Dilip Buildcon Ltd

NSE:DBL

Earnings Call Analysis

Dilip Buildcon's Q2 FY '25: Revenue Decline with Significant Profit Growth

Dilip Buildcon reported a 10% decline in standalone revenue year-over-year in Q2 FY '25, totaling INR 2,077 crores. However, consolidated profit after tax surged 263%, reaching INR 266 crores thanks to strong MDO performance. The company anticipates a revenue shrink of 10% for FY '25 but maintains EBITDA margins of 11-12%. Notably, coal production is projected to reach 25 million metric tons, exceeding initial targets by 10-15%. With an extensive order pipeline valued at INR 90,000 crores, Dilip Buildcon remains optimistic about future growth, aiming for a net debt-free status by FY '27.

Navigating Fiscal Challenges

In the recent earnings call, Dilip Buildcon Limited discussed its financial results for the second quarter of FY '25, highlighting a decrease in standalone revenue year-over-year by 10.3%, dropping to INR 2,077 crores compared to INR 2,428 crores in the previous year. On a consolidated basis, revenue fell by 13.6% to INR 2,461 crores from INR 2,849 crores. These declines are attributed to weak order inflow across the first half of FY '25, with projected full-year standalone revenue expected to decline by 10% due to weak demand and seasonality effects.

Profitability Amidst Declines

Despite lower revenues, the company has reported substantial growth in profitability. The consolidated EBITDA surged 47% to INR 500 crores from INR 340 crores YoY, primarily driven by robust performance in the MDO (Mine Developer and Operator) sector and the completion of several projects. Additionally, profit after tax (PAT) skyrocketed by 263%, reaching INR 266 crores, compared to INR 73 crores in the same quarter last year. For the first half of FY '25, PAT increased by 374%, resulting in a total of INR 406 crores, demonstrating a significant improvement in operational efficiency.

Operational Highlights: MDO Success

Dilip Buildcon's MDO business is on track, achieving 10.2 million metric tons of coal production in the first half of the fiscal year and is expected to surpass its annual target by 10-15%, potentially reaching 25 million metric tons. This production growth emphasizes the company's strategic focus on expanding its coal business, which will be a vital revenue driver moving forward, as it expects to become one of India’s top coal producers within the next five years.

Investment Initiatives and Future Revenue Streams

The company also updated stakeholders on its investment initiatives, including the formation of an InvIT (Infrastructure Investment Trust). Dilip Buildcon has concluded a significant stake transfer in its portfolio of HAM (Hybrid Annuity Model) assets, ensuring a steady revenue stream through operational and maintenance activities. Guidance suggests that this initiative is expected to increase revenues further, contributing to a long-term assured cash flow as the asset pool expands.

Market Position and Future Outlook

Management remains optimistic about future growth, retaining a target order inflow of INR 15,000 crores for FY '25. To date, the company has secured INR 3,000 crores worth of orders, leaving a significant pipeline pending. The company’s growth outlook is supported by a robust INR 2 lakh crore order pipeline being evaluated, indicating a strong potential for recovery in revenues in the coming years.

Margins and Debt Management

While the standalone EBITDA margin is expected to stabilize at 11-12%, the company's consolidated margins are anticipated to outperform last year. The management emphasized a commitment to reducing debt and achieving a net debt-free status, albeit with a slight delay to FY '27 due to changes in operational dynamics and lower than expected revenue. The sustained focus on improving return ratios and managing financial health remains a priority.

Strategic Vision for Long-Term Growth

In the long term, Dilip Buildcon aims to establish a predictable cash flow model through its dual revenue streams from the coal business and InvIT. The management forecasted that by FY '28, coal production could reach 60 million metric tons, translating to estimated revenue contributions around INR 5,000 crores annually. This vision positions Dilip Buildcon as a key player in India's infrastructure landscape, capable of leveraging ongoing government commitments to infrastructure expansion.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to Dilip Buildcon Limited Q2 H1 FY '25 Post-Earnings Conference Call hosted by Essential Technologies. [Operator Instructions] Please note that this conference corded.

I now hand the conference over to Ms. Jill Chandrani from S-ANCIAL Technologies. Thank you, and over to you, ma'am.

[Jill Chandrani, analyst]

Thank you, Neha. Good morning, everyone. Welcome to Dilip Buildcon Limited Q2 and H1 FY '25 Earnings Conference. From the management we have on the call today, Mr. Devendra Jain, Managing Director and CEO; Rohan Suryavanshi, Head of Strategy & Planning; and Sanjay Bansal, Chief Financial Officer.

Before we begin this call, let me mention the standard disclaimer. The presentation that we have uploaded on stock exchange, including the interaction in this call which contains some forward-looking statements concerning our business prospects and profitability, which are subject to some uncertainties and actual result could differ from this.

Now let me hand the management to Mr. Suryavanshi's Jain remarks. After which, we can open the floor for question-and-answer session.

Now I hand over the call to Mr. Rohan Suryavanshi for his opening remarks. Thank you, and over to you, sir.

[Rohan Suryavanshi, executive]

Thank you, Jill. On behalf of Dilip Buildcon Limited, I welcome all the participants in our Q2 and H1 FY '25 results con call. The results and presentation have been uploaded on the stock exchange, and I hope all of you had a chance to look at it. At the outset, I would like to share some industry updates, and then I'll touch upon the company.

So the infrastructure awarding activity in recent months have seen some deceleration. However, we anticipate a pickup in the near future, fueled by several initiatives like the PM [indiscernible]. Ministry Of Road Transport and Highways has outlined a remarkable goal for FY. In the new union budget 2025, the government had high aspirations for the infrastructure sector with a view to making it a power house in our economy.

Road and Highway alport was allocated INR 2.78 lakh crores. And despite a slow start this fiscal year due to election season and modern code of conduct and the various industries getting set up in place, MoRTH is committed to finalizing these contracts as confirmed by the honorable Union Minister. The Honorable Minister has stated that India will achieve the highest ever highway construction level this fiscal year. So we remain optimistic.

As of August 2024, around 700 kilometers of projects were awarded while 2,700 kilometers of national highway have been completed. Although this is lower than last year's state, we expect a significant uptrend as awarding activities regain momentum.

Another noteworthy development is the most ambitious INR 1 trillion investment in 74 new highway tunnels, spanning 273 kilometers. Notably 35-kilometer -- 35 tunnels, covering 49 kilometers have already been completed, and that sustained focus on tunneling is poised to unlock further growth opportunity for our company.

In other infrastructure news, in FY '25, Indian Railways has allocated INR 1.24 lakh trillion for facility upgrades and safety enhancements.

India projects [indiscernible] had been [ 95 ] million tonnes in annual capacity with INR 1.33 lakh crores in [indiscernible] for productivity and sustainable [ mining ].

Even from an outsider perspective, according to Morgan Stanley, investments in India's infrastructure are projected to grow at an impressive 15.3% CAGR over the next 5 years, amounting to an estimated USD 1.5 trillion in cumulative spending. This investment wave will significantly boost India's growth trajectory, reinforcing its position as an emerging global economic powerhouse.

Now coming to the sector and company. During the quarter under review, ordering activity was weak across all sectors, which was expected because of elections, but now it is expected to pick up going forward. Just like in the past years, quarter 3 and quarter 4, specifically ordering.

On the back of our strong order pipeline and our [indiscernible] across all intra segment, we're expecting a good order flow in the next few months. Currently, over INR 1 lakh crores of NHI and MoRTH orders already floated and expected to open in this financial year. In this, there is about 70% HAM and 30% EPC.

Besides these [indiscernible] off orders, [indiscernible] sectors, where we are evaluating orders of INR 90,000 crores.

I'm happy to announce that we got our first breakthrough in optical fiber laying business by securing first order of BSNL in partnership with STL of about INR 1,625 crores. In the quarter, our share is about 70%.

Also to update, as I mentioned last time, there were some challenges in the GM project money coming through. We still continue to [indiscernible] both challenges even though it is an [indiscernible] improvement trajectory, but the situation has still persisted in this current quarter as well. We're expecting more improvement in release from the next quarter this quarter and next onwards.

Now in continuation of our vision of [indiscernible] 2.0, I'm happy to report that our long-term revenue base business is growing at a fast pace. This plan and these projects predictable free cash flows, improving return ratios and 0 debt on a stand-alone basis. So when you look at DBL going forward, you will have to look at the consolidated numbers to get a better perspective.

Even in this quarter, we have achieved the highest ever quarterly PAT on a consolidated basis. Our focus is to keep increasing this.

But in the same breath, if I have to give you guidance on the standalone revenue for this year, given that the order inflow has been weak till now, we're expecting a degrowth of around 10% in FY '25. The EBITDA margin was still treated to be in the 11%, 12%, as we had indicated earlier. However, the consolidated margin will be higher than last year. Let me reiterate that. The consolidated margin will be higher than last year.

The debt reduction in guidance on a standalone basis for this year may changed slightly because of lower revenue and lower order inflows, but it will still be reduced from the past year debt.

So the key takeaway here is that rebuild is focused on being a net debt 0 company as we had indicated earlier. Even if the timing is postponed by 6 months or so, but our target still remains the same.

Now coming to our investment portfolio of HAM assets. I'm happy to inform that recently, we have concluded -- fully conclude the Shrem InvIT team the transfer of 51% equity stake in the last project. With this, our entire deal with Shrem is concluded, and we will continue to do the O&M of their assets for the live duration of both assets. This provides us with long-term assured revenue stream, and this O&M revenue stream, which keeps -- will keep on increasing as our InvIT asset pool keeps getting larger in size.

To talk about our own InvIT as well and to give you an update on that, deal with Alpha, we are progressing as per the plan. Until now, we have transferred 26% stake in 7 assets out of a total deal of 18 assets. These 7 assets have received COD and the annuity has started. One more asset will receive COLD in this in month. Post which, it will also be answered to Alpha and eventually to be InvIT. This will conclude the first tranche of Alpha REIT.

Our InvIT formation process is also progressing well. We have received JV approval for forming public InvIT.

Coming to our core business. Our core MDO business is on an accelerated execution part. I'm very happy to report that we have achieved production of 10.2 million metric tons in the first half of the year as compared to a target of 22 million metric tons for the full year. We are also confident and on track to beat this target by at least 10% to 15%, meaning we will end the going end year with a 25 million metric tonnes of coal production.

Now with this update, I would like to hand over the call to our CFO for the financial overview. Thank you.

[Sanjay Bansal, executive]

Thank you, Rohan. Good morning, everyone. I welcome all our stakeholders to our earnings call. For the quarter ended 30th September 2024, let me present the standalone and consolidated results of the Dilip Buildcon Limited for the quarter and half year ended 30 September 2024.

On standalone basis, on Y-o-Y basis, revenue decreased by 10.3% to INR 2,077 crores against INR 2,428 in quarter 2 FY '24 decreased by [indiscernible] in quarter 2 FY '25 against INR 294 crores EBITDA in quarter 2 FY '24. Profit after tax increased base about 8% in quarter 2 FY '25 [indiscernible] INR 129 crore against INR 120 crores in quarter 2 FY '24.

Now let me update on the consolidated performance of Dilip Buildcon. The revenue on Y-o-Y basis decreased by 13.6%, to INR 2,461 crores in quarter 2 FY '25 against the revenue of INR 2,849 crores in quarter 2 FY '24.

The EBITDA increased by about 47% to INR 500 crore from INR 340 crores in quarter 2 FY '24, and this is mainly due to better performance of our MDO business and completed 6 same projects at December 2024.

The profit after tax is also increased by 263% to INR 266 crores in quarter 2 FY '25 against INR 73 crores in quarter 2 FY '24. The consolidated performance for half year [indiscernible] Y-o-Y, the revenue decreased by about 3% in H1 FY '25 to INR 5,595 crores from INR 5,769 crores in H1 FY '24. The EBITDA increased by 33% to INR 977 crores in H1 FY '25 versus INR 734 crores in H1 FY '24.

The profit after tax increased by 374% in H1 FY '25 to INR 406 crores from INR 85 crores in H1 FY '24. This increase in profit after tax by 374% is mainly due to better performance of MDU business, completed 6 projects [indiscernible] and exceptional items of INR 158 crores.

Thank you all. And now we can open the floor for questions and answers.

[Operator]

[Operator Instructions] The first question is from the line of Kunal Ocuramani from Kitara Capital.

[Unknown Analyst]

I just wanted to ask, like you told you are evaluating some orders of INR 90,000 crores in other sectors. We are well diversified. How to look at your company at 5 years' perspective as to will we gauge the book? And as [indiscernible], how do you [indiscernible]?

[Rohan Suryavanshi, executive]

[indiscernible] They do pricing have to look at the company [indiscernible] 2 to 4 years time line projects. And this [indiscernible] engineering and execution capability that will bring for the last few years, we have our own equipment bank, our own people, all the credentials. And [indiscernible] experience now considering those effects. [indiscernible] that we are already doing and some more [indiscernible] stage now, continuing to do that we are already doing and some more depending on what opportunities are presented by the government in the country at that point of time. So we continue to [indiscernible] or I guess the biggest thing of intra-project is the execution [indiscernible]. Then also all those nonbusiness project very well of the deal that will continue to keep going.

Second was we mentioned and which will set us apart in the sector and in this area is that we are focusing on a long-term business revenue model as well. So there will be an increasing share in both our revenue and more than that, our bottom line from the long-term business. These businesses, the 2 pillars of those business will be 1 will be the coal business, where 4 or 5 years -- 5 years is down the line would be possibly the second largest maybe after Adani terms of the coal production that we do because we'll be doing almost 60 million metric tons of coal production by that time. Currently, in this year, we will do about 5 million. But at that time, we'll be doing about 60 million metric ton of coal production, which will give us a clear revenue of about INR 3.5 -- to INR 2,500 cores crores, INR 5,000 crores or revenue coming from that sector. So that -- and this is without accounting for new projects that we're already bidding for. I'm just talking about the current order that we already have.

So when I say the 60 million metric ton of coal production, this accounts for amount to almost 10% of the core India current production. So that is the scale of operations that CBL will be sort of doing that. And as we add more mines to it, this will keep on increasing.

The second bit of this long-term revenue pile will be our InvIT business, the one that we're setting up with asset. The 18 projects that we've already committed there already gives us about equity valuation of our 74% that we'll be holding of about somewhere in the range of INR 4,000 crores, which will give us INR 400 crores, INR 450 crores of cash flow every year. This in the next 5 years will also increase because we will add more HAM projects of our own. Also, the inventory procuring more assets from market. So our revenue from that will also keep on increasing. So if I look at a 5-year down the plan, my 2 large sort of these businesses alone will be throwing out an EBITDA of more than INR 1,500 crores easily. Like when I'm talking about coal and just our payment business.

Besides that, whatever revenue we'll do on the standalone basis will, again, let's say, even if you're doing some INR 8,000 crores, INR 10,000 crores of revenue, let's assume at the same current ratio. Again, if you imagine 10%, 12% of EBITDA, it will again [indiscernible] that additionally. So we will have not only increase that bottom line, but we will also have very predictable and assured long-term cash flow, which in this sector and this industry is difficult to find.

So our learning after COVID was, we want to build an institution where there are long-term predictable cash flow, and we can continue growing that business year after year. So that was the idea of -- and that's where we see ourselves in 5 years from now.

[Unknown Analyst]

How we see as the company is when we value or when we see our coal business and [indiscernible] business is fairly estimatable that we can estimate and we can arrive at a value or we can -- we have some visibility on the business? Can you comment something on EPC side as to how will our order book grow or some internal estimates you guys see at least 10% or some ballpark number you have in mind?

[Rohan Suryavanshi, executive]

So well in the past will obviously roll for a faster growth rate, we were also expressing a lot in our -- both our bank facilities and also investing in equipment. Going forward, as we have indicated, we are really targeting a growth of 5% to 10%. So that is the growth rate that we continue to target.

Now when it comes to a 5-year plan around what are the businesses, that question is better asked to the government because they are the ones who planned out. They have laid out a vision. If you look at the last 10 years of the government, they have kept on increasing the infrastructure budget year-on-year. Then in 2014, the total infrastructure budget was about INR 2.5 lakh crores or somewhere in that ballpark. Last year, it was about INR 10 lakh crores -- actually, INR 11 lakh crores. This financial was INR 11 lakh something crores. So this pie will keep on increasing. And as this pie keeps increasing, our business should keep on increasing as we have also gone into 2 different [indiscernible].

[Operator]

[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.

[Shravan Shah, analyst]

Sir, just a couple of questions on the broad construction part, you explained very well on the MDO and the InvIT part. So first is this [indiscernible] order. So what would be the 70% EPC value excluding GST for us?

[Rohan Suryavanshi, executive]

So the total order value is INR 1,675 crores, and we have 70%, about 75% work basically allocated to us. And this value is basically construction. And they're up around 7 years. There is an O&M also. So there will be additional revenue from O&M, which is not included in INR 16 crores, INR 25 crores.

[Shravan Shah, analyst]

Okay. So here also by 18% GST is there?

[Rohan Suryavanshi, executive]

Yes. This is exclusive to GST, sir. This number that you see, INR 1,625 crores is excluding GST.

[Unknown Executive]

Excluding GST and can be O&M [indiscernible], which is about INR 925 crores or something.

[Rohan Suryavanshi, executive]

INR 975 crores. About INR 1,000 crores of O&M will also come.

[Shravan Shah, analyst]

Okay. And sir, you have mentioned that is including the GST INR 1,625 crores including GST.

[Rohan Suryavanshi, executive]

I don't do that including GST but we'll [indiscernible]...

[Shravan Shah, analyst]

No, is. So...

[Rohan Suryavanshi, executive]

[indiscernible] Release part is 70% is the execution and the O&M. So O&M was INR 975 crores, about the INR 1,625 crores.

[Shravan Shah, analyst]

Okay. Got it. So now broadly in terms of order inflow for this year, so you have highlighted even INR 90,000 crores tenders you are evaluating. So if you can also help us in terms of sector-wise breakup which are the segments and also would also, if you can help us, what's the pipeline and what we are looking at. So net-net INR 1,100 crores plus this INR 1,200-odd crores, so kind of a INR 2,300 crores kind of order inflows that we have already received. So how much more we will be looking at for this year? So INR 15,000 cores, INR 16,000 crores last time you said that we are looking at in terms of inflow. And also just to clarify, out of this, are we also including the MDO mining inflow that we normally take for 3-year kind of revenue? So that is also included in this whatever the full year order inflow we are looking at?

[Rohan Suryavanshi, executive]

Sir, when we speak about new order inflow, when we mentioned INR 15,000 crores to INR 16,000 crores, that is only, that means the new order that we are targeting this year. It doesn't include what had already been won, number one.

Number two, the target remains to be in that zone only INR 15,000 crore, INR 16,000 crore target that we mentioned. I obviously can't give you a makeup of all the sectors, like what a piece-by-piece breakup of all the sectors that, like how you're expecting. But the current sectors that we're working in, these orders are in all those sectors, and we are looking at those orders. So that's the key takeaway. And unlike -- I mean, even in the past, we've never given like the detailed breakup of each sectors.

The thing the road sector we do mention, the other sectors will give you a lower parking picture, and that we are bidding for these projects. So that's what you're trying to do here also.

[Shravan Shah, analyst]

Okay. And now in terms of the date rate just get more clarity, which has increased close to INR 700 crores plus in 1H at a gross level. So how one can look at acquired -- from now onwards, how much more reduction we are looking at by March end? And in terms of the net debt fee by FY '26, so that remains intact?

[Rohan Suryavanshi, executive]

Shravan, the debt is primarily increased because of the [indiscernible] changes, especially the delayed receivable from retail projects and the accumulation of the GST in [indiscernible] credit, and we have faster paid to credits. So in all, we have basically invested in working capital around INR 700 crores and corresponding debt has increased. In terms of debt reduction, [indiscernible] detailed in [indiscernible].

Actually, like I mentioned in the speech as well, our target still remains to reduce debt. While we will be able to achieve the earlier number that we have done or not remains to be seen, we are optimistic. But even though we rationalize it a little bit and sort of look at things, we will reduce the number of debt, the -- amount of total debt will be lower than last year's debt. So that is for sure even though it might not reduce to the level that the earlier thought it will, and primarily is because we didn't get the orders that we thought we will -- which would have culminated into revenue and improved our margins.

Number two, when you get new orders, you also get the mobilization advance, which culminates into changes in of the older projects began mobilized advance is getting cut. So there is always a sweet spot, which continues going there. So that's why.

And surely, let me add to what [indiscernible] said. So this is a temporary phenomena. We own our debt free company, the estimates are fintech. So what we is in part, the company will be debt free on the similar lines.

[Shravan Shah, analyst]

So net debt free -- so will it -- now are we saying that we can be a net debt free by even FY '27 and may not be in FY '26?

[Rohan Suryavanshi, executive]

Yes, yes, not FY '26. FY '27 is where we will do it. So that's why I said there is a postponement of this trajectory that we had started on because of things which are outside our control. The lower order sort of inflow that came in and all of that and revenue that we had, but the trajectory should remain the same. There is no plan to sort of change this or do anything else. The trajectory you will see here onward are happening.

[Shravan Shah, analyst]

What was the DBL start date, was it the similar it's INR 650-odd crore around September.

[Rohan Suryavanshi, executive]

Yes. So the net debt at infra asset level is INR 645 crores.

[Shravan Shah, analyst]

Okay. Got it. And so broadly, in terms of the -- whatever the -- we are looking at INR 400 crores, INR 450-odd crores in net inflow to the -- as a dividend and plus interest and everything. So how much broadly -- so this 1H, how much we have received and at a standalone level? And it's possible more we are looking at in the second half and then maybe FY '26 if you can help us there?

[Rohan Suryavanshi, executive]

So surely, the total inflow what is projected to be received from the overall unit holding in at is around INR 95 crores. Out of that, around INR 45 crores has been received, and it is in 60-40 ratio, 60% in DBL and 40% in infra.

[Shravan Shah, analyst]

Okay. Okay. Got it. And this Alpha Alternative will start from FY '26 onwards only?

[Rohan Suryavanshi, executive]

Yes.

[Shravan Shah, analyst]

Okay. Got it. And just to check-in terms of the CapEx, just to INR 46 crores, we have done so for full year at standalone level, how much we can look at.

[Rohan Suryavanshi, executive]

Shravan, the total CapEx in FY '24, '25 would be around INR 150 crores. So total INR 116 crores is already incurred.

[Shravan Shah, analyst]

Okay, okay. Got it. Sir, when you say now we got to the SEBI approval for [indiscernible], does that mean that it will be listed on the stock exchanges?

[Rohan Suryavanshi, executive]

This is trust approval, and the lawyers and the bankers are creating the document. So it will be filed once ready. So our plan to launch the InvIT will remain intact.

[Unknown Executive]

Yes, it will be listed on the exchanges, sir.

[Shravan Shah, analyst]

So maybe 6 months long in line, one can look at this will be listed?

[Rohan Suryavanshi, executive]

Yes, 6 months or so, sir.

[Operator]

The next question is from the line of [indiscernible] from [indiscernible] investments.

[Unknown Analyst]

Sir, just wanted to check it out one or two questions. Firstly, on the net debt, sir, you mentioned it got delayed by 1 year. [indiscernible] net debt by FY '27? What is your expectation by end of FY '25 at the current juncture now? Or we were saying it would be around INR 1,000-odd crores? How should we see this year, we will be closing it out?

[Rohan Suryavanshi, executive]

So the net debt as of '24, INR 1,515 crores. Today, the date has increased because of the [indiscernible]. We are expecting some relaxation. So there will be reduction in FY '25 end, but we can't permit a higher number, but it will definitely reduced from the level which we had on the results March 2024.

[Unknown Analyst]

And secondly, it's good to see there is a sharp ramp-up in the MDO business. I think volume on the overall basis had increase to 10.3, which is close to last year volume in the first half itself. But you can also share the revenues in EBITDA, how much has been the total revenue from the MDO business in the first half and what has been the EBITDA?

[Rohan Suryavanshi, executive]

We don't share the entity-to-entity EBITDA. So I detailed out in my presentation, the increase in consol performance is because of these factors, the MDO business and the completed and processed.

[Unknown Analyst]

Okay. And in terms of the further ramp-up in the production of MDO, how should we look into the similar as a whole now currently? And what should be the expectation over the next 2 years for the MDO business?

[Unknown Executive]

So there are 2 MDOs, Shrem and Pachhwara. Pachhwara, there's a fixed production of 7 million ton we will be achieving this year. And this 7 million ton will continue for 55 years. So for that, we will this year will continue for the next 3 to 4 years.

In terms of Shrem, this year, originally, we have indicated target by 15 million ton. And as Rohan detailed out in his presentation, he will increase this production by 10% to 15% meaning to % 17 million, 18 million tonnes this year. So in total, it is 24 million ton, 25 million ton this year MDO business. And next year, it will rise by another 10 million ton. And in FY '28, we will be doing around 60 million ton as Rohan just said.

[Operator]

The next question is from Narendra from Robo Capital.

[Unknown Analyst]

Earlier, if I'm not wrong, you had guided for INR 15,000 crores kind of order inflow. So are we still expecting that...

[Rohan Suryavanshi, executive]

Yes, we have guided for an order inflow INR 15,000 crores just last year -- mean for this financial year.

You think we have guided for a INR 15,000 crore order inflow, right? That's what you're after. Yes, we have guided for that.

[Unknown Analyst]

So are we still on track? Or do we see some softness?

[Rohan Suryavanshi, executive]

Yes, we are optimistic on that number because there's still the larger orders have not sort of been bidded out and we are bidding for them. So we are already sort of working on those orders. Like I mentioned, there's almost a INR 2 lakh crore order pipeline that DBL is currently evaluating. So we are fairly optimistic that we should be in that range. And out of that INR 15,000 crores, we've already won orders about INR 3,000 crores till now. There's still INR 12,000 crores more that we need to win.

[Unknown Analyst]

Okay. Great, sir. And on the margin front sir, there was some softness this quarter. So was it due to the seasonal nature or what was the kind of are we optimistic for that 11%, 12% kind of a margin?

[Rohan Suryavanshi, executive]

Yes, the margins were up because seasonality and also because of lower execution. However, we have guided towards an 11%, 12% margin only for the year keeping in mind some of these things. So that is how we should look at the year on a standalone basis.

[Unknown Analyst]

Okay. Okay, sir. And would it be possible to give a light on the margins in the MDO project that you are doing? What would be the ballpark number for margins there?

[Rohan Suryavanshi, executive]

Sir, we don't share margin sector by sector. We look -- we only share the company margins.

[Unknown Analyst]

Rohan you mentioned that you will be around INR 1,500 crores of EBITDA, these long-term projects, right, the InvIT and MDO project, right? You did mentioned that.

[Rohan Suryavanshi, executive]

We've mentioned those -- the 2 items, the inflow from InvIT and the MDO business. You're right.

[Operator]

[Operator Instructions] The next question is from the line of Vaibhav Shah from JM Financial Limited.

[Vaibhav Shah, analyst]

Sir, you have guided for a 10% decline in terms of revenue for FY '25. So given the lower base now, so can FY '26 see a better growth or it should be in the range of, say, 5% to 10-odd percent?

[Rohan Suryavanshi, executive]

Yes, sir, obviously, it will [indiscernible] because we will have the orders that we have guided for. So once that [indiscernible], there will be a ramp up in revenue.

[Vaibhav Shah, analyst]

So any particular guidance from your end in terms of revenue growth?

[Rohan Suryavanshi, executive]

So I think to give you a better perspective on that will be end of the year we are sitting with the order book and where we are exactly, we'll give you a better precise number rather than shooting in the dark right now with still expecting for orders.

[Vaibhav Shah, analyst]

Okay. And over the longer term, say, 2 to 3 years, our margins should be in the range of 11% to 12%?

[Rohan Suryavanshi, executive]

Yes, sir, it will be in that 12%. It will be there. Though we should look at the consol numbers going forward, like we mentioned, because all of it will not be captured on the standalone, the margin that the company will be making. So you should start also paying closer attention to the consol numbers as we go forward, sir.

[Operator]

The next question is from the line of Saket Kapoor from Kapoor Company.

[Unknown Analyst]

Sir, firstly, if you could explain to us the BharatNet project, which we have had in consortium with Sterlite, what is our scope of work here? And for the O&M part also, the proportionate of 70-30 [indiscernible]?

[Rohan Suryavanshi, executive]

The scope of work there is the trench laying of the cables. That is what we'll be doing in execution and it will be in the O&M.

[Unknown Analyst]

Sorry, I missed your point. Come again, please.

[Rohan Suryavanshi, executive]

Sir, it's the trenching and laying of cables and the O&M of it.

[Unknown Analyst]

Okay. And the O&M also the 925, 70-30 ratio prevail similarly?

[Rohan Suryavanshi, executive]

Yes, yes, sir.

[Unknown Analyst]

Okay. But taking into account the realm of things and the space where we are, what drew us to this INR 1,200 crores, INR 1,500 crores INR 1,800 crores order in a totally different field altogether. All those are I think we bid for 8 or the packages, we were awarded once. So if you could just give us some color on the experience and we have garnered from this type of participating in the project? And how does it make that significant for us to diverge into these businesses or these line of operations?

[Rohan Suryavanshi, executive]

Sir, obviously, we had built together, we and SPL had build for all the packages. Unfortunately, we were not -- we did not win more. So our idea was to obviously do a bigger portion of this. Now coming to what is the work and expertise, this is a very simple job compared to a road business or any other infrastructure business that we do, whether it is metro, or tunneling. All of it is far more engineering-wise, more complex. This is a simple trenching, bringing up of a whole and then laying that. So we already have the equipment for that and manpower. So it's a very simple job that we'll be doing, and this kind of stuff we already do on our road projects and all. So it's a very simple sort of project execution where we already have all the equipment and people. So that's why we were doing it along with this.

[Unknown Analyst]

Sir, when we look at being one of the MDO operator for the coal mine part, what is the -- how many players have been garnered that project? Or are we simply operating the mine?

[Rohan Suryavanshi, executive]

I didn't understand the question, sir.

[Unknown Analyst]

Sir, I was trying to understand whether in the coal mine part also, there are a lot of players operating in MDO or are we the sole [indiscernible]?

[Rohan Suryavanshi, executive]

Sir, there are people in the coal business as well. They are very separate than what we see in the business. There are separate set of players in the coal has different set of challenges. So there is decent competition there as well.

[Unknown Analyst]

Sir, I didn't get the point, sir. I was asking that as an MDO operator for the mines where we are operating and we are also alluding to the fact that going ahead, we will be the second largest MDO operator for coal mines in India after Adani. So in this project also, we are garnering our total output for our client as a single person or here also we have a consortium and we are sharing a part of it?

[Rohan Suryavanshi, executive]

So we said we have 2 MDOs, 50 million tons every year and 7 million tons every year. This makes to 57 million tons. So today, we have 2 principles only PFPCL and Pachhwara and MCL [indiscernible] project. So with these 2, we will be achieving about 60 million. And there are other set of MDO players in market like Adani and others. So there are a few people working in MDO segment as well.

[Unknown Analyst]

Okay. And sir, what explains the increase in capital work in progress at standalone number also? And if you could give the breakup for the consol part, capital work in progress.

[Rohan Suryavanshi, executive]

Okay, in terms of capital work in progress in consolidate, on a standalone basis, it is INR 80 crores. This is part of our INR 150 crore total CapEx this year at standalone level. And in the SPVs, the same SPVs, capital work in progress is in capital work progress and one part of MDO. So in CR, we have the capital working progress for this project CapEx, which is already approved by the authorities.

[Unknown Analyst]

Okay. And lastly, sir, we have also heard from BSNL in fact, that one of the tender participant has even approached the court to challenge the tender process having unfair practices. So are we aware of this? This is a notification from BharatNet from BSNL itself dated yesterday 13 November.

[Rohan Suryavanshi, executive]

So we are not aware about any objection made by any participant in the tenders.

[Operator]

The next question is from the line of Rishikesh from Robo Capital.

[Unknown Analyst]

In the last con call, we had shared that we were going to receive around INR 477 crores from Alpha during this year. But it looks like the time lines have been shifted to FY '26 and '27. I would like to know is there any possibility for these cash flows to go beyond FY '27 as well? Or are we fully confident that we will receive these cash flows in the said time lines?

[Rohan Suryavanshi, executive]

So let me correct basically, the last year -- last quarter presentation, INR 477 crores was shown from [indiscernible] So balance, [indiscernible] INR 477 crores will be received. Out of that, only INR 61 crores is [indiscernible] Slide # 28 from [indiscernible] INR 450 crores, INR 550 crores so that [indiscernible] is still not complete. So once the asset complete, this INR 550 crores is additional to the INR 477 crores. So out of INR 477 crores, only INR 60 crores will be spending organically.

[Unknown Analyst]

Okay. So we are saying that around INR 400 crores has been received basically?

[Rohan Suryavanshi, executive]

Yes.

[Operator]

The next follow-up question is from the line of Shravan Shah from Dolat Capital.

[Shravan Shah, analyst]

Sir, I just wanted to check when we are saying our net debt, even if we are saying some reduction will be there on Y-o-Y basis. So that seems close INR 800 crores kind of a reduction that we are looking at in the second half of this financial year. So can you help us how this will be done?

[Rohan Suryavanshi, executive]

So one, basically we are expecting the unlocking the working capital what we invest in first half. So it is basically the JJM project and the TDS and the income tax refund. So basically, the original provision will be restated by 31st March 2025 and further reduction from the operational cash flow. So we said FY '24 level, there will be slightly a reduction in -- as of 31st March 2025.

[Shravan Shah, analyst]

Okay. Got it. So in terms of [indiscernible] in terms of standalone, the finance cost is close to INR 42-odd crores, so INR 120 crores, INR 122 crores quarterly. So at least for next 2 quarters, the similar run rate will be there?

[Rohan Suryavanshi, executive]

So Shravan, I would say a little bit relaxed from the first half, not very significantly down. But yes, it will be in the range where we are in H1.

[Shravan Shah, analyst]

Okay. Okay. And sir, in terms of the inventory days, so obviously, we are trying to reduce, but do we see that any material reduction is possible even in next 1, 2 years?

[Rohan Suryavanshi, executive]

Shravan, we are working for each and every balance sheet item. So yes, there will be reduction in working capital days going forward. I can't tell you whether it will be in inventory or debtor. But yes, the net debt working capital days will be reduced by some extent.

[Operator]

[Operator Instructions] The next follow-up question is from the line of Saket Kapoor from Kapoor Company.

[Unknown Analyst]

Sir, for the margin profile for the BharatNet project, can you explain to us how the margins will look like?

[Rohan Suryavanshi, executive]

We try and build all project on the similar margin profile. So what we have indicated towards this project will also have that kind of margin.

[Unknown Analyst]

So this 11% to 12% EBITDA margin is what we are eyeing for the BharatNet business?

[Rohan Suryavanshi, executive]

Yes. Yes.

[Unknown Analyst]

Okay, sir. And sir, since you mentioned that we have bid in consortium with done with for all the projects. So is this margin profile the key reason for so many people participating for these packages? Or what has led to you garnering only one of the same and not getting further even though your partner has an expertise in laying cable?

[Rohan Suryavanshi, executive]

Sir, we are also evaluating, but that is live. When you bid for a lot of projects, even on the NHI road side, we end up winning 5%, 6% of the project that we bid for. So similarly, also, we had bid for enough but we didn't get -- so it's just hard enough tough luck. It's the nature of L1 business, and that's how it kind of works either you work on your margin pool or you reduce the margins and then you get more orders.

[Unknown Analyst]

So you have also spoken about delay in cables. So which entity, government entity has delayed in the funds in this project?

[Rohan Suryavanshi, executive]

Given [indiscernible] 2 projects. The central government has not released their share to the states, which is why there is delay. So this is across many states in the [indiscernible] projects are going. The central government has not released a part only the sale government have been doing their part, which is why there is a buildup of product business payables from the government in these projects. and this across all players across all states.

[Vaibhav Shah, analyst]

And what are the reasons the government have highlighted for this the noncompliance from their end? Are there any milestone?

[Rohan Suryavanshi, executive]

Yes, there's an increase, but you are asking the wrong question. That question, I think you should be asking the government that question what are the reasons.

I believe that there is an increase in budget, which is why they are sort of evaluating how to -- and sort of the budget and getting approvals there. That's the reason that I know. If there are more things that are happening in the background, I am not privy to that. But you should definitely reach out to the government and ask them why has there been a delay in the payments.

[Unknown Analyst]

Okay. And sir, lastly, on the [indiscernible] scheme also wherein the [indiscernible]

linking projects have also been -- okay. What is -- in your bid pipeline, do you have the reason linking project of the central government under [indiscernible] 2 also wherein we are participating or we are keen to bid for?

[Rohan Suryavanshi, executive]

Sir, whenever these projects come and they fit into our project profile, so they fit into our project profile and the kind of project that we look at, then we'll obviously bid for them. That's all I can say on that matter right now.

[Unknown Analyst]

Okay. So we have not exactly there as of now for these projects?

[Rohan Suryavanshi, executive]

No, sir, we have not.

[Operator]

Thank you. Ladies and gentlemen, we'll take this as the last question. I now hand the conference over to Rohan Suryavanshi for closing comments.

[Rohan Suryavanshi, executive]

I thank all the participants to come and ask all the questions that they had. We are -- if anyone could not get their questions answered, please feel free to reach out to our IR or our team, and we'll be happy to give you more information on that.

I look forward to seeing you guys in the next quarter, the next year. I wish you all a great new year, and I hope all of you had a phenomenal Diwali. Thank you all from everyone here at the DBL team.

[Operator]

Thank you. On behalf of Dilip Buildcon Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.