Good morning, ladies and gentlemen. Welcome to the Q1 FY 2023 post earnings conference call of H.G. Infra Engineering Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Smit Shah. Thank you, and over to you, sir.
Good morning, everyone. This is Smit Shah from Pareto Capital. We represent investor relations for H.G. Infra Engineering Limited. On behalf of H.G. Infra, I welcome you all to our Q1 FY23 earnings conference call. I have with me from the management, Mr. Harendra Singh, Chairman and Managing Director, Mr. Rajeev Mishra, Chief Financial Officer, Mr. Sanjay Bafna, Group Finance and Accounts Head. We will have a brief opening remarks from the management, followed by a Q&A session. Please note that certain statements made during this call may be forward-looking in nature.
Such forward-looking statements are subject to certain risks and uncertainties that could cause our actual results or projections to differ materially from those statements. H.G. Infra will not be, in a way, responsible for any actions taken based on such statements and undertakes no obligation to publicly update these forward-looking statements. I would now like to hand over the call to Harendra Singh for his opening remarks. Over to you, sir.
Yeah, thank you, Smit. Good morning, everyone. I welcome you all to our first quarter FY 2023 earnings conference call. This year marks our fifth ongoing year of being listed on the Indian stock exchanges and interacting with you all. We believe that we have come a long way in terms of our business performance, and I am proud of my team for this feat. Additionally, I am proud of the credibility and transparency we have established among investors and analysts, and we look forward to your continued support. At H.G., our focus has always been on profitable growth, lean balance sheet, strong internal processes, and we will continue to build on this.
It gives me pleasure to say that we have touched revenue of INR 1,065.7 crore in first quarter of FY 2023, which is all-time highest number of any quarter till now, with an EBITDA at 15.2% and PAT margin of 9.2%. During the quarter, we received a new EPC order worth INR 4,971 crore, which is inclusive of GST, from Adani Group to develop a six-lane access-controlled expressway, that is the Ganga Expressway in the state of Uttar Pradesh. The work on it has already been begun. Taking the above order, the total order book stood at INR 11,508 crore as on June 30 2022. Out of the total order book, 64% are EPC contract and 36% are HAM projects.
These orders give us strong visibility of revenues for the next two to three years. As I can just give an idea of the size of the project, it is important to share with the forum that there has been paradigm shift in the magnitude of average ticket size of projects under execution in entire order book. Currently, there are 20 projects under execution, out of which seven projects has already got PCOD, and only small portion of work is left out in these projects. Apart from this, there are 13 high-value projects which are in execution with an average size of INR 900 crore, which was around INR 200 crore few years back, thus bringing better operational efficiency, cost optimization with better control and governance of these projects, which will eventually result in a better margins in these projects. Now, coming to a few project updates.
During the first quarter of financial year, we have achieved financial closure of our Raipur-Visakhapatnam OD-6 package, that is on May 5, and received the appointed dates of our Raipur-Visakhapatnam OD-5 and 6, both the packages, on May 30 and June 1, respectively. Coming to progress of major EPC projects, it gives us the immense pleasure to inform you that we have received completion certificate for Delhi-Vadodara package 4 on August 1, with effect from June 26, 2022. We are pleased to inform that execution has completed in Hapur-Moradabad project of IRB. This project has already received the completion certificate from competent authority, and shortly we would be issued the same. In Delhi-Vadodara package 8, we have made good progress and have completed around 84%. In Delhi-Vadodara package again, in package 9, we have completed around 73%.
In the Mancherial project of Adani, we have completed around 70%. In the EPC project, we have received on 28th of October last year, that is Karala-Kanjhawala, that is a Delhi UER-II , we have completed 14%. In Nelamangala-Tumkur project, post signing of the agreement in May 2022, we expect appointed date by end of August. So this is all about the EPC projects. Coming to our HAM projects under execution, which are also progressing well as per the scheduled timeline. In Rewari Bypass HAM project, we have completed around 74%. In Raipur-Visakhapatnam, that is AP-1, we have completed 10%. In two of the HAM projects of Raipur-Visakhapatnam corridor, that is Odisha Package 4 and 5, we started the work in the current quarter, and we completed around 5% and 6% , respectively.
In Khammam-Devarapalle Package 1 and 2, we have received the financial closure of KD-2, that is on July 20th, 2022, and we are going to sign the contract agreement of KD-1 very soon. We have initiated the work on these packages, and the progress will further fast-track from the third quarter onwards. For the HAM projects, we have a total equity requirement of INR 1,137 crore. That is projected till FY 2025. Of this total amount, we have already invested INR 529.5 crore as on June 2022, and we project to invest INR 286 crore in this remaining financial year, that is FY 2023. Before I share the outlook and the guidance with you, I would like to hand over the call to our CFO, Rajeev Mishra, to touch upon the financial highlights. Over to you, Rajeev.
Thank you, sir. Good morning to all of you. Let me highlight on the financial performance for this quarter that ended June 2022. Our endeavors to strengthen our balance sheet continue to remain our focus. For this quarter, standalone revenue stood at INR 1,065.70 crore, a growth of 16.6%, as compared to INR 913.6 crore in Q1 FY 2022. We reported a growth of 8% in our EBITDA, which stood at INR 162.5 crore, compared to INR 150.4 crore in corresponding previous quarters.
Profit after tax for this quarter stood at INR 97.60 crore, a year-on-year growth of 9.8%. Our consolidated debt stood at INR 1,406 crore, which includes project loans of INR 959 crore. Cash and bank balance on the consolidated level stood at INR 16.9 crore. This is all from my side in brief. I will now request Harendra sir to for the further remarks on the future business guidance. Over to you, sir.
Thank you, Rajeev. We are very positive on the sector outlook and the opportunities. Numerous initiatives, including National Infrastructure Pipeline Program, and an increase in the budgeted allocation for infrastructure spending, et cetera, will give trust of this, to this sector and offer ample opportunities to players like us. We at H.G. are readying ourselves for the next level of growth through various steps. We have continued to build a robust business model, having complete integration in operations, along with a large fleet of in-house equipment and a skilled human resource. We are investing heavily on digital initiatives to make our system more robust.
We are confident in times ahead, as guided earlier, to achieve INR 5,000 crore of revenue while maintaining 15.5%-16% range of EBITDA margin for the financial year FY 2023. As far as order is concerned, a key focus ahead would be to winning selective projects that complement our order book and ensure efficiency. Our goal is to achieve guided number as INR 9,000 crore-INR 10,000 crore order inflows in this financial year. Now, I'd like to like the moderator to open the floor for question and answers. Thank you.
Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question, may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Mohit Kumar from DAM Capital. Please go ahead.
Yeah, good afternoon, sir, and congratulations on another stellar performance. So my first question is, do you maintain the guidance of INR 50 billion of, you know, revenue and order inflow of INR 100 billion for the, for the fiscal year? And, and does the declining inflation improves your outlook on margin?
You see, we have already received the order of around INR 4,450 crore from Adani. That is excluding of GST. So, with that, we are having almost eight months going ahead, and with NHAI, and they are having a strong billing pipeline. We expect that another 5,000 crore of order can be added during this next eigh t months. And, guided as per the revenue, which we already have taken into our consideration, that most of the orders are under execution in quarter two only, we are likely to get two more appointed dates of Ganga Expressway and this Chanaka-Korata project. With that, it gives us the visibility and confidence that we will be touching upon around INR 5,000 crore of turnover.
As the margins are concerned, we would be in a same range, coming back to our normal range, because the commodity price hit, which really has impacted in quarter three and quarter four of last year, and now in quarter one as well, we experienced the same. But now, there has been a significant relief in the steel prices and other commodity prices, which again, we can expect in quarter three, four onwards, we would be coming on the track, about 15.5+, like 16, 15+ margin.
Secondly, on this, sir, on the monetization of our ATM portfolio, I think roughly around four of our assets are coming to, you know, closer to physical completion. Is there some update which you can share or some outlook that we'll able to close the monetization by the end of this fiscal year with some strategic investor?
Yeah, of course. I think the discussions are on with the three potential funds, and we believe that this discussion is at a very advanced stage. We expect that by the end of this financial year, this entire transaction can happen.
Sir, are you looking for selling this stake, or is this more like in a portfolio kind approach, we are going to give these assets and also the future assets?
No, as of now, we do plan that these are three projects which we already completed, and one is likely to be completed in this financial year only. So with that, I think there's a pause of about one and a half to two years. So we are targeting to monetize these projects as soon as we get say right fund and the right price. And we expect it is quite maturing quite well.
Understood, sir. Thanks and all the best, sir. Thank you.
Thank you. The next question is on the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you. Congratulations on good set of numbers. Sir, just again, reiterating for FY 2024, we maintain the same guidance of 20% growth, that is INR 6,000 crore revenue?
Yeah.
Okay. Second, in terms of the order inflow, you mentioned that INR 9,000 crore-INR 10,000 crore, INR 4,400 crore Adani Ganga Expressway we received. So now the remaining that we are targeting INR 5,000 odd crore inflow, out of that, previously we mentioned that around INR 3,500 crores can come from the HAM and INR 1,000-INR 1,500 odd crore from NHAI, EPC and JJM and Railways. So that guidance remains intact?
Yeah, of course. I think, we have already taken up bids in few other sectors like railway, where the modeling of, say, remodeling of the stations. And that, again, gives us the confidence that apart from the NHAI EPC, we would be able to make out some INR 1,000 crore-INR 1,500 crore in highway or, say, water or, say, railways or these sectors.
Okay, okay. Secondly, sir, this both, Khammam-Devarapalle package 1 and 2, the Appointed Date, will be by this September, October?
So, for Khammam-Devarapalle Package 2, which we are already done with the financial closure, most likely by end of September or first week of October, we will be getting the appointed date. By end of November, so for KD-2, where the concession agreement would be signed very soon, and the significant development has been there as far as land, say, compensation, payments, et cetera, is concerned. So by November end, we expect that all the projects would, where this is the last project which we will be getting the appointed date.
Okay, okay. And, regarding the equity requirement, you mentioned that INR 286 crore are to be invested in FY 2023. So, for FY 2024 and 2025?
So it is coming at about INR 208 crore to be invested into FY 2024 for these HAM projects, and around another INR 13 crore for balance for this FY 2025. Looking for the completion of all these HAM projects by FY 2025. So, INR 529 already invested up.
Okay. And sir, how much CapEx we have done and, the guidance, last time you said INR 110-INR 120-odd crore for this year?
Yeah, this quarter we have done significant CapEx around INR 45 crore being added in our total gross block. And so almost we expect that INR 135 crore to be added, but that in turn that we have already given that last, last two, last call, that we are now in that range, where almost seven years+ or five years+ age of equipment, which gives us as an internal policy, that we would be phasing out and just taking out those equipment and to be sold out, which it's about targeted about INR 40 crore revenue would be coming from these selling of these say equipments, plant and equipments. So with that, around INR 90 crore would be say added during this financial year.
Okay. Sir, now on the debt front. Debt this quarter has increased INR 133 odd crore from the last quarter. Just wanted to understand of what's the reason. Definitely I will be the next question on the working capital will be asking, but on the debt front, do we see this current INR 440-INR 450 odd crore debt will it reduce by end of March?
Yeah, sure. It is an interim increase in the debt because, see, we have already taken the appointed date of these three HAM projects, where if you can see, the debtors have gone high in SPVs, and the investment in SPVs as well as over 135 odd crore invested during the current quarter only. So with that, whatever is there, it is again going to cool down and come back to the range of INR 300 crore-INR 350 crore. Say, within this July only, we have received most of the payments from the debtors as frm NHAI from SPV and other. So it would be coming back to the same trend as we have guided earlier.
Okay, sir. Now I need the numbers on the retention money, mobilization advance, unbilled revenue, debtors, inventory, and payable as on June.
So you are looking at, what exactly is the data? Data is around six, because there has been significant increase in the debtors, as I have given you that. SPV debtors has gone very high, and with that, this daily packages, where we are having three packages. So this, this again, where the 334, the, so if you are talking of the debtors, I will just give you a clear retention to your attention.
Yeah. So last March, it was INR 695 crores. So against that, what's the number as on June?
As of June, it has increased to INR 685, which is the data.
So, this INR 685 does not include the retention money?
No. INR 185 is the retention and whatever is hold amount or retention that is there.
Okay. So what's the unbilled revenue number, mobilization number as on June?
Unbilled is total, is almost the same, almost INR 314 crore.
Sorry, sir?
INR 314 crore.
314. Okay.
Yeah.
Mobilization Advance?
Mobilization Advance is INR 286 crore.
INR 286 odd crore. Inventory, what's the number as on June?
Inventory has gone high. It is up by INR 36 crore. It is nowadays INR 219 crore.
219. And, payable?
Payable again has gone high by almost it is at about INR 435 crore.
INR 435. Sorry, sir, INR 435 odd crore?
Eight.
So from INR 426 crore, as on March, it has increased to INR 435 crore.
No, if you are considering as retention and hold, there are two kind of payables. One is the trade payables, and which is we are accounting as a payable, and then the retention and hold. Again, we are categorizing as a debtor plus retention. Together, it is, INR 685 + INR 185 for this, closing balance.
No, no, that I understand, sir. So I'm saying as on trade payable, which was INR 426 crore as on March, what's the number as on June?
Now it has gone high by INR 125 crore, which is coming at, say, 119 and 435. Which together it is coming at 400, 454 crore rupees.
Four fifty-four.
5:54, sorry. 5:54.
Five fifty-four. Okay. Okay, but now, do you see this working capital, which has increased, will come back to the normalized level by end of March?
Yeah, as already I had indicated, that this is a very short period which we have seen, that the debtors has gone very high. As far as the payable, again, they all reached to. And the borrowing has increased, working capital borrowing, overall limit has been there. But now it has been again called drop down to the same level, and we believe that in September or in the coming by March, we would be in the same range. And the working capital, net of working capital is almost same. There is no change, because the payables and receivables both have increased. But we would be coming back to the same normal days as well as absolute numbers.
Okay. Okay. Thank you, and all the best, sir.
Thank you.
Thank you. The next question is from the line of Vibhor Singhal from PhillipCapital. Please go ahead.
Yeah, hi. Good afternoon, sir. Thanks for taking my question, and congrats on a great performance yet again. So just two questions from my side. So one is, sir, this quarter, we've done around INR 1,000 crore plus of revenue. Q2 will most likely be impacted by monsoon, as it every year is. So assuming that we're able to do maybe even a similar kind of revenue in Q2 as Q1, that means in the last two quarters, in the second half of the year, we would need to do almost INR 3,000 crore of revenue to achieve our guidance. Given that, Ganga Expressway project might only start in Q3 onwards only, but do you believe this high lasting rate of Q3 and Q4 is achievable?
And if yes, which project do you think could contribute more to it? So specifically, if I were to ask, how would you expect Ganga Expressway to contribute in terms of revenue in this year, in your INR 5,000 crore guidance, sir?
Yes, sure. You can just see into the breakup of our, the total order balance on the thirtieth of June. And with that, say, the breakup is majorly being categorized into the Ganga Expressway, which we believe that we would be able to execute around INR 1,000 crore in Ganga Expressway project. Which gives us the confidence even, because the land availability is all there. We have mobilized very, very aggressively into that, and most of the things are all aligned. And by, maximum by end of September, so most of the, which we believe the execution, as of now, we already started certain portion of it. So that gives us the visibility that Ganga Expressway would be the major contributor.
Apart from that, if you see the other project like Raipur-Visakhapatnam, that is only 5, 6, and AP-1, which we've already done some 5%-7% progress in these projects. Some 1,000 crore would be added, because they are all together 3,000-odd crores of total project as an EPC value. The 1,000 crore would be done during this balance period of the financial year. The three packages where the appointed date would be received by August end or September end, and November. So these Khammam-Devarapalle packages 1, 2, and then Nelamangala-Tumkur package. This INR 400 crore-INR 500 crore would be executed in these packages. And major apart from that, contribution from Delhi UER would be INR 550 crore, and then balance from Rewari packages, it's about INR 100 crore.
Packages 8 and 9 of Delhi-Gurugram would be all completed, which is a balance of about, say, INR 450-INR 460 crore. And Mancherial, Rewari, which is a balance of what, INR 225 crore, which we have all executed during the current year only. So this gives a total, about 3,800 crore rupees, that is excluding price variations, no O&M, and no utility.
Right, right. So, in theory, so roughly 5,000 can be clearly, easily achieved, given the order status of our projects that are coming?
Sorry?
So, you believe we can easily achieve this INR 5,000 crore of items, given the order with the status of the projects that they are right now?
Sorry to interrupt, Mr. Singhal. We are not able to hear you clearly, sir. Your voice is sounding very low.
Uh.
Can you use the hands-free mode while speaking?
Yeah. Hello?
Yeah.
Yeah, am I audible now? Sorry for the disturbance.
Yes, quite audible. Yes, quite clear.
Yes, yes, sir.
As you were saying that we are very confident, yes, we have taken into that, that how the things, the, all the projects could be contributing to the total INR 5,000 crore.
Got it. Got it, sir. So sir, my second question is basically on the HAM projects and the debt level. As I think Shravan asked in the last question, the debt has increased by almost INR 130 crore in this quarter. But if I look at the cash, which has decreased, our net debt at the standalone level has actually increased by around INR 280 crore. So as you rightly mentioned that, yes, this is basically on the back of the HAM equity that needs to be invested and some payments which we got in July as well. Now, with the further INR 250 crore of equity that need to be invested in the remaining part of the year, and you're also looking at taking on a few more HAM projects. Sir, how in...
How important is it for us to be able to monetize these assets in order to keep our debt levels down to INR 350 crore? Because from what we see, even if we were to do a INR 5,000 crore... Yeah, sure, sir.
Yeah, yeah, I got your point. See, it is major important is where the all-time high debtor number is there. So SPVs was at about INR 232 crore. So this is a big number of SPV, where the date, the receivables were all there, and which would have been earlier, because there are a few conditions of the bank where the say, disbursement conditions were about to be completed. So we could not receive the mobilization advance to that extent, to that magnitude, which indeed, definitely we would be getting. In this quarter only, we are going to get mobilization advance and SPV total debtors, which we are received during the month of July itself. NHAI, again, at about INR 229 crore, which is a big number.
So apart from these two big numbers, there are not a very significant changes there. And if you say that when we are going to look at our March number, the, the total, equity requirement, balance equity requirement is INR 286 crore. And we are expecting that the total cash accrual would be somewhere in the range of INR 585 crore, and total INR 585 crore. So with this is a clear, idea that we would be in a, that sphere or that, comfort zone, that the debtors cooling down and, the mobilization advance coming in, we would be able to do so.
Got it. Got it. Just one last follow-up. But we haven't yet received the Mobilization Advance for Ganga Expressway, right?
No, no, not at all. Not the Ganga Expressway, Nelamangala-Tumkur, Khammam-Devarapalle, even this OD-6 package. So there are all these packages, we've not received any mobilization advance till date.
For Ganga Expressway, it would be the regular 10%?
It's coming. It's most likely it is coming at about INR 350 odd crore mobilization advance that we could get from these projects.
Right.
This is during the next five months, we would be getting that.
Got it. Got it, sir. Thank you, sir. Thanks for taking my questions, and wish you all the best.
Thank you.
Thank you. The next question is from the line of Jiten Rushi from Axis Capital. Please go ahead.
Congratulations on the good set of numbers.
Sorry to interrupt, Mr. Rushi, we are not able to hear you. Can you speak a bit louder?
Sure. Can you hear me now? Hello.
A little better. Thank you.
Yeah, yeah. So good, good, very good morning, and congratulations on good set of numbers. So my first question was on the revenue. So I was just doing reverse math. So our order backlog as on June, adjusted for the order backlog as on March, which gives us a revenue of around INR 871 crore. And while our reported revenue is higher during the quarter, so the gap is around INR 195 crore.
There is, there is a big impact of price variation. If you see, there is about INR 70 odd crore in the total revenue, which has been recognized. It's from price variation. And, if you see the projects, if the projects, they start about INR 900 crore, so altogether coming at about INR 1,065, with others being contributed to the revenue.
So basically, the increase in order backlog is by INR 1,055 crore because of price variation. And we have booked a INR 70 crore order revenue of price variation in Q1. Am I just getting correct, sir?
Yes, yes.
Sir, so the variation is around 195, so INR 70 crore explains. What about the balance? Is it from the utility shifting, sir?
Yeah, utility shifting, when NHAI revenue and some certain portion of the revenue was there, where the aggregate supply was there, which is kept, which is now almost done, because in Hapur-Moradabad, we were supposed to supply aggregate even.
Okay, so that explains the gap. Okay. Okay. And sir, now, if we can say that you have given the guidance for the revenue, but sir, your debtors were high, like INR 232 crore from SPVs and INR 229 crore from NHAI. So what has been the collection in July? So now what's so what could be the debtors in July? ... and, if you can highlight on that side after your disbursement.
Coming almost down by INR 200 crore. So in July end, we are having not more than INR 450 crore.
Okay, good.
Yeah.
This was just basically we were not able to achieve some threshold, which resulted in delay in disbursement, and hence we had to fund in that.
Majorly, there were two things. One was the, the mobilization advance, which we, were expecting to, say, be released to the SP- from the SPVs to HE, or rather from, NHAI to SPV. This has not happened in that period, and moreover, the entire billing or whatever work that we have executed in these projects, which is in the magnitude of INR 200 crore, which could not be, in these, Raipur Visakhapatnam, I'm talking in those projects only.
Okay, so now the debtors have come in?
Now it has been again that we have received the amount from the SPV, from NHAI, in fact, and then to the EPC.
Sir, you said this mobilization advance of INR 350 crore-
Sorry to interrupt, sir, we're not able to hear you.
Sir, yeah. So you're, sir, you have said, you said INR 350 crore of mobilization advance you will receive next five months. So this is including Ganga Express or excluding Ganga Express?
Sir, we have just taken into account 5% from Ganga Express.
Five percent.
Not more.
Yeah, that is what. Okay. Okay, okay. Okay. And, sir, on the CapEx, as you said, you'll be doing INR 135 crore gross CapEx, and net CapEx would be INR 90 crore, right, sir?
Right. Right, right.
sir, what about the margin guidance for FY 2024? We maintained the guidance of 16%.
Yeah, very right. In FY 2023, we will be coming back to almost 15.5%-16%, and that again, in 2024, we can just look for beyond 16%.
So, and again, sir, on the interest cost, which has come down. So do we expect the run rate to continue, or we can see interest costs going up because there was a temporary increase in the working capital? So has the debt come down, sir?
It's a matter of only working capital limit being utilized for a certain period, or it can be in days, not in months, and for that reason it has gone high. But ultimately, it would be in the same range as we have seen, that it is about 1.35% of the total top line, for this current year, current quarters only.
Sir, last question on the financial closure, which you did recently. What was the rate of interest, sir?
It's around 8%-8.3% on all the projects.
Sir, we have seen increase in the finance, interest cost now because of the interest costs going up, at the corporate level and as well as in the SPV when we go for refinancing.
No, no. For refinancing, we have already said that there are six months, that is, in the delta, which we, again, which we are likely to get from NHAI, which is, which is already inbuilt. That, that is where 0.3%-0.4% is already there in all the refinanced projects of the three refinanced project.
Sir, outstanding bid pipeline as on date, sir, in terms of roads, waters and railways, if you can have it, and another tenders opening?
No, no, there are good number of bids which are not yet safe, but there are bid pipeline is long and it's very strong, that we have seen and indicated that 6,000-odd thousand kilometers being awarded likely to be awarded in the current year only. So with that, I think lot, lot, many projects are there, and which in quarter two and/or quarter three, four, it would be there. As of now, we have bided for almost INR 7,000-odd crore, where the results are yet to be declared.
This is NHAI, right, sir?
Yeah, these are all NHAI, and one is two, one is in Metro, but two are in railway, and one is, say, in water.
So basically, one Metro, two railway, one water, and how many NHAI?
NHAI, there are three projects.
So total is INR 6,000 crore-INR 7,000 crore will be with outstanding, which will open in, like, next one month time, right, sir?
Yes. Yes, yes.
Okay, sir. That's it from my side. Thank you and all the best, sir.
Thank you.
Thank you. The next question is from the line of Prem Khurana from Anand Rathi. Please go ahead.
Yeah, thank you for taking my questions. So most of my questions are already answered, I think just clarifications mostly. So when you say, and we're looking at around INR 5,000-INR 6,000 crore of incremental orders during the year, possible to share, I mean, how do you expect this to be kind of split between various segments of, let's say, EPC, hybrid, irrigation and water, I think you said 1,000, 1,500 crores is what you're targeting, so the balance would be almost around INR 4,000-INR 5,000 odd crore. How, how would this, be, I mean, be split between, let's say, EPC road EPC and, hybrid?
The major portion which we are expecting are from HAM of NHAI, which around INR 3,000-3,500 crore, and balance about 1,500 or 1,500-2,000 crore, which we are expecting either EPC from NHAI or say, other than that, other sectors are all there, which we already started bidding. And it is where the railways or the water sectors. So these are two, three more avenues which we are looking to add this year, at least INR 1,000-1,500 crore will be from these new sectors.
Sure. Any comments on the competitive intensity in railways and water? I mean, essentially, if you participate any and which have already been opened, how did we fare against our competition, or we are yet to kind of see?
We stood at about L4 or L5 in two of the railway projects, being and the results being declared in last two to three months. But still, we do not, we are not going very aggressively. We do not expect that without compromising or without just doing most of the things. We want to maintain our EBITDA at the same level, and we would be able to get these numbers, which 1,000-odd crores from other sectors.
Sure. And for waters, we are looking at Madhya Pradesh, Rajasthan. We are open to look at Uttar Pradesh as well, because now-
Yeah, UP also because we are, we are now, as having a good presence in UP and few districts, majorly. So we do look forward that in UP, MP or Rajasthan for water.
Okay, okay. And sir, on this OD- 6, I mean, the FC that we've been able to manage, and other, I mean, we've already infused some equity. So just I was wondering, I mean, when I look at the numbers, the equity that you've infused during the quarter, it's almost INR 120-odd crore. It seems as if you've infused almost 50% of the total required amount in a single quarter. So I think initially banks required you to put in only 35% upfront, and then gradually you used to infuse the incremental.
They are having different category of equity, where the requirement is there. So if you see it, INR 175 crore were being invested in HAM in this quarter.
Got it. Got it. So now banks require you to put in more upfront, is that the case? And would the conditions be similar with some of the other OD-5 and the other AP project as well, wherein you would be required to kind of infuse a larger portion of the equity upfront?
No, it's not that, or not upfront. It is again the same category. Like few, it's ranging from 35%-50% upfront, and balance is as a proportion as we are taking the debt from them. So it depends upon that.
Oh, okay. Sure. Sure, sir. Thank you very much for answering my questions. That's it from my side. Thank you, and all the very best for future.
Thank you.
Thank you. The next question is from the line of Dipen Shah, an investor. Please go ahead.
Yeah, thank you for the opportunity, and congratulations on a good set of numbers. Sir, I had a question on the margins. Now, the order book for us, probably 65% EPC and 35% HAM. Next year, probably the revenue contribution could be under similar terms. So under when, given that EPC generally enjoys a lower margin, and this is also with Adani, so it's an EPC order, a large part of it. What factors will kind of, you know, help you to maintain a 16% margin in the next year?
You see, the orders which we have taken, like we are talking about Delhi UER project as well as the Adani project, which is a major portion of work is to be executed in next one year or so. So with the EPC, definitely a trend has been there, where the lower margins were there, which we-
or any company has seen. But in this project we are having, like in Moradabad also, IRB, Adani, Mancherial, we are working and in these projects. So usually it has been not a bid, the project which has been bid, say, rather than it's a clear understanding between what is the total cost of execution, where the price variation or anything being taken, operational, execution, say, aspects being taken into consideration. So we have taken this project with a very conscious decision that we will be making this margin.
Okay, sir, because generally when a project is taken under HAM, you enjoy a maybe in a margin in excess of 16, 17%. Now, with one of the, you know, primary bidders bidding, giving you a project, obviously there will be some impact on the margins, right? Even if you taken it on your commercial terms and without bidding. So just wanted to understand your confidence on the 16% margin next year, when a large proportion of the revenues is going to come from EPC. So basically, some more light on that, sir. Thank you so much.
See, important is I will just. One more reason is there. Say, important is any developer or any of that HAM or BOT players, they are usually giving away the EPC to those players, where they are having the good strength to execute rather than there is an aggressive bidding, or aggressive, say, call being taken by any company. So there, I think it's the mutual interest and the mutual benefit of both, because they are looking at to their developer margins rather than EPC margins.
Okay. All right, sir. Thank you so much, and all the best.
Thank you.
Thank you. The next question is from the line of Faisal Hawa from H.G. Hawa & Co. Please go ahead. Mr. Faisal Hawa, your line is on the talk mode. Please go ahead. The line for the current participant has dropped off. We'll move on to the next question. That is from the line of Ashish Shah from Centrum Broking. Please go ahead.
Yeah, good afternoon. Thank you for the opportunity. Sir, my first question is on the appointed date for the projects. So for particularly the Khammam one package, the agreement is not yet signed, and we are in the month of August now. So do you think signing of the agreement, financial closure, et cetera, everything can be done by November? Or that timeline might slip to, let's say, beyond December?
No, no, it all will be done by November, because the financial closure, we already got the sanction from bank, and it's a matter of only, well, just a concession agreement, signing to submission of FC and declaration to FC, and then three months are ideally a reasonably good period. Within that, so most of the things are on track at site.
Okay. So you, you believe the timeline for the financial closure can be crunched in, and because you must have already made the preparation, et cetera?
Correct, correct, correct.
Okay, sure. So second is on the monetization. I know you did update a bit on that. Now the question is that, you know, we have seen that there has been a mismatch between the expectations from the company side, and what the investors are willing to offer. So where are those negotiations and where are those numbers today? So are we getting the kind of numbers that we expect, or the numbers are still far below our expectation, and because of which the monetization may continue to be delayed?
No, no, it's not that far below, and monetization, in any case, depends upon our willingness, more of the willingness or the desperation. So we are not desperate enough to to— We have already received one of the annuity, annuity of another project. In this quarter two, we will be getting two more, project annuity. We are experiencing good part of O&M, regular maintenance being taken. So this gives us the confidence and the to the other investor as well, to what exactly is the margin, where they, and we are going to map it.
Right. But, sir, just to push a little bit on this. So when we say willingness, what I'm just trying to understand is that if, if it is a little below than what we expect, are we still willing to go ahead and close the transaction in the interest of, recovering our investments for future projects?
If it is in the range of 10% below our expectations, that we can do. We would be able to do that. But if it is going, say, 25%-50% below our expectations, and our expectations are quite reasonable, no? It's quite checked and authenticated.
Right. Sir, on the non-highways bid, we did say we have bid for a few railway projects and looking at water, et cetera. So now, are we approaching the bids in a slightly different manner now? Because earlier we have bid for a few projects, but we haven't got a significant amount of traction in the non-highways area. Are we looking at new partners, or are we looking at a different approach towards this bids going forward?
Say, apart from water, other than it's a single entity basis, we are eligible and qualified to bid all railways, whether it be station or it be railway doubling or new tracks. So apart from that, and water, we already tied up with JV, alliance being done. So there, we have already strategically doing most of the things, and we believe that not less than INR 1,000 crore will be added into these two, three areas, which we expect within next eight months during the year.
Sure. So just last one. On the Ganga Expressway, just a few data points. So one is that you said you have 5% mobilization at once. Would this be interest paid?
Yeah, interest, of course. Everywhere it is interest paying advance.
Yeah, sure. Sure. And secondly, in terms of the structure of the contract, there would be price escalations available, right? We, we would have quoted on a star-rated basis.
Correct, correct. Correct.
Okay, so there are escalations available for all kind of commodity increases, from based on a bidding?
Diesel, everything is there.
Right. And the timeline that we are looking forward is 27 months, but there is some sort of an early completion bonus if we achieve it within 24 months.
Very right.
Right. Okay. Thank you. Thanks.
Thank you. The next question is on the line of Ankita Shah from Elara Capital. Please go ahead.
Thank you so much for this opportunity, sir. I had just one question. There were news reports that the NHAI is planning to cut the upfront payment from 40% to 20%. They are planning. So is it true? I mean, have you got any notification from NHAI for the same?
No, no. See, for the projects which already has been awarded, there's nothing can change. But in, say, in the forthcoming any bids, if there is a model being discussed and, say, it may take time, and whenever the new model is going to come in, it, so always, call combination, permutation, they all usually changes. Statistics.
Okay. Okay, yeah. Thank you. That was my only question.
Thank you. The next question is on the line of Harshad Gadekar from GEPL. Please go ahead.
Yes, is my voice audible?
Sure.
Okay. Yes, sir, congratulations for the good set of numbers and for receiving the prestigious Ganga Expressway award. So, I was just comparing H.G. Infra with one of the South India-based listed peer, which is again close to in terms of our revenue type and order book. So, I found that we have very less percentage of fixed asset as a percentage of balance sheet size and higher subcontracting expense as a percentage of revenue. But that's quite fair because we are operating in all directions of India. So, right now, this Ganga Expressway project is now going to contribute around 40% of your order book. So, you just mentioned that you are going quite aggressive on the mobilization, mobilizing the equipment.
How we are planning for these projects, are we going to focus more on the subcontracting for this, or we are going to do it on our own?
All right, sir. Every project complexity requires the mixed nature of execution strategy. So it doesn't have the same similar kind of a strategy which we are doing in for Odisha project or, say, Andhra or Delhi projects. So this is how we have already identified that the portion which is the material part or the subcon part, it is about 28%-29%, which is not only subcontracting, it is basically mix of certain items where certain miscellaneous items of toll management system, automatic traffic management system, then building works, rest area, etc., which usually being subcontracted or get offloaded to our vendors. So it's a mix, and so almost would be there in the same range, similar range, which we have already bring in past.
Okay. And the second one is regarding the margin portion of the Mumbai Expressway project, as it is a EPC project. So if this project falls under our standardized IRR criteria?
Yeah, of course.
Okay. Any color on our ongoing bid pipeline?
Yes, quite strong as we have seen that lot many bids are now being coming and reflected in the month of August or September. There are almost 25 odd projects of NHAI, which earlier were at a very slow pace. Now, the things are now gradually it has been improved.
Okay. Thank you, sir. All the best for the upcoming quarters.
Should we move on to the next question?
Yes, yes.
Thank you. The next question is from the line of Alok Deora from Motilal Oswal. Please go ahead.
Good afternoon, sir. Just a couple of questions. Sir, first question was just a follow-up from the earlier question that about the NHAI reducing the, you know, the their contribution to 20%. So have you heard anything on that? Because there was a big article on that, and because that could mean higher equity by the contractor. So how are we looking at that? If you could just elaborate a little more on that part.
See, earlier on the last year, I think it's almost eight to nine months back, this net worth criteria, restricting the concessionaires with the net worth criteria was all discussed, but, it's yet to be concluded or being just formulated in this concession agreement. So again, this is a concept being discussed, that, since we are getting good response from all the concessionaire, all the companies, construction companies. So with that, I-- they have taken into that consideration, okay, if it can be reduced down to 20% from 40%. But, I don't believe that is going to be very soon. Yeah, definitely, if it is like that, we don't see that if in case any company is having the, say, equity restriction or the ability to infuse the capital in equity.
I think it would be, they will be lowering down the total, say, appetite, as an appetite total. If they are looking at INR 4,000 crore, they will be lowering by say almost INR 1,000 crore-INR 1,500 crore.
Sure. So that would also mean some reduced competition, right? I mean, then not all-
Of course, I can. There are two senses to that. One is whether every company individual they would be looking into their appetite, number one. And definitely with that, I think you can discount both numbers of players.
Sure, sure. And, also, sir, I just wanted to understand, like, so, since we already had a good start of year, to the year with the, with a large order, so, any sense on the order? So you mentioned about INR 10,000 crore, but could we, could we exceed that? Because, you know, we'll be executing also around, as per the target, around INR 4,000 crore in the remaining part of the year. So by the end of the year, we'll be having an order book close to, say, INR 11,000-12,000 crores, and then, it should be around 2x the FY 2023 revenues. So just any, sense whether we could outdo the order inflows in this year, considering the pipeline is so strong?
See, with this Adani project being added this year, and with 9,000-10,000 is our total inflow guidance for the entire year, we expect that whatever, say, consolidation or stabilization on the aggression, it may take place during the course of eight-10 months. So with that, I think it is a better opportunity to be taken, rather than going very aggressively just to build up our order book at the end of this financial year.
Right. Right, right. Sure. So you expect some aggression also to come in, in the near future?
Sir, it will be cooling down. In any case, it would be coming down.
Oh, okay. Got it, sir. That's all from my side. Thank you, and all the best, sir.
Thank you.
Thank you. The next question is in the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, sir. Congratulations on a good set of numbers.
Thank you.
So my first question is on order book. So by this year end, we will be somewhere around INR 13,000 crore for order book, if we are able to get INR 10,000 crore this year. So averaging, we have been averaging at about INR 6,000-INR 7,000 crore for last few three years. So with the increase in order book, how we see the fund and non-fund based limits ramping up? So if you can just touch upon that, is my first question.
See, we are already having some 1,600 odd crores of limit, and today, utilization is about 1,100 crores. It gets you non-fund and fund based both together. So with that, 500 odd crores of limits are available, not yet to be utilized. Majorly, it is a non-fund based, okay? And our assessment is already in place, and about 500 odd crores of addition limit would be there, by this maximum by Q2 end or by Q3 max. So I think, there's—I don't see much of a challenge getting this limits, and I'm just too happy to share, as we have already got the upgradation in the rating. That, with that, I think the banks and we are having a different attitude to just look forward for a big exposure.
Okay. The second question is on the debt level. So, as the execution ramps up, we will require both investments on CapEx and equity, besides investment in working capital. So, do you think that we should be in the range of, like, INR 350 crores or INR 320 crores of debt by like, anything else?
See, Parikshit, the major important aspect is where we are getting the timely payment from SPV. So whatever has been there, which we have seen, that 40%-50% execution was in our control, means we are getting within 30 days, and that is the first part. Number two, if we are getting regular payment from NHAI, that is the second part. That, of course, that has helped us, the working capital or the any of the such requirements has not gone very high. Earlier, it was, yes, we have also seen that last 2, one and a half year plus with IRB and with the Rajasthan projects, which we experienced earlier. Now, the things are that we have already completed those projects, and we are getting regular payments from Adani. We are getting regular payments.
That's the range of working capital, which is about 51-52 days as of now, would be reasonably at about, say, 40-45 days, not more.
Why do you see the debt levels by the year end, sir? Sorry, I missed that number.
It's, it's more or less, we are expecting about INR 350-odd crore.
350?
Yeah.
Okay. Just one more thing-
In any case, we are having this facility that all the projects do have 10% of the Mobilization Advance. And with this, all entire project getting this Appointed Date, then, say, we would be in a range of to get, say, INR 500-odd crore of total Mobilization Advance, INR 350 in any case, and INR 150 in the earlier project, older, older projects.
No, the issue is that the big project which is there in the order book, it doesn't have, this has only 5% mobilization advance. So the balance 5% you will have to bring in, so that will add to your working capital limits.
No, no. Say, what I'm saying is INR 350 crore odd are to be added as a mobilization advance in this quarter three and quarter one, quarter three. So with that, we would be in a range of about INR 500 crore of total mobilization advance by end of this year.
What is the Mobilization Advance right now?
It's almost 10% everywhere.
No, no, no. I'm saying, what is as of when first quarter, and how much is the Mobilization Advance in the bank?
INR 288 crore. As of first quarter, it's INR 288 crore, which likely in quarter two, what we will be executing, it will be getting the, say, the reduction, the deduction would be in the range of INR 80-odd crore. Then again, we need to get this INR 350-odd crore. So with that, it's, we're going to reach up to INR 500.
Got it. So you will add around INR 200 crore on top of it from the mobilization.
Yes. Yes, yes, yes.
Okay. And just one more thing, sir, on this. What is the total pending, portfolio pending equity requirement?
Funding requirement for?
The total pending equity requirement for the HAM projects.
The total is 1,100. I've already given you that. 1,137 is the total requirement. Out of this, 529 already done till this quarter one. We are looking at 286, but it is quite aggressively and high number, which we are expecting in 286. Likely it would be in some 200, 10-15 crore rupees would be funded in during the year, balance portion of the year. In quarter, say FY 2024, it is coming at 208.
So my question was, so now this year we had a big order which had contributed, a large single order, which has contributed, and now the expectation is like every year annually, you will have to book in about INR 10,000 crore of orders, 10-11 thousand. And next year, if we have, if you assume some growth on that number, and if order of the magnitude of Adani is not there in that next year. So incrementally, we have to rely either for more HAM projects, which is the typically awarding by NHAI, large quantum of working happens through HAM. So incrementally, we will see more investment going into equity. And if we don't have back-to-back monetization platform or, some arrangement with the investors, which is, a lot of cash flows will go into servicing the equity requirement.
So, I think we need to work on monetization of these assets and need to have something in place some-
You are very right, and you are very right, and we are working on it. We are not that, that. But as of now, we do believe that as already just answer the question, what should be the minimum level, what of your, your expectations? The expectations is quite reasonably being worked out, and if that asset is coming at, say, whatever number is being discounted by 10% or any offer is coming at 10% less the offer with or expectation, which we are taking. So we are very keen and going ahead doing those transactions. It's not that we are just holding the asset for a longer period in confidence that our working capital and all, everything will be so aligned and. So we are doing most of the exercise in that line only.
Okay. Okay, sir. Thank you very much.
Thank you. Participants, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. The next question is on the line of Jiten Rushi from Axis Capital. Please go ahead.
So thank you for taking my question. So my question would be on the competitive intensity. So assuming, you said that competitive intensity is easing out, so we have the high chances of winning the order inflows which you are targeting. So let's say we are in the next year, which is the run-up to the election year, we see ordering activity to slow down probably from Q2 or Q3 onwards. So, do you see yourself winning more projects this year than your target INR 5,000-6,000 crore for the balance period, or you will also look for similar INR 10,000 crore for next year? Because we will be seeing that NHAI, you know, the awarding from NHAI comes down probably in the run-up to the election year.
So then competitive intensity can go up this year because of the NHAI target being steep in terms of awarding. So how do we see ourselves placed in the competitive environment? And do we see that we would accumulate more orders this year so that our revenue visibility remains intact for the next two to three years? Or we will be according to our target of INR 10,000 crore this term, probably INR 10,000-11,000 crore next year. Can you, sir, throw some light on this? Thank you.
See, we would be bidding, as per our own target, where the margin should be in that range. That is more important. See, if it is 5,000 that we're likely to get, say, even with this, margin, we can get even more. That just gives us the confidence that for the coming years, it would be, we would be not so aggressively doing so. But again, if you are saying in quarter three, four onwards, looking to the election year of 2024, we may or any company will, would be looking so aggressively. I, I think the aggression which you have seen in last one year, that has, that is- gives us a clear sense that most of the things have, already been damaged. Now the things are going to be, be repaired, not damaged.
Sir, one more thing. You said that there was a price escalation in the order backlog of INR 1,055 crore. So how... any further price escalation you're expecting in the order backlog in coming quarter?
No, no. We have not taken into consideration the price variation, which would likely to get for the further execution. It is a trend of price variation, which we are getting is about, say, 8%-10% in most of the projects. So this is where I think the execution at 1,055, in that breakup, the INR 70 crore was the price escalation. So the order book consumed was not giving that, what you are saying and what I'm saying.
Okay. So you're saying that INR 1,055 crore of the execution this quarter had INR 70 crore for price escalation?
Price variation, yes.
Price variation. But sir, in the order book also went up, there will be some price variation also in the order backlog, right, sir? Because of the-
Of course, I think while we are going to execute quarter-on-quarter basis, then the PV would be recognized or taken, whenever we have what exactly is the number which we usually would be getting in, on certification.
So any price variation number in the order backlog, which you have added in June, at the end of June, any number we can highlight?
No. See, this cannot be estimated right now.
No worry. Okay, got it. Got it. And sir, on the margin front, so just can you say that is it safe to assume that in HAM projects, our EPC margin is 18%, while on the third party NHAI project, we were getting 12%-13%, and on the subcontracting, our margin would be in the range of 15-16. Can we safely assume that, sir?
It's almost a similar trend which we have already experienced earlier, like 18%-19% in this HAM projects, and then 15% or in this EPC, which we are usually getting from the private clients as a subcontract. And then, 10%-12% in this other regular EPC projects of NHAI.
Okay, sir. Thank you, sir. All the best.
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Sir, just a clarification. The monetization, we are looking at three plus one, four, all the four projects we are looking for the monetization?
Yeah.
And, one more thing is, let's assume if this gets delayed, for whatever reasons, so from here, how much more HAM projects we can add, in terms of the value? Can we add INR 5,000-6,000 crore of HAM projects, even if the monetization does not go ahead?
Yeah, usually year-over-year basis, we can add from INR 3,000 crore-INR 3,400 or 500 crore. That is the range which we can add comfortably, even the monetization is not taking place.
Okay. Okay. Thank you, sir.
Yeah.
Thank you. The next question is from the line of Meet Parikh from Anand Rathi. Please go ahead. Meet, your line is in the talk mode. Please go ahead.
Hello. Can you hear me?
Yes, sir. Please go ahead.
Yeah. So I had a question regarding the early completion bonus. So, we were supposed to receive an early completion bonus, so has it come during the quarter, or it'll come into Q2?
No, no. As soon as we just receive the completion certificate, in Q2 and Q3, we would be getting it.
Okay, in Q2 and Q3, we'll be getting. Sir, can you tell me the amount, how much will be, we will be getting?
It's around somewhere about INR 26 crore in both the projects.
In both the projects. Okay. And sir, one more thing. For any project where we'll be receiving the PCOD or the COD in the next few next one or two quarters?
Yeah, of course, I think we are expecting to complete 3 or 4 projects. That is, one is the Mancherial-Repallewada project, and then two of Delhi-Gurugram 8 and 9. Delhi-Gurugram 4, we already got the completion.
Okay. So for the Mancherial, when do we expect it to receive, sir?
The PCOD, in any case, by in this quarter only, and for Delhi-Gurugram 8 and 9, the entire completion, because they are all CODs. There is no PCOD in Delhi-Gurugram packages. It's a completion, basically. So by December, in quarter three or maximum quarter four, we will be getting both of the projects.
Okay. Okay, done, sir. Thank you so much.
... Thank you. The next question is from the line of Faisal Hawa from H.G. Hawa & Co. Please go ahead.
So can you just elaborate on, you know, some three or four best practices that we have introduced into our road construction, which will, you know, enhance our margins, you know, any kind of changes you have made to the processes? Because now we are dealing with, you know-
I think apart from automation, digitalization of most of the, say, online tracking to, it, it can be FDMS, FLMS, where there's some technique being used for, your diesel dispensing and tracking control of, all our GPS tracking of our equipments. So these are all online tracking of, daily DPR, so any material reconciliations, any of such kind. So usually, the best of the human resource are being deployed at all the areas where the control can be more effectively being put to place. So these are all regular practices which we are doing.
Any backward integrations that we have got into, like, you know?
No, say we are as a part of it, we have started that, as we have taken a stake in one of the metal beam crash barrier that is where we usually consume every year, INR 100 crore-INR 150 crore of total requirement of our... So looking forward, I think it's not a more of the backward integration, it's more of the operational efficiency which we can look into the areas where most, mostly few things they can add.
You, you have taken stakes in some stone crusher?
No, stone crushers, we usually have already having, say, 18 to 20-odd crushers in-house. And apart from that, it's a balance of, where the procurement or production being done in-house or outsourced.
Okay. And, sir, I mean, why is the, you know, NHAI tender pipeline so weak, you know, from the last two or three quarters? I mean, like, is there some reason to it, or it will get more warm in the coming two quarters?
I think it is very good in quarter three and four, and they have almost reached to the total what they have guided. And then quarter three and four of this year, again, there's some 6,000 kilometers to be awarded, most likely they will do so.
So, in value terms, in rupee terms, how much would it be?
Yes, almost INR 1.25 lakh-INR 1.5 lakh.
In road construction alone, and this would be including HAM as well as EPC?
Yes.
How much would it be HAM, and how much would it be EPC in the coming three quarters?
The guidance right now is 60, 14.
Okay. So quite a bit to come.
Yes.
Thank you so much.
Thank you. The next question is from the line of Dhruv Bhimrajka from Monarch AIF. Please go ahead.
Yeah. Good afternoon, sir, and congrats on a good set of numbers. Sir, I was going through your, you know, AGM resolutions, and one of it says that, there's a special resolution in which you propose to, you know, keep aside INR 60 crore for, giving as a loan or guarantee to your, you know, subsidiary companies. So can you explain why, you know, this, is being moved in the AGM? I mean, what is the logic behind this, putting up INR 50 crore sum as a, you know, collateral or guarantee for those subsidiary companies?
So this, we have received the collateral security or equity mortgage on our working capital limits from these promoter group companies. So there are a few, almost, it's almost in the range of INR 200-odd crore being provided by them. So one of the business operations requires 20 crore of lending from the borrower, let's say, towards their day-to-day business, like as a resort or what. So that is where we have proposed, that is in case it required, the collateral security in lieu of that, we are going to give the corporate security.
Okay, okay. So wanted to understand that, in this business, so how many hotels do we operate as of now, apart from this, core business?
First property we are developing. So most likely in November it will be started.
Okay, so you already have one property, and you are developing another property, which will start in November, right?
Yeah.
Okay, and this property is in which area, sir?
It is in Udaipur, and I think we can discuss afterwards even.
Okay. Okay. Okay, sir, thank you so much.
Thank you. The next question is from the line of Vishal Periwal from IDBI Capital. Please go ahead.
Yes, sir. So one industry specific question. I think you mentioned on the price escalation clause. Now any prices have increased, and if you have executed that order, so you can book it in your revenue, like INR 70 crore, which you have mentioned. But then how the order book get a price escalation? Because it is not yet executed, because the prices can go down further also.
We have not considered any price variation, which is likely to be received over once we execute these projects. So whatever actual we receive, we only taken that particular into account as a total what we have executed. But we cannot take anything for granted, that this is the likely price variation which we can take in our order book.
No, but I think, just correct me if I'm wrong. So you mentioned INR 70 crore we have already booked as a P&L, and then there is a c-component of probably price escalation, which is there in the order book, which has led to increase in the order book.
No, no, no. The order book doesn't have any price variation.
Okay. Yeah, okay.
The order management order book is only the number which is yet to be executed.
Okay, fine. So but then, this, the INR 70 crore that we have booked, it is, for the order that we've executed only in this quarter or it, it includes previous quarters?
Yeah.
Ex-
Correct. In that quarter, whatever we executed, we received the price variation of INR 70 crore, so that is coming as a revenue.
Okay, okay. Fine, sir. Sure. Thanks, thanks for the clarity. Thanks.
Thank you. The next question is from the line of Shikha Doshi from Axis Securities. Please go ahead.
Good afternoon, sir. Thank you for this opportunity. I would like to know what is the working capital days for this quarter and your guidance for the year for the same?
The working capital, net working capital days are coming at 33, which is the 51 is the debtor days and 52 creditor days, and 20 days is about that, 31.
Okay. Like, what is the expectation for the coming quarter?
Yeah, most likely we are in the similar trend for last few quarters, and we will be in that trend only.
Okay. Thank you, sir.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.
So thank you everyone for your participation in our quarter one FY 2023 earnings call. In case of further queries, please feel free to get in touch with us. We look forward to interacting with you next quarter. Thanks.
Thank you. Ladies and gentlemen, on behalf of H.G. Infra Engineering Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.