Ahluwalia Contracts (India) Limited (BOM:532811)
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At close: May 7, 2026
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Q2 24/25

Nov 18, 2024

Operator

Ladies and gentlemen, good day and welcome to the Ahluwalia Contracts (India) Limited Q2 FY 2025 earnings conference call hosted by Ambit Capital. As a reminder, all participant 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 this conference, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you, and over to you, sir.

Dhruv Jain
VP, Ambit Capital

Thank you. Hello everyone, welcome to the Q2 FY 2025 earnings call of Ahluwalia Contracts (India) Limited. From the management side, today we have with us Mr. Shobhit Uppal, Deputy Managing Director, Mr. Vikas Ahluwalia, Director, and Mr. Satbeer Singh, Chief Financial Officer. Thank you, and over to you, sir, for your opening remarks.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Thank you, Dhruv. Good afternoon, everybody. Ahluwalia Contracts (India) Limited has announced the financial results for Q2 FY 2025. During this quarter, Q2 FY 2025, the company has achieved a turnover of INR 1011.48 crores and a PAT of INR 38.36 crores in comparison to a turnover of INR 901.55 crores and a PAT of INR 55.30 crores in Q2 of FY 2024. The company has registered a growth and degrowth of 12.19% and minus 30.63% in turnover and PAT, respectively, during Q2 FY 2025 in comparison to Q2 FY 2024. EPS of the company for Q2 FY 2025 is INR 5.73 as compared to INR 8.26 in Q2 FY 2024. During Q2 FY 2025, the company's EBITDA margin is 7.25% as compared to 9.96%, and a PAT margin of 3.79% as compared to 6.13% in the corresponding period of the last financial year.

During the H1 FY 2025, the company has achieved a turnover of INR 1930.83 crores and a PAT of INR 68.96 crores in comparison to a turnover of INR 1665.16 crores and a PAT of INR 105.03 crores in H1 FY 2024. EPS of the company for H1 FY 2025 is INR 10.29 as compared to INR 15.68 in H1 FY 2024. During H1 FY 2025, the company's EBITDA margin is 6.93% as compared to 10.36%, and a PAT margin of 3.57% as compared to 6.31% in the corresponding period of the last financial year.

Net order book of the company as of 30th September 2024 is INR 16,193.45 crores to be executed in the next two to two and a half years. Total order inflow during FY 2025 till 30th September 2024: INR 6699.70 crores. From 01/10/2024 till date, INR 1094.67 crores. So total order inflow in this financial year till date is INR 7794.37 crores. Thank you. We are ready to take questions.

Operator

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 the touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah
Director Research, Dolat Capital

Hi, sir. Thank you, sir.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Hi, Shravan Shah.

Shravan Shah
Director Research, Dolat Capital

Hi. Sir, just to recheck on the guidance front. So now for this FY 2025, in terms of the revenue growth and for FY 2026, how much growth are we looking at? And also, possibly on the margin front, given the margin was very low in the H1. So in the second half, how much margin are we looking at? And in FY 2026, will it again go back to 1%?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

So as far as our top line growth is concerned, we are sticking to a guidance of about 15% growth. As far as our margin is concerned, we feel that we'll have to moderate it a bit. It'll come below double digits now. It'll be around 9%. As far as the next financial year is concerned, since our order book is healthy and a lot of our design-build projects, we feel, will be in full swing in the next financial year, we should cross the double-digit margin barrier in the next financial year, that is FY 2026.

Shravan Shah
Director Research, Dolat Capital

Okay. And in terms of the revenue, will it be in FY 2026? Can we see more than a 20% kind of a growth?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Yeah, it should be between 15%-20%. We are targeting a 20% growth.

Shravan Shah
Director Research, Dolat Capital

Okay. Got it. And in terms of the order inflow, now already we have received a significant INR 7,800 crores, including the recent one. So now how much more are we looking at by March? And if possible, if you can, sir, in terms of the bid pipeline and our long-term vision was to have a 50/50 private government, which we are already there. So how do we want to now go ahead?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Yeah, that is what I've been mentioning in our last two or three con calls, that we would like to maintain it at this level, at a 50/50 level. And going forward, we are actually consolidating. So in the rest of the three, four months of this financial year, we're not bidding very aggressively. Maybe another INR 1,000 crores inflow. And going forward in the next financial year, maybe anywhere between INR 5,000 crores-INR 6,000 crores new orders.

Shravan Shah
Director Research, Dolat Capital

Got it. And currently, the bid pipeline would be?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Currently, the bid pipeline as it stands is about INR 5,000 crores.

Shravan Shah
Director Research, Dolat Capital

Got it. And just a couple of data points on the balance sheet front: mobilization advance, retention money, and unbilled revenue.

Satbeer Singh
CFO, Ahluwalia Contracts

Yes. Mobilization advance is INR 542 crores, and unbilled revenue is INR 598 crores, and retention is INR 335 crores.

Shravan Shah
Director Research, Dolat Capital

335 and just on the CapEx front, so already INR 92 crores done. So once.

Satbeer Singh
CFO, Ahluwalia Contracts

CapEx 30th September, INR 101 crores has incurred.

Shravan Shah
Director Research, Dolat Capital

So for full year, how much now we are looking at?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Given a guidance of about INR 130 crores.

Satbeer Singh
CFO, Ahluwalia Contracts

INR 175 crores.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

INR 175 crores. In the rest of the financial year, it should be about another INR 30 crores-INR 35 crores. That also, we're revising it downwards.

Shravan Shah
Director Research, Dolat Capital

Okay. Got it. Got it, sir. Thank you, and all the best, sir.

Operator

Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. We have the next question from the line of Amit Khetan from Laburnum Capital. Please go ahead.

Amit Khetan
VP, Laburnum Capital

Hi, sir. Thank you for taking my question. So we have a good order book currently, but if I were to look out over the next two to three years, what are the segments or areas you are most bullish on in terms of incremental new orders? Are there going to be new areas that we will participate in, or is it going to be the current segment that we are in?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

So Amit, as you would be aware, we are present in the entire spectrum of the building industry. So there are areas over a period of time which we had not focused on because there was not much activity. We are now refocusing on industrial activity. We've recently won an order with Balco also. Airports is something which we continue to be bullish on. The government is continuing to spend on airports. So we already are executing two airports which are in design stage as we speak. And there are a couple of orders in the pipeline which we are bidding on. So that is another area that we're looking at. Commercial and retail activity is something that also excites us. We are focusing on that. So these are the areas. And residential activity, there is a lot happening, but we are now being a little wary.

We already have a healthy exposure as far as residential projects go. So we are bidding sort of conservatively going forward as far as residential is concerned.

Amit Khetan
VP, Laburnum Capital

Got it. Got it. And this industrial sector that you talked about and airports, right, what are the typical order sizes like? Are these in the similar ticket size range of INR 500 crores-INR 1,000 crores, or would they be much larger?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

No, they are in this range only. As far as office infrastructure goes, the government is also coming out with larger orders for government office buildings using alternative technology. They are INR 1,000+ crores. That is an area which is of interest to us.

Amit Khetan
VP, Laburnum Capital

Understood. Understood. And secondly, in the last couple of quarters, you've been talking about a shortage of labor and things like that. Has that eased, or do you see that continuing for the next few quarters?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

No, that is continuing. On account of various factors, as the country continues to be permanently in an election mode, that's what we've been seeing since the general elections, preparations for the general elections started. So this labor problem continues as labor comes from a few areas geographically. And this continues in NGT issues such as NGT and rain. This continues to affect labor supply. So we feel that this will, throughout this financial year at least, and even in the first quarter of next year, this problem will continue to be there.

Amit Khetan
VP, Laburnum Capital

Got it. And would this also be a factor in margin contraction, or is that just a function of operating leverage?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

No, no, it's a huge factor. It's a huge factor.

Amit Khetan
VP, Laburnum Capital

Okay. Okay. Got it. That's very helpful. Thank you and all the best.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Thank you.

Operator

Thank you. To ask a question, ladies and gentlemen, you may press star and one. The next question is from the line of Lakshmin arayan from Tunga Investments. Please go ahead.

Lakshminarayan K.G.
Founder, Tunga Investments

Yeah. Thank you. A few things. See, when you started the year, you actually alluded to a particular margin, and then we stand at this point in time at a slightly lower margin level, right? Now, what has actually positive? I mean, what has negatively surprised you when you actually drew up your budgets start of the year? And whether things have become a little unpredictable now than earlier, and how do you think it's becoming a little more predictable going forward?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

So look, while one of the things which had surprised us in the past is the volatility in material costs that we had catered for by building in escalations in our contracts. But on some of our larger contracts which we have won in the last year or so, there are various factors which have hit us, which were not sort of within our control. One is, of course, the prolonged monsoon across the country. Some of our biggest projects are in, say, places like Mumbai or Odisha or Bihar, right, where Assam, where the monsoons this year have been exceptionally heavy. The turnover has been affected there. Then, as I mentioned in my answer to the earlier question about the last five, six months, the country has been in election mode. That has impacted the labor force availability on site. So this was something which was not expected.

Thirdly, on some of our large contracts, the design part, approval, so to say, has been delayed for no fault of ours, which was beyond our control. CSMT being one such project, which is our largest project to date. That has impacted our margins because our fixed overheads have continued to be there, and we have not been able to execute on the ground. So these are factors which have impacted our margins. And fourthly, some of these factors are generic or general to the industry. If you were to compare our margins with our peers, actually, we've done better than most of them. So we've managed our cash flows better. But the industry as such has been affected and impacted by some of these margins. Going forward, hopefully, in the next financial year, I don't think there'll be so much focus on electioneering.

A lot of state elections would be behind us. Most of our large projects, the design is nearing completion. Approvals are mostly going to be in place, so hopefully, we'll have a clear run, and our margins will be on the upswing again.

Lakshminarayan K.G.
Founder, Tunga Investments

Got it. And in the last call, you mentioned that there has been a spurt in the subcontractors' expenses, as well as, I think, employee expenses for both of them. Now, you said that only some of your contracts have a pass-through. You can actually pass these expenses on. So right now, what kind of situation are we in? Have there been any changes in the contract that you have passed on these expenses, or how is the situation looking now?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

So most of our contracts now have built-in escalation clauses one way or the other. As far as the government, most of our fixed-price contracts have been completed or are nearing completion. As far as the ongoing contracts are concerned, the government contracts, they have a built-in escalation clause, a standard clause based on wholesale price index. As far as the private contracts go, all the volatile materials, the basic pricing is there for cement, for steel, for brick, stone aggregate, so on and so forth, even the finishing materials like stone, wood, etc. So as I said earlier, the volatility in these materials is covered. And because we have a healthy order book to a certain extent, in the private sector, we are able to dictate terms in having a more balanced contract agreement and plugging in these.

Lakshminarayan K.G.
Founder, Tunga Investments

Got it. Now, if you just look at your current assets in the balance sheet and the trade receivables are something like INR 625 crores, can you just tell me how do you classify these current assets? How much of them are payable within six months? I mean, receivables within six months, you can just throw some light on what is the aging of the receivables and current assets. What I could understand that there is basically INR 625 crores that are current receivables, and that we are expecting within our normal days, the operational days that's coming around 60 days, 60 to 75 days. That we are expecting to receive that.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

More than six months?

Satbeer Singh
CFO, Ahluwalia Contracts

Yeah, one second. More than six months or. This is non-current receivables, hardly INR 33 crores, I think so. We are expecting a realization of.

Lakshminarayan K.G.
Founder, Tunga Investments

I think it's the current receivables.

Satbeer Singh
CFO, Ahluwalia Contracts

Yes, please?

Lakshminarayan K.G.
Founder, Tunga Investments

I think it's the current assets, trade receivables around INR 625 crores. I just want to understand how much of your trade receivables are within six months and how much is beyond six months to one year, less than six months and six months to one year.

Satbeer Singh
CFO, Ahluwalia Contracts

This is INR 625 crores expecting around might be INR 100 crores more at upper side, just more than six months.

Lakshminarayan K.G.
Founder, Tunga Investments

Less INR 525 crores will be within six months?

Satbeer Singh
CFO, Ahluwalia Contracts

Yes, yes. Less within six months. Yes.

Lakshminarayan K.G.
Founder, Tunga Investments

Okay. Okay. So one more question regarding your, you talked about fixed costs are slightly estimated. Now, if I just look at your expenses, which are the ones that are variable in nature? So if you look at it, the subcontract work is completely variable in nature. And how about the employee benefit expense? How much is variable and how much is fixed?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Variable, as far as employee cost is concerned, variable is very less. As far as the variable is concerned, it's only for the top maybe out of a total employee strength of about 3,500. Variable component would be only there for about 20 people who are at the top levels of management in the company.

Lakshminarayan K.G.
Founder, Tunga Investments

Because your employee benefit expenses have actually kind of gone from around INR 70 crores for the first quarter and to that almost INR 89 crores. So just want to understand what actually led to a substantial increase in the employee benefit expenses.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

So two things. One is our employee cost includes labor costs also. This is the labor which the company is spending directly on. So there are two components to the labor. One is labor which is under the subcontractor. And as a part of this INR 89 crores, there is labor which the company is directly spending on.

Part of this increase is due to the increase in revenue, and part of the increase is also.

Employee benefits, 22% labor.

Yeah. So that's what I'm saying. And the other big thing is we have paid arrears to the staff increments. Our staff increments, we put those increments in the last quarter, and the arrears have been paid, right? This was due from first of January, but the process was delayed. So part of that increase is due to that. And thirdly, obviously, the number of people, the number of staff has also increased to cater for our increased order book where we are going to be executing the work over the next, say, two, two and a half years.

Lakshminarayan K.G.
Founder, Tunga Investments

Got it. Got it. And any idea what is the band one should expect? Because it is like one or five years it has been taken into consideration. So employee benefit expenses.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Just to give you an idea, our staff cost per se, only our staff cost, if that is helpful to you, is in the region of. It varies from about 6.8%-7.1%. And this is where it's been kept at over the past, say, two to three years.

Lakshminarayan K.G.
Founder, Tunga Investments

Got it. And this is part of the employee benefit expense?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Yes. This is a part of the employee benefit expense.

Lakshminarayan K.G.
Founder, Tunga Investments

Got it. Got it. Thank you, sir. I'm congratulating you.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Thank you. Hi. One minute. Can I just hello? Are you there?

Lakshminarayan K.G.
Founder, Tunga Investments

Yeah.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Yeah. Okay. So you asked about specifically a question about the trade receivables, right? So our trade receivables are about 60 days, as Mr. Satbeer said, right, which is one of the lowest in the industry today, right? I mean, it goes on up to about so we have reduced also our net working capital days have reduced from 117 in the last quarter. That's Q1 of 2025 to 93 days in the current quarter. Yeah. That's additional information for you.

Lakshminarayan K.G.
Founder, Tunga Investments

Thank you. Thank you.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Thank you.

Operator

Thank you. The next question comes from the line of Parvez Qazi from Nuvama. Please go ahead.

Parvez Qazi
Executive Director, Nuvama

Hi. Good afternoon, sir. And thanks for taking my question.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Hi, Parvez.

Parvez Qazi
Executive Director, Nuvama

Yeah. Hi. A couple of questions from my side. As you rightly said, historically, our staff expenses have been between 6.8%-7.1%, whereas if one looks at H1 numbers, they are at about 8.8% or something. Now, clearly, part of the reason is because of operating leverage, as you rightly said, some of our projects, because of various reasons, haven't progressed at the pace at which we would like. So maybe part of the reason is also because of the industry-wide labor shortage. Now, going ahead, do you think we should pencil in slightly higher than historical average for this, or do you think this will normalize and come back to the 7%-7.5% marks, maybe one year down the line, two years down the line? Just wanted to get your thoughts on that.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

We aim to get it down to anywhere between 7% to 7.5%. That is what our internal planning is, but as I mentioned earlier, and you also sort of alluded to that, it all depends on our revenue, on our actual execution on the ground. Other than the factors that I've mentioned earlier, which have affected our work on the ground, our production on the ground, one factor which will continue to impact us in this quarter, the ongoing quarter, is the NGT, right? All of you are aware of what's happening in NCR. So now GRAP-IV is in place, and that is another big thing which is going to impact this quarter. That's why I've kept the margin guidance muted for the rest of the year because we have a lot of large projects in NCR, especially Gurgaon.

Parvez Qazi
Executive Director, Nuvama

Sure. My second question is, I mean, you said that for the CST development project, there are design issues, and which hopefully will get resolved going ahead. But if you look at some of our other major projects like the Tata Memorial Hospital in Parel or the DLF The Arbour project, there also the quarterly execution run rate seems to be somewhere around INR 25 crores-INR 30 crores only. So I mean, in these projects also, are there some design issues or some other issues, and when do we expect a pickup in the pace of execution for these larger projects?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

As far as the DLF The Arbour Project goes, we actually executed about INR 11 crores-INR 12 crores per month. Last month, we achieved that run rate, and this month, we were on a target to double that and then going forward, maintain about INR 25 crores every month. But this quarter, as I said, now it will be impacted by NGT. But we are out of the ground there now. The design issues were designed; it was not in our scope. It was in the client's scope, but there were a few issues there, and labor shortage was there. But I think as far as DLF goes, once the NGT issues are behind us, we are ready to take off. As far as Tata is concerned, there, yes, there were design issues. But that also, I think within a month or so, we should be taking off on that project also.

Vikas Ahluwalia
Director, Ahluwalia Contracts

What the Tata Cancer Hospital is nearly on target now. I mean, whatever time we've lost is because of the monsoon. So whatever were the design issues, they were more to do with the foundation part of it, which the Tata Memorial people had to redesign or do a little bit of changes because we encountered a certain rock which was not there. So that is the otherwise Tata per se is on track.

Parvez Qazi
Executive Director, Nuvama

Sure. My second question is, I mean, the overall industry, I mean, when we talk to real estate developers, they do highlight that there is a shortage of good quality contractors in India. You, as well as some of your other peers in the building contracting space, clearly have lifetime high order book. There is no shortage of order intake. So then the question is, I mean, in the previous cycle, 2002-2008, we had seen a similar case, and all of you, as well as your peers, had seen significant expansion in EBITDA margin. Why do you think the similar situation is not playing out this time?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

It's too early to sort of say whether those kind of margins will happen or not happen. All we can say is, or to give you the reason for why they have not happened up until now as far as this financial year is concerned. I did mention all those reasons: prolonged monsoon, election year in, right, and all of a sudden, the infrastructure growth is upon us, and this kind of growth is unprecedented. This was not even there in the last decade. So the kind of labor shortage that we are seeing now, I mentioned in my last two calls that this is virtually an epidemic which is waiting to be upon us. So the government has to wake up and do something about upskilling of labor force, do something or change the NREGA laws.

So labor shortage, till the government steps in, I don't think anything much is going to happen. So that is a major contributor to works not proceeding on schedule. And that, in turn, is affecting not only our revenues, projected revenues, but also our margins.

The entire industry is suffering. It's not only us. That's why I mentioned, if you see the results of all construction companies, all these factors have contributed.

Parvez Qazi
Executive Director, Nuvama

Yes. Absolutely, sir. Last question to Satbeer Singh . What would be our gross debt level?

Satbeer Singh
CFO, Ahluwalia Contracts

This is INR 9 crores.

Parvez Qazi
Executive Director, Nuvama

INR 9 crore. Sure. Thanks, sir, and all the best.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Thank you.

Operator

Thank you. We have the next question from the line of Vaibhav Shah from JM Financial. Please go ahead.

Vaibhav Shah
Assistant Vice President, JM Financial

EBITDA margin guidance for FY 2025. What's your number?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

About 9%.

Vaibhav Shah
Assistant Vice President, JM Financial

Sir, so what will drive that improvement in the second half, the margin improvement?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

As we mentioned, some of the factors which have affected us till now, they are behind us. One is, I think, other than NCR, we should have a clear run execution. No monsoons are there. Once the Maharashtra elections are over, that sort of holdback should also not be there. As far as NGT is concerned in NCR, this month or maybe December, maybe a washout, but the last quarter, we should see a good run rate. Most of our contracts have taken off now. And out of our total order book, almost 30% comes from NCR. And our bigger projects like CSMT and Tata, as Vikas mentioned, the design phase is almost over. So we are looking for a healthy revenue from these projects also. The two airports that we are doing, Varanasi and Darbhanga, there also design phase is nearing completion.

So in the last quarter of this financial year, we should see a good run rate from these projects also.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay. Sir, secondly, out of our total order book, what would be the share of fixed-price contracts?

Satbeer Singh
CFO, Ahluwalia Contracts

This is 15%.

Vaibhav Shah
Assistant Vice President, JM Financial

And this should be completed by March, largely?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

You can say, yeah, largely this should be completed by March. Almost totally, it will be over by H1 FY 2026.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay. And sir, lastly, on few projects. So for CST, now, what would be our guidance for FY 2025 in terms of revenue and earlier targeting completion of June 2026? So would we be revising the numbers?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

Vikas, you want to answer that? Come again, please.

Vaibhav Shah
Assistant Vice President, JM Financial

So for CSMT project, what would be our revenue guidance for next couple of years? And we were targeting a completion of June 2026 earlier. So are we maintaining that target?

Vikas Ahluwalia
Director, Ahluwalia Contracts

So the project is actually about three and a half years. And I mean, the execution time will probably remain the same. I mean, whatever time we lost last six months, eight months because of design and approvals from the railways is lost is lost. But it is going to be compensated for that. That is for sure.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay, so what revenue are we targeting for 2025 and 2026 from this project?

Vikas Ahluwalia
Director, Ahluwalia Contracts

You can take an average run rate of about INR 80 crore. So some months it's going to go up, some months it's going to come down. So the average run rate is about INR 70-80 crore.

Vaibhav Shah
Assistant Vice President, JM Financial

That should start from fourth quarter onwards, INR 70-80 crore run rate?

Vikas Ahluwalia
Director, Ahluwalia Contracts

That should start from, yes, somewhere in January-February, it should start.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

So to specifically answer your question, as far as this financial year is concerned, we are looking at a turnover of about we are targeting a turnover of about INR 300 crores. And as far as the next financial year is concerned, as Vikas has said, INR 70-80 crores per month would be an average.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay. And, sir.

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

That's about INR 800 crores, give or take a few crores here and there for the next financial year.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay. Sir, when do we expect to start the work on Jewellery Park?

Vikas Ahluwalia
Director, Ahluwalia Contracts

Jewellery Park, we have not yet got the notice to proceed. But we are expecting it in the month of December. We are expecting the notice to proceed. And then again, it will go into the design stage. So let's be fair and square, not to expect much from this financial year itself.

Vaibhav Shah
Assistant Vice President, JM Financial

So revenue will start flowing into next year second half?

Vikas Ahluwalia
Director, Ahluwalia Contracts

Yeah, next year second half.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay. Sir, any broad guidance in terms of revenue from the pushing for FY 2026?

Vikas Ahluwalia
Director, Ahluwalia Contracts

Maybe about 15 crore rupees a month. You see, what will happen in this is that by the time the design is all, it's going to get complete, rains are going to set into Mumbai, Maharashtra next year. So that is what is going to happen in this case, I think very honestly. So maybe next year, again, an average run rate of about 30-50 the first few months. Then again, it is going to go up to that level of 70-80, 70-80.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay. Sir, and lastly, any issues on the working capital side from any particular states?

Shobhit Uppal
Deputy Managing Director, Ahluwalia Contracts

As I mentioned during the last call, Bengal, Bihar were two states. Bihar working capital is actually improved. All our deals have been certified, and we should see them being cleared in this financial year, rest of the financial year. Bengal, we are not executing any government jobs as we speak. So I know the earlier jobs have been finished.

Vaibhav Shah
Assistant Vice President, JM Financial

Okay, sir. Thank you. So those are my questions.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Thank you.

Operator

Thank you. The next question is from the line of Samyak Jain from Marcellus Investment. Please go ahead.

Samyak Jain
Analyst, Marcellus Investment

Thank you for the opportunity. Sir, I understand that you are maintaining your revenue guidance at 15% for FY 2025, but bringing down the CapEx guidance for the year. So just wanted to understand how will you maintain the pace of execution for this financial year?

Vikas Ahluwalia
Director, Ahluwalia Contracts

It's an internal reworking that we have done. Some of our larger projects have gotten over, and as I mentioned earlier, we are conservative as far as new order inflow is concerned, so as a part of cost-cutting exercise that we have gotten into, once we've realized that the margins are down for the reasons as enumerated earlier by us, so we are looking to reduce our CapEx expenditure as far as equipment and shuttering go. We are looking at, as far as shuttering goes, we are looking at maybe going the rental route on some of our projects where we feel which are fast-track projects where we can use rented shuttering quick in and out, so as a part of the overall strategy to cut costs.

Samyak Jain
Analyst, Marcellus Investment

Understood. And if the renting increases, will that further impact the margins or it will remain in the guided rate?

Vikas Ahluwalia
Director, Ahluwalia Contracts

We have an internal, you can say, the way we work out which projects can take renting where the profitability will not be impacted, which are fast-track projects, right? Where the projects which are to be finished in about a year, year and a half, at least the structured bit. So there we go the renting route.

Samyak Jain
Analyst, Marcellus Investment

Understood. That's it from my side. Thank you.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Thank you.

Operator

Thank you. The next question is from the line of Sunny Roy, an individual investor. Please go ahead.

Hello. Am I audible?

Vikas Ahluwalia
Director, Ahluwalia Contracts

Yes.

Yeah. So I just wanted to know that since we are targeting a 50-50 between the private and the public sector for our orders, what is stopping us from bidding for the private sector more than 50% given that the terms and conditions are much better and the payable receivables and the margins and all, and competitive intensity is much better against the public sector? So why aren't we increasing the private sector part and the order?

Nothing is stopping us other than the scars of the last downturn. Earlier, when the downturn hit the private sector, a lot of contractors got nailed. They lost. Actually, companies got finished. So we don't want to put a lot of eggs in one basket. And while the going is good today, as an infrastructure company, we are always at the forefront of cycles, be it upward cycle or downward cycle. So we're just being cautious.

Right. Right. And sir, lastly, as mentioned by a previous caller regarding the earlier cycle of 2028, if we compare that to this, so where are we in that cycle? Are we in the starting point? Are we in the midway? Where do you feel, even though it's not comparable, where do you feel from the industry standpoint, the construction industry compared to the last cycle? Is it in the midway or in the starting point?

I think we are somewhere between the starting point and midway. But it would not be right to do a strict comparison because when the last cycle was there, the geopolitical situation was something else. Today, the world is flatter. What happens in America impacts us immediately. So it would not be fair to do a direct comparison. If you would have asked me this question one and a half months ago, I would have said we are just at the starting of the cycle. But today, I would like to say we are somewhere between starting and the midpoint.

Right.

So we have to be cautious. That's what I'm saying. Anybody who's not cautious who throws caution to the wind and indiscriminately plans to grow, that's what actually we are seeing. There is a plethora of issues which are coming out from construction for construction companies and in the real estate sector. So we don't agree with that line of thought. I think one has to be cautious going forward.

Right. So thank you for the strong execution and the prudential approach. I've always been a long-term investor. So I wish you all the best. Thank you.

Thank you. Thank you so much. Good to hear that.

Operator

Thank you. Ladies and gentlemen, if you wish to ask questions, you may please press star and one. We have the next question from the line of Ketan Jain from Avendus Spark. Please go ahead.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

Thank you. Sir, my question is on the Emaar settlement. How much of the money is received and yet to be received?

Satbeer Singh
CFO, Ahluwalia Contracts

I think it's just INR 56 crores to be received now. All money, total is INR 218 crores. Out of just INR 56 crores, it's to be received now.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

Oh, 56 is pending. 56 is pending.

Vikas Ahluwalia
Director, Ahluwalia Contracts

The tranche that was to be received in this quarter has been received. That has been received so that the payment is happening as scheduled.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

How much in this quarter is it?

Vikas Ahluwalia
Director, Ahluwalia Contracts

This is INR 70 crores.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

So it will get done by FY 2025?

Vikas Ahluwalia
Director, Ahluwalia Contracts

Yeah. The next tranche is due in January. The last tranche.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

January. Okay. Sir, so my second question is on, I was just seeing your P&L in FY 2019, 2020, and 2021. We have had a big bad debt provision, bad debts written off in FY 2020 and 2021, worth INR 42 crores and INR 53 crores. If you could tell us what does it pertain to, which client does it pertain to?

Satbeer Singh
CFO, Ahluwalia Contracts

That is also related to Emaar also. That time, we have taken provision of INR 47 crores, and various other parties were there at that moment. That's like the case where various parties are there.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

Okay. So it's largely Emaar and other parties?

Satbeer Singh
CFO, Ahluwalia Contracts

Yes. Exactly.

Ketan Jain
Associate Analyst Institutional Equities, Avendus Spark

Okay. Okay. Thank you, sir. I'll get back to you.

Operator

Thank you. Ladies and gentlemen, we have no further questions at this time. I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Thank you so much, everybody, for joining in. See you soon in about three months' time. Thank you. Thank you so much.

Operator

Thank you.

Vikas Ahluwalia
Director, Ahluwalia Contracts

Thank you.

Operator

On behalf of Ambit Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

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