I now hand the conference over to Mr. Mohit Kumar. I now hand the conference over to Mr. Mohit Kumar from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Thank you, Mallika. On behalf of DAM Capital, we welcome you all to the Q4 FY 2021 earnings conference call for Ashoka Buildcon. We have from the management side, Mr. Satish Parakh, Managing Director, Mr. Paresh Mehta, the Chief Financial Officer. We'll start with a brief update, followed by Q&A. Over to you, sir.
Yeah. Thank you, Mohit. Good afternoon, everyone. We welcome you all to our earnings conference call for the quarter and year ended March 31, 2021. I have with me on call Mr. Paresh Mehta, our CFO. To start with, I'll initially brief you on industry updates, followed by the company's performance during the year gone by. As we all know, the road construction industry has encountered numerous challenges, most notably in terms of workforce availability. As a result of COVID-19 related disruption at the start of financial year 2021, despite the pandemic-led disruptions, the pace of highway construction touches a record of 36.4 kilometers per day in fiscal 2021. Thanks to the slew of industry-friendly measures enacted by the government, as well as continuation of liquidity-boosting measures and relaxation of norms for the bidders.
This exudes confidence that the current fiscal target of 40 km per day of highways construction, set by the government, will be accomplished. Furthermore, the government has set a target of INR 1,500,000 crore in road construction in next two years, underlining government trust on infrastructure development as part of economic growth. NHAI expects to award projects worth around INR 225,000 crore, indicating a higher order inflow going forward. On toll collection front, with a modest rebound in economic activity, toll collection began to pick up in H2 of FY 2021, surpassing pre-COVID levels. But the second wave of COVID-19 has had a negative impact on toll collection across India. Despite the lack of statewide stringent lockdown or toll suspension, regional restrictions implemented in various states, combined with increased fear and negativity, affected the movement in the month of April and May.
We are seeing gradual recovery in toll collection as the number of COVID cases are decreasing, the lockdown restriction is relaxed. However, for the full year 2022, toll collection likely to witness a double-digit growth on lower base of FY 2021. Now, coming on company's performance. Despite the challenging year, we were able to maintain our momentum and efficiency, resulting in a complete recovery in execution following the difficult first quarter. We were able to recover the difficulty in last two quarters and delivered performance in line with the last fiscal, a resultant of our unwavering commitment. The pace of execution across all projects are faring well. However, we witnessed the impact of second wave of COVID-19 in the months of April and May, with labor efficiency dropping by around 30%, which is presently improving as general situation improves.
In terms of order book, we have won projects worth INR 1,949 crore in the current quarter, which includes an order from Gujarat Rail Infrastructure Development Corporation, worth INR 283 crore for gauge conversion, total length of 38 km in Ahmedabad, division of Western Railway. We also won $140 million, approximately INR 1,018 crore order from FDC, a state-owned company of government of Republic of Maldives, for construction of 2,000 social housing units on EPC basis in Hulhumalé, Republic of Maldives. And we also won a NHAI project in Punjab, worth INR 648 crore, where we emerged as the lowest bidder. The project entails development of six laning of IT City Chowk, Mohali-Chandigarh Road, with design length of 31.23 kilometers in the state of Punjab on EPC mode. This is under Bharatmala Pariyojana Package 2.
The company's total order book, as on date, stands at INR 10,117 crores, against INR 8,167 crores on March 31, 2021. The breakup of this is road projects comprise around INR 6,183 crores, which is 76% of our order book. Among road projects order book, HAM roads are to the tune of INR 3,471 crores, and EPC projects are around INR 2,712 crores. Power T&D and other comprises of INR 1,376 crores, which is 17% of the total order book. Railways contribute around INR 537 crores, which is 7% of the total balance order book. CGD business comprises around INR 71 crores.
Other key developments of the company, the company has entered into share purchase agreement with India Infrastructure Fund for purchase of 49% stake held by IIF and its subsidiaries in Ashoka Highways (Bhandara) Limited, along with zero-interest shareholders' loan for an aggregate consideration of INR 34 crore. Post-completion of this transaction, the company, along with its subsidiary, Ashoka Concessions Limited, would hold 100% stake in Ashoka Highways (Bhandara) Limited. The completion of the transaction is subject to receipt of approvals from NHAI and, if required, from lenders. This is all from my side. I would now request Mr. Paresh Mehta to present the financial performance of Q4 FY21. Thank you.
Thank you, sir. Good afternoon, everyone. The result presentation and press release for the quarter have been uploaded on the stock exchanges and on the company's website. I believe you all may have gone through the same. Now, I will present the financial results for the quarter and year ended March 31, 2021. Starting with the consolidated results, the total income of Q4 FY 2021 grew by 11% year-on-year to INR 1,780 crore as compared to INR 1,609 crore in Q4 FY20. EBITDA stood at INR 525 crore in Q4 FY 2021, with a margin of 30%. Profit after tax is at INR 153 crore in Q4 FY21. PAT margins is at around 8.6%.
Now, coming to the standalone numbers, the total income for Q4 FY 2021 stands at INR 1,434 crore as compared to INR 1,289 crore in the corresponding quarter last fiscal, registered growth of 11%. EBITDA for the quarter was at INR 248 crore, with EBITDA margin of 17.3%. The company reported profit after tax of INR 149 crore in Q4 FY 2021, with a margin of 10.4%. During Q4 FY 2021, BOT division recorded a toll collection of INR 262 crore, recording growth of 18% year-on-year, as against INR 222 crore in Q4 FY 2020. For FY 2021, toll collection totally was at INR 880 crore as compared to INR 900 crore in FY 2020.
Total consolidated debt as on March 31st, 2021, stood at INR 6,157 crores, of which project debt is INR 5,795 crores, including INR 150 crores of NCDs at ACL level. The standalone debt is at INR 362 crores, which comprises of INR 157 crores of equipment loans and INR 205 crores of working capital loans. We would also like to inform that the CGD arm of the company achieved financial closure for its debt for its projects for a total debt of INR 543 crores and equivalent equity of INR 291 crores for the project. With this, we now open the floor for question answers. Thank you.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephones. 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 to ask a question, you may press star and one now. The first question is from the line of Meet Vora from DAM Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity. I had just two questions. First one is, what will be the equity requirements for FY 2022 and 2023 for HAM projects?
For FY 2021-22, equity requirement would be INR 176 crores, and for FY 2022-2023, INR 141 crores, totaling to INR 317 crores for our HAM projects.
Understood, sir. Thanks for that. The second question was regarding our BOT projects. Where are we in terms of closing the deal to exit our BOT, BOT projects?
The portfolio of projects, which ACL has of BOT as well as annuity and HAM projects-
We are under process for monetization with the ultimate aim of giving exit to Macquarie, which is our shareholder at ACL level. So the process adopted is the potential investors are looking at SPVs to pick up. So there is a diligence process going on, which is almost at a stage of completion. And we are also discussing on certain assets, and we are also discussing on the share purchase agreement on those for those assets. And so this we believe should crystallize, the SPA should crystallize within the coming quarter.
Understood, sir. Thanks. That's all from my side.
Thank you. The next question is from the line of Seetharaman from Spark Capital. Please go ahead.
Mm-hmm. Thank you. Thank you. Can you give an idea about the bid pipeline and when it is expected to start, given the current, the disruptions on the bidding side, also from the government? That is my first question.
Hello? Yeah.
Uh, hello.
From next quarter onwards, means Q2 onwards, we'll see bidding at NHAI happening. There are already announced bids of around INR 70,000 crore, and other states also would start now bidding, like UP and Tamil Nadu, and all other states. So I think Q2, Q3, we'll see a good amount of bidding.
Okay. And what is the order inflow expected across segments by Ashoka?
We are expecting, like, you know, Q1, we have won around INR 2,000 crore. And going ahead, INR 4,000 crore-INR 5,000 crore should be achievable.
Okay.
That is our target. Yeah.
So totally 7K. On the roadside alone, or it's on the-
This is a mix of road and others.
Okay. And what will be the proportion approximately?
Proportion exact cannot be said, but normally 60%-70% is roads, and 30%-40% orders we are expecting from other sectors, like power, railways.
Okay.
Yeah.
Okay. How do you see the impact of competition on the EPC bids, HAM bids? And also, what is the impact of the commodity price rise that you are seeing in your books?
Yeah, see, there is an impact of, you know, lowering down the qualifications. So aggression is there in the industry, particularly at national highway level. And competition is there, but I think there will be a huge opportunity of INR 225,000 crore, which NHAI and MoRTH are planning to bid out. So again, we will see some reasonable competition going ahead, as far as these two authorities are concerned. There is a reasonable competition even at states. And this competition is there in HAM as well as in EPC.
Okay. And the average number of people participating in HAM and EPC?
Depending upon the size of the project, they vary. If the size of the project is below INR 800 crore, we see a lot of competition. If it is beyond, like, INR 1,500-1,600 crore, we see around 10, 12 competitors. If it is below 1,000 crore, the competition number is almost 15, 20 numbers.
Okay, this is for EPC?
This is for EPC, and for HAM, it is around six to eight bidders for larger projects, 10, 12 bidders for smaller projects.
Okay. And on the commodity side, the question that I asked?
Since there is an element of pass-through escalation, certain impact is there, but it is not a significant impact, looking at the project sizes.
Okay. And on the EBITDA level, what will be the change? I mean, can you give some sort of an indication?
It will all depend. If I bid today, if I bid today, which is at peak of the market, then there may not be any significant impact.
No, on the-
If people who have bid earlier... In our order book, we are not seeing much of the impact.
Okay. Thank you.
Thank you. The next question is from the line of Vibhor Singhal from Phillip Capital. Please go ahead.
Yes. Good afternoon, sir. Thanks for taking my question. And congrats on the resilient performance from this year. So a few questions from my side. So standing back, as we are in almost end of June, so we are right now at the end of our second quarter, or the first quarter itself. So just wanted to check with you, as you mentioned, that the labor had dropped by around 50%, due to the second wave of Covid. Where are we right now in terms of labor availability? Has it come back? And where are we in terms of the execution capacity? So at what levels are we executing at current level, currently in June, as we are today?
See, whatever effect was there in April, May, for efficiency was around 70%. Now, it has gone around 90%-95%.
Okay. The labor also, the migration patterns, so has that revived, or there's still some problems with labor that we have?
Come back.
Okay.
Hence, we are able to match around 90%-95%.
Sure, sir. And in that backdrop, given that, this COVID-impacted year also, we were able to basically report a kind of a flat top line on the YoY basis. What is the kind of top line that you're looking this year? Any sort of a guidance in terms of either, either growth or absolute number of top line that you're looking at?
This year we should grow by at least 20%. 20%-25% easily we should grow, depending upon how we bag the orders. Yeah.
Right. So 20%-25% for top line growth is what you're looking at?
Yeah.
Right. And so, to support that, if I look at our order book right now, even if we include the 2,000 crore projects that we have received, we are standing at an order book of around INR 10,000 crore, INR 10,000 crore.
Right.
Which is like a 2.5 times book to sales. So do you feel comfortable with that kind of an order book for 20%-25% growth, given that there are two HAM projects which are awaiting financial closure, and which might take more time to start execution? What is the road map to that kind of a growth, given that our order book is slightly on the weaker side?
We think we can still target for 25% of growth. 20%-25%, again, is easily achievable, because going ahead also, Q2, Q3, we'll see some orders coming in.
Right.
And this-
Sure, sir.
I mentioned, which have not done FC. That definitely will happen in a month or month and a half.
Okay, actually, that's my next question. So we are expecting the financial closure for-
That also will come.
These two activities.
Yeah.
Sorry, sir?
Work will start in Q2, Q3, Q4, yeah.
Two, three, Q4. Sure. And just one last bookkeeping question from Paresh, sir. So the equity requirement that you mentioned does not include the two HAM projects which are under financial closure, right?
No, it includes that. It includes the two HAM projects.
Oh.
So the Bettadahalli Shivamogga, as well as the Banavara Bettadahalli.
But, sir, if I look at our presentation,
Yeah.
In our presentation, what we say is that our total equity requirement for the HAM portfolio is around INR 1,336 crore, and we have invested around INR 775 crore.
Yeah. Right, right.
So that is another-
This includes, sir, to clarify, this includes PIM. If you see the statement, it includes also the PIM, which is to the extent retained at the SPV level.
Mm-hmm.
This is around INR 200 crore for all these projects put together.
Okay. Right.
Then-
The INR 175 crore. Yeah. Okay. Including them, that would be, the number actually plus INR 200 crore?
Yeah, yeah.
Yeah. So, sure. Great, sir. Thank you so much for taking my questions. I wish you all the best.
Great.
Thank you. The next question is from the line of Jiten Rushi from Axis Capital. Please go ahead.
Yeah, good afternoon, sir, and congratulations on good set of numbers. Sir, the first question is on the revenue break-up between roads, railways, power, T&D, and CGD business for Q4 and comparable last year and FY 2020 compared to this.
I'll just give you the breakup of the road and power and rail and CGD for-
Mm-hmm.
Q on, year on year.
Yes.
For the year, we did road turnover of INR 2,884 crore against INR 2,974 crore last year.
Mm-hmm.
On the power side, INR 2,218 crores against INR 474 crore last year.
Mm.
On the railway side, INR 373 crore against INR 210 crore last year.
Mm.
CGD was INR 40 crores against INR 32 crores last year.
Mm.
And then other businesses, INR 181 crores, against INR 69 crores of last year.
Q4?
Q4, okay. Q4 would be INR 1,031 crore on road, against INR 918 crore last year.
Mm-hmm.
73 crore on power, against INR 137 crore last year.
73 crore, right?
Yeah. Yeah, yeah.
Mm.
Railway, INR 162 crore, over INR 89 crore last year.
Mm.
CGD, INR 10 crores, over INR 14 crores last year.
Mm.
other sectors, INR 57 crore, over INR 39 crore last year.
Sir, on the numbers of mobilization advances, unbilled revenue retention, and what is the loans and advances outstanding, please, as on March?
I didn't get you, sir. What was that?
Sir, can you, the March ending numbers for mobilization advances out, unbilled revenue, retentions, and loans advances outstanding to subsidiaries. Can you give the numbers, sir?
Yeah. So, total receivables was INR 1,061.6 crores, against which the retention over, over and above which the retention more, retention and hold amounts was around INR 480 crores.
Mm-hmm.
And
Unbilled?
On the mobilization, the unbilled portion was around INR 460 crore. Mobilization advance was to the tune of INR 290 crore.
So basically, receivable was INR 1,016 crores, retention INR 480 crores, unbilled INR 460 crores, and mobilization INR 290 crores, right?
Yes.
Sir, debtors, can you give some break-up in terms of roads, railways, power, D&D?
On a net-net basis, including receivables, hold, advances or unbilled, all considered together, road exposure was INR 4,562 crore. Power was around INR 223 crore. Railway was INR 111 crore.
Mm.
Other sectors was INR 195 crores. CGD was INR 36 crores.
Okay.... And sir, on the Tumkur-Shivamogga, as you said, the two packages are expected to get the financial closure maybe soon. So what is the land status in both the projects, and have we achieved actually in any of these? Because we were in discussion last quarter to achieve actually in the package three, and the AD expected, sir.
Sorry to interrupt, Mr. Rushi. Sir, there's a disturbance coming from your line. Request you to mute your line while the management answers your question.
Okay. Yes, sir, please tell.
Package three, land is around 92%, and package three closure is happening in maybe another 15 days' time. Well, we have already submitted to NHAI, but due to COVID, there was no due diligence done at their end. So now we are expecting within another 15 days' time. Package four, we have around 61% of land available, which they promised within a month's time, they would be around 80%. And there also, then we can proceed with financial closure, and maybe in next quarter, we'll be able to achieve that. Hello?
Mr. Rushi?
So package three, we should get the AD by July and four by end of Q2, right?
Right.
Okay, sir, I have more questions. I will come back in the queue. Thank you, sir.
Sure.
Thank you. We would like to remind participants that you may press star one to ask a question. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead. Sorry to interrupt, Mr. Shah, your voice is not audible, sir.
Okay.
Sir, we are unable to hear you. I would request you to move to a better reception area.
Hi, is it better now?
Sir, it's still the same. I would request you to rejoin the conference. The next question is from the line of Subhadip Mitra from JM Financial Services. Please go ahead.
Hi, good afternoon. So my questions pertain to how do you see the EBITDA margin sustaining over the next couple of years?
So, EBITDA margins in the last year, except for Q3, have been in the range of 14% on the construction without other incomes, 14%, 14.5%. So these are, these have been basically resultant of projects coming to an end, and ECLs being reversed for receivables on power front, which have contributed to the margins, which are generally our recommended margins of 12.5%, more by 2%. So these are basically reasons of certain division in margins, ECL provisions being reversed, some impact of PIM on achieving milestone or enable, so PIM being passed on to the EPC contractor on achievement of milestones and reversal of any COVID contingencies.
Based on these grounds, our expected margins in coming quarters also would be in the range of 12%-12.5%.
Okay. So the sustainable margin number that you're looking at is about 12%-12.5%.
Right.
-over FY 2022, 2023
Yeah. That is before other incomes. That is, construction margins.
So secondly, with regard to the order inflow that you are targeting, in the current year, and you did mention that there is a, you know, good tender pipeline from NHAI. Would you be focusing more on HAM or EPC or any preference?
There is no specific selection from the ease of working and availability of land acquisition and available of raw material in those areas and our strength of working in those areas. Whether it is HAM, whether it is EPC, it will all depend upon particular stretches.
Okay, understood. And, sir, lastly, just, you know, harping back on the debt scale with the Macquarie part, is there any visibility in terms of by when you would like to, you know, target completing this transaction, given it has been pending for long? And at least my understanding is, you know, until this transaction doesn't rectify, it, it may even impair your, you know, consolidated debt equity and the ability to bid for more HAM. Kindly correct me if I'm wrong.
So, on the deal perspective, we're definitely working very keenly on the deal, and the potential investor is also quite very keen. So we do expect to close the deal, most of the assets to be monetized by Q3, Q2 or Q3. That's the target. But from a perspective of whether it will... These are all most of the projects are invested projects, and there is cash flow available with the company for taking up new HAM projects. So we believe that there will not be challenges on further taking up projects on the balance sheet of ACL.
Understood. That's it from my side. Thank you so much.
Thank you. Participants, to ask a question, you may press star and one now. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead.
Yeah, thank you for the opportunity. Sir, if you can spend some time on the Kharagpur project, the balance on your book is going to be de-scoped now, or this is going to get executed, about INR 109 crore?
... So, they are so part of it could be descoped fully, smaller amount, 26, and balance of it would be executed as and when land is handed over.
Sir, I think the number, can you state the number for the amount that can be descoped?
Mr. Shah, sir, your voice is breaking. We are unable to hear you.
Yeah. Sir, just repeat the amount you said that could be descoped?
Approximately, I think it's INR 26 crore.
Okay. Thank you. Right. Thanks. Also, what is the status of the smart infra project in Kerala that we have? Is that on track or it has kind of slowed down?
Hello? Hello, Ashish, could you repeat?
Yeah, sir, I was checking on the smart infra project that we have in Kerala. Where are we on that project?
Yeah, we are executing the major, amongst them is KFON. So KFON is delayed due to COVID, so we've got an extension, and balance works of around INR 100 crore will be executed this year.
Okay, sure. And, just last thing, can you just, just once again come back on the number for the equity invested in the ACL portfolio? I know we would have discussed this number in the past, but just to get us aligned with the March 2021 numbers, what is the total equity invested? How much of that is invested by Ashoka and by Macquarie, if you can give that number.
So, as far as the HAM projects are concerned, total invested to invest total equity to be invested is around INR 176 crore for 2021, 2022, and 2023, INR 141 crore, that is INR 317 crore total to be invested. On all these HAM projects or any project which we have, we have totally invested INR 841 crore and INR 317 crore yet to be invested, of which INR 140 crore is pertaining to projects under ABL. So the INR 700 crore for ACL projects, plus INR 317 crore to be invested, a total INR 1,017 crore.
If you ask the total investment of ACL in its projects, including its own funding, around INR 3,100 crore has been totally invested, of which INR 800 crore has been invested by Macquarie, and INR 2,300 crore invested by Ashoka Buildcon.
INR 2,300 is ABL's total investment in ACL portfolio?
Yes.
This is inclusive of-
Yeah.
This is inclusive of any support loans or something loans that we would have taken?
Yeah, all kinds of support loans as well as CCDs.
Sure. Thank you, sir. Thank you.
Thank you. The next question is from the line of Prem Khurana from Anand Rathi. Please go ahead. Mr. Prem Khurana, your line is unmuted. Please go ahead with your question.
Yeah, thank you for taking my question, sir. So the first question was on this asset monetization that we've been working on, and I think in your response to one of the earlier questions, it sounded as if, I mean, you're looking at a piecemeal transaction rather than going for a single buyer. So am I right in my reading, or is it a single buyer that you plan to deal with and not do multiple transactions? Because you said, I mean, there are multiple buyers involved, and they're doing due diligence, and there could be multiple SPAs. So would it be done asset by asset, or this is the entire portfolio is going to go to a single buyer?
We can get to know only at the end of the transition. But, to give you an assurance, it's not very multiple buyers. There are a couple of buyers only looking at it, and, but asset by asset.
Couple of buyers, okay. So sure. So there could be multiple SPAs, but then, I mean, the count, I mean, in terms of buyers, would not be that big a number.
Yes.
Okay. And sir, also, if you could share your thoughts on international Maldives order, because I think we've done one project and was done long back, and between we didn't do much in international geography, and then we've taken this project and that, too, of this size. So if you could help us understand, I mean, one is, how do you see the margin profile to be different from the way we work in India? Because as far as I know, and most of these international orders tend to be fixed price in nature. And are there any more in the pipeline in international geographies that you're looking at in terms of adding more projects in either Maldives or some of these other geographies that you're targeting?
Yeah. So after the first completion, we have also started second phase. These are smaller value. And then this is the third project which we have bagged in Maldives. And margin-wise, they are similar to what we make in India.
Sure. So 12%-12.5%.
Yes, we are participating in and evaluating, participating in other geographies like Africa.
Okay. Any number, if you would, I mean, that you could share in terms of what is the big pipeline and what is our target or what is our appetite from international geographies in terms of the order addition on a yearly basis or as a percentage of the order backlog that you ideally would want to have from these international geographies?
We are not sure. We being a new player in these geographies.
Okay.
We are still evaluating, like, where, which geographies, which countries to approach, how to close and how much to close. All this is under evaluation.
... Sure, sure. And Paresh, sir, I think on this PIM that you spoke about, I always thought the orders that you get to have SPV, these tend to be fixed price and fixed time orders. So how do we pass on this PIM benefit to the standalone entities?
So how do the situations of the PIM passing through to is only situations where it is over. So the PIM, so there is a PIM budget at the SPV level, which SPV retains. So that is kept intact. And due to delays in execution, because of non-availability of land or because of delay in awarding an appointed date, the fixed price typically cannot remain. So that the impact of fixed price is done only with the impact of additional PIM, only if receivable from NHAI, over and above the PIM of the budgeted PIM of the SPV.
Sure. And just one last, if I may please, I mean, what was the total equity infusion during the quarter? And-
During the fourth quarter, approximately hardly anything, INR 40 odd crores, sir.
INR 40-odd crore?
Yeah.
Okay. Because when I look at the cash flow statement, it seems as if we've invested almost around INR 280-odd crore. And last quarter, when you spoke, I mean, you had given us a number of almost around INR 87 crore. So which is why I was wondering, I mean, why would this jump be there? Because cash flow statement shows some other number, and, I mean, if I were to add this INR 14 core to the INR 87 crore that you gave us the last time, it works out to be around INR 127 crore. So am I missing something there?
So INR 285 crore and
When I look at the cash flow statement, cash flow-
There's a loan repaid also of the subsidiaries. So INR 285 and INR 123 net.
Okay, INR 123 crore is what we managed to ... Okay, sure. Okay. And just finally, on Jawaharnagar, there was this issue with one of the feeder stretches. I mean, it was under construction, which is why we were not getting the kind of traffic that we used to get at Jawaharnagar. So has that been taken care of, and is-
No. So the project, which is to the north of the Jawaharnagar stretch, continues to be under construction. Their construction also held up, all held up due to COVID and other reasons.
Okay.
So we still continue to face that impact on the stretch, but I believe in three to four months' time or six months' time, they should be able to get the work done.
Sure, sir. Thank, thank you. That's it my ... Thank you.
Thank you. The next question is from the line of Parvez Akhtar Kazi from Edelweiss Securities. Please go ahead.
Yeah. Good afternoon, sir. A couple of questions from my side. First, I mean, if you could tell us what is the kind of CapEx that we are looking to do for FY 2022, and what is it that we did in Q4?
So, last year, we, the CapEx, was only to the tune of around INR 27.6 crores. Coming this year, we probably will be in the range of INR 50-60 crores, for FY 2021-2022.
Sure. And for the CGD business-
It would again change as per projects which come in, so-
Sure, sure, sure.
New projects, yeah.
For the CGD business, what is the incremental equity that we need to infuse?
So INR 291 crore is the total equity to be funded for the project over the period of another four, three years, of which we have already funded INR 130 crore. So INR 162 crore, INR 160 crore to be funded, maybe after almost one and a half to two years' time. Before that, debt will be drawn now, because most of the construction work which has been done today is based on equity. Now, debt has been tied up, so debt will be drawn for the next two years before any further equity is to be funded.
You had mentioned the figure of, I think, INR 543 crore for the debt. Is that correct?
Yeah. Correct, correct.
Okay.
INR 543 of the, that is the total proposed debt.
Sure. In terms of payment cycle, I mean, how have things been over the last couple of months, especially after the second wave? How do we see, you see things going ahead?
Parvez, could not hear the last line. Could you just go again?
So, I was talking about the payment cycle, especially during April and May, when there was a second wave, have there been any kind of delays from any person? And, and how do we see the payment cycle going ahead?
So as far as NHAI is concerned, NHAI continues the support system. So they have been up to June, and they continue to, they have a circular continue to fund the projects on a monthly basis also. On the state funds, other than Uttar Pradesh and Jharkhand, where we have certain jobs and certain exposures, there is a challenge. I think they will come out only in two to three months' time. It will take some time. But other states are quite comfortable. We have had a lot of recoveries from Bihar also. So I think the payment cycle would be comfortable, except for certain teething problems in Uttar Pradesh and Jharkhand.
Sure, sir. That's it my side. All the best for you.
Thank you.
Thank you. Participants, to ask a question, you may press star and one now. The next question is from the line of Jiten Rushi from Axis Capital. Please go ahead.
Yeah, thanks for the question, sir. Sir, just wanted to understand the NTPC solar project. We have seen the increase in the cost quarter by quarter. So this is because of the increase in the solar modules and PVs silicon prices. So why, why there is an increase in the cost? And is it a fixed price cost already structured, sir?
... Hello, could you just repeat the last part of it?
Sir, the NTPC project which we have received, we are seeing increase in the project cost from INR 503 crore to INR 625 crore. So just wanted to understand the reason behind the increase in the project cost. This is due to the increase in the solar module prices, that is the main reason why there is an increase or? So last, in Q3, the order backlog was INR 503 crore, and Q4, it is INR 624, INR 625 crore.
Thank you.
Oh, Paresh, could you clarify?
Maybe just one second, I'll just come back to the excluded... Yeah, there is something more added in that. NTPC.
No, no reason for any addition.
The basic NTPC contract cost remains same.
Okay, okay. But, this is a fixed price contract or how it is like, and whether it has started now?
Yeah, it started now. It's a fixed price contract, and it is 503. I don't know.
Sorry. Anyway, sorry, so, okay.
It is fixed, one, two. Right?
I don't know, sir. It's in the order backlog. Anyways, we'll take it off.
There are two GSS orders clubbed into NTPC, things like in them. The nomenclature is not full. There is another INR 120 crore added in that column.
Okay.
We'll clarify. Yeah.
So, sir, any. Okay, so there was a new inflows in Q4 for power, the power segment in the current one. It's up here.
Correct, correct.
Okay, okay, okay. The solar projects are fixed price, so any impact because of the increase in the solar module prices or something like that?
Yeah.
On the margin.
The prices, there is some impact, but we feel going ahead, we will be able to fit within our contingencies.
Okay. And sir, any loss funding this year and any expected next year, sir?
Couldn't understand. What was that?
Loss funding, loss funding done in any of, any of our BOT toll assets in FY 2021, and any additional loss funding which we are expected to do in FY 2022?
Yeah, major as we continue, the Sambalpur continues to need support.
Mm-hmm.
-of around INR 35-odd crore per year. So that will continue to be there.
Okay. So basically, we did INR 35 crore in 2021, and 2022 also, we'll do INR 35 crore.
Yeah, yeah.
Sir, can you highlight on the fund limit and non-fund limit and utilization level, sir?
So, our funded limits are CC limits of INR 330 crore, which we are generally utilizing around 35%-40% only, and on average. So it could come up and down. And then they are over and above these funded limits, we have other funded limits of INR 200 crore of CP limits, as well as supply chain finance limits of INR 125 crore. On the non-fund based, we have almost INR 3,000 crore of non-fund based, of which approximately 60, 65% of... 60% is utilized. Balance is available.
Okay. Okay, sir. And sir, on this CCD project, as you said, we have achieved the debt tie-up for INR 543 crore, and we have to invest further equity of INR 160 crore. So sir, the INR 160 crore of equity will be coming 50% from our partners, right? We had entered into-
Right. Right, right. Correct.
Sir, this debt, debt tie-up has been done with which bank, sir, and the interest rate?
Debt tie-up is been done with PNB and HDFC at a cost of 8.75.
Okay, sir. That's it from my side. Thanks a lot, and all the best.
Thank you. The next question is from the line of Anupam Gupta from IIFL. Please go ahead.
Just one question. Why did you... Why was the Bhandara project bought by you? What was the logic behind that?
So, see, basically, in order to facilitate which we are in the process of monetizing assets. So all buyers are typically looking at buying the 100% stakes in the SPVs. From that perspective, we have targeted one of the SPVs to take 100%, so that it's easier to then sell the total project.
Okay, but is it like individual SPVs are being bought or, are you still together? How will that be?
As I said before, the basic interest is in picking individual assets, which you find from the potential buyers.
Okay, so there is a possibility that a few assets left, are left behind with you. That is also a possibility.
Could be, yeah.
Okay, okay. Understand, sir. Thank you.
Thank you. The next question is from the line of Harshal Kothari, an individual investor. Please go ahead.
Hello.
Hello.
Am I audible?
Yes, sir.
So my point is, what is the reason behind, you know, the change in stance of regarding, you know si r, previously we were thinking of monetizing it, directly at ACL level, and now we are thinking of having individual asset by asset. So what is the reason behind that?
It's more from the perspective of the buyer's interest, what they want to, what they are interested in, and what kind of risk profile they want to buy into. Whether they buy into ACL as, as such, as a company or at the SPV level, at SPV risk level. So it's more of a perception of the buyer, and we are, we were open to that.
Okay. Thank you.
Yes.
Thank you. The next question is from the line of Meet Vora from DAM Capital. Please go ahead.
Yeah, hi, sir. Just had a follow-up on the EBITDA margin. So if you exclude other income, our EBITDA margin is at 14.5% this quarter. So is there any one-off in EBITDA? Because the normal run rate, we are guiding at 12%-11.5%. So just wanted to understand on that.
As I said, on the year-end transition, there were certain revision in margins in certain projects. Certain, due to power project, because amounts were stuck, there were ECL created, which were reversed because of receipt of payments on the power projects. Also, there were certain on achievement of certain milestones and reasonability of PIM being realized by the HAM projects, more than the budgeted PIM. That was passed on to ABL, provided for ABL. And whatever COVID provisions we had contingent we had created in the last year were reversed in this year. So all put together were the reasons for a margin crystallization of 14.5%.
But otherwise, at the project level, generally, our targets are for 12-12.5%. So any release in contingencies or certain events which give higher margins are the reason for higher margin. Otherwise, 12.5% is generally guided EBITDA margins.
Understood, sir. Thank you.
Thank you. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead.
Yeah, thank you for the opportunity again. Sir, question on the financial results of Ashoka Concessions. So there, in the, there has been an impairment of INR 110 crore.
Yeah.
Last year, there was an impairment of INR 155 crore. But that kind of impairment, we don't see in our standalone or consolidated numbers. So if you can just throw some light on how is that account... How does that accounting work, where we don't see those impairments be reflected in our numbers?
Right. So, in ACL, our impairment is based on SPV-wise evaluation. So some assets may be impaired and some assets may be doing well. So, based on each asset which is impaired, we need to provide for in ACL. But when we go at ABL at our upper level, it's an investment in ACL. So then we look at a consolidated number of pluses and minuses in ACL, and then compare. So that does not have any impact. So there are assets which are not impaired, are doing better. So their value is positive and over and above the INR 155 + 110 provision created. That's the reason there is no impairment at the ABL level.
But, sir, that would mean that there are some assets of ACL whose value has been revised upwards, and which is why those can negate the impairments, right? Otherwise, I'm still not clear why-
Exactly. Yeah, yeah. So suppose an asset is on the books for, say, INR 200 crore, and another asset is at another INR 200 crore. One is revised to INR 150 crore, other FMV is INR 250 crore. So overall, there is no impact when you total up the two. 250 + 150 is 400, and 200 + 200 is 400. So from that perspective, there's no impairment at the parent grandparent level, sort of. And at CFS level, what happens is these impairments get knocked off because they do not get carried forward.
Sure. Okay. Yeah. Thank you.
Thank you. The next question is from the line of Subhadip Mitra from JM Financial. Please go ahead.
Yeah, thank you for the opportunity. So my question is again on the NTPC solar projects. Just to get a little bit of deeper understanding, given that these are fixed price contracts, and we have seen a sharp spot in the module prices. And my understanding is that by-
Sir, sorry, your voice is fluctuating. I would request you to come a little closer to the phone and speak a bit louder.
Is this better? Am I audible?
No, sir, I would request you to come a little more closer, sir. It's not that audible.
Yeah. Is this better now? Am I audible now?
Yes, sir. Thank you.
Perfect. So, yeah, so my question is pertaining to the solar contract, and there, you know, given that we have seen a spurt in the module prices, and the fact that by March 2022, we will be seeing basically becoming applicable, do you really see a larger risk going ahead?
Yeah, so the being fixed price contract, we do keep contingencies while bidding. As of now, yes, prices are very steep, but going forward, we feel that this may come down.
... Okay, we will not place any orders for these modules. Due to COVID, there is an extension of around six months in the timelines, so we have sufficient time to decide on when to buy.
Understood. So by when are we mandated to deliver these modules or this project? As for the contract, what is the timeline?
The total timeline for this contract is 24 months.
24 months, starting January? I'm sorry, if you can just help me on that.
Start time was January, but due to COVID, we are getting around five months of extension.
Understood. Understood. And, lastly, are you looking to expand on the solar, EPC business? What are your thoughts on that?
Yeah, we are participating in other bids. This is an EPC business, so absolutely, whenever we get an opportunity, we are participating.
Okay, right.
Thank you. The next question is from the line of Parikshit Kanpal from HDFC Securities. Please go ahead.
Hi, sir. So my first question is on the... Sorry, I joined the call a little late, on the monetization. So, so will the HAM monetization happen before the toll assets monetization now, any hint on that?
Sorry to interrupt, Mr. Kanpal. So there's a disturbance coming from your line. Request you to mute your line while the management answers your question.
I would request to repeat. So what you're saying is...?
Given the second wave of COVID and potential third wave coming in, so are the prospective investors; there are many decision making on moving on the toll projects, and does it imply that the HAM assets monetization will happen earlier than the toll assets get monetized?
No, no. So, the whole portfolio is being looked at at the same time. So depending on where the closure happens, any project which is completed for the due diligence could achieve SPA stage. And, so there's no specific reason the toll projects will get delayed or the HAM projects will get earlier. So it will all depend on how the investor wants to go ahead with acquiring the assets.
Okay. And second point which you made earlier in the call, that they will affect specific end of transition or SPAs.
Yeah.
So, when do we see these actually kicking off and we start signing on the SPA? So any timelines on that now?
We are already under discussion on the SPA as well as final stage of DD, so, for a few assets. So that should be happening within this quarter's time. I mean, sorry, coming quarters.
You're talking about the September, so basically July to September.
Definitely for midway September quarter.
Something concrete will basically come out by midway September. Because we are targeting, I think money is coming in, that September, October quarter. So inflows will happen most probably this financial year, before December, or you looking at the fourth quarter of FY 2022?
We are targeting this quarter, this financial year's financial flow to happen.
Okay. So just on the, I think this affordable housing project which you have picked up, so, so any thoughts there? So are you looking to do more projects? Because I understand there are some more bids coming up. So first of all, whether, I mean, are there not enough opportunities in India, no? And, we have earlier done projects there in Maldives. So is it just because we are picking up some more orders, because we have some presence there earlier? So just to understand the rationale of getting outside India, when the opportunity India itself presents a huge opportunities on the building side.
Yeah. So this is an independent vertical which is looking for opportunities outside India. India definitely is going to throw up a lot of opportunities. So anywhere, 80%-90% of book is going to be India. But since our presence is there in Maldives, and we are also exploring Africa, and our strategy always has been to start with smaller projects and then scale up.
Okay. So in this international market, what kind of opportunities are you going to basically look at? So across segments or specific to certain segments, if you can just highlight on your strategy on international-
Opportunities.
So roads, the buildings-
It could be power, it could be railways. So we're looking at whatever EPC, wherever it makes sense, definitely we'll participate and bid.
Okay. And these will be largely multilateral funded projects, which will be AIM or...
These are mostly Exim Bank funded projects.
Okay. Okay, sir. Thank you. That's all from us.
Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Mohit Kumar from DAM Capital Advisors Limited for closing comments.
Yeah. Thank you all for joining in. Thank you, sir, for giving us a chance to host the call. Do you have any comment to make, sir, before we close this?
Yeah, yeah. So, I mean, we thank all the participants for having joined the call, and taking out the time. If you have any further queries, you may get in touch with us or our IR relationship agency, Stellar Investor Relations. That's all from my side.
Thank you, everyone.
Thank you.
Thank you.
Thank you.
Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.