Please note that this conference is being recorded. I now hand the conference over to Miss Sana Kapoor from Go India Advisors. Thank you, and over to you.
Thank you, Urshati. Good afternoon, everybody, and welcome to H.G. Infra Engineering Limited earnings call to discuss the Q2 and H1 FY 2024 results. We have on the call Mr. Harendra Singh, Chairman and Managing Director, and Mr. Rajeev Mishra, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request Mr. Harendra Singh to take us through the company's business outlook and performance, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.
Yeah. Thank you, Sana. Good afternoon, ladies and gentlemen. A very warm welcome to the H1 FY 2024 and Q2 FY 2024 earnings conference call of H.G. Infra Engineering Limited. We welcome you all here to share the highlights of our quarterly and half yearly performance, achievements, and our vision for the future. I hope all of you have had the opportunity to review the investors' presentation and financial results, which have been made available on the exchange. As we all know that H.G. Infra Engineering has been in the slow lane till September 2023. The major reason behind lagging in numbers is because of the prolonged and uncertain monsoon across the country. That is for the execution as well. It has now recently picked up due to certain changes in the bidding process and internal conditioning of the department.
Next 4-5 months will be vital for the sector due to upcoming central and state elections as known to each one of us. We are working on our strategy for priorities to overcome these challenges, and we are optimistic that bidding will definitely accelerate in coming months. Let me share some thoughts on the opportunities in other sectors, as we wish to diversify our order in all other mentioned sectors. In railway sector, PM Narendra Modi, on August sixth, 2023, launched Atmanirbhar Railway Station Scheme to transform and revitalize 1,309 railway stations across the nation. It aims to transform railway stations into modern, well-equipped hubs.
We have already bidded two tenders amounting to INR 1,000 crore, and we are working on three new tenders, about INR 1,200 crore in this scheme for the financial year FY 2023-24. We have also bidded 14 projects costing INR 6,500 crore on various bodies like Indian Railways, IRCON, et cetera, in railway sector. The results of these bidded projects are yet awaited. In this financial year, we are planning to bid about 15 more bids of INR 8,000 crore in this sector. In metro sector, we are eligible to bid for elevated metro and RRTS project that includes orbital railway as well, and started bidding for various metro projects. We are also exploring possibility to bid underground metro rail project in association with other organizations. This sector remains in our focus in upcoming months.
Awarding in water sector was quite slow during six months because of the state elections in a few of the states. We are expecting momentum in this segment in coming months. I would like to assure our shareholders, all the financial partners and other stakeholders, that company is prudent and vigilant to ramp up the growth story and persistent to grab the upcoming opportunities in the near future. Let me start the journey of this quarter and give you the glimpse of operational highlights first. For quarter ended September 2023, our order books stand at INR 1,10,678 crore, which have established our presence across 11 states, with the EPC segment comprising 51% of our in-hand projects, and HAM segment constituting the remaining 49%. Now, the update on the ongoing projects of EPC.
The execution progress on various EPC projects is as follows: The Ganga Expressway project has achieved approximately 29.3% completion. The project is running well in the time as per the contractual timelines. In Delhi UER projects, we are around 78.8%. That is the financial progress and expected to get complete in December 2023. The New Mangalore-Tumkur project of NHAI is progressing well and has reached an execution of 6%. The progress on various HAM projects is also running as per the planned schedule. The update is, that all three Rayagada-Visakhapatnam packages of Odisha, OD five and six, and Andhra AP one, are progressing well, and we are around 50% completion in these projects, and we would be completing two out of these three projects before quarter one FY 2023, that is by June 2025, June 2024, sorry.
In Khammam-Devarapalle project package one, we have achieved 21.9% completion. It has reached up to 28.1% completion. In case of Rewari Bypass, we have received PCOD, dated 25th May 2023. That was on 9th of August 2023. This project will be monetized in the second tranche. For our new Kurnool Ring Road HAM project, financial closure has been declared on 29th August 2023, and we have received the appointed date of Kurnool on 31st August 2023. Till now, we have executed 5.3% of the work in this project. As you know, we have set our footprints in current order books with diversification to railways and metro. I would like to touch upon the progress of these projects as well. We have completed 26.6% of DMRC metro project.
Execution of this project is going well on track as per the contract timelines. We have received appointed date of Haryana Orbital Rail project on 24th May 2023. Now, post rainy season, the project is progressing well as per the scheduled timelines. The NOA of Kanpur Railway Station project has been received on June 2023, and very recently, the appointed date is also declared. The resources and machinery mobilization in this project is already completed, and the progress is going to be very well in this quarter, as well as from last quarter of this year. Let me now share other significant updates for H1 FY 2024. The PCOD of Mancherial Road project received on 26th July 2023, that was with effect from 30th December 2022.
For Varanasi, Ranchi, Kolkata package 10 and 13, financial sanction, final sanction from lenders, HDFC and Axis, has been received, and the documents for the financial closure will be submitted to NHAI in this month. Coming to the financial highlights of this quarter, at the stand-alone level, our overall revenue in H1 FY 2024 was INR 2,140.8 crores. That is an increase of 17.8% year-on-year, compared to INR 1,870.7 crores in H1 FY 2023. EBITDA stood at INR 343.2 crores in H1 FY 2024, resulting in the EBITDA margin at around 16% as compared to INR 283.2 crores at 13.6% margin in H1 FY 2023.
PAT in H1 FY 2024 was at INR 180 crores, with 8.4% profit margin, as compared to INR 162.3 crores at 8.9% margin at H1 FY 2023. In Q2 FY 2024, the standard revenue reached at INR 869.5 crores, indicating a notable 15.6% year-on-year growth from INR 752.1 crores recorded in quarter two, FY 2023. The standard EBITDA for quarter two FY 2024 was INR 138.4 crores, reflecting a year-on-year growth of 14.6%.
The PAT and, the PAT margin for quarter two, FY 2024, stood at INR 61.7 crore and 7.1%, as compared to 64.6 crore, that was 8.6% last year. Regarding the company's debt position on a stand-alone basis, the gross debt amounting to INR 597.3 crore, which includes the working capital debt of INR 157.1 crore, term loan and current maturities, along with the credit limit totaling INR 359.4 crore and NCD of INR 80.8 crore. The increase in debt in this quarter was due to excess utilization of working capital limits on account of less execution of that project and due to prolonged and erratic monsoon conditions. Earlier, the company has mobilized all the resources as per the planning of the execution at all the projects.
How we are optimistic to reduce the debt in the coming quarters with improved receivables. Moving on to the consolidated numbers, the revenue of H1 FY 2024 surged to INR 2,305.7 crores, an increase of 21.2% year-on-year, compared to INR 1,901.6 crores in H2 FY 2023. EBITDA stood at INR 500.9 crores, resulting in EBITDA margin of 21.7% growth, as compared to INR 360.1 crores and 18.9% margin at H1 FY 2023. PAT in H1 FY 2024 was INR 246.5 crores, with 10%-10.7% profit margin, as compared to 191.4 crores at 10.1% margin in H1 FY 2023.
During Q2 FY 2024, the consolidated revenue surged to INR 954.5 crore, marking a 20% year-on-year growth compared to INR 795.7 crore recorded in Q2 FY 2023. At the consolidated level, the EBITDA for Q2 FY 2024 was INR 222 crore, displaying a robust year-on-year growth rate of 36.7%. The PAT margin for Q2 FY 2024 consolidated stood at 10.1%, resulting in a PAT of INR 99.6 crore compared to INR 81.8 crore in Q2 FY 2023. This represents a significant growth of 17.3% in PAT on a year-on-year basis. Regarding the company's debt position at the consolidated level, the gross debt amounting to INR 2,029.2 crore, that was on 30th September 2023.
The total equity requirement for the entire HAM project is INR 1,606.2 crore as of FY 2026, that was it, next three years. As of September 2023, INR 777.7 crore has already been infused, and there is a projection of infusion for the year at INR 395.3 crore. Update on the monetization of four assets. During the last quarter, we have signed share purchase agreement with Highways Infrastructure Trust, backed by KKR, for sale of four HAM projects. This is certainly one of the most coveted transaction for us. For first tranche of existing three SPVs, we have received all NHAI and lenders' approval for change of the control, change of control.
We have completed and submitted all the conditions precedent required for the successful close, closure of this first tranche. We are expecting to close the transaction during the month of November 2023. Before I end my speech, let me assure you that we will achieve our expected numbers with 20%+ upside in the revenue that will bring momentum in the order inflow, with new projects in the tune of INR 5,000-6,000 crore to be added this year, considerably from road and other diversified sectors. We have started preparatory works of analyzing and costing other bidding elements and undergoing preliminary discussions with various clients in solar and metro sector to propel our way forward. We are working manually in our operational efficiency and executional capabilities to add every penny in our EBITDA and PAT margin.
Digital transformation remains on our priority cards with, from automation in our plant and machinery, operations, and other verticals, which will add a lot of value in our financial indicators with seamless and transparent real-time working environment. That's all from my side. We can now open the floor for the question and answers. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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. We have our first question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you, sir. So first on the order inflow. So, in your opening remarks, you have talked about INR 5,000 crore-INR 6,000 crore order inflow versus originally when we started the year, we were looking at INR 9,000 crore odd kind of inflow. So, just trying to understand why we are having a low confidence, and also is there a possibility this INR 5,000 crore-INR 6,000 crore may further reduce to INR 3,000 crore-INR 4,000 crore for this year? And at the same time also, if you can repeat the value of projects that you have bid, that would be helpful.
Yeah, sure. I think the order inflow, which say, almost 7 months completed, so now we are having 5 months during the year. So definitely it was a very slow pace, which never has been the historical past at NHAI, but because of some consolidation, some kind of a project appraisal, now the things are moving very fast, as well indicated, and as in 2024, 2047, this Gati Shakti and every say, scheme is giving a very promising note of a highway and awarding. We feel that not 6,000, but at least it's 3,000+ kilometers being awarded and about, say, this 2,000-2,500 kilometers in that 4 months. Out of that, we expect that definitely we have lowered our numbers.
By this number, we should be bare minimum for the year, and we are hoping that it can be 8,000, but we are keeping it at a low level, about 6,000. This is one part of NHAI. The second is MSRDC, which has been—we expect that they are going to be awarded by January, February. Earlier, it was almost October, November. There are also, say, almost INR 45,000 crore of projects to be awarded. We expect from them as well. Apart from this diversified sector, as we have already started bidding and revaluation in metro, which can be underground, we have bidded for, say, railway projects, around INR 6,500 crore.
We have already done with two railway station bids, so we are looking into INR 8,000 crore of railway bids and RVNL, which are upcoming in the upcoming months. So that is how we have a certain base already done, but this awarding the results we have not yet declared. So with that, we are keeping about INR 5,000-6,000 crore, which for this particular year, with only 4-5 months balance.
Okay, got it. So, two aspects. First, whatever, let's say, we get the lower order inflow this year, are you confident to compensate for the next year? So, on a broader sense, how much one can look at in terms of the order inflow for FY 25?
Yeah, for sure. I think whatever is the, will be the shortfall for the year, we will try to compensate for the next year as well, only because of few, let's say, five odd states going into election this year and then looking into this central election come in next May. By that time, we would be in a position that entire thing would be consolidated, and in the quarter two onwards for next year, we expect that we would be adding not less than INR 10,000-12,000 crore, which is a deficit of this crore, this particular year, being added next year.
Okay. Okay, great. So, and in terms of the revenue also, now we are looking at 20% growth this year versus 25%. So, so that is, in terms of, that will also will get compensated in the next year, because broadly, in annual report, we have, we have talked about INR 10,000 crore revenue by FY 2027, so that is a kind of a 23% kind gap. So on a sustainable basis, can that be achievable?
We talked about annual report. In the annual report, we talked about that by, say, next five years, we are looking to take this revenue to 10,000. To be very specific, it's roughly carrying about 7%-18%, let me say, clear on that. One thing is that for this year, we were looking at about, say, INR 5,400 crore, and this is roughly 21%-22%. We are almost on track because we have done about 17% year-on-year done, and we believe that what always, latter half of the year is very good for our kind of infrastructure. There are highway and all, monsoon activities or festival activities doesn't hamper in our progress.
So, with that quarter three and quarter four, we expect that we will be touching upon the same number, some 20%-21%.
Okay. In terms of the breakup of the revenue segment-wise, what last time we had talked about, INR 1,800 crore from HAM and INR 50 crore from EPC, Ganga Expressway, INR 2,000 crore, and the new HAM, all this. So that more or less remains the same, marginal decline across all the four, five segments?
Yeah, almost all the same, even it's like the, like Ganga Expressway, where we initially had projected the INR 2,100 crore would be for the year, 2021, 2,200. Again, in the remaining part of six months, we are looking at INR 1,450 crore coming from Ganga Expressway and all six HAM projects. The all six HAM projects would be giving about INR 1,250 crore or so. Major change is coming from these, say, Odisha, Andhra, and Khammam Devarapalle and Kurnool, appointed already, is with us. Then, metro and other sectors like railway, we would be adding, say, this for this INR 250 crore or so to be done.
Tumkur EPC, then one NTPC, small project is there, is about INR 150 or so value. These are all, and UER would be completed, and Mancherial, Rewari, the balance small work portion which is going on will be completed. It's a few work of Maharashtra, say, both projects we were going on, but small parts that would be completed. We are not looking at the appointed date of Jharsuguda package 13, which we expect that by January, February, but we have not counted that progress in the year. Roughly, the total number is coming as the same, which we had projected earlier.
The Appointed Date for Package 13 and Package 10 is now, when we are expecting?
Package 13, we are expecting by January they would be giving this Appointed Date, and Package 10 would be delayed by another two months, whereby, say, April, we are expecting, because there are few forest permissions which are yet not obtained.
Okay. Lastly, couple of data points on the equity breakup to be invested in 2024, 2025, 2026, and retention money, mobilization advance, unbilled revenue as on September.
See, for the year, we have kept 395 crore rupees to be invested. For the year the next year, it would be 270 crore rupees and only 163 crore rupees balance for FY 2026 for the projects which we are operating on HAM basis. So this is one part. You have asked about the mobilization advance. The mobilization advance is, including the material advance, this is INR 335 crore. So what else you asked?
Unbilled revenue and retention money.
Unbilled revenue is about INR 755 crore, and net debt including retention, retention is INR 172 crore, and net debt is INR 550 crore. Yeah.
Okay. And the date you mentioned, the CapEx actually has, has increased INR 129 odd crore, and we were looking at INR 100 crore. So for full year, how much now we can look at the CapEx and the date? We have mentioned that we will be reducing. So, previously we have talked about INR 425 crore-INR 450 crore. So what's the new number?
So that in any case would be in the same range, about INR 425-450 crore, but whatever repayment is going to be there for the second half of the year is very high. You can see, because we already paid one tranche of NCD, and the second tranche will be paid by March, rather December. So looking to that, say, or whatever CapEx, which was supposed to be done for all these projects has been done. Hardly there is any CapEx which is to be done for the year, balance part portion of the year, so under INR 20-25 crore.
It's the major part going into capital working progress is related to shutters, say, for metro, for RVNL, for Kanpur railway station, and even for Raipur-Visakhapatnam, where the elevated portion was being constructed. Those, there's, I think, of forty odd crore rupees being invested into shutters and cranes and launchers.
Okay. Thank you, sir, and all the best.
Thank you. Thank you.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. Participants are requested to press star and one to ask a question. We'll take our next question from the line of Mangesh Bhadang from Centrum Broking. Please go ahead.
Hello, sir. My question is regarding the monetization. I think we are looking to sell or transfer four HAM assets to the InvIT. Out of that, we have received the approvals for three. Just wanted to understand, will we go ahead with the transfer of these three assets first, or we'll wait for the fourth one? And what are the timelines for actual cash flow to come from this?
See, these are four projects which we have already entered and signed the SPA with KKR. In this particular quarter, three projects which we already got the PCOD and COD, they are the ones who are going to be first, transferred first, where all entire NOC are in place. So everything has been done. We are expecting that the fund is, would be coming in, in our account within this month only. And the fourth one, where the PCOD, which we got on 25th of May, say post 25th of November, we would be applying six months down, we would be applying to NHAI and our lenders for the further NOC proposals, and within, by the end of this year, we expect that the amount for that particular fourth project also would be credited in our account.
Okay, sir. Thank you, sir.
Thank you.
Thank you. We have our next question from the line of Vinit Prasad from Investec. Please go ahead.
Good afternoon, sir. Thanks for the opportunity. Sir, I have a couple of questions. One is, what have been the reason for increase in unbilled WIP? If you look at last two years or 24 odd months, consistently, that number has increased. It was closer to INR 250-270 crore at the end of 2021, and gradually it has shot up to almost INR 740-750 crore. What has been the reason for this increase, number one? Number two, sir, what gives you confidence that NHAI ordering will pick up significantly? Is it a case that the pipeline is extremely healthy? If that is the case, how much worth of projects are under the pipeline as of now?
Mr. Vinit, may I request you to mute your line, please? There's background disturbance. Thank you.
Sure, sure.
Go ahead.
Your first question was regarding this unbilled revenue, which has now gone up very high. Earlier, two years back, it was about INR 200 crore. A very significant reason for this is, one part answer in this Ganga Expressway projects, we were having the milestone payment, which were not actually where what is the physical progress and the financial progress. The physical progress in this particular portion, projects is always 2%-3% gap into that. The number is INR 4,400 crore. Out of INR 4,400 crore, INR 151 crore always, INR 150-200 crore are always lying unbilled. Definitely, it's a matter of only every month we complete one milestone, and then this portion being released.
But this is a continuity of that unbilled, which has been significantly gone high. Now, definitely in NHAI projects, there, because in UER we have gone through the all structure-related projects, there again, some milestone payments are not giving us. SPV, again, some portion has gone very high because we have started execution in many of the projects. We have started execution, but then again, we are not say, targeting and getting certification from SPV even. And this is our... But it's a very time-gap arrangement.
It is going to be stable somewhere around INR 500 crore, by quarter three, because in the many of the projects, old projects, NHAI and more projects, where certain receivables are unbilled, where the consolidation and, certain, say, like, claims were, actually, being entertained unbilled, but they are likely to be released in quarter three and quarter four. By quarter four, we expect it to be in a range of about INR 500 rupees, not beyond that. And the second question was, NHAI. NHAI is definitely having a strong bidding pipeline, which we, at the end of this financial year, in March 2023, they were having almost 60,000-odd crores of project, at that point of a time to be awarded, then could not be awarded because of certain reason.
Now, those 60 and another INR 40-45 crore, INR 45,000 crore of orders, they are expecting to award by the end of this year, as they have guided. And we are expecting that, definitely, around 2,500 to 3,000 odd kilometers, we are already on the bidding pipeline. They would be all awarded.
Understood, understood. Thank you. Thank you so much, sir.
Thank you.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have a question from the line of Jiten Rushi from Axis Capital. Please go ahead.
Good afternoon, sir. Thank you for taking my question. So my first question would be on the monetization. So, in terms of the proceeds, so what could be, in terms of value, we are expecting the proceeds from the first three project and the last project in total, sir?
The first one is INR 405 crore, all three HAM projects. The remaining portion would be in the Rewari Bypass, that is the fourth project.
Mm-hmm.
That is, 531 minus 405, roughly about INR 127 crore.
Okay. So the equity which you have invested, as mentioned in the presentation, that will not change, right, sir?
Obviously, INR 343 crore, to be very specific, was the original number. That remains the same.
I understand. Okay. And sir, on the debtors, so, can you give the breakup between the SPV debtors and Ganga Expressway?
Yeah, of course. This unbilled, we have already explained that in Ganga Expressway-
Right.
There is INR 150 crore in Adani Ganga Expressway unbilled. NHAI is about INR 180 crore. SPVs are INR 270 crore. Railway and metro, they are INR 58 crore. Others, about what I have already done, that explained about it, that we are having certain ministry projects, ministry-funded projects, and certain NHAI consolidation projects which are INR 150 crore into that. They all would be stable. The net present attention altogether is INR 721 crore. Out of major portion is definitely Ganga Expressway. NHAI is INR 145 crore, SPV is under INR 225 crore, and others stood at about INR 133 crore.
Adani's Ganga Expressway project is INR 220 crore, which we have received. Every month we are getting the payment. It's not that it's being stuck for, say, longer period. So within 45 days, we are getting the payment, but due, due to higher range of execution, this is the figure.
Mm. Mm. Sir, the Red Upon, the PCOD date which you mentioned for Mancherial was which date, sir? December something, you said, correct?
It was 30th December 2022, but the letter we received very recently.
Thirtieth December 2022. Okay. Okay. This letter is issued now. Okay. Sir, in terms of your revenue guidance, probably this year, you have said almost 5,400 is achievable, plus or minus here and there. What about 2025 and 2026? Because sir, now what we see is the inflow guidance is coming down, so we'll have to catch up on the inflow in the first quarter or first half of FY 2025. What kind of revenue growth have we seen in '25 now, in the short term?
Projects which we are already operating, except for Karnal, Kanpur railway station or even RVNL, most of the projects are going to be completed, next year, say FY 25.
Mm, mm.
The order backlog is INR 10,600 crore, and if we are going to execute some 3,600 crore during the year, later part of the year. So with that, almost the balance would be in the range of INR 7,500 crore or say, even more than that. So probably INR 8,000 crore. So with that, INR 7,500 crore, and if order we are looking to add INR 5,000 crore-6,000 crore. So the number would be coming almost the same as we started this year. So with that, the orders which we are having that execution where Odisha, Andhra, all SPVs, except for Karnal and Ganga Expressway even, they all would be completed in FY 2025.
So that way, I think INR 6,000 crore is going to be executed or rather INR 5,500+ crore is going to be executed in this, from this portion only.
That is, you expect INR 5,005 crore revenue from the existing order backlog at this time?
It's a backlog only getting new orders-
Mm.
-while to the tune of INR 12,000 crore. That is where we restrict ourselves to INR 5,000-6,000 crore this year.
Where 6,000 is upper end. Okay.
Right.
Okay, sir. That's it from my side. Thank you and all the best, and wish you happy Diwali to you and your team, sir. Thanks a lot.
Okay.
Thank you. We have our next question from the line of Vaibhav Shah from JM Financial. Please go ahead.
Yeah. Just to reiterate, our revenue guidance would be around INR 5,400 crore for FY 2024?
Yeah.
What would be our margin guidance for the year?
The margin roughly would be the same. As you have seen that in this monsoon months also, we could maintain the same margin. That would be roughly the same, 15.5%-16%.
Okay. And, sir, you mentioned about some claims in the unbilled portion. So what are those claims related to?
So basically, they are not those kind of a claim, but claims we actually quantify or take into our accounts only those claims which are legitimate, CS, variations, and some other. We do not take those arbitrary claims, time overrun, idling costs into our account. We always take those things very separately. So these are very small things. Almost 12 projects we completed right from 2016 to 2020. So those are the projects where some kind of a pending, say, variations, approval and. So those are the, this is the amounts coming from those, 10 to 12 projects.
What would be the amount?
It's INR 115 crore.
Okay. Sir, was there any reduction in scope in any orders during the second quarter?
No, there's no reduction as such.
Okay, because when we reduce the, take the difference of the order backlogs, we can't reach the revenue. There is some gap of INR 50-50 crore.
I think there's INR 50-60 crore of a gap, where because in few of the HAM, this Maharashtra projects, three projects were there, where the supplementary agreement was executed for the balance portion of the work, where the land was not available to us in 2020, when the completion was given. Now, it's supplementary agreement being, say, likely to be exhausted. They reduced that number into the supplement, from the supplementary agreement, it is INR 104 crore. This is the exhaustion, I think.
The backlog for Maharashtra and Rajasthan would be what amount as of September?
Today, I think if you see the backlog from Maharashtra and Rajasthan, it's roughly about INR 72 crore.
Okay. Okay. Thank you, sir.
Thank you. We have our next question from the line of Ash Shah from Elara Capital. Please go ahead.
Good afternoon, sir. Thank you for the opportunity. So I have two questions. The first one, with the recent construction ban in Delhi NCR, and we have two main projects out there, one in the metro segment and one, the UER one. So are we going to see any... Are these projects going to be affected in any manner for this quarter or something, the portions?
I believe, I think, these, because we are, they are the projects where there's this, very high priority PM office is monitoring these projects, linear projects rather, I'm talking about especially UER. As of yesterday, as we, we were discussing, that a special permission is going to be given for, at least for this particular project, UER. And metro, of course, they are looking at, some waiver because in these projects, hardly there is any, pollution. Because, as they have guided that the pollution department is going to give us a special relaxation for these projects.
Okay. And, second one would be, do we have any arbitration claims against NHAI or any other government body? If you could provide some color on that.
No, we don't have any, say, big claim. It was a very small claim with the NHAI, just INR 10 crore. Out of that, we have already provided INR 6 crore in out of our unbilled. So, and in the conciliation also, we are running with the, say, conciliation is going for four projects of NHAI, old projects, 20 in 2018, we completed those projects. But very, very small amount, with hardly INR 22 crore, all four projects. In the Maharashtra also, it's only a matter of small amount of conciliation being done for, three years, certain years.
Also, could you provide the revenue breakup segment-wise, roads, metros, and railways for Q2 FY 2024, if possible?
Yeah. You are asking for Q2, what we have done?
Yeah, the revenue breakup.
Revenue, you see, there is Ganga Expressway, Mancherial, which is Adani project, we did INR 290 crore. In NHAI, EPC, it was 188, and SPVs it is INR 303 on a very, let's say, broad line. Metro and railway is almost is INR 52 crore.
Okay, that's all from my side. Thank you.
Thank you.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We'll take the next question from the line of Uttam Kumar Srimal from Axis Securities. Please go ahead.
Yes, sir, good afternoon, and thanks for the opportunity. Sir, you have bid for a few railway projects. So what kind of margin profile will be there in this project, if awarded?
In railway projects, we are keeping a margin for our, at the bidding level, at about, say, 14%.
Around 14%?
Yeah.
Okay. Okay. Sir, how is the competitive intensity currently in both HAM and EPC? If you can elaborate on that.
The competition, definitely, as we have seen last year, this year, not many bids have been called and opened, but, definitely in HAM, it is a bit easier. EPC is very hard, say, very aggressive, and, but then again, I think 25 odd bidders, 20-25 odd bidders are normally being seen in EPC. In HAM, it is coming around 7-10 bidders.
Okay. Okay. And sir, in case of water projects, you are also expecting a margin profile in the range of 14%-15%?
Sorry?
Water projects. In case of water projects.
Sure, sure. We are keeping our margin for these, diversified sectoral projects, it can be water, metro, on there, about, say, a 12%-15% range.
And all these diversification projects, how much this will constitute in terms of revenue? Because currently, I think it's around 80% is coming from road, over 90%. So, this diversified sector will constitute at least 20-25% of revenue more than that?
See, for the year, we are keeping that at least 10% of the total turnover would be coming from these metro and railway projects, which we already have started, three projects. And with by the, in three years, two years down the line, rather, in 2025, 2026, we are looking at about, say, 20% of the total order execution would be from this sector. And by that, year, 2026, we are looking at about 25% order backlog should be from this sector, other than roads.
Okay. Okay. Sir, depreciation has increased in this quarter. So, what is the reason? This trend, it will continue for the whole year?
Definitely this will be continuing for the whole year. As you have seen in last year, we added about INR 235 odd crore of CapEx, which are the new and some, say, all, shutters, last year. This year also, six months we have added, say, this almost INR 25 odd crore of shuttering being added. So the shuttering usually depreciate faster, and that is the reason, because in the entire project, within three years' duration, we usually depreciate, all the entire shutters.
Okay. Okay, then. That's all from my side, and thanks to all of you, and Happy Diwali!
Yeah, thank you. But then again, I can just see that depreciation and interest cost is going to be almost in the similar line. Hardly there will be change about 0.25%, if you see last year to this year, at the end of this year. This time-
Okay.
Say, seen on the higher side.
Okay, then. Thank you, ma'am. Okay.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, please restrict your questions to two at a time. You may join back the queue for follow-up questions. We'll take the next question from the line of Devang Shah from Asit C. Mehta Investment Intermediates Limited. Please go ahead.
Hi, good afternoon, sir. Sir, I have two questions. First is, sir, what is your execution timeline for such kind of road project or the railway project? Because earlier in a con call transcript, I have read that 24-36 months. So whatever the order book you are comprising, both of road and railway or metro, just give us a segregation, sir. What is the execution timeline of all three?
It is roughly the same, I think, as you are also saying that 24 months is the minimum timeline for highway, or even for seeing Kanpur railway station, it is 36 months. RVNL railway project is 30 months. Metro usually is 30 months. So water also is having 36 months. So you just 2-3 years of time.
Okay, sir. And one more question. So we have seen in a recent quarter, in a standalone numbers, there is a decline in a PAT margin due to rise in your interest cost. So moving forward, so by considering the fact that you are also using the asset monetization of HAM project that you have mentioned, will it be margin is going to, you know, further touch the earlier level that we have seen somewhere close to 8.6% or something? I'm talking about the PAT margin, standalone basis.
Of course, I think PAT margin would be coming to the same range. It is, because of the you see, the employee cost is has been all-time high for the quarter year, because all the projects being mobilized, but the execution was not that range. So there is one reason was that, but then again, finance costs and depreciation put together, we would be by end of this year, finance costs could be in the same range as which we are doing earlier. It was coming at about 1.4%. This year we will be at, in a range of 1-1.25% of the total turnover, which we are going to execute.
Okay. So moving forward, you feel that it is going to improve from here on, PAT margin?
Yes, quite correct.
Okay, sir. Thank you.
Thank you.
Thank you. We have our next question from the line of Darshit from Robo Capital. Please go ahead.
Hello, am I audible?
Yes.
Yeah. Thanks for taking my question. So, I just wanted to know that do we see the previous, say, 18%-19% of margins, coming back anytime soon, probably in FY 2026-2027?
The margins of, at the company level?
At the company level, yes.
Yeah, it would be almost in the similar range, 15.5%-16% as we are doing within the last 4 quarters. We have delivered that margins, and we're to be almost maintaining that discipline.
Okay. For the medium term, we're going to maintain this.
Yes.
Some view, or you know, medium-term view on order book and order inflow, can you please?
Order inflow, definitely, as we have, earlier discussed, during the call in one, and during the year, we are expecting to add at least INR 5,000-INR 6,000 crore of orders, the highways and other sectors we are... And then the, the execution, which we, are, we believe that we would be almost doing 20% plus, year, plus also from the last year.
Okay. For the medium term, say, FY 2026, 2025, 2027?
Sure, I think for 2026 and 2027, with the government to focus on infrastructure, especially highway, again, with interest, and we have seen all other sectors, their budget allocation has gone, has been all-time high in railways and, so most of the sectors. So we believe that, everything because of the election time, we are putting, just keeping a caution that we may not have, the, these, many orders. But then 2025 and 2026, they are the years we would be, we believe that, that we will be adding at least INR 10,000-12,000 crore of orders for next year and beyond that, next year.
Okay. Okay. Thank you so much.
Thank you.
Thank you. Before we take the next question, I would like to remind participants to press Star and One to ask a question. We'll take the next question from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.
Good afternoon, sir. Sir, one question on the Ganga Expressway. Now, see, that was a very sizable sort of an order which came our way, and that helped us grow both the order book as well as the revenue profile. Now, going forward, you know, as such a large project runs off from our revenue profile as well as order book, do we think that, you know, overall, you know, revenue growth, et cetera, will taper down? Because, you know, we don't have any such large order in either in pipeline or maybe expect to win in the coming years.
Your concern is very valid. So basically, with the recent, say, project being executed where, UER or Delhi, where about 8 kilometers of elevated portion being done, Gurugram, Sohna, it's almost similar to Gurugram, Sohna, with viaducts being constructed in Odisha projects, so almost 8-9 kilometers. So, so this was, to say, qualification and capacity to bid for, for the huge size projects like it's being called, if you see high-speed network, corridors to be developed for railways, there's a dedicated bullet train being developed. So in that, the range of projects are big-size projects, we believe that we would be, say, putting up on a race to build those projects, say, bid, as a sole entity or as well as from JV.
That is only, I think, what you are saying, INR 4,500 crore of order. This cannot be from any, say, one single size project is a very high magnitude. We are looking into these sectors, and then it cannot also we are looking with some joint, joint venture, joint venture allies. We are also looking into this sector.
Understood. And secondly, sir, on the order inflows till date for this year. Now, of course, you know, the pipeline, I mean, the NHAI ordering has been small, but we have been seeing at least the peers have been able to manage to get something, you know, even in the last seven-eight months, while for us, it has been almost negligible in terms of what we have been able to win in this seven-eight months. So, how do you explain that sort of a, you know, sort of a market share loss in the orders till date for this year, vis-a-vis your peers?
Probably, we did, say, few projects, but the margins, which we are expecting we should get were not there. We have lost almost 7-8 projects, even for NHAI, awarded. Again, it's not a very, say, many number of projects being bidded and awarded. We are expecting this momentum or this tempo is going to be, right now, November onwards, it would be going to be all-time high, and as we have seen last six months, almost negligible. That way, we believe that we would be getting the same, as we have guided, that we can have, say, INR 5,000-6,000 crore of orders.
Then again, as MSRDC RFQ results have been delayed, that is again, the potential is there with almost our individual order size is about 1,700-1,800 crore individual, say, project.
Understood, sir. On depreciation and interest, so, what I understood was that in the absolute amount, it will remain the same now. So as you scale your revenues in H2, your overall PAT margins would increase. But going forward, let's say in FY 25, how do you see these two items moving? Because, you know, this quarter, in this half year, we have seen that these two line items below EBITDA has sort of hurt our P&L percentages. So for FY 25, then, from that base of end of FY 24, how do you see them moving?
The depreciation, we have added almost a very high CapEx last year, and this year also, INR 128 crore, 20-30 crore rupees, and this is going to end up roughly around 150, with net of CapEx rather. So what is reason behind was that five years, six years back, when we added which, the all machines, the technology of the machines being upgraded. So taking out or phasing out the old machines and replenishing and getting new equipment, like, with, with the BS6 and BS4 technology, and fuel economy efficiency is there. So this is one reason that you can see the all-time high depreciation going, this time.
But then again, 25, 26, it would be all eased out, to a normalcy, that in that phase, the depreciation and interest put together would be in the range of 3.5%.
Understood, sir. And lastly, maybe I missed it, but FY 2024, you said around 50-
May I request you to join back the queue, please?
Yeah, just last-
We have a participant waiting.
Just one last question. So FY 2024, you are saying INR 5,400 crore of revenue guidance, and FY 2025, sir, what is the guidance?
Roughly, we are keeping our number about, say, 5,200, 6,000-6,200.
Okay, sir. Thank you. Thank you, and all the best.
Thank you. We have our next question from the line of Vishal Periwal from IDBI Capital. Please go ahead.
Yes, sir, thanks for the opportunity. I think in terms of bid, you did mention on the railway where you are eyeing. So apart from that, is there any other sector in the known road, known road side where we are bidding or any bids are in the circuit?
In road sector, there are six bids which we already have done. There is, Chambal Expressway, which we already award, bidded. And one project also is, was there, is there, I think, that was in the, that is in the state of Chhattisgarh, where the, its results are yet to be declared.
No, no, sir. What, what I'm trying to understand is like, you know, in roads, definitely there are number we are submitting bid, and railway, again, we have already shared the opportunity of roughly INR 8,000 crore. But apart from these two sectors, any other sector where we have bidded or we are eyeing an order inflow for us?
No, no, we are expecting that we will be bidding for metro, where we have already have qualified, say, with this recent completion of this project. So that is where I think we will be bidding. And we are looking into some tunnel opportunity, in few, say, northeast, this, state of Himachal and, with BRO. So this year, we are looking into that.
Okay. And then when we say metro, it is over and above this INR 8,000 crore opportunity, which I mentioned, the railways, that's on top of it, right?
That is absolutely. Yeah, we are looking for bids.
Okay, okay. And sir, in a non-road side, when we are bidding, say, a couple of projects that is there in order book also. So these are, bidded on our own or they are in, JV with any partner?
Which project?
The non-road orders that we have in the order book, they are, the or-
As of now, all, all the orders are with its own entity. HG has already bagged those orders without the JV. And in the future, I think, as we are looking some water projects where we are not qualifying, 100% not qualifying to that. Even for tunnels, we are not qualified. So any for these big size projects of metro even, we are not qualified. So we would be looking into these opportunity where the joint venture alliance would be done.
Okay. Sure, sir, I'll come back in the queue. Thank you very much.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We'll take the next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
... Hi, sir. So, just to again clarifying on the numbers. So in station redevelopment, you mentioned we have bidded INR 1,000 crore projects and plans to bid three more station redevelopment projects worth INR 1,200 crore.
Yeah, correct.
So, the INR 1,000 crore we bidded, two projects, which are these, railway station?
One is Gorakhpur and one is in South.
Okay. Fourteen thousand six hundred crore also in initial mark, we said, so that we are planning to bid on the INR 8,000 crore. Also, the number that we are planning to bid, so that is INR 8,000 crore is a road so sector where we are planning to bid. What is this INR 14,600 crore? That is including everything that we are planning to bid.
No, no, no. That's not included of anything. Highway, we, I have not touched upon as a number. Highway, definitely, as we were discussing upon, is INR 45,000 crore of highway bidding opportunity at MSRDC, and 60-something thousand crore bidding opportunity at NHAI. So this is what we are looking into, to be bidded for, say, during the year.
Okay. And on road, we are further planning to bid for INR 8,000-odd crore?
Right.
Okay. Okay, okay. Okay, got it. And, on the working capital, sir, so our core cash current days, we have seen, actually it has reduced and, 31 days, came to the max level. So will it remain the same or, it will further inch up?
No, I think, as the net working capital cycle, it would remain almost 35 days, which, say, in between, in the intermediate intervals, it, always requires the working capital. Even, you see the bank limits being used. Now, again, it is coming to the same stable, that 35 days ideally would be the, range of working capital.
Okay. And when we will receive this monetization among this November 3 for 3 projects, so in terms of the gain which will be booking. So one is how much the gain that we will be booking, and in terms of the tax treatment, how that the... Will it be a 20% tax capital gain tax kind of a thing? So how it will work out?
So we are working on it. Definitely, it's not that big number because it's almost years from we started investing equity. So whatever gain is there, there are two kind of one into SPV. So one is for equity invested by HG. So there are the two numbers, but that this that is not a very big say number.
Okay. So on standalone level, it will not be a major number?
Yeah. Yeah.
Okay. Okay. Thanks, sir.
Thank you. As there are no further questions, I would now like to hand the conference over to management for closing comments. Over to you, sir.
Yeah, thank you, Sana. Thank you everyone for bringing their expertise and experience around the table. We appreciate everyone joining us today on the call, and hope that we have addressed all your questions. If you have any further inquiries, please do not hesitate to reach out to our IR advisor, Go India Advisors, and thank you for your participation. Happy Diwali!
Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.