Very good evening, everyone, and we welcome you all in today's meeting for our quarterly results. Joining with us are our senior management, Mr. Arjun Dhawan, our Vice Chairman has joined the call, Mr. Jaspreet Bhullar, our MD and CEO, and shortly our CFO, Mr. Girish Gangal will also be joining.
He has also joined.
Okay, already joined.
Yeah.
We will take you through this presentation. As a quick refresher to someone who is new to HCC. As a pioneer in construction industry, HCC has completed more than 4,000 lane kilometers of highways, almost 400 km of tunneling, especially in the complex Himalayan region. 60% of installed nuclear capacity has been contributed by HCC, and almost 26% of installed hydro power capacity has been done by us. We have got presence all across India and executed project in almost every state. Apart from India, we have executed projects in Bhutan, Nepal, and Bangladesh as well. Our current order backlog as of 31st of December stands at INR 9,773 crore. Primarily, dominated by transport sector, which accounts for 47%, followed by hydro, 26%, water, 22%, and nuclear, 5%.
Geographically also, we are very well-diversified, with Uttarakhand leading the show because of our hydro projects being there, followed by Maharashtra and Gujarat. This order book position excludes L1 position worth INR 3,513 crore, which we expect to realize very soon. On our quarterly numbers. On a standalone basis, we have achieved a turnover of INR 1,002 crore for this quarter versus INR 1,244 crore in the Q3 of last financial year. Our EBITDA margin had been quite well, 14.7%, which is also consistent with our historical track record. However, last financial year it was 12.3%. Profit before tax, excluding exceptional items, was INR 18 crore for this quarter, vis-à-vis last year's Q3 of INR 21 crore.
However, on a standalone basis, we have booked a loss of INR 216 crore during the quarter because of certain exceptional item, which I will be explaining in the next point, against the net profit of INR 68.5 crore during last year. Now on the exceptional item. Basically, company has opted for new tax regime. Till now we have been working on old tax regime. Because of that, we had to restate certain deferred tax assets and liabilities, and accordingly, INR 147 crore of deferred tax assets had to be reversed. Also, since this new tax regime doesn't allow MAT provisions, we had to take write-off of INR 154 crore of MAT credits. However, at the same time, this has helped us in boosting our liquidity, because we have received tax refund of INR 54.74 crore, so this was written back.
The net impact though, accounting-wise, it appears that we have made a loss of INR 216 crore, but net-net, if we exclude these items, we have made a PBT of INR 18 crore. Now on a console level, our revenue has been almost INR 1,006 crore against INR 1,474 crore during Q3 of last financial year. Essentially on account of Steiner divestment because those numbers are not there now. On a console basis, we have made a net loss of INR 38.9 crore versus net profit of INR 233 crore, because of the tax regime change that I explained just now. On business development side, we have received the letter of award for Agardanda Creek Bridge of INR 1,032 crore. In addition to this, we are also L1 in projects worth INR 3,513 crore.
We have also submitted bids for INR 17,679 crore, which essentially comprise of three metro rails, two pump storage projects, one elevated road, and one railway corridor, and also one dam. These bids are yet to be opened. Last year had been a little slow in terms of announcement of bids, but we certainly expect that this quarter being last quarter of the year, bulk of bid results should be announced, and we hope to get a decent amount of L1 positions during the quarter. In addition to this, we are also very closely working on projects worth almost INR 36,000 crore, which we plan to bid in coming quarters. We also completed the qualified institutional placement of INR 600 crore, which was well-subscribed by very renowned investors. We divested stake in Steiner AG, which is our Swiss real estate entity, to focus on core operations in India.
Now I will take you through this Steiner transaction. As I mentioned that company wants to focus on growing Indian market. This last quarter there has been divestment of this Steiner business. Steiner was initially owned by HCC through its Mauritius entity, HMEL and HMIL, which were wholly owned subsidiaries of HCC. Our goal has always been to divest our non-core businesses. As far as Steiner is concerned, our focus has been to maximize return on capital and the right timing for this was the target. We faced challenges in the past when we looked to divest the business as a whole.
The transaction with m3 last December has helped us provide a clear liquidity path as we have been able to bifurcate the construction-related asset receivables, which we have retained, while the development business was sold to a Swiss-based developer with whom we can look forward to joint success via INR 200 crore of earn-out. To summarize, HCC has retained claims and receivables worth almost INR 1,000 crore. That will be wound down in the next five to six years. Earn-out from Steiner Development AG, up to INR 200 crore. Ownership of Steiner India, which has land assets worth almost INR 43 crore. This is how this slide summarizes the transaction. m3 Groupe retains Steiner AG and Steiner Development AG. Moving on to operational updates. Anji Khad Bridge project, we have received the completion certificate.
Mumbai Coastal Road project, northbound arm of this project was inaugurated by Chief Minister of Maharashtra, so project is fully functional now. BARC Tarapur, all structure works completed and handing over is in progress. Tehri Pump Storage Scheme, synchronization of unit five has been completed and finishing works are in progress. Vishnugad Pipalkoti HEP. Here we have achieved 4.8 km of TBM mining out of 12.1 km in the HRT. Mumbai Metro projects, at the far end, finishing works of almost every station is being done, and we are hoping that by March, trial run will also be started. Stand-alone financials. Key numbers I have already explained. You can just take a look. You will notice tax expenses here, which are quite high because of the shifting to new tax regime that I explained in the previous slide. Consolidated numbers. Thank you so much.
Now we are open to questions.
We request to kindly raise your hand so that I can allow you to speak. I can unmute you here. Viraj, please go ahead.
Yeah. Hi. Still a little unclear, can you please let us know what is the net debt in the business as it stands today? And what are the implications on that absolute net debt over the next FY 2026 and 2027, given the staggered payments and earn-outs collection on Steiner AG?
Viraj, net debt today stands at around INR 3,500 crore, which includes almost INR 1,700 crore of principal and-
You're a little soft. Sorry, if you don't mind being a little louder.
Viraj, can you hear me?
Yeah.
Net debt today is around INR 3,500 crore. Going forward, we can see that year -on -year, we are making repayments.
Rahul, let me interrupt for a second. Net debt, as I am guessing Viraj and the analyst community would like to probably have a sense, would be net of cash available-
Yes.
-on the balance sheet. You take the gross debt position, subtract all the cash, and then actually project these numbers out. Maybe if Viraj requires a little more detail, that can be provided separately offline, but you can go ahead and communicate. Just subtract all the cash, please.
If you can tell me, of that net debt number, how much is term loan and how much is working capital debt?
Total debt as of now is almost INR 3,500 crore, which is a term loan, not a working capital loan.
Okay.
Cash-wise, we have almost INR 600 crore. So net debt, you can say almost INR 2,900 crore. Cash number, I will have to recheck.
Understood.
We do not have working capital loan as of now.
Okay.
Hope these answers.
How do we see this INR 2,900 crore reducing as an absolute over FY 2026 and FY 2027? Best guess estimate.
If we clearly go as per the repayment plan, it will reduce every year by almost 15%. Next year it will reduce by almost 15%, which is our repayment plan. However, we plan to accelerate the repayment process, and there are quite a few avenues which we are exploring with lenders, including repayment through court BG transaction, which in some of the previous call we had explained also, and generation of cash from other avenues. That will be extra that we will be doing.
Okay. The Steiner monies that will come in, the INR 200 crore earn out from SDAG, is it linked to anything in particular in a particular year?
It is an earn out, and it is linked with performance of the company as well as new acquirers ability to raise. They are planning to go public and all that. There are quite a few milestones that needs to be achieved. We are, at least today, not in a position to put a strict timeline to that.
Okay. Is this over the next two, three years or is it a shorter period?
Yeah. Correct. You are right. Two, three years.
Okay. Thanks. I will come back if anything.
Bharat Mani, please go ahead.
Hi, am I audible?
Yeah. Go ahead.
Yeah. So, thanks for the opportunity. So I was looking at the HCC standalone numbers. So I guess in the corresponding quarter, you did INR 1,200 crore of revenue. In this quarter, you have done INR 1,000 crore. So what has been the reason for this decline? The standalone, not the console. I can agree console level, the Steiner divestment took place. But what about standalone numbers?
Bharat, this is what we had budgeted for the quarter, and this is a good performance in terms that we have completed a lot of projects, like we have completed Anji Khad project, we have completed Delhi Metro, Mumbai Metro coastal routes are also at the fag end of completion. With limited availability of work front, this is a very good outcome as per our budget we have achieved. And certainly with new orders which are lined up and which one L1 is already there, others are about to come, we will be able to ramp up the turnover once again.
You expect the next quarter to be better than this? What is the outlook on the next quarter?
Next quarter, generally, we don't give future forward-looking statements.
No, I know that, but just a general-
Yes. But looking at current order position and the work front that will be available, we should be in the same range.
Okay. And one more question on the consolidated statements. I could see a change in inventory of INR 305 crore. Could you just direct me what is that regarding?
I would request Mr. Gangal-ji.
Yeah. Good evening, Bharat.
Hello, sir.
Yeah. Can you hear me?
Yeah.
Yeah. As you know, we have divested Steiner. Because of divestment of Steiner, there are a lot of movements on these expenses, whether it is inventory or you will find finance costs or other expenses.
Okay.
Since all businesses are moved out, then there are typical transactions. For example, depreciation and other expenses have gone up because various lease transactions, what we had in Steiner. You have to create as per Ind AS the lease equalization reserve, which slowly releases cost to the profit loss account. Whereas when you transfer this completely to a different party, the entire balance what is lying in the balance sheet has to be written off. Similarly, all these adjustments, including for inventories, have been written off as far as Steiner is concerned on a deconsolidation. You will see that variation.
In the finance and depreciation cost result, you could see the lease being written off partly in terms of interest and depreciation. That's what you're saying-
That's it.
-in the inventory as well.
That is it.
Is it a one time, or should we-
One time. No, that is over. See, this is related to Steiner. So for us, Steiner is over now. Chapter is over now.
Okay.
This is the last quarter we will have all these adjustments.
Okay.
Next time, you will find more or less standalone and console numbers will be more or less matching. I mean, personally say that.
Okay.
Because there is no Steiner turnover or related costs coming into HCC anymore.
Okay. In the last quarter, you had said about you had submitted a few bids for the metro segment, the port project, and a PSP project.
Correct.
What is the status on that front?
Those bids are unfortunately got delayed as far as opening up those tenders is concerned. But few of things are expected in this month itself, especially PSPs and some metro bid, and something will go to next quarter.
There were a few projects that you won L1 as well.
Correct.
Like, I guess INR 3,500 crore worth of projects.
Correct.
What is the status on that?
Bharat, Girish, let me just jump in.
Yeah.
Let me give you just a broader perspective right now on order book. Certainly, I think we are a little disappointed that at the closure of this quarter, we are not able to communicate a much stronger LOA position. That is a little unfortunate in terms of the timing of what we are expecting. Hopefully, in the coming weeks, would be a little more of a flurry of not only L1s, but the conversion of L1s into LOAs. I think our expectation certainly is that we will have a much, much stronger Q4 that will actually make up for the previous couple of quarters. We have also had a change of government in two states, in Maharashtra and J&K. That is where both our L1 orders basically are.
As a result of that, w e have actually had, I think probably a three to six -month delay that has been in our Maharashtra project, a land acquisition position that is going to probably get completed fairly soon. Our expectation is that we should probably end up having those conversions done there. There was a question also that you had with regard to the turnover being lower. Yes, as Rahul has said, it is as per our budget and it is comparable on an operating basis. Historically, our business is seasonal, yes, but it also basically is a little lumpy, depending on claim settlements and arbitration awards that we get from time to time. To some extent, the comparable quarter that you have before is not entirely comparable because in the previous basically-
Yeah. That I agree. But at the same time, the corresponding quarter in the last year as well, you did around, in standalone, you did INR 1,200 crore.
This is where we request basically you as the analyst community and our shareholders to look beyond this coming fiscal year. We've had such strong operational performance, and as we wind down our current order backlog, what is really going to see the growth in our future basically turnover and our profitability is going to come from new orders. To some extent, as we've said before in previous calls, that we'd like for fiscal, at least large portion of fiscal 2026, this is now we're closing 2025. For the next two or three quarters, you will see some softness in the top line because the conversion of our current new jobs that we intend to win will probably take about six months or so, and the current order backlog, as it winds down, will show a little softness in our numbers.
But that certainly as far as basically fiscal 2026, 2027, 2028, when you look at the future growth in turnover of the business and the profitability will not really, from a shareholder perspective, really be disappointing.
Okay. Just one last question. Did you receive any claims or awards in this quarter?
Girish, I think I'll let our CFO answer that question. We tend to not answer the question as directly, I'm afraid, as to whether-
Okay.
-we did or we did not. Unless, of course, Girish, you may clarify that we did not-
Yeah.
-in this quarter get any.
No, I think I can answer it in such a way that we did not receive any material claim or award in this quarter.
Correct.
There is some marginal thing, as compared to what we have received in last quarter. That's why you are seeing also the reduction in turnover, what you have seen in this quarter vis-à-vis last quarter. But specific numbers-
Okay.
Naturally we would not like to share what is included.
Okay.
What is excluded. Yeah.
Yeah. That's it from my side. Yeah. Thank you.
Yeah. Thank you.
Gaurav, you may please start. Gaurav, can you hear me?
Yeah. Can you hear me?
Yeah. Go ahead.
Yes. Thanks for the opportunity. My question is on the subcontracting expense. Looking at the December quarter figure, we have INR 316 crore against the September quarter number of INR 758 crore. Quite a significant drop in that number. Can you please provide some more color on it? Does it mean slower execution this quarter compared to last quarter?
Gaurav, that is not the case. See, the accounting as far as this cost of material consumed and subcontracting expenses, it is based on the accounting standard of accounting revenues and cost, that is Ind AS 115, which has a particular method in which you can account. That is the first statement. Secondly, we have certain turnover which is of our own and which is something what is subcontracted. If at all in a particular quarter, if at all we have done a turnover more where we have subcontracted the work, naturally the subcontracting cost of that quarter goes up. In particular quarter, when this execution of subcontracting is less as compared to our own execution, the subcontracting cost goes down.
It depends on composition of my revenue, what I have, and the typical nature of accounting standard, the way it is accounted, which is called, just for your information, cost-to-completion method. Because of that, typically abnormalities will be seen.
But it doesn't mean the slower execution this quarter, right?
No, absolutely not. Rather, that's what Rahul has confirmed, and I'm reiterating, that we have done the turnover, what we have envisaged for the quarter fully. We are not even down by 1% than our estimation from our budget or expectation, both.
Okay. Thanks a lot.
Yeah.
That's it from my side.
Thank you.
Shikha Mehta, you may please start. Shikha?
Am I audible?
Yes. Go ahead.
Yes. Hi. I just had a few questions. One is in our growth for this quarter and next quarter. If I refer to the last few con calls, we said
Shikha, you have gone on mute. Can you please unmute again?
Yes. Sorry. I'll just repeat my question.
Yeah.
I think earlier we had said that FY 2025 would be a washout year, and FY 2026 onwards we would start seeing growth. I think we have deferred that guidance from what I understand, that FY 2027 onwards we'd start seeing meaningful growth. Is that the right way to look at it?
No, I don't think that is the solution. We continue to state the same thing, that this year, that is financial year 2025, we might be more or less having a flattish turnover. But next year onwards, you can see the results once these tenders or the orders are converted. I mean, orders are issued in our favor during the year, during the next few months.
So we have-
A little bit of a lag, I guess. It would be fair to say about six months. There has been about a delay in sort of our plan, but I think the goal is for us to actually make that up considerably. As far as we are concerned from a profitability standpoint, I think that we hope to kind of still be on track for what we actually have planned in terms of our growth and profitability and margins.
Understood. So internally, you are expecting FY 2026 to be better than FY 2025 and 2027 better than 2026. Would that be the right way to see it?
Yes, you can take it that way. Yes, please.
One of the key measures for us, Shikha, as Rahul has already pointed out before, is an accelerated deleveraging of the business. We have a considerable amount of assets in the forms of our arbitration awards and claims. There is settlements that we expect to accelerate with our clients. There is award monies that deposit in court that we plan to actually have with our banks, taken out in prepaid debt. You will see a substantial reduction in finance charges is what our goal is to achieve.
Yes, while I think that you will have a combination of new jobs building in, pushing up turnover, I think next couple of quarters year-over-year, I think you could probably expect to see some softness, and that is because it will take time for the new jobs that we actually convert to actually flow into our P&L, which will probably be about six months from today.
When we say softness, do we mean around the same as this quarter? Or do we mean this quarter is the bottom, and then we-
Well, I guess it would be unfair for me to be more precise than the broader general statement that I have made. I think that my CFO would actually probably not be too happy if we actually give a little more detail than that. I mean, Girish, do you want to give any more color or is that
No, I think that is fair because we will not like to make too many specific forward-looking statements. Because this is not permitted also as per the-
Sure. I had a few more questions, if you would allow me.
Yes, please. Yeah.
One was with regards to the exceptional item this quarter. I understand we have seen a restructuring of our tax structure. I would just like to understand, going forward, do we have any other exceptional items expected? Because I guess Steiner is done, our tax structure is done. So going forward, it will just be business as usual, right?
Perfect. That estimation is perfect.
Understood. Lastly, on the nuclear side, we have been reading and hearing about a lot of things happening on the nuclear power side. Are we seeing any traction? Are we seeing any orders coming out or is that still very nascent?
See, the government initially had announced even last year that budgeted expenditure, what they have planned, INR 11 lakh crore, et cetera, they did not spend in full. At that time also, they were expecting that nuclear jobs of INR 2 lack crore-INR 3 lakh crore will be issued. However, they are not forthcoming as they were planned or expected. To the best of our knowledge, only one project got awarded, Kaiga. That is the only thing where we had also participated, but through our other partner, but that went to somebody else. Except that, we have not come across any other nuclear job in recent times.
All right. Got it. I will come back in the queue. Thank you.
Thank you.
Can I just request while we are on the subject of nuclear, I will just request our CEO, Mr. Jaspreet Bhullar, to give some comments on what we can probably expect. It is something that we are entirely focused on. We have a large market share in nuclear. We have a fantastic track record with the Department of Atomic Energy, and we do see these prospects actually be fairly bright in the future. Maybe he can give you some additional color in terms of what our plan and preparation is there.
Yeah. Mr. Dhawan, thank you. Shikha, basically, we have been involved in this sector since long, and we have executed many works recently. We have completed BARC Tarapur. We are doing reasonably well, I would say quite well at FRFCF. NPCIL, which is the client for basically nuclear projects, they are gaining momentum, and I believe that in next one year or so, we will get some good traction on the orders. I think nuclear projects require a lot of planning. That has been done by them, and we are quite hopeful that we will have some decent target to improve on these projects. Government of India is definitely planning big projects. It takes time. There are units which are coming up, which are smaller units of 250 MW. Some of the private players are also getting into it.
I would say that six to eight months, six to nine months, you will see some good movement in the sector.
Thank you so much.
Thank you, Shikha. Gaurav, do you have anything to add?
Yeah.
Yeah.
Today morning there was one news regarding Engineers India getting into nuclear power segment. Does it affect our positioning in the sector, and how is the competitive landscape looking like for the nuclear power segment?
Sorry, can you repeat the question once again?
Today morning, there was an article in the newspaper that Engineers India, the government of India company, getting into nuclear power segment. Does it affect our positioning in the sector, and how is the competitive landscape looking like? We have L&T also in the sector pretty active.
Yeah.
How is the competitive landscape looking like?
Engineers India Limited is basically looking at design. They are not into construction. They are working for the government agencies to do the design, and they are expanding their teams into nucleus also now. Execution agency is Nuclear Power Corporation of India. They have joint ventures now with NTPC. We are contractors, so it doesn't basically affect us at all.
Okay, basically.
We contract the projects. Engineers India Limited is more towards consultancy in terms of designing the project.
Okay, sounds good. Okay, thanks a lot.
Viraj, do you have an additional question?
Yes, hello.
Yeah.
Going back to your pro forma Steiner transaction, you referred to Eagle AG, having claims receivables of about INR 1,000 crore. Who are these claims and receivables against? Is it in Europe? Is there a court process for these claims? Is it bilateral with clients or older clients? Can you explain that a bit and what are the timelines there?
These are. Let me just quickly take that, Rahul. These are all counterparties in Switzerland for projects that have already been completed, because the construction business was wound down. In some cases, these are just basic receivables that require the closure of final bills, certain kind of reconciliations. In some cases, they happen to be substantial amounts that involve a portion of which are, let's say, in dispute, but do require to actually have an effort made with the clients to end up closing settlements of final bills. Some cases, there are a couple of matters which are in litigation. For us, this is something that we have targeted in entirety to see wound down in the next, let's say, conservatively five to six years. Our goal is to try to achieve as many closures and settlements as early as possible.
When we wound down the construction business in Steiner, I will basically say in a very circumspect fashion, there were certain counterparties who, because we were winding down the business, thought that they could probably take advantage of the situation and withhold payment. For that matter, dispute payment. I think as a function of this transformation that there has been affected with the bifurcation of the assets and the receivables as well as the real estate development business. It's now fairly clear that we have an entity, which is now focused on entirely basically closing these receivables out. We have a clear focused team on this that will actually see these obligations through in the coming months and years.
Understood. Arjun, are these receivables due entirely to HCC or does entity-
They're entirely due to HCC. Earlier, we had a structure where within Steiner, we had Steiner's banks. We had effectively other liens. We had banks. The banks, we had liens, we had other counterparties cross-collateral. Now as a function of this transaction, really as soon as basically the money is received from any one of these counterparties, the money comes directly to HCC. That structure basically is a much cleaner way to actually have these payments actually and these cash flows flow directly to us.
Understood.
Let me say it another way. The structure that you saw that Rahul presented earlier is within basically H56 Immo and Steiner. These are all debt-free entities without any kind of liens or without any other kind of cross-collateral, et cetera.
Right. Understood. Arjun, again, the INR 1,000 crore or the CHF 125 million, are these equally split between court processes and bilateral conversations or is everything in litigation in this case?
Yeah. Well, I would rather basically not go into that level of detail at this point in time.
Okay.
I think that let us reflect on exactly how we should and how we'd like to present this going forward.
Sure.
I will basically limit my comments to state that we expect a material portion of this to be recovered in the coming months and years.
Okay, that's good to hear. As you can see, I'm just trying to drill down on the balance sheet fix, right? As simple as that.
No, of course. I understand. I mean,
Trying to get some timelines around that.
No, no.
Is it a 2026 event, 2027 event, et cetera?
No, I appreciate exactly your first question in terms of figuring out how soon the de-leveraging will take place and how the earnings growth and where the earnings growth is going to come from, which is a function of obviously the new jobs that we get in, it is also a function, frankly, of the finance charges and how those basically come down-
Correct.
-on our balance sheet. These are the two simple metrics.
Absolutely.
I can just tell you with confidence that as far as the team is concerned, these are the two fundamental metrics that we are focused on as well.
Excellent. The last piece is Steiner India, the land assets. Is that more easily monetizable? Can we see that happen
That would be fair to say that these are less liquid. Some of these land assets include land in Lavasa.
Right.
Which frankly, and unfortunately, is seeing this very prolonged process of resolution. I think that we could probably expect, as far as we are concerned, obviously return on capital and any liquidity that we have today that we can actually have back in HCC and then generate that sort of higher return on is much better than it sitting on our books. We will be focused on a resolution very soon. We are talking about a fair amount of acreage, which by the way is reflected at book value. You can imagine it is a substantial amount of acreage. I think that we could expect something hopefully basically in the next year and a half as we have seen a huge interest, a much bigger interest, be evinced in Lavasa's resolution, more recently than it was the first time around.
Understood. Maybe if you can spend 30 more seconds on that, Arjun, on Lavasa. It is going through an NCLT court process and there are bidders coming in and lenders are taking haircuts and you would get a certain amount of land paid. Is that the broad picture?
No. Let us be clear. HCC has nothing to do with Lavasa any further after-
Right.
I think nearly about seven years ago or eight years ago, we took our full write off to Lavasa when it went into IBC.
Right.
All we own is effectively land in Lavasa. Part of this INR 43 crore sitting in this subsidiary is land that is owned in Lavasa, but it has nothing to do with anything else. We have nothing to do with the IBC process. We are not involved and-
Understood. Is that IBC process making progress in terms of the overall Lavasa?
As an erstwhile promoter of effectively Lavasa, we are kept the furthest away from any kind of progress and understanding as to what's going on.
Right.
From what I understand, because obviously, we would like to see it succeed, my understanding at this point in time is that the process has been restarted. The previous shortlisted bidder has actually been canceled. That guarantee was encashed. The banks have decided to restart the process again, and I hope that obviously with all the infrastructure and urbanization that is happening in Maharashtra, we are going to see a much better value and appreciation for the project in the coming future. As a result of that, I guess we could get some satisfaction that the project will actually see some light of day at some point in the future, just as an erstwhile promoter of it.
Right.
The minor benefit that would actually happen is the monetization of whatever land assets that we have in Steiner India's books.
Understood.
This land was actually acquired at the time because Steiner had actually, as a real estate development business, had an idea to actually develop that land itself, but it never happened. So we have now inherited it as part of this transformation.
Understood. Thank you. Good luck with the de-leveraging.
Thank you very much.
Kapil Agarwal. Your mic is loud. Kapil Agarwal?
Hello. Am I audible?
Yeah. Go ahead. Yes.
Kapil, let me interrupt immediately so that you don't have to repeat yourself. Your voice is not coming in clearly, so if you can kindly just maybe speak up or actually probably just shift the phone.
Okay. I will skip for now. We can go for later.
Okay. Bharat Mani?
Just, Sandeep, please make it a point that you follow up with Kapil with regard to the question he has and just offline, basically, please get it answered.
Sure, sir. Thank you. Bharat Mani?
Yeah, hi.
Yeah. Go ahead.
Just one small question. Could you just elaborate a little on why have you made EBIT losses in the engineering and construction divisions?
No, we haven't made any losses as such. From where you are referring this to? You are referring to standalone or-
The console level segment revenue. I could see engineering and construction division making an INR 7 crore EBIT loss.
No. I think when you get into a segment, possibly I need to also check for the details, but it would include some portion of the Steiner also. Because as I mentioned to you, some Steiner losses also have been, the expenses have been booked in this quarter.
That is real estate, right?
No. We had a construction division also earlier. There are some-
Yeah, but that has been divested for a while, right?
That is right. But few liabilities were also carried by us. Like we have carried this Eagle receivables, we have carried certain liabilities also of this construction business, even after divesting.
Okay.
Because of that, you might be seeing that loss. Yeah.
How much is the liability and should we expect something further in the next quarters?
No, I already explained that since we have divested Steiner completely, there is nothing on account of Steiner, either revenue or cost will come from next quarter onwards. We don't expect anything further coming.
This is the last quarter, right?
100%. This is the last and only quarter where we are having this charge because of the closing down or the selling of that asset completely.
Okay. Yeah. That is it from here. Thank you.
Yeah.
Shikha Mehta, you have any additional question?
No, that is all from my side. Thank you.
Okay. Anybody else?
Sandeep, I would like to come in just to explain that subcontract question.
Yes, go ahead.
I think Gaurav had raised it. When we are executing our jobs, when we get the project, every project has a different subcontract component depending on the nature of the job, execution strategy. When I say subcontract, it is job which is to be done through a subcontractor and we manage all the other enablers. Certain work we do directly. That means self-delivery. We deploy our own equipment, our own manpower. So every project has a different component of subcontract and direct delivery. Every project at a different stage, like in beginning, in between, in finishing, has again, a mix which is different than the total mix. Whenever you compare from quarter to quarter, subcontract expenditure, it doesn't yield to anything.
It is just a figure because that quarter, probably, a particular project which had lesser component of subcontract or the stage of that project at which it had lesser component of the subcontract that was executed. So there is no direct relationship between what we are executing as a total turnover. There is no relationship as a percentage. So it's a total mix, which is quite complex. I hope I have answered it in the right perspective.
Yes. Thanks a lot.
Hello. Am I clear? Hello?
Yes.
I wanted to know, does the private PSP project include in the order tender, order builders segment, or it's only PSUs?
It's included, Kenil.
Okay. Should we expect, there has been heightened government intervention in PSP segment. Should we expect a majority of our order wins in coming quarters will be majorly heavily related to PSP projects, 40% or 50% of our order wins? The order size will be also huge.
No. I think our order backlog that is currently represented will largely be something that you will see going forward. PSP, I think if we look at transportation will continue to form the bulk of our order backlog, probably ranging from about 50% - 60%. When I say transport, we are talking about metros, we are talking about bridges, we are talking about complex, basically, highway networks. Then hydro, which accounts for about, let us say 30%, which is going to increase because we have our remaining order backlog increase. I think of that basically 30% - 40% you could probably expect one or two jobs to certainly continue to be PSPs, but our traditional hydro will continue to actually be the bulk of our order backlog.
I wanted to know, there has been one huge order from Arunachal Pradesh for Dibang Hydropower project. Have you bid for that order or are we in the process of getting L1?
We do not comment on the projects that we have bid on until they have actually been opened and we communicate at the appropriate time.
Understood.
Once we are L1 on a particular job, at that point in time, we will communicate that and we will know where we stand on it.
Understood. No problem. No question further. Great results. Congratulations.
Thank you.
Anybody else? Please raise your hands. Rahul, you may please close then.
Okay. Since there are no more questions, we would like to close this call for today. We thank you all for participating and your encouraging words also, and look forward to meeting you again in the next quarter. Thank you so much.
Thank you, everyone.