Ladies and gentlemen, good day and welcome to PSP Projects' Q1 FY 2025 earnings conference call hosted by Avendus Spark. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involves risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any 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 Mr. Bharani Vijayakumar from Avendus Spark. Thank you, and over to you, sir.
Thanks, Manav. Good evening, everyone. Welcome to the 1Q FY 2025 earnings call of PSP Projects. From PSP Projects, we have Mr. P.S. Patel, Chairman, MD, and CEO, along with Ms. Hetal Patel, Chief Financial Officer. Without further ado, I am handing it over to the management, Kenan Patel, Company Secretary of PSP Projects, to give initial remarks and post which the management, P.S. Patel, sir, would give their initial remarks, post which we will open it for Q&A. Over to you, Kenan.
Thank you, Bharanidhar , and good evening, everyone. I am pleased to welcome you all to PSP Projects Limited earnings call for the analysts and institutional investors to discuss the Q1 FY 2025 financial results. Please note a copy of disclosure is available in the investor section of the website as well as on the stock exchange. Anything said on this call which reflects the outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. Now I shall hand over the call to our chairman, sir, for his opening remarks. Over to you, sir.
Thank you, Kenan. Good evening, everyone, and warm welcome to quarter one FY 2025 earnings conference call of PSP Projects Limited. As in quarter one FY 2025, the outstanding order book was to extent of INR 5,890 crores, a year-on-year growth of 11%. During quarter one FY 2025, the order inflow was to the extent of INR 297 crores. Major order received was INR 229 crores for the construction of Palladium Mall , Surat. During the quarter, the company clocked a revenue of INR 612 crores, 20% year-on-year growth. The EBITDA was INR 73 crores, 14% year-on-year growth. We did EBITDA margin was at 12%. Let me start by highlighting the project level update across the major ongoing projects.
Surat Municipal Corporation, as we all are aware, after the election, there was a little bit scarcity of labor in the first quarter, and presently also there is little bit disturbance because last 15 days there is a huge rain in Gujarat. Surat Municipal Corporation Highrise building project is going on well. Now the labor strength has fully mobilized. As such we have reached to that sort of the above basement, and probably still we expect that now the project will go smoothly. Dharoi Dam, yes, both the packages are now open. During this monsoon, little bit disturbance was still there, but the labor force is sufficient and the project is also going with full force. Gati Shakti Vishwavidyalaya almost we are through with the excavation and foundation, everything. So now the developer says that full labor is available, and we can go ahead with the full bank.
Sports Complex, almost the structure part of the project is over. We have already completed C & D block, B & D blocks, and A& C block is in working progress. We expect the project to complete by October or November maximum, but the estimated timeline for the project is October, so probably it may be extended up to one month or so. Otherwise, the project is on track. Fourth, the majority of the orders, that is 70% of the orders, were either awarded or executed or at advanced stage in quarter four FY 2024, and several projects such as INR 399 crores of Sabarmati Riverfront , INR 333 crores of Fintech Buildings at GIFT City, INR 260 crores of Human and Biological Science, Gallery and Science City. The projects are currently under initial phase of execution and shall pick up pace starting of quarter two FY 2025.
As far as our ongoing projects are concerned, all projects are working as per execution cycle and none of the projects are stuck or slow moving at the moment. Our current pipeline is to tune of INR 6,000 crores. We are confident and optimistic to achieve our order inflow guidance of FY 2025. Our key focus for the financial year will be on smooth execution of all our ongoing projects and ramp up our order book with new projects in building space. With certain recently concluded projects, the company has become eligible to bid on projects across spectrum, that is sports complexes, tourism projects, airport projects, railway stations, transit projects, rail estate development projects, etc. We foresee a decent order inflow and our prime focus will remain on execution and delivering the projects in a timely manner.
With this, I conclude my remarks and would like to hand over the call to our CFO, Ms. Hetal Patel, to take you through the financial highlights in detail.
Thank you, sir. Good evening, everyone. The financial performance during the quarter ended June 30, 2024, is as below. Quarter one FY 2025 versus quarter one FY 2024. Revenue from operations for the quarter is at INR 612 crores versus INR 510 crores, increased by 20% on YoY basis.
EBITDA for the quarter is at INR 73 crores versus INR 65 crores, increased by 14% on YoY basis. EBITDA margin is at 12% versus 12.69%. Net profit for the quarter is at INR 34 crores versus INR 37 crores, reduced by 7% on YoY basis. PAT margin is at 5.56% versus 7.13%. During the quarter, company has booked revenue of INR 64 crores from SDB projects, and with this, total cumulative revenue from SDB projects has arrived at INR 1,960 crores. Pending revenue of INR 53.80 crores has been raised now, and an invoice with gross value of INR 117.89 crores, with GST INR 139.11 crores, is submitted to the client during the quarter.
As on June 30, 2024, receivable from SDB stands at INR 225.37 crores. In the first week of July, company has received INR 104 crores against the first tranche, as per the settlement agreement entered with the SDB. The additional revenue from the SDB has largely contributed to the increase in EBITDA margin. But at the same time, company had to incur higher expenses at the UP site due to escalation in material prices and site overheads and change in scope of work to the extent of INR 25 crores during the quarter, which affected the EBITDA level to that extent. For the project awarded in quarter four 2024, that is RVNL, SRFDCL , Fintech Building, Dharoi Dam, Science City, et cetera, are at the initial stage of the execution and did not much contribute to the EBITDA.
The consolidated revenue generated from seven UP projects was INR 10 crores during quarter one FY 2025. Cumulative revenue is INR 1,469 crore. Out of total sanction credit facility of INR 1,497 crores, company utilized INR 974 crores, including fund-based utilization of INR 206 crores and INR 523 crores available for utilization. Bank guarantee issued to SDB project for INR 78 crores was received back during the month of June, and to that extent, the utilized limit was released. As on June 30th, 2024, the company had total fixed deposit of INR 264 crores, out of which lien free deposits of INR 47 crores, FD worth INR 209 crores are under lien with the bank for credit facilities, and FD worth INR 8 crores are given as security deposit to the client.
Work on hand as on June 30th, 2024, is INR 5,890 crore. Detailed by progression is available in our presentation. That concludes the updates on financials, and we are now open for the question and answer session. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you. Hello, ma'am. How much EBITDA margin we have booked on INR 64 crore SDB revenue in this quarter?
See, basically, sir, not much expenses here, but we had to incur certain administrative and some maintenance expenses also, and some legal expenses. Around INR 9 crore- INR 10 crore we have to incur. You can consider INR 54 crore as the EBITDA margin.
So the entire INR 64 crore revenue is kind of flown out to the EBITDA margin.
No, INR 54 crore.
INR 54 crores. Okay.
Yeah.
So that means if I remove that, then the core EBITDA margin comes at 3.5%. So how do we now look at two things to understand. As you mentioned, the INR 25 crore extra that we have spent on the UP medical projects. So anything left to be more spent or any other projects where we have to do extra expenses because this 3.5% core EBITDA margin is also, I think, a historical low EBITDA margin. So how do we understand now?
Shravan, you are absolutely right. 3.5% is lower than what we observed ever.
As I said in the December quarter also, the first quarter from January to March, we were in the process of handing over. There were few materials which were yet to be purchased and are yet to be installed as far as MEPs are concerned. Few of the cost has gone higher on MEP side. All these three months, again, the project was to be completed by March, but during this process of first quarter of handing over, everything little bit, the cost on overheads has also gone high. Third part was more related to some of the quotes which we were not touching. That was because there was little bit technical confusion in terms of whether such scope was in our scope of work or not. That was also to be executed because that was more or less hampering the overall handling of the project.
All put together has been the extra cost of INR 20 crore-INR 25 crore, which has majorly impacted on the EBITDA margin, and this is the last of the, maybe we can consider further, we can have an expense of not more than INR 5 crore-INR 10 crore plus on the last quarter, on the next quarter. Otherwise, none of the projects has these types of expenses. All of the projects are on interest, and this is what I always envisaged and I was expecting. Because as I said, the project started initially in the month of March 2021, just after Corona. There is no escalation on these projects and things are little bit on escalation we never expected to such a large extent and the project timeline has also gone little bit high. All put together, these things have occurred in this quarter.
We assure it will not happen other projects.
Now onwards, in terms of our earlier guidance of 10%-11% EBITDA margin, can we start seeing from the second quarter itself?
Yeah, we can expect, but I feel as such that as I said that there can be some expenses to the last quarter, which is the closing quarter for UP. So there can be some expense, but not to this extent, but that can impact less than 2%. Otherwise, we can expect 10%-11% right throughout the project.
Okay. In terms of the revenue level, so excluding this SDB, so core level, it is a 7.5% kind of a growth, if I look at. So we were looking at last time said 15% kind of a growth. So if I remove this INR 64 crore and the core, so we are still maintaining that 15% revenue growth on the core level at revenue.
This is INR 2,008 crore, which is what we have thought of for this year, and I personally feel that we should be in position to reach to INR 2,008 crore.
Okay. Great, sir. A couple of things. First, actually, if you can help me in terms of the bid pipeline, how the bid pipeline and couple of the major projects of that, and then I have bookkeeping data points.
I think we have already said that there is about INR 6,400 crore of bid pipeline. Out of which there is one commercial project of INR 1,800 crore in Noida. Power Plant at Raigarh at INR 700 crore. Industrial Plant at Sanand, INR 500 crore. Residential Building at Delhi, INR 400 crore. Delhi Transportation Colony at Delhi for NBCC, INR 445 crore. Development of Indore Railway Station , INR 450 crore. Residential Project at Mumbai, INR 400 crore. Industrial Plant at Sanand Ahmedabad , INR 300 crore. Iconic Road Development for AMC , INR 650 crore. Sabarmati Riverfront Infra Project at Ahmedabad, INR 250 crore. Commercial Tower at Bangalore, INR 400 crore. Highrise building at Gurugram, INR 230 crore. A Corporate office at Surat, INR 100 crore. So totaling to INR 6,400 crore. Out of these, in Gujarat it is about 25%. Other states, it is 75% in the bid pipeline.
Okay. For full year in terms of order inflow-
Sorry to interrupt, Shravan Shah, sir. May I request you to please rejoin the queue as there are several participants waiting for their turn?
Okay.
Thank you. Ladies and gentlemen. Ladies and gentlemen, we have the management line disconnected with us. Please stay connected. We will get them back shortly. Ladies and gentlemen, we have the management back with us. A reminder to all participants, you may press star and one to ask questions. You may press star and one to ask questions. We have our next question from the line of Ketan Jain from Avendus Spark. Please go ahead.
Hi, sir. Good evening, sir. My first question is on the margin. Given the first quarter margin at 3%, what margin can we expect for the whole year basis adjusted for the SDB receivables?
See, now receivable is not going to impact on the margins. That is only the receivables because the bills are already booked. Whatever margins we have always been saying, it will be in the range of 10% and 11%.
You are saying 10% for the rest of the three quarters?
Yeah.
We can expect that?
Yeah.
Sir, my second question is on how much money is yet to be received from Surat Diamond Bourse and when will we receive it? What's the timeline?
Yeah. We have still to receive INR 121 crores from SDB, and mainly timeline will be by end of October 2025. They will try to pay it earlier, but latest by October 2025 will be paid. There will be two tranches of the money.
Okay. Is there any dates in between when they will receive, or they can give it at any time between from now till October 2025?
There is a specified time every quarter, and they have given a clear timeline on which year to raise the payment to us. It is on a pre-defined time, but the time has been given till October 2025. If their sales of the offices goes a little bit faster, they can give it early, but these are the latest figures, the latest timeline they have given.
Understood, sir. My last question is, there was a project, commercial building at GIFT City of INR 118 crores, which was there in the last presentation. It is not there. What is the status of it now?
INR 180 crores?
INR 118 crores. Commercial building at-
receipt or in the pipeline?
In the other backlog slide. It is not there in this quarter.
We are mentioning high-value projects only in that presentation.
Okay.
So that has fallen below. That remaining order value has fallen below.
Understood, ma'am. Thank you. Those are the questions.
Thank you.
Thank you.
Thank you.
A reminder to all participants, you may press star and one to ask questions. We have our next question from the line of Aditya pal from MSA Capital Partners. Please go ahead.
Hello. Am I audible?
Yes, sir.
Thank you so much for the opportunity. I just have a couple of questions. When we look at UP, we booked INR 10 crores on an expense of INR 25 crores. Q2, what is the expense and revenues that we are looking at?
See, UP now the work is not left too much. It will be in the range of INR 25 crores- INR 30 crores, which is yet to be billed. Probably the overheads and if anything which has been left out, which we have to say more on part of the execution, I presently expect that against this revenue, there cannot be more difference between INR 5 crores and INR 10 crores. INR 5 crores more.
Okay. Understood. We recently raised an equity round of INR 244 crores. We also received some money from Surat Diamond Bourse. What would be our debt outstanding as on date?
Yeah. This SDB money we have received in the first week of July, so that is not included in these numbers.
Understood.
Yeah. We have utilized around INR 200 crore of fund-based facility, and that includes some LC/BD discounting of around INR 70 crore. Once we have paid off, we have utilized certain amount for our routine working capital requirement.
The debt has reduced by how much, if you can just quantify that number?
Yeah. I have already said. It's around INR 200 crore we have used fund-based facility.
Understood. I have a couple of more questions. I will come back in the queue.
Okay.
Thank you. We have our next question from the line of Vaibhav Shah from JM Financial. Please go ahead.
Yeah, thanks for the opportunity. Sir, previously you had mentioned that the pending receivables from SDB should be coming by March 2025. So that has been delayed to October 2025, correct?
No, I think there can be a mistake, because right from the first day it was more than 12 months, but I was saying that was my mistake. It has never been agreed as March 2025. What happened is because final agreement, which we have received, and from that time when we settled the whole issue, it is still October 2025. But that I said just because they told me orally, they will try to make sure that it is being done before March 2025. Their offices are sold as per their thought.
Is there any scope of further delay or October 2025 is the final deadline?
No, that is to be finally agreed. And on that day, even if their offices are not sold, they are committed.
Okay, so irrespective of the sale of the offices-
Yeah.
They will be paying us the money by October 2025.
This is only related to our requirement, that if they can give us early. If the offices are not sold till October 2025, they are committed for October 2025.
Okay. Sir, secondly, what would be the outstanding debt as of June 2024? As of March, it was around INR 455 crores.
As of June 2024-
Yeah. I would like to mention, banks borrowing is around INR 200 crore.
We have repaid almost INR 250 crore.
Yeah. In that, we can add the INR 60 crore of director's loan was still outstanding as on 30th of June , but now that has been repaid out of the receipts from SDB.
I did not get, madam. Director's loan, you mentioned.
Yeah, INR 60 crore director's loan, which was outstanding as in March. That was still outstanding as on 30th of June , but that has been repaid once we received the money, INR 100 crore from SDB.
As on June closing, it would be INR 260 crore, but now it is INR 200.
Yeah, you are correct.
Yeah. Okay. Thank you, sir. Those are my questions.
Thank you. We have our next question from the line of Navid Virani from Bastion Research. Please go ahead.
Hi. Thank you for the opportunity. Firstly, just wanted to understand about the SDB receipts. If my memory serves me correct, last time we said that there are INR 220 crores to be received from the Surat Diamond Bourse. Is that understanding right?
INR 220 crore.
INR 220 crore.
INR 220 crore, yeah. That's right. INR 225 crore.
Okay. I think that was including GST, INR 225. Currently we are able to reconcile INR 185. So INR 64 we have already received, and INR 120, something which we are expected to receive going forward by October 2025. I could not understand where the rest of the amount went over.
No. See, we have received INR 104 crores. Right?
Okay.
Still INR 121 crore is to be received in four tranches.
Okay.
Out of that INR 104 crores, we have repaid INR 60 crore of loan of director. That is what we were saying.
Wonderful. Thank you. That helps. And last question I had was again regarding the UP project. Sir, if I was able to understand your answer to the previous question right, you are saying that we are still expecting a INR 5 crore-INR 10 crore kind of a pressure more on EBITDA in Q2. Is that understanding correct?
Right.
Okay. Understood. That is it from my side. Thank you, and all the best.
Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. We have a follow-up question from the line of Shravan Shah from-. We have our next question from the line of Deepesh Agarwal from UTI AMC. Please go ahead.
From Surat Diamond Bourse, acts of expenses of-
Sorry to interrupt. Can you please restart your question? We were unable to hear you.
Sure.
Can you please restart?
Sure. Now you can hear me?
Yes.
Yeah. If I adjust the Surat Diamond Bourse impact and the write-off which you have taken in the UP project, your EBITDA may come around INR 40 crores, which could be a recurring EBITDA. If I look at, compared to your revenue, that gives us almost like a 7% kind of an EBITDA margin. What was wrong during the quarter?
As I said, it is more related to the expenses and the escalation which incurred. Whenever you are booking the bills, it is more related to cost to complete. Our cost of completion has gone little high, overheads has gone little high. We were not expecting too much work to be carried out in the month of this first quarter. That overhead has also prolonged, and escalations on MEP side has impacted the cost. Some of the scope which were little bit a confusion, whether it is a part of the contract or not, also has to be executed because we wanted to close the project and get out of it and hand over the project. All put together has impacted this expense.
These expenses are more to do with UP or beyond UP also?
No, it is absolutely for UP.
If I make that UP adjustment also of INR 20 crores which ma'am mentioned, then also your margins are significantly on a lower side.
If you put that INR 25 crore, it will be in the range of 9%.
Yeah. See, basically INR 73 crore is the total EBITDA. If we remove INR 54 crore contribution from Surat, around INR 19 crore-INR 20 crore is from the regular projects. If we add back that expenses, it will be INR 45 core, we can say, and that margin comes to around 8%-9%. As we have already mentioned during the quarter, we have started high-value projects which were awarded in quarter four. These major projects, in fact, also because they are on the initial stage of that execution, it should not generate that much EBITDA. That also contributes to the lower side EBITDA margin.
Okay. Incrementally from Q2, given UP is largely done, we should move towards that 10%-11% margin with third quarter guidance.
Yes.
Okay, sure. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. We have our next question from the line of Aditya pal from MSA Capital Partners. Please go ahead.
Hello. Thanks again. Just want to understand, historically, we were anywhere between 11%-12%, if I look at over the last four, five years of data, and now we are guiding anywhere between 10%-11%. What has changed? Has the labor cost increased? Are we bidding for contracts more aggressively? Just want to understand what is the management's thought process on this.
It is not about the overall cost which has gone high. There are few risks on an EPC project, or there are few risks on a contracting firm when the things are not falling exactly to what we expect. Some of the projects may get extended, your overhead can go out. During some season, there is no labor, so due to workforce less, you are not getting the revenue based on your overheads. Keeping all these risks, it is better to have a consideration of 10% rather than 11% and 12%.
Understood. What I am able to understand that nothing has changed. Is it that you are guiding it lower so that we are able to match the expectations?
Maybe you can consider that way.
Understood. Sir, also wanted to understand, so excluding UP is done and dusted. Excluding UP, now when we move to the higher margin in the project phase, the EBITDA margin will come up from here, right? Is that fair to understand?
You should not consider it that way, but you should consider to the extent of 10%-11%, which I already said, because as I said, as Hetalben already mentioned, that in the first quarter, the projects which were actually given in the last quarter of 2024 could not gear up in that first phase of the construction and could not generate EBITDA. Such types of risk we cannot envisage all the time, and this may impact the overall EBITDA margins on an average level. So we are considering it at 10%.
Understood. Sir, can you give me a bit color on when can you see that you will start receiving fresh order inflow?
Which order fresh inflow?
Just-
New orders?
The order that you have spoken about, when can we see at least a number of orders?
Yeah. There are a few orders which we are expecting to come and get in. Presently, it is at the near to closure. So we expect one or two orders maybe within next 15, 20 days, or maybe by end of this month.
Understood. Thank you so much for the opportunity.
Thank you.
Thank you. We have our next question from the line of Saif Sohrab from ICICI Prudential. Please go ahead.
Yes, sir. Thank you for the opportunity. First question is on precast. Can you help us with currently how is the order book on precast side and what new orders are you looking at and the utilizations of precast currently?
See, presently, compared to last year, the overall market view of precast is good. Last year, we were able to do about 12 lakh sq ft of warehousing facility. We are now focusing a little bit more on building type. We have one or two orders on building type, which we are going to executing this year. So in general, if I say that precast business is now gearing up. At the same time, some of the large corporates like Reliance, Adani, these people are also now considering precast as the acceptable technology to move faster because there is always a little bit failure on all the projects because of the consistency of labor availability and the seasonal issues. So I am a little bit positive here now, and the factory is going on with full force now. We are having sufficient orders. I do not know the exact figure.
I will come back to you what is the exact order inflow of precast.
But how much would be the current utilization level, sir, for precast?
I think this year we were able to make a revenue of around INR 180 crore out of precast. So probably this year we should be in the range of INR 200 crore- INR 250 crore.
Okay. And sir, second question, just if you can repeat about the UP projects and going ahead in 2Q, what do you expect both on revenue and expenses? That would be net impact on EBITDA.
The revenue side, I think we don't have to book more than INR 30 crore from here. On the expenses side, still I expect that because the overheads are still the same, a little bit the overheads has gone down, but all the buildings are under the process of handing over. So the impact which we have got for this quarter will not be that much impact on the second quarter, but maybe maximum five or maximum 10, it will not be there. Any other projects except UP, there is no issue related to prices going high or overheads going high. So things will be clear by second quarter.
So balance revenue would be INR 20 crore-INR 30 crore, and against that balance expenses overheads which maximum you would incur is? You would book as, and P&L would be?
Maybe an extra cost of INR 8 crores-INR 10 crores. So if it is INR 20 crores-INR 30 crores, it can be INR 30 crores-INR 40 crores, maybe in the range of expenses.
Sorry, expenses, what range you mentioned?
INR 30 crores-INR 40 crores.
Okay. Understood. Okay. Thank you, sir, and all the best.
Thank you. We have our next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yes, Shravan.
Hi, sir. Sir, couple of data points. On the balance sheet front, I need the retention money, mobilization advance, unbilled revenue, and then the debtors inventory and creditors as on June.
Okay. Thank you.
See, we haven't yet finalized that balance sheet numbers. It is more or less the same. Only unbilled revenue have reduced because INR 53 crores of SDB we have transferred to GST bill amount receivable amount. Otherwise, most other data are on the similar status. We haven't yet finalized exact numbers.
Okay, thanks. Unbilled revenue as on March was INR 442 crores. You are saying out of that, how much is lower, INR 64 crores?
Yeah, INR 53 crores was included in unbilled revenue, and that we have billed. As I have already mentioned, along with INR 64 additional revenue, we have billed INR 53 crore also, and total GST invoice of INR 117 crores we have issued to the client.
Sorry, ma'am, but normally because these are the relevant data just to understand in terms of how the balance sheet and the working capital is moving, because that's the way we normally used to share for last so many quarters. I'm not able to understand what's the not sharing this basic balance sheet numbers.
We haven't yet audited those numbers. At this time we haven't finalized those figures, because normally what happens, trade receivable we arrive at after adding retention which is already due. All these numbers yet not derived because our balance sheets were not required to be given. We can share you at a later stage.
Is that
But if I look at from the March to now in terms of the working capital days, which was around 35 odd days, has that increased?
Shravan, you can have a separate call with investor relations to understand whatever you want. We are still open to anything you want to ask. But don't make it confusion at that time when she's not ready, please.
Okay. Got it. Okay. All the data points. Now in terms of the CapEx, how much we have done in the first quarter and how much we are looking at for full year?
Yeah. We have done around INR 17 crore in the first quarter. We are putting this into the board, so we have these numbers, and INR 17 crore we have already done, and you can take it multiplied by four or more or less, around INR 60 crore projected CapEx during the year.
Okay.
Yes.
In terms of now that we have repaid the debt. Just to even clarify on that part also, because it seems the previous participant has asked, but you mentioned that INR 200 crore is a gross debt as on June. Out of that, we have repaid INR 64 crore director's loan, so now that number is close to INR 136 crore. If everything is-
No, I will just correct it. It is INR 260 crore, date as on 30th June. We have paid INR 60 crore once we received this FD, and it is INR 200 crore. But as of today, see, it is like bill discounting facilities and FD what we are utilizing. It will change every day. We cannot say today also it will be the same amount.
Okay. Got it. And then
Working capital requirement.
Okay. In terms of now the debt has reduced. This quarter we were having a INR 30 odd crore kind of a finance cost, similar to the last quarter. How do we see in terms of this number finance cost going forward?
Yeah. It is reduced by around INR 1 crore. It should have been reduced, but if you see, finance cost also includes bank guarantee charges. This time we have issued bank guarantees of all those new projects. Earlier project bank guarantee charges already continued, and this additional new project, high-value projects bank guarantee charges has also hit the finance cost. To that extent, that has been a bit on the higher side.
So similar INR 13 crore kind of a run rate can continue for remaining three quarters, or will it reduce?
Yeah, we can say.
It will be little bit less.
It will be little bit less in terms of this FD/OD bank guarantee also because we have already received back as on 30th of June . So from July onwards, that charge will not be there. And to some extent, other charges also, other bank guarantees we may also receive on a later stage.
Okay. Just trying to understand. I thought that this will reduce by INR 67 crore on quarterly basis. That will not be the case.
No. See, because what happens, we are utilizing these FD/OD facilities also, right? So that interest also comes in finance cost. At the same time, we book this FD/OD, this FD income in our other financial results. So if you net off that, then it will be on a similar trend.
Okay. And sir, this SMC Surat. Yeah, last one. This is the last one, sir. Surat project, so for last almost one and a half year is already there. It has in terms of the revenue booking, just INR 192 crore, and even this quarter also, it was just INR 25 odd crore. So this year, full year, in nine months, how much more revenue are we looking to book from this Surat project?
I think it will be in the range of total project, I think we should be in position to book INR 350 crore-INR 400 crore because now the finishing item has started, and we have moved to the four basement and four stories of podium level. Now we are moving towards typical floors. So now all the activities have now been finalized. Samples are already approved. So the other activities and MEP will fall in line. So we should expect INR 300 crore-INR 400 crore.
Next year, FY 2026, will it be a significantly higher, INR 600 crore kind of a number?
Yes, lastly it will be there.
Okay. Thank you, and all the best.
Thank you, sir. We have our next question from the line of Vaibhav Shah from JM Financial. Please go ahead.
Sir, thanks for the follow-up. Sir, for UP project, what would be our outstanding receivable? Do we have any claims for that project, or there would not be any claims on that project once we complete the project?
Presently, there is as of there won't be any claim, but there is one issue which is related to area, which is under discussion, which we are thinking that it will be positively solved. Otherwise, the outstanding today is in the range of INR 100 crores.
The receivables are INR 100 crores?
Yeah, that is basically because some issues related to PMC going on strike since last two months, their orders were not extended, so they were not certifying our bills because the bills have been placed on time. Today also, I have talked to the principal secretary regarding the same. We are hoping that this issue should be solved in a week or two, and some of the receivables can be received in next 15 days.
Sir, you mentioned that there was also a change in scope which led to a higher cost.
No, it is not about change in scope. I think the technical confusion in terms of scope. It is more related to understanding of the documents, wherein there was an issue related to we have to provide services for equipment. They have asked for equipment also. Some cases it was related to return and DBR as equipment, and some in their mode of payment, it was said only services for the equipment. Due to that confusion, we have to carry out the work. If we stop, we were not doing till now, but as the projects are getting delayed in terms of handing over, we have initiated that part. That is what I meant to say in terms of change of scope.
We do not expect any relief from the client's end in monetary terms.
Again, pardon me.
We don't expect any relief from the client's end for this change in scope. We have to incur on our books, the cost.
Yeah, presently it is on our books. Yeah.
So we are contesting for that, or it would be this way only?
We are contesting, but as the work was getting suffered in terms of handing over because that will relate to my defect liability. Presently we have carried out the work. Then we are carrying out against the contest. But as of now, it is in our.
What would be the quantum of that?
I think it is about INR 13 crore- INR 14 crore.
Okay. Sir, overall on the UP project, on overall post-completion basis, what margin we would be making on the project entirely, and what we were targeting at the time of bidding?
Each project has a different margin and different cost. Presently it won't be possible for us to give an individual profit on the whole overall project.
Okay. And sir, lastly, what would be our order inflow guidance? It should be INR 3.5, or we are changing it for the entire year?
It is still INR 3.5, and we should be able to reach to INR 3.5.
And our year-to-date inflow is INR 230 crores, right?
This quarter?
Yeah, this quarter.
Yeah. It's INR 230 crores.
Okay. Thank you, sir.
Thank you.
Thank you. We have our next question from the line of Rushabh from RBSA Investment Managers. Please go ahead.
Yeah. Hi, sir. We are seeing the semiconductor industry coming up in Gujarat. Are we participating in any of these bids or have discussion with any of the players for EPC services?
I think Tata people contacted us, but later on, that project has been now allocated to Tata. These Tata Electronics people have given that total turnkey project to Tata Projects. There was one inquiry from Tata Projects related to precast, not on the project side, but on the precast side, there was an inquiry.
Okay. Are we seeing any big orders that we know in the next six months or something, INR 800 crore-INR 1,000 crore orders? It's been some time they've not secured any big orders.
We are expecting very soon, a few projects of that size in our detail.
Okay. Thank you, sir.
Thank you.
Thank you. We have our next question from the line of Jiteen Rushe from Axis Capital. Please go ahead.
Good evening, sir. Thank you for taking my question. My first question is on SMC project. As you said there was a labor issue and the issue still continues. Do you see any cost overrun and whether you will be able to complete the project on time or there will be some penalty because we are seeing the same in UP. Any escalation or anything which we are covered with price escalation?
You see, SMC is covered with escalations related to RBI index. There is no issue related to escalation. Neither there is an issue related to penalty because the project is going on track. Only the issue was related to that April and May, when there was little bit, 30% less labor. Otherwise, things are on track.
30% less labor, right, sir?
Yeah.
And sir, in terms of the precast facility, any thoughts on the phase two expansion? As you said, that capacity utilization will be almost 60%-70% .
We are not utilizing-
30%.
We are utilizing only 50%- 60%. We are trying to increase more orders. Still we have a spare capacity of 30%-40%.
Basically, probably next two years' time, probably you may reach 70%, 80%, then you can look for phase two, right, sir?
Yeah.
And sir, any guidance in terms of FY 2026 revenue and margin? Because we understand this year has been, first quarter was a-
We have already said guideline. We have already given a-
FY 2026.
I think we have already said it in the range of 10%.
No, I am asking for the year after FY 2026. Can we expect a better
We are sure that we should be in position to grow from each year by 10%-15%.
10%-15%. Margin should be improving going forward.
Yeah. Margin should be in that range. But the bidding criteria is still the same.
Yeah, sir. Thank you, sir. That's from my side. All the best.
Thank you.
Thank you. The last question for today will be from the line of Navid Virani from Bastion Research. Please go ahead.
Hi. Thanks for the follow-up. I just needed one clarification, sir. Is it fair to assume that all our projects which are now a part of our order book have escalation clause built in and UP project was the only exception?
Most of the projects which we are doing today, it carries that escalation. If it is a government project that carries it through RBI index escalation, or if it is a private project, it is a item-rate project. That was the only project which was not having any escalation related to cement, steel or material or labor.
Okay. Thank you, sir. All the best.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for PSP Projects for closing comments.
Thank you all for joining us on our earning conference call today. Thank you for the support and trust in 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 relation advisor, Ernst & Young, and they will connect with you offline. Thank you, Bharanidhar and Avendus Spark , for hosting our call this quarter. Thank you, everyone, and God bless.
Thank you, everyone.
Thank you. On behalf of PSP Projects, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.