Ladies and gentlemen, good day, and welcome to the Q3 FY23 Earnings Conference Call of Ashoka Buildcon Limited, hosted by PhillipCapital (India) Private Limited. This conference call may contain forward-looking statements of the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 the conference call, please signal an operator by pressing star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.
Good afternoon, sir. Thank you. Good afternoon, and a very warm welcome to everyone. Thank you for being on the call of Ashoka Buildcon Limited. We are happy to have the management with us here today for question and answer session with the investment community. The management is represented by Mr. Satish Parakh, Managing Director, and Mr. Paresh Mehta, Chief Financial Officer. Before we start with the question and answer session, we have some opening remarks from the management. Now, I hand over this call to Mr. Satish Parakh for opening comments. Over to you, sir.
Thank you, Vikram. Good afternoon, everyone. I would like to extend a warm welcome to everyone on this earnings call for the Q4 and full year ended 31st March 2023. I'm with Mr. Paresh Mehta, our CFO, and HGA, our investor relations partner, along with me on the call. During the quarter gone by, till March 23, company along with the North Haven India Infrastructure Fund, an India-focused infrastructure fund managed by Morgan Stanley Investment Management Private Limited, has entered into a share purchase agreement with Mahanagar Gas Limited, to sell its 50% subsidiary, Unison Enviro Pvt. Limited, UEPL, for a total consideration of INR 5,300 crores for 100% stake.
The transaction is subject to satisfaction of some customary conditions, including approval by Petroleum and Natural Gas Regulatory Board, and lender here, UEPL, and is expected to be completed by 31st March 2024. Just to reiterate, the company has 61% stake in Unison Enviro. The company has also entered into SPA with National Investment and Infrastructure Fund, N IIF, the sale of Yamuna BPA project and Chennai ORR project. The company continues to work towards various customary conditions precedent as per the respective SPAs. I'd like to touch upon the recent acquisition of SPA, Galaxy Investments Private Limited, which is an affiliate of KKR. We had been in continuous discussion with Galaxy regarding various cities as per SPA. There has been unanticipated delays.
Based on our discussion with KKR, we are initially re-accepting the acquisition and are happy to terminate the existing SPA and enter into a new agreement for the project. I would like to highlight that we have re-initiated the divestment process and are discussing with various relevant parties. We are also divesting 11 HAM projects, and discussions are at advanced stage. We will keep all of you updated on the progress of the sale. Before I begin, I would like to clarify regarding the Department of Companies and subsequent cancellation of EPC project on 31st March 2023. We received a notification from NHAI regarding the company's involvement in qualifying of the project JFK. We have received an ROI of the EPC, project worth INR 361 crores, as the company has currently underway bidding process and invited a final bid for the said project.
I would like to highlight that is not required to see the EPC, company is eligible to participate in all the bids being called by various authorities, including NHAI. Coming to the order book status, as on 31st March 2023, our book of orders stands at INR 15,805 crores, as on date, it stands at INR 18,090 crores, including projects awarded after 31st March 2023. In road construction, company has bagged another award from Ministry of Road Transport and Bridges, Government of Bangladesh, for project improvement of Baraiyarhat-Heako-Ramgarh , widening and reconstruction of existing railway on an estimated contract value of $80 million. In power and the infrastructure development, the company received notification of an award in the state of Maharashtra from Maharashtra State Electricity Distribution Company Limited, MSEDCL.
In Bihar, the North as well as South Bihar Power Distribution Company Limited, for development of distribution of infrastructure for an accepted contract value of INR 2,285 crores and INR 632 crores respectively. The railways company received letter of references from Ministry of Railways for EPC projects in connection with Bolvum Sub-1 EPC project from North Central Railway for accepted contract value of INR 285 crores. Let me read it. The focus remains on these strong EPC business in segments of Highway, Railways, Power, T&D buildings, and hybrid Annuit y Projects of NHAI . Balance order book as on 31st March 2023, is INR 15,805 crores. The breakup of the order book for road and railway projects comprise of INR 9,595 crores, which is 61% of the total order book.
Among the the Road project order book, HAM projects are to the tune of INR 1,728 crores, and EPC Road projects are worth INR 6,318 crores, and Railway is around INR 1,549 crores. Power T&D and others accounting for around INR 3,965 crore, which is approximately 25% of the total order book. The total EPC buildings segment, which amount to INR 2,221 crores which is 14% of the total order book, and EPC work of CGD business is comprised of balance INR 25 crores. This is all from my side. I would now request Mr. Paresh Mehta to present the financial performance of Q4 and Full Fiscal Year 2023. Thank you.
Thank you very much, sir. With reference to one and all present on the call, the presentation and press release for the quarter has been loaded on the Stock Exchange and the company website. You shall have an opportunity to go through the same. Here, let me introduce that SGA Growth Advisors have been appointed as our IR from this quarter onwards, so they will be taking care of all the requirements of the investors information as well as any guidance from the company side. Of course, company will be available at any time for information. Now, I'll present the financial results for the Q4 ended March 31, 2023.
Starting with the standalone numbers, the total income for Q4 FY 23 stood at INR 2,067.9 crores as compared to INR 1,622.7 crores in the corresponding quarter last year, which showing a growth of 27%. EBITDA for the quarter was INR 124.4 crores, with an additional of 8.4%. EBITDA margins have been impacted mainly due to inflation pressures, high competition among the projects. Profit before tax stand at INR 108.7 crores before accounting of exceptional gains of INR 349.2 crores, which is on account of reversal of impairments on its investments and loans in the succeeding including ACL. The reported PBT is INR 457.8 crores and tax is INR 434.8 crores.
For the full fiscal year 2023, total revenue was INR 6,478 crores, up by 35% year-on-year. The EBITDA at INR 639.4 crores with a margin of 9.9%. Profit before tax stand at INR 424.1 crores before accounting for exceptional gains, as I looked at earlier. If you connect during FY 2023, we had 769.6 crores as exceptional expenses on account of the impairment of investment loans in subsidiaries including ACL. This should average during FY 2022, the exceptional expenes of INR 769.6 crores, leading to an impairment of our investment in ACL and fulfillment of our obligation towards investment in ACL.
However, during FY 2023, we have reversed these impairments on our investments in Ashoka Concessions Ltd. and also reversed the obligation towards investment in Ashoka Concessions Ltd., which will increase the valuation of Ashoka Concessions Ltd., mainly on account of increased cash flow in its HAM projects, consequently increasing interest receivable on annuity payments. Included profit after tax for FY 2023 stood at INR 631.6 crores. You can consolidate results. The total income of Q4 FY 2023 grew by 20% year-on-year to INR 2,478 crores as compared to INR 2,057 crores in Q4 FY 2022. EBITDA stood at INR 585.2 crores for Q4 FY 2023, a margin of 23.6%. Included profit after tax stands at INR 334.2 crores in Q4 FY 2023.
For full fiscal year 2023, on consolidated basis, income was INR 8,235.1 crores, up by 34% year-on-year. EBITDA stood at INR 2,103.4 crores, and a margin of 25.5%. Total profits after tax stood at INR 372.9 crores. During Q4, FY 2023, BOT division recorded a total collection of INR 309.9 crores, average INR 262.6 crores in Q4, FY 2022, and INR 291.4 crores in Q3, FY 2023.
It should be noticed here that the year-on-year growth of the five BOT projects which was there may be a time with KKR, where the revenues have grown in the last year from INR 24 to 5 crores to INR 19 and 10 crores in the % in the revenue. The revenue growth has been over in the past two years. When you see that, the total consolidated and the 1st March 2023 stood at INR 6,895 crores, of which debt was INR 5,819 crores, of which INR 2,732 crores stand for the five BOT projects. NCD sits at INR 200 crores at ACL level. The standard debt is at INR 876 crores, which contains of INR 134 crores of equipment loan and INR 742 crores of working capital loans. Now open the floor for question answers. Thank you.
Thank you very much, sir. 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 your question. Please, gentlemen, let us wait for a moment while the question queue assembles. We have the first question from the line of Mohit Kumar from ICICI Securities. Please go on.
Good afternoon, sir, and thanks for the opportunity. My first question is on the deal which went through. Why there was delay due to NHAI, or, and wasn't there any scope for renegotiation with the same buyers? The related question is, realistically, when do you think the new deal will be able to close?
Hello.
Yes.
This deal we had been negotiating with them, almost taken 15 months. Basically, the biggest project, Dhankuni, was a typical concession agreement where the pre-COD condition was not envisaged mentioned, that final COD. Final COD happened very late because of the relaxation issues in the project. Contract agreement started two years after final COD. We were trying with NHAI to get relaxation, which they have given to HAM projects, and finally we could not succeed in that, and we also timelines relaxed. We have project, the concession was cancelled. As far as new deal, yes, we have already soft launched, the process is started. We have good inquiry. As Paresh said, the revenues have also grown last year, we have seen around 22% average growth in the revenues. We feel we'll be able to close this in this year, calendar year.
My second question is on this here, of course, here, the execution-wise last year was decent . Margins were pretty low, so see a lot this question here again. Before margin compared to Q3. Realistically, based on the current order book, what are the kind of margin one should be thinking? It should be 9% is a fair assumption based on the current order book?
You're right, what we observed in Q3, the same situation we can see for another Q4, which is business in hand, another two to three quarters. We believe Q4 margins will reach correct pencils to the normal margins which we used to see in the previous years. There are certain contracts of low margin, which will get executed in the next few quarters, and most of it will get executed and completed then.
We need to get back at 10%, you know, check the current close. Okay. My last question to you again, taking straight to execution for this time, and with the powerful appealing team, this is still something where the working capital has been an issue in the past. Do you think under the new RDSS , which is expected to be far better based on the current terms are even more clear? How, daddy, have you got any comfort from the, you know, the straight response about the payment?
Obviously, 10% payment is to get locked for, final completion, year after completion of different language issues, right? Here, we are going to develop our completion, so the payments are looking better than what we used to have earlier.
What is the current working capital you think, in six months, last nine or six to eight months while we regularize, if I remember correctly, yeah?
Here, working capital would be in the range of three and a half months. Other than that, on an average, I would share a point of view. There'll be processes of clinical completion, but there will be part payment in between, which will take care of the overall life of the working capital.
understood, sir. Thank you. Understand, sir. Thank you.
Thank you. The next question is from the line of Vasu Gupta from Green Portfolio Private Limited. Please go ahead.
Hi, thank you for the opportunity. Can you hear me?
Yes, yes, we can.
Yeah. My question is on the recent order win of INR 2,284 crores from MSEDCL. Just wanted to know that management view on how to complete it, since MSEDCL in financial defect and is not able to pay it due to power developers.
Yeah, these are 100% funded by PFC. They have a 60% grant and 40% loan been given for this project from PFC.
You don't see any risk?
Yeah.
Okay. tell me, what are the payments being, any mobilization or advance received for the project?
Yeah, we have mobilization advance to the tune of 10%. We have more to receive, which we'll get in maybe this month or next month.
Okay.
Earlier, we used to pay only 90% in the completion. As you complete the section, you will get, e ven the part completion, you're going to get your 100% payment. The performance security is usually remain up to different liability period.
Okay. My second question is on the investigation of the bribery case. What are the views of the management on it?
This is, you know, we have to establish complete information on this, what happened in the last call. The government is done with the overall investigation. Now, we are able to build for all the projects. The impact of it will be no more there. Did you follow?
The negative impact of the department will not be in the future.
No, there is no negative impact. The problem is already fixed.
Okay. Thank you. That's all. That's all.
Thank you. The next question is from the line of Nikhil Abhyankar from ICICI Securities. Please go ahead.
Thanks for the opportunity, sir. You said that we are looking to monetize around 11 operations that we have. What is the mode of monetization you are looking at?
Excuse me, we didn't follow. What was the seven?
As in, we are looking to monetize our operational assets, almost 11 operational assets we have.
Okay, I got it.
Yeah. What is the mode of monetization you are looking at?
It will be a sale to a property fund.
Okay. Sir, why aren't we looking at something like an Invit or something?
We believe that we would like to exit 100% and not be a 50%, because then you end up holding more than at least 25% of the. You can agree to hold it for another three years. We believe in, instead of being a sponsor for the valuating, rather than sell to a fund who intends to create a value and give you a negotiating price.
Okay. Okay, sir. I understand you have mentioned earlier about the margins as well, so should we consider that by FY 2025, we will be coming back to double-digit margins?
Yes.
around 10, 11%?
Yeah, 10%-11% will be the range of that in future.
Okay. Sir, what is the kind of order input guidance that we ask for FY 2024?
FY 2024, we look to bid for road projects specifically, and we try to keep the road projects in the range of INR 6,000 for this year. Partially in EPC and partially in HAM project. The other sectors also we continue to bid and try to take orders to the tune of the power is approximately INR 3,000-INR 4,000 crore, and other businesses in the range of INR 2,000-INR 3,000 crore.
Power, you mentioned, will it be linked to RDSS or will it be T& D as well?
It can be RFPs, actually, which are currently funded.
Okay.
Basically, roads, railways, building, and power. Road will be our focus area, like modest, and HAM would be our critical focus area.
Okay, sir. Thank you.
Thank you. The next question is from the line of Sanjeevkumar Damani from SKD Consulting . Please go ahead.
Namaste, am I audible?
Yes, you are audible.
All right, okay, sir. My first question is regarding the fact that you have said within next three, I mean, in three quarters of this year, you will be completing the low-margin business, pending orders. Sir, can I know, confirm, that we are targeting to complete in the next three targets with old order? Can I also know the amount, that, high-margin business which we will execute in coming, three quarters, I mean, current, the current year, kindly reply, sir.
Yeah, I really don't think that information, in that kind of a format, which you are asking for. We could take it offline.
Okay. Okay, okay. Second thing is that, you know, our balance sheet is very heavily loaded. There are lots of subsidiary. I mean, is there any thinking of the management to reduce the subsidiary and make it a single company for better understanding of the analyst community? Is there any such plan of reducing the subsidiaries in coming days?
Our asset monetization plan is typically created towards that. All these subsidiaries, which are below our holding cost, holdco subsidiary, EPC. This is what we intend to monetize. There are 11 HAM projects under SPVs, which are subsidiary of a subsidiary, and there are six BOT projects, one big annuity project, and the CGD business. All these we have already put some blocks for monetization, and we expect that within a year and so, we should be able to clean up our monetize most of it. My last question is regarding the fact that the time you were negotiating to sell certain projects to monetize those road projects and other projects. Now, the revenue from toll collection has gone up. Do you see that we will be able to better realize the money from same assets now, when we are negotiating?
Yeah, definitely. That's what the trend basically shows. When we did the valuation in 2051, when we signed the agreement with KKR, revenues and the growth rates were not looking as good as they did. Things have changed substantially in the last two years, definitely we see a better valuation stepping up for these projects.
Sir, my appreciation lastly, and all the regard for the kind of organization that you have created and the kind of work that you are executing for the growth of the country. I wish you all the best. Thank you.
Thank you.
Thank you. Our next question is from the line of Riya from Aequitas Investments . Please go ahead.
Hello. Thank you for giving me the opportunity.
I'm sorry to interrupt. Ma'am, your audio is not clear.
Hello?
Yeah.
Thank you for giving me the opportunity. My first question is in regard with your debt level. Currently we are around INR 6,800 odd crores at consolidated level. What are the plans to reduce this? I understand that part of it, majority participated because of the projects. What are the plans in the next, coming two years? How do we plan to reduce the debt level?
As we, as a follow-on of effect of the completion of assets, once we have the assets monetized, almost INR 6,000 crore of our debt will go off the consol valuations. Also once we recognize or get the equity money into the company, the standalone debt also could be reduced substantially, so that the debt level could be substantially low in this year's time, the coming two years' time.
Which is where the monetization would take. The monetization is completed by the year-end. It will take more, some time to get consummated. In FY 2024, it is difficult to reduce the debt level, as it said earlier?
FY 2024, at least on the HAM projects, the Chennai ORR projects and the.
Yeah, okay.
Jaora-Nayagaon and KKR. KKR five projects, which we have sold to them. They will come on the block two, and then there's a possibility that we could exchange hands. Just to back up, the reason being that most of the process being done at base level and then the mid-level, were done for the previous team. Now, everything is ready for, we are in a better position to grant the timing. If not, if I keep before, definitely, first half of April 2025, we should see most of the assets profits over for mortgage.
Okay, I understand. My second question is in regard to the order book. I understand you said that the growth area would be roads and we are sitting on power as well. I believe post-election, the ordering for roads would see a little slowdown. For the next year, how do you see where does the demand come in from, and what kind of pipeline do you see, pre- and post-election?
Focus on roads is the government, pre or post-election would remain the same. That is what we understand, because there is a lot of work being done, and there is a lot of focus on building good infrastructure. Railways would be another area which will catch up. These two are going to bring major opportunities.
What will be your guidance for the book year, 2024?
We should cross 20,000 next year, 20,000 customers. We are having currently 18,000.
Right.
We've been working this year.
Okay. Right. In terms of working capital, what changes or what activities are you doing to reduce the working capital?
In the light of the growth in the execution, the working capital also will grow, requirement will grow. Today, at today's level, approximately, would continue with the increased number of, we have increased from 4,000 to 6,000, in this year, and then we expect to do another at least 25%-30% every year. I think, these levels of debt on the working capital side, would be there for some time.
Okay.
Monetization of factors probably will come down.
Right.
-because of the
What is your cost of funding, average cost of funding?
It should be in the range of, we think average of around 9%-9.25.
9.25%. Going forward, we assume that our interest cost would only increase going forward. Is that the right assumption?
No, no. It is already increased. You can see FY 23 numbers. It will continue to be the same because the volume and interest rates we expect to stabilize or probably move south. Volumes is, they continue, I think so these interest rates could, the interest amount could continue to be approximately same or slightly down.
Okay. We also had an order which, I think the government had given it to us, then we were not qualified, and again put to bid for. Right now, why did we have the disqualification in the first place, and, what is the current situation there? Do we have any projects from there?
She had explained, we were debarred for three years because of the Patna railway case. There was an alleged allegation that is our employee was involved in that. This particular debarment period exactly came in between when this project the agreement was signed. We have to
It has gone for re-invitation of the bid, which we are available to bid now. Okay. We would be L1 there?
Of course, that is a clear competition in the bid.
Okay. In current pipeline for you, specifically, which are major projects are there?
Currently, Edelweiss is very aggressive in terms of making more specialized and INR four to six lane projects. We have a pipeline of around INR 72,000 crores, and we have identified around INR 30,000 crores in the bidding at the end of this quarter.
Okay. in power and railway?
Power and railway continues, opportunities are coming in. Railway is saying around INR 20,000 crores around. We'll be participating in various bids of railway. Power is very, unpredictable. Most of the bids have, bid before March, so maybe this quarter we may not see much power activity, but maybe next quarter, much.
Okay. I think that is enough. Thank you so much for updating us. Thank you.
Thank you.
We have the next question from the line of Anupam Gupta from IIFL Securities. Please go ahead.
Sir, a couple of questions from my side. Actually, what is the equity commitment, for FY 2024 and 2025 for the HAM projects?
For the HAM projects, we are going to execute at the last three or four HAM projects, which are pending for three years. For 2023, 2024, the amount would be INR 113 crores, and for 2024, 2025, it will be INR 56 crores. It could be INR 169 crores, which should be required for HAM projects.
Okay. The second question is, of this 15,800 gates expected growth of order book, what numbers would be under execution at this point of time, and what is the balance?
Most of the projects are under execution, except for a few projects on the bidding which are not taken off into, as yet, for being by the employers. Otherwise, after all, projects are in execution stage.
The bidding, what number and which are the projects which are yet to start now?
It is basically multi project, which is around INR 1,100 crore, is yet to start. Otherwise, all other projects are absolutely on.
Okay. One more question. Now this, the KKR deal is not happening. What happens to the INR 1200 crore payout which you have to do to NHAI? Will that get linked to fresh debt or fresh deal, or do you go ahead, paying that?2
The payment of INR 1200 crores is linked to monetization of assets. Any asset monetization only we given the positive on maturity to get it to the next course. We have about partners are working towards monetization. Though the people we have fallen off, we are still looking at alternative potential investors. We believe that as soon as this monetization happens in the next 12 months, it should be positioned to keep them at least. Typically, there is no talk or intention of keeping exit out of the context then.
Okay, understand. One last question: the strong 22%, total revenue growth, which you have reported, is that, this has some component of double sort of, a toll, which literally because of FASTag not being there, or this is the actual number, which is there, in terms of revenue growth?
These are actual numbers, yeah.
Okay. Incrementally, this year, obviously, you would have high increase because of the inflation, next year onwards, once inflation normalizes, it should normalize, right? You won't expect that to continue for the next year as well?
Yes. Next year expectation for inflation is around between the range of 5%-7%. Keeping the growth in the mind, I think so it may not be significant, it will be better than the current year.
For the previous year, for these projects, what was the toll rate per number?
Approximately, for this was, around, 10.5% .
Okay.
On the toll rates, the balance was.
Okay. Just one last question: What is your revenue guidance for this year?
As I said, we would raise an order book and new orders, we would target for a growth of 25%-30% to try to see that.
Okay. Okay, okay, understand. Thank you.
Thank you. Mehta Sir.
Here the guidance will be 22%.
Okay.
Thank you, sir. Mehta Sir, I have a request from Motilal Oswal. There is an early discussion from your line. Thank you, sir. The next question is from the line of Rikesh Parikh from Rockstud Capital LLP. Please go ahead.
Yeah. Sir, wanted to understand on the valuation front, whether it's Chennai or RRR, Jaora-Nayagaon, we will face the same kind of problem what we faced with the first team?
All these projects are at advanced stage of four to six months. We hope we will be able to clear, you know, Chennai over by September 2023, and Jaora-Nayagaon will go up to March, December.
Even in the first quarter, the finishing first quarter of this year, we will be able to go through, and we were not able to get the approval from the NHAI. Just want to understand, do we have the same kind of concern over here in this two deal also?
The concerns were there because we have to give state. The state is a little slow. Often the timeline is very slow. We are taking a little time. We think we'll be able to do all this.
As you just previously in the question, you suggested that the exit from Macquarie is dependent on the deal getting closed. Hypothetically, assuming this two deal that close, would it mean that we will have to make a payout of GDP component to them, partial adjustment?
Sorry. Whatever cash comes in, we would like to pay them off, and accordingly, I think that's what will happen. Chennai and Jaora-Nayagaon, we have a clear tradition, but we pay them off and stack up to 200+, we pay them off.
Okay. Last year, does the thing change because there has been a delay in the repayment? There was some consultation being given at that time of quarter, and it shows coming into the picture. Does the term change by any time?
It is policy surrounding from our side.
means that revised IRR, between the Macquarie in the INR 1,200 crores, so does the same amount extends to, or we have to pay more because of the action, because of the time?
My understanding was that they would get a CDP to carry on the monetization of assets. We will pass part of it to our client, to them. They will get some kind of an additional amount based on whatever we get. It could be in the range of 8% amount.
Okay. Thanks. That's it. Thank you.
Thank you. The next question is from the line of Anant Mundra, from Mytemple Capital Advisors LLP. Please go ahead.
Yeah, good afternoon. My question is around the exit that we are publishing towards, initially, before we had closed the deal, I think the amount was more than INR 1,500 crores, the deal with KKR. It was renegotiated to INR 1,200 crores. Now that the deal is off, I just want to be sure the number still remains INR 1,200 crores, right? There's no room for renegotiation here. Is that assumption correct?
No. As, as I explained just now, it will be INR 28 crore, plus any carry, the understanding then also was that INR 28 crore, plus any carry which we get from a monetization would be paid to them based on their INR 200 crore investment. That kind of understanding has been reached at approximately 8%, which will be paid to them, and from what we get from the monetization process.
From the monetization of only the BOT assets, any kind of monetization?
Yes, it is possible.
Does the 8% basically carrying cost on whatever is there?
Yeah. Okay. Okay.
My next question is with respect to the NHAI premium and NHAI default payment liability of the five BOT assets. Can I have that figure, please?
Sorry, what is that?
NHAI premium. On the liability side, there's an NHAI premium and an NHAI default payment liability by BOT assets. When we see the balance sheet, how much would that figure be at the end of March 2025?
There are only two main major projects where deferment premium has occurred. One is Jhansi project and Pindwara project. I think the total default premium there is in the range of approximately INR 700 crores. I'll come back to you offline on the exact amount.
Okay. Sir, there has been a very good jump of the in March 2025. Do we expect to continue providing funding support for these five BOT projects, or now all of them will be self-sufficient?
All of them are self-sufficient. Some will still need support, though they have got a, they already have a, what you call, high recommendation for increasing concession period by six years, which will take care of the projects' IRR. In the short term, they will require cash flow. Other projects could be self-sufficient.
Okay. Okay. Sir, my final question is on, subsequently, India and infrastructure. They are holding a lot of land banks, right? So are there any plans to monetize some kind of development that we can do, or just on these, on these land assets, are there any possibilities?
We are looking at opportunities. Wherever it is possible, we would like to, if that's the right opportunity time, we would definitely monetize that, preferably through direct sale or a joint development process.
These land bank, you mean Nashik or Mumbai are they?
They would get Nashik, Pune, and MP, which is on the highway in Madhya Pradesh, which we own there, something like that.
What is the book value of these land parcels?
Approximately 70 odd.
Okay. All right. Thank you so much. Thank you, sir.
Thank you. The next question is from the line of Vasudev from Nuvama. Please go ahead.
Yeah, thank you for the opportunity, sir. Most of my questions are answered. I just had one question. We look at the standalone balance sheet of capital working, which has gone up substantially in FY 2023. What is the reason for that, and how much CapEx do we plan to do in FY 2024? Thank you.
We did a CapEx of INR 81 crores in last year, and in this coming year, the CapEx would be in the range of another INR 80-85 crores, another INR 80-90 crores.
quickly, our CWIP as on FY 2024, INR 17 odd crore.
Yeah, these are for the new projects which we have started on in the Kerala project. Accordingly, that will immediately put to use and we capitalize. This CapEx required is for couple of these projects, like the Kerala project.
Okay. That's it. Thank you.
Thank you. The next question is from the line of Nikhil Kanodia from HDFC Securities Limited. Please go ahead.
Good afternoon. Thank you for your question. My question is, the bid plan is around 72,000 crores, right?
Sorry, which deal sir ?
sir, the bid plan,
Mr. Kanodia, your audio is not clear. I would request you to kindly raise your hand please.
Am I better now?
Yes, sir. Please proceed.
Yeah. As I had, correct me, the bid plan is around Sunday, INR 1,000 crores, right?
Right.
Okay. Only NJO, when do you expect it that to complete? In December?
Yeah, between October and November, we should be able to close it.
Okay. Sir, with all these three projects generated this year, what kind of cash would you are sitting in this year, and like the balance sheet cash, so like what would be the breakup?
Approximately, INR 450 crores in Chennai project, around INR 300 crores, in Jaora-Nayagaon project, and INR 260 crores in MNGL. That's the indicate cash coming.
end of 2024, right?
23, 24, yeah.
Okay, like any flow in the next financial year, or like what sort of amount are we expecting in the next financial year from these deals?
No, if we complete the deals, so these three projects are concerned.
Okay. Okay. Okay, thank you. Sir, on your margin, I understand that you did mention that from those projects you might or you will be executing the lower margin project coming in the Q4, you are expecting the margins to normalize. On a, on an annual basis, what sort of, like if you were to give any guidance on a blended level, so what sort of number could we assume?
I think it will be in the range of say between 9.2, 9.5.
8.2-9.2, right?
Yes.
Okay. Okay, sir. Those are all my questions. Thank you and have a good day. Thank you.
Thank you. The next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead.
Yeah, thank you for the opportunity. Sir, have you removed any building order in this quarter? As per the background, around INR 2,000 crores, and there's also a different INR 2,100 crores.
Yeah, Grand Court Hospital is what we have removed from the order.
Grand Court Hospital?
Grand Court Hospital in Mumbai. That order was not starting only, so that has been deleted, and we should have been signing with the owners.
Value would be somewhere around INR 60 crores?
Yes, sir. Exactly.
Okay. Sir, secondly, what would be the current debt in the five BOT assets that were supposed to be sold to PFA?
Yeah. One second. It's INR 1,700 crores.
What would be the gross funding that you are doing with expected in, sometime for FY 2024?
Around INR 67 crores.
What was the same number for FY 2023?
Almost slightly, lower from the previous number.
Oh, thank you, sir.
Thank you. We have the next question from the line of Saif Gujar from ICICI Prudential AMC. Please go ahead.
Yeah, thank you for the opportunity. I have a couple of questions.
I'm sorry, sir. Sir, your volume is too low. Can you please increase it a little?
Is that better? Hello.
Okay, sir. Perfect.
My first question is on the Bangladesh order. It's an $80 million project, who is participating? What type of partnership agreements we have here when the execution is due, and whether we have all approvals are in place for this?
Here all approvals are in place. Work is already started. This is actually an excellent project.
Okay, what type of partnership we have here in terms of cost estimations or something, or is there a scope agreement?
Scope agreement.
We are not exposed to FX or something, right? We can fix this $6 million.
We get mostly profit situation on that. Almost.
My second question, are there working projects? Any further update on this, and we can expect to start the movement in our-
Yeah, we have already started now. We almost completed 6% of work. Now there's a monsoon there. It will close maybe after three months, and that is when we can move fast. Bali, we have to start. We're still hoping for clearance from Exim Bank. This is a bi-annual project, different nature of project. We require approval from Exim Bank, particularly from Exim Bank. This we are expecting what we should get.
My third question would be on the structure. How is it structure? Which is total modeling, it takes it is floating, whether it will link to a poor bank rate?
I'm sorry, sir, your audio is too low. Can you please use your handset?
Is that better?
Yes, sir. Just, bring your mic or handset closer to your mouth once again, please.
Yeah, sure. The question is regarding the structure. How is it? It is fixed, floating, whether it will link to a repo rate or bank rate. How is it?
In the working category side, almost everything is for floating with certain rate of lead to advantage rate. On the projects, a few projects are need to refinate, and otherwise, most are need to NCI, three months or six months NCI.
Okay, thanks. That's it.
Thank you. We have the next question from the line of Prem Khurana from Anand Rathi Share. Please go ahead.
My question was-
I'm sorry, sir, your volume is too low again. Can you please increase the volume or you can use your handset?
Hello, is it better?
Yes, sir. Please continue.
Yeah. Sir, my question was with respect to the share transaction which went through. Just want to understand, and I think as you said, we couldn't have approved from NLC because there was some issue with the concession agreement for Dankuni in terms of COD and DCOD issue. Given the fact that we are planning to re-submit our efforts for these assets, and again, I'm assuming when Dankuni, since it's a large project, it will still be a part of the transaction. Do we have that comfort now, everything kind of made to be by NLC, and this time around we'll get to have it, and the concession will be changed according to the transaction?
This time what happens, we have just completed on August 2023.
Oh.
Anyway, pre-post office, this issue doesn't remain.
Sure.
We are very sure that we'll be getting the message inside.
If that is the case, ICICI could have stayed back for another few months, waiting for this transaction from all the files, you cancel it in the month of May, August is when buyer will be able to have it even without changing the consideration. They could convince them to stay back for another two, three months?
I think it is more also related to their fund life.
Okay.
That's what we suggested. They also fund life was ending in August. I think that initiative was started by August, we would have crossed it by September end or October.
Oh, okay. Sure.
If you get the date, you will be able to fully through once our negotiations are over, and the NOC will fall in line around with the other states.
Sure. The second question was, I mean, when I look at the balance sheet, it seems as if an AGM inquiry, payout, which is around INR 1,200, which is INR 1 to INR 1,272 now, am I right? In my reading.
As I explained just now, it's different carrying, which we have completed from July 2022.
Okay. Sure. Just I mean to help you with the revenue breakup for the quarter and other segments, about GM road and the other verticals.
You want to become quarter?
Yes, that's right.
on the CC roads, which was INR 43 crores, INR 14-15 crores.
Okay.
On the power front, it was INR 2 crores.
Sure.
On the railway front, it was INR 53 crores.
Okay.
Balance approximately, including all smart infrastructure, building all the terminals, around INR 100 crores.
How much would be CGD and how much would be sale of?
CGD would be small, around, say, INR 8 crores. Pardon, what did you say?
No, CGD would be INR 8 crores. Then we also seem to have the sale of RNC. How much is that?
Sale of RNC would be INR 56 crore.
Okay.
This is over and above the, excuse me, above what I said, INR 190 crores.
Okay.
say, RNC is over and above INR 190 crores also. INR 56 crores.
Sure, eight is a part, and CGD is a part of this one?
Yep.
Okay, sure. That's been all the various questions.
Thank you. The next question is from the line of Ash Shah from Elara Capital. Please go ahead.
Can you give the revenue breakup for FY 23 as well?
Yeah. For FY 2023, roads is INR 2,398 crores. Power is INR 675 crores. Railway is INR 7 crores. CGD is INR 51 crores. RNC is INR 217 crores. Other verticals INR 375 crores.
Yes. Okay. Also, how much have you invested in the CGD business till now?
CGD is INR 67 crores.
Okay. Yeah, that's all from my side. Thank you.
Thank you. The next question is from the line of Jitendra Soni from JD Capital. Please go ahead. Mr. Biggal, I have unmuted your line. Kindly proceed with your question. As the current participant is not answering, we move on to the next question, which is from the line of Bharanidhar Vijayakumar from Spark Capital. Please go ahead.
Good evening, sir. Can you repeat on the Chennai ORR and Puram projects total value for us and how we get INR 450 and INR 307 around my funds?
On the Chennai ORR, the total value is approximately INR 650 crore, of which INR 450, which is INR 650 crore, includes debt given by API to the FPG, and it's scheduled as well. Ashoka Buildcon will get INR 450 crore out of that project issue. In Jaora-Nayagaon project, Ashoka because we get approximately signed it, of course, of which 100, up to 184 is already drawn by Ashoka because company C, in the past, like 32 billion CNN.
The Mahanagar being, it will be 51% on the total bill?
Yes, 51. 51% is 51.
Coming to the Bangalore projects, COD, which is the reason why the team kind of got fancy. Just can you make me understand how this project, because it's been operational for some time, how is this ECOD and COD still in place for so long?
We had pre-COD long back, around eight years back. COD was delayed because some of the underpasses could not be carried out because of land acquisition issues. This particular project, pre-COD, provision is not there. Commercial operation actually started from day one. It's a clean project.
Right.
That's the thing. We could get COD only on completion of all the underpasses, they finally could see us. Essentially, since only COD tradition was there, two years from COD is the timeline which they are to adhere to. For which we tried for relaxation through various forums, but we could not achieve that.
If I understand right, the project has been collecting toll and has been operating for eight years, but we've not been able to get the COD, final COD, because of land acquisition issues or these underpasses.
Correct. Correct.
And, uh-
It has nothing to do with the revenues, but revenue we were getting from day one. We got our revisions for tolling time, but the technical issue of getting project completion was delayed.
Land will now be obtained in August of 2018.
Which we already got, and two years will be complete August 2023. In August 2021, we got the final COD.
Got you.
Two years from that date is August 23, after which we can permit it to well evaluation.
Right. isn't this, one year now, a new norm, for BOT projects?
New norms for one year, those were for modification agreement. This was an agreement before that. That correction again, was to be done, which was in the process and could not be done.
Thank you, Sir Palani.
Thank you. The next question is from the line of Akhilesh B, an individual investor. Please go ahead.
Hi, Dr. Akhilesh B
Yes, please proceed.
Yeah. Sir, what is the status of the progress in NTPC?
NTPC, almost, entire land acquisition is in position. Part of the land is yet to be transferred to NTPC. All the pre-work has to be carried on, like, the piling and putting up the entire structures, with the entire settling. 90% of it is over, and, only ordering of modules for which we have given the MOI, and, we are yet to finalize on the PO of the modules, which we will do in the month of June or July. We have extension up to 2024, without any penalty clause.
Now is he anticipating any loss to us in this?
Yes, in fact, even at present, we are negotiating for price variation with them. If we get price variation, then there will be a loss. If we don't get price variation, only the ordering of modules will be able to negotiate what exactly loss we receive. The prices are substantially selected from NTPC. For example, this July, they should come to our future.
Just for the recent from a couple of things, they mentioned that the, report to the dot, projects is only in sample two, there's only 60 to 70 stores that he has seen in person.
That is correct.
Right? The NAPI premium only 5% is only around INR 750,000.
Yeah, that's what I forgot the number off time. That's approximately that. The 750 supposed to be exact.
Okay. I assume therefore, that you are expecting a better valuation this time around for these, four types, compared to what we found in 2021, is that right?
Actually, I think the revenue is stacking more than what was considered at the time of valuation, when it was given in 2021. There is, the model would be run the same way. I think it's sort of a substantially large variation can be expected. In fact, 37, two years have passed since 2021 valuation, now it becomes 2023 or 2024 valuation. That kind of a yearly increase will definitely happen, and based on trans, the traffic, incrementally, and the GPI, being more than, it was there in the past, say, two years, period of delay, the valuation should be substantially better.
My last question is on the PAM investment. Do you expect to close between by the end of Q1 or will it be more?
We expect to sign a SPA, we are working on the SPA with the potential investors trying to close it and, try to do it as early as possible, in the timeframe of, around, eight to 10 maximum. Then, work on the projects which are already ECO done, and six months are over, where the permission is obviously possible, can be given by initially.
to avoid.
Pardon?
To avoid the issues, you know, like we had in the previous projects in terms of-
Yeah. Here the SOPs of NHAI are quite clear and simple, so. There are not much issues and not long-term issues that will be facing this whole project. Issues and the risk should be even faster.
This will be comparatively much more straightforward.
Yeah.
Yeah. Okay, that's all. Thank you.
Thank you. The next question is from the line of Ash Shah from Elara Capital. Please go ahead.
Sir, can you just repeat the earlier input item for the slide 24?
In road sector, we expect around INR 5,000-INR 7,000, and others like highways and power and buildings, INR 150,000. That will be a total of INR 10,000 should be, what we should be able to club this year.
Okay. Thank you.
Thank you. The next question is from the line of Hari Kumar, an individual investor. Please go ahead.
Good afternoon, sir. Am I audible, ma'am?
Yes, sir, you're audible.
Okay, the first question regarding the interest of INR 1,100 crore and consolidated debt of INR 6,900 crore. Like, are we paying higher rate of interest or any other reason it gets at this high rate? Also, a related question, is there any interest that is being capitalized in the books?
The asset is, there's a NHAI's policy which we adopted for acquiring assets and providing of the interest. Interest rate is in the range of, as I said, in the range of 9%, 9%-10% for the term loan assets, like public assets and high assets are lower.
Is it any INR 1,900 crores, sir, because you are saying INR 1,100 crores?
I'll just look it up and come back.
The second question is, this increment which you have written back, once we receive it again, we will go for the increments again?
The moment of increment was created by the reduction in the interest rate regime in the HAM projects two years back, in 2021. Into that, the additions of HAM projects got impact. Increasing the interest rates in the past eight months, these additions have been restricted, and the term increment has been reversed.
Okay. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
We thank all the investors who have joined for the investor call. I know a couple of queries which will be addressed. We are free to answer them once on an offline basis. The details of contact are in the presentation. We are free, we are available to give any advice, and thank you again for joining us.
Thank you, everyone.
Thank you very much, sir. On behalf of PhillipCapital (India) Private Limited, I thank you. This conference call, thank you for joining us, and you may now disconnect your line. Thank you.