Engineers India Ltd
NSE:ENGINERSIN
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
128.25
290.25
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Engineers India Ltd
You don't have any saved screeners yet
[Audio Gap] call and thank them for giving us this opportunity. From the management, we have Mr. Sunil Bhatia, the Director of Finance; Mr. Suvendu Padhi, Company Secretary; Mr. R. P. Batra, Group General Manager, F&A and IR; and Mr. Vinay Kalia, Chief General Manager, Business Development and IR. I request the management to give us the opening remarks, and then we can open the floor for a Q&A. Over to you, sir.
Yes, good afternoon to all. As you all know that the first quarter was very challenging due to lockdown declared by the government. And even after the lockdown, the time the lockdown was lifted, the site activities took its own time to get augmented, also mainly due to the local restrictions imposed by the local authorities. The period from April to June, we experienced that the site activities could be operated at around 30%, 40% of pre-COVID level, but that loss was partially made up by improving the activities for engineering division. We had introduced the policy of working from home and the engineering activities could get boosted up from May -- in May and June and we could see around 70% to 80% activities getting performed as compared to pre-COVID level. So on an overall basis, we can say that the activities we could achieve was around 60%, 65% of pre-COVID level, which was in our view reasonably well placed. Based on this, we have declared our financial results yesterday after its approval by Board, and you must have all gone through our financial results. Just I will give brief snapshot of our financial results.The consultancy revenue which we achieved during this quarter was INR 275 crores as compared to INR 444 crore during June '19, down by 38%. The breakup of consultancy revenue was out of INR 275 crore, INR 205 crores from domestic and INR 70 crores from foreign. In turnkey segment, the revenue achieved is INR 193 crore as compared to INR 290 crore achieved in June '19, down by 34%. On an overall basis, revenue achieved was INR 468 crore as compared to INR 735 crore, down by 36% compared to June '19.In June '19, as you will recall that we had one time impact of variation order to the tune of INR 97 crore. So if we compare on leg to leg basis, INR 735 crore is basically INR 638 crore. So the turnover has decreased from INR 638 crore to INR 468 crore. Operating profit EBITDA was INR 21.42 crore as compared to INR 139.46 crore during June '19. INR 139.46 crore of EBITDA achieved during June '19 included onetime impact of INR 58.35 crore, which comprised of 2 components. One was INR 84.79 crore on account of variation orders and INR 26.44 crore due to impairment of exploration expenditure. So in case we offset that, EBITDA during June '19 was INR 81.11 crore. So from INR 81.11 crore, it has come down to INR 21.42 crore. EBITDA margin achieved is 4.57% compared to EBITDA margin of 12.7% on like-to-like basis for June '19.On consolidated basis, there is not much change. The revenue has increased by INR 7 crore and profit remaining almost at the same level, mainly due to the fact that our joint venture RFCL is under commissioning stage. We had targeted for its commissioning by June 2020. Now due to lockdown, the commissioning is now targeted by mid-November 2020.With respect to orders secured, we have secured orders of INR 97 crore as on till date. And during the course of discussion, we'll also inform you what is going to be the likely position in the current financial year as well as our target order flows during next financial year.Now the house is open for queries.
[Operator Instructions] We have a question from Mr. Arun Malhotra from CapGrow.
Wanted to understand what is the current status of the orders which we are executing. How is the scenario looking like? That's one. And second, in terms of ordering, do you see any ordering activity resuming? Or they are still being pushed to the next quarter?
First of all, as far as the projects, which we are currently executing, the activity because of the lockdown they are on standstill and price. However, because work-from-home activity was still continuing in the head office, so design and engineering activities, we could still continue further to some extent. Hence, we were able to also build and get revenues for the same. Site activities will start gradually picking up as the construction labor and tools and packets start moving to the sites. So those activities are picking up. And there is a variation. Some activities are very active. Some sites are very active like HMEL site where almost 90% construction activities are happening. And with regards to the new order...
Numbers are revenue generating, how much you will be able to recover revenue in terms of...
See, in terms of revenue recognition, the numbers we are already showing in our quarterly results. I will first tell you the scenario. In terms of the activities at site, they are gradually picking up. There is a possible delay because of the lockdown happening at sites. We ensure that to be...
Last sentence, I think there was some audio problem. Can you repeat what you said last, last sentence.
The site activities because of the lockdown were closed, but they are now gradually picking up. So there is a -- site because of 3 months of lockdown happening. However, design and engineering activities from home office are actively being done. People -- 50% occupancy is already there in the office and balance are doing work from home. So activities are there in the home office, which is a major portion of our services given.Second, regarding the tenders which are being floated, yes, tenders have come out from the clients. They have not delayed their tendering process. So whatever expected tender which we have shared in the past, and those tenders are still going on.
Sure, sure. Recently, we have seen in this lockdown big orders getting split between small, small orders and a lot of the MNC companies...
Mr. Malhotra, your voice is breaking, sir.
[Technical Difficulty] competitive.
Mr. Malhotra, we are not able to hear you, sir.
Hello?
Yes, please go ahead.
Yes. I said recently, we have seen the big orders were getting split into small, small orders and a lot of MNC consultancy companies coming in and trying to underprice you. Do you see higher competitive intensity going forward for you? That's one. And second, we have high cash on the balance sheet. Use of that cash for the equity shareholders.
First of all, the number of players and the competitive players, which we are having in an industry are virtually the same as in last 2, 3 years. They are the same multinational branch offices who are bidding. Only because some few very large greenfield tenders were coming out in the market, wherein they were feeling that nobody would qualify in India except for Engineers India. So they had to come out with a number of packages. I mean basically, a very large greenfield projects were taken out into 3 packages because it was too large to be handled for a competitive bidding process. But the players are the same. So it's -- and the packages are not small. I think these are still very large. They are in the range of, say, INR 4,000 crores to INR 6,000 crores, INR 7,000 crores. So packages still will be large. And there are only a few players even now who are bidding. Not everybody is able to qualify, and we could expect only 3, 4 players only bidding.
Sure. And the high cash on the balance sheet, high cash on the balance sheet.
With respect to cash, we are aware of the situation, and we are trying to increase the dividend payout to the equity shareholders to the extent possible. You must have seen from the last 2 years that the dividend payout ratio has improved as compared to previous year. 2018/'19, we had paid dividend of INR 4 per share. But in '19/'20, we have declared a dividend of INR 5.50 per share. The process is on, and we'll do our best to improve it further.
Yes. Because as an equity shareholder, if you see the stock performance over 3 years, 5 years, I don't know, it doesn't matter much to the management. But if you see as an equity shareholder, we are having maybe 70% of the market cap in terms -- in the form of cash equivalents on the balance sheet. So a better utilization of the cash would help the equity shareholders, will raise the market cap and also increase the return on equity for everybody.
Absolutely. Absolutely. And we are working on the same lines. See basically, we're also exploring the possibility of various uses of -- wherein the cash can be utilized, including the dividend payout for the equity shareholders. So all those schemes are under study. And as and when anything materializes, we'll inform you.
We have a question from Ms. Bhoomika from IDFC.
Yes, sir. Sir, if you could talk about the long-term pipeline of orders that is there in terms of order intake and where the CapEx is happening. And also if you could touch upon the international market in terms of where there is CapEx happening and what is the potential ordering activity -- tendering activity?
Yes. Bhoomika, as we had shared in the last quarter, I mean, those projects are still on. And we're still seeing traction in those projects. We are looking at petrochemical projects from GAIL in this year itself, probably in Q2 it will materialize. Some projects, which 2 projects are already awarded to us. One is for Indian Oil expansion from 15 to 25 MMTPA. Phase 1 activities are going on. I mean the main project execution is expected somewhere in Q2 of FY '21/'22 while the front-end activities are taken up, client is planning out the CapEx requirements for this project.Polypropylene Project of BPCL refinery is also on track. So we can expect the main project execution for this project also in Q4 of '21. We are looking at a small project from Barauni for a revamp less than INR 100 crores. That's also on track. That's also in a bidding process. Then the tender for Cauvery Basin refinery are also being -- has been floated. So we are also looking at -- seriously at Cauvery Basin refinery. By the end of this year, they should be able to award all these tenders. So all the projects which were being looked at in the near future are currently on track. So none of these projects have been abandoned or put on hold as of now.
Okay. And yes...
Yes.
No, no, go ahead, sir.
Regarding the future for our prospects, we have shared some projects like petrochemical expansion at HMEL, and then MRPL refinery expansion, Paradip refinery expansion as we had already shared in the last earnings call. Those projects are still visible and none of these projects as of now, they have been phased out.
Okay. Okay. So sir, what would be the guidance for the order intake in the current year and next year?
Although we have lost 3 months in terms of active working, I mean so there is an impact. But in terms of securing business, tendering processes was active. So we can still see an inflow in the range of INR 1,500 crores in this year. I mean I'm looking at 2 orders which are already committed to us. Indian Oil order, the main project execution, might shift to next year if the front-end loading activities that we are currently doing gets delayed because after we do front-end loading activities, client has to take in physical approvals for the main project execution. So they are all decision based involved in execution of this project. However, BPCL refinery, we can expect in Q4 '21 itself, that's about INR 200 crores and GAIL petchem is -- there is a possibility we will even secure it in Q2. Cauvery Basin, some of the packages we'll get awarded in this year itself.
Okay. And then next year, what can this number be? And is there anything on the international side?
Not immediately, we were looking at 1 or 2 opportunities, could not materialize them, which were large. I mean, nothing of a very large size as of now. I mean, because most of these OPEC countries are set out because of the fall in the energy demand. We are looking at optimization and efficiency improvement projects rather than green field expansion.
Okay. And sir, just one thing in this quarter, is there any -- would you say, variations or provisions or anything of that sort in the current quarter in 1Q '21?
Yes. Basically, these are normal variations. We used to receive certain change orders and the provisions are made as per the progress of the project. So these are normal things, and these have happened and going to happen during every quarter.
We have a question from Dikshit Doshi from Whitestone Financial Advisors.
Some of my questions are answered. One thing, there was some report recently where Oil India Management have mentioned that Oil India and EIL consortium will buy 48% in Numaligarh Refinery. So if you can just update in case this is happening, then what kind of stake and what kind of cash outflow will it require from EIL side?
With respect to NRL, we have given our consent to Oil India to submit expression of interest to BPCL for sale of NRL stake held by BPCL under consortium bidding. Subsequently, after submission of EOI by Oil India, no further development has taken place. As far as we are concerned, we see this as commercial opportunity.And final decision will be taken once the due diligence is carried out and all things are there for us to make our fair assessment of the investment. And as far as the quantum of investment which you are referring to, this will also be known only after due diligence is carried out and once the final valuation price is also worked out by -- after the due diligence exercise, only then we'll be in a position to throw some light on it. But at the same time, let me also inform you that whatever decision will be taken for this investment, it will be purely on commercial basis, purely in the interest of EIL, purely in the interest of shareholders of EIL.
But -- so as on Q4, we would be having some INR 2,500 crore of cash. So can we assume that a significant part of this cash will be used for this thing?
That assumption is too premature at this stage. And that is -- this is not, I mean, not appropriate to take any assumption as on date. As I told you, once the due diligence is over, we'll be informing you the quantum of stake, which we'll be intending to take in NRL.
Okay. Secondly, sir, if I see our consolidated numbers, so there is a loss of -- loss from joint venture entities, so last year, it was around INR 10 crore. So this is majorly because of that fertilizer plant?
Yes, it is only from the fertilizer plant, RFCL, Ramagundam Fertilizers & Chemicals Limited, the joint venture company of EIL. The company, as I told you in my opening remarks, the company presently under precommissioning and commissioning stage. Initially, we had planned for commissioning of the plant by June 2020. Now due to COVID and lockdown, the commissioning we are targeting by mid-November 2020. So once the company comes into operation, the profitability of the joint venture company will be coming to EIL based on our proportionate shareholding.
Okay. And Rakesh, any ideas. So will it take a couple of years for them to ramp up and make profits or it can make profit in the first year of operation also?
In fertilizer sector, the profitability comes from the first year itself because the pricing policy of urea provides a sufficient leeway to urea manufacturer under the new policy. I'm talking about the new investment policy of urea, which is different from the policy under which existing plants are operating. So under the new policy, the new manufacturer of urea will start earning profit for the first year itself.
Okay. Okay. And just one last thing. So in last con call you mentioned that there is not much clarity in the export market due to -- also due to the travel restrictions. So any better clarity or it's still a dull market in terms of tenders?
No, the situation remains the same as of now. International travel has been restricted. Some of the proposals we are doing from home office but since site activities are involved, it's difficult for clients also plus because of the fall in the energy demand, most of the OPEC countries, which are our clients, Middle East countries, they are slowing down their expansion.
See the situation is that everyone is aware and they are working on the various alternatives how to keep on going with these constraints and restrictions. I'll give you example of RFCL, where for pre-commissioning and commissioning activities, we had attentive licensors are required at site.So now what they are doing, they are -- the licensors are giving instructions to the site people through remote control. So that is the possibility which has been explored and implemented at RFCL site. And leaving aside the supply chain management disruption, in any case, it in case of supply has to come from overseas, it has to reach site but all other activities like the visits to the site. Those things are being taken care of through this alternate mechanism.
Okay. And just one last small question. So there was an impact in Q1 due to the lockdown. And now the things are improving gradually. So if the situation improves in the second half, can we make up for the lost ground? And can we still do sales and profit -- sales at least similar to the last year? Or you expect that this year, there might be slight de-growth?
That is practically not possible because the sales loss in the first quarter is lost now because you will recall that our booking of revenue is based on our efforts deployed. So only to the extent that the activities are picking up. So we are hopeful that the situation will improve in second quarter and will further improve in third and fourth quarter. To that extent, the sales will get improved.
Okay. Okay. Understood. Thank you. That's it from me.
We have a question from Mr. Sagar Parekh from One Up Financial.
So firstly, on this order inflow, you mentioned INR 1,500 crore is our target for FY '21, right? Did I hear it correctly?
Yes, sir.
And so that basically includes 2 projects of GAIL and BPCL and some part of IOC, right? And so you mentioned that the main project will spill over to FY '22. So FY '22, what kind of order inflow can we expect broadly?
It will be too early and premature to work out the exact numbers of '22. Because we have large lumpy projects. So timing of their tenders, award of their packages will differ.
Sure, sir. So could you give us a broad sense of the large projects that are upcoming for FY '22, then probably the size of the order, then probably we can get some sense on the outflow for next -- inflow for next year?
I've just shared those projects. We have shared in the last earnings call also. Looking at -- besides these projects which we have already announced, we are looking at Cauvery Basin refinery.
How big is that?
About INR 25,000 crores to INR 30,000 crores. But there are different packages coming out in that. Since those packages are of different sizes. So those packages will get awarded one by one. Then we have petrochemical complex for HMEL, which is targeted for next year. We are looking at a study for MRPL for their expansion for 15 to 25 MMTPA. Then there is an expansion for Bina Refinery also although it is slightly delayed. So it will go by the end of next year. So there are projects lined up. We have already shared in the past. Then there are strategic storages for ISPRL, which are planned for expansion. We have already done about INR 7,000 crores of storages, CapEx is planned for the coming year.
INR 7,000 crores for just storages?
Yes. For these additional storages to be built which are already there, but we have to see the timing of their tenders. Ordering cycle for May is about 4 to 5 months, I believe. So then we will able to give you a clear picture on refining these projects.
Sure. And secondly, on the margins, broadly, I mean, how should we look at your overall EBITDA margins for FY '21 and FY '22?
Yes, in the turnkey segment, it will be around 3%. In the consultancy, after the COVID impact is over, we expect the margins in the range of around 25%.
Okay. Okay, sir, that's it from my side.
We have a question from Mr. Samarth Singh from TPF Capital.
My first question was on RFCL. What is our expected total commitment to the project? And what was it as of the quarter end, please?
See our total commitment to the project is INR 448 crores, which is 26% of the total equity. And the total equity has already been infused till June 2020.
Okay. And so what is new to this project, could you just tell me what are the sort of economics of this RFCL investment?
As I explained previously that the new fertilizer plants are covered under new investment policy of the government. The policy provides that at a gas price of $6.5 floor price to be given for 1 tonne of urea $305 per tonne of urea. Now this floor price increases or decreases with variation in the gas price.So depending upon the gas price, which RFCL will be getting on quarterly basis, the floor price will be revised every quarter by the government. Now based on the indicative floor price of $10, the gas price of $10 per MMBTU, the floor become $375. The EBITDA margin for new fertilizer plant like RFCL is around 28% to 29%. So the policy provides for a sure return from the first year itself. And as per my experience in fertilizer sector, I have not seen any fertilizer plant having any problem in the first year. So all fertilizer plants basically, they are into profit from the first year itself.
Okay. And on -- so we are making this investment in RFCL. We're also looking potential -- this potential investment in Numaligarh. So I'm just trying to understand, is there -- has there been a change where the company is slowly moving from an asset-light model to making investments in various related industries where it sort of becomes an asset-heavy model?
See, basically, this RFCL investment was -- the decision was taken in 2011, if I am correct. The decision was based on the premise that we are into fertilizer sector consultancy. And to inform you that the NFL's Panipat and Bhatinda plant were commissioned by EIL in 1978. So we are having good exposure to fertilizer sector. So this decision was taken for investment in fertilizer sector.And when the policy was announced, this joint venture company was incorporated after carrying out the feasibility assessment and study of the new fertilizer plant based on the policy announced by the government. So as per the policy, as I informed you that it makes sense to make investment in fertilizer sector based on the policy.As far as another prospective investment, which we are looking, the decision will be based on due diligence exercise to be carried out once the process gets commenced. At present, we are not having any equity in any refinery. And we have footprint in almost all the refineries in the country. So we see this as a good opportunity for us to have some small equity in NFL refinery. But as I told you, all these things will depend upon once due diligence is completed.
Okay. So just for my understanding sir. So is it fair to assume that we will continuously keep looking at making investments in related sectors as long as it makes sense for the company which we sort of have not really done much of in the past?
So it depends on the merits of the proposal. Yes, you're right in one sense that now since the sector in which we are working, we need to grow. So we are looking at such options purely on the merit of each case.
Okay, great. One last question. Could you just tell me the cash balance, net of customer advances as of the quarter end, please?
Around INR 2,500 crores.
We have a question from Mr. Arpit Ranka from Kovil Investments.
So I have a question which is on the business we do with a public sector OMCs like BPCL, HPCL and -- so there are talks about them being privatized in say some years. Wouldn't that change the volume of the business we do with them or the pricing at which we need to do with them. Or do you think that it doesn't matter if it's a fellow public sector unit or even if privatized. So is there any risk for us? If and when that privatization materializes is what I'm trying to understand with your help.
First of all if we look at EIL, we are having a major presence in PSU because in India, PSUs are the governing oil and gas lines. However, if you see international markets, we are also dealing with all big OMC companies. They are also national oil companies and most of these Middle East countries. Besides, we are also dealing with private sector clients in India and overseas both. Here, we have Bina refineries, we have HMEL, we have worked with Vedanta. So we are doing their projects as well.I mean from the client's perspective, if you're looking at there is a high end of design and engineering and technology and associated guarantees involved. So that cannot be compromised because the entire plant gets affected. And as far as the consultant fees is considered, it's a very small percentage of the plant CapEx. So normally, these clients do not compromise on the engineering quality and the consultant quality. So we do not have such issues based on the privatization. However, the qualification would continue to be on the basis of experience and capability where we got sufficient experience.
Okay. So that helps. And just if you could give a broad sense of what percentage of our business, say, either on turnkey or consultancy over the years has been driven by these 2 large OMCs, let's say, BPCL and HPCL, if you could -- even a broad range is fine, I think.
Difficult to say because it depends upon the kind of projects and whose project is coming up because we do very large sized projects. So today, a very large project of BPCL comes in, the percentage of BPCL which will -- in the next year if a large project of IOCL is coming up, the IOCL percentage will shoot up. If you see current order book as of now, we are doing very large projects with HPCL on refinery for Vizag.So HPCL in India has -- is a major contributor, but the situation will probably change down the line when Indian Oil plant comes in tomorrow. So their percentage -- along with BPCL, Cauvery Basin will also be a major contribute in that.
Just to give you a idea in consultancy, the clientele in PSU and private is around 50%, 50%.
Okay. Okay. No, that helps. Okay. Sounds good. And also, if I have understood what you're trying to communicate that, it's not that easy just to kind of shift away from engagements that you've had with these people, even if they wanted. So at least from the next 3- to 5-year perspective, we don't expect any major like shakeup in our trajectories even if the privatization were to happen. Is this a right assumption to work with?
Yes, yes. If you look at all international jobs that we are securing, they are against competition from private players.
Understood. Understood. Understand. I just wanted some clarifications on that. That helps, sir. Good luck. Thank you.
We have a question from Mr. Renjith Sivaram from ICICI Securities.
Sir just wanted to understand if Numaligarh been ordered out because in your prospect list, you did not spell out Numaligarh and also HMEL was also missing. Anything delay in that?
One large project of Numaligarh is under bidding stage. Since it is under bidding stage, we are not able to say anything on this one. So once we had some clarity on Numaligarh, we'll share with you. We shared in the terms that it is under bidding stage.
What is the size of that last portion?
Can't share anything since it is under currently under competitive bidding. We will be able to share some information on the Numaligarh in the next 2 months.
Okay. And HMEL?
HMEL projects are targeted for next year. I mean not for this year. Cauvery Basin Refinery tenders have started coming in. By November, you will come to know something on Cauvery Basin.
Financial closure is done in Cauvery? Or is that yet to be done?
It has to go to their Board and Indian Oil Board also for approvals. So I'm not very clear on that. They have one stage approval left I believe.
If that Cauvery gets an approval, will Panipat Paradip expansion can be -- have a rethought or that is Panipat and Paradip is anyway going to happen?
I cannot say. It is Indian Oil's decision. Their Board's decision on which all projects they are going to take up immediately, which are to be taken up in subsequent but they will not be shunting out these products. They will only be delaying some of the projects to an extent that they are able to arrange for the investment.
And what's the status of MRPL?
MRPL is currently in feasibility stage. Next year, we can look for an expansion for MRPL. No timing as yet decided by clients. Currently, they have completed the DFR.
Okay. And the GAIL Kakinada, which was another thing which has been...
The project was concluded in the DFR and budget approval taken but currently it is on hold. GAIL and HPCL both are looking at this petrochemical project, which is a live project but currently on hold.
Okay. And sir, lastly, just consultancy dip in margins of 14% this quarter. It's largely to do with the top line? Or is there any variable or something some project-related provision, which would have resulted in that dip in the margins of consultancy this quarter?
This is only related to the reduction in the consultancy turnover -- due to reduction in the consultancy turnover, there is a dip in the margins.
Okay. Because we believe that consultancy is largely you can easily move to virtual because it's -- to do that teams working. So that is not really possible or the team -- because we believe that consultancy is more digital compared to LSTK, but the result show that LSTK is more digital compared to consultancy. Is there something wrong in that understanding?
No, there is a clarity required. Since we are executing a project, we are building and putting up and installing an entire project at site, the first phase of activities, as you are right, are design and engineering activities and overall management activities, which can be done from home office and can be done through office also and partly through work-from-home activities.However, since large engineering companies are involved, not everything can be done from home also. Simulation activities are required to be done from specialized software. When it comes to site, a large portion of our services are to be given at site for construction, supervision and management of site activity wherein we are dependent upon the supply from the vendors and the construction activities to be taken by the contractor also.Once the supply chain activities are through, we are also not able to do supervision plus because of the social distancing norms, many of these site activities and because of the lockdown, movement of labor back to their homes, the sites got locked down. Site activities could not be taken up at all. And since our engineering and design activities are also sometimes linked to the site development activities, at least the latter phase of the design and engineering, the balance will go through design and engineering. So those activities can also work in parallel if the site is active.
Okay. Okay. Sir, lastly, the HPCL Barmer where are we in terms of the project and have the subsequent ordering for the subcontractor completed? And when do you see the -- because we expect that next year, the revenue should be from HPCL Barmer. Is that assumption right? Or you see some more delay in that?
The project activities at home office are continuing. We are also looking at the various additional studies how to optimize the cost and schedule for the project. Currently, the project completion is targeted for the October '22. However, there has been some delays in the licensors giving their packages. As you know, technologies are involved so the licensors had to give their design packaging based on which we have to continue our engineering activities.Since those design packages have not come in, we are not able to proceed with our engineering activities. So there are delays in terms of award of packages also. And from engineering activities to be taken up by our EPC contractor, we had already started the work because of the sudden lockdown, they were not able to do. So some delays can occur.
Okay. But largely, the subcontracting packages have been ordered out? Or is there something pending in terms of subcontractor ordering in that?
Some packages might be left out. I'm not clear as of now on the entire list of all packages, which are awarded. Major packages have got awarded.
Okay. So this October '22...
If you want to know the progress, it's around 15% overall packages.
So that October '22 can get delayed a bit, but you don't see a major delay?
See, if the normalization happens soon then the impact will be limited of COVID. But let's see when the COVID situation improves and we normalize -- come back to that normal activity so that everything is normal.
And HPCL Vizag is going on smoothly?
The HPCL Vizag was in the advanced stage of execution so it was going on smoothly. Some site activities obviously got delayed because of the lockdown, movement of labor. The design activities were virtually completed. So there was no major issues.
Okay. Great, sir. All the best. And hopefully, we'll come back to normal by next quarter.
We have a question from Mr. Rajendra Mishra from IDFC AMC.
On this target of order inflow that you have said around INR 1,500 crores, how much is the overseas that you're looking at? And secondly, if you can give some commentary on overseas projects with respect to what is the visibility that the countries and all what's happening there?
See, we are not looking at a major visibility, we have 2 major orders in the order book. Those projects will continue to be executed as per the target and schedule, one from Mongolia and another for Dangote. We have a few orders to the tune of INR 20 crores to INR 30 crores coming from UAE. But as of now, we do not have a visibility of a major project in the overseas from Middle East region. We are also seeking some variation orders from Southeast Asia for the online project that will be realized. So some variation orders will come in. But a new order of a very large size still not visible in the overseas. The INR 1,500 crores will majorly come from the domestic projects.
Okay. And this -- what is this Southeast Asia, sorry what was that you referred to?
We are working for a project in Bangladesh for Eastern Refineries Limited. Variation order is expected.
So this will come this year or next year? Is this expected this financial year or next financial year?
This year only.
We have a question from Mr. Deepak Kumar Kapadia.
Sir, what is the total order book as of today of the company, sir? And what is the international percentage in that?
Total order book as of date is INR 9,117 crores. Out of that, INR 1,317 crores is from overseas. That is 14% of the total order book.
I would now like to hand over the floor to the management team for closing comments. Please go ahead, sir.
Okay. Thank you, everyone, for participation. And we look forward for another meeting at appropriate time. So thank you all. Have a great day. Thank you.
Ladies and gentlemen, this does conclude your conference for today. We thank you for your participation and for using I-junction conference service.