Antony Waste Handling Cell Ltd

NSE:AWHCL

Ladies and gentlemen, good day and welcome to the Q3 FY '25 Antony Waste Handling Cell Limited Conference Call.

We would like to mention that 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]

I now hand the conference over to Mr. Jose Jacob, Chairman and Managing Director from the Antony Waste Handling Cell Limited. Thank you. And over to you, sir.

Good afternoon, and thank you for joining us for our Q3 FY '25 earnings conference call.

With me I have Mr. Mahendra Ananthula, our Group President, Operation Business Development and Diversification; Mr. Subramanian, our Group CFO; and SGA, our Investor Relations Advisors. Our investor presentation of Q3 FY '25 is now available on the stock exchange and on our company website.

I'm pleased to share that for the Q3 FY '25, we achieved a record-high quarterly operating revenue of INR 221 crores, witnessing a strong growth of 15% compared to the same period last year. Our total operating revenue, which includes income from the sale of recyclables and RDF, refuse derived fuel but excludes contract revenue, stood at INR 243 crores, reflecting a good growth of 12% on year-over-year basis. This excellent result was attributed to higher volumes, better compost/RDF revenues, increased tipping fee and greater green energy generation from our WTE plant.

During the quarter, our collection and transportation business achieved an impressive 18% year-on-year revenue growth, reaching INR 163 crores. Our processing business also saw a decent growth of 9%, recording INR 58 crores in revenue driven by power sales from our PCMC waste-to-energy plant, initial contribution from our CIDCO Bio-Mining project and as well from commercial start of C&D operations.

EBITDA for the quarter stood at INR 59 crores, reflecting an 18% growth with an EBITDA margin of 24%, expanding by 120 basis points compared to the same quarter last year. This strong financial performance underscores our operational efficiency, strategic growth initiative and optimized waste processing and energy recovery, demonstrating effective asset utilization and a firm commitment to sustainable waste management practices.

We are delighted to share that our construction and demolition waste management site has started yielding impressive results, underscoring its significant market potential and growth opportunities. This achievement reaffirms our commitment to sustainable waste management solutions and positions us well to capitalize on emerging opportunities like this. In addition, our wholly owned subsidiary, AG Infra Project Private Limited, which has been recently awarded a contract worth INR 976 crores by the Navi Mumbai Municipal Corporation for collection and transportation services. Revenue from this contract will start in a phased manner, with full ramp up being expected towards end of Q1 FY '26. This further strengthens our financial positions and builds up our portfolio in municipal solid waste management.

Looking ahead, we remain focused on scaling our investment in sustainable waste management and operational excellence. Our recent initiative not only contributes to revenue growth, but also aligns with our broader vision of environmental responsibility. By leveraging innovation, efficiency and strategic expansion, we are committed to delivering strong, sustainable and long-term results while cleaning a cleaner, greener future for the communities we serve.

Thanking you, and I now turn to the operational aspect. Let me get Mahendra in. Mahendra, over to you. Thank you.

Thank you, Jose.

I would like to provide an update on the operational performance of Antony Waste Handling Cell Limited. During the quarter, the PCMC waste-to-energy plant maintained its strong operational performance. Having successfully completed its inaugural year with a plant load factor of approximately 71%, the facility further improved its efficiency, achieving an impressive PLF of about 77% in quarter 3 of FY '25. The achievement not only reflects operational excellence, but also sets a benchmark in line with global industry standards.

During the quarter, our collection and transportation operations efficiently managed approximately 0.49 million tonnes of waste and processed around 0.69 million tonnes of municipal solid waste. The total tonnage for quarter 3 FY '25 stood at approximately 1.18 million tonnes, representing a 3.2% year-over-year increase when adjusted for completed projects. Over the first 9 months of FY '25, we managed total MSW volume of approximately 3.56 million tonnes, reflecting a 5.7% year-over-year growth after similar adjustments. This strong performance underscores the resilience of our operations and reinforces our confidence in meeting our internal volume growth projections.

I would also like to highlight the special initiative that we undertook in partnership with the Navi Mumbai Corporation during the Coldplay event, which was organized in Navi Mumbai. We had deployed 150-plus Swachhta Warriors and 30-plus vehicles collecting over 14,000 kg of waste in 3 days, out of which 8,000 kg of plastic, which was recycled and remaining 6,000 of wet waste, which was composted, ensuring a zero waste event. This achievement reflects the trust our clients places on us.

During the quarter, our PCMC waste-energy plant generated over 23-plus million green units in quarter 3 of FY '25, reinforcing our commitment to reduce fossil fuel dependence and minimize carbon emissions. Additionally, our operations contributed to the avoidance of 3,334 tonnes of CO2 equivalent, further supporting our sustainability goals and environmental responsibility.

During the quarter, the company sold approximately 38,500 tonnes of Refuse Derived Fuel, that is RDF, and 6,400 tonnes of compost, bringing the total for the first 9 months of FY '25 to around 103,000 tonnes of RDF and 16,600 tonnes of compost. Overall operational metrics, including both RDF and compost grew by 7% year-over-year, highlighting strong market demand for recyclable materials.

Our circular economy initiatives continue to deliver strong results, reinforcing our commitment to sustainability. By converting municipal solid waste into RDF, we not only support environmental conservation, but also help cement companies meet their alternative fuel requirement targets, driving industry-wide adoption of sustainable practices. Additionally, of over 20,000 tonnes of construction and demolition waste processed at Dahisar plant in Mumbai, an impressive 96% of this has been successfully recycled into valuable resources.

On the ESG front, our Scope 1 and Scope 2 emissions for the first 9 months of FY '25 totaled approximately 19,545 tonnes and 2,213 tonnes of carbon dioxide equivalents, respectively, with avoided emissions amounting to around 10,172 tonnes. Additionally, our ground staff strength currently stands at 10,157, reflecting our continued investment in skilled workforce to support our operations and sustainability initiatives. As we navigate the evolving landscape of municipal solid waste management, we remain committed to driving sustainable growth and enhancing operational efficiency. Our strong track record, innovative approach and unwavering commitment to excellence will continue to be the pillars of our success, enabling us to achieve our strategic objectives and contribute to a cleaner, more sustainable future.

Thank you. And I now hand over the call to N. G. for financial highlights.

Thank you, Mahendra. Good afternoon, everyone.

For the third quarter ending FY '25, our operating revenue grew by 15%, reaching INR 221 crores compared to the same period last year. Our total operating revenue, which includes income from sale of recyclables and RDF, excluding contract revenue, stood at INR 243 crores, a [12% ] Y-o-Y increase. In third quarter, the revenue composition stood at 62% of MSW C&D, 24% of processing and 14% of contracts and other sources. For the current quarter ending December '24, this contribution changed to 65% from C&D, 23% from processing and 11% from contracts and others.

Our diversified revenue streams continue to provide flexibility and position us for sustained long-term growth. The group achieved a consolidated EBITDA of INR 59 crores for the quarter ending December '24, marking a growth of 18% with an EBITDA margin of 24%, which has expanded by 120 bps compared to Q3 FY '24. This quarter has been the highest for the group in terms of reported total revenue and reported EBITDA.

The PAT for the quarter stood at INR 18 crores, which is a growth of 16% compared to Q3 FY '24. As of December '24, the group's gross debt stood at INR 431 crores and cash and cash equivalent was around INR 65 crores, reflecting in a net debt of approximately INR 366 crores. This indicates a net debt-to-equity ratio of 0.5x. The group's weighted cost of debt is approximately 9.6%, and our DSOs have remained stable during the quarter at 105. The standalone company's performance during the quarter has been weak, and this is primarily because Anthony Waste had initially submitted bids for various projects and executed them through multiple SPVs as mandated by tender conditions.

Over time, due to the operational excellence of these SPVs and involving technical qualification criteria, projects began to be awarded directly to material subsidiaries. As new contracts are now received directly by our 100% owned subsidiaries and other material subsidiaries, it is more appropriate to assess the company's performance on a consolidated basis. Additionally, we are actively working to optimize our operations and streamline our group structure to enhance overall efficiency and sustainability.

Moving forward, we remain committed to our consistent efforts, the efficient operations of our PCMC WTE plant, the successful commercial launch of our C&D waste management project and the commencement of revenue from our new C&D contract positions us for strong revenue growth over the next couple of quarter. We expect steady and sustainable progress in the upcoming quarters and throughout financial year '25 and '26, which reinforces our confidence in achieving our long-term strategic goals.

This concludes our remarks. We would now like to open the floor for Q&A.

[Operator Instructions]

Our first question comes from the line of [ Prashant Kothari ] from [ Stock Market Red ].

I have a few questions. First, in Q2, the EBITDA margin stood at around 21.4%. And in Q3, we see an improvement to around 23.5%. What are the key cost efficiencies or the revenue mix changes that are driving this?

Yes, Prashant. So the revenue mix has a direct implication on the positive flip, which we have achieved in the EBITDA margins for the third quarter. If you see over the last 3 quarters, we have seen the contribution from project revenue coming down, which is basically reflecting the construction phase of the company getting over. So once the construction phase has got over, what we are seeing today is the core operating revenue getting reflected in our reported numbers. That is why you're seeing a significant shift in the margin profile from lows of 20% to around 23.5% that we have just reported.

Okay. And second question, in Q2, the guidance for INR 78 crores CapEx in FY '25 was given and plan to be debt-free was also given in 5 years if there are no new large projects, right? So given the cash flows generated in Q3 and the upcoming project investments, do you still expect to stay on this trajectory?

Yes. As of today, I mean, we don't see any change to revisit our assumptions over here. So, we will still be looking at the same similar CapEx and the growth rate over the next couple of years.

Okay. And last question. What scale of revenue collection do you foresee from the EPR segment in the next 2 years to 3 years?

I mean, we have right now applied for EPR in a wallet for plastic. And it's already -- our application is already filed with CPCB, Central Pollution Control Board. But we will update you maybe next quarter when there is more clarity in terms of how much -- how many credits we have got.

Okay. Okay. So by next year, should we expect these approvals to be received?

We will at least have clarity in terms of how many credits we have got and then we will go in the market because these are still early days for the EPR from the plastics. So, let's explore. We're also expecting the policy and the business to evolve over a period of time.

Okay. One last additional question, please. Your PCMC WTE plant has achieved 76% PLF in Q3 almost, which is above industry average. Congratulations on that. With discussions ongoing for a much larger WTE plant at the Kanjurmarg, what are the expected capacity and timelines for that?

So BMC in their recent budget free speech, the commissioner has announced the waste-to-energy plant in Kanjur. I think in the last call, we also mentioned that we submitted the proposal to BMC. We are looking at a capacity of almost 3,000 tonnes per day. Almost 4 to 5x that of the PCMC plant.

So it will take 2 years to 3 years at least for the....

For the construction? Yes.

[Operator Instructions] Yes. The next question comes from the line of Neerav Dalal from MIB Securities India.

I had 2 questions. One is that if we see the operating revenue, that is C&T and processing, it's up 15%. However, we see that the volume of waste is 3%. So is it correct to assume that the volume is becoming -- the volume number, its importance in the results is reducing? Or could you let us know about the bridge between 3% to 15%?

So the collection and transportation volumes have inched up by less than 4% because these are stabilized projects in areas that we work in. So, we are seeing around -- normally an urban center generates anywhere between growth of 3% to 6% volumes growth. So, we reported around 3.1%. So, that's the kind of growth that we are seeing in the areas that we provide services. The spike in revenue comes primarily due to escalations getting passed on to us through the increase in fuel and minimum wage bills and other miscellaneous items.

Okay. So would it be correct to say that of the 18% MSW C&T revenues, 3%, 4% is volume and the other is escalations?

Yes. So 4% would be volume driven. The balance would be escalation-driven adjustments.

And this escalation would obviously be volatile quarter over -- across different quarters?

So normally, we have seen bulk of our contracts have annual escalations. So once the revenue ratchets go up, we don't see a significant shift happening till the time it comes for a recalibration at the end of the next assessment.

So would it be right to say that the third quarter was the quarter where the escalations came into effect? Or how should one look at it?

So the third quarter was the quarter where bulk of our contracts got escalations kicked in from various mutual corporations, which was not passed in the past. So, we are seeing a lumpy impact coming into that. So, we are seeing a significant benefit from coming in the third quarter.

Okay. Got that. So say, next year, third quarter, we could also see escalations, but depends on what the percentage would be?

Yes. So if you were to look on a year-on-year basis, a volume growth of 3% to 4%, plus an escalation of fuel and wage bill as and when the changes gets changed and calibrated as a tipping fee. So maybe the Y-o-Y increase will not be very hard, but it will be definitely different. Also, 1 year down the line, we are talking about new revenues from construction demolition and your CNG project from Navi Mumbai kicking in, which are at a higher rate. So the base effect itself changes.

Correct. Correct. So next year, we will have, say -- earlier we used to assume like 4% to 5% as escalation, it will be some escalation plus the demolition and plus the new contracts setting in. So, you will also have some volume growth there from the new contract coming in from that.

The second question is, we've seen the debt -- so on one side, we are seeing the net debt increase. On the other side, we have seen our average cost of debt coming down. So, 2 questions here. One is that have we renegotiated the PCMC debt lower? And what is the target in terms of -- could you repeat in terms of the target for the net debt to equity?

So, we have not renegotiated the PCMC loan yet. We are planning to do that maybe 2 years down the line when the PFC loan statement allows us to do that. So the refinancing benefit is coming from our other core businesses, which has seen significant operational efficiency kicking in. And also my credit rating has improved in a few of my material subsidiaries, which helps us in renegotiating the rates. And to comment on our net debt position, I mean, if you were to assume that the company is not going to bag any new contracts and the existing contracts are going to be executed, then this company would be debt-free in 4.5 years period of time.

Got it. But would it be right to assume that ex of the PCMC debt, so what would be the ex of PCMC debt, what would be our -- what would be our debt?

Our costs -- so PCMC currently has a debt of around INR 130 crores. So if I look at the total net debt of INR 318 crores, if you remove INR 130 crores, I mean, that's the total vehicle financing and my term loans with my other processing entity over here.

Got that. And sorry, the PCMC debt is about 12.5%, 13% or...

10.5%.

Sorry, 10.5%.

The next question comes from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking.

Congratulations on a good set of numbers. Sir, my first question is regarding the incremental revenue that we'll be seeing from the new projects. And if you can name the projects and the incremental revenue for next year, that will be great, which have not yet started or have recently started.

So the most recent project, which has recently started is the construction and demi plants, which we got the COD in November. So next year will be the full year. So, that will have a significant revenue coming from that. The second is the commencement of the Navi Mumbai tender, which formally will get over the -- ongoing tender will get over last week of March. And from 1st April, we will start the new tender, where there is about 20% increase in revenue in the top line.

Possible to share the absolute number, C&D plant and Navi Mumbai?

Navi Mumbai, I presume we are looking at some INR 900-plus crores of revenue over the 9-year period. So, that should add up, say, around INR 100 crores of revenue. And the C&D plant will give us a very conservative number of INR 30 crores per add-on. I mean, this doesn't include revenue from sale of byproducts like manufactured sand and aggregates.

I will put it at INR 25 crores, I mean, because -- let it stabilize. So, I think INR 25 crores is a reasonable estimate from the C&d plant.

And this INR 100 crores, this is with 20% escalation. So, we can assume that INR 80 crores, INR 85 crores is already there in the current revenues?

So yes, the existing NMMC is an ongoing mandate. So you're right, so 20% over, you can say everything, gives you INR 100 kind of thing, yes.

Got it. So everything put together, we can assume another INR 40 crores, INR 45 crores of incremental revenue we will be seeing next year?

About INR 40 crores. Yes.

From C&T and from construction and demolition, yes. We also have a CIDCO bio-mining project, which will be executed next year. So, that will also add to the top line. That would be around -- so let's say about INR 45-odd crores, yes.

Okay. That would be full year? So CIDCO bio-mining will be operational from?

So it's already operational. We started 3 months ago. So next year will be the full year of operations.

Got it. And with respect to the gross debt and net debt, if you can provide figures as of 31st December?

So the gross debt for us was around INR 431 crores and net debt is INR 366 crores.

INR 366 crores. Okay. And just if you can throw some light on the outstanding receivables, except the 5% amount that we have to block every year, which has been outstanding for more than a year or maybe some timeline, if you can provide?

So the total current outstanding for us is around INR 225-odd crores. And this includes the long-term receivables of around INR 52 crores.

INR 52 crores? I mean, this is more than 365 days?

Yes. That has the retention cost of the tender conditions.

No, I'm not talking about the retention amount. If we separate the retention amount, what would be the amount of plain outstanding debtors more than 365 days?

So that would be around INR 38 crores.

INR 7 crores, INR 8 crores.

INR 38 crores, 3-8.

[Operator Instructions] The next question comes from the line of Omkar Bhambid from Finto Asset Management Private Limited.

I have 2 questions to ask. First is BMC is planning to levy INR 100 and INR 1,000 from every household per month as fee for handling solid waste generated in each home. From this move, how Antony is going to benefit?

And my second question is will the shift of Mumbai T1 Terminal to Navi Mumbai will impact company's tonnage or there will be a neutral impact on company's tonnage due to -- we have existing presence in Navi Mumbai?

The first one, BMC's decision to levy user charges is a positive step because that will improve BMC's cash flows on account of solid waste management. So, their future waste management projects will probably have sustainable cash flows purely coming from this activity. Secondly, regarding the change of airport, I mean, that is -- that will hardly have any impact because most of the dry waste, which is generated from the terminal, I don't think it comes to us. It probably gets recycled somewhere else. So it will have -- it will hardly have any impact.

Next question comes from the line of [ Payal Shah ] from Billion Securities.

I just have one question. As mentioned before, we want to reduce the dependency from corporations. So are we looking at other businesses or any update on that?

Sorry, I couldn't get you. Can you just come again, please?

Can you hear me now?

Yes, better. Yes.

So, I just have one question. Like we have mentioned before that we want to reduce the dependency from corporations. So are we looking at other businesses or any update on that?

Yes. I mean, for those recycling projects, I mean, we were looking at land purchase from MIDC, which -- there is some change of guard at the MIDC level. So because of which the decision is taking more time. So, we are also eagerly waiting for a decision from MIDC on the state of our application. So once we get that, I think then we should be able to start our non-municipal business.

[Operator Instructions] The next question comes from the line of [ Ketan R. Chedda ], an Retail Investor.

I'd like to ask, one, with respect to the VGF funding for the PCMC project, have we received the entire VGF amount or something is still pending? And if it is pending, by when are we expected to receive?

Of the INR 50 crores of VGF funding, we have received INR 45 crores and the same has been applied towards debt repayment. The balance INR 5 crores is expected by September 2025.

Okay. And we will use that amount again to repay the debt on the project?

Yes. We have repaid that debt on the term loan on the project.

Okay. And the other question is with respect to the PET bottles project, we have submitted a proposal to an FMCG company. Could you share an update on that one? When can we expect to start that project?

No. I mean, I think in the last call also, we had mentioned that thing there is JCOMP. The FMCG company had different ideas. So, we are not pursuing that now.

Okay. Okay. And with respect to the tire recycling, I believe you mentioned that we still have -- we don't have the land and discussions are going with MIDC. So assuming the land thing gets settled, so from that point onwards, how long would you take to start commercializing the project?

I think the tire thing can be started in about 6 months to 9 months, say, 2 to 3 quarters.

Okay. And so I assume that you would have identified all the equipment.

Yes. Those are identified, I mean. Yes.

Okay. So, those 3 quarters are basically for placing the orders and getting the equipment commissioned?

That's right, yes.

Next follow-up question comes from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking.

Just wanted to again ask on the plastic waste management. Are we looking more on the C&T side or we are looking on the recycling side?

You talking about the plastic thing?

Yes, plastic.

No, plastic is on the processing side, processing, recycling.

Okay. So are we planning to set up a plant or something? Or what exactly are we trying to do over there?

I was talking in the context of the EPR. The EPR revenue that we get will be from the plastic processing that we do in our waste-to-energy plant.

Okay. Any quantum of revenue or CapEx or any timeline, if you would like to provide?

So as I mentioned a while ago that we have already filed the application based on all the volumes and so on. Our application is pending with CPCB, which opens a wallet and which will decide the credit that we will get. So the policy is still evolving. So, we will get to know as time progresses maybe in the next 1 or 2 quarters to understand the real impact of the revenue that we get from this stream.

Got it. And in terms of non-municipal revenue, I'm just rechecking. One is tire recycling that we are actively looking at. Another is vehicle scrapping. Third is plastic waste management, right? Is it the fair assumption? Or are we looking at something else also?

So plastic in a small way, we have given the plastic to a company, which was converting that into oil. So, we are still evaluating the technical feasibility and the sustainability of the technology. Once that feasibility is figured out, then we will take a call on that. But as of now, we are talking only about the vehicle and the tire. But the third dimension that we are trying to evaluate and we have got fairly good response is the revenue from the sand, M-Sand that we get at our construction and debris processing plant. So that's M-Sand. There is a lot of good response. We are getting a lot of good traction, and we have already sold close to 3,500 tonnes in the last -- in the first 1 month of operations itself.

So what is it called? M-Sand.

Yes, manufactured sand. You can say the recycled sand.

Okay. Okay. Recycled sand. Okay. Okay. That's done out of construction debris?

That's right. Yes.

Okay. And would you like to give the revenue EBITDA guidance for next 1 or 2 years?

Still too early. I mean, we would like to club it with the P&G financials. But very broadly, I would say that because tipping fee will continue to be the main revenue stream for the C&D plant. This would essentially be between 3% to 5% of the total revenue coming of the C&D project.

Actually, I was asking with respect to the entire overall group revenue and EBITDA guidance?

So, we would be looking at a growth of around 15% to 18%, at least for the next year based on the existing contracts. Of course, things will be changing as and when we execute the new contracts. EBITDA margin should be in line with what we have already achieved in the first 9 months, if not better. And we are seeing a decent upward traction in the revenue realization from sale of recycled products and also as the volumes efficiency kicks in as larger volumes get processed out.

Sir, earlier, we had guided for 25% sort of CAGR in terms of revenue, 20% to 25%, that was...

25% CAGR revenue growth over the next 3 years to 5 years holds on, but you have asked for the next year's revenue number.

Okay. This 15% to 18% is just for the next year, right?

So, we still hold on to the 25% CAGR growth over the next 3 years to 5 years based on the pipeline of projects that we want to bid for.

[Operator Instructions] The next question comes from the line of [ Dhruv Raut ] from DSM Securities.

So my question is, can you share any numbers on C&D business as it has started? And how much will it contribute to this year? And possibly, if you can share for FY '26 also?

So this project, we started commercial operations middle of November. And we will be processing close to 400 tonnes to 500 tonnes per day in the next, I would say, 3 months to 4 months. After that, we expect the tonnage or the waste processed to increase to about 600 tonnes per day. So, that's a gradual ramp-up that we want to do to make sure that the processing is better. And as and when the recycled products are produced, we also find -- we also create a good market for that. In terms of top line, as we mentioned, I mean, we can expect about INR 25 crores of top line from this project.

Based on the tipping fees.

Yes. Plus a little more for -- from the sale of sand and aggregates.

And so my follow-up question is, are we looking for any WTE plant? And would it be -- what would be the CapEx for the same? What would be the CapEx for the same?

Sorry, you said -- can you come again, please?

So are we looking for any WTE plant? And what would be the CapEx for the same?

So as I mentioned a while ago, BMC, we have submitted a proposal to BMC to set up a large waste-to-energy plant at Kanjurmarg, which is where we currently are processing about 6,000 tonnes of waste. So that proposal we are in discussion with BMC, and that should be our next project as and when deal is finalized with BMC. The good thing is that BMC in their recent budget announced setting up of waste-to-energy project at Kanjur. So, that shows that BMC has all the intent to go ahead with this project.

The next follow-up question comes from Ketan R. Chedda, a Retail Investor.

Any updates you can share with respect to new opportunities either in C&T or in waste processing areas? Any upcoming opportunities, any tenders in different cities or municipal corporations across India?

When it comes to processing, we are looking at a couple of -- I mean, first of all, I mean, our focus is essentially in closing this transaction with BMC for the waste-to-energy at Kanjur. That remains our foremost focus area. In addition to that, we are looking at a couple of more waste-to-energy plants, where we -- we just want to be choosy because we want to make sure that whichever project we take, I mean, that's going to be commercially sustainable. And in addition to that, we are also looking at -- in fact, we have bid for certain construction and debris projects. We will update as and when there is progress on that. Same goes for some of the collection and transportation projects.

[Operator Instructions]

Our next question comes from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking.

Sir, I just wanted to ask, you mentioned that the waste-to-energy project at Kanjurmarg could be 4x to 5x that of PCMC. So, can we assume that the overall CapEx would go in the range of INR 800 crores to INR 1,000 crores?

Yes, there about maybe slightly more because it's going to also have a very large bio CNG project in addition to the existing composting and RDF production that we do. So it's going to be an integrated project in that respect.

Sir, won't it be a heavy burden of debt? If we look at the net debt at current levels, it's not that elevated. But with the waste-to-energy at Kanjurmarg, what would be the net debt to equity or some other metrics if you can provide?

So Bhavya, debt would be one part of the transaction. Also, we have -- the proposal that we have given off also extend the life of the projects beyond the 2036, which is being governed by the existing tender condition. So, we are extending the project life. We are also trying to have a risk mitigation tool by reducing the transportation cost linked to the RD of supply, which kind of speaks of the shine from the EBITDA margins, which we are currently facing at the processing entity. So by coming up with this proposal, we are ensuring that there is a 100% circularity and sustainability solution being provided for the city of Mumbai and then the entire waste gets processed, handled and disposed of in a most efficient manner. So yes, the total debt will definitely increase. But currently, my net debt to equity is 0.5x. So even after a drawdown of, say, INR 800 crores of debt, I will still be well within a serviceable limits based on any infrastructure definition.

Got it. And also that -- can we assume that that gives us some affirmation on the renewal of the C&T at Mumbai -- C&T project at Mumbai, which is due somewhere in....

Those are mutually exclusive contracts. So the collection and transportation contracts are completely delinked with the processing contracts. Those contracts will be coming up for renewal in 2027, 2028. So the collection and transportation contracts and waste processing contracts are mutually exclusive. They have their own life cycles.

Got it. Got it. And you mentioned in the press release regarding the end-of-life plastic for road construction. You've done some collaborative project with IIT Bombay. If you can throw some light on that as well?

Yes. So that's a project where we collaborated with IIT Bombay because we wanted to use some of the plastic that we get our site. So it's about 150 meters of stretch, which has been -- sorry, it's about 300 meters of stretch, which has been made, looks strong. I mean -- so the idea basically is that how this plastic can be used effectively to reduce bitumen -- usage of bitumen.

Got it. And just one last thing on the waste-to-energy at Kanjurmarg, if you can throw ROIC, ROCE or x IRR, cash, x IRR or any of that metric?

I think still early days for this thing, but the IRRs and viability under those metrics should be same as what we are seeing in the various processing projects like the PCMC waste-to-energy.

[Operator Instructions]

As there are no further questions from the participants, I now hand the conference over to Mr. Jose Jacob for closing comments.

I want to take a moment to thank our dedicated team for their incredible contribution to our success. Your tireless efforts have been essential in achieving our goals, and we are building on that momentum. Our focus remains on delivering consistent results and creating long-term value for our shareholders. We are committed to investing in innovation and leveraging our expertise to strengthen our market position and drive sustainable growth. I'm particularly excited about our path towards a cleaner and a greener future.

Thank you for all of you, and I wish you a pleasant evening. Bye.

Thank you. On behalf of Antony Waste Handling Cell Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.