Ladies and gentlemen, good day and welcome to the Dilip Buildcon Limited Q1 FY 2026 earnings conference call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gautam Jain from DBL. Thank you, and over to you, sir.
Thank you, Anushka. Good morning, everyone. Welcome to Dilip Buildcon Q1 FY 2026 earnings conference call. From the management we have today Mr. Devendra Jain, Managing Director and CEO. Mr. Rohan Suryavanshi, Head of Strategy and Planning, and Mr. Sanjay Kumar Bansal, Chief Financial Officer. Before proceeding with the call, I would like to mention the standard disclaimer.
The presentation that we have uploaded to the stock exchange, including the interaction in this call, contains or may contain certain forward-looking statements concerning our business prospects and profitability, which are subject to some uncertainties, and the actual results could differ from those. Now, I would request Mr. Rohan to take us through the key remarks, after which we can open the floor for question and answer session. Thank you, and over to you, Rohan.
Thank you, Gautam. Good morning, everyone. On behalf of the entire DBL family, I welcome you all to this conference call. The results and presentation have been uploaded to the stock exchanges, and I trust you've had a chance to review them. To provide a brief overview of the industry, the muted order activity trend we experienced last year has continued into the first quarter of this fiscal year across all infrastructure sectors.
However, based on recent developments and assurances from the government and a very clear intent, we're expecting a significant increase in orders for the remainder of the year. In the road sector, the National Highways Authority of India is preparing to build out 124 road projects worth INR 3.4 lakh crores in FY 2026. These projects will include a mix of HAM, BOT, and EPC models.
Additionally, Honorable Minister Shri Nitin Gadkari Ji has pledged INR 2 lakh crores for infrastructure development in Jharkhand. The Ministry's focus on increasing capital expenditure, along with overhauling processes related to tendering, DPR preparation, road safety and quality, maintenance, and toll collection bodes well for the long-term outlook of the sector.
In the water distribution sector, particularly with the government's flagship Jal Jeevan Mission, challenges such as water scarcity, difficult terrains, and funding issues have hindered full implementation. Given these delays and issues, the government has extended the execution timelines to 2028 in the last budget.
As the central government remains committed to completing the scheme with various interventions, we anticipate some progress this year. In the metro rail sector, we stand on the brink of significant opportunities.
Recently, the Andhra Pradesh government approved a proposal to invest over INR 20,000 crores in the development of the Vizag and Vijayawada metro rail corridors. According to a recent World Bank report, Indian cities require investments exceeding USD 2.4 trillion in urban infrastructure by 2050 to meet the needs of the growing urban population.
This highlights the urgent need for increased infrastructure investment in the country. As a well-established and diversified infrastructure player, we at DBL are actively exploring opportunities across all related sectors and are confident in our ability to capitalize on these prospects.
Now focusing on DBL performance in the last quarter. We have encountered challenges in securing new orders, primarily due to a slowdown in the ordering activity across most of our verticals and heightened competition for the limited projects available.
This situation is true for all players of the industry and even more so for the larger players, because a large portion of orders have been won by smaller and unrecognized players due to lowering of the bid standard by the authorities. It's vital to keep our investors and analysts informed about the situation.
Over the past few months, we have faced intense competition, especially in some large orders as well. However, at DBL, we remain steadfast in our commitment to our long-term strategy of profitable growth.
We have chosen to uphold our threshold margin levels, which has led to a temporary decline in our order book. However, we are optimistic that as the market stabilizes and conditions improve, we will successfully secure orders across all our established verticals. While we will be experiencing a period of degrowth, we view this as an opportunity for strategic refinement.
The government on its part, like I mentioned, has already improved the qualification criteria, and we hope this will lead to significant reduction in competitive intensity. Right now, rather than lowering our threshold margin levels to chase sub-optimal projects, we are taking this time to realign our operations to be leaner and more agile.
As part of this initiative within our EPC business, we have paused all CapEx plans and implemented targeted workforce adjustments, which will enhance our operational efficiency in the long term. We believe these proactive cost-cutting measures will yield lasting benefits for our performance moving forward.
In our HAM projects portfolio, execution is progressing smoothly and according to schedule. In the last quarter, we have completed partial divestments in three projects to the Alpha Alternatives Fund for a consideration of INR 25 crores. The remaining seven projects are on track.
We anticipate completing and partially divesting four of them within this financial year, followed by the remaining three in the next financial year. I'm also happy to report that our InvIT formation process is nearing completion, and we have received in-principle approval from NSE, BSE, and SEBI.
After a few more necessary clearances, we're excited, and we anticipate to launch the InvIT within this quarter. Now moving on to our coal operations. Our coal MDO operations are thriving and progressing on schedule. In our Siarmal MDO, we have achieved a production volume of 5.4 million metric tons in quarter 1 FY 2026. We are on track to meet our full year target of 25 million metric tons for FY 2026.
Similarly, our Pachhwara MDO achieved 2.9 million metric tons in Q1 of FY 2026, positioning us well to reach our full year target of 7 million metric tons for FY 2026. In total, we will achieve production of 32 million metric tons in FY 2026. Finally, I am excited to share our vision for DBL 2.0 remains on track even in the current challenging macro environment.
It is truly promising to see our two long-term revenue generating businesses, our coal MDO and the HAM portfolio progressing robustly. These ventures will provide us with predictable cash flows, improved return ratios, and a more balanced risk profile. We hope that our robust order inflow from the government in this financial year will help us further strengthen our strategy and growth.
As I mentioned before, evaluating DBL from a consolidated perspective is extremely essential to fully appreciate our various business verticals, the nuances, trends, performances, and potential. With that, I would like to hand over a call to our CFO, Mr. Sanjay Kumar Bansal, who will provide a detailed overview of our financials. Thank you.
Thank you, Rohan. Good morning, everyone. I welcome all our stakeholders to our earnings call for Q1 FY 2026. Let me present the results and highlights. During quarter ended 30th June 2026, the company completed two HAM projects worth INR 1,605 crores and received LOA for our tunnel projects in state of Kerala.
Moving to business to financial performance. Firstly, standalone quarterly performance on YOY basis. The company's revenue decreased by 14.76% to INR 2,010 crores against INR 2,358 crores. EBITDA decreased by 22.5% to INR 203 crores from INR 262 crores. The EBITDA margin decreased on account of reduction in revenue from road and water supply projects. Profit after tax increased by 161% to INR 123 crores from INR 47 crores.
Now, come to consolidated quarterly performance on YOY basis. The revenue of the company decreased by 16.4% to INR 2,620 crores from INR 3,134 crores. EBITDA increased by about 9% to INR 520 crores from INR 478 crores.
The EBITDA margin increased on account of completed HAM projects and coal business performance. Profit after tax increased by 93.57% to INR 271 crores from INR 140 crores. This is the financial performance of the company. Now we can open the floor for the questions and 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 their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two.
Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Shravan Shah from Dolat Capital. Please proceed.
Thank you for the opportunity. Sir, couple of questions. First, just to rephrase on the guidance on the standalone front. So what is the now revised EBITDA margin, ordering flow, CapEx for this year?
Shravan?
Yeah.
Hello. Sir, your voice is breaking. Could you please fix that?
Is this better now? Is it fine?
Yeah, fine. Loud and clear.
Sir, can you just restate the revised guidance on the standalone revenue, EBITDA margin, order inflow and CapEx for FY 2026?
Sure. Sir, so let me start with order inflow. We are expecting INR 12,000-INR 15,000 crores of new order inflow. That is what we are expecting. The guidance, what we expect should be in the range of INR 8,000-INR 8,500 crores of revenue. This is for the full year. And the EBITDA margin should be in the range of 11% or so.
Okay. And CapEx on the standalone would not be anything for this year?
It should be very negligible if only some replacement effect has to be done. I do not expect to be more than, if at all, because we are expecting it not to go, but for assumption sake, let us assume between 25- 50.
Okay, got it. On the debt front, this quarter, obviously, the debt has increased. Last time we have talked about just a standalone debt, we are looking at INR 500 crore reduction in this set and net debt free by FY 2027. Any change on that stand?
Anushka, basically our target for Fiscal Year 2026, the reduction of debt by INR 500 crore remains intact, number one. Number two, it is a quarterly increase by INR 85 crore, which we will address in nine months. There are activities mapped in these last three quarters. The plan is intact.
Okay. Net debt free by FY 2027, that also intact?
Yes. Net debt free by FY 2027 is intact.
Okay. On the operational front, a couple of things I just wanted to know. First, this Shrem unit distribution post whatever the sale that we have done, what is now left with us? Because in the distribution from FY 2027, previously we used to have INR 76 crore. Now we are seeing a nil number for Shrem unit distribution.
So, the projected distribution decreased to INR 24 crore because the management has decided to prepay part of CPPIB debt. So this quarter, basically we have prepaid INR 312 crore of CPPIB debt from DIAPL.
We basically paid this out of sale of Shrem units. So we sold INR 263 crore worth units this quarter. And now around INR 300 crore units is pending. So basically it is because of the reduction in units and reduction in the corresponding debt of the DIAPL.
Okay. So balance INR 300 crore, are we looking at to sell during this year and that is why we are looking at from FY 2027? There will not be any distribution from Shrem.
I will have a right of prepayment from August 20 this year. We are planning to pay or prepay the debt within this financial year. That is why we have kept zero distribution in FY 2027.
Okay. Real infra debt is how much?
Principal remains INR 285 crore as of June 30.
Okay. Sir, is it possible, can share the MDO revenue, EBITDA margin, PAT?
Shravan, last few calls we have said basically, we see and we give the
No, EBITDA.
statistic console, and we do not give entity by entity. Yes, in the console coal business proportionate is included, but company to company, it is very difficult.
Okay. CRML co-handling plant CapEx of INR 850 odd crore has started, which we were supposed to start from this quarter.
Shamshi, the major CapEx in CRML will come from or will be done for the CHP. CHP, out of the total balance CapEx, is around INR 900 crore. Without CHP also, we are targeting 25 million ton and next year 35 million ton. We will start this CHP basis when we want to go above 35 million ton.
We are well within the targeted total production capacity. Within, you can say next one or two quarter we will start because there is no point doing the CapEx early than required. Basically, we are basically planning basis our production requirements.
Okay. Lastly, sir, the cash number as on FY 2025 has been restated from INR 292 crore to INR 80 odd crore for standalone. Is there anything because this was an audited number, and similarly, that number has been increased in the non-current financial asset.
Non-current financial assets. Basically, cash reduction is the total. If you can see the standalone cash flow, the cash impact for this quarter is INR 61 crore negative. There will be some balance sheet item adjustment. Shravan ji , on specific queries, we can have a separate discussion with my accounts team. We can have a separate call on each and every item.
No issues, sir. I was not referring for this quarter. I was saying for FY 2025, what we reported when we declared the result. At that time, the cash and bank balance on standalone was INR 292 crore, which now revised down to INR 80 odd crore, and the difference has been increased in the non-current financial assets. I was asking that.
Shravan , I think it will be basically some grouping change. My accounts team will basically explain you some grouping change. Otherwise, the cash adjustment for this quarter is only INR 61 crore.
Got it, sir. Thank you, and all the best. I will come in touch with you. Thank you.
Thank you, Shravan .
Thank you. The next question is from the line of Ishita Lodha from SVAN Investment . Please proceed.
Hi, sir. Thank you for the opportunity. My question is with respect to the inventory levels. We saw a slight increase from 75 days as on March to 84 days. How are we looking at inventory levels by the end of this financial year?
Basically, if you can see the inventory in absolute terms, the inventory is decreased marginally. Yes, because my sales is down by around 15%. The 9 days increase in my net working capital days is because my denominator is down, which is the revenue. In absolute terms, my inventory is not increasing. It will be more or less same as previous year, and we will end with more or less 75-80 days in the entire financial year.
Okay. What is the update on Jal Jeevan Mission receivables?
Jal Jeevan Mission receivable in the financial results call of quarter 4, we have said we have received majorly all Jal Jeevan Mission payments in March. Now the regular one-month outstanding remains from the Jal Jeevan Mission. Otherwise, it is regular.
Okay. Since last seven odd quarters, we are seeing that the order inflow has been quite muted. By when are we expecting the momentum to pick up?
The order inflow is in the opening remarks by Rohan Suryavanshi. He said because there were qualification criteria issue and competition from unrecognized player. Now, since MoRTH and NHAI changed the qualification criteria in EPC and HAM projects recently, now we expect lesser competition from unrecognized players. We expect good amount of order flow between quarter 2 to quarter 4, and we expect INR 12,000 crore to INR 15,000 crore worth projects in the remaining period of this financial year.
Okay. The other income was slightly higher. Any one-off during this quarter?
In console, the other income is higher because in CPPIB, we paid INR 164 crore of redemption premium, the corresponding impact of reversal of provision. It is there in the reversal of provision in other income.
The same INR 164 crore is in finance cost. Basically, we recognize the cost through provision in past quarters. But now the real payment happens. Now my interest cost increase and my other income increase because of the reversal of provision.
Okay. Thank you, sir. That is it from my side.
Thank you so much.
Thank you. The next question is from the line of Ashish Shah from HDFC Mutual Fund. Please proceed.
Yeah, good morning, you all. Sir, just one thing I wanted to understand. We spoke about tightening of qualification norms for EPC and HAM projects. Could you elaborate what are the key changes which have been either proposed or have already been implemented? When do you expect really for these new norms to take into effect as far as bidding is concerned?
Mainly, I think the change in the qualification criteria is the net worth criteria. Earlier, what used to happen was that the size of the project should have a 20% net worth. But now they have prescribed an assets net worth. In this already, if you have a project of INR 5,000 crore, so that INR 5,000 crore, 20% will deduct from the existing net worth.
So the smaller net worth companies like INR 50, 60, 70, 80 crore which were directly qualifying in INR 1,000 and INR 2,000 crore projects, they will not qualify now. So one major change has happened.
They have also changed some technical qualifications, single size of the project. So altogether, we are expecting, and it has already been implemented. They have done one more good thing, that they have also increased the sizing of the project.
For example, if there were seven or eight packages in one corridor, they have reduced it to three or four packages and increased it to INR 2,000 crore, INR 2,500 crore type of projects which they have now floated in the bid. So we are expecting that in Q3 and Q4, there will be major momentum in NHAI and MoRTH works.
Right. Sir, this adjusted net worth computation, that is going to be applicable for BOT and HAM projects, right? For EPC-
Actually, they had implemented this already. But for this, the net worth criteria, particularly EPC project, there is some change criteria in the EPC. But this criteria that has been implemented now, is only for HAM project, not for BOT.
Okay. This is particularly for HAM. Even for BOT, the older norms continue.
Yes.
Okay. And sir, in your assessment, what will be the mix this year for HAM and BOT and EPC?
Sir, mostly, the bidding perspectives are 60-40 ratio is going on from the MoRTH and NHAI. Approximately 40% of the projects are still on EPC, and 60% majorly on HAM and BOT. So we are also respecting the order mix in the same way.
Okay. And sir, practically, how long do we expect that the shelf of projects is going to be ready for actual bidding to commence? Because there have been various false starts. So one is really cautious on how to look at this year's opportunity. In your assessment, when do you think this is actually likely to revive the whole bidding process?
Till now, these people were busy in fixing the qualification, which has ultimately been done, and now I think the orders will ramp up. Some will happen in Q2, but the major activities will be visible in Q3 and Q4, and we are very keenly monitoring at what places we have to bid orders and where we have to win orders.
Almost a lot of activity will be visible. The government is continuously saying that it is going to give orders worth approximately INR 3,00,000 crores this year. Already in the last two years, after the elections, everything was muted. We are looking that this time the government has to give orders properly.
Right. Other thing is on the MDO business. These two mines, now we have started operating these mines. Are we looking at more such concessions?
Yes. Continuously. Mining is our prime sector. Continuously, we bid. Even we are bidding in the underground mining also, and we bid in open cast as well. Not only the coal, we are bidding in the iron ore, we are bidding in the bauxite also. We are looking this type of project in this financial year.
Okay, sir. All right. Thank you. Thank you very much.
Thank you.
Thank you. The next question is from the line of Vishal Periwal from Antique Stock Broking. Please proceed.
Yes, sir. Thanks for the opportunity. First of all, sir, in the presentation, you have given one slide of equity divestment tracker. So if I look at the latest presentation, it talks about the total inflow is around INR 2,000 crores, and FY 2025 PPT, this number was INR 3,000 crores. So I just want to understand how much. Have you received INR 1,000 crores in this quarter, or is there any other change which is there in this?
If you compare the previous equity divestment tracker, so the known operational cash flows, yes, it was INR 3,000 crores. So partly we have received and partly we have adjusted with this. Our revised understanding in terms of, like I explained Shravan Shah's call question, we have sold INR 260 crores worth Shrem units .
So basically, we have reduced the inflows from the units because we already sold and we create to CPPIB. And balance money we have received from Alpha during this quarter. So basically, there is no change again other than this. So except these changes, the non-operational cash flow is same.
Okay. And then, sir, I think you did mention. If we look at balance sheet, where exactly this comes? Because we are not seeing that change in the increase in the cash line item, say even for the warrant amount that we have received.
Okay. The warrant amount you can see, it is increased in basically the net worth. You can see the INR 399 crores. You can see the financing activity in cash flow. So INR 399 crores received in this quarter from the warrant.
In the asset side.
Asset side, it will be basically reduction in working capital utilization. But if you can see the operational cash flow, I have invested INR 492 crores in my operational cash flow this year. So basically, INR 60 crores came from my borrowings and around INR 400 crores from the investment what I got from warrants. So net-net, my investment in operational cash flow is INR 492 crores. So basically, asset side, it won't see because it is already invested in operation side. So there is a current asset increase.
Okay. Largely it is a working capital increase, which is basically
Yes. That is why my net working capital days increased from 75 to 84 days.
Okay. Got it, sir. The one-offs which is there in this quarterly result, I think the footnotes do provide some clarity.
Yes.
I think a INR 9,800 crore one-off. The large part, where exactly it is coming and any clarity that can be provided, sir.
Out of the total INR 98 crores, basically INR 68 odd crores received from Shrem against the deferred consideration.
The balance is basically profit on sale of 24.99% stake to Alpha and profit of INR 23 crore on unit sale.
Okay. In terms of the one-offs, it is very difficult to guide, but incrementally we are planning to sell the units, that is one. The second one-offs which can come in the coming quarters is the couple of other HAM projects which are yet to be transferred to the InvIT. So these two things will lead to couple of one-offs in the coming quarters also. That is a way to understand, right, sir?
Yes.
Okay. Sure, sir. That is all from my side.
Thank you.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please proceed.
Yes, sir. My first question is on debt. Rohan spoke about this formation of InvIT. If you can help us understand what is the total breakup of the HAM debt, asset debt, standalone debt, asset debt, and outside debt, which is there in assets, DBL assets. If you can help us on how does it move once the InvIT formation happens.
Basically, there are nine assets planned to be transferred to InvIT. Eight assets of DBL and one asset of the third party. The total debt to be transferred is close to INR 3,850 crore to the InvIT.
How much is the current debt, the total standalone that we have? If you can help us understand standalone, then asset debt and the third-party debt. Then how it will come down after the formation of the InvIT. I know standalone will be net cash in 2 years, but I just want to understand how will the console look.
Let me tell you, on Quarter 1 ending, my net debt is INR 8,266 crore. Basically, out of that, around INR 3,850 crore debt will move out of these 9 assets. 8 assets, INR 3,850 crore.
Standalone debt is about INR 1,700 crore, right? How much is standalone debt?
Yes, INR 1,661 crore. Out of that, I explained the INR 500 crore reduction will be done by 31st March 2026, which we guided in last call.
Okay. Out of the total debt of INR 8,266 crore, you said INR 3,850 is this. What will the residual debt on the asset side after this, and how do you intend to knock it off or will it be transferred to the asset?
If we project the control debt as of March 31, 2026, INR 3,850 crore will go, but only under construction debt, which is INR 24.18 crore, which will increase by at least INR 1,000 crore because the civil projects are under construction. There we will draw the debt. Net, around INR 3,000 crore debt will go from here.
Okay. When all these assets are completed, then what will be the debt after the peak debt on the console basis, and what is your plan for monetizing the balance assets?
On the monetization, the plan is already updated. We have already agreed with long-term plan with Alpha. 10 assets, 36% will go. Eventually these 10 assets entirely will be transferred to Anantam Highways InvIT. During FY 2027 end, I believe, entire debt of HAM, the existing HAM projects will be shifted to the InvIT. After, remaining debt will be standalone debt and the coal CRML debt. That is it.
Okay. So coal CRML, how much is the debt right now?
It is INR 420 crore as of June 30, 2025.
This will go as we do the CapEx. This will go up. Okay. Second question is on the ordering. I think, Devendra Jain, you were mentioning about the ordering this year from NHAI. Sir, has all the issues, like earlier there were issues of any project which NHAI has the authority will move to the cabinet committee for approval.
So now has that been sorted or still that same way it will be done? Secondly, what is the status of the land acquisition for the INR 3 trillion which you spoke about in terms of ordering?
Beyond roads, what are the other segments you are exploring given that in two years we expect to be net cash? What are the other segments you are evaluating, especially on the renewable side, if you can highlight anything on battery storage. Some of your peers have been getting orders there, solar, and other segments. Renewables, probably.
Sir, in terms of the new areas or the areas that we are already working in, we mentioned all the 8, 9 verticals that we do, and all those areas we are looking at, whether it is water, whether it is metro, whether it is specialized bridges, tunnels, all those areas we are looking at.
Besides that, we are also looking at energy sector, renewable sources, and all. So we are also looking at those kind of projects. Mining continues to be a large focus for us. Those are the areas that we are looking at for new orders. The first question that you wanted to understand, the land acquisition status for all those new projects. Sir, for all of them, they are in different stages.
The government, given that there was lower ordering activity in the last 2 years, and because these projects have also been further delayed, the land acquisition, while it is a project-to-project specific thing, it is definitely in a decent shape than what it was earlier when the government started ordering in a larger pace.
What has happened is, because there has been, like I said, in the last 2 years, muted order activity. While the government was intending to push out more projects, they were not able to. So the land acquisition has obviously improved as an overall percentage.
Just lastly, any signs of revival on the state CapEx on road, which earlier when we have seen, at least in Maharashtra, SMMC and Mumbai ring road kind of projects are now talking about Konkan Expressway, Gujarat is talking about big plans. So anything on the ground which you have seen taking shape up so wherein we can participate and can give an opportunity to us in near term?
Parikshit, state matters are extremely unique to each different state, given their own sort of consideration at that time and which state is going into elections or not. During or around elections, they start focusing more on social rollouts, and after that, there is a bigger focus on CapEx.
Whether it is state or national, that kind of trend does repeat. Instead of diving into specific states, that is basically the larger sort of strategy that they do adopt. More and more states have started doing CapEx on specialized projects, whether it is large expressways or unique or sort of large infrastructure projects.
We will have to go into each state by state. While we do look at different state government orders, it is a more measured approach, looking at what is the financial tie-up for such projects, and then only as a company, do we bid for that.
Okay. Just lastly, on the margins and EBITDA margins, our size has decreased because of the order slowdown, but some of our peers are still doing better margins, like 13%-14%. So directionally, now this is the bottom of the margin, or this is for us like a new normal. Do you think with the mix changing, these margins can again go back to the 13%-14% EBITDA range?
Sanjay, I might not be able to sort of comment on specific peers that you may be referring to, but each of us are working in different areas and sectors and different government authorities and agencies with very different competitive intensity.
Part of our business strategy for the last decade plus had been our own CapEx, which is where we had higher fixed costs, but that transferred into better sort of margins when we had a larger order book and good visibility.
Obviously, in a scenario where the order book scenario was depleted, our fixed costs will remain, and which is where we have addressed that and reduced all of those also on a considerable front, which is why we were able to even protect our margins even right now.
Going forward, as new orders come in, what I and we anticipate as a company, that once you have enough orders, and once this fixed cost that the company has gets absorbed even better, there will be an improvement in margins. But different verticals will have different margin profiles.
So for me to say where we are right now, I definitely think this 10%, 11% is probably at the lower end of the margin profile that we are at. Our anticipation, at least we hope, once things are on a regular kind of basis and order book is fine, full, and we are targeting what we are doing, we are able to fully utilize all our assets. It should be at least a 300-400 basis point improvement in an ideal scenario, where I will also look at early completion and all of those things as well.
All of that has not kind of happened. Let's see how it goes. Once we have more orders, new orders, what profile we win at, we will be able to give you a better guidance. You should definitely consider that this 10, 11% is a bottom level of the margin profile.
Awesome. Thank you.
Thank you. The next question is from the line of Naysar Parikh from Native Investment Managers. Please proceed.
Yeah, hi. I just wanted to know, you planning the listing for InvIT, so what is the indicative valuation and your stake in it, if you have any thoughts on that?
Basically, if you can refer Rohan 's opening remark wherein he said the BSE, NSE, and SEBI in-principle approval is received. We are basically updating our offer document. We believe this will be somewhere in September.
So September month, the InvIT listing will happen. Valuation, I can't commit now because that is going on with the investment bankers. I said we are transferring eight assets. One asset is third party.
So our stake would be 74% from the eight assets, but ninth asset will basically dilute my shareholding. So would be closer to 70% or so, subject to the equity raised in InvIT. Basically, will be in the range of 70%.
Okay, got it. On the order book, we understand on the margin front, but given you are already at the bottom of the margin, and many players across different segments are showing growth. It is not like they're not showing.
Even larger players are showing growth in order book across different segments. Are we being overly conservative or what is it that we are not able to win orders? Because it's been obviously a secular decline, and if you remove coal MDO, we are like, let's say, INR 10,000 crore order book.
Sir, again, I would not be able to comment on which specific PSS you might be referring to. But largely the industry, if I talk about, let's say, specifically road-focused EPC players. From the national government, 90% plus HAM projects have gone to unrecognized players, and I would say the EPC front has been almost 95% to smaller unrecognized players, which are not listed.
There has been a significant. If they are showing order inflow, that is maybe in separate sectors that you may be referring to. But the road sector from the national government has definitely been muted for all of us players. That data at least I know. What new sectors? Now, let's be clear, when they have taken order book. We mentioned very clearly that we have a very specific focus. We have a very specific goal.
We don't want to take new orders at the cost of our profitability, at the cost of hitting our return ratios, or just for the sake of taking orders. We are happy with what we are currently executing. We have stable cash flows which are already coming in, which is giving us a good guide as sort of visibility into what we are doing currently.
Some of these orders that people may have won, and I can send you data if you want specific. Even in INR 1,000 crore projects, people have bid -35%. There are 20-20 bidders in that. Do I want to bid an order at that price? No, I don't, because I know that project will not be completed, or if it will be completed, it will be of a very terrible quality.
I am sure you would have noticed there has been a spate and there are high incidences of people posting videos and pictures on social media of public infrastructure assets getting washed out after rain. These are even good national highways and expressways which are facing those troubles of poor quality issues.
That whole issue has only started and happened because NHAI and the national authority decided to reduce criteria, because of which people bid stupidly, because of which you can't make an asset worth INR 1,000 crore in INR 700 crore and say it will be of the same quality of a INR 1,000 crore asset.
We don't want to get into that. We take a lot of pride in our construction quality. We have till now built about and won about INR 45,000 crore plus of HAM assets, which is the largest for any construction company in India.
The biggest source of pride for us is not the size of what we've done, but the fact that of all our projects that we've done, all have been done with exceptional quality. We have not faced challenging issues of any reduction in annuity in any places. Even Shrem, when it's running its own InvIT, they are relying.
Shrem has our 24 plus, I think, 35 assets that we have given to them. All of those assets receive annuities before time. We take care of the O&M and the quality that has been there. There's no reported incidents of any quality issue. As a company, if you want that, will I be changing my policy towards the kind of quality work I'm doing? I won't be.
We don't want to get into a situation where not only does it impact our name and reputation, but also our finances, so to say. Which is why we have avoided those sectors. Even if you look at our road sector order book right now, it's a smaller part.
Eight years ago, five years ago, it was 80%, 90% of our order book. Right now it's 20%. The fact that we have built capabilities over eight, nine sectors in the last decade was precisely why we are able to do that. A lot of players in our sector are diversifying into other areas. Now they've won the orders. The performance of it will only come in the next one, two years that you'll be able to see.
Even order that you have won, while there might be some decent performance right now for the orders that they already had. Going forward, performance will only come in the years to come. That is basically that.
If I talk about the coal MDOs, the size of our coal business, in terms of size, it's possibly one of the largest order book overall that any company has. It is not just largest in terms of the size that is there for any player, but it is also giving us visibility for the next 40- 55 years.
Even in a nuclear situation, if I have not received any orders in my other businesses, I still have a continuous revenue stream going forward for the next 40- 55 years. With reducing debt and improving ROEs and clear visibility of revenue, would I want to trade off that for a short-term revenue which is at a loss? No, I will not. That is the long and short of it, sir.
No, got it. That is very clear, very helpful. Just one follow-up. You mentioned that you are seeing obviously H2 to be better. One, just from H2 and maybe next year perspective, what kind of visibility or any indication that you have from an order book perspective?
Second, other than roads, like you mentioned, since you have got into other sectors, can't we use other sectors like irrigation, water, et cetera, to win orders so that it will also overall improve not just the revenues, but like you said, which stayed even your margins. If you can just throw some light on those two.
Order book projection, like I mentioned, INR 12,000 crore -INR 15,000 crore and all these other sectors are already. We are looking at water, we are looking at tunnel, we are looking at bridges, we are looking at metros, mining. All these sectors we are looking at. The most important thing, I think, takeaway which I think the larger market is probably not taken.
We were growing at a very high pace from 2015 onwards, and we were growing YOY 20%, 30% at least. Our order books were growing very robustly. But also realize so was our debt at that time.
At its peak, our debt was INR 3,500 crore. Imagine in the last two years. That is why I think that turnaround of the company is probably not in the last two years, we have not won orders that we wanted to. We have had a depleting order book.
Because of depleting order book, we would have had pressures on our cost structures, all of those things. Our margins have not been. Yet, we have consistently managed to reduce debt, bring it down.
Even in a bad external environment, what I have tried to say, look at our revenues are down furthermore, our order book may be down, but our net debt is at INR 1,500 crore, INR 1,600 crore right now, even though temporarily this thing.
But we are talking about a reduced net debt of about INR 1,000 crore by the end of this financial year, even in this kind of scenario. I think that is the largest takeaway that wherever, and not only the standalone, even on the console level, other sort of, whether it was a CPPIB listing loan that we had, we are reducing it even with all these external challenges.
The turnaround in terms of strategy of the company, the focus that I have mentioned that we are kind of doing, we are not chasing just large order book sizes or more and more growth. We are chasing sustainable revenues and better ROE with a different angle. For that listing, with that goal, we are looking at projects across the board.
We are fairly confident that in this financial year, the INR 10,000, INR 12,000 or INR 15,000 crores of new orders we will win. There are a bunch of orders that we have already bid for, and we are looking at opening new areas as well. The confidence for this year is fairly high.
Got it. Thank you so much and all the best. Thank you.
Thank you. The next question is from the line of Deepak from SVAN Investment . Please proceed.
Yeah. Hi. Thank you for the opportunity. Just wanted to check out two things. Firstly, you mentioned about the listing of the HAM where we mentioned we would be transferring the 8 assets in the platform at a stage 1. Just wanted to check out. We have a deal with Alpha Alternatives for the 18 projects. Out of this, 8 projects are moving in this platform. What about the 10 projects? What are our broader thought process on these projects?
Sir, the eight projects which are completed are moving immediately. The others are in the stage of that's the first phase. The others are in a stage of under construction right now. As they get completed, they will keep on moving to the InvIT.
Seven in this one.
Seven, yeah.
Out of 18, as Rohan said, eight assets will go in first phase. Second phase is 10 assets. We have filed our draft offer document for eight assets. Now the next asset will go in next phase. Three assets we already completed. Out of seven, four assets will be completed this year.
This financial year-end, we will have seven assets completed. Now to transfer InvIT, we should have NHAI NOC. Once the asset complete, we apply for NOC. It is a time-taking process. After completion, it is 6 to 12 months when we can transfer to InvIT. These 10 assets, I have said we will transfer in FY 2027 entirely.
Okay. Also, second part of the question, if you can also give a broader clarity. At the whole core of these SPV, all these SPVs are lying. What is the current debt we have for these HAM projects? This CPPIB repayment which we have done, that was a part of bad debt, and how much is the remaining outstanding as of now?
So, let me give you the breakup of the console date. I said the console date is INR 8,266 crore as on 30th June 2025. Out of that, my net debt at standalone level is INR 1,661 crore. The balance debt is from the SPVs, from the completed assets. So, completed asset, I said 8 plus 3. So, the completed asset debt is total around INR 4,550 crore. Out of that, INR 3,850 crore will move with 8 assets. Balance will remain against 3 assets completed.
These 7 assets which is under construction, the current debt as of 30th June is INR 2,418 crore, which will increase by INR 1,000 odd crore by 31st March 2026. So, net-net basis, what we are reducing is INR 3,850 crore from the completed asset, which is going in InvIT, and INR 1,000 crore will increase in the under construction assets.
So, net-net basis, INR 3,000 crore will be reduced because of the adjustment of the transfer of assets to InvIT. Number 1. Number 2, we have INR 285 crore outstanding debt as of 30th June from CPPIB. This debt we can prepay because this debt is to be paid in next 13 months, but there is a window after August 2025. We can prepay early as we wish. So, this is the plan.
Okay. So, would it be fair to say even on the consolidated basis by end of FY 2027, we will have a zero debt?
Not zero debt. I said console basis, there will be two types of debt. One, standalone debt. So FY 2026, we are reducing INR 500 crores further. So you can say around INR 1,000 odd crore debt will remain in standalone. The balance debt from the coal segment will remain, and coal will remain versus the project requirement.
So, after 2027 also, there will be some debt of standalone and the coal business, and if we win further HAM assets, then we will take further project debt that will remain in 2027. So it is not only zero debt at console level.
Okay. Thank you. Thank you and wish you all the best.
Thank you so much.
Thank you. The next question is from the line of Bhavin Modi from Anand Rathi. Please proceed.
Yeah. Hi, sir. Thank you for giving the opportunity. My question pertains to the cash flow, sir. When I see the cash flow in your presentation, there has been around INR 1,000 crore of cash flow coming in through multiple sources, like from borrowings, there is INR 400 crore, from Shrem InvIT and Alpha Alternatives, there is INR 260 crore, and INR 60 crore from the GST deferred consideration.
With respect to the utilization, sir, that is where I want to understand. You have mentioned purchase of investment of around INR 200 crore and increase in current and non-current asset of around INR 540 crore and decrease in current liability of INR 143 crore. Can you just help me with the utilization? Where have we utilized in terms of asset or investment purchase?
If you can refer my page number 18 of the investor presentation, that is standalone cash flow. There are three markets, cash from operating activities, cash from investing activity, and cash from financing activity.
Right.
As far as operating activities, I have made INR 224 crore of cash. Number one. Before working capital adjustments. After working capital adjustment, my net cash flow invested in the operating activities is INR 491 crore. In this quarter, my generated cash flow, INR 224 crore is invested, and further, I have invested around INR 500 crore. So total INR 700 crore cash flow is invested in operating activities.
Okay? Now come to the right side, the investing activities. You can see the purchase of investment. Basically, my investment in the subsidiaries, net basis it is INR 196 crore is invested.
The increase in investment is because we have basically invested in DIAPL to pay CPPIB. So we have invested around INR 300 crore in DIAPL. This is majorly increased because of that. But at the same time, we have sold 26% in Alpha.
Net-net basis, my increase in investment is INR 200 crore. Further, sale of investment. The INR 254 crore came from basically Prezasip sold and basically INR 226 crore we received from the Shrem InvIT unit sale.
Right.
Basically, if you see, I have invested INR 491 crores in the operating activities. I have got net INR 84 crores from my investing activity. Similarly, in the financing activity, my net cash positive is INR 346 crores.
If I add up all three, then you will see INR 61 crores is net-net invested in this quarter, either in operating activities and cash from the other two activities received. Basically, net-net only adjustment is INR 61 crores.
I got it, sir. Just wanted to understand, when you say working capital investment of around INR 700 crores, what is it like? Is it in the form of unbilled revenue? What is the major component of that?
There are two, three items. One item is, you rightly said, unbilled revenue. Unbilled revenue specifically for the JJM projects, where basically the milestone is hydro testing, wherein we should receive 10%, and that 10% is already due once hydro testing is done, because I already invested. There is no expense to be done. Once hydro test is done, I can receive the 10% out of these three projects, which is primarily for INR 50 crores. Number one.
Oh, INR 50 crores.
Number two, data rates increased marginally. Thirdly, I have reduced my creditors by INR 140 crore. These three items together is more or less negative for this quarter.
Sir, the INR 450 crore which you expect after that hydro testing is done from the JJM project. When can we expect that cash flow to come in?
Sir, it will be timeline in mind, quarter 3.
Okay. Sir, second, with respect to the HAM, the 10 HAM assets which probably you have divested around 26% stake. Sir, where does it stand currently in the balance sheet? Does it stand in the non-current investment or does it stand under asset under sale? Where does it stand exactly?
First of all, eight assets. Eight assets, it is held for sale because we have already completed those assets. It is in the held for sale. You can see INR 397 crore is held for sale. This is about the eight asset block, number one. Number two-
Sir, 74% stake, right?
It is 74% stake in the asset which will go in first phase. The second phase will be under the investment. So investment in the non-current investment.
Okay, got it. Yeah, so that's it from my side. Thank you.
Thank you. Thank you so much.
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please proceed.
Hi. Thank you. Sir, just a couple of clarification. This INR 300 crore, the pipeline that we have talked about, this is only for NHAI that we are looking at that they will be awarding this year?
Yes, sir. NHAI and MoRTH, both.
NHAI and MoRTH put together, INR 300 crore pipeline. Okay, got it. Second, you have also mentioned that we have also bid for a couple of projects. If you can highlight how many that we have already bid and where the outcome is yet to come.
Sir, are you talking about projects where we bid and outcome is likely to come?
Yes, sir.
We bid in some different kind of projects, sir. About INR 20,000 crore of projects we have bid for right now, sir. Across different.
Okay. Got it. And second, sir, in other income this quarter, how much was the Shrem InvIT distribution for standalone?
I will tell you the total other income. Shrem InvIT distribution is INR 22 crore. INR 14 crore from fixed asset sale, and basically INR 9 crore from the total income from FDR interest. Let me just give you the right just a second.
Shravan, the other income breakup is basically interest from deposit is INR 6 crore. Then we have InvIT distribution of around INR 8 crore, and we have around over INR 12 crore from asset sale, and dividend of around INR 1.1 crore. So total it is INR 28 crore.
Okay. Got it. And just a last clarification, so once we will do this eight asset when we transfer to Alpha InvIT and will go for listing, for the 100%, for that we will get the units, but obviously we will have only percent, we will get the InvIT units from the Alpha InvIT.
Shravan, I am replying to your question. If it is not, then you please repeat your question. First of all, eight assets are going into InvIT. 26% in seven assets we have already divested. 74% with DBL. So basically, the 100% is transferred to InvIT. So we will be receiving units against 74% of DBL stake, number one. Anything else?
Okay.
Is not answered?
No, got it. Thank you.
Thank you so much.
Thank you. The next question is from the line of Gaurav Gandhi from Glory Tale Capital Management. Please proceed.
Yes. Thanks for the opportunity. As you said, sir, Minister of Transport has also highlighted and accepted this mistake of loosening rules for bidding, which has led to entry of a lot of small or unorganized players, which has affected the quality of construction. In his recent comments, we have seen that the ministry is willing to correct this thing. So any action or tightening of rules, have you observed any such things?
Sir, we already mentioned earlier as well on this call that they have taken a bunch of steps around tightening of qualification criteria and networks. So those have already happened. We mentioned that earlier in the call as well.
Okay, sir. Thank you.
Thank you.
Thank you so much.
Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Rohan Suryavanshi for closing comments. Over to you, sir.
I would like to thank all the participants for coming for our conference call. In case we were unable to answer some questions or if anybody has requests for clarifications around anything, please feel free to reach out our team and we would be happy to answer any queries you may have. I look forward to seeing all of you guys on our next call, and from everyone here at DBL, I wish you a great quarter ahead.
On behalf of Dilip Buildcon Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.