rahul Shukla has already said, we cannot give you exact guidance, but we are looking at a fairly good growth from where we are. You can assume that by the end of FY 2027, we may be sitting on an order backlog of something like INR 24,000 crore- INR 27,000 crore. It could be something like that.
Order backlog, sir, execution, because execution.
Rajesh-j i, as I said, we have done nearly INR 4,000 crore this year, right? Yes. You can expect a 20% kind of growth you will see in turnover in this year.
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[Non-English content] This year we have paid almost more than INR 1,500 crore, right?
Yes, sir.
Our endeavor is to continue to prepay debt and become debt-free fairly soon, which we have already said, and we are working in that direction.
We can expect by FY 2027, 2028?
FY 2028, we can assume in a fair manner, we can assume FY 2028.
Because profitability, sir.
Of course. Because execution is strong, legacy, qualification, market.
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Certainly, at company level we are very hopeful, very positive.
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Of course. We are working towards ramping up that.
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Yeah.
This is Arjun Dhawan. Let me just add a couple of perspectives. I fully agree and we are definitely at this point in time punching below our weight. This I certainly appreciate the patience that all our investors have had with that. One thing that I want to say is that we are very particular about our risk management. As far as the pricing of bids are concerned, we are certainly not going to make any compromises there. Execution wise, as far as safety, quality is concerned, there are no compromises there either. As far as basically growth is concerned, I think that these questions have come up. Obviously, we do not give guidance, but we should expect a certain healthy growth from this year onwards, starting with fiscal 2027 numbers onward.
What you can expect with the operation efficiencies continuing to actually happen and at the same time, the deleveraging happening at the same time, the PAT growth and the PAT margins you should see will actually also substantially continue to improve. This year we have been very particular with regard to costs. We have been very particular with regard to risk management. It has not been an easy year from a competitive intensity perspective. We should expect that some of the pipeline that we have our eye on in the coming months should actually yield some substantial results. Please stay tuned for that.
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I think that is a very fair expectation. I think that the only one thing that we can certainly look forward to actually working off a very low base is certainly as far as growth is concerned, both of our top line, but even greater for our bottom line should actually be much higher. It is absolutely correct.
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Hopefully soon. I think the one thing we definitely do want to do is ensure that we have that healthy order book in. We want free cash flow and a substantially healthy balance sheet. The questions have basically come up about debt repayment. I am expecting and our strategic imperative very clearly is that we want the company to be debt free as early as possible.
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That leaves a lot of room for us to basically take some very big decisions regarding growth.
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We appreciate the suggestion.
Please, sir. Okay, sir. Thank you very much.
Thank you.
Bye, sir.
Mr. Abhishek Leekha. You can go in next, please. Mr. Abhishek, are you able to hear us?
Hello.
Yes, go ahead please.
Yes.
Yes.
Thank you for the opportunity and congrats for a good set of stable numbers. One thing that I am also coming on to that interest question. Even if we take into account INR 1,995 crore of reducing debt to almost INR 1,995 crore, the effective interest still works out to be 14.4%. What concrete steps can still be taken to refinance at least so that even if we are not able to reduce it immediately, but it should not eat into the bottom line.
What is this 14.4%? I am sorry. Could you just please repeat. We would like to understand what this 14% number was, please, that you had come up with.
INR 400 crore is the interest that has been for 2025, 2026 and we are expecting INR 112 crore saving for this year. That means INR 288 crore or INR 1,995 crore of debt portion.
I think we would like to just. The accounting standard requires to actually have us report finance charges as reflecting not only interest to lenders but also interest on client advances. Those are when we price projects and take them on, those automatically over the life of the project get rest. The number that you are actually thinking about is much higher than what the actual number of lender interest services divided by. That is I think number one. We have in our presentation already talked about. In fiscal 2027, we intend to prepay further debt.
Right.
Obviously, we cannot tell you precisely what that number is, but you will see a substantial EPS accretion as a result of that further prepayment. We have talked about wanting to deleverage the company completely. Now, we cannot tell you precisely when that is going to happen, but certainly, our goal is to actually have that happen in the very short to medium term. The point that you make on refinancing, our cost of finance is about 11%. We appreciate the fact that there are financing options in the market today that are lower.
We are now moving to higher levels of investment grade, and we have had proposals been made to us, one of which we are actually contemplating right now, that will potentially refinance our current debt. Which will then not only reduce the cost of our debt, but ensure that there is greater liquidity in the short term for growth. Again, I cannot say anything more beyond the fact that this is under consideration, and your suggestion actually happens to be quite timely because it is something that we are in the process of considering.
Yeah. Thank you. Thank you so much. That is it from my side.
Mr. Aggarwal, you can go in, please.
Yeah. My next question is regarding Are you getting me?
Yes. Yes, Mr. Aggarwal. Go ahead.
Now we are proposing fresh issue of, we can say, equity share up to INR 800 crore. What will be its usage, and how we will raise this?
Mr. Aggarwal, we are taking that enabling approval, but the idea is that we are planning to grow very fast. We are targeting to book INR 15,000 crore of order.
Okay.
When that comes, there can certainly be need of growth capital. We want to have that enabling approval in our hand in case we have to go. It's not that we are immediately going and doing that, but we will take a call according to our requirement.
Okay. We have given some likelihood that by end of FY 2027, we will be having order book of more than INR 20,000. We can say INR 20,000-INR 25,000 crore. What about 2028, we are expecting it can be further this kind of jump or, we can say, normal growth?
No, our thrust would be to continue this momentum.
We can expect if everything will be in line, then it can be INR 40,000-INR 50,000 raised by March 2028?
Yes. I mean, Again, we are reluctant to put the numbers there, but I think the long-term CAGR in terms of order backlog and revenue growth should be, I think, considering our low base, should be about 20%-25% in the long term.
In the long term. Okay. Thank you. That is it from my side.
Mr. Tokas, you can go ahead, please.
Am I clear?
Yes, please go ahead.
Okay. Just one quick question. In your balance sheet, we have a line item called loans under non-current assets, which has moved up from around INR 250 crore- INR 600 crore. Does that reflect the amount extended to PRPL?
That is correct.
Okay.
You remember our contingent liability had come down substantially during the year-
Yes.
...with regard to that PRPL loan. It belongs to that.
Okay.
This is an activity that we have infused, so at some point in time, we expect to get it back along with interest.
Okay. Thank you.
Mr. Rajiv, you can go in next, please.
Yeah. Hi. I've seen that you have taken an enabling provision of INR 800 crore fundraise. What is the purpose of this, and what is the mode going to be? Like a QIP or a rights or what?
We have not yet decided. We are keeping it open. I just answered a question with regard to that. We'll come back whenever that mode and all is decided.
But, just to be very precise, if we do go down this path, it will be a rights issue, which will benefit the existing shareholder base. As far as we're concerned, the promoter group will be entirely basically supportive of, including potentially look to increase their stake. So, as Rahul has said, the goal is to actually sync that along with our plans for high growth, as well as basically a complete deleveraging of the company.
No, but will it be planned in the near term, like in the quarter or two, or it's at the end of the year?
I'm sorry, but it would be quite unfair for us to answer that question. I think that we would do that at the appropriate time, taking into account all the various considerations.
Because if I see, the company has raised around INR 2,000 crore over the last one and a half, two years, and the price has kept on reducing. Like first you all raised at INR 32, then at INR 16, INR 15. So I mean, at the current situation, does it make sense to raise money given that you have prepaid the debt?
I mean, we can't comment any further to what you said. I think that the entire point is for us to generate value for shareholders. I think that's fundamental. The return on equity considerations that we have as far as the medium to long term is concerned are basically the most important consideration. I think that we will keep you informed, and hopefully you will be clearly convinced once we actually have the plan before you in terms of what we intend to do.
Okay. Last question is regarding the amount of claims which are pending.
Claims that are pending.
Let me just I'm not sure. CFO, do we share that information in terms of our-
We don't share all that information. We would like to reserve it to us. Whenever there is some more conversion in award and all, that can be discussed at some point.
You know, one thing that we will say is that's something that we're fairly conservative about as far as our accounting is concerned. The projects that we actually execute, by nature, have delays associated with them, and these are not delays associated with simple things like land and right of way, where HCC is involved in heavily complex works, many underground works, which are due to geology, due to uncertainty, prone to delays that our clients entirely acknowledge. As a result of that, you generally see contract values increase. As is basically, clearly contractually required, there will be amounts that get paid as a result of those delays. Many of those amounts tend to actually end up getting paid towards the end of the contract, mid to end of the contract, or when substantial milestones have been completed.
You can expect, I mean, if you've seen HCC's track record in this particular regard, you can expect a similar track record to continue. I think that would be fair to say. One thing I will basically qualify, I'll qualify that remark. I think that considering HCC's pedigree and the fact that it's been part of HCC's infrastructure expansion all the way from, besides 100 years, but in the last basically 20, 30 years, we've seen the infrastructure program really basically escalate. In the last 10- 15 years, the government has been much, much more responsible about the kind of projects it's bringing to market with the preparation that it has in its DPRs, the clearances that it has in place.
You would expect that in the more recent projects would actually be less delayed than they were before, and you would expect the percentage of claims as a percentage of the, or the amount of claims as a percentage of the total project cost to also come down as a result of. Then finally, basically, it depends on the client mix as well, right? I think that in certain kinds of projects, you generally have delays which lead to kind of additional payments. In other projects, you don't.
Okay, that's it.
Mr. Saurabh, you can go in next, please.
Yeah, thank you. Am I audible?
Yeah.
Yeah. Mr. Arjun, I do acknowledge that there's a lot of work happening at the company side, and we have a lot of hopes coming through. The point that you just confirmed that the fundraise would be through the rights issue, I have little bit of concern there. In last four to five years, you have done two rights issue, and this would be the third right issue. Every time shareholders are kind of forced to apply for rights issues so that their value is not diluted. But again, as one of the other speakers said, the share price is not commensurate to the kind of investments we are having to make in the company. What is your comment on that, and what is the ray of light that we should wait for?
I mean, it's a fair comment. I think that the last rights issue was a large one because we had clearly placed at the fore the strategic imperative to substantially deleverage the company, ensure that we had the highest grade of investment rating that puts us in the position of having our facilities be at the lowest cost of capital, then allows us to kind of expand for growth, right? As far as basically the going forward is concerned, I think that we're in a much, much better position to address the market opportunity. I think that as far as the rights issue is concerned, it's certainly not a done deal. I think that it's an enabling provision that Rahul has taken.
Perhaps maybe, what we should have done was actually not take it at all and actually come to the board at the time that it was required. But we decided to do so simply because there's a material expectation of some very, very substantial orders and opportunities, including, a potential BOT opportunity. These are extremely sort of high IRR, basically, opportunities before us. So if those opportunities were to materialize, we needed to actually be flexible. But, I do take your point. As far as the equity raise is concerned, the feedback that we have received in the past is that generally, rather than actually do a QIP or raise equity in another fashion, given the shareholder base, we've actually had many shareholders benefit from an oversubscription or getting additional, basically, shares as part of the rights issue.
It has also basically synced promoter incentive and interest along with what our goals is, right? But your point is taken, I think as far as we're concerned, if we do not need to raise equity, certainly this year to achieve our goals, we will certainly basically avoid doing so. Because for me personally, equity rate of return is much, much higher. It's the highest as far as we're concerned.
Sure. Thank you. Just to affirm that if it's done for a major opportunity, we would be there with you.
I really appreciate your support, and I deeply appreciate the fact that our investors and shareholders like yourself have been patient with regard to what we need to execute. Look, as far as this past year is concerned or the past year and a half is concerned, the easiest thing for us is to take a job at a price that is not meaningful. As far as the integrity of our process is concerned and how we think about our responsibility to our clients and to our shareholders and to our stakeholders, that is not something that we will indulge in.
That said, we do need to deliver on the promise of that growth and frankly, at some stage, a substantial repayment to shareholders for their patience, which includes starting to actually pay dividends. We take this responsibility very seriously, and I think that there is always scope for improvement in terms of what we can be doing better, and certainly we will strive to actually have a much stronger year. We have had many achievements this year we are very, very proud of. I think that we are happy with our results, but certainly I think from a growth standpoint, next year we will certainly basically hit all the boxes is my expectation.
Yeah. Thanks for maintaining that discipline. One last request, if you could do that, I think you need to have more analyst events and have a better perception of the company. I could see some of the reports coming on the nuclear sector projecting company on the pivotal position. A little bit more of PR, I think would help improve the overall sentiment.
Thank you. We take the suggestion very seriously, and we will act on it.
Thank you.
Mr. Pranav, you can go in next, please.
Hello. Hi, am I audible?
Yes.
Hi, sir. Sir, I just had one question. You earlier commented saying that we are contemplating on a certain funding, that we have an opportunity towards us. If we have that opportunity, why do we need the rights issue then?
I don't think that we need to comment any further, Pranav. It would be inappropriate for us to get into the details of that. Certainly opportunities that generate high returns require investment, and require working capital and require, frankly, a cushion and contingency, right? I think that the kind of size of company that we need to be requires to actually have at least that cushion in place. That doesn't mean that there will be a continual increase in fundraising as a function of further jobs, basically, and opportunities coming in. But at least that certain cushion and that certain base needs to be there for us to really avail of, I think, some very, very scalable opportunities.
Okay.
I can't go into any further detail on that. I think at the appropriate time, and I think that this enabling resolution has actually raised more questions than we expected. To be very honest, I think that we might have made perhaps an error to actually have taken this board approval as a contingency. Please treat that as a contingency. At this point in time, when we have something material to basically talk about, and it will certainly be positive as far as we're concerned, we will come back.
Okay, sir. That was the only question I had. Thank you so much, and all the best.
Thank you very much.
Mr. Shashi Kant, you can go ahead next.
Yeah. Thank you for giving me the opportunity again. So actually, currently our order book, nuclear is just 3%. How do we see in coming 5 years this change? How much percentage of the order book it can go to?
Mr. Shashi Kant, look, this position is low right now because the projects which we are doing, two major jobs which we are doing are already completed. The FRFCF job, which we are also doing, is nearing completion now, almost 70% done. The point is, how will increase is because these opportunities, which used to come like once in two years or something, are going to multiply much more. We expect a lot of traction in this sector because of the private developers and as well as the government.
I will just add, traditionally, the nuclear order backlog percentage as a percentage of the total has been relatively small. It has been something that we have been tremendously proud of. We have been 14 of the 24 reactors in the country on the civil side. But it has been less than 5%, Santosh Rai, if I am correct, 5%.
Yes, almost 5%-8%.
Since certainly what we can expect as the nuclear program scales up and the lack of capacity in this space to execute these complex projects and the qualifications that HCC has. When this program does basically take off and generate real orders and revenue, I certainly think that there is a huge opportunity for HCC to really scale its nuclear business such that it will actually be akin to the transport and hydro and water spaces that we have actually traditionally have occupied about 90% of our order back.
Okay, sir. So what is the average, if we take 700 MW plant, what is the average order size that we normally see for HCC?
Look, traditionally, the procurement mode was very different. These orders would be in the size of, you can say, I am saying in terms of present value, could be like INR 2,000 crore.
Okay.
Now since the mode has changed, the mode has changed, and these are going to be called Nuclear Island Mega EPC packages, that is what they called us, an NIMEP. These packages are in the north of INR 12,000 crore- INR 14,000 crore.
Okay.
Yeah.
Thank you, sir. Thanks a lot. That is all.
Thank you.
Best of luck.
Thank you.
Mr. Leekha, please go ahead with your question.
Yeah. Thank you for the opportunity again. My take is like commodity prices are rising and as a result because of war scenario. How effective are escalation clauses in protecting HCC's profitability?
I think we have, look, I can say, appropriately placed escalation mechanism into these contracts. Our procurement strategies have been such that we have been able to hold on to some of the prices, what we have been negotiated and everything. That is reflected in our results too. Largely, I will say the escalation formulas are made in such a manner that we are able to absorb some of the shocks.
You know, Abhi , I would say that it's not a major area of risk or concern for us.
Okay.
I think that the clients that we have as far as HCC is concerned are top quality clients with very deep pockets. They tend not to be certain clients at the state level that have very poor resource constraints or have payment issues. I think that the quality of client also basically, I think, allows for a very fair and amicable and swift discussion as far as payments are concerned.
With some of the difficulties that we're seeing globally and India is actually also facing these headwinds, I think macroeconomically, the challenges that we might actually face from inflationary perspective, you might actually see in some cases that HCC would, through its escalation formulas, actually have an efficiency rather than a risk. To some extent, we're, as a sector, a nicer alternative to some of the other sectors that are actually probably more effective. So in that sense, I think that we're thankful.
I think fortunately, we're not building enough blacktop roads.
No, correct.
We are not doing that.
Exactly. I think that if we had exposure to huge amounts of bitumen requirement, where there is direct correlation with prices of crude, I think that we would have a concern. Look, I think that the inflationary expectations that may creep in if this conflict continues, will really affect the price of everything ultimately.
Yeah.
I think that that is where the quality of our contracts and the quality of our clients do matter. To some extent, I believe that the heavy civil space, especially the kind of projects we do, is relatively well-insulated from other sectors in the market.
Yeah, thank you for the elaborate answer. One suggestion, if I may. Can we have an analyst day wherein we probably give a next three to five years kind of horizon where we want HCC to be?
Yes, I think, one thing that I have not completed my commitment on, I have to apologize to everyone. We talked about this last year where we decided that at least once a year or during the fiscal year-end, that we will actually have a meeting in person. So certainly what we will do, because HCC is actually in the process of finalizing its three to five-year plan and its business strategy, and that is something that we are extremely excited about. So I think in the coming months, once that is finalized, we will organize an analyst day. Maybe we will have it coincide with one of our quarterlies. You can expect that we will actually have a clear presentation, at some point late in this calendar year to the entire community to give you a sense of what our direction is for the next three to five.
Yeah, that would be great because India at this stage would require lot many rail L&Ts and lot many rails, and HCC deserves its roaring lion to be back.
We deeply appreciate your support. Thank you.
Thank you.
Mr. Bhandari, please go ahead with your question.
Oh, I think Soubhik, it is just that his hand is there. Yeah, he's asked his questions.
Okay.
Okay. With that, I think we've taken all the questions. No more questions. Thank you for your time.
I just want to just again, thank you for your support. It is the end of the fiscal year. It has been a very momentous time for us because HCC celebrated 100 years of its service to the nation. As far as we are concerned, we are blessed with the support that we have from all of our stakeholders, including our investors and our shareholders. Thank you very much for your support.