Ladies and gentlemen, good day and welcome to PSP Projects Limited conference call hosted by SMIFS Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Lokesh Kashikar. Thank you, and over to you, sir.
Thank you, operator. Good evening, ladies and gentlemen. On behalf of SMIFS Limited, I am pleased to welcome you all on the PSP Projects Q4 FY 2024 and FY 2024 earnings conference call. From the management side, we have Mr. P.S. Patel, Chairman, Managing Director, and CEO, and Ms. Hetal Patel, CFO of the company. I will now hand over the floor to Mr. Kenan Patel, Company Secretary, for a disclaimer, and then the management will have the opening remarks. This will be followed by interactive Q&A. Thank you, and over to you, sir.
Thank you, Lokesh. Good evening, everyone. I am pleased to welcome you all to PSP Projects Limited earnings conference call for analysts and institutional investors to discuss Q4 FY 2024 and FY 2024 financial results. Please note a copy of disclosure is available in the investor section of the website as well as on the stock exchanges. Anything said on this call which reflects outlook for the future or which could be considered 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. A warm welcome to post-earning conference call of PSP Projects Limited. We concluded the board meeting this afternoon. I hope you got a chance to review the financial results and investors presentations uploaded on the stock exchange website. Financial year 2024 has been interesting year with the company with several aspects. I am happy that the company has come out with satisfactory performance in this year. Let us discuss the year's update before I move to the quarter highlights. Company closed the financial year with the highest ever outstanding order book of INR 6,029 crore and an year-on-year growth of 20%.
During the year, the company received highest ever order inflow to the tune of INR 3,498 crore, which is excluding GST. We had expected an order inflow in excess of INR 3,000 crore, and we have clearly achieved our order inflow guidance for this financial year.
Till date, the company has completed 222 projects in total since inception, with 85% private projects and balance government projects. During April 2024, the company successfully raised INR 244 crore by the way of qualified institutional placement and successfully placed with marquee domestic mutual funds and FIIs participating in the issue. My heartfelt gratitude to all the investors who participated and showed a long-term trust in the company's growth story that is yet to unfold. We are confident of our journey upwards from here and remain dedicated and committed to deliver to the best of our ability in the interest of our stakeholders and employees.
I am happy to share that pertaining to our ongoing litigation with Surat Diamond Bourse on May 15, 2024, an out-of-court settlement had been reached between the company and SDB on the basis construction dialogue, discussion, and negotiations, effectively resolving all the disputes between the parties.
Under this settlement, SDB has agreed to pay us a total amount of INR 617 crore and above our INR 1,719 crore already certified by them. With this settlement, the total approved end project value amounts to INR 1,960 crore excluding GST. Till now, the company had recorded a revenue of INR 1,896 crore in the accounts, and now the remaining revenue of INR 64 crore will be recorded upon the receipt of the certificate from SDB. We expect to receive 50% of the due payment within 30 days and the balance in 20 days. During the year, the company completed 17 projects.
The major projects completed were construction of Manip lant High Street in Ahmedabad, Reliance Corporate Office in Ahmedabad, construction of Adani International School in Adani Shantigram, construction of Vikas Precast Shed and Vikas Corporate House in Gandhinagar, Surat Smart City Development Command Center, Adani Amogha Residential Project, Vikas warehouse at four different locations in Gujarat. During the year, the company was awarded 27 projects. The major projects awarded were development of Dholavira region as a world-class sustainable tourism village unit destination phase I and II. Construction of Gujarat Biotechnology Research Centre, construction of Gati Shakti Vishwavidyalaya at Baroda, Sabarmati Riverfront phase II, Ahmedabad, construction of Intas building at GIFT City, Gujarat, Human and Biological Science Gallery at Science City, Ahmedabad, Gujarat, street beautification at Gandhinagar, construction of commercial building in GIFT City, GJEPC Gift City, Gandhinagar.
Overall, on the financial performance of the year, the company closed the financial year at the highest-ever revenue of INR 2,262 crore, which is 28% year-on-year growth. The revenue of the company has grown at 30% CAGR over the past seven years. EBITDA at 22% and PAT at 17% CAGR growth. The EBITDA margins for the year remained at 18.62%. The impact in margins in FY 2024 as a whole was largely on account of all the EPC projects put together. These were EPC contracts, and the company did incur certain additional expense during the course of the project, which has impact EBITDA margins. Newly awarded major projects are SNC-IRS Building, Sabarmati Riverfront Development Project, Gandhi Southeastern City, Centek Building in GRID City, are at the initial phase of construction and hence you can see its marginal impact coming in terms of revenue in Q4 2024.
For FY 2025, considering the bid book and the upcoming projects, I expect an order inflow of nearly INR 3,500 crore. As far as our ongoing projects are concerned, all our projects are working as per execution cycle and none of the projects are stuck or slow moving at the moment. You are all aware the company is bidding for the projects in building space across ticket size and states. We are confident to gradually move up the value chain and increase the projects of higher ticket size gradually over a period of time. Our bid book is spread across projects in states of Madhya Pradesh, Odisha, Delhi, UP and Karnataka, etc. We look forward to participating in India's growth story by playing our pivotal role in the development process.
With this, I conclude my remarks and now I would like to hand over the call to Ms. Hetal to take us through the financial details. Hetal, go on .
Thank you, sir. Good evening, everyone. The financial performance during the quarter and year ending March 31st, 2024 on standalone basis is as below. Quarter four FY 2024 versus quarter four FY 2023. Revenue from operations for the quarter is at INR 649 crore versus INR 729 crore, decreased by 11% YoY basis. EBITDA for the quarter is at INR 52 crore versus INR 78 crore, reduced by 33% YoY basis. EBITDA margin is at 7.98% versus 10.67%. Net profit for the quarter is at INR 15 crore versus INR 46 crore, reduced by 67% on YoY basis. Tax margin is at 2.3% versus 6.3%. Decrease in profitability pertaining to EBITDA margin is mainly attributable to higher employee benefit expense and other expenses as compared to quarter four of FY 2023.
Decrease in tax margin is mainly attributable to decrease in EBITDA margin, increase in finance cost, and depreciation. Finance cost has increased due to increase in borrowing compared to quarter four of FY 2023. Increase in depreciation is mainly due to additional CapEx incurred during the whole year. Will brief about this year's financial results, FY 2024 versus FY 2023. Revenue from operations for FY 2024 is arrived at INR 2,462 crore versus INR 1,927 crore, which is increased by 28%. EBITDA for the year is INR 262 crore versus INR 225 crore, which is higher by 16% on YoY basis. EBITDA margin is at 10.62% versus 11.68%. Net profit for the year is at INR 124 crore versus INR 133 crore, which is reduced by 7%. Tax margin is at 5% versus 6.8%.
The revenue generated from seven UP projects put together was INR 26 crore during Q4 FY 2024. Cumulative revenue till March 31st, 2024 is INR 1,459 crore. During FY 2024, company has incurred CapEx of INR 160 crore, including INR 2.88 crore of strategic capital working progress. CapEx incurred for CA facilities amounts to INR 79 crore. Would like to mention a few of the important balance sheet numbers as on March 31st, 2024. Long-term borrowing, INR 95 crore, including short-term maturities of INR 54 crore. Short-term borrowing is INR 360 crore, excluding short-term maturities of INR 54 crore. Gross block of assets is INR 559 crore, and net block of assets is INR 321 crore. Additions during the quarter is INR 16 crore, and additions during the year is INR 148 crore.
Total CapEx incurred for CA facilities is INR 201 crore, including INR 2.8 crore from capital working progress. Net earnings revenue is INR 433 crore. Retention non-current portion is INR 104. Retention current portion is INR 50 crore. Mobilization advance is INR 135 crore. Inventories stand at INR 316 crore, which comprises of INR 107 crore of construction materials, INR 187 crore of work in progress, and INR 22 crore of finished goods. Working capital days are as follows. Debtor days are 50, creditor days are 62, inventory days are 47, and total net working capital days are 35. Out of total sanctioned credit facilities of INR 1,497 crore, company has utilized INR 1,031 crore and INR 466 crore available for utilization. Fund-based utilization is INR 247 crore and non-fund-based utilization is INR 784 crore.
As of March 31st, 2024, the company has total fixed deposit of INR 249 crore, out of which lien-free deposits are INR 32 crore. FD worth INR 209 crore are under lien with banks for credit facility, and FD worth INR 8 crore are given as security deposits to clients. Work on hand as on March 31st, 2024, is 6,490. Detailed bifurcation is available in the uploaded presentation. That concludes the updates on the financials, and we are now open for the question answer session. Thank you.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on 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 while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder, you may press star and one to ask questions. We have our first question from the line of Shravan Shah from Dolat Capital. Please go ahead. Shravan, are you there?
Yeah. Sir, can you hear me?
Yeah. You're there.
Yeah. Sir, first, I wanted to understand particularly just a broader guidance on the revenue and margin front. We'll want to understand more on the margin going forward, particularly given the 8% EBITDA margin that we have in the fourth quarter. Previously, we used to say 11%-12% kind of a margin. Will we come back to that level, and that too from the Q1 FY 2025 itself, given that we will be having higher other expenses for the QIP, and also if you can specify how much on the other expenses will be there for the QIP in the Q1 FY 2025?
Shravan, first of all, let me correct you about 12%. We have been talking to you on 11% and 12% before six months, and I think last two quarters, I've been saying between 10% and 11%. Because I already explained about the EPC contract, there is always a variation of 1% or 2% in terms of operational cost or in terms of the cost, which we have not considered in the tender part, and sometimes if you have to carry on because the tenders are being built in a very faster mode within 30 days. This year also, we'd like to maintain our margins within that range of 10% and 11%. In terms of revenue, I'd still say there will be a revenue growth of about 15% from here.
Okay. Only the 15%. Will it, the recent order inflow, in terms of the pickup in the execution, is it taking time? Because otherwise, we should be growing at least 18%-20%+ kind of a number. We will revise the number once we have one or two quarters.
That's always a possibility that we are waiting for the first two quarters, what will be in nearby the order inflow, because presently the bid pipeline is about in the range of INR 4,000 crore-INR 5,000 crore. Whenever we get earliest order within the first two quarters, that can also be revised. But at the same time as the last year impact of about INR 100 crore revenue, which we got because of some of the projects we got at the last stage after within the last two quarters could not start immediately, and that we're at the finishing stage. The revenue could not have been generated. The same thing can happen this year also. If we get maximum order in the last two quarters, then we may not have it, the revenue, the projections which we have guided. But presently, I can assure you about 15% as minimum.
Then, one can think of the higher execution in the FY 2026, one year down the line.
It is either both way. Again, I will come back to you because projections about the execution is always not possible 100%. By looking to our last two years' experience, both the years we fall short of INR 100 crore, and this year also. There are so many uncertainties during the course of the project, whether it's from EPC contracts. There are so many approvals. Sometimes there is a labor issue, sometimes there is a monsoon issue. The consistency of construction, it is very hard to predict all the time. But yes, by looking to the pace with which we are growing and by looking to the pace which we have execution capability, we can assure you that this will be in that same range.
But probably next year also, if the order book is 2x or 3x, then you can say that, "Yeah, there can be more revenue." Presently, the order book is over 2x. So I think any order book beyond 2.5x can give a better revenue rather than sticking to the revenue which I am saying today.
Okay. Got it. Secondly, in terms of how much the other expenses will be higher in the Q1 for the QIP particularly, how much will be there?
The QIP expenses will not be affecting the P&L number significantly.
Okay. Got it. And sir, just in terms of the CapEx and the working capital, particularly because previously, even this year, it seems to be slightly on the higher side. We used to say 3%-4% of revenue, but if I look at the last four years, that average comes at 5.2%. So how we look at the CapEx for next two years?
I think you must have heard during the call of little balance sheet bifurcated both the CapEx, one on the precast side and second on the company side. If you see on the company side, it is INR 76 crore. That is still within the range of 3%. I would always say that it should not go beyond 3%- 4%, but here the CapEx is going little bit high because depending on precast, always requires some CapEx when you have an order. Molds are something which you have to prepare depending on the size of the order and the delivery timeline. That is the only reason this CapEx has gone little bit high. Otherwise, you can still stick to 3%- 4% of CapEx of the revenue, which we usually do, and it is the standard practice which we have an experience also with Classic Cements.
It should be within that range only.
And sir, now the debt level post the INR 244 crore QIP. The current INR 445 crore debt, how much it has reduced and how now one can look at in terms of the, both by end of FY 2025, how the debt level and the finance cost for the full year from close to INR 50 crore, which we have reported in FY 2024.
Yeah. Basically out of this QIP money, we have already repaid INR 188 crore of the debt which was on our maximum utilization as on 31st March. Currently, to that extent, that amount has reduced, and going forward, we will be using it as and when required for any future projects. Compared to FY 2024, definitely the utilization of loan-based facilities will be on a lower side and, in the same way, our finance cost also may reduce to that extent.
Okay. In terms of just a clarification on SDB.
Shravan sir.
Yeah.
Sorry to interrupt.
No issue.
May I request you to please repeat the question because there are several participants waiting for their turn.
Yeah.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Sorry to interrupt, Mr. Parikshit. We are unable to hear you.
Can you hear now at all?
No. Your voice is not clear at all.
Parikshit, sir. May we request you to please rejoin the queue. We are unable to hear you. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.
Yeah. Thanks for the opportunity. Sir, in terms of SDB money, you mentioned that INR 85 crore should come in one month, right?
No, it will be in the range of INR 100 crore because 50% of the amount of total will be that 225, which will be final amount with GST. So INR 100+ crore will be given within the maximum of 30 days. We are waiting for the final certificate, probably this week value or next week value. So that 50% you can expect in one month and 50% in tranches, which can be extended to one year.
So INR 220 crore including GST and ex of GST is INR 170 crore.
Yeah.
So basically, INR 170 crore is the amount which they have additionally approved over and above that certified value of INR 1,790. We have mentioned in the presentation, you can refer to it. And we have booked INR 1,896 crore of revenue as of 31st March 2024. Additionally, to make the total revenue of INR 1,960, we will be booking INR 64 crore additionally. And in total, we will be receiving around 224 including GST, and which will include the amount outstanding on balance sheet.
With retention, 1%. With retention.
Yeah, with retention.
So total amount, so 100 would come in one month, and the pending should come in FY 2025 only or it may go to 2026 as well?
Yeah. Probably it will be maximum within the FY 2025 only because they are waiting for some of the sales to be done. If the sales are done before time, they can pay. They agreed to pay within six months. If there is a delay in sales of their offices which are left, that can go maximum for the whole year .
Okay. Secondly, in terms of margin. We booked around 8% margin in Q4. It was entirely on account of increased cost in the UP project?
Yeah, maximum we can say because we have said the total UP projects have started. Although it was a single project, it was started around 14 sites. The infrastructure which we have created, and at the last moment, whatever speed we have to generate, it gives a little bit extra cost, and we have to pay extra money on purchase side also, because some of the MEP materials which were, these order were just after March 2021. The impact of corona came up maximum after March 2021. So that was also one of the reasons that the margins have fallen, majorly because of UP.
Right. Are we planning to book any claims in future after the completion of the project?
No, as such, there is no claim as of now. Everything is as per the books or as per the contract. There is no plan of any claim related to the project.
Our initial margin estimate was a bit higher when we bid for the project, and it has not panned out accordingly. Is that the right understanding?
It is both way. When we planned it was only in the range of 10%- 11%, but later on it has become at an impact of 4%, 5% overall. We have not made a loss, but in general, the overall margin has gone little bit down, and the maximum impact has come in last two quarters because now different projects are almost in the completion. We have handed over about 90% billing, only three hospitals which we have to hand over, which probably we are planning to hand over by June end.
We may see some impact in June quarter as well pertaining to UP projects in terms of margin, or everything is done?
Yeah. See, it cannot be on margin at UP side because it is a general impact on the total projects whatever we have carried out. So there will be some impact, but not on a major side. But yes, at the conclusion there will be some impact on the overall, the company level.
Lastly, what would be your current bid pipeline?
Sorry to interrupt, sir. Sorry to interrupt. I would request you to please rejoin the queue.
Sure.
Thank you. The next question is from the line of Bharani from Avendus Spark. Please go ahead.
Yeah. Good evening, sir. Can you-
Can you speak a little bit louder?
Okay. Yeah. Is it better?
Yeah, fine now.
Yeah. Two questions. One on the lower margin in 4Q due to expenses being higher in the UP projects. What are these UP projects? Is it these hospital projects, and what is the total size of this order all put together?
See, it was total INR 1,478 crore in total, whatever we are doing on the medical college hospitals and university. That was the total size of the project, but the project total numbers were seven, and all the six medical college, if the location of medical college and the medical hospitals are at a different location about 9 km-10 km from each other.
So on this INR 1,478 crore projects, we are going to earn a lower margin. Is that my understanding right?
Perfectly right.
Okay. You are telling initially we bid at 10-11, but it could be lower. How much lower will it be in this project?
That we can conclude in this last quarter when we conclude and final conclusion and the final bills which we submit.
Okay. My second question is on FY 2024's operating cash flows, which has come in at a negative number. Can you give me an understanding why that is the case?
Yeah, sure. If you look at the movement in working capital number, we have increased inventories and at the same time there is an increase in other asset also, and there is a decrease in other liabilities. For example, mobilization advance that was around INR 245 crore last year, which has reduced to INR 135 crore. So that has impacted our net cash generated from operating activities, which has resulted into INR 326 crore negative.
What is this increase in other current assets?
Yeah, that is other asset. That is mainly unbilled revenue. Unbilled revenue was INR 257 crore last year, and that is since last few quarters, this unbilled revenue is around INR 400 crore. As I already mentioned, this time, as on March 31, 2024, unbilled revenue is INR 432 crore.
Okay, got it. I will join back to the queue. Thanks.
Okay. Thank you.
Thank you. We have our next question from the line of Devang Patel from Sameeksha Capital. Please go ahead.
Sir, you mentioned earlier that private historically has been 85% of our projects. If I look at the orders book now, government is almost 70%. Also, we now almost clearly 100% Gujarat. This is moving from private historically to the government. Does this impact our margins because we go for government projects on tender basis, et cetera?
No, it is not absolutely about that because the government percentage in the total order book has gone high. It is majorly for this percentage, whether it is 50/50 or 60/40 or 30/70. We can't predict throughout our whole year. It is the process wherein private companies investments are coming a little bit less. We are not working too much on the developer side because there is a huge works to come in the developer side. As far as the corporate companies are concerned and the industrial infrastructures are concerned, the hospitals are concerned, we deal with those private clients. Government, we always know that the economic growth of the country is so fast that the government projects are going to come on larger scale. That's how the percentage has gone little bit high. Margins are not related to whether it's a private or government.
Of course, private has a different margin, but at the same time, there is different costs also because each private project has a different requirement of the client in terms of quality, safety, and years.
On a similar note, if you are moving up the ticket sizes and now we are qualified for INR 2,500 crore, would that be margin accretive if we get large ticket size orders?
No, it is not like that, but it may happen the large ticket size project where your overheads can come down little bit low because your revenue per month can go high. That can only But the project timelines are strict too. Otherwise, whatever effort has been invested, like UP, project timeline has got extended to 13 months. These type of things can help them increase or reduce your profit as the overheads have been extended amount for that 12 months.
Okay. Sir, finally, on the settlement amount, we had already booked in our accounts already INR 140 crore was there, but the cash flow we get is INR 170 crore. We effectively only getting INR 28 crore additional, whereas the claims were raised, I think, about INR 430 crore, INR 440 crore. So why such a lower settlement with Surat Diamond Bourse?
Yes, that's an individual call, wherein the overall, whatever we have claimed, we have received INR 103 crore, out of which we were expecting about INR 100 crore more. But as we wanted to get out of this issue, because that was giving a bad impression to the company also. We have concluded at INR 103 total. About the bills, the part which was already booked and INR 103 were cleared as a part of the settlement.
Since you were thinking of the settlement, did we really need to do the QIP? Because the UP project receivables will also start coming up in the first half. So our working capital problem will get sort of sorted. Did we really need to dilute?
What?
Did we need to dilute really in this last quarter? We could have waited for some more time. Our debt would have gone down with it.
That is again, a call which each person has its own perception. What should I do? What should I not do? But at that time, we were feeling the pressure of working capital cycle and the interest cost was going little bit high. So we took that call. But when we were going ahead with the court matters and everything, there were also suggestions from so many investors also, that we should come out of this issue, and we concentrate more on the execution side. So that is the first call, which is, I think, and I have taken.
Fine, sir. Thank you so much. I will come back to you.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Can you hear me now? Hello.
Yes, sir, we can.
Yeah.
Please go ahead.
Yeah. My first question is to Hetal ma'am. Ma'am, what was the total revenue booked from the UP projects in FY 2024?
Yeah, sorry, I don't have that number right now. But as of today, we have in total booked INR 1,433 crore.
But you don't have number for FY 2024?
Yeah. Sorry. We have booked INR 1,459 crore in total.
In FY 2024, you do not have the number?
Yeah. Right now, I do not have the number.
Okay. Ma'am, my second question is around this. Ma'am was telling the net block and the gross block breakups. Now, this Precast facility has substantially given us close to about INR 200 crore. Just wanted to know what has been the contribution to revenues, because if I see the net block is 321, Precast gross block is 200. I do not have the net block number, but I assume it is significantly high. So in terms of asset turns and revenue, how do you see the potential of Precast contribution towards revenue? What has it contributed in FY 2024? And what are the margins you booked on that?
Yes, where contribution is concerned, I think the first two years were better. This is a new technology which was going up. Presently what we are seeing is there is a huge inquiry and huge requirement. We are also quoting for Tata also. We are also quoting for The Coca-Cola Company also. Everywhere now Precast is going up in terms of industry. Warehouse thing, I have already stated this quarter, we completed three warehouses. In totality, I think last year we did about 12 lakh sq ft of warehouse facility. Now this technology should move ahead, and we should be in a position to ask for better margins also. This is a time is tested and people have trusted now. Of course, you are right that overall gross block of about INR 200 crore and that is the revenue.
But I think we should be in a better position than last year, and we will be able to generate good revenue from this side. Because it is a mixed revenue, so we are not able to give you the exact revenue, because some of the projects are on CapEx composition and some of the projects are individual projects which are done only under the OpEx side.
So over the next two, three years, what is your business plan on this? INR 200 crore of CapEx can give you what kind of revenues or asset turns?
I think within next three or four years, we should be in position to generate minimum year-on-year growth of about 25%, 30% from what we are doing today. And maximum we can generate a revenue of up to INR 350-INR 400 crore, maybe after one year or so.
INR 400 crore revenue. Okay. Ma'am, second question is on for UP projects and SDB. So what is the total pending receivables yet to be recovered, and what is the total pending order books? I think SDB there is no pending order book, but you told me correctly INR 200 crore is yet to be received from them in terms of collections or cash coming into you, including the GST, and your share will be about INR 170 excluding GST. So that is INR 170 crore of cash to come in from SDB. Also, if you can tell me what is the total pending collection from UP and what is the total order books yet to be completed?
I think in UP it is not more than INR 40 crore or INR 50 crore.
Yeah.
INR 40 crore- INR 50 crore, and some portion is from Kashi Vishwanath, that is INR 20+ crore. I think these are the major, we can say these are the pending amounts which we have to receive this year.
From medical colleges, what is the pending from medical colleges? Basically, I wanted to know how much cash inflow you are expected to receive because now SDB settled. Is it right that you will receive INR 170 crore of cash from SDB over the next one year, one month? Within one month you will get 100, and balance will come by the end of this year? Secondly, what is the pending receipts from UP Medical College, which are yet to be realized?
From UP Medical Colleges and Hospitals, both together, if you see, around INR 80 crore is outstanding receivable. The number which you were asking, the revenue from the whole year, I have just got the number, that is INR 741 crore we have booked for the whole year, UP revenue.
UP revenue, right ma'am?
Right.
Okay, got it. Collections from SDB, is it INR 170 crore which you will receive in this year?
Yeah.
Okay. That's the cash inflow, INR 170.
INR 170 is the claim amount. We will be receiving INR 225 crore, including GST.
INR 170 excluding GST. That is the inflow which will come in, and another INR 80 crore. That will take the number to close to about your share, excluding GST, will be 170 + 80, right? So INR 250 crore of cash will come in the company.
Yeah.
Okay, got it. That should take care of your net cash. I mean, the debt will then go to zero. I mean, you have already reduced the debt, so with this money coming in, you will again become net cash company, right?
Yeah, we can say.
Okay. Okay, sir. Thank you and wish you all the best. That is all from my side.
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 have given a guidance of 15% revenue growth for this year. Historically, we have been growing at 20%+ over the longer period of time. Is it that we are being conservative this year and maybe FY 2026 onwards we will grow back to looking at targeting 20%+ growth? If you could just share some thoughts.
It cannot be said that it is broadly conservative, but it is a conscious call which since last two years of accelerating the execution pace are not 100% being attributed to the company itself, because there are so many other factors which impact on your growth. It depends on the order inflow also, as I already said, that if your order inflow is majorly before six months, first two quarters, then it makes a difference that it can give you on 15%. But if your order inflow is in the last two quarters, majorly order inflow is in the last two quarters, there can be different scenario. That is what I am saying. That is on the minimum side, I am saying 15%. It can go up or down, or up only. But it depends on how the new orders are coming in next year, this year.
Yes, sir. We observed that certain, let's say the three high-value projects like the Varanasi Airport, Gems Park, and hospital projects, they have gone to the same competition. Have the players become more aggressive in the current scenario? What is your reading here?
It is not like that somebody is quoting on aggressive side, so we also start bidding on an aggressive side. Still, we are going cautiously, and we expect the order inflow does in the range of INR 3,000 crore- INR 5,000 crore. Last year also, we thought of going for INR 3,000 crore. We reached to INR 3,498 crore. Probably we should go and concentrate on the pace that we are going on. Even if that order inflow is little bit less, it's not about going on a dynamic bidding only.
Any big order are we expecting in this year, INR 700 crore, INR 800+ crore in FY 2025?
Pardon me. Repeat the question.
Any big order that are we expecting this year, which are, say, INR 800+ crore order in FY 2025?
Yeah, there are few orders. We are already bidding for one of the large projects, about INR 2,000 crore. I will not name the project now, but it's in Delhi, and we are bidding for that project. There will be some few large orders which we are bidding. Now already we are bidding for more than 350- 400. There can be a few more orders which are roughly from INR 800 crore to INR 1,500 crore.
Okay. Sir, any update on the Pandharpur arbitration? What is the update there? We've not heard since long.
Beyond the, I think, cross-examination is going on. Probably once the cross-examination from their side is over, further it can take two or three months for the final conclusion on the arbitration side. Pandharpur is yet to start.
Cross-examination will be yet to start.
Pandharpur cross-examination is yet to start. So probably we can say six months from here for Pandharpur.
Sir, can you just share the bid pipeline on this?
Sorry to interrupt, sir. May I request you to please rejoin the queue?
Okay.
Thank you.
The next question is from the line of Navid Virani from Bastion Research. Please go ahead.
Hi. Thank you for the opportunity. All my questions have been answered. Just one question on the bid pipeline. Can you please give the sense of what is the current bid pipeline? If you can name the large projects along with the value, that will be helpful. Thank you.
I already said that the bid pipeline is in the range of INR 5,000+ crore . Out of that, there is a commercial project in Delhi which is INR 2,000 crore. There is one new Delhi project of INR 435 crore. There is an academic and residential project for Tata Institute at Hyderabad, INR 350 crore. High-rise building towers for the renowned developer at Bangalore, INR 350 crore. Sabarmati Riverfront infra project in Ahmedabad, about INR 300 crore. Most of the rest of the all other projects are within the range of INR 150 crore- INR 300 crore. It is about 22 projects. Major, I have already mentioned, INR 2,000 crore, Tata Steel, INR 450 crore, INR 350 crore, INR 350 crore and INR 300 crore. I think, she got my point.
Yes, sir. Thank you and all the best.
Thank you.
Thank you. We have a follow-up question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Sir, just to clarify, you said our bid pipeline is INR 4,000 crore- INR 5,000 crore, and that includes the INR 2,000 crore of one Delhi project and rest, whatever you mentioned, four or five projects. So that also is INR 1,200, INR 1,500. So INR 3,000-
Shravan, the total is exactly 5,746. I will name each and every project because it's a big list, so I didn't mention it, but you can hear now again. Commercial project at Delhi is INR 2,000. AIIMS, New Delhi is INR 445. A segment on residential project for Tata Estate at Hyderabad, INR 350. Highrise residential tower building at Bangalore, INR 350. Sabarmati Riverfront, INR 300. Industrial project at Sanand, INR 300. Industrial project at Delhi, INR 300. Sports Complex at Gandhinagar, INR 250. Road communication project at Ahmedabad, INR 250. Residential project at Mumbai, INR 200. Other project at Bangalore, INR 150. State beautification of GNC, Gandhinagar, INR 100 crore. IRS residential building at Ahmedabad, INR 225 crore. Corporate office of Torrent, INR 80 crore, and residential project at Charitra Vihar, INR 70. Other projects is INR 390. So this totals to INR 5,746.
Thank you, sir. And sir, this SNC Surat project, so in terms of the execution, is there any problem? Because since the last one year, we have just booked close to INR 160, INR 170 odd crore kind of a revenue. In this year, FY 2025, how we are looking at in terms of the execution for this project?
Shravan, actually, this was a four basement project, and this was the first four basement project which we were doing. So major structure was underground. Now we have already reached the first floor, and probably once we reach to the typical floor from the podium level, we'll be in better position to complete the RCC structure in this year.
So in terms of the revenue perspective, can we look at INR 600, INR 700 odd crore kind of a revenue from this project in FY 2025?
I think I have to come back because usually from structure side there should be about INR 300+ crore , INR 300 crore- INR 400 crore. On the energy side, I think, they can give you a clear answer. I am not sure because usually what happens when the structure is almost completed, at least the glazing part and the civil part, if it is completed, we can reach up to at least INR 100 crore.
Okay. In terms of the deadline, this project is supposed to be now completed by?
Actually, the timeline is 36 months, but we are trying plus the monsoon period they have given. Probably, we should be in position to complete it by 36 months. We will not ask for additional monsoon period which is being allowed in the total timeline of the project.
The projects that recently we have received, particularly in the last six months. In terms of the execution, will it start contributing execution from this quarter or next quarter itself, or it will take time to start booking?
No, I think only one project of INR 225 crore in Science City, that is we are waiting for EC. That's in here. Rest of all the projects which we have declared till March end are under execution, just started. Mobilization is over and some of the project the execution is going on. We can say yes, that has already started, except one.
Yeah. Because what I'm trying to still understand is that in terms of the overall, because last two years we have recorded a lower revenue, INR 100 odd crore, and now again, last time we were looking at INR 3,000 odd crore kind of a revenue in FY 2025, but the 15%, if I look at then it is still on the lower side. Rather we would have done or guided on the higher side because another INR 170 odd crore is on the lower side. That's the-
Shravan, the basic problem which we always should consider, and when you see the peer companies also, most of the peer companies are having an order book of maybe 3x or 4x, whatever revenue they are generating. When we have a track record of generating revenue, then we have an outstanding order of 2x only. Probably that is also one of the reason that we should concentrate on the size of the project. But when we talk about project, it is always two years or two and a half years. If we have a better order inflow this year, then we can go beyond 15%. But by looking to my past two years experience, growing at a pace of 20%+ or 25%+ , only the thing which we can manage should be order inflow on a major time, which should be about two years to three years.
That can give you revenue of whatever you are saying is more than 20% or 25%.
Because at the same time, even 1% lower EBITDA margin, because initially we used to say 11%-13%, and now we are saying 10%-11%. So, INR 100 crore-INR 200 crore lower revenue +1%, 2% lower margin. That is actually having a decent impact on the PAT level. That's the only worry I am trying to understand.
Yeah, your understanding and your doubt is very I can understand. By looking to my two years of experience, I'm saying what I've already cleared you. See, what we should concentrate is should we ever order, our outstanding order book should always be more than two years. At the same time, when your order book is of more than two years, your construction pace will go high. Because the overheads is going to remain the same, that will automatically add to your margins and automatically add to your growth also.
Okay. Last, just a clarification. Once we, in the previous reply, we said that by end of FY 2025, we hope to be a net cash company. So the date we will be having a very minimal debt.
That's right, and that's what we are expecting, provided we get all the money which we have just discussed about INR 50 crore from UP projects and INR 225 crore from Surat.
Okay. Thank you, and all the best, sir.
Thank you.
Thank you. We have our next question from the line of Uttam Kumar from Axis Securities. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. My question pertains to UP projects. You executed two large projects in UP, that is hospitals and Kashi Vishwanath. What has been your experience in executing project outside Gujarat, and just wanted to understand whether you are more comfortable in executing project inside Gujarat rather than going outside Gujarat.
It is not about the comfort. Now, company is able to operate anywhere out of Gujarat. I can understand what was your question.
Sir, just wanted to understand because there has been a delay in receiving payments and all that from UP projects, and that has also impacted our revenue and margin also this quarter.
Exactly. It was not because we were in UP that the project got delayed. It was about the issue of the type of the project was refusing. At the start of the project, some of the project there was a land issue, so little bit project may start late. There were some issues related to foundation also because that EPC project, all the responsibility lies on the contractor. That was also one of the reasons. But it is not because of the state, that because in Gujarat we can make a faster track project and in UP we are not able to do a faster track project. We have already done a fast-track project of Kashi Vishwanath in UP. It depends on the type of the project.
Yeah. Next, my question is to Hetal madam. What would be our depreciation this year, FY 2025, overall depreciation?
Yeah. In total, we have around INR 60 crore of depreciation.
No, madam, in FY 2025.
Sorry. Next year, you need to say?
Yeah.
Yeah. See, it will depend on the additions of the next year, and at the same time, it will more or less continue on this level which we are having right now. With FY 2024 depreciation will be there, but it may increase if looking to the future additions of the fixed assets.
Okay, ma'am. That's all from my side, and all the best to you.
Okay. Thank you.
I think there were. How many questions are waiting?
Hello?
Yeah.
Yes, sir.
How many more questions are there?
Sir, we have three more questions now.
Okay. Fine.
Mr. Deepesh, are you there?
Yeah, I am online.
Please go ahead with the questions.
Yeah. Originally, for the Surat Diamond Bourse, how much was our claim, and how much have we We have received that we have already mentioned, but how much was originally our claim?
That also we have declared several times. I think it was in the range of roughly INR 500 crore.
Okay.
Including everything. That was related to retention, that was related to billing, that was related to claims. So out of that INR 500 crore, we have concluded INR 225.
225. Thank you so much. Just wanted to understand now, with this resolution happening, will we bid for that makes us easily be able to bid for projects from Gem & Jewellery Export Promotion Council, like the one of the manufacturing facility which they are planning in Navi Mumbai.
Gem & Jewellery project I think already started by Ahluwalia Contracts (India) Ltd. That was a tender we also bidded, and it was, I think, one year back. No Gem & Jewellery park coming new. If there is a new project, I am not aware of.
Okay. Going forward, how much potentially growth do we see in sales growth for the coming next few years?
15% I already said. 15% I already did say.
Okay. How much was our ROE this year?
Yeah. It is already there in our presentation. You can have a look at it.
I am not knowing the exact figure. You can look at the presentation.
Okay. Thank you.
Thank you. We have our next question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Thanks for the follow-up. Hetal ma'am, you mentioned that the contribution from this UP project was INR 741 crore to the revenue this year. I was just doing math. I think P.S. sir told that the margins were expected only to be 10%-11%, but it may be a good 5%-6%. If I do that 5% EBITDA on that, it comes to INR 37 crore on INR 741. If I adjust for the full year EBITDA of INR 261 on the rest of the revenues, which is X of UP, and EBITDA is INR 224 and EBITDA margin 13.5%. Now, going ahead, we don't have any sizable projects contributing a large portion of revenue, maybe in FY 2025, but still we are guiding at 10%-11%. While it adjusted for UP project, we've still done 13.5% in FY 2024. If you can just comment on that.
Basically, if you are talking about the FY 2025 impact of UP, that we'll be able to know only when we complete the project.
Now the overall sales volume is not so high. I think it will be in the range of INR 30 crore-INR 50 crore less. There won't be a much impact, but that one can be on the same margins which we have been expecting. That much impact can be there, but it won't be on a larger scale.
No, I think next year you don't have too much to book from UP, right? I mean, you hardly have any order book left.
Yeah. We are talking about first quarter margin. We are not talking about other quarters.
But X of UP this year, you had margins of almost 13.5%. While you're guiding at 10%-11% margin when next year UP won't be there, I think you are guiding much lower in terms of EBITDA margin.
No, it's not only because I'm guiding 10% and 11%, because it has been, if you see details also, the overall cost related to overheads has also become a little bit high. Because on the construction side, the cost which we required on the overheads, previously we were able to manage at 3.5%- 4%. This year we have been doing at 5%. So incremental cost of the staff and the overall labor cost has also impacted this year. Such types of impact can impact in future also. That's why I'm saying we should target between 10% and 11%. Of course, the tendering process will still remain on the range of 12% and 13%, but the guideline has to be on a little bit lower side. That's the reason I'm saying. That's what we have been experiencing last few years. Little bit surprises.
Basically, you are looking at a recency bias of a UP project, which makes you maybe on the lower side of the margin band, but since such a large project will not be there in revenue contribution next year, it will be more diversified across projects. Certainly, margins could be better, but you are still sticking to a lower side.
Yeah, you can say that.
Okay, sir. Thank you, sir.
Thank you, sir. We have our next question from the line of Devang Patel from Sameeksha Capital. Please go ahead.
Sir, on the Kashi Vishwanath Dham project also, we had some 30 odd crore of pending dues. If you can please update us on that.
It's still under process because of the elections. Since last two months, there has not been any movement. So probably after election, we will be positioned to give you a right time. But it has been discussed twice with the government secretary level, so probably it should move in next two months.
Okay. Sir, on precast revenues, if you can indicate what is the profitability right now and when can we reach the 14%+ margins on that?
Presently, we cannot have that individual figure for precast because it is both way it is going. Some of the projects which we are doing as a civil is being converted by client as a precast. There is no separate order. But in general, yes, we can think about 14%-15% margin in future because now the technology has been understood well by the market and more and more inquiries are coming from industrial side. We are able to supply precast from here to Tamil Nadu also. Lastly also, we had some orders from Adani, and we are also bidding for INR 150 crore project of Adani, which is purely precast. So such types of project will come in future and that can give you better margins.
Because now when there is a shortfall of labor and there will be a shortfall of some seasonal issues related to project commitment, precast is the best way to give you on-time delivery and it lasts a little bit of labor and consistency throughout the year.
Sir, will it be fair to say that precast could have also depressed our margins this year because the margins you would have made would be lower than our construction margins?
No, we can't say that. That is a little bit marginal impact because we don't have a revenue this year, must be in general, if I say, it should be in the range of INR 200 crore. So any dropping margin of 1% or 2%, this cannot impact the total INR 300, INR 2,500 crore. So it's not that way. But yes, this precast technology as we are developing, we are also in the portion of investment. So probably, now after two years, people have understood it very well. So probably we will be in a better position for assuming good rate in future.
Sir, when you reach INR 400 crore of revenue, what will be the continuing CapEx in that business for molds? Because for every new project you might need new molds.
No, it is not like that. As far as industrial projects are concerned or as far as the residential projects are concerned, our facility is still in final. Last two years, we have been able to invest majorly. On the building side, we had expanded capacity into double size, and that was purely on the infrastructure side. That was order from Larsen & Toubro where we required a new mold. Otherwise, as far as building sales concerned, we have sufficient molds. On the building side, even if we have to expand, we have one line pending, so that will be not more than 15, 20 days.
Okay. Sir, lastly, the Gujarat Biotechnology Research Centre project, I think we announced in October. There we've not seen any execution yet. Is that project on track?
No, but it has just came up on track last month only because there was no basement. But then the project went to approval in which they required a basement. So concluding on the cost of the basement and adding on the order size, then re-approval of the whole plan has just concluded before 15, 20 days, and we are presently in the excavation stage.
Okay, sir. Thank you so much, and all the best, sir.
Thank you.
Thank you.
Can we conclude now or do you want to continue?
Sure, sir. As you say.
No, because as the last question, we can go to the other person who has a single question then, but they already talked to me. You can ask all of three people.
Okay. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.
Only one question from my end. What will be the Precast order book and revenue for FY 2024?
We are not able to visualize that order at Precast because as I said, this business is in the process of development. Every year it is increasing. This year also, as I said, we are bidding for INR 150 crore project. If such types of one or two projects can conclude, then it will be a different story. It is very difficult to conclude on that part. But yes, it can grow from INR 200 crore to INR 250 crore and INR 300 crore and INR 400 crore over the next three years. That is possible with the facility we have.
FY 2024 revenue should be closer to INR 200 crore from Precast?
Yeah, minimum.
Okay. Thank you, sir.
Thank you, sir. As there are no further questions, I would now like to hand the conference over to Mr. Lokesh for closing comments. Over to you, sir.
Yeah. Thank you. On behalf of SMIFS Limited, I thank all the participants for attending the call. At the same time, I thank the management for giving us the opportunity to host the call. Over to you, sir, for any closing remarks. Thank you.
Thank you. On behalf of SMIFS Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.