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IRB Infrastructure Developers Ltd
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Good evening, ladies and gentlemen, and welcome to the IRB Infrastructure Developers Conference Call hosted by the company for the unaudited financial results for Q3 and 9 months FY '18. We have with us today from the management Mr. Virendra Mhaiskar, Mr. Anil Yadav, Mr. Mehul Patel, Ms. Poonam Nishal. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Virendra Mhaiskar to give you an overview of the significant development during the quarter. Thank you, and over to you, sir.
A very good evening. I would like to welcome all the investors and analysts on this conference call. I hope you will have just received the detailed numbers as well as the presentation. Q3 FY '18 has been a good quarter with strong bounce back in traffic volumes across our projects as well as progress on construction plant. A 24% sequential growth in toll revenues was achieved on the back of double-digit growth for Ahmedabad-Vadodara and Agra-Etawah projects, a robust growth in Mumbai - Pune and new project additions. We have started tolling for Chittorgarh-Gulabpura project in November and are replacing collections better than our projection. On the whole, our toll collection run rate has been encouraging for Q3 and continues to be strong in the current quarter as well.Coming to the construction segment, progress continues well for all the 7 projects under implementation. Construction order book now stands at approximately INR 7,400 crores, providing us good revenue visibility for the next 2 years. On the operational front, we have been able to keep our operational efficiencies intact as well. Despite the transfer of 7 BOT assets to IRB InvIT, we have achieved a 13% increase in PAT. The loss of EBITDA on account of transfer of assets has been more than made up by savings in financial expenses and depreciation. And the income from investment in InvIT and cash surplus has boosted income further.We now have a strong and leaner balance sheet, providing us a strong footing for building for large upcoming projects. The Bharatmala road development plan, which was announced sometime back, has rightly reflected in the budget provisions for 2018, '19.The pipeline of project continues to be strong, with almost 6,000 kilometers expected to be bid out by March and another 20,000 kilometers being targeted for the coming year. Most of these projects are likely to be on HAM-EPC basis and a small portion will comprise of BOT projects, as per our understanding. We have been participating in the HAM opportunities as well and will continue to bid for BOT projects as usual. The TOT projects also provide a good opportunity for us, considering the balance sheet strength. IRB will be participating across these opportunities to build long-term business visibility while keeping the return profile intact.Now I will request Anil to give an overview of the financial performance. Over to you, Anil.
Thank you, sir. Now I'll present the financial analysis of Q3 of FY '18 versus Q3 of FY '17 corresponding quarter of the last year. The total income for Q3 of FY '18 has declined to INR 1,342 crores from INR 1,441 crores, a decline of 7% over Q3 of FY '17. As explained earlier, that we have transferred the 7 assets to the InvIT. That has resulted in our lower revenue numbers. The consolidated toll revenue for Q3 of FY '18 also declined to INR 460 crores from INR 600 crores, a decline of 23%. Consolidated construction revenue for Q3 of FY '18 has marginally increased to INR 836 crores from INR 811 crores over Q3 of FY '17. EBITDA for Q3 of FY '18 has declined to INR 676 crores from INR 773 crores, a decline of 13%. The interest cost reduced by 30% to INR 237 crores in Q3 of FY '18 from INR 339 crores in Q3 of FY '17. Depreciation has also reduced by 33% to INR 121 crores in Q3 of FY '18 from INR 180 crores in Q3 of FY '17. PBT has increased to INR 318 crores in Q3 of FY '18, from INR 254 crores, a growth of 25% over Q3 of FY '17.PAT for Q3 of FY '18 has increased to INR 207 crores from INR 184 crores in Q3 of FY '17, registering growth of 13%. The EPS of the company for the quarter, not annualized, has increased to INR 5.90 per share for Q3 of FY '18 as against INR 5.24 per share in Q3 of FY '17, a growth of 13%.Now I will request the moderator to open the session for question and answer.
[Operator Instructions] The first question is from the line of Mayank Goel from B&K Securities.
So just wondering, on the order front, as you said, the order book pipeline is really strong and -- as well as INR 50,000 crores to INR 60,000 crores of other revenue open for bid. So just wanted to understand what is the position of our company in this front? How much orders we have bid for? And what is the amount that we expect to convert in actual inflows?
So as I said, we will be participating across the spectrum, that would mean BOT, hybrid annuity as well as upcoming TOT opportunity. At this point in time, we have around 3 projects where we are putting bids on hybrid annuity mode. Other than that, there is a strong bidding calendar in front of us over the next 45 days. So we will keep participating as the tender dates become due. And as I said earlier, around 6,000 kilometers worth of projects are on the anvil for award in the next 45 days.
Sir, any number which you can get down on kilometers you have bid for the amount of projects?
I think it will be premature to announce those details. We will only let you all know once we have visibility on the tender results if we happen to win any.
And sir, on the toll, the toll revenues have been good at 24%. Just wanted to understand what has been the average traffic growth for our assets.
So basically, in this quarter, we have not seen any kind of tariff revision and of the significant areas, some project which has added during the quarter. And basically, the traffic growth was in the range of close to 9% to 10%.
Okay. And lastly, sir, could you give us some idea on this [indiscernible] deal with IRB of around $2 million?
Yes, we also read about it in the papers. Beyond that, I don't have anything to share at this point.
Okay, sir. And lastly, sir, the other income of around [ 454 billion ], sir, can you give a breakup on the EPC on the BOT side?
Mayank, do you have the copy of presentation with you?
Just one second. I think the referral is 1 year out. The presentation has announced it. I'll check.
All right.
The income breakup is INR 23 crores from the construction segment and INR 23 crores from the BOT segment. And corresponding quarter of the last year, INR 23 crores was the construction and BOT was INR 7 crores.
[Operator Instructions] The next question is from the line of Ashish Shah from IDFC Securities.
In terms of the results for the quarter, we see that the employee expenses for the company have risen quite sharply on a sequential basis as well as on a year-on-year basis. So any idea you could give on that?
Basically, concerning the bonus and other things, steady on the October month and the Kaithal - Rajasthan project was completed and there was some incentive also paid and same is accounted during the quarter.
Right. So Anil, what should be the normalized level of employee expenses? Let's say for the full year, how much we could expect and -- in a normalized growth that one could look at?
For full year, [indiscernible] basically have a construction segment only. In the construction segment, that will be roughly close to -- just a moment.
You can give on a consolidated basis also if you like, as you can get as comfortable for you.
Yes. I think it will be -- based on the roughly current run rate is total INR 270 crores in the total expenditure. And I think if -- a portion in the equal quarters, I think that will be the broad range, roughly INR 350-odd crores maybe in the quarter.
So I think, Anil, you are giving the number including admin expenses, just more on the salary expenses.
Basically, if you look at the 9 months, we have total expenditure of INR 200 crores. If you can add roughly INR 70-odd crores more, so roughly INR 260 crores to INR 270 crores will be total expenditure.
So basically, you are saying fourth quarter should be -- should get normalized back to around INR 70 crores from INR 81 crores in the third quarter because there were certain payout -- bonus payouts and incentives which were paid during this quarter?
Yes, yes, yes.
Sure. On the construction business side, could you indicate what could be a good estimate for -- or what could be a guidance for the revenue for the full year?
So as I said, balance order book now remains at around INR 7,400 crores, which I said we will be executing over next -- around 9-odd quarters.
Basically, if you're talking about guidance for FY '18, as we have talked about, roughly INR 3,600 crores to INR 3,800 crores at the beginning of the year. Since we have already achieved roughly INR 3,000 crores of that number, I think the -- fairly INR 3,800 crores is quite achievable.
INR 3,800 crores achievable.
The next question is from the line of Vibhor Singhal from PhillipCapital.
Sir, 2 questions on my side. One is on the toll collection number. Sir, if I look at the toll collection for this quarter, adjusting the last quarter for the 23 days of toll collection that did not happen, I see that probably was around over -- reported around a 9% Y-o-Y growth in toll collection and Agra-Etawah is still quite muted at around 3%. Now I believe in the non-EBIT projects that we have, the other 2 projects in which we have -- I mean, the initial traffic, of course, also was a little below our expectations. So are we seeing any pickup in these projects which can probably take these projects back to the numbers where we are really expecting them to be? Have you seen any change in the ground reality in terms of the parallel growth that was impacting in Vadodara - Ahmedabad project? And any such thing in the Agra-Etawah as well?
So as far as Ahmedabad-Vadodara is concerned, certainly, we had a three-pronged strategy in place for turning around the project. One was improvement in the revenues, which is certainly happening, which is visible from the volume growth that has been witnessed. And second was on terms of interest rate savings, which also we have now achieved. And the third was with regard to the claim that we had with NHAI, which has now been sent to their head office where we will be further negotiating. So there has been considerable progress on all these 3 fronts as regards turning around these projects is concerned. And on Agra-Etawah, as you know, the project is still under construction, which also provides some disruptions on the traffic movement as we have seen in Surat - Dahisar in the past as well. But in terms of the overall visibility and the strength of the project, we are quite convinced that it will be a good project addition in our portfolio.
Fair enough. Sir, in the Ahmedabad-Vadodara project, what approximately could be, at this point of time, the share of toll collection between the highway and the expressway?
If you look at roughly INR 1.2 crores as the ballpark gross collection, we are expecting around 50-odd lakhs on NE-1 and around -- sorry, 50-odd lakhs on NH-8 and 70 lakhs on NE-1.
70 lakhs on the expressway?
Yes.
Okay. This is the current number that you're talking of?
Yes, yes.
And -- so I mean, if I'm right, I think the tariff for NH-8 probably is higher than the expressway. So I mean, is there a strategy also that we're putting in place so that the -- I mean, there is a shift of traffic that we can move towards expressway -- towards the highway, sorry? Anything that is being done on that part?
No, no, nothing of the kind.
Okay. So I mean, we're letting it progress as it is.
Yes, yes. We have already seen good ramp-up on NH-8 from around 40 lakhs, 42 lakhs, it has now moved up close to 50 lakhs. So we are seeing traffic coming back on NH-8 because it provides a considerably good quality asset, which is underutilized at the moment. And for somebody who's wanting to really use a quality road in the least possible time to reach between the destination, it offers a very good possible solution. So we believe that there is no need to tinker with the tariffs at this point in time, and we will continue to watch how it plays out.
Fair enough. Sir, my second question is for Anil. Sir, if you can just give the breakup of the order book project-wise. So the Goa-Kundapur, Solapur - Yedeshi, what would be the individual amount of project value remaining in the order book at this point of time?
Goa-Kundapur will be close to INR 250 crores. And basically, Yedeshi – Aurangabad will be close to INR 150 crores. Agra-Etawah close to INR 1,100 crores.
INR 1,100 crores?
Yes. Udaipur – Gujarat Border close to INR 1,800 crores; Gulabpura-Chittorgarh, INR 1,900 crores; Kishangarh Guplabpura, INR 1,550 crores.
Right. And the Solapur - Yedeshi will be completed also, sir?
Roughly INR 30-odd crores, not significant amount.
INR 30-odd crores. When then would we [indiscernible] for that, I suppose it is there in the presentation and [Solapur - Pune] INR 350 crores?
Yes.
The next question is from the line of Alok Deora from IIFL Wealth.
Sir, I just had a couple of questions, one was on the bidding part. So have we bid significantly from -- for the hybrid annuity projects? Because whatever the tender pipeline is affordable by NHAI, the toll project is very limited. So whatever we have bid now, would that be timely for the hybrid annuity projects? Is that understanding correct?
Yes, you're right. So the 3 projects which we mentioned where we have submitted a bid are all hybrid annuity projects. Some BOT projects continue to be on the anvil -- on the NHAI website as well as on some state highways, and we will be continuing to look at that. We believe there will be more BOT announcements happening in the next few months, that is the understanding we get to know. So as I said earlier, we will continue to look at opportunities and bid on all the 3 verticals going forward, which will include the default EPC mode, which is hybrid annuity and BOT and TOT as well.
Right. And sir, I just wanted some update on the [India Valley] Metro. So like I think we are shortlisted. So any update on that, when the awarding could happen and when the project could start? I mean -- and also the size of the project?
No, we haven't made up our mind on that project as yet. In case -- if we decide to go ahead, then we will certainly let you know.
Okay, okay. So we have not like really -- I mean, we would be participating or are we still in the...
I cannot disclose you that at this point in time.
The next question is from the line of Viral Shah from Emkay Global.
Just wanted to know what is the key project-wise contribution during the quarter? Can we have that number?
On the toll side?
On the revenue -- on the construction income side.
Basically, construction breakup is Yedeshi - Aurangabad, close to INR 200 crores; Karwar-Kundapur, INR 75 crores; Agra-Etawah, INR 230 crores; U.S. BOT close to INR 180 crores; CG Tollway Private Limited close to INR 80 crores; and Sindhudurg airport, INR 30 crores. And balance is utility shifting and others.
Okay. And secondly, sir, when do we expect the financial closure of the Kishangarh project to happen?
Yes, I'm happy to share that we have now received all the final sanctions and the documentation is being formed up. I think we should be able to start the project very soon.
Okay. Secondly, sir, has the project on the Chittorgarh-Gulabpura picked up significantly such as getting the appointment date?
Yes, the run rate is very strong at this point in time. We are expecting around 65-plus couple of lakhs here and there kind of run rate on a daily basis.
So can we expect the project to get executed early?
No, I'm talking about the toll revenues. The construction also has commenced. And certainly, as all the land issues are resolved in the project in the beginning itself, we certainly are sure to complete it in time. Early completion, we will not comment at this point in time.
The next question is from the line of Bharanidhar Vijayakumar from Spark Capital.
My question is on the TOT model. So is my understanding right that over and above the INR 6,300 crores that NHAI is expecting a onetime fee from the bidding concessioner, there will be a CapEx of about INR 900 crores for all these 9 stretches, is that right?
Yes.
Right. So the INR 6,300 crores plus the INR 900 crores would be, if we are the winning bidder, would be arranged through debt and equity, 70-30 roughly?
I won't be able to disclose how that whole mechanics will evolve at this point because we are still in the process of determining that. Largely, yes.
Okay. No, because why I'm asking this, at this size, it will be almost equivalent to our yearly target of getting 3 projects, the size. So that's why I'm just trying to...
Yes. But when you say size, it will mean from a CapEx perspective. But we have to keep in mind that we have to also look at the construction vertical, that we have been providing sufficient work for them to grow as well. So from a financial standpoint, you are right, but we'll also have to look at bagging projects for the construction vertical.
Understood. And again on...
And as you all know that the Hybrid Annuity Model is a less capital-intensive vertical. So even if substantial capital is likely to get deployed towards the BOT or TOT side, the hybrid annuity is not likely to warrant much of capital infusion.
Understood. Fine, sir. On the same breath, this financial bidding for BOT has been postponed by, you said, 2 to 3 weeks. Any particular reason?
I think you should pose this question to NHAI.
The next question is from the line of Aditya Mongia from Kotak Securities.
Sir, I wanted to focus on the Rajasthan - Kaithal project. Now the initial numbers which are coming across suggested -- against the debt, which is there on this project, fairly weak numbers to start with. So just wanted to have your view on whether these numbers were expected to start with or you expect them to pick up over time.
Yes, there are a couple of points which we'll have to look at; A, this project has been commissioned 5 months ahead of schedule. B, the tariffs that we have levied presently is around 88% of the full tariff. And C, when we had back this project, this whole corridor was under development mode. And we had looked at the traffic visibility on a whole corridor basis. Now we have completed the project ahead of schedule but the adjoining corridors happen to be still under construction, which is also providing a lot of deterrent in terms of the traffic from plying on it. And once those adjoining corridors ahead and behind us also get done, I believe the estimated traffic should be back on the road, which is presently using a detour rather than using this particular route. And one more point I would like to highlight here is if you go to the Bharatmala presentation, which is out in public domain from the Road Ministry, you will notice that there are 2 specific corridors as a high-density corridor identified by government of India. And this Kaithal project corridor also happens to be a part of that, which will be a significant focus area for the government of India in terms of developing it for decongesting the entire region. So we are very certain that once these adjoining projects are tackled, we will see the estimated traffic that we had emphasized during the bidding stage. But until that time, you are right, it is presently giving a lower revenue count than what we had originally planned.
Sir, would we have, sir, close to about 30 lakhs or more in this...
I think it was around 25 lakhs, and we are presently doing around 18 lakhs. But that 18 lakhs with the 88% number.
Understood, sir. Got it. Sir, secondly, on the construction side of things, I just wanted to clarify. You actually gave a guidance for the full year. What was this number for the construction revenue?
Basically, we will be able to achieve INR 3,800 crores.
3,800 U.S.A.?
Yes, 38 billion.
That was some -- I mean, that guidance was also around the same number.
Yes. So why I ask this question is it would appear as if the last quarter would be a good decline on a Y-o-Y basis. Is that the right way of looking at things? So backlog would start impacting the execution from fourth quarter onwards, is that the right way to look at things?
I didn't get that, sorry.
I didn't get it.
So I guess, would fourth quarter be a decline at [indiscernible] number, sir, on a Y-o-Y basis?
He has completely...
On the basis of guidance, yes. On terms of execution, it might be a surprising one.
Okay. So the related question was actually on the backlog now being at your estimate of full year at [ 11 2x ] book. So what is the strategy going forward for next year in terms of adding order inflows and thus growing the backlog from where it is today?
So as we have stated in the past as well, in terms of our execution capacity, I think 500 kilometers worth of road projects is something bare minimum, we will look to that. And now having decided to participate on the HAM side as well, I don't see that there will be a problem in terms of getting that kind of order visibility for the construction vertical.
[Operator Instructions] The next question is from the line of Shrinidhi Karlekar from HSBC.
Sir, when we used to target this broad project, we typically used to target something like 18% equity IRR, if I'm not wrong. Sir, what would be a similar IRR when you are targeting these hybrid annuity projects or it would be looked in a different way?
Yes, it's a good question. You're very right, when we look at the BOT bidding, we look at 18% equity IRR in terms of the equity that we'll be investing on the project other the construction profit that we will be booking. Whereas when we look at hybrid annuity project, we are looking at a default EPC. That's the way we look at it. That's the way the major of the project, to my mind, is. So the right way to look at the hybrid annuity is to look at the -- is to look at retaining the construction margins that we had been having in the construction vertical, which is in the range of 11% to 12% PAT. And I think that is something which we will be able to certainly achieve on the HAM projects that we'll be bidding on. I wouldn't look at it from an IRR perspective. I don't think the industry looks at it that way either. So it will be more of an order book and EBITDA and the PAT margins on the construction vertical that we will able to generate from these projects.
Okay. And sir, this 18% equity IRR that we target, that excludes currently -- like I'm asking on the BOT front, B-O-T front, that excludes construction income? Or it includes the construction income?
It excludes construction income.
It excludes, okay. And sir, in hindsight, you can see some of the projects that we've won. There were some of the things that were beyond company's control like, say, Ahmedabad - Vadodara where we have a panel role. Then, there's IRB Kolhapur project. The traffic was much below our expectation or those projects were asked to close. But in hindsight, sir, do you believe that in BOT project, we should target higher IRR because some of the risks just can't be factored in your model?
Certain aberrations experienced on the BOT over the last 20 years have been extremely good. We haven't experienced any issues with regard to the BOT model as such. When you discuss about Kolhapur, I would say that Kolhapur strictly is or was not a user pay concept project because it was a city development for which users were supposed to pay on entering and exiting the city. So it was not technically a user pay concept. So there, the city had resistance in paying toll and the government had to foreclose it for which they are compensating us. So it won't be a correct comparison. But Ahmedabad - Vadodara is one project where, again, we have been having a very strong concession agreement, which provides for all the required remedies that would be warranted to tackle the problems that we are facing. And on the execution perspective, I think whatever was possible in terms of reduction of interest rates or improving the revenue visibility, all that is being done by the company. So overall, I wouldn't say the BOT experience has been a bad one. On the contrary, I would say that it is one of the best methods to bid out projects from a government standpoint.
True. And sir, the last one, if I may. Sir, so you have raised this claim to NHAI. So how do you see it progressing in, say, the next 6 to 12 months? What could be the direction in which it can progress?
I assume that you are asking about the Ahmedabad - Vadodara claim.
Yes, yes, yes.
Yes. So there, it was delayed a bit because of the state elections. But as per our understanding, the findings of our -- or the response to our claim and their findings has been sent by the what we consider project unit of NHAI to their headquarters. And now we will be taking up with the headquarters with regard to the claim and the remedy available. And in case if required, it will go into an arbitration mode, wherein now government has set a fixed timeline of 1 year. So I think it is progressing in the right direction is what all I can say right now.
Okay. And sir, if it goes to arbitration, I guess, 75% would be deposited with some guarantees, right? That has been the...
That's the objective, winning an arbitration award.
Okay, winning arbitration. Okay, fair enough. And that's it from my side, sir.
Yes. But arbitration process has been defined to be concluded in a year's time, which gives us a good amount of comfort in that timeline perspective.
The next question is from the line of Rajesh Agarwal from Moneyore Investment.
Sir, what is the status of the...
[Technical Difficulty]
Sir, what is the update on the case pending in the [ Pune–Nashik ] quote?
At the moment, there is no update. It was filed and in response to that, we have filed a discharge application and the hearing is yet to happen.
None of the hearing has begun?
There is only one hearing.
And if we look here, would the case be followed up, no?
No. I mean, it will have to be posed to the [indiscernible].
The next question is from the line of Prem Khurana from Anand Rathi.
Sir, my first question was with respect to other comprehensive income. So there appears to be an INR 50-odd crore of negative number there. So what does that pertain to?
Basically, as far as in this adjustment, we have to do a mark-to-market, so that pertains to that only. So the reduction has a part in the investment of the InvIT investment.
Sure, okay, okay. And sir, [indiscernible] has been with the equity requirement and how would that be phased over the next 2 to 3 years? And also, if you could help me with the debt number between controlled entity and stand-alone in MRM?
So basically, in terms of equity requirement, that is close to INR 1,400 crores. Roughly, INR 800 crores will be required in this 1 financial year and balance INR 600-odd crores will be required in subsequent year. In terms of the debt, basically, both MRM and IRB put together, gross debt will be roughly INR 3,000-odd crores and the SPV debt is roughly INR 9,800-odd crores.
And how about cash number, how much is the cash available with us now?
Yes, total cash available is basically roughly INR 2,000 crores.
The next question is from the line of Abhishek Agrawal from [indiscernible].
Sir, my question is related to toll collection. Like, there are -- a lot of talk is going on that digital collection will be replaced by the automation or something. So what's your view on this? How much time it will take? And will we require to do any CapEx for that?
Yes, I'll answer it in 2 parts. As regards the automation-related part and revenue getting digitalized form of revenue generation, now we are generating almost close to 20% to 25% of the revenue is generated on the digital platform. And as regards the target is concerned, we would certainly want more revenue to come from this platform. And for that, all the lanes are being upgraded to hybrid lanes where the RFID tagged user can use any of the lanes for which NHAI will be giving a change of scope to take care of the CapEx involved in that. So once that process happens, certainly, more revenue will be getting generated from the digitalized format. And to answer your second part of the question, no, we won't be incurring any CapEx for that.
The next question is from the line of Aditya Mongia from Kotak Securities.
Just a clarification. What is the status of the Kolhapur project? Is it now completely out of company's books or is there still something pending on that side?
Yes, there has been a positive development now. MSRDC has confirmed the claim amount and additional INR 100 crores has been just released a few days back. So out of the INR 454 crores that we will be receiving now -- earlier, they had released INR 50 crores. They have now released an additional INR 100 crores. And we are hopeful that the balance payment also should come in, in the next 2 to 3 months.
So essentially...
We would be paid back all the investment that we have done in the project.
So the debt amount of INR 400 crores gets taken out from here, and then, what is remaining is us? Is that the way to read through it?
I think the outstanding debt is not INR 400 crores.
It's roughly INR 220-odd crores.
Okay. So INR 220-odd crores gets taken out from this, right?
Yes, yes.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Sir, we are considering bidding for the deferred EPC contract, basically HAM. So in future, is there any possibility that we may also start directly bidding for EPC projects?
Yes. If hybrid annuity also is stopped, then we'll build for EPC projects.
Okay. So you may directly -- I mean, the direct contractor then.
Yes, we had started our career in the same way.
Yes. And sir, just on the margin, I just missed. Probably I think this was asked earlier. So what kind of EPC margin we'll be looking at in the HAM projects? I just missed that.
I would like to say that we will be willing to retain our present EPC margins of around 10% to 11% PAT.
At EBITDA level?
At margins.
But EBITDA level, what had been -- is this similar to currently what we have...
No. I think EBITDA will be not the right way to look at it because we have said in the past that our EBITDA is higher because we have lower direct expense, more depreciation because of owning of equipment and no rental that we pay out like other construction contractors do. So the right way to look at comparative would be to look at the PAT numbers, and PAT will be in the range of 10% to 11% is what I can say.
Okay. But for modeling purpose, how much one should consider here because this...
Parikshit, what I would suggest is the way -- today also our EPC is structured. As far as net income is concerned, you can assume the same kind of profitability. How it gets split before that is something that perhaps even the accounting for SPV, et cetera, would consider or would depend on. So to that extent, it's best to assume that what is the net profitability that's coming in. And you can go backward the way you want.
Okay. And are you going to incur any significant CapEx for taking up these projects or...
No, no.
The next question is from the line of Vibhor Singhal from PhillipCapital.
Sorry to trouble you again. So I just missed out the number of the stand-alone debt and the equity requirement. Can I just please have those numbers, please?
Yes, stand-alone debt, both MRM and IRB, gross level is INR 3,000 crores. And basically, equity required is roughly INR 1,400 crores. Out of that, INR 800 crores will be required in the next 1 year and roughly INR 600 crores will be required in subsequent year.
Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.
Yes, we would like to thank all of you for taking time out and joining us on this conference call. We look forward to having you again with us when we come out with the audited results for the period ending March. Until then, have a very good evening. Thank you.
Thank you. On behalf of IRB Infrastructure Developers, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.