Ladies and gentlemen, good day and welcome to PSP Projects Limited Q2 FY 2024 result conference call hosted by JM Financial. 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 the conference is being recorded. I now hand the conference over to Kenan Patel. Thank you, and over to you.
On behalf of the management, I am pleased to welcome you all to the PSP earnings conference call to discuss the Q2 FY 2024 quarterly financial results. Please note a copy of our disclosure is available in the investor section of our website, as well as on the stock exchange's website. Anything said on this call which reflects our outlook for the future, or which could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. Now I shall hand over the call to our Chairman for his opening remarks. Over to you, sir.
Thank you, Kenan. Good evening, everyone. A warm welcome to the earning conference call of PSP Projects Limited to discuss the unaudited financial results for the second quarter and half year ended September 30th, 2023. We concluded the board meeting this morning and uploaded the detailed investor presentation on the stock exchange and website for your review. I hope you got the chance to review the same.
I shall first discuss the key highlights that took place during the quarter. During Q2 FY 2024 and H1 FY 2024, the company was awarded nine projects and 14 projects respectively. During the quarter, key projects awarded are commercial buildings in GIFT City, Astral Corporate House Phase 3, additional scope of work for Construction of Chocolate Plant Phase 3 for Multi-National Company in Sanand, Ahmedabad. Balance from institutional and industrial precast orders totaling to INR 42 crore.
During the quarter, the company completed two projects, one of Surat Smart City Development Command Center and Adani International School at Ahmedabad. As on September 30th, 2023, the outstanding order book was to the tune of INR 4,898 crore, a marginal decline of 4% on year-on-year basis on account of faster execution and completion of ongoing projects in comparison to order inflow. Out of the outstanding order book, the private projects comprises of 48%, while government projects comprises of 52%. As on September 30th, 2023, there are 54 ongoing projects, 83% are based in Gujarat and 17% in U.P. To date, the company has completed 212 projects in total since inception, with 84% private projects and balance were government projects.
During the quarter and half year, the company has received an order inflow of the tune of INR 175 crore and INR 934 crore including GST respectively. During the past five years, the average order inflow received by PSP Projects has been to the tune of INR 710 crore, except for FY 2023, where the order inflow was in excess of INR 1,500 crore. In addition, considering the recent orders received by the company, the order inflow as on date stands at INR 958.62 crore. We continue to maintain our guidance on the expected order inflow annually INR 3,000 crore in FY 2024, considering the robust deal book in place.
During the quarter, the company was bestowed with Contractor of the Year award for 500 crore or above projects category, as well as Excellence in Construction Sector award for the project of Development of Shri Kashi Vishwanath Dham by the Gujarat Contractors Association Award and Vibrant Summit 2023. Now, I would like to share the project level updates. Regarding U.P. project, during the quarter the revenue booked from U.P. project is to the tune of INR 268 crore as on date. The revenue booked is INR 1,183 crore in total. The projects are at an advanced stage, and work is going on as per schedule. Regarding SMC Administrative Building, the project is on track. The rafts are completed till September 30th, 2023. The company has booked revenue of INR 122 crore from that project.
Regarding the dispute with Pandharpur , the Hon'ble High Court at Bombay, Civil Appellate Jurisdiction has appointed two arbitrators as nominated by each party, and the nominated arbitrators in turn have also appointed the presiding arbitrator, and thus the arbitral tribunal has been formed. Hearing will be held in coming months. We are giving instructions to parties on further proceedings in this matter. During Q2 FY 2024, sales revenue from operating grew by 70% to INR 607 crore. EBITDA grew by 91% to INR 74 crore. EBITDA margin for the quarter is at 12.2%. The improvement in revenue is a mix of higher execution of our ongoing projects and U.P. projects being an advanced stage of completion.
As per latest statistics, the Indian economy is expected to double in the next seven years, with infrastructure spend to double from estimated of INR 66.7 lakh crore between fiscal year 2017 to 2023, to INR 142.9 lakh crore between fiscal year 2024 to 2030. During the recent visit of PM Narendra Modi in Gujarat, he announced and laid the foundation stone of projects worth INR 6,909 crore to be utilized towards railways and urban infrastructure, smart cities, and tourism. There exists immense opportunity for growth of the company in the coming future. With this, I conclude my remarks and now I would like to hand over the call to Ms. Hetal Patel to take through the financial details. Thank you.
Thank you, sir. Good evening, everyone. The financial performance during the quarter ended September 30th, 2023, is as below. Q2 FY 2024 versus Q2 FY 2023. Revenue from operations for the quarter is at INR 607 crores versus INR 357 crores, which is increased by 70% on year-on-year basis. EBITDA for quarter is INR 74 crores versus INR 39 crores, higher by 91% on year-on-year basis. EBITDA margin is 12.15% versus 10.83%. Net profit for the quarter is at INR 39 crores versus INR 23 crores, higher by 71% on year-on-year basis. Tax margin is at 6.4% versus 6.3%. The revenue generated from seven U.P. projects put together was INR 268 crores during Q2 FY 2024.
The cumulative revenue till September 30th, 2023, is INR 1,183 crores. The increase in the finance cost from INR 7 crores in quarter one to INR 12 crores in quarter two is mainly on account of increase in short-term borrowings during the quarter. The increase in depreciation from INR 9 crores in quarter one to INR 14 crores in quarter two is on account of significant additions in fixed assets to the extent of INR 79 crores during the quarter.
During the half year, company has incurred CapEx of INR 97 crores, out of which INR 61 crores is for precast facilities. The inventory comprises of INR 114 crores of consumption materials, INR 83 crores of work in progress, and INR 21 crores of finished goods. Increase in other financial assets from INR 297 crores to INR 410 crores is mainly attributable to increase in unbilled revenue of current projects and earlier years carry forward of unbilled revenue of SDB Surat project and Kashi project amounting to INR 53 crores and INR 31 crores respectively, awaiting for their final bill pending certification. The current borrowings has increased from INR 107 crores as on March 31st, 2023, to INR 377 crores as on September 30th, 2023.
This number mainly comprises of short-term portion of long-term borrowings, INR 58 crores; fund-based WCDL utilization, INR 210 crores; FD OD utilization, INR 59 crores; and unsecured short-term borrowings, INR 50 crores. The increase in short-term borrowings can be attributable to increase in the level of inventory, increase in the payment of CapEx, addition of fixed assets, and increase in level of other financial assets. Would like to mention few of the important balance sheet numbers as on September 30th, 2023. Long-term borrowings, INR 81 crores, including short-term maturities of INR 58 crores. Short-term borrowings, INR 319 crores, excluding short-term maturity of INR 58 crores. Gross block of assets, INR 513 crores. Net block, INR 311 crores.
Addition during the quarter, INR 79 crores. Net unbilled revenue, INR 336 crores. Retention non-current portion, INR 123 crores. Retention current portion, INR 48 crores. Mobilization advance, INR 243 crores. Working capital days are as follows. Debtor days are 69. Creditor days are 65. Inventory days are 37. Total net working capital days are 41. During the quarter, the company was in a position to increase the bank credit facility limits from INR 1,047 crores to INR 1,497 crores, net increase of INR 450 crores.
The fund-based limits are increased from INR 145 crores to INR 225 crores, and non-fund-based limits are increased from INR 902 crores to INR 1,273 crores. The consortium member banks have also reduced the margin requirements from 25% to 20%. The utilization of limits as on September 30th are as follows. Fund-based utilization, INR 210 crores. Non-fund-based utilization, INR 725 crores. As of September 30th, 2023, the company has total fixed deposit of INR 281 crores, out of which lien-free deposits are of INR 45 crores and FDs worth INR 236 crores are under lien with banks for credit facilities. Work on hand as on September 30th, 2023, is INR 4,898 crores and detailed bifurcation is available in the uploaded presentation. That concludes the update on financials. We are now open the floors for question-and-answers. 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you. First of all, congratulations to the entire team for robust performance.
Thank you.
Yeah. Sir, before asking the question, Hetal ma'am, can you repeat the retention money amount?
Yeah, sure. See, retention non-current amount is INR 123 crores and current portion is INR 48 crores.
Okay, got it. P.S. sir, so cost is on the guidance front. We were guided INR 2,600 crore revenue for this year. Definitely we have done a much better number. Is there any chance that we can look at even slightly better number for second half?
Shravan, it still depends upon how the overall execution goes on for next six months. Presently, we will not be able to accelerate on that, but we will try to stick to our original provided guidance .
Okay. On the margin front, we normally say 11%-13%, but now are we getting a confidence that 12%-13% would be a better range?
No, still, I would like to stick to our 11%-13% because again, I say it depends on quarter-to-quarter. This year margin is a little bit better in terms of 12.5% because of the projects of U.P. getting near to completion, except for three hospitals which will be getting completed in March. Most of the projects getting completed. Some of the revenues which are on hold get converted into the billing. That way that margin may reflect ±2.5% . We keep this margin at 11% and continue.
Okay. Sir, on the inflows of INR 959 crore we have received and we are L1 in INR 102 odd crore. INR 1,060 odd crore if I consider that, we are saying INR 3,000 crore. If you can help us in terms of the big pipeline and particularly the Ahmedabad and Delhi railway station redevelopment?
See, the total outstanding bid book is as follows. It is nearly about INR 6,500 crore. Out of which I will mention some of the major projects. One is the AIIMS at Rewari, that is INR 1,000 crore. A museum project at Madhya Pradesh, it is INR 1,000 crore. A university project at Baroda, which is INR 775 crore. A university project in Lucknow, which is INR 525 crore. Dharoi Dam Package 2, which we already bided, that is INR 421 crore.
Commercial building in Delhi, INR 350 crore. Commercial building in Delhi for a developer, which is INR 300 crore. A university project in Hyderabad, which is INR 350 crore and infra package in Ahmedabad, which is about INR 300 crore. Museum project in Ahmedabad, which is again INR 400 crore and airport project at Udaipur, which is INR 237 crore and industrial project in Gujarat, that is INR 150 crore.
Gujarat Biotechnology Research Centre main building at Gandhinagar we have stood low, it is INR 101 crore. Reservation facility at Gandhinagar, INR 100 crore. Other projects, about INR 500 crore. T hat totals to about INR 6,500 crore. About these two railway stations, I think you must be knowing that these were not ours, that the railway stations at Ahmedabad, tender for already were opened and that has gone to DR Agrawal. This is the lowest. Now we don't have that as a part of our bid book. We will be bidding for Delhi, which are not covered in these INR 6,500 crore, but we will be bidding for Delhi.
This Delhi will be the same INR 4,800 crore that we talked last time?
Yeah.
That bid to be submitted by this month end or December?
What is the date? By month end? This month end, yeah. Maybe it gets extended by 10 - 15 days because of Diwali, but presently it is by month end.
Okay. U.P. sir, whatever is remaining, how much now will be? By March, mostly everything will be over. INR 308 crore is remaining in U.P.?
Probably, yeah. Probably we should be through by March. That may be completion, which you can extend up to one, two months at least. Rest of the deal should be closed by March end.
Okay. Then for SMC Surat, how much more in the second half we can look at in terms of the revenue?
I think it will be in the same line because presently it is going at the structural level only. It will be in the same line what we are doing. Once we are out of the basement, then the other activities start, then the revenue rate will go little bit high. P resently it is on the structure side only. It will be in the same line.
Okay. Any more CapEx is to be done for this year, sir, because we have already done INR 79- odd crore?
I think there won't be much, but maybe something may require at SMC side, so that will be not a larger expense. Maybe INR 10 crore-INR 12 crore, no more than that.
Okay. Lastly, sir, the debt by end of March, once the U.P. project will be over, so INR 400 crore combined debt, will it reduce? How much it will reduce?
You are talking about debt?
Yes, long-term, short-term combined put together debt.
Yeah, right. See, if you see, this INR 377 crores comprises our FD OD also. T hat is around INR 60 crores. T hat is our own money we have borrowed, so that we may get it transferred. I t will be on the lower side compared to this quarter once these projects are over and funds are received.
Okay, but it will not reduce by INR 200 crore. It will be fixed at INR 30 crores only, or reduction will happen?
Yeah, as of now you can consider that way.
Okay. The finance cost on quarterly basis will remain the same. INR 12 crore kind of finance cost run rate will continue.
More or less, yes. INR 10 crore- INR 11 crore should be there.
Okay. Thank you, sir. Thank you, and all the best.
Thank you.
Thank you. The next question is from the line of Nusan Dhura from Nivesha. Please go ahead.
Hello, sir. I have a couple of questions. Firstly, what percentage of order book has a fixed price contract?
Can you repeat the question?
What percentage of order book is fixed price? I mean, there are no escalation clause in those projects.
The fixed price, which was mostly in the projects of U.P. I think rest of the projects, whether it is government or private, most of the private projects will carry that escalation of cement and steel and the finishing materials and pass on. For other projects like Surat and the bridge project, these are also covered by escalation through RBI index.
Okay, sir. Thank you. All the best.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Nikhil Kanodia from HDFC Securities. Please go ahead.
Good evening, sir. Congratulations on great set of numbers. Sir, last quarter-
Please speak out loudly or switch to the handset.
Am I audible now?
Yes, sir. Please go ahead.
Good evening, sir, and congratulations on decent set of numbers.
Thank you.
Last quarter, you had mentioned that you had taken some approval for the increase in sanction limit up to 30 billion, and you were planning to increase it to get some additional INR 5 billion or so. I f you can give us the latest status on the sanction and the utilization limits from fund and non-fund based.
I have already mentioned in my initial speech, but I will repeat once again. See, our overall limits earlier was INR 1,047 crores, and which is increased by INR 450 crores. N ow the credit facility limits are INR 1,497 crores. T he bifurcation between fund based and non-fund based is INR 225 crores is fund based and INR 1,272 is non-fund based.
Okay. What is the utilization?
Currently, the utilization is INR 210 crores fund-based unit we have utilized, and non fund-based is INR 725 crores.
INR 725 crores?
Yeah, INR 725 crores.
And sir, what is the bid pipeline that you have currently?
The bid pipeline I already said it is about INR 6,500 crores plus the Delhi Railway Redevelopment project if we can include, which is INR 4,800 crores itself. I t is nearly INR 10,000 crores.
Okay. T hose are my questions. Thank you for answering those. If I have any other questions, I will rejoin the queue. Thank you, and all the best.
Yeah, thank you.
Thank you. The next question is from the line of Richa from Equitymaster. Please go ahead.
Thank you for the opportunity, sir. My question was on the investment in the precast facility. I mean, are we done with putting money in that or more expenses are expected? What kind of revenue potential are we expecting from whatever investment or as a whole precast facility itself related to, if you could highlight that.
See, in last two quarters also, we were saying that when we initially made the first factory, we said that there are few expansion has to be done at the mold level, not at the infrastructure level, which we have done in this quarter, which was in the tune of about INR 13 crore-INR 15 crore. The rest of the order which is related to bullet train, which we have got from L&T, that was a huge requirement of molds and that was the mold investment, not in the factory units. We have also constructed a new shed for infrastructure. Probably we are almost done with whatever we have to invest as of now. There won't be much investment on precast from now on.
Okay. On an absolute basis, I think your other expenses per quarter have come down significantly. I mean, correct me if I am wrong, but do you expect this in the run rate or is there any special reason why it is relatively low?
No, there is no specific reason. There are various base in which there are some reduction, like consultant fees expenses have been reduced. T here are small reductions which has accumulated to this difference.
Okay. Going forward, they would remain at this run rate or what was normal in the previous fiscal quarters?
It should be in the same range. If you see, last year also, the other expenses were INR 26 crores and half yearly it is INR 13 crores. I t should be in the same range.
Okay. Sir, just on a year-on-year basis, the promoter stake in the company has come down from 70% to 66%. Is a further reduction expected, or would you be maintaining the stake that you have?
No, not as of now.
Okay. Thanks.
Thank you.
Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.
Sir, what was the precast revenue for the second quarter in 2023? What is our guidance for FY 2024 in terms of precast revenue?
Last year, I think we did about INR 75 crores or INR 80 crores. This year we are only generating INR 25 crores in precast. As of now, it is not clear about what was the revenue exactly from precast. Because there are some projects which are being booked in the project side. Now we consider the precast plant as a facility, not as a cost center.
You said INR 225 crores for FY 2024?
Totally it should be in that range only.
And sir, with respect to our U.P. project, what would be the total receivables as of September? What is the unbilled revenue for the same?
Sir, around INR 100 crores is the unbilled revenue for U.P. project. Basically, last month's billing is normally in the unbilled revenue. Because once they certify the bill, then we get the three days the GST invoice. This belongs to the last month billing, that is normally the outstanding. We have some outstanding of INR 50 million for earlier month.
Okay. Lastly, how do you see the execution panning out for the SMC projects for FY 2024?
The SMC project, just before one investor asked the same question, I said that the billing is under structure stage now. Once we are out of the basement, I said that till March, I don't see any place to grow from here because there won't be any other activities related to civil work will start. It will be only on structure side. I t will be in the same place what we have been doing till now.
For FY 2024, the revenue should be around INR 140 crores-INR 150 crores?
Yeah, in totality, you can consider that.
Okay. Thank you. Those are my questions.
Thank you. The next question is from the line of Bharani Vijayakumar from Spark Capital. Please go ahead.
Good evening, sir.
Pardon me, sir. Can you speak it louder?
Yeah. Is it better?
No, sir. Can you please switch to the handset?
Okay. I've switched to the handset. Is it better?
Yeah.
Okay. I will go ahead with my question. The increase in current assets is due to the unbilled revenue from the U.P. project, right?
See, I have already mentioned the increase in current asset is mainly due to unbilled revenue, and that includes the increase in the execution of current projects as well as a few of the unbilled revenue of earlier years, which is carried forward. Th at has been now been converted to GST bills, and that I have already mentioned. It's SDB INR 53 crore and Kashi project INR 31 crore. I ncluding those amounts, there are revenue on which has been generated.
Okay. Including the earlier, including the other two projects and U.P. projects, it is around INR 160 crores-INR 170 crores increase?
Yeah.
There are other routine projects also has increased,
Major, you can consider these three.
Okay. My question is, shouldn't we be including this as part of our working capital calculation?
Yeah, you can include. Since it is a part of current assets so that we can see. You mean to say you want to include in our receivables and all? Because see, that is not receivable because still we haven't raised the bill. Those bills are under certification.
Right. I f I see your cash flow from operations, it is negative. Which is why I'm saying if this is going to be recurring-
No, that it is already included. In cash flow, it is already included. If you see other assets movement, that is this other current assets movement only.
Correct. What I am trying to tell is if this is going to be recurring kind of a number in the future also, shouldn't we be including this as part of our working capital calculation?
Yeah, you can see whatever shortfall is there, if increase is there, that much working capital we will be requiring for that from our borrowing base amount.
That is only because of these two projects, bill getting delayed because of finalization. Otherwise, generally, the bill does not get delayed to such an extent. Both the cases were little bit difficult in terms of getting some escalation part also after COVID-19 pandemic for Surat and some pending issues of lump sum contract at the Shri Kashi Vishwanath Dham, which needs to be discussed at the top level. That has prolonged the finalization of the bill. Otherwise, in general, whatever the unbilled revenue you are considering, that is not something which carries on for six to eight months.
Okay. We are expecting this to be collected by when?
Probably, I think we are expecting any time. This is not the quarter. I want things are seeming to go beyond. Maybe by next quarter it should get into you.
Okay. Your short-term borrowing will also come down from the INR 377 crore level to what level, in your view, by end of this year?
Maybe there can be a decrement of INR 50 crore - INR 100 crore. After getting these small unbilled revenue into in cash flow, then that can give us some relief, some relaxation in terms of INR 50 crore-INR 100 crore.
Yeah. See, our funded facilities had also increased from INR 145 crore to INR 225 crore. Now on an average, we will be utilizing around INR 200 crore of our working capital facilities.
Okay. Understood. Final question on CapEx. full-year CapEx, how much it will be, sir?
See, as of now, we always give the guidance and we stick to that, and it is always coming on that average. If you calculate 3%-4%, it should be near to INR 100 crores. A s we have already reached to INR 90 crores because of most of the precast site. Probably not more than INR 10 crores-INR 15 crores, as I already answered to some other investor. It should be in that range, only 3%-4% .
Okay. Thank you, sir, and all the best for the future.
Thank you. Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is on the line of Ash Shah from Elara. Please go ahead.
Good evening, sir. Thank you for the opportunity. I just have one question.
Good evening.
How much have we invested in the precast facility till date, and also cumulatively? I think we were going to invest in three phases, and we have just operated phase one till the last quarter. Now is it safe to assume that all three phases have been activated or have been commissioned?
Earlier we have invested INR 110 crores in first phase, and now it is INR 51 crores. It is around INR 160 crores-INR 165 crores investment in precast. To some extent we may need to buy further going forward.
Okay. Can we say that the facility's production capacity has increased from 1 million sq ft to 2 million or 3 million sq ft ?
Yes, to an extent you can consider because previously the molds required for beam column and slab, they were not to that large extent because we could adjust the space for getting those molds with the latest thing. After which we have almost touched more than 75% of that requirement. Probably presently we are having a requirement more on the factory side and the warehousing facility. It is not converted into all the time as a square feet output of the precast plant. I t is majorly on the concrete work we do every day in terms of cubic meter of concrete now. When we go totally into buildings, when you construct a purely a residential building or a commercial building, then you can say it has increased from 1 million sq ft to 3 million sq ft.
Okay. That is all from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hi. Sir, broadly now, as you previously also answered, structurally now, it is safe to assume that our gross debt, including working capital and long term, will remain more than INR 300- odd crores. That is one. S econd, in terms of the working capital, one is the core cash conversion days, that is inventory, debtor, payable, and the other. How do we keep, those core cash conversion days are as maintained at 42, 43 days. I f we look at the other also, is there a possibility of further increase in debt, and that can lead to a further increase in debt?
See, last quarter also, we discussed this point, and I was expecting that we should come near to 30- 35 days, which still I am expecting, because as I said, last three quarters were at the stage of completion. O nce we get into the completion stage, I think most of the due payment will be on, due payment will be converted into payment, so that we should be in position to get a better than, less than 40 days in near future. That is what I am expecting. It should not even go beyond from here.
Okay. Got it. Secondly, sir, this year in terms of the revenue growth would be significantly high, 34%, 35%. Going forward, FY 2025-2026, normally what we used to say, 20%, 25% that we normally aim to achieve. That will remain the same. The purpose is to why I'm reiterating is for that we need a sizable order inflow. That's the point I want to understand.
I can't understand your question, Shravan. Can you repeat it?
Sir, I'm saying that in terms of the sustainable revenue growth for FY 2025-2026 onwards, 20%, 25%, if we are targeting that, for that we need a sizable order inflow. Definitely INR 3,000 crores, then maybe we need to increase to INR 4,000 -odd crores . Are we confident that we can do it? Currently, definitely the opportunity is there in Gujarat. We are sizably present and by March end when U.P. projects will be over, our order book will be more than 90% from Gujarat. How we are trying to diversify, de-risk ourselves so that at least we should be able to consistent basis get the order inflow. Hopefully, if we get the Delhi station development, then everything is sorted. That's the thing I want to understand.
See, there are what the order book I've already said, is there INR 6,500 crore without Delhi project. There are, if you can find, there are a few projects which is to a scale of INR 1,000 crore. Rewari AIIMS Hospital is INR 1,000 crore medium project. For INR 1,000 crore, one municipality project in Vadodara, INR 775 crore. There are a few opportunities which we are expecting and the bids which we have already submitted, we are expecting some of the bids to get converted to orders.
Still, I am confident we should be in position to reach to INR 3,000 crores, which is 25% more than what revenue we have annually. Every year when we are increasing some revenue from 15% to 20%, the same way we keep our order inflow of 20%, 25% +. I think we should be in position to maintain our revenue versus order inflow.
How much value of bids that we have submitted and where still the outcome is yet to come?
I think it is four number more than INR 1,000 crore.
Okay.
Something like INR 400 crore and INR 100 crore. I t is INR 1,000 crore. More than that. INR 2,500+ crore .
Okay. More than INR 2,500 crore bids we have submitted. These are the four or five projects.
Yeah.
Okay. Great, sir. Wish you a happy Diwali in advance. Thank you, and all the best.
Same to you, sir.
Thank you. The next question is from the line of Nusan Dhura from Nivesha. Please go ahead.
Hello, am I audible, sir?
Yes, ma'am.
Yeah.
Just wanted to know what is the success rate of orders for the company?
Usually we always expect between 15%-20% and that is what we have been doing till now. At an average of whatever order bid book we have, it converts into 10%-12% or 15%-20%, sorry.
Can you repeat, sir? I could not understand.
15%-20%. If you say INR 6,500 crore is present order, we can expect INR 1,200 crore to be converted into some bids.
Okay. Thank you, sir. That is all. All the best.
Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Devang Patel from Sameeksha Capital. Please go ahead.
Hi, sir. Earlier in the presentation, you were giving the total cash and bank balance including FDs for year-end. Can we have a figure for the half year?
In the presentation, we are just showing this itself, so you need the numbers?
Yes, the cash you mentioned is INR 281 crores. What is the total cash including FD?
Yeah, that is as per the cash and cash equivalent what we are showing. Out of that, it is hardly INR 2 crore- INR 3 crore because, normally we do not keep cash in our current accounts and all. W e put it in the FD OD utilization. I ncluding the cash, it will be around INR 285 crore.
Okay. Secondly, if I look at the cash flow statement, the cash flow is negative. You mentioned the unbilled revenues. Also in the other liabilities item, what was INR +32 crore is INR -87 crore for this half. O n the liability side, has something reduced for us, mobilization advance or something?
Yeah. See, mobilization advance, there is not much reduction, but the negative unearned revenue, which was last year, as on March 31st, it was around INR 60 crore, and this is reduced to INR 24 crore. A round INR 30 crore reduction is there in unearned revenue. This amount due to customer.
For the half year, there is a reduction of INR 88 crore, INR 87.6 crore?
Yeah.
Okay. Moving on, sir, what your thought process on the bidding strategy. It is going to be an election year next year. Do you foresee a situation where we would want to have a healthy order book pipeline before the election hits? Have you kept some leeway for the large station redevelopment project?
See, I think the order for the bid pipeline what we are having today, INR 6,500 crore plus INR 4,800 crore at Delhi is almost INR 10,000 crore. This on average also since last one year we have been seeing that it is always being more than INR 6,000 crore at any time. We do not see any slowdown of bids coming from government side or private side because of election. Even if at the time of election, there will be a disturbance of one to 1.5 months. Before that, whatever bids which we are having and which we are expecting, maybe it will be that we get converted into our projection of INR 3,000 crore. I think that we do not have to worry about what will happen to election and how the bids will get slowed.
Okay. Sir, on the Delhi project size is bigger than the Ahmedabad project, and last call you mentioned you will be partnering with someone. Is it going to be the same partnership for this project as well?
You mean to say Ahmedabad Railway Station?
Yes.
I already said the Ahmedabad Railway Station tender is open and it has gone to DRA. We stood, I think, third or fourth among six. Now it is not a part of our bid package.
Our maximum bid capability is INR 2,500 crore, and the Delhi project is even larger.
That still remains at INR 2,500+ crore .
Are we bidding for the project on our own?
Bidding for project?
For the Delhi project. Are we bidding on our own as a partner?
No. It has to be a JV because when there is a requirement of the project to have experience of bridge, which we do not have, so we need a bridge partner.
Okay. That is all from my side, sir. Thank you.
Thank you.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Piyush, an individual investor. Please go ahead.
Hello?
Yes, sir. Please go ahead.
Hello?
Yeah.
Good evening. Sir, I have one question regarding our U.P. project is almost on the verge of finishing, I believe. The remaining project corridor left is of the Gujarat only. Is there any plan from the management side that you want to diversify from Gujarat to other states or something? I heard of Delhi project also on this call. Any specific thought process on this?
No, nothing like that. As I have already said in my bid book also, there is an AIIMS project of INR 1,000 crore at Rewari. There is a university project in Hyderabad. There are two development projects, the commercial building in Delhi. It is not like that, but it is a matter of coincidence. That is U.P. project, most of the projects are getting completed. S till, we are bidding on whatever opportunities we are getting in the states of Delhi and U.P. One more project, a university project in Lucknow also, I said, which is INR 525 crore. That is also in U.P.
And sir, you said AIIMS project. At which city you said?
Rewari, Haryana.
Okay. Sir, got it. Any new projects you are targeting or on the pipeline in U.P.?
Any?
Any new projects which is under pipeline in U.P. only.
There is one project in U.P. that is INR 525 crore. It is a university project in Lucknow.
Okay. On second thing, which some other participant also asked, the cash from operation was negative for half year. Can we expect this will be reversed something full-year FY 2024 numbers? Because this half year it is around INR 200- odd crore minus something.
Yeah, it will see a variable. The utilization of working capital will reduce accordingly, will get improved by end of this current financial year.
But what about the unbilled revenue which is there in the September, which will also be billed in the next half year, correctly?
Yeah. As far as already the earlier year one should be over by next quarter.
Okay. How much is the revenue potential from precast facility at the optimum utilization? Currently what run rate we are going?
We are aiming, whatever orders presently we are eyeing, we are expecting more than INR 200 crore-INR 225 crore.
Okay. Sir, last year we did not achieve our whatever the number you have given the guidance, which is around INR 2,100 crore-INR 2,200 crore. You said in the last previous calls also, "This year we will definitely compensate and do this." The Q2 number also looking into that. What can be the guidance for next half year? This year, what number we will close?
It will be already declared about INR 2,600 crore for the total revenue for the year.
We are on track to achieve this?
Yeah, we are already on track. If you compare it with quarter-to-quarter and year-to-year, first two quarters are little bit less than last two quarters. If you compare both the half year quarters, you will get the idea that most of the revenue in concessions side comes converted only the full first and-
H2 is always heavy.
Excuse me?
H2 is always heavy on the revenue side, correct?
Yeah, H2 is very heavy all the time for all companies.
Sir, last question on order book traction. The current year, we have got some INR 900- odd crore order. Is this number on lower side as compared to last year? Because I do not know exactly the number, how much we got in the last half year. Because I don't remember exactly the number. How much we got in the last half year?
Yeah, it is probably not something which is consistent throughout the year. Last year, presently we are at the same stage, but last year first quarter only we have got an order of Surat SMC that is INR 1,3 50 crore. I t depends on the bidding process and it depends on what type of orders are coming in which quarter. At the end of the year, we are still expecting and we are still strict to that order inflow of INR 3,000 crores, which I already said that the order book or the bid pipeline which we have is worth INR 6,000. We are expecting more than INR 1,000 crores to be converted by this financial year.
Okay. What I understood from you are saying full-year you will get an order inflow of INR 3,000 crores, correct?
That is what we have received, yeah.
You have received INR 900 crore or INR 1,000 crore in H1. By H2, you are saying INR 2,000 crore will be expecting.
We are expecting, yeah. You are right.
And sir, just last point. What will be our closing order book in FY 2024? It will be around INR 5,500 crore- INR 6,000 crore type number?
Yeah. If you can total up the total things minus INR 2,600 crore, it will be in the range of INR 5,500 crore - INR 6,000 crore, yeah.
Okay. Perfectly, sir. T he margin we expect is around we will be able to maintain 12%. That is the guidance you have given earlier also, 12% type of margin.
I already said between 11% - 13%, so it can be 12%, it can be 11.5%, it can be 12%.
Okay. Thank you, sir. Thank you so much, and congratulations for the great set of numbers.
Thank you.
Thank you. The next question is from the line of Richa from Equitymaster. Please go ahead.
Sir, thank you for the opportunity again. My question is, again, on precast, we have incurred certain expenses on molds for the rail project as you suggested. I just wanted to understand what is the fungibility of these kind of molds, and considering that these are for the rail project, is there a possibility that they would be well-utilized once this specific project is over? Or do you expect similar kind of orders to come in and this capacity be utilized?
That case which we are making for bullet train, it is not something which cannot be utilized for road infrastructure. These are the ducts which will be specifically used as a conveyance for data duct and electrical ducts for bullet trains. The same sizes of duct can be utilized for drains and stormwater drains and drainage line also. It is something which can be repeated. In future also, the same molds can be utilized for road infrastructure also.
Okay. Could you also talk about the discipline when it comes to bidding? Because, like you said that we were not the L1 bidders and perhaps we ranked fourth or fifth. Do you see this competition intensifying where margins are being kind of sacrificed and we would still stick to something where we can maintain 11%-13% margin? If you could talk about the competition in the industry.
Competition is there. People are little bit aggressive at some of the projects, but in general, we will stick to our margins and we will try to maintain our order inflow. Because we would not like to enter into that rush of market where people are much aggressive. I think we'll still try to maintain margins and we'll try to remain in that zone. Maybe the size of the project can be in the range of INR 150 crore-INR 200 crore. We have that capacity to handle 50 projects at a time. N o need that we should get aggressive on larger projects just because of this competition.
Yeah, I just wanted to understand your thought process on it. Sir, is there any kind of sense of visibility on when this matter which is under litigation can be finalized?
I think we're something with that. Actually, the arbitrations process as that the government has now decided once the files start, it has to be completed within 12 months. Probably both the arbitrations are not so much complicated. I would see that both of arbitrations should close within one year. That's what the guideline and the government rules have now decided that no arbitration should be extended beyond one year. Let us expect it gets promoted into a finalization by one year.
Okay. All the best and happy Diwali. Thank you.
Happy Diwali. Thank you.
Thank you.
I think it is over. Then we can conclude this.
There are no further questions from participants. I now hand over conference to Mr. Ashish Shah. Over to you, sir.
On behalf of JM Financial Institutional Securities, I thank you all the participants for attending the call, and thank you to the management for letting us host the call. Over to you, sir, for any closing remarks. Thank you.
Thank you. On behalf of the management of PSP Projects, thank you for joining us on the earning call today. Wishing you everyone a happy Diwali and Eid Mubarak in advance. We hope that we have been able to address most of your queries. In case of further queries, you may reach out to our investor relation advisor, Ernst & Young , and they will connect with you offline. Thank you, Mr. Ashish, for hosting the call. Thank you, everyone. God bless you.
Thank you, everyone.
Thank you, sir. Thank you.