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ITD Cementation India Ltd
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Good morning, ladies and gentlemen. I'm [ Talshiya ], moderator for the conference call. Welcome to ITD Cementation Q1 FY '24 Earnings Conference Call. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Mr. [ Bharat Jain ] from ICICI Securities Limited. Thank you, and over to you, sir.
Thank you. Good morning, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY '24 Earnings Call of ITD Cementation India Limited. Today, we are pleased to host the senior management of the company, which is represented by Mr. Jayanta Basu, Managing Director; and Mr. Prasad Patwardhan, CFO of the company. I will now hand over the call to Mr. Patwardhan for his comments. Thank you, and over to you, sir.
Thank you. Good morning, everyone, and thank you for joining us for this Q1 FY '21 earnings call. Before I begin the discussion, I would like to mention that this call -- during this call, there could be some forward-looking statements, which will be subject to a number of risks and uncertainties, and the actual results going forward could defer on these statements. So I would request you to bear that in mind.
Let me touch upon our financial performance during this quarter ending June '23. We have seen a very robust healthy performance during the quarter on the back of a strong order backlog. We have reported the highest ever quarterly income of INR 1,800 crores as against INR 1,098 crores a year ago, which represents a growth of about 67% on a Y-on-Y basis. EBITDA for quarter stood at INR 174 crores as against INR 100 crores a year back, a growth of about 73%. And PAT for the quarter was about INR 52 crores as against INR 30 crores a year back.
Our balance sheet is in good shape with debt equity -- net debt to equity of just around 0.5x. These are my initial comments, and I will take your questions going forward. But before that, let me hand over to our MD, Mr. Basu for his initial comments on the operations of the company.
Thank you, Prasad and good morning, all of you. Thank you for joining this con call. Myself Jayanta Basu, will explain on our operational performance for the last quarter. As you have seen that our revenue has scaled up to INR 18,000 -- INR 1,800 crores, which is to be around INR 1,000 crores a year back. So it's a big jump, and we hope that we'll be able to maintain the similar tempo going forward.
The operations mostly contributed by 2 big jobs like Chennai Metro, both the contract has done well last quarter. Bengaluru Metro has also contributed significantly. The most contribution has come from Ganga Expressway, we are executing at U.P. The most of the revenue has come from there. Otherwise, in Marine, IOCL at Ennore port has done well. BMCT Jetty contract at JNPT. The Udangudi as usual has done well in the beginning of the quarter. So these are the main contributor for the last year -- last quarter, revenue and the bottom line.
About the visibility and the prospects, we have got around INR18,500 crore work in hand. I also must add here that there are 2 big contracts where we are L1 and expected that LOI will be -- at least by this month, we'll be able to receive the LOI and put together will be around INR 5,500 crores, both the jobs together.
There are a few more jobs uner our pipeline under tenders and in various stages of prequalification of tenders. So that's all from my side, and we'll be happy to answer your questions. So please go ahead.
[Operator Instructions] First question comes from Bajrang Bafna from Sunidhi Securities.
Congratulations for a good set of numbers. Sir, my first question pertains to the -- if we see the last couple of quarters as per your guidance, the execution has been pretty strong and that is expected to pick up even going forward. But in terms of margins, we are yet to see the 10% kind of margin that perhaps you are guiding as maybe should be possible in foreseeable future. So considering the execution pickup and the legacy orders are behind us, expect that we go towards double-digit margins? And since now, our hands are full with a lot of orders and we are getting more and more selective in terms of choosing orders. So can we expect that the new orders that you are envisaging where you are L1, the margin profile is far better than what we are having in our hands currently?
So some guidance on these margins for the existing orders and the forthcoming orders would be really great, sir, if you could guide us in that sense.
Well, this is Jayanta Basu. I'll tell you about this long-term issue, for sure that the new tender, new bids will definitely with a better margin than what is before, considering our work in hand and considering the opportunities we have. So that is -- that effect will come not now, maybe after 1, 1.5 year. But immediately, as we have mentioned before that the latter part of this year, maybe from third and fourth quarter, we will definitely see improvement in the margin as we have discussed, double-digit sort of things. In fact, in this quarter also, margin is close to 9.4%, 9.5%. So there is a little bit of improvement in that as well. That is what I can say at this point. So we have to wait for another 1 quarter or 2 quarters to get the desired margin numbers.
Okay. And sir, my second question pertains to the visibility? Because earlier in the last call, you've guided that we'll be doing close to INR 6,000 crores kind of revenue. But considering the superb execution in this quarter, can we expect now the earlier guidance of INR 6,000 crores sort of revenue in FY '24 can be revised a little bit upwards. I know that the second quarter is again monsoons are pretty havoc in different parts of the country. So how our work got impacted in Q2, if in any sense that you are seeing right now? And any guidance on this division of the INR 6,000 crores kind of execution that you guided us earlier in the last quarter. So that will be helpful. Thank You Sir.
Well, INR 6,000 crores definitely is achievable. And if not, more than that, close to INR 7,000 crores or even that is possible because we don't have any job which is being an issue. I mean, we should go ahead except coming 2, 3 months of monsoon. You can expect the numbers we have put in before and even slightly more than that.
Next question comes from Rajesh Kumar Rathi from Right Shopping Private Limited.
My question again is on the margin front. What I noticed is that we are doing NP net profit margin of less than 3% whereas the competitors or same people in the field, though there is no direct linkage, like NCC has guided for 5% net profit margin. H.G. Infra, who is doing -- they are doing the same Ganga Expressway, they have a 9% plus net profit margin. We have this quarter at least done substantially the Ganga Expressway, which is, I think, I would presume should be around 30%, 35% of the turnover. But still, the margin is 9.5%. Where are we going wrong? So I'd like to understand more on this.
Okay. So we have referred about H.G. Infra and NCC, and I agree that their margin H.G. Infra has way above than anybody else and NCC also 4 plus, 5%. But I also like to mention that there are other companies of our nature, like, if you can mention their margin, I would have happy to know the margin of what they are doing. 3% margin, what we have seen today, that is based on some of our legacy projects, some of our old jobs and some of the jobs which are not able to recognize the margin. So as I said, it will improve gradually. And definitely, we are monitoring the margins of other companies, as you have mentioned.
We are not going long anywhere. Ganga Expressway has contributed to whatever contribution has to come from there. And so I don't see that much of issue on that. We have to wait a bit for another 1 or 2 quarters to get a better margin.
Just to add further to what Mr. Basu said, some of the companies that you mentioned just now other than ITD Cementation, they are having projects which are slightly different in nature like a BOT or a HAM project. So there accordingly, margin profile will also be different. We are in the pure EPC space. So strictly, our numbers and the EBITDA margins, et cetera, may not be comparable with some of the other companies that you mentioned.
No. Of course, it is not directly comparable. But especially given that H.G. Infra has done substantially the Ganga Expressway project, and we are doing the same. So that is why it's a bit of a concern. And I just hope management will look deeply into that so that the profile improved because we are at almost at the kind of peak of the cycle, intra-cycle around that, at least. And at that this time, if we don't improve our margins, I am worried about what happens after 2, 3 years. So well, one was that.
Second was the tax percentage. Again, this time is high at 33.5% around. Last time we discussed that, and I had a question on that, and I think the management guided that it should be around 25%, 26%. So what is missing here?
No, nothing is missing. Firstly, your point at the margins is noted, and we have taken action to see an improvement in the margins. And as Mr. Basu mentioned, we hope to see an improvement in the margins in the later part of this year.
Coming to your question on the tax provisioning, we are doing an elevated metro project in Bangalore, where we have taken a provision of about INR 29 crores in this quarter. So that doesn't impact our tax provision. So the tax provision is on the PBT plus the loss that we have taken on Bangalore Metro. So that works out to about 25%. Optically, the tax provisioning seems to be higher, but that is because of this onetime loss that we have taken on the Bangalore Metro project.
So again, in this quarter, you have taken that provision, right? The Bangalore Metro loss provision you have done in this quarter again? Last quarter, a similar thing, I think.
That's Right.
Okay. So have we done away with that Bangalore lost thing? Or will it recur again in next quarter onwards?
No. I mean as far as -- I can see that most of the provisions has been done. And in fact, this provision of INR 27 or 20-odd crores also we have a very prudent approach -- so we are more or less sure that this will come, but we have kept the provision for that. And we don't expect any further provision or loss to be making this contract.
Yes, that could be important because for the last 2 quarters, we have been listening to this. So of course, yes, everything is not in your hand. But okay. Sir, now my third question, the last question is about the orders because the last 5, 6 months, we hardly have any orders that we have received. The Bangladesh order L1 position for 3, 4 months, we have not received the orders yet. So what is the position on the ground? Are we seeing less ordering? Or it is to do with our higher quotation or higher bids.
Both of them, I have mentioned that Bangladesh order, the Prime Minister has already signed MOU last week and we are expecting orders, even it can come today. On them on being Marine jobs in the East Coast of India, close to INR 4,000 crores order also expected any time. So as I said in last quarter, we can imagine that our order book by this time would have been INR 5,000 crores plus.
What is the status of this Chennai Metro, the bids that we had submitted?
Chennai Metro, I think all together 5 bids we have submitted. And 2 bids, we are very close to L1. There is hardly any difference but since we are not L1. Other 3 bids, we are not so be seen so our price is a little high. So as far as we are concerned, we have lost all the 5 bids in Chennai Metro.
That's a bad news.
Not that -- let me clarify that Chennai Metro already we are executing INR 4,000 crores of jobs and 2 jobs, what was we expected was close to our existing job, but other jobs we don't regret because it is better not to put all the eggs in one basket. We have a lot [indiscernible].
Yes, yes, that is true, that is true, Okay.
I request the participants to restrict with 2 questions in the initial round and join back the queue for more questions. Next question comes from Pratik Kothari from Unique PMS.
Sir, one question on the competition. We did speak about 1 given our pretext full, we are very choosing in terms of acquiring new projects. But -- and we do hear this commentary across multiple infra-player. So are you seeing a change in terms of the discipline or in terms of pricing when it comes to bidding for a new project?
I couldn't get your question. If you kindly repeat it, please.
Sir, my question is on the competition part. Are we seeing a change in terms of the pricing discipline amongst our peers, when it comes to bidding for a project, a number of players who participate in each tender?
Well, it is a very dynamic because once upon time, you had only 5 to 10 bidder for growth project, now to find 25 bidders. In elevated metro, it was only 3, 4, now it is 15. Underground also now it has been -- so it will continue like that. But today, one thing, which is, I must mention that the jobs are quite big in terms of the value, INR 2,000 crores, INR 3,000 crores, INR 4,000 crores in that day. So there lies the opportunity for the players like us who get qualified. So that gives us some advantages. And as because the opportunities are more, definitely, the contractors must be quoting at a better margin than what's in the industry before.
Got it. So just to tie that up. I mean if the number of bidders for each tender is significantly higher, we did mention that now we are bidding at something which gives us higher margins, and we see those changes as 1, 2 years out. So how does that workout then?
Well, see today -- I mean, for the last few years, we have not participated in any NHAI tenders. Last 1 or 2 years, we have hardly participated in elevated metro. But the same time, our revenue is going up, our market had is going up. That every time we have to find the ways and means how to know, strategize our bidding, go abroad, getting to work this job, getting big ticket job, which is to be not our cup of tea because we are not qualified. So it's the dynamic situation, as I say, I mean, that will remain and we have to think about that. But I don't see any issue because there are opportunities elsewhere where the competition is less. So we are confident that, that should not be much problem with the competition.
Where would that be, where the competition is less and where we would bring in some technical capability of our own?
There are a few areas like, first of all Marine. Those jobs like break water, dredging and reclamation, you don't get many of the competitors to get qualified. I think we are there very much pleased. Secondly it's project explored by the government of India like many countries like Maldives, Mauritius, Bangladesh, Ceylon, South African country funded by government of India, where only Indian vendors are allowed. So there lies a big opportunity for us. And some big ticket metros of underground where many people cannot get qualified. So these are the opportunity we have now.
Correct. And sir, what would be our bid pipeline currently?
Bid pipeline, L1 I mentioned, around INR 5,500 crores, which is we are waiting for the order. In addition to that, maybe we are pursuing around 15,000 crores INR 17,000 crores of jobs altogether. Some are in tender states, some are in the prequalification. So around that.
Correct. And then of this INR 5,500 crores L1 you said INR 4,000 crores is some port project in East of India.
Yes, you are right.
Next question comes from Siddharth Shah from MK Ventures.
Yes. Sir, congratulations on great set of numbers and specially very impressed with the execution ramp-up last few quarters. Sir, just most of my questions have been answered, just to check again on this Bangalore Metro, sir, the number in which you provided is INR 28 crores, right?
Yes, that's correct.
Okay. And sir, can you just explain a bit on -- in terms of -- I think last time, you had said that most of the packages have been handed over. So what is the situation right now? And any possibility of any further provisioning at the last moment when you close the accounts with them for this project?
I mean, as far as provision is concerned, we can expect that is nothing pending, all are done. So we don't expect any further provisioning in this project. That is number one. Number two, as I mentioned last time, 3 contracts, now all the 4 contracts has been completed and handed over. So what we are waiting for now, 2 things. One is our pre-final and final bid to get certified which is a little bit lengthy process because these jobs are there for the last 5 years, 6 years, lot of de-consolidations and things like that. I've been winding up of the sites and selling of the some of assets. So those things are going on. The provisioning part, I can confirm there is no further.
Okay. So that's very encouraging to hear. And the second question is on overall revenue and margin guidance. If you can just reiterate that again? Because I think last quarter itself, we had seen something like INR 7,000 crores possible. And post that, this L1 questions if they translate, are you in a position to sort of give a revised guidance for this year or next year or something like that?
I mean, yes, I mentioned that it will be -- of course, 6,000-crore plus, it may crosee INR 7,000 crores as well in terms of top line.
Okay. And in terms of margin, sir, because if we adjust for this onetime provisioning, which is the last provision, we are already at double-digit margin. So can we expect going forward, double-digit margins?
Margin, first 2 quarters of Q1 and Q2 will remain between below double digit because next quarter also monsoon little effect there. But last 2 quarters, now we hope to improve close to double-digit or even double-digit. So it's like that, that can go finally.
Next question comes from Dhananjay Mishra from Sunidhi Securities.
You said Bangalore elevated had a negative impact of INR 29 Crore on EBITDA. So what was the revenue contribution in this quarter and this the final bill and pre-final bill certification evaluating. what will be that amount in terms of revenue?
In terms of revenue contribution, there was hardly any contribution this quarter because, as Mr. Basu mentioned earlier, 3 projects have been handed over and the fourth project also as we recently handed over. There was no contribution or negligible contribution to the top line. The other question -- what was the other question you asked?
The pre-final and final bill, that what will be that amount?
Yes, that is on the certification. We have to drop down all the 4 projects together. But I think in terms of -- certification will be around 50, around INR 50 crores, INR 60 crores put together, around that number. It will not be much.
And there will be no negative impact on EBITDA?
No.
Okay. Okay. And if you also give what is the overall CapEx plan for this year and how much we already invested until the first quarter?
In Q1, we have invested about INR 90 crores in acquiring construction plant and equipment. For the whole year, we expect it to be somewhere in between INR 150 crores and INR 200 crores.
INR 150 crores, INR 200 crores.
That's correct.
And what is gross debt level as of now?
Gross debt is about INR 790 crores.
Okay. And secondly, just in terms of pipeline after -- even after losing this Chennai job, we are saying that we are having INR 150 million to INR 170 million prospects, right?
Yes.
Next question comes from AM Lodha from Sanmati Consultants.
Congratulations, a very good set of numbers and very good execution by the company even in the first quarter. And my best wishes to the company and the team for the bright future ahead. I'm sorry, I joined just now a bit late on con call, so my question may be a repetitive nature. So I have got only 2 questions. One is the order intake because these quarters have got something INR 250 crore order. This is a very, very negligible order. Therefore, the credit order, order book has come down to INR 18,000 crores plus. So can you repeat, please, sir, the bids and likely -- company likely to get the order by the end of the FY '24.
This order what we have secured in first quarter is very late. But at the same time, there are 2 jobs we are L1 and we are expecting orders anytime. When I say any time means even today also, put together, we are INR 5,500 crores. So if you add that...
Yes sir, Carry on sir.
Full year, as I mentioned, around 17,000 crore, INR 18,000 crores of pipeline. If you go by simple statistics, if you factor 20%, 30%, around INR 3,000 crore to INR 4,000 crores of job is secure, that's by going with the statistics. So end of the year, altogether, it should be around 8,000 crore , 9,000 crore plus.
My second and last question, sir. Regarding dividend payout, sir. We have paid this year 0.75% dividend. It is very -- because earlier, we were not having that much of the working sir, we have not asked anything for the whole dividend. Now this year, company, again, has given very conservatively dividend, 0.75% dividend. You see that you are paying the royalty to the promoter on the turnover of the company. Companies -- suppose company is getting INR 8,000 crores turnover in current year, then INR 40 crores, you will be paying the royalty to the promoter. Then decide in addition to the promoter holding, promoter will be getting the dividend. Then why this is raw deal the minority shareholders, sir? Why is company is not giving a good dividend to the other shareholders, also?
Yes, your question is well noted, and we will definitely take it up with our...
Convey our grievances to the Board? The company should reward the shareholders. When the company was not earning, company was writing off the bad debt in earlier years, company are now telling a good order book position not having a good order execution. Now company, where you think good orders, good execution, quality of order, margins order, There is still the company is making raw deal with a minority shareholder, it's not good, sir. You Convey our grievances to the Board.
Next question comes from Venkat Subramanian from Organic Capital.
Congratulations on excellent execution. I had a couple of observations. Now in spite of substantially improved execution, why isn't there flow through below the line. We still have a 3% kind of PAT margins at about INR 1,800 crore kind of execution. While we had something similar, even if something like about INR 1,050 crore to INR 1,100 crore kind of execution, which is a little surprising. Are there some limiting factors here? Are they one-offs?
Well, PAT margin, 3% in the Indian scenario is not -- I would say, it's not so bad because if you see historically also, the company, those who are working in our type of business, I can name there, like Tata projects or [ F-Coms ]...
Mr. Basu, for every name you give at lower margins, there are at least a couple of names where margins are more than about 5%, 6%. But my question is a little...
Let me finish. So there are a few other companies, those who are being better margin as well, we know that. At this point, we have addressed in a few minutes back. So we have to be a little bit of patience because we are just coming out of a few legacy jobs as you may be knowing. So things are improving, and we can promise that it will improve further going forward.
Certainly. Mr Basu, my question was a little more -- it's just actually a mathematical in terms of a question. You can't possibly have the same 3% PAT margin when you have INR 1,800 crore execution as you have a INR 1,100 crore execution. There has to be a much better absorption of your fixed costs, right? It's quite surprising.
I agree with you. But this time, we have kept some provision for Bangalore Metro as well, which is not -- around INR 28 crores. So that has doubted the margin a little bit.
The second question is actually on that. We have heard quite a few times that a lot of provisions that we are making for Bangalore Metro are conservative in nature, which probably then means that you're expecting to recover. If you kind of recall a few past calls, I think one can think of almost about INR 75 crores to INR 100-odd crores. So is that recoverable? Do you have realistic chances of recovering?
Well, let me be very clear on this. Today, whatever provision, we should do have already done that. We have done more than that because we are more or less confident whatever position we have done in this month also was not required. Now that is one part. That means there will be no further negative in this job going forward. There are a huge amount of -- I mean, the items we are pursuing with the clients, and some of them are really genuine, some of them are little bit here and there but those things take time. And so we have to wait until the upgradation process is over. But definitely, something will come out from there.
Next question comes from [ Nivana Laha ] from Nirvana Capital.
So these provisions that you do in the -- in every quarter, is it included in other expenses in the financial report?
Yes, that's correct. It is included in other expenses in the standalone financials.
Right. Sir, can we request you to call this out separately if that is possible because it gives us a lot of clarity because a lot of infra companies don't do this kind of provisioning. So we appreciate the fact that you are actually taking these calls, but we would also like to have some clarity on this. So if you can add a line item just to show it separately.
No, I'm sorry, we won't be able to do that because this is a format which is -- which has been communicated to all the listed companies, and we need to strictly go by that format for reporting our quarterly results. But you would appreciate that we have been transparent in our communication with all investors, and we have been stating the facts with the investors on our con calls regularly.
Right. If possible, sir, please add it in the presentation. I leave it to you. So my next question is on -- from the annual report, I saw that there was a INR 38 crore increase in credit impaired receivables. So this is to do with which projects and are provisioned again, please?
No, this is not against any particular project. This is largely -- it is an expected credit loss provision that we need to do based on our past historical track record which is not specific to any particular project.
Okay. And I think we have written off some receivables in FY '23. Can you tell us the quantum?
I don't have that with me right now. Maybe we can share that number with you offline.
Should I write through your Investor Relations?
Yes, you can do that.
Okay. And on contingent liabilities, so our contingent liabilities have gone up from INR 150 crores last year to around INR 300 crores this year, which is around 25% of net worth. And all of these are to do with taxes. And while the annual report says that you don't expect cash outflows, the number is so big that it forces me to ask this question like what is your view here? Like are we expecting nothing to go out from here? And how is it?
We are tackling this matter with our tax consultants and opinion is we don't expect any further -- any liability to arise from these tax litigations. It is a matter of process where we'll be finding an appeal and taking it through the process of adjudication. So once the matter is resolved, we expect the outcome to be in our favor.
Right. Because I think you have not provisioned anything against it and going by your conservatism that you usually show. So the expectation is that you don't need to provide for anything, right?
The fact we have not provided is based on our view that we don't expect any liability to arise out of these tax litigations.
Okay. And one final question on the ITD SEM India JV losses. So there was a INR 65 crore loss last year booked under this JV. So can you please tell us which projects are causing these major losses in this JV?
This is the same project, Bangalore Metro -- Elevated Bangalore Metro project.
Bangalore Metro. Okay. Would it be possible, sir, in your presentation, you have several JVs. It would be really nice for investors to understand which JV is undertaking which project. So if you can call that out in the presentation, that could help us much more in correlating the subsidiary numbers with your -- what your comment on project, because Otherwise it's a..
I think it's already there in our presentation, but let me check. If I'm not mistaken, it is already there in one of the slides of our presentation.
JV wise which projects are being executed, you mean?
Yes. That's -- maybe you can look the presentation again.
Okay Sir. I will check. I couldn't find it, but maybe I'm mistaken. And congrats on a great quarter, I hope the operating leverage starts playing out from quarter 3.
Next question comes from Vishal Periwal from IDBI Capital.
Yes, one clarification. In our order book, the international exposure is only towards Sri Lanka, which is roughly 4-odd percent in order book? Is that a fair enough...
Presently, it is only for Sri Lanka. We are L1 on 1 project, which is in Bangladesh. So whenever we get that order maybe this month, it will increase our international exposure to 2 countries of Bangladesh and Sri Lanka.
Okay. So that is the Bangladesh order is currently in the part of L1, which you mentioned, INR 5,000-odd crore.
That's correct.
And sir, I think a fair -- decent pipeline, and again, like L1 [indiscernible] in a couple of quarters, in terms of client wise, can you just give a perspective like the new bridge that is coming and where the L1, if you can the share? Is it coming from government, PSU or private. Just to get a sense of like which side the CapEx is happening.
Are you speaking about -- are you asking about the L1 projects?
Maybe for a big pipeline, where exactly the big pipeline is coming from, is it from -- basically, is it coming from the government or PSU or private in this big pipeline.
These L1, 2 projects of motor government, one is for the Indian Navy and others for the Bangladesh government. The big pipeline, is a mix of that mainly it is mostly from the multinationals like Port of Singapore or [ BPWAL ], [indiscernible] that and for Metro, ofcourse, it is government. So you can say around 50% government, 30% from the PSU and 20% for the multinationals.
Okay. And then sir, I think probably in the last, I would say, 6 months, only 12 months, are you getting a sense like after this government CapEx pickup, which has been there for quite a some time, any positivity that you are seeing even on the private side, anything that you can share?
This is what we are in underground Metro, Airport and Marine, because of sea area Marine of course, is list private sector and there are, as I mentioned, the Port of Singapore to be [indiscernible] there. But otherwise, Metro and the airport, this is mostly from the government, even some port also from the government. So this investment from the Adani group is coming down a little bit, which used to be very high once upon a time.
So we have to really see how it is going. But International, the investment, what is happening that is from the government of India, that is charging off. That is a good part of our story.
Okay. Okay. And even in terms of sector wise, we are in multiple sectors. So is it -- I mean, fair to say probably in the big pipeline that is similar to what our order book is or any particular tilt is happening and sector wise we're getting more. Are you seeing more opportunity? Yes, I mean the actual bid can be a bit different, whether you believe it or not. But I think the sale is happening towards one particular sector vis-a-vis others. Can you highlight anything on that front, sir?
The 3 particular sectors where we are focusing or we have got the bids and pipeline. One is, of course, Marine. There are 3 or 4 jobs we are pursuing now, even more than that and underground metro and few mining jobs mining means hydel projects, where it's not some tunneling and the rock excavation but big jobs that also -- these are the key areas we are pursuing now, from pipeline.
Okay. So I mean like from complexity of the work, even like the bid that we are getting, it is towards that. It's not a plain marine lawn and road construction or stand-alone building. So the complexity is there in terms of new bid. Can we fairly say that?
Yes, all these jobs having technical challenges requires having expertise. Its marine, its underground metro and hydel projects. But otherwise, there are a plenty of road opportunities which we don't pursue even elevated metro also we don't pursue where there are many players nowadays.
Okay. Sure, sir. And maybe last thing from me. Our executions are pretty healthy and thats getting reflected in numbers, but sir on cash flow front also can you just touch on -- I mean, maybe a working capital to say or will it be a fair to say it will be on single trajectory or anything any color that you can provide that will be helpful.
The working capital has been pretty stable in terms of number of days as well, we have not seen any significant rise in the working capital number of days. So it continue to be -- hi-tech days, the net working capital today is under 100 days. So I think that is how it has been for quite some time now. In spite of the growth in our order book, we are not seeing significant increase in the working capital days.
Next question comes from Punjan Shah from Congruence Advisers.
My first question would be, if you look at the Marine specific, so we were at a trajectory of INR 4,000 crore, INR 4500 crore and now currently, if we are looking at the trajectory view. So are the order book we are specifically looking for the profitable like highly profitable order to bid or like we are looking like the Marine has been going slow in comparison to other projects?
Marine actually what happened mainly in the jobs, I mean, completion times are quite fast. I mean the moment to get job within 2 years' time, we are able to compete the job, there are various factors behind that because you get the front immediately, you can start the work. So the work in hand, what all you see in Marine that gets depleted very fast.
Okay, okay. But -- and the Sri Lanka which we got in order, have we started to executing the project? And is the started a flowing revenue? Like is it be contributing to revenue in Q1?
Yes, yes. Very much started. If you know that the file foundation, we have started in 2 out of 4 fronts, 2 fronts already started. So what kind of schedule we have started the job, 10 months.
Okay. And my last question would be on the specific to so as we have state. So are we in the order book size of around INR 25,000 crore net? With the order prospect and how the pipeline including all the things, winning order and visibility what we have currently. So would the order book would be around INR 25,000 crore? Not talking out the executing fee. So it is like the inclusion of all these things.
Sorry, can you please repeat the question?
So as we have stated that we have that INR 5,500 crores of order book. The INR 5,000 crores is the prospect order book, which we have been planning to get and plus INR 16,000 crore, 17,000 crore, which is being the order pipeline. So we add that one and considering that 20% of the winning order, so that would be around INR 3,000-odd crore stuff. So if we consider that it would be around INR 8,000 crore. And currently, we have visibility like we have the order book pipeline of INR 18,000 crore. So would it be consumed fair to say that it would be around INR 25,000 crore order book at the year-end?
Well, it will depend on the execution of the orders and the timing when we get the new orders in. So we expect new order wins in this year to be in the range of INR 8,000 crores, INR 9,000 crores. I mean you can work on the order book, it should be in the range of here somewhere in that range.
Next question comes from Vignesh Iyer from Sequent Investments.
Congratulations, sir, on amazing execution that you've done in quarter 1. My question is on the Ganga Expressway project. Just want to understand what percentage of the total project has been already executed? And what is the total value of the project that still is part of the order book?
Total value of the job is INR 4,850 crores. Out of that, till last quarter that is June, we are -- sorry, July. There around INR 700 crores order what has been already done till now.
And what is the time line for executing this project, specific project, Ganga Expressway?
Other 2 years from now to 2025 April, May, we have to complete.
Okay. Another 2 years right? So yes, also, the L1 project that we have -- we are sitting in L1 for the project in Bangladesh. What is the margin profile for this international orders? I mean, compared to, say, you have Indian -- in the domestic orders, I mean, is it any different?
Actually, it's a bit of mix of margin and the risk. So normally, when you go international, we analyze the risk factor of the country. The margin may remain same but we have provided more provision in the risk. And if the risk doesn't happen, it is less, then that will add to the margin. It is like that.
Sorry, I didn't get it sir, exactly. If you could just...
There are 2 components on top of the cost. One is the margin and then the provision for the risk. So when we go international, there are certain unknown factor that normally provide more cost towards risk. And if it happens then the risk is less, then that converted to the margin. So that's to be seen.
Okay. So -- but for a project like this in Bangladesh, I mean, say, the commodity prices goes up, is it a pass on completely? Or it is more like we have to take it on our books?
So this is in our account. Mostly, it is only one item that is still. So we have already spoken to the vendors internationally. We have fixed our contract with them. But yes, if the prices go up that is on our account, to our account.
Okay. Okay. Okay. And just one final question. Just to understand for quarter 2, is there any major impact due to heavy rains in certain part of the countries to our Project in any ways? I mean, or would we see a similar run rate or a bit less than what we saw in quarter 1.
Quarter 2 normally it will be a little slow because even in Mumbai also, we are executing at least 3 jobs but the progress, it will be less Kerala and some of the north of India in West Bengal and Sikkim. So it is normal as far in every moonsoon time. So we'll find little bit of lesser problem this quarter.
Next question comes from Deepak Poddar from Sapphire Capital.
So first off, I just wanted to understand now this Bangalore Metro provision was around INR 29 crores, right, which you did this quarter?
Yes.
So ideally, I mean you said that most of it, it has been done, and it will not reoccur, right? So that effectively means that 1.5% to 2%, right, on the EBITDA margin, that can have a positive impact.
That's correct.
And when you are saying that you are looking for a margins of double digit, so that includes your associates and other income, right?
Yes.
Okay. But I believe when this 1.5% to 2% comes slightly, we are already at 9.5%, right, including your other income and associates. So I believe when this provision is not there, your EBITDA margin can be much higher than double digit, right? Maybe what 11%, 11.5%?
In what we have said that we see -- we would hope to see an improvement in our margins from Q3 or Q4 onwards because this Q2 will also be impacted to some extent by the monsoon. So we expect to see an improvement in the margins from Q3 or Q4.
Understood. Understood. And in terms of execution, I mean, any comments that you can make on FY '25? I mean, next year, what sort of execution we might be looking at?
I don't think we would like to comment on FY '25 at this stage. Maybe when we are closer to ending FY '24, then we'll have more clarity and be able to comment on the performance in FY '25.
Okay. Okay. Understood. In general INR 18,500 crores of order book that we had as of now, what would be the execution time line of that, that particular order?
Would be ideally around close to 3 years.
Next question comes from [ Mehul Mehta ] from Nuvama wealth.
Does this with reference to INR 29 crores of loss provision for Bangalore Metro project, which you have mentioned, like-to-like during quarter 1 FY '23, there were any provisioning, in case of any other project, so like-to-like?
No, I don't think there was any provision in Q1 FY '23.
So if I look at like an operating profit without including JV profits and other income, it's amounting to INR 162 crores, and that is flat profit margin. Like if we take out this INR 129 crores loss, 8.8%, is that correct?
Yes. Then I don't have the exact working front of me, but we'll go by what you're saying.
The last question for the day comes from Nikhil Abhyankar from ICICI Securities.
Congrats on a very good set of numbers. So my question, you mentioned earlier that we will be looking at NHAI orders going forward as well after a bit of it. So what is the pipeline does NHAI have for, say, next year? And how much order into are we targeting from NHAI?
I don't think we have mentioned that we'll be targeting NHAI, and it is not in our radar at all. We don't have any idea. We can, of course, we can go through the detail. But no, we don't have any idea about NHAI prospects next year.
So we are not even looking at NHAI tenders?
No, no. This one, no.
Sir, if I may understand the rationale. So because we are taking EPC projects for Ganga Expressway then why not NHAI EPC or say HAM, whatever?
Yes. The nature of work is technically same, both our road construction, but the conditions are totally different. Ganga Expressway, we have got 150-kilometer of industry aside to have, we can just hit the ground and around. But in NHAI, based on our past experience, very difficult to get size on time and there are a lot of another issues. So we want to go slow on that part.
Thank you. Now I hand over the floor to management for closing comments.
Thank you very much, everybody, for joining us on this Q1 FY '24 earnings call. We really appreciate your questions and the opportunity to explain our position to everyone. Look forward to interacting with you again next quarter. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes the conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a good day.