Ladies and gentlemen, good day and welcome to PNC Infratech Limited Q2 FY23 earnings conference call, hosted by Spark Capital Advisors (India) Private 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 and then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bharanidhar Vijayakumar from Spark Capital. Thank you, and over to you, sir.
Yes, thank you. Good afternoon, everybody. Thanks for logging in to the Q2 FY23 earnings call of PNC Infratech. Representing PNC Infratech are Mr. Yogesh Kumar Jain, Managing Director, Mr. B. Sawhney, Chief Financial Officer, Mr. D.K. Maheshwari, Vice President, Finance. Handing over the call to Mr. Yogesh Jain now for opening remarks. Over to you, sir.
Small request. Please read out the standard disclaimer clause before our managing director will start the speech. Hello?
The disclaimer clause from the forward-looking statements and.
Sure, sir.
The disclaimer clause, because we'll be making forward-looking statements in the speech.
Sure. Ladies and gentlemen, please note this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. With that, I hand over to the management for their opening remarks. Over to you, sir.
Good afternoon and season greetings to everyone. On behalf of PNC Infratech Limited, I extend a very warm welcome to everyone for joining us today on this call. I have with me Mr. T.R. Rao, Director Infra, Dr. Bhupinder Sawhney, CFO, Mr. D.K. Maheshwari, Vice President, Finance, and Strategic Growth Advisors and our Investor Relations Advisors. We have uploaded the financial year-end and investors presentation on the website of the stock exchange, as well as on our company website for reference. I will quickly highlight major development in the sector before sharing key happening in the company and financial performance during quarter 2 and H1 of financial year 2023 with you.
As per the Ministry of Road Transport and Highways, 3,559 kilometers of national highway built during the first quarter, first half of current financial year as compared to 3,824 kilometers built during the corresponding period previous year. Awarding of new projects stood at 4,092 kilometers during the same period, compared to 4,609 kilometers awarded during last year, reflecting 11% lesser awarding activity in H1 of financial year 2023. Government recently announced that MoRTH is planning to take over a greater number of state highways, having high traffic volume from respective state governments for 25 years period to develop and upgrade them into either four or six lane national highway.
Industry believes that this move would be highly beneficial to roads and highway sectors as a whole and would greatly help accelerating country's socio-economic growth, as many of the state governments are not able to undertake major capital projects due to paucity of funds. As per CRISIL, vehicle movement on highways witnessed a decent recovery during April up to August this financial year. This coupled with sizable hike in user fees rates owing to higher WPI resulted in significant revenue growth during the period. Now coming to the key update of the company. We achieved financial closure for three HAM projects, Kanpur-Lucknow Expressway Package 1 and 2 and Akkalkot-Karnataka project with an aggregate bid project cost of INR 4,501 crores. Historically, the company has maintained a healthy track record of achieving financial closures within stipulated time, which reflect healthy financial position of, and credibility.
Now I will share operational and financial performance of the company. At present company has a portfolio of 23 projects on PPP format comprising BOT Toll, BOT Equity, and HAM assets. Out of these 23 projects, we have 18 projects, 18 HAM projects with an aggregate bid project cost of INR 24,590 crore. Out of 18, company has achieved COD and PCOD for five projects, six are under construction, concession agreements executed for seven projects, and for three projects, company has achieved financial closure. Out of remaining five PPP mandates, three are BOT Toll and two are BOT Equity projects.
In terms of equity investment, the total requirement for all these 18 HAM projects is around INR 2,390 crores, out of which INR 1,109 crores infused till September 2022, and the balance will be infused over the next two, three years. The internal accruals generated over the next two, three years should be sufficient to fund the total equity investment. Now moving on to our order book. Our unexecuted order book on 30th September 2022 is over INR 19,000 crore that includes EPC value of all 7 HAM projects for which appointed dates are accepted during the current financial year. Out of the total order book of INR 19,000 crores, the roads and highway sector is around 65% and water and irrigation project is around 35%.
In water supply projects, the company booked a total revenue of INR 348 crore till 30 September 2022, which includes INR 108 crore revenue booked during the last financial year. Total revenue booked in first half of financial year 2023 is INR 240 crore. We expect up to INR 760 crore more revenue from water supply space during the second half of financial year 2023, which would get translated into INR 1,000 crore revenue during financial year 2023. As on 30 September 2022, total value of DPR approvals and contract agreements signed for physical execution of projects under phase one and second was INR 2,260 crore. It is expected that at the end of financial year 2023, the total value of approved DPRs for execution would be around INR 4,000 crore.
As such, it is expected that net executable work would be around INR 3,000 crore at the beginning of financial year 2024, and remaining DPRs are expected to be approved during financial year 2024. Now I would present the standalone and consolidated results for the quarter and half-year ended September 30, 2022. The standalone revenue of second quarter of financial year 2023 is INR 1,561 crore. EBITDA for the second quarter is INR 207 crore, and the EBITDA margin is 13.3%. Profit for the second quarter of financial year 2023 is INR 131 crore. Consolidated revenue of quarter two financial year 2023 is INR 1,795 crore.
The consolidated EBITDA for the second quarter of financial year 2023 is INR 3,326 crore, and the EBITDA margin is 18%. The consolidated PAT for quarter two financial year 2023 is INR 132 crore. The standalone revenue of H1 financial year 2023 is INR 3,319 crore, which is higher by 16% as compared to INR 2,866 crore of H1 2022. The EBITDA for H1 2023 is INR 455 crore, which is higher by 17% as compared to INR 397 crore in H1 2022. The EBITDA margin for quarter two financial year 2023 is 14%. The profit for H1 2023 is INR 298 crore as compared to INR 229 crore in H1 2022, a growth of 30% on year-over-year basis.
The consolidated revenue of H1 financial year 2023 is INR 3,848 crore as compared to INR 3,260 crore in H1 2022, with a growth of 18%. The consolidated EBITDA for H1 financial year 2023 is INR 845 crore, which grew by 16% as compared to INR 729 crore for the corresponding period last year. The EBITDA margin for H1 financial year 2023 is 22%. The consolidated PAT for H1 financial year 2023 is INR 373 crore as compared to INR 250 crore in H1 financial year 2022, a growth of 48%. As on thirtieth September 2022, our net working cycle is 79 days. Our net worth on standalone basis is INR 3,643 crore as on thirtieth September 2022. Whereas total standalone debt is INR 281 crore.
As of 30 September 2022, the total cash and bank balance as of 30 September 2022 is INR 523 crore. We have a net cash of INR 242 crore. This translates to net debt to equity 0.08 times. On consolidated basis, our net worth is INR 3,986 crore, whereas total debt is INR 5,526 crore as of 1 September 2022. The total cash and bank balance, including current investment, is INR 1,191 crore. This translates to net debt to equity of 1.09 times. With this, now the floor is open for questions and answers.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter 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. Any participant who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from DAM Capital. Please go ahead.
Good afternoon, sir, and congratulations on a good set of numbers. First question is, the order inflow has been very tepid for not only us, for the entire industry. I think we have given order inflow guidance of INR 90 billion-INR 100 billion. Do you think that is possible in the H2, given everything?
See, as you know, the awarding process, normally, historically, as you all know, awarding process by NHAI and MoRTH, during the first half of the financial year, has always been lower when compared to awarding activity in the second half of the financial year, any given financial year. Similarly, this year also, the first year, not many projects have been bid out, and many of them, even after bidding out, financial bids have not opened and awarding has not started. Whatever bidding target we had given for the financial year F3, which would be around INR 8,000-10,000 crores, we'll stick by that.
We expect to achieve the new business of this amount before the end of the financial year, specifically in the second half of the current financial year. As we have a 2:1 kind of a highway sector and roads, around 66% and 33% in the water sector projects. We also expect around INR 3,000 crore new projects in water sector and around INR 7,000 crore new project in the highway sector. We are pretty sure about getting this new business before end of the current financial year.
Sir, on the water segment, with the new orders entirely into JJM and entirely into Uttar Pradesh, is this the opportunity you are talking about?
That will be one of the focus areas, because the JJM new water projects under JJM. It could be focus areas being Uttar Pradesh, and it could be some other state around. Yeah, yeah, Rajasthan and other areas, states also. It is primarily from JJM.
Okay, understood. Speaking of water, where are we in the process of monetization of our portfolio? Have we moved ahead? Can you please throw some color on that?
Our MD, sir. Sure. See, we are giving the highest priority to the monetization, as we shared with you earlier. Though we have total more than 23 projects, as our MD mentioned, of fund-based projects, we selected eight projects for monetization. That includes HAM assets and one BOT toll and one BOT annuity project. We had already retained a strategic advisor for running the process. The process has already begun. Out of the eight selected fund-based projects, the due diligence has already been commenced by a potential investor for the three HAM projects, which is underway. These eight selected fund-based projects for monetization have a total debt of around INR 4,700 crores and a total equity of INR 940 crores.
We'll update you on the progress as we move ahead. Still, we are giving the highest priority for the monetization, as we said earlier.
Understood, sir. Thank you and best of luck, sir. Thank you.
Thank you. Our next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah. Thank you, sir. Sir, just to complete the last question. By end of this year, we should be able to monetize?
We are expecting at least execution of a definitive agreement for certain projects before end of the financial year.
Okay. In terms of the equity investment, so INR 1,100 crore we invested. What is left in this year and for 2024 and 2025?
Actually, we have already infused INR 1,109 crore in the HAM project, and the balance is required INR 1,280. This year, in second half, we are expecting INR 250 crore. In FY 2024, around INR 450 crore, and in FY 2025, INR 450 crore rupees.
Okay. Okay.
Okay?
Now in terms of the execution, revenue guidance. For last time you said INR 7,200-7,300 crore revenue for this year. That is a 15%. This first half we have already done kind of a INR 3,300 crore. If I take the same number, in the second half we expect the same 15%-16% growth. Is there any update or this is doable or we can do much higher?
Our guidance is clear. Actually, this year we are expecting the growth of 10%-15%.
Okay. We are lowering the numbers, so the overall revenue may be lesser than what previously we were thinking. Is there any specific reason or any projects where we are earlier whatever we have factored and now we are not that confident that we will not be able to get the execution?
This is due to extended rains in the monsoon month. Apart from that, also we are expecting 10%-15% growth.
Okay. In terms of the margin, 13.5%, is this doable?
Yes. Yes. Yes.
Okay. The seven HAM projects, by March end, we will be getting the appointed date for all the projects.
By the end of March, this current financial year, we expected to get appointed date for all the seven new HAM projects.
Okay. I need, sir, a couple of data points on the balance sheet side and the project-wise order book. Mobilization advance, retention money, if you can help me.
Retention money INR 150 crore, and mobilization advance is INR 419 crore.
419?
Yes, sir.
Okay. HAM receivable is? HAM debtors.
HAM debtors is INR 545 crore.
INR 545 crores. Okay. In terms of the project-wise order book, what is the ask for Bhojpur-Buxar and Koilwar-Bhojpur?
Koilwar-Bhojpur is only INR 7 crore and Bhojpur-Buxar is INR 23 crore. It is inaugurated by Mr. Gadkari also yesterday.
Okay. Chakeri-Allahabad?
Chakeri-Allahabad is INR 230 crore.
Okay. 230. Delhi-Vadodara Package 29 and 31.
Twenty-nine is two fifty-nine and thirty-one is two eighty-nine.
89. Irrigation project in AP, what would be the value?
It is 896 is the outstanding.
896. Last time I think you mentioned INR 850 odd crores. Is there any change in increase in scope, or last quarter also the same amount was there?
No, no. Actually, there is an increase in scope, and also the billed amount, INR 104 crore. We are considering the original scope only. So 1,000 crore minus 104 crore is 896. But certain works are done. That will be billed later. In the second half.
Oh, okay. Okay. In terms of the CapEx, last time we said INR 100 crore-INR 120-odd crore. We have done only INR 22 crore in one eighth. For the full year, how much now are we looking at?
That will be in the range of INR 100 crore-INR 120 crore in the entire FY 2023.
Okay. Now the fund-based, non-fund-based limit and the utilization?
Fund-based limit utilization INR 100 crore. We have taken the bill discounting of INR 100 crore. Non-fund-based limit is around INR 2,800 crore for bank guarantee and LCs.
Okay, that we have utilized. Our limit remains the same, INR 5,000 crore for non-fund.
Non-fund based limit is INR 5,000 crore and fund-based is INR 8,000 crore.
Okay. Just a clarification on the JJM projects. Sir mentioned that 348 crore revenue till date we have booked, which includes 108 crore in FY 2022, so 250 crore. I think last time we mentioned that we have done 400 crore revenue till date. If you can help me, that and how much more revenue. You mentioned 760 crore more we will be expecting. Next year then once the more DPR will come in, next year, how do we see in terms of the execution?
See, this Jal Jeevan Mission, we are precisely telling the INR 348 crore, which we received the payment. We have to build it. The certain work for further done, that will be received during FY H2 of FY 2023. As we said, the revenue target in water sector, drinking water sector for the FY 2024 would be around INR 2,500 crore.
On the debt front, though that is not a concern for us, but still this INR 280 crore-INR 300 crore that we will be able to maintain or we can see a further reduction by end of year?
Can you elaborate?
Debt level. Which is at INR 281 crore. Can we see some more further reduction by end of year?
It will be around in the range of INR 250 crore because we will take some equipment CapEx funding. It should be within the range of INR 250 crore by, you know, March 2023.
Okay, okay. Thank you and all the best, sir.
Thank you. We'll take our next question from the line of Jiten Parmar from Aurum Capital. Please go ahead.
Yeah. My first question is basically, top line has been flat for the quarter. Do we have any execution challenges for this quarter? Our margins are down. Our consolidated margins are down to 18% from 25%, quarter-over-quarter and 20% year-over-year. Any reasons for that?
There's no specific reason, but the reason, main reason as compared to last year is only because of the one project we are executing, Eastern Peripheral Expressway toll project. We had told the revenue around INR 102 crore, and that project is only a break-even point. In case if we will remove that project, my turnover and EBITDA, my EBITDA margin comes to 14.6% as compared to the 13.26%. That is the main reason, because last year it was not there. This project was not there.
There was an answer to the question about, you know, monetizing the assets, and you mentioned three projects are on the way and details against. Now this, you mentioned a monetization figure, but I think line was that time not clear, so I couldn't get it. What was that? Can you repeat by the year-end?
Yeah. Out of the eight projects selected for monetization in the first lot, these eight projects will have a debt of around INR 4,700 crores and the equity of INR 940 crores. Once, if you successfully monetize these projects, to that extent, our debt will get reduced and our equity will get unlocked for further investing.
Okay. How much of that equity of INR 940 crore are we expecting in this year?
See, as I said, this year we are not expecting the consummation of the deal, but we are expecting signing of definitive agreements before end of financial year for a few of the projects.
This equity requirement around INR 1,050-INR 1,060 crores, which you have in the next two, three years, what will be the mode of funding for that? I mean, how are we going to arrange for the equity?
It's sufficient from my own generation.
Okay. Okay, perfect. Last question I have-
Total equity requirement of INR 1,200 crore in next three years.
Right. Okay. Last question I have is on the contingent liability. We carry a large contingent liability. What is the status on that? I see a lot of it is around INR 2,900 crores are guarantees to NHAI or something. Apart from that, we have some others also. Can you just tell a bit more about it? Is this standard? Because I don't see that in other companies also, these high liabilities. If you can throw some color on that.
Major corporate liability reflecting in the balance sheet are mostly mainly in the account of BG, bank guarantee liability. One guarantee is for reflecting only INR 145 crore of annuity 2024 that has been removed. See, these bank guarantees, what are the thing? As we are bidding, we'll be submitting bank guarantees for the this-
For our bidding.
Bridge corporation, bid security, and also for a retention amount. Also, normally, we don't keep any cash retention with the authority. We submit the bank guarantees and we take our retention, so that we have the cash flows. Second thing is, for performance security also we need to provide. In case of UP projects and that, we need to keep this performance security for five years during the maintenance and defect liability period. Since some of the major projects we completed and we expect to get back the retention bank guarantee in a sizable amount. Also, since one of the projects we completed five years defect liability period also. We'll be getting back our performance security. Continuous process.
Yeah, it's a continuous process, a rolling process, usual, because we are executing 23 projects and also we are bidding new projects.
Perfect.
We don't think this is any unusual, different scenario.
Okay. Are you in a position to give guidance for FY24 for revenue as well as margins and order intake?
See, FY 2024 will be slightly different. FY 2024, our guidance would be up to 10%.
10%.
Up to 10%. Margins would be the same thing. EBITDA margin, we will be able to maintain them in the same levels as in FY 2022.
The order intake?
Order intake also, we are expecting in the same lines, around INR 10,000 crore.
INR 10,000.
In FY 2024 also.
Okay, thank you so much. That's all from me. Best of luck.
Thank you. We'll take the next question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, Yogeshji. Congratulations on a decent quarter. See, in the water sector, as we mentioned, our primary target is in, under Jal Jeevan Mission projects, where we find the no constraint of funds. Our primary target would be Jal Jeevan Mission, where, as we know, if you see the projects that have been floated by the different state governments, around 20-25 thousand new projects are expected to be bid out in the next 2-3 months. In other things, as of now, our focus is on roads and highway, which will be our focus in the going forward and the water sector. We are not particularly looking at other sectors as on date. Sir, last quarter we heard about also, I think if I remember correctly, INR 8,000 crore of JJM orders.
If you can quantify
You said that about INR 23 crores of DPR has got approvals and by this year end, you'll have another INR 4,000 crores of DPR which will get approval. In FY 25, we have balance of about INR 2,000 crores coming in FY 25?
See, as you know, the total value of works in hand, where we got the letter of award is around INR 7,000 crores. We expect INR 1,000 crores execution during the current financial year. Another INR 2,500 crores around the execution in the FY 2024, and the remaining will be FY 2025.
How much of the DPR is allowed? All these, you have secured all the DPR approvals now. Is it part of active order book or only a part of this will be moving into execution?
No, no. Actually, the process is like that. Once the DPRs are approved, we execute concession agreements, then only the zero date starts after the concession agreement. So far, as I mentioned, as of thirteenth of September, around INR 2,260, we expect DPRs worth of INR 4,000 will be approved by before end of the current financial year. The remaining INR 3,000 worth of DPRs will be approved during the next financial year. That is in FY 2024.
24. Okay. One thing is, my question is, any update on that related party transaction? How much is the peak outstanding and, what is outstanding right now at the end of September, and why, when, by when you want to close it to zero?
That transaction already closed. There were the two transactions of INR 30 crore each in FY 2021 and FY 2022, that the entire INR 60 crore rupees has been repaid to the RPT. As on date there is no-
As of September, there is no outstanding on account of the related party transaction.
As on date, there is no outstanding.
In future also you're not looking to do any extension, any support from the related entity to the RPT. Right?
Yes.
Great. Great to hear that. Just last question, sir. On the Eastern Peripheral revenue contribution for the quarter. This INR 108 crore is for the quarter, right? Q2.
Can you repeat, please?
The Eastern Peripheral Expressway, the revenue contribution was how much in this quarter? Q2 main kitna contribution tha?
Hundred two, hundred two crores.
Okay. On that, you had breakeven EBITDA, so you did not make any EBITDA on that.
Yeah, yeah.
Okay. Few questions. Just one last thing, sorry for this. Appointed date were expected to come in Q3 for the 7 HAM projects, but now it has moved to Q4. Any particular reason? Is there any delay there? How confident are you that you will be achieving it? Some of these will come in Q3 and some of these in Q4. If you can just give some sense out of the seven, how much, how many appointed dates will come in Q3 and Q4?
Total 7 projects the.
Hmm.
Usmein se karib 5 projects ki appointed date is quarter mein aa jayegi. Q3 mein.
Hmm.
Do project ki appointed date Q4 mein aayegi. January mein.
Hmm.
Both on time hai. Usme delay nahi hai.
Understood. Thank you, sir. Ananda next to you.
Thank you. Our next question is from the line of Ashish Shah from Centrum Broking. Please go ahead.
Yeah, good afternoon, sir. Sir, my question again is on the JJM. The pace of approval seems to be a little slower. I mean, you did mention that there is no funding constraint, but still the pace at which, the speed at which you've been getting the approvals, I think it is far slower than what we would have originally expected. Any reason that you think this is happening?
Generally, Ashish, isme kya hai na ki pura DPR banana padta hai.
Right.
Complete survey ke baad complete jab land handover karte hai aur uske baad jo hai pura ye, it is a process of 4-5 months. Woh jo hai usko 4-5 months ke baad jab hum submit karte hai then zero date start hoti hai uski. Approval ke baad. Aap ye keh sakte ho ki aaj ki date mein the total value of contracts secured in drinking water around INR 7,000 crore. Value of project approved for execution till September is around INR 2,300 crore.
Right.
INR 2,300 crore ke work hi hum aage execute kar sakte hai, aisa keh sakte hai.
Ji. Sir, basically main ye puchna chah raha hoon ki isme administrative issues hai ya phir yaha pe koi funding issues hai?
Sir, ye funding, there is no funding issue. There is a process only.
Right.
There is regular process is there.
Right
In between what had happened, they initially approved DPRs worth INR 1,550 crores, and there was a pause of more than six months because of the local elections, Panchayati Raj elections, and other elections, followed by the state assembly elections. Actually, they have not approved any new DPRs because of the code of conduct and other constraints, and people are also engaged. They started approving after the assembly elections only. There was some pause. Otherwise, there is no funding constraint. It is a normal process. Going forward, we expect these DPRs will be approved progressively.
Right, sir. Sir, dusra question is on the AP Irrigation project. Toh waha pe kya hamara experience raha on the ground? Are we able to take you know take the execution forward? I mean second half additionally should be a better period. What execution are we expecting on the irrigation projects, sir?
As you said, normally, only we get a six months working period out of 12 months in a year. Right from July till December, we're not able to execute any significant works there because the water is left into the canal systems. We'll resume our work in January onwards. We'll have from January to June, we have another 6 months of full-fledged working period. Otherwise, we are executing, so we expect this should be completed, maybe next two to three years, the project should be completed.
Right. Okay, sir. Thank you.
Thank you. Our next question is from the line of Ashish Shah from Elara Capital. Please go ahead.
Good afternoon, sir. My first question was towards Eastern Peripheral. As I recollect that the Eastern Peripheral was for one year only. By December 2022, we should be done with it, or there is any extension, or can you just throw us some color on it?
It is already handed over to NHAI.
To NHAI.
Before-
Around two months before.
50 days ago. On 10th of November.
50 days ago.
On ninth, tenth of November. See,
Yes.
The Eastern Peripheral Expressway, NHAI, as you know, the one of the TOT bidders, secured this project for next 15 years. On tenth of November, at 24 hours, we handed over back to NHAI, so 50 days before the scheduled date of thirty-first December.
Okay. Are we looking for any more TOT projects going ahead? I mean, given that they are margin dilutive, even for the brief period. Are we looking forward to bid into this model?
Not now.
As of now, nothing.
As of now, no.
Okay. Thank you. Thank you so much. That's all from my end.
Thank you. Ladies and gentlemen, we would request you to please limit your questions to two per participant so that we give opportunity to all participants to ask questions. The next question is from the line of Nikhil Abhyankar from DAM Capital. Please go ahead.
Thanks for the opportunity, sir. Sir, I would like to know the total bidding pipeline for road projects in H2, and how many and the amount of bids that you have already put in till date.
MoRTH and NHAI floated around 85 projects including EPC and HAM. The value of the aggregate value of these projects are around INR 80,000 crore. We are working on around 50 projects opportunities with an aggregate estimated project cost of INR 50,000 crore.
Okay.
Bid due dates are staggered up to December and January.
Uh-
There is a work of INR 11,000 crore we already bid out. We submitted our bids. They are under evaluation. The price bids are expected to be opened before thirty-first December, maybe next one month or half months.
Okay.
The bids we had already submitted.
Sir, we have received PCOD for multiple projects recently. Do we expect any bonuses from them in H2?
PCOD for which? HAM projects or EPC?
Both, sir.
We are expecting bonus from in EPC Gujarat, Delhi-Vadodara Expressway.
Yeah, both the projects.
On both the projects.
What will be the quantum of it, sir?
See, these projects have a scheduled completion, original scheduled completion of April, May next year. We will get to know, maybe around two months we are expecting in March.
Sure, sir. Sir, I did not earlier get the unbilled revenue for as of September. What is the value for it?
Unbilled of?
Unbilled revenue.
Around INR 74-INR 75 crore.
Okay. Sir, just a final question, sir. The provision have increased. It is a very minor amount to INR 15 crores, but it has increased from INR 1 crore to INR 15 crores. What exactly is this provision?
That is on account of the provision of the taxation. Tax, tax.
Tax.
Yeah.
Okay. Okay.
Thank you. Our next question is from the line of Parikshit Kandpal from Edelweiss Securities. Please go ahead.
Good afternoon, sir, and thanks for taking my question. My first question is on the competitive intensity. Last couple of years, we have seen very high competition for road projects. What is the kind of competitive intensity that we expect this year? Also a similar question for the JJM or the water projects that we are targeting.
See, you know, due to dilution of criteria for the bidding, both in terms of network and turnover and other things, and also they dispensed with the requirement of bid security as a part of Aatmanirbhar Bharat Abhiyan. The competition was much steeper, much aggressive. Now, the bid security requirement they reintroduced. Also then, the eligibility and the experience criteria, turnover criteria, and also expected to be restored. Competition will be there. If you see typically, competition for EPC projects will always be more than the HAM projects. Also competition for the larger size of projects will be lesser when compared to smaller size of projects. This is the thing. If the project size is more, the competition will be less.
Where the funds require fund-based projects, competition will be less when compared to non-fund-based projects.
For JJM projects?
JJM projects.
There is no, you can say, high level competition is not there.
Yeah, yeah. Because of the experiential criteria set forth.
Sure. Couple of data questions from my side. First, if could get the toll collection on the various projects this quarter.
At the OMT project, Kanpur Airport was INR 105, 104.5 lakhs. Kanpur-Ayodhya is INR 18.5 crore. Bareilly-Almora is INR 13.5 crore. MP Highway is lower, it is INR 4.7 crore. Rabari Jodhpur, INR 32.16 crore. PP one, under INR 2 crore.
Sure. Sir, I missed the pending equity commitment for second half FY 2024 and 2025. Would be great if you could repeat it.
Second half commitment is around INR 250 crore. FY 2024 it should be under INR 450 crore.
Oh, okay. Sure. Thanks, all the best for future.
Thank you. Our next question is from the line of Prem Khurana from Anand Rathi. Please go ahead.
Yeah, thank you for taking my question, sir. My question was with respect to our guidance for FY 2024. If I heard you right, I think we're targeting around 10% growth in FY 2024. I think somewhere in your comments when you mentioned that you expect water or rather JJM water to kind of contribute almost around INR 2,500 crore in FY 2024 versus INR 1,000 crore that you're expecting in FY 2023. There's a jump of almost around INR 1,500 crore in water itself. Does it mean we are targeting lower revenues in road segment? Because the overall growth that you're talking about for FY 2024 is only around 7%. Are we being little conservative on the overall guidance?
This is on conservative side because we are expecting a COD in our 10 projects. After COD, we can give a proper guidance.
Sure. I mean, if you can help us with the execution timeline for the water projects, I mean, is it, so once we have DPRs approved and you have zero day, how many months does it take you to be able to kind of finish and how is our experience been? Are we able to stick to your timelines, I mean, which are mentioned in the document that you finish these projects at this time or these many months?
Post signing of the concession agreements, means after approval of the DPR and signing of tripartite agreement followed by concession agreement. Post signing of concession agreement, we have a 15-month period for execution and testing and commissioning. We should be able to complete within 15 months, except in few places where there is a delay on the part of the client regarding the provision of land for the project and other such things, and also on the approval process. Approval of the drawings and things like that, work on the site and other things. We should be able to complete within 15 months from the respective dates of signing of concession agreements for these projects.
Sure. Thank you. All the very best for future.
Thank you. Our next question is from the line of Uttam Kumar Srimal from Axis Securities. Please go ahead.
Yeah, thanks for the opportunity, sir. You have given a bidding pipeline of INR 80,000 crore. Can you bifurcate between EPC and HAM? What would be a proportion of EPC and HAM in this bidding pipeline of INR 80,000 crore?
It would be something like, 50-50% you can say. Maybe, HAM slightly higher than the EPC.
Okay. Sir, the last one. How much equity investment will be done in FY 2023? Direct equity investment in FY 2023?
INR 240 crores.
INR 240 crore?
In the second half.
INR 240 crore, no?
In the second half, INR 250 crore.
INR 250 crore. Okay, sir. That's all from me, sir. Thank you.
Thank you. The next question is from Parikshit Kandpal from HDFC Securities. Please go ahead.
Thanks for the follow-up. Any idea on any new big state projects coming up, besides the NHAI projects in UP or any other state?
As of now, we don't see any major projects coming from the state governments because for most of the state government, they have state highways. As mentioned by our MD, these state highways they want to give it to central government for the development. In the maybe next two to three months, we don't expect any major projects in the highway sector coming from the state governments.
Greenfield, as in, I mean, like Ganga Expressway or anything like that. Any major mega projects of states, you are expecting. Like Maharashtra government recently announced some big projects. Do you think any of these will be coming in the next six months?
We'll share you. We are not.
Okay.
specifically focused upon those bidding opportunities.
Okay.
We'll share with you priorities.
Sir, second question is on this, monetization. You said about six HAM projects on BOT and on NTP, but about INR 950 crores of equity invested. You said some of these may happen. Is it that there'll be pick and choose or there'll be one investor or multiple investors? How are you looking to monetize this?
It is not a pick and choose. See, this out of six projects, five projects we already achieved the PCOD and a few projects we achieved the financial COD. One project we are expected to achieve the PCOD maybe next one month. These are the projects which are operational. Even one BOT toll and one HAM project also are operational projects. It is not permanent. See, as we progress, as we complete construction and achieve the PCOD, then accordingly we'll give the priority. Of course now NHAI has reduced the locking period six months from the PCOD. All these projects are out of eight projects, seven projects are eligible for the equity divestment.
This will be with one investor or looking at multiple investors?
We are looking at multiple investors. We already retained a strategic advisor for handholding and, he's looking at the potential investor.
You have not entered into any exclusivity with anyone yet, as of now?
No, no. So far, no.
Okay. Thank you.
Thank you. Our next question is from the line of Alok Deora from Motilal Oswal. Please go ahead.
Sir, good afternoon. Most questions are answered. Just a couple of questions. One is of this INR 19,000 crore order book. How much is currently under execution, at this point of time?
Out of 19,000, around INR 12,000 crore projects are under execution. If you precisely go for the sector of the road projects, it'll be around INR 10,000 crore. Because the road project only around INR 2,300 crore projects approved. The HAM project, another INR 7,000 crore of projects are to be taken care. It will be around INR 10,000 crore.
Sure. Sir, you, in one of the previous questions you mentioned that after the DPR, it takes 15 months to get it kind of completed. Just want to understand when you receive these projects, so typically how we should consider the execution timeline? Because you know the DPR will take its own time and then the execution will start and then there could be some delays in the DPR execution. Just if you could indicate what's the typical timeline we should consider for these kind of projects.
Typically, from the date they give us the list of the agents and also they give us the land for surveys and all. DPR and the approval of the DPR, then the execution, testing and commissioning 15 months or 5 months or 15 and 4 months, 2-4 months. 24 months from the day they give us the
Right.
List of villages. Since they specifically say out of a district you go ahead with this gram panchayat. From that zero point it takes 24 months.
All right. Just last question and so you mentioned you have bid for certain projects which bids are yet to open. These would be all HAM projects?
They are EPC and HAM both.
Okay. Okay.
Okay.
That's all from my side. Thank you. All the best.
Thank you. Our next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah. Thank you. Sir, when we are saying that we are looking at INR 7,000-odd crore inflow in road, so mostly this would be INR 5,000-odd crore would be from the HAM?
We are expecting from both sides, EPC and HAM. We will see.
Okay.
Yes.
Yeah. No, my point was because the competition would be high in the EPC. That's why I was trying to understand, can the proportion would be 60%-70% of the INR 7,000 crore would be on the HAM?
Yeah. Maybe because HAM projects are more than EPC.
Yeah. Second, sir, last time we said we are expecting bonus on Mumbai-Nagpur also and Aligarh-Moradabad by March 2023 we will be able to see. Any update on that?
Aligarh-Moradabad, it is in the process and you can say Samruddhi Expressway is also in the process.
By when, if it is, and if it comes, what would be the broad, rough value of the bonus?
This Aligarh-Moradabad, we believe that we had already mentioned its bonus is around INR 15 crore. We are at that still we expected before.
Right.
Current financial year. In case of Mumbai-Nagpur Samruddhi Expressway, the state government has to take some policy decision on the payment of bonus, because we completed before the extended completion time because there was a COVID affected period. How this government will take a view on that?
Mm-hmm.
We will see. Otherwise we made a request for considering the bonus. Okay.
Okay. Thank you.
Thank you. Ladies and gentlemen, that was the last question. I now hand the floor back to the management for closing comments. Over to you, sir.
Thank you everyone for your participation in our earnings call. In case of further queries, please get in touch with Strategic Growth Advisors, our investor relations advisors, or feel free to get in touch with us. Thank you.
Thank you. On behalf of Spark Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.