Good evening, everybody. We'll be starting the analyst investor call in a few minutes. Rahul, sir, are you ready?
Yes.
Okay. Mr. Rahul Shukla, our CFO, will start with the presentation. Over to you, Rahul.
Sorry for the delay. Good evening, everyone. Sorry for the delay, first because of some technical issues. We start with the presentation. Next, please. Just a quick refresher. We are a 100-year-old company. This year on 27th of January 27, we have just now celebrated our centenary year. With our very strong credentials, we are now geared up to take forward this infrastructure and nation building of India. We thank you all for your continued support. We have been receiving good support from all our stakeholders. With this, we'll just play a small video to take you through our journey. Moving forward, quick snapshot of our diversified order book. As of now, we have INR 13,000 crore of order book, well diversified across sectors and across geographies. Next slide. Key highlights of this quarter.
In this quarter, we have achieved INR 921 crore of turnover, and with standalone profit of almost INR 86 crore. We have continued to maintain very strong EBITDA margins of over 15%, and that's what we will continue to do. We have been discussing in the past also that while our order book and revenue take some time to pick up, we will continue to improve our operational efficiencies and demonstrate good amount of EBITDA margin as well as improving PAT. Quality of our PAT will continue to improve. In this quarter, we have secured two orders aggregating to almost INR 1,500 crore in joint venture with NFR. In addition to that, we are also lowest bidder in INR 2,700 crore of projects.
We have submitted bids of almost INR 36,000 crore, which are under evaluation. We have got very strong pipeline of almost INR 54,000 crore, which we are regularly submitting bids in coming quarters. We have successfully completed INR 1,000 crore of rights issue, which got 200% subscribed. We have also received INR 84 crore from our Steiner subsidiary H56, with the total receivables of INR 89 crore. Balance will come in due course. In our journey towards accelerated deleveraging, we have repaid INR 650 crore to lenders in this entire financial year. We are also in the process of paying INR 876 crore during this quarter by March. We are hoping that with this payment, our substantial reduction will happen. Our debt will come down to INR 1,950 crore, which was our target for this financial year. We have also achieved a reduction of corporate guarantee of HCC to Prolific debt.
We have talked about it earlier also. Now everything has been completed and documents have been signed. This process is completed. On the operations update, things are moving quite well. In Patna Metro Rail project, we had taken two projects, two packages, package five and six. They have been inaugurated by Chief Minister of Bihar, Mr. Nitish Kumar, and projects are progressing well. Indore Metro Rail project also, piling works are underway. You will see some photographs going forward. Work is well underway in all five stations. Excavation work in progress in airport station as well as Rajwada station. In Vishnugad Pipalkoti Hydro Electric Project , which is a large project which we are doing, we have achieved significant progress in tunnel excavation. Out of 12 km of HRT, we have completed 8.5 km. Work is progressing swiftly on other projects also.
Agardanda Creek cable stay project, Tehri Pumped Storage project, Bhivpuri Pumped Storage project, all progressing well. Now we will go to details of these projects. In Indore Metro, certain photographs, dry rail bridge assembly photo, as well as BSF Kalani Nagar station excavation work, piling work going on. Next, please. Patna Metro inauguration photo, as well as Casting Yard development picture. In Agardanda, a significant amount of marine work is going on. You can see photographs of piling happening, as well as segment casting work going on. This is the picture of Tehri Pumped Storage project, wherein out of 1,000 MW, 750 MW is already generating electricity, and the last unit of 250 MW is also expected to be completed soon. Next. This is a picture of Bhivpuri Pumped Storage project. You can see excavation work going on in lower reservoir. Next, please.
On Vishnugad Pipalkoti, dam concreting work progressing quite well. HRT, we already spoke about. We have completed 8.5 km out of 13 km of HRT. On Tapovan Vishnugad project, which is another hydro project in Uttarakhand, work in both phase four and phase five is moving on quite well. These are tunnels that we are doing there. Then FRFC nuclear power project. Nuclear project, again, block six and seven photographs are here, and work is progressing well. These are the financials. In this, I have already given key numbers, and other numbers are here, which are also uploaded in the exchange. Next, please. These are the consolidated numbers. Next. Now we will just take you through another video of our centenary year celebration before we open for question and answer. Thank you. Thank you so much. Now we are open for question and answer.
You can raise your hands and ask your question.
Please raise your hand so that I can allow you. [Ajay Desai], you may please start.
Yeah. The question is easily to understand how the SHANTI Bill which has come is going to impact us and how quickly we will be able to get business and orders.
Yeah. Look, SHANTI Bill, I think what it does is definitely paves way for the private sector to participate in nuclear power development and operation. This definitely is a big step, and we are clearly seeing lot of entities showing interest in collaborating, first of all, with HCC, given our nuclear grade safety and quality performance, which we have done over the years. As you might be aware, we have already delivered more than 65% of country's nuclear power plants, main plant construction, and other related works. This definitely, what we are seeing is not only the Indian technology, but also some of the other technologies like light water or maybe EPR. These are going to come into line. Next, in line with the government's plan of adding almost 100 GW of nuclear power by 2047, it is very close to reality.
Even if we say 50% of that, it is a huge program which will unfold itself over the next 10-12 years. HCC, being one of the front runners, is well poised to participate in that. At the same time, we are also expanding our footprint into the allied sectors of mechanical and electrical and instrumentation works. By this strategy, we are going to be present in this market.
Earliest, the revenue we can start seeing from FY 2027?
No. As a result of this, what we foresee, that we will see actions on the ground starting somewhere in 2027- 2028, actual contracts getting placed. Because this will take some time for development of identification of sites, acquiring land, agreeing on the technology. Post that, only we can see these works actually coming to the ground. So you can see something coming from this, maybe from early 2028.
Sure. Thanks.
Thank you.
[Kunal Tokas] , you may please start.
Hello, am I audible?
Yeah. Go ahead, please.
Thank you. My first question is an accounting question. As I see on the balance sheet for FY 2025, because those are the details that I have, your advances from contract fees stand at around INR 1,000 crore. Please correct me wherever I am wrong. Your interest due on these advances were at INR 345 crore for FY 2025 end. Just wanted to understand why it was so high in relation to the amount of advances. What is the interest rate that you pay on advances from contract fees?
We pay very nominal interest on contract fee advances, which generally goes around bank rate + 2% kind of thing. Not every advance is interest-bearing. Most of them are interest-bearing. What interest accrual you are seeing are in one or two projects where the repayment has not been due or necessary at that point in time. However, we are also working towards settling those advances with clients because there are certain receivables also in those projects. Once those settlements complete, you will see significant reduction in these client advances in comparison to FY 2025. However, in continuity of our business, we will keep on acquiring new orders and there will be more client advances which will be coming as a virtue of contract. That number may not be comparable. Yes, as far as historical advances are concerned, they will reduce very significantly.
When they will reduce, they will reduce along with their accrued interest. That will get settled once those things are
If I understand correct, there were some advances which are sort of on limbo but continue to accrue interest and that is why First of all, are my numbers correct, INR 345 crore for interest and INR 1,000 crore of advances for FY 2025? INR 345 for the period and INR 1,000 crore as on 31st March.
[Kunal], our team is checking the numbers as you are speaking.
Okay.
Ravi, I think your numbers are correct. I think maybe Ravi Jain, our Deputy CFO, or Rahul can take this up with you offline if required, if you need some further reconciliation. I will add one perspective. Typically, client advances over the life of the project will be recovered through the cash flows of the project, and the project will basically close with no liabilities. What happens when project delays take place is where sometimes a client also basically allows for further ad hoc advances until such a time certain bills and certain claims are settled. That has happened in the case of one or two of our larger projects that are now probably in the next year and a half closing. In fact, we have large independent engineer-related awards and receivables against which those client advances will be squared off.
Typically, there is a process and there is a lag within which period these things do happen. The expectation that we have is that these projects will get closed with those. In fact, there were certain hydro projects that actually went through a period even during COVID, when certain large unusual delays took place. As we close a couple of these large hydro projects over the next year and a half, you will see a substantial amount of this debt basically come off our balance sheet, which is actually today flowing through our P&L in terms of our finance charges as well. That will be a substantial increase in the bottom line or our PAT when that happens. Because this, in addition to our bank debt, is another reason why our finance charges are actually a little on the higher side.
Yes, that is exactly what I saw. Now that you are mentioning the hydropower project, in the last phone call you had said that one was stuck in Maharashtra. You removed it from L1.
That is a project that was not even awarded for which we did not even begin any work. That is not relevant to this discussion. There are hydro projects that we have in Uttarakhand. Because of some various issues that we had in Uttarakhand, including COVID, then we had certain landslides that took place. There was court orders that prevented work from basically continuing. There are one or two projects that we have that have faced an unusual delay. In fact, there is only really one, and I think when that basically closes out about 18 months from today, you will see a substantial amount of this go off our balance sheets.
Yes. Thank you. My question was concerning the hydropower project as it related to your L1 position. Last quarter you had said that
Correct. We have a project in New Gandarbal , which is basically an L1 project, which has been L1 for a while, and we expect for that to actually now be converted quite soon.
Okay.
Please stay tuned for that in the coming months.
Okay. Understood. The other question is regarding PRPL. You have reduced your BG guarantee , and the payment starts from September 2026. How is progress towards that resolution of awards sticking in PRPL?
PRPL September 2026 is already prepaid.
Okay.
Yeah.
Okay. Wonderful. Then you could progress on a semi-annual basis?
No, it is annual.
Annual.
Yes.
Okay. Also in the consolidated segmental accounts, if we look at this segment called others, which contributed just [INR 83 lakhs] to top line, there is a INR 84 crore charge in the EBIT against this others segment. Can you explain that a little bit, please?
Okay. You are in console you are talking about console numbers?
Console segmental numbers.
Okay. You are talking about—
Yeah.
—INR 83 crore number that is charged there?
Yes. Against the others line item.
These specific items we can discuss in the statement.
Sure. INR 83 crore—
I think, [Kunal], if we can just limit everybody's questions to two per—
Okay, sure.
—Maybe get back in the queue. We would appreciate it. And there is a lot of people basically, you know.
Sure.
Thank you.
Okay. Thank you.
[Rajesh Pandari] , you may please start. Please unmute and start, [Rajesh]. [Rajesh] is not responding. Any more hands? I cannot see any more hands raised. Please raise your hands. Okay. [Ken], you may please start.
[Difference in our consolidated and standalone numbers.]
I am sorry. There is a lot of ambient noise. You need to please be clear with your question, or we will have to go to somebody else.
[Difference from consolidated and standalone numbers in profit side. Yeah. I wanted to know what was the reason for our consolidated profit being down compared to standalone, as Steiner has been sold out. The consolidated should be similar.]
I am sorry, your question is not clear. I will request my CFO to touch base with you offline, and we can have this question answered later, please. If your question is relating to why there is a difference between the standalone and the console numbers. In fact, this is probably something I should [crosstalk].
[Rajesh Pandari] , you may please proceed with your question.
Hello. Yes. I was basically pointing out that we have actually had a very positive development in the settlement of a substantial erstwhile Steiner-related receivable. In fact, these were receivables that we were expecting to have come in the next two to three years. But we have managed to close one well in advance, and we have taken a minor write-off on that in trade-off for the substantial cash flow that comes as a result of that. So that is perhaps maybe where you see that particular write-off, because we have got a number of receivables associated with a few counterparties.
[Hardik Chheda], you may please start.
Sir, I just want to ask, other expenses have gone up substantially YoY and quarter-on-quarter. The reason for the jump in the other expenses. Secondly, first you can answer that, then I will ask my second question.
Other expenses has gone up by almost INR 20 crore quarter-on-quarter. That is essentially, we have settled one large tax-related dispute. Wherein it was a very positive outcome. INR 157 crore has got settled.
Okay.
That has resulted into INR 20 crore of book losses. That is why you are seeing that number. But that is one time.
But sir, in the consolidated it has gone up even more. On the consolidated basis, it is up even more sharply. So the reason is only tax or something else?
So other, we just now explained with regard to our settlements wherein cash has been—
Yeah, that I understood. So it is because of that only, right?
Yeah. Both put together. Yeah.
Okay, perfect. Sir, just wanted to understand a little more on the nuclear power side opportunity, apart from the SHANTI Bill, which was launched. Apart from that, in the near term, any other opportunities in the nuclear power space which you can expect in this year? Any orders, any L1 or anything?
When you say this year, I am treating till December, right?
Yeah.
Yeah.
Yeah.
We are clearly seeing that NPCIL will come out with some tenders for their PHWR program, specifically Mahi Banswara and Chutka. These two bids are going to come out in the next four to five months. We can expect that those orders will get decided.
Okay. How large will be those orders, roughly, sir, the bid size?
Mahi Banswara, and if they are going on fleet mode, it will be like each order would be close to INR 8,000 crore-INR 9,000 crore.
Okay. Will you be bidding for the whole part? How much will be the lot? In terms of percentage, can you just say?
The civil constitutes almost 40%-50% of this value, the civil works.
Okay, great. Thank you, sir. Thank you. That is very helpful.
Thank you.
INR 8,000-9,000 crore each you said, right? Both INR 8,000-9,000 crore.
Yeah.
Then 40% will be the civil and that part. Thank you so much, sir. Thank you. That is all from my side.
Thank you.
Thank you.
[Lokesh]. [Lokesh Kashikar], you may please start.
Yeah, hi. Thanks for the opportunity. Couple of questions from my side, basically. Just wanted to understand, out of this INR 13,000 crore of orders you have, how much is basically slow-moving or yet to start work on those projects?
Look, I think, in fact, none is slow-moving here in this entire INR 13,000 crore.
Okay.
We have secured almost INR 2,500 crore of Patna Metro, which has just started. Indore Metro is in the initial take-off stage. So that is another INR 1,200 crore. We have also secured some orders in the railway sector recently, around INR 600 crore-INR 700 crore. So these are in the optics stage. Everything else is ongoing works.
Okay. Sir, we were basically targeting around INR 10,000 crore of projects in this year. I understand that we have got around INR 3,000 crore , INR 3,500 crore, INR 3,600 crore kind of numbers at YTD levels. So where do you see that the order inflows basically settle down for FY 2026? What is your expectation for FY 2027 as well?
Lokesh, I think I will not be able to help you with number specific because these are forward projections and we would not like to do that. But I can give you some sense. Look, we already have a position where our order intake as on date, if I speak, will be around INR 3,800 crore. We are holding L1 position of another INR 2,000 crore. There are bids almost worth INR 9,000 crore which are under evaluation. We expect to be successful somewhere. So you can consider some percentage around that, let us say 20%-25%.
Sure.
If we think somewhere around that, we should be able to close that.
Okay, cool.
I think one thing I want to add, I think that most of the jobs that we are looking at now are in that sort of INR 1,000 crore -INR 3,000 crore range. There will be some lumpiness. Certainly, the shortfall that we basically have on a quarterly, on a fiscal year basis, we certainly look to make up within the next basically three to five months. I certainly expect that while there might be a little bit of shortfall year to date, I think that it is highly likely that we should be able to make that up in the coming months. Yeah.
Okay. Sir, on the revenues, just qualitatively, if you can say—
Sorry, just one more point I would like to make on that subject without giving sort of forward guidance, is that there are a number of jobs in which we are in discussions with clients and we are in negotiating discussions with clients. So where we have a certain positivity with regard to how some of those discussions will actually unfold in the coming months.
Okay. Sir, just last one from my side. We have basically a decline on the top-line front, understandably because we have got a lower inflow as well. Contribution was lower. I just wanted to know, our long-term target is around 15%-20% CAGR, we want to be able to grow. Do you think that will basically start with FY 2027?
Yes. I think we should certainly try to exceed that. I mean, certainly our order backlog growth should be substantially basically higher than that in terms of growth. The turnover from that will obviously flow depending on when the projects mobilize and get moving. At least, from our investment community, you would have a very good visibility of what the earnings will look like for the next three to five years as we start to build this up. One thing that Rahul did mention in his initial remarks, which I wanted to just re-emphasize. We are entirely basically along with top line because that will drive ultimately the exponential growth that everybody's been patiently waiting to see. Effectively, we will continue to generate strong margins.
As one, our operational efficiency has increased, but at the same time, the quality of the work that we're doing is continuing to improve, along with some of the major settlements that we expect to conclude with our clients for closing projects. A combination of these three factors along with our de-leveraging should actually see our profit margins actually in the short run be higher than normal. While our top line may continue to be constrained until the order book flows into sort of a top line, our expectation is that our margins will actually, relatively speaking, be stronger in the short run.
Sure. That's all, sir. That's it from my side. Thank you.
[Harish]. [Harish], you may please start.
Hello.
Yes, [Harish], we can hear you.
Good evening, and thanks for the opportunity. During the presentation, there was no mention about the BKC bullet train upgrade, and there was some media report that the work has been stopped due to pollution problems. Can you just give us a brief update on that, sir?
Thank you. [ Harish], look, so bullet trains. See, bullet train project is ongoing at a good pace, I will say. Definitely, there are some slowdowns due to issues mainly with respect to the restricted working hours, and that is why the progress has not been able to achieve the desired pace. Also, there are some interface issues with the adjoining contractors. There are some planning-related issues with that.
I think that's not correct news that the work has stopped there.
No, but it came in the media that multibagger has stopped the work over there.
That was long back, and that happens for one or two days when the—
Yeah.
—AQI goes very high and all those things.
Okay. What is your expected date of completion of this project?
Right now it is 2029, almost April 2029.
Okay. Any more package from this project, bullet train, you are expecting?
See, the Mumbai-Ahmedabad line is almost awarded for every package. Now you might have read in the newspaper that there are seven more bullet train projects which government
There is a long way to go.
Exactly. So whenever you know that's there, we will focus on that.
But here also, there are some underground tunneling work to be done. So that is already awarded?
Yes, to Afcons.
Okay. Thank you very much, sir. All the best.
Thank you.
[Ajay Desai], you may please start. You have more questions?
Yeah. Sir, I just wanted to understand this Mahi Banswara and other projects which you talked about, saying INR 8,000-INR 9,000 crore each. If you can give me a little bit more understanding about these two projects.
Sir, sorry, Ajay. These projects are basically PHWR program. They are all 700 MW reactors. What the government is going to do, you might have seen the bits of Kaiga NPP beforehand. There are going to be six units which will be tendered together with all the ancillary equipments, MEP, main plant and equipments. That is going to be the package, and that is why this package size will be bigger in nature to what you have traditionally seen.
This will, like, bidding will start. Effectively, the execution will start when? Whatever we get on contract.
Execution will start in August or October 2027.
Okay. August and October 2027. It will start at that time, correct?
Yes.
I have one more question from investors' point of view. Like, the market cap, which was pre right issue, post right issue, and how do you evaluate that when you look at it? Basically, the investors, the change in market cap between pre right and post right, effectively are sitting at loss. What's your view?
See, it's a function of how the market is reading the current situation, but I think it will improve.
Look, I think first of all, there are two things here. One, I think it is technically, I think, and mathematically, pre- and post-money situation, the market cap should actually adjust for the fact that there are obviously more shares and you have a subscription now. I think that we have to probably take into account folks that decided to arbitrage versus basically people that were long-term investors. I think that the rights issue certainly benefited a lot of our long-term investors that subscribed for additional shares and actually got them, consolidated their positions. I think that our goal is to actually build a larger, stronger institutional shareholder base. Perhaps maybe the and look, I don't think that we want to comment on why our market cap either moves up or down.
I think that what I will basically say from a positive standpoint is that we certainly look to deliver a substantial value to shareholders as we really grow our order backlog, and that is something that I feel very positively about in the coming months.
Sure. Thanks.
[Ken, you have any additional questions? You can unmute and start.
Sir, ]would like to know whether on the private side, sir was telling about negotiating contract with some big players. Would like to know which industry we are and which segment we are discussing.
[Ken], look, we are talking about renewables and renewables of both nuclear and hydro form. That's one part. We are engaged with the private sector.
Hydro includes pumped storage.
Pumped storage, yeah. In addition to that, the minerals and metal sectors are where, again, we have picked up pace, and we are working on some projects right now for Hindalco. We are definitely seeing a lot of traction there. We are again engaged with the, you can say, the leading players of that sector. We believe we shall be in a position to convert some good orders over there.
We have identified two regions abroad where we have an interest to actually work in the medium to long term. We have made fair amount of headway in terms of establishing a presence with hopefully the beginning of some new business, which we will basically communicate at the appropriate time.
Understood. Sir, one more question. There was one big hydropower orders bid coming in Arunachal, so what was status for that?
This was Dibang and we have lost that bid. I can say some of the industry players have gone ahead with a very aggressive bidding on that project. We continue to maintain our bidding discipline after analyzing all the risk associated with such a large job. We have not been successful on that bid.
Understood. No problem.
Thank you.
[Kunal Tokas], you may please start again if you have more questions.
Yes, please. Thank you.
Yeah.
A question about you obviously expect to grow very fast. Do you think labor can become an obstacle to that growth?
Yeah, that's an industry issue. You are right. Labor is a challenge for the entire industry, and I think we will have to factor this into when we are looking at growth. The solution to that is going to be some of the captive training which we have to do, some very innovative retention programs with the labor workforce. We are engaged on that. But yes, we'll have to live with that problem, and I think we'll have to work around it.
Well, I think the one other thing that I would like to say on this front, I think that HCC has remained very proud of its health, safety, and environment standards. And, I think the respect for our labor force and the quality of our labor camps and how we treat our labor, and at least what we consider to be the joy of working within HCC is something that we tend to basically feel fairly strongly about. So that certainly helps. But we all know that there's a stretched demand supply situation in the country. So yes, I think what Santosh has said is something that we continue to be cognizant about in terms of, well, how do we better manage with our labor, with our partners to ensure that at no point in time we have our cycle times disrupted by labor disruptions.
Thank you for the answer. And also, did I hear correctly that you said you are evaluating two international destinations to do work in?
Sorry, we couldn't understand this question clearly.
Did I hear you correctly saying that you were evaluating two foreign destinations to work in?
Yes, that is right.
Yes.
When you divested Steiner, did you also not say that you were satisfied with the amount of opportunity available in India and wanted to focus just here for—
Yeah, Steiner was in a different line in building construction, so I think that our goal, and we still maintain that, is that our core business of engineering construction is where our focus area is, period. Where we see clear high margin opportunity and where we have actually frankly, in some cases, been invited to work and provide our expertise is in a couple of regions. It is something that we are evaluating, and this is something that we do not see as a dramatic shift or distraction from our core area of working. This will always account for a very small portion of our order backlog, but then could tomorrow could complement basically our work and our diversified order book and our margins as time goes by.
In fact, we are taking our own the best friends in new locations.
That's good to hear. I was just worrying that it might not become a stretch on the working capital given that you still going to—
No, we're very clear. Look, I think that we're blessed with a lot of opportunity in India. The government continues to be focused on infrastructure spend and at least for the number of years to come, we will always have tremendous opportunity here, but we will look very opportunistically at a couple of opportunities. Just because we mentioned international is not because we don't see opportunity in India, right? It's sometimes the quality of the work, the quality of the client, the prequalification that comes with that, and the high margin basically that comes with that is something that we don't turn a blind eye to. And certainly this is not something that will require any material investment. We're very clear about a wise use of our capital in the short to medium-term.
I am glad to hear your thoughts and excited for this next phase of your journey. Thank you very much.
Thank you very much.
Have a good day.
Thank you.
[Hardik Chheda], you may please start.
Yes, sir. I just wanted to ask regarding the margin. For the next year, do we see margins remaining at the same level, or now do we see the margins going up from the present level?
I think I have already commented on that. I think that it would be unfair to probably say anything further.
No, I do not know the exact I missed that part. I just wanted to understand. Let us say not about next year, in general, the margin trends, are you seeing them going up from here for the forthcoming orders that you will execute or staying in the same range around where they are?
I think—
I am not asking for exact numbers.
I think if you are asking from a job-specific standpoint, I think we will continue to maintain our discipline of, and we have always maintained the position that the kind of work we do is in the mid-teen EBITDA margin category. As you see our debt come down, and our goal is not just by the end of fiscal 2026 to see the debt come down to sub INR 2,000 crore, but to actually have the company completely de-leveraged as early as possible. In the next basically two to three years, we want to be debt-free. So that, along with basically the client advances being adjusted, the kind of works that we are pitching, at least Rahul talked about the fact our diversified order book, as well as effectively the fact that we work across the country, allows us to actually see through cycles, right?
Whether it is in a particular sector or in a particular region. And to some extent, because of our pre-qualifications and the complexity of the works we do, and the appreciation that the clients have for our work, we tend to actually not have competition in more than basically three or four players in the space we look at. So combination of all these factors is going to, I imagine, maintain the quality of our margins.
Okay.
I certainly don't think that you should be disappointed on that front.
Okay. Let me just put it that way. This I got it, with the opportunity in the nuclear space, say I'm not asking six months, say two to three years down the line, could that substantially take our margins up from the present level? Or even after that, the margins you are expecting to remain same or that could be a changer in terms of margins?
The answer is yes. It's a simple yes. It's a function of two things. It's a function of the quality of work, but it's also a function of scale.
Okay. Got it. Thank you, sir. Thank you. That answers my question. Thank you.
Thank you. [H.S. Reed], [H.S. Reed], you may please start.
Yeah. You mentioned about this Dibang 3 project. So, if I am not wrong, Patel Engineering Ltd and your group were there. So who has actually finally won this?
I am sorry, who is what?
Finally won this.
A company by the name of Rithwik has won the project. Or has won the project, or bids the L1.
Is the lowest bidder.
Is the lowest bidder.
But sir, do they have any track record or something? Because the technical things are also pretty same.
Look, we are not in the position to comment on our competitors or peers or any other company. That would be certainly unfair.
Okay. I appreciate.
I think you have to do your own diligence.
No, I agree, sir. Thank you so much. I just wanted to ask because I might have—
It's a question you can ask NHPC in their next analyst call.
Sure. Okay, I just wanted to ask, sir, one thing, like the guidance, because we are shareholders for a long time now. What kind of thing we can expect, say, next two, three years? What kind of guidance you can give us? Because all these rights issues and everything is over, financial restructuring is over. So what we can look up to now in three to—
We've seen, I think, this past year, there's been a higher level of competitive intensity. I think that what you will certainly expect is, at least from HCC, you will not expect us to make a mistake. You would expect the highest qualities of basically health, safety, environment. I think that that's something that when the industry goes through cycles, people basically appreciate that at the end of the day, and certainly our clients do. As far as now coming down to what investors care about is growth and growth in earnings, and return on investment. As far as we're concerned, I think that one, I already spoke about the de-leveraging and the substantial growth in earnings that will come from that's one.
As far as turnover is concerned, we've said this in prior calls, that we want to see a doubling of our turnover every three years. Ultimately we want to, on such a low base, I think it would be certainly a disappointment for us if we didn't basically grow at 20%-25% a year, right? That's now a function of us building an order backlog and really kind of having those numbers translate into free cash flow. What we requested in the past, basically quarters, is that the analyst community or the investor community overlook this period during which time we've been looking to grow our business. I have said this on our last analyst call that I've been a little disappointed at the speed at which we've done that in this past year. But I certainly look to make that up in spades.
Not only will we look to make up for the last year, but we look to basically accelerate that along with this year's fiscal, and I say fiscal 2027's, basically plan, right? I hope that gives you a sense as to the ambitious plan that we have, and I appreciate the patience that people have had in us basically achieving this task.
Okay. You are giving this bid pipeline of INR 53,000 crore in your presentation.
Yes.
I could not attend that initial part of your presentation, so I am sorry for that at the outset. You might have explained something. Can you just tell me now which are the main projects in that, and what is our probability of winning them?
We are not going through the bid pipeline in terms of project by project. Certainly what you can expect is that we have been in our areas of core competence, right? I think if you look at our diversified order book, you wouldn't be that surprised to effectively see that most of our pipeline, the work we've already done and the work we plan to do, is actually in that. Now, I'll let Santosh basically add to that, but I think, we look at, generally speaking, a 15%-20% hit ratio. That's what we target, and I think that in some cases, I think we'll actually probably maybe even exceed that, where there are jobs in which the competition is lower, and we're one of two or three players that it is earmarked to win the job.
I think just to give you a feel, this bid pipeline which is there. Majority of the bids are coming from hydropower sector and urban transport sector.
Sir, our hit ratio, if it is 15%, let us say, then it translates into only INR 5,000 crore. Maybe INR 7,000 crore-INR 8,000 crore.
Yeah, INR 7,000 crore-INR 8,000 crore.
That takes care of only one year of, I think one year. Because now we are going to grow at 25% also, year by year.
Yeah, but this is in addition to whatever we have secured already.
Got you.
Yes.
By the way, this pipeline we are talking about is what we are talking about currently. In the next three, four months, that pipeline will continue to grow, right?
Yes.
For us, the definition of pipeline is a project that we are getting very near ready to bid for, as opposed to the identified numbers. It depends on how we define it. The INR 50,000 crore is not a definition of a fiscal 2027. It is basically currently what is on our slate and what we plan to basically look to focus on.
Okay. And that INR 35,000 crore which is mentioned above is order book?
Its bids submitted.
Bids submitted. Okay. So there the hit ratio will be 15% of—
Again—
That's the number.
To be very honest, I'd like to withdraw the comment of 15%-20%. Look, I think that we—
Yeah, just for understanding, sir. I appreciate.
We think about that from a growth allocation of capital, capacity perspective. It obviously could be much higher than that. It could be slightly lower than that. Now certainly, we don't expect it to be lower than that, but it certainly could be higher than that. In which case, then we have to obviously accelerate our capacity to execute that.
Okay. Thank you, sir. Thank you so much.
Thank you. [Kunal Tokas], you may please start.
No, I just forgot to lower on my end. Thank you.
Okay. [Pranav], you may please start.
Hello, am I audible?
Yeah. Go ahead.
I am clear, right?
Yes. Yeah.
Sir, like you said, looking at our past results also, we have quite been consistent and proven ourselves when it comes to having the margin that we wanted as a company. Right? And we have started showing the results when it comes to getting our money back, receivables, clearing our balance sheet. Just one thing, for the last three, four quarters, we have always been talking on the order booking side. Where is the lack or where is the lag that is happening? Is it from the government side, is it from our end, or is it the business environment as such that is not letting us—
I don't think that first of all, that we can place the blame on the government at all. I think the government's doing a wonderful job in bringing a very large infrastructure pipeline to market. I think that perhaps maybe, as I've said this in the last quarter, perhaps a little bit of ill luck on our part. We had INR 5,000 crore of L1 jobs basically in our order book, which were Maharashtra jobs which were then canceled or re-tendered. Right? We went back. That should have theoretically today been in an LOA position which we could have executed. I think, to be very frank, I think it's a function of us not having executed as quickly. There's no other excuse for that. I think that there are, yes, we're looking at fewer bids, but larger bids in terms of size, to the INR 4,000 crore.
There's a greater lumpiness in our order backlog. Hopefully, there will be one or two quarters where you will be surprised with a substantial order. For example—
Right.
—Dibang was a bid that was INR 15,000 crore. If we had won that, doubled our order backlog. I don't think that there's any excuse but effectively our own performance in terms of generating our order backlog. Very simple.
Okay. The path going ahead, because now our balance sheet can basically support a lot of larger orders and more orders to us because we are technically at the lowest debt in our last 10 years history. How as a management, what do you see our company becoming in the next four to five years? Where will our niche be or what is our moat that is going to be as a company?
I do not know. Are you asking from a financial standpoint or you are asking from a position standpoint?
No. From a promoter standpoint, what do you see our company becoming or what is our niche that we are going to create or probably, that this is the segment that we are going to have our foot in like an elephant or cement our position there that whatever orders we—
I do not. The one thing that we have been blessed with is that we have been blessed with a 100-year pedigree in having actually done landmark projects for the nation. There have been projects of incredible difficulty and complexity, which have not just basically helped contribute to the economic growth of the country, but also basically been associated with strategic areas in defense, et cetera. Right?
Right.
So as far as we're concerned, we will continue to work in our core areas of expertise. I think you're already aware that we've done nearly a quarter of India's hydro. Out of the 24 nuclear reactor buildings today, 14 have been built by HCC. I don't think I need to repeat our credentials on the tunneling front in terms of even building some of the most complex and most impressive bridges.
Right.
Or for that matter, strategic projects like effectively the dry dock for our aircraft carrier or the strategic oil cavern reserves, where our crude oil basically rests. I think that we will continue to embrace complexity. We will continue to take on projects which require great engineering excellence. I think that you will not notice probably more than a few competitors in the field that we basically completely competed. Does HCC need to regain. Yes, HCC has a lot of these landmark projects to its name. But financially speaking, and in terms of the size of our business, in the next five years if you ask me, do we need to regain our place as one of the largest and most financially successful companies in India doing large, complex infrastructure projects? That's certainly basically where we need to be and where we will be. That's basically our goal.
Okay. Our plan to reach there is basically keep building and showing our complexity historically?
Yeah. It is simple. Like I said, the most important thing is being true to who we are, the integrity with which we work. We are a professionally driven firm. We will continue to maintain that discipline in terms of taking on commitments responsibly and executing them with the highest standards of basically quality and safety. That is right. We just need to do much more of what we have done before.
Okay. Thank you so much.
[Kiran K.R.] [Kiran K.R.], you may start. Kiran is not responding. [Naman Ranbhan]. [Naman]?
Hello.
Yeah, you can start.
Yeah. Hi, sir. Sir, my only question was regarding the profitability. If we see on a standalone basis versus the consolidated basis, there has been a reduction. Just wanted to understand the reason for the difference, and is it a one-off, or how should we see it on a future basis?
[Naman], we have already explained this. It's one-off because of a couple of items which I have explained. Maybe you can refer to my comments there, please.
Sure.
[Sandeep], are you?
Hello.
Hello, yes.
Yeah. Thanks for the opportunity. I have two, three clarifications to ask. One is about the promoters are having some shares pledge. What is the road map for that? Secondly, are we planning to take our stake in this company because it's only 16%- 17%? Third is, did they subscribe to the right issue recently concluded?
I'm sorry, I didn't really understand your last question. I think that, look, as far as the promoter group shareholding is concerned, you have the facts. I think the goal is to obviously have as much of the shareholding unpledged as possible, and that's the goal. I can't comment beyond that at this point, but we will share that information basically with you in due course. The promoters basically are not only subscribed to their portion, but actually oversubscribed as far as this part, as this rights issue is concerned. I think that what you can expect in the near future is our plan to try to basically raise the shareholding. At this point in time, I won't say anything further on the subject. You can please stay tuned for what our plans are in that regard.
Yes, sir, but this pledging is a bit on the stock price. What is the road map for that?
I'm sorry, your question is not clear. In any case, I-
I'm talking about the pledging of the shares by the promoter. It's supposed to have a bad sentiment on the stock price. What is the road map to remove the pledge of the promoter?
We can't comment on that, Harish. This is not the appropriate forum in which I will comment on that. What I will say, and I will repeat again to you, is that there is a clear plan to basically do that, but unfortunately, I will be unable to basically be explicit on this, I'm just sorry.
Okay. Thank you. Thank you very much, and all the best.
Thank you.
Sir, there are two more hands raised. [Rajesh Pandari] and Ken. They are repeat. I am unpausing [Rajesh]. [Rajesh], you may please start. Have you raised your hand, or it is by mistake?
[Sandeep], I think they have just not put it down.
Yeah. I think most of the things are answered. Rahul sir, you may please close the call.