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Ashoka Buildcon Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '24 Earnings Conference Call of Ashoka Buildcon Limited, hosted by IIFL Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Mudit Bhandari from IIFL Securities Limited. Thank you, and over to you, sir.
Thank you, Dico. Good afternoon, everybody. On behalf of IIFL Securities, I welcome you all to the First Quarter FY '24 Earnings Conference Call of Ashoka Buildcon Limited. We are pleased to have with us Mr. Satish Parakh, Managing Director; and Mr. Paresh Mehta, Chief Financial Officer of the company. Firstly, we will have opening remarks by the management, followed by a question-and-answer session.
Now I'll hand over the call to Mr. Satish Parakh. Over to you, sir.
Thank you, Mudit. Thank you. Good afternoon, everyone. I would like to extend a warm welcome to everyone on this earnings call for the quarter ended 30th June 2023. I have Mr. Paresh Mehta, our CFO; and SGA, our Investor Relations partner, along with me on the call.
Let me start by the sector update. Year-to-date FY '24, NHAI road construction stand at 844 kilometers compared to 863 kilometers in the same period last year in FY '23, the average length of roads constructed by MoRTH per day was 30.1 kilometer. If the present momentum in the construction of road continues, reports indicate that the average length of roads constructed per day will jump to 33 kilometers in FY '24.
To follow on, NHAI and Ministry plans to award 8,700 kilometers of highways, requiring over INR 1.5 trillion investment in current fiscal. Under the hybrid and EPC, with the share likely to be 65% HAM projects and 35% EPC projects.
On our project fund, let me share an update. In the last month of April 2023, company has received letter of awards for power distribution, infrastructure development on 7 circles in the state of Maharashtra, from MSEDCL, Maharashtra State Electricity Distribution Company Limited for a accepted contract value of INR 2,285 crores. The 7 circles are at Latur, Nanded, Gadchiroli, Nashik, Akola Buldhana, Hingoli, and Malegaon ,work has started in most of them from July onwards.
On asset monetization, during the previous year, the company has entered into a share purchase agreement with Mahanagar Gas Ltd. for the sale of 100% stake in Unison Private Limited, a subsidiary of the company, where we expect to close the transaction by October 2023. Additionally, we are awaiting NOC from TNRDC for our Chennai ring road and expect the transaction to close by October 2023.
Also, the previous year, ACL and Viva Highways Limited has entered into a SPA for sale of their stake in Jaora-Nayagaon Toll Road Company Private Limited, a subsidiary of Ashoka Buildcon and we expect the NOCs for the transaction and expect to close this transaction by December 2023.
On our HAM portfolio, we are at an advanced stage of signing SPA for 11 HAM projects, and we expect the transaction closure for 7 projects where we already have COD, probably 3 COD by December 2023. So for 7 projects of HAM, we are expecting to close by 2023. And for 2 projects by March 2024 and balance 2 projects by December 2024. On 5 BOT toll projects, we are engaging with potential investors and intend to close the transaction by March 2024.
Coming to the order book status. As on June 30, 2023, our balance order book stands at INR 16,920 crores. The breakup of the order book is, for roads and railway project compromise around INR 8,669 crores, which is 51% of the total order book. Among the road projects, HAM projects are to the tune of INR 1,455 crores. EPC projects to the tune of INR 5,802 crores and railways around INR 1,412 crores. Power T&D and other accounts for INR 6,060 crores, which is approximately 36% of the order book. This also includes project awarded in MSEDCL as mentioned earlier.
The total EPC Building segment is INR 2,179 crores, which is 13% of the total order book and CGD comprises of around INR 12 crores. Let me reiterate that our focus remains to build sustainable EPC business and hybrid annuity business in highways. EPC and Railways, Power T&D and Buildings.
This is all from my side. I would now request Mr. Paresh Mehta to present the financial performance for the quarter. Thank you.
Good afternoon to one and all present on this call. The results presentation and press release for the quarter have been uploaded on the stock exchange and the company's website. I'm sure you must have had the time to go through the things. I will now present the financial results for the quarter ended June 30, 2023.
Starting with the stand-alone numbers. The total income for Q1 FY '24 stood at INR 1,557 crores as compared to INR 1,510 crores in corresponding quarter last year. We're seeing a growth of 3%. EBITDA for the quarter was INR 196 -- was INR 96 crores with an EBITDA margin of 6.1%. EBITDA margins have been impacted and subdued mainly due to inflationary prices and onetime provision taken related to execution of our solar power plant project which is on EPC basis, amounting to INR 56 crores. The reported PBT stood at INR 22 crores and PAT at INR 16 crores. Our debt-to-equity ratio stood at 0.34x as on June 30, 2023.
Coming to the consolidated results. The total income for Q1 FY '21 grew at again by 3% year-on-year to INR 1,973 crores as compared to INR 1,916 crores in Q1 FY '23. EBITDA stood at INR 511 crores for Q1 FY '24, with a margin of 25.9%. Reported profit after tax is at INR 72 crores in Q1 FY '24.
In the financial year, in FY '23, the company, ACL, Viva Highways and SBI Macquarie, had entered into an agreement to elaborate on the terms of [ industrial relation ] to the exit actions to the investors, and towards the obligation assumed by the company, which may be recharged through the sale of restructuring of identified assets. Based on the terms of the sale agreement, including a subsequent extension letters signed between parties, the company has recognized a liability of INR 25 crores of finance cost in current quarter and INR 72 crores as an exceptional item in the previous year.
On one of the ACL's BOT projects, Sambalpur-Baragarh road project. We have done refinancing with SBI against our current loan. This refinanced amount based on interest cost of 9% per annum against the current interest rate of 11.7% with an additional debt of INR 72 crores for funding of the major maintenance costs and the deferred principal payment with a corporate guarantee of Ashoka Buildcon. This will enable the project to have a cash flow stretch for another 8 years, and still, there will be a tape period for a project of 3 years.
Going to the BOT division. During Q1 FY '24, it acquired a gross total collection of INR 317 crores as against INR 281 crores in Q1 FY '23 with a robust revenue growth of 13%, split as 5% as a toll rate rise and traffic growth of 8%. And INR -- and competitively, INR 310 crores in Q4 FY '23. Total consolidated debt as on June 30, 2023 stood at INR 6,978 crores, of which project debt was INR 5,840 crores. NCD stood at INR 150 crores at ACL level. The standalone debt is at INR 988 crores, which comprises of INR 132 crores of equipment loan and INR 856 crores of working capital loan.
With this, we can open the floor for question and answers. Thank you.
[Operator Instructions] The first question is from the line of Ashish Narendra Shah from JM Financial.
Sir, you did talk about some INR 25 crores some provision related to one of the assets, but I missed it. If you can just elaborate a little bit on that part, INR 25 crores recognition of liability. And also about some refinancing in Sambalpur, if you can just again discuss the same.
So one subject was the provision of INR 24 crores, which was related to the amount -- carry amount payable to SBI Macquarie on INR 1,200 crores of basic exit amount, which is to be paid to Macquarie. So this is on the carry cost to be paid to Macquarie along with INR 1200 crores, of which another INR 72 crores are already provided in the previous year March '23. So total stands at INR 96 crores plus INR 1,200 crores, payable to Macquarie.
On the second aspect, Sambalpur Baragarh project, which is our project where there is a lot of funding support was done by Ashoka Buildcon in the past years has been now refinanced with another banker, State Bank of India, wherein the interest cost has been reduced to 9% per annum and also the repayment schedule has been stretched by another 8 years, thereby resulting into self sustenance of the project from a cash flow perspective, so that it will not require any support from ABL. And there will still be a 3-year tail left out and another extension of the toll period -- a concession period for this project based on target traffic, which is approximately 6 years. So this is the nutshell on the Sambalpur project.
On the provisioning of -- so yes, you can go ahead.
No, no, sir, please complete, please complete.
So I think one of another related question which you were talking about is provisioning of expenses. I think so you referred for the provisioning of expenses on the solar project of INR 56 crores, which is a onetime hit which has been taken on the P&L for the project as a whole. The project will get over by March '24. So going on further, whatever revenue is recognized in the coming quarters, there will be no impact on the P&L account on the same.
Right. So this INR 24 crore liability that we have for the carry on to SBI Macquarie, this is part of which line item is there in consol or stand-alone accounts?
It is on the consol.
It is on the consol accounts. Right. And as far as Sambalpur is concerned, you did also mention something about corporate guarantee. So did we say that we have -- we do not have the corporate guarantee after the refinancing? Or that things still...
We had undertaking given in the past, which has been now treated as a corporate guarantee for the project. So presently there is a corporate guarantee for [indiscernible] on the same.
Got it, sir. Right. Also, coming back to the order book, if you can just give some clarity on when do we expect some of our international projects to start execution especially, let's say, Maldives or Bangladesh or -- when do we expect that part of the order book to start moving?
So Bangladesh, we have already started in last quarter. And Maldives, we are expecting to get the final order in this quarter. Guyana is already open. Benin has also started.s.
Our next question is from the line of [ Harshal ], who is an investor.
Hello? Am I audible?
Yes, go ahead.
So I would just like to know the exact amount of onetime provision that is done for the power project? Can you just...
Hello?
Hello?
That is INR 56 crores.
INR 56 crores?
INR 56 crores, 5-6, yes.
Okay. And sir, regarding the toll road, which we have already sold. And what is the process? So when we expect it to be completed for Chennai and -- I just missed the name, can you just -- Jaora-Nayagaon.
Jaora-Nayagaon. In Jaora-Nayagaon, we expect to close by -- Chennai ORR, we expect to close to October. And Jaora-Nayagaon by December.
Okay. And all this amount that we are about to receive, can we expect that this will be used to exit other investors that we have in ABL?
Yes, this all amount will go to Macquarie's exit.
[Operator Instructions] Our next question is from the line of [ Narendra ], who is an Investor.
I would like to know about the interest cost and as to why it has gone up this quarter from the usual INR 290 crores to say INR 320 crores?
Yes. So basically, the interest rates in the past 1 year have increased from almost repo rates have increased from 4% to 6.5%, this being the major impact. Second, also, reiteration in the working capital has been higher vis-a-vis the execution. So from that perspective, in the last 6, 8 months execution is higher from that perspective, the interest cost has increased. Also on the mobilization advances which we received from the clients, we have almost INR 600 crores of interest bearing mobilization advance, which is part of this INR 51 crores.
And what kind of top line growth are we expecting this year? And what kind of order inflows are we expecting?
So order inflow has been weak in the first quarter. So in balance, we expect around INR 5,000 crores to INR 7,000 crores, which we have reduced from INR 6,000 crores to INR 8,000 crores to INR 5,000 crores to INR 7,000 crores. And top line growth, we see around 15% this year.
Our next question is from the line of Parikshit Kandpal from HDFC Securities.
My question is the INR 25 crores of financial cost. So this will keep coming every quarter until the deal is done with the SBI Macquarie, INR 1,200 crores is paid?
Can you just repeat?
The INR 25 crores of financial costs we have taken on that SBI Macquarie INR 1,200 crores of outstanding. So this will keep coming every quarter until we repay this amount to them?
Right.
Okay. So this will continue. And on this solar project, so now you said that all the provisions, the entire cost overruns. So is it right to assume that we won't be -- I mean, you will not be breaking even -- So now the project is breakeven, we'll not be making any margins. And on a stand-alone basis, our margins will come back to 8% and then eventually move to double digit by fourth quarter?
Yes, fourth or '24, '25, somewhere in that, depending on executions. But you're right.
Okay. Okay, sir. So -- and just on the BOT monetization. So what is the stage of monetization right now? And do you expect that the valuation which we received last time, do you think we can better that valuation in this round of dealing with the investors?
Right. On the 5 BOT projects, we -- the amount which was indicated in the -- finally in the last deal, definitely, there was a carry in that and traffic revenue also has been far better than what was estimated in the sale model. So we expect a substantially good price over and above the offer price in the last process.
Okay. Just the last question on the HAM projects this monetization of 11 assets. So when do you expect to sign the SPA because this has been quite some time in the media and some valuations have been talked off. But what kind of realistic timeline you have to sign the SPA?
So in the next 2 to 3 -- 2 to 4 weeks, we should expect to sign the SPA.
Okay. And generally, the valuation should be in line with the recent deals, I mean, which were in upwards of like anywhere from 1.5 to 1.6x price to book value?
Yes, that should not be a challenge there definitely.
Okay, sir. And what will be the total value of all these 11 assets in terms of equity investment?
So fully invested approximately INR 1,200 crores.
So including the PIM part or excluding the PIM part? .
Excluding that PIM part.
So how do we read the PIM part in this? So when we arrive at the multiple, should we add the PIM part or it should be excluding the PIM part, because this INR 1,200 crores, I think, and you have another INR 300 crores, what will be the PIM part over and above this INR 1,200 crores of invested equity?
No. So whatever realization will happen will be compared to what we have invested. It's not -- the PIM part is not invested PIM.
Okay. So INR 1,200 crore, so will be measured on the INR 1,200 crores investments which we have done in these assets?
Yes, yes.
And what will be the balance equity requirement of these 11 assets?
INR 170 crores.
Okay. So INR 1,370 crores will be the total equity investment. So the deal valuation will happen on that?
Yes.
Our next question is from the line of Rohit Natarajan from Antique.
Sir, could you just guide us -- I understand there were some one-offs in the EBITDA margin at the stand-alone level. What will be the secular normalized EBITDA margins going forward?
See, going forward the next 2 to 3 quarters, the EBITDA margins would be in the range of 8% to 8.5%. And post '24, '25, then it will go back to numbers like 10%, 10.5%.
Okay. Sir, my second question is on the transaction of the 11 assets. We -- in the classification of consolidated debt, I see that the consolidated debt asset held for sale which is for the old transaction that we're talking about, the 5 assets, right, INR 51 billion that I see the figure, INR 5,104 crores?
I didn't get that. What was the question?
The asset -- project debt of asset held for sale, this is attributable to the old transaction of the SBI Macquarie transaction, the KKR deal that didn't takeoff?
No, no. So no. The total debt on the books, including HAM projects, the BOT projects and the annuity projects together is approximately INR 5,640 crores.
Okay. Okay. No, apart from that, when you say stand-alone debt, project debt and CDs is all put together close to INR 7,000 crores. But when I look at the project debt, excluding asset held for sale is INR 1,800 crores. And debt for assets held for sale is INR 5,100 crores. So this one is the one that we're talking about the deal.
Look, so the INR 1,800 crores is pertaining to 3 assets, the assets which are still under construction, which are under ABL, under construction.
Okay. I got it. I got it. And finally, sir, the distribution circle order, if you could just help us understand what this project is about? The Maharashtra distribution.
Yes. So Maharashtra has come out with this RDSS scheme, which are completely centrally funded projects for INR 2,285 crores is what we have received orders, and these are to be completed in timeline of 24 months.
How will the margin profile would look like?
So these are at normal margins. So you will make EBITDA of 10% plus.
Our next question is from the line of Nikhil Abhyankar from ICICI Securities.
Just a clarification. Sir, you have mentioned a revenue growth of 10% order inflow of INR 5,000 crores to INR 6,000 crores and margins 8.5%. So I wanted to understand why exactly are our margins lower and aren't going up because everyone else is either flat or they are improving on their margins.
So on this -- if you see in the past, like for the past 2 to 3 quarters, the margins have been down. Basically, some projects which have been taken during COVID period and at a competitive price and another reason being that cost escalation, which was compared to what we had bid for way back in 2020. So that is the impact of the margins being lower. Going forward, we expect -- and whatever bids we have done post 2013 -- sorry, 2022. These are typically at fair margins of -- in the range of 10% to 11%.
So from FY '25, should we expect around double-digit margin?
Yes, yes.
Okay. And sir, what exactly is the reason for reducing the order inflow target?
See, we have seen NHAI bidding not happening in the last 4, 5 months. Actually, April, May, there was absolutely no bidding, and June, July, we have seen. Now July has picked up bidding activity. And again, the election may be like announced in Feb or March. So we see only 4, 5 months of bidding cycle going ahead.
Okay. And sir, we have also participated in RDSS...
Degradation in the margin again remains. So certainty of bagging bids is also not there because we see a lot of players and a lot of cut-throat competition.
Right. But sir, at least in the transmission segment, there is, I guess, some visibility over the medium term this year as well as next. So anything over there?
Yes. In distribution sector, we do expect on a lot of orders.
In transmission?
We expect some orders and some in private sector. So all this put together will range between INR 5,000 crores to INR 7,000 crores.
Understood. And sir, the proceeds from the sale loss of Jaora-Nayagaon and Chennai ORR, will they be used to exit SBI Macquarie?
Yes. So what -- the intent is that whatever monetization money comes in. First, we would utilize to give exit to Macquarie. And then we'll apply it on the balance sheet of -- on the -- for ABL to use.
Understood. So minimum for next 2 quarters, we'll take a hit of INR 25 crores.
Yes.
Our next question is from the line of Bhavya from Sambhavna Securities.
Sir I just wanted to know whether we have any plans to monetize any other assets? And what would be the timeframe then would be when you monetize and how many assets?
So we do have a land pool available, and we are looking at monetizing that assets. A couple of transitions we already entered into and where the transitions the [ monies ] have been realized slowly on a periodical basis through a joint development agreement where we are just a land providers, and we are getting retail for the land, it's a slow process. And other chunk of land will -- other pieces of land as and when opportunities available, we will monetize.
Our next question is from the line of Balasubramanian from Arihant Capital.
Sir, I just wanted to understand our current order book around INR 16,920 crores, but I just want to understand the margin profile of HAM, EPC and Power T&D and railways, what will be the margin difference if you could throw some light on that.
So on the -- so it's a mix of certain projects where the range of margins could be in the range of 6.5%, 7% to 9.5%, 10%. So various projects are at various pricing levels. On the road sector, typically, the existing range of margins are in the range of 8.5%, 9%. And on the railways also in the range of 8.5%, 9%. In the power in the range of 9%. And other projects in the range of 6% to 7%. They are smaller projects. And on the building side, definitely, the range is 10% to 11%, but execution will come over a period of time.
Our next question is from the line of Prem Khurana from Anand Rathi Shares.
So my question was with respect to the agreement that we restructured with SBI Macquarie, wherein there is a carry that you would have to pay now till the time the transactions are closed. So is there any cap in terms of what -- to what extent that amount could go to? I mean last time, the original agreement that we had, and it capped the number at INR 1,575-odd crores, and as I see it, I think INR 72 crores is what we provided last year and INR 24 crores is what we provided there so almost INR 1,300 crores is reflecting in the balance sheet now as a liability. So I mean, is it as -- I mean, there's no cap on this number or this again gets capped at INR 1,575 crores the original amount that was there? And what is the coupon or the carry that we're paying, I mean, 8% or 9%?
So the cap of INR 1,526 crores, which was there continues to exist. So -- and the carry of 8%, approximately 8%, which is there, which is used for -- which is provided for in the books is what is accruing quarter-by-quarter.
Sure. And when you say, I mean, monetization proceeds would go to enough -- provide an exit to SBI Macquarie, so buy them out first. But when I look at our HAM portfolio, so technically, some of these assets are with ACL and then some of these asset are held through ABL directly. So could there be a situation, I mean, we are planning to set an entire portfolio, but some of these are set with the ABL. I mean, could you use that money from these assets, I mean, whenever you get to this monetization proceeds come to you, would you be in a position to kind of use this to kind of provide an exit? Or I mean only the assets from the ACL portfolio would be used to kind of buy the amount?
So all growth portfolio monetization typically first we apply to give an exit to SBI Macquarie. The ability to do that by ABL is there.
Okay. Sure. Okay. And just I think -- I mean, in Jaora-Nayagaon, we were waiting for certain permission to kind of get the shares transferred in which is where we would be in a position to kind of close the transaction. So where are we in that process? And has the permission come from MPRDC for the transfer of the shares?
We are pursuing with MPRDC on the same, and we expect to get a favorable decision.
Sure. And sir, just one last one, if you can help me with the revenue breakup for the quarter, please? Segment-wise.
Yes. I just -- on the road sector, it is INR 1,156 crores. Power, it is INR 1,000 -- sorry, INR 119 crores, railways INR 149 crores. And other businesses is approximately INR 65 crores.
Our next question is from the line of Nikhil Kanodia from HDFC Securities.
I wanted your [indiscernible]...
Mr. Nikhil Kanodia, sorry to interrupt. May we request you to use your handset, please?
Any better now?
Yes, sir.
I wanted to know your revenue guidance and the CapEx guidance for the year.
So total CapEx done up-to-date for the quarter was around INR 47 crores. We expect to do approximately as indicated around INR 100 crores of CapEx by the year-end.
So INR 100 crores will be total FY '24, right?
Yes, FY '24, total.
Okay. And sir, anything on equity infusion?
Equity infusion, as we said, INR 169 crores is what -- is what led to be -- yet to be deployed in HAM projects, of which INR 107 crores will be done in '23, '24 and balance INR 56 crores in '24, '25.
Understood. And sir, what is your current bid pipeline?
Bid pipeline is INR 25,000 crores.
Sorry can you repeat that amount?
INR 25,000 crores is the bid pipeline for us.
Our next question is from the line of Ash Shah from Elara Capital.
So my first question would be on the debt level. So if I go back in FY '22, our debt was around INR 488 crores on stand-alone level. which has now increased to INR 990 crores, I mean, it's more than doubled. So any guidance on why it has taken -- why it has doubled on first place? And secondly, what is the future expected number because all the proceeds are going to be used towards SBI Macquarie initially? So what do you think would be the debt number eventually by FY '24?
So definitely, debt numbers have gone up from '22 to '23 by almost INR 400 crores to INR 500 crores. It is more because of the larger execution and larger turnover and a larger order book also, which has typically pushed that up. This will continue to remain as it is irrespective of the payments required to be made to SBI Macquarie from the cash proceeds. We believe that the cash proceeds will be more than what is required for SBI Macquarie, so that will definitely be helpful in reducing the stand-alone debt.
Okay. Also, the second question would be on the Maldives project. So right now, if I was just reading through it, 2 of our competitors, they are also building the same projects order and they are on the verge of -- they have already started. So why is that case that we are not able to yet start because it's been almost 2.5 years since we have received the project, but there's no execution on that part.
No, in the last 2.5 years, ours was the last awarded project, only what was awarded earlier has started now. There's no new project which has started.
No. So I was talking about -- so during that period only, so if we have received in May, the competitors received in March '21, but they are -- they have already started. So I think in December '21, they got an advanced payment for the same, but we were not receiving it and that's why the Exim Bank was not giving us the go ahead. So I just wanted to know what is exactly that's going on in that project.
So these are approved in a COD in the final committee meetings, in which their projects were approved much earlier. And our project got approved in COD, but for ECGC coverage, insurance coverage, it was held back. ECGC had certain problems with certain devolvement of earlier insurance. So it was a policy decision which went up to finance ministry, which is now being taken in the next board meeting.
So we expect that by end of Q2, we'll start education on that project?
Yes, if we -- they really clear it, then definitely we will start.
And the project timeline would be 2 years?
Yes. Project timeline is 2 years.
Also last question, could you just give us the breakup of the order bid pipeline? You said INR 25,000 crores, can you just give it sector-wise?
Sector wise, the majority is highway projects. INR 25,000 crores is completely highway project. I have not taken other bid pipelines, INR 25,000 crores is completely highway.
Okay. So if we include other projects, then how much would that go up to?
At around [ INR 10,000 crores ].
Our next question is from the line of Vasudev from Nuvama.
Most of my questions are answered. I just need the fund based and the nonfund-based limit and the utilization for that?
So we have a total limit of around INR 5,800 crores, of which approximately INR 800 crores is pertaining to -- sorry, INR 350 crores is pertaining to fund-based and balance is all pertaining to nonfund-based. And from a utilization perspective, at the fund-based, the utilization is almost 60% to 70% and on the nonfund-based approximately 70%, 75%.
Our next question is from the line of Anant Mundra from Mytemple Capital.
So just wanted to understand why our Q1 revenue growth is lower than the guided 15% revenue growth for the entire year?
So see, basically, the -- there are a lot of new projects which have been -- which is part of the order book now, which has just started -- are just kicking off. So that estimated turnover will be captured in the quarter 3, quarter 4. Other projects like projects in Guyana and Bangladesh, typically, their mobile -- what you call, mobilization process is a bit longer. So now they are fully -- the Guyana project is fully mobilized. So their turnover will now start catching up from Q3, Q4. And even Bangladesh from Q2 itself, even for projects like the Kerala project, there, the mobilization process is going on. And once the mobilization process is totally complete, then the turnover will catch up. So this 15% or 10% to 15% growth is typically on account of the full year expectations. So initially, this quarter definitely is flat, but it will take off by Q3, Q4.
All right, sir. And sir, the stake of INR 56 crores that we've taken on the NTPC power project, where exactly is this figuring in which line item?
It is in other expenses and construction expenses, we put together. Other expenses has approximately INR 31 crores of it, which is for the future yet to be incurred, the expense's yet to be incurred or loss on that and contract revenue balance INR 25 crores.
Okay. Got it. And sir, you explained the different margins among the different sectors. Could you also give us an idea about which sector is most working capital-intensive and which is the least working capital-intensive?
So generally, our power projects are most working capital intensive because their payment cycle is already -- I mean, it's already factored in the way we have bid for the project. But until -- so they do give advances on material, but the final settlement of bills are almost 4 to 5 months post their full certification and what you call final commissioning of the modules, different modules under the project. Road projects are typically funded by -- their HAM projects funded by bankers, so their funding is almost on the -- almost 60 days kind of working capital.
All right, all right, all right. And sir, given that we've refinanced the Sambalpur BOT project, and I remember you had explained in the last con call that, that was the only project in which loss funding was required. So given that the refinancing has happened, there is no BOT project, which will require any loss funding from the parent. Am I correct in that assumption?
Yes.
All right. All right. And sir, which is the road project, the BOT project in which the deferred liability, NHAI deferred liability premium is the highest?
Dhankuni project.
So even that project is not going to require any loss funding or any another round of refinancing of the NHAI deferred premium?
No, no. So the Dhankuni cash flows are sufficient to take care of its all cash flows subject to total deferment availability is available in the scheme. So up to '25, '26, the deferment is possible though with a lesser amount of premium, but that will continue. So on its own, it will be self-sustainable.
Okay. So the deferred liability premium will be due from '26, '27?
Yes. There's no repayment schedule as and when enabled by the SPV.
Okay. Okay. Got it. Got it. And sir, how much is the revenue that we are recognizing from the real estate JV? And that is coming in consol level or in stand-alone level?
This quarter, nothing much.
Okay. But like could you give us some idea of how much can that be for the year? And how much was it for the previous year, just approximate ballpark?
Previous approximately in the range of INR 35 crores to INR 40 crores.
And it comes in the consol level or it comes in the consol that's because the JV...
[indiscernible] It is being amortized.
Our next question is from the line of Deepika Bhandari from PhillipCapital.
I just have 1 question from the order book as on 30th June, how much portion was not executable at that moment at that point of time?
I mean you're talking order book, which is not executable today?
No, not today, as on 30th June from INR 16,920 crores order book, how much was not executable at that moment?
All are executable, but they are delayed. So like the Maldives project, which is there, there the start of construction will happen as calculated -- as soon as financial type is done by the government.
So everything has started now.
Yes. Yes.
Okay. Okay. So except for Maldives project, everything was under execution as of quarter 1. Is my understanding correct?
No, that could -- so all are executable on the -- like -- except for -- I think -- yes, I agree what you're saying ma'am. Everything is contributing to the turnover.
So except for Maldives, everything is on...
Our next question is from the line of Sourav, who's an investor.
Yes. So just 1 question. The consolidated debt level of company is around INR 7,000-odd crores. So with the asset monetization, which is repeated, say, by October, by December, and by March '24, what will be the kind of debt after all the monetization which will happen in the next 3 to 6 to 9 months?
So once we are -- by March '24, based on whatever we have communicated, the total debt, which will be remaining outstanding would be approximately -- today, it is approximately INR 500 crores. So that will increase to approximately another INR 500 crores. So INR 1,000 crores will be outstanding for the -- so approximately -- if we sell all the projects, approximately INR 600 crores will be outstanding as of March '24, less all debt other than the stand-alone debt will be of the consolidated balance sheet.
Okay. So remaining debt by '24 would be just close to around INR 500 crores to INR 600 crores, right? .
Yes.
Okay. And after this monetization, the revenue, which is coming to the company, say, currently INR 8,000 crores per annum, so this will all be coming from the EPC project, nothing from the HAM and BOT side as of '24, March '24?
Yes. I mean we can reasonably consider that except for a few HAM projects which are -- would be under construction. But that is the majority will be captured under ABL EPC part only. So nothing significant contribution will be there from other SPVs in the turnover.
So as guided the revenue -- gross revenue from, say, '24 onwards would be close to around about INR 6,000 crores of order run rate with a margin of 10%, which is -- is it fair to assume?
No, INR 6,000 crore is already a run rate for this year [ March '22 ]. So for March '24, it will be approximately INR 7,000 crores to INR 7,500 crores.
With a margin of close to 9% to 10% kind of margin which has been guided, right?
For '24, it would be 8% to 9%, between that 8%, 8.5%. But from '24 onwards, whatever, there will be approximately at least 10% to 15% increase in the turnover. That would be subject to approximately 10% to 10.5% margins.
Our next question is from the line of Anupam Gupta from IIFL Securities.
A couple of questions from my side. Firstly, on the provision which you have done for NTPC project, is there any chance of this claimed then in terms of [ rescuing ] it back? Or this is a definite out from our side?
So here, we have got a circular from the Ministry of renewable energy for the extension, we are expecting circular for price revision also. So if we get price revision, then that will make up for the loss we have booked.
Okay. But are there any timelines for this?
Yes?
Is there any timeline for this?
Timelines cannot be guaranteed because this is all Ministry prerogative, whether to allow price revision along with time extension. So presently, they have just given time extension. The industry is expecting price revision because this was all due to COVID and other impacts.
Understood. And second question, sir, on your guidance. If I recall, in the fourth quarter, you had guided to 20% to 25% revenue for this year. Any specific reason why you're lowering it to 15% for this year? Or what has changed since then?
First quarter, most of the projects were delayed start. And order book inflow also we haven't seen anything in the first quarter. So that is not going to get converted into any revenue. Therefore, we have reduced our guidance to 15%.
Our next question is from the line of Ash Shah from Elara Capital.
Sir in your initial remarks, you had mentioned that NHAI is planning to award around 8,700 kilometers. And since we have not seen a lot of awarding activity in Q1 and Q4 is also going to be a washout because of the election. Don't you think over the next like 5, 6 months, you will see a lot of bridge opening up like there will be preponing of those ordering because they want to achieve those targets or something? If you could comment on that?
Yes. So we can see a good amount of order and balance part up to Feb. So whatever balance like 5,000-odd kilometers by NHAI, 2,000 to 2,500 kilometers by MRTH. So this entire ordering we'll see in coming months up to Feb.
Okay. So -- okay. And second question would be, can you give us an update about the NHAI bribery case, I mean -- there was 1 project that we had lost out on. So is there any rebidding that has happened on that or something like that?
Yes, rebidding that has happened, we have participated. Results are yet to be announced. So there are 10 participants in that, and we are awaiting results maybe this month or next month.
Okay. And last question would be, is there any international bid pipeline that we are looking at? Or if you are planning to move out of any other countries or something like that?
So we are focusing on the countries that we are working. So presently, Bangladesh and Guyana may give us some more opportunity. We are not exploring new countries at this stage.
Ladies and gentlemen, that was the last question of our question-and-answer session. I would now like to hand the conference over to Mr. Satish for his closing comments. Thank you.
Thank you, everyone, for participating. We are thankful to all the participants for their questions. I hope we have been able to answer most of your queries. We look forward for your participation in the coming quarters. For any further queries, you can always contact our SGA or our CFO. Thank you.
Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. .