Ladies and gentlemen, good day, and welcome to the G R Infraprojects Limited Q1 FY25 earnings conference call, hosted by HDFC Securities. This conference call may contain forward-looking statements about the company, which are based on the belief, opinions, and expectations of the company as on the date of this call. These statements are not the 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 D. Kandpal. Thank you, and over to you, sir.
Thank you, Deepika. Good afternoon, everyone. Today we have on this call Mr. Rajendra Kumar Agarwal, the Managing Director of GR Infraprojects. We also have Mr. Anand Rathi, who is the Group CFO of the company. Without taking any further time, I would now like to hand over the call to Mr. Rajendra Kumar Agarwal for his opening comment. Thank you, sir, and over to you.
Thank you, Parikshit Ji. Ladies and gentlemen, a very good afternoon. Welcome to conference call to discuss the operational and financial performance of GR Infraprojects Limited for the first quarter of financial year 2025. Joining me is our CFO, Mr. Anand Rathi. I will now take you through the key highlights of the quarter and developments in the infrastructure sector as part of Union Budget 2024-25. Revenue in first quarter of 2025 stood at INR 1,897 crore, with an EBITDA margin of 13%. The revenue declined by 12% in comparison to corresponding period in the previous financial year, whereas the EBITDA margin reduced by 14.6 to 13%. As on date, the company has 29 projects on hand, spanning across highways, railway, metro, roadway, transmissions, tunnels, hydro, and multimodal logistic park.
22 of these projects are ongoing, and we are awaiting appointed dates for the balance 7, which are expected by Q2 and Q3 this year. In addition, we emerged as the lowest bidder for 2 EPC road projects in Maharashtra, for which letter of award is expected by end of Q2 or early Q3 this year. The overall value of order book as on thirtieth June stands at INR 19,075 crore, which include the 2 EPC road projects with L1 status in Maharashtra. Almost 200 bids with value of over INR 260,000 crore are currently in pipeline, across amounting to INR 15,318 crore towards highway, railway, metro. Pipeline across the various sector mentioned earlier.
The company has so far submitted 16 bids amounting to INR 15,318 crore towards highways, railway, metro, and transmission sector in the current financial year. These bids are expected to be open soon, and in the meantime, we are working on submitting other bids as and when they are called. Moving on to the sector highlights and infrastructure development in India. The Union Budget presented last month aligns perfectly with our internal capabilities and aspiration. It reflects the government's commitment to infrastructure development and economic growth, resonating with our strategic direction. The government has allocated over INR 1,100,000 crore for infrastructure this year. Road transport and highway has been allocated INR 278,000 crore. Railway has been allocated INR 265,000 crore. Logistics and supply chain sector has been allocated INR 200,000 crore.
Metro rail has been allocated INR 24,900 crore. NHAI has also announced a pipeline of 53 projects worth about INR 200,000 crore through the BOT mode in the next 3-5 years. The revised model concession agreement announced by NHAI provides significant risk mitigation and makes it investment friendly. NHAI has already invited bids for 13 projects under the BOT mode, and more bids are expected in this second quarter. This underscores a commitment to the rapid growth and presents substantial opportunity for the company. Our expertise in delivering large-scale projects on time positions us to benefit significantly from these developments. As mentioned earlier, the company is targeting order pipeline worth INR 259,000 crore across highway, railway, metro, roadway, transmission, tunnel, hydro, multimodal logistic park.
We aim to add a decent share to our order book in financial year 2024, 2025, and take the company back to double-digit growth in financial year 2026. At GR Infraprojects Limited, we will continue our strategy of diversifying our portfolio and seize these opportunities, thereby contributing to society and nation building. I am confident in our strategic direction and our ability to succeed in new markets. Our strong team and focus on project delivery will continue to drive our success. Now, I will hand over to Mr. Anand Rathi for an update on our financial position. Thank you.
Thank you, sir. Thank you. Also, let me take all partners on this call through the financial highlights of the quarter, for the quarter ending June 30, 2024. So our standalone revenue from operation decreased by almost INR 156 crore, from INR 2,152 crore to INR 1,897 crore in the quarter ended June 2024, compared to the quarter ended June 2023. This decrease was found primarily on account of lowering of our order backlog, as well as delay in getting the appointed dates in the new HAM projects. As a consequence, consolidated revenue from operation also decreased by INR 448 crore, or a decrease of almost 18% from INR 2,478 crore in quarter ended June 2023 to INR 2,030 crore in quarter ended June 2024.
A standalone EBITDA margin has decreased to 13% in the quarter ended June 2024, from 14.62% in quarter ending June 2023. This decrease is primarily on account of decrease in operating revenue, as mentioned above. EBITDA margin at group level also decreased to 18% in the quarter ending June 2024, from 24.51% in the quarter ended June 2023. Our PAT margin at a standalone level, after excluding net of taxes, exceptional losses, decreased by 5.9% to INR 196 crore in the quarter ended June 2024, as compared to INR 208 crore in quarter ending June 2023.
Similarly, our PAT margin at consolidated level, after assuming net of taxes on exceptional losses, decreased by 35.5% to INR 199.8 crore in quarter ending June 2024, as compared to INR 2,310 crores in quarter ending June 2023. Our standalone net worth stands at 7,350 crores at the end of quarter ending June 2024, which was 7,196 crore at the end of fiscal year March 2024. Net worth at consolidated level is INR 7,760 crores at the end of quarter ending June 2024, which was 7,602 crores at the end of fiscal March 2024.
Our total external borrowing, outstanding at the end of quarter ending June 2024, is INR 8,840 crores, which includes short-term borrowing of INR 200 crores, with debt-to-equity ratio of 0.11 times. Total consolidated borrowings outstanding at the end of quarter ending June 2024, is around INR 4,528 crores, with debt to equity of 0.58 times. During the quarter, company has made addition to the fixed asset amounted INR 22.6 crore. Net block of property, plant and equipment and tangible assets is INR 1,328 crore at the end of current quarter. Investment in our subsidiary company, in form of loans and equities, is INR 1,835 crore at the end of June 2024.
Balance promoter contribution required to be made for our operational HAM projects or under construction HAM projects put together, of which we are expecting contribution of INR 600 crore in this year. Our working capital days at the end of current quarter is 122 days, as compared to 112 days at the end of fiscal 2024. This increase is primarily on account of increase in SPV debtors. Trade receivable at the end at the standalone basis are INR 2,174 crore, which include INR 1,903 crore of from SPV at the end of current quarter. Trade receivable at the consolidated level are INR 285 crore at the end of current quarter.
Inventories are at INR 697 crore at the end of current quarter, as compared to INR 768 crore at the fiscal, at the, at the year ended March 2024. Our unbilled revenue at the end of, at the standalone basis, is INR 651 crore at the end of current quarter, which was... and, and that unbilled revenue at the consolidated level is around INR 94 crore at the end of current quarter. So I sincerely thanks all our stakeholder, including employees, business partner, vendor, banker, auditor, for their full-hearted support in our corporate journey. On behalf of GR Infraprojects Limited, I thank everyone for attending this earnings call. Thank you very much. May I request the moderator to open the floor for question and answer, please? 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 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.
... Yeah. Thank you, sir. Sir, just a data point, what was the trade receivable you mentioned at standalone, and what was the HAM debtors ?
Trade receivable at the standalone level is INR 2,174 crore, which include SPV debtors of INR 1,903 crore.
INR 1,903 crore?
Yeah.
Okay, and payable was how much, as on June?
Payables is around INR 840 crore or INR 850 crore.
INR 850 crore. Okay. And, this total equity to be infused now is how much? 600 you said to be invested in EPC.
Currently, it is, we are expecting INR 600 crore, but total equity infusion which is required for the ongoing projects is around INR 2,000 crore.
Okay, INR 2,000 crore is required to be invested. Okay. Yeah. So sir, basic broad, just in terms of the guidance, just, so last time you said, flat revenue growth for this year, and for next year, FY 2026, 15%-20%. So is there any change in that stand?
No, I believe so, because we just started with the current year, and we believe that we'll be getting more projects, and as more projects have been, you know, announced by the government also, and now coming also—government also coming into power, we believe that we'll be getting our expected orders over the next 3-6 months. And we'll be, you know, achieving, we'll, we aim to achieve almost 15%-20% growth for next basically fiscal. And current year, of course, it's a flat, is maybe 5% here and there.
Okay, 5% you are saying it can be a positive?
Maybe positive, maybe. I mean, so 5% plus minus, but it's almost flat is what we do.
Okay.
Depending on when, because we are waiting, so far we have been declared L1 for the EPC projects, not yet started. If we are able to start, maybe we'll be, you know, we may get 5% kind of growth as well for the current year.
Okay. So total order inflow for now, for full year, how much we are, we are expecting, including this INR 4,400 odd crore that L1 we are?
Total target hai, woh toh, INR 15,000 crore ka hai. So total order 4,000 crore bhi ye, already we are, you know, L1. So approximately INR 20,000 crore for the current year we are targeting.
So, INR 20,000 crore total we are targeting for full year, you are saying?
Yeah.
Full year.
Yeah.
Okay, full year. And, usme, jo hai, known, non-road rahega, woh broadly INR 5,000 crore or INR 6,000 crore?
INR 5,000 crore-INR 7,000 crore we are targeting.
Okay, INR 5,000-INR 7,000 crore non-road rahega. And margin 13%, jo pehle hum log bol rahe the, abhi thoda sa kam ho raha hai, toh margin mein bhi thoda sa niche ho sakta hai, ke 13% can be achievable?
13% or even more than if we are, you know, again, if we are back on this track of more than double-digit growth now.
Mm.
So then probably we can again come back to 15% kind of margin, 14, 15%, because we are not, you know, utilizing our capacity to its full extent. We are underutilized. So, ab woh 12, 13 percent, 14 percent, I mean, that's the case. I mean, in current quarter, we are only down, right?
Mm.
So if we are, if we are back on track, we'll be 13% is maintainable.
Okay. And the pending AD hai, woh 7 project ka, the value is how much, sir?
Just hold on. It's almost INR 7,000 crore.
INR 7,000 crore. So apna ye jo INR 19,300 crore hai, usme se INR 7,000 crore ka abhi appointed date pending hai.
7,000 + 4,000, 4,000 L1 hai, right?
Okay, haan, 4,000, 400 L1 hai, sorry. So mota moti 11,000, 300, 400 crore ka apna Appointed Date pending hai.
INR 4,000 crore is already ongoing.
In sabka apna by Q3, the everything will be executable.
Q3 mein, yes. Q3 mein, we are expecting ki ek do HAM chhod ke, we are expecting balance all would be executed. So maybe around INR 1,500 crore ko chhod do aap, then everything would be what we believe under execution.
Okay. Sir, lastly, other income apna is baar bahut jyada tha, INR 108 crore, so anything specific in that? And will this hundred and eight crore kind of a quarterly other income run rate continue? So isme InvIT ka kuch aaya hai kya, dividend ya kuch?
InvIT ka dividend, we have received almost into the tune of INR 60 crore ke aspas aaya hoga, which we expect will be continuing for the every quarter in this kind of range, right?
Okay.
So bas utna hi difference hai. Otherwise, earlier we used to get interest on our investment, but now we'll be getting dividend or interest, whatever, which is, you know, received by InvIT.
Okay. INR 60 crore every quarter is, is kind of a predictable dividend income.
50 crore-INR 60 crore, you can expect.
Okay, okay. Thank you, sir, and all the best.
Thank you.
Thank you very much. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Sir, good afternoon, and thanks for the opportunity. My question is on the tender pipeline for NHAI. So how do you see the... Have you seen any accretion in tender pipeline, especially post-election?
... No, so pipeline, I mean, for last, I would say 8-9 months, we have been, you know, the pipeline was visible, but somehow those projects were getting extended, right? Because of whatever situation which was prevailing in the country, right? Now, government is back again into action. You might have heard of that news that, that cabinet approval, cabinet has given the approval for, you know, 8-9 projects, almost INR 50,000 crore of. So I think NHAI is again back into action. Maybe another end, then minister is also, you know, you might have heard him saying that the, he will be awarding INR 300,000 crore of projects next 3-9 months or 6-9 months like this.
We believe that because government is already in place and there is a budget has also been allocated, we believe that the that NHAI will be coming into action very fast.
The earlier understanding was that the cabinet has to approve the enhanced project cost of Bharatmala Pariyojana. It looks like the government is looking to give the approval project-wise. Is that understanding correct?
You can say may, I mean, some sort of correction is required. It may not be project-wise, it may be corridor-wise, like, in 8-9 projects. They have especially, you know, given the approval for corridors, right? So yes, of course, and Bharatmala Pariyojana, probably they may not continue, but yes, what I also understand from various sources is that probably, the, the ministry or the government, government especially, that cabinet, cabinet committee would be, you know, giving approval to the corridor-wise project or something like this.
Understood. My last question on this, sir, you have said that you submitted bids for 16 projects amounting to INR 50,318 crore. Is it possible to break up this between road and non-road sector?
So road is, I think around INR 10,000 crore. The balance is basically in power transmission, in railways, and so road is almost INR 10,000 crore. So I have to basically check one, two, some parts. Actually. So road is around... Okay, total. Out of INR 15,000 crore, road is almost INR 13,000-INR 14,000 crore. And balance is railway, one project of railway, then... No, no. So sorry, I think this number is. Let me come back, right?
Sure. Sure, sir. Sir, one last question, sir, excuse me. Sir, which are the assets you're looking to transfer to InvIT in the next nine months?
This is-
How many assets?
The project which is already operational, for last one year is Aligarh-Kanpur. Which we have already, you know, got the approval, and we are waiting for NHAI approval, you know. NHAI approval for NHAI is basically in terms of NOC, for change of shareholding and all that. Which, we have already moved in with NHAI. And, as in, in fact, we are having one more project which is operational, just, got operational current year only, in the month of April, or I would say 31st March or whatsoever. That would be, you know, next project. And, yeah, I mean, we'll be getting 3-4 more projects of, getting COD in the current year.
So, may not be in the current year, we'll be able to transfer 2, but yes, next year we'll be able to transfer 3 more, 3 or 4 projects more.
2 in next year, sir. 2, right, sir?
Yeah, yeah.
2 in this year, right, sir?
Yeah, yeah, yeah.
Understood, sir. Thank you and all the best, sir. Thank you.
Thank you.
Thank you very much. Parties who wish to ask question may please press Star and One at this time. The next question is from the line of Anupam Gupta, IIFL Securities. Please go ahead.
Yeah, Vinay sir, just one question. So of the existing order book, what quantum is under execution at this point of time? You said seven projects are awaiting AD, but what is the quantum of those projects?
See, execution under execution is almost INR 8,500 crore, which is under execution, right?
Okay.
INR 7,000 crore for which Appointed Date is awaited, and INR 4,200-odd crore would be L1 status.
Right. The appointed dates awaited, when do you expect the INR 7,000 crore, let's say, if you look at next two, three quarters, when, what proportion do you expect to start in the next two, three quarters?
So INR 5,000, INR 5,500 we'll be expecting by end of Q3, right?
Okay.
For next 1-2,000 will be mostly large, I mean, we are of firm opinion we'll be getting by Q4.
Okay. Okay, so basically then, let's say if we take this, then, what was the, what is the guidance, if I, I don't know whether I missed it, what is the revenue guidance which you're looking at from, for this year then?
So last quarter also, we have given the guidance that we'll be keeping our... I mean, we'll be getting our revenue flattish for the current year, unless until we get some more EPC projects, which can be started at a early date, right? So then probably-
Okay.
we can, you know, have the growth of 5%. Otherwise, it's more or less flattish.
... Okay. And, whatever you are targeting this year, INR 22,000 crore, ideally should largely contribute ideally next year, right? Given the timeline which you're already in.
EPC, we can probably cross some revenue from those projects if we, if those projects are EPC. Otherwise, if we have more sort of BOT projects, then certainly we'll be getting revenue next year.
Okay. And just one last question: so when you are, let's say, taking these projects in non-road sector, which is railways and transmission and all of these segments, will these segments also give you similar 13% margins, or will it be -- so inherent margin, I'm not talking about the operating leverage which you get because you grow double digits, but inherent, bid margins is what? Similar to roads or lower than roads?
See, we have recently diversified into transmission, right? So we are-
Yeah.
There probably we are, you know, making our presence stronger day by day. So what we believe is for transmission, we'll be having this kind of margin, 12%-13% or 14%, kind of, maybe from next year, as and when we are getting more projects. Railway, we are very much comfortable with 13%-14% kind of EBITDA margin, right?
Mm-hmm.
Roadway, we are also comfortable with 13%-14% of EBITDA margin.
Okay.
So, and we are diving into tunneling as well.
Yeah.
So because it's, again, this operation we started last year only, right? So within next two years, we'll be getting this kind of margin. We are of some belief that we'll be having this kind of margin in these sectors.
Okay. Okay. Understand. That's all from my side, sir. Thank you.
Thank you.
Thank you very much. The next question is from the line of Nidhi Shah from ICICI Securities. Please go ahead. Nidhi Shah, your line is unmuted. You can please go ahead.
Hello. Am I audible?
Yes, you are.
Yes. Thank you. Thank you so much for taking my question. So as, firstly, on the other income, I'm sorry if I missed this, but what is the reason for the increase of the other income this quarter, as we can see, all the previous four quarters been nearly half of the one that we posted this quarter, in the standalone?
Yeah. So in other income, 50, more than 50% of, I would say 55% of, I mean, 50%-60% of that component we are getting from InvIT as a dividend distribution or interest distribution, right?
Uh-huh.
So earlier, we used to get our standard interest, those projects, right, while it was not transferred to InvIT at that point of time. And this time we are getting some higher interest or dividend, right? So that's the basic reason for that.
Okay.
This particular interest, our dividend income, which we believe is over the next full year, we'll be getting, you know, importantly.
Okay. So can we assume that, so right now it's a little over INR 100 crore. Can we assume INR 450 crore-INR 500 crore coming from this in the full year?
No, I think, if we can safely assume that we'll be getting INR 200-INR 225 crore, this particular range, right, from InvIT.
Okay. Mm-hmm.
The lens, maybe 100. So 300-350 would be, I think, that's the good range basically.
300-350.
Right.
Okay. Okay, so, that was on the other income. The other question that I had is, you mentioned, I think just the previous question, is that if you have any recent, any EPC projects that can open soon, then you could see a 5% growth. Do you see anything in your pipeline as of now, something that you're probably targeting? What is the... Do you see any probability of that happening anytime soon?
That pipeline in getting, I mean, so, you're talking about pipeline, right?
Yeah.
Yeah.
Especially for the ones that we can probably start this year, those projects.
This year, depends on how... I mean, if we are getting EPC, we will be bidding for EPC, right? We'll be bidding for EPC, we'll be bidding for HAM, we'll be bidding for BOT. I think if we're able to get more EPC, we'll be, you know, start executing those projects in current year itself. That is how, I mean, industry behaves, right?
Mm-hmm. Yeah.
Probably we can have growth of 5% at least. If you are getting more projects on BOT, HAM mode, then probably this year would be flattish or ±5%.
Right. So in your understanding, are those projects, those EPC projects on the horizon right now? Is there something, is there any project that you would probably name with any rupee amount that are probably, say, something that you would be targeting this year?
The total INR 250,000 crore, when 260,000 pipeline, there is a EPC pie, EPC of around INR 80,000 crore, INR 85,000 crore of projects which are under EPC mode, right?
Okay. Okay.
So we'll be targeting those projects as well. But, at what time and when that NHAI will be coming with the bids for those EPC and when we'll be getting that also, I mean, so right now it's very difficult to say.
Mm-hmm.
We will be able to start whatever EPC projects get in the current year, right? Which is, you know, where we get advance stages or whatever award is being given to us.
Okay. And my last question actually would be on the BOT projects. How are you planning to do the bidding this year? Would you want to do any financial alliances with somebody else, or you'll be independently bidding for these projects?
... See, we can independently bid that project, both of, generally, that both projects which have been so far announced, that we can do independently. We can explore other option as well. So right now, I think it's very difficult to comment on this, but yes, even if we-- I mean, we can explore what will be the best suitable, you know, mechanism or the framework which will be, depending on that, basically discussion, delegation will be take our call forward. But yes, we can bid on independent basis as well. So there is no challenge.
Right. So, from my understanding, then there is no, there's no set strategy. You'll be looking at it project wise, right?
Sorry, come again?
My understanding is that you will be looking at your bidding strategy project-wise, and there is nothing that is fixed as of now that every project will be done.
Yeah, yeah. Not yet fixed, but that strategy has to be yet, it is yet to be formed, right?
Okay.
Not yet finalized.
Mm-hmm. Got it. Got it. Thank you so much.
Thank you.
Thank you. The next question is from the line of Chirag Singhal from First Water Capital. Please go ahead.
Hello, am I audible?
Yes, sir, you're audible.
Yeah, thanks for the opportunity. So just couple of questions from the guidance. So first of all, you mentioned that you're expecting a flatish top line for this year. Would it be also same for the OPM? So last year, I think we did somewhere around 14% on standalone basis. So, are you expecting a similar OPM number for this year?
Sorry, I didn't get your question, right.
I wanted to check with you on the OPM, operating EBITDA margin. Last year, we did somewhere around 14%.
Right, right, right. So EBITDA margin you're talking about, right?
Yeah.
Yeah, EBITDA margin, see, because if we are, let's say, we'll be getting, you know, 5%-10% growth, certainly we'll be having EBITDA margin more than 14%. Because we are not growing, we're not able to utilize our capacity, so that's the challenge which we are facing here. So we're not able to recover our expenses, fixed, fixed sort of expenses. Then our margin is basically 12.6 or something like that, right? So we are expecting-
Scenario would be in the range of 12%-13%. Okay, understood. And, sorry if I missed the order inflow guidance. So, what is the order inflow target for this year based on the bidding pipeline?
So this year we are targeting some 20,000 crore of, or 20,000 crore of order book, where we have already been declared L1 for 4,000 odd crore, right? So next, in next, I mean, the balance in the current financial year, our balance target is around 16,000 crore, which we are targeting from road sector, railway, high, and metros, and then tunneling, right, and optical fiber. So all these sectors we are targeting, ropeways. As of now, as we already mentioned, that almost, there are twelve bids already been submitted, right? And, amounting to this 10,000 crore is already under, in a bid evaluation stage. Out of that, road is almost 7,100 crore, and railway is around 1,800 crore, and metro is around 1,000 crore.
Okay. And, coming to the next year revenue guidance. So, with this order inflow that you are looking at for this year, like, what is the revenue guidance for the coming year?
Coming year will be around, I mean, we'll be having more of 10%. I mean, it would be kind of double digits.
Okay. But earlier, I think you were expecting a higher growth number, right, for FY 2026, because-
We are expecting 15%-20%, but depending on and at what time of, at, what time of the projects we are getting more EPC and more... I mean, if, if we are getting more EPC towards the end of year or if we're getting EPC in the current year, right? Depending on what kind of, what, mix of order book we'll be getting at and when. Probably we can grow even more than 15%, 15%-20%. But even if, let's say, we are able to secure INR 20,000 crore, then also we'll be getting almost 10% or more than 10%. It's a double-digit growth we'll be achieving next year.
Okay. But just to understand from a strategic perspective, like, if we compare ourselves to other infra companies, you know, all the companies have been reporting high teen growth, whether it's in the top line or in the bottom line, they have been able to sustain the margins also. Earlier, I think what we mentioned is that you were not able to get orders because they were not at the margins that you were looking at. But the other companies who have secured the orders, they have been able to grow their top line as well as bottom line and able to maintain the margins so far.
So just to understand as to what else went wrong in the past, and how do you plan to, let's say, you know, streamline things in terms of at least grow at the industry pace? Because in FY 2026 also, you said planning only, if you're looking at only 10% odd growth, then there is nothing exciting in terms of growth, right? FY 2025 were almost flat. 2024 was not so great for us, and 2026 also, we are looking at like 10% odd growth, whereas most of the players are looking at maybe somewhere around 15%-20% growth, even on a higher base of FY 2025.
I'm just trying to understand from you what went wrong from a strategic point of view, and how do you plan that this kind of, you know, lackluster growth doesn't repeat going forward, especially when the industry is doing so well?
... See, maybe I'm not very confident of who is growing at, but what I believe is that they're looking at the competition, right? Which is available, I mean, which is present in the current market condition. If you're not able to get this kind of margin, probably you not be, you know, going for this growth, I mean, not be chasing the growth, without... So if I'm getting only 5%-7% kind of EBITDA margin, certainly I'll not grow. I mean, because the risk which we'll be carrying while, you know, getting projects, that will be much, much higher than what the benefit which will be accruing to us, right? So, and, and, and for that reason only, we have, we have been, you know, diversifying.
We are trying to get out of, and we are trying to, you know, test other sector as well, right? So, when we are moving to other sector, there also we don't want to be, you know, very aggressive on day one. We want to test the water first. We want to do one or two projects in that particular sector, then understand the dynamics of that particular sector, so that we have more understanding. And then probably we can be more confident in taking more and more projects. So that's our strategy, basically. That's how we have been, you know, working. Maybe-
Out of the 20-
Yeah. Sorry?
No, so out of the INR 20,000 crore order inflow that you're looking at, how much is expected from the road and how much is expected from non-roads?
See, non-road, we are expecting INR 5-7 thousand. Right.
Okay.
That will be from non-road sector. Balance would be coming from road sector. But yes, of course, so far we have, you know, I mean, we have witnessed that there's a huge competition prevailing in the road sector, and which is not actually leaving a good margin for us. So we may not be, you know, willing to generally, you know, compromise on quality and all that. So it's a, I would say it's a company-to-company call. I don't, I mean, because I'm not privy to other company data, but yes, that's our situation.
Okay. Got it, sir. That's it from my end.
Thank you.
Thank you. The next question is from the line of Alok Deora from Motilal Oswal. Please go ahead.
Hi, sir. Good afternoon, and just, most of the questions are answered. Just wanted to understand, FY 2026, we are giving a target of nearly 10% growth, 10%-15%?
Yeah. I would say range is broader, 10%-20%-
Mm-hmm.
Depending on at what time we'll be getting orders and under what format, right?
Right. Right.
Absolutely, we can grow by 20%.
Sure. And sir, this project, this MSRDC project's appointed date, is the growth also contingent on the timely receipt of appointed date of this? Because so when you give, say, 20%, is it, assuming that this appointed date comes by end of October or something? Hello?
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I think Alok's question was that I-
Yes, sir. He's in the question queue.
Yeah, yeah.
Can you please-
Yeah, yeah. Am I audible?
Yes, sir.
Yeah, yeah, yeah.
Thank you.
Yeah. Sir, I was asking about the MSRDC project. So when you say 20% growth, it's assuming that this appointed date comes by?
Yeah, yeah, yeah. So we are assuming we'll be getting that, you know, LOA and appointed date declared in the-
Okay.
By latest, latest by Q3, right?
Okay. Okay. So if there's any delay, then this number could be lower than-
Yeah, yeah. But, but then again, depending on because what other projects which is being, you know, in the pipeline we'll be targeting, right?
Right. Sir, just wanted to understand this. I mean, if you look at YTD, NHAI has not given any, I mean, any, you know, quantity of project. I mean, it's only some 50-100 km project they've awarded till now, primarily because of election period and stuff. So, you know, how optimistic are you on the NHAI side? Because, you know, a lot of players are not having the order book now. They all will be targeting the project. So especially on the EPC side, how confident are you of bagging the projects for NHAI?
EPC, probably we have to wait a little.
Right.
Because if there are more projects what are getting, and so far they haven't got any, you know, projects in their hand, right?
Mm-hmm.
Probably there would be, there would be more competition on day one. Probably we'll be waiting for right time to target EPC, but we'll be continue to be bidding basically for EPC mode as well, right? And what we believe is that the more projects they would be awarding under HAM as well as BOT. So there we are very much comfortable, and even HAM as well, I mean, we have to basically in wait and watch mode unless until the next... Once it starts flowing into the market, right, then only we'll get some 8, 10 bids would be coming up, then we'll be getting the sense of the market, how and where the competition is moving, right? So, and we believe that in BOT projects, there, then there will not, there will not be much competition in the BOT.
Yes, of course, over the next 3-4 months, that whole situation will be clear.
Right. So sir, the probability, well, of the growth on '26 could be more towards the 10%-15%, right? I mean, even if you get HAM projects by, say, January or February, then your projects won't start materially contributing in FY 2026, right? So your growth primary, I mean, most likely will be in the lower end of the guided number, right?
Actually, generally, what we believe, this is a pipeline where NHAI, I mean, INR 260,000 crore. There are so many projects other than NHAI, I mean, from state, which is coming up, right, for bidding.
Right.
And depending on, I mean, the comfort which we'll be having on the state, we'll be participating in those EPC projects as well. So there also, we are hopeful that we'll be getting some EPC projects in, you know, like as we got the project from MSRDC, we'll be, you know, targeting other state as well. And if we'll be getting that EPC in those state, then only I believe that we'll be again back on the growth of 15%+. And what time they would be hitting the market? Yes, of course, I mean, that actually would be, you know, a deciding factor for me for my next year's growth, basically.
Got it. Got it, sir. Thank you, sir. That's all from my side. All the best.
Thank you.
Thank you very much. The next question is from the line of Jiten Rushi from Axis Capital. Please go ahead.
Yeah. Good morning, sir. Thank you for taking my question. So my first question would be on the BOT projects. So, if you bid for the projects independently, so what would be your qualification, pre-qualification in terms of project size?
I think projects, unless until there is a specific qualification required from technical side, will be, you know, eligible even for INR 6,000 crore-INR 7,000 crore of BOT projects. So that's not a big issue for us.
Basically, you can independently bid 2-3 projects at a time. Probably, you can have good projects, right?
Yeah, yeah, yeah, yeah. I mean, we can... I mean, see, our target is INR 20,000 crore, certainly we'll not go beyond that. I mean, that will not be having 100% target fulfilled, you know, through BOT only, right?
Sir, other income, which you said, from the InvIT, we can expect around INR 225 crore this year. But, for the next year, you are saying INR 300 crore-INR 350 crore. Is my understanding correct?
Next year, it's very difficult to say for, I mean-
So this INR 300 crore, INR 350 crore, you said for this year, or this was for which year?
No, no, no. So including this InvIT dividend, I'm telling that other income would be in this range.
I said the full year.
I mean, yeah, because current quarter, it is INR 100+ crore of other income, and it is, if we are, you know, multiplying for FY by four, then it will be more than INR 450 crore, right? So what we expect, that may not be as... I mean, what I believe is that we'll be consistently getting certain income from InvIT, right?
Mm-hmm.
But then other income, you know, other than InvIT dividends and all that, that may vary. I mean, that may be sometimes high, sometimes low.
Yeah.
Overall, other income would be in this kind of range.
So this big pipeline which is outstanding right now, you said in the opening remarks of INR 15,318 crore. Can you give the breakup in terms of the highway EPC projects or railway metro, if it is with you available readily?
See, highway EPC is around INR 80,000-INR 85,000 crore. Highway HAM projects is around INR 70,000-INR 75,000 crore, right?
No, no, sir, I'm talking about these 16 bid which you have submitted of 15,318-
Okay, 16 bid, which is already we have submitted, right?
Yes, yes.
So EPC is around INR 2,000 crore, HAM is around INR 5,500 crore, railway and metro is totally around INR 2,500 crore.
Anything on T&D side?
T&D, again, there is not much. It's INR 400 crore, right? This is already in the pipeline. It's already submitted bill.
Basically, EPC is INR 2,000 crore, HAM is INR 5,500 crore. Railway, metro, both put together, INR 2,500 crore, INR 400 crore is the T&D.
Yep.
Sir, obviously, you are, you are also giving me the number inside on the INR 2.6 trillion pipeline, in which you said almost INR 80,000 crore is the EPC part from NHAI. So what could be the other breakup, if at all possible, to share?
EPC would be INR 80-85 thousand. HAM would be INR 70-75 thousand. Then the project under hydro, hydropower, I mean, tunneling under hydropower, then optical fiber, again, INR 40,000 crore, INR 35,000 crore optical fiber. We'll be having tunneling projects or pipeline around INR 24,000, right? Then INR 20,000.
20,000, okay.
21,000 power transmission, railway is around 11,000. So it's a mix of, yes, and we'll be targeting everything.
This tunnel, tunnel for work for hydropower, is how much you said? INR 30,000.
Tunnel and hydro, I mean, both. I mean, we generally clubbed it. That would be around INR 60,000 crore.
The tunnel hydro and optical fiber, tunnels , both put to INR 60,000.
Optical fiber is different. It's laying an optical fiber cable. This time we are targeting, which is again, around INR 35,000 crore of target projects.
I'll repeat once for clarification. INR 80,000-85,000 crore EPC, INR 70,000-70,000 crore HAM, tunnel hydro projects INR 60,000 crore, and optical fiber projects INR 35,000 crore. The RTND is INR 20,000 crore, railway is INR 11,000 crore, balance others.
Yeah.
Anything on Ropeway , sir?
Road pay, around INR 2,000-2,300 crore, right.
Sir, last question from my side. On the MSRDC project, obviously, we have already won two projects. There are more projects which are likely to come. So do you have any number on which more projects and any other states which you are highlighting, what kind of EPC pipeline is there from these states?
See, right now, I may not be able to comment upon this because we'll be targeting again more projects from MSRDC, and we'll be targeting other state as well, because in one or two state, we are, we are not comfortable. And then looking towards, I mean, analyzing the finances of that state and the, the funding pattern of that particular state or the projects, right? This is it. We'll be taking call on those states.
Are we targeting Amravati city project, Andhra Pradesh? Any, any updates on the different targeting of that?
Not so far. Not so far.
Okay, so that is from my side. Thank you in advance.
Okay. Bye-bye. Thank you.
Thank you very much. The next question is from the line of Prem Khurana from Anand Rathi Share and Stock Brokers. Please go ahead.
Yeah, thank you for taking my question, sir. Sir, my first question was with respect to the assets that we intend to transfer. So you, I mean, we've already taken board approval earlier, Kanpur, and the idea is to kind of progressively transfer more. Would you be able to share your thoughts on, I mean, how would the structure be this time around? I mean, the first asset that we transferred, we took units against the consideration, right? So, for the incremental assets that you transfer, would you be willing to kind of take InvIT units, or you could also seek cash payments?
No, no, it would be 100%. Going forward, it will be only cash transaction.
Going forward, all cash transactions? Sure.
Yeah.
Okay. I mean, given the fact that you will get to have cash, I mean, how would the valuation work? I mean, I understand, it would be based on asset-
It would be at arm's length only, will be, you know, will be it's, it's more kind of negotiation, it's more kind of involvement of third party as well, because then, and with then, us both would be sitting together to evaluate the O&M piece also, that for the next 14-15 years-
Sure.
They have to take proper... I mean, they have to be, you know, conscious in types of, in terms of taking call on O&M for next 14, 15 years, right? So it would be vetted by some third party consultant, right?
Sure.
So it would be kind of, at arm's length billing.
No, no, arm's length, I understand. What, what I want to understand, so let's say there is an asset, I mean, hypothetically speaking, and you have two options. One is, I mean, they are willing to give you InvIT units, and the second is cash. I mean, theoretically speaking, is it fair to assume that, I mean, if it is cash, the valuation would be slightly lower than the InvIT units? Because you're getting a hard cash now versus-
No, no, no.
I mean, the money coming to you over a period of time.
No, no, no, no, no. No, no, no. So units, I mean, see, units is, is already listed, right? It's getting traded on daily basis.
Mm-hmm.
I can sell it off. I mean, because of certain reasons, because it was pre-IPO, so, there is a lock-in of one year. Otherwise, I can immediately sell it in the market, right?
Sure. Okay.
It was the only reason that we are not requiring any cash on our balance sheet, and hence we opted for this route.
Sure.
I don't think because of cash or unit, there would be any difference in terms of price.
Okay. And second, was on the MSRDC, I mean, possible to share the status? I mean, since the bids were, I mean, in terms of the bids that would given, ahead of the base cost estimate, I mean, there was this perception that there will be some negotiations. So would you be able to confirm or, I mean, give us some sense on why it is taking-
They called for some negotiation. They have taken our comments as well, and that process is going on. So yes, I mean, we are also not used to that kind of processes, right? It's generally-
Sure.
I mean, if we have bid and we declared L1, generally we get the projects from, you know, we get the award from NHAI, right?
Sure.
Yes, in this, particularly MSRDC, particularly, they are, you know, again, coming up for negotiation and all that.
Sure.
So, we have been called, we have offered our comments, right?
Sir, just one-
Mm.
Just one last one, which MSRDC only, I mean, what will be the effective cost for the mobilization advance? And if you decide to seek mobilization, what would be the effective cost?
You are talking about interest?
Yeah, interest. And let's say, I mean, BG, because-
It's SBI MCLR plus something, but, I don't remember exactly because generally, so far, we haven't, you know, we-
MCLR.
MCLR plus maybe 1%-2%.
Two percent.
But, generally we have been not drawing this Mobilization Advance for last so many years.... So, as of now, I'm not remembering it. Right now, I'm not having it in a day, right?
Sure, sir, no problem. Sure. Thank you, and all the very best for future, sir. Thank you.
Thank you. Thank you.
Thank you very much. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you, sir. Sir, on the CapEx front, how much we have done in Q1, and for full year, how much are we are looking at?
So far we have done INR 21 crore, something, kind of CapEx for the Q1. Current year, for the whole year, we are not targeting more than INR 150 crores.
Okay, INR 150 crore. But the next year, once we will be looking at more 10%-20% kind of a revenue growth-
Right.
there, then the CapEx number
That can be done from our existing, you know, machineries and whatever machinery we are having right now with us, which is, you know, underutilized on it, right?
Okay. But, but this INR 150 crore also have, previously you mentioned about the, 150 crore was for office building, so this-
Right, right, right.
So, this INR 150 crore also include-
How far we'll be building that office, that 150 would be 200 or 150, like this. But yes, 100, 150 crore would be, you know, going towards our office building, which may spread over the next one to two years.
Okay, okay. Got it. Got it. And on this MSRDC, just one thing. So let's say I don't know whether you will share in terms of the negotiation what the government is looking at, but is there any kind of a benchmarking? Let's say if they are asking for, let's say, 10% or 15% lower, then you may also think of to cancel the projects.
Yeah, yeah. It's, it has to be calculated upon.
So, so right now in terms of the range, in terms of how the government is looking at in terms of... Obviously, when negotiation is happening, obviously they are looking at a lower value. So what kind of a number are in terms of the percentage, broader range, what they are looking at? And from your side, how—Let's say if it is 5%, you are comfortable. If it is more than 10% reduction, then will you go for a cancellation or a 50% red- 15% reduction, then you go for a cancellation?
No, sir, it would be just like that. I'll be, you know, disclosing my price to you. It's very difficult to, you know, answer this question.
Or, let's say in another way, in terms of the margin, let's say if the P-margin is lower than 10%, then we will go for a cancellation?
Certainly, certainly.
Okay. Okay, great. And, sir, lastly, just because the range for the FY 2026 in terms of the revenue is obviously much higher, depends on the how much value of EPC projects and also the timing of that is also important. So, broadly, whatever the existing order book is there, can you help in terms of break it down in terms of the revenue? Because that is already there. This... So one is where the appointed date is not available, 7,000, which we are looking at by Q3 and Q4 would be there. So out of this INR 7,000 crore, how much we will be getting the revenue in FY 2026, and balance, which is already ongoing, INR 8,500 odd crore, whatever.
So out of that, how much are we looking at, balance would be available for FY 2026 in terms of the revenue? So just trying to understand, what extra revenue are we looking at from the new orders? So that, that primarily should be, should be from the, from the EPC revenue, because HAM, even if we get, it will be just the last quarter of FY 2026, where we will be getting a HAM revenue from the new projects that we will, we are going to win. So that, just trying to understand that.
So, yeah, I mean, for INR 7,000 crore, where Appointed Date is yet awaited, right? We can safely expect around the 30%-35% crore, 34%-35% of its Order Book, you know, its amount converting into revenue for next year.
Okay.
Yeah.
Okay. And right now, the executable INR 8,500, that definitely will be over by FY 2026?
Yeah, yeah.
Okay, okay. That's it. Thank you and all the best.
Thank you.
Thank you very much. Ladies and gentlemen, that was the last question from Mr. Shravan. I would now like to hand over the conference to the management for the closing comments.
Yeah. Thank you, Deepika. Thank you very much. Thank you. I would like to once again thank you all the investors, participants, whosoever has, you know, given their full unwavering support to us in our corporate journey. We believe that we'll be back again on the same growth path as we did in past, and we'll deliver our best with your support. Thank you very much.
Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.