Ircon International Ltd

NSE:IRCON

Earnings Call Transcript 2024-Q1

[Operator]

Good afternoon, ladies and gentlemen. I'm Nirav, the moderator for this conference call. I thank each one of you for joining us today for the Ircon International Limited Q1 FY '24 Analysts Conference Call. [Operator Instructions] Today we have with us from the senior management represented by Smt. Ragini Advani, Director of Finance; Shri. B Mugunthan, Chief Financial Officer and Executive Director of Finance;and Shri. Alin Choudhary, CGM Finance.I would like to remind you that some of the statements made in today's call, or discussion, may be forward-looking in nature. It is subject to several risks and uncertainties that the actual results could materially differ. [Operator Instructions]I would now like to hand the conference over to Smt. Ragini Advani for the opening remarks, after which we will have the forum open for interactive Q&A session. Thank you and over to you, madam.

[Ragini Advani, executive]

Thank you. Thank you, Nirav. Good afternoon, everyone. I'm Ragini Advani, Director of Finance at Ircon International Limited. On behalf of my team, I extend a very warm welcome to all of you and thank you for your presence today at Ircon's earning call for first quarter ended 30th June 2023.I have with me Shri. B Mugunthan, my Chief Financial Officer and ED Finance and Shri. Alin Roy Choudhary, CGM Finance.We extend our heartfelt gratitude to all our esteemed stakeholders whose unwavering support and trust have been instrumental in driving this organization forward. Our focus remains on creating a strong foundation, sustainable and profitable growth, while maintaining a robust balance between short-term profitability as well as long-term value creation. Our commitment lies in extensive expertise, abundant resources, strategic partnerships to fuel culture of innovation, increase operational efficiency and secure superior outcomes on behalf of all our investors and stakeholders.I'm pleased to report that our ongoing projects are progressing well. Milestones are being achieved within the scheduled timelines. Our technical teams have demonstrated exceptional dedication, expertise and a commitment to overall corporate governance and safety matters. And it has allowed us to overcome all the challenges that we had and deliver excellent outstanding execution results. I'm sure you have all gone through the financial results of the company as well as the investor presentation that was uploaded.We are delighted to inform that Ircon has achieved the highest-ever first quarter turnover. Let me now take you through a snapshot of our financial performance for Q1 FY '24. The company has reported a total revenue of INR 2,828 crore in Q1 FY '24. This is as high as 37% increase over the corresponding period of the previous last year. PAT has increased by 30% to INR 187 crore as compared to INR 145 crores in Q1 FY '23. Core EBITDA has increased to INR 204 crores vis-a-vis INR 172 crores for the corresponding previous year quarter. Earnings per share have also gone up to INR 1.99 per equity share in Q1 FY '24 as against INR 1.54 in last fiscal Q1 FY '23. And this is on a face value of INR 2 per share.The order book of the company as on 30th June 2023 stood at INR 32,486 crores, which comprised about 45% orders on nomination and 55% on a competitive basis. The domestic international split of our order book is in the range of 91:9. And currently, Ircon, as you all are aware, has 11 subsidiaries and 7 joint ventures. All of these subsidiaries and joint ventures along with Ircon, we are essentially into roads, railways, highways, renewable power projects.Now without taking much time, I would now like to open the floor for the Q&A session. Thank you.

[Operator]

[Operator Instructions] First question is from the line of Manish Ostwal from Nirmal Bang.

[Manish Ostwal, analyst]

My question on the order book trend which we are seeing in last 4, 5 quarters, it is not growing even if you look at Y-o-Y and quarter-to-quarter basis. So how do you see the growth in the order book and order inflow for the rest of the current financial year? That's the question number one. And the second question on the margin side. You've seen some improvement on margin on quarter-to-quarter basis. So where is the operating margin to settle down given our current order book position?

[Ragini Advani, executive]

So answering your first question. As far as the order book is concerned, we have been maintaining that previous year we were focusing on execution. And now we have picked up our marketing and business development activities again. We do hope to get orders in the range of INR 10,000 crores to INR 12,000 crores in the current year, so that our order book remains in the levels of about INR 35,000 crore at the year-end as well. As regards the orders that we secured in Q1, there have been some orders that we secured of a smaller value. But going forward, we are hopeful, as we mentioned, that we'll be able to get overall in the entire financial year orders equivalent to the range of INR 10,000 crores to INR 12,000 crores because we are fairly at advanced levels in certain orders. As regards margins are concerned, this is an EPC business. We have been maintaining that the PAT margins will be in the range of 7% to 7.5%. And our EBITDA margins will be in the range of 10% to 11%. And we continue to maintain that stance. Quarter 1 has given us results slightly better than earlier thing. And but it is also the fact is that there are certain provisions which typically come at the year end. So on a year-to-year basis, I think that is where we would like to continue maintaining ourselves. Our Q1 has given us results much better than the market or our own expectations in terms of margins. But overall, it should come down to that level eventually.

[Manish Ostwal, analyst]

And lastly, in your press release you mentioned that the prime minister recently announced railway station development. So in that market opportunity, do we share a significant portion for our company? Or how we participate in that opportunity? The station development opportunity.

[Ragini Advani, executive]

This is a new item. And as you rightly mentioned, our honorable prime minister has talked about 508 station developments. These projects are of a very small size. They're typically in the range of INR 20 crores to INR 30 crores. And again, when we've been making our analyst calls, we've been explaining that the niche for Ircon lies in slightly bigger size projects and also in complex projects, which involves tracks, tunnels, bridges, that kind of a work. So this is not our immediate pie of orders that one will look at. However, should there be certain station development projects of a bigger or a larger value and where we see we can fit in, we'll definitely look at those opportunities. But the typical project size of INR 20 crores to INR 30 crores is not something that we'll be looking at.

[Operator]

[Operator Instructions] Next question is from the line of Swechha from ANS Wealth.

[Swechha Jain, analyst]

Ma'am, I had few questions. So my first question is regarding the order book and the order wins. So if you could tell us how many orders that we won in -- or new orders that we added in Q1 FY '24? And also if you could give me the value of the orders that we've already submitted our bids for, but the decisions are still pending?

[Ragini Advani, executive]

So we have won orders to be trend of about INR 200 crores to INR 250 crores in the --

[Swechha Jain, analyst]

In Q1?

[Ragini Advani, executive]

Yes, in Q1. As regards the orders that we are pursuing, obviously they are much higher in number, and it also depends because it's a competitive bidding. It will really depend on who becomes the L1. Some of them are QCBS where we have scored a high technical score. But I mean, at the end of it, you are quoting for a much bigger pie and then getting a share of it. So, those numbers would be humongous. But I think we would like to announce as and when those orders come of the value at which they are. But overall, we are quite comfortable with our existing order book position. And the fact that we'll be able to recoup the order to about INR 35,000 crore level by the year end. That's something that we are looking at, and we are very confident about it.

[Swechha Jain, analyst]

Okay. Okay. So any broad ballpark number also you would not be able to give --

[Ragini Advani, executive]

No, because it is very difficult. If I was to say that I'm sticking in for INR 20,000 crore job, it has no meaning for you because it really depends on how many of them you would turn out to be L1. And it's other way round also. If I know some of them are very close, I would rather not announce till it is done because at the end of it, it's all an L1-driven industry. So I think that is where we would like to stay put at this point. And we'll be happy to share as and when those orders are reasonably certain.

[Swechha Jain, analyst]

Okay. Okay. So just one follow-up on this. So this is about the orders that you already submitted. But if you could give some sense of what kind of bid pipeline that we are looking at, are we bidding in the export market? Some color, if you could give there.

[Ragini Advani, executive]

See, there are 3 main areas in which we are working right now. One is of course the rail project. And when we say rail projects, it is not just the Ministry of Railways but also the associated projects, which is your bullet train and your dedicated freight corridors and associated projects. So if you were to look at an opportunity sitting there, it's humungous. So those projects, as and when they come up, provided they are of a reasonable size and have a good technical involvement, we'll be bidding for all those kind of projects. And depending upon our ability as well as pricing because we've also maintained that we would like to do a sustained pricing, we will not get into a case where we are taking the order for the sake of making losses. So given these 2 factors, that's something which we'll continue to bid and get reasonably size orders from that industry because that's where our forte is, our experience is. And second is that on roads and highways, again we will continue with certain PPP project bidding for HAM projects. And as far as international markets are concerned, the existing markets in which we are working, which is Bangladesh, Sri Lanka, Nepal, there of course we are already talking to those governments and trying to get some more projects. They're also in pipeline. But in these kind of projects since these are specific country outside-of-India-driven projects, and some of them may not be MEA- or LOC-driven projects. These projects may take a little time to establish and then come out. But all those exercises are happening. Beyond these countries, the rest of the countries, again, for example, are CMD went with a delegation to Africa, to Tanzania, and there are certain opportunities that we are looking at in those areas. But those are the steps that have just been initiated. It could happen in few months, it could take certain years as well, but we are totally on that job as well. And those are the areas which we are continuing to do. And we should be hopefully getting, if not immediately, over a longer period of time we should be getting international orders as well of a significant amount. So all these would be our focus areas.

[Swechha Jain, analyst]

Understood. Okay. So, ma'am, we have an other income of INR 111 crores. Could you tell me how much of this is on account of HAM projects?

[Ragini Advani, executive]

Yes. So HAM projects is roughly about INR 47 crores.

[Swechha Jain, analyst]

Okay. So ma'am, actually in our last call we had kind of said that INR 80 crores on a quarterly basis is what we'll make on HAM projects going forward. So this is significantly lower than that number. So what kind of led to this lower income from HAM projects in this quarter? And then how should we look at it going forward? Can we do that INR 80 crores kind of a number from next quarter or this guidance changes?

[Ragini Advani, executive]

No. So what happens is that there are certain projects which are currently operational. There are certain projects which will get operational in the next few months. And also, there is a part which we call a scoping and descoping which happens. So going forward, we should be able to do more than this INR 47 crores. And our guidance on this other income that we'll be earning. So when we were talking about INR 80 crores, that also included O&M number along with the interest income number. So that O&M number will probably figure in this interest on financial asset. So when I'm telling you INR 47 crore, this is out of INR 111 crores.

[Swechha Jain, analyst]

Right. So last quarter, out of INR 173 crore, we had done INR 80 crores on HAM projects, right?

[Ragini Advani, executive]

So, that INR 80 crores, last time when we did, included a cumulative catch-up on one of the projects. It was not -- INR 87 crore was not a number which would happen every quarter out of the 2 existing projects. So where we have 2 operational projects, Vadodara Kim and Davanagere Haveri as of now. So in Vadodara Kim, there was a catch-up which happened in the last quarter which will obviously not happen going forward. So interest income that will sit in other income currently will be in the range of INR 45 crores to INR 50 crores on account of HAM projects. But on an overall basis, the annuity number should be in the range of about INR 80 crores every quarter.

[Swechha Jain, analyst]

Okay. Okay. Okay. And sir, just one last clarification. I think you mentioned in the previous answer to a participant that EBITDA 11% be maintained. This is not the core EBITDA, right?

[Ragini Advani, executive]

No, it's not core EBITDA.

[Operator]

Next question is from the line of Pranay Khandelwal from Alpha Invesco.

[Pranay Khandelwal, analyst]

Okay. Just a housekeeping question. I just wanted to understand how is the core EBITDA calculated?

[Ragini Advani, executive]

Core EBITDA is basically by taking out your other income.

[Pranay Khandelwal, analyst]

Okay. But then based on the --

[Ragini Advani, executive]

EBITDA excluding other income.

[Pranay Khandelwal, analyst]

Based on the presentation, I think our core EBITDA right now is 7.52% this quarter.

[Ragini Advani, executive]

Yes.

[Pranay Khandelwal, analyst]

While if we take out the other income and calculate it, it comes out to around 7.8% or so. And some discrepancies also there in the quarters before this. That's why I wanted to understand where might be this difference coming from.

[Ragini Advani, executive]

No, I think that's a calculation that you can check with my team subsequently. But yes, it is typically that and you can check it with my teams after this.

[Operator]

Next question is from the line of [ Ashutosh ] from [ Ambit Portfolio Management Service ].

[Unknown Analyst]

So just a broad understanding, I'm asking on a core EBITDA level. So if I see your core EBITDA level for -- I mean, you have grown quite significantly in the last 2 or 3 years now but your core EBITDA has actually come down from 11%, 10% to almost 7%, 7.5% now. So, A, can you explain the reason for this? And going forward, on a core EBITDA level, what are your expectations? I mean have you seen the last or the lower margins from a core EBITDA aspect? And can we see them improving back to 10%, 11%?

[Unknown Analyst]

Okay. So there are 2 things. The first thing is that as far as 11% margins were concerned couple of years back, they were exceptionally high for this industry. Once we've come into a competitive build and also once we have lesser share of international projects, the EBITDA -- core EBITDA margins will remain in the range of about 7.5% to 8.5% or maximum 9%. Now when I say core EBITDA margin, 7.5% to 8.5%, this is excluding the total other income that we have shown quarter-on-quarter. But if you typically see that also has an amount which is something that I'm earning as a part of my annuity and projects. So that ideally is out of my operations only. And it doesn't get depicted in an Excel that way. But if I was to add back that number, I think it should add to about 1%.

[Unknown Analyst]

Yes.

[Ragini Advani, executive]

Yes?

[Unknown Analyst]

Yeah.

[Ragini Advani, executive]

So, yes, that will remain. See, we've always said that currently the profit margins that I'm getting at a PAT level as well as at a EBITDA levels is what is sustainable. What I had a couple of years back was not sustainable. It was an exception.

[Unknown Analyst]

So just to understand, so do you mean to say before let's say 3, 4 years back, it was not on bidding basis? Or were there some --

[Ragini Advani, executive]

So there were 2 things. One, we had some significant international projects where our margins were as high as 40% to 50%. So those projects, I mean, we got a one-off. We'll be happy if we get on in future also, but you can't be relying on those because internationally also now most of the bids are done on a competitive basis. And the second thing is that, yes, to some extent earlier entire business was practically on nomination, then over the years it became on to competitive basis. So that is something which will, over a period of time, now that the competition is totally there, there had been some cuts in margins and which we have said that has happened. And now it will continue on levels at which we've been doing our FY '23, et cetera.

[Unknown Analyst]

Yes. That is helpful. So this competition is basically from private players also?

[Ragini Advani, executive]

Yes, that's right. From every player in the industry. It's not just between the public sector.

[Operator]

Next question is from the line of Dipen Shan, individual investor.

[Unknown Attendee]

I had a couple of questions. Firstly, in the first quarter we have done a significant growth of more than 30%. How would you look at the full year? Last time you told we should be looking at maybe 8%, 10% kind of growth. But looking at the first quarter, should we aspire to be or should we look at a higher number in that?

[Ragini Advani, executive]

I would still say that we would say around 10% is what we will expect. But, yes, we will definitely aim to do much better because we do have the order book and we do have the execution skill sets. But I mean with the kind of industry in which we are working, it really depends on lot of factors which are beyond our control also as well. So we'll be happy to take anything beyond that. But as of now, as a management, we would say that we expect the growth in the range of 10% over the previous year.

[Unknown Attendee]

Okay. And in the high-speed rail project, recently there was a contract which was finalized and probably a private player has won it. So any further contracts? Or are we bidding for any further contracts in the high speed rail project or any other area where we have got a higher technical expertise? And maybe you have a higher --

[Ragini Advani, executive]

Yes, absolutely. As we've been maintaining, we are and we will be bidding for all projects where we feel our technical expertise will be utilized to the maximum because that's where our niche lies. And also unlike many other companies, we like to take a project which we deliver with quality and time. So that will be continuing as our focus area. But I mean, at the end of it it's a competitive sector, and we are fairly confident of our skill sets as well as pricing. So as and when we get the order, we'll be happy to share it with you. But yes, definitely, that is our focus area, no two ways about it.

[Operator]

Next question is from Shreyans Mehta from Equirus Securities.

[Shreyans Mehta, analyst]

Congratulations on a very good set of numbers. Ma'am, I joined a bit late, so my questions -- so first, on the revenue guidance, would like to throw some numbers, given that 1Q is much better than what we had expected.

[Ragini Advani, executive]

Yes. So I think the previous stakeholder also asked the same question. And I just mentioned that, yes, we are very happy with our Q1 performance. And we hope we can take it forward in the other quarters. But on an overall year basis, I would still like to say that we should be about increasing our overall revenue in the range of 10% over the previous year. If we do better than that, we will have a clearer picture probably in Q2 or early Q3 and we'll be sharing it forward. But that would be the overall factor right now because there are many extraneous factors which at times are beyond us. And therefore, we will not like to overcome it to any of our investors.

[Shreyans Mehta, analyst]

Got it. Got it. Got it. Ma'am, second question is pertaining to the press release, which was given that one of our JV, Bastar Railway, would be taken over by the Railways. So what is the investment out there? And how much will we be getting from that?

[Ragini Advani, executive]

So it is just an in-principle decision which has happened right now. And our equity investment in that project was INR 76.34 crores. We will be working out the pricing. It should be on a mutually agreed price. But this is a project which has just started. Land was taken and some basic earthwork was started. So I think it should eventually materialize around the level at which we have invested only. But the nitty-gritties and the details we will do -- as and when we tie it up Railways we will share it with you all.

[Shreyans Mehta, analyst]

Got it. And, ma'am, this is the equity portion. And it was which we've given in the form of loans and advances or any other advances to this subsidiary?

[Ragini Advani, executive]

There are no advances, no loans. In fact, that entire project, that JV had also not taken up any loans so far. So it was at a very preliminary stage when it's being announced to be taken over by Railway. It's not much of a problem that way. Yes.

[Shreyans Mehta, analyst]

Got it. Got it. Got it. Sure. And certainly, ma'am, in terms of order inflows, we were driving for that order inflows would be -- will be targeting from second half onwards. So how much can you expect going forward?

[Ragini Advani, executive]

So I just mentioned that we will like to keep our order book in the range of INR 35,000 crores by the year-end. And that is something which we are targeting and going full-fledgedly to look for orders, securing orders in that range or even higher. But as and when we get those orders, we'll be happy to share it with you all.

[Shreyans Mehta, analyst]

Sure. Ma'am, and then lastly on the cash on books, our own cash and the investments which we made and likely investments in next couple of years.

[Ragini Advani, executive]

So our own cash is in the range of INR 800 crores to INR 900 crores. And as far as the investments which we are likely to make, these are in the range of about INR 1,150 crores to INR 1,200-odd crores cumulatively, out of which INR 500 crores to INR 600 crores should be in the current year.

[Shreyans Mehta, analyst]

And how much have you done till yet?

[Ragini Advani, executive]

-- we've already made, I think it's in the region or range of about INR 2,200-odd crores.

[Shreyans Mehta, analyst]

INR 2,000 crore, an incremental INR 1,000-odd crores.

[Ragini Advani, executive]

Incremental another INR 1,100 crores, yes.

[Operator]

Next question is from the line of [ Amit Kumar ] from [ Beta Mine Investments ].

[Unknown Analyst]

Just one question with respect to what kind of [indiscernible] you are bidding for, we've seen a few of your peers like RVNL enter into very wide variety of segments, roads and gone very, very aggressively into international as well. So just wanted your thoughts on in terms of whether you are also sort of looking at segments other than railways and international markets. So India versus international and railways versus nonrailways in terms of opportunities and risks, if you can just --

[Ragini Advani, executive]

So the first thing is that apart from railways, we are already in 2 group. RVNL has recently taken one order there. But we've been taking orders on roads and highways in PPP mode as well as otherwise for few years now. And in fact, 4 of our assets, in fact 5 of our road assets are already operational. So that's something which we are doing continuously and we'll continue to do. Railways will remain our core area of focus. Internationally, again, as you all are aware, Ircon has had a history of doing maximum number of projects outside India as a PSU. We have done some 120-odd projects in 25-plus countries. And currently also we are executing in about 5 to 6 countries, some projects. So international also will continue to be our focus area. It is just that because of the economies worldwide, there are certain decisions which many countries are right now delaying or are taking a little time. And that's what may impact in terms of us securing orders over a short-term period from international markets, but they continue to be our strength as well as focus. The order that RVNL took internationally is something that even we bid in that, and we were L2.

[Unknown Analyst]

Okay. Ma'am, in terms of your order book, if you can please help me with the mix, so railways versus nonrailways and international versus India?

[Ragini Advani, executive]

So our railways is about 70-odd percent of our order book. And our domestic is about 90% of our order book. So domestic/international is 90-10. And railway versus others is 70-30 almost. And nomination versus competition is 45-55.

[Operator]

Next caller is from the line of Swechha from ANS Wealth.

[Swechha Jain, analyst]

Sorry, just a follow-up here regarding again the order book addition. It's really encouraging to know that you're pretty confident that we'll be able to add INR 10,000 crores to INR 12,000 crores of order this year. But I just wanted to understand that in Q1 you've only added I think INR 200 crores to INR 250 crores of orders. And even in the last couple of quarters, as we see, Q3 we added INR 120 crores last year, last year Q2 also we did INR 330 crores. So I'm so sure that confidence of adding INR 10,000 crores to INR 12,000 crores of orders this year is definitely basis, some comfort that you have in the orders that we've already submitted the bid, right? So because it is a big thing, right, because we've already done only INR 200 crores, INR 250 crores this quarter. So if you could give some sense that what kind of orders that you've already bid for the decisions are pending and we are so sure that. So there might be some big orders that we've bid for and you're confident --

[Ragini Advani, executive]

All I would say is, as one of your colleagues asked the same thing is rest assured whichever sectors we are right now in, operational in as well as focusing on, which is railways, roads and highways as well as the international business, we are definitely focusing in these areas only. In terms of specific opportunities and how much are we expecting in pipeline and by when, I think we would only be in a position to share that as and when we are almost there or we've got the award letter from them because, see, it's a competitive business. It is a tough industry. We are fairly confident because we know that, one, our technical skill sets and our experience is great. And, two, in terms of sustainable pricing, that's something where we are always good. So if someone comes in quoting a low price with the objective of entering and not earning profits out of it, those are the players with whom probably even Ircon wouldn't compete and would not like to compete. But otherwise, there's no reason for us to get certain projects that we are targeting. And we will be sharing it in the due course as and when it comes. As of now, I think the very fact that we picked up and built an order book up to INR 44,000 crores last year should be a good enough proof or a confidence that you all may have in the management of the company that we are capable of getting that. The reason why we went slow last year is because we were focusing on execution. And INR 44,000 crore order book is also a significant number which Ircon had. And we want to be very comfortable that we are able to actually deliver similar projects on these fast and stringent timelines. This was a contentious decision that we have taken. And as I have mentioned in my last call also, it is now that we are going back into other books because we knew we were comfortable with the range of INR 30,000 crore to INR 35,000 crore. And so we don't need to kind of rush into getting orders. So I mean, if one is comparing for INR 42,000 crore to INR 32,000 crore or INR 35,000 crore, it's right what you're asking. But if one was to see in terms of the order size, we had it for a 3 to 3.5 year previous. So there is nothing to worry per se.

[Operator]

[Operator Instructions] Next follow-up is from the line of Ashutosh from Ambit PMS.

[Unknown Analyst]

So just to understand the growth guidance of 10%. So I just wanted to understand because we have grown significantly for last many quarters rather. And even in this year's Q1, we have grown by almost 35%, 36% on the top line. But if we're thinking from a 10% kind of growth on annual basis, that actually leaves us with almost no growth for the rest of the 9 months, mathematically speaking. And if you already have the order book of INR 32,000 crore, INR 33,000 crore kind of order book right now, then wouldn't it be a fair assumption for the -- from execution angle, you would be in a position to continue on this kind of a run rate from a top line growth perspective and not expect like a very flattish top line in the rest of the quarters and this year.

[Ragini Advani, executive]

See, there are many factors which are beyond us, whether it is geographical, economically, political. We've had a fairly good quarter 1, which typically is not the case. But we've added because of course there was a lot of execution pressure and we've delivered it. But going forward, one, geographically, there are monsoons in many areas where Q2 could be effective. And two, from an overall perspective, that kind of -- because our projects go in tandem with the owners. They also have to do certain things to make sure that the execution is happening at the speed at which it should be happening. So those are things which what I'm saying is if it happens, it will be great, and we'll be happy to have a higher growth. But to say with certainty that that will happen is very difficult to say. So if there is no execution pressure on some of our clients, and associated government as well as other associated partners, then, yes, it could come to that level of INR 10,000 crores to INR 12,000 crores only. So this is something which we will be having a better idea in Q2 or Q3. As of now, we will like to go with the fact that overall minimum increase would be 10% over the previous year. Upside is always there, yes.

[Operator]

[Operator Instructions] Next question is from the line of [ Pranay ] from [ J&J Holdings ].

[Unknown Analyst]

On the same line, basically if I heard you correctly, our order book is about INR 32,400 something crores. And we plan to close this year by about INR 35,000 crores on the order book front. And basically we have executed about INR 2,700 crores in the first quarter. And if you are expecting INR 10,000 crores, INR 12,000 crores of new order book addition in the current year, the max work out to be around 25% -- 20%, 25% of top line growth. So I'm just unable to basically correlate because that number comes up to about INR 12,500 cores, INR 13,000 crores of top line vis-a-vis your guidance of 10% of top line growth. So if you can just help me understand.

[Ragini Advani, executive]

-- 10% of top line growth is working out around INR 11,000, INR 11,500 crores, right.

[Unknown Analyst]

Yes. But if I do the simple maths of your --

[Ragini Advani, executive]

-- is actually a matter of -- I mean, it really depends on the execution skill set, right, so which is what I've been maintaining, that why we can go beyond INR 11,000 crores, INR 11,500 crore, but there are elections coming up. There are certain things which tend to go slow, which are extraneous of us. There is monsoon which will come up in Q2. So if we do around INR 13,000 crore, it will be great, and we will target. But to say I will achieve that number is not something I'm confident[Audio Gap]I'm saying that we'll need to actually grow at least to a level of a 10% increase over the period, yes.

[Unknown Analyst]

Okay. And with the same 7%, 7.5% PAT margin?

[Ragini Advani, executive]

Yes.

[Operator]

[Operator Instructions] As there are no further questions, I would like to hand the conference over to the management for closing comments.

[Ragini Advani, executive]

Thank you. Thank you, Nirav, for moderating the call. I would also like to thank all our stakeholders, business partners, analysts, investor friends for continued faith in our company and supported this journey. We assure you that we'll continue to deliver. We would be happy to connect with you on a one-to-one basis, if required, for any further queries or clarification. And with this, I conclude today's con call, and thank you all for the active participation. Thank you, please.

[Operator]

Thank you very much. Thank you all for being a part of the conference call. If you need any further information or clarification, please mail at [e-mail]. On behalf of Ircon International Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

[Ragini Advani, executive]

Thanks.