ITD Cementation India Ltd
NSE:ITDCEM
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
268.2
645.05
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
ITD Cementation India Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the ITD Cementation India Limited Q4 FY '22 Post Results Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rahul Modi. Thank you, and over to you, sir.
Thank you, Seema. Ladies and gentlemen, good day, and welcome to the Q4 FY '22 Post Results Conference Call of ITD Cementation India Limited. Today, we are pleased to host the senior management of the company represented by Mr. Jayanta Basu, Managing Director; and Mr. Prasad Patwardhan, CFO.
The call will begin with a brief introduction by the company, after which we'll open the floor for the Q&A session. Thank you, sir. I now hand over the call to Mr. Patwardhan for his opening remarks. Thank you, and over to you, sir.
Thank you, Rahul. Good morning, everyone, and welcome to this Q4 FY '22 earnings call of ITD Cementation. We have declared our results yesterday, and I'm sure you would have had a chance to go through the numbers.
We have reported a very healthy operating performance in this quarter and in the year as well. Our top line has grown by nearly 40% to INR 3,810 crores for the whole year. And for the quarter as well, we have crossed the INR 1,000 crore mark and reported a turnover of INR 1,175 crores.
In terms of the order backlog as well, we have an all-time high order backlog as of March 22 of about INR 15,500 crores. And one more post that we have for this financial year is the new order bookings. We have received new orders for INR 7,700 crores during the year.
In terms of the working capital management as well, the operating cycle has reduced significantly due to large collections that we have received during the year and that has helped us to deleverage our balance sheet and our debt equity ratio stands at about 0.2% as of March 22. This is all from my side in terms of the opening comments.
Now I'll hand over to Mr. Basu for his comments, and then we'll take your questions.
Good morning, and thank you all for joining this con call. As Mr. Prasad has mentioned that our last quarter performance was good. I think we have achieved a revenue of INR 1,175 crores, which is a record in our company's history in any quarter, and revenue of INR 3,800 crores plus in consolidated.
So we are going through an exciting time and work in hand position also quite healthy. Not only that, there are a few good jobs in the pipeline, which may convert to order very soon. So the work in hand what you see today will increase drastically by another 1 or 2 months' time.
With that, I'll touch upon a few projects, important projects which we discuss in every meeting. Like Mumbai Metro, as we all know that hopefully, by end of this year, the job will be completed. Around 90% progress has been achieved so far. Kolkata Metro, maybe another 3 months, 97% progress has been achieved. Bangalore Metro underground, we have started a year back. And the tunnel is going on in full swing, both of our TBMs are working.
So far, we have achieved around 22% progress. As you know, Udangudi was our signature project. Work is going on very good. We have reached an endpoint, which is 8 kilometers from the shore. Around 60% progress has been achieved. Both the seawater job under Navy -- Indian Navy is going well, except 1 job, which is at Chhara, which we had to suspend because of client issue. All the other projects are going on okay.
So with this, I think I'll request to your question, and we will be there to answer any questions whatever you have. Thank you.
[Operator Instructions] We have the first question from the line of Mr. Mohit from DAM Capital.
Congratulations on good set of revenue numbers. So the first question is that of course, we have a large order book, and we are doing quite well in terms of revenue booking but our EBITDA margins and our PAT margins remain very low despite having a large order book, which is, I think, where we have price addition clause. So what can we expect in FY '23, can you expect this EBITDA margin to move into double digits?
The -- see whatever job we have been executing now, we're mostly -- we have secured 1 or 2 years or 3 years back. And even though they have the escalation clause available, most of them, but the amount of increase in the steel price is beyond any expectation.
When we discussed last time con call, it was around INR 60,000. Recently, it has gone up to INR 75,000, INR 76,000. So that has had some impact on the bottom line. But the means of what we have secured, they will yield their revenue and the margin maybe after 2, 3 quarters from now. So we hope that this year margin will be better than last year.
Can I expect double-digit margins, sir, in the medium term maybe to -- maybe not FY '23, FY '24?
FY '24, yes. FY '23, it will be close to double digits. If it is double digit, we'll be very happy. We'll try to do that.
Understood, sir. And sir, can you please lay out the order opportunities for FY '23 segment-wise and the appetite for us for taking a larger order, given that the order book has -- is very sizable at this point in time?
I can discuss segment-wide opportunity and also the update of Mumbai -- in Mumbai, the JNPT order where it is? And anything on the Adani terminal order from Colombo?
Yes. I'll update you about, first of all, JNPT. The tender is on, and we are shortlisted, and we have been discussing with the customer. 2, 3 rounds of negotiation has already happened. So someone will get the job by end of this month, I believe and we are well placed there.
Coming to Colombo, as you know, the local situation in Sri Lanka is not so conducive. So purposefully both Adani and ourselves are going slow to see how it becomes after a few months, and accordingly, we'll proceed. But otherwise, we are pretty sure that we'll be preferred contractor for this job.
And then overseas job, apart from Colombo, we are pursuing some job in Bangladesh, which is a new addition now, some net income [ levered ] job, which is also more than INR 2,000 crores. The tender is -- I mean already tender going on. By end of June, we will submit our bid. Recently, we are discussing with some of the prospective to client, our old client for a big infrastructure job. I will not be able to disclose now. If it comes to us, that will be a quite sizable job. So if -- all these things, there are 2 tenders at sea water. So all these sizing INR 15,000 crore jobs are knocking. And I hope that some of them will be definitely matured. We'll secure these, convert to orders.
Anything on the airport, sir, given that Adani has a very large pipeline, and I think we won a small contract in Lucknow or something, right? Do you think there is a significant opportunity for Adani in this fiscal year will get a larger order for their 6 airports?
Well, if you know that already, we have secured 2 contracts from Adani for redevelopment of Ahmedabad airport, both the terminals, T1, T2. Value will be around INR 500-odd crores. So most of the airports what Adani is now doing, they are renovating it. It is not a greenfield one, except Navi Mumbai Airport.
So they're after us to take part of some of the jobs like Lucknow and Guwahati and all. But as far as we are concerned, we're already with Trichy and Pune. We want to complete Ahmedabad as well, thereafter we'll see, because the airport is not the segment where we do much. We'll be happy with this Ahmedabad job at this moment.
We take the next question from the line of Meet Parikh from Anand Rathi.
Congratulations on the good set of numbers. Sir, in terms of the Chennai Metro, what is -- how is the progress? Means, have we started work on mobilizing the work on the project?
Yes. We have 2 jobs. They are underground, UG1 and UG2 and our mobilization in terms of manpower and the temporary installments such as office building, store, et cetera, those things are almost done. Now we have to mobilize special equipment called trench cutter, which has been already ordered, and I think some will reach by end of this month. So it is as per the plan, the mobilization is going on.
Okay. Sir, in the order book, do you -- how much is the fixed price contract? And how much is the variable?
There are very less fixed price contracts. Most of them are variable in the sense that escalation is payable. I'll not be able to tell you exact number, but close to 90% escalation is available in our contract.
Okay. Sir, and on the Bangalore Metro, has the progress been good on the underground and the elevated?
Underground progress is very good. The amounts that [indiscernible] L&T, ourselves, I think we are doing better and customer is also very happy, and we are doing well.
And as far as elevated is concerned, as you know, that it is almost verge of completion. Out of 4 jobs, 3 jobs are almost handed over. The large job also, I think we have done around 85% to 86%. So by end of this year, we should be able to come out of this elevated.
Now we take the next question from the line of Vibhor Singhal from Philip Capital.
Congrats on great execution in this quarter. Sir, my question -- my first question was basically on the margins front again. So I think in this quarter, if we look at our margins, I know we're kind of taking the headwinds in terms of commodity price inflation, but the margins have actually now fallen down to around 7% in this quarter.
Last quarter across, it has been, I mean, around 8%, and we were hoping for some revivals on those numbers. So given the commodity price inflation that we have, do you foresee this kind of a pressure continuing? I know you wanted to make it close to double-digit margins in FY '23.
But given that in the last 8 quarters, we have crossed double digit only once. Do you see -- I mean, so basically trying to understand, in the last 3 quarters also, we had 6%, 8%, and 7% EBITDA margin. So what will it take us for us to consistently report a double digit or close to double-digit margins every quarter and not as an [ aberration ], just like once in 8 quarters.
Well, as all of you know, and you have just mentioned rightly that commodities prices is influenced because the margin, what you saw last year, that is mostly the jobs which are secured a long time back, where our basic assumption for the steel was INR 40,000, INR 45,000. Though escalation is payable, but the price will end up to INR 70,000, INR 75,000. This is one. And secondly, what happened, if I just forget last 2 weeks. Before that, the steel prices were going up.
So we had to keep adequate contingency for future. So that is also 1 factor. But good thing is that if you see last 2 weeks, the steel price is coming down INR 75,000 to INR 71,000 to INR 69,000 to INR 55,000. So if it goes like that, that will be good news for us. And hopefully, we'll be able to touch or if not touch very close to double-digit margin next year, I mean this year.
Just to add, the numbers like we have reported, I have seen the numbers reported by some other of our peer companies as well. And the operating profits and the operating margins that we have reported are more or less in line with what the others have also reported.
So I mean I don't see a large variation between our operating margins and other companies in our industry. As you rightly said, the headwinds on the commodity prices are hurting us to some extent. And hopefully, as Mr. Basu said, once the prices start correcting, we should see an improvement in our operating margins.
Got it. Got it, sir. Just to add on that, sir, basically, you're absolutely right that other companies also and almost all peers have kind of reported around 50 to 100 basis points Q-on-Q contraction in margins, which we also have. But just for guiding perspective, sir, other companies are, let's say, 100 basis -- I mean peers are like 100 basis points lower from their normal range of margin, which is like 10% to 12%.
We are right now at 7%, which is like 300 basis points from our targeted range or our [indiscernible] range of margins of 10% so I mean if there is a commodity price impact. So my impact question was that, okay, the commodity price impact in this quarter is probably 100 basis points, but what is our business in terms of our margins being consistently in single digits, 7% to 8% in the last few quarters also, and those are not getting recovered at all?
One aspect, as you all know, for last several quarters, that a big chunk of our turnover has come even last year also from elevated Bangalore Metro where we are not declaring any margin at all for last 1 year.
So if you just eliminate that turnover of Bangalore Metro and consider 0 margin from there and remove that, you'll find [indiscernible] more than double digit. I mean double...
Got it. Got it, sir. And this year that we are saying that we should be able to complete the project. Hopefully, next year onwards, we should be able to report better margins. Yes, hopefully, there is no other project like Bangalore Metro, which gets [indiscernible]?
Yes, yes. There is no other project like that.
Got it. Got it, sir. So just 1 last question, given our order book of INR 15,000 crores and the strong top line this year, what would you kind of guide to in terms of top line next year? What is the kind of top line that we could do next year?
Top line should be at least 25% more than this year?
25%. Sure, sir, that's great. And just 1 last bookkeeping question. Prasad sir, if I could get the gross debt number at the consolable at the end of this year.
Our gross debt is a little over INR 500 crores, it's about INR 515 crores.
INR 515 crores?
Yes.
We'll take the next question from the line of Mr. Shreyans from Equirus Securities.
Congrats on a great turnover. Sir, my question pertains again to the EBITDA margins. So if you could quantify in terms of provisioning, how much provisioning we've taken for the raw material price, #1.
And #2, sir, our contract and site expenses for this quarter look very high, particularly for this quarter. So any particular reason for that?
We haven't -- to answer the first part of your question, we haven't taken any hit on the material cost as such. Whatever we are actually paying for procuring steel, cement or other commodities, that is being booked in our financials. So there's no addition provisions that we've taken in our financials. The other expenses you mentioned, we have considered a provision loss of about INR 30 crores from the Bangalore Metro project.
INR 30 crores?
Yes.
Okay. Sure. And sir, in terms of guidance, in terms of margins, in FY '23 or even for that matter FY '24, can we see that? I mean, looking at the current the way raw material prices are, can we foresee at least, say, 10% to 11%?
Actually, Mr. Basu answered the same question earlier. So in FY '24, as we mentioned, we hope to see normalized double-digit margins. And this year, as the steel prices -- steel and other commodity prices pulled off, we should see an improvement in our margins in this year as well.
We take the next question from the line of Aksh Vohra from Praj Financial.
Yes, sir, I just wanted to know the INR 15,000 crore order book, what's the execution time line for the same?
Execution timing should be in the range of 3 to 3.5 years.
Okay. And then new orders what we got in this FY '22, around INR 7,700 crores, what would be the time line for those execution order?
There are 2 large orders from Chennai Metro, which are to be executed over 4 years. There are some other projects that the execution time line is short term. For marine projects, it would be about 2, 2.5 years. So as I said, the average execution time line for our order book would be between 3 to 3.5 years.
So is it safe to assume that over the next 3 to 4 years, we'll be having around 20% to 30% kind of revenue increment every year?
3 to 4 years is difficult to envision at this stage. But as Mr. Basu had also indicated earlier, we should see a 25% rise in our top line this year. And next year as well, we should see that it could be better if we book more orders during the current year, then that will obviously add to our top line in FY '24 as well.
Okay. Sir, 1 more thing is, what would be our gross debt?
Gross debt is INR 515 crores.
And net debt is around INR 120 crores?
Net debt is around INR 120 crores, INR 130 crores, yes. That's right.
Okay. And how would we be funding these coming projects in the near term?
Well, we have enough bank lines. We have a consortium of 16 banks. We have added a couple of banks into our consortium in the previous year. And some of our large projects, in fact, our banks have been very supportive and there we have provided us with enhancement in the banking limits. So with the support of our banks, we have been able to take on these large value projects and execute them in the time line that we are required to execute these projects.
Sorry, sir. Actually, I meant will we be taking debt or -- debt route or how will be funding in those terms?
Sir, our requirement is largely in terms of bank guarantees and letters of credit. The funding requirement is not that significant. Of course, the funding requirement will definitely be there when we execute the projects, but the larger requirement is in terms of bank guarantees and LCs. And that is where the banks have -- our consortium of banks has been supporting us.
We take the next question from the line of Parikshit Kandpal from HDFC Securities.
Elevated metro purchase. Again, we have a provision of INR 50 crores. So we have said that all -- at least we have now done the cost of completion accounting has been done. So why is this value coming up?
It is a combination of 2, 3 things, Parikshit. Extension of time lines because of COVID and the commodity prices as well. Both these things have impacted the margins on that project. But the good thing is we have claims, and we are going to pursue these claims and the money will get recovered.
But in the Indian context, the time line for recovery will be quite long. So in terms of the accounting policies that we are required to follow, we've accounted for this loss. But our feeling is it will be more of a timing mismatch, and we hope to recover this money from the legitimate claims that we have on the project.
Secondly, on the Kolkata Metro, we again heard some news of cracks [ emerging ]. So if you can throw some light there and also the update on insurance gains. So where are we in terms of progress on that?
Well, yes, 2, 3 buildings, there are some damage we have observed and those buildings are there for last 200 years without proper foundations. And if you do something below that, something can happen. But it was well controlled.
Those inhabitants are all evacuated on time. So it is under control now. There is no such issues and work has already started. As far as insurance is concerned, we have already got some amount from insurance company, few, not much. That means that there is an indication that it is going well.
So this tunneling work was already over, right, sir? Are you still expecting back on that Kolkata Metro tunneling work is over?
Tunneling work is well over a long time back. But if you remember that tunnel boring machine, which was struck up on 31st of August, that needs to be removed from there, so that the track can be through. To remove that, we need to excavate up to the bottom of the TBM machine. So while excavating or exposing the hard surface and during that time, once some surrounding buildings were cracked.
And that TBM has been removed or like still continuous, like the work is in progress.
The excavation is completed and we need to protect the site by concrete and all, which has been done. Now part of that TBM has been removed and part is going on now. I hope by June end, it will be completed.
So just on this Mumbai Metro and Kolkata Metro, so how much would we be residual cash lease to entities as these projects are nearing completion now. So do you think that once these projects are completed, we still have some sizable profits to be recognized from these projects, these two projects?
Yes. Definitely, Kolkata Metro, we have almost around INR 200 crores lying there in the bank. So despite of all what has happened, we don't see that there will be further problem, and this should be processed to us. Mumbai Metro as well, I think, Prasad?
Yes, that's right. We do have cash balances over there, but it is precisely because of such -- the possibility of some such incidents happening that we are withholding or not declaring the full margin just now.
But as the project nears completion, we should see some release of margins, and that should get accounted in the current financial year or maybe slip a little bit into the next year.
Okay. Just on the JNPT project, I think there will be some project for a while. If you can update, I think we have bid for these projects, any status update there so...
JNPT, as we have been discussing, there are 3 contracts. I mean, 3 tenders. One is the supply of sealing material, which is basically earth work, almost local work. So that has gone to a local party. Second is that compaction of those earth. So that also has gone to the local party. But our target was the JT work, which is still we are discussing with them and let us hope for the best.
And how big is the JT work?
It is close to INR 1,000 crores.
Okay. Sir, any outlook on the pipeline as I've joined the call a little later so I don't know whether you've discussed it. If you've discussed it, then I can take it offline. So any outlook on segment-wise ordering potential bid pipeline and all.
Ordering potential, as far as marine is concerned, JNPT and Colombo put together, it'll be INR 4,000 crores. Apart from that, INR 2,000-odd crores we are pursuing in Bangladesh. So INR 4,000 plus INR 2,000, INR 6,000 in marine, which is under active persuasion through tender process.
There are some other infrastructure jobs, put together will be around INR 6,000 crores, which is also likely to be completed -- I mean, concluded very soon. And there are seawater [indiscernible] 2 big development projects we are pursuing now, put together around INR 2,500 crores. So altogether, if you see, INR 15,000 crore jobs under pipeline, the verge of finalization through tender process.
And you earlier did mention that you were looking at some road projects of contracting opportunity being on the road projects. Are you seeing any developments there?
Yes, that is still there. And the number, what I have told you, that includes that also.
Okay. So sir, I think just to summarize mainly now the worst thing behind us and we are gradually moving towards the double-digit margin. So can we expect by second half, starting second -- the third quarter, can we say that we move towards double-digit margin?
See, margin is a function of various things. I mean, I can only tell you that towards the end of this year, we'll be in a very good position and we'll be able to tell you exactly that what will be our margin, which should be very close to 10%.
[Operator Instructions] We take the next question from the line of Mr. Mohit from DAM Capital.
Thanks for the opportunity once again. Sir, while you alluded to the order inflow from the various other segments, is there any order inflow or order opportunity from the railways or the Metro in the fiscal year, which you are foreseeing? Or would you believe that could be closed in this fiscal?
Yes. Metro, yes. As you know that there are several Metro jobs -- tenders in Delhi and in Chennai underground and so forth. So definitely we will be targeting those, and we are very much there in terms of our capability and our appetite.
Otherwise, railway, most of the works are tunneling job in northeast and northern part of India, where we already have 3 big jobs. So I don't think that we'll be much interested for those type of jobs for the time being.
But are these opportunities very large, the tunneling jobs? And why we are not pursuing with some of them?
Opportunities are very large, but at the same time, the risk is also very large. I mean doing tunnel in Himalayan range, you can see in paper, every day, there are something happening. So when you have good work in hand, why to go there to that extent.
So already we have got around INR 2,500 crores of job in Sivok Rangpo tunnel job. So let us complete that, then we'll be interested for those jobs.
We'll take the next question from the line of Prem Khurana from Anand Rathi.
Congratulations on good execution during the quarter. Sir, most of my questions are already answered. Just 2. So 1 was when I look at the inflows and in this quarter, the inflows have been very, very strong. But what I realized, I mean -- so we had this INR 5,000-odd crores of inflows available with us when we spoke the last time and during Q3 con call, and that was in the month of February, so which -- essentially in the second half of February and even in March, we've not been able to have much incrementally.
So what would you attribute this to essentially, I mean there were hardly any tenders in your areas of liking or the competitive intensity still remains high, which is you couldn't have any new orders come to you, let's say, in the month of March or in the second half of February. So if you could share your thoughts on the competitive intensity that is there in the market today?
No, no, Prem, we have already secured. In April, in fact, we have secured orders worth about INR 450 crores. The values may not have been as large as the ones we secured in January. But there has been a continuous flow of orders.
And as Mr. Basu said, the pipeline is very strong. And in the next few months, we are opening up, our order book increasing further. So the intensity -- right, there is competition. There are a lot of projects that are coming up for tender and we have been winning projects as well. It's not that we haven't received any orders after January or February '22.
Sure. And do we see this competitive intensity to go down because of the way the commodities have been behaving, where in some of these smaller, especially smaller players get carried away or you don't see that situation and you would get to have similar kind of competition, which has been there in the system for a while now?
Today, if you see the market, most of the, I mean, investments by the government is in the sector -- road sector. And road sector does not have much affect because of the commodity price because it is mostly earth work and cement. So I don't think that this affects the road sector. But we are not there.
Apart from that, Metro competitions are as usual between few parties like us, of course, L&T, Vijay Kumar, 4 or -- 4, 5 of us. So competitions will remain. And so we have to survive in that situation.
Sure. And second question was Chennai underground Metro. So by when are you likely going to start with tunneling work there? And any number that you could share in the CapEx that you would need to incur either in terms of, let's say, TBMs or any other equipment that which -- we would need to kind of first start with the tunneling job there?
See, tunneling job requires a lot of enabling work to do before tunneling starts. So from now, it will be another at least 1 year so that genuine tunnel work will start. So next year, May or June.
CapEx, yes, Chennai Metro has CapEx involved in terms of buying up TBM and trench cutter, close to some INR 300 crores, INR 400 crores.
Yes. The CapEx this year is likely to be quite sizable, especially for Chennai Metro projects and some other projects as well. So in terms -- and we could see CapEx in the range of about INR 300 crores during the year.
Okay, INR 300-odd crores. But then a large part of this would be made good because you would be able to kind of use mobilization advances with these projects so...
Yes, that's correct. The funding for this CapEx will be out of the advances that we get on the project and maybe some term loans.
Sure. And sir, last on working capital cycle. So I see on our balance sheet, I mean the cash balance has gone up substantially. So is it essentially, the year-end phenomena that we generally get to have wherein the government department release payments because they want to exhaust their budget and which is where I mean in the subsequent quarters, the cash balance number would go down. Is it the right understanding?
And where do you see the normalized working capital cycle for us as we progress.
What you are saying is partly correct. Yes, we did see a large inflow towards the end of the year. But overall, during the quarter, we have seen the collections coming through. And that has resulted in a large cash balance as on the balance sheet date.
But normally, by the working capital numbers in terms of number of days are much lower as of months. They will probably go up to some extent. Our endeavor would be to manage working capital in a better manner so that the investment in working capital doesn't go up significantly.
Sure. And just last, with our permission, if I may. How much is the mobilization advance that you would be able to draw from the recently added projects? And any quantum that you could share with us, the amount that you would be able to draw from these projects?
Generally, we get 10% mobilization advance. We have taken -- partly taken some of the advances, but then I think another INR 250 crores to INR 300 crores, we should be able to draw over a period of time during this financial year.
We take the next question from the line of Vipul Shah from Sumangal Investments.
Sir, I joined the call late, so there may be some repetitive questions. Why there is a sudden jump in other expenses?
Vipul, as I mentioned earlier, we have booked some loss on the Bangalore Metro project in this quarter of about INR 30 crores. And some of the other heads of expense where we -- because of the execution has also picked up on our projects, we have seen some increase in our plant hire, the cost of spares and other project-related expenses. Those have also gone up during this quarter.
Sir, this INR 30 crores, are they recoverable or it is written off permanent?
Well, it is written off as of now, but we do have claims on the client for various reasons, and these are legitimate claims in our opinion, and we pursue these claims and recover this money, but that process is likely to take a bit longer.
And sir, regarding the cost -- cost escalation clauses in your contracts. So are they 100% or only partially cost inflation in commodities recoverable in your majority of the contract. So if you can give some color, it will be very helpful.
Around 90% of the contracts are protected with the escalation clause. But typically, those clauses are driven by the formula from RBI indexes and so on and so forth. So what happened, the steel price has gone up to so extent that this escalation clause is not adequate enough to cover up in their cost escalation.
So there will be some effect which has affected our bottom line this month and last quarter. But going forward, it seems steel prices are also now coming down, and we hope that things will be better coming days.
So sir, can you quantify what percentage of cost inflation is recoverable?
Difficult to say.
Vipul, it will be difficult to quantify because each contract has its own defined escalation clause, and we need to claim it from the client as per the clause. And the cost that we incur isn't the quantum of steel or cement, which goes into every project will also be different. So it will be difficult for us to quantify, but we have -- we do claim it on a regular basis from the client based on the contractual conditions.
We take the next question from the line of Rahul Modi from ICICI Securities.
Sir, just -- most of my questions have been answered. Just 2 questions. Any provisions which are left and to be done in the Bangalore project going forward? And how much CapEx, if you could just quantify that we've done so far?
Whatever losses we have envisaged on the Bangalore Metro project have already been considered in the March financials. In terms of CapEx, as I mentioned earlier, for the Chennai Metro project and for some of the other projects that are under execution, we would be incurring CapEx of about INR 300 crores during this year.
We take the next question from the line of Jiten from Axis.
Sir, my first question would be on the future pipeline, which we are looking to it. Any large projects which you are targeting this year from [indiscernible] opening remarks, can you highlight please?
Yes, in marine, as I mentioned, that 1 project in Colombo, which is getting delayed because of local political issues, sizable job of around INR 3,000 crores. Other working job in Bangladesh will be INR 2,000 crores and 1 more infrastructure job, which is also quite big. We are pursuing with some party in India.
But sir, these projects would be a fixed price contract, like Columbo probably would get further delayed and Bangladesh also could be a fixed price contract, right, sir?
Bangladesh is not fixed price contract. Escalation clauses are there. Colombo is because it is from the private party, you have to negotiate with them, and it depends upon the cost benefit by both the parties. Maybe they can include the escalation, maybe they not include, that depends up on the negotiation.
Now if we are bidding for any more projects on [indiscernible], what kind of margins [indiscernible] while you're waiting for these projects. Are we building in like 12%, 13% margin because we are looking for a double-digit margin coming second half of '23 and '24. So what kind of margins you are building in after the recent commodity price run up and competitive intensity going forward? So what is your view on this, sir?
Actually, there are several factors which decide what could be the margin. It depends up on the segment. It depends up on the size of the job. [indiscernible] from 8% to 15%, location of the job and the segment-wise.
So probably our marine could be having the highest margin being one of the largest player in the country for us?
Yes. Yes. Marine is highest margin. And that too also marine big jobs will be around, say, 10%, 11%. Small job will be 15% in that range.
And sir, again, this execution guidance. So we are talking about 20%, 25% growth for FY '23. But seeing the order backlog is strong and large, so what kind of growth you are looking envisaging in FY '24 and the CapEx for FY '24?
FY '24, I think the same momentum will be there, which is around 20% -- 20% to 25%. Let's see, most of the CapEx this year is because of the Chennai Metro. I don't foresee much requirement next year.
And sir, we'll not be seeing such provisions what we have done in Bangalore Metro, and any other projects, which we shall be executing now and in the future?
Fortunately not. We are already behind this Bangalore Metro almost and Delhi Metro long time back.
As there are no further questions, I would now like to hand over the conference to the management for closing comments.
Thank you so much, everyone, for joining us on this earnings call. We look forward to your continued support to the company. Thank you, once again.
Thank you.
Thank you. On behalf of ICICI Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.