Ladies and gentlemen, good day and welcome to Ahluwalia Contracts (India) Limited Q2 FY 2021 Post-Results Analyst Conference Call hosted by Ambit Capital. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Just note, 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 so much, Vikram, and good afternoon, everyone. On behalf of Ambit Capital, I welcome you all to quarter two FY 2021 earnings conference call of Ahluwalia Contracts Limited. Today we have with us from the management, Mr. Shobhit Uppal, Deputy Managing Director, Mr. Vikas Ahluwalia, Whole-time Director, Mr. Satbir Singh, CFO, and Mr. Rohit Patni from Investor Relations. In terms of flow of the call, Mr. Uppal will give a brief summary of the results and the outlook, and then we'll open the floor to Q&A. Sir, over to you.
Thanks, Varun. Good afternoon, everybody. We have announced the financial results for Q2 FY 2021. During Q2 FY 2021, Ahluwalia Contracts has achieved a turnover of INR 434.51 crores and a PAT of INR 17.96 crores, in comparison to a turnover of INR 433.69 crores and a PAT of INR 13.08 crores in Q2 FY 2020. EPS of the company for Q2 FY 2021 is 2.68, as compared to 1.95 in the corresponding quarter last year. During Q2 FY 2021, the company's EBITDA margin is 7.87%, as compared to 8.97%, and a PAT margin of 4.07%, as compared to 3% in the corresponding period of the last year.
During H1 FY 2021, the company has achieved a turnover of INR 684.36 crore and a PAT of INR 25.44 crore, in comparison to a turnover of INR 837.71 crore and a PAT of INR 37.20 crore in the corresponding first half of the last year. EPS of the company for H1 FY 2021 is 3.80, as compared to 5.55 in H1 FY 2020. During H1 FY 2021, the company's EBITDA margin is 7.70%, as compared to 10.32%, and PAT margin of 3.64%, as compared to 4.41% in the corresponding period of the last year.
The net order book of the company, as on date, stands at INR 8,120 crores. We have got orders worth INR 1,243 crores in this financial year till date. Thank you. We are open for questions now.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. If anyone wishes to ask a question, press star and one on your touchtone phone now. If you wish to remove yourself from the question queue once your questions have been answered, you may press star and two. Participants are requested to use handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the questions assembles. To ask a question, please press star one. We have a first question from the line of Mohit Kumar from DAM Capital. Please go ahead.
Yeah. Good afternoon, sir.
Good afternoon.
Congratulations on the, congratulations on a decent set of numbers. Sir, my first question is, given the, you know, COVID and given the lockdown and everything, is it possible to now, you know, give some kind of run rate? If I'm not wrong, I don't think you've given any guidance for FY 2020, FY 2021. So are we in a position to guide for the H2, and do you think that any comment on the labor availability or readiness of project size, which you can comment on?
Uncertainty still persist, Mohit, so it would not be prudent for me to give any sort of a run rate. But having said that, you know, I had mentioned in my last con call that things are improving, and we were at about 60%. Now, we are at about 80%, and H2, obviously will be much better than H1. But I would not be in a position to give any run rate as things stand today.
Okay, understood, sir. Secondly, obviously, the PWD AIIMS , the largest order which you have.
Yeah. Yeah.
Have you started the work? Have you started the initial work and, given update which you can share?
Work started. No, no, we've actually begun construction on the ground.
Okay. Last year.
We've begun construction on the ground. Sorry?
On the Mandale Depot contract, which you received, I think in this year, in last few days, when do you expect the, you know, to start the construction?
We should begin construction in the next one month.
What is the tenure of that contract?
It's about 40 months.
This Mandale Depot is 40 months?
Yeah, nearly 40 months.
Yeah, understood, sir. Thank you, sir. Thank you, and best of luck. Thank you.
Thank you.
Thank you. We have next question from the line of Himanshu Upadhyay from PGIM Mutual Fund . Please go ahead.
Yeah, hi, good afternoon.
Good afternoon.
I have a question on our numbers per se and our path ahead. If you look in last four years, our order book has increased quite significantly, okay? So remaining order book, what we show, has grown from INR 3,600 crore to INR 7,400 crore at, at FY 2020. And I think currently it could be around INR 8,000 crore.
Yes.
Based on what numbers we have, okay? But if you see my income from operations now, they have not moved in line with the way the order book has grown, okay? And even my margins have been slowly, steadily come off only from FY 2016- 2017. What is the path ahead for us? Means, how do you see our scaling up of our business? Do you think we can scale up better from here on? And what has been the challenges that we have not been able to scale up the way we have been able to win the orders? And again, on the margins trajectory side, what would be your thought process now?
And once more projects start, do you think you will require a lot more capital infusion, so let's say in terms of gross block and working capital cycle, or how are you thinking on those terms? And again, can you leave some thoughts on these things? It would be quite helpful to understand the future trajectory of the business?
Okay. So, you know, our order book has swelled up in the last two years, not in the last four years. So we are very comfortable now. It's as you rightly said, it's at about INR 8,100 crores. So this is a result of the efforts of the last two years. As far as the margins are concerned, you know, we feel that, had COVID not hit, our margins would have been much better. In fact, we would have been on our way to achieve the margins that we had achieved in our glory days, that is around 2010 and prior to that. Having said that, you know, we've over the last year, year and a half, we've been cleaning up our balance sheet.
There have been a few write-offs also. In spite of that, I think we have been at par as far as the margins are concerned with most of our peers, if not better. Going forward, you know, this financial year, as I said, there is really no guidance that I can give, but you know, because we are well stocked up as far as our order book is concerned, I think FY 2022 onwards, we should be in a position to match our peak as far as the margins are concerned. As far as our CapEx is concerned, we have been able to keep the CapEx in check. That is because of aggressively you know, utilizing our existing assets.
Going forward, as far as this year is concerned, we don't, in spite of a very healthy order book, we don't see a major increase in our CapEx as far as this financial year is concerned. Have I answered your question? Have I left, missed out on anything?
A follow-up on this.
Yeah.
So do you think that, the margins which were, you were doing in FY 2016, 2017, nearly 13% and 13.5%, are those achievable? Or so should we assume that the business here, what we have taken on to build the order book, are as margin accretive as they were, the business which you were having four years back? Or you think that b ecause if we, even if we see FY 2020, it was around 8%, which is pre-COVID, type of numbers, okay?
Yeah.
FY 2019 also was lower than FY 2016 and FY 2018.
Yeah.
So, have we compromised on margins, or you think the margins were there and b ecause the scale has obviously increased from FY 17, INR 1,400 crore, nearly INR 1,900 crore?
We haven't compromised on the margin. There were a lot of. If I take you back to our earlier con calls, there were a lot of extraneous factors which led to the margin, not only for us, but the entire infra industry, margin getting suppressed. So, if you see the quality of order book, you know, they comprise of a lot of hospital projects, some education projects. We are, our exposure to the private sector is limited. So as I said, going forward, FY 2022 onwards, I think, we would be getting back to our glory days as far as margin is concerned.
The revenue growth should also start improving? Means, just a last question, and then I'll join back the queue.
Yeah, it will. Obviously, the healthy order book shows that the revenue will increase. But, you know, this year, for obvious reasons, that increase is not going to be there.
Okay. As you follow, join back in the queue.
Yeah.
Okay, yes.
Thank you, sir. Your next question from the line of Vibhor Singhal from PhillipCapital. Please go ahead.
Yeah. Good afternoon, sir. Thanks a lot.
Good afternoon, Vibhor. Hi.
I'm happy to welcome you, management. So my, yeah, so my question was, actually two questions. One is on the margins front. Basically, for the last quarter, of course, we had the April month was almost negligible , and of course, because of lower executions, our margins were at around 7.5%. This quarter, we've almost doubled our revenues, as compared to last quarter, and I mentioned that as compared to last quarter, 60%, now we are probably running around 80%. So any specific reason that even in this quarter we could not jump the margins significantly on a quarter-on-quarter basis? Any exceptional write-off or anything else which held up the margins in this quarter?
Look, first of all, you know, there is a significant headwind which we continue to face, right? COVID has not gone anywhere. While we have labor now is at about 80%, but at the end of the day, the productivity still continues to suffer. There are a number of factors which are contributing to a lower productivity, and which in turn is affecting the margin. One is, of course, the supply chain continues to be affected. B, you know, due to the protocols which are in place on project site, the productivity of the labor is down, right?
So that is why, while we've been able to overcome one challenge in terms of increasing our top line, but, you know, as far as the margins are concerned, they continue to be affected. That will continue to, that will continue to remain, I think, for another six months.
In fact, that was about to be my next question. By protocols, I would assume you're meaning those social distancing norms and that the max amount of labor that we can have in a site, right?
Exactly. That, and then obviously, because of these social distancing norms, the labor, the productivity on ground suffers, right? Be it for casting of concrete or doing brick walls or laying stone and aluminum and facade and so on and so forth. Obviously, what people are, people are forgetting is that the supply chain is yet not back to normal.
Just to give you an example, COVID is one, but then if you see, you know, say somebody, one of, somebody asked me about Jammu. Now, Jammu work is happening at a breakneck speed, but for the last 15 days, we haven't been able to get steel to Jammu. Why? Because Punjab, no trains are going through Punjab. So Jammu, there is sale stockyards, there is zero stock. And, so the supply chain is constricted. These are factors which are contributing to, or hitting the margins.
Right, sir. We expect that this will probably be there for some more time, maybe five, six months.
Yes, as I said, this, the rest of the financial year, yes, these factors are going to be there. We have to live with it.
Sure, sir. I know it's difficult times for everybody. In terms of the order books, and now that we have got a very strong order book of more than INR 8,000 crore, what is the pipeline that you see ahead in terms of some large projects that we are looking at? Are we looking at the Central Vista project, the other projects that might come out of it, or some of the key projects which we will be looking at? And also, if you could just provide a quick update on the execution activity on some of the key projects like Gardanibagh and your Nagpur projects and the Sion Hospital project?
Yeah. So, our AIIMS project, I've already told you about Jammu. That project is happening at full speed, this notwithstanding the supply chain issue, which hopefully will be over in the next 10, 15 days. As far as our other AIIMS, two AIIMS projects are concerned, we are on target to complete them in May next year, both Kalyani as well as Nagpur, both the AIIMS. In fact, 50% of both these projects have been handed over and have been made operational. The academic blocks are made operational at both these locations. As far as the hospital is concerned, that we will complete in May next year. As far as Gardanibagh is concerned, Gardanibagh project has begun. The piling has begun on the ground.
Now, with obviously continuity being there as far as the government is concerned, we feel that we foresee no, no problems as far as our projects on the ground in Bihar are concerned. As far as what was, what was the other part of your question? Can you repeat it, please?
How do you see the pipeline in terms of the Central Vista Project or some of the key projects that we are targeting or looking at?
Yeah. So yes, we will evaluate, we will participate in some of these projects, but on account of having a healthy order book, we will not bid indiscriminately. In fact, we are letting go of a few projects. There are two or three. We've seen recently that, you know, there have been four or five AIIMS which have been bid out. We participated in two. We felt that the competitive intensity was very, very high. That's why we then let go of a couple. So we are doing our due diligence, and as I said, we are not bidding indiscriminately.
Okay, sir. Thanks for taking my question from this over. Thanks.
Thank you.
Thank you, sir. The next question from the line of Shravan Shah from Dolat Capital Markets. Please go ahead.
Yeah, thank you. So, as you are saying, first, clarification, the labor availability that you said, 80%, is as on today, or is it for average of second quarter?
No, no, as on today.
Okay, for second quarter, what was the labor availability, abroad or average?
Second quarter, the labor will. As I said, last con call, we were at about 60%, so it has gone up to about 80% now.
Okay. And in terms of the company operating efficiency, last time I think you said that it is kind of a link to the labor. So we were working at 60%. So in the second quarter, at what efficiency broader? Are we at 60-70% plus efficiency level, and now at 80% efficiency level?
No, no, no. Very difficult, as I mentioned, as an answer to the question.
Got it. Got it. It is, it is difficult. I, I got it.
Yeah, yeah.
Now, sir, coming back to the main, the revenue and the margin, so that's the two major question mark for all the analysts, despite so much of order book. So let's assume now, as you are saying that there are supply chain issues are there, labors though have improved to 80%. First of all, can we see at least 1% to 2% growth in the third and fourth quarter, or that is also difficult to say?
I don't. I'll be candid. Third quarter, there are continuing issues, headwinds. One, I have already mentioned, supply chain issues. B, our projects in Delhi, though construction continues to happen in NCR, but, productivity is not high, again, for obvious reasons, because of pollution. So third quarter, I don't see any major improvement happening, but fourth quarter, yes.
So, fourth quarter can be 5% to 10%, or it can be higher than 10%?
Yeah. Don't put words in my mouth, but fourth quarter will be significantly better.
Okay. And then coming to the, for the full year of FY 2022 and 2023, then on broader level, because last, three, four years, we were, marginally growing kind of a thing. Then can we expect a 20%+ kind of a run rate? Because our order book is definitely, INR 8,100 crore, and maybe we will be winning a couple of more projects.
Yeah, 15%-20%. Yeah, that's our target. FY 2022 onwards, 15%-20% growth.
You already mentioned that the margin in FY 22 would be coming to the previous peak level, that is close to 13% kind of a thing that will be coming.
Yes.
Yeah. Sir, I need now order book breakup, segment-wise, region-wise, and the government private. That would be helpful.
I think Rohit will provide that. Rohit, go ahead.
I'm sorry, we lost the line of Mr. Rohit, but I'm calling him again.
Satbeer, can you provide that, Satbeer?
Yes, yes, I'm providing that.
Go ahead.
Government is 80% and private is 20%. Geographically, North is 55%, East 33%, West 10%. Segment-wise: Commercial 6.31%, Hospital 52%, Institutional 24%, Retention 12%, and Infra 5%.
Okay. And, sir, any write-off or liability written back in this quarter?
Yes. Liability written back is around INR 6-7 crores and INR 3 crores, sorry. Retention is not there in this quarter, but we have made provision for around INR 5 crores.
Okay, INR 5 crore you made the provision. Okay, okay, that's it from my side. Thank you.
Thank you. We have next question from the line of Mohit Kumar from DAM Capital. Please go ahead.
Hello?
Hello.
Yeah, thanks for the opportunity once again, sir. Sir, have you provided anything in this quarter, last quarter, I think you guided for some write-off on the data side?
Yeah, last quarter we had a write-off around INR 5 crore, and this quarter we have made a provision. We have not written off, which are also INR 5 crore, approximately.
Okay. Secondly on this, sir, on the last quarter, you said something about there is some issue with payment- with receivables from Bihar and West Bengal. Can you please comment on that? Have you seen improvement, something?
Yes, definitely, there is improvement. Most of our receivables have come in. And whatever is pending, we are hopeful that in December we will be up to date.
I n general, can you, how has been the payments around in the last quarter, Q2? And what are you hearing from the client for, you know, in general, what do you think about, you know, this, the payment cycle?
There is an improvement. As far as Bihar is concerned, just prior to elections, some payments did come in, but there was a bit of a logjam, because the state machinery had, you know, got busy with elections. But we are hopeful. As I said, in December, all our payments will come. Bengal, things have improved substantially. So, again, by December, we should, payment should be up to date.
Generally also, by and large, I think, last month, month and a half, there has been an improvement all around with most of our clients.
Can we safely assume that working capital will not deteriorate in FY 2021?
I think so.
Okay. Understood, sir. Thank you.
Thank you. We have next question from the line of Vaibhav Shah from Centrum Broking. Please go ahead.
Yeah, thanks for the opportunity. In last quarter, we were guided that we were doing a write-off of around INR 5 crore in Q1, and there is a pending write-off of around INR 10 crore-INR 15 crore, which we take.
Sir, I'm sorry to interrupt. Mr. Shah, would you please like to use the handset while asking a question? Just use the handset. So we're not able to hear you properly. Thank you.
Can you hear me?
Yes. Please go on.
Sir, in the last quarter, you had told that we had taken write-off around INR 5 crore in Q1, and we had guided for a write-off of around INR 10 crore to INR 15 crore in Q2 and Q3. So where are we on that? So we will take another INR 5 crore write-off in Q3, or what is the plan?
We have provided INR 5 crore in this quarter also, made a provision. We have not rightly, rightly written off, but that's, we will we have to see what the situation would be there for recovery. Just accordingly, we have to do any kind of provision or written off, but definitely there would be there.
Okay. Okay. And, secondly, on a couple of projects, so what is the current status on the government hospitals in Chapra and Nalanda, in terms of projects?
Yeah, yeah. The execution is well underway, and as far as Nalanda is concerned, both these projects actually, in the next one year, would be substantially completed.
What would be the broad status of the completion as of now? Have we made a certain progress on those?
Which, which one? You're talking about these projects only?
Yeah, yeah, on these only at Nalanda and Chapra.
Yeah, yeah. The projects are well underway. In fact, at Nalanda, the structure is almost complete.
Okay. Okay, okay. Sir, and lastly, and in NCR projects, so what has been the impact of is there any ban due to pollution or, or is a partial ban or something, or we are going on track?
No, we are, the construction is happening. As I mentioned earlier, there is no blanket ban on, on construction as yet, but, productivity is low on account of, you know, DG sets are banned.
They've tightened the, you know, the some rules for pollution, et cetera. So that's why there is a little slow. There is a lot of checking happening at sites, from the department, things like that.
So, like, you know, DG sets are banned, so that affects progress. Then secondly, you know, fly ash is no longer available. It's, it can't ply. Fly ash-laden trucks cannot ply within the city limits. So such things are affecting the production on the ground.
Okay. Okay. Sir, can you provide a ballpark figure for the NCR order backlog in our current order book?
Would you have that, Satbeer or Rohit?
Sir, I have no data, please.
27% in Delhi, NCR.
Okay. Okay. Thanks a lot. Okay. Thank you, sir.
Thank you. To ask a question, participants may press star followed by one on their touchtone phone now. We have next question from the line of Jiten Rushi from Axis Capital. Please go ahead.
Yeah, good afternoon, sir. Thanks for taking our call.
Yeah.
Sir, there are a few questions in terms of the ordering, so far in first half and continuing Q2 and Q3. So sir, can you throw some light in terms of the guidance and tell me how much you're targeting this year, and CapEx done so far?
I think in terms of order book, as I said, we are bidding very conservatively. We are not aggressive. We don't have an aggressive target. We stand at about INR 8,120 crores, and there is a project of Sion Hospital, in which we are L1, which we are also expecting shortly. So other than that, maybe another INR 1,000 crores, as far as further orders are concerned. As far as the CapEx is concerned, I think this year, it should be anywhere between INR 25 crores to INR 30 crores. Till date, we have done about.
INR 8.7 crores.
INR 8 crore. How much?
INR 8.7 crores.
INR 8.7 crores.
The Sion Hospital, what is the value, sir?
Sion Hospital, the value is about INR 500 odd crores.
Okay. So what about that? You are expecting only INR 1,000 crore to this year?
Yes.
And sir, on this Central Vista project, obviously, you have said, you have given the input during the call. But any additional input, like, what could be the pipeline in Q4? Because, most of the contractors are expecting the awarding, from that particular project to pick up from Q4, and the pipeline is at around INR 14,000 to INR 15,000 crore, with a ticket size of around, you know, INR 500 to INR 1,000 crore. So, what is our view? So are we looking to bid? As you said, you'll be bidding selectively. So, any chances of bidding at least INR 4,000 to INR 5,000 crore in winning at least one or two packages, something like that?
As I said, we will bid selectively. It's not that we are not going to bid, but we will not bid indiscriminately and not aggressively. So another INR 1,000, INR 1,400, INR 1,500 crores. That's what the target is.
Bihar projects, now should be back on track, like, after the election and things settling down, right, sir?
I'm sorry, come again? Your voice was not very clear.
Bihar, the Bihar project, should be.
Yeah, yeah. Bihar is, Bihar is now on track, with, with continuity in the government being there. And, what is good is, look, we are primarily working with two departments there. One is, the state PWD, and, one is, Bihar Medical. And, with both, in the ministries released yesterday, the names, there is continuity, in terms of the ministers at the helm of affairs. So we feel that the projects will continue now, and, without any impediments.
Sir, can you just throw a bookkeeping question. What is the gross debt number and the mobilization outstanding as on September, and retention outstanding as on September?
Just, mobilization total outstanding, INR 250 crore.
Okay.
Retention is total current and non-current. It's INR 155 crore. Borrowing is INR 44 crore. That is on the face of the balance sheet side.
Okay, that's okay. So this mobilization is interest-bearing, right, sir?
Out of it, just with private or non-interest bearing, and government is interest bearing.
So, you have the breakups, sir?
That is, Rohit will provide to you later. Please talk to him.
All right, sir. Right, sir. And sir, on the, coming back to the, receivables, obviously, the receivables are high, but, do you feel like most of the, government agencies, would make payments in Q4, and we can see receivables coming back to around 75 to 80 days, likely, likely we can see that, sir, end of this year?
Yes. As I mentioned earlier, our receivables will come under control. We already are seeing an improvement in the payments, which are coming from the various government agencies.
That's it from my side, and thanks a lot, sir, and wish you happy developing in the year, sir.
Thank you. Thank you. Same to you.
Thank you, sir. Your next question from the line of Parvez Akhtar from Edelweiss. Please go ahead.
Yeah. Hi, good afternoon, sir. Couple of questions from my side. First, I think you gave the order book as on date. Would it be possible to get the order book figure at the end of Q2?
In the Q2, it was 7,590.
Sure. Also, and you gave status of some of our major projects. Apart from those, I mean, how is the work happening on some of the other projects like the central project that we have got or the NBCC Kolkata and the Nagpur project?
Yeah, project pace has picked up. As I said, we are at about 80%, and the Central Vista project is we are working full speed. It's just that in the last 20 to 30 days, because of the effects of pollution, there are there are productivity issues on the ground. As far as the Kolkata auditorium is concerned, we are on target to complete it in about July-August next year. Nagpur and Kalyani, as I'd already mentioned earlier, by May-June, we will be handing over. We've already partly handed over or commissioned some building, the academic blocks, on both the locations. As far as the hospitals are concerned, in May, we should be handing it over.
So we also had some private sector projects, I think, in Pune. So, how has been progress there over the last, let's say, one to two quarters?
So there are Pune continues to be hit by COVID, so that has affected the sales as far as the residential projects is concerned. But you know, over the last 15, 20 days, because of the festive season, the sales have picked up there, and now the client is talking of starting 2 more towers there, which he'd held back. So that is good news. As far as the other part of the project, which is a commercial project, which is totally you know booked by Brookfield, so that is going on full speed.
Sure. Then lastly, a question to Satbeer . This quarter also, our other income was pretty high, so are there any one-offs in the other income this quarter?
It's INR 3.3 crores, approximately, liability written back in this quarter?
Oh, okay. Sure, sir. Thanks. That's it from my side. All the best for future, and happy developing, ma'am.
Thank you. Same to you.
Thank you. Anyone who wishes to ask a question, may press star and one on your touchtone phone now. We have next question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, sir. Congratulations on good set of numbers.
Thank you.
My question is on, so you had spoken about social distancing impacting the COVID-related issue, the supply chain issue, leading to softer execution. Given it's, we have been a more normalized kind of scenario, so are we already like we have averaged about INR 400 crore of turnover last two quarters? So as per the current order book and, we should be somewhere around INR 600 crore if these issues are not there?
Yes. Would it be?
Okay, okay. So, my second question is related to your order book, and out of INR 8,120 crore, so I think the Mandale Depot's orders are being included in that. And including that, about Western India clocks about 10%, or so about INR 800 crore, out of which Mandale remains the largest contributor. So going ahead into next few quarters, so what is your strategy with respect to the Western India bidding, Western India bidding, and how do you see the order book ramp up? What kind of opportunities, opportunities do you see here? Because at 10%, it makes it a very small contribution, so I don't know whether it makes sense to exist in this market, and if not, then what is the way ahead in terms of growing this order book?
You're specifically asking about the Western region?
Yeah, yeah, the Western region.
So as I mentioned earlier, we are shortly hoping to get the Sion order also. That, you know, and so if you then between Nagpur, Mumbai, and Pune, the western region now contributes or will contribute substantially to our total order book.
Okay. Because as of now, you're at, I think, 10% is the contribution of the-
Yeah, but it's b ut now it's, if you see, I think.
It will increase to INR 1,700 crore after Sion.
Yeah. After Sion, yeah. No, actually, it'll be, it'll be more. It'll be in excess of INR 2,000 crore.
Yeah. The breakup of the percentages which you gave was on Q4, like 77 into order book or 81, INR 20 crore order book?
Yeah, it was 7,5 90.
Okay, fine. Got it. So now coming to the Mandale Depot project, I mean, is it the first similar project you are doing for a metro project, and what are the.
No, no. No, we've done numerous depot projects. In fact, we had done the famous project that we've done for Reliance Infrastructure, the depot, in Mumbai for phase I. Then we've done a depot for the Bangalore metro at Peenya. Then we've also done a depot for the airport line in Delhi. So we are quite experienced as far as depots are concerned.
Coming back to the one big piece which is missing, I mean, in our order book or region south, I think I've asked this earlier also to you, multiple calls. So any thought you have with regards to the southern Indian market, how do you see it, or you still continue to be away from that market?
Which, which market? Come again, please. Hello?
Southern India.
We continue to stay away from Southern India at the moment.
Okay. Okay, sir. Well, wish you all the best. Look forward to being in touch with you.
Thank you. Thank you so much.
Thank you. A reminder to participants, to ask a question, please press star followed by one on your touchtone phone. Now, we have next question from the line of Varun Ginodia from Ambit Capital. Please go ahead.
Hello?
Sir, we can't hear you. Please unmute yourself and ask your question. Thank you.
We can't hear him.
Mr. Ginodia, please unmute your line, if you have muted yourself, and ask your question.
Hello, am I audible?
Yes, you are, sir. Please go ahead.
Sorry, sorry for that. So sir, my question was on the revenue you booked in second quarter. As you said, that, you know, the labor availability was about 60% in the quarter gone by. Despite that, your revenue was roughly in line with the revenue in the same quarter last year. So what led to that, you know, execution ramp up, despite constraints on the supply chain side and the labor availability side? If you can throw some light there.
We had invested in techniques of off-site construction. Some projects, you know, pre-engineered techniques are being used. And, you know, we are also, as far as finishing is concerned, like pre-cut stones and tiles, we are doing work off-site and then delivering them to site. That plus, of course, a healthier order book led to a similar kind of run rate when we compare it to last year.
Okay. Okay. Because, because your, you know, your guidance or maybe your commentary sounded a bit cautious on the Q3 side. So I thought, I mean, if Q2, we were able to do similar numbers, despite 60% labor availability and Q3 already at 80%, then, you know.
Yeah
We should be able to do pretty good growth on in Q3 as well, and not just Q4. Is that a fair assumption, that second half overall should show a good growth and not just Q4?
Well, I did mention that in the last con call also, that the second half will be much better. But, you know, Q3, we continue to see a surge in the pandemic, you know. So that is why it will not be right for me to comment as far as Q3 is concerned. And then, you know, pollution obviously does affect the NCR projects also.
That is why I'm cautious on the third quarter. But fourth quarter, traditionally, fourth quarter is also the best quarter as far as construction companies are concerned. And now, you know, with labor, you know, by December end, we should be at 100% as far as labor is concerned. Supply chain issues are something which are beyond us, so that is something which I feel should also be ironed out by the time we enter into the new year. So that's why I'm saying I'm quite bullish on the fourth quarter.
All right. Thank you so much. Thank you.
Yeah.
Thank you. To ask a question, participants are press star one. The next question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Just one last question on the margins. So you did mention that because of COVID, the hit on margins. So, so what kind of hit on account of COVID you have had on the margins, and you can quantify the impact?
So come again, you're saying, you want a quantification of how COVID has impacted the margins?
Yeah, yeah.
Parikshit, it's very difficult to put that. We are still in the process of quantifying that, and I had mentioned this last time around also. It's very difficult as on date to put a figure.
But what kind of costs will be coming, extra costs, like idling manpower, idling costs, and so what could be potentially the cost, which-
You know, the main thing is, main thing is productivity of the labor. That is something which we are still assessing. You know, अभी तक तो the projects were stalling. Now the projects have started. We are at about 80%. Now we are trying to calculate what is the, what is the productivity in terms of, you know, masons who are doing the block work or doing the plastering, so on and so forth, and then, the impact in terms of the excess infrastructure we have to create, to maintain social distancing, so on and so forth. So I think, it will be very difficult for us to put a figure. It will take at least, at least this entire year.
Only when things normalize to a certain extent will we be able to put a figure as to what, how COVID has impacted our margins. And then out of those margins or out of that impact, what is it that the client is willing to bear or what percentage is... Because everything is fluid at the moment. I did mention last time around also, we are keeping all our clients informed as to whatever steps we are taking, whatever expenses we are incurring, whatever loss or hit on productivity is happening, we are keeping our clients informed on that. But at the moment, there is no surety. Clients are being sympathetic about it, but no client has come forward and said, "Okay, we'll compensate you this."
I see. Because I think the material costs have gone up, or employee costs have been, manpower costs have been lower YOY. Material costs are only the reason, like, which is on the expansion of 132 at this point, which is impacting our mix margin.
Yeah.
Okay, we got the point. It's hard to quantify.
Yeah, yeah.
Okay, sir. Thank you. That's all for me.
Thanks.
Thank you. We have next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah, thank you, sir. Sir, what is the unbilled revenue as on September?
Unbilled revenue is INR 187 crore.
INR 187 crore. Okay. And, sir, some numbers on the Kota and, any progress or any thought that it can, when it can be monetized? उसके ऊपर कुछ sir, something, sir, anything, progress or कुछ discussion हुआ है?
Sir, it's our half year ended, so revenue was INR 55 lakhs, and we have incurred loss of around 4.76 crores as per accounting information, and but there is cash deficit would be around INR 97 lakhs for this half year. For the going forward this year, we are expecting that cash deficit would be INR 1.8 crores more, approximately for this year. For the next year, we are targeting that we will be able to get the revenue of around 80 lakhs, 70 to 80 lakhs per month, and thereafter, we can see that the debt would be at par, cash deficit would be at par for the next year.
Currently, in terms of the how many utilization in the...
Actually, what is running there, there is 76% utilization there for the ground floor and second, second floor. And, but there is a revenue, which you can say around the 44% out of it, because that LOI has been issued, and we are expecting that 76% would start from end of December, and, basically, and that we are expecting next fourth quarter revenue would be around INR 1 crore. That's why.
Okay. And, sir, any monetization thought with the hotel we were thinking to somebody can come, anything on that?
Because we are still talking. We are still talking to a lot of players. So, we are also considering to convert the space into a commercial office area. We have received some queries, but, we are still, you know, talking to them. If somebody takes a large piece of the space, so we are talking to a couple of people. There is a good possibility.
Okay, okay. And sir, in terms of the... What is the value of the flat inventory that we have taken over of, I think for last couple of quarters we are not discussing. Just to refresh, what's the value currently, the flat inventory that we have?
As of 30th September, INR 48 crore.
INR 48 crore. So has it reduced since March, or it's the same?
Just this quarter, basically, there is sale of a four crores, and that's why that has been reduced from 53 to 48 now.
Okay.
During this quarter.
Okay, okay. So, and whenever we are doing that, are we booking any loss or anything in, in our P&L?
People who are already, you can see segment-wise , that was INR 95 lakh loss in this quarter on the flat sale.
Sorry, sir. What do you say? INR 95 lakhs loss, this quarter?
Yeah. Yeah, this quarter it is up here, you can see.
Okay, so INR 95 lakh loss, that, that is a part of other expenses that, or it is- it has been adjusted against the other income?
Sir, basically, that is the increase and decrease in the basically real estate inventory.
Okay, okay, okay. Got it. Got it. And sir, any progress on arbitration? Any expectation of anything on arbitration front?
No, at the moment, nothing in this quarter.
Okay.
The award that we had got for the SPM Swimming Pool Complex has been challenged by CPWD.
Okay, okay, okay. Thank you, and all the best.
Okay, thanks.
Thank you, sir. We have next question from the line of Vaibhav Shah from Centrum Broking. Please go ahead.
Yeah, thanks for the follow-up. Only one question: So what is the current status of Mohammadpur project? Has the execution taken?
Yeah, yeah, it's taken off, and the project is well underway.
We can. When do you expect to complete, maybe, next couple of years?
Yeah, about 2.5 years. About 2.5 years.
Okay, so we don't foresee any issues.
No, the funding. The government has started funding. Because, you know, part of the funding had to come from Nauroji Nagar. Sale proceeds from Nauroji Nagar, that has started happening now.
Okay, okay. Okay, thank you.
Thank you. Ladies and gentlemen, that was the last question. I'd now like to hand the conference over to Mr. Varun Ginodia from Ambit Capital for closing comments. Over to you, sir.
Thank you so much, Vikram, and thank you so much, sir, for answering all the questions patiently. I hope the call was helpful to everyone, and thank you for allowing us to host this call, for you. I will, you know, hand over the call to you if you have any closing comments.
No, thank you. Thank you, everybody, for joining in. Hopefully, you know, we could answer all your questions. If there are any further queries, please feel free. Rohit or Satbir will get back to you individually. Thank you once again, and all the best. Stay safe. Bye.
Thank you very much, sir. Ladies and gentlemen, on behalf of Ambit Capital, that concludes this conference call. Thank you for joining with us, and you may now disconnect your lines. Thank you, sir.