Larsen and Toubro Ltd
F:LTO
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
35
43.6
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Larsen and Toubro Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to Larsen & Toubro Limited Q1 FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. P. Ramakrishnan. Thank you, and over to you, sir.
Thank you, [ Aneel ]. Good evening, ladies and gentlemen. A very warm welcome to all of you into the Q1 FY '23 Earnings Call of Larsen & Toubro Limited. The earnings presentation was uploaded on the stock exchange and in our website around 6:40 p.m. IST. I hope you would have had a chance to take a quick look at the numbers. As per past practice, instead of going through the entire presentation, I will take you through the key highlights for the quarter in the next 20 minutes or so, post which we will get into Q&A.
Before I begin the overview, a brief disclaimer. The presentation which we have uploaded on the stock exchange and our website today, including the discussions during this call, contains or may contain certain forward-looking statements concerning L&T's 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.
During Q1 FY '23, the Indian economy continued to exhibit resilience, supported by relatively strong macroeconomic fundamentals and as evidenced by improving high-frequency economic indicators. Despite global turbulence and the rise in energy prices, both government and the Reserve Bank of India have succeeded in maintaining fiscal and monetary stability in the country. We can safely conclude that during this quarter, India remained a bright spot amidst continuing global chaos.
Our group also reported a strong all-round performance in an otherwise seasonally weak quarter. Before I move further, I would like to mention that effective April 1, 2002 (sic) [ April 1, 2022 ], that is the start of this financial year, the operating segments of L&T have been reorganized in line with the business strategy to be adopted by the company under its 5-year Lakshya Plan 2026. We had articulated on this aspect when we spoke about the strategic plan road map for FY '26 during the Q4 FY '22 earnings call. Just to refresh, some of the existing segments have been realigned to reflect the group's Lakshya 2026 strategy. The changes are as follows.
Energy Projects. This is a newly formed segment that constitutes the current segments of Hydrocarbon and Power to reflect the company's integrated pursuit of opportunities in a rapidly transforming energy sector, including green energy EPC opportunities. The second segment is Hi-Tech Manufacturing. This being a segment that comprises the Heavy Engineering and the Defence Engineering business being combined to leverage the extensive engineering, manufacturing and fabrication expertise across the various customer segments.
IT & Technology Services. This segment earlier comprising of the listed 3 IT&TS subsidiaries, that is L&T Infotech, L&T Technology Services and Mindtree, will now also include the new edge businesses of data centers and e-commerce and digital platforms. Both data centers and e-commerce digital platforms, our recently incubated businesses, were shown under the Others segment in the previous year.
I will now cover the financial performance parameters for Q1 FY '23.
Our group order inflows for Q1 FY '23, at INR 418 billion, registered a Y-on-Y growth of 57%. Within that, the projects and manufacturing businesses secured order inflows of INR 281 billion for this Q1, registering a Y-on-Y growth of 85%. Our current year Q1 order inflows in the Projects & Manufacturing portfolio are mainly from Infrastructure, Hydrocarbon and Defence businesses.
During the quarter, our share of international orders in the Projects & Manufacturing portfolio are at 33% vis-a-vis 15% in the Q1 of the previous year. The domestic ordering environment in Q1 was also significantly better compared to Q1 of the previous year. At a macro level, there was an improvement in domestic tendering and awarding activity.
Secondly, we expect public CapEx spends comprising of centers, states, public sector units in the current year to be better than that of the previous year. Hopefully, the private CapEx would also include improvement in the second half of the current year. Our order prospects pipeline for the remaining 9 months of the current fiscal is around INR 7.6 trillion, comprising of domestic prospects of INR 6.1 trillion and international prospects of INR 1.5 trillion.
The broad breakup of the overall prospect pipeline of INR 7.6 trillion is as follows: Infrastructure segment, INR 5.6 trillion; Energy, INR 1.6 trillion; and Projects & Manufacturing, around INR 0.4 trillion. Finally, we remain confident of achieving the annual guidance we gave on order inflows at the beginning of this year.
Moving on to order book. Our order book at INR 3.63 trillion as on June '22 is once again at a record high. As our Projects & Manufacturing business is largely India-centric, 72% of this order book is domestic and the balance 28% is international. Of the international order book of roughly around INR 1 trillion, around 79% is from the Middle East and 11% from Africa. The remaining 10% is from various countries including Southeast Asia.
Clearly, the Middle East CapEx in the infra and hydrocarbon is on an upswing post recovery in oil price. The breakdown of the domestic order book of INR 2.63 trillion as at June is as follows: central government, 11%; state government, 30%; public sector corporations or state-owned enterprise at 42%; and private sector at 17%. Approximately around 26% of this total order book of INR 3.63 trillion is funded by bilateral and multilateral funding institutions.
As you can see from the slides, 91% of our total order book is from infrastructure and energy. Again, and within infrastructure, our order book is well diversified across various businesses like heavy civil, water, power transmission and distribution, buildings and factories, transportation infrastructure and minerals and metals. Finally, during the year -- during the quarter, we have deleted around INR 14 billion of nonmoving orders from the order book. Our share of slow-moving orders in the order book is just around 3%.
Coming to revenues. Our group revenues for Q1 FY '23 at INR 359 billion, registered a Y-on-Y growth of 22%. International revenues constitute 37% of the revenues during the quarter. The IT&TS portfolio continued to report industry-leading growth in Q1 as well.
In the Projects & Manufacturing business portfolio, our revenues for Q1 FY '23 were at INR 221 billion, thereby registering a Y-on-Y growth of 23%. The robust execution in infrastructure and power within the Projects & Manufacturing business portfolio during the quarter was, to some extent, offset by other businesses. I will cover the details a little later when I cover each of the segments. We remain confident on achieving the annual guidance on revenue given at the start of this year.
Moving on to EBITDA margin. Our group level EBITDA margin without other income for Q1 FY '23 is 11% vis-a-vis 10.8% in Q1 FY '22, up by 20 basis points. The detailed breakup of the EBITDA margin business-wise is given in the annexure to the analyst presentation. You would have noticed that the EBITDA margin in the Projects & Manufacturing business for Q1 FY '23 is at 8.2% vis-a-vis 8.8% in Q1 FY '22. This drop of 60 basis points for the quarter is explained by cost headwinds and the change in the job mix. Despite the recent correction in commodity prices, our average procurement cost for the quarter was still higher compared to the corresponding quarter of the previous year.
We retained our annual guidance on EBITDA margin in our Projects & Manufacturing portfolio at 9.5%. The recent commodity price correction brings in the much needed relief. But since our EBITDA guidance for the current year was constructed versus the average price levels of FY '22 assumed, we believe it is prudent to retain the margin guidance for the year at the same level at this juncture. We will have better visibility on improvements, if any, as the year progresses.
Our operational and reported PAT for the quarter, at INR 17 billion, registers a healthy growth of 45% over previous year Q1, largely aided by the improved group level EBITDA margin as well as improved treasury operations and a lower tax expense. The group performance P&L construct, along with the reasons for the major variances and their respective [ functionaries ], is provided in the analyst presentation.
Coming to working capital. Our NWC-to-sales ratio has improved from 22.9% in the quarter 1 of the previous year to 20.9% in the current quarter. However, this ratio has moved up from 19.9% that we reported for last year as a whole. NWC-to-sales moved higher on a sequential basis, primarily due to vendor payments, which fell during the quarter.
As we have stated before, Q1 of every financial year is seasonally a weak quarter for customer collections. Having said that, let me mention here that our customer collections for Q1 FY '23 is substantially higher than the corresponding quarter of the previous financial year. Our group level collections, excluding financial services for Q1 FY '23, is around INR 0.34 trillion vis-a-vis INR 0.27 trillion in Q1 FY '22.
Although we expect some interim volatility in the NWC to sales ratio for 1 or 2 quarters, we will endeavor to bring down our NWC-to-sales ratio closer to 20% by March '23. Just to reiterate here, we had guided for NWC-to-sales ratio of between -- ranging between 20% to 22% for FY '23.
Moving on to the balance sheet. If you glance through the balance sheet given in the annexes to the analyst presentation, you would notice that at the group level, the group debt-equity ratio has improved over March '22. We are at the same net debt-equity ratio in June '22 vis-a-vis March '22. This is mainly due to repayment of liabilities of the financial services business, around INR 36 billion, and development projects, INR 19 billion, offset by INR 23 billion increase in the parent. Some portion of our debt in the parent company is coming up for repayment and, therefore, this incremental borrowing at parent is largely front-ended in an environment of rising interest rates.
Finally, our trailing 12-month ROE for Q1 FY '23 is 11.5% vis-a-vis 17.2% in Q1 FY '22. As you are aware, the trailing 12-month ROE for Q1 FY '22 includes the benefit of the onetime gain on the divestiture of our electrical automation business net of exceptional items. However, on a sequential basis, our ROE has improved from 11% in March '22 to 11.5% in June '22, an improvement of around 50 basis points.
Our robust business portfolio focused on working capital management, better -- improved working capital management and focused on cash generation and stock distribution. And finally, the divestment of core assets will lead to better ROEs as envisaged in L&T strat plan for FY '26.
Very briefly, I will now comment on the performance of each business segment before we give our final commitments -- comments on our outlook for the near term.
Infrastructure segment. On order inflows, our Q1 FY '23 order inflows are well spread across various subsegments. Infrastructure segment secured orders of INR 183 billion for Q1, registering a healthy growth of 66% over Q1 of the previous year. During the quarter, orders were diversified across public spaces, metros, waste management and wastewater, minerals and metals, factories, data centers and power transmission and distribution.
Our order prospect pipeline in infra for the remaining 9 months of the current financial year is around INR 5.61 trillion, comprising of domestic prospects of INR 4.76 trillion and international prospects of INR 0.85 trillion. The subsegment breakup of the total order prospects in infra is as follows: power transmission and distribution would be around 19%; water, 22%; transportation infrastructure, 19%; heavy civil, 18%; buildings and factories, 20%; and minerals and metals for the balance.
The order book in this segment at INR 2.64 trillion as on June '22. The book bill for Infrastructure segment is around 36 months. The Q1 revenues at INR 142 billion registered a growth of 36% over the comparable quarter of the previous year, aided by improved execution momentum as the COVID-related challenges receded in the current quarter. Our EBITDA margin in this segment dropped from 7.1% in Q1 FY '22 to 6.5% in Q1 FY '23, largely impacted by input cost escalation and changes in the revenue mix.
Moving on to the next segment, which is Energy Projects. The receipt of a large order from the Middle East in the offshore vertical of hydrocarbon business buoys the order book of this segment, whereas subdued ordering environment continues in the thermal power business. The order prospects pipeline of INR 1.6 trillion for the balance 9 months is healthy. The order book for the Energy segment stands at INR 654 billion as on June '22, with the international order book constituting 58% share.
The Q1 FY '23 revenues at INR 50.7 billion registered a growth of 3% over the comparable quarter of the previous year. That is largely attributed by healthy execution in the power business on the back of a robust ordering -- opening order book. The hydrocarbon revenues, on the other hand, were impacted to some extent due to client delays and supply chain issues. The EBITDA margin for this segment at 8.5% for Q1 FY '23 improved compared to 7.5% over the corresponding quarter of the previous financial year. The execution cost savings aided hydrocarbon margins where cost contingency release improves the power margin.
We will now move on to the Hi-Tech Manufacturing segment that comprises the Heavy Engineering and the Defence Engineering businesses. In Q1 FY '23, this segment witnessed a broad-based pickup in order inflows across Defence and Heavy Engineering businesses. We have an order prospect pipeline of INR 300 billion in the remaining 3 quarters of the current financial year. The order book of this segment is at INR 194 billion as of June 30, 2022. The revenues for Q1 FY '23, at INR 12.7 billion, registers a marginal growth of 3%.
Improved execution drove Heavy Engineering revenue, whereas tapering of certain shipbuilding jobs in the Defence Engineering business impacted Defence revenues. The EBITDA margins in this segment is at 15.1% in Q1 FY '23 vis-a-vis 19.2% in Q1 FY '22. The previous year margin in this segment was higher, primarily due to release of cost provisions on the completion of a key project and also due to recognition of certain customer claims.
As we repeat in every quarter, let me once again mention that the Defence Engineering business does not manufacture any explosives nor ammunitions of any kind, including controversial weapons. The business also does not customize any delivery systems for such munitions.
Coming on to the IT&TS portfolio. Our revenues for Q1 FY '23, at INR 94.2 billion, registered a growth of 30% over the corresponding quarter of the previous year, reflecting the continuing growth momentum in this sector with a surge in demand for technology-focused offerings. The business outlook for this segment continues to be good. A lot of spends today are being directed towards cloud, data center, security, machine learning and intelligence -- and artificial intelligence. The margins for this segment is a function of wage costs offset by operational efficiency.
The merger between LTI and Mindtree is progressing satisfactorily and should hopefully be concluded by the end of this financial year once all the regulatory approvals are obtained. I will not dwell too much on the segment as the fact sheets of all the 3 companies are already available in the public domain.
We now move on to Financial Services segment. Here again, L&T Finance Holdings is the listed subsidiary, and the detailed results are available in public domain. L&T Finance's thrust towards retailization continues. And as of June '22, the share of retail in the overall book has moved up to 54%. The strategic deliverables in this business revolve around portfolio reorganization, strong asset quality and improvement in return on assets. This business endeavors to be a top class digitally enabled retail finance company moving from product-focused to a customer-focused approach. Finally, to conclude, sufficient growth capital is available in the balance sheet.
Moving on to Development Projects segment. This segment currently includes the power development business that comprises of Nabha Power. And last quarter -- on the Q1 of the previous year, also included Uttaranchal Hydropower that was divested in August 30, 2021. Besides Nabha Power, the segment also includes Hyderabad Metro. As you may be aware, the roads and transmission line concessions, which are forming part of L&T IDPL, are consolidated at a PAT level under the equity method.
The majority of revenues in this segment is contributed by Nabha Power, improved ridership with Metro, and the 95% average PLF in Nabha drive revenue growth for this segment. Just to give you some statistics. The average Hyderabad Metro ridership improved from 55,000 passengers a day in Q1 FY '22 to around 2 lakh 85,000 passengers per day in Q1 FY '23. Our average ridership in the preceding quarter, that is Q4 FY '22, was 199,000 passengers per day. We are happy to report that, as we speak, the current ridership in Metro has touched also a peak of 3 lakh 77,000 passengers on one of the days this month.
The Q1 FY '23 margin in this segment, at 4.5%, is contributed by Metro operations only, as Nabha margin is not being recognized from Q3 of FY 2021. The improvement in average daily ridership has enabled Metro to report positive EBITDA for Q1 FY '23 vis-a-vis an EBITDA loss for Q1 FY '22. The metro at a PAT level, the consolidated loss of INR 3.25 billion in Q1 FY '23 vis-a-vis a loss of INR 4.72 billion in Q1 FY '22. The operating and amortization costs are around INR 0.75 billion, whereas interest cost is INR 3 billion for the quarter.
At this juncture, I would like to give you a quick status update on the divestments of our concessions portfolio. As all of you are aware, our stake in hydropower plant, that is Uttaranchal Hydropower project, was successfully divested in Q2 FY '22. For Nabha, various divestment options are being explored currently.
Coming to IDPL. We are also exploring the possibility of divesting our remaining 51% stake in favor of third-party investors. For Metro, with the prospect of improved ridership and the confirmed government assistance, including a POD monetization and with the recently concluded debt refinancing, the performance parameters for Metro should definitely look up in FY '23. We are also discussing with strategic investors for equity infusion into the SPV. However, it is premature to comment on time lines at this juncture.
Moving on to the last segment, Others segment. This segment comprises Realty, Industrial Machinery, Industrial Valves and Smart World & Communications businesses. During the quarter, the strong revenue growth in realty due to the higher number of handing over of flats and the Industrial Machinery business was offset by subdued revenues in Valves and Smart World & Communications. Despite this, the revenues for the segment, at INR 16 billion, registered a growth of 21% over the corresponding quarter of the previous financial year. The EBITDA margins for this segment, at 17.2% for Q1 FY '23, remained stable compared to 17.1% during the corresponding quarter of the previous year.
Coming to the last part of my presentation. We remain optimistic on India recovery despite the ongoing global geopolitical uncertainty. The government's persistent efforts to jump-start economic growth through higher infrastructure spend and incentivizing domestic manufacturing should yield benefits in the medium term. Possibly, the private CapEx should also join this bandwagon in a couple of quarters.
On the global front, amidst the continuing chaos, we are closely monitoring the movement of commodity prices and resulting supply chain disruptions. Surprisingly, the Middle East has a better budget visibility due to the high energy prices and continues to spend on hydrocarbon and infrastructure projects. This augurs well for the company in terms of providing a larger scope of contracting opportunities.
For the year FY '23, we retain our guidance of 12% to 15% growth in the group order inflow and revenue and our margin in our Projects & Manufacturing business portfolio to remain around 9.5%. On the working capital side, the group level NWC-to-sales, we have given a guidance for a range of 20% to 22%. We will continue to endeavor to end March '23 at around 20%.
The company in its first year post announcing its Lakshya '26 strategic plan expects to continue its planned trajectory of profitable growth through efficient and timely execution of its large order book. And along with its many value-enhancing measures, to retain its leadership position and improve shareholder on a sustainable basis. The company is on the path of diversification into new businesses of green energy and e-commerce and digital platforms and, at the same time, pursuing exit options, [ stock ] or limiting exposure in noncore businesses over this Lakshya 2026 strategic plan period.
Thank you, ladies and gentlemen, for the patient hearing. We will now take the Q&A.
[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital Advisors.
Sir, congratulations on a very, very good quarter, especially on the order inflow. Sir, does your confidence level on the order prospects have improved compared to the end of Q4, since there has been increase in prospects because I think the PAT had come down from 8.5 to 7.6, while the last quarter order inflow was around INR 40,000 crores. And which are the segments where the process improved?
So thank you, Mohit. In fact, at the start of the year, we had given the order prospects at around INR 8.6 trillion, and today, it is at INR 7.66 trillion. Even at the start of the year, we were very careful in targeting the opportunities that will come up, and we are pursuing a very selective basis of bidding. And this is the kind of awards that has been -- tenders that were opened during the quarter and the awards that got finalized and the share of L&T's awards. We do believe that we have against the current order prospects of INR 7.66 trillion, considering the awarding ratio that we expect to happen, we are reasonably confident to meet the order inflow guidance of 12% to 15% that we have given.
Essentially, the orders that we expect to happen in the next 9 months or so will once again be a share of infrastructure will continue to have a lion's share and followed by hydrocarbon opportunities. And as I mentioned just now that the hydrocarbon opportunities in the Middle East has also picked up, and we do believe that we have a fair share of getting order wins in both infrastructure and hydrocarbons. This is the, I would say, very positive ordering environment that we see in India and Middle East in the next 9 months or so.
Understood. On the private CapEx, the first time you are seeing a very positive commentary compared to last few quarters. How confident are you of private CapEx to pick up, especially in 12- to 24-month horizon?
Okay. In sense of L&T scope in the private sector CapEx, I would say, would be largely focused on the minerals and metals and also, to some extent, in the buildings and factory space. As it's already available in the public domain, the steel sector and including the other nonferrous metal producers are looking forward to expansions of their existing production lines, including putting in additional complementary equipment in their existing plants. Most of the metal majors in this country are long-standing L&T clients, and we do expect that announcements that they have been making should fructify into reasonably good ordering opportunities, at least in the later part of the current financial year.
Similarly, on the infrastructure side, we see a reasonable uptick of opportunities in the IT real estate space. Many of the IT companies, given the fact of -- given a hybrid kind of working environment, they're also looking forward to putting larger -- more number of campuses, if not in size, but more in terms of campuses across the country as they tap talent to work from a sort of a work-from-anywhere kind of a situation. So we do expect some amount of CapEx opportunity to come for us.
Besides this, the country is also witnessing a lot of investments in data centers. And there, again, L&T does have belief that some of this data center ordering that will happen, L&T stands to get a good share. Lastly, the e-commerce businesses are also set to expand their delivery capabilities. And that requires more amount of logistics and warehousing spaces, and we do expect a strong momentum of ordering opportunities in this segment as well.
Sir, lastly, sir, are you bidding for core-based projects? Or is it completely no-go for us?
Unlike the last quarter, when we went with the Q4 FY '22 call, the amount of coal-based opportunities that we witnessed was not as much as what we see today. We do believe that some of the major thermal plant -- thermal power producers are thinking of putting up newer plants, almost in the nature of 6,000, 7,000 megawatts. But there is -- obviously, there is a good amount of competition. And we do -- we will be selective in the bidding in this particular segment. But definitely, we see an uptick of opportunities coming up for coal-based power plants in the near term.
The next question is from the line of Ashish Shah from Centrum Broking Limited.
My first question is on the Hyderabad Metro. So could you update on what is the status of the support that we are expecting from the Telangana government? Where are we in that process? And secondly, in the cash flow, one sees INR 910 crores of long-term investment being made in the first quarter. So would that be to support Hyderabad Metro or some other assets where we invested?
Okay. So the first part of your question, Ashish, is that with respect to the Hyderabad Metro, the Metro SPV company has executed the supplementary agreement with Hyderabad Metro Rail Corporation, which is the granter of the concession. And we are looking at getting a funding assistance of almost INR 3,000-odd crores in the next 2 years in the form of long-term interest-free loans.
We also have the approval of the granter to monetize POD rights that the L&T Metro Rail Corporation has. In terms of the approval contains in terms of delinking our ability to POD monetize irrespective of whether the Metro operations continues with L&T or not. So to that extent, it's a very favorable development.
We have been talking of this in the past as well, but I would like to tell you that in the current month, we have executed the supplementary agreement, and that is going to, hopefully, as I stated earlier in this call, the improved ridership, the government assistance, the POD monetization and the possibility of a new investor if we are able to tie it up, obviously, the impact of Hyderabad Metro and L&T's financials should hopefully come down.
Secondly, to the question of the long term -- the other question that you talked about, that is essentially L&T Finance security receipts by converting some part of their loan book into ARC.
Okay. So what is the support that we would have given for either Metro this quarter or...
The financial support that we gave in the current quarter is almost around INR 230-odd crores. And the exposure of L&T to Hyderabad Metro as of June is around [ INR 7,400 crores ].
Got it. Just one more, the key thing. The tax rate for the quarter is low. So what is driving that low tax rate? And in general, what should we expect for S-33 because it's kind of very difficult to predict -- like plugging that tax rate. If you can answer the question, it will be good, sir.
Okay. So in this quarter, as you may be aware, Mindtree has shifted from the old tax regime to the 25.19 new tax regime in the current quarter. When L&T, and this is a CFS adjustment, that is a consolidated financial adjustment, first went to Mindtree shifting to the new tax regime at a lower rate, the deferred tax liability that we had accrued at the older rate at the consolidation level has also taken an appropriate entry.
And to that extent, the tax provisions, I would say, has been by way of a credit in the detail of almost INR 134 crores. To that extent, I would say it's one type of an event -- one-off event in the current quarter. This should not happen again. So this means that you can see in the next 9 months the normalized tax rate should apply across the group.
So would that be like closer to 30% on a consolidated basis?
It could be around 25% to 27%.
25 to 27. Sure. Thank you.
Next question is from the line of Ankur Sharma from HDFC Life Insurance.
I have 2 questions. One, very surprised to see the slowdown in execution on the hydrocarbon business given the fact that we had a very strong order booking and order book as of end of FY '22. So while you did highlight some supply chain issues and some client -- could you help us understand, is this more of a Q1 phenomena that kind of picks up as we go through the coming quarters?
So Ankur, let me tell you that this is a Q1 specific issue that there were certain client delays in terms of approvals, and there were some supply chain issues. It doesn't mean that the execution momentum will not get into -- I mean not get into a higher level. This is specific to Q1. We don't expect that to happen in the balance 9 months.
Okay, fair. Secondly, sir, on the infra margins, right? Now of course, the backdrop is that iron prices have corrected meaningfully across pretty much all matters. So fair to assume that at least as we go into the coming quarters, at least on a Y-o-Y basis, we start seeing margins on the infra segment look higher. Would that be a fair assumption? Not wanting exact number here, but at least on a Y-o-Y basis, is it fair to assume that infra are better from Q2 onward on a Y-o-Y basis?
Okay. So in Q1 FY '23, the infra margins was at 6.5% as compared to 7.1% in the previous year. Now I mean, instead of talking specific to infra margins, if I take that the projects and manufacturing portfolio, given the fact that it's the EPC contracting company, quarter-on-quarter developments on the execution side, the amount of projects that get into valuation threshold, the closure of projects, the release of cost provisions towards closure, all of that is a sense of a dynamic situation.
However in Q1, the impact of the drop is largely because of commodity prices because these procurements, what we have put on the site during Q1 are essentially against orders that would have been placed in the previous quarter at elevated commodity prices. But going forward, whatever procurements that will happen, that we'll get into the activity level and thereafter, revenue recognition.
Hopefully, I think it should be at a lower level. But as I said during the earlier part of my call, that what we -- why we gave a guidance on the entire projects and manufacturing portfolio at 9.5%, we also stated that the cost of commodity prices that we have taken for FY '23 is an average of FY '22. And what we see today is essentially the -- most of the prices are coming to what we call an FY '22 average levels. So this, in a way, has been factored in our yearly guidance that we have provided at 9.5%.
Okay. Fair. And lastly, so just on the domestic ordering, and it's nice to know the pipeline, which I think now you share every quarter, so that's extremely helpful. But just going into the domestic part and little more in terms of the end segments within the domestic infra piece. This segment looks the most promising, state ordering obviously has been quite weak over the last year or so, which is reflected in weak orders in water in some way, other segment as well.
So just if you could help us sitting here today, which are the segments are most positive? We've also heard about some tendering pick up on the bullet train from Maharashtra section as well. So some color there would be appreciated.
Okay. So Ankur, the total order prospects pipeline for the balance 9 months that I mentioned at INR 7.6 trillion and against that INR 6.14 trillion is domestic opportunities, okay? If I take -- give you a slightly granular details in terms of infrastructure segment, that comes to around INR 4.76 trillion against that INR 6.14 trillion. That's the order prospects we have for domestic infrastructure. And there, where we see in terms of order prospects, which are likely to come into ordering momentum. In the Buildings and factories segment, we do see a lot of ordering opportunities across public spaces and health.
When I say -- refer to public spaces, I'm referring to central secretarial, state secretary buildings. I'm referring to railway station, new railway station developments. And on the health, it is a lot of money is being spent at the various state level on setting up of hospitals. So this itself is a significant chunk, I would say, in the B&F portion. That is buildings and factories.
In the Heavy Civil portion of the prospects, I do feel -- we do feel a lot of opportunities or prospects in terms of hydel and tunnels and metro, this itself is a large piece of action that we expect to happen.
The water segment also has a lot of opportunities in rural water supply and irrigation projects. Again, a major part of the entire prospect of opportunities in the water segment.
Power transmission and distribution, more on the transmission and distribution of almost 70% of opportunities coming there in the segment, the balance, 30%, is renewables. That's the overall, I would say, on the infrastructure piece in terms of where do we see opportunities, public spaces help, hydel projects and tunnels, metro, rural water supply, irrigation and the entire scheme of renewables and power transmission and distribution.
Coming to the hydrocarbon space. The total prospects pipeline in domestic is around INR 0.39 trillion. Lastly, comprising of onshore, I would say, onshore means not offshore, onshore and construction-related prospects of majorly comprising of this INR 0.39 trillion. On the power, as I mentioned, to -- I responded to an earlier question, the power opportunities in India is almost INR 0.58 trillion, largely led by coal, which is around INR 0.49 trillion. So -- and coming to defense, we do have almost INR 0.25 trillion of order prospects that we are looking at in the next 9 months or so.
The next question is from the line of Sumit Jain from ASK Investment Managers.
Sir, if you can [ spell ] on the balance sheet for Hyderabad Metro, as an equity, the debt, cash support from L&T and accumulated losses.
So the total balance sheet would be in the range of INR 19,000 crores, okay? Just one second, I need to get into -- okay. So if I say the total balance sheet of around INR 20,000 crores, out of which L&T equity is INR 2,400-odd crores, then there is a total, I would say, external borrowings of around INR 13,000 crores.
And the balance, as I said, L&T's exposure to Hyderabad Metro is around INR 7,400 minus INR 2,000 foreign equity. So that comprises the additional funding assistance. External borrowings at INR 13,000. So INR 13,000 external borrowings, plus L&T exposure at INR 7,000. That sums up at INR 20,000 crores.
And the current accumulated losses?
I see around INR 4,000 crores.
And just to quickly understand the sales, the OpEx difference is the interest and tax for the quarter?
I have already told that it is around INR 0.75 billion for the quarter, and INR 300 crores as interest.
If you can just spell out the depreciation, so that we can back calculate the cash flow.
INR 75 crores per quarter.
Sure. And what will be the capital employed that will get released from the 3 assets that is L&T eligible 51% stake, Nabha Power. Hyderabad Metro, you already told. If these were to get sold, what is the capital employed that is currently sitting on the balance sheet?
As I mentioned earlier that we are looking forward to limit our exposure in the concessions. We are looking to divest in IDPL and also Nabha Power. So it is all work in progress. So in terms of our exposure to IDPL would be around in the nature of INR 1,100 crores, and Nabha by exposure, INR 2,400 crores. That's the current carrying value that we have. But a question of time as to when we will release and how much we'll release.
Sure. And just 1 last question on Slide 26, that is the cash flow statement. Net sale and purchase of current investment, that has released INR 28 billion for Q1 FY '23. If you can just explain that.
That's a reduction of our, I would say, overall surplus that we have at the group level, cash surplus.
Okay. Sure. Sure, sir. And the long-term investment sale, 9.1%, was on the account of?
As I said earlier that there has been the sale of a portfolio of L&T Finance to ARC security receipts of almost INR 645 crores.
Next question is from the line of Renu Baid from IIFL Securities.
Two questions from my side. First, if you can help us understand that [indiscernible] orders seemed to be one of the orders which will be booked this quarter. Can you elaborate which segments or which orders were they related to, domestic, international, which business segment?
So in terms of the international orders, we had secured one order in the hydrocarbon space, one large order. And in the other part, we have secured one reasonably large order on the defense engineering space also. And similarly, we have secured one order in the Middle East with respect to power transmission and distribution. All of this would be aggregated to around INR 10,000 crores or so.
Okay. And which segments were the orders which were canceled during the quarter or which will be booked related to?
That's a small amount. Essentially, this was smaller orders, some amount of smaller orders aggregating to INR 1,400 crores, essentially in power transmission and distribution and transportation infrastructure.
Okay. So nothing material there.
Yes.
Secondly, on the infra margins, though we understand that it was more of a transient impact of commodity cost, but if you see last fourth quarter also, there was an impact of commodities, the cost of which we list on the infra margin front marginally. And at the onset of this year itself, your infra margins have been sub-5%. So broadly, while the guidance is for the entire segment and not just subsegment infra, which you said today, but do you think that infra margins in itself as a subsegment all should be back to 8%, 9% levels once these commodity pressures ease out and the mix of projects, which are under execution of [indiscernible].
So infra margins last year was around 8.2%, Renu, okay? But as a guidance, you will know that L&T, we gave guidance at the overall P&L segment for, obviously, the reasons because each of these subsegments are essentially in aggregate of pursuing EPC opportunities across multiple segments.
So in some segments, you could have a mix of jobs that are getting to margin recognition, some segments are having some orders are getting into closure where we will be able to get some margin releases if the margins have been higher than what we bid for. But when we gave the construct of 9.5% is an overall construct that the overall portfolio level of projects and manufacturing basis, the assumption that commodity prices in FY '23 will be an average of what FY '22 was.
Q1 did not witness that because, obviously, the costs that have been booked is basis the elevated commodity prices that was there prevailing in the last 6 months or so. But now the recent, I would say, softness in the commodity prices, hopefully, the procurement cost also should come down and hopefully result into, I would say, better margins in each of the segment. And having said this, at this juncture, we would still like to maintain at 9.5%. We are working to improving margins through a better, more higher improved execution of projects. And also possibly, if some of the customer claims that we have factored in last financial year did not materialize, if they could materialize, should hopefully improve the margin trajectory from whatever we have given guidance.
Sure. And just to clarify the margin guidance probably will not assume much of -- I don't know, the bullet train project margin acquisition of bullet trains would be the first proper full year of execution, you may not be able to cross that threshold limit. Just asking.
The C4 and C6 packages of the orders have actually crossed the threshold margin in the Q4 of the previous year. So yes, the momentum of execution may be the maximum in the current year and possibly in the next year as well.
Okay. And lastly, what percentage of the backlog that we have today is on fixed price business?
Is still around the same level, Renu, that at overall projects and manufacturing portfolio, we would have 1/3 of the contracts at fixed price, the balance 2/3. I would say, variable price in terms of actual reimbursement are linked to indexes.
Next question is from the line of Aditya from Investec.
Certain Middle East media articles have indicated that L&T has been one of -- has been the lowest bidder in a fairly large hydrocarbon renewable facilities contract for [ new ]. Anything that you can speak about on that contract?
At this juncture I think we will not be in a position to comment on client names or the sectors. So kindly excuse me for that.
Sure. But are we pursuing renewable and hydrogen opportunities actively in the Middle East?
Like the way we are pursuing our competencies for opportunities in India, the same stress and emphasis goes on to Middle East as well.
Understood, sir. And sir, just wanted to clarify, roughly similar time last year, our order pipeline would have been somewhere around INR 8.9 trillion to INR 9 trillion [indiscernible].
INR 8.6 trillion was order pipeline.
Understood. So in overall pipeline terms, we may be slightly lower as was the case at the beginning of the year, but we are...
Like the way we started last year with a INR 9.06 trillion pipeline. But this time, we started the year at around INR 8.5 trillion, INR 8.6 trillion. So this time, we have been a little, I would say, selective in pursuing the bids and of ordering opportunities. So we do believe with a better run rate on awards happening and we're getting a fair share, we are reasonably confident to get into the guidance of 12% to 15% that we have provided for order inflows.
The next question is from the line of Kunal Sheth from B&K Securities.
I just wanted to hear your thoughts on the -- how has been the execution environment has hit, especially both on domestic and overseas side? Has it improved? And are we seeing any major constraints or now more or less most of the issues are behind us, and we will see a much easier execution going ahead?
So Kunal, I will restrict myself to Q1. Q1 was just like any other normalized quarter for L&T prior to the onset of COVID in terms of workforce ability, in terms of overall, I would say, supply chain as well. However, as is normal in any normalized quarter pre-COVID, you can have certain things, like the way I talked about hydrocarbons, there was right of way, some issues, client delays on approvals and even some supply chain disruptions -- I won't say supply chain disruptions, supply chain delays.
So I would put it like this, it seems to be a normalized 9 months as well. But you never know because with COVID gone, now we are talking of something else, like monkeypox and so on. So I would say, as it stands now, it's a normalized, I would say, execution environment. The only one point I would like to emphasize is that L&T for the last 2.5 years or so, we have been focusing to execute. Execution ramp-up is a direct function of payments from clients happening on time. So if we find that any particular project, the periodicity of payments is getting delayed or there has been substantial delay in payments, in such cases, we are consciously ramping down, we are bringing down the execution in such of those sites. But otherwise, from an environmental perspective, as it stands now, it is normal.
The next question is from the line of Deepika Mundra from JPMorgan.
Deepika here. Hello? Can you hear me?
Yes, please. Yes, Deepika, I can hear you.
Okay. Great. P.R., I mean we wanted to understand how the commodity price, the recent fluctuation is impacting order inflows as well as execution. Are you seeing better traction on the prospect materializing because of a shift in the commodity prices?
See, Deepika, I mean, I have to provide you a statistic here because I think that statistic itself will communicate in a way that the ordering momentum at -- as far as India and Middle East is concerned, which are the 2 primary geographies for our projects and manufacturing portfolio seems to be quite robust.
The tendering activity in terms of the tenders that got announced in Q1 FY '23 was almost [ INR 2.566 trillion ], okay, [ INR 2.5 trillion ] as compared to [ INR 1.35 trillion ] of Q1 FY '22, which is almost an increase of 90%. And obviously, the tenders that have been opened out in the current quarter at INR 2.56 trillion.
Obviously, it takes into account that the clients are aware of the increase in the commodity prices. And the award to tender ratio, a more important metric, is for Q1 FY '23, the award to tender ratio stands at 70% as compared to Q1 FY '22 at 39%.
So we believe this itself, in a way, communicates that, yes, commodity prices have gone up, project costs have gone up. But I guess the kind of the India growth trajectory that we believe is going to be fairly positive. The government tax collections also has been quite, I think, higher than what was expected. The government has -- it seemed to have collected 7 lakh crores of total aggregate of taxes in Q1, which is far ahead of the estimates -- far ahead of almost a 25% increase of Q1 of the previous year.
So with improved tax collections, we believe that the ordering momentum will continue, largely led by the government. Of course, there can be black sun events, but at this juncture, looks to be fairly good for India, and we do believe that India continues to be a good spot for investment-led economic growth momentum.
Okay. And secondly, on the fixed versus variable priced orders, I think last year, there were far more variable priced orders which were being booked. On a flow basis, is that changing now with the decline in steel prices?
No. Actually speaking, I think last year also, our -- I mean, in terms of structurally, it has been 2/3 variable and 1/3 fixed, okay? So most of the infrastructure orders are largely orders where we get pass-through mechanism in some form or the other. Whereas in the case of hydrocarbons, typically, some of those projects are usually fixed price contracts.
Now if the momentum of ordering in hydrocarbon segment goes up as compared to infrastructure, then the percentage of the fixed-price contracts should be inching up higher. But otherwise, if it continues the way it has been for the last 2 years, I guess this 66%-33% kind of a breakup we continue.
Understood. And last one, could you comment anything on the competitive intensity in Middle East, given that you are seeing so many large tenders coming through?
The opportunities, especially in the hydrocarbon segment, Deepika, I think, is quite robust. And I believe that with L&T's capability and its scope of offerings, we still have a good chance of winning some of the packages. And there is, I would say at this juncture, a place for all.
Next question comes from the line of Puneet Gulati from HSBC.
Yes. Congrats on good numbers. I think last time, there was some commentary from your side that because of sudden change in commodity prices, some of the tenders seem to have been delayed, and government officials have gone back to recalibrate. That seems to have sorted out now, is it?
So Puneet, in fact, in the second half of the last year, the kind of -- I would say the tenders did get delayed, okay? We did not see tenders being announced in the same robustness that we saw in the previous year or 2 quarters. But the way that first quarter has started, as I just now responded to Deepika's question, I think the tendering momentum has regained pace and hopefully, I think, should continue to remain at elevated levels in the next 9 months as well.
Excellent. And in terms of the commodity price correction, should we see some benefit coming in Q2 itself? Or do you think it goes with a lag of a quarter or so?
I think, Puneet, this is the fourth time the question on margins is coming. I have already explained that as we speak, given our order book and given the kind of execution plan that we have across all the segments, we are fairly confident that we should be able to touch that 9.5 % as we close the year. You can have quarter-on-quarter volatilities, but that's the intrinsic part of whosoever is following L&T business. Typically, the second half of the year is a very busy second half as compared to the first 6 months. And we have started Q1, I would say, quite favorably.
Understood. And lastly, on some of the new initiatives that you announced last time, any capital allocation so far in 1Q or too early?
It's still too early in terms of the -- if I say, to put it across the investment cumulative that we have made on data centers and both at e-commerce and the digital platform, on aggregate, it's around INR 200-odd crores. But no major investment has yet to happen on the green energy side because as we said earlier, the first priority is to tie up with a technology partner and then set up the JV.
The next question is from the line of Sumit Kishore from Axis Capital.
P.R., my compliments on a good set of numbers. Yes, my first question is it appears that the domestic order prospects have got a boost in relative terms versus overseas because domestic order prospects have come up from INR 6.01 trillion at the beginning of FY '23 to about INR 6.1 trillion now. Is there any specific subsegment in domestic which has been like faring better in terms of new prospects?
Okay. So Sumit, in June '21, I think the total order prospects that we had provided was INR 8.96 trillion. Out of it, the share was -- domestic was 70%, okay? And today, as we speak, the share of domestic order prospects to the total order prospects is 80% at INR 6.14 trillion, okay? So the share of infra was earlier at INR 5.05 trillion is marginally down to INR 4.76 trillion. Hydrocarbons was -- previous June '21 was INR 0.52 trillion. It's now at INR 0.4 trillion. Power is also at INR 0.48 trillion to INR 0.58 trillion.
I don't think there is any structural change in terms of saying that a particular segment is showing higher prospects. I think it's most to do with the fact that we have been a little more selective this time as compared to the last year into targeting opportunities where we believe that these are large enough where L&T will bid and have a good chance to win.
Sure. So being selective essentially means that you expect a better win ratio as well because you had to invest.
Time will tell.
You signed -- put out a press release that L&T has signed up 3 projects worth $1 billion in prime locations in MMR of about 4.4 million square feet with a INR 80 billion sort of development opportunity. So does that essentially mean that it's like a harbinger of a contract for L&T for construction in buildings and factories which have already been booked or...
So Sumit, obviously, yes, we have executed what we call in that industry parlance binding agreements to jointly develop certain plots across Mumbai. But in terms of transitioning all of that into a business opportunity for both reality and potentially the construction arm of our Infrastructure segment, I guess it's still some time away because we may have executed binding agreements to develop it, but there are a lot of -- as you know, there are a lot of steps before we actually get into development in terms of approvals and all other stuff.
So we have joint development agreements, binding agreements for properties across out South Mumbai, Andheri and Thane. But I believe that it will still take some time before we receive all the clearances before we launch these projects.
Okay. So it may not be prudent for us to consider that as an order in Q2.
Q2 current year, no, no. I think it's still a time off. We will articulate that in appropriate time.
Yes. Just one quick question on the fact that you tried [ an initial soft ] big water sewage treatment contracts awarded by BMC of INR 60 billion in Bombay broken up into 6, 7 packages. And it will cost one package simply because you couldn't take more than one. The Jewar airport will [ become our project ]. So I hope these are -- in airports, L&T had a sort of dominance for PPP, EPC among the big greenfield airports. So what are your thoughts? Is the competitive intensity for big ticket contracts of INR 20 billion plus going up simply because packages are being broken up into smaller ones, which are still INR 20 billion plus, and the breadth of players who can take INR 20 billion plus contracts is not good enough?
So Sumit, it is like this, that competitive intensity, we do see, as has always been in the recent past, very intense in some segments. And some segments, we do see a reduced competitive intensity. But wherever there is competitive intensity lower does not necessarily mean that L&T should get. But one thing I would like to tell that wherever we are quoting for jobs, we are really careful about our ability to ensure that we don't compromise on our margins. And that is the, I would say, the fundamental pillar taking into account.
Like in the case of airports, I believe we almost have a 90% share of all the contracting opportunities that have come. And we have learned to bid and execute such contracts with some more of experience. So we're careful in terms of pricing. And obviously, in many projects, you can have L&T winning some and probably L&T losing some.
Next question is from the line of Parikshit Kandpal from HDFC Securities.
P.R., congratulations on a great quarter. So my first question is on the tendering. So you said that tendering is up 90%. And the award to tender ratio is up from 39% to 70%. But our order book has only grown 57%. So are we losing -- have we lost some market share there?
No. No, I won't agree to that particular conclusion that whatever order prospects that we had at the start of the year, I think that -- I would say that we have got reasonably a good share. So almost INR 88,000 crores of that orders that we bid for, we have been close to getting INR 28,000 crores as award wins. So if you see our award win ratio, this is quite favorable, both for domestic and international put together.
So it is inappropriate to conclude that -- whether our competitive intensity is getting diluted. I guess it's a question of the type of project and how confident and -- we are in terms of not compromising on margins and executing. And so we have been a little careful. But our Q1 bids to award for us has been quite, I would say, on the positive direction.
Because if I look at the recent bids in the EPC segment, so L&T is not at all aggressive. In fact, between [indiscernible] and 5, we don't see you bidding below for project costs most of the cases, which is quite a departure from the historical trends. So just wondering if I'm connecting the 2 things.
Yes. So sir, my second question is on the real estate segment. So INR 8,000 crores of GDV addition is phenomenal, and I think you're giving competition to some of the large real estate developers or some of the larger developers in India. So just wanted to know whether this INR 8,000 crores is a one-off or do we have a plan for the full year that we are looking to add INR 15,000 crores or INR 20,000 crores of GDV? Also, if you can touch upon what kind of presales we have booked in this quarter or maybe last year? So that you would give us some sense on how big this business is now getting into because this could be a big value add in the overall [indiscernible] value in this segment.
Sorry. As far as -- you're referring to our real estate portfolio as a developer, no?
Yes. Sir, development as well as real estate projects [indiscernible] INR 8,000 crores of GDV. Besides that, you have [indiscernible] projects [indiscernible]. As I probably understand...
Parikshit, sorry to interrupt you, but your voice, it's not coming very clear. [Operator Instructions]
Yes. I was referring -- is it better now?
Yes.
Yes, please.
Yes. I was referring to the real estate segment. So we have added INR 8,000 crores of gross development value, which was announced earlier. So for the full year, I mean, there's still -- this is like one of the larger developers in India, they have like targets of INR 15,000 crores or INR 20,000 crores of GDV addition. So if you can just highlight, is this a one-off kind of an announcement? Are we looking for more such deals like this? Because that will translate to more than INR 2,000 crores of presales annually, the strongest number -- this was -- like that can still develop over the next 4, 5 years. So -- and also, if you can touch upon how much -- what has been the presales for the first quarter of this financial year or maybe last year, how much was the prices from the L&T Realty?
So Parikshit, I will tell you that we have gone on public domain to say that as per the entire strat plan for L&T Realty is concerned, we will try to do 5 million square feet of real estate development each year. And in the -- over the next 3 to 4 years, some of these developments will be largely from our own land banks in Powai, Navi Mumbai, Bangalore and Chennai. So -- and we could have, like I responded to a previous question, some joint development opportunities also that we could see in this particular area.
In Q1, the presales activity, we have around INR 649 crores of orders that we have secured in this particular segment.
Okay. But this 5 million annually which you are looking to do sales for will have an average realization of about like INR 15,000 a square feet?
It depends on the property across those places. So at this juncture, it would be inappropriate for me to be so granular in terms of giving the rates just because this is a function of demand and supply. But wherever L&T projects have been launched, both in the Navi Mumbai side and also in Powai, they have definitely received a good, I think, investor -- I would say, good amount of bookings and demand.
Okay. My next question is on the monetization bit. So we have Nabha, L&T, IDPL and Hyderabad Metro as the big items here. So do you think that in this financial year, all of this can happen? Or I mean, which have the higher probability, even sort of these 3, which could happen potentially in this year?
So the divestment of Hyderabad Metro under the concession agreement would not be possible. The only way we can target is to bring down our stake up to 51%. And after some time to maximum, we can dilute another 24% to bring it at 26%. Definitely, we are looking at, I would say, fast-forwarding the process of divestment of IDPL and Nabha Power.
Let's see. Let's -- I mean, it's at the top, I would say, objective of the management. We do expect an early closure. But in terms of time lines, it would be a little speculative, in fact, to talk about that today at this juncture.
Just the last thing, sir, on the -- you have disclosed the carrying value of Nabha and L&T, IDPL. Are you able to tell us how much is the debt on these 2 and the [indiscernible]?
Sorry?
The debt on Nabha and IDPL, if you can give that figure.
The debt on Nabha is around INR 4,000-odd crores, okay? And IDPL is not getting consolidated.
Okay. But when you sell it, so enterprise value, so that will -- anyway, it's not getting consolidated. Your investment is INR 1,100 crores.
And just lastly, on the infra spend, sir. So infra spend has been sharply cut by the government. So government used to map around INR 2.4 trillion annually from -- which will now reduce INR 0.4 trillion, which was largely going towards the budgetary support and the union budget for various infrastructure investment segments. Do you think an impact of that in your ordering or awarding?
See, the union budget for FY '23, I think, referred to net tax collections at the center at INR 19.35 lakh crores, and this is what our Q1 numbers have come. We do expect that this number would be substantially higher than what they have budgeted for.
Okay. So you don't see any impact of this in the ordering.
At least in Q1, the numbers have been, I would say, robust enough so that we don't see any negative implications in terms of tax collections where the government is concerned for the balance 9 months.
Thank you. I now hand the conference over to Sri Ramakrishnan for closing comments.
So I hope all your questions have been answered. We have tried to be as granular as possible, and thanks for everyone for attending this call. It was a pleasure to interact with all of you. Thank you, and good night to all. Thank you.
Thank you very much. On behalf of Larsen & Toubro Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.