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IRB Infrastructure Developers Ltd
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Good evening, ladies and gentlemen. Welcome to the IRB Infrastructure Developers conference call for discussing the financial results for the quarter ended March 31, 2023 and financial year ended March 31, 2023, along with recent developments. We have with us on the call today, Mr. Virendra Mhaiskar, Mr. Anil Yadav, Mr. Mehul Patel and Mr. Tushar Kawedia. [Operator Instructions]. Please note that this conference is being recorded. I now request Mr. Anil Yadav to give you an overview of the significant development during the quarter. Thank you, and over to you, sir.
Thank you. Good evening, everyone. I welcome all the investors and analysts on the quarterly con call. Hope you all have been able to go through our detailed numbers as well as presentation release. We are pleased to inform you that our private InvIT has been listed on NSE on April 3 2023, in line with this a semi InvIT regulation, which requires listing of all invests. On the day of listing of trust has 10 assets spread across 7 states of India, and having a balanced average concession life of around 21 years and with total enterprise value of more than INR 28,000 crores, and equity value of more than INR 18,000 crores.
The IRB Group has now listed the third entity that is IRB Infrastructure. The combined market cap of all 3 entities more than INR 38,000 crores and gross debt for all 3 entities less than INR 26,000 crores. The implied debt-to-equity ratio for the group is very low. That is less than 0.7x to the gross debt. This means that IRB Group is well capitalized to grow strongly from here on by undertaking the large-sized projects.
The traffic momentum continues. Mumbai-Pune reports 16% growth for FY 2023 as compared to FY '22 without any tariff revision. Ahmedabad Vadodara reports 23% growth for FY '23 as compared to FY '22. We have also witnessed robust growth in the private InvIT. Private InvIT portfolio grows at 70% in terms of toll revenue for FY '23 as compared to FY '22.
Recently, we have backed 2 projects that is one upgradation of 6 laning of NH27 from Samakhiyali to Santalpur having project cost of INR 2,132 crores and concession life of 20 years on BOT business from NHAI and State of Gujarat. The project will be funded by a debt of approximately INR 1,400 crores and balance through equity and internal accruals. IRB share of equity is less than INR 350 crores.
And the second project is in state of Telangana. It's a 8 lane highway. Hyderabad ORR project, starting at kilometer 0 at Narsingi junction and ending at kilometer 158 that is at Gachibowli in Hyderabad. In the state of Telangana, an upfront payment of INR 7,380 crores for a concession period of 30 years.
The total CapEx will be around INR 8,400 crores, which will be funded debt of INR 5,500 crores and balance through equity of INR 2,900 crores. IRB share will be close to INR 1,500 crores. The total order book of the company now stands at INR 20,500 crores. EPC order book is close to INR 9,000 crores, providing good revenue visibility for next 3 years for construction segment and further bolstered by a 3-year executable O&M order, which is close to INR 2,000 crores. This excludes the order book for Hyderabad ORR project. Hyderabad ORR project will add EPC of INR 450-plus crores and O&M order book of INR 14,500 crores.
TOT project not only provides the visibility for toll revenue, but also significant long deviation O&M order book, which provides visibility for construction revenue as well. Including the Hyderabad ORR project, now our O&M order book is more than INR 25,000 crores. As per dividend policy of the company, the Board has declared second interim division of 7.5% on face value of equity share rupee 1 each, making aggregate dividend payout for the current financials, that is FY '23 of INR 120 crores.
Now I will request Sri Tushar to provide the financial analysis for March 31, 2023. Over to you, Tushar.
Yes. Thank you, sir. I'll brief about the financial analysis for Q4 FY '23 versus Q4 FY '22. The total consolidated income for Q4 FY '23 has increased to INR 1,699 crores from INR 1,683 crores increased by 1% over Q4 FY '22. For previous year FY '22, in the fourth quarter, we had a onetime income of Goa claims or Goa budget. Hence, the numbers are not comparable. The consolidated toll revenues for Q4 FY '23 have increased to INR 547 crores from INR 510 crores, increased by 7%.
The consolidated construction revenues for Q4 FY '23 has decreased to INR 1,151 crores from INR 1,173 crores, decreased by 2%. EBITDA for Q4 FY '23 decreased to INR 838 crores from INR 891 crores, declined by 6%. Interest cost has decreased to INR 373 crores in Q4 FY '23 from INR 399 crores, down by 6%. Depreciation has increased to INR 222 crores in Q4 FY '23 from INR 189 crores. Increased by 18%.
EBITDA has decreased to INR 242 crores in Q4 FY '23 from INR 303 crores, down by 20%. PAT before share of JV decreased to INR 167 crores from INR 234 crores in Q4 FY '20. PAT after share from JV has decreased to INR 130 crores in Q4 FY '23 from INR 175 crores in Q4 FY '22, declined by 25%. Cash profit has decreased to INR 389 crores in Q4 FY '23 from INR 424 crores in Q4 FY '22, decreased by 8%.
Now I request moderator to open the session for question and answer.
[Operator Instructions]. The first question is from the line of Alok Deora from Motilal Oswal.
Sir, just had a couple of questions. So first is, there was this -- loss at the JV level has increased quite substantially if you look at that compared to the last 2 quarters. So just some view there because what we were of the impression that it would be at the stable level going ahead?
Alok, we have started revenue share in Kishangarh Gulabpura and Hapur Moradabad projects. And last quarter, the loss was INR 12 crores. And this quarter, it has increased to INR 37 crores, it means the increase of 25%.
And since our share is only 51%, it means that revenue share number is close to INR 50 crores. And as we have moved in FY '24 we have got tariff revision of 5%. And also if we expect a 5% to 6% kind of traffic growth, then around 10% revenue growth will be there in FY '24. And considering the last quarters, toll collection was INR 565 crores. If we annualize that number, that reaches to close to INR 2,300 crores of revenue, 10% of that will be roughly INR 230 crores. Whatever the revenue share is coming -- impact of revenue share is coming in this quarter, that will get negated by growth in the next financial year.
So what's the run rate we should work with for this -- if I take FY '24, so how much would this number look like?
I think for an entire financial year, it should be in the range of INR 50 crores to INR 60 crores of loss for next financial year.
Sure. And also just wanted to understand, like there were your EBITDA increased of rupee and there was a big toll price change expected from April for many projects. So have we undertaken that? If you can throw some light on that?
December WPI was close to 4.95%. And we have got almost 5% tariff revision in line with the WPI. On Mumbai-Pune Expressway, we've got 18% increase on NH4, we got a 15% tariff increase.
So all this will come from April onwards?
Yes, 1st of April.
Sure, sure. Just one last question from my side. So now what's the ordering scenario because this year, what we understand is due to the election year, the ordering will be kind of tail for the first 8, 9 months, and then it will kind of dry out. So since we have got a very decent order book now, how are we approaching it?
And also, if you could throw some light that how are the BOT toll projects coming up if at all? Because what we have been anticipating BOT toll projects have not been so much also in the overall NHAI awarding, just your views on that?
So our stance continues the same as it was and the priorities will remain BOT, TOT and HAM in that order. So as you know, we have already banked one large TOT. There are a couple of more TOTs coming up. So we are looking at participating in those. At the same time, we expect the BOT pipeline to shape up well. I'm sure you would have come across several articles on the filing up of NHAI debt that has been coming around in the last 1 week.
And we sincerely feel that there would be an uptick on the BOT ordering. Nevertheless, TOTs with sound CapEx are also something which we can alternatively look at and that is the strategy we will adopt to ensure a good order book intake and good portfolio building exercise.
For this year, sir, how much we are targeting?
Yes, I think the way we look at growing business is a combination of what we can execute and how much capital can we invest. So from the investment perspective, we certainly can add another INR 10,000 crores worth of assets in the coming year.
Now whether the asset is in the BOT side or TOT side, is something which will be decided basis, what comes up for bidding. But certainly, the appetite with the company to grow at this pace remains intact. After taking into consideration the Hyderabad TOT CapEx.
Sure. Just one last thing, sir. This Ganga Expressway, the construction has started, so what kind of revenues would be seeing in FY '24 from this particular project?
So a run rate of at least minimum INR 500 crores per quarter, taking it to INR 2,000 crores to INR 2,200 crores for FY '24.
Sure. And sorry, in this HAM project, there was this 20% [indiscernible] 20% equity by the authority. So any update on that, sir? Because actually there is no update we have got from anywhere, so if you could just provide any update if that is happening or not happening or...
So we haven't heard about that particular initiative as yet.
[Operator Instructions]. The next question is from the line of Nikhil Kanodia from HDFC Securities.
Sir, first of all congratulations on the recent set of numbers. So my first set of questions are based on the guidance. So if you can throw some light on the [indiscernible] revenue margin, CapEx guidance and also the equity infusion that you are planning to do within like in coming years?
So Nikhil, on the next year plan, we are envisaging our contract revenue somewhere between INR 4,900 crores to INR 5,000 crores, which is almost 20% to 25% up compared to our FY '23 numbers. We are expecting a margin stable between, say, whatever we are delivering so far. So between, say, 23% to 25%.
And on a BOT, as we have already disclosed, the toll collection what we are assuming because Mumbai-Pune has received an 18% tariff hike and the Ahmedabad - Vadodara at 5%, so a traffic hike of somewhere around 7% to 8% for Mumbai-Pune and another 5% for EV. The gross toll collections, what we are expecting is around 20% higher than what we have achieved for FY '23.
Okay. And sir, what would be the CapEx that you are planning to do in coming years?
So equity requirement for next year for us with the existing project is INR 1,000 crores for FY '24 and another INR 250 crores for the next year. This is for the projects -- ongoing projects with us.
Okay. And sir, with the recent win of the overall, -- sorry, yes.
Nikhil, sorry to intervene. This includes the Samakhiyali project also.
Okay.
Yes. Sorry, you were asking something.
Yes. Sir, with the recent win of the overall projects. So going ahead, what sort of projects are we, like, number one, what is the bid and then what sort of projects are we like, -- like we have a chance of winning, so like the debt numbers would have already gone up. So what is the leverage that we can take in going ahead in the future and the size of the project that can be won?
So I think we need to be seeing the fact that these projects will be executed through the private InvIT platform. So firstly, this debt will not consolidate in the IRB debt. Number two, if you look at the equity value of the private InvIT, it stands at around INR 17,500 crores and the debt there is hardly INR 10,000 crores. So we can certainly grow faster in CapEx heavy projects going forward. We have enough leg room there to grow the asset base.
Sir, the leverage on the private InvIT like is similar to what we can take in the public InvIT like as per the SEBI guidelines?
In fact, we can go higher there up to 70%.
[Operator Instructions]. We have a follow-up question from the line of Nikhil Kanodia from HDFC.
Sir, in the guidance front, on the order inflow, I guess, I missed the numbers. So can you please repeat the order inflow guidance for the next year?
So we have -- so on the order inflow, as I said, from a CapEx side, we would target somewhere close to INR 10,000 crores. Now I'm not saying whether this will be construction CapEx or TOT or a combination of TOT and BOT. But we look at 2 parameters when we look at incremental order intake that, as I said, one is the execution capacity on the construction side and the capacity to infuse the required equity into these projects. So the range which we feel we can certainly take in for the upcoming year is around INR 10,000 crores. It can be a combination of a BOT and TOT or a TOT and a HAM, the way the opportunities make themselves available.
Okay. Okay. And sir, the recent ORR project, I guess it is rooted to the private InvIT, so have we also received the GIC shares of -- share of equity inclusion in the project?
So I think as we clearly have a policy, we endeavor to execute this project through private InvIT. And as soon as we have achieved the financial closures, we would announce the same, we have 120 days to announce the financial closure for the project.
Okay. Okay. Do we have any outstanding credit rating on the project as of now, be it in the provision one or on the actual debt numbers?
For the ORR, you mean?
That's correct, sir.
For ORR, we expect -- I mean we are working with credit rating agency. So all of the funding details and the credit rating and how it's going to fit in the overall scheme of things, we will come out with a detailed presentation on [ ST ].
Okay. So you mean as on date, we don't even have any provision rating on the project, right?
I think the agreement is yet to be signed.
The next question is from the line of Teena Virmani from Kotak Institutional Equities.
My question is regarding the equity investment breakup that you have shared for INR 1,000 crores for FY '24 and INR 250 crores for FY '25. Does this include this Hyderabad TOT?
No, it doesn't. No, it doesn't include the Hyderabad equity.
Okay. So including that, so that would be somewhere around INR 1,500 crores upfront for FY '24. This will have to be put entirely altogether.
Yes.
Okay. Okay. So effectively, it will be INR 2,500 crores for FY '24 equity investment?
Yes. That's right.
And INR 250 crores for FY '25 based on the current set of portfolio of projects?
Yes.
So for meeting this INR 2,500 crores of equity requirements, how would that happen? Because these are the investments which would have to be routed by a core company.
Right.
So how would the funding for this entire INR 2,500 crores work out?
So we have a good amount of cash on hand plus the cash that will be generated during the upcoming financial year, a combination of that, plus the part of the equity will be coming from the private InvIT side. So all put together, we should be very comfortably be able to meet this target.
Okay. Sir, INR 1,000 crores is IRB share not the entire equity, -- INR 1,000 crores for FY '24, excluding Hyderabad TOT?
Yes. So IRB share, excluding ORR is INR 1,000 crores. And as you rightly said, the Hyderabad number would be in the range of around INR 1,500 crores. So all put together [indiscernible] crores is the equity commitment that we will have on hand for FY '24. And we are very confident to meet that. We have a plan in place, and we will discuss the details once we have achieved the SP.
[Operator Instructions]. The next question is from the line of Nikhil Abhyankar from ICICI Securities.
So just a segment question, sir. Are toll collections to the private InvIT route has been increasing significantly in FY '23. So is there any chance of higher dividend payouts in this year? And if there is, then can you just quantify that?
We are working on those. You are right, that the collections are improving extremely well. And there would be a good amount of distribution that should become feasible. So at the moment, we would not like to give any specific guidance on that aspect, but your thoughts are rightly placed. And that also would come in handy to meet the overall equity requirement.
Okay. So these will be basically used to fund the equity requirements?
Equity requirements for the IRB CapEx.
[Operator Instructions]. Next question is from the line of [indiscernible], Individual Investor.
Yes. So my question is on HAM project. Can you give any guidance on monetization of [indiscernible] what I understand last time you mentioned we would be moving this [ positively ].
So IRB now has 3 HAM projects, which are under various stages of development. And as per our stated policy, once we complete the projects and they become eligible for transfer, we will certainly be offering them for sales to either public InvIT or any other investor who's interested to buy it.
So can we expect any monetization in the balance sheet?
No, I don't think we will be eligible for the same.
[Operator Instructions]
If no more questions, I think we can conclude the call.
Yes, sir, there are no further questions. I now hand the conference over to Mr. Mhaiskar for closing comments.
Yes. Thank you, everyone, for being on this call, and it has been a great year gone by, and we look forward for a more engrossing year going forward in terms of growth and look forward to meet you all again on the first quarter results. Thank you, and have a great evening.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using Researchbytes conferencing services. You may please disconnect your lines now. Thank you, and have a great evening.