Good evening, everybody, and welcome to HCC's Quarter Two Financial 2026 investor call. I am Sandeep Chauhan, I will be your moderator for today's sessions. From the HCC leadership we have with us today, Mr. Arjun Dhawan, Vice Chairman and Managing Director, Mr. Rahul Shukla, Chief Financial Officer, Mr. Santosh Rai, Operations Director and Chief Business Officer. We will begin with a brief presentation from the management team, followed by a Q&A sessions. Over to you, Rahul Sir.
Thank you, Sandeep. Good evening, everyone. Welcome you all in this presentation. A quick snapshot, HCC has been doing nation building since 1926. This is our centenary year. January 26, we are going to celebrate 100 years of proud existence. During this tenure, we have done many landmark projects. To summarize, we have done more than 4,000 lane kilometers of highways, 400 km of tunneling. We have contributed to 60% of India's installed nuclear capacity and 26% of India's hydropower capacity. We have got very well-diversified order book, which stands today INR 13,152 crores, diversified across sectors as well as geographies. As you can see, with transport sector leading the pie, followed by hydro, nuclear, and others. Geography-wise, Maharashtra is the leader, followed by other states like Bihar, Manipur. Key performance highlights for this quarter.
Our standalone turnover stood at INR 958 crores, vis-à-vis INR 1,200 crores last year. We had mentioned that there is going to be tapering of turnover because we have completed many projects, and now we have embarked on the journey of new order intakes, which we will brief you about. This is the outcome of that. However, our profit stands strong. We are at PAT level of INR 36 crore, and EBITDA margin of 16% in this quarter. We have secured three orders, two packages of Patna Metro underground Metro project, and one project from Hindalco group for aluminum smelter expansion project, and totaling to INR 2,770 crore. In addition to this, we are also L1 in INR 840 crores worth of projects.
The bids which are under evaluation, which we have already made, are amounting to INR 29,581 crores across various sectors, hydro, transport and water. In addition to this, we also have robust bid pipeline which are under tendering at various stages of tendering, amounting to around INR 57,000 crores. We have been telling you about our deleveraging efforts. There also, we have achieved significant progress. In this financial year, till date, we have done INR 339 crores of prepayment to lenders, in addition to their normal repayments which keep on happening year on year. Additionally, INR 450 crores of repayments are already lined up. So, which we will try to complete in this quarter. In addition to that, you are aware that we are also embarking on rights issue. Almost INR 1,000 crores of rights issue we are planning to do.
A portion of that will again be utilized for deleveraging. Put together, considerable debt reduction is expected to happen in this financial year. Also, reduction of HCC corporate guarantee to priority debt. We had talked about it in past. Now we have achieved required significant amount of required lender approvals have been received. 97.4% lenders have approved it. Now final formalities, paperwork for this CG reduction is going on, and this will also be completed very soon. I already talked about rights issue, so we will move forward to the next slide. On the operation side, our Mumbai Metro project has recently been inaugurated by the Prime Minister. You might have seen pictures and all in the media. Tehri Pumped Storage project. This is a 1,000 MW project that we are doing for THDC Uttarakhand. So third unit out of four unit has been synchronized.
The fourth one is also on track for synchronization in next couple of months. Vishnugad Pipalkoti Hydroelectric Project progressing quite well. Out of total 12.1 km of TBM mining, we have completed 7.5 km. Indore Metro project, which we had recently acquired, is making steady progress, very well mobilized and works are going on. You will see some pictures in the coming slides. Bhivpuri Pumped Storage project, which we are doing in JV with Tata Projects, is also progressing well and excavation work across upper reservoir, lower reservoir, powerhouse, penstock, et cetera, penstock fabrication, all is moving well. Now we will move on to a few slides. Operation updates. The pictures of Mumbai Metro slides. As I mentioned, Prime Minister has inaugurated this on 8th of October. So these are the pictures of CST station, Kalbadevi Station, Girgaon Station , and Grant Road Station.
So we have done four underground stations here. The work is completed. This is Tehri Pumped Storage project, which I just talked about. Pictures of the project. Unit number seven, which has just been synchronized with grid. Vishnugad Pipalkoti, a picture of HRT, which we are doing through tunnel boring machine. And another picture of machine hall unit spiral casing. In Indore Metro project, some piling works are going on at various locations. This contains seven underground stations. About Bhivpuri, excavation work is going on at various locations. On the financial side, as you can see, I have already mentioned key numbers. So total income stands at INR 975 crore. EBITDA is at INR 154 crore with 16.1% margin. Finance cost, you are seeing a reduction from last year because of the repayments that we have done.
PAT is at INR 36.7 crore. This is standalone numbers. On console basis, income is at INR 983 crore. You are seeing reduction from last quarter because earlier Steiner was also getting consolidated. Now it is mainly standalone apart from some numbers from HCC Infrastructure which are contributing to consoles. So essentially, standalone console numbers are not very different now. EBITDA is INR 147 crore with 15.38% margin, and PAT is at INR 47.8 crore. This is all from the presentation side. Now we are open to questions.
I request everybody to raise their hand so that I can allow them. Okay. First is Vaibhav Jain. You may please start.
Sir, am I audible?
Yes, yes. Go ahead.
Sir, my question is, if the rights issue is undersubscribed, are the promoters planning to underwrite that fully, the undersubscribed portion also, and then make sure it is complete?
Promoters have taken the responsibility of ensuring success of the rights. Naturally, they will take care in case there is subscription.
Okay. But can we expect promoters to be the ones infusing in case the rights are undersubscribed?
Yes.
Okay. Thank you, Sir. Thank you.
Rajesh Bhandari. Rajesh Bhandari, you may please start. Rajesh Bhandari, you can unmute and start.
Hello.
Yeah. We can hear you.
Yeah. About six months before, there was a talk from the Government of India side also that there will be a number of nuclear power plants government and also the private sector is planning. Is there any progress on that?
I mean, yeah, the talks are there, but still things have to move on ground. But routine projects like which comes once in two years or something, they are moving on. Big fleet programs are yet to come.
What normally is our share in the nuclear power plant, Sir?
As we showed in the presentation, we have built around 60% of India's nuclear capacity. Right now, we are just completing few of our engagements, and we are involved in two or three projects of theirs right now.
Basically, ours is the civil work.
Yes. We largely do the main plant civil building, which is the main reactor building. Also some plant water intake system. And we are ramping up our capabilities to undertake more scope in these fields.
When do we expect the interest amount to come down, Sir, so that there is a better profitability?
Mr. Bhandari, it has already started coming down.
Yes.
As I have already explained about the deleveraging plan in this financial year.
Hmm.
You will see substantial reduction after Q1 FY 2027 onwards.
Just to give you a sense, the goal for us is to, at the end of September 30th, we had debt of roughly INR 3,200. We have had a prepayment of a further INR 150. So today we are about INR 3,050 crores of standalone debt. We should expect by March 31st to have a further INR 1,000-INR 1,200 crores of debt prepayment. That will come from various sources, free cash flow settlements, arbitration basically proceeds, and a portion of our rights issue proceeds should also basically go to prepaid debt. So if you look at from a pro forma standpoint, the actual interest expense on an annualized basis should come down by more than INR 100 crores.
And obviously, that will have a partial bottom line impact for FY 2026 because the deleveraging is happening substantially only for a portion of this year. But for the full year, 2027 onwards, we should have a much, much larger basic impact.
When do we expect? Yeah, sorry.
Yeah. Besides the fact that our investment grade rating will continue to climb as a result of that, and the ability for us to actually have access to greater opportunities as a result of the growth that we see is something that we expect as well.
Mm-hmm. Sir, I have two small questions. One is, when do we expect the rights issue?
You can expect it very soon. The board-appointed committee will communicate that in due course. That's basically what I would certainly expect that, perhaps maybe this quarter you would probably get some news about the rights issue.
Means, say within December?
That's correct.
Okay. One last question, Sir. There was a news item that the ships will also have the smaller sized nuclear power plants.
Yeah, that is the small modular reactors, SMRs.
Modular reactors. Should we be participating in that?
Yeah. Whenever these opportunities will come, we will definitely participate on them.
Okay, Sir.
Yeah.
Thank you, Sir.
Thank you.
Thank you.
Yeah.
Kapil Agarwal, you may please start. Unmute and start.
Yeah. Am I audible?
Yes. Go ahead.
First question is regarding the L1 position, which is we have given that INR 840 crore is the L1 position at the end of Q2. Is this the total L1 or is this the L1 we can say received in Q2 only?
This is the L1 position as of this quarter, and this is ongoing from a project where we are with the hydropower project, where we are the lowest bidder for some time. Conversion process is, we are engaged with a client to convert this into an award.
Actually, in Q1, our L1 position was INR 6,000 crore something, and out of that, I think INR 2,500 we converted in main order. What is the status of rest of the L1?
Yeah. Another project also, the client is into the decision-making process with us.
It's like someone, we can say some INR 2,000 crore-INR 3,000 crore of order from L1 have been canceled in a way?
Not canceled. As I said, they're into the process wherein the client is still to make up. They are in the decision-making process.
That is why we have not mentioned it in our L1 position.
We have been a little conservative in actually keeping that out of our L1 position, but we should expect that to effectively by the end of the fiscal year to actually have some clarity. But conservatively speaking, we have kept that out of our L1 communication at this point in time.
Yes.
Okay. Our, we can say, available award amount is approximately INR 1,800 crore. What is the as on date total claim amount from standalone basis?
Claim amounts are large number which we do not book in balance sheet, that is why we do not talk about that.
I understand. But any idea that how much it would be approximately?
They are almost INR 6,000 crores.
As per our historic, we can say, report, approximately how much of that ultimately converts into award?
Typically, claim to award conversion ranges around 55%-60%.
55% - 60%. We can say more than INR 3,000 crore of that claim may be converted in awards in future life.
I would not like to speculate that. It is-
Yeah.
I can just tell you the historical numbers.
Yeah, just on the basis of historical number only. One more thing I want to understand that when this claim will be converted in award, at that moment directly that will be, we can say, reflected in our profit and loss account and data will be created or any expense also we book against that?
No, we do not book expense against that. Generally, because expenses are already incurred in the project while those claims are there.
Is my understanding correct if I say that in future, out of this INR 6,000 crore of claim, if INR 3,000 crore will be converted to award, then this INR 3,000 crore will be directly, we can say, hit our bottom line in future, if it will be done.
Right.
Okay.
I do not think it is realistic for you to assume the full INR 3,000 crore to hit our bottom line.
Okay.
Navin can talk to it.
Yeah.
Yeah. So basically when there are claims, right? Some portion of claim we do book because we have to incur some expenses for converting those claim to award.
Okay.
For example, if there is INR 6,000 crores of claim, almost INR 1,500 is already there in the books. To that extent, when claim to award conversion will happen, that conversion will reduce by that amount. So for example, if you are making an estimate that INR 6,000 crore claims are going to be converted into INR 3,000 crores of awards-
Hmm.
-almost INR 1,500 crores, INR 1,500 crores, 1,600 crores is already booked.
Okay.
So additional INR 1,400 crore is something that you can see in terms of profit.
I think it would be fair to say that there is a material impact whenever a claim gets converted to award. I think that what we have to as management responsibly convey is a broad sense of what the track record has been. And obviously, when a claim gets converted to award, the award also carries with it the interest that has accrued from the time that the claim was made. So that interest expense, depending on when effectively the claim has been filed, generally ends up becoming some percentage of that award value. So let's say, for example, and I'm saying this so that I can give you a sense of how conservative our conversion is. Generally speaking, on a principal basis, the conversion is generally, let's say 25%-35%.
But the interest component, so let's say, for example, you file a claim, the award only comes two years later. There's two years of interest that will be added on to that principal amount. So, I think that if you go with, let's say, a 30% plus another, let's say 15%-20% of interest, it generally ends up becoming a 50% is generally what our track record has been, Abhishek.
Okay. We have about INR 450 crore of debt repayment in Q3. What will be the source of that?
These will be award receivables.
This will be award.
It is a combination of some free cash flow, some settlements, but largely effectively award arbitration awards that we have in our favor.
Okay, great. What will be our utilization for this rights issue, INR 1,000 crore-INR 1,100 crore?
I have covered that. We will not go into the specific, but broadly, a material portion of the rights issue proceeds will go for debt prepayment.
Okay.
A chunk of the rights issue proceeds will be retained for general corporate purposes, which largely for us is growth of our business in the next couple of years.
The last question regarding this award available amount of INR 1,800 crore. Overall, we can say how much period we can encash it to utilize, we can encash or monetize this to repay our debt, like over a period of one year?
This is a combination. In some cases where we want to prepay bank debt, there are available guarantees provided by our banks to actually execute these petitions and to immediately repay debt.
In some cases, there are settlements ongoing with clients that would like to effectively settle these amounts. Yes, we would maybe leave a little bit on the table there, 10%-15% perhaps in some cases. You have seen Vivad Se Vishwas, which generally has ranged anywhere between 65%-85% of the award amounts have been paid out. But largely effectively, we will be looking for a one-to-one ratio of actually ensuring that this money is utilized to immediately basically repay our banks.
If in a particular awards case, we would like to effectively run its due course through the courts, then we are looking at effectively about a three-year process during which time we would have to be a little patient with our courts, could be anywhere between three to four years before we will actually see a final disposal and the monies being paid to us.
Okay. Thank you. That is it.
Thank you. Saro, you may please start. Unmute and please start.
Thank you, Sir, for giving me the opportunity to ask the question. First of all, my question is that the earlier investor has asked the question already. Why we are getting the order very slowly, Sir? What kind of order book we can expect as of March 2026, Sir?
Look, I think we are targeting to have an order in takeoff. This is just for guidance purpose. I mean, north of INR 10,000 crore for this year, at least. See, the kind of movement which is there into the overall market and the sectors where we are, we have been judicious in picking up the orders also. As of now, we have lot of bids under evaluation, which I believe, once they are cleared, we can see a much better performance. I can right now say that it is basically a result of the bids what we have applied, and there is a slowdown into the evaluation process of them. Some bids which we had done, they got canceled, and they got retendered. That has also taken some time.
We are pretty confident that the kind of bids we have done, we have submitted, which are under evaluation. We will largely meet the target.
I will add a couple of points here, which is very important. I think it is very easy in our business to take a job. The one thing that we have, Rahul talked about the fact that we are 100 years old. I think that we have also had the wisdom of seeing cycles in our industry where there is irresponsibility in bidding, in taking projects which are at a very high risk and a very low to sometimes even negative profitability. As far as we are concerned, the way we will take things forward is with a very high level of fiscal discipline to ensure that every job we take on and every client that we do that with is with the highest standards of not only profitability, but quality, safety, environment, et cetera, for us are very important standards. I think that we see around us.
Now, on one hand, I think that we compete in areas where the competition is less. Certainly, you will not see us participate in areas where the competition is higher. But again, we will continue to maintain that discipline. I will add one more point to this. There will be a little bit of lumpiness, at least in the short run for us, because we are off of a low base. But at the same time, we have made a conscious decision that we will only actually do projects of a certain size. For us, our sweet spot basically being, let us say, INR 1,000 crore -INR 2,500 crore. We might need to be a little more patient with regard to the order acquisition that we do because we want to actually have fewer jobs that are larger, where we actually have a higher degree of profitability and control.
In that sense, until probably at least for the next year and a half, we just request your patience to have our order booking in a very ambitious but yet responsible fashion.
Okay. That is it. Santosh, Arjun Sir, in FY 2026 and in FY 2027, can we expect the order book to go to INR 30,000 crore?
I don't think it's unreasonable for you to expect that at all, because just to give you a sense, Santosh, we've actually made bids, I think, so far that are under valuation of about INR 30,000 crores.
Yes.
Already submitted. Some of these are mega projects. Some of these are mega projects because they're not more than two or three bidders. Baking a cake sometimes takes a lot of care and love. I think that as far as we're concerned, our goal is to actually, in our specialized area of focus, want to do that. I don't think your number is unreasonable at all. For us to be able to at least double our turnover in the next basically three years is not something that we're shying away from.
Okay. Thank you, Sir.
Oh, yes.
Thank you, Sir.
Yeah. Sir, good evening. First of all, very nice presentation you made. Congratulations. Am I audible, Sir?
Yes.
Yes.
Yeah. Why this profit, that total revenue has come down, Sir? Is it only due to the repayment of leveraging or any other reason? Even year-on-year, this quarter, this Q2 has come down. Is there any specific reason for that?
I think Rahul has spoken about the fact that the last year's order booking was weak. As a result of that, we've had also much, much faster execution of our projects. So a combination of both those factors has led to, at least what we've communicated to all of you, that this year will be a flat year for us. We've also basically on one of our projects had a routine TBM maintenance. It's our largest project, Vishnugad Pipalkoti Hydroelectric Project. So, this quarter has actually been marginally basic. But we're ahead of our budget. As far as we're concerned, we're quite pleased with the quarterly results.
For this year, we have actually requested the investor community to bear with us with regard to the backlog not being as strong, but the goal is now from FY 2027 onwards to really actually generate that growth that we have been talking about.
You mean to say even the Q3 and Q4 will be muted results?
I think that the new projects that we have basically started, for example, Bhivpuri, that we are executing for Tata Power, Indore Metro, Patna Metro, these are new projects which are just getting mobilized. Some of them have EPC payment schedules that then require for turnover to be recognized in a slightly deferred fashion, which is not commensurate with the work that is underway. Yes, I think that we should basically complete the year fairly similar to where the previous year has actually been with fairly strong profitability, and most importantly for us, with a significant de-leveraging. Then I think that a combination of further de-leveraging as we move forward in FY 2027, along with growth, is really what is going to have the double impact of actually seeing a tremendous, basically bottom-line impact along with the growth of the bottom line.
Okay, Sir. What sort of the price, is there anything you pitch for the right issue or what will be the investor's
I think the committee, once it deliberates on that, will communicate that as per the protocols.
Okay, Sir. Thank you so much. Thank you. Hopefully we'll get that-
We remain committed to our shareholders, and certainly as far as I'm concerned, the goal is to always basically do things in a manner that allows for our shareholders to achieve the maximum benefit.
Thank you, Sir. Thank you so much.
Thank you. Mr. Sampath, you can start, please. Mr. Sampath.
Yeah. Good evening, Sir. Sir, considering the pedigree and the difficult projects that we have done in our past shows that we can really do very complex projects. Considering that, when you bid for projects which are fairly complex, do the party, whether it is government or private, do they consider even at a higher margin a company like yours vis-à-vis other companies?
I think when it comes to government projects, I think the responsibility that the Government of India has is to do two things. One is to qualify technically relevant parties, and then once it qualifies those parties, it ends up having to go with this L1 methodology in terms of pricing. That sometimes is unfortunate because what it does is open up the doors to irresponsible bidding. Again, I've said this before, HCC also competes in areas with clients where effectively the technical complexity is high enough to have the competition limited to only a few people with that competence. I think that we certainly look forward to the day where a mix of our technical experience and our record goes hand in hand with effectively the way a client measures price. India and most Indian government entities don't have that.
Private entities certainly do. For example, some of the private projects that we are executing, whether it's for Tata Power or whether it's for Hindalco, I think that the entities with whom we have such a high level of credibility certainly look at the track record and the pedigree and not just simply at the price. That's a very good example of projects where we were passed not L1, but we actually ended up winning the job because of our pedigree. What you can expect to see is our increased exposure to pedigree private sector in the coming years. Where today our government jobs is nearly over 90%, I think you could probably end up seeing that sort of diversification to increase in the coming months, Anuj.
Right. For private companies vis-a-vis government, is there a difference in what we bid for in terms of margin that we pick?
No, I do not think that there is. I think this is a question that if I was to very sincerely answer, it would go into sort of how we think about risk and our clients and our tendering strategies. I would avoid basically going into the details, but broadly, I think we think about risk and return responsibly. I think that each client is different, each project is different. The technical complexity is different. Obviously, there is no comparison with the sovereign Government of India. Private sector, as a rule, irrespective of how pedigree private sector is, will always basically as a rule, trade at a premium to, not trade at a premium, but effectively you would command a slightly, basically higher margin with private sector than you would with the Government of India, is what is traditional.
But then again, it depends on the client, depends on the complexity of the job, depends on the history with that client and the track record with that client. I think every case is different.
Okay, Sir. Going forward, say, in three years' time from now, from government and private, right now you said around 90%:10%, that is the ratio. What we expect or what is our aspiration in terms of breakup of the-
Look, I would like to see us at 70/30-
Okay.
-within a relatively short period of time. In the next basically two, three years. I think that there are enough opportunities as India scales and the private sector also grows. For us, the history with having done work for the Government of India is a function of the government's pipeline and the size of the projects. As we see, I think the private sector becoming much more ambitious in the size of the projects get to the point where they meet our size criteria, our quality criteria. I think you will see us probably do some of those jobs as well.
Okay. Sir, one more thing. What is the average margin we look to bid from here on?
I think that you have seen our EBITDA margins be in the mid-10s.
Okay.
We would expect to continue to have those EBITDA margins be in the mid-10s, which is much, I would say, higher than generally our competitor landscape. As a result of now the business scaling, our overheads are going to remain broadly the same. So you're going to see sort of a margin expansion as a function of when we grow. The current overheads that we have will actually be much more productive. When you see that additional deleveraging that will happen at the same time, you will see basically a margin expansion and growth from that as well.
Right, Sir. Sir, booking of revenue for private companies and for Government of India projects, is it different or how we go about that?
Remains same.
Okay. Sir, considering the working capital debt now we have, how much you think from FY 2027, how much project we can execute in a financial year?
Yeah, we do not have a constraint at this point in time. I think that for us, the focus is basically finding and identifying the right jobs with that high margin and with the right client. Again, if I may just make a general comment, there is a lot of basically people with their hands raised. If I can just request everybody to limit their questions to maybe two or three at a time and then be back in queue, I think we can be respectful to everybody else as well.
Right, Sir. Thank you, Sir. Thanks a lot, Sir.
Thank you. Omkar Nair, Omkar, you may please start. Omkar Nair.
Sorry.
It is right here. We can hear you, Omkar.
We cannot hear.
I will move to the next one. Kenil?
Am I audible? Hello.
Okay, Omkar. Go ahead.
My question is on L1 position. This quarter, the company won orders amounting to INR 2,770 crore. Is this part of the L1 position of INR 6,079 crore mentioned in the last quarter?
Yes, we have had most 1/2 of our L1s converted to LOAs.
You have also mentioned in the presentation of securing L1 position of INR 840 crore. Was this secured this quarter?
No, this is an old L1 position which is continued, and it is a hydro project, which we are highly confident will get awarded. It is still pending a few couple of clearances.
This INR 840 crore is your total L1 position as of September 20, correct?
That is correct.
What about the balance? Last quarter you mentioned INR 6,079 crores and then if I remove INR 2,770 and INR 840, still there is a balance.
We had already covered that before. There was a large Maharashtra project which we have actually taken out from our L1 position from a conservative basis, which we will then reevaluate in the next three months to six months, and we will communicate that at the appropriate time.
Thank you, Omkar. Kenil, you may please start.
Sir, my question is, the INR 19,000 crore bids under hydro project, is it for single project or multiple projects?
Multiple. There is one large project in that.
Okay. When will it be bidded out? The technical bids will come out?
We should expect the opening of those in the next basically 30 to 45 days. Maybe 30 to 60 days, Santosh, I think would be fair to say.
Yeah. December, January, we should be knowing something.
Understood. And Sir, we have been seeing a lot of our peers getting big PSP projects from private sector and PSUs power companies. But we haven't seen after the Tata Power project any big orders. What's the bid pipeline on PSP side as Government of India has also reduced the regulations for solar now?
Those are ongoing discussions with leading developers, which also don't feature exactly in our bids submitted because these are ongoing negotiations with effectively third-party developers. And so, at the appropriate time when we actually are able to convert one of these discussions into an order, and there are I think two or three very large opportunities that we are basically evaluating here, we will be communicating that at the appropriate time.
Understood. Sir, what-
Vaibhav, we cannot hear you. Kenil. Sorry, Kenil, we cannot hear you.
What are the current receivables for Steiner AG? Hello.
Yeah. Can you repeat that question as well, please?
Wanted to know what will be the current receivables for Steiner AG, and how many months are we expecting it to convert it into our revenue?
Have we disclosed effectively what the-
Yeah.
I think that we've not basically disclosed. We do have assets, I think based on our disclosure that we made, which are north of about INR 1,000 crores of receivables. Obviously, I don't think that our expectation is to actually have a material chunk of that basically realized over the next three years. We're actually probably fairly close on one or two cases. But it's not something that we've actually given guidance on in the past. Again, I just want to take a break and ask our CFO as to what our consistent position has been, because I don't want to basically detract from that. But the expectation that we have is that in the next three years, we should basically conclude most of these matters.
My expectation certainly is in the next year; we should at least basically have some positive feedback on some realization as well.
Understood. Sir, one last question. Are we planning to enter into data center and power related due to huge surge in the AI business across world?
The answer is yes. We will communicate sort of our business strategy at the appropriate time after we've thoroughly evaluated that and a few other areas that we find not only interesting, but where we've actually had third parties and existing clients push us to kind of consider doing work for them in those areas as well.
Understood. No question. All the best for the future.
Thank you, Kenil. Rajesh Bhandari, if you have any additional questions, please.
Sir, since we are doing a lot of underground work, then we saw in some of the TV news that the big drilling machines will be now given by China. Should we be buying that as a supplier or Government of India will provide for drilling purpose?
No, we buy them ourselves. In fact, we are buying right as we are speaking, we are buying almost eight machines right now.
Oh, that works out too costly, Sir?
Depends on what we are buying.
Okay. And, Sir, as you said that it is 100 years in January. [Non-English content]
Yes.
{Non-English content] Will there be some surprise dividend or bonus or something like that, Sir?
We will surprise you hopefully with wonderful results-
Okay
-and a much, much greater clarity for the future. That will come with a big thank you for being supportive of us through very difficult times that we have had in the past. Now, as far as we are concerned, the future, as far as we see it, very, very bright for what is certainly before us, and we have a lot of catch up to do as well.
Sir, on this point I have a small question. [ Non-English content] There was a time when if someone took the name of HCC, the person's collar used to go up. When will that time come back?
[Non-English content] Very soon. I think the answer is, emotionally speaking, as far as I'm concerned, the answer is just immediately. I think that first of all, the entire company and its management team and its employees are fired up and proud.
Yes.
I don't think that we lack basically the resources to achieve really anything at this point in time. I think that we have departments that are continuing to basically grow stronger in basically size and capability to take on even more complex basically jobs.
Good.
Now I think the real excitement will come from our continuous basically and rapid improvement in building more and more jobs. Santosh, you want to add to that?
No, I think you said it. We are making every effort to bring this moment as soon as possible.
Yeah. Glory. Yes.
Yes.
Thank you, Sir.
I think I want to tell you one thing.
Yes, Sir.
I think that we are blessed to actually have stakeholders and clients that are deeply supportive of us and very, very appreciative of the kind of work we do and what we stand for. With this kind of support around us, and at least the fact that we have achieved so much in such a difficult time in the last few years, I do not think that there is anything that can basically stop us from what we need to achieve in the end.
Yes. I would like to give a compliment, Sir, for the amount of transparency with which you replied to everything, plus the way you have conducted this conference, it is really remarkable.
Thank you.
Really remarkable, Sir.
Thank you.
And very transparent replies.
Thank you, Sir.
Thank you, Sir. Thank you very much.
Jayesh Gandhi is the new person who has raised hand. You may please start, Jayesh. You may unmute and start.
Am I audible, Sir?
Yeah, go ahead.
Okay. Sir, I have only one question. It is regarding the auditor's comment on point number two, which talks about unbilled work in progress and current trade receivables, non-trade receivables including, totaling to some INR 500 odd crores, which are receivable in the books of holding company. Any update on that?
Yeah, these are the various receivables from the different clients. At the various stages, like WIP receivables, trade receivables are there. They are there since our business is like this. We have various stages to do other things also. Routine things are there, so there is nothing to worry as such. These are the routine things, and this composition is changing each and every time.
This is not stale. This keeps evolving with the billing cycle every month, every quarter.
Sir, I am asking because the same comment was there in last quarter as well.
Yeah, composition is changing. What we mean to say, some part is there right now, so this is changing from the other part of the other projects. These other combinations are there.
Auditors report it as per their formula. If it has crossed number of this, they will report it. But does it mean that we are not able to recover some money? That is not the case. We keep on recovering. Some receivables keep on adding that. That is the point.
Sorry to harp on that, but Sir, the amount is also same as in last quarter. It was the same amount, INR 245, INR 210, INR 57.
No, last quarter and this quarter may not be the changes. We are not saying that all the quarters it will changes.
Okay.
The combination is there. This is depending on the collections and the progress. There is a coincidence.
Okay. That's all from my side, Sir. Good luck for future.
Thank you, Jayesh. Omkar, you have additional questions, you may start.
Yeah, thank you. Just one question. Last quarter, it was mentioned the company achieved a claim to award conversion amounting to INR 453 crores. I just want to understand from an accounting perspective, was it booked as award revenue last quarter itself?
First of all, anything that has happened in a certain quarter is basically booked in that particular quarter. If your follow-up question is how much basically it contributed to the various line items, that is not something that we actually get into the details in this call.
No, that is okay. I just wanted to know if it was booked as award revenue last quarter.
Thank you, Omkar. Sampath, do you have any additional question? Please unmute and start.
Question, Sir. Sir, the award, which you say historically is like 55%-60% to the claim, it includes the interest portion also, right? 55%-60%?
That's correct.
Yes.
That's correct. I think that like I said, I think that there's a conservatism, I think in the claim to awards conversion. And obviously, the interest is just basically on the principal, on the converted amount, which generally comes with a lag of effectively, let's say, at least a couple of years.
Okay. Sir, last thing. Historically speaking, award to final realization is how much time lag, Sir?
Award to final realization, most of our matters, 90+% of them are in Delhi High Court. Now, again, when I give you this feedback, it depends on which court we're talking about. But our matters are primarily central government in Delhi, which is the most efficient court, basically, in the land. We look at generally speaking about three years is generally the timeline that we like to kind of challenge ourselves internally, but we're looking at maybe three to five years. In some cases, it could happen. And I think that the timeline has actually extended in the last few years because the courts in Delhi, especially, whether it's the High Court or Supreme Court, have not been functioning at full strength.
For the first time in many years, actually, the courts are now in full strength, and you've probably been reading a lot of news about the vacancies that we've had in our judicial system. That's actually placed a huge burden on the timely, basically, adjudication of matters. So at least we're hopeful now that things will move fast.
Thank you, Sir.
Thank you, Sampath. Kenil, you have an additional question?
Just one request.
Yes.
Majority of investors over last few years-
Sure.
-in-person meeting, okay?
Absolutely. I think that what we will do is certainly, we definitely will take that on board and we will definitely do that. I think that it's far more meaningful to connect in person. Whether we do that once a year at the end of the fiscal year, or we do that every other quarter, we will get back to you and we value the advice on that front.
Thank you.
Thank you, Naman Rambhan. Naman, you may please start.
Hello, am I audible?
Yes, go ahead.
Yes, my question is regarding the order book. What is the order book growth or target that HCC is aiming to achieve over the next few years?
If you ask me, we are targeting close to between 20%-25% CAGR over the next four to five years.
That's a conservative measure. We've talked a little bit about, basically, just want to interrupt with the particular L1 position. We have not received any cancellation of L1, but we've basically been conservative with a particular client to take an L1 off, and I think that's a conversation we're having with our client. We'll figure out how to basically communicate that back to you in the next, basically, few months.
Okay. Basically, our 6,000 L1 position out of that, I understand that 50% is already like-
50% is converted.
Yeah.
We have basically a large, nearly INR 3,000 crore L1 position, which is not canceled, which is still very much basically in place, but we have chosen to actually take it out of our analyst presentation for a couple of reasons. We will communicate to you in the next quarter.
Okay. Also, Sir, in the Q1, we had stated that there is a 40,000 bid pipeline, and we have a hit ratio of close to 20%-25%. So will we be achieving that kind of hit ratio for the entire year of FY 2026, or it can be around 15% as well?
No, I think conservatively anything between 15% and 20% we can safely assume.
Okay, Sir. Thank you.
Thank you, Naman. Abhishek Leekha, you may please start. Abhishek, can you unmute and start?
Hello?
Yeah. Abhishek, go ahead.
Yeah. Thank you for the opportunity. Just one understanding, in worst, a lot of small nuclear plants are coming in terms of data centers and all. In India also, we are seeing a lot of data centers coming up. Do we have that kind of engineering to get into that, or probably how we can tap that opportunity?
Abhishek, look, HCC traditionally has been the pioneers when it had come to the nuclear energy program in the country, especially building all types of plants. Whatever are existing in the country, we have built almost all of them. When the small version of this comes, and they are largely going to be based on a proven technology, which is like PHWR technology, we are already there. Whenever it comes, I believe we are going to be one of the suitable candidates to engage with the potential developers to construct these facilities for them. Data center, of course, we have done a lot of allied works and a lot of projects where these capabilities are in-house. Of course, we are evaluating the full value chain. As Mr. Dhawan said in the earlier part of the presentation, this is something which we are working upon.
Once things are, the slide is on our side, we will be in a better position to communicate that how we will approach this thing.
We have been approached by third parties for collaboration. We want to be respectful to these third parties as well as effectively to the grand plan we have in that. I think that once we have finalized basically our thinking in terms of how we will approach this opportunity, we will basically communicate it to the market.
Yeah.
Okay. Yeah. Thank you so much.
Thank you. Thank you, Abhishek. There are no more hands raised, so Rahul Sir, you may please conclude.
Thank you. Thank you everyone for joining this con call, and we appreciate your questions, and hopefully we have been able to successfully answer your questions. Look forward you all in the next analyst meet. Thank you so much. Bye.
Thank you.