Ladies and gentlemen, good day, and welcome to NCC Limited Q1 FY25 Earnings Conference Call hosted by JM Financial. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Shah. Thank you, and over to you, sir.
Yeah. Thank you, Vibeka. On behalf of JM Financial, I welcome everybody to the Q1 FY25 earnings conference call of NCC Limited. We have, from the management today, C.R.S. Raju, Director of Projects, Sanjay Pusarla, Executive Vice President, Finance and Accounts, and Neeraj Sharma, Head of Strategy and Investor Relations. I hand over the call to the management now for their opening remarks. Over to you, sir.
Okay. Thank you, Mr. Raju.
Sir, sorry. Good evening, ladies and gentlemen. A warm welcome to all of you into the Q1 FY 2025 investors' earnings call of NCC Limited. The presentation containing the performance of Q1 FY 2025 was uploaded on the Stock Exchange website and to our website. Now, I will take you through the key highlights of the first quarter, and thereafter, we will take you to questions and answers. The interaction is broadly divided into three following sections. In the first part, I will talk about a brief overview of the business environment and prospects for our company. In the second part, our CFO will brief about the financial performance of the company for the first quarter. In the third part, we will attempt to answer all your questions and clarifications.
Before going to the details, the usual disclaimer of the presentation that we have uploaded on the Stock Exchange and our website today, including the discussions that we will have in this call, contains or may contain certain forward-looking statements relating to NCCL business prospects and profitability, which are subject to several risks and uncertainties. Actual results may materially differ from those in such forward-looking statements. Now, when it comes to the guidance, we have given a guidance for order booking in the range of INR 20,000-22,000 crore for FY 2024-25. The order pipeline of NCC is very strong at this moment, and we expect that the company will achieve the given guidance for the order booking. We have given a guidance of 15% growth in invoice booking, against which, in the first quarter, we achieved 23% despite the elections and steep high temperatures at various places.
Therefore, we are confident to achieve guidance given for FY 2025 for invoice booking. With respect to the margins, the company achieved 9.3% EBITDA margin in Q1, as against guidance given for a range of 9.5%-10% for the year as a whole. So, going forward, we expect to reach 9.5% EBITDA margins. It comes to the earlier visit to discuss AP projects. Now, all of you are aware that there is a change in the government in AP. So, NDA-led government is there now, and particularly the earlier ruling party. It is a pro-development or a pro-infra development nature of the government. So, when you take the prospects in the AP now, there is a positive outlook with respect to the AP projects now. The orders relating to Capital City abandoned four years back. Now, there is a chance to restart those orders.
Further, the pending payments relating to the projects awarded prior to 2019 are going to materialize in a couple of months. With this, there is an overall positive outlook with respect to AP projects for the company from the growth perspective. Further, in the recent budget, all of you are aware that about INR 15,000 crore specific allocation made for the development of the Capital City projects. And further, the other allocations were also given for the infra development across Andhra Pradesh. So, with this, the NCC company has a good opportunity to, again, restart the works and to realize the unbilled amounts. Similarly, in the union budget, there is a special allocation of funds given by INR 26,000 crore for infra development and INR 22,000 crore funds for Bihar State. In Bihar State, NCC is doing already several works.
So, here also, we have the chance to get the orders besides the orders from all over India. About the debt of the company, as far as debt is concerned, there is an increase in debt from that of the previous year by about INR 8-15 crores. So, there are two primary reasons for increase in the debt. The first one is, generally, in the construction industry, the debt increased in the first and second quarters and comes down in the third and fourth quarters. The second reason is because of elections. There is a slow process in releasing bills and allocation of funds by the clients. So, but in subsequent months, in July 2024, the company received nearly about INR 500 crores of payment spending in the first quarter. With this, the debt question also from the debt question also now comes down.
NCC Vizag Urban Infrastructure Limited is concerned, in the first quarter, we received an amount of INR 67.25 crore relating to the sale of our equity investment and a balance investment of INR 232 crore we expect to receive in two to three months' period. Now, I will hand over this mic to Mr. Sanjay, our CFO, to take up the second part, detailed brief on the operating and financial performance of the company. Good afternoon, everyone. This is Sanjay Pusarla, EVP and CFO of NCC Limited. I'm going to give you a brief on the performance of the company at the standalone level and the consolidated level. At the standalone level, the company has achieved a turnover of INR 4,747 crore, which is 23% higher when compared to the same quarter of the last year. Similarly, in the case of EBITDA, also, there is an improvement.
The EBITDA for this year, for this year, first quarter is INR 439 crore, as against INR 380 crore in the previous year. Similarly, same PAT also, there is an increase of about INR 38 crore. That is INR 200.74 crore in the first quarter of 2024-25, as against INR 162 crore of the last year. There is an increase of about 24% in the PAT level. For the consolidated level, the turnover at the consolidated level is INR 5,558 crore, as against INR 4,407 crore, showing an increase of 26%. And at the EBITDA level, the increase is 21%. If it is current year, it is INR 478 crore, as against the previous year, INR 409 crore. At PAT level, attributable to the shareholders, the current year, it is INR 210 crore, INR 209.92 crore precisely, as against INR 173.54 crore, which is a 21% increase.
The order book position, as on the beginning of the year, the order book was INR 57,536 crores, and we have received an order of INR 408 crores in the first quarter. After eliminating the execution in the first quarter, the order book stands at INR 52,626 crores as of the end of June 2024. Okay. Coming to the trade receivables, as it was explained earlier, the debt position has a little bit increased because of the first quarter. As it is in the nature of the construction industry, the first quarter debt level will be a little higher. Besides that, because of these elections, the corrections were a little hampered and realizations were slowed down. The details stand at INR 3,654 crores, as against INR 3,063 crores as of the same date of the previous year.
Compared to 31 March, it was almost like INR 900 crore higher when compared to 31 March. The debtors collection period, as of June 2024, stands at 86 days, as against the 57 days of 31 March. When you compare with the same period of the previous year, it was 82 days. That means it is 86 days in the current quarter, as against the 82 days of the same period of the last year. Coming to the advances, like mobilization advances, there is an increase of about INR 100 crore. It stands at INR 2,425 crore as of the end of March 2024. The interest-bearing advances, of which 72% of the advances will be interest-bearing, about INR 1,751 crore. The average interest works out to 9.5%, which is less than what it was there as of March 2024, which is 9.72%.
A year before, it was 10.72%. The advances, the average interest rate has come down by almost like 22 basis points when compared to March 2024. I'll be explaining about the unbilled revenue. Unbilled revenue, as of 30th June, is INR 4,719 crores, as against INR 3,859 crores in March 2024, which is 25% of the turnover. When compared to the previous year, previous year it was 21%, and this year it was 25%. The increase in unbilled revenue is due to the reasons which we have explained before. There was a slowdown in the billing process, but all these things were cleared in the month of July. As regards to debt position, I think Mr.
Raj has already explained to you that the debt as of 30th June 2024 is INR 1,819 crores, as against INR 1,005 crores as of the end of March 2024, showing an increase in debt utilization by INR 814 crores. So the finance costs, when we compared with the last year, the finance costs have come down from 3.45% to 3.25%. The gross finance cost is INR 153 crores, and the net finance cost, after eliminating the income and in terms of interest, is coming to INR 132 crores, which is 2.8% in the first quarter of this year, when compared to the same period of the last year at 3.03%. The interest cost is coming down to this extent. Yeah. So now the session is open for the question and answers. Yeah.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead, sir.
Yes. Good evening, sir, and thanks for the opportunity. My question is on this, sir, on the new government. Do you think the old projects can be revived meaningfully? If I remember correctly, I think orders worth INR 100 billion was got canceled last time in 2019.
Okay. AP projects. Now, there are three parts we can discuss the AP projects. In 2019, the government has canceled certain orders. And at the same time, they abandoned certain orders. They have not canceled those orders, but they are in force. And certain orders, they asked us to continue, and that we are continuing those orders. About the Capital City projects, which are there in force now, but only the amounts are outstanding from the client. Works are abandoned, but they have not canceled those orders. So those orders, since Capital City now coming up, so we have a chance, and the government also asked us to restart those works. But whether we take up those projects at the given dates and other things is a big question to see. So therefore, a lot of discussions take place between the client and the NCC.
Basing on the conclusions, those orders, roughly at this moment, we can say about INR 5,000 crore. Those orders may restart. About the order cancel, that is, again, a different outlook. Again, the government, again, will come up with a new term or they may revise those orders. And how they are going to be at this moment, we cannot talk on that one. But we have to wait for some time to have more clarity about the government conclusion on that one.
Understood, sir. My second question is on the order inflow. We start with a very, very soft quarter in Q1 terms of order inflow. While you've seen that some of your competitors have received a decent amount of order inflow, especially post-June, how do you think about the order prospects for the balance of the year, and which are the segments where you are more positive compared to last year?
Yes. So in the first quarter, yes, about order pipeline concern, we have a strong order pipeline. And we have some orders waiting for the LOAs orders. So once those LOAs come, then in the first half year, whatever the guidance we have given, and mostly we achieve that guidance for even first half year also. So for the year as a whole, at this moment, the company is confident to achieve whatever guidance given for the order booking.
Understood, sir. Thank you, another sir. Thank you.
Thank you very much. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead, sir.
Yeah. Thank you, sir. Sir, just to clarify in the sense that we are seeing that a 15% revenue growth for this year and 23% we have already done. So is there a possibility that this number growth of 15% can even go up to 18%-20% for this year?
Yes. That's one, based on the present order progress taking place in the first quarter. There are chances, but in the third and fourth quarter, the order, the invoice booking out of the new orders to secure in the year 2024-25 is to be seen, isn't it? We have not got any orders into our books of accounts while we are waiting for the LOAs. So barring that one, definitely 15%+ would be there, the invoice booking in the remaining quarters. In the second half year, at that time, we can comment on that one about how the third and fourth quarter progress. At that time, again, we will confirm you on that one.
Okay. And on the margin front, in the presentation, we said that 9.5%-10%, but in your opening remarks, you said 9.5%. So slightly on the lower band of the margin. So that's what we are seeing, whatever the orders that we have won, and we are about to execute where we are likely to see a slightly lower margin, and that's what we are saying maybe we can achieve a lower band of 9.5% EBITDA margin.
Yes. So in the guidance work we given, 9.5%-10% that we have given. So the first quarter, we achieved about 9.33%. So as a result, at this moment, the minimum range band, whatever is there, 9.5%, we are confident to achieve 9.5% level. And again, more or less about 9.5%, okay, we have to wait and see about third and fourth quarter results.
Sir, L1 orders are two MSRDC and one another project. The value is close to INR 8,700 crore, if you can reconfirm?
Yes. INR 8,500 crores.
We are above that number only. Yeah. Okay. And sir, just a couple of data points on the balance sheet front. So inventory data, retention money, and loans and investment to subsidiary and associate.
One second. Yeah. Sir, can you please recall what you are looking for?
Yeah. Inventory, trade payable, retention money, and total investment in subsidiary and associates.
Yeah. Inventory is as of 31st March is INR 1,400, and as of 30th June, it's INR 1,300. Okay. Retention money is INR 1,500 as of 31st March, and it is INR 1,532 as of 30th of June. Okay. And investments is INR 1,033 as of the end of March 2024, and it is the same level even as of the 30th March.
What was the loan numbers, which was INR 509 crore as of March to subsidiary and associates?
509 as of the end of March, and that was 473 at the end of the first quarter now. There is a reduction.
Trade payable as of June?
Trade payable as of June is INR 5,481, and again, INR 4,966 as of March.
Okay. And lastly, possibly, the CapEx, how much we have done and for full year, how much we are looking at?
Full year, we were budgeting around INR 250 crore, and we have done around INR 51 crore as of the end of the first quarter.
This does not include the J. Kumar JV TBM?
No. We have already told in the last year itself that when it is coming, it will be added in the CapEx additionally.
Okay. Okay. Thank you and all the best, sir.
Thank you so much.
Thank you very much. The next question is from the line of Parvez Kazi from Nuvama Group. Please go ahead, sir.
Hi. Good afternoon, sir. So you mentioned that on certain projects in Andhra, the payment is still pending. So what would be the quantum of such payments we have still yet to receive?
Okay. Now, there are two or three parts out there. The first part is about the funds blocked on account of the Capital City projects are about INR 150 crore. And the running projects are about INR 350 crore or INR 400 crore out there. So now, already, the dialogues are taking place with the government, and we expect nearly INR 300 crore to materialize in a couple of weeks. Out of that one, thereafter, some clarity will be known about the continuation of the projects. Some of the projects are already running. There is change in the government, and what the priorities of this government from that of the earlier government, what works they ask us to continue, what works they give the priority. Based on that clarity, some of that will come. But as far as the pending payments are concerned, we expect about INR 300 crore to materialize in a couple of weeks.
Sure. So when we say that INR 350 crore-INR 400 crore is on account of running projects, these are also in Amaravati and running, or these are projects in the rest of the state?
In the rest of the place, these are the projects which are running in the rest of the places, other than APTIDCO and Amaravati projects. They are called medical colleges and APMSIDC projects. Water projects, water supply projects.
Sure. What would be the cash level at the end of June?
Cash. INR 140 crore.
140 crore. I get the sum right?
Yes, sir.
Sure. Last question, it would be great if you could update us about the status of the Jal Jeevan Mission Project and also the Smart Meter Project. Thank you.
Thank you for the Jal Jeevan and Smart Meter. About the Jal Jeevan project, by the end of June 2024, we have completed 60% of the projects. The balance we have about INR 6,000 crore as of this date. By March 2025, we expect to complete about 95% of the projects. About the Smart Meter projects, the Bihar project is one already we issued the orders for supply of meters and supplied the meters, about 80,000 meters supplied. 55,000 meters we installed, and also the software system is also installed into that one. Now, the client is verifying the system as properly synchronized with the IT system and communication system. The checking is over, and our department, our division, is expecting this clearance from the client in a month's time. Thereafter, once the clearance comes, they continue to install the meters. That is about this Bihar project.
They also done the mobilization at once of the first lot to spend for the project. And about the Maharashtra state two packages are concerned, there is now the client changed priorities, changed that one, and they are given priority to install the meters at the offices rather than at the total remote villages. Installation at the offices means in a scattered place, the progress of the installation will be low. So in the first two, three months, the progress would be low. And once the government gives the clearance to install in the total village, then the progress will pick up. So thereby, we expect that Q2 and Q3 may not be there good progress. And in Q4, we expect to pick up the progress on that one.
Sir, but you expect any impact of the Maharashtra election on this approval, etc.?
Certainly, we are also cautiously moving on that one. We are not aggressively moving, keeping the elections ahead. And thereby, we will also want to do, as per the client, go in this slow pace because every uncertainty would be there when elections are there. Even if I done the work done as per bill process, payments are concerned, there is some uncertainty. So we are going a little bit slow as far as Maharashtra projects are concerned. And the rest of the things, whatever requirements are there, that we are doing except buying and installing the meters.
Sure, sir. Thanks then. All the best. I'll come back in a bit.
Thank you.
Thank you very much. The next question is from the line of Prem Khurana. From Anand Rathi Shares. Please go ahead, sir.
My question, sir. Sir, two questions. So one was with respect to TAQA settlement that we had achieved sometime back. I mean, INR 175 crore was the number that we were supposed to pay to TAQA, and INR 90 crore was paid last quarter itself. So what's the status on the balance amount? Has it been paid, or it is still to go?
We have paid the second installment of INR 45 crore which is due in June, and the third last installment is due in December. We expect to pay on time as scheduled.
Sure.
And the second, and I'm not sure I'm going to, I mean, in the opening remarks, I joined a little later, so please pardon me. I mean, if it is already answered. But I mean, we were looking to have a partner for our smart meter business. I mean, any progress there that you could share with us?
Partner. Partner.
Okay. So the two SPV projects, we want to onboard a partner, right, wherein we were willing to kind of give away 50% sort of economic interest. So have we been able to identify any partner and what sort of dilution we'd be willing to kind of go with them in?
Mr. Khurana, good evening.
Good evening, sir.
I think Mr. Raju, my colleague, Mr. Raju, has already brought to your attention the fact that for the Maharashtra project, which is in JV, we have decided to go a bit slow. That said, we have initiated discussions with a couple of potential investors. So as and when the pace of the project picks up, we should be in a position to finalize the partner.
Sure. So the plan stays, but in obvious time, you would want to make some progress before you go ahead with the plan.
Right. That's right. Because at the end of the day, there is a mobilization advance, and we have to raise the equity when we have to really procure those meters in bulk. For that, we need the money. So currently, as Mr. Raju brought to your attention, we are going a bit slow. As and when this picks up pace, we will have a partner on board.
Sir, any thoughts on, I mean, how many vendors are we dealing with to kind of procure meters? I mean, given the fact that there were many orders of the same nature, I'm not sure if the industry has that sort of capacity to be able to kind of produce those many meters. So how is the situation? I mean, I'm sure you would have already assessed the situation in which you would have taken the orders, but I mean, if you could share your thoughts on how easy or difficult is it to be able to find a vendor?
It's a big question. Now, vendors are there in the market, and it is not a big challenge for the company to procure the meters identifying this one. But a lot of work is going on in that front. Ultimately, what we look for is a reliable quality and lower price. These are the primary objectives. So on that one, a lot of exercise is going on. To keep the progress, already we identified, and the suppliers supplying the meters. But going forward, it goes in a different manner, not depending on one supplier. So like that, the exercise is going on, and this moment it is not correct to detail vendor names and other things.
Mr. Khurana, if I may add my two cents to your question. So in this project, the ownership rests with us for about a decade or so. So at the end of the day, we are responsible for the performance of the meters for a decade. And in most of the tenders, conditions talk about some kind of technology platform, not a name of the vendor X, Y, Z, A, B, C, or so. So if there are plenty of vendors available in the market, we have to also keep in mind the fact that to how long these vendors should be in a position to support the maintenance of these meters, operations of these meters for about a decade's time.
So the technology platform is available, and there are a lot of people who should be able to qualify for the SLAs which are required for the performance of these meters. So we will decide at the right point of time. But I don't think that is going to be a challenge for us.
Sure. And just a last bookkeeping question. If you could help me with the bank balance number. You gave the cash number, but if possible, the bank balance number, please.
140 crore cash and cash equivalents. INR 140 crore cash and cash equivalents as of 30th June 2024. As against before INR 89 crore of March 2024.
For margin money deposits, how much would that amount be? I mean, if you could share, please.
694 crore now.
674?
694.
Sure. Thank you. And all the very best for you. A few more, I'll come back in a bit. Thank you.
Thank you very much. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, sir. Hello.
Hello.
Congratulations on that decent quarter. So my first question is on the AP ordering. So if I remember correctly, at the peak, you had an order booked close to about INR 18,000 crore from AP. So directionally, how do we see the ordering happening in AP? Do you think that over the next three, four years, there could be a big catch-up? Because in the last four, five years, nothing much has happened from the ordering point of view. So how substantial can this opportunity be for you?
Talking with AP, right? Please.
Mr. Parikshit, could you please repeat your question? Is it about AP, or is it about the market as a whole?
No, no, no.
Yeah. So I'm talking only about AP. At the peak of your order book, AP was contributing about INR 18,000 crore to the total overall order book. So just on it, understand from the point of view of next three, four years, how do you think how.
Yeah. Your voice is not very clear to us. Could you speak a bit louder? But by the way, I have understood your question.
Yeah.
So I would answer this question in two parts. Firstly, it is premature to talk about what kind of projects are really coming for bidding, what is the competition, what is the size of the project, and who are the people who are finally going to qualify. So we will cross the bridge when we get to it. At this point of time, it is really difficult to even estimate what kind of projects are coming, what is the size, nature, vertical. So we'll cross the bridge when we get to it. That said, the second thing that I wish to bring to your attention is we are not a company that is currently dependent on only one state, AP or X, Y, or Z. You must have seen in the investor presentation that we have uploaded on our website.
We are a pan-India company. We have projects from almost all the states. We are quite confident to go to any state of the country wherever good projects are available to bid for the projects, bag the projects, and execute the projects. Specifically, coming back to the AP, once the projects are announced, then we should be in a position to really talk about a possible number, whether that may be the top contributing state or the second top contributing state or the fifth. That time hasn't come as we speak.
Given your current, I think, if you can just repeat, what is the current inflow guidance? I think you spoke about INR 20,000-25,000 crore for inflows of this year, right?
Yeah. Let me repeat. The inflow that we have shared with the state is a band, is time for a change. That is INR 20,000 crore-INR 22,000 crore.
Okay. And you're not expecting any meaningful contribution in this to come in from AP?
May come, may not come. The kind of media reports which are coming out that the government itself is trying to study which are the right projects to start. But we.
No, I understand, sir. I mean, in your assumptions, you're not building a big order inflow from the AP in these numbers of so 20. So if anything comes from AP, it could be a positive surprise on this number, right?
Of course. Of course. When we shared these numbers with you way back in mid-May, we did not have all these developments available with us. So the guidance that we have shared with the state is all these states minus AP, if you prefer, you could say that.
Okay. So my second question is on the entire transmission and distribution opportunity. So what is the play for us there? Do you think now with Power Grid giving large orders on the transmission side, do you think we'll participate in that or we'll focus on lower voltage segment, maybe more on RDSS opportunity and state utility side? So if you can highlight the opportunity and the play for us there.
See, there are all three kinds of opportunities which are coming. Though we have done a lot of projects on HT side also, we have the qualification for 400 kV transmission line, even higher transmission line. We have also done 220 kV. But those kind of projects which are really coming for bidding are some kind of BOOT kind of model in which you have to invest some equity, coming to some date. So we are actively looking at those projects. But I think the prime activity currently is happening in the LV space. That is RDSS scheme. RDSS scheme is a signature project of the Government of India, well funded. The total outlay available is more than INR 300,000 crore. The funding is already in place, largely by PFC and REC.
I think that is the main chunk of the market that we are currently focusing upon.
Okay. Just last question. So now most of the Indian players are, I mean, of your similar size like KEC, Kalpataru and all. So my question was more on the opportunities they are playing in T&D on 400 kV and above, 400, 765, 800 kV. That was there. And related to that, again, are you revisiting your international strategy? Do you think that now it's time to revisit and start also looking at opportunities in international market or you think that India is self-sufficient wherein you can still grow domestic orders?
Currently, we are not focusing any international market. We think this market is sufficiently large for us to give us the inflows that we really need for short to medium term. So currently, our focus continues to be the construction market in India.
Hello. Okay. Just last thing, if you can help me understand, what is the pending real estate payments on the land we have sold in Vizag?
That is INR 33 crore. That is the equity part. And there would be the loan part that is expected to come to us in the next couple of years. I repeat, the equity portion, the pending payment from the client is about INR 33 crore. And then we are expecting to get the loan back in the next couple of years.
What is the loan amount, sir? Total loan amount pending?
370 odd. 377. 377 to be accurate. As of 30th June.
This is expected by when? INR 377 crore? Any revised date or when is?
Next two years.
Next two years. Okay. This balance, INR 33 crore, is expected when?
In 2-3 months. This quarter.
Okay, sir. Sure. Sure, sir. Thank you, Mr. Alvarez. Those were my questions. I'll join back in for more questions.
Thank you very much. The next question is from the line of Dhananjay Mishra from Sunidhi Securities. Please go ahead.
Yeah. Good evening, sir. All my questions are answered. Just one question again on AP part. So given the past experience we had, although you said that this incumbent government is pro-development and central is also supporting this year or maybe next 4-5 years going to support state government and more projects will come. But in terms of our exposure, would we like to be selective in AP given the past experience or you will be, I mean, aggressive in bidding project in AP?
Let me answer your question a little differently. Being a listed company, we have a committee of the board, and we look at the statewise, vertical-wise risk very carefully. So not only for the AP, for any state or any vertical for that matter, we do not really believe in going aggressively, just bidding for the sake of bidding, bagging a project for the sake of bagging a project. We never have followed that strategy, and we continue to have the same stance as far as aggressive bidding is concerned.
Okay. Thank you, sir.
Thank you. Thanks.
Thank you. The next question is from the line of Nitisha, ICICI Securities. Please go ahead.
Thank you so much for taking my question. I know that you've already answered a couple of questions on the order book, but I still wanted to know the LOAs that you said you'll be receiving. What is the amount of that that is pending, number one? And how much do you think could be cleared in this coming quarter from that? That's my first question.
The second part comes to you.
I mean, that order book, we have already explained earlier that around INR 8,500 crore is the orders which are in the pipeline. And we are expecting those orders to get matured maybe in this quarter.
Okay. So you are expecting the entire balance to be matured in this quarter?
As on date, it is the expectation, and we have to wait and see. Yeah. Mishra, as I said, this is a priority of the client. When the client intends to award the order, then only we get it.
Right. Of course.
It doesn't really depend on the kind of efforts that we make. We might prefer to have it tomorrow morning, but they may not be in a position to award. So hopefully, in this quarter or maybe next quarter, we are quite hopeful to get those projects.
You also, of course, the PPT mentions the order inflow for the first quarter. But in the last two months since this quarter has started, have we received any new orders?
You're talking about the second quarter?
Yeah. Second quarter. Have we received any orders in the second quarter?
We have not received any. Even if we receive, we would first submit that to the stock exchange. As we speak, we have not received. All that we have is what we have shared with the PPT.
Okay. Okay. And in smart meters, again.
I'm sorry, Mishra. May we please request you to return to the question queue for follow-up questions?
Okay.
Thank you. The next question is from the line of Vishal Periwal from Antique Stock Broking. Please go ahead.
Yes, sir. Thanks for the opportunity. Sir, in this quarter's presentation, so the order book has a composition of mining as one of the segments. Is that fair to understand that the order book, which is mining, will be executed within 12 months entering?
Yes. Now, the order book, whatever we given in the order book, is for a period of 3 years. So that is executable in 3 years' period. At this moment, the progress in the project is going well. And whatever now we considered in the budget of FY 2024-25 from that company or from the project is achievable. And the order book will go on increase every year since it is a long-term project of 25-30 years. So whatever value given in the book that represents 3 years' value.
Okay. 8% is three years. Got it. Maybe one clarification. In the initial part of the commentary, you did mention that Andhra roughly, INR 5,000-odd crore worth of project would get addressed. So these projects, they are part of the order book or they have been dropped and then further they can come back as an order inflow for us?
It is not there. It is not there in the present order book that we have dropped earlier.
Okay. Okay. Okay. Sure, sir. That's all from my side. Thank you.
Thank you very much. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah. So continuing, sir, if this INR 5,000 crore comes up, so our order inflow that we are looking at INR 22,000 crore plus this INR 5,000 crore if it comes back and plus if AP anything more comes up. So that's the way one can look at it.
Already that part was explained by your colleague. In the budget, no orders we consider from the Andhra Pradesh. So now if any orders come, generally projecting the order book. So again, this INR 22,000 crore, there is no order in addition to that. It can also vary. Downward may vary or upward may vary even without Andhra Pradesh. So when Andhra Pradesh is there, there is a positive outlook to book more orders than what we given in the guidance.
Got it. Got it. And sir, in terms of the debt level which you have mentioned that it normally increases in the 1H and then it reduces, so by end of FY 2025, how we look at in terms of the standalone gross debt level?
Now, according to our plan, is to stand at INR 500 crore level by end of FY 2025.
Okay. Okay. Got it. And in terms of this Sembcorp, we were supposed to get INR 47,000, 47 crore. Have we received it?
No. It is not received. There are certain issues for which the Sembcorp went to the court. At the same time, NCC also went to the court. Once that court proceedings are over, then only the result will come about that payment. It takes some time.
Okay. Okay. Okay. Okay. Got it, sir. Thank you and all the best.
Thank you.
Thank you very much. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.
Yeah. First, we mentioned that our exposure to AP, so receivable would be around INR 150 crore for capital city and for running projects around INR 350 crore-INR 400 crore.
Yes, sir.
The total amount is roughly INR 500-550 crore. So what was this amount as of March 2024?
At the same level. There's no change in the first quarter. Since the elections are taking place in AP, no significant change taking place from the date of March 2024 to June 2024.
We expect this INR 550 crore to come down to around 200 odd crore in the next couple of weeks?
Not a couple of weeks totally. Some progress is there. Gradually, first, they may release INR 100 crore. Thereafter, another INR 100 crore like that will be taking place. By end of second quarter, some clarity will come. By end of third quarter, some more amounts also may get released.
Okay. Okay. Thank you, sir.
Thank you very much. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead, sir.
Yeah. Namaskar sir, and thank you for the opportunity. Firstly, when you mentioned about order intake of, say, INR 22,000-INR 22,000 crore, what is our bid pipeline out of which we are looking at the conversion rate of INR 22,000-INR 22,000 crores?
Mr. Kapoor, we have a very healthy prospective pipeline of projects, close to INR 200,000 crore. It's a prospective pipeline of projects, but it depends at what time client intends to award which project. So this is a function of the time and the decision-making cycle of the client. But we continue to have a very healthy pipeline of prospective projects for the next 12 to 15 months.
Sir, what is our O&M component in the order book?
What do you mean by O&M component? Oh, okay. O&M, operation and maintenance.
Operation maintenance, yes, sir.
Now, in this order book, for all the major orders, for all the major orders, what we secured in the last two years, particularly the Malad water treatment project, the Malad project, the Vizag project, in all the projects, whatever O&M part is there, that we have excluded in the present order book. That will only take into the order book as and when the project is completed, as and when we start the O&M. That is the policy of the company. As such, for all these major projects, O&M content is not there in the present order book. But in some of the other small size of orders, INR 300 crore, INR 400 crore, INR 500 crore orders, the one-year O&M, some INR 20 crore, INR 30 crore, small amounts, they will be there in the order book along with the main order value.
Okay, sir. But just to hop on it, so for revenue from operation at a control level, what is the O&M component there?
Okay. From the O&M content, we can take about 10.
10.
10%.
10%.
10%.
400-500, 4%-5% of the major order book will be there. Okay. So the revenue of INR 5,500 crore has an O&M component of INR 550 crore, to be precise.
That's 4,500 to 500.
400 crore-INR 500 crore. INR 400 crore-INR 500 crore.
Yes.
Sir, when we look at the order book setup in the various verticals, irrigation part is very small, only 2%. So can you allude to the factors? Is there not enough work in the irrigation sector, or what's the reason for a very small order book?
Yeah, yeah. You are right. Unfortunately or fortunately, the irrigation continues to be a state subject. There have been few awards, but this is not a very focused business area for us. We have four large focus areas or divisions. Irrigation is a very small business for us, and depending on the experience that we have had in the sector in the past, in the last two decades or so. So we are very selective. Let me say that. We are very selective in bidding for irrigation projects. In the irrigation project, there are a lot of permissions, forest clearance. These projects are in very vast areas. This involves many times states. So we are very selective in this space. That said, there are four large divisions that I take this opportunity to share with you, which are giving us the orders that we really need.
The first one is the buildings division. The second one is the transportation division. The third one is water division. And the fourth one is electrical T&D. So these four businesses are the focus areas for us. And I have already shared with you that the fact that we have a very healthy prospective pipeline of projects. And we are very happy to concentrate on the sectors that we think are profitable, sustainable for us in the long term. I hope that answers your question.
Yes, sir. Sir, a small concluding point. I think so this time, it is mentioned in the notes also that the board has given approval, in-principle approval for amalgamation of NCC Infrastructure Holdings. So if you could just share your thought process on this procedure, although the rationale has been mentioned, but why has this timing been selected now? And if you could give some more color.
NCC IHL is a wholly owned subsidiary. That is the reason we thought, okay, we will merge that into this. Two things which we were thinking to achieve. One is on the tax benefits, okay, by getting the dividends into the main company so that they can get exempted because of the dividend declaration by the main company. So the second one is on the administrative control and cutting down of the cost and also limiting the number of entities. These are the advantages we thought, okay, we'll have it when we have the merger of this amalgamation of this NCC IHL with NCC.
Sir, concluding point on the major projects and their execution, you alluded to the fact of UP project component having INR 6,000 crore of unexecutable portion that will get executed by this financial year. However, in your presentation, slide number 23, you allude to the fact of INR 1,635 crore as survey design, drawing, and construction, multi-group villages scheme, water supply scheme in Agra. So if you could explain this, my understanding, where I'm getting it wrong?
No, no, no. I will explain. I will try to explain this question to you a little bit. We are executing Jal Jeevan Mission projects, different kinds of projects. There are two broad buckets of these Jal Jeevan Mission projects. The first bucket of projects is about the households, primarily rural potable water connections to the households. This is the first part. So we are executing this project. As well as we have bulk water supply projects. We have two large projects in Agra, Firozabad, in these two places. So in this slide, what we intend to do is to share with the investors and analyst community the broad span of projects that we are executing. This is not a total number. If you add these projects, all the value of the projects, this is not INR 52,626 crore.
What we intend to do here is to highlight what are these signature, marquee projects that we are currently executing. Just to give a sense of the span of the complexity, the different verticals, the projects that we are currently executing. That is what the intent is.
Okay, sir. For the UP project, sir, can you give the number, what is the execution amount we have executed for Q1? You have given INR 6,000 crore will be spread over the coming three quarters. But how much have we done in terms of the billing?
Please?
Ma'am, let me complete, and I'm done with this. How much have we?
We had total order value of about INR 17,000 crore from this mission. We have already executed about 60%-70% of the project. What remains to be executed in the next three quarters is about INR 6,000 crore of the project.
Yes, sir.
To answer your question, how much have we done in the first quarter? 1,212. 1,212. I repeat, what we have done in the first quarter is INR 1,212 crore.
For Q4, what was the number, sir?
The last year, we have the number. Last year, we have done about INR 6,000 crore.
Total, total?
Whole year, whole year, we have done INR 6,000 crore.
Okay. What number do you have, sir? I want to just understand the scale of execution.
Sir, it would be close to INR 1,400-INR 1,500 per quarter. That is what makes it INR 6,000 for the whole year. So in any quarter, depending on the billing cycle, milestone of the project, the execution of the project, so these factors. But broadly, it would be anywhere close to INR 1,200-INR 1,600 every quarter.
Right, sir. And lastly, sir, on the MDO, sir, you want to give us?
I apologize for the interruption.
Yeah, yeah. I'll join the team. For MDO, if you want to give any understanding of how the annual revenue would be.
Join the queue.
Yeah, I'm in the queue, sir. Thank you.
MDO project.
Thank you, ladies and gentlemen. The next question is from the line of Prachi, Business Standard. Please go ahead.
Over to Prachi.
Hello, sir. So this is regarding the real estate segment. I would like to know, would you like to comment on the reduction of assets? It was INR 743 crore in June 2023. The quarter ended in June 2023, and it was INR 716 crore in the recently concluded quarter. So what would you say about it? And also, I would like to know profit after tax consolidated in the real estate segment in comparison with the last year.
Repeat me the second part.
Profit after tax consolidated in comparison with the last year. The real estate segment, sir.
The NCC Urban. You are questioning about NCC Urban?
Hello?
Repeat me. Repeat us, or you are questioning?
The first part is, sir, about the real estate segment assets, which reduced on a year-over-year basis. The second part is profit after tax consolidated in the real estate segment in comparison with the last year.
So the current quarter reported a profit of INR 7.38 crores against a turnover of INR 75.35 crores. Same time, the profit INR 7.38 crores against INR 10.08 crores of the last year. So the change or the variation in the profitability depends upon the mix of the projects. There are two parts of projects that are going on. Again, in the second part, real estate projects, there are several projects. The profit margins vary from the project to project. And also, the profit margin varies from the other projects. They're also taking up on development on a construction basis, some of the real estate projects from the others. So it depends upon the mix of the projects from quarter on quarter and year on year. The other question is about the reduction in the.
Segment assets, real estate.
Reduction in the real estate assets. So as we develop the land pockets and as we book the income into the profit and loss account, the value of the investment also gradually comes down.
Dividend. Dividend. She's asking this.
Yeah, yeah.
Dividend they have paid.
No, you are asking investment by NCC. Hello?
Sorry?
Investment by NCC, you are asking? Hello?
Yes, sir. I just wanted to know about segment assets, the reduction. And.
Last quarter.
Okay. The investment by NCC. Okay. That's the difference. The buyback of the buyback of the shares taken place in the last quarter of the last year. The difference represents the buyback of shares. We got the money on account of buyback of shares. As a result, the investment has come down from INR 240 crore to INR 229 crore.
Thank you, sir. Sir, about the last question, we have vision future outlook about especially in context with Amaravati in the real estate segment and the order book of this segment.
Could you please repeat your question, ma'am?
Sir, your future outlook in this real estate segment, particularly in context with Amaravati and the segment's order book in the coming days?
Yeah, yeah. There are two parts to your question. Firstly, the real estate business that we have reported in our investors' presentation is a very small business at the group level that is less than about 1.5% of our revenue. So that business is a real estate business. What we do here is we acquire land and we develop apartments, villas, commercial spaces, and we sell these to our clients, same clients. So that's a very small business. In Amaravati, what we have tried to do in the past or what possibly we may get to do in the future is a contracting business. It has nothing really to do with the real estate business that we have reported. Our contracting business is our bread and butter. What we do really here is we get the contract from the client and construct whatever is required to be constructed.
In Amaravati, we hope to get those construction contracts. That may be a real estate business for the government or the ministry, not for us.
Okay, sir. Thank you for your comments. All the best.
Thank you. Thanks.
Thank you very much, ladies and gentlemen. That was the last question. I would now like to hand over the conference to Mr. Vaibhav Shah. Please go ahead, sir.
Sir, just one question from my end. Sir, out of our standalone order book of around INR 47,625 crore as of June, what would be the value of those smart meter contracts taken in the standalone book?
About 2,000.
About 2,000.
That smart meters where you participate in the standalone Order Book.
About 3,000.
Anything in value terms?
3,300 crore is considered in our standalone order book related to the smart meters. And in consolidated, how much we have taken?
927.
927.
So order book is lower. Order book is lower.
Yeah.
Lower.
Yes.
Okay, okay.
Yeah.
Okay. Thanks a lot for giving us the opportunity. Sir, any closing remarks from your end?
Thank you very much, Mr. Shah, for hosting this call for us. We take this opportunity to thank you and the investors and broad analyst community that participated in this discussion. Thank you very much.
Thank you all.
Thank you so much.
Thank you. Thanks a lot.
Thank you.
We can disconnect now, right?
On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you. Thank you. Thank you.