Ladies and gentlemen, good day and Welcome to the G R Infraprojects Limited Q2 and H1 FY25 Earnings Conference Call hosted by HDFC Securities. We have with us today from the management team, Mr. Ajendra Kumar Agarwal, Managing Director, G R Infraprojects Limited, and Mr. Anand Rathi Group CFO, G R Infraprojects Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Parikshit Kandpal from HDFC Securities. Thank you, and over to you, sir.
Thank you, Tanya.
Thank you.
We'll begin the call with the opening remarks from the management team, followed by the Q&A. Over to you, Ajendra Agarwal . Please give your opening remarks. Thank you.
Thank you, Parikshit ji . Good afternoon, ladies and gentlemen. I welcome you all to the second quarter earnings call of G R Infraprojects Limited for financial year 2025. First of all, I would like to wish everyone on the call a belated happy Diwali. We are accompanied by Mr. Anand Rathi, the CFO of the company. I would like to start by mentioning that the company has a strong track record of delivering excellent. It's a company which is inspired by its purpose, having consistency in strategy, execution, result delivery, and stability of management, having effective and transparent governance, focused on quality of projects, which is executing projects in a way that protects people and the environment, and with care for employee safety, health, and promotes diversity and inclusion.
I will now take you through the key highlights of the quarter and recent developments in the infrastructure sector, followed by questions and answer session. On financial highlights of the company, during Q2 FY25, the company has recorded revenue from operations of INR 1,128 crores as against INR 1,574 crores during the same period in the previous financial year. The EBITDA margin for the current quarter stood at 10.39% as against 12.31% during the quarter ended September 30, 2023. During the quarter, the company has transferred one operational HAM asset to Bharat Highways InvIT, in which at the valuation of approximately INR 339 crores. During the quarter, the company has repaid the debt of INR 32.17 crores, which has resulted in an improved debt-to-equity ratio to 0.10, which is one of the best in the sector.
During the quarter, the company has received three CODs for two HAM projects and final COD for one HAM project and appointed dates for one project. The company has signed its third power transmission service agreement during this quarter and has commenced the development activity on the same. As of the date, the company has a good mix of 28 projects, which six are operational, 17 are under construction, and five projects are awaiting appointed dates. Going on the update on the order book, as on date, the order book stood at INR 20,680 crores, out of which INR 13,303 crores are under execution and INR 4,127 crores are awaiting appointed date. Further, it includes two projects having L1 status amounting INR 3,250 crores, which includes one EPC road project in the state of Maharashtra worth INR 2,349 crores and a power transmission project of INR 900 crores approximately.
As of date, the company has submitted 19 highway and railway projects amounting to INR 13,900 crores, which are expected to be opened soon. Moving on to the sector highlights and infrastructure development of India. This year, awarding activity has been a little limited. However, looking at the central government commitment, which is evident from the budgetary allocation towards infrastructure, we expect a decent flow of awarding activity coming in the next few months of the current financial year. The company is targeting an order pipeline of INR 15,000 crores in various sectors like highways, roads, tunnels, metro, T&D, railways, ropeway, et cetera. Given our track record of strike rate, we are confident of winning the new order to take us to double-digit growth in financial year 2026. We continue to work towards creating a positive impact on climate change.
We target to be a climate-positive business based on the Scope 1, 2, 3 emissions according to the Greenhouse Gas Protocol. Our actions to reach our ambitions include decreasing carbon emissions and energy consumption, recycling and reuse of waste, reducing freshwater consumption, et cetera . We continue to tap on different opportunities, emerging from the aggressive infra growth plan of the government. That's all from my side. Over to you, Anand ji, for the update on the financial position of the company. Thank you.
Yes, thank you, sir. Thank you. And let me take all of you through the financial highlights of the company for the quarter. Our standalone revenue from operations decreased by almost INR 446 crores on YOY basis from INR 1,574 crores in Q2 of financial year 2024 to INR 1,128 crores in Q2 of the current financial year. This decrease was on account of a decrease in execution primarily caused by heavy rainfall and lesser executable order books, as a result of which our consolidated revenue from operations decreased by INR 488 crores on YOY basis from INR 1,883 crores in Q2 of FY24 to INR 1,394 crores in Q2 of the current financial year. Our standalone gross margin has improved to 26% almost in the quarter ended September 2024 from 24.50% in the same quarter last year.
Our standalone EBITDA margin has reduced to 10.39% in the quarter ended September 2024 from 12.31% in the same quarter last year. Our EBITDA margin at the group level has increased to 25.32% in the quarter ended September 2024 from 24.81% in the quarter ended September 2023. Just to highlight an exceptional item for the current quarter, the company has sold 100% stake in its wholly-owned subsidiary, namely G R Aligarh Kanpur Highway Private Limited, to Bharat Highways InvIT for a total consideration of INR 39.6 crores. The resultant gain of INR 35.6 crores has been disclosed as an exceptional item. Our PAT margin at standalone level decreased by 6.86% to INR 114.82 crores in the quarter ended September 2024, as compared to INR 123.27 crores in the quarter ended September 2023.
Our standalone net worth stood at INR 7,466.75 crores at the end of September 2024, which was INR 7,195.72 crores at the end of fiscal 2024. Our net worth at consolidated level is INR 7,956 crores at the end of September 2024, which was INR 7,602 crores at the end of fiscal 2024. Our standalone revenue borrowing, sorry, take my pardon, our standalone borrowing at the end of September 2024 is INR 689 crores, which includes short-term borrowing of INR 75 crores with debt-to-equity of 0.10 x. Our consolidated borrowing at the end of September 2024 is INR 4,301 crores with debt-to-equity of 0.55 x. During the quarter, the company has made an additional fixed asset amounting to INR 26.79 crores.
Our net block of property, plants, and equipment, which includes CWIP, is INR 1,286 crores at the end of the current quarter. Investment in our subsidiary company in the form of loans and equity is INR 1,895 crores at the end of September 2024. Balance promoter contributions required to be made for our under construction and operational HAM projects is approximately INR 2,000 crores, of which we are expecting a contribution of around INR 350 crores-INR 400 crores as of the financial year 2025. Our working capital at the end of the current quarter has increased by 41 days and stood at 153 days. This increase is primarily on account of an increase in SPV debtors. Our net receivable at the standalone basis is INR 2,200 crores, including SPV debtors of INR 2,000 crores approximately at the end of September 2024.
Our trade receivable at the consolidated level is INR 217 crores at the end of September 2024. Our unbilled revenue at the standalone basis is INR 527 crores at the end of the current quarter. Our unbilled revenue at the consolidated level is INR 130 crores at the end of September 2024. Our inventories are at INR 625 crores at the end of the current quarter, as compared to INR 768 crores at the end of fiscal 2024. I sincerely thank all our stakeholders, including employees, business partners, vendors, bankers, and auditors who have been supporting the company throughout its transformation journey. On behalf of G R Infraprojects Limited, I thank everyone for attending this standing call. Thank you again. Yeah, over to you, Parikshit. For Q&A, please. I mean, may I request to open the session for the question and answer?
Sure, sir. 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 touch-tone 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. The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hi, sir. Sir, now, just to recheck in terms of the guidance, so obviously, in 1H , the revenue is 19% down for full year. Previously, we said that we are looking at -5% to +5%. So now, what's the revised downward guidance? And even for FY26, so what's the number one can look at?
Current financial year, what we are expecting that may not be we may not be growing, but I believe that we'll be + 5%-10%, the degrowth may be possible for the current financial year, right? And for the 2026 financial year, I believe that once we are having various projects in our fold, probably we'll be able to achieve a growth track, right? We'll be again on the growth track, maybe on double digit again. But that depends on how fast and how quick we can get that project and what kind of composition, maybe EPC and BOT. Depending on that, probably we'll be able to get on again back on this growth track.
So, sir, just to get the number right, so in terms of the order inflow, so how much we have already received? L1 is how much? And now, how much total we are looking at further in the second half?
See, so far, including L1, we have received INR 5,000 crores in the, I would say, for the current year, which includes the EPC project of Maharashtra as well, right? And our target for the current year was around INR 20,000 crores. And the INR 15,000 crores yet to be, we are expecting we'll be able to get in the remaining financial year.
Okay. Okay. And so this INR 15,000 crores would be anything in terms of the road? How much? And non-road would be how much? Any broad idea?
See, other than road, we are targeting out of the INR 20,000 crores so far. I mean, we have received INR 5,000 crores. It is, I would say, so far we have received power transmission projects, right, which are in the range of around INR 1,300 crores-1,400 crores. But then balance all our road projects, right? And for balance INR 15,000 crores, again, what we are expecting is that 60%, maybe INR 9,000 crores-10,000 crores would be from road and balance the INR 5,000 crores, the power transmission or other railway projects or tunneling and all that. That would be the case.
Okay. And then on the margin front, so obviously, this quarter is one of the lowest multi-year lowest margin. So how one can now look at in terms of the margin?
See, margin, because we are underutilized, right? We are not able to utilize our capacity for the simple reason that we are not getting the orders, right? So you see that our gross margin has improved, but we are not able to because of the overhead. Once we are having enough order in our fold, we'll be back on that same margin track, again, 14%-15%, which we are expecting from the EPC. But yeah, it may take time because unless until we start utilizing our whole capacity, right? So to that extent, probably in current year, our margin guidance would be same, 12%-13% for the remaining year, balance of the year, right? But next year, again, we'll be back on this margin ratio of 14%-15%.
Okay. Got it. And the remaining four HAM appointed date and for the transmission, and when we are likely to get this appointed date, and what's the value of this where the appointed date is pending?
Our appointed date, we are waiting for appointed date for five of the projects. Out of that five, four are HAM projects, and one would be multimodal logistics park. The recent one which we got yesterday only, where we are having L1 status, so I'm not talking about L1 status. We are talking about the agreement, the projects where we have already entered into the agreement, right? There are five projects out of that. For five projects, three projects, we are expecting in the next one or two months the appointed date for those three projects. The remaining two projects, we are expecting that the appointed date would be declared by last quarter of the current financial year.
Okay. Okay. Got it, and the equity breakup for FY26 and FY27, you said INR 353 crores, INR 400 crores in the second half?
Yeah. So for next, I mean, after 2025, we would be requiring around INR 1,600 crores of the equity contribution, right? Which would be, again, we'll be increasing next two and a half years. So maybe INR 700 crores every year basis.
Okay. Okay. Got it, sir. Got it. Thank you. All the best.
Thank you.
Thank you very much. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. I repeat, you may press star and one to ask a question. The next question is from the line of Alok Deora from Motilal Oswal. Please go ahead.
Hi, sir. Good afternoon. So, sir, just again on the execution side, so this quarter has been extremely low, and even if we take a 10% decline for the full year, we are still looking at around INR 1,900 crores kind of average execution for the remaining two quarters. So based on the order book which we have, and I believe October also has been a pretty heavy monsoon month, so are we confident on this number, or we could see some kind of the best-case scenario where we end the year with around 10% lower execution?
We'll always predict best-case scenario only, and we'll try to achieve that scenario, right? I mean, see, as of now, we are having decent executable orders, more than INR 13,000 crores. And we believe, or we are confident, I mean, and then again, depends on how that all other formalities are being provided to us or all other approvals are being made available to us. But we are confident we'll be able to achieve that kind of number, maybe 10%.
Right. And sir, if we get these appointed dates like in the next two months and the end of the year, which you just mentioned, so what kind of growth rate are you looking at for FY26?
We'll try. If we are getting more EPC projects, we certainly will be able to get more than 10% of growth rate for the next financial year. That means FY26. But we certainly would be on growth track, right?
Got it, and just one last question. This working capital has gone up in the quarter, so how do we see that shaping up ahead?
See, working capital, if you exclude our SPV debtors, then it actually has gone down. Because we are not having enough deployment means. Maybe we'll not be able to deploy whatever. So the idea is to basically not to draw the debt at SPV level and keep the liquidity at Holdco level, right? And hence, this is how, I mean, we have planned, basically just to reduce our interest cost at SPV level also, right? And hence, that working capital has gone. Otherwise, if you exclude the SPV number, then our working capital has improved significantly.
Got it. Okay. Sure, sir. That's all from my side. Thank you. All the best.
Thank you.
Thank you very much. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.
Good afternoon, sir. Sir, this quarter, the execution has been very low for us. So, I mean, I understand range and all, but any specific reasons because we still have a decent executable order book at the beginning of this quarter, but still the execution got very delayed. So was it related to any of the particular geographies where we were doing some work or? No. So yes, one state, Punjab, we already mentioned in the previous call also, where we are finding, I mean, that industry is finding difficult to get the project on execution mode. That is one aspect. But largely because of we were not having enough executable orders before the start of this quarter, right, or even at the beginning of this financial year.
I would say in the last three, four months, we have got the appointed date for three or four HAM projects. So the point is we have got the appointed date, but again, in the monsoon months. So then we could not get the progress over those projects. But it's largely because of, see, rainfall is one issue because this Q2 is always because of high monsoon, that execution is low. But because of, and this particular year, we are largely running short of our executable orders. That's why we are very much down in terms of our revenue.
Okay. And on the NHAI ordering front, any updates because that also has been very slow till now. So how do you see that shaping up for the sector as well as for you in the remaining part of this financial year?
We are quite bullish. I mean, there is a pipeline. Though there is a good pipeline, maybe of INR 131,000 crores, which is again coming from highway sector only. So the pipeline is visible. But so far, for the current financial year, the government has not been maybe for different reasons. This particular sector might not be having proper focus of the government. And I believe that once these elections are over in Maharashtra and other Jharkhand states, probably that government again would be focusing on highway development and will be getting more and more orders for the current financial year.
Okay. And this Maharashtra MSRDC order, what is the update on that? And given that elections are there with a possibility of a regime change, how do you see that? Is it something like confirmed for us, or can it go into some sort of a loop?
See, this is something I may not be able to comment. This is the prerogative of the authority. But yes, out of the two projects, we have already signed one agreement, right? And one is the one where we have been declared L1 so far. We are waiting for LOA, and because of that, Maharashtra state is under election. Probably we have to wait until the results are out, right? Because of this code of conduct. Right now, they may not be issuing, I believe so.
Understood. And then Bharat InvIT deal, sir, what kind of price to book? Is it closer to 1.1 that we had sold this to?
Yes. It's, I would say, see, INR 39 crores against we have got, so our book value was around INR 300 crores, including debt, right? And that includes that interest also, which we are agreeing on year-on-year basis, right? So on the date of deal, it was almost 1.1.
That was the multiple on the invested equity that you got?
No, no, no. That was not multiple. See, we invested my original investment equity would have been right, INR 250 crores, INR 240 crores. I don't remember exactly, but including interest, which we are agreeing on the loan part, which we have been extending to our SPV, right? So on original equity, I would say it would be more than 1.5.
Okay. Okay. Understood, sir. Thank you and all the best.
Thank you.
Thank you very much. The next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead.
Sir, thanks for the opportunity. Sir, if we consider a 10% decline for FY25, the revenue would be around INR 7,000 crores, so over this lower base, don't we feel that our 10% growth is very minimal? so we'll go back to only 2024 numbers, around INR 7,800 crores for 2026, given the stronger order book we have.
No, no, no. So growth point is, again, growth would be subject to what kind of order we'll be getting for the, I mean, remaining during the remaining financial year, right? So that's why I'm saying we may get back on that growth track, maybe of 20% or 15%, or even in the range of 10%, depending on the order composition which we'll be getting over the period of next six months.
Okay. Sir, so our total order book as of September should be around INR 19,600 crores, right?
INR 19,600 crores plus L1 of power transmission would be more than INR 20,000 crores, which we got yesterday.
Okay. So out of this INR 19,600 crores, what is the value of order which is already under execution right now?
NRI 13,000 crores.
It would be closer to INR 10,000 crores?
INR 13,000 crores. INR 13,000 crores.
INR 13,000 crores. Okay. And sir, secondly, we saw a higher other income in the first half. So what is our expected distribution, total distribution from InvIT for the entire year?
What I believe is that we'll be getting in the range of 11%-11.5% of the distribution from the InvIT, right? And my total investment in there is in the range of INR 2,000 crores. So our total income from InvIT would be in the range of INR 200 crores-INR 225 crores.
Is the InvIT income from the dividend, right? Interest income is over and above this?
Dividend plus interest.
Okay. So what was the amount in first half, dividend plus interest total?
First half was around INR 134,500 crores, something like this.
So in second half, we exposed somewhere around INR 90 crores-INR 100 crores?
Yeah.
Okay. Okay. Thank you, sir. Those are my questions.
Thank you.
Thank you very much. The next question is from the line of D. Rit. Tripathi from IndusInd Bank. Please go ahead.
Hey, thanks for the opportunity. I just have one question, sir. What amount of CapEx we can expect in the coming quarters or the coming years?
CapEx, we don't see a big amount. Maybe, I mean, for the year, we are targeting not more than. So far, we have done CapEx of around INR 50 crores in H1. And in H2 also, we don't expect that more than INR 50 crores of CapEx we'll be doing. And which includes actually that office building which we are considering in Gurugram.
Okay. Yeah. This was my question. Thanks.
Thank you.
Thank you very much. The next question is from the line of `` Parvez Qazi from Nuvama Group. Please go ahead.
Hi. Good afternoon, and thanks for taking my question. Sir, what would be the EPC value of the orders for the two power transmission projects that we have won this year?
See, that would be in the range of put together, both projects put together would be in the range of INR 11 crores-INR 1,200 crores.
INR 11 crores-INR 1,200 crores. Okay. Sure. Thanks, and all the best.
Thank you.
Thank you very much. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Vineet Prasad from Investec. Please go ahead.
Hi. Hi. Good afternoon, sir.
Yeah. Good afternoon, sir.
I think, what is the risk to our Maharashtra government orders if there's a change in government? Is there a case that the orders which have been placed and one L1 order, those can be canceled or there'll be change of work or could go for rebuilding, etc.?
[Foreign language] देखिए, अगर historically अगर अपन देखें, इंडिया में इस तरह के incidents होते नहीं हैं। Government change होती है, लेकिन मतलब इस तरह के जो project है, वो government के जो projects हैं, वो continuity रहती है। Historically ऐसा रहा है, आगे भी अपन सोचते हैं, ऐसे इस तरह की चीज होनी नहीं चाहिए। तो government due process के साथ में bidding process चलता है। ये particular person का या particular government का ऐसा कोई agenda नहीं है, जिसमें scheme को बंद किया जाए या पूरे projects होते हैं। But फिर भी जब कोई change होता है, तो risk कहीं ना कहीं कुछ ना कुछ तो रहती है।
Understood. Understood. Thank you. And the second question is, now NHAI ordering has remained muted for almost one and a half, two years now. What it is, why is it taking so long for NHAI ordering to come back, particularly given ordering pipeline at least for NHAI has always remained strong for these last one and a half, two years?
See, government, [Foreign language] अगर अपन ने ये देखें तो एक तो government change हुई, सबसे पहले election mode में आ गई। फिर Bharatmala की जो scheme थी, उसमें change हुए। अभी काफी कुछ change भी है, मतलब ground level पे government की जो policy implementation है, उसमें भी change है। Government की जो land availability के जो issues हैं, उसमें भी change है। Government work कर रही है और फिर सबसे बड़ी change जो government की जो scheme है, HAM से BOT में transfer करने की, अभी HAM पे उतना उस तरह से force नहीं है और BOT तैयार नहीं हुआ है। BOT के कुछ जो agreement के जो lenders के साथ में, bankers के साथ में जो इनका
discussion चल रहा है, वो final नहीं हुआ है। उसकी वजह से ये delay हो रहा है। लेकिन government के ऊपर pressure तो है ही है। इस second half में अपन ये expect करते हैं कि order outflow बढ़ना चाहिए।
Understood. And is there any case of shifting focus for central government or NHAI away from road and focusing more on sectors like renewables or railway, et cetera?
[Foreign language] ये तो सर, ये तो budget के अंदर आता ही है। अब आपको ये तो अपने को, मतलब उनके दिमाग में क्या चल रहा है, ये तो नहीं समझा जा सकता। लेकिन ये तो अपने को budget को देख के, budget का जो allocation है, उसको देख के समझ में आता है कि भैया, अपन government किस तरह से thought process है। तो अभी ऐसा कुछ नहीं है कि government highway को de-prioritize करके और solar में या किसी में जा रही है। सबकी अपनी अपनी priorities भी हैं और अपना focus है।
Understood. And sir, the last question is on building segment. We had alluded to looking at building and factories as a segment and trying to build up team around it. Can you just highlight what's the progress on that side? Have we started building for it or is it still under building phase?
See, this is still under evaluation. I mean, because we have diversified into the last, I would say, one year or maybe in two years, we have diversified into different different sectors. So we are taking time actually because we have built up team in tunneling sector. We have built team in roadway, power transmission, right? So it is taking time. But yes, we are working on it.
Understood. Understood. Thank you so much, sir. Thank you.
Thank you.
Thank you very much. We would like to remind participants that you may press star and one to ask a question. I repeat, you may press star and one to ask a question. Participants may press star and one to ask a question. The next question is from the line of Vineet Prasad from Investec. Please go ahead.
Sir, just one clarification. You just mentioned that we have also built a team for tunneling. So will we be only looking at road tunneling related projects or we are also qualified to take up underground metros sort of projects or we can have some JV out there and bid for underground metro projects as well?
[Foreign language] इसमें जो tunneling किसी भी तरह का business हो, हम लोग interested हैं। पर जब तक specific आप जो metro tunnels के लिए कह रहे हैं, उसमें भी हम लोग interested हैं। लेकिन जहां पर TBM machine का use होता है, वहां पर हम लोग नहीं हैं।
Understood. Understood. Okay. Okay. Thank you so much.
Thank you very much. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead, sir.
Yeah, sir. Hi. Sir, you earlier spoke about the ERP and sustainability team, and we also see that you are bidding for the transmission projects now, taking larger projects. So first question was that how much will be the equity contribution beyond the road portfolio which you need to invest for developing the transmission assets? And within the entire transmission ecosystem on the renewable side, so how do you see yourself getting aligned more towards battery storage, solar, and other themes? So how do you think you can contribute or participate in that growth story?
See, Parikshit, guys, we are trying to build our this sector, right? And we started with slow pace, and gradually we are moving, and we are targeting even bigger projects. So in current year, we are targeting around INR 2,000 crores of the transmission EPC order book. And in transmission, generally, we have been targeting through BOT. I mean, we have entered through BOT mode. This is, I mean, BOT mode means where we have to invest our equity as well. So maybe I would say for next two to three years, we'll be targeting around, assuming that it will be putting what I would say is around INR 8,000 crores-INR 10,000 crores of transmission EPC we would like to execute in the next three years of time, right?
And there we are expecting to infuse equity to the tune of INR 3,000 crores in the next three years of time. That is our basically what I would say is that the estimate which we are having in our mind, right? And when you talk about other renewable, other power sectors, we are working on it. First, we want to establish ourselves into transmission sector, then certainly we'll be exploring other renewable sectors, other power sectors, right? And we'll be doing much more into power sectors going forward, yeah.
You said in the roads alone, you have almost INR 2,000 crores pending to be invested. So beyond that, you are planning to invest another INR 3,000 crores in transmission BOT assets over the next three years. So total outgo in the next three years will be about INR 5,000 crores on the equity investments?
Yeah. We can again. So it's not only into road sector, which includes power sector also, right? In transmission, when we are saying INR 2,000 crores is pending for equity infusion in the next two and a half years, which includes transmission project as well, whatever so far we are having, right, in our order book. So yes, you can say in the range of INR 4,000 crores, I mean, INR 4,000 crores-INR 4,500 crores, which is to be infused in. And when you are saying, so this includes that the future transmission project will be getting more, I would say, road projects as well where we have to infuse more equity as well. So overall, equity infusion for next years will be more than INR 5,000 crores, certainly.
When I look at the so this is on the transmission side where you seem to be getting big now. And beyond that, you have BOT toll assets. So now what's your view on the BOT toll, which would be coming up for the second half? So out of the INR 9,000 crores-INR 10,000 crores of order inflow you're expecting from roads, how do you think you will visualize HAM coming in and BOT toll coming in? So what's your appetite there?
What we are expecting for the current financial year is that maybe in the range of INR 5,000 crores-INR 7,000 crores of EPC will be having in our order book by the end of this year, and balance would be from HAM or other EPCs.
So this will INR 5,000 crores-INR 7,000 crores at 30% also will mean about INR 2,000 crores. That means over the next three, four years, you'll be investing close to about INR 7,000 crores in equity.
See, when we are saying that INR 10,000 crores of the power sector, which will be eventually executed in five years, right?
Yeah.
Next three years would be eventually executed in the next five years, right? So we have to take five years of origin how we'll be planning our equity infusion and all that, right? And we'll be getting another INR 10,000 crores-INR 15,000 crores of the BOT projects depending on what kind of competitive intensity over there, right? So yes, I mean, on additional INR 10,000 crores-INR 15,000 crores equity for the BOT projects, we need another 30% kind of equity infusion for next three to five years, right? So you can say INR 5,000 crores additional as a road project for road project itself, right? So in next, I would say for five years, we can expect INR 10,000 crores of equity investment for next five years.
So how will you fund it? Because I understand that you have a Bharatmala InvIT where you can monetize and recycle equity, and some of your HAMs will move there and you'll get unlocking. So what kind of unlocking of equity or recycling of equity while you are investing INR 10,000 crores over the next four, five years? How much do you think you will recoup from your recycling of HAM equity? And beyond that, are you have any thoughts on how you would de-risk your portfolio on the transmission side? I mean, are you looking to have some platform like you have for Bharat Highways? So how are you thinking on those lines so that you get more share of EPC than rather investing too much of equity?
See, I mean, that we have proven in past as well while we have created that monetization platform in form of InvIT for road, right? So as of now, we are having enough liquidity in our balance sheet, maybe more than INR 2,000 crores in form of the investment in form of the InvIT units, right? And then, as I told in my opening remark as well, where my SPV debts are more than INR 2,000 crores, right, which can immediately be realized in cash. And whatever HAM projects we are building, right, and over the period of next two years we'll be building that again can be monetized. So far, we have invested into existing HAM in the range of INR 1,800 crores that can also be realized over the period of next two years or next three years.
So I would say next three years of time, I'll be having INR 6,000 crores of cash available with me right now, right? So I don't think even if, let's say, if we are planning for INR 10,000 crores of equity investment next five years, that would be a challenge for us. Of course, we'd be and we are exploring for transmission as well, the platform where we can create a platform which can actually eventually help us in monetizing the transmission assets so far which we are building, right? As of date, we are having four transmission BOT projects in our fold. Going forward, we are targeting more and more transmission projects. So we are expecting that, and we are confident we'll be able to come out with a monetization platform for transmission asset as well.
These four are transmission assets. What was the total equity investment? I know you have included it in your INR 2,000 crores outgo. So what will be if I have to just ask on these four assets, how much is the total equity out here?
So four includes the latest one which we got yesterday, where equity investment is around INR 200 crores so far, which is not included into the INR 2,000 crores, right? But otherwise, total equity investment, proposed equity investment, I mean, total put together all four is around INR 600 crores.
Out of INR 600 crores, what is the balance? What is invested and what is already invested now?
What is already invested? So INR 400 crores we have already accounted for, right? Which is actually investment is in the range of INR 150 crores-INR 160 crores.
So, INR 150 crores. So, balance about INR 450 crores is pending to be invested.
Yeah, yeah.
Okay. Sure, sir. Thank you. Those are my questions. I'll ask the operator to follow the queue, please.
Thank you.
Thank you very much. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.
Good afternoon, sir. Sir, recently, one of the players got banned by NHAI for almost a year. So how do you see this sort of a development happening in the sector wherein this poses a risk for all the major players? And how do you see this sort of a development affecting us?
This is unfortunate, I would say. But yes, risk remains. You have to be transparent while dealing with everybody in the sector, right? So I think it's a case between these two parties. I may not be able to comment on this more than this because I'm not privy to what information or I mean, I'm not privy of the information which probably I should have before commenting on this. But this is unfortunate, I would say.
Okay, but does it increase the opportunities for players like us because there will be slightly less companies?
If someone is banned, out of 10, if one or two is banned, let's say, then certainly that the opportunity increases for the remaining seven, eight, whoever are there. I mean, that's to go without doubt.
Okay. And sir, I think you have done some MOU with IndiGrid also regarding the transmission assets. So is that the platform that you are alluding to while talking about the downloading of the transmission assets from the company to release the equity?
Yeah. We entered into an MOU with IndiGrid maybe two years back, right, when we started our transmission journey, right? But over the period during the last two years, what we have realized that probably we'll be able to build, I mean, we have enough, I would say, asset into our fold. Then certainly, we'll be exploring more such kind of opportunities. Maybe we'll be entering into JV with some investors or some other sort of monetization platform which can be, which would be eventually helping us basically in monetizing those transmissions, whatever transmissions that we'll be building, right? And actually, it would certainly be helping us basically in sustaining our transmission business, right, because it requires equity infusion to a large extent. So we are exploring, and we are confident we'll be able to deliver this platform as well.
The margins in the transmission EPC business, are they similar or different than the road?
Transmission, I would say, largely similar, plus minus, I would say, one or two%. But largely, they are similar.
Okay. Okay. Thank you, sir, and all the best.
Thank you.
Thank you very much. The next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead.
Sir, what was the equity invested in first half?
It is around INR 300 crores.
So last call, I mentioned that incrementally, we were supposed to put around INR 2,100 crores. So how does it add up? So INR 2,000 is till September, and INR 200 crores will add up for the power T&D project. So incrementally, we have INR 2,200 crores, right?
INR 2,200 crores. Last time we called, we told around INR 2,000 crores, right? INR 2,100 crores, right?
Yes. Yes. Yes.
So we have infused so far INR 290 odd crores, I think, INR 300 crores, maybe. So what we are saying is because we have got one more transmission project where we have to put in INR 150 crores of equity, right, in the current financial year, right? And the last one, so far, we have not added.
So as of now, we are having. [crosstalk]
As of today?
As of now, we are having INR 2,000 crores of the equity contribution, which is pending, right?
Including yesterday's project, it would be INR 2,200 crores, right?
INR 2,200 crores.
Okay. So this year, first half is INR 300 crores we have invested, and second half, we are expecting another INR 400 crores. So it should be INR 700 crores for FY25 as well.
INR 700 crores? INR 700 crores for FY25, yeah.
It should be similar for next two years as well.
Yeah, yeah. Next year too.
Okay, and sir, secondly, on the non-highway side, apart from highways and T&D, what kind of margins do we target while bidding for those projects in railway or tunneling?
See, for EPC, if you talk about tunneling or railway, we are expecting same kind of margin in the range of 14%, right? 13%, 14%, 15%, whatever you may say. But then, depending on the competitive intensity, right now, we are not getting those projects at these kind of margin, right? So what we are trying right now is to basically keep at least, I mean, minimum threshold margin of 12% and to get basically and to diversify ourselves into different sectors as well, right? So we'll be able to, if we'll be having that opportunity to get more projects into tunneling or ropeway or power transmission, probably we'll be able to get back to our track of 14% or 15% kind of equation.
Okay. Sir, lastly, on working capital side, so it went up to 153 odd days in 2Q. So how do you see it coming down by March 2025, or it should remain at similar levels?
See, working capital days, excluding my SPV debtors
So the 150-day number should remain similar as of March 2025 as well, including SPV debtors
If we require more cash to invest into our equity, the BOT projects will certainly reduce our SPV debtors, and we'll be putting that money into equity investment, right? And certainly, it will help us basically to reduce my working capital from 153 to 100 or 120 or whatever. So point A, what I'm saying is 153 days includes 113 days of my SPV debts. It can be excluded. It can be realized in cash immediately on day one, right? So actual working capital is 40 days.
Okay. Okay. Thank you, sir. Those are my questions.
Thank you.
Thank you very much. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead, sir.
Thank you. Just to follow up, just one question. So you spoke about INR 10,000 crores of transmission projects you're looking to add in the next five years or execute. So are you looking to do any backward integration here since either in tower manufacturing or conductors or anything? Thoughts on that?
See, that is even for bidding for third party also. No, that we can bid for third party, we can do it EPC only also. But that actually is under evolution, right? If we'll be doing backward integration or not, or what kind of backward integration can be done, maybe because tower manufacturing, we are having certain fabrication facilities in Gujarat as well as Rajasthan. So it can be extended for tower manufacturing. That has to be seen. So far, this is under evolution.
You're open to bid for like projects like tunnel, road or other things for the EPC part?
Yeah.
Okay. Thank you, sir. I think there are no further questions. So on behalf of HDFC Securities, I would like to thank you for giving us this opportunity to hold the call. If you have any further or last comments, please make them in the meeting tools today.
Thank you, sir. [Foreign language] सभी इन्वेस्टर्स को जो कंपनी के साथ में पूरे इस जर्नी में सपोर्ट किया है, आगे से मैं एक्सपेक्ट करता हूं, इसी तरह से सपोर्ट बना रहेगा और कंपनी आपके एक्सपेक्टेशन पे पूरी करती रहेगी. थैंक यू. थैंक यू टू ऑल.
Thank you.
Thank you so much, sir. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.