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Ladies and gentlemen, good day, and welcome to Capacit'e Infraprojects Limited Q1 FY '23 Results Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rohit Katyal, Director and CFO of Capacit'e Infraprojects. Thank you, and over to you, sir.
Good afternoon, everyone. On behalf of Capacit'e, I welcome everyone to the Q1 F'23 earnings conference call of the company. Joining me on this call is Mr. Alok Mehrotra, Mr. Nishith Pujary and our IR team. I hope everyone has had an opportunity to look at our results. The presentation and press release have been uploaded on the stock exchanges and our company's website.
Before I begin the review, a brief disclaimer. The presentation, which we have uploaded on the stock exchange on our website includes a discussion during this call -- including the discussions during this call may contain certain forward-looking statements concerning the company, its prospects and profitability, which are subject to several risks and uncertainties, and the actual results could differ from those in such forward-looking statements.
We are very excited to start the financial year on a positive note with robust overall performance. Our strong execution capabilities, coupled with depository of asset base, enabling efficient execution reflected in healthy revenue growth and profitability. We are witnessing strong execution momentum across our projects and are focused to create value for all our stakeholders. With a healthy order book and sustained order inflow and our expertise in executing and delivering projects on time, we are optimistic that we will witness a healthy and sustainable growth here on.
Other key updates. The company was awarded a project from MCGM for a multi-specialty hospital project in Bhandup Mumbai valuing INR 670 crores in Q1 FY '23. Similarly a residential project in Navi, Mumbai from a prestigious private sector client for INR 227.45 crores was awarded. Allotment of INR 31 lakh fully convertible warrants to promoter and chemical group at a price of INR 1.60 per warrant. Promoters have already brought in 25% of the upfront amount in the company.
Let me now turn to the performance highlights of Q1 FY '23. Revenue from operations for the period grew by 70% to INR 477 crores as compared to INR 280 crores in Q1 FY '22. EBITDA for Q1 FY '23 stood at INR 101 crores as compared to INR 42 crores for corresponding period last year. EBITDA margin for Q1 FY '23 stood at 21% as compared to 14.9% in Q1 FY '22.
PBT for Q1 FY '23 grew to INR 38 crores as compared to INR 6 crores in corresponding year -- corresponding period previous year. PBT margin for Q1 FY '23 stood at 8% as compared to 2.1% in Q1 FY '22. PAT for Q1 FY '23 grew by 5.38% to INR 29 crores as against INR 4 crores in Q1 FY '22. PAT margin for Q1 FY '23 stood at 6% as compared to 1.6% in Q1 FY '22. Cash PAT for Q1 FY '23 grew by 1.97% to INR 76 crores as compared to INR 26 crores in Q1 FY '22. Cash margin for Q1 FY '23 stood at 15.9% as compared to 9.1% in Q1 FY '22.
The company continues to focus on working capital management and quality of order book. The working capital cycle, excluding retention has improved marginally from 91 days to March '22 to 89 days in June '22. Order book on a stand-alone basis stood at INR 8,229 crores as of June 30, 2022. Public sector accounts for 68%, while the balance comes from private sector. Residential account for 28% of the order book, followed by commercial and institutional at 21%, and mixed-use construction at 52%. We remain optimistic on India's recovery at list the continued geopolitical uncertainty.
Before taking the question-and-answer session, I would like to reiterate the vision of the company. The company stands committed to improving the net working capital cycle and bring it down to 60 days, excluding retention by Q1 FY '24. The company endeavors to reduce leverage levels in medium level, medium term by release of retention money. Objective is to continue to improve shareholder value by investing in people, technology and processes. I now leave the floor open for questions, please.
[Operator Instructions] Our first question is from Mohit Kumar of DAM Capital.
And congratulations on a very, very good set of numbers. So my first question on the margin, margin is pretty high. Is there any one-off in this margin, is this something which got booked this quarter compare -- related to some project which got completed in this particular quarter, that's why the margin is higher, is that a fair understanding?
Yes, that's a fair understanding. There is an impact positively of INR 8 crores on certain accounting changes, which, therefore, has resulted in a onetime benefit of INR 8 crores. Our guidance for the full year continues to be 18% to 18.5%, as was guided earlier during the last conference call.
There's nothing else, right, upon accounting change?
Nothing. There is no change. So that has been corrected. And that positive impact on the sales has been INR 8-odd crores. Net of tax, that's about INR 6.5 crores.
Second one is the MHADA project. I think we are expecting the book of INR 5 billion, if I'm not wrong in this particular fiscal year. Of course, that would be get consolidated in the JV accounting, but I think the order book is almost in the like Q4. When do you expect the booking to happen in this fiscal?
The overall revenue will be booked at the LLP level and being 35% shareholders and as per accounting standard 116, yes, we will not be in a position to book revenue on that. However, the LLP has contracted proportion of capacities lower to the company. And it shall be booking the proposal revenue executed through such subcontract for the LLP in its books of accounts. So it will be booking its share of 35% in its books, which could be close to INR 135 crores-odd in the current financial year.
INR 135 crores. Is that our share?
Yes. That's our share.
Yes. Understood, sir. And lastly, on the other earning opportunity. Of course, we are getting more private orders now. How do you see this evolving over the next 2, 3 quarters? Are we expecting more residential orders in this fiscal and the balance sheet in public on private to change materially over the next few years?
I believe that the auto mix at the moment is approximately 70% in favor of public sector and 30% in private sector. That primarily should continue over the next 2 years. However, order booking is dynamic. A bigger inflow of order from a private sector could change that by 5% here and there. But on a sustainable and more logical basis, I believe that 17% towards public sector and 30% towards our recreated client in private sector is a good assessment to make.
Are there a large order opportunity from the government side in Mumbai especially?
That continues in all the geographies where we have operated earlier. However, we have in the current last quarter just concluded booked substantially a sizable order from MCGM and in the health care segment. And such opportunities continue to be present. More elaborate details were provided in the last conference call. So company is very optimistic of booking the orders, and that has been reflected over the last 6, 7 years of operations of the company. So yes, we are very confident of booking and surpassing the current year targets of order book as well.
The next question is from Rishikesh Oza of RoboCapital.
My first question is that quarter-on-quarter, our depreciation has gone up from INR 20 crores to INR 42 crores. So can you please provide some reason on that? And will it remain on this similar level?
You have rightly pointed out. However, the reason for that increase is that, as informed in last quarter, that Oberoi projects were changed from with material to without materials. So when the value of the raw material that is steel and concrete was removed, that resulted in accelerated provisioning of site establishment, which comes under the depreciation header. This is a onetime exercise. And therefore, from next quarter, it will be the normal INR 18 crores to INR 20 crores, what you see towards the site establishment, and INR 30 crores on an overall basis. So the excess depreciation, which has been booked this year is because of the change in the order from with material to without material in case of one big client.
Okay. Sir, my second question is, if you could provide revenue guidance for FY '23?
That's too early to say. Let's complete quarter 2. And in the next conference call, I'll definitely give you our guidance.
Okay, sir. And sir, also, if you could elaborate on the accounting change?
As I told you, the accounting change is in line with the industry standards, India's 116 on -- 115 on input method. There is hardly any difference in that because we -- now in both the cases, taken at cost plus profit. So the impact of that, as I just answered, was in totality INR 8 crores, which has been recognized and has been taken into the limited review or coverance.
Okay, sir. And my last question is if you could provide an order inflow guidance for this year, sir?
I have always maintained that the company shall book minimum order of what it executes. And this means we should be upward of INR 2,000 crores in our order inflow, fresh order inflow, of which nearly INR 800 crores have been achieved. So in 9 months, we have to go towards INR 1,400 crores or thereabouts, which is a very doable and -- task, given the track record of the company.
[Operator Instructions] The next question is from Deepak Poddar of Sapphire Capital.
Just first off, I wanted to understand on the retention money by when we are expected to get that? And what's the quantum?
So the retention money closing balance stands at INR 175 crore, out of which we have realized about INR 10 crores in the current quarter. We expect to issue bank guarantees in view of cash retention to our clients starting September end and in October. So our target is to connect close to INR 120 crores of retention money in the quarter 3 and quarter 4 of the current fiscal. This obviously will come into the cash flows of the company other than the normal data recovery, which happened.
Okay. And what about this quarter, second quarter, what are the amounts that are expected to collect?
We are expected to collect INR 20 crores, of which INR 10 crores has already been collected.
Okay. Okay. So I believe by fourth quarter, you do expect some deleveraging to happen, right, as you mentioned in the...
I just told you that this is a temporary blip in the gross and the net debt of the company. It is directly related to the accumulation of retention money, which is now due and payable against bank guarantee. And on submission of bank guarantees, this money will get released.
Understood. And what's the status on the rating upgrade that we were looking for?
The rating exercise has already started. I am hopeful that before the next time we meet for a conference quarterly call, we should have some good news for you.
That's great. And lastly, on the margin front, I mean, if you adjust this INR 8 crores, I think our adjusted margin stands at about 19%, excluding other income?
Yes.
Now does the minimum margin level at least we can expect going forward?
It would be too optimistic that we don't expect or factor in any unforeseen. So the margin guidance continues at 17.5% to 18%, anything more should be taken as a bonus.
Okay. Okay. The reason I ask is because I assume that the commodity prices is also going down.
Our order book is not speculative when it went up, when we did not make loss. So when it comes down, we don't make any profit. It's a pass-through mechanism, which means that if the price is INR 100, the client has to pay the difference. And if it will go to INR 20, the client takes away all the money. So except for increase in percentage of PAT margin due to such price increase or reduction, nothing else is an absolute loss for the company or profit.
The next question is from [ Nikhil Varma ] [indiscernible]
Congratulations on a very good set of numbers. My question is the provision what we have made of INR 84 crores, as you mentioned in the last quarter, will there be any realization on that account?
Yes. We are in discussion on settlement agreement with the Radius Group -- not Radius Group, but the newcomer realtor, which was earlier a part of Radius Group, but now we believe Broadridge is coming in. It's finalized. We expect the documents to be signed over the remainder of the current month and monies to be realized in quarter 3. This amount is close to INR 15 crores.
Similarly, we are expecting the resolution to another project where the bankers, as per the latest guidelines and GR of the Club SRA, Slum Rehabilitation Authority, have taken up a project which was earlier belonging to radio desserts in Chembur. And the new promoter and the banks supporting them are coming in. So we expect that resolution to happen also in quarter 3 and some payment towards that being realized in quarter 4. So these are the 2 big resolutions, which we expect. And therefore, you should expect some write-back on the provisions which have been made, but all our projections are given without considering any write-back.
So this INR 15 crores, as you mentioned about Midcon realtors. And what would be the quantum for this SRA project cost limbo?
INR 24 crores.
The next question is from Dhananjay Mishra from Sunidhi Securities.
Sir, could you provide a breakup in terms of which all projects contributed majorly in this quarter revenue?
I do not have project-wise detail in front of me. However, we shall advise our IR team to make it to you very promptly.
More difficult to give you the number. So just majorly we should all point it to that quantifiable data.
Quarter base, 95% of these revenues have come from the '21 operational projects of the company. With Raymond, Oberoi, CIDCO and Piramal leading the pack, setting led by BSNL data centers. And obviously, the other projects like JJ and BMC. As I told you that I don't have the exact figures project-wise. However, that can be provided to you by our IR team very promptly.
And looking at current pace of execution, I assume that coming quarters will not have much deviation in terms of revenue, like dealerships INR 470 crores. So these numbers here and there, we can have...
Remember that Q2, these days, June is not a very powerful season for monsoons. Monsoon's more so from July to September. September last year, October also was impacted. However, considering that and the average loss over the last 5 years being close to 21 days, we do believe that we will be closer to your target what you have mentioned. However, our overall year's target of INR 1,800 crores is given.
Okay. Okay. And lastly, what is your nonfund base limit and utilize limit?
The non fund-based limit is INR 940 crores, out of which further allocation is INR 190 crores for LC and balance for bank guarantee. The bank guarantee outstanding is currently at INR 400 crores. And the LC outstanding is currently at INR 175 crores.
The next question is from Ron of Meritor Stocks.
Sir, my question is, in the long term, what are the emerging trends that you see will drive the growth for Capacit'e? I understand Capacit'e's focus from government of India and plus covering oppose to coworking has been driving Capacit'e's order book. Any other trends that you foresee that will drive Capacit'e's order book for the future?
Good question. You see that there is an overall optimism around the real estate industry starting Q3 of '21. That continues. That is relevant from the financials of our clients. So that announcement of new projects and award of construction contracts will continue. We have a new player in form of Adani taking over many projects that has been added to our clientele. So I believe that it is quite -- we are quite optimistic on the opportunities which the private sector will present, whether it is residential in super high rise, commercial, retail, on these 3 aspects.
Secondly, from the public sector side, it is not only hospitals. The growth plans, as far as Housing For All, continues to be in focus. And all of our existing clients are planning for projects in current year leading into next financial year. And Capacit'e, with the qualification processes, it presents a good opportunity across all segments.
Thirdly, the Railway Land Development Authority is coming up with a renovation -- major renovations of its existing railway stations to modernize them. They go to 172 stations. The tenders have already gone live, and we believe that the Capacit'e will have a good opportunity in that as well. So apart from hospitals or what we call the health care, institutional, hospitality, retail, commercial and residential, railway station redevelopment, airport modernization or modular expansion will present an opportunity to Capacit'e in the years to come.
So since Capacit'e is present across the government of all the subsegments of building construction and has the specialization and the equipment base, we are optimistic about capitalizing on these opportunities.
Awesome. Very nice to reason of cost saving in response to that question. My second question, sir, given the have been Mumbai and Mumbai has a huge redevelopment opportunity. Is Capacit'e looking...
I can't hear you clearly.
Sir, am I audible now?
Yes, better.
Sir, given Mumbai has a huge redevelopment opportunity, is Capacit'e looking at this opportunity at the near future?
As a construction company, yes. As a developer, no. MHADA is the largest redevelopment project on cash contract basis in Asia. However, you know very well that redevelopment projects start to take some time to kick off. So while we will be present for some decent-sized projects, we may not look at every and all the opportunities that may arise out of this.
Secondly, we will be skeptical of doing private sector projects as far as redevelopment is concerned, because of the size and obviously the risks attached post the IFF debacle, which we have faced and all along that. On the government side, as I just mentioned, some opportunities will come up in MHADA. It will come up in Mumbai Municipal Corporation, [ Thane ] Municipal Corporation could be [indiscernible] and so on, and we shall look at them on a case-to-case basis.
[Operator Instructions] The next question is from Jiten Rushi.
Sir, my first question is on the updates on Selco projects. So just one thing what revenue we have booked in Q1? And what is the run rate you're expecting from the Selco and has it received any clients in market?
So the Q1 revenue booked in Selco is INR 75 crores on [indiscernible], all right. And we believe that we shall book close to INR 200 crores in the monsoon season. Thereafter, we shall be booking INR 50 crores in quarter 3 of the current fiscal. That means INR 50 crores per month. So INR 150 crores in quarter 3 and close to INR 180 crores in quarter 4. So you can add up the total, and that shall be giving you the revenue for Selco for the current fiscal.
And on the seventh land parcel, then, can you explain your [indiscernible]
seventh land parcel in writing has been received. However, being monsoons, the excavation activity cannot start at the moment. So we shall be only taking pocession once the monsoons are over.
As then we will have full exit automation [indiscernible]
Absolutely. But the current order backlog from CIDCO continues at INR 2,380 crore which is -- with the interim extension in place and second expansion going on by the client, we already have our hands full for the next 3 years, even if you consider INR 600 crores per year.
So then next year, what kind of execution we can see from CIDCO probably how once you have the second
Conservative -- on conservative basis, INR 600 crores to INR 700 crores minimum.
That is yearly run rate you are talking about right sir ?
A yearly run rate -- you can see a better figure. But since you are asking for a project-wise specific number, I'm giving me an approximate number.
So sir, in this project, also we will be using [ Mould only rate ] . So sir, in CIDCO project we are using mould for formwork for during the construction. So sir , is the CapEX still pending for the formwork because we are still to receive Seventh land parcel. So obviously, the building will start, which is a larger and order backlog of CIDCO project.. So what kind of CapEX you can see.
Yes. So as explained last time, we already have purchased total 18 set [indiscernible] at project site, 18 sets translates in fulfilling of 54 slabs or 54 floors per month, which therefore target to INR 50 crores of billing, right? Of course, in monsoons, you will have obstruction. This is apart from the 6 sets are under manufacturing. We have given a projection of INR 42 crores for the current year as far as balance it corporate procurement is concerned. And it will remain at that level, give or take INR 2 crores here and there.
So for the 6 formwork pictures the cost is 42 crore
No, including what has been received this year, plus whatever has to be received, the cost is INR 42 crores. This cost is subject to the aluminum price, which was at peak Fortunately, it has come down. But the budget approved at the moment for aluminum formwork in the current financial year for the remainder is INR 42 crores in totality.
So we have recieved how many this year so far?
Saying out of 24 sets, 18 sets are [ arrived ] 6 sets are balanced to be received.
So you said that INR 42 crores including the [indiscernible] this year. So all [indiscernible] year is it [indiscernible] And sir, on the [indiscernible ] like you were supposed to book some revenue from the [ manav ] project.
INR 0.77 crores of revenue has been booked. The project is in filing and we have come out of the business, which is now not as the structure around filing the superstructure will be constructed. So [indiscernible] sets of aluminum formwork are at site. And given the intensity of the monsoons, we should be starting the superstructure construction by this month and early next month. So as I told that our share of close to INR 135 crores is what we are looking in the remainder of the year to do.
And sir, what is the executable portion of share in the [indiscernible] order backlog right now, which we are considering [indiscernible]
The LLP has given an order of INR 1,400 crores to Capacit'e Infraprojects for the rehab portion, which is 35% of the INR 5,000 crores of rehab portion.
In next 2, 3 years, 3 years, right?
The completion period is 27 months from handover of individual building. So this includes design charges have all put together, 11 to 12 towers. At the moment, work on 2 towers at Capacit'e have started. We expect to start other 6 towers in the current year. So you can safely presume INR 1,400 crores divided by 11 towers were the value 4 towers. So if we have started 2 towers, we have started work on INR 280 crores. As soon as we started our on next 2 towers, the value will go to INR 480 crores. Since it's monitoring. We do believe that the construction speed will be quite good. And therefore, we have -- we are anticipating a revenue of INR 135 crores in the current financial year.
Probably we can see good kind of next year onwards.
Absolutely. Absolutely.
Sorry, I'm asking on the depreciation part. So probably from the coming quarters, we will not see such high lease in this is just one of [indiscernible]
As explained, you have to take a depreciation of INR 30 crores. As the revenue increases, your write-off of temporary sectors and site establishment will also increase. And therefore, it will be close to INR 30 crores in absolute terms. But if the revenue goes beyond INR 500 crores, it could increase also.
Sir, any CapEx other than the CIDCO CapEX which you are planning for this year or odd INR 40 crores to INR 42 crores, any other CapEx we're looking on?
At the moment, no order has been taken, which will require additional CapEx. However, it is directly proportional to inflow of orders. The company is looking to book orders, which do not involve further CapEx because we would like to increase our asset turn. However, there is any such order could be promptly intimated to you during the next conference call.
Sir, one last question in terms of bidding strategy. So are we looking to bid for what we have seen recently that diesels are supplied from customer and we would do [indiscernible] Are we looking for such type of this. We are looking for...
We are not ever to such type of bids because we have our margins covered, and we are not investing from working capital as far as steel and concrete is concerned. So there is no harm. So you are definitely sacrificing. So let's say, if you're doing a revenue of INR 250 crores for Oberoi in a year. So obviously, you are sacrificing 40% of that because of having 3 issue material. But similarly, the returns on revenue go up so the past margins will be higher. So if you see our revenue for the current year, in spite of having 2 major orders, 1 from Oberoi and second from CID creators, which involve steel and concrete free issue, there has been substantial increase in the revenue. So that will continue for the remainder of the current financial year. And yes, we are not averse to the client getting steel and concrete on free issue or issue basis. Whatever reduces our working capital cycle, we will definitely look into that.
Our next question is from part of Parvez Qazi from Edelweiss Securities.
A couple of questions from my side. First, sorry, I missed the revenue contribution from the MHADA project this quarter?
INR 10.77 crores.
Sure. Second is, what would be your bid pipeline currently? And what is the competitive intensity that we are facing nowadays?
See, the company is well poised and placed to pick and choose at this moment in time. And therefore, we are not bidding for government projects, which are below INR 350 crores or so. Simply because the competitive intensity increase in lower-value projects as far as public sector is concerned. And when the projects are above INR 400 crores, INR 500 crores, the competitive intensity is lesser. And you have more mature players competing with each other, therefore, the pricing comes that's fair. That's number one.
Number two, in private sector, it was never a competitive intensity. It's more of you will be closing on our technical competency and capability by the client. And subsequently, it's an open book policy. So we continue to work accordingly. As far as the big pipeline is concerned, if you talk in general, all India basis is very, very strong. But if you talk from Capacit'e's perspective, we are looking at geographies that we have already worked. And we do believe that there will be an opportunity of more than INR 45,000 crores for the remainder of the year to before, of which we will choose the projects to our lighting, which can be accredited or PAT accredited. So that is the philosophy which we have followed. As far as the total order book is concerned, we're looking at upward of INR 2,000 crores to be added up to INR 8,000. INR 800 crores has already been added.
Sure. And you did mention that we are witnessing an improvement in working capital, and this trend will continue going -- so where do we see our debt level by lets say this fiscal?
You will have a more clearer picture by the end of quarter 2, but I do believe that release of retention on gross basis should add to a -- lead to a reduction of INR 60 crores to INR 70 crores in the debt level.
[Operator Instructions]The next question is from Ankit Babel Subhkam Ventures
My question was again on the debt part, which you just answered, like also what was the gross debt at the end of Q1?
INR 356 crores. And then...
356. Okay.
That is including the promoter debt. Excluding the promoter, it continues at INR 314 crores.
INR 314 crores. And on this base of now assuming that promoted debt will be converted into equity, -- so not this INR 314 crores debt you expect, a INR 50 crores to INR 60 crores of reduction by the end of this year, right?
Absolutely, that is directly proportional I believe of retention, I've explained in my earlier answers.
Okay. And this takes care of the fact that your working capital will also reduce from current 90 days to around 70 days by the end of this year excluding retention money.
Net of retention, yes. And that's the reason for guiding for reduction in the capital, that is reduction in debt. If your working capital cycle increases, the debt cannot reduce.
Okay. And sir, lastly, what will lead to this reduction in working capital from 90 to 70 days?
The collection efficiencies. We are talking about retention that is long-term receivables coming into its system. And as I have explained, that INR 120 crores are already due and receivable awaiting submission of bank guarantees, expected to be realized at INR 20 crores in the current quarter and balance in the quarter 3 and quarter 4 of current fiscal. So this is, one, such money comes into the system. It acted 2 manners. A, it could reduce your overall debt position. B, it will reduce your total trade level, capital utilization. But most importantly, it reduces your debtor level on a consolidated basis.
Therefore, the net working capital will reduce on account of 2 things: number one, release of retention and the money coming into the system for utilization by the company or reduction of debt. And number two, and more importantly, the clients now paying on time. That will be the second big positive. If you see over the last 5 quarters, it has come down from 117 days to 89 days now.
So sir, if this receivables comes down, can there be any benefit in your ECL provisioning. Any write-backs or future ECL provisions would be lower as compared to the previous one. Any benefit from that angle?
You see that ECL provisioning is a policy which is separate from debtor collection. Right, yes, reversals will happen as and when the collection happens. And I'll explain that we are expecting collections against the provisions which we have made. We have received all our moneys from [ Kalpataru ] in quarter 1 and some part in quarter 2 of the current fiscal. So whatever provisioning was made obviously has been reversed. Against that, we are quite optimistic of 2 major collections in the current financial year. And if that happens, that will positively add to your profitability and the cash flow.
Okay. And sir, lastly, a lot of your retention money requirement and receivables you are planning to replace it with bank guarantee. So that could be a huge jump in your bank guarantee charges. So which would be forming part of your interest cost. So just for our understanding. So this quarter, your interest cost was INR 20 crores. Now considering the fact that going forward, your gross debt will reduce, and at the same time, your bank guarantee commissions will increase. So net to net, I mean, this INR 20 crores is the peak number on a quarterly basis? And did expect a reduction in December? Or you believe that this number will go up in the near term and going forward also?
So firstly, the bank guarantee commissions are at between 1.6% to 1.7% for the year, while the interest costs are our upward trend, assuming 9% per year. So there will be a differential -- there's a barrier differential of nearly 7%, which will have a positive impact on the finance charges, which are levied. Although as one point we have to remember that bank guarantees on an absolute debt. It's a nonfund-based limit where the bank charges commission and not interest, okay.
Number two, with the estate total with further utilization of INR 250 crores in the current fiscal, our bank guarantee charges for the remaining period. There is -- on an annualized basis, it may be close to INR 4.5 crores. And 4 our 6 months, it may be INR 2.25 crores. But if the money which is coming in quarter 3 and quarter 4 will nullify this increase, and more or less, your assessment that the finance charges will be between INR 21 crores and INR 22 crores is fair enough.
So overall interest cost, what you are expecting? I mean, this year, I understand that it will take time for it to come down because the money would be realized in the second half. But next year, considering the growth also in your revenue and everything. So what kind of interest cost we should build in, in our model?
As a percentage, it's already come down on absolute is INR 21 crores. So we are expecting finance charges of INR 83 crores to INR 84 crores in the current financial year. In the next financial year, with the reduction of debt, it obviously will come down.
Okay. So you'll peak this year at around INR 80 crores, INR 83 crores.
Absolutely.
Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr. Katyal for closing comments.
I would like to thank once again all of you for joining us on this call. We hope we have been able to answer your queries. Please feel free to reach out to our IR team for any clarification or feedback. Thank you and see you next time. Bye-bye.
Thank you very much, sir. Ladies and gentlemen, on behalf of Capacit'e Infraprojects Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.