Ladies and gentlemen, good day, and welcome to Larson and Tubro Limited Q2 FY 'twenty Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr.
Arndog Mondal. Thank you, and over to you, sir.
Thank you, Zed. Good evening, ladies and gentlemen. Thank you for logging in at a slightly late hour, but better late than ever. As far as the format is concerned, we'll first run you through presentation, after which the session will be open for q and a. We uploaded the presentation on our website at 05:00.
So hopefully, you have downloaded it and had the opportunity to have a look at it. Before we get into the details, just a few opening remarks. This quarter and this half year to a large extent was a very unusual year in the sense that we've been facing a very uncertain and volatile economic scenario, but we'll talk about that towards the end when we talk about the environment after the retail sites. Two things that happened in this quarter particularly, which merits mention. Firstly, we acquired control of Mindtree in the beginning of this quarter and hence because it became a subsidiary, it has been consolidated on line by line basis.
So the current year current quarter results and obviously the half year results also incorporate monthly numbers. Some data points may not be strictly comparable with the previous year on a year on year basis or even on a sequential basis. The other thing that happened was there's a reduction in tax rate for domestic companies. Favorite of complications arisen from that including whether companies can opt for whether they'd like to opt for it and forego all exemptions. And as you know, we are a very large group and we consolidate a number of legal entities.
So we have had to take decisions on whether to opt for that on a company by company basis, but more on that later when we come to the detailed P and L commentary. But these two are the major developments that have happened during the year. I would to move to the next slide, which is disclaimer slide. And obviously, this is a very important slide. I will take it as read.
And we put this slide primarily because very often we make forward looking statements, which may or may not materialize in the course of time. And we obviously would not like to be held responsible for accuracy, for utmost accuracy of those forward looking statements. We'd now like to move to the group performance highlights and that is on Slide four. I think firstly, we've seen very strong all around growth in very testing times starting from growth of order inflows at 20% more on that later to very decent revenue growth of 15% to an increase in the order book. And of course we have seen a recurring PAT growth of 24%.
There is a very strong showing actually. Just for clarification, when we display recurring PAT, it's actually on a like to like basis. What we do is that we take the normal reported profit after tax and we subtract or add back whatever exceptional items of income or expense are. So if you sort of bring it on a like to like basis, on a like to like basis, PAT recurring PAT as recorded has grown by 24%. Going to the next slide, Slide number five, which deals with key financial indicators.
First upfront, I think we've had a very stellar show as far as order inflows are concerned. In the current quarter, they've we've crossed INR48000 crores and order inflows have grown by 20% and overall for the 16% for the last six months. As I mentioned, this is in the face of a very uncertain and challenging economic environment. The order book, as you can see, has also crossed the 3 lakh crore milestone after a very long time. We have not had it before, but it took quite some time for it to cross.
And on a year on year basis, it has grown by 9%. Revenue growth again, I think all of us are aware of the uncertain and difficult times that we are living in, particularly as far as credit flows are concerned. And in that environment revenues have grown by 15% for the quarter and 13% for the half year. Reported PAT has grown by 13%, but I mentioned the recurring PAT growth. One thing you which you'll notice is that working capital is still a bit elevated at 23%.
It was close to around this level at the end of Q1. And obviously, this is due to stretch payment cycles in a tough credit flow environment as well as our continuing efforts to ensure that we give proper support adequate support to our vendors. Return on equity on trailing twelve month basis continues to improve and we hope to reach our target of 18% in FY21. Going to the next slide, which is Slide seven, which is essentially deals deals with order inflow and order book. We had very strong order growth in order orders in q two as well as h one And Q2 has grown, as I mentioned, by 20% and H1 by 16%.
This is essentially driven by hydrocarbon power as well as buildings and factories to some extent. As you can see in Q2, international orders grew significantly whereas in Q1, was domestic orders which had grown. So the tables have turned to some extent. And this growth has been achieved even though the previous year had some large order wins like the Raghkam Metro, Nagpur Mumbai, Nagpur Mumbai Expressway and coastal road projects. We also have a very decent prospect pipeline for the remaining half of the year, which is the pipeline is encouraging in the volatile environment.
And as far as the order book is concerned, I mentioned that we have crossed 3 lakh crores. Now we have six business verticals who are all of which are fairly decently sized a range between 11% of the order book going right up to 17% of the order book in that range, but more or less all are equally all are fairly big size, whether it be buildings and factories or transportation infra or heavy civil or power transmission distribution or water and effluent treatment or hydrocarbon. All these six are now occupying a fairly large size of order book and hence the growth is not so much dependent on any single vertical, it is more secular to that extent. Going to the next slide, Slide number eight, which deals with performance and sales. As far as revenue is concerned, I mentioned that we have grown 15% in Q2 and 13% for the full year.
Here again, I think all of us are well aware that since beginning of Q1, number of projects are not contributing to revenue, which were expected to have contributed, number of projects in Ahmedabadish are not contributing, the coastal road is not contributing and we have our revenues are significantly short of budget what we had internally budgeted because of this, even though we have made up in some other areas as well. As far as and of course Q2, the revenue growth has largely been driven by infrastructure, hydrocarbon and information technology and technology services businesses. There's been a fairly large increase in the finance charge operational expenditure. This finance charge operational expenditure is essentially financial services and the finance lease that we have for NAVA and power plant. There's not been much there's not been any increase in NAVA, but the growth is largely on account of financial services.
And like any other business, there it's essentially because of larger volume of borrowings to fund their growth. That's why we landed up with a growth of 13% in this in Q2 and 19% for the half year as a whole. Even though there has been a small marginal credit, 30 bps increase in the borrowing costs, which again is an outcome of increased utilization to a large extent. As far as staff cost is concerned, staff costs have also gone up by 39% this quarter and 25% for the full year. This is essentially because of the resource augmentation that we have done in our services business and as well as MindTee, as I mentioned, has got consolidated.
In fact, my MindTee has added over 20,000 customer over 20,000 headcount to the staff's cost. And in fact, out of a total of around INR1700 crores increase in staff cost in Q2 Mindshare alone accounts for around INR1200 crores or so, slightly more than INR1200 crores. So that itself accounts for major bulk of increase in staff cost. Sales and admin that's why sales and admin is concerned. There again, Mynty has got consolidated as well and the increase that you see in sales and admin is largely because of number one, Myntree consolidation and secondly, NPA provisions in financial services business.
If we strip out these two increases, then the net increase comes to around 10%, which is fairly in line with the revenue increase. Going to the next slide, is Slide nine, I think EBITDA has grown reasonably well and to a large extent, this EBITDA has been driven also by good EBITDA in the core business as well. The finance cost has gone up significantly 72% in Q2 And this is essentially on account of borrowings increased borrowings that we have had to do to fund our growth. And even though the borrowing costs at around 7.5% per annum are still one of the lowest amongst all corporates.
But this is a natural outcome of growth, nothing else. As far as depreciation is concerned, the higher depreciation charges that you see, again, partly on account of mine tree consolidation as well as partly on account of right of use assets, which have come into the balance sheet after implementation of Indes 116. That is essentially the reason why depreciation has gone up. Tax expense, will come to it the next slide. As far as joint ventures and SNA company path is concerned, it reflects IDPL roads, forgings and power JVs performance in addition to some other JVs and associate companies.
And to some extent, this has seen a growth in particularly in Q4 because we were accounted for a claim in IDPL that we have we have done in Q2. Discontinued businesses discontinued operations represents electrical automation since we are well on the way to divesting those and we have a decent line of sight into conclusion of the transaction. So it is now being classified as discontinued operations. Reduction in non controlling interest profits essentially reflects lower profits in services business. I think all of us are aware that services business as a whole, whether it be financial services or information technology or engineering services has the growth rates have come down to some extent.
So the extent of profits has also come down. And in case of financial services, I'll come to that later on, to a large extent, the lower profits is because of restatement of deferred tax assets that they did in Q2. Going to the next slide, is a brief word on the income tax expense. Much has been talked about this and what we have done is that the parent company and some of the subsidiaries have computed the tax expense of the current financial year in line with the new tax regime announced under Section 115 BAA. Here again, we won company by company.
Accordingly, number one, the provision for current and deferred tax has been determined at the rate of 25% in Q2 and obviously for H1 as well, for the whole of H1. The deferred tax assets and deferred tax liabilities on the April 1 have been restated, had recomputed at the rate of 25% and that has obviously led to fair amount of one time expenses. And the other thing that has happened is that since those companies which offer low tax rate are not allowed, there's no math applicable and clarification has come from the department saying that the unutilized math credit will lapse and hence we have those companies including the parent who have opted for the new tax regime have written off the unused material that was being carried forward in the balance sheet. So barring information technology and technology services, most group companies plan to migrate to the new tax regime. We'll move to the next slide.
The next few slides deal with the key subsidiaries and segments. Slide number 12 is for reference. So here's a segment composition. I think all of you are aware of this. And there is no change here except for the fact that information and technology services, which considers information technology and technology services, is now as a new entity included in the information technology part, which is MindTee.
But there no change in the segment definition as such. Moving to the next slide which deals with order inflow composition, this again is essentially for reference purposes. I won't get into every every single line item here. You you can study it at your leisure. As far as order inflow is concerned and here, I'd again like to reiterate that we also include services as part of the order inflow because the revenues arise from short short cycle orders.
Going to the next slide, slide number 14, this again is essentially for reference and this gives you the order book, the INR 3 lakh crores of order book and as you can see the infrastructure segment accounts are over 70%. As far as international order book is concerned, it's around INR 67,000 crores out of INR 3 lakh INR 3,000 crores. And one noticeable fact that has happened over the last few years is that our efforts to diversify our geographical concentration away from The Middle East by entering other countries is paying fruit. And today, 43% of the international order book is now non Middle East concern is considers orders from non Middle East countries. As far as the order book is concerned, here again, as in previous quarters, for quite a few quarters in fact, public sector has been the major contributor to this and it still continues to have a major contributor to around public sector in the domestic order book accounts for 78% of the total domestic order book to date.
Going to the next slide, which is again revenue, Slide number 15, this again is for reference. I have already given my comments on revenues and revenue growth. I will not repeat that. We will go to the next slide, Slide number 16, which is infrastructure sector. And as all of you would know, this sector or segment is the largest segment today that we have within the Group.
And obviously, the financial fortunes of this particular segment brings the entire Group level financials. Now as far as infrastructure segment is concerned, public sector still continues to drive order inflows and there has been a decent revenue growth of 9% in the current quarter and 11% for the half year as a whole. And this 9% is in spite of the fact that as
I
mentioned, underappreciated jobs and coastal jobs have not contributed to revenues in spite of that. In fact, if you look at this domestic growth, domestic part has grown faster than international. In fact, growth in Q2 was 1319% for the first half as a whole. That also indicates that the execution of our domestic order book barring those few orders which are not moving are going fairly strong. As far as EBITDA margins is concerned, you'd also see that there's been a 30 basis points improvement in Q2 and now as far as the full half year is concerned, H1 is concerned, the EBITDA margins of this segment are now at par, which is more or less in line with what we had sort of indicated not guided, sort of indicated in our last quarterly call.
Going to the next slide, which is power, I think everybody knows that this particular sector is going through significant steps by way of overcapacity. Today, in a year, as far as coal fired power plants are concerned, around six to eight gigawatt of orders are getting ordered out against installed capacity of boilers and turbines supercritical boilers and turbines in excess of 20 gigawatt. And obviously, price competition is fierce in this sector. And for the last couple of years, we've hardly won any orders, barring a few one off orders in things like FGD and all, but no large block bus orders and that had led to significant decline, of the order book and the opening order book had decreased significantly. And even though the current year has again replenished that we've got two large orders in the current year itself.
So that portends well for future revenues. But the depleted opening order book has also been responsible for the revenue decline of 54% that you see. And obviously, this has also pulled down the overall revenue growth of the company as well. However, we do think that this is a relatively short term phenomenon, primarily because of the new orders that we have got in the current year, one in Q1 and one in Q2. The prospects are very are still very decent and there are two EPC coal fired power plant prospects on the handrail in the remaining part of the year as well as one Bangladesh power plant prospect that we are pursuing and some smaller MGD prospects that are there in the pipeline.
As far as margins are concerned, margins of INR is reflective of different stage of job mix and stage of execution. Here again, even though most of you would know this, we have some joint ventures, particularly joint venture for manufacturing supercritical boilers and another joint venture for manufacturing supercritical turbines in collaboration with Mitsubishi Hitachi Power Systems. And because we share joint control under the current accounting standards that we follow, which are which is in line with IFRS followed by Golar Europe, These are not consolidated on a line by line basis and hence revenues and EBITDA don't appear in this segment. They are consolidated only as our share of PAT under equity method. Going to the next slide, Slide 18, which deals with heavy engineering.
This particular segment in the last couple of years, last four to six quarters has seen fairly strong order inflows, very decent order inflows and as a result of which they landed up with a very large order book compared to the size of business. However, as far as Q2 is concerned, we have seen orders impacted by deferments. And however, that again would to some extent be dependent upon economic cycles of global oil and gas industry. But the revenue growth both in Q2 and H1 has grown very strongly and this is essentially because of the very large opening order book that this business had in the beginning on April 1, which they have been executed executing in line with what they had planned to do. And that has led to a large revenue growth.
Here, this business you will see as very strong margins in excess of 20%. And of course, to some extent, it's logical because being a heavy manufacturing business, it's also capital intensive business. So EBITDA margins typically tend to be higher in capital intensive businesses because they have to recover fair bit of interest and depreciation as well. But in addition to this, one of the defining features of this business is that they have global competence. In fact, a large part of their output is exported to manufacture and exported to country to develop countries.
They pride themselves on being at the cutting edge of technology and of course they've got a proven track record and they've also been doing a lot of cost efficiencies in the last couple of years which are altogether these are yielding very strong margins. Going to the next slide which deals with defense, here I think policy is a big damper whether it be converting the make policy into make to the second version of make, which is more which is turning out to be a bit of a non starter as well as deferment of the strategic partner program or broadening the SP program to include defense PSUs. There are various policy indentures which inhibit private sector participation in this sector in a meaningful manner. And in spite of the fact that as a country, we spend around INR 90,000 crores a year every from defense equipment procurement, around 70% of that is on imports and 30% is on is on in domestic, but large part of that domestic thing goes to public sector undertaking. So private sector participation has not evolved in a big manner yet, but even though we get get decent orders in the business.
The revenue increase that you see in Q2 as well as in H1 are essentially the increase is also is largely being contributed by execution of the tracked artillery gun order that we got earlier last day in earlier years. And that also continues to drive growth as well as margins. And margins actually reflect the stage of execution, job mix as well as operational efficiency and decline in margins in Q2 is essentially because last year we also recognized margins on one large job that we are executing. Moving to the next slide, Slide number 20, this is hydrocarbon segment. This segment has been doing significantly well and today their un executed order book now has now crossed INR fifty thousand crores at the September.
The order inflows have also been very significant and these have been obtained both from domestic as well as international markets, whether it be domestic or be customers like ONGC and HPC are internationally. Saudi Aramco is one of the largest customers, but they've got significant order inflows from both domestic and international. The strong revenue growth of 21% in Q2 and 14% in H1 is again essentially on the growth of very efficient execution on the back of a very large opening order book. As far as margins are concerned, there has been a bump up in margins and this is again contributed by efficient execution, job mix as well as certain gains which they received in the current year. And one thing which I think you need to note as far as this business is concerned, it's been very successful not only in ramping up order inflows and revenues and at a 10%, 12% margin, it's still a very high ROCE business because of very efficient working capital management.
Going to the next slide, Slide 21, which deals with developmental projects. This segment is bit of a complicated segment because it includes both power development business, essentially Naba, and which is a 1,400 megawatt power plant that we operate in Punjab and Hyderabad Metro, which is partially commissioned and getting progressively commissioned. And of course, last year, we also sold container port in South India in a place called Kathopali, which also gave us a significant revenue and margin bump up. The revenue is largely contributed, as you can see, largely contributed contributed by Nava. In case of q two, it contributed over INR1000 crores and in case of half year, it contributed over INR2000 crores.
But Hyderabad Metro has also started contributing revenues. Hyderabad Metro, we've achieved partial commissioning of 30 kilometers in November 17, sixteen kilometers in September 18, nine kilometers in March 19, we're progressively commissioning them. We've commissioned around 55 kilometers and we hope to complete we think we should be able to complete in the full commissioning by the end of this year. Hopefully, maybe sometime in Q3, if not Q3 at least Q4. The margin profile of this business is still emerging primarily because it also depends on outcome of various claims that we have raised on the state government.
So we'll have to wait and see what the outcome of those claims are. Here again, like the power joint ventures, we also have a number of concession or cluster concessions held under the intermediate holdco, which is IDPL, which constitutes both roads and one transmission line and that is again consolidated consolidated at PAT level under equity method. Going to the next slide, which is with information technology and technology services, as I mentioned earlier, Mindtree results have now being consolidated in Q2 and you hear in on this slide, you can see the revenue stack up between actually it's LTI, LTI Infotech Technology Services and Mindtree. And MindTee, as you can see, has contributed 1,900 crores to the top line and, of course, something in the bottom line as well. One one thing I think here, everybody is aware that as far as this sector is concerned, there's been a growth slowdown across the across industry.
And all three businesses here, whether it be anything for tech or technology services or MindT have been growing faster than InnoC. In fact, their growth has been in excess of 10% in Q2 and a bit more in H1. Infotech revenues have largely been the growth has largely been led by manufacturing and energy and utilities. Technology services growth has been led by transportation, plant engineering, and medical devices verticals. And MINTE revenue growth has largely been led by travel and hospitality as well as high-tech and media.
Margin variation, of course, is an outcome of increased resource cost, is an industry phenomenon primarily because of pressures of in developed countries, particularly USA, as well as in most companies have also seen a bump up in some visa costs they have incurred, most IT companies. Going to the next slide, is other which segment. This segment again is a residuary segment. It comprises of construction and mining equipment, rubber processing machinery as well as industrial valves and reality business. Again, reality is a mix of residential as well as commercial.
The Q2 revenue growth that you see of 7% has largely been driven by VLT and VALS. And here, margin there's been a bit of a margin variation, which is again due to business mix variation. We'll now go to the next slide, which is financial services. This is they had their earnings call. They're a listed company, so all their numbers are available for all to see in the public domain.
And they had their earnings call yesterday. But be that as it may, this business has grown in a very challenging environment. I think the entire NBFC space was severely affected starting from early September last year and it's still not out of the woods yet. And some NBFCs have been in the news for long reasons, but be that as it may, in a very challenging environment, they managed to grow decently well. Their focus continues to be on retailization of the loan book, ensuring that they get a robust net interest margin as well as fee income, very prudent asset liability, maturity management, trying to ensure that the asset quality keeps on improving and of course, increasing the diversity of funding sources is something which they're also focusing on.
Apart from ensuring that they remain in what they call high quartile return on equity business. In fact, the loan book now at the end of Q2 is now 53% of the total loan book. L and D Finance holding, most of the companies have opted for a lower tax rate and this has also given rise to a onetime impact arising out of deferred tax asset restatement that they had. And that has primarily been responsible for the drop in PAT in Q2 compared to Q2 of FY twenty nineteen. Going to the next slide, which is Electrical and Automation.
As I mentioned, this we have classified as discontinued operations in our financial statements, but here I'd still like to give the revenue and margin numbers for your information. One point to note here is that they have had a relatively flat revenue growth in a very softer demand environment. In fact, the industry has raised a negative growth. So to that extent, they've been holding their own in a creditable manner and probably gaining a little bit of market share in the process. Margins here, again, very decent margins and margins reflect, again, operational efficiency as well as better realization that they've been obtaining.
Sorry. The next slide, before I go in going to the actual environmental outlook, I just like to mention a few points. One is the economic slowdown is economic is the economy is very volatile, uncertain and challenging. I think there is no doubt about that. Private sector CapEx is still muted, whether in the areas of public private partnership or industrial CapEx or buildings in urban agglomerations.
Real GDP growth has slowed down and if you look at the classical formula of GDP, whether it is consumption plus investments plus government revenue spending plus exports minus imports, All of these have registered a bit of a weakness, particularly in the consumption part which has slowed, which has dragged down real GDP. The only silver lining is that the public sector investments are still relatively strong. And the areas where we are seeing decent strength are in water, metro railways, some roads and road adjacencies, whether they be expressive programs or flyovers or special bridges, as well as decent spends in power transmission and distribution as well as in hydrocarbon. Now, moving to the environment that we operate in the next slide. In the next slide, here I have tried to deal with four major external pulls and pushes starting from the top on going down on the right hand side.
Those are in green front and on the left hand side going down to the bottom, the ones in red front are four major internal trends that we think provide us with an economic moat to tide over short to medium economic cycles. I'll not go into all of these. Suffice to say that these appear to be the most important macro level factors. As far as the internal capabilities are concerned, I think everybody knows that a very strong and large order book is a good insurance against volatility. A very strong balance sheet enables us to execute even in a difficult time.
A proper business portfolio diversified within the EPC also reduces cyclicality in addition to which annuity sort of businesses which are services business lend a fair bit of stability as well. And of course, our capability spectrum is almost unmatched as far as execution of large complex infrastructure projects are concerned. The next slide is the end of the presentation. However, I'd also like you to keep in mind that there are five important one is the segmental performance, and we also try to give a disaggregated balance sheet in another which gives an idea of the very large composition of the debt that we hold as well as some major components of the assets that are on the balance sheet. We've also given a slide on cash flows where you can see that Q2 has been Q2 this year has been H1 Q1 as all of you would know saw significant eating up of operational cash flows by through increase in working capital.
Q2 to that extent has been much better. Then there's also a slide giving the broad breakup of PAT that we our share of PAT that we get from JVs and associates. And finally, the slide which gives an overview of the Concessions business portfolio. With that, I'd like to hand over the session back to Zed to start the Q and A.
Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. The first question is from the line of Renu Bhat from IIFL. Please go ahead.
Good evening, sir.
Hi, Renu.
Hi. And yes, positively surprised that the operating performance of the core business is there. So the question, the first question comes around the core business itself. Typically in hydrocarbon, we used to say that with this kind of execution ramp up in orders coming through, 8% to 10% was a more sustainable margin rate. And now that this year itself, you have been sustaining good double digit margins.
Do we think the overall operating margin expectation for hydrocarbon should now be early teens?
I would not like to go out on a limb and try to interpolate current margins with what could happen.
What kind of inflows, the size, scale of inflows and the type of jobs which are coming to the business vertical?
No, I think around 10% margin should be a decent thing too because you must also understand that in this quarter, we got some claims as well. So if you look at half yearly margin, it's 10.2%. It's not it's not significantly higher higher than 10%.
Mhmm. Sure. Sir, you also mentioned that despite having a reasonably strong inflow in the first half, core inflows you're saying, the order prospects still looks encouraging. So within the second half inflow, as in would it be possible for you to highlight the overall prospect list remaining for the second half and which could be the key, mega projects which could be targeted, be it the high speed rail or the refinery or something, it could be there. So any key notable orders which one should watch out for in the second half?
You already mentioned the two which are on the radar, but it looks as if the high speed rail is getting postponed next date. Apparently, it would be sometime in January. We'll have to wait and see. And Barma refinery, we'll have to wait and see when it gets ordered out. There are two larger prospects on the Anvil.
But overall, as far as the Infra segment is concerned, we are seeing around 4.5 lakh crores worth of prospects, fairly evenly distributed between buildings and factories and smart world and heavy civil and transportation, infra and water as well as PT and D, all between typically between INR 80,000 crores to INR 1 lakh crores approximately, INR10000 crores, almost equally spread out. So that accounts for around INR400 crores. Power generation, whether it be the two EPC orders that we talked about, coal fired EPC orders, domestic order Bangladesh, international order that we are trying to bid for as well as some small MGD orders is another INR20000 crores. Hydrocarbon for the remaining part of the year, the total prospect base is around INR40000 crores. Metallurgical and metal handling is another INR 10,000 odd crores.
And heavy engineering and defense without taking into account any possibility of any large defense programs getting ordered out this year, there is another INR 10,000 crores. So that stacks up to approximately INR 520,000 crores in our core EPC business.
Sure.
It should be good. And when we say high speed, the kind of opportunity for Larsen here would be something like $3,540,000 crores or the addressable market for us? Because one single package is 20,000 crore package here.
So how The 20,000 crore is media reported number. I don't know where they got it from because, obviously I think
that number is quoted by the customer and themselves as expected size of the contract. But in in in in your assessment, what would be average opportunity size for you here at the end well?
See, the EPC portion of the high speed rail could be anywhere close to between 50 to 60,000 close, which we would look at targeting. But that will obviously be ordered out over a period of time. It will not get ordered out in one shot. As you said, a very large package is tendering is going on, but at this point of time, it's still in the technical prequalification stage.
Sure. Sure. And so my last question related to the order backlog, as in would it be possible for you to quantify the value of these stock projects, be it Andhra Pradesh jobs on the coastal road? As in when they might get sorted out, but what could be the value cumulative value for all these orders put together, which are stuck or nonmoving in the backlog at the moment?
Andhra Pazesh and Kausal Road together would be around INR16000 crores.
Okay. All right, sir. That's it from my side. I'll get back in the questions.
You.
Thank you so much, sir, and all the best.
Thank you. Next question is from Ranjit Shivaram from ICICI Securities. Please go ahead.
Hi, sir. Congrats on a good set of numbers given the environment.
Thank you, Ranjit.
Sir, if you can just highlight the infra growth has been good given the overall environment that too largely domestic. If you can which which segment actually was the major driver on the infra?
Yeah. Almost all segments have driven a very decent growth. Almost all segments. Building and factories is slightly slow, but not unduly slow. All the others have grown reasonably well.
Belizean factors and PT and D, transmission distribution are slightly slow, there's not, as I mentioned, nothing of great concern. They've grown, but not as fast as the other five large businesses there.
Okay. And when we look at the balance sheet, the payables have reduced and this has impacted the overall net working capital. So what is the outlook here? Will it normalize going forward? Or is do we continue to support our suppliers going forward?
What's the outlook out here?
See, Ranjit, you're absolutely correct. The increase in networking capital is essentially because receivables have been under control. In fact, on a absolute amount, they've not gone up either. But the fact is that vendor payables have gone down primarily, as you said, because we had to support we had to support our vendors. If you do look at really look at it objectively, vendors are our execution partners.
And any sense that they undergo financial stress ultimately reflects in our execution as well. So obviously, we will continue to support it. And from a macro point of view, while there is enough liquidity in the system, liquidity is not flowing. So credit growth is not really flowing. So and that is what is also affecting smaller players, particularly our vendors.
So you would have seen between March and now I think as far as I recollect the decrease in vendor payables is around 7,000 crores or so.
Yeah. And so finally this hydrocarbon if you can quantify how much was that claim amount?
How much was that?
Claim you told. There were some claims in.
It was around INR70 crores.
Okay, Thanks. I'll join.
Thank you very much. Next question is from the line of Mohit Kumar from IDFC Securities. Please go ahead.
Yes. Good evening, sir.
Good evening.
My question so congratulations on good set of numbers. It's actually So order my question pertains to the taxation tax impact. Is it possible to quantify if you had not used this new tax regime, what would have been the taxes for the quarter?
Taxes would have probably gone up. The charge P and L charge would have gone up by over INR700 crores.
700 crores. So that's a very high number? That's
which was Ross, this is before NCI. Yeah?
Is it possible to give the
the corresponding tax number, the to to total tax number?
Sorry?
Is it possible to give the total tax number, which is right now, I think for the quarter was $7,900,000,000
correct. What would have
been the corresponding figure if it was, you know,
if it we hadn't aware, you know?
Effective tax rate would have been pretty much similar to last year.
Okay. So that's the 1% of the rate.
Yeah. Okay. So thanks.
On the order inflow, does this order inflow include the mine fee for the quarter? Does it mean that if we have to compare, we have to exclude the mine fee from the quarter for an apple to apple comparison?
Actually, if you want an apple to apple comparison, there there are many things which you need to adjust. Firstly, look at it this way. When you're saying apple to apple comparison, you're probably referring to the guidance that we gave. Correct?
Right.
Now, of course, guidance didn't have Mindtree, but at the same time, the guidance never anticipated a slowdown in AP jobs or postal road for which we have lost over 2,000 crores of revenues alone. So, speaking, all these so it is not appropriate to exclude one part of it depending upon the way you look at it and ignore all the other things. Because during the course of the year, many unforeseen things happen which could which lead to a difference in outcome compared to what we had originally projected.
I was asking, is this deal with Schneider as it finalized? In the sense, have you received the cash or when do expect the cash to receive?
No. No. The transaction has not really been consummated. There are still some conditions precedent which need to be which need to be fulfilled before we can we can get the cash.
What is the timeline, sir, expected timeline?
We do think that we should be able to close the deal by the end of this year.
Sir. Thank you, sir. You.
You.
Wish you all the best.
Thank you very much. Next question is from the line of Sumit Keshav from JPMorgan. Please go ahead.
Good evening, Good evening, Sumit.
My first question is the recurring profit that you state as 24% growth. What is the 2Q FY twenty twenty absolute recurring path that you're looking at and what adjustments have you
made to arrive at that?
See, all we have done is that 2Q you're talking about the second quarter, correct? Yes. Second quarter, there's no adjustment that we've done. What we've done is that Q2 of last year, the post tax exceptional was 190 crores, which was essentially write back a provision under a case which got resolved under NCLT. Okay.
So that was exception. So what we have done is that we've reduced that from the reported pattern of last year.
So basically, have still looked at INR25 billion odd for 2Q FY20?
Yes, I still look at 25,000,000,000 odd for 2Q FY20. You are correct.
Okay. And if I look at your taxes, I mean, would you say is the one time which is going to restatement of DTA or put together with the L T finance related write down of DTA?
Gross amount would be in excess of INR500 crores.
No, INR470 crores was for L and T finance itself.
Yes, it's bulk of it. R and T finance is the bulk of DTA. See, as far as L and T is concerned, our ECL provisions lead to some amount of DTA, but nothing is nothing very significantly large compared to L and T finance. Their NPA provisions lead to a very large detail. There are also some details in the parent which we reset it.
So the bulk of the detail was in L and T finance. You're correct, it is INR $4.70 crores or so.
And the and the write off of unutilized credit for Matt, that should be seen as a one off or is
one off. That's also one off.
And that is also a 400 odd crores. Right?
No. It's not 400 crores. It was around $2.30 odd crores.
INR230 crores.
Okay. Okay.
And just the last point, if I look at other income reported for 1Q FY20, there seems to be a restatement in other income and sales administration and other expenses. So what is this restatement and why has it been done?
See, the restatement was essentially in financial services where they have taken a 50% provision against bonds of housing finance company because it was relating to bonds, was put on another income. But after subsequently in discussion with auditors, they decided to reclassify it under sales and admin.
Okay. So it doesn't impact the recurring nature in how you recognize Adarini?
No, doesn't recognize that.
I'll join the queue. Thanks a lot.
Thank you.
Thank you very much. Next question is from the line of Vinu Gopal Gade from Bernstein. Please go ahead.
Hi, Mondal. Congratulations on a good quarter.
Thank you.
Just two small questions. Firstly, on the cash flow perspective, especially in terms of what you intend to use towards investments excluding CapEx, are there what are the planned investments for this year, including equity contributions towards, let's say, Hyderabad Metro, which would be some opportunity left as well as anything for L and T finance, etcetera?
So I don't think L and T we are not using anything for L and T finance. See, L and D finance, typically what happens when will they require equity? Number one, if their growth rates are so fast that their internal generations can't meet with that, then they'll go to the market to get money. And obviously, growth rates are not what it used to be in Novo Nord. And so as far as the NTT finance is concerned, I don't think we are looking at any equity investment.
In Hyderabad Metro, yes, it will take a few 100 crores maybe. But apart from that That's only thing, right? Yes, that's the only large thing. But at the parent level, we continue to buy approximately what around INR 1,500 crores of fixed assets every year typically. So that's CapEx at the parent company level.
Got it. Sir, secondly, I
know in 1Q you mentioned that that was election quarter. So you were seeing some tight payment environment, especially from these government projects, you know, and otherwise, you could have done a better revenue is what you mentioned. So is it now easing, you know, in terms of the payments, etcetera, from state government, etcetera? Is that environment easing at this juncture? Would that play a role per se in terms of you being able to accelerate revenue growth in the second half?
Frankly, it has not eased as such. It's not eased yet. But at the same time, we have not assumed that the payment situation was significantly improved during the course of the year and our guidance, revenue guidance was not based on that either. So that's why we still we are still holding on to our guidance revenue growth guidance of between 12% to 15%.
So lastly, if I may, especially this order environment, you have done much better. You've done quite well in the first half. You've seen a lot of acceleration actually post September. So is this more a market share gain situation you're seeing? By which, I mean to say that ex power, maybe power, if I exclude power, you're generally seeing competitive intensity, number of bidders, etcetera, across your projects being lower.
And would that be sort of positive for margins in future when they reach the or is it be could it be too positive to think of it that way?
The order inflow gains has largely come from power and hydrocarbon if you don't consider the services business. Part of it has also come from reality, but largely power. And I think everybody is aware of the two large orders that we got in power. And hydrocarbon, of course, there's got some significantly large international orders as well. So as far as core infrastructure is concerned, it's not that we have particularly grown or anything.
Not for this particular quarter, actually.
Were talking about trailing couple of quarters, because you've been seeing significant gains
in Even in H1, it's not that we have grown in H1 either.
Okay. Thank you. Thank you so much.
Thank you, Venu.
Thank you. Next question is from the line of Abhishek Puri from Axis Capital. Please go ahead.
Congrats, Anubh. Thank you. Just a couple of things. One, in terms of the order prospects that you mentioned, in Heavy Engineering, the deferred projects, could you specify which ones are them? And in the defense business also, we've been reading bid submissions that happened for the submarine.
When are they expected?
Okay. As far as heavy engineering is concerned, typically they told us they bid for $1,000,000,000 projects. Typically, their project sizes, they bid for vary between 50 to 100 crores or so. So a number of those around maybe 400 crores odd projects have got deferred from q q in q two that they're expecting to get awarded in q two, it didn't happen. So it's not that it is very blockbuster, but for that particular business, yes, is it does bite them a bit even though their order book is still very healthy today.
As far as defense is concerned, strategic partner, I don't think we're in any position to take any call on that. We'll have to wait and see. I don't think the government has yet made up its mind on various other things as far as which strategy partners will they'll invite to within which program. If my submarines are concerned, your guess is as good as mine. But I don't think it's going to happen in a hurry.
Okay. I have two more questions. One on the IDPL parts of CPPIB preference share conversion, when it is expected and valuations, any idea on that has been decided, numbers have been decided there or no?
Numbers have not been finalized yet, but we are progressing towards that. What is the long
short data?
Hopefully in Q3. Q3? Hopefully.
Okay. And my the other question is on the borrowing that your Slide number 30 shows. For the others part
of the business, I think
the financial services is showing a decline, whereas the others has increased by INR93 billion. I'm assuming it is largely for Mindtree?
See, Mindtree, we already had the cash end of last year itself, so that cash got depleted. So the borrowings that increase in borrowings that you see to a large extent, it has been number one used to again build up cash buffers. And secondly, you would notice that in the current year, particularly in H1, the working capital has consumed a fair bit of cash as well. So that's also led to an increase in borrowings.
Okay. And in terms of that vendor financing support, are you seeing the stress becoming worse? Or is it getting better? Or how do we look at it? Because it is eating away a large part of our cash flow from operations?
Firstly, Abhishek, it is not venture financing supporter. It's just that we are not expecting a new long credit period from them, but we still expect But credit be that as it may, I don't think it's deteriorating, but it's not yet seen a significant improvement. But now that there is reasonable liquidity in the market, but the credit flows are not happening, Hopefully, if credit flows start happening, if liquidity starts moving, particularly into the SME sector, then I think we could see some improvement there.
Got it, Thanks so much and all the very best.
Thank you, Abhishek.
Thank you. Next question is from the line of Indrajit Singh Bhatia from Macquarie. Please go ahead.
Yes. Hi, thanks. Thanks all for the opportunity. Congratulations on good set of numbers.
Thanks, Indra.
First thing is just a quick clarification. We are not changing any guidance parameter, right?
Correct.
Okay. And secondly, on the order inflows, is my understanding right that we are including Mine three, but we are excluding electrical and automation?
Yes, correct.
And that should be the basis for calculating the order inflows for the year?
Order inflows and revenues.
Okay. The second is on the revenue side, do you think that basically does our guidance assume that this INR16000 crores of orders in Andhra and coastal Road will start to give us some revenues in the remaining part of the year? And if that does not happen, does that put our guidance at risk?
See, we had assumed that they would contribute both these would contribute significantly. Okay. We had assumed that. But at the same time, there are other projects where the execution has been better as well. So all things considered, every at the end of every quarter, we do an assessment of business by business assessment of how the remaining part of the year is likely to pan out.
And when we aggregate all that, we find that we're in a position to maintain our guidance. Sure.
On working capital, do we think we can go back to that the comfort zone was at 18% to 20% kind of a band? And do you think that the environment is conducive for us to go back to that level by end of this financial year?
Indran, I would not like to speculate on that. Suffice to say that we are trying to exert every effort to be in that band.
Got it. Now final question is on margins. Now in quarter one also when our infra margins were kind of declining year on year, it was attributed to early stage and the mix of those early stage revenues, some extra charges that we are taking. Some of that hopefully are going out and hydrocarbon is doing well. In that context, do we think that there is an upside to potentially our margin guidance of flat in the core business, core E and C business?
No, I think we had factored in all that at the end of Q1 itself.
Okay. Thanks a lot, Anubh.
Thank you, Indra.
Thank you very much. Next question is from the line of Aditya Bhatia from Investec. Please go ahead.
Hi, good evening, Anubh.
Hi, Aditya.
Anubh, while the order pipeline has been strong, are you seeing that the government different projects in the few quarters? The reason I'm asking is because the government is confident. And is that a big risk that you've seen?
Yes. It is a risk. Absolutely correct. In fact, order difference, we have seen that even in q one and q two. In spite of the fact that we have one off our share, what you say is absolutely correct.
The risk of our difference is very real. And that could pose a risk to our order inflow numbers, guidance numbers. But frankly speaking with a INR 3 lakh crore plus unregulated order book, few thousand crores here and there, 10 to 10 to 20,000 crores deferrals is not something which will shake our foundations. Okay. But the pipeline is strong.
Pipeline is strong.
Right. In terms of payment cost, are you seeing any delays from government side?
Till now, no. Because we are getting our payments reasonably well, but I will I will reasonably well in the circumstances. There are delays on practically every payment. And being a large company, we tend to be immediate target of payment delays.
I think that you attributed bulk of working capital increase to quicker payment to payables, which essentially means that your receivables haven't really gone up drastically. And in this kind of an environment, are you seeing a possibility of that also starting to happen?
I would not like to speculate on working capital. So one of the most difficult parameters to control, It is the control has to be exercised on hundreds of sites that we executed in any point of time. And it so many different variables are there. So please don't ask me for a view on any numbers or number of days.
Sure. Sure. Sure. And I have you've spoken about monetization of commercial real estate at SeaWorld. Is this one single chunky transaction?
And if that's the case, what could be the value of the thing?
Yeah. There was a chunky transaction, something close to 500 crores or so.
Okay. I'm sorry, sir. I was wondering, but your
voice was breaking. The
voice is breaking, Aditya.
Is it Aditya? Yeah.
Okay. See.
So last question, like, while we understand that margin profile is still emerging, it would
be great if you could
share revenue, EBITDA and part numbers, whatever you can share for H1 FY twenty twenty?
Yeah. Hyderabad Metro, we made a loss at the PAT level of around INR180 crores. EBITDA was around INR150 crores approximately.
Okay. That's really helpful. Thank you so much.
Thank you. Thank you. Next question is from the line of Kirti Jain from Sundaram Mutual Fund. Please go ahead. The
trade payable support which we are offering, is it like we get a discount from the vendors for paying earlier? It's not that.
Who's that? Madhangupal?
No. Kirti, sir.
Kirti, sir. It's not that we get a discount by paying earlier or anything like that. Okay. Those are terms of trade, contractual terms.
Okay. Because, like like, we will not get any rebate by paying early?
I don't think so. Because once the purchase price is fixed, I don't think any vendor would like to compromise on that.
Mhmm. Okay. Secondly, sir, this Hyderabad Metro, so this $1.80 crore kind of loss, so 800 crore per annum kind of loss.
$8.80 crore, not $1.80 crore, sir.
Okay. Okay. So like when full commissioning, what should be the loss we should expect, sir, for FY
'twenty I think the margin profile is still emerging, Kiti. You'll have to wait till full commissioning happens, and then we'll try to give you a better picture.
Okay. That's
it sir. That's it from me. Thank you.
Thank you very much. The next question is from the line of Jonas Butta from PhillipCapital. Please go ahead.
Good evening sir and congrats on a great set of numbers. So just a few number specific queries. If you can share what was dividend from subsidiaries in the stand alone account part of the other income, sir?
See, as far as dividend from subsidiaries in standalone was concerned, in Q2, we got INR $6.75 crores against INR $4.20 odd crores in Q2 last year. The increase was on account of dividend from INR 90 that we got essentially. For
the
full year, the dividend was around slightly over INR700 crores and last year it was INR70 crores because last year we also got a dividend in excess of INR300 crores from LTCL.
Okay. Okay. Sir, also, if you see the differential in margins for the E and A segment, it's just about on the EBITDA level is about 40 bps, while that expands to almost 400 basis points on the EBIT level, implying that there's been some depreciation adjustment.
Yes. See, once it is classified as asset held for sale, depreciation is not applicable because it's taken out of fixed assets.
Okay. Okay. So because this is very particular to Q2, though Q1 still had a positive charge?
Yes.
Okay. And lastly, sir, if at all you can throw some light on there's been a very small amount of order cancellations, INR3500 odd crores. From what segments would that largely be driven by, sir?
It's less than INR3500 crores. It's not there. Mean, some other adjustments are there. Some part of that is due to in power transmission and distribution, we have got a number of orders from the Sohagya initiative, which also had certain non Sohagya portion. So that has got descoped to pure Sohagya.
So we have adjusted the order values there. That has led to quite a bit.
Got it. Fine. That's it from my side. Thanks a lot.
Thank you.
Thank you. Next question is from Ankit Babin from Shubkam Ventures. Please go ahead.
Yes. Good evening, sir.
Good evening. Ankit, you'll have to talk louder, please.
Am I audible, sir?
Yes. Now you're audible.
Okay. Yes. Actually, my question was on your order inflows. So in the first half, you have mentioned that including the services, the order inflow growth has been 16%, so INR 87,000 crores versus INR 75,100 crores. But if I see your last year H1 FY 2019 presentation, the order inflow figure was $778,100 crores.
So there has been a difference of around 3,000 crores. So what is
This is a relation in automation. This is because of order inflows, revenues and margins, EBITDA.
So sir, could you tell us for the last full year, what was the inflow of this particular segment so that we'll have a good base to compare
for the full year? You just referred to last year's Q4 presentation. The order inflow breakup is there.
Okay. Okay. Yeah. Okay. Thank you so much,
sir. Yeah.
Thank you. It was around INR 6,000 crores approximately.
Okay, sir. Thank you.
Thank you. Next question is from the line of Deepa Krishna from Goldman Sachs. Please go ahead.
Sir, good evening. This is Pulskit.
Hi, Pulskit. Can you hear me? Yeah. I can hear you, Pulskit.
Okay. Sir, all my questions are answered. Just one bookkeeping question. When you were talking about in your opening remarks, you mentioned that hydrocarbon, we've seen some good orders, including orders from Saudi Aramco and HPCL. So would it be fair to assume that this HPCL order that was announced this morning is already included in the order inflow?
We don't talk about specific orders, Pulkit. So
I I Because you mentioned in your opening remarks, which is I was wondering.
I mentioned ONGC, HP, Saudi Aramco, these are three major major customers that we have in our order book. The order book is more than 50,000 crores.
No, sir. The order that you announced this morning,
you won't be able to
comment whether that's included or not.
No. Okay. Thank you, sir. Thank you.
Thank you. Next question is from the line of Girish Ajipaliya from Morgan Stanley. Please go ahead.
Good evening sir. Thanks for the opportunity. Hi, Girish. Just a couple of questions. Firstly, on Help Others business, if you can quantify what is the real estate revenue in first half?
As real estate is concerned, we don't give real estate revenue or revenues for CEO in sub segment wise. We give segment wise. Please don't ask me to get into further granular level details, Girish. I'll have to talk about you. Okay.
And just a second thing on this buyback guidelines that CP has announced. I mean, any thoughts that you could share as a management team as to how we think about it right now? Actually, at this point of time, there is no question of our going in for a buyback because we don't have excess cash to do sufficiently large excess cash to do that. But in any case, with the new taxes on buyback, I think the tax the arbitrage is no longer there. So we'll be indifferent between buyback and dividend, frankly.
Thank you, sir.
Thank you.
Thank you. Next question is a follow-up from the line of Renu Bhat from IIFL. Please go ahead.
Yes. Hi. Good evening, Just a clarification. So for the effective tax rate, what should we assume for the full year and for next year? Should 24%, 26% be assumed?
Or do
you think it could be a bit higher?
I think average tax rate of around 25, 26% is reasonable.
That should be reasonable at the company level.
Yeah. At the company level.
Yeah. And within this quarter, I'm not sure if I've missed this on other income. We had seen a very sharp jump this particular quarter. So any particular line item that you want to highlight which led to this jump in other income?
It's mainly treasury. Just like we had higher debt, we also had higher investments. Right. So we liquidated some of those investments, and then those led to gains as well.
Okay. So just that. Yes, because on a sequential basis, all those jump was there. So largely treasury gains to that extent.
Essentially, treasury gains. Yes.
Sure. That's it from my side, sir. Thank you so much.
Thank you, Renu. Yes.
Thank you. Next question is from the line of Shreyas Pukhanwala from Kannada Rubeko Mutual Fund. Please go ahead.
Yes. Thanks for the opportunity. Sir, just one question on the number. So how much will be the receivables outstanding for more than six months?
Please don't ask us to give that level of information on individual projects or individual companies, but we still have a large amount of receivables stuck with PSTCL. Even though we got a favorable order from the Supreme Court, they've only paid part of it. Okay. They not not paid a large part of it yet.
Okay. But on ongoing basis, we have we have been receiving the amount now?
Yeah. Ongoing basis, we are getting.
Okay, thanks. Thank you.
Thank you. Next question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yes, good evening. Thank you so much and congrats on good numbers. Just wanted to check here, so for your working capital, is it fair to understand that despite government delaying, your receivables haven't gone up, it's essentially driven by payables?
Yeah. You are absolutely correct. And this I had mentioned earlier that our philosophy is that if customers don't pay on time, we slow down execution.
Okay.
So that's why we try our best to ensure that receivables don't belong.
Okay. So under normal course of business and receivables, how much more revenue could you have added?
That's a hypothetical question. I'd not like to speculate on that.
Okay. Okay. Fair enough. So the other thing is on your prospective order base, have missed a number. Is it INR5.2 lakh crores or INR4.5 lakh crores?
INR5.2 lakh crores. Of which, infrastructure is INR4.5 lakh crores.
Okay, infra is 4.5.
Infra segment, sir.
Okay, okay. Great, that's all from my side. Thank you so much.
Thank you.
Thank you. The next question is from the line of Aditya Mungya from Kodak Institutional Equities. Please go ahead.
Good evening, sir.
Hi, Aditya.
Sir, wanted a clarification. You know for the slide in which kind of carries the segmented numbers with the overall numbers.
Yeah. The annexure.
Exactly the annexure. Wherein for the first half, corporate overhead accounts for maybe a 4 and a half billion rupees kind of VAT impact. Is it fair to assume this could be the recurring rate of the client item incrementally or are there any one off insight?
Aditya, all this time you've been saying that you don't look at corporate. You only want PAT at a segment level. You're not bothered about corporate. Now you're asking about corporate. You're asking me to extrapolate corporate.
There are so many videos that I'm sorry, I can't get into that level of extrapolation.
Got that. Sure, sir. That was the only question from my side. Thank you.
Thank
think no more questions. Looks like it.
Sir, we have a follow-up which has come up in the queue. Shall we take that? Okay. One last question. All right, sir.
The next question is a follow-up from the line of Kirti Jain from Sundaram Mutual Fund. Please go ahead.
Sir, the commodity prices in general, especially the steel have corrected by 20% to 30%. So how much margin improvement we can see from these factors over, let's say, one year next one year or
next year?
You're asking me something which is almost impossible to quantify on a forward looking basis. Obviously, we have firstly, we will continue to it line inventory. It will depend upon when that inventory is consumed. So I think that's some question which I would not like to speculate on.
Because in Q4 results, told that steel price increase jump was very significant and we lost in some of our fixed price contracts.
That is correct. So our reverse is happening. Higher commodity prices are embedded in whatever inventories we have. Going forward, yes, hopefully we'll gain something. But probably the results of that will come in FY 2021.
And those and all that will be baked into our FY 2021 EBITDA margin guidance.
Sure, sir.
Thanks, sir.
Thank you.
Thank you very much. As there are no further questions, I now hand the conference over to Mr. Mondal for closing remarks. Over to you, sir.
Thank you, Zed. You, ladies and gentlemen, for a very patient and interactive session. One last point, which I forgot to mention in my opening and closing remarks was that once again, I'd urge you not to view everything on a quarterly basis as far as long term interpolation is concerned. As all of you will be aware, both order inflows, revenues and margins in our sort of business can be very lumpy and spiky on a quarter to quarter basis, not just because of uncertainty in order inflows, but because of revenue and margin recognition laws. Be that as it may, I think all of us are very satisfied with the quarter with the performance of the quarter just gone by.
And I've talked about that enough in my opening remarks. With that, I'd like to close this session. And thank you once again.
Thank you very much, sir. Ladies and gentlemen, on behalf of Larsen and Trouble Limited, that concludes today's conference call. Thank you all for joining us, and you may now disconnect your lines.