Ladies and gentlemen, good day and welcome to the PSP Projects Limited Q1 FY 2026 earnings conference call. As a reminder, all participants' 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 a touch-tone phone. Please note that this conference is being recorded. I would now hand the conference over to Ms. Pooja Dhruve, Company Secretary, PSP Projects, for the cautionary statements. Thank you, and over to you, ma'am.
Thank you, and good evening, everyone. I am pleased to welcome you all to PSP Projects Limited earnings call for analysts and institutional investors to discuss quarter one financial results. Please note a copy of disclosure is available in the Investor section of website as well as stock exchange. Anything said on this call which reflects the outlook for the future, or which could be constructed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. Now I shall hand over the call to Chairman, sir, for opening remarks. Over to you, sir.
Thank you, Pooja. Good evening, everyone. On behalf of the management of PSP Projects Limited, I welcome everyone to the earnings conference call to discuss on quarter one FY 2026 quarter performance. We concluded the board meeting this afternoon and uploaded the necessary call details on the stock exchange and the company website. Please note the transcript of this call will also be made available on the portal. During quarter one FY 2026, the construction industry was suffered by labor shortage, and PSP Projects was no different. During the quarter, we faced labor shortage in the month of April, May 2025, and during FY 2026 there was 37% shortfall in labor. Now the good part, at present, we are at a 19% labor shortfall.
The minor impact of this and monsoon will come in quarter two FY 2026 also, but I am confident of the shortfall further reducing starting August 2025.
During the quarter, the employees cost spiral to 6.8%, which is usually in the range of 4%-5%. Because of new order wins from Adani, the company has hired employees at various levels, so its impact can be seen in the higher employee cost. Secondly, majority of the newly awarded projects worth INR 1,600 crores that started after March 2025, they are all under initial stage of construction. That is foundation stage. During this construction stage, the deployment of labor is always on the higher side, while the labor availability was less during the same period. Hence, we faced a negative impact on our profitability. Another minor impact was on account of monsoon. In Gujarat, the monsoon season comparatively began early this year, hence we saw some impact of the same in the month of June 2025.
During this quarter, the company has also had to book additional expense worth INR 4.5 crore on account of new build projects also. Company has reported an outstanding order book of INR 6,514 crore, a year-on-year growth at 11% as on June 30, 2025. The order inflow reported was INR 107 crore, excluding GST of the current outstanding order book of Adani projects comprising of 27%, and the rest are non-Adani projects. With regards to order inflow for FY 2026, we are expecting new projects to be confirmed and service orders to be received from August 2025 onwards. At present, we are in various stages of discussion and project workings are going on. We expect this to conclude soon. During quarter one FY 2026, company has successfully completed eight projects. Construction of residential project of Aster at Adani Shantigram.
Precast elements of compound wall and drains to Larsen & Toubro for High Street Villa project. Nestle phase two steel structure erection project, Ocean phase two at Sainath project. Precast plant of DeepTech Limited. Precast plant of Kutch Copper Limited at Mundra. Design and construction of school building in Jodhpur, Rajasthan has been tasked. During the last con call, I mentioned certain projects which did not take off as per our planning. I would like to share updates on each of those. Sintex building at Bridge City, the client-side delays are now over. The shortfall in revenue for the quarter was due only because of less availability of labor. GBRC has received client's approval and the project work is going on well. Science City, the project work is going on well. In this quarter, we made a decision to move from conventional format to modular format system. That is GemForm.
Due to this, now work happened in quarter 2026 on the project. But eventually, due to this technology change, now I'm confident to see the closure of this project as per plan. EMC, the problem still persist. Work is on hold due to land acquisition. SMC, there has been considerable delay in the receipt of drawing from the client side, and hence work is— the finishing has not been able to start. Baroda, there are now ongoing delays in land acquisition till today. Regarding the definitive agreement, the Adani Infra Limited has acquired 44,86,193 equity shares pursuant to the open offer, representing 11.32% of the paid-up equity share capital of the company. The settlement of open offer was completed on June 11, 2025, and all subscribing shareholders were duly paid against the shares tendered by them in open offer.
Now let me talk about some of the project updates like Coca-Cola. I think the project started last August, and presently we are in a good shape and size as the most of the structure part is over. We are currently working now on the finishing part and the general development of the project. Gati Shakti Vishwavidyalaya , yes, last year only we started that project and during last monsoon, we suffered a lot of delay and some delay this year also in April, May. But overall the buildings are out of basement and at the level of first and second floor. So probably now the finishing activity and MEP will gear up on Gati Shakti Vishwavidyalaya project at Baroda. Palladium Mall, yes, this was the same project which we started last year in the season of April, May, and we suffered a lot of delay last monsoon also.
This year also we suffered a delay. All the drawings are in place and most of the activities in the basements are on track now. So project should move on from here on a regular basis without any much failure from August onwards. With this, I conclude my remarks and now I would like to hand over the call to Ms. Hetal Patel to take through the financials in detail.
Thank you, sir. Good afternoon, everyone. The financial performance during the quarter ended June 30, 2025, is as below. quarter one FY 2026 versus quarter one FY 2025. Revenue from operations for the quarter is at INR 513 crores versus INR 612 crores, which has decreased by 16% on YoY basis. EBITDA for the quarter is at INR 24 crores versus INR 73 crores, decreased by 67% on YoY basis. EBITDA margin is at 4.77% versus 12%. Net profit for the quarter is minimal, that is INR 13 lakhs versus INR 34 crores, reduced by 100% almost on YoY basis. Decline in revenue from operations is mainly attributable to labor shortage, which has been explained by PSR in his speech.
During the quarter under review, company had to incur additional expenses for UP project to the extent of INR 4.5 crores and other expenses include ECL provisions made to the extent of INR 8.68 crores, which was INR 4 crores in quarter one FY 2025. During quarter one FY 2026, company has incurred CapEx of INR 32 crores. Gross block as on June 30, 2025, is INR 627 crores and net block is INR 322 crores. Would like to mention few of the important balance sheet numbers as on June 30, 2025. Long-term borrowing, INR 44 crores including short-term maturities of INR 25 crores. Short-term borrowings is INR 338 crores, excluding short-term maturities of INR 25 crores. Net unbilled revenue is at INR 556 crores. Retention is INR 137 crores. Mobilization advance is INR 326 crores.
Inventories are INR 344 crores which comprises of INR 158 crores of construction material, INR 161 crores of work in progress and INR 25 crores of finished goods.
Out of total sanctioned credit facilities of INR 1,497 crores, company utilized INR 864 crores, excluding fund-based utilization of INR 202 crores and INR 431 crores is available for utilization. As on June 30, 2025, the company has total fixed deposit of INR 268 crores, out of which lien-free deposits are INR 74 crores. FD worth INR 169 crores are under lien with the bank for credit facilities. FD worth INR 25 crores are given as a security deposits to the client. Work on hand as on June 30, 2025, is INR 6,514 crores. Detailed bifurcation is available in the uploaded presentation. That concludes the update from the financials and we are now open for the question and answer session. Thank you.
Thank you very much. We will now begin the question and answer section. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Shravan first.
The first question is from the line of Shravan from Dolat Capital. Please go ahead.
Hi. Thank you for the opportunity. Sir, couple of questions. First one on the guidance front and then will come on the detailed question. Now in terms of the revenue, EBITDA margin and order inflow for FY 2026, what is the revised guidance?
Order inflow?
For FY 2026, what is the order inflow that we are looking at, revenue and EBITDA margin?
The order inflow as per the those companies we have confirmed we are in the presently in top eight or nine groups for the projects worth INR 8,000 crores-INR 9,000 crores. There can be a chance that probably that order inflow for this year could be in the range of about, if I say, it will be in the range of INR 7,500-INR 8,000.
Okay.
Even the guidelines, we laid down because as we have faced a big problem in the first quarter and that will go through with the second quarter. Last time also I told that, let me give you revenue guidelines after completion of first two quarters. Because all these projects which we are going to get from the group company also, they are going to start somewhere in the second quarter or maybe third quarter. Better we give revenue guidelines on the work of second quarter completion. EBITDA margins here, still we are in the range of the same thing what we have been telling, it will be in the range of 8%-9%.
Okay. From the Q2 itself, whatever the challenges are, whether the labor shortage and plus extra provision, everything given now, as you are saying, that the labor shortage has reduced. From Q2 itself, can we start seeing 8%, 9% kind of a margin, or it would be mostly in the third and fourth quarter we can start seeing? Is there any further provisioning for any of the UP or any other project is still pending?
No, nothing is pending at UP actually. This time also INR 5 crore expense which has come because most of the projects are in the place of Anand and since the hospitals are not operating, people are not taking care about the project. Department is not looking after the project in a very efficient way. So cost which we are incurring today is mostly because of the project being not well-maintained by them. So we are not sure, but yes, not more than INR 5 crore and it can be within the INR 5 crore. There can be some cost which can come still in the second quarter. But looking to my first quarter's experience, why this expense came at UP side, because I was aware that the projects have already been handed over. Why this cost is coming up?
But the problem is with the department is that the closure of the project has not happened. They are taking undue advantage of the contractor, and that's how it has happened.
From the Q2 itself, can we start seeing 8%, 9% kind of EBITDA margin?
Yeah, it should be Q2 or Q3, but probably I would expect also in the Q2 quarter only.
Okay. Apart from Adani, we are not looking at any other order inflow now. This INR 7,000 crore-INR 7,500 crore that—
As we said last time also, if there are prestigious projects where we can bid. One of the large project of Gujarat, which is Shri Ambaji Corridor Development, has come. The tender has been rejected, a single tender came up. Now that tender may come in these months only. Probably we get qualified, we will be bidding for such types of projects. But mostly it will be from Adani, that you are right.
Okay. Given that now, let's see, even if whatever the similar run rate, we can do INR 500 crore or maybe INR 600 crore or maybe lesser than that in Q2. Second half, how one can look at, because whatever the new orders that we are looking at INR 7,000 crore-INR 7,500 crore, from where, when one can start seeing the execution to coming in. For next year, let's say, if this comes by, let's say, December. Next year out of this INR 7,000 crore-INR 7,500 crore, how much one can look at in terms of the revenue for next year?
Yeah. If you consider this as an order inflow of INR 7,500, probably that will come starting the month of third quarter. I say this, most of the projects are in basement as we are doing most of the projects for real estate. Probably we can expect that revenue to come to an extent in the last quarter only. So our guidance for the project revenue will stabilize in second quarter also. Whatever new orders which are coming in the second quarter, we get close in terms of going through with the work at third quarter. Probably basement part can start after in the fourth quarter only.
Okay. I am just trying to understand. Currently, we have the existing order book of INR 6,100 crore and plus what we additionally get, INR 7,000 crore-INR 7,500 crore odd. This would be close to INR 13,000 crore-INR 14,000 crore, and plus whatever we will be doing, let us say maybe INR 2,500 odd crore. So INR 11,000 crore-INR 12,000 crore would be there by end of this. Next year, how one can look at, can it easily one can do a INR 4,500 crore kind of a revenue? That is the fair way one can look at?
Yeah, INR 4,500 we can all easily say, because now the order book will be in multiple of 2x to 3x. So we will be easily able to do a revenue of INR 4,500 crore next year.
In terms of the working capital for doing this, so two aspects. One is the employee cost. Whatever we have currently this quarter, INR 35 odd crore. Additionally, how much more one can look at in terms of absolute level, the skill we need to hire as we are still to get the more orders. That is one and second, on the working capital front, how much more, because of this, the working capital can go up or can come down? As a resultant in terms of the debt level, how one can look at the gross debt level?
See, as far as working capital or debt is concerned, we should be in a better position by end of second quarter or maybe maximum by end of third quarter. Whatever orders which we are getting from the Adani Group, it is considering 5%-10%. First, initially, once you start the project, it is 5% mobilization, and once the mobilization is over, it is further 5%. Even if we are considering INR 7,500 crore order info from the group only, we will be getting minimum INR 750 crore as an advance. Probably, working capital should not be an issue, and whatever working capital which we are using today from the bank's fund base can get reduced to a basic level by end of third quarter.
Okay. Last, just a clarity, sir. Order book project-wise, whatever we've given in the presentation, all the numbers are same as it was in the FY 2025. Is it a printing mistake or nothing, there is no execution in any of the projects?
No, there is no printing mistake. No, it cannot be like all the numbers are same. That can be the total value of the project, but remaining work to be executed must have changed.
No, that's the same. That's what I'm asking, sir, for a—
Okay, again, we will recheck. Shravan, let me recheck.
Okay. No issues, sir. Thank you, and all the best. Thank you, sir.
Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask questions. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.
Sir, Ma'am mentioned that there is an ECL provision of INR 8.7 crore, and last year also it was INR 4.5 crore in Q1. This is regarding to which project?
See, ECL provision we are doing based on the calculation for the tenure of the receivables. All new receivables bracket that we provide on a higher side. So one provision is that, and regarding Pandharpur, we have provided in full now. So out of INR 8.68 crore, we have provided around INR 4 crore for Pandharpur project. So as of now, all INR 17 crore which were receivables from Pandharpur, that has been provided for.
Okay, so do we expect some number in Q2 as well on the ECL side, or everything is likely done for the existing book?
Q2, it can be, because, see, it's purely based on the formula, ECL formula, which we put on the receivable numbers. So there can be some amount of provision in Q2 also, depending on the receivables.
Even if Pandharpur is over.
Yeah, even the Pandharpur we have already provided.
What is the receivable number as of June?
Yeah, it is INR 525 crore as on 30th June.
Okay. We have seen a sharp increase in debt as well on a QoQ basis, around INR 100 crore increase. This is due to rise in working capital?
You are talking about, sorry—
Gross debt has increased from INR 270 crore to INR 382 crore on a QoQ basis.
Yeah. That is mainly because of some of the CapEx acquisitions. As I already mentioned, INR 32 crore of CapEx we have incurred. Some of the CapEx we have to pay 100% advance. Because of that, it has increased. To some extent, yeah, because of this increase in working capital requirement, we had to borrow that.
Okay. Secondly, we had won a project of Ahmedabad Airport Cityside Development of around INR 600 crore in last year in Q4. I was not able to see that project in the order book sheet that we have in the PPT. Have we missed putting it in the PPT, or there is some cancellation or change in scope?
That we will check. We will check again.
No, I think the project is there, but I think they must have missed it. We will check it.
Okay. Sir, secondly, if we look at the order book movement over a QoQ basis, there is a difference of some INR 300 crore. Have we canceled any order in the quarter?
Yes, to some extent, a few projects. One project we have short closed. Still that project is running, but the execution amount has been reduced. That is the FRF DCL, and that might have given the effect in the work on end.
Sir, what is our CapEx guidance for FY 2026 and FY 2027?
It will be in the same range of 3%-4% because these are all projects from Adani Group is on large scale, can go from 5% ± . Otherwise, it will be the same thing.
Sir, last you mentioned that there were some delays in payments from SMC, so you have not done any work in Q1. Is this correct?
No, no. There is nothing like delay in payment and we have not worked. It is absolutely because payments are coming on time. The only thing was the labor issue, for which we were not able to execute majorly because in the first part.
What will be our targeted revenue from the SMC project for FY 2026? Earlier, we were targeting to complete the bill in FY 2027. Still we hold that or it will spill over to FY 2028?
No, it cannot go beyond the FY 2027 because it has to be completed and we are on out path because all the finishing activities are now currently started. They just concluded before March. Even the facade before this quarter, and even the facade is also now approved and the materials have been ordered from our side also. Probably after one and a half or two months, during this second quarter end or third quarter start, we will be in a better position to work on all the activities related to MEP, civil, finish, interior, and facade.
Okay sir. But as of now, only 30% work is done, right? 34 is the original value, and 960 is the outstanding order.
You mean to say that the working value is only 33, right?
Yeah.
You are right.
Okay. Thank you, sir. I will call back in the queue.
Thank you.
Thank you. The next question is from the line of Aayush Saboo from Choice Institutional Equities. Please go ahead.
Yeah. Hi. What is the margin that we can expect from the non-Adani businesses, the non-Adani order book? Also, do we have the same internal hurdle rates for these others?
We always give a guideline of 9%-10% for non-Adani. Previously also, last year also, we have been giving a guideline of 9%-10%, and the same thing we will be expecting from Adani Group. So there is nothing like that there will be less margin from Adani Group and more margin from other projects.
Okay. What will be the order pipeline FY 2027 from the Adani? Which will give a rough approximate guidance. Adani order inflow for FY 2027.
Your voice is breaking.
What would be the Adani order inflow that we could get in FY 2027? One year down the line, is there any guidance you could give for that?
That is what I said, that it will be between INR 7,000-INR 8,000.
Okay. FY 2026 and FY 2027 years. That will be
No. I am just saying for FY 2026 only. These are the projects which are in build, and we are in discussion of these two projects at present. These are the expectations from Adani Group this year only, not next year. Next year, still we have to see what their new projects are coming at Dharavi and Mumbai Airport.
Okay, so could you give some approximate guidance that next year, what could be the possible order inflows? Will it be in the same range, two or three?
This year, we can give a guideline on which the projects are under discussion. For next year, what are the projects which are going to come from their side, still we have to work on, and probably even if they have that projection of next year, they will be able to give the guideline after two quarters.
Okay. Thank you.
Thank you. The next question is from the line of Ankita Shah from Elara Capital. Please go ahead.
Sir, what kind of projects are we expecting from Adani Group? Do we have a pipeline of projects identified?
Yeah, we made you some of the projects which we are into discussion. There is the residential colony at Mundra, which is INR 1,250 crores, which is from Adani. The second is a township at Mundra, which is INR 2,300 crores. Museum at Ahmedabad, which is INR 100 crores. Temple development, which I said that this is the government tender which we are going to bid, is about INR 800 crores. That is second, a residential project at Dharavi, which is INR 830 crores. Infrastructure work, commercial tower at Shantigram, which is INR 100 crores. Development work at Ahmedabad Airport, which is INR 610 crores. Residence at Shantigram, Ahmedabad, which is INR 550 crores. An hotel at Shantigram, which is INR 580 crores. An institutional building at Shantigram is INR 750 crores. These are the projects under discussion with them.
Okay. We expect to make similar margins that we have highlighted in the guidance on this. Only if they meet this threshold, you are going ahead with this, am I correct?
Yeah.
Got it. Thank you.
Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask question. The next question is from the line of Balasubramanian A from Arihant Capital. Please go ahead.
Good evening, sir. Sir, I just want to understand about labor shortage. It has been 37% right now, 19% of shortfall. When can we expect complete recovery on that labor shortage side? If you could share a few key reasons, like what are the specific things out there for labor shortage, whether it is because of salary or lack of facilities, and how we are dealing this issue compared to the industry. Because without shutting out these labor issues, whatever numbers we are discussing is not going to come. These are my first questions, sir.
See, the like the facility or the infrastructure which we are providing for labor is equal to less to other peer group companies. It is absolutely because of the market of April, May is the season when the people are going for marriages. It is absolutely early. If you understand this one, there were two Eids, and both the Eids were nearby 15-20 days in June. Probably that is the only reason where there was a shortfall. Also, we have to understand one more thing. When we are starting any project after March, that is the period where the people would like to go back for this reason of marriages and all those things. Otherwise, when we start up the project, they would not like to start a project which has started in April.
If the projects have started in November, December, they can have a continuity, so they can maintain a little bit of 50%, 60% labor for projects which have already been awarded to them and they are working on it. The thing which you are talking about that how we can mitigate, we are absolutely working on high-level thinking about technology, how to reduce the, how to simplify the work, how to put in more and more technology in the organization, how to utilize that solid level of shedding so that we can put less number of labors and do more amount of work. We are also buying some of the technologies from PERI to make table forms. So in slab also, we are able to make 50 cm of slab at one go, which can be lifted directly to the upper floor.
So we are clearly understanding the labor situation is not going to help the organization, and this will continue throughout the year. Day by day, the country’s economy is growing fast. So we are very much serious to work on that part also. At the same time, we are putting unskilled labor to a little bit of skill. So some of the skills we can train them here also, because unskilled labors are still available from Odisha and West Bengal. So there also, we are working to train some of the unskilled people to make them skilled labor on skill-level work. So the company is very much serious to mitigate this requirement of shortfall of labor. But probably, the seasonal impact is the only impact which is affecting us.
Otherwise, we have initiated so many things which can put our labor requirement to 30%, 40% less than what we required in the last few years of our experience.
Okay, sir. Secondly, in the Dharavi projects, around 5,200 interim residential homes for displaced families. I just want to understand what is the timeline for these projects, what are the executions things they are doing? If you could share what kind of opportunity size in that Dharavi project itself, what is the saleable GDP value, and what are the share we can be able to take it?
See, now Dharavi is a rehabilitation program, and that houses which are made for Dharavi project will be given to the inhabitants which are living in Dharavi. For us, it is purely a contract wherein we have to construct the houses as per the requirement of the group. There is nothing like that, what will be the sale price or what the price we are going to take from the people who are going to stay there in the Dharavi. That’s not our lookout. Our lookout is to just construct that part. Presently, the status of the work is that we are in the process of sheet piling to make basements. Otherwise, the project is meant for 36 months. Probably, maybe in October, November, we will be in a better position to answer your question once the basement starts and the excavation is done.
Sir, this 5,200 displaced home, when we are going to start this project, and what is the completion timeline?
As I said, the project has already initiated, and we are in the process of making sheet piling for basement excavation.
Got it. Yeah, thank you, sir.
Thank you. Next question is from Deval Shah from RBSA Investment. Please go ahead.
Hello.
Yes, sir.
Good evening, everyone. My question is particularly with regard to Mumbai project. What we hear is that Adani Realty is getting really aggressive in the Mumbai market. Apart from the Dharavi, we also have Motilal Nagar redevelopment project and the Bandra project. Just wanted to understand what is the likelihood of us getting the lion share of these other two redevelopment projects as well as the city side development in Mumbai?
See, as far as the group is concerned, they are the only partner in this company. They are partnered in IPDC also. IPDC is majorly concerned in the projects which are related to ports and industry. Probably the opportunity will surely come to PSP as far as we are capable of handling so many projects at one go. It is more about building the project, not getting the quarter projects, whether we will be getting that project or not. If we can prove on ground and we are able to handle, then most of the projects, we will be given the first priority always.
It is fair to assume, sir, that we are scaling up our team in Mumbai as well? Just wanted to understand. In the anticipation of—
Yeah, we have already built up a team in Mumbai. I think 13, 14 people are already appointed. We are starting a small new office also in Mumbai to manage the projects directly from that office. We are trying to mobilize on a stronger way and build up ourselves in terms of management and scalability in Mumbai.
Okay. Thank you. All the best.
Thank you. A reminder to all the participants, you may press star and one to ask question. The next question is from the line of Keyurkumar from Niveshaay . Please go ahead.
Hello. Yes. My question is regarding the CapEx that you mentioned about the INR 32 crore, where this CapEx is allocated. I think I missed the unbilled revenue part. What is the unbilled revenue in this quarter?
Yeah. Unbilled revenue is INR 556 crore and the CapEx is mainly plant and machinery, and that includes formwork for various new sites and cranes for the new sites.
Okay. My second question is on the precast company. In our precast industry, what is the utilization for internal purposes and what is the utilization for the external, like we are selling outside? If you can tell, what percentage of precast is used in our project?
See, it is not actually to give you what is the percentage which we are doing for the market and what we are doing for the in-house. It depends on the requirement of the building, and it depends on the requirement of the client. Previously, we were not doing too much on the building side. Last two years, if you see, we have already executed most of the projects for infrastructure. If you have seen bullet train project, we have supplied so many materials to over INR 300 crore, INR 200 crore. Last one year, we have made about 12 lakh square feet of warehousing facilities, which we were able to execute on a faster scale and people who are making it INR 15 crore or INR 20 crore warehouse, they are not able to get a good contractor so that the project can be completed on time.
Now onwards, we are having three or four projects for group also, which we have initiated right from the foundation. Once the foundations are over, it is on precast. It will be going on both the direction. Majorly it will be utilized for our in-house, but if there is a large requirement from outside the group also, we will be supplying some of the materials to outside group also, to customers.
Okay, so there is no percentage for the captive and the outside project?
No. We can define that way. It depends. As I said that previously we were not working too much on building. Now we have started, initiated four buildings which are about 60, 70 m height. If we are working on four buildings and if we are already engaged with our own work, we may not be able to take outside orders easily. It depends on the production capacity and the requirement at site. If there is a gap in between to supply some of the materials in one month or two months, we can take up that order. But probably that won't be an issue now onwards because now this technology is being accepted easily by the market and on high-rise scale. High-rise building also, people have accepted. So probably the group, we will be having our own captive production in that way.
Okay. The last question is, regarding the capacity we have as a precast, what is the utilization if you can define that term and what is the maximum potential of the revenue that we can get if we utilize at peak level?
See, I think when we started and initiated this precast facility, we were targeting about INR 400 crore-INR 500 crore to be revenue, which we can generate purely from precast plant. Probably now we have reached to almost 50%+ . So within this next one and one and half year, we'll be able to make more and more revenue to an extent of INR 500 crore.
Okay. Thank you.
Thank you. The next question is from the line of Vivek Lodariya from Nirbhay Asset Management. Please go ahead.
Hello. Yes, I am audible?
Yeah.
Okay. Good evening. I noticed that cost of material consumed as a percentage of total expense increased sharply to 38.51% in quarter one, up from 30.03% in quarter one FY 2025, which is a rise of over 800 basis points year-on-year basis. Could you please help us understand the key reason behind this spike? What has driven a rise by raw material prices or change in project mix or anything else?
See, if you see in the construction industry, we are doing civil, MEP and interior fit-outs. Depending on the project situation, material components little bit change. If you consider MEP, there the material component will be about 80%-90% and labor component will be 10%. If you see the major civil part, when we are into core and shell, it will be 45%-50%. When we are in the finishing state, it will be 70%-30%. Since we are doing all such types of project in our composition, some of the projects are purely core and shell, some of the projects are core and shell with finishing, and some of the projects we are doing the expectancy core and shell finishing and MEP.
These components cannot be 100% compared directly with the revenue because in that particular quarter, what activities were going majorly, that is to be understood.
I want to check if company is currently bidding for or involved in any capacity in the Dharavi redevelopment project, either in a project or throughout any joint venture or anything.
No, we are quoting directly and we are in discussion with the Adani Group because it's a group company's project. Dharavi is a group company project, so we are discussing directly with them. There is nothing like we are bidding even the JV with someone else.
Okay. If we have 100% or something like 10% or—
What 100% and what 10%?
We are— Hello.
Hello.
As there is no response from the person, we will move to the next. The next question is from the line of Balasubramanian A from Arihant Capital. Please go ahead.
Thank you, sir, for the opportunity again. Sir, out of INR 6,150 crore order book, how much is fixed price and how much is from variable priced contract? Upcoming INR 7,000 crore-INR 7,500 crore kind of inflows also, whether we can expect more fixed price contracts or variable price contracts.
See, as far as the group is concerned, almost all the projects are not fixed price. It is an open price where the cement and steel is with base rate and any difference in the major materials, they will be taking risk. So it is mostly an item rate contract, which will be continuing with so many basic rates. At the same time, at the stage of each and every activity, there is a clear return which is done on the discussion of the rates which will be clearly based on the type of work which is to be executed. So I think as far as new projects are concerned, there won't be any fixed price contract. In present, I cannot exactly answer you how much percentage is fixed price and how much is item rate contract.
We will share you the percentage out of that INR 6,100 crore, how much is fixed price and how much is item rate. I do not know the exact percentage.
Okay, sir. Thank you.
Thank you. As that was the last question for the day, I now hand the conference over to the management for closing comments. Over to you, sir.
Thank you, all of you for joining us on this earning conference call today. Thank you for your support and trusting us. We hope that we have been able to address most of your queries. In case of further queries, you may reach out to our Investor Relations advisor, EY, and they will be connecting with you offline. Thanks all again and good evening.
Thank you. Thank you. On behalf of PSP Projects Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.