Ladies and gentlemen, good day, and welcome to the PNC Infratech Limited Fourth Quarter FY 23 Earnings Conference Call, hosted by Equirus Securities. 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 date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jainam Shah from Equirus Securities. Thank you, and over to you, sir.
Good evening, ladies and gentlemen. On behalf of Equirus Securities, I'm pleased to welcome you all on the PNC Infratech Limited QFY 23 Earnings Conference Call. We have with us the management team of the PNC Infratech, represented by Mr. Yogesh Kumar Jain, Managing Director, and senior team members. We also have with us investor relations team of Strategic Growth Advisors. We will begin with the opening remarks from the management, followed by interactive Q&A session. Thank you, and over to you, sir.
Good afternoon, 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, and Mr. D.K. Maheshwari, Vice President, Finance, and Strategic Growth Advisors, our Investor Relations Advisors. We have uploaded the financial results and investor presentation on the stock exchanges, as well as company's website for your reference. Initially, I would like to mention key updates of the industry, followed by key operational development of company and highlights of financial performance during quarter four and financial year 2023, post which we will answer your questions. Highway construction activities were impacted in financial year 20 23 on account of prolonged monsoon and other factors beyond control of contractors and concessionaires.
Till February 2023, only 8,064 km of national highways constructed in the country, as against the set target of 12,000 km of the full year. Highway construction activities have picked up since January 2023, and the same are to remain at elevated levels till January 2023. As we report, they missed the awarding target of 6,500 km in financial year 2023, by over 1,000 as for several projects with due dates scheduled between March 2023, therefore two to three months.
Sorry to interrupt, sir. There is disturbance on the management line. Let me just quickly check on that. Yes, sir, please go ahead.
Yes, please. Ministry of Road Transport and Highways has recently announced its plan to award 12,000 km of highway and construct around 12,500 km.
Please enter your pin, followed by-
2024.
Hello? Sir, please go ahead. Go ahead, sir.
Yes. The average daily toll collection through FASTag in December 2022 reaches INR 134.4 crores, with single day highest collection of INR 144.2 crore on 24th December 2022. The growth in traffic revenue, mainly due to increase in economic activities during second half of financial year 2023 and hike in user fees. Coming to updates on the company. During the fourth quarter of financial year 2023, the company achieved financial closure for one pending project, 4 l aning of Sonauli–Gorakhpur by its due date. With the above financial closures for all the seven HAM projects awarded to the company during financial year 2022 has been achieved. We are happy to share with you that NHAI declared substantive for all above seven HAM projects. Accordingly, construction activities go underway at all these projects.
Seven HAM projects would contribute substantial EPC revenue to the company in financial year 2024 and 2025. The company received Provisional Completion Certificate for Koilwar to Bhojpur, as well as Bhojpur to Buxar EPC project from NHAI. The company also received Provisional Completion Certificate for Chakeri-Allahabad HAM project in financial year 2023. The company's robust balance sheet, driven by prudent financial acumen, has led to continuous upgrade in the credit ratings, which have helped the company to raise the debt capital at competitive rates. The company has divested its entire share of 51% in its one of the subsidiary company, namely, Ferrovia Transrail Solutions Private Limited, to BF Infrastructure Limited, which was formed for construction of 66 long track and track-related works of Dedicated Eastern Freight Corridor project for value of INR 132 crore. The said project completed in all respect in JV with BF Infrastructure.
On business development front, the company has been declared as L1 bidder and received letters of acceptance from NHAI for construction of six-lane Greenfield Varanasi-Ranchi -Kolkata Highway HAM Project Package number 2, 3, and 6, for Bid Project Costs of INR 891 crore, INR 1,113 crore and INR 1,260 crore respectively. The company also received letter of acceptance for construction of four laning of Allahabad-Kaushambi section of NH 731A, for a Bid Project Cost of INR 819 crore from MoRTH. Aggregate Bid Project Cost of four HAM projects secured in financial year 2023, comes to INR 4,083 crore. All the above four HAM projects are to be constructed in 24 months and operated for 15 years post-construction.
Apart from four HAM projects, the company also became lowest bidder and received letter of acceptance of design and construction of civil work for 25.9 km long New Broad Gauge Double Railway Line. Its connectivity to Indian Railways' Network as part of Haryana Orbit Rail Project, for a contract price of INR 771.5 crore from Haryana Rail Infrastructure Development Corporation in financial year 2023. Total value of new business secured by the company in financial year 2023 is INR 4,855 crores. Coming on to operational and financial performance of the company. At present, the company has a total 23 ongoing mandates, various PPP formats, including BOT-T oll, BOT Annuity. Out of these 23 projects, we have 18 HAM projects with an aggregate Bid Project Cost of INR 24,590 crores.
Out of 18 HAM projects, we achieved COD and PCOD for six projects. Remaining 12 projects are under construction. In terms of equity investment, the total requirement for all these 18 HAM projects is approximately INR 2,440 crore, out of which we have already infused INR 1,253 crore till March 2023. The balance will be infused over next two years. The internal accruals that would be generated over the next two, three years should be sufficient to fund the equity investment. If recently secured four new HAM projects are also taken into consideration, total HAM portfolio would be of 22 projects with an aggregate Bid Project Cost of INR 28,673 crore.
Our unexecuted order book on 31st March 2023, is over INR 15,600 crores, which does not include value of four new HAM projects and one EPC project secured recently. Out of the total order book, over INR 15,600 crores, the highway and expressway contract contribute around 67%, and water project contribute around 33%. In rural drinking water under JJM, the company has booked a revenue of INR 1,033 crores till 31st March 2023. Which include INR 108 crore revenue booked during the previous financial year. During the financial year 2023, total INR 935 crores revenue has been booked from drinking water supply projects.
As the government signs cover agreement of approved scheme progressively for execution during the financial year 2023, the business executable work as on April 1, 2023, is around INR 4,500 crore, and cover agreement for all the remaining schemes are expected to be signed during the current financial year. Now I would present the standalone and consolidated results for the quarter and financial year ended March 31. Revenue for fourth quarter of financial year 2023 is INR 2,115 crore, which is higher by 10%. EBITDA for fourth quarter is INR 281 crore, which is higher by 25%. EBITDA margin for fourth quarter of financial year 2023 is 13.3%. Profit for the fourth quarter of financial year 2023 is INR 184 crore, which is higher by 33% on year-to-year basis.
Profit margin for the fourth quarter is 8.7%. Standalone revenue for financial year 2023, INR 1,061 crore, which is higher by 12%. EBITDA for financial year 2023 is INR 954 crore, which is higher by 21%. EBITDA margin for financial year 2023 is 13.5%. Profit for financial year 2023 is INR 611 crore, which is higher by 37%. Profit margin for financial year 2023 is 8.7%.
Sorry to interrupt, sir.
Yeah.
Please hold the line.
Now, consolidated revenue.
Yes, sir, go ahead.
We can start?
Yes, sir.
Consolidated revenue for quarter four of financial year 2023 is INR 2,305 crore, which is higher by 4%. Consolidated EBITDA for quarter four of financial year 2023 is INR 411 crore. EBITDA margin for quarter four is 17.8%. Consolidated PAT for quarter four of financial year 2023 is INR 146 crore. PAT margin for quarter four is 6.3%. Consolidated revenue for financial year 2023 is INR 7,956 crore, which is higher by 10%. Consolidated EBITDA for financial year 2023 is INR 1,600 crore, which is higher by 4%. EBITDA margin for financial year 2023 is 20.1%. Consolidated PAT for financial year 2023 is INR 658 crore, which is higher by 13%.
PAT margin for financial year 2023 is 8.3%. On the standalone balance sheet side, as on 31st March 2023, our net working cycle is 87 days. Our net worth on standalone basis is INR 3,942 crore as on 31st March, whereas total standalone debt is INR 337 crore, including INR 137 crore for instrument finance debt. The total cash and bank balance as on 31st March 2023 is INR 293 crore. We have a net debt of INR 44 crore. Our net debt to equity is 0.11 times. On consolidated, our net worth is INR 4,285 crore, whereas total debt is INR 6,282 crore as on 31st March 2023.
The total cash and bank balance, including current investment, is INR 1,017 crore, net debt to equity of 1.4 times. With this, we now open the floor for question answer.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you, sir. Sir, before asking any questions, I need a couple of data points, and then I will ask the questions. First, mobilization advance, retention money, HAM datas, water datas.
Retention money, March 2023, INR 131 crore, and mobilization advance is INR 329 crore.
Okay, HAM data, water datas?
SPV debtor is INR 1,079 crore.
INR 1,079 crore. Okay, that's why the debtor has increased. Okay. Okay, JJM debtors?
EPC debtors is INR 826 crore.
Mr. Shah, may we request you to use the handset while asking questions?
Actually, I'm using it. Sir, water debtor is how much you say? JJM debtors.
JJM was INR 375 crore.
INR 375 crore, okay. Unbilled revenue is how much, sir?
Sir, most of the debtor, whether this water or SPV, we have relays in the month of April and mid of May. Major part of this.
Okay.
Outstanding of better.
Okay. Data as on April or as on now, standard one has reduced to how much, sir?
Since on 31st March data was 99 days, if case we see as on date, it will be around 78-77 days.
Okay. Sir, unbilled revenue is how much?
It is INR 52 crore, sir.
INR 52 crore, okay. Now I need the project-wise order book break up. First is Chakeri- Allahabad. As of March, I need the order book. Hello?
Allahabad is INR 7 crore.
Sorry, sir, Chakeri- Allahabad, INR 72 crore?
INR 70, yeah. seven zero.
Okay, INR 70. seven zero, okay. Challakere and Hiriyur?
Challakere, INR 293 crore.
INR 293 crore. Lucknow, Ring Road, package 1?
Lucknow, Ring Road, INR 110. one one zero.
One one zero. Jagdishpur- Faizabad?
INR 154.
INR 154. Aligarh Kanpur, package 5?
INR 256.
INR 256. Unnao Lalganj?
INR 464.
INR 464. Meerut, Najibabad?
INR 238.
INR 238. Delhi-Vadodara, package 29 and 31.
It is 29, Delhi is INR 33 crore, 31 is INR 160 crore.
Has it increased the scope? Because last time we said INR 22 crore, so now we are saying INR 160 crore, 31, package 31.
Delhi-Vadodara.
Ha, Delhi-Vadodara, package 31, you said INR 160 crore. In December, it was INR 22 crore.
Which is 29, was INR 22 crore, sir.
Sorry, sir. Sorry, sir?
29 was last time, December was INR 22.
aur abhi March Mein kitna, INR 150 crore?
INR 150 crore. Yes, sir.
There is a increase in scope.
There's some confirmation lately, yeah. Lately, we increased what?
Okay, sir, ye jo apna irrigation project ke, how much is the value?
INR 979 outstanding.
INR 979. Okay. All the four water projects put together is INR 5,761 crore. The last one is. Yes, sir, go ahead.
Hello?
Yeah. Sir, you were saying something. I said the all four water projects is put together is INR 5,767 odd crore.
Right. Right.
Gaju Village, Devin agar bypass, package 1C, how much order book?
INR 597.
INR 597. Okay. Now coming to the question part. First, in terms of the broader guidance, for the FY 2023 was lower than what we were looking at INR 10,000 odd crore, INR 4,855. I hope this is the EPC value that we said in the opening remarks. Now for FY 2023, in terms of revenue, margin, order inflow, what's the guidance?
In FY 2024, in terms of revenue, we are expecting around 50% growth. In case of order book, it is around INR 10,000 crore. Maybe between INR 10,000.
INR 10,000-INR 12,000.
INR 12,000 crore order book.
Okay, and margin will be the same, 13.5% that, we guided?
Should be 13%-13.5%.
Okay, 13%-13.5%. Okay, got it. In terms of the including the four new, the four new HAM, first of all, when are we likely to get the appointed date? For guiding this 15%, how much roughly we are taking the revenue from these four new HAM projects? what's the equity value or equity to be invested in these four new HAM?
The equity entity requirement is around INR 500 crore in new four HAM project. As usual, part can start in the fourth quarter. By 2024, we can execute some part. It will take around six months to start the work.
We need to execute the concession agreements, expect execution of concession in the month of June, then we have five months for the financial project, both that appointed date and are showing the fourth quarter of FY 2024, we expect some argument for HAM projects.
Sorry to interrupt. Thank you for the answer, sir. Mr. Shravan Shah, may we request that you return to the question queue for follow-up questions, as there are several participants waiting for their turn. Thank you. Our next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Good evening, sir, and congratulations on a good set of numbers. My first question is, sir, how do you see the tender pipeline at this point of time? Are you confident that the tender opportunity from NHAI will pick up for the rest of the year? The related question is that, do you think that we need to build and scale up other EPC segments because our road dependence on road is too high, and that is limiting our opportunity size.
If you see, during the FY 2023, NHAI planned to award more number of projects. Many projects were supposed to be in the weeks before 31st March, but quite a few projects they deferred. There will be 40-45 projects, 31st March. Now, they are now scheduled to be received, these are scheduled to be received between July. It's one of the reasons what are targeted during the FY 2023, we should not. There is a robust pipeline available, NHAI. NHAI now, more than 100 projects are there, both on EPC and HAM. HAM is the majority, 75% HAM-based projects and 25% EPC-based projects. Nearly INR 1 lakh crore worth of projects are there. These projects, as I mentioned, about INR 10,000 crore-INR 12,000 crore.
Apart from this, we are also targeting some projects and services in UP under phase four. UP government established a bidding of 14 projects and a value of around INR 15,000 crores. We are evaluating those. There is another area apart from four we are pursuing to secure. We are hopeful that we should be able to secure around 10 projects in FY 2024.
My second question is that large part of our order is Uttar Pradesh. I think it's around 90%. Do you think we need to revisit our portfolio and diversify to other states? Dependence on one state is just too high.
As you see, the last year, we secured five projects. Out of five projects, three projects are in Bihar.
Right.
Varanasi, Kolkata, all three packages falling in Bihar. One package we got from Haryana Orbital, as a part of Haryana Orbital Rail Corporation. It is located in Haryana. Only one project, that is, Prayagraj to Kaushambi is there in UP, HAM projects. We are also looking now the new opportunities spread across the country. We are looking at other states other than UP also, with the regional focus. We always endeavor to deconcentrate our risk only in UP. That will be there. We are hopeful of some projects outside UP also during the FY 2024.
Understood, sir. Thank you and all the best, sir. Thank you.
Thank you. Our next question is from the line of Noel Vaz from Union Asset Management. Before you go ahead with your question, a reminder to all participants, you may press star and one to ask a question. Mr. Noel Vaz, you can go ahead.
Yes. Actually, I just have one question. Now that we have kind of, our mix in the order book for road projects is likely to move slightly lower going forward if we are aiming for diversification of the order book, what kind of ex-execution rates should we see for FY 2024 or even FY 2025 onwards? Thank you.
Come again?
We are expecting around 15% growth in this financial year.
Okay. The execution timelines for the non-road projects are similar to road projects?
Yeah, yeah.
Yeah, yeah.
We are targeting revenue for financial year 2024 is around INR 2,500 from water supply sector.
Okay.
That includes remaining from roads.
Okay, yeah, understood. Water supply, this is, same as irrigation, or this is more of urban infrastructure?
This is a drink, rural drinking water.
Drinking water supply.
Drinking water. Okay, fine. Thank you. I just wanted to confirm. Thank you. That's all from me.
Thank you. Our next question is from the line of Nikhil Kanodia from HDFC Securities Limited. Please go ahead.
Good afternoon, sir. Am I audible?
Yes, we are.
Yeah. During the previous, some of the previous questions, I was not audible. Pardon me if I repeat the questions. My first question, set of questions is on the guidance front. What will be the guidance from, revenue from water segment for the year?
The question, can you repeat, please?
Sir, request you to use the handset as the audio quality is not very clear while you are asking the question.
Is it any better now?
Yeah.
Yes, it works.
What is the revenue guidance from water segment for FY 2024?
INR 2,500 crore is the revenue segment from FY 2024.
Okay. sir, you have guided for 15% revenue growth for FY 2024, with EBITDA margins in the range of 13%-13.5%, right?
Right. Yes.
What would be the order inflow guidance for the year?
It is around INR 10,000-12,000.
Okay. Sir, what would be the equity infusion? Like you mentioned, there is some equity requirement for the seven, as well as the new four HAM assets. FY 2024, 2025, what would be the equity infusion?
Around INR 540 crore, sir.
INR 540 is for FY 2024, right? Hello?
Yeah. Yes.
Yeah, sir. If you can give the entire equity infusion within what time it would be done? Like FY 2024, INR 540, then FY 2025?
four hundred and fifty thousand.
Okay, the balance will be in FY 2026?
Yes.
Okay, Sir, what is the CapEx that guidance that you are giving for FY 2024?
FY 2024, we are expecting around INR 100 crore-INR 120 crore, sir.
You will be maintaining your NWC days, right?
It should reduce as compared to 31st March.
Okay. Sir, what will be your debt levels?
Recently, it is 99 days. We are expecting around 70-80 days.
May we request you to rejoin the question queue for follow-up questions, as there are several participants waiting there. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Thank you. Our next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Yeah, hi, Yogesh Jain, congratulations on a good quarter, sir. My question is on asset monetization. We have INR 2,400 crores of equity requirement now. INR 1,200 crores we have invested, and another INR 500 crores we have to invest in new assets. Right now, nothing is coming up, nothing is happening on the monetization front. Some of our peers have already monetized assets, and we have been telling every quarter that we monetize, but nothing is happening. What is the issue, sir? I mean, what are we facing? Any challenges in monetization, any concerns on valuation? Where is the deal got stuck, basically? We want to understand that.
We are continuous to give highest priority to monetization of operational assets for unlocking its equity and de-leverage its balance sheet. In the first lot, total 12 projects floated for monetization, including 11 HAM assets and one BOT-T oll asset, which would have a total debt over INR 6,900 crores and total equity of INR 1,700 crores. Strategic Growth Advisors retained for running the monetization process. Under discussions and negotiation, in case we find valuation offer are reasonable, exclusivity would be provided to the selected investor for conducting due diligence, followed by execution of definitive agreements. We expect to conclude this process divestment before the end of financial year 2024, I think.
We are in very early stages of the process, right? It will take one more year for this to complete.
Mr. Kandpal, it's not like that. See, we are on the process. We are very keen, we are very eagerly going for that. Already you received the NBO. Now we are evaluating, shortly once we give go-ahead to the selected investor, followed by the due diligence. The due diligence also, we are asking them to quickly do it in an expeditious manner. The definitive agreement should be signed before the calendar year, before we would say even third quarter, followed by the closeout and other things. We are looking forward to have everything completed and unlock our equity before the end of the current financial year.
We are hoping we are lagging behind our peers, and we sold all HAM assets, and by the time all these 11 HAM assets would have received the final COD also, and locking periods also would have been completed, so there should not be any issue in transferring the assets.
Okay, I wish you all the best that you could initially close the scheme by Diwali or third quarter. That will help us unlock a lot of value. My second question is on the Jal Jeevan Mission projects now. We have been somehow lagging behind again on execution. The guidance which we have given earlier also, we have not been the number is below 1,000 crores even this year. Next year, we are saying in FY 2024 that 2,500 crores. How confident are we in closing these in this year? Also if you can touch upon what is a big pipeline in the Jal Jeevan segment for us.
See, in the Jal Jeevan Mission, what has happened, these projects are spread across various places. There are 3,000 locations we need to do with an average value of INR 2.25 crores at each location, each scheme. The geographic spread is the one thing. As we move ahead, if you see the in FY 2023, in the first quarter, we could able to do only INR 80 crores, whereas in second, we have done INR 160. In the third quarter, we have done INR 270. In the fourth quarter, we have done a work of INR 450. We are progressively improving our progress and the work done. Year we closed at INR 925.
Going forward, we are confident of completing INR 2,500 crores worth during the FY 2024. From INR 80 crores, we scaled up to INR 415 crores as we get the new projects. As of now, working go out of 2,885 schemes, work is going on at 2,000 locations. At the 450 locations, we already started providing drinking water to the rural household. We got the certificates from the Har Ghar Jal Certificate for quite a few. We are confident we will be able to do around INR 2,500 crores worth in FY 2024, and then remaining in FY 2025. From INR 80 crores, we scaled up to INR 415 crores in 4 quarters of FY 2023.
What is the big pipeline thing?
Hello?
What is the big pipeline of continuing?
As I mentioned, INR 14,000 crores worth of projects are bid out by Jal, this SWM of Government of Uttar Pradesh. The bid due date is 3rd June, 2nd June. We will be bidding those projects. We expect around INR 1,000 crores worth of new business from the water sector in this quarter. Going forward, in case any new projects comes up in any other states, then we'll evaluate those opportunities and see whether we can bid for those projects also in FY 2024.
Okay.
Sorry to interrupt. May we request that you rejoin the queue for follow-up questions, as there are several participants waiting their turn. Thank you. Our next question is from the line of Jiteen Rushe from Axis Capital. Please go ahead.
Good evening, sir. Congratulations on good set of numbers. Sir, first on the two debt numbers. In the balance sheet, the debt number is around INR 450 crores. You said in the opening remarks, the debt number at a standalone level is INR 337 crores. Are we missing anything, sir, in this?
Pardon?
Yeah, balance sheet. The borrowings in the balance sheet.
Yeah.
The number seems to be higher than what you said in your opening remarks. The number is around INR 450 crore, and you said in the opening remarks INR 337 crore. There is a lag.
Working capital loan is INR 200 crore, term loan is INR 127 crore, that is INR 337 crore. Remaining is the unsecured loan taken from the SPVs. That is why that, total amount is INR 440 crore. Borrowing is INR 337 crore only, sir.
This unsecured loan has been repaid back to the SPVs?
Yeah. Yeah, it's still outstanding.
How much, sir?
It is INR 140 crore.
Any, so what is the reason why you have taken this unsecured loan from the HAM SPV? Any reason for that, or?
Actually, there is a surplus in that SPV. There is no debt in that SPV.
Which SPV, sir?
That is Delhi-Narela Industrial Estate and Kanpur-Lucknow-Ayodhya. That is because all the OMT project, that has already been completed. Delhi-Narela Industrial Estate, they both senior debt in the project, SPV.
Can you give me the toll numbers now, sir, for the SPV, including the Narela Industrial Estate?
The Narela Industrial Estate was, INR 14.37 crore in this quarter.
Uh.
MP Highway was INR 12.46.
Uh.
Kanpur Highway was INR 23.5.
Uh.
Bareilly is INR 14.37, and sorry, Narela is INR 10.56.
INR 10.35.
INR 10.56.
Bareilly, I said, INR 14.35.
Right.
Right, Bareilly is an annuity asset. Okay, okay.
There is INR 32.16.
Yeah. Sir, on the railway projects, we have received the project from Haryana. When do we expect the execution to start in this project? How is the payment cycle from the government on that project?
This execution already started there. Now, as work is going on, it's a 26 km long civil works for the broad gauge, double broad gauge. The Haryana government, what we were told that Haryana government is getting funds from the NDB, New Development Bank. They're getting the funding from them. They promised us this should not be any issue for the payments and other things.
Thank you, Mr. Jiteen Rushe. May we request you to rejoin the queue for follow-up questions. Our next question is from the line of Nikhil Abhyankar from ICICI Securities. Please go ahead.
Thank you for the opportunity, sir. My first question is, given our higher concentration towards highways and roads, so are we looking at any segmental diversification? If yes, then which all segments?
As we had already diversified into road sector, as you said, as we had already mentioned, 33% our order book is unexecuted. Order book is there, water supply and irrigation, and 67% is from roads and highways. Our revenues also would be like that, 33% from this water supply and irrigation, as a part of diversification, we also bid this Haryana Orbital Rail Corporation project. Many state governments are coming up with similar kind of a urban rail, metro rail kind of a thing, light rail projects across the country. That is another area we are looking at, and we secured one project from Haryana government.
Wherever there is some synergy, and particularly with respect to roadwork, this Haryana, we have a synergy over there. In the water sector also, we look forward to have new projects, if other state governments also come out with similar projects, both rural drinking water, groundwater and as well as surface water.
Okay. Of the INR 12,000 crore order inflow that you are targeting, can you give us the target for each segment for FY 2024?
Around 70%, you can say 70% from the roads and highways and 30% from the non-road sector.
Sorry to interrupt. May we request Mr. Abhyankar to join the queue for follow-up questions. Requesting all participants to restrict to one to two questions per participant. Thank you. Our next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead.
Yeah. Thank you, sir. For the Badadal- Maradgi HAM received 18, 20, December 2022, but the execution for the quarter is zero for the project. Any particular reason why the execution has not started?
Hello? Pardon, please. Which project?
Badadal-Maradgi .
Yes. Akkalkot.
Hello, can you hear me, sir?
Akkalkot. Hello?
Hello.
You know, there the work has started, Akkalkot project, what we call it as Akkalkot to Karnataka, Telangana state border. There work has started, so in this quarter, we'll be raising the invoice towards the milestone payments.
Okay. Okay. Sir, secondly, you gave the guidance of INR 2,500 crores of revenue for the water segment for FY 2024. Does that include irrigation project as well?
See, irrigation project, we don't expect significant revenue there, because we have another hardly one and a half months working time there. Because once in the come, in July, they leave the water inside the canal system, so this goes up to again, January, end of FY 2024. This is mainly significantly from work sector only. There will be some marginal amount from irrigation.
We had a timeline of around three years for the project. The completion date is March 2024. Has that been extended from the client?
We had already applied for extension of time, quoting that, very limited working period is available. We had already asked for an extension of time of two years, beyond, 2024.
Thank you. We move to our next question. Mr. Vaibhav Shah, we would request you to join the question queue for follow-up. Our next question is from the line of Deepika Bhandari from Phillip Capital. Please go ahead.
Hi, sir. Thank you for taking my question. Congratulations on good set of numbers. First thing, I just looked at party, I think I missed. Equity requirement for, Can you bifurcate the requirement for FY 2024 and 2025?
FY 2024 is INR 540, and FY 2025 is INR 450.
INR 450. Okay, thank you, sir. Can you give me a geographical breakup for order book, exact breakup for the year ending FY 2023? What, what was the UP percentage in Bihar and Haryana?
The calculated effect. We'll share with you.
Okay, sir. Thank you.
Thank you. Our next question is from the line of Prem Khurana from Anand Rathi Shares. Please go ahead.
Thank you for taking my questions, sir. Just to understand our receivables a little better, I think we've seen significant jump during the quarter, and a large part of this seems to be because of our own SPVs hybrid annuities which are under construction. Is it that we are also delaying drawdowns in these SPVs to kind of, and because we were sitting on some cash, and, I mean, obviously, and the cost of borrowing for the standalone entity would be somewhat better than SPVs. Is it that I mean, we're intentionally delaying the drawdowns or you're seeing delayed disbursements by these lenders or the bankers?
Of our lenders, actually, the, we have executed, around INR 400 crore rupees HAM and projects in the month of February and March. For that, we are taking the disbursement subsequently in the month of April and May. In the starting, for taking the disbursement, it takes around, 30-40 days.
Okay. Sure. Even if you adjust for this INR 400 crore, we still would have more than INR 600-700 crore of number due from SPVs. Would this be the number, and this were to run the same run rate in terms of revenue, and this is the number that we need to kind of settle for, or, I mean, this would go down?
It will go down, certainly.
Okay. Second, if you could help us understand, when I look at our, the P&L for the year, we've grown pretty fairly good. I mean, in terms of top line, profitability again has been, fairly stable. For some reason, our employee cost is down. I mean, since we are growing, I was under the impression that you would have more people, come on board and work for you. How do I explain, the employee cost going down? Are we, I mean, trying to have more of mechanization or automation, which is where the manpower requirement has come down, or was the last year number a one-off?
Actually, percentage-wise, it will go down because of the, around INR 1,000 crore we have executed water project, where the element of labor is much more than the machinery.
the absolute number is down.
Subcontractor. That we also do subcontractor.
Okay. Just one last from my side, and if you could help me with the EPC potential for these four hybrid annuities, I mean, you've given us bid project cost, and if you could help us with the EPC part of the total number. How much would be the EPC, which would come in our standalone books, I mean, on the order backlog side?
Around INR 4,500 something. INR 4,000.
INR 4,500.
Yeah. We are not finalized.
Okay. Sure, sir. Sure. Thank you. I have one more, I'll come back with you. Thank you. Thanks a lot, and all the very best for future.
Thank you.
Our next question is from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go ahead.
Yes, thanks for the opportunity, sir, and congratulations on this second number. Sir, have you received any bonus in this quarter? Early, early completion bonus in this quarter?
No. No, not this quarter. We have not. In the fourth quarter, there were no bonus.
Okay. Sir, any bonus that we have expected to receive in this year from any of the projects?
One or two HAM projects, we expect to complete before schedule of time, particularly our carrier control package 5. For that project, we expect to receive bonus during FY 2024.
Okay. Can you quantify the amount?
Until unless we know the date of PCOD .
Mm-hmm.
What is the schedule date, sir, then, the bonus will be calculated accordingly. We can't say right now, but we'll receive certain amount of bonus from that particular project.
Okay, sir. Okay. That's all from my side, and all the best to you.
Thank you.
Thank you. Our next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah, sir. Sir, just to clarify, you mentioned in terms of the monetization, that you expect that the definite agreement likely to be signed before December and deal to be completed by FY 2024. Does that mean that are we also expecting the entire cash to be before to be received before FY 2024 ends?
Yes.
Yeah.
Yes. Entire, conservation amount of equity, we expect to receive by March. That is our target. We are endeavoring towards the same.
We move to our next question. Our next question is from the line of Nikhil Kanodia from HDFC Securities Limited. Please go ahead.
Sir, all my questions have been asked. Thank you.
Thank you. Our next question is from the line of Prem Khurana from Anand Rathi Shares. Please go ahead.
Yeah, thank you once again. Sir, on monetization efforts that are underway for 12 assets, the four prospective buyers that you have in place, and all these are interested in all the 12 assets, or they want to take it as, I mean, they, let's say they like some asset, they'll bid for these four, five, six, seven assets? You want to sell this as an entire single bouquet?
Sir, we are for all 12 projects.
Okay, okay. Sure.
Interested in all toll assets.
Okay, sure, sir. Thank you.
Thank you.
Our next question is on the line of Jiteen Rushe from Axis Capital. Please go ahead.
Yeah, thank you, sir. Just harping on the monetization thing only. Sir, are you also thinking of an alternate process of InvIT? We have seen certain InvITs in the past with this poor prospective buyer discussion, you know, calls, gets called off. Are we looking for any InvIT option also an alternate? Are we working towards it, or we are looking only for a complete exit?
For these toll assets, as of now, we are not looking at, because we received good response from the potential buyers for these toll assets. Out of these toll assets, seven assets are already operational. Only five assets will be operational in next, three to four months. We at this point of time, we are not looking at, alternate thing for these toll assets. Going forward, as you have remaining, fund-based assets, we look at that option.
Which is the toll asset which you are looking to sell? Just for what? Can you just help me with the name?
Bareilly-Almora project. It's a BOT Toll.
Yeah. Any targeted valuation you're looking for, in terms of the book value? Like, what is, Although we are seeing a strong valuation coming from the recent deals, which is almost 1.5x and above. Any targeted valuation are we targeting in terms of the
We are looking at a very reasonable valuation, which is based on the, because we can't disclose the figure as of now. The talks are going on with the investors through our strategic advisor. Some clarity would emerge maybe next 10 days. Anyhow, we'll share with the exchanges, and then we'll come to know once we sign the LBOs.
Thank you. We move to our next question. Our next question is on the line of Shravan Shah from Dolat Capital. Please go ahead.
Sir, just a humble request. I understand there are many questions people are asking, but at least allow the participant to complete the question. It is, it seems like insulting the person or to cut in between. Or rather, we should be sharing all this basic data in the presentation so that we should not be asking all these basic questions and asking the relevant, proper questions on the business and strategy. That's the humble request. Even before, just we are about to ask the question or in between, the guy seems to cut the line. This should not be happening. That's a humble request.
Now my question is on the bonus part, I was just clarifying. Last time we were talking about INR 15 crore bonus we were looking for in Aligarh-Moradabad in the fourth quarter. What's the status on there? Mumbai- Nagpur, we were expecting, but some decision from the authority. We were expecting Delhi–Vadodara package 29 and 31. All these four projects now, there will be no bonus or do some bonus will come?
See, in case of Aligarh-Moradabad, what we expected, bonus will be realized by next 1st March, because the final bill completion and there are change of PIU people at NHAI headquarter, there are many changes are happened. It is right from CGM to down to the manager. People have moved and new set of people have come, so the process is getting delayed. Second thing, in case of DAV 29, Delhi-Vadodara, because of some hindrances and other part, even today, 150 m left of land is not available. Anyhow, we'll be completing that particular project by the scheduled time. We don't expect any bonus there, 29, because the delays happened beyond our control.
In case of DAV 2031, there is a lot of HT, high tension, power lines are going on. Again, there is a delay in shifting of these things. Despite our best efforts, the things are not happening because of some lack of things from NHAI side and other things. There also, the whatever bonus we expected, that is not taken.
90%.
Yeah, yeah. There also, we completed more than 90% work. In case of DAV 29, we completed almost 100% of work. It's the land hindered. In case of Nagpur-Mumbai, the government has not taken decision. Again, the political change at the state government level, so they have not taken final decision yet.
Nothing to come as a bonus, not for the even Aligarh-Moradabad also the
That we will get in Aligarh-Moradabad, no doubt about it. We are also expecting.
Uh.
From Aligarh to Kanpur, package 5.
Project.
Projects.
Okay. Second is on the JJM, we say INR 2,500 crore revenue in FY24. This INR 2,500 crore, if I just look at the, in terms of the order book, excluding the irrigation part, if I remove, INR 5,700 crore, out of that, INR 2,500 are to be done in FY24, and the entire remaining should be close to INR 3,200 odd crore should be in FY 2025, or it will extend to even FY 2026?
FY 2025 will be able to complete, except normally they keep some amount, retention amount and other things. Otherwise, we'll come to all works in FY 2025.
Okay. The irrigation you mentioned till January, because of the rain and water to be in the canal, very, very marginal revenue to come, and the deadline will be extended to FY 2025 or 2026?
Yeah, FY 2026, because we asked for, two years of extension, we asked for.
Mm.
It will be applied to water resources department.
In terms of the HAM requirement, whatever you mentioned, that is only for 18 HAM projects. The four HAM projects where we said INR 500 crore more equity. Assuming, as you mentioned, that appointed date by December 2024, then how much equity to be infused from that in 2024 and FY 2025 and FY 2026? Broadly, INR 1,700 odd crore, if you can help me break up in 2024, 2025, 2026?
Yes. Total equity requirement, including all the four HAM projects, is INR 1,690, around it.
Yeah.
Around INR 540 crore, FY 2024, and INR 460 crore, FY 2025, FY 2026 is INR 365 crore, and remaining, INR 327 crore in FY 2027.
Okay, okay. FY 2027. Got it. Got it. Okay. Thank you, sir.
Thank you. Our next question is from the line of Deepesh Agarwal from UTI AMC. Please go ahead.
Yeah, good evening, gentlemen. I have just one question. If I look at your segmental reporting, it seems the margin on the water segment at EBITDA level is quite high versus our old EBITDA water margins were at almost like 17% for the year versus 10.8% for this year. Is it a sustainable margin for water? If that's so, with the share of water revenue going up next year, why do you still stick to that 13%-13.5% guidance?
It will maintain, around 16%-17%.
Okay. If the water share goes up in our revenue, margin will ideally have an upside risk, right?
Deepesh Agarwal, sorry to interrupt. May we request you to use the handset, please? The audio is not very clear.
My question is: If the share of water segment goes up and it's a higher margin, ideally there should be an upside risk to our guidance on the margin of 13%-13.5%.
The guidance.
Around 13.5%, yeah. Average.
It may vary around 16%, 15% to 17% quarter. That party very one-third portion of the turnover.
Yeah. Understand. Okay, thank you, and all the best.
Thank you. Our next question is from the line of Jainam Shah from Equirus Securities Private Limited. Please go ahead.
Yeah. Thank you for the opportunity for this hosting call. There are no further questions. I would request you for some closing remarks.
Yes. Thank you everyone for your participation in our earnings call. We have uploaded the presentation on our company website as well as on exchanges. In case of further queries, you may get in touch with the Strategic Growth Advisors, our investor relations advisors, or feel free to get in touch with us. Thank you very much.
Thank you. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.