Ashoka Buildcon Ltd
NSE:ASHOKA
| 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 |
136.8
304.02
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
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.
Ashoka Buildcon Ltd
Earnings Call Analysis
Summary
Q2-2024
Ashoka Buildcon Limited reported strong earnings for Q2 FY24, with income growth and stable margin expectations. Management expects order executions to pick up, projecting increased Ministry of Road Transport and Highways execution orders by 16% to 21%. They've received awards for new projects and completed milestones in existing ones. Q2 revenue rose to INR 1,590 crores, marking a 21% year-over-year increase, with an EBITDA margin at 10.8%. H1 revenue is up by 12% to INR 3,147 crores with an 8.5% EBITDA margin. Debt reduced to a 0.38x ratio. Consolidated income grew by 19% YoY to INR 2,195 crores in Q2. Asset monetization is underway, with Mahanagar Gas Limited deal expected to close by Q4. The company targets a sustainable margin of 10% to 11% from Q1 FY25.
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Ashoka Buildcon Limited Q2 FY '24 Earnings Conference Call hosted by JM Financial. [Operator Instructions] Please note that this conference is being recorded.
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 the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
I now hand the conference over to Mr. Ashish Shah from JM Financial. Thank you, and over to you, sir.
Thank you, Devin. Very good afternoon to everyone. On behalf of JM Financial Institutional Securities, I welcome you all to the Q2 FY '24 Earnings Conference call of Ashoka Buildcon Limited. Today, we have from the management, Mr. Satish Parakh, Managing Director; and Mr. Paresh Mehta, the Chief Financial Officer of the company.
I hand over the call to Mr. Parakh for his opening remarks, after which we will move on to the Q&A. Thank you, sir. Over to you.
Thank you, Ashish. Good afternoon, everyone. Hope everyone is doing well. On behalf of Ashoka Buildcon Limited, I extend my warm welcome to everyone joining us today to discuss our business and financial results for quarter and half year ended 30th September 2023.
On this call, we're joined by Mr. Paresh Mehta, our CFO; and SGA, our Investor Relations adviser. Let me start with the sector update. As per the research reports, following are the key highlights of the sector. the execution orders of Ministry of Road Transport and Highways is expected to increase by 16% to 21%. That is 12,000 to 12,500 kilometers. That is 33 to 34 kilometers a day in FY 2024. This was on the back of healthy order book and an increased budget outlay of 25% in FY 2024 budget for Execution increased by 9.8% year-on-year. That is 3,196 kilometers in 5 months of FY 2024 compared to 2,912 kilometers in 5 months of FY 2023, and is expected to gain momentum in coming quarters ahead of general elections in next year.
However, awards 2024 up to August 2023 declined by 38% to 1,756 6 kilometers from 2,706 kilometers during the similar period of FY 2023. The overall awards are expected to fall to 9,000 to 9,500 kilometers in FY '24 from 12,375 kilometers FY '23. Going to the likely slowdown in bidding activity before the general elections which have to be held in May 2024.
Previously, during 2023 award by MRTH has declined marginally by 2.8% compared to 12,731 kilometers. So this year, we have seen a decline of 35% in August. Now on the project front, I'll give you an update. In the month of September company has received a letter of award for power distribution infrastructure development projects for 4 circles in the state of Maharashtra from MSEDCL -- for accepted contract value of INR 646 crores.
In addition to that, for 1 more circle at Osmanabad been awarded for INR 125 crores in the month of October 2023. With this current order balance book for the power T&D stands at INR 6,250 crores. However, we have also been awarded 1 project in October 2023 for construction of cable stay bridge at Telangana for total consideration of INR 146 crores, adding to the current order book of EPC to INR 5,388 crores.
Two of our HAM projects with NHI has received certificate of commercial operation dates in the month of September 2023. order was received for section of project, that is packages place in Karnataka and other COD was received in October 2023 for a section of project from packaged One of the company's SPV BG Ashoka Infrastructure Private Limited has handed over the project, which was on BOT basis back to the PWD authority on September 28, 2023. After the expiry of construction period as per the terms of the construction obligation awards.
On asset monetization, the company has entered into share purchase agreement with Mahanagar Gas Limited for the sale of 100% stake along Morgan Stanley Fund, held in Private Limited, a subsidiary of the company. Also, it has entered into a SPA for sale of its stake in project and Chennai project.
The company and its subsidiary Ashoka Construction Limited are at the advanced stage in respect of divestment of their entire stake in certain subsidiaries engaged in construction of -- construction and operation of good projects on HAM basis and BOT basis awarded by NHI. Considering higher capability of sell getting completed in the next 12 months, the assets and liabilities of these subsidiaries are continue to be classifies as assets held for sale.
Coming to the order book. As of 30th September 2023, our balanced order book stands at INR 14,795 crores. The breakup of order book for roads and railway projects comprise of INR 7,842 crores which is 53% of the total order book. Along the road of the project order book HAM projects are to the tune of INR 1,299 crores. EPC order are worth INR 5,242 crores, and railway is around INR 1,302 crores.
Power T&D and others account for INR 6,126 crores, which is approximately 41% of the total order book. The total EPC Building segment of INR 789 crores, which is 5% of the total order book. And CGT comparison of around INR 39 crores. We have brought them all these EPC projects on the order book as financial project could not happen or could not be achieved the government of Maldives and Let me reiterate that our focus remains to build sustainable EPC business in segments of hires, railways, power T&D and buildings. This is all from my side.
I will now request Mr. Paresh Mehta to present the financial performance. Thank you.
Thank you, sir. Good afternoon 1 and all in on this call. The results investor presentation and the press release have already been uploaded on the stock exchange and the company website. I'm sure you must have had time to go through the same.
Now we'll present the financial results for the quarter and half year ended September 30, 2023. The total income for Q2 FY '24 stood at INR 1,590 crores as compared to INR 1,310 crores in the corresponding quarter last year, seeing a growth of 21%.
The quarter stood at INR 172 crores with an EBITDA margin of 10.8%. The reported PBT stood at INR 195 crores and PAT at INR 71 crores. For H1 FY '24, the total income stood at INR 3,147 crores as compared to INR 2,820 crores in the corresponding period last half year is seeing a growth of 12%. EBITDA for the period stood at INR 268 crores and an EBITDA -- with an EBITDA margin of 8.5%. The reported PBT stood at INR 117 crores and PAT is INR 88 crores.
Our debt-to-equity ratio stood at 0.38x as on 30 September 2023. Coming to the consolidated results. The total income for Q2 FY '21 grew by 19% year-on-year to INR 2,195 crores as compared to INR 1,845 crores in Q2 FY '23. EBITDA stood at INR 587 crores for Q2 FY '24 with a margin of 26.7%.
Reported profit after tax is at INR 119 crores in Q2 FY '24. for half year FY '24, the total income stood at INR 4,169 crores as compared to INR 3,761 crores in the corresponding period last year, registering a growth of 11%. EBITDA for the period stood at INR 1,098 crores with an EBITDA margin of 26.3%.
The reported PBT stood at INR 264 crores and PAT at INR 191 crores. Total consolidated debt as on 30th September 2020 stood at INR 7,200 crores, of which debt is INR 5,932 crores, NCD stood at INR 200 crores at the ECL level -- INR 150 crores at ECL level. The stand-alone debt is at INR 1,118 crores, which comprises of INR 220 crores of equipment loan and INR 898 crores of working capital loan.
On HAM projects, as mentioned in opening remarks by Mr. Parakh, we have received COD clinicians for 2 sections of projects in September '23, October '23. Post that, the are now eligible for receipt of annuity payments from NHAI for the operations period of 15 years at the interval of every 6 months from the date of the achievement of COD.
Towards our division, during Q2 FY '24, it recorded a gross total collection of INR 307 crores as against INR 273 crores in Q2 FY '22 whereas in H1 FY '24, it recorded a gross store collection of INR 624 crores as against INR 550 crores in H1 FY '23.
With this, we now open the floor for questions and answers. Thank you.
[Operator Instructions] The first question is from the line of Parikshit Kandpal from HDFC Securities.
Congratulations on a decent quarter. So first question is on the key asset monetization [indiscernible] So what stage of approval the...
Sir, sorry to interrupt, but the line for you sounds very muffled.
Hello, is it better now? .
Yes.
My question was on what stage of government approvals have we secured for the Chennai or and the project. Because was Central Secretary and the Development Corporation. So at what stage of progress we have achieved in now on the government side on approving this investment.
So we have received NOC for Chennai but we are yet to receive a NOC for project. So this NOC for Chennai, we got after almost a deal 1.5 years. No, this has resulted in renegotiation with our JV partner on the price to be given to her, and that is now under process. yet to get which we feel we'll get only after these elections are over and new government is formed.
Okay. So Chennai government approvals are in place. Now it's only the partner where we have to renegotiate on the valuation. And what about the lenders NOCs on the other approvals.
Lender NOCs are in place for Chennai...
Okay. So Chennai when do you expect to close the deal and money coming in that's possible both on Chennai and on MGL for these 2 assets at least you can update us?
So we should be able to see something by Q4 end, we should be able to -- this gas definitely will go from our portfolio by this Q4. And Chennai ORR also we are trying to resolve with our partners to see how we can close this asset sale.
Okay. And just on the sale monetization. So we have been hearing every quarter and goal posts are now getting shifted. If you can update on what is the stumbling block here and it is being might be reported in media is coming, you also highlighted that H1 should have got closed at least in Q3. We should have got fund. So what's the status on approvals there? Where are we pass of negotiation? And when do we expect to close this deal?
So on this, we are under discussions for the share purchase agreement with the potential investors. And -- there is a set of 11 projects, it's 11 project deals. So it has taken some time to close out on the SPA in the process and we should activate at the earliest.
What are you looking at the Q3 now or we move into Q4 next year?
We expect that SPA should happen before Q3 -- by Q3.
Okay. just the last question on margins. I mean, you have now recovered our margins stand-alone basis. So is the worth of the margin behind us now and how we look at, as you had earlier highlighted towards Q4 moving to a double digits. So are we on track to achieve double-digit margin -- early double-digit margins by Q4?
Yes. So as we had indicated in the last call, this couple of quarters we'll continue with this margins of approximately 8% to 9%. And then Q1 FY '25, we see recovery of these margins when a substantial portion of lower-margin projects will get over and higher margin purchase we takeover.
So what kind of band you're looking from Q1 FY '25? Is it more like 10% to 11% or 11% to 12%?
10% to 11%.
Okay. And that is the sustainable margin for us?
And that would be our target for our new project.
And just lastly, on the beauty asset, sir, so what stage of it has shortlisted potential investor last time you said that finalized on nonbinding back up a thing and look at finalizing a couple of investors and proceeding with So what stage are we now in the duty on assets and when do we expect to close it.
On the OBT assets, we are -- as indicated, we have received NPO offers and the potential investors have started diligence on the project. Sunday. We just started, we should see some progress by Q3 on closure of the diligence and in Q4 by signing up some SBA.
The next question is from the line of Mohit Kumar from ICICI Securities.
The first question is that can you help us with the impact of interest cost, which you're providing for the SBI exit.
So it's approximately INR 24 crores per quarter.
Understood, sir. The second question is on the -- how is the work progress on the scheme for the Maharashtra. And what is our scope of work is it including buying [indiscernible] et cetera. And also right the repayment, the payment profile -- are we getting paid on time? How are the receivables.
So Maharashtra and UP, MP, Bihar all these are project where -- these are distribution lines and transformer related projects. Nothing to do with or metering. These are regular distribution projects, which company had been doing last almost 1.5 decades.
Understood, sir. My last question is how the tender -- so the payment front on the payment, are you receiving payment on time? How is that compared to what compared to what you used to do earlier? Is it better payment terms?
Yes. All these projects have just started, we have received advance in almost all the projects except the last few projects which were awarded in the last quarter. And billing also cycle seems to be quite efficient now.
My last question is, how is the tender pipeline for NHAI. Are you expecting some increase in BOT tenders?
See, NHAI for EPC and HAM, though they have a pipeline, but this is continuously getting extended because nowadays all approvals are coming from Finance Ministry and finance committees. So the ordering is getting delayed. Though we see the pipeline, but continuous extension in the bidding dates is not resulting in any of the awards. Remains at EPC and HAM level.
BOT is what NHAI is exploring and they may come out with certain bridge very soon. They have identified around 20 projects. I don't know how many of them will really see the light of the day.
the next question is from the line of Bhavya Shah from Sambhavana Securities.
So I just wanted to know on the asset sales at Chennai ORR, which is Mahanagar Gas. So do we have any strategic demand in place these transactions.
See, no specific deadlines. These are taking their own time. Mahanagar Gas, now a period of was up to 30th September that lock-in has been over by 30th September. So we are expecting in the next Board meeting, we should clear this. After that, there are some CPs to be completed and transaction will get completed on Mahanagar. So there, we see certainty.
As far as Chennai ORR is concerned, we got NOC, but it was delayed by almost 1.5 years. Now since this deal in time-lapse, there has been some difference of opinion with the partners. So we have negotiated their part of the cost, which we have to purchase and then sell to NIF. So if this takes place mutually agreed terms, we should be able to close in Q4. As far as was concerned, we have still not received NOC. So only the new government we'll have to proceed with and maybe Q4 or early Q1, we'll get the NOC and we'll be able to complete the transaction.
Understood. And my second question is on the order book. So when the post expense a lot of orders. Our order book has been little lackluster. So are we planning to address before more orders in the future? And what kind of order book it will be more of the fees or we are vetting towards the power higher margins.
So looking at order book, our focus definitely will remain on highways. We would pursue our EPC and HAM projects and may also participate in some all the BOT projects of 5 days. Now these orders, we hope that next month, they should really pick up -- and we will be able to back good number of orders by March end.
As far as railways is concerned, they are also aggressive in coming out with a lot of projects, and we have now good foothold in railways where we have completed our Punjab project and other projects are also advanced stage of completion. So railways would be another focus for the company. Our T&D, we have enough order book in -- so we'll not be aggressive in this sector, but -- if we get a good margin, definitely will participation will be there, and we will pick up some good orders. As far as building is concerned, it's a new segment. Our FDA project is moving as expected. And we do expect some orders in Building segment also in the coming future.
The next question is from the line of Nikhil Abhyankar from ICICI Securities. .
Sir, can you tell us something about the bidding pipeline that is the tile -- because after December, Jan most likely there won't be any orders given out. So how are we looking at it? And how much orders into are we targeting for this year?
So bidding pipeline wise, if you see NHAI and MoRTH is growing up around INR 75,000 crores order book, which is a significant 3,600 kilometers around. And our target, we are expecting about INR 4,000 crores to INR 5,000 crores to bag all across sectors like roads, railways, power together.
Okay. And sir, on the railways, are there any more opportunities remaining in station redevelopment?
Station redevelopment, we're not participating yet. The development projects and connected to real estate projects, so we have not participated in these projects.
Okay. Okay. Understood, sir. And sir, any update on the NTPC project?
NTPC is moving well. We have almost procured all the modules and the erection is underway. Payments are also being done by NTPC in time. And they're also in reinvestment of custom duty. So NTPC moving as targeted.
So we should expect to make money in this project?
We have already booked loss on this project in last quarter. And this the number will remain same.
Okay. So no more profit no more losses from that project?
No, no more profit, no more losses.
the next question is from the line of Dr. Amit Vora from The Homeopathic Clinic.
Yes. Am I audible?
Yes, yes.
Sir, about the margins, you said the margins would improve from the fourth quarter or the first quarter of next financial year.
Yes. On the first quarter of the next financial year.
Financial year. Okay. Any target for this full year? Where do you see your in terms of sales?
So we should be able to grow by around 15%.
15% This year for next 2, 3 years?
This year, 15%. Next year will, of course, depend on bagging of orders.
Okay. Sir, railways is coming out with lot of big ticket projects in terms of this Bombay and many other -- so any plans of going for railway projects or will you or other projects of railways?
Yes, we are focused on railways, and we are working with various verticals of railways and railway would be a focus area along with highways going ahead.
Sir, 1 last question about -- there was some complaints regarding some driver -- so can you update us on that, what is the status right now? And how will -- how will it affect the company or it will not certain more?
See, there is a status quo on this issue. Nothing has really moved in last quarter. And it's really not affecting company in any way.
The next question is from the line of Vishal Periwal from IDBI Capital. .
A couple of questions. One clarification. I think previous participant, you mentioned 15% number. So this was regarding or, sir?
15% growth this year is what is -- the guidance we're giving. Revenue top line.
Okay. Sure, sir. And in the Power T&D, can you give some color, like what is the execution time frame for these orders? Are they short cycle order or I mean -- like similar to what road sector like little long period order? Can you give some color?
Most of the orders are 2 years time, right?
Okay. And I mean, like since I mean, we are getting LOE from that 1 should consider a 2-year kind of execution for these orders?
Yes. These are all from LO edits.
Okay. Okay. And 1 color on this awarding for the road sector. I think you did mention like it has been weak. But even in terms of execution and then in the construction side, are you seeing any stress or probably increase in the receivables? Because there again, like the role of finance industry also comes in -- so any delay on that front, are you seeing for us for the sector?
See, execution while NHAI is doing well. We are also doing very much with their expectations. So execution wise, there is no challenge. Payment wise, there is no challenge as far as NHI is concerned. They are paying very much in time.
We have next question from the line of Vasudev from Nuvama.
Sir, whatever pending commitment? And how much is the infusion to '24, '25 and '26?
I could not hear you. Could you go again?
Sir, I was asking about pending equity commitments and how much do we plan to infuse in H2 of FY '24 and '25 and '26?
So by the end of '23, '24, our equipment commitment pending is INR 147 crore and for '24, '25, INR 56 crores, these are for the HAM projects. Toally approximately at INR 200 crores.
Okay. Okay. Can you help me with the segmental revenue for Q2.
Yes. So this being a lean quarter because of rains, the EPC road revenue was INR 872 crores. Power was INR 405 crores. Railways was INR 173 crores. PCD was a small amount, INR 6 crores, and other sector was approximately INR 63 crores. Over and above that, RMC business was around INR 38 crores.
Okay, sir. And sir, just 1 clarification. So you said that you're getting to INR 4,000 crores to INR 5,000 crores of order win. So that is incremental order wins for FY '24 or for the full year?
That is incremental order we are targeting.
Okay. Sure, sir. And just 1 last question from my side, what is the CapEx that we did in Q2? And how much are you planning for the full year?
The CapEx for up-to-date was around INR 79 crores and maybe the pending CapEx would be approximately INR 15-odd crores for March '24.
[Operator Instructions] the next question is from the line of Devam Modi from.
Yes. Yes, sir, just we have seen a high year-on-year traffic. I mean the collection growth rate in Bhandara, if you can just explain the reasons for this sort of double-digit plus store collection growth rate in the last couple of quarters in these 4 projects.
I mean, actually, this is the impact of economic growth, no specific reason for this growth. Of course, if you see revenue rise in the project was 7%. That is right. And in was almost 9%. So keeping that apart and probably in the -- and also in the NHAI projects, approximately 5.3%. So keeping that aside, that these growth rates are more from the industry pattern, which is there. No exceptional impact.
And would it be fair to say that the environment for toll roads in terms of economic environment in terms of the way of traffic growth and all those things have been there in the last 1 to 1.5 years. plus the kind of multiple is pacing in the private markets or on the -- I think the first for toll roads, 1 of the other private for toll roads is also out with tubes in it. So would it be better to say that the valuation environment as well as the economic environment, both have improved much more after the cancellation of the deal with KKR.
Technically, there is a lot of interest for looking at BOT projects, coal-based projects. and traffic for the last 2 years typically also indicate high growth in the traffic revenue. So interest is there, and I -- and also government also is intending to take out projects, a few on BOT projects, which we don't -- we need see the light of the day, but there is interest in people to buy assets.
And we understand that in and Sambalpur, I mean what you have shown in the presentation that we have premiums which are payable -- so what would be the current year premium because it's a 5% escalation from appointed date in each of the projects. So what be the current year cumulative premium that you have to pay in all these 4 projects?
Approximately INR 200 crores in Dankuni and around INR 45 crores -- INR 65 crores in Belgaon.
And the other 2 will be much smaller, right?
Is there is nominal. It was INR 1.8 crores.
Okay, sure. And would there be any major threat on the traffic, how many alternate road or spreads would be coming up because that used to be a big thing industry to NHAI transfer. So now how should 1 look at it? And I mean, what kind of sort of longevity should that road have? Any thoughts or flavor you can provide on that front?
See, over the years, we have seen that the traffic, though, there are alternative routes coming in, but traffic has generally been increasing. So we don't see a significant rate. There will be some shift in traffic off and on, but I think so we should expect typical growth of 6% to 7% traffic growth expect it.
Sure. And I understand you give updates on the sale of Chennai ORR and in terms of the status of the NOCs and the probably renegotiation with the partner. Any update on with regards to the where the sale is ongoing right now?
Yes. So we have -- the lenders have already cleared NOCs from their side. We are waiting for PNGRB their lock-in period has already expired on 30th September. And the NOC is already lined up with board. So we should get that by the before the month end. And then we should try to conclude the transaction in the next month or latest by Jan.
All right. Sure, sir. And just an import that we have seen multiple other similar peers to you who have announced transactions of similar kinds of assets, probably higher or over in complexity. But from how those transactions are consummated much faster. So any learnings or any particular things that you would like to highlight by some of what Anderson are taking much longer -- or anything you feel is affecting our consummation of transactions?
No, I would not be able to compare time lines to any other peer because everybody starts at a particular angle and closes. I don't know how many actual SPAs have closed at this moment. People are in discussions on diligence as well as -- we believe that our SPA discussions are going on that in view of 11 transitions definitely it takes more time because each project has its nuances and closing takes some time. So it has overshot our estimate, but I think we conclude in this manner.
The next question is from the line of Anupam Gupta from IIFL Securities. .
Sir, just a couple of questions. Firstly, on the stand-alone debt, if we -- sort of during the first half, we have seen a sharp increase in the stand-alone net debt per se. How do you look at it by the end of this year, assuming that, let's say, the NGL transaction is done, but -- and other -- and possibly Chennai ORR transaction is done, what should the debt should and that for this year at the stand-alone level?
So we, at the stand-alone level are approximately at around INR 1,100 crores by the transition on Unisen, which we consider, I think so we should end up with a working capital debt in the range of INR 750 crores, INR 800 crores around.
Okay. Okay. And then so this doesn't include any closure of the Chennai ORR project for this year, right?
That comes in approximately another INR 200 crores will definitely go down.
Okay. Okay. Understand. And sir, secondly, on your execution side of 15% growth, is there a risk to that 15% growth are any projects running slow? Or how do you look at it for this year?
Projects are on screen. The power projects because they started off late, I think so they will take more steam. So we are -- probably at this moment time, we are comfortable in estimating a 15% growth.
The next question is from the line of Vaibhav Shah from JM Financial.
What is the update water treatment process? How has been the exemption so far?
So execution on this project in monsoon was held up. Now it has restarted in future, and we should be able to complete in targeted right lines. it's moving well.
Okay. And sir, for the oder, so we have the cancers of order or still we hope for any status update on the pace -- any progress on the same?
We have dropped from the order book, but we do not know how the relations between India and Maldives will play out and this order can get revived. We have no -- there is no cancellation or termination of this order. But the FC between Bank and government of Maldives has not taken place. So now the chances have gone a little weak of getting this FC done.
But if it gets done and the order is definitely, we already have a corner in place. But for the FIs not moving. So if it happens between Bank and government of Maldives, definitely, we'll have the order. Otherwise, it will get terminated. As of now, it's still live.
Okay. Sir, and lastly, on the order, we saw a strong execution in the second quarter. So we expect the run rate to be maintained in coming quarters.
Yes. This last quarter, they did not run on so this quarter, there will be a monsoon. So no progress will be there, but the run rate may little vary. .
Okay. And you already read the 10% mobilization advance, right?
Yes, yes, we have received it. Yes, we've have received on time. There's no issue.
The next question is from the line of Akhilesh B., an Individual Investor.
Congratulations on strong set of numbers. I had a few questions, sir. First question was what is the kind of margins that we will get on the T&D part of our order book.
10% to 11% is the EBITDA margins which we expect in the T&D order book.
Okay. And how is the competitive intensity in this segment? Or is it better than the intensity within the road business or...
No, we do have competitive intensity. There are 8 to 10 players in every bid. But there is a competition in this segment?
Okay. And sir, second question is, as you also alluded that the performance of the DoT assets has been improving. And so we've will expect a better valuation this time around when we close it to ballpark, what kind of valuations are you expecting for the BOT assets, given the HAM asset.
No, it's very difficult to specify a number to this because negotiations are underway.
Okay. And any thoughts on entering the water EPC space also that seems to be a segment which has higher margins in our traditional segments. As in you have some thoughts to that?
We have not explored this yet.
[Operator Instructions] The next question is from the line of Faiza Zuber Hawa from HG Hawa & Company.
I mean in the road segment, why do you feel your overall order inflow or the tendering has been so slow. Is the NHAI some kind of a problem in land acquisition or in funds -- or is there something more to it than And what is the kind of the HAM projects, you feel that we are wean back at least INR 4,000 crores to INR 5,000 crores more orders, just our balance sheet allow that kind of a levy?
So as far as NHAI is concerned, of course, land acquisition has been challenging throughout and it's -- the challenge remains as it is. In addition to that, the approvals have now moved from earlier, INR 1,000 crores and below were approved at NHAI level now they have moved to standing financial committee. So this does get delayed looking at the priority of project and status of land acquisition.
As far as bagging orders concerned, yes, we are expecting good amount of orders to be released by NHAI, which have been continuously extended, but now they'll see the bidding process definitely, we'll have our share of take in this.
And sir, regarding the opportunity in the water segment, do we have any plans to really enter it or kind of...
We are already doing 1 project or Bombay Municipal Corporation. So on completion, we'll have our own qualification and then we can move ahead in this segment as we are moving in other EPC segments.
And sir, since the new generation of the families also taking over the company, is there any plan to really improve our ROE, ROCE metrics so that finally, we get the market cap that a company which has been in business for almost more than I would say, 3 decades, deserves and kind of mission-critical work also that we have done, but the market doesn't recognize that because we talk of our low return on equity metrics. So is there any work that the major nation is integrating into the company to get that sorted out?
Yes, new generation is there now in business last 1.5 decades almost. And we are taking care of the entire international business as well as part of the India business. As gas was 1 of the new generation initiative, which they very successfully completed, and we are getting a successful exit also. So there are new areas which are being explored and definitely will come to you when...
How will we really improve our ROCE and ROE metrics?
So on the return expectations and the business of EPC will continue the way it is. Of course, looking at newer sectors, we'll definitely bring in better margins and which should improve the return on capital. Also in view of the monetization of athletes and opportunity available for return of capital to the investors.
Again, ROC could get a bump up because EPC business would continue the way it is continuing and we'll grow over a period of time.
[Operator Instructions] the next question is from the line of Bharani Vijaykumar from Spark Capital.
Yes. So in your opening remarks, you mentioned that the most awarding for the full year FY '21 will be around 9,000 to 9,500 kilometers down from earlier year number of 12,375. So essentially, we are expecting a different total awarding by NHAI compared to last year. And that would be related to the delays and extensions we are seeing. Is that a fair assumption? .
Could you just repeat your question.
Yes. So in your initial remarks, you mentioned down from last year is fully a number of about 12,000. So essentially, there will be a different awarding activity compared to last year.
This is what we feel from the existing numbers -- and the delay which is happening in the order. This is our estimate.
That's what. So your estimate. Okay. Okay. Okay. So will that mean that maybe the spillover would have a positive impact on FY '25 number?
It should have because government is focused on building good infrastructure, they have capital allocation. But awarding is a bit slow, which should improve in the next year.
Okay. So specifically...
There to put up a good amount of infrastructure.
Okay. Specifically from , how much you expect of this 9,000 to 9,500 NHAI component...
It is a combination NHAI and MoRTH together.
So NHAI alone, would you have an estimate?
No specific estimate or they have around 6,000 kilometers of pipeline already declared, which is in the award stage.
The next question is from the line of Ashish Shah from JM Financial.
Sir, I have a question on the operating cash flows and working capital. So while we have been growing over the last couple of years, it rapidly -- but we've also seen the working capital and otherwise at that level also go up. So we think at some point of time, this working capital starts unwinding because then at some point of time, this can put a break on the growth, right?
Because if the debt keeps on increases with every growth, then at some point, they'll have to be great on the road. So you think there can be a sizable unwinding on the working capital and improvement in the operating cash flow?
Yes. So there will be unwinding which will be happening over a period of time coming to quarter 2, 3 quarters. Also, in the new businesses, which we have started where payments are back ended, that uniting also will happen. So we should typically come down at -- from these levels to a lower level of working capital requirement for a particular tenor.
And sir, currently, I mean, if you look at your mix of working capital today, which pockets have the maximum working capital and where you are relatively better up? So these segments are relatively higher and we are going to be lower? .
So definitely, the exposure on the road is higher from a working capital requirement because exhibition is higher. And the next comes at power and railway.
And that would be true in terms of like number of days as well? Is the number of days of working capital more for your road segment versus the power T&D?
So I think the road cycle would be slightly lower than the power.
Okay. In terms of days of working capital?
Yes.
Okay. Sir, also, you mentioned the equity investments we need to make in hand. Are the 5 BOT assets on their own completely? Or they also need some additional support in the form of loans.
Nothing very significant was a project which we used to require funding. But today, it's all the refinance and that is taken care of.
Yes. So sir, I think there are no more questions in the queue, so we can end the call. So on behalf of JM Financial, I'd like to thank everyone for participating in this call. Also, thank you to the management for allowing us to host the call. And sir, over to you for any closing remarks.
We thank all the investors who have been joined on this call. We are open for question answers and one-to-one interactions for any queries you have on the financials and the company's operations. through us or through our investor advisers, HGA Adviser. Thank you.
And we wish you all the very happy and prosperous Diwali.
On behalf of JM Financial, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.