Ladies and gentlemen, good day, and welcome to Ahluwalia Contracts (India) Limited Q4 FY21 post-results analyst conference call, hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Varun Ginodia from Ambit Capital. Thank you, and over to you, sir.
Thank you. Thank you so much, Niraj, and good afternoon, everyone. I wish and I hope everyone is keeping in good health. We welcome everyone to Ahluwalia Contracts for Q4 FY 2021 post-results earnings call. Today we have from the management, Mr. Shobhit Uppal, Deputy Managing Director, Mr. Vikas Ahluwalia, Director, and Mr. Satbeer Singh, CFO. In terms of flow of the call, Mr. Shobhit Uppal will give some opening remarks, and then we will open the floor to Q&A. Sir, over to you.
Thanks, Varun. Thanks, Niraj. Good afternoon, everybody. Welcome to this results call, year-ending FY 2021 financial results for Ahluwalia Contracts. During Q4 FY 2021, the company has achieved a turnover of INR 761.70 crore and a PAT of INR 37.07 crore, in comparison to a turnover of INR 549.22 crore and a PAT of INR 6.10 crore in Q4 of FY 2020. EPS of the company for Q4 FY 2021 is 5.53, as compared to 0.91 in Q4 of FY 2020. During Q4 FY 2021, the company's EBITDA margin is 9.62%, as compared to 4.71%, and a PAT margin of 4.87%, as compared to 1.11% in the corresponding period of the last financial year.
During the financial year 2021, the company achieved a turnover of INR 1,982.19 crores and a PAT of INR 77.24 crores, in comparison to a turnover of INR 1,884.93 crores and a PAT of INR 64.44 crores in the financial year 2019-20. EPS of the company for FY 2021 is 11.53, as compared to INR 9.62 in the financial year 2019-20. During the financial year 2021, the company's EBITDA margin is 8.91%, as compared to 8.67%, and a PAT margin of 3.9%, as compared to 3.42% in the corresponding period of the last financial year.
Net order book of the company as on 31 March 2021, stood at INR 7,605 crore, to be executed in the next 2-2.5 years. Thank you. We are open for questions now.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Hi, hi, Shobhit, sir, good evening.
Hi, Nitin. Hi.
Sir, first of all, you know, just-
Nitin, your voice is faint.
Nitin, if you get the question-
Yeah. Am I audible now, sir?
Yes, much better.
Yes, you are.
All right, sir. Sir, first in your opening remarks related to what kind of an execution you are seeing at the down level for, specifically for our order book in context of two things. One, how Bihar project is moving now, and, you know, projects like Sion, because Maharashtra, you have two projects, which is your metro and the Sion one, how they are proceeding? Why I'm asking this, sir, because, you know, the projects like Jammu and the Delhi government project, the central government, Central Vista was in full swing, as you were guiding earlier as well. So if, you know, can throw some light, will execution ramp up from the Bihar and the Maharashtra projects, how we should build in that?
Okay. Yeah, you know, Bihar, the projects, now going forward will move full swing. You know, first there was a hangover of elections, and secondly, you know, what we've seen in Bihar and in most of the government projects that, you know, when the financial year ends, the next couple of months, the treasury movement is a little slow. So that is behind us now. That coincided with the impact of second wave of COVID. So, you know, while the first quarter is sluggish, but going forward, Bihar, I think, we'll pick up speed now. It's already, it's in the process of doing that. We are picking up speed there, and some fund release there has already started in the last 7-10 days.
As far as Mumbai, the two projects are concerned, MMRDA, the depot, has also picked up speed. Sion, as per the nature of the project there, it really doesn't affect the total turnover too much because the stipulated duration of that project is about four years. So it's not the run rate, and that project is never going to be high. That's what has been taken into our planning also.
Okay. So then, next year, given what the second wave would have impacted your Q1, I'm assuming not much impact because the construction activity was picking—was I think already on. You can comment on that, that would be helpful. But generally, for the next one year, given you know, the Bihar will ramp up, I think Jammu already in full swing, how much revenue one should build up for the next year, going forward?
Look, Nitin, there is an impact. If people are telling you that the first quarter, there is no impact. While construction did not stop totally, but definitely our labor dropped down to about 30% on an average in these two months. So yes, as I mentioned, first quarter will be sluggish. And then secondly, you know, everybody is talking about the third wave. That's an unknown. How that is going to impact moving forward, this uncertainty continues to be there. And, you know, labor force still is not back to 100% on all our projects because of this uncertainty. However, in spite of these headwinds, our guidance for this financial year is 10%-15% growth-
Okay. I n our revenue. So you're taking much impact of third wave, any which way in your guidance. Is that the right way to look at it, when you're guiding at the lower end at 10%?
We can only take a certain amount of impact. We don't know how bad t hat will be--
Because, why I'm asking this, that, because INR 7,500 crore backlog, you will be executing very fast your Central Vista, AIIMS Jammu in the first half. In second half, it has to be driven by, let's say, Bihar. So that's why I asked you, Bihar started moving and on, because Calcutta, not much order book left now. They've already executed very fast there.
Yeah, within the first half of the first half of this financial year, Calcutta will contribute because it’s been good that the same regime has come back to power, and we have a couple of large projects which now have started moving post-elections there again, the auditorium project and the Milan Mela project. So yeah, the first half will contribute. Contribution will be there from Calcutta also.
So this last take of yours on the big pipeline across the projects, and that is one. And second, can you throw some light how now you're viewing the real estate part? Because we keep hearing from the real estate sector that, you know, the demand is coming back. So and some of the players are in a, you know, a hurry of new launches as well. What's your sense? Because, you can be being positive on commercial, I remember, and we saw some orders also coming from there. I just need your take on the big pipeline, how you're seeing in terms of ordering, how much you're planning, and your take on real estate. That's it from me. Thank you.
We continue to be very of private real estate, especially residential. It is yet not a focus area for us. So that's one part of your question answered. As far as the big pipeline is concerned, we have submitted bids for about INR 2,000 crore, INR 1,950 crore as in today. And beyond this also, I'm seeing a big pipeline of about INR 1,200 crore.
Great. Great. Thank you very much, sir.
Thank you.
Thank you.
Thank you. Participant, press star and one to ask the question. The next question is from the line of Shravan Shah from Dolat Capital Market Private Limited. Please go ahead.
Thank you, and congrats for good set of numbers.
Thanks, Shravan. Thanks.
Yeah. Sir, couple of things. First, when we are saying that labor is 70% and first quarter is sluggish, if you can help me, just a broad number, can we say at least INR 500 crore, so INR 762 crore is the fourth quarter revenue? Even if I do a 0.7%, 70% of that, that is a INR 532 crore. So will it be even lower than that, or that would be a kind of a broadly on that range, as we are already finishing the quarter?
I think it will be around INR 500 crore. Okay, and t hat's sort of the projection so...
Okay. On the EBITDA margin front, previously we said that we were looking at 10%-11% for this year and 11%-10% for FY 2023. Is there any change in that number?
We are quite bullish on our EBITDA in this year, the ongoing financial year, 11%-12%.
For this year?
We increased it by a percentage point.
Okay, that's great. Third thing, sir, just wanted to understand in terms of the provisions for debt. Last time we said in 9 months, we have written INR 13.78 crore. But now if I look at in terms of the cash flow, it is around INR 53 crore. So this quarter, it seems that we have written off INR 39 crore or made a provision for that. So just trying to understand what is that, and is it over? Because even last time also, we said we will expecting INR 6 crore provision this quarter, and now actually we have done close to INR 39-40 crore. So not able to understand where we are going wrong and what is still left in terms of the debt.
And at the same time, in terms of the CapEx also, last time when we said that in nine months we did around INR 19 crore and expecting INR 7-8 crore, but we have done actually INR 35-36 crore. So, what would be the number for next year in terms of the CapEx also?
So yeah, I had given you a total CapEx for the entire year at about anywhere between INR 25-INR 28 crore. You're right, we have done INR 45 crores. That is because due to scarcity of labor, we've invested more in mechanization to get projects up to speed, especially large projects like especially hospital projects, where we've taken a calculated gamble in investing more in machinery, primarily cranes and excavators and also, you know, shuttering systems. And we've done this on the Jammu project, we've done this on the Hamirpur project and the Chamba project. These are hospital projects, where the state governments are also extremely bullish, as is the center for the Jammu project, because they feel that the funds for these projects are not going to be in short supply.
Going forward, the CapEx for this year will be between INR 25-INR 30 crore. As far as the write-offs are concerned, you know, there is no confusion. I think you used the word, where we are going wrong. We're not going wrong at all. I thought the street would be happy. We cleaned up our balance sheet totally, you know? And I had maintained that, by the end of this financial year, most of the so-called bad debts we would write off, and we've done that.
Okay, so now nothing left in terms of the provision.
Minor, minor, right. Minor things and that also we are hoping that it would not come to that, but the balance sheet is mostly totally cleaned up now.
Okay. Lastly, sir, on data point, a break up of order book, segment-wise, region-wise, and also the number on the mobilization advance, retention money and unbilled revenue.
That is the last part. That is the order book, regarding this is.
For both segments.
This is government is 80% and private is twenty percent. And segment-wise, it's commercial, that is 4.90%, hospital is 51.58%, infra 12.75%, institutional 16.37%, residential 14.48%. And region-wise, East, this is 33%, North 46.1%, and West 20.23%, and South negligible, 0.66%. And, you are asking about mobilization advance , that is around INR 322 crore. And, further, what you are asking?
Retention Money and Unbilled Revenue.
Retention money, that is, this is retention and debtors, this is INR 616 crore. Unbilled revenue is INR 252 crore.
Sorry, sorry, retention, sir, you said how much?
Retention is out of that INR 181 crore. 181? 1 crore, including current and non-current.
Okay, okay. Thank you, sir, and all the best.
Thank you.
Thank you. The next question is on the line of Mohit Kumar from DAM Capital Advisors. Please go ahead.
Yeah. Good afternoon, sir, and congratulations.
Good afternoon, Mohit. Thanks.
Congratulations on good set of numbers, sir. So still on trade receivables, you said that you've written off entirely everything and there's no, absolutely no, there's no write-off, likely in the FY 2022. My question is: How do you see the trade receivables going forward for FY 2022? Do you think it will increase? Or do you think it will be to maintain at these levels, given that we are guiding for a very, you know, muted kind of revenue growth and given our large order book? And secondly, sir, can you just, is the order book INR 7,500 crore? Can you confirm that number?
Yeah, INR 7,605 crores.
My questions are answered.
Mohit, did you get that?
Yes, I got it, sir. And the trade receivables, sir, can you please elaborate on that? How do you see the trend going forward?
Look, trade receivables, it will be , you know, it will remain at these levels, because as I said, you know, the pandemic is still continuing, and the impact of the third wave, what it's going to be, and how, even if it's not there, how the economy, you know, reacts or bounces back. So these are some of the things which are still in the realm of uncertainty. You want any specific numbers on trade receivables?
Got it. I think it will remain like this. I think you're guiding for a stable, trade receivables, right?
Yes. Yeah.
So, is there any ordering for guidance you can provide for FY 2022? And, what kind of orders are available from the government side, in the sense, the hospitals, are you seeing more tenders of hospitals or with, you know, general buildings?
At the moment, you know, it's as far as the government order pipeline is concerned, we are seeing focus on healthcare projects. Otherwise, it is sluggish because the government, various state governments and the central government are also looking at, you know, balancing their budgets and seeing how money can be allocated for various projects. So there is a bit of slowdown in other projects, other institutional projects, let me put it that way. As far as our guidance to the order inflow is concerned, it's about INR 2,500 crores for the entire year.
Last year was INR 2,000 crore, am I right, sir?
Yes.
Wonderful. Thank you, sir, and all the best. Thank you.
Thank you.
Thank you. The next question is from the line of Ashish Shah from Centrum Broking Limited. Please go ahead.
Yeah, good afternoon, sir.
Good afternoon, Ashish.
Yeah. So just coming back to the subject of provisions. So, as in the last annual report, we had three distinct buckets of issues. One was the BG encashment , which was about INR 20 crores. We had overdue retentions and disagreements of INR 79 crores, and we had INR 53 crores of inventories of flats. So I believe the inventory part is what remains. And, where are we on the BG encashment part of INR 19? Is that completely written off during this year? And where are we on the INR 79 crore, which we had recorded as of the last annual report? So how much of that is remaining?
We are not able to understand what you are asking. You know, the first part, I think he's talking about the BG encashment of Reliance.
Right.
Is that what he's talking about, with the Reliance Metro?
Yes.
Right, he's talking about that.
Yes.
No, that is not written off. You know, there a settlement has been reached with Reliance, in addition, this is nineteen crores, in addition to that, another about twenty-four crores, I think. So the total settlement is about INR 40-odd crore, which they have to pay us in the next 4-5 years. Obviously, the repayment plan, as per the repayment plan, it should have started, but only a token amount has come, obviously, on account of because their revenues continue to be hit, because of Metro not functioning on account of pandemic, and their award from Delhi Metro airport line yet not having certified. So that is not written off.
Okay.
What was the next part of your question that I think-
The next part was-
We didn't understand.
Overdue, overdue retentions and trade receivables. That was recorded at INR 79 crore in the last annual report. What I'm checking is that-
That is not an overdue. Basically, that is a part of the-- So if you're asking for the old legal project, that, that is amount hardly INR 44 crores retention money.
Okay, so four-
Because we are in a legal and arbitration, that is hardly INR 4 crore retention, you can say. But all the rest of the retention money for the running projects are there. Out of INR 181 crore, you can say around INR 175 crore are related to running projects.
Okay. Sure. So we are basically saying what is balanced, what Shobhit sir said, is that the remaining amounts, if at all, are going to be very small. So, we are talking about the quantum of, let's say, around INR 4 crore of retention, which probably-
That's only INR 4.5 crores related to old projects, whether we have taken action in legal or arbitration matters.
Correct. Apart from that, there is nothing remaining?
No, no, that's all running projects, but we are realizing time to time, according to the situation of the availability with the client and also availability of our limits also. So that we are realizing time to time.
Okay.
Against the BG. Most of the projects have, have terms of realizing the retention against the BG.
Okay. So can you give the breakup of the finance charges, the interest cost for Q4 and FY 21, as reported in the P&L?
Interest cost is hardly, now this is coming out, 7.5%.
So I think, the total finance charges, the finance costs reported for the quarter--
Out of this, basically majorly related to mobilization advance , that we have taken around INR 320 crore. That amount is around INR 21 crore, that's the mobilization advance rate as a interest. And another one is, you, will find that, discounting of the lease liability, lease liability, that's the INR 4 crore 21,20 lakhs. That is also included in this.
Kota.
Kota. Kota for 10 years.
Kota, yeah.
This is another, the 12-13 crore related to BG commission-like expenses. Interest cost is hardly INR 3.90 crores.
Sure. Got it. Thank you.
It is given to the banks.
Right, sir. Got it. Thank you.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, Shobhit, congratulations on a good set of numbers.
Thanks, Parikshit.
Sir, Shobhit, my first question was on-- If I go a little bit back in the history, so I see your numbers. So FY 2019, 2020, we had major inflows, and FY 2018 to 2021, we've almost more than doubled our order book. And, but in terms of revenue, we are still struggling in that range of INR 17,000 crore-INR 20,000 crore as numbers, while the order book has more than doubled. So, so the INR 750 odd crore which we have done, so is it the optimum revenue we, we can do in a normalized condition on the current order book? Because I was waiting for last almost two years that sometime we'll catch up with the order inflows and the order book in terms of execution. Have we reached that stage now, maybe whatever happened in the COVID first and second waves, are we there?
You use the word, optimum condition. Yes, we are there. If conditions stay, optimal, then, yeah, 750 is achievable. But as we have seen, Parikshit, year- after- year, there are surprises around the corner, you know, every time we get to completion. So, that is why, you know, I'm giving the guidance that I am, that probably by the end of this year, we should be at INR 2,300 crores or there and thereabout.
This will be almost very conservative in terms of sizing in the face of this large second wave and other conditions related to payments of your dues and all, so considering economic factors as well. So I mean, there could be potentially upside from these levels, and this is not the optimal kind of execution which you are guiding, right?
Could be, Parikshit, could be. But as I said, you know, we are still not out of the pandemic. So it's only prudent to assume that there will be some continued effect over the next few months at least.
Second question was on, again, on the same issue that the order book has doubled, but large part of that has not reflected yet in the execution, and it is followed by a massive increase in the raw material prices last year. So do you think that this 11%-12% kind of margin guidance prices in the raw material escalation on the entire order book or are there any further negative surprises on the margin front, which could possibly come up?
They have been factored in.
Okay. And for FY 2023, so trajectory-wise, you said you're getting bullish on the margin, so 11%-12% for next year, and does it have further scope of increasing to 12%-13% in FY 2023? Hopefully, by then, we'll have no more of, like, third or fourth or potentially fourth or fifth wave. In the absence of that, so can we move back to our normalized margins of about 13%-[audio distortion] -% range by FY 2023?
Yes. Yes.
Okay, great. Just lastly, on this year, so how much is the total write-off which you took in FY 2021?
I think INR 53 crore.
INR 53 crore. Okay. So, and this is, so—and you're saying that next—this time, maybe very minor amount may come in and almost everything-
Yes.
Okay. Yes. Okay, thanks. Okay, thanks a lot, Shailesh. That's all from my end.
Thank you.
Hello?
Thanks.
The next question is from the line of Vaibhav Singhal from PhillipCapital (India) Private Limited. Please go ahead. Vaibhav Singhal, may I request you to unmute your line from your side and go ahead with your question?
Yeah. Can you hear me?
Yes.
Yeah, sorry. I think I was mute. Sure. Thanks for taking my question. So sir, my question, just two questions. One, just harping a little bit more on the provision side. So you mentioned the total INR 53 crore of provision is what we are taking for this full year. Assuming, and going by the call that we had, in the last quarter, the total provision for this quarter would be around INR 34 crore?
Yes, exactly.
And, sir, this would reflect in our-- Sir?
Hello?
Yeah.
That will have been made provision and write-off is INR 34 crore.
34 crore. Right. Got it. So sir, basically, if I were to... And this would be reflected in the other expenditure, right? In the P&L?
Yes, yes, yes.
Right. So that's around 4 or 5 basis points. So, we can assume that, if the provision was not there, our core operating margin would have been close to 13, 13.5%.
Just around 12, 12%.
Okay.
INR 53 crore, that's 12.5%.
14.5%.
Yeah. About 12%. 11.5-12%.
Right. So that is the margin that we can, as you mentioned, we can replicate as well next year on our core operation business, obviously-
That's why I said 11%-12%, yes.
Sure. Great, sir. And sir, this entire INR 53 crore was related to the Commonwealth Games project, or were there other provisions, other projects as well?
Majorly, majorly to the Commonwealth Games.
The Commonwealth Games has been expensed out completely. There is no more provision left for that project to be made?
Yes.
Sure. Great, sir. Sir, my next question is just one. I mean, I just wanted to get a clarification on a couple of balance sheet items. So our non-current, our other non-current assets have increased from INR 71 crores to around INR 120 crores, and our other current assets have increased from INR 315 crores- INR 458 crores. So put together, there's approximately INR 150 crores of increase in our other current and non-current assets.
Yes. Basically, you are asking other current assets that has increased INR 315-INR 458 crores, mainly due to unbilled revenue. That has been grown from INR 120 crores- INR 252 crores. And besides that, that's majorly due to GST, we have to take a refund around that amount has also increased by INR 30 crores. That is a major impact. But the other current assets have been increased from around INR 143 crores. And you are asking about other current financial assets, other current financial assets?
No, sir, other non-current assets.
That is not available.
INR 71 crore-INR 118 crore. Hold on, hold on. That is mobilization. Hold on, hold on. Other non-current? Hold on, hold on, hold on. Yeah, yeah, sure. That is due to the previous retention money. Retention money has increased to INR 60 crore-INR 105 crore. So that is the major impact only in other non-current assets. And sir, in the unbilled revenue you mentioned, unbilled revenue has increased from INR 120 crore-INR 252 crore. Okay, good. So this is INR 130 crore of incremental. This is against any specific project which captures major part of this unbilled revenue or is it spread across? That is due to change in the system.
Basically, what's happening now is that earlier we are taking the work done in particular quarter, particular month, we are taking—we are invoicing according to that. But now, because of real-time invoicing is there, that's why we are, we have to increase the amount that is WIP and unbilled revenue, that we are now able to recognize the revenue.
Okay, so just that, maybe a recognition kind of a problem, not a real—because of changes in the GST system, that's, you know, might be aware that they have introduced this in e-invoicing system. Okay. So because of that, the major increase is because of that? Yes, that's why the unbilled revenue has been grown.
Okay, okay. Sure, sir. Okay. So, Shobhit, sir, just one last question from my side. Just wanted to pick your brain on basically, we know that the healthcare sector is basically seeing a lot of boost. And, as we were having this call, The PM again came on to television , and they've been delivering some more sops to the sector. So, do you see the our business also kind of moving towards that direction? We have certain expertise in this domain. So, do you foresee that in the next couple of years, maybe larger part of the order book than what it is today, could be in the Healthcare segment, and there could be much larger projects coming through way in this in this segment, sir?
Look, I will not exactly replicate what you're saying, but what I would say, and I had said this in my last call also, that we are in a special position because of our expertise of having delivered hospital in the past 5-7 years. And going forward, this will remain a focus area, and it will help us in growing up.
Sure, sir. So great, sir. That's your call. Thank you so much.
Thank you.
For taking my question. Thanks. Wish you all the best.
Thank you.
Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Rajat Setiya from iThought Financial Consulting. Please go ahead.
Hi, am I audible?
Hi, Rajat. Hi.
Hi, thanks. Thanks for your attention. Listen, most of my questions have been answered, just one thing is remaining. If you look at our finance cost, so it keeps on changing every three, depending on the order that we receive and depending on the order that we place. So just want to understand, in reference to the revenues, maybe if this is something that we can generalize or, you know, this is the revenue that we would be comfortable in looking at, or it will be the revenue?
Rajat, your voice is not very clear. Rajat, your voice is not very clear.
Is it, is it any better now?
It is, it is.
Okay. I was saying, in terms of finance cost as a percentage of sales, if we have to look at in relation to revenues?
Do you want to take that question and answer that?
Yeah. Basically, going onwards, this is that finance cost will reduce gradually because of adjustment of mobilization advance. Mobilization advance, we have INR 322 crore. You can say, over our project over 2.5 years to 3 years, that would be advance to be adjusted. So that's now going onwards, you will find that coming down to 2.14%, so that will be some paid down. Basically, major mobilization advance impacted there, INR 21 crore. That we are expecting that will be
No, no, I think what he wants to understand. If I understood your question correctly, you want to understand why there is a variation year after year. Is that what your question is, Rajat?
Yeah, just would like to understand how to really understand this particular cost component? Because I think it is a function of not just the revenues that we book in our PNL, but also the order book, I think, that we have in the pipeline, correct?
So I'll tell you what it is a function of. If you see, normally for companies which are debt-laden, you know, a majority of the finance costs comes from the interest that they pay to the bank. We are virtually a debt-free company. Out of this total, I think the advance total finance cost is about 40-odd crores, INR 42 crores. Out of this, what we paid to the banks, as far as is virtually negligible, it's INR 4 crores. You know, more than 50%, about 50% of this cost is on account of the mobilization advance, which we have taken on various government projects, which is interest-clearing. About INR 20 crores out of this 40-odd crores is that finance cost, right?
In this year, particularly in the latter part of this financial year, you know, last financial year, we did not take much mobilization advance. Even when it was due, we did not take it. But seeing the market scenario, seeing the fund position with various state governments and central government, we thought it prudent to take this advance. That is why this absolute figure stands of this advance outstanding on our books is about INR 320 crore. And what Satbeer mentioned, he has mentioned is that going forward, you know, if conditions improve, we would get it deducted and try and reduce this finance cost on our balance sheet.
The other portion of this finance cost is what we pay to the bank for our bank charges against bank guarantees that we take, which we have to give as performance securities, as mobilization advance bank guarantees, and retention securities to various government clients.
Sure.
About INR 4 crore he mentioned as an answer to one of the earlier questions is for the Kota project.
Sure.
Is your question answered?
Yes, yes, pretty much. Just one follow-up on this. On this mobilization advances that we get, so we took it because we thought the considering in mind liquidity situation, but now going forward, let's say when we don't take this advance, this interest- bearing mobilization advance, then how do we finance? From our own books or how does it happen?
It depends on project- to- project. You know, if it's a central government project, especially relating to Ministry of Health Care, for instance, we would, going forward, we would avoid taking mobilization advance, or we will not take it to its fullest extent, and we would like to finance it from internal accruals. But if it is in state, say, Arunachal, for instance, if we feel, you know, in the long term, funds may be an issue, we would like to stock up by taking the mobilization advance.
What is the charge of mobilization advance, and what's the rate of interest?
It's 10%. The rate of interest is only 10%, and the charge, there is no other charge other than the charges that we pay to the bank for getting the bank guarantees, because this advance is securitized by giving bank guarantees to the client.
All right, sir. Thank you so much.
Thank you.
Thank you.
Thank you. The next question is from the line of Jiten Doshi from Axis Capital Limited. Please go ahead.
Yeah, good evening, sir.
Thanks.
In the order backlog, can you give us a break-up between the fixed price contract and the contracts like variable, which are covered by escalation, or most of the contracts are covered by escalation?
I think about 80% of the projects. We will send these exact numbers to you, so please note this. But about 80% of the contracts are covered by an escalation clause.
We are, like, well protected against the raw material increase, right?
Yes. Yes.
Sir, on the inventory part, so do we have you sold any, inventory in the form of real estate which we were having, which we have taken from our clients and which were in our books? What would be the pending outstanding inventory, such type of inventory?
That we have sold during the year, that is, real estate inventory, around INR 7.89 crores. And that is where the also we have shown the lot of the PPE to INR 9 crore, which include impairment of INR 1.99 crores.
Sorry, I didn't get you, sir. You said INR 7.9 crore was the opening you said, right, sir?
We have sold during the year INR 7.89 crore inventory.
That is, that is what we have sold?
Yes.
And now, what is the outstanding is?
You can see that there was INR 7.9 crore there, that we have shown here for the stock.
Thank you. And, sir, in terms of the order backlog, so can you give me the outstanding order backlog for a few key projects, if I may ask, as on March ending? So, Jammu, two project, the hospital project, and the hospital project in Nagpur, AIIMS, and the Kalyani , West Bengal, then the government hospital project in Bihar, Chhapra. See, if it is possible, can you share these numbers or could I take it?
Tell me for this one. I will tell you.
Okay.
He's asking for maybe the outstanding. That is in Kalyani, INR 177 crore.
Sorry, hello?
Bihar to Bihar, AIIMS, Kalyani. AIIMS, Kalyani, INR 177 crores.
Okay.
You are talking about Chhapra, this is INR 314 crore, and Nalanda, INR 268 crore.
Okay. And Jammu?
Jammu, this is INR 1,176 crore.
1,176, okay.
INR 1,176 crore.
1,176. Central Vista, sir?
Central Vista, this is INR 246 crore.
So, almost significant execution done this quarter, I think.
Yes, yes, yes.
Okay. And, sir, this Nagpur AIIMS, sir?
AIIMS Nagpur, this is INR 125 crore.
Acha, okay. And the, sir, Chhapra you gave. Okay, okay. And, sir, one more project, if you can, I'd like to the MCGM and Sion Hospital, you said it has started. So any- is it still the same in the order backlog?
That just started. That has just started. That's all, amount is pending.
That 24-bed hospital project also started or how it is, sir?
Which project?
In Hamirpur, Hamirpur project, sir.
Hamirpur is just, it's just a cluster. It, you know, it's a designed-in project, but work on the ground has begun. We have already done a billing of about INR 10 crore there.
Crores or INR 12 crores.
Exactly.
So sir, can I get separately the list of outstanding order book project-wise, if I mail it to the IR team, can they mail me?
Yes.
So if it is-
It will be sent to you.
That's it from my side, sir. Thanks a lot, and all the best, sir.
Thank you.
Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Jaimin Shah from Equirus Securities . Please go ahead.
Good evening, sir. Congratulations on the good set of numbers.
Thanks. Thanks, Jaimin.
So my question regarding the gross margin that was reported during this fourth quarter 2021. So if we see the trend of Q3 of 2021 or Q4 of 2020, then the gross margins are moving around 17%-18%. Whereas we have recorded around 21%-22% during this fourth quarter 2021, despite the raw material prices increase. So like, how we are looking at this margin going forward, like, in the range of 21%-22% or below that?
Look, we have been able to achieve an excellent set of numbers in this quarter due to various factors. Primarily, you know, some projects where the margins were high, we could, our execution levels were very high. So but this, I don't expect these kind of numbers to last quarter- after- quarter, especially on account of the uncertainty, as I said. But, but if optimal conditions are there, why not? As I mentioned, I think it was Shravan who asked that question, you know, maybe two years down the line, we will go back to the highs that we had attained in the past, around 2010.
Okay . Thank you, sir.
Jaimin, do you have any follow-up questions?
No, no. Thank you.
Thank you.
Thanks.
Participants, you may press star and one to ask a question. The next question is from the line of Shravan Shah from Dolat Capital Markets. Please go ahead.
Sir, last time you said that we bid two projects. One was NBCC, Delhi, and one was Patna, around 1,000 crore, 1,000 crore each. Has that bid opened or is it still pending, that what we said around INR 1,930 crore that we have submitted, so that is still a part of that?
No. The first one, the Delhi one in Karol Bagh, there were two bidders. One was Nagarjuna, one was us. The job has been awarded to Nagarjuna, who was about 18% lower than us, if memory serves me right. So what we had bid as INR 1,050 crores, I think he has taken the job at about INR 830 or 840 crores. So that has been awarded, not to us. The second job is yet to be, the price bid is yet to be opened, I think, Bihar, because it was, various government departments were, reeling under the effects of the pandemic. So I think the evaluation is on, on the pre-qualification or post-qualification is still continuing.
Okay. So currently, what we said, around INR 1,930 crore bids submitted, so around INR 1,000 crore would be the Bihar one. So the other, INR 900 or INR 1,000 crore, that would be a single project or 2 or 3 projects are there?
No, there are 1, 2, 3, 5 other projects.
Okay, okay. So just smaller one. Okay.
Yeah.
Okay. No issues. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities. Please go ahead.
Hi, good afternoon, sir, and congratulations for a great quarter, sir.
Thanks, Parvez. Thank you.
So a couple of questions from my side. First, when you mentioned that the pipeline has been slightly sluggish, so what is the kind of competitive intensity that you are looking at? You just said, NBCC is some 18% lower than you. But as a general trend, over the last 6-12 months whether better prices are getting there, how has the competitive intensity?
Parvez, as I had mentioned, in my last call, you know, I had expected the competitive intensity to be high, but now, it will taper off. I think things will start normalizing, because almost every contractor is reeling from the price increase. Albeit, you know, although, most of the contracts are covered, government contracts are covered by a price escalation clause, but in the short term, it has impacted contractors whose balances, whose borrowings were high. So I think they would have learned their lesson. Going forward, maybe in the next, in the second part of this financial year, I think the competitive intensity would not be as much.
Okay. Just had a couple of quick questions. What was the overall debt at the end of this last quarter?
I think the debt is about INR 15 crores.
Fourteen crores.
Fourteen crores.
It is not too much have happened. Can you please repeat the segment-wise breakup of the orders?
Sure, hold on. That is commercial, 4.90%; hospitals, 51.58%. I nfra 12.75%, institutional 15.27%, residential 14.48%.
Okay, thanks. That's it from my side. Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Parikshit, may I request you to unmute your line from your side and go ahead with the question? Parikshit, we are unable to hear you. May I request that you unmute your line from your side and go ahead with the question?
Hello. Is it better now?
Yes.
Yeah. Yeah, Parikshit, we can hear you now.
So INR 25 crore of cash on the books, so is it largely explained by the high level of mobilization advances which we have availed during this year, just to keep the liquidity buffer on our side?
Parikshit, just repeat the question, please.
Hello?
Yes, sir, can you please repeat? Sorry. Parikshit, can you please question. Sir, I'm sorry, half of the question was not really audible.
INR 325 crore of cash, which we have on the books.
Yeah, largely on account of mobilization advances, yes.
So this year, how much was the equivalent of mobilization advance you would have availed versus last year?
Just, last year, mobilization outstanding was INR 207 crores, and now INR 332 crores. But we have to check how much mobilization advance has been taken this year.
Okay, so 207 was last year closing, and now it's at 300. That's okay. Okay. So the second question was on the real estate side, we are seeing very good recovery in residential, which was back till the second wave hit us. And even if I listen to commentary of most of the organized real estate, private real estate developers, they sound very confident on the second half of FY 2022. And this COVID has also resulted in a large part of market share shifting. Just from Bengaluru market alone, top 4, 5 developers market share has increased from 20% to almost 50%, when the market shrunk about 35% from 50 million to 31 million sq ft. So are we a nd these are all, like, strong balance sheet developers.
We can pay developers like you on time, who can give you good projects, good contracts. So are somewhere in the near future, do you really think that we can come back and start looking at private sector, especially the tier one developers, as a potential part of our order book and growth? So if you can comment something on that.
Yeah, if I take you back a couple of years, I told you that, you know, in the long term, we would like to maintain a 50/50 order book, right?
Yeah.
But in the short term, we continue to be risk-averse and wary of residential projects on the private sector side. In the long term, it, in the past, it has been our bread and butter, and we will eventually, you know, after evaluating the stronger players and when the market has stabilized, we would, we will obviously be working on the private residential projects also. We are, we are doing that in a handful of projects. You know, the projects in Pune that we are doing, 50% of that project is residential, as you know.
Okay. So but that long term is now, now, not that, not that long term, right? I mean, is it maybe, is it like maybe another year or like. So how, how far do you feel that you'll be in a position to come back?
There is a lot of uncertainty. As things stand, in the next one year at least, residential projects on the private sector side do not interest us.
Okay. Sure, sir. Sure, sir. Thank you. That's all. Thank you.
Thank you. Ladies and gentlemen, we'll take the last question from the line of Mohit Kumar from DAM Capital. Please go ahead.
Yes, sir. Thank you for the opportunity once again, sir. So one clarification, sir: The kind of order we bid for in the government side, be it the state or central, all are covered by escalation clauses, right?
Yes.
There's no fixed price contract on the government side. Am I right in saying that, in general?
NBCC used to have fixed price contracts, but on larger contracts now, they've also acceded to the demands of the construction companies and have started putting in escalation clauses.
Understood, sir. Thank you, sir. All the best. Thank you.
Thank you.
Thank you very much. I will now hand the conference over to Mr. Varun Ginodia for closing comments.
Thank you. Thank you, Nirav, and thank you so much, sir, for patiently answering all the questions. I hope, you know, everyone does keep in good health during such times. Sir, any closing remarks, I hand over the call to you for that.
Thank you. Thank you, Varun. Thank you, thank you everybody for joining in, and listening to us. We-- If there are any further questions, please feel free to mail them to us. We will respond, and, see you soon, hopefully with a good set of numbers again after a couple of months. Thank you. Thank you so much. Bye.
Thank you very much.
Thank you, everybody.
Thank you so much. Thank you, Varun. Take care.
Thank you very much. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.