Note that this conference is being recorded. I now hand the conference over to Mr. Kishan Mundhra from DAM Capital Advisors. Thank you, and over to you, sir.
Hi, thanks, Henrik. Good morning, everyone, and thanks for joining in. A warm welcome to the Q3 FY 2026 earnings call of Kalpataru Projects International Limited. Today we have the management, which is represented by Mr. Manish Mohnot, who is the Managing Director and CEO; Mr. S.K. Tripathi, who is Deputy Managing Director; Mr. Sanjay Dalmia, Executive Director; Mr. Amit Uplenchwar, Director, Group Strategy; and Mr. Ram Patodia, President, Finance, and the CFO. Now, at this point, I'll hand over the floor to Mr. Mohnot for his initial remarks, post which, we'll open the floor up for question and answer. With that, thank you, and over to you, sir.
Thank you, Kishan. Good morning, everyone. Thank you for joining us today and for your continued interest in Kalpataru Projects International Limited. We trust you have had a chance to review our financial results and the presentation available on the stock exchanges and our website. To start, this has been an exceptionally strong year, operationally, financially and strategically. Before we dive into the specific performance metrics, I would like to provide a broader perspective on our progress achieved in the last three quarters. First, our revenue has consistently improved over the last three quarters, driven by robust execution and a healthy order backlog. At the consolidated level, we achieved 27% YOY growth for nine months 2026, while standalone growth reached 28%. Both at standalone and consolidated level, we are already ahead of our full-year guidance of 25% of revenue growth.
Second, we maintained a steady trend of securing new projects with better margins. The same is reflected from improvement in consolidated and standalone PBT margin of 110 basis points and 80 basis points, respectively, for nine months FY 2026. This performance exceeds our guidance of consolidated PBT margin improvement of 100 basis points and standalone PBT margin increase of 50 basis points for FY 2026. Third, our achievement on the net working capital front reflects our relentless focus on timely project delivery and disciplined bidding approach, with an aim to improve returns on the invested capital. With net working capital at 79 days at consolidated level and 97 days at standalone level, we are performing significantly better than our year-end target of 100 days. Fourth, we have significantly elevated our corporate positioning this year by securing several large-scale strategic orders in our T&D and B&F business.
With INR 19,456 crore in YTD order inflows and an additional INR 7,000+ crore in favorable position, we are well-positioned to meet our annual inflow target of INR 26,000+ crore. Fifth, and the most important, our balance sheet is at its strongest point in recent history. We have reported a notable decline in net debt due to improved operational performance. Furthermore, we have completed the divestment of the Vindhyachal Road asset in January 2026, and we are on track to fully monetize the Indore real estate project by March 2026. These steps align with our commitment to redeploy capital into our core EPC businesses to enhance our return ratios. Let me now go into more details on the financial performance.
At consolidated level, we delivered Q3 FY 2026 revenue of INR 6,665 crore, a 16% YOY increase. For nine months FY 2026, revenue rose 27% YOY to INR 19,365 crore. Similarly, standalone revenue grew by 20% in Q3 26 and 28% for the nine-month period. The growth in revenue is broad-based, with most of the business verticals delivering a healthy double-digit growth, led by strong execution and healthy order backlog. Our consolidated EBITDA rose 23% YOY for the first nine months of FY 2026. At the standalone level, EBITDA grew by 20% YOY in Q3 and 28% YOY for nine months period. For nine-month FY 2026, our consolidated and standalone EBITDA margins remain healthy at 8.3% and 8.4% respectively.
We continue to deliver a solid earnings performance, characterized by a healthy improvement in PBT margins. Our consolidated PBT before exceptional items grew by a robust 37% in Q3 and 69% for nine months FY 2026. Similarly, for the standalone business, PBT before exceptional items rose by 44% in Q3 and 52% for the nine-month period. For nine months FY 2026, our consolidated PBT margins expanded by 110 basis points to 4.6%, while the standalone PBT margin increased by 80 basis points to 5.3%. More importantly, we have continued to strengthen our balance sheet through notable improvements in working capital management and leverage. Our net debt at both consolidated and standalone levels declined significantly, dropping by 29% and 16% respectively compared to the previous quarter.
As of 31st December, our consolidated net debt stands at INR 2,240 crores, while standalone net debt is at INR 1,849 crores. These debt numbers would further improve in Q4, given the inflows of Vindhyachal and normally a healthy inflows in Q4. Our net working capital days have shown further improvement in both on a year-on-year and quarter-on-quarter basis. For the period ending December, NWC days for both consolidated and standalone basis improved by 15 days. As a recent and significant update, we successfully completed the divestment of our 100% equity stake in the Vindhyachal Road asset in January 2026.
This transaction was based on an enterprise value of approximately INR 799 crores post-closing adjustments, and has resulted in a net cash inflow exceeding INR 600 crores for KPIL. Looking ahead, we are on track to complete the full monetization of inventory in our Indore real estate project before the end of March 2026. These strategic divestments will help us to further reduce leverage and strengthen our financial position as we approach the end of the fiscal year. Turning now to our order book position. Our consolidated order book remains exceptionally strong, standing at INR 63,287 crores as of December 31, 2025. This provides us with significant revenue visibility for the quarters ahead. We have maintained robust business momentum in FY 2026, securing INR 19,456 crores in new orders year to date.
Furthermore, we have favorably placed traditional orders exceeding INR 7,000 crore, predominantly in our T&D business. We continue to gather substantial T&D orders, both domestically and internationally, alongside several significant wins in our B&F business. These orders will further solidify our leadership in the global EPC landscape. Now, coming to the performance of individual businesses. First, starting with T&D business. Business visibility in the T&D business continues to improve and remains strong on the back of global push for renewables and development of grid infrastructure, both domestic and internationally. We have solidified our position as a global leader in the T&D business with key wins in the strategic markets and reputed clients. We've received orders of INR 7,826 crore in the T&D business till date in 2026, and further are relevant or favorably placed in projects over INR 5,800 crore.
Our T&D business order backlog stands at over INR 25,752 crore as on 31 December 2025, reflecting a growth of 12% YOY. T&D revenues saw a strong YOY growth of 37% for nine months 2026, to reach INR 8,992 crore, on the back of improved execution and healthy order backlog in India, Sweden, and other international markets. Talking specifically on the Indian T&D market, we expect the growth momentum to remain strong, led by major impetus on renewable energy integration and rising electricity demand. This is amply supported by PGCIL CapEx numbers and annual pipeline projection of INR 90,000 crore per annum for the next four years.
With a strong order book and robust tender pipeline in the focus markets over the next three to four years, we remain confident to deliver strong growth in the T&D business going forward. Our B&F business has reported one of the best performances, with order inflow crossing the INR 10,000 crore mark in nine months. We have secured orders worth INR 10,911 crore till date in FY 2026, and further have an element of INR 1,100 crore. Our B&F order book has grown by 40% YOY to INR 18,596 crore. During the year, we have added prestigious projects in terms of data center, large-size residential projects, hospitals, and industrial works. Our strong execution capabilities and ability to deliver large-scale projects has helped us to improve our competitive position across marquee developers in India.
Our B&F business maintains its growth momentum, recording revenue growth of 17% YOY for nine months FY 2026. Our oil and gas business delivered strong YOY growth of 58% for nine months FY 2026, led by robust execution in Saudi project. Our water business saw a decline in revenue in Q3 and nine months FY 2026. Collections in the water business have started to improve, especially from UPJJM project, starting January 20, 2026. To date in the current year, we have received collections of over INR 1,250 crore, and in the month of January, we have received collections in the range of INR 250 crore. We remain confident on improving collections from water projects in Q4 itself. In our railway business, revenue improved by 31% in Q3 and 15% for nine months 26.
Our order book in the railway business is INR 2,713 crore, and further, we are relevant in the metro rail electrification project. The outlook for railways business remains positive, with considerable opportunity in the area, like high-speed rail, RRTS, safety, and signaling works. Our urban business delivered strong performance this quarter, with 79% YOY growth, driven by progress on metro rail projects. We have strengthened our position in the metro rail segment with major, major order win on the Thane metro rail project. Before I conclude, I would like to reiterate my opening comments that we continue to deliver consistently strong results, underpinned by three key pillars. First, strong growth in revenue and earnings. Our operational performance has consistently outpaced our guidance, reflecting robust execution across most of the business verticals. Second, a robust order book.
With significant new wins, mainly in T&D and B&F businesses, we have built a high-quality order backlog that ensures long-term revenue visibility with improved margins going forward. Third, a strengthened balance sheet. We are successfully reducing debt and maintaining an efficient net working capital, ensuring we remain financially agile without compromising on CapEx. We have incurred more than INR 500 crore of CapEx in the first nine months of the current year. More importantly, we are well-positioned to deliver on the strategic priorities and guidance set for FY 2026. We expect revenue growth for the full-year to be approx 25%, accompanied by improvement in earnings of minimum 50 basis points at standalone and 100 basis points in consol. Furthermore, we remain confident in reaching our target consol EPS exceeding INR 50 per share for the current year.
We are well-placed to achieve targeted net working capital and order inflows guided for the year. Lastly, we expect growth momentum to remain buoyant, supported by clear visibility in T&D, B&F, and civil businesses. We strategically align with evolving market needs and occupy a strong position in the global EPC landscape, backed by an integrated expertise, robust execution capabilities, global reach, and a resilient financial profile. On back of this, we expect growth momentum to continue along with margin improvement in financial year 2027. With that, I conclude my opening remarks, and moderator may now open the floor for Q&A. Thank you!
...Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Amit Anwani from PL Capital. Please go ahead.
Hi, sir. Thank you, and, congratulations for good set of numbers.
Good morning, Amit.
Yeah. So first question, sir, on, there's a kind of decent decline in the consolidated versus standalone, and you did explain that two legacy projects are getting executed in Fasttel. So just want more explanation what led to kind of 10%-12% decline on consolidated, and where are we today with respect to the legacy executions in this, yeah.
No. So, Amit, as we've explained in the presentation also, on the consolidated level, at a PBT level, obviously we have done reasonably well. When you look at the EBITDA level, there were three specific areas. One, water EBITDA is much lower than what it was in the previous year, driven by results, all driven by reasons all of us know that, and I'm hoping this will improve in Q4, because in January itself, we have collected INR 220 crores, as I said earlier. And, looks like, majority of the states now have the budgets to start paying us. We're keeping fingers crossed. Second, you know, in the previous year, we had our road assets with us, all of, all the, three of them, now it's only two. So there's some decline in consolidated EBITDA coming from there also in Q3.
And third, you know, we continue to suffer on Brazilian operations, as we are just closing some of our old projects, while we have claims and all of that with client, but normally we don't take that in books till the claims materialize. So I think Brazil has been a dampener in some form. The good part is, the Brazil order book has nearly completed the historical order book. We have less than INR 100 crore of orders left to be delivered. And we are reviewing what we need to do in terms of Brazilian operations going forward. So it was a combination of three things at EBITDA level, while EBITDA has grown not exactly in the same form of revenue on a quarterly basis.
But if I look at it on a nine-month basis, while our revenue has grown, you know, at 27%, EBITDA has also grown by 23% and PBT at 69%. So, this was a few challenges in EBITDA, and I think it's, maybe one more quarter, or if not, maybe, you know, this was the last quarter where because road assets could continue, so, you know, in terms of comparison from previous year, water should improve in Q4, and Brazil losses should start coming down at least at a consolidated level, given that we have a lower order book there.
Sure. Sir, in terms of pipeline, since I think the budget is also over, and so just wanted to understand, this year definitely would be strong. With 12-15 perspective, what is the pipeline for domestic T&D, international T&D? Any changes you have seen post-budget where you feel that the pipeline can improve or can be reasonably okay, and especially metro, if you would like to highlight there, in terms of pipeline additionally, yeah.
No, so post-budget, I think, on an infrastructure overall, given the kind of thrust by the government and given the thrust of all the PSUs, I think pipeline has only improved significantly. We're still looking at finer details, but whatever numbers have come out, whether it was PGCIL yesterday, increasing their CapEx guidance significantly, whether it was in metro projects, we're seeing a lot of tenders now coming in. Whether it is even on B&F, where you're seeing industrial projects coming in, whether you're seeing data centers coming in, whether you're seeing airports coming in, and residential and commercial continue to come in. We are also seeing some good traction on the international front on oil and gas.
So if you ask me from a pipeline perspective, all businesses, T&D, B&F, oil and gas, urban infra, as well as Sweden, they only look more promising than what it was prior to budget. We are looking at the finer details now, and hopefully, you know, in the next few months, we'll get a lot more clarity. The good part is, today, you know, we have a visibility of orders in excess of 2.5 years. So, and even if we grow at a reasonably good number, we have good visibility for the next two to three years. So with improved pipeline and strong visibility, I think, you know, performance should improve only going forward.
All right. So, sir, fair to assume that even next year, the growth can be 20%+?
I would come back with exact numbers in the April call, but yes, it would be definitely a very good growth with improved margins. Just to commitment, you can take, but exact numbers, give me some more time to come back.
Sure, sir. Thank you so much, sir. Thank you. All the best.
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, congratulations on a great quarter. So my first question, if I see your order book, so now T&D is about 41% and 29% is B&F, and I understand these will have excess of double-digit margins. So if I have to look at profitability from here on in the coming quarters, every quarter from here on, so what are the pain points currently you are facing in terms of legacy order book? How do you think the margin trajectory will move quarterly from here on into the next years? Whether it will improve on a sustainable basis, given 70% of these order backlogs is from double-digit plus kind of margins?
So Parikshit, first to answer the pain points. You know, the pain points clearly are where we exist today. One, still continues to be water, where our outstanding is in four-digit crores, a very high number of crores. While collections have improved and we're keeping our fingers crossed, that still, as of today, is a pain point, and we are hoping that that would improve significantly in February, March. Second, from a pain point perspective, today, it's just the volatility in whatever has happening in exchange or whatever else, while we're 90%+ hedged. But that second pain point, because, you know, tendering in all our businesses, that continues to be, it's calls which needs to be taken.
But while we say so, I completely agree with you, that at least three of our business units, transmission, B&F, and oil and gas, are at a double-digit EBITDA level, and going forward also, they'll continue at that levels. So assuming that the water business cash flow improves, definitely margins should improve, going forward, including in Q4 itself. We would just like to wait for guidance, you know, post March, once we have this clarity on water. But the current order... On the legacy orders, I don't think I have anything left now. Maybe on INR 63,000 crore, maybe INR 1,000- odd crores. Otherwise, legacy, legacy orders with lower order margins are all gone.
Yet, on some of our business segments, like urban infra, we have not taken orders at similar double-digit margins, because those are businesses we have grown in the last three years. But even with that, overall, you'll see margins improving, reasonably well going forward.
So, on these water orders, I think INR 8,000 crore of backlog, so what kind of margins will be there? I mean, is it more of an overhead issue, because you are only progressing to the extent you are receiving cash flows? Or, is it that these now have much lower margins, given that projects have been significantly delayed? So, how does one evaluate or look at this profitability in this segment, supposing the payments are coming on time?
So Parikshit, out of the INR 8,000 crore of orders, you'll have to divide this into two. Around INR 5,500 crore are orders which have to be delivered, and there's around INR 2,500 crore, which is O&M for the next five, say, five, six, seven years across the various projects, okay? So on the balance, INR 5,500 crore orders to be delivered, at a, if I look at it at a gross margin levels, I don't think there's a big dent. The dent is only coming because of interest costs. You know, interest costs typically with all those delays, get hit at a project level. So at a gross margin level, the dent is minimal. You know, if I was at whatever X level, it is maybe 100 basis points dent, not more than that.
But the bigger dent comes out of interest cost. So, that's where we're waiting and watching. Second, I think it's the speed of execution, right? Today, we are, while we are delivering on water projects, we're not delivering at the speed ideally which we would like to, given the constraints on cash flow. The moment cash flows come, you can work on everything. You can increase the speed and deliver this quickly. You can also build a healthy order book also, because tenders would also start coming. And you could rationalize these cash flows to do better things on other business units also. So it's a combination of all of this, all dependent on water. But dent in terms of EBITDA could be 100-200 basis points, not more than that, as far as water business is concerned.
Mm-hmm. Just on the monetizations, you have received, I think, INR 600 crore from VEPL. So now, directionally, how one should look at that, and what are the other low-hanging fruits? I think you have some arbitration in progress, and, well, you've termination, gone for termination. So over the next two, three years, how do you think further cash flows can come in? And also from Indore real estate monetization point of view, what is now pending from there?
So, on monetization, to first answer your question, whatever cash flow receiving are just going into working capital and debt improvement and some CapEx. So that's clearly our indication going forward. As far as Indore is concerned, as of 31st December, we had a outstanding of approximately INR 75 crores. In January, we have already collected INR 35-odd crores, and we believe the entire amount should come in, maybe INR a few crores here and there, should come in before March. We're pretty confident that all collections would be done by March. So we would be done as far as Indore is concerned, and that would also go in debt reduction only. As far as monetization of the other assets are concerned, I think now we have all transmission assets are monetized. We just have one road asset left.
We have Shubham, which we have declared as non-core, where also we are selling specific warehouses to reduce debt. And you can see that debt reduction coming at a consolidated level also. So I believe there also, debt reduction should happen by selling specific assets at a Shubham level. Besides this, as we had indicated earlier also, that we have appointed bankers to advise us on fundraising at Sweden, which is also progressing well. We do not know which options and what timing it exactly is, but we have appointed bankers to look at exploring fundraising options at Sweden also, which I'm expecting in 2026, 2027, should give us further cash flows.
From arbitration, right, whether you've gone for termination, so what kind of realization do you think you can get over the next two, three years?
So Parikshit, it's a very difficult question to answer. I can say that on arbitration, we have a lot of awards, and the total amount of those awards might be in four-digit crores INR. But whether it would happen, whether we would get that money in year one, year two, year three, difficult to assess that. We have not taken any of these awards in books. As and when this comes through, you know, we would take that in the quarterly numbers, but difficult to assess from a three-to-five-year perspective.
Okay. Thanks, sir. I have no more questions. I'll join later for more. Thank you.
Thank you.
Thank you. The next question comes from the line of Ashish Shah from HDFC Mutual Fund. Please go ahead.
...Yeah, good morning. Thank you. Sir, my question is on the commodity cost inflation. So, you know, with aluminum, copper, et cetera, going high, you know, can you just explain or walk us through how we are protecting ourselves from any potential pressures? And where does the risk, if it all exists still, on this particular issue?
Sure. Ashish, on the commodity front, you know, we have exposure primarily on aluminum, zinc, copper, and steel. As of today, as per our risk management policy on aluminum, zinc, and copper, we are 80%-90% hedged, if not 95%+ hedged in some of them. I can confidently tell you that whatever levels we are hedged are lower than our tender cost on 99% of our tenders. And so to that extent, our profit margins, whatever we have bid at tender level, is reasonably protected. At a steel level, we obviously cannot hedge steel because there isn't a market available for that. We're carrying an inventory which is in excess of 50,000 tons when I look at raw materials, finished goods, and WIP.
And we have continuously loaded the, you know, the steel increase expected cost into our tenders. So to the extent on steel, you know, our total order book is approximately 300,000 tons, as of now. We have a visibility of already 50,000, and some would be on in terms of we would have ordered for Q4 also. So there could be some exposure to steel, but at a tender level, we have adequately provided contingency for that. So my view is, you know, even on steel increase from here of INR 5,000-INR 7,000 further, it shouldn't dent our margins to any extent on a totality basis.
Sure. And sir, particularly coming to transmission projects in India from PGCIL, et cetera. Now, are these sort of fixed price EPC contracts for you, or there is a provision for commodity cost pass-through in some of these projects?
I think majority of our transmission projects are fixed price projects, and we have to load the expected increase in cost at a tender level itself.
Right. And then you do go and hedge for the commodity again, except for-
Yes, except steel. Except steel, as I said, we are 90%-95% hedged on all our commodities. Including some of our L1 positions, we are hedged, which we are reasonably sure we should be getting them sooner than later.
Right. Sir, also, the other issue is on the water side, where you did mention that you're expecting things to improve. So this is your expectation, primarily from the central budget starting to flow, or you expect state to really come and chip in more and hence your cash flow will improve in water?
Ashish, it's a combination of both. Before the budget came in, the state level, we had already collected closer to INR 220 crore in the month of January. The budget just came in a few days ago. Even in the budget, I think the allocation to water at INR 67,000 crore is a huge number, and they also indicated that out of the... Currently at INR 67,000 crore, hardly 25%-30% has been spent. So with that, with that message of saying that they would be spending more at a central level and with states coming in with their own cash flow, and we're seeing that improvement at the ground also. So except Jharkhand, across, you know, UP, MP, Orissa, Punjab, we are seeing improvements across.
So today, if you ask me, you know, except Jharkhand, everywhere I'm reasonably sure that Q4 you should see good inflow coming in. But I would still like to keep my fingers crossed, because, you know, we get this hope several times in the last six, seven quarters. But I'll just keep myself positive right now and hope that it goes the way we have planned.
Right. And sir, last one. LMG could be on what sort of a margin range right now?
So LMG, if you look at the margin range, is more at a level of 5.5%-6%, both EBITDA and PBT. Because their EBITDA is nearly equal to PBT, they hardly have interest costs. I think it was 5.9%, if I'm not mistaken, but more in the 6.9% for 7.8% EBITDA for nine months and PBT at 6.9%. But I, I expect it should be at an annualized basis, more in the range of 6%-7% only.
At the PBT level?
At the PBT level.
Okay, sir. Thank you. Thank you very much.
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Vaibhav Shah from JM Financial. Please go ahead.
Yeah. So firstly, what CapEx are we targeting for the entire year, this year and for FY 2027?
So for the current year, I think we had already taken approval of CapEx outflow of closer to INR 700+ crores. We have already incurred CapEx outflow of INR 500+ crores. So if you ask me for the current year, CapEx outflow should be in the range of INR 700 crores-INR 758 crores in terms of outflow. I believe that we should be at a similar range going forward also, because we are seeing good traction across all our businesses. And given the healthy cash flows which we have and some more cash flows which have come in January, I think we believe that you know that's the best place to invest from a long-term perspective.
So I think, on a cash outflow basis, next year should be also similar numbers, but we'll come back to you in April with exact trend on that or exact numbers which we are projecting for the next year.
Okay. Secondly, when you mentioned revenue growth guidance of 25% for FY 2026, it is for standalone as well?
Yes, at the standalone level also, we believe that we should be in the range of 25% for the current year.
Okay. So secondly, what is our plan at Fasttel now going ahead in the next couple of years? Given the almost negligible order backlog right now, so are we looking to slow it down or close the business, or we'll be doing at a nominal level?
So Vaibhav, we are reviewing the business in detail in Q4, including some detailed presentations at the senior-most level, and we're meeting clients and all of that. We clearly are not very optimistic about the business where we stand today, and in the last few years we've seen several challenges coming on that business. So as far as optimism is concerned, looks slow. As far as way forward, I think we'll have a lot more clarity in the next two months, and clearly the business is on a downturn and not an upturn in any form.
So, currently, what would be the EBITDA loss right now at the Fasttel level in nine months?
In the nine months, I think at a Fasttel level, we have already provided at a consolidated level, a number closer to INR 230-odd crores. INR 238-odd crores. And if you look at it, in the last two years, we've provided closer to INR 325+ crores at a consolidated level. So at a consolidated level, we've provided for majority of the losses, which is equivalent to the amount we've already invested in Fasttel.
EBITDA was negative INR 230 crores in first nine months?
Yeah, in the current year.
Okay. Okay, okay.
INR 237 crores.
And lastly, you have received-
Sorry, I just correct myself.
Okay.
At the EBITDA level in Fasttel, it's INR 186 crores, at a PBT level, it's INR 237 crores. I correct myself, for nine months.
EBITDA is INR 186 crore?
Yes, yes.
Okay, okay. And sir, lastly, in terms of the receive, so the money we have received, so we have received INR 600 crore already in the Q4, right?
Yes, we've already... The money is in the bank.
Yeah, so how is the-
Plus, there's a debt, plus there's a debt reduction at a consolidated level, because there was around INR 190 crores of debt, which has been taken over by the acquiring entity.
Okay.
So at a consolidated level, the impact of the cash inflow plus debt is closer to INR 800 crores.
Got it. Sir, so how do you see the debt, the debt number, which we have right now, gross debt of around INR 0-INR 100 crores as of September-December? So how do you see it, moving ahead by, at around March?
So at a net debt level, I believe March should be lower than December. On account of everything, normally Q4, your cash inflows are normally very healthy in our business. Also, the VEPL and also what is coming from Indore. So the net debt level, we would be much lower, and also the net working capital, we would like to be lower than where we are. Difficult to give you exact projections, but I can tell you it will be much lower than Q4. Than Q3, whatever we reported net debt at Q3, it is much lower than that, both at standalone and consolidated.
Our total investment, as I said, would be somewhere around INR 420-odd crores?
Total investments in?
In VEPL, loans and equity put together.
I think it was around INR 340- odd crores.
INR 400 crores .
Sorry. Yes, sir.
INR 400 crores .
Sorry, my team just said it's around INR 417 crore. You're right, Vaibhav.
Okay, okay. So the gain should be booked in Q4?
Yes, for sure.
Yeah, yeah. Okay, cool. Thank you, sir. Those are my questions.
Thank you. The next question comes from the line of Sumit Kishore from Axis Capital. Please go ahead.
Thanks for the opportunity and very strong performance on factors that are within your control. The first question is, your working capital days are again, you know, well below your guidance. Ex of water, what would be your working capital days at the consolidated level?
Sumit, ex water, the working capital days could come down by six to seven days at a current standalone and consolidated level. Assuming that the cash inflows were normal, it could be in the range of six to seven days, because we have not done so much revenue also for the current year. If it was a normal situation, the numbers could have been, and if the revenue would have been on target, numbers could have been lower by eight to 10 days also. But as of now, six to seven days is what the impact is.
Understood. And following up from an earlier question of, you know, from Ashish, what is the hedging costs that you have incurred for, you know, commodity and/or exchange, in Q3 FY 2026 and nine months FY 2026, in case you have the number ready?
I do not have the hedging cost number, but I'll be happy to explain you that as far as FX is concerned, we are a net exporter, so there is never a hedging cost. We always get a premium.
Okay.
As far as commodities are concerned, whatever is the cost, it's loaded at a project level. So at a project level, when we bid, we take the, let's say, the three-month forward, plus assuming that it is required nine months, we add that forward cost also at a project level itself.
Mm-hmm.
So typically, our forward cost, you know, which is, let's say, a 12-month, 18-month, 24-month forward cost, is what is bid at a project and what is charged also at a project level. As I said earlier, today, where we stand on 99% of our projects, whatever is hedged at actual cost forward, including the forward premium, it's lower than what we have bid at a project level. It's significantly lower, and that's where, you know, you'll see margins improving going forward.
Okay. But this cost of hedging would be sitting as part of your other expenses?
Not necessarily. The cost of hedging is sitting as a part of the project cost, as in when delivery happens, it comes into P&L. It sits in the project cost as a CTC cost, right?
Mm-hmm.
Of saying that this is the cost to be incurred going forward. As and when delivery happens, the revenue and cost both comes into P&L, not in other costs. It would come in the direct cost itself.
... Right. So it would be as part of the landed raw material costs for you in your RM expenses for your commodity, Ajay, after the-
Perfect.
Whatever.
Perfect.
Yeah.
Perfect.
Understood.
You got it right.
Understood. Understood. So, yeah, that, that is very clear. And just, you know, for bookkeeping, what was your Fasttel EBITDA loss in Q3, if you can tell us? It will help us adjust numbers better.
In Q3, Fasttel EBITDA loss is around INR 63 crore in Q3 itself.
INR 63 crores.
Yeah, and total for nine months, around INR 186 crores. This is one area where we believe, against whatever we had projected for the year, this is one area where we have not been able to achieve on whatever projections we did. So that's something which is a setback for us.
But with INR 100-
But in totality, at whatever we have guided at a PBT level, we have exceeded our guidance on all accounts.
Okay, phenomenal. So, with the INR 100-odd crore of Fasttel backlog remaining, even if you have to quantify remaining pain, it should be less than INR 100 crores?
Yeah, yeah, much lesser than that, at a console level.
At a console. Thank you, and wish you all the best.
Thank you.
Thank you. The next question comes from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Yeah, good morning, sir, and thank you-
Good morning.
for the opportunity. My question is on the T&D opportunity in India, especially, right? The I think last quarter was pretty weak, right? Can you just talk about the T&D opportunity pipeline or tender opportunity, which you see in the, especially in the, for the next six to eight, six to 12 months?
So, Mohit, as I said earlier on the call, we're seeing a lot of tenders coming on T&D. And we had presented that earlier also. As of now, out of our INR 7,000 crore, around INR 5,800 crore, we are L1 in T&D itself, both domestic and international. Also, if you look at the guidance of Power Grid in terms of what CapEx they planned, you know, they've increased their guidance significantly, and it's visible now. So whether it is tenders coming up on HVDC, whether it is in Rajasthan and Gujarat to support renewable, whether it is Southern India, whether it is Northeast, or whether it is Jammu and Kashmir. So, overall, we continue, we believe that next two to three years, these opportunities will only increase, multi-fold level, both domestic and international.
And we're well-positioned in terms of that, because we are among the top two, three globally in all markets except China and the T&D space. So it always, it's a good position to be in, and that would be the one of our biggest drivers of growth from a three-year perspective.
What was the international T&D inflow in the last nine months compared to FY 2025?
So if you look at the T&D international, in the last nine months, we have received orders of around INR 3,600 crores, and we are L1 in orders of around INR 4,500 crores. There's some order we declared yesterday. So I believe by the end of the year, TLI should get orders closer to INR 8,000 crores, and this includes, this excludes the Sweden orders. If I include Sweden also, TLI should be reaching a number around INR 9,500 crores-INR 10,000 crores of order inflow in the current year.
How is this number in the base year?
If you look at the previous year, TLI and plus, means international all put together was around INR 5,500 crore, which includes TLI, LMG and Fasttel for nine months in the previous year.
Understood, sir. Thank you, and all the best. Thank you.
Thank you. The next question comes from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Okay, thanks for the follow-up. So now, so in this year, how much loss funding you have provided? And from Q4, so how are you looking at the loss funding for the road projects?
I don't think we have provided significant amount of cash funding to any of the road projects. As far as loss funding is concerned, the first six months we had approximately INR 40- odd crores, but that was more a P&L. I don't think funding we did significantly. Nine months, if you look at it?
Loan.
We did some INR 40 crore for loan repayment. It was not for loss funding. I think going forward, we just have one asset, so there's no more loss funding required, and that asset is positive in every form, both at a P&L level as well as on a cash flow level. So going forward, I expect zero loss funding to be done on road assets.
Okay. So, on the pipeline, if you can quantify segment-wise the prospects pipeline, both domestic and international, and also want to give a view on pipeline opportunities, because after the last big order, I've not seen anything major coming up. So, if you can give us some sense in terms of quantifying the pipelines, both international and domestic, segment-wise, that will be helpful.
So as I said earlier, Parikshit, on the oil and gas front, our major focus continues to be on the international market. We had taken a large order at Saudi Aramco last year, and then we're focused more on execution of that project. I'm happy to say that as of now, we are closer to 50% of the project, you know, what needs to be delivered, closer to that, where we stand today, and this, I expect the balance project to be done in the next 15-18 months. We are on track as far as execution of Saudi project is concerned. As far as pipeline is concerned, we're seeing a lot of tenders coming from Saudi, Abu Dhabi, as well as Qatar. We are now qualified for maximum projects, and there's no size restrictions.
And now that we have already delivered significant portion of the project, we would continue to bid for a lot of these projects. We ourselves were cautious in bidding in the last 12-odd months, because, you know, this size was itself very big. And you know, our typical approach is being cautious when it comes to taking large size projects. Given that, I don't have the exact quantification, but I know while we speak, we have bid for at least four or five large projects in Saudi and India, which in the next three to six months, we should hear from them. Clearly, as I said earlier, going forward, from a 2026, 2027 perspective, one of the largest drivers of order book will be oil and gas in the international front.
What about if you can quantify domestic and international T&D opportunity in the next 12 months?
So if you look at it, in the current year, you know, when I look at T&D, out of our INR 26,000 crore expected order book, T&D itself would be around INR 15,000 crore. Going forward, next couple of years, I expect this inflows to increase by at least 15%-20% on an annualized basis, if not more than that. If I have to give you a number perspective, you know, it could be trillions of dollars differently at different places. But clearly, the focus today for us is India, number one focus, CIS countries, number two focus, Sweden, number three focus, and neighboring countries, and LatAm, which is a big area for us, not necessarily Brazil, but LatAm, Chile, Guyana, all of that, is our number four focus.
We're seeing opportunities everywhere. I don't have the exact quantification of what kind of orders, but I can say it's trillions of dollars of tenders expected over the next 24-odd months. Clearly, that business growing at 20%-25% on order book would be a bare minimum for us, and with improved margins, which is very, very important for us, Parikshit.
Given the robust pipeline and ordering expected, so how are you looking at CapEx and T&D segment and looking, I mean, both from tower expansion? So how are you looking at it?
So on the T&D front, typically the CapEx is much lower than when I compare at a B&F level, right? So typically, on a B&F front, you know, our CapEx is more in the range of... CapEx is more in the range of 5%-6% of our revenue, if you need to do the entire CapEx. On the T&D front, our CapEx would primarily, and which is continuing, would come in plant expansion of capacity. Our plant has already reached closer to 275,000, both plant put together in terms of capacity on transmission itself. Besides that, we do staging, shuttering, girders, all of that separately, and railway projects. So some CapEx would go on plant expansion, some CapEx would go in terms of TSE equipments and, and, you know, cranes and all of that for the transmission side.
But it's not going to be as significant as we're looking at B&F side. So if you ask me, a number of INR 100 crores-INR 150 crores or max INR 150 crores should be enough as far as CapEx on transmission is concerned for the next year.
What kind of bookings, I mean, is your this capacity of 2.7 lakh tons completely booked? So what kind of like, just to get under current on the order, so the orders which you have currently, so is the capacity fully booked for the year, or like, how one should look at it?
As we stand today, we are at 90%+ capacity booked for the next year, and if I include the L1 orders, we are nearly fully booked. The good part is capacity expansion in this business is very important, you know, it's very simple. We have huge galvanizing capacity, so it's only about adding CNC machines, which takes three odd months, and you can easily increase your capacity to a higher level. But as of now, looks like 275,000-300,000 tons should be enough for us from a next two-year perspective.
Okay. Sure. Thank you, sir.
Thank you. The next question comes from the line of Sucrit Patil from Eyesight Fintrade. Please go ahead.
Good morning, all the team. I have two forward-looking questions. As Kalpataru operates across multiple infrastructure segments and geographies, where project selection and execution discipline matter as much as order inflows? From a strategic point of view, what factors now play the biggest role in deciding which projects to aggressively pursue versus where to remain selective, especially as competition and execution risk are involved? That's my first question. I'll ask my second question after this. Thank you.
This is very, I think, a very valid question. I think we are very clear that we all our six businesses are cyclical in nature. And if you look at the last five, six years itself, you know, you saw first two years, T&D, domestic, there were hardly any orders, there were orders in water and railways. Last two years, you've seen T&D and TLI and B&F running at a different speed. So starting point is assessment of what the market is and what competitive strength we have, and what is our strength in terms of delivery is our starting point. The second point is which markets to focus. So it's domestic, international, which clients to focus, private, public, out of which, which clients.
Third important aspect is availability of labor, because there are some projects which are very high, where labor requirement is very high. Versus some projects, for example, urban infra for the same volume, labor requirement is much lower than B&F. Then the fourth aspect comes as CapEx. You know, what are the CapEx requirements? So it's a mix of five or six things based on which we decide resource allocation strategy, based on which we decide our bidding strategy, based on which we decide our margin strategy, which we need to bid at, and based on which we decide what, is that our balance sheet can afford. If you ask me personally, that's been our biggest trend for the last few decades, not even for the last few years.
That's why you'll see that even with growth, which we have happened over the last 10 years of, around 2%-15%, per annum, our net debt number nearly stays the same, right? Even after we have done CapEx every year. Last three years, we've done CapEx of closer to INR 2,000 crore. So it's a mix of six to seven factors which go in, and it's a larger team which gets involved. You know, so, it's not about one person, but it's a team which five to six-man team, including guidance from the risk management committee on what we need to do. I don't... It's not an Excel spreadsheet based, or it's not something which is a yes or no, but a combination of various factors based on which this gets decided.
As far as execution methodology is concerned, which is the point you asked, I think our strategy has been very simple. We first build teams, and then we take work. That's been our strategy always. Whether I look at, you know, urban infra, whether I look at Saudi Aramco, whether I look at the solar business, which we are looking at the international front, where we already have one large L1. You know, our strategy first is to build a team, a reasonably good team, before we bid for an order, and then continue building that business. And that's been very effective for us all across.
It's Mr. Ram. Again, along the similar lines, from a financial point of view, as the order book mix changes across different segments and regions, what internal metrics help you assess whether the execution quality is improving or not, particularly in terms of cash flow, working capital discipline, and returns on deployed capital? Just want to understand how you look at this beyond just the reported margin numbers.
But, I think maybe it might help for you to have a specific discussion on this, Ram, separately, but Ram is on the call. But I can just say that, as I said earlier, for us, one of the biggest drivers is balance sheet strengthening. Last five years, our ROCE has improved by more than 500 basis points, through various aspects, improvement of profitability, through reduction in non-core investments, all of that. So at a project level, we have all three components, PBT level, tenders, ROCE, ROE, and CapEx. When we tender, all of them are available. And if you need to further deep dive, you could meet Ram separately in office. I can ask my office to schedule that meeting with you.
That would be wonderful. Thank you and best of luck.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Thank you everyone for joining us on this call. We expect results to improve going forward. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.