Ladies and gentlemen, good day and welcome to PSP Projects Limited Q3 and nine months FY 2024 Results Conference Call hosted by Dolat Capital. 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. Shravan Shah, VP Research and Analyst from Dolat Capital. Thank you, and over to you, sir.
Thank you, Tushar. Good afternoon, ladies and gentlemen. On behalf of Dolat Capital, I am pleased to welcome you all on the PSP Projects Q3 FY 2024 Earnings Conference Call. We have with us Mr. PS Patel, Chairman, MD, and CEO, along with Ms. Hetal Patel, CFO of the company. We will begin with the opening remarks from the management, followed by interactive Q&A session. I will hand over the floor to Mr. Kenan Patel, Company Secretary, for disclaimer, and then the management will have opening remarks. Over to you, sir. Thank you.
Thank you, Shravan. Good evening, everyone. On behalf of the management, I am pleased to welcome you all to the PSP Projects Earnings Conference Call to discuss Q3 and nine-month FY 2024 financial results. The presentation, which we have uploaded on Stock Exchange and our website today, including the discussions that we will be having in this call, contains or may contain certain forward-looking statements concerning our business prospects and profitability, which are subject to several risks and uncertainties, and actual results could materially differ from those in such forward-looking statements. Please note a copy of our disclosures is available on the investor section of our website as well as on the stock exchanges. 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 the earnings call conference call of PSP Projects Limited to discuss the unaudited financial results for the third quarter and nine months ended on December 31st, 2023. We concluded the board meeting this morning and uploaded details to investor presentation on Stock Exchange and the website for your review. I hope you got a chance to review the same. I would begin by sharing certain important highlights that took place during the quarter. During quarter three FY 2024, the company completed seven projects. The major projects completed are residential project for Adani Realty, industrial warehousing project of Precast at various locations in Gujarat, Precast box culverts for Reliance Jamnagar. During quarter three FY 2024, the company was awarded two projects.
The major projects awarded are Kalamkhush Campus at Gandhi Ashram, one of the initial project part of the massive development government plans to do for the Gandhi Ashram. Second is Gujarat Biotechnology Research Centre at GIFT City, Gandhinagar. Company has received an order inflow to the tune of INR 1,060 crore, excluding GST, and lowest bidder L1 in the total order of value of INR 1,222 crore till end of nine months FY 2024. As on today, post receipt of recent letters of acceptance, the order inflow is to the tune of INR 1,995 crore, and total L1 order of value of INR 928 crore. We are fairly in line with the order inflow guidance provided for this fiscal financial year.
As on nine months FY 2024, the outstanding order book was to the tune of INR 4,443 crore, a decline of 12% on year-on-year basis on account of faster execution of projects and higher number of completion of ongoing projects as compared to order inflow. Out of the outstanding order book, the private projects comprises of 49%, while government projects comprises of 51%. As on December 31st, 2023, there are 49 ongoing projects, 87% of which are based in Gujarat and 13% in U.P. Till date, the company has completed 219 projects in total since inception, with 84% private projects in balance as government projects. In October 2023, the company was bestowed with an award of fastest growing construction company in India below INR 2,000 crore turnover category, fourth year in a row at the 21st Construction World Global Awards 2023.
Now, I would like to share certain essential development that took place in the project side. Regarding Surat Diamond Bourse, as per our release dated December 7th, 2023, your company has filed a commercial civil miscellaneous application seeking an interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 before the Honorable District Court. Your company prayed to the Honorable Court to grant an interim relief in form of injection and to pass an order directing the respondent to deposit an amount of INR 538.59 crore, along with interest thereon, amongst other relief.
The case is at the stage of arguments and pending before the Honorable District Judge, Surat. The matter is adjourned to February 1st, 2024. Regarding U.P. projects, during the quarter, the revenue book for all projects is to the tune of INR 250 crore, and on nine months FY 2024, the total revenue book is INR 1,429 crore. Cumulatively, all the U.P. projects are at an advanced stage and nearing completion. Regarding SNC administrative building, the project is moving as per planning and schedule. The rafts are completed during the quarter.
The revenue booked to the tune of INR 49 crore, and as on nine months FY 2024, the total revenue booked is INR 171 crore. Hetal ma'am will share the financial performance of the company in detail with you. I would like to highlight that now the company has entered into a different league of building projects. We are getting pre-qualified and are bidding for large size projects across different states. Post completion of large size and certain market projects, our team at present is beaming with the confidence to handle projects and execute them with effective planning across the country.
In our journey of 15 years, we have over time made our mark, and are recognized for delivering quality projects and our planning systems, as well as regarded in the marketplace, which is helping us complete projects adhering to the project timelines. We endeavor to gradually move up the value chain and increase the projects of higher ticket size gradually over a period of time. Our bid book now is spread across the projects in the states of Madhya Pradesh, Odisha, Delhi, U.P., etc .
The 2024 budget enforces a visionary roadmap for Digital India with INR 11 lakh crore towards infrastructure allocation consisting of 3.4% of GDP. We look forward to participating in India's growth story by playing our positive role in the development process. We are confident on the fundamentals of the Indian economy and expect them to remain solid, with focus on growth, development across all states of the country. With this, I conclude my remarks, and now I would like to hand over the call to Ms. Hetal Patel to take us through the financial in detail.
Thank you, sir. Good evening, everyone. The financial performance during the quarter ended on December 31st, 2023 is as below. Quarter three FY 2024 versus quarter three FY 2023. Revenue from operations for the quarter is INR 697 crore versus INR 497 crore, which is increased by 40% on year-on-year basis. EBITDA for the quarter is at INR 71 crore versus INR 62 crore, which is higher by 16% on year-on-year basis. EBITDA margin is at 10.25% versus 12.39%. Net profit for the quarter is at INR 33 crore versus INR 35 crore, reduced by 8% on year-on-year basis. PAT margin is 4.63% versus 7.01%. The revenue generated from seven U.P. projects put together was INR 250 crore during Quarter 3 FY 2024. Cumulative revenstue till December 31st, 2023 is INR 1,429 crore.
The other expenses increased from INR 5.2 crore in quarter two to INR 8.51 crore in quarter three, which mainly includes ECL provision on trade receivables to the extent of INR 3 crore. Employee cost increased from INR 29.56 crore in quarter two to INR 33.75 crore in quarter three, mainly due to appraisals processed during the quarter. The increase in finance cost from INR 12 crore in quarter two to INR 15 crore in quarter three is mainly on account of increase in short-term borrowings and bill discounting facilities used during the quarter.
The increase in depreciation from INR 14 crore in quarter two to INR 18 crore in quarter three is on account of significant additions in fixed assets to the extent of INR 34 crore during the quarter. During the period of nine months, company has incurred CapEx of INR 142 crore, out of which INR 74 crore is for precast facilities. Would like to mention few of the important balance sheet numbers as on December 2023. Long-term borrowing, INR 75 crore, including short-term maturities of INR 50 crore. Short-term borrowing, INR 403 crore, excluding short-term maturities of INR 50 crore. Gross block of assets, INR 543 crore. Net block, INR 325 crore. Additions during the quarter is INR 34 crore.
Net unbilled revenue, INR 409 crore. Retention non-current, INR 58 crore. Retention current, INR 101 crore. Mobilization advanced, INR 221 crore. Inventories, INR 269 crore, which comprises of INR 122 crore of construction material, INR 123 crore of working progress, and INR 24 crore of finished goods. Working capital days are as follows. Debtor days are 63, creditor days 60, inventory days are 35, and total net working capital days are 38. Out of the total sanctioned credit facilities of INR 1,497 crore, company utilized INR 1,030 crore, and INR 467 crore are available for further utilization.
Fund-based utilization is INR 245 crore, and non-fund based utilization is INR 785 crore. As on December 31st, 2023, the company has total fixed deposit of INR 257 crore, out of which lien-free deposits are of INR 47 crore, and FDs with lien are INR 210 crore, with bank for credit facilities. Work on hand as on December 31st is INR 4,443 crore, and detailed bifurcation is available in our uploaded presentation. That concludes the update on financials, and we are now open for the question and answer session. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. 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. The first question is from the line of Tushar from KamayaKya Wealth Management. Please go ahead, sir.
Good afternoon, sir. Thank you for the opportunity. I just wanted to understand the receivable from the Surat Diamond Bourse, and what is the update on that?
Hello.
Hello.
Receivables which are booked on the accounts, it is, I think, INR 65 crore is on the account of the bill, INR 40 crore is on the account of work in progress, and INR 42 crore is on the account of retention money.
Hello. Yeah, I'll repeat. It's INR 46 crore on receivables, INR 53 crore on unbilled, and INR 42 crore as retention. That is the outstanding as we have already mentioned in the notes.
Okay. There was some hearing on the same. What's the update on that. I just wanted to know.
The update I've already discussed in my initial call, wherein we have stated that the matter is in the court, and presently we have initiated only Section 9. Wherein, just to safeguard our money before when we go to the arbitration. The first hearing has already happened on the seventh, and second hearing from our side is on the 12th. Probably by the end of February, the Section 9 matter should get completed, and we should be in a position to get some order from the court safeguarding our money.
Very much, sir. Sir, I could see you are getting good orders. I just wanted to understand your growth and forth. Like for next two years, how do you see your top line growing? Also the order book, sir.
The order book, as I already said that the present order book this year which we earned, which was about in the range of INR 3,000 crore. I think we are still in the line that we will be able to achieve that INR 3 ,000 crore order book. Next year also, when we think about the projection, we went up about INR 3,000 crore. Then the order book inflow should be in the range of INR 3,500 crore. I think both the things are which we have been doing till now, and we are confident that next year also we will be able to remain the same.
Sir, what sort of margin you are foresee on that?
The margin, as I always say, it should be in the range of 11% and 12%. We try to maintain that as far as possible, as we maintain our tender bidding criteria, and we will be trying to remain in the same range.
Very much, sir. I will get back in the queue. Thank you.
Thank you.
Thank you. The next question is from the line of Amit Khetan from Laburnum Capital. Please go ahead.
Hi, good evening. Thank you for the opportunity. A couple of questions. First, just wanted to get a better sense of institutionalization in the company. In that context, would it be possible to share how many employees in the company beyond the promoter family, get a remuneration of, say, more than INR 50 lakh?
I think I have to come back to you, but at least I think it should be more than 10 - 15 people.
Okay, more than 10 - 15 people.
Ten. Maybe maximum 10 people, yeah. Yeah, it must be in the range of 10 people, yeah.
Got it. Secondly, over the last two to three years, the promoter shareholding has come down significantly from 74% to 66%. What is the reason for this, and how should we look at the promoter shareholding going forward?
This reduction has been done before March, and I think after that also in the first quarter and the second quarter, we already said that it won't go beyond this level, as that was some requirement from my personal side, wherein we have done that. Originally, it was 72%, then we increased our shares to 74%, and lately, by selling some few of the shares, it has now been to 66.2%. Probably this will remain the same as far as next one year is concerned.
Got it. The reason was for some personal requirement.
Yeah, it was a personal requirement.
Okay. All right. Thank you.
Thank you. The next question is from the line of Vishal Periwal from IDBI Capital. Please go ahead.
Yes, sir. Thanks for the opportunity. I have two questions. First, in terms of margin in this quarter, we have seen a little bit of dip. Is there any particular project that we have executed or started that has led to this, or how exactly you see this going ahead?
Actually, it is not related to any one project, but yes, we can say that there has been some more expense at the U.P. site because it is at the verge of completion also, and as we were moving a little bit fast to complete it by December on major projects and by March, all the projects. There were some few expenses made because the labor which we were managing must be on department labor. I think INR 4 crore or INR 5 crore must have gone there in terms of speeding up the project.
Okay. As you are saying that probably we are on a verge of conclusion by March, so probably March quarter, we could have a similar sort of trend. That will be fair understanding?
Pardon me?
You said we are on the verge of completing those projects in U.P., which has led to this margin. Which means in the quarter four, we can expect a similar sort of margin that what we have done in this December quarter?
That depends, again, because as I said, that we try to maintain at 11% and 12%, but as now the project work which is left is about in the range of INR 60 crore -INR 63 crore. So probably there won't be any much impact. But the work which we did in the last quarter was the highest, at INR 250 crore, so that was the reason that there was some more expenses than on the labor side.
Okay, sure. Second is on the equity raising plan that we have put it in the DSC. If I look at in terms of our limits and borrowings, everything is probably quite benign and there's a lot of buffer. What is the reason of the board taking an approval for the equity raising?
See, it is an enabling process which we have initiated. It will be decided later on because it is majorly required in terms of growth capital. The present requirement of enabling up to INR 300 crore, that is what we have thought of. No fixed idea of what exact amount we may go at. As we have been facing this working capital issue in the company since March 2022. It is not that we are very much inclined towards going clearly, but just it is an enabling process which we have done. If we get a better opportunity, we will go ahead.
Okay. If I can just get the number again, sir. I think Madam did mention, I missed. What is the gross debt as on date?
Yeah.
Short term plus long term.
As of December, long-term borrowing is INR 75 crore and short-term borrowing is INR 403 crore.
Okay.
Yeah. Which includes
Yeah, sorry.
Fund-based facility utilization also, that is around INR 60 crore. FDOD facility utilization is INR 60 crore.
Okay. Based on the current, probably, the bandwidth that we have, what is the incremental debt that we can raise? Then probably we can go for equity raising. Anything that you can provide a color?
Incremental debt in terms of short-term debts you are talking about?
Yes. I think that working capital.
We have around INR 30 crore of free limit, so that we will be utilizing some consumption limit, but we will not be going for further debt increase.
Okay. Yeah. That is all from my side. Thank you very much.
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah. Thank you, sir. Sir, just to get a further clarity. So in nine months, we have done a 15% revenue growth. So in the fourth quarter, how much are we planning? So for the full year, how much growth are we looking at? Last time we said INR 2,600 crore revenue for this year, FY 2024. So for now, how we are seeing that?
I think, Shravan, last time also I said between INR 2,500 crore and INR 2,600 crore. So we will be in the range of INR 2,500+ crore .
Okay. For next year, you said that INR 3,000 crore revenue that we are looking at for FY 2025.
Right.
Okay. In terms of the margins, previously we used to say 11%-13%, but now it seems that we have reduced this range to 11%-12%. Are we seeing that going forward our margin, there is no scope for it moving up?
See, it's an impact of 1% or 1.5% plus or minus. On the conservative side, I usually say 11%, 12%, and you people always say 11% and 13%. That's the only difference. As I've always said, it is very difficult for a contracting company, we are working more on an EPC project, to anticipate the exact margin what we will earn because there are so many uncertainties in an EPC project. Sometimes you get a benefit of 1.5% or sometimes you get a loss of 1.5% because we are not able to anticipate the whole project within 20, 25 days of bidding. There'll be plus or minus both sides.
Okay. For fourth quarter, the way this quarter we had a lower EBITDA margin of 10.3%, it should come back to the normal level of, that's for nine months also, if you look at 11.5%, 11.6%. That range will come back again in the fourth quarter.
See, I cannot assure you, but yes, the major projects which was hit this quarter was because of U.P., and now the U.P. projects are getting completed. Only INR 65 crore, INR 60+ crore is work is left out. I think we should be in a position to come back to our original margins what we have been expecting.
Just to get a clarity, so equity raising and the debt combined put together. So this INR 300 crore is just enabling resolution that we are taking, and if we get an opportunity, we will try to raise, but as such, we are not needing this capital right now on the urgent basis.
Yeah, it is not an urgent basis, but as I have already said that if it is required for the growth capital from here on, the orders which we are anticipating is 3,000, and most of the orders, if you remember, L1 are getting converted to order in third quarter and maybe in the last quarter. So probably all these projects will require bank guarantees, which will require margin also. So probably this is an enabling process which we have initiated. We will think of it as and when needed.
Okay. But, sir, how much is, I think still we have a scope on the non-fund based limit scope is there. So even if this INR 928 crore L1 is there, even if it gets converted, do we need the extra equity to get the bank guarantees?
Yeah. Basically what I am saying is the order book, if you see the INR 900 crore, we have already declared INR 650 crore and further two orders are going to be getting, which we will receive in few days. Probably adding on this INR 1,500 crore - INR 1,600 crore from here on, that will also require a bank guarantee of INR 350 crore - INR 400 crore, which will require margin of minimum 20%, if we say, then also it is INR 200 crore. Sorry, INR 1,500 crore into INR 2,000 crore , so INR 300 crore.
Okay. Just a clarification in terms of the L1 order INR 928 crore. Does this only include Science City INR 297 crore and Gati Shakti Vadodara order of INR 631 crore? There was a one dairy plant, Rajkot project of INR 441 crore. Is it also not part of L1 or got converted?
No, it is not now a part of L1 because we have deducted that from our L1 order as that project is canceled because of the budget. Dairy was expecting an order of these prices to come in the range of INR 400 crore- INR 450 crore, but both the bids have gone beyond INR 500 crore, which was not their budget. So now they are revising the whole budget and reducing the scope of work, and they will come up with a tender of INR 350 crore- INR 400 crore again by end of March or maybe in first week of April.
Okay. So now in terms of the bid pipeline, what's the bid pipeline and particularly couple of projects from there and the Delhi Railway Station INR 4,800 crore project, so what's the status there?
I think it is already there in the news that INR 4,800 crore Delhi Railway Station tender has been canceled. Still we have an order bid pipeline of about INR 6,000 crore, which I would give in detail. Residential building in Delhi is about INR 1,000 crore. Commercial building in Delhi, NCR is about INR 1,000 crore. There is one mall in Surat, which is about INR 200 crore. Commercial building in GIFT City, which we are building is INR 400 crore. Airport at Varanasi, which we already bidded is INR 1,000 crore. Industry project at Sanand is INR 350 crore, and commercial building at GIFT City is INR 150 crore.
Then there are few tenders which have just come within this last week, about five to six projects in UT of court building, which is in the range of INR 2,000 crore. This totals to INR 6,000 crore. Presently, we can say that the bid pipeline is in the range of INR 6,000 crore, excluding the Delhi.
Okay. Got it. Sir, if, let's say, this SDB, as you were saying, correct me if I'm wrong, that we have put a claim of INR 539 odd crore, that's what you mentioned, I think, in your remarks. Broadly, we are expecting by end of this February the outcome. If, let's say, we even if settle in middle of this INR 300 crore, INR 400 crore also, if we receive this plus whatever we were supposed to get INR 141 crore, then do we think that we need to go for an equity raising?
See, first and the foremost thing, Shravan, you should understand that we are not getting the cash money out of this hearing of Section 9. Section 9 allows the provision of protecting my money. It is not that they will be paying me that money. When there is a private organization, you have to protect before go to the court. Because in private organizations, when the project is over and there is no one in the association who can bear this money, or the association may not have that much money at the latest stage, when you get an award of an arbitration. By law, before going to arbitration in private organization, you have to file in Section 9, whereby they can protect your interest.
Supposing we have made a claim of INR 530 crore, how can they, after understanding the claims, if they find some truthness in the claim, they will protect our money in a way of bank guarantee to be placed by the client or maybe in terms of putting a lien on the sales part of the offices which are yet to be sold. Such types of provisions they make, or they can create an escrow account also, wherein this money which is coming as a part of revenue in that organization is put in escrow. Such types of provisions are there in Section 9.
Otherwise, after hearing of Section 9, if they come to a conciliation at the personal level, and if there is a result, before going to arbitration and we get something out of this in the range of INR 300 crore-INR 350 crore, I think then we will always think that whether we want to go for QIP or not. Then probably let us wait for one month and half months.
Okay. Got it. The current debt level which is going up, so INR 478 crore combined short-term and long-term. How do we see this for this year and for next year, considering if we are reaching the INR 3,000 crore revenue next year? How one can look at this debt and at the same time the finance cost which is going up quarter -on -quarter. How one can look at this thing?
See, actually, if you clearly see the overall from March 2022, this has started. The basic money which we got stuck up is majorly because of Surat Diamond Bourse, and later still the projects of U.P., still we have some money receivables we receive from U.P. projects also. Probably this is majorly because of the money getting stuck up in these two large projects. That's the issue related to that. But both the monies are in place. I think there won't be any much requirement of debt going up from here. That's the way, at least if we can get INR 300 crore out of Surat within this 1 month before March, and then I think the debt level will come to less than normal.
Okay. But if you do not get then this INR 400 crore-INR 500 crore is the normal level that
Yeah, that was the reason for enabling this QIP. That was the further option of going with this case, goes on for arbitration for further one year, then we need some money to ease out our process and getting the working capital smoothness. That is the reason, and reducing our interest cost. That was the reason to enable this QIP.
Got it. And last, Hetal Ma'am, the unbilled revenue is how much, and the CapEx for the full year is how much? So nine-month number we have. For the full year, how much we are looking at?
Yeah, I have already mentioned this amount in my speech, but I will repeat it. Net unbilled revenue is INR 409 crore. And CapEx we have incurred during the nine months is INR 142 crore.
Yeah. For fourth quarter, how much more are we looking to do CapEx?
Okay. See, that depends on the initiation of the project, and we may require around 2% to 3% of additional CapEx for new projects.
Basically, we are in the process of starting two or three large projects. One is this Chhatrapati University at INR 630 crore, INR 450 crore, INR 400 + crore of river front and INR 400+ crore of this Dharoi dam. I think the two projects of Dharoi and the Sabarmati River Front, that will not require much of the CapEx. But yes, at the site of Chhatrapati University we may require, but probably that will be also in the initial stage of foundation, doing diaphragm wall and excavation and going to the basement. I don't see much investment on the CapEx for this large project.
Okay. Got it. Thank you and all the best, sir.
Okay. Thank you.
Thank you. The next question is from the line of Parikshit from HDFC Securities. Please go ahead, sir.
Okay, sir. Congratulations on a decent number. My question is, why Surat Diamond Bourse withholding the money payment? Why are they not paying you? What is the issue? What are they telling you on this?
Sorry, can you please repeat? Your voice is-
Yeah, voice is very low, Parikshit.
Sir, I am saying, why is SDB not paying you money? What is the contention? Why are they blocking or withholding the money?
You are talking about SDB?
Yeah.
See, the best way to understand is we have completed this project in March 2022, and we got virtual completion in June 2022. So probably till that time, the overall scenario was good. They completed and also they have certified and approved some of the bills which we have already claimed in our books also. So when they saw the claim in detail and by going through some of the legal process, they must have understood that they are not eligible to pay such a large claim. Then they started putting on hold the existing money so that we come to a conclusion very easily with them. Because my INR 150 crore will be on hold, so they are trying to push me in a way that I come to compromise easily for the INR 500 crore claim. That must be the reason.
Otherwise, there is no point, because in our claims also, we are very clear, and it has been approved, and only the certification is not done, about INR 150 crore. Rest, everything is on claim side. That is a dispute that they can always say that is a dispute which can go to arbitration. But again, there is a clause of price escalation after force majeure. They understand that our point of view is very clear. But since they have initiated to fight, now they are understanding day by day on the hearing side, when the hearing are going on in sessions court, they are able to understand that we are not able to cease because we are very clear on our terms and condition of the contract.
Okay. On the U.P. projects, here in SDB, we have INR 141 crore which we have to receive and we have claims. What about the U.P. projects? How much is the pending which is withheld there?
It is INR 129 crore, and which is in the process only. It is not something which has been held back.
We have received that amount in January month. The December option is paid receivable INR 129 crore. December invoices have been paid in January and February initial also.
Okay. So against the full year of revenues, you have executed around INR 129 crore is pending here, sir.
Yeah, right. As on December, INR 129 crore.
Okay, sir. The last thing, sir, you said that because of U.P. projects now getting over, about INR 60 crore-INR 65 crore is left. Once that is done, you will come back to your historical margins, I mean, which I think you are guiding in the range of 11%-12%, right? Is my understanding right, that from first quarter of next year, you should be back to 11%-12% EBITDA margin?
That you should expect that.
Okay. Okay, sir. Thank you and wish you the best. Those were my questions. Thank you.
Thanks.
Thank you. The next question is from the line of Adnan from Bastion Research. Please go ahead, sir.
Hello, am I audible?
Yes.
Yeah.
Yeah. Sir, thank you for the opportunity. Sir, first one was on debt. I think couple of quarters back in the conference call, we discussed that once the U.P. project gets over, there will be a substantial reduction which will take place as far as debt is concerned. Now that the U.P. Project is on the verge of getting completed, can we expect a INR 150 crore odd respite in debt in the coming two quarters? Is that a fair understanding to go forward with?
See, debt level you are talking about, right?
Right.
Yes. As sir has already mentioned in reply for your question, this debt level increase is mainly due to the amount stuck up with SDB and the routine U.P. bills are being paid in around one and a half months or so. That type of working capital is required till the U.P. Projects are over and SDB matter is sorted out.
Yes, that is what I am asking, sir. Once the U.P. project is over, can we see a substantial reduction in debt taking place? Maybe in the next couple of quarters if that is going to get over?
Yes, of course, we can expect that.
Right. That's helpful. Sir, the second one was on the Surat Diamond Bourse only. Sir, there are two amounts. One is this INR 140 crore amount, and one is this around INR 500 crore is some other demand. Can you just help me understand what is this INR 140 crore pertaining to, and what is the INR 500 crore pertaining to? I am little confused there.
Total it is INR 532 crore, which includes this INR 140 crore.
Okay.
The INR 140 crore is already booked in the books, and the rest of the things which are at disputed claims, which is a part of this INR 532 crore.
Understood, sir. That's it from my side. Thank you, and onwards.
Thank you.
Thank you. The next question is from the line of Devang Patel from Sameeksha Capital. Please go ahead.
Hi, sir. Firstly, you mentioned in the bid pipeline a few thousand crore projects, some in Delhi, including the airport project. On these thousand crore projects, are we bidding on our own 100%?
Yeah. All the projects which is of the larger size, we are qualifying and we are bidding of our own. There is no JV in that.
Okay. The airport project also, we will be qualifying on our own?
Yeah, of course, we are qualifying, so we are bidding.
Okay. Sir, secondly on this Surat Diamond Bourse, could you give some timeline on how things are progressing? At one point you mentioned by March, we might be getting some amount back.
No, it is not like that. See, there are two things going on. One is the Section 9, which is related to safeguarding our money when we go to arbitration. Even if the Section 9 is to be concluded before 5th of March as per the court's understanding. So before 5th of March, they have to give us a decision that how much money they are pushing the client to withheld, or they ask the client to put a bank guarantee. So once they understand about this INR 532 crore claim, they may ask Surat Diamond Bourse to put INR 100 crore, INR 200 crore, maximum INR 300 crore. That will be in form of bank guarantee or a lien to a property which is not sold. So that's first part.
Second part is after this hearing, the client may consider that when the facts are little bit true, if they come to conciliation part, then the whole story can be concluded. If they are ready to accept and we are ready to negotiate, then that can end up in March. But if this thing does not happen on the conciliation part, we will have to go to arbitration, and that arbitration process is going to take minimum one year.
Understood, sir. Sir, and secondly on the debt reduction, earlier, I think last call, we were looking at debt coming down to INR 300 crore by March. How does it look now with what has happened in the last quarter?
Yeah, I have already mentioned the debt level is around INR 400 crore. Short-term debt, I am talking about.
Okay. Are we expecting some reduction by the end in the next quarter? Because you mentioned INR 129 crore has come.
Yeah. See, it depends on the movement of money receivable from U.P. projects. If the cycles go fast, then we will be utilizing less cash compared to this quarter.
Okay. Sir, and lastly, because the U.P. project will get completed, and I think you indicated earlier in the closing stages, we will book higher margins. Is that still possible that this U.P. project getting over, we will have higher margins from that project booked?
No, it is not about higher margin. It will be in the range of what we are focusing on, or we have been understanding from the tender bidding which we do. We should be in the range of 11% and 12%, or maybe 11% and 13%, what you people always say. In my view, it will be in the range of 11% and 12%.
Okay, sir. That is all from my side. Thank you.
Thank you. Participants who wish to ask questions may please press star and one. The next question is from the line of Rushabh Shah from RBSA Investment Managers. Please go ahead, sir.
Yeah. Hi, sir. This LuLu Mall is going to come up in Ahmedabad with a project cost of around INR 4,000 crore. Sir, are we bidding for that or is bidding completed, sir? Any status on this project?
You are talking about the sports complex?
LuLu Mall project, sir. India's largest mall project in Ahmedabad.
Oh, LuLu Mall. Okay. No. There is a project, but it cannot be of a size of INR 4,000 crore. That can be a rumor. But yes, there will be a process wherein we will participate, but as of now, nothing has come from the client side, so we have not heard about the tender as now. But yes, the LuLu Mall is announced, and the place is already defined. So probably that may come in the later stage. After March.
After March. Okay.
Yes.
And sir, that will be around 30%-40% of the total cost that we may be able to bid for.
Pardon me?
Sir, what is the total size of the project that we may be able to bid for? Out of the total project.
I think that the INR 4,000 crore may be the total investment which LuLu Mall people have announced. That includes land and then total fit outs and everything. Probably the size of the project should be in the range of INR 500 crore -INR 1,000 crore, as far as civil part is concerned.
Okay. Sir, regarding this SDB, is there anything? Have you provisioned so far? Or everything is just currently standing in the books, in terms of reversal of debtors or anything, has any entry been done in the book so far?
No, it is standing in the book. There is no provision. We have already mentioned in our notes that we are hopeful of recovering this amount.
Okay. And sir, you mentioned that post-March, there will be the things may go forward, whether in arbitration or conciliation. If you choose to go for arbitration, then things can go for one year also. So what stand will we take? Will we be interested more in settling the matter, or we would be keen to delay the matter and wait for one year for the money to be received?
That depends, because, see, it is more about the disputes, what we have raised and what are the disputes which can be negotiated. So that depends on client's intention, then only we can say. If the client is concerned and say that let us negotiate at INR 50 crore, we are not ready. So it depends on what type of conciliation client would like to go in, what are the strong claims which are positive as per the terms and conditions in the contract. So we will stick to that. But probably we are inclined towards conciliation, but not at the sake of any money.
Okay. Thank you, sir.
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hetal, ma'am, what is the total debtor sales on December and trade payable?
Yeah. As on December, the debtors are INR 481 crore, and trade payables are INR 462 crore.
INR 462 crore. And inventory, you mentioned INR 269 crore.
Yeah, right.
Okay. Got it. Thank you.
The next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead, sir.
Thanks for the opportunity. Sir, what is our precast revenue in the first nine months?
See, exactly, we have a figure which is related to precast because it is on the base level. Some of the orders are from a different client, and some of the orders we execute from our existing orders, which are related to sale work. So exact revenue we cannot declare as of now, or we are not getting the right figure for exact revenue generated from precast till now. But overall, we were expecting that this year we should be able to generate a revenue of about INR 180 crore from the total facility after the end of the year.
Ballpark, what margins are we expecting for the whole year from precast? Could be similar to ACP margins?
At the initial stage, we were just trying to push it in the market and make the people understand. Now, if you have heard some of the figures, lastly, we were able to do INR 12 lakh square feet of warehousing facility in the last 12 months. We have done so many compound works, which was also at the speed of one kilometer per month. Things are now getting materialized, and now people are accepting this technology. On a longer run, we will be trying to stick to our margins of 11% and 12%. On the later stage, again, when this technology is universally accepted and there is a shortfall and people requiring these works to be completed before time or on time, they will be paying us more. At that time, we can increase our margins of 12% to 3% or 4% higher.
Currently we are EBITDA positive, right? On the precast work.
Yeah. Presently we are at EBITDA positive, but not to that level that we are saying at 11% and 12%.
Okay. And sir, out of the INR 142 crore CapEx we have done in the first nine months, what has been done for precast?
INR 74 crore.
INR 74 crore.
I missed the number for CapEx on fourth quarter.
That is INR 34 crore.
Okay. Next year, what are we expecting in terms of CapEx?
I think every year, if you see our total figures, it is in the range of 3%-4% of the total revenue. So if we are considering next year as INR 3,000 crore, it will be in the range of the same, INR 100 crore -INR 100+ crore .
Okay. It includes anything on precast for FY 2025?
Precast, again, now presently we have full-fledged facility of doing the work for infrastructure and for the buildings. As of now, we are not seeing any possibilities to invest. But if there is a large order in terms of infrastructure, which molds we are not having, maybe we may go for such type of order if the order is large. But as of now, we are not seeing any large CapEx to come in precast.
Sir, lastly, what is the capacity utilization of precast plant currently, and what is the exact capacity of
Presently, we can say, as I said, that we did INR 2 lakh square feet of warehousing facility in a year. Our total plant capacity is about INR 30 lakh square feet per year. Presently, our utilization is in the range of 40%-50%.
At maybe 80% utilization, we can clock 11%-12% margins.
Yeah.
Okay. Thank you, sir.
Thank you. The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go ahead, sir.
Sir, my question has been answered. Thanks.
The next question is from the line of Dinesh Kulkarni from RDST. Please go ahead, sir.
Hello, sir. Can you hear me?
Yeah
Okay. Just one question. We see most of our projects are being executed in Gujarat and largely in U.P. I just want to understand what's our thought process. Why are you not looking at other states which are coming up, or even Maharashtra for that matter? Are there not good enough projects that you've centered your criteria?
It is not about the region which we are not quoting, or it is not about the region which we are keen to quote. It is more about the opportunity and type of project we build. Presently, what order book, which I have said, that we are going to build for Delhi, we are going to build for, again, U.P., and there are a few projects which we are going to build for Odisha also. It depends on the type of project and the size of the project and the qualification criteria of the project. We always think about the state of the project.
Okay, sir. Got it. Thank you. Thanks for that.
Yeah.
I now hand the conference over to Mr. Shravan Shah.
I thank management for giving us the opportunity to host the call and thank you all the participants. PS sir, do you have any closing comments?
Yeah, I'll close my statement. Thank you, Shravan, for organizing this call. So on behalf of the management of PSP Projects, thank you for joining us on the earning calls today. Thank you for your 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, Anvest India, and they will connect with you offline. Thank you, Shravan Shah, Dolat Capital, for hosting our call. Thank you, all of you, and God bless you.
Thank you.
On behalf of Dolat Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.