Ladies and gentlemen, good day and welcome to the Power Mech Projects Q3 FY 2025 earnings conference call. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Teresa John from Nirmal Bang Institutional Equities. Thank you, and over to you, ma'am.
On behalf of Nirmal Bang Institutional Equities, I would like to welcome you all to the Q3 FY 2025 earnings call at Power Mech Projects . The management today is represented by Mr. Nani Aravind, CFO of the company, and Mr. S. K. Ramaiah, Director of Business Development. I will now hand over to the management for their opening remarks, after which we will open up the floor for Q&A. Thank you, and over to you, sir.
Thank you, Teresa John. Good afternoon, everyone. I'm Nani Aravind, CFO of the company. I have with me Mr. S. K. Ramaiah , Director of Business Development. I welcome you all to our Q3 FY 2025 earnings call. The performance for Q3 and nine months for this financial year continued as per our set targets for the entire year. The reported total income for Q3 financial year 2024-2025 is INR 1,347 crore against INR 1,115 crore in Q3 FY 2024, an increase of 21% year-on-year. EBITDA is INR 160 crore against INR 141 crore, a growth of 13%, and PAT is INR 87 crore, which has grown 39% compared to INR 62 crore in Q3 FY 2024. EBITDA margin has decreased from 12.66% in Q3 FY 2024 to 11.87% in Q3 FY 2025 due to increased overhead costs. PAT margin has gone up from 5.6% to 6.5% due to lower tax and increase of other income.
Revenue mix for Q3 FY 2025 is as follows: Mechanical business has contributed INR 277 crore against INR 230 crore in Q2 FY 2024, showing an increase of 20% year-on-year. Civil business, including railways and water distribution, contributed INR 522 crore against INR 596 crore in Q3 FY 2024, a decrease of 12%. O&M revenue are INR 481 crore against INR 260 crore in corresponding period last year, reaching a growth of 85%. Electrical business is INR 25 crore against INR 21 crore, an increase of 19%. Mining business is INR 34 crore against zero in Q3 20FY 2024 during last year.
Other income is INR 9 crore against INR 7 crore in Q3 FY24. So, during Q3 FY 2025, the distribution between domestic business and international business is 95% and 5% respectively. Contribution from the power sector remained at 65%. Non-power sector contributed 35%. Similarly, the total reported income for nine months of FY 2025 stands at INR 3,409 crore against INR 2,922 crore in nine months of FY 2024, an increase of 17% year-on-year.
EBITDA is INR 417 crore against INR 360 crore, a growth of 15%. PAT is INR 218 crore against INR 164 crore in nine months of FY 2024, a growth of 33% year-on-year. So, on a nine-month-to-nine-month basis, EBITDA margin has decreased from 12.4% in FY 2024 to 12.22% in nine months of FY 2025 due to increase of overhead costs. PAT margin has gone up from 5.7% to 6.4% due to lower finance costs, lower tax expenses, and increase of other income. Revenue mix for nine months: Mechanical business has contributed INR 608 crore against INR 517 crore in nine months of FY 2024, showing an increase of 18% year-on-year growth. Civil business, including railways and water distribution, contributed INR 1,459 crore against INR 1,586 crore during last year, a decrease of 8% year-on-year. O&M revenues are INR 1,213 crore against INR 753 crore in corresponding period last year, reaching a growth of 61%.
Electrical business is INR 42 crore against INR 47 crore, a decrease of 10% year-on-year. Mining business is INR 60 crore against zero during last year. Other income is INR 28 crore against INR 17 crore of other income during last financial year. During nine months of FY 2025, the distribution between domestic business and international business is 94% and 6% respectively. Contribution from the power sector remained at 62%. Non-power sector contributed 38%. With reference to the other financial parameters of concern, net current days, excluding cash and cash equivalents, have increased from 147 days in Q2 to 155 days in Q3 due to delays in certification of the waterworks and delays in realization of receivables, resulting in an increase in the current assets of the company. On stabilization of MDO business from FY 2025 and FY 2026 onwards, we can expect a significant improvement in net working capital days.
The gross debt and net debt remained controlled despite delays in certification of water bills and delays in realization of receivables. As of 31st December 2024, the gross debt is around INR 614 crore, and the net debt stands at INR 141 crore. The debt-to-EBITDA ratio as of 31st December stands at 0.39x . Order book status so far in this financial year, the company has secured orders worth INR 4,242 crore till December. The order backlog as of 31st December is around INR 57,915 crore. If we exclude two MDO, the unexecuted order book stands at INR 18,284 crore. We are actively pursuing upcoming tenders, targeting INR 3,000 crore in new orders by March 2025. Additionally, we have been declared as the L1 bidder for the 49 km Deoghar Bypass Highway project in Jharkhand, valued around INR 973 crore. Under HAM, and we are awaiting the issuance of LOA from NHAI.
With reference to MDO businesses concerned, we are making significant progress in our two MDO projects. At Kotre Basantpur KBP Mining, we have achieved a key milestone with the State Forest Department's release of 564 hectares of notified forest land in the month of July. Following the securing of tree felling permission in October, tree felling beginning December 24, we anticipate OB removal to commence next month, March 25, with coal supply scheduled to start from April 25. The other MDO, Kalyaneshwari Tasra project, is gaining traction. We have completed equipment mobilization for initial mining and received environmental clearance for 3.5 million tons per annum washery on October 24. OB removal and coal production have been ongoing since January 24, with approximately INR 5.38 lakh tons of coal excavated and dispatched to SAIL as of January 25.
Although SAIL offtake is currently lower than planned due to limited washery capacity outside, we are working to address this constraint and scale up production. Now, I request Mr. Ramaiah to update on the development of business side.
Yeah, thanks, Aravind, for your update on the overall numbers. Thanks for your remarks.
As I said, Aravind is doing his update. As far as the business side is there, the backlog of orders, which was INR 17,362 crore at the beginning of the year, has gone up to INR 18,284 crore, upside of 5.3%, with the overall addition of INR 4,242 crore, which has added up to the three quarters, and in this case, a few important things: the mechanical and ETC business has gone up by 7% from INR 6,422 crore to INR 6,857 crore. Civil backlog is from INR 7,814 crore to INR 7,310 crore, a reduction of 6%. O&M, there is a huge uptake in that in terms of order booking. There is a positive indication from backlog of INR 2,197 crore to INR 3,228, about 47% more.
Electrical, a modest decrease from INR 930 crore to INR 887 crore, minus 4.6%. The overall order backlog has gone up by 5.3% from INR 17,362 crore to INR 18,284 crore.
And the domestic business continues to drive the business substantially, more than 95%-96%. And international operations, recently mainly on the O&M and the maintenance jobs, we are now trying to catch up. There is a balance portion. Then power sector continues to drive the substantial business because of the huge surge in the opportunities which have been available, both in the installation business, civil business, as well as the O&M business. And then MDO has given an update about the overall position in terms of the present execution and the actions taken. Now, what we can say is that as the opportunity side, there is a positive thing in terms of the investments, particularly in the power sector. What I can give, that is an important thing which is driving the business.
What I can give an update on this is that BHEL has been ordered with substantial orders in both the EPC and the main plant works along with the civil works. That comes to almost 24,000 MW in the last two years. In the EPC business, they have taken about INR 81,680 crore. And the main plant installation, main plant works in the supply and installation, and then the civil works also, civil works, that is the main plant boiler and turbine, INR 55,302 crore. And L&T is also entering now. They are taking further interest into this one. They have taken two major jobs of 4,000 MW, and that is around INR 27,523 crore.
And therefore, in that way, the overall ordering which has been done in the last two years is about 28,900 MW. In that, the major players are Adani Group, has taken six projects, about INR 10,920 crore.
They have done the ordering. Haryana Power Generation Corporation Limited, 800 MW. DVC, INR 6,600 crore. And then recently, the latest news is that they have taken a decision on the Raghunathpur for the boiler island of the work. That has come about INR 6,500 crore or something like that. And then Mahagenco, this is also latest development, Koradi. They have taken forward the addition which was pending on the Koradi investments, 2 x 800 MW. Now that has come to 1,600 MW. And then they have ordered on BHEL for about INR 8,000 crore to main plant works. And then NTPC has substantially ordered on BHEL about 11,580 MW. Totally comes to 28,900 MW`. In that, the EPC portion, as I explained to you, BHEL EPC portion comes to INR 81,680 crore. Now, balance ordering has to be done in many places. Koradi, they have to order about 1,600 MW.
Adani, because they are doing the packaging themselves in about 10,920 MW, they are doing in-house. Of course, there also, the opportunity can be there in many of the civil works, mechanical works, coal handling, miscellaneous works, etc. Then NTPC, the recent bulk tender which has been awarded two to L&T and one to BHEL in Telangana, that is about 6,400 MW. That opportunity can be substantial. Now, Raghunathpur latest update about INR 6,000 crore which has been awarded on the, this is the latest yesterday's news to BHEL on the boiler island. That means they have split the entire EPC into two EPCs. One is the boiler island, another is the turbine island. On the boiler island, they have taken this job. Then the MPGCL, and there are new projects which will be expected out of the eight sets also.
Therefore, from the combined opportunities in the power sector, I would like to dwell in the first instance. The main business interest for us is the installation business, civil and structural business for the main plant and wherever balance of plant is there. We have measured out the total opportunity size about INR 27,250 crore. New projects which have been allotted about 13,560 MW. Then there is a recent development wherein KSK Mahanadi, the NCLT project which was gone for liquidation has been awarded to JSW. That is, there are existing three units are running, three into 600, and one more unit they are going to complete it. That is 600 MW. Two more units, they are going to change the configuration from 600 MW to 660 MW. These are the major things.
The other areas, yes, on the infrastructure side, government continues to be bullish on investments in railways, drinking water schemes, roads, and then metro projects, etc. Therefore, what we are focusing is that the experience what we have gained in the drinking water, we want to expand the business because this drinking water scheme has been extended up to 2028. The total investment may exceed about nearly from INR 3.6 lakh crore, which will go up to nearly INR 5 lakh crore. It is expected particularly in the southern states, Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, and Maharashtra. A lot of investments are expected. Now with the experience what we have gained in the UP, where we have done substantial work for about INR 2,723 crore, about 1,969 villages, the work is in progress. Substantial work has been completed. That is the focus on that.
The O&M, what I can say is that we are very bullish on the O&M because one is that a lot of new projects are getting commissioned. In fact, last year, the commissioning was expected about 6,000 MW. And that will go up to 8,000 MW-10,000 MW in this year. And then if they maintain this pace, because the government's plan is to ramp up the capacity of the power plant installation from the existing 218 GW to the 218,000 MW or nearly 3 lakh MW. That means 80,000 MW. And a lot of ordering is there, and many players are coming with investments. JSPL is planning two projects, one in Odisha, and then another in West Bengal. They have taken [Foreign language] Sailong. Already yesterday, the news is that they have been awarded. That is JSW Energy.
JSPL, the sister group, is also planning two major plants in Odisha and also in Chhattisgarh. And then there are other players also expected. After the utilities also, sorry. Many utilities are expected to make the investments, including Coal India and many other public sector government undertakings in Uttarakhand, is also planning 13,200 MW for whatever requirements are there. Then Coal India, I said, they are planning investments in Odisha and Rajasthan in a joint venture basis. Therefore, we are really bullish, sorry, on the power sector investment in the next two to three years, which has the execution go for another four to five years. It will throw up two major opportunities. One is the complete installation business, which will be available, which will be our major player.
Another is the follow-up O&M jobs, which will come up as part of the new commissioning, which will take place every year, about 8,000 MW, and that is a substantial business opportunity, and that we have seen in the major orders we have taken recently in many of the O&M jobs. For example, the major O&M jobs what we have taken last year is the drinking water, about INR 681 crore, as part of the commissioning operations, which is going to take place. And then Meenakshi Rehab and O&M job, INR 685 crore. And then INR 951 crore for Talwandi, 3x 660 MW. Tuticorin, INR 392 crore for 2x 600 MW. Singareni, 2 MW into 600 megawatts, INR 343 crore.
And there was a job we have taken in Nigeria, where we have done the commissioning of the Captive Power Plant, INR 139 crore. Then other jobs for the JP Group in Bara.
Udupi Adani jobs, we have taken about INR 100 crore, and JSPL Angul also, we have taken colony of INR 68 crore. In all, this is how it adds up. Now, certain things which we have to factor in that. Mainly, the election processes happen continuously state after state. It has some sort of a postponement of the ordering and also decision to call the tenders and all. There is another positive development which companies are trying to foray into it. That is in trying to see how much we can make the best of our experience in terms of the complete installation, O&M, and then civil structural, and then material handling jobs, and then main plant works, etc. Particularly trying to Balance of Plant packages. Because the NTPC has plans to do the Balance of Plant packages, and we are working with BHEL. Then other customers also meeting.
Also, Singareni, there is an opportunity coming up. Koradi, I said about 2 MW into 18 MW, that also is coming up. And then there can be other opportunities. Therefore, balanced opportunities can throw up at least around INR 12,000-15,000 crore, more than INR 15,000 crore of opportunities. Then we have to see how to take that call. And then the other things what we are doing in the international market, the focus is more on the domestic market. And the areas of railways, yes, railways, particularly the metro jobs. Metro jobs refers to the maintenance shifts. About INR 10,000 crore of opportunities are there. And we are already working in many such maintenance shops and railway workshops also. This is what I would like to say. Thank you very much.
Shall we begin with the question and answer session?
Yes, ma'am.
Sure. We will now begin with 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. We take the first question from the line of Dhruv Bhatia from AUM Fund Advisors. Please go ahead.
Yes, hi. Am I audible?
Yes, sir.
Yes, sir. Thank you for the presentation. My question is, sir, obviously the opportunity is very, very large. What you are pursuing, your order book already reflects that. But in terms of execution, what are the challenges for you to grow much faster than the 20% sales growth that you have done? Because you have a massive order book. If you can give us some guidance in terms of execution, also what we can expect next year and maybe in FY 2027. Just focusing on FY 2026 and 2027, what is the internal target? What are the instances to grow much faster in terms of people, CapEx, materials, or working capital? Is there any constraint? And linked to that question is, what are the margins that you expect with higher and higher scale? Where should the margins stabilize? Both across the non-MDO business and in the MDO business as well.
Thank you.
Yeah. So thank you, sir. It refers to the scale of operations concerned. Last year, we have touched almost INR 1,500 crore per quarter execution capacity. So we may scale up this because of the number of new line of business we started. And O&M also, there is operationally. We received more orders during the year. So we may touch, we can execute up to INR 1,800 crore to even we may can touch up to INR 2,000 crore of revenue. So the next year target for 2026 and 2027 guidance is that we have, earlier we have committed INR 7,500 crore crore. We targeted for the 2026 and 2027 is around INR 9,500. It's including the MDO operation together.
But there is a delay in terms of the starting of the projects in MDO. Most likely, maybe 10% or 15% here and there probably will touch between INR 7,000 crore-INR 7,500 crore.
Between, we may touch in 2026 and maybe around INR 9,000 crore we can touch in 2027. So in terms of the profitability is concerned, the MDO business will give a more EBITDA margins once we reach the peak rated capacity, which we are expecting from FY 2028 onwards. Till that time, during the development phase, we may not expect that much of EBITDA increase in the overall margins. But regular business, we are choosy about picking the right orders and high profitable orders we are planning to execute. And O&M orders also we are going to increase. So the O&M, the EBITDA margin maybe year- on- year versus maybe around 0.5% to next two to three years maybe in the range of 1%-1.5% range we can expect to grow, sir.
Yeah. I will add a few things to what Aravind has said. The other thing what we have built upon right is on the capacities and the methodologies what we can do to ramp up the revenue and also the growth. That is obviously comes from the capacities organization has built up over the years. In fact, one of the basic things is that the organization capacity what we have seen is it was around 30-32,000, including all the manpower direct and indirect manpower and also engineering supervisors and the contracting labor. So it has gone up to 37,000. That itself shows that for the O&M in the last six months, we have ramped up the organization strength of both execution, operation maintenance, skilled people, engineers from total of 12,000 to 13,000 to 17,500.
Therefore, that is because of the large pool of the piece rate workers and the skilled people we are having in our roles from our piece rate workers or contractors and other agencies and all. Second thing is that the organization has finally gathered a lot of expertise in terms of site execution that they want to convert into high-end value jobs. That is mainly in conversion in the civil works, for example, end-to-end solution, civil structural mechanical, and then O&M. Therefore, we are perhaps next to L&T or some of the bigger companies which are not into this traditional type of business. We are perhaps the only player who can provide end-to-end solution from in the entire construction as a construction partner.
That capacity is to be established in terms of physical capacities of mechanical works about four to four and a half lakh tonnes at one time. We have demonstrated. And then in the concrete inside, two and a half to three lakh cu m , that is substantial. And when we have reached that type of capacities, when the new orders are expected, and each plant for a 2 x 800 MW or 600 MW plant has got a capacity of 150,000-400,000 tonnes. And then doing a couple of jobs parallelly is not a challenge for us, which we have demonstrated earlier. And therefore, not only that, in the infrastructure side also, a lot of expertise has been developed in the recent years. Sorry.
Sir, my question on the margins, do we expect for the next two years at least margins to be constant in the 12% range?
Sir, we see. Yeah. See, there is one basic change which has happened in the market. Why we are a little bit bullish on the market is that the O&M pie of the execution has gone up substantially in terms of the backlog by 47%-50%. As we all know, O&M provides better EBITDA margins and all. Now, on the bullish trend in the main plant power plant ordering, it is now demonstrated that a lot of order holding is there, and then competition is a little bit subdued now because of the historical reasons. We are well able to handle that. The realization of the average value has gone about 20%-30% in the last couple of years. Both in the mechanical works and the civil works and the O&M side.
That is the main reason why perhaps Aravind is working on these figures, and in the coming years, we should be able to show better margins.
What would be the, Aravind, do you think going forward just as an indication for the power business or the non-MDO business? And then what would be in MDO business over the next year? The margins?
Sir, MDO, so our mining operations are progressing well, and we expect this segment to contribute around INR 2,000 crore to our top line by 2028. As we reach full operational capacity, the growth will further solidify our market position and support our overall revenue targets also, and we are actually targeting to annual growth of around 25%-30% over next four to five years of top line, and the EBITDA margin, right now we are at 12.2% average we are giving, so O&M division with margins exceeding 15% is a key contributor for the major increase in the O&M, the EBITDA margins, so looking forward, we are projecting an increase of EBITDA margin with 1%-1.5% over next three to four years. As the mining revenues also will continue to grow along with and contribute to major top line.
So both mixed together maybe 1.5% at the peak rated capacity we are expecting in next two to three years, sir.
That's 1.4%, Aravind?
Over three years, it will be 1.5% higher.
The both together over a period of two to three years. When we reach the peak rated capacity, it will not happen immediately. It will year- on- year, it will go. And when we reach the peak rated capacity, we expect another 1.5% jump in the EBITDA margin.
Yeah. One more thing I would like to add up is that since we are having a single establishment doing multi-area jobs in construction, particularly the civil works, the structural works, and mechanical works, our overheads can come down reasonably. That will contribute some better margins. And then O&M backlog and capacities is going up, and that will definitely add up also to the margins down the line. And the other trend is that the customer is now preferring outsourcing the O&M on a comprehensive basis. That brings a lot of value addition, not only in the private sector. Private sector has started now. Public sector also has started. Many of the public sector companies also like KPCL, GMDC, and then other many companies are going to catch up because they don't want to increase their establishment, and this is a better option to work on that.
Some of the private customers are further expanding the O&M profile into such a way that we take the entire responsibility because of the capacities and the performance what we demonstrated so far.
Thank you, sir. Thank you for answering my question.
Thank you. We take the next question from the line of Pritesh from Lucky Securities. Please go ahead.
Sir, any reason why when you see your nine months number and when you also see this quarter's number, the O&M in your revenue mix have risen quite substantially? and the growth is also a bigger growth is coming from the O&M revenue itself. so why is it that your operating margins are moving up? Have you taken some orders in civil which are a lower margin order? What is the key reason, if you could tell us?
Sir, we are executing for.
See, if you are saying that your margins are going to go up because of O&M, they should be visible now also, right?
Correct. I'll come to that, sir. See, the current last year, because of the general elections, and there were delays in terms of the realization of receivables. And moreover, there are new O&M orders we received during last year. We have taken up a lot of manpower into the rolls of the company. And so the conversion will happen slowly. Initially, we'll have more overheads in terms of the starting of the new projects. That is one reason.
And UP Water Division, we are executing this project under Jal Jeevan Mission. Because of the general election, there was no fund allocation at that point of time. So there is delays in realization of these bills. And subsequently, Jal Jeevan Mission timelines has expired in the month of November. Again, there is no fund allocation for this project. So again, the department has not certified the lot of bills pending from the certification.
So this resulted in more overheads, and we are incurring working capital limits to utilize for the running the projects further. So that caused the more expenditure overheads increase in the current year, Sir. Next year, once these O&M operations are stabilized, automatically the initial cost, whatever we incurred, is normalized, and we may improve the maybe Q4 onwards, there may be increase in the EBITDA margins compared to the Q3.
So you are saying, if I understand your answer correctly, you are saying costs associated with new projects have come in the P&L, but the corresponding revenue related to those new projects are yet to come in your P&L.
No, no. Corresponding revenue we received, but initially, we have to start up costs will be there to start major overheads we have to incur to start up these works. We have to set up the site establishment and everything. So that incurs more cost in terms of the overheads it comes in. The revenues we realize, but this cost will be normalized during the subsequent quarters. In the initial period of starting of the actual operations, it will have to incur the more cost in mobilizing the resources.
What is your usual margin that you bid at for in the O&M contracts?
It ranges from case to case, sir. So it depends on the scope of work and all. So it ranges from 15%-20%; 21% is also there. Some cases we are having 21%-22%. On average, we are getting 16%-17% average.
Actually, there are two categories in this. One is the long-term O&M contracts. There is a steady margin. Then short-term shutdown jobs, repair jobs, maintenance jobs, that can get a better margin also. Because customer is in a hurry to get the job done because of the shutdowns and all. There's some opportunity cost is there. That is how the overall O&M pie, both the AMC and the shutdown jobs can provide better margins. As I told you, in the main plant installation business, the civil work, because of the competition being reduced a little bit and also the higher demand, the margin profile has gone up, and that realization will come in coming years.
Okay. Sir, last, on the order, or let's say the order visibility available in the power sector. You guys gave a lot big analysis. But if I have to shorten it and understand, how much of the orders for BTG, which have been given out to BHEL by various utility companies, out of that order, how much order is yet to be ordered out for the main plant erection and the balance of plant? If you could.
I'm taking out the overall figures I gave you of what the BHEL order has taken in the last two years.
That is about 29,000 MW, right, what you said?
29,000 MW, roughly it comes to nearly almost INR 140,000 crores. Okay. Then L&T has taken recently INR 27,523 crores. Therefore, all these things will come. Of course, a few orders have been getting converted and all, but bulk of the orders have to be converted. And this year and next year, major ordering will happen. That's what I gave a figure of the total opportunity side when the ETC civil package is for the balance ordering to be done by out of these things, about INR 27,000-INR 30,000 crores will be there. This is when the orders already placed by BHEL on BHEL and L&T.
Then there will be another 13,560 MW of new ordering has to be done by the utilities, by various utilities if they have to place the order because the urgency of doing it is very important to ramp up the capacity to 80,000 MW by 2030-2032 from the present 220,000 MW to 3,000,000 MW. That is also there will be better margins which will come because of the increased demand. As you know, the demand goes up, the margins also slightly can go up also.
So basically, simple to understand, out of whatever is ordered with BHEL plus NTPC put together, the main plant erection worth INR 27,000 crore, balance of plant worth INR 15,000 crore are yet to be ordered out to various contractors like you. And over and above that, there will be new tenders for BTG or new tenders for power plants.
13,560 MW.
13,500 MW, which is yet to order out completely, correct?
Yeah, yeah.
Okay. Now, you have a 50% market share, so is there a change there in the BTG direction? To the first participant's question you never answered, why is it that you have orders today in the non-MDO area? In the non-MDO, but when it comes to revenue execution, why is it slow?
Look, revenue execution, you see, we also, that was mainly because in drinking water, there were certain fund allocation issues. That is where we had some shortfalls there. And then there were certain delays, this local that happens in some of the projects and all because of the engineering issues and clearances and all. That is also a factor. And when we are doing a lot of projects in the open area, there can be local issues on the land acquisition, clearances, approaches, and these types of these are all to be there. And that is how there is some sort of a this one. But even then, as I said, with the INR 3,380 crore, and then our figure was to exceed the INR 5,000 crores revenue in this year. That we are confident about doing it.
Okay, okay.
Mr. Pritesh, does that answer your question, sir?
Yeah, ma'am. I'm done. Thank you.
Thanks. The next question is from the line of Anupam Gupta from IIFL Securities. Please go ahead.
Yeah. Thanks for the opportunity. So you outlined the opportunity side pretty well, but we have seen BHEL getting orders quite some time back. So when do you actually see BHEL tendering out and you being able to book these ETC or BoP orders in 2023? Do you expect anything to come in fourth quarter? Or when should we start seeing the tendering happen from BHEL side, given that they themselves have a large order book?
For example, a couple of tenders we are already in bidding processes on. Unless it is extended, let us say it will take one to two months. Particularly, BoP Koradi tender is due, and that is the one that we are working with BHEL, and there is going to be Singareni tender also, 1 MW into 800 MW. That is also due, but first of all, BHEL has to get the order, and that is in the final process of giving the offer and all, and perhaps that needs to approve the state government at the cabinet level. Then there can be other projects also which are expected there. That's why I gave a figure of INR 15,000 crores in the BoP.
And then as far as the installation civil and other opportunities what the BHEL has got, and even the L&T has got about INR 27,000 crore, what I said is that this should happen maximum in another six months to nine months. Because including Adani direct orders, BHEL main plant orders, and then balance of plant orders, whatever they have there, then L&T also. Then all these things in various areas, main plant, balance of plant, coal handling, the civil works, structural works, piping works, etc. That is where you know. But in the worst situation, it is extended to 9 months to 10 months. Because if they don't award all these things by end of the another 8 months to 10 months, perhaps your projects get delayed. That is what I can say. Sorry.
Understand. So let's say next year when you say that you will deliver for short INR 7,000 crore of revenues, what is the minimum ordering which you are looking at for this year, at least?
Looking at the trends, of course, this election process, the continuous phenomenon, many of the projects are located in these segments and all. And then perhaps about INR 10,000 crores should be reasonable.
10,000 crores total ordering in this year?
No, next year, next year.
Next year. Okay. Okay. Understand. And in this INR 18,000 crore order, we should assume that the same thing which you had mentioned in the last call, that the Adani orders which have not started are not going to be executed, right? Around INR 4,000 crores. That's right, as I'm sure?
Actually, actually.
No, Mir.
Yeah, Mirzapur, we are discussing it. That's Mirzapur, then Kodarma.
Kodarma, Mahan.
And then Mahan stage three. Stage two, we are already executing. Stage three, then Mirzapur new units. And then Amarkantak, we have taken it. And they are also planning Kawai and all. Of course, Kawai out of four units, two units were shifted to the projects in Madhya Pradesh. These are all to be expected.
Are you saying that INR 4,000 crores can still be executed or they will not be executed?
Sorry, Anupam, can you repeat your question?
I'm saying the FGD orders which were there from Adani of INR 4,000 crores on which work had not started, will that happen or will that not happen? What is the clarity on that as well?
As of today, except for that INR 900 crores which are in Mundra, they have taken out for the time being, we are executing this one Udupi project. Then other projects as of today, yes, it stands. Because one more development I can say is that Supreme Court recently has taken a very hard call in terms of that they don't want to make compromise on the pollution, and some postponement can be there in the implementation of new orders because there are other related issues in terms of the tariff adjustment and tariff compensation by the regulatory boards and then discounts, and that is one of the reasons which is a little bit delaying all this implementation. Otherwise, in our opinion, I don't think they will compromise much on the FGD. It will take some more time.
Understood. And the next question is on the MDO. So let's say the revenues are obviously pretty volatile given that sales, the washing capacity gets washing capacity clarity is not there. But broadly, if you look at, let's say, FY 2026, what sort of revenues would you expect for the mining MDO from CIL and CCL projects separately?
Maybe around in the range of INR 300 crore-400 crore range. Because per month, we are executing around 1 lakh tons in Tasra. We may execute from April. So Tasra must do around INR 200 crore-INR 220 crore roughly we can execute for the next year. And CCL also, we may execute around INR 50 crore-INR 80 crore for the O&M pie for MDO is the initial capacity we have to execute. So together, maybe INR 300 crore-INR 400 crore between we can execute the MDO business.
Okay. And your washery for which the groundbreaking had happened, what is the execution timeline for that?
By September 26, we have to complete the washery. We have already acquired all the required permissions and everything, so major equipment designs are also completed, and we have ordered, we have identified, finalized the vendors, and we have ordered some equipment also, so remaining are also under negotiation and discussion. Most likely, ordering will happen in the next two to three months.
Okay. Because September is the final.
Yeah, yeah.
Okay. Okay. Understood. That's all from my side. Thank you.
Thank you. We take the next question from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Hello. I'm audible, sir?
Yes, sir.
Yeah. Thank you very much for the opportunity. So just first, I just wanted to understand on the debt side, how are we looking to, I mean, in terms of debt, how do we look the outlook?
Sir, as of today, we are having fund exposure of around INR 700 crore, INR 714 crore without utilization. And going forward, we are executing this CapEx requirement, I mean, the washery requirement in the power order book. So there may be a requirement of around INR 700 crore-INR 750 crore capacity addition in the next two years. So roughly by 2028, we'll have roughly around INR 1,200 crore addition will happen in terms of CapEx is concerned. Debt loads will be added to that. And working capital side, maybe another INR 100 crore-INR 150 crore will be added to that. Because we are speaking of the BOP ETC projects. So roughly maybe INR 1,800 crore-INR 2,000 crore roughly will touch by 2028.
So INR 2,000 crores debt by FY 2028. That's what we are looking at?
Yes.
Which is currently?
No, no. It's not debt, sorry. It is a CapEx total. Debt will be around 500 only. We are adding to the CapEx. 500 plus another, so around 800 will be added to that. 800 plus another 700, 1,500 to 1,600 will be roughly the debt number by 28.
So INR 1,500 crore-INR 1,600 crore debt by FY 2028, right? And which is currently INR 600 crores, right? Gross debt?
INR 714 crore, yeah.
INR 740 crore debt right now. It will be about INR 1,500 crore-INR 1,600 crores by FY 2028. This addition, I mean, each year it will be like INR 200 crore-INR 300 crore? I mean, the addition will be on the phased manner or will there be?
The CapEx requirement is roughly around INR 700 crore-INR 750 crores. In that INR 240 crore, we have equity, the QIP funds we raise. So INR 450 crore-INR 500 crore will be added in the next two years. Plus the regular CapEx on the new orders we received, so around INR 100 crores every year regular CapEx will be added to that.
Okay, okay. So INR 750 crores is the CapEx for next two years. So out of that INR 400 crore-INR 500 crores, debt will be added in the next two years, right?
Yes, yes.
That's the right understanding?
Yes, yes.
Okay. I got it, and in terms of execution, I mean, this year FY 2026, we are looking at INR 7,000 crore-INR 7,500 crores kind of a revenue, right? FY 2026.
Yes.
Out of which, how much is coming from MDO in this year itself, FY 2026?
FY 2026, we are projecting maybe 300-400 between, depends on the momentum of the orders intake from the sales, sir.
300-400, and you mentioned by FY 2028, optimally MDO can do INR 2,000 crores of revenue. And so at optimal levels, what sort of EBITDA margin one should look at in MDO? Is it close to 20%?
Both together, an average of 20%-22% we can take up, sir. We have higher margins in Tasra and lower margin in KBP. Weighted average of around 20%-22% we can take.
This year, earlier we were targeting, I think, close to INR 5,500 crores of execution. Now, given the nine-month execution that we have done, what would be our revised target for this year, FY 2025?
We may touch this year around INR 5,000 crore to INR 5,200 crore between, sir, roughly, and we are, as of nine months, we have executed around INR 3,400 crores.
Correct.
We are short by INR 1,800 crore. The water utility certifications are pending. Roughly around INR 200 crore works are there in the WIP that certification happened. Another INR 1,600 crore-INR 1,700 crore we can execute in the Q3.
Q4.
Q4, actually, for both government and private sector clients are likely to expedite the certifications and payments. So we can be able to touch at least 25% growth for the current year. So INR 5,200 crores we are targeting to reach.
How much? Last point I missed.
INR 5,200 crore, roughly.
INR 5,200 crore, so Q4 we are looking at INR 1,700 crores plus kind of execution, right?
Yes. Because already some certification is pending from water division. So that is already there 150. It was supposed to happen in Q3, but there is a delay in terms of certification because of the timelines expiry of Jal Jeevan Mission. So now the recent budget also has extended the timelines.
Correct.
They will do the certification. They will release the funds in April.
Understood. And in terms of order book accretion, we are looking at around INR 10,000 crores of order inflow in next year, FY 2026, right?
Right.
Okay, okay, okay. That clarifies, I think. That would be it from my side. All the very best to you. Thank you so much.
Thank you.
Thank you. The next question is from the line of Manthan from Nexus Equity. Please go ahead.
Hello?
Hello.
Are you able to hear me ?
Yes, sir.
So I think earlier we were targeting order inflows of around INR 10,000 crore-INR 12,000 crores for this fiscal year, so now, till December, I think we have just received INR 40 crore-INR 100 crores of order, and what you said that we might receive another INR 3,000 crores of order in the remaining three months, so INR 973 crores we were in L1 in road projects, so we are awaiting for the LOA, so that will also be added to that.
Okay. So overall, how much order inflows that we expect?
Between INR 7,000 crore-INR 8,000 crore, sir.
So because earlier we were targeting something INR 10,000 crore-INR 12,000 crore. So are there delays in order bidding or some orders will be spilled over to next fiscal year?
Actually, what happened was that the election process, another is some of the tenders got postponed. The major BoP tenders, it got postponed by five to six months. Then Koradi, it was the earlier project should be started long back, six months back, eight months back. Normally, they have started some tendering work. And the main plant has been awarded. And then there were some ordering itself on BHEL and L&T, there were some delays by the utilities. This is a major reason for that.
Okay. But sir, then so next year we are targeting order inflows of INR 10,000 crore roughly. Now, if I consider that INR 4,000 crore were which were actually going to receive in FY 2025, will be received in FY 2026. So next year also, incremental order will be just INR 6,000 crore. So the pace of order inflows is decreasing despite you being, I mean, despite been having such a strong order book. You said that L&T is also having strong order book, even Adani also. Then why we can't target much aggressive order inflows? Because our order inflows have been stagnant since last nine to ten months.
No, I agree with you. But basically, what we have to understand, there can be a time lag between taking decisions. And then some of the places, there are engineering issues out there. More than that, there were layout issues. And then basic approvals will be there. These are the things we generally delayed. Therefore, we have been doing well in certain big ticket items like previous years. And of course, this year onwards, the big ticket items what we are hoping for the BoP, there is a postponement. And that is where our optimism was making INR 10,000 crore-INR 12,000 crore earlier.
Okay, so this year, as you said, the previous participant, that we are quite confident of achieving INR 5,000 crores to INR 5,200 crores of top line. Is that so we stick to that?
Because we have demonstrated last Q4 also the capacity to execute. Q4, as I said, building and the certification process will be better in the customer also because he wants to dispose of his funds and then build it also. Payment also.
See, the UP government is certifying the bills only when there is a fund available in the system, so they are holding the certification, so we are recognizing it as a WIP. When they allot the funds, they are certifying. And based on the certification, we are checking, so that way, we are content of getting the certification by March, and we can be able to reach our target.
Let me hear further.
Okay. So what you are saying is that INR 200 crores is just INR 200 crores of revenue booking is just delayed because of certification. As soon as you receive the certificate, that INR 200 crores of order revenues will straight away come. Is that correct?
Yes, sir.
Okay. And, sir, since that we might need to borrow in the next one or two years. So as of now, we are working on a PAT margin of roughly 6%. So we expect that our PAT margin will be 6%, net net 5.5%-6%, or will that come down?
Basically, the finances are under control, and that's why we are able to manage the 6.5%-6.8% level of PAT margins. Now, if the EBITDA margin is improved, then automatically this margin also will go up. So the main constraint is happening at this EBITDA margin level only. So as and when we get the, I mean, the two profitable orders added to the portfolio, EBITDA will automatically go up and your PAT margins will go up, sir.
Okay.
Even here, we are well within the planned number, and compared to the previous numbers also, we have less finance costs. But going forward, if we go for the because we are majorly new hybrid models, we are executing, there is no working capital requirement for that. So only EPC projects, if I bid, then I have to go for the more working capital, and my finance cost will be more. And if I add more CapEx to my balance sheet, then again, I have to add more interest costs. So far, we are managing well within that. So again, the future depends on our growth pattern and BoP works. Probably we may have to incur more finance costs, and so the PAT levels will undergo a change.
Okay. And MDO revenues were INR 34 crores in this quarter, which was like a significant jump from previous quarter. So can we expect such a QoQ jump on the MDO revenues, or is that some, again, in MDO revenues also H2 is heavier than H1? How does it work for MDO orders?
Tasra project, actually, this ready platform readily available. So we started mining because earlier some other MDO promoter has done this excavation. And so we were readily available, and we are doing the billing directly. So now we have to, there is no appointed date. We have not received so far. But SAIL is giving as and when the available quantity. It depends on the availability of the washery capacity outside. So from April onwards, we may get appointed date, and then it's a binding agreement between the SAIL and us for lifting the material as per the contractual terms. So based on that, we are hoping that every month we can raise a bill to SAIL as per the agreement conditions.
Okay. And of this mix of MDO order book of INR 17,000 crore-INR 18,000 crore, how much is slow moving? Or these all are executable in the next two to three years? Current INR 18,000 crore of order book mix of MDO?
Except the FGD of INR 4,600 crores roughly will be the FGD orders, non-moving. The rest of the order is running only INR 14,000 crores roughly right now.
So INR 18,000 crores includes FGD slow moving order of 4,200 of Adani. Correct?
Yes. Yes, yes.
Okay. So that is INR 14,000 crore in what you plan to execute in the next one, two years or three years means with current order?
average, you can take two to one and a half years.
40%.
40% is the conversion rate.
Yeah. Okay, okay. Fair enough. That's it from my side. Thanks.
Thank you. We take the next question from the line of Anush Mokashi from Yadnya Academy. Please go ahead.
Hello?
Hello.
Am I audible, sir?
Yes, sir. Yes.
Yes. Thank you for the opportunity. So my question is about this recent development about the nuclear energy mission. So I just wanted to understand what benefits do Power Mech see from this. And basically, do Power Mech have the capability to develop these small modular reactors? And if not, would you consider entering into this segment?
Yeah. That is a government initiative. Already, Jindal has started a joint venture. I think they are going to start. And then NTPC, then this one Nuclear Power Corporation, they have started a joint venture. Idea is to put 200 or 250 MW sets. Of course, that has to be developed and all. Of course, we have recently taken a job of INR 550 crore in Kawai for the main plant works and all. We are looking at it, but it is going to be a challenge because the technology is there, then the sourcing is there, and then a lot of aspects are there. But one good thing is that these plants will run long, a lot of time, 30 years, 40 years. It makes sense. And that we are just thinking. We have not taken any calls so far.
Okay. And just one next question was, like you said, the INR 200 crore of revenue booking has been delayed to Q4. So is the cost also delayed? I mean, the cost booking is also delayed to Q4? Is it currently booked in Q3 only?
No. Because when we recognize the WIP, it automatically comes into the revenue part, sir. So some back-to-back contractors are there in this project. So wherever the back-to-back contractors are there, the cost has not been booked, and the revenue has also not come through. Wherever direct execution is concerned, we have already recognized the WIP. For the balance portion, wherever back-to-back contractors are there, for that, we have not recognized the both costs and revenue because we have not received the bills from the clients' subcontractors also.
Okay. Thank you. Thank you, sir. That's it from my side. Thank you.
Thank you. The next question is from the line of Kamlesh Jain from Lotus Asset Managers. Please go ahead.
Yeah. Thanks for the opportunity. So just one, I wanted your thought on the fact that recently, Ambuja has come out with the tenders to update their cement plants.
I'm sorry to interrupt, Mr. Jain. We are not able to hear you clearly, sir. Can you please increase the volume?
Yeah, yeah. So am I audible?
Yes, please go ahead.
Yeah, yeah. So sir, just wanted to have your thoughts on the development that Ambuja has come out with the tenders for some of their cement plants to operate on MDO basis or on contract basis or outsourcing. So as we are looking to diversify into other sectors, would we be pursuing that particular opportunity going forward?
So, is this a capital consumption power plants which you are referring by the Ambuja?
No, I'm talking about the entire cement plants.
Okay. So now we are pursuing in Dalmia Cement, Bihar, and Andhra, and Tamil Nadu also. They are actually planning to start the captive power plants, solar power plant and wind power plants. So they want to join as the 26% partner, and we will install the required megawatts of solar power plant and wind power plants. And we have to supply for 25 years of PPA, they will enter with the Dalmia. So the negotiations are going on. We have given our quotes for them. So we are waiting for their confirmation on that, sir. So there is a new solar business which we are actually looking at to start with. In future for entering into the green hydrogen business, we want to have this kind of experience requirement is there for the solar power. So in that plan, we are in touch with them, sir.
I was referring to operating the entire cement plant. So Adani has come out with the tenders to operate their entire cement plant, some of their cement plants on a pilot basis. So it will be.
So the oil refineries and the power plant wind up. But if that kind of work is there, probably we can also explore that opportunity, and we'll also look into that.
Oil refineries is an option. BPCL has committed INR 60,000 crore investment in Bina. Then HPCL is expanding it. We have got some experience. We have done some of the jobs in Ruwais and other places also. Therefore, it is an option because the same expertise we have to deploy it and do the work. Only thing, mostly quality and safety issues will be there.
But do we have the potential, or are we looking to operate the entire cement plant like the grinding, clinker making capacity, all those?
We can operate a power plant which is highly sophisticated, and that with a control room operation. Like we have started working in some of the O&M plants in the NMDC and then JSPL for the steel plant and all. It is an option which you can explore it if we can get a reasonable returns on that. There is going to be captive power plant in any cement plant. Then the kiln operation and the other ancillaries and all. Those things, the skills which are required and all, only the operating characteristics, production characteristics, and then the various parameters in the cement plant, that we have to get used to it. That can be a question of taking a correct call and then going about it.
As of today, we are reasonably well satisfied with the MDO initiatives, whatever we have taken, and there continue to be more opportunities which will come up because of the annual capacity addition of 8,000 MW-10,000 MW in the next four to five years.
Great, great. And lastly, sir, I'm not aware whether you have articulated about that. But on the Tasra mines, we have seen very suboptimal operations from SAIL. So how confident are we to execute those orders in the coming times?
Sir, as of now, we have not received appointed date in Tasra project. So it's not a binding obligation at this moment from the SAIL also to lift the material. From April onwards, we are getting the appointed date. So then the contract clauses will kick in. So it is a binding on them to lift the material irrespective of the capacity there or not outside. So the contract is protecting our rights. So there is no problem in terms of achieving our targets for the next year.
Thanks a lot, sir.
Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments.
Yeah. Thanks for your participation. And I mean, the inquiries have brought out. It is a very interesting discussion we had. I think power sector is highly bullish. And infrastructure, we are well established now. The drinking water, railways, roads, and other related projects, and then metro maintenance shops, etc. And naturally, business should look up. BHEL is bulking up the orders, and L&T is also coming up. And there are many new areas which will come up certainly. And we continue to be aggressive in our approach in both marketing and execution, exceeding INR 5,000 crores in this year certainly. And then in the coming year, about INR 10,000 crores, as we said, that is looking at some of these O&M opportunities which are major items.
And then the non-power sector jobs which we establish in railways, roads, and then material handling, coal handling, and then mine site development work, etc. Therefore, let us look into that way. And then as far as the capacity of the company is concerned to augment the execution capacity, that is always there. And that we can do it. Thank you.
Thank you, members of the management. On behalf of Nirmal Bang Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.