KNR Constructions Ltd

NSE:KNRCON

Earnings Call Transcript 2024-Q1

[Kamidi Reddy, executive]

Good afternoon, everyone. Thank you for joining us today on the call to discuss the Financial Results for Q1 FY '24. Along with me, I have Mr. K. Jalandhar Reddy, Executive Director; Mr. S. Vaikuntanathan, Vice President - Finance; and Strategic Growth Advisors, our Investor Relations Advisors. We have uploaded results in the investor presentation on the stock exchanges as well as on our company website. I hope everyone got an opportunity to go through it. We would like to touch upon a few key company updates and the industrial events post in which we will have a question-and-answer session. We have signed a concession agreement for our three HAM projects with NHAI for a total build cost of INR 2,005 crores: our Mysore to Kushalnagar Project Package IV on 28th June 2023, for Marripudi to Somvarappadu of Bengaluru-Vijayawada Economic Corridor Project on 27th April 2023, and Mysore to Kushalnagara Project Package V on 22nd May 2023. CRISIL has upgraded its outlook on the long-term bank facility of the KNR transaction rated from AA minus positive to AA stable. Further, the start on rating is reaffirmed at CRISIL A1+ so our strong financial stability and business operation process. I would now like to share our processing on the significant industry divestment. Based on the industry report, it has been observed that there was a decrease in the road concession and awarding it during the first quarter. In the first quarter of the fiscal year 2024, only around 600 kilometer was awarded for the road construction with a cumulative construction rent of approximately 2,000 kilometers. The project annualy awarded for the year is estimated to be approximately in the range of 8,500 to 9,000 kilometers. With general election around the corner, the government continues its fearsome overall industrial development. The same is also reflected in the more commitment to utilize a substantial portion of this FY '24 budgeted capital expenditure by December '23. This also other well-established sector as this will result in the good project awarding activities towards H2 of current financial year. In the first assets monetized deal of the year, NHAI will save two highway bundles, Bundle 11 and Bundle 12, for over INR 6,000 crores. A toll, operate, and transfer mode is used to monetize these bundles. The NHAI expected TOT asset monetization to raise INR 10,000 crores to INR 15,000 crores this financial year. NHAI hope to monetize INR 45,000 crores in 2023 to 2024, including other models such as infrastructure investments and NHAI special vehicle role such as securitization model. The 600-kilometer long Varanasi-Kolkata Expressway connecting this to Bihar and Bihar [Indiscernible] 319B by NHAI. Cost of the project is estimated to be a range of INR 34,000 crores to INR 35,000 crores. The acquisition of land is likely to be expedited after the naming. The completion of expressway will reduce the travel time between Kolkata and Varanasi by less than half. The NHAI recorded toll collection of more than INR 12,300 crores and INR 4,500 crores and INR 4,300 crores in the month of April, May and June, respectively. From Vehicles equipped with [Indiscernible], the amount exceeded by average monthly past collection for the fiscal year 2022-23, which amounted to INR 3,841 crores. In each month of the year 2023 up to until the month of June, the monthly room rates consistently exceed to be INR 4,000 crores. Now coming to key updates of the company. The percentage of physical progress as of June 30, 2023, for the HAM project is as follows: Magadi to Somwarpet, 75%; Oddanchatram to Madathukulam, 93%; Valanchery to Kappirikkad, 42%; Ramanattukara to Valanchery, 40%; Chittor to Thatchur, 11%. During the quarter, the execution has primarily been driven by HAM projects. As of June 30, 2023, the company has already invested INR 404 crores out of INR 732.86 crores to revise equity requirement for all the five HAM projects. The additional equity requirement of INR 330 crores to be increased at INR 146 crores and INR 161 crores and balance INR 72 crores in FY '24, '25, and '26, respectively. You can refer to Slide 24 on the investor presentation for the detail on each of the said projects. The total collection for the HAM projects that is in the form of revenue is Q1 FY '24 was INR 11.63 crores. Now coming to the order-book position. As of June 30, 2023, the company has an outstanding order-book position of INR 6,265 crores, which compares with our EPC road projects and HAM projects which is 75% of the total order-book while irrigation projects comprise of the remaining 25%. When broken down by the client, 53% of the order-book is from third-party clients and balance 47% is from the captive HAM projects. The third-party order-book are non-captive order book accounts for 53% of the total order book position. This percentage is shared between the State Government contract at 38% and 11% for Central Government and balance 4% of the order book from the other private player. The current order book position remains healthy and provides a clear visuality of the execution over the period of next 2 years. Under the Bharatmala project, our robust project pipeline and completed DPR retail project to expedite the project regarding excluding in the future. The company is targeting an order inflow of INR 4,000 to INR 5,000 past FY '24. To provide further even through the react through competition for the NHAI tender, our company is actively exploring various other opportunity [Indiscernible] sectors, including our own developments such as [Indiscernible] with the plan that we have of diversifying our order book. Our company is diligently engaging in the partly lucrative and appropriate bidding opportunity in the western and central region of the market rates, including selected areas, Maharashtra, Madya Pradesh, and others. I will now begin the results for the quarter ended June 3,223. I will take you through first the Q1 FY '24 stand-alone financial performance. I will start with the quarterly highlights. The revenue for the quarter grew by 4% year-on-year to INR 930 crores. EBITDA for Q1 FY '24 grew by 5% year-on-year to INR 173 crores as compared to INR 165 crores in Q1 FY '23. EBITDA margin in Q1 FY '24 stood at 18.6%. The net profit for the quarter was INR 110 crores as compared to INR 101 crores in Q1 FY '23, a growth of 9%. Now coming to the consolidated financial performance. I will start with the quarterly highlights first. The company recorded a flat year-on-year growth in the total revenue to INR 980 crores in Q1 FY '23 to INR 981 crores in Q1 FY '24. EBITDA came at INR 216 crores in Q1 FY '24 to INR 211 crores in Q1 FY '23. EBITDA margin in the current quarter stood at 22%. Profit after tax stood at INR 133 crores in Q1 FY '24 verus the INR 91 crores in Q1 FY '23. With this, we can open the floor for question and answer.

[Operator]

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.

[Shravan Shah, analyst]

Sir, the first question is on the order inflow. So we have already said that we are looking at INR 4,000 crores to INR 5,000 crores for this year. So two, three things to understand from this aspect. So first is how much orders that we have already created and we yet an outcome is yet to be unknown. Second is INR 4,000 crores to INR 5,000 crores, is it entirely from the road sector because we mentioned that we are looking at Urban segment like a metro or Urban and the Metro. So what kind of opportunities or order inflow are we looking at for this year? Second, in terms of the competition related to this because most of the road companies haven't seen the order inflow till now. So do you think that there will be the competition and we will be able to get the orders at the required margin that we are looking at?

[Kamidi Reddy, executive]

Sir, actually, the order inflow concern, first I would like to place the issue before you that the EBITDA orders are not yet started the -- bidding process has not been started. There have been a few bids, which have done in this month first week, but later, we found them -- all of them have gone postponed for the -- I think last week of this month, they've been postponed so tenders and two tenders are postponed to the next one. So kind of that we are heading in NHAI. So why now we are even trying some bits in the irrigation project. there have been some pipeline which is coming up. I don't say that we have placed bid. They are coming up in a way that Telengana Irrigation project is also there. There are about in NPLs there are irrigation base and Rajasthan, also, there are irrigation base. This pipeline considerably from selling an around INR 3,000 to INR 500 crores bidding is likely to happen in coming this month or next month. And NP also, I think we have in the last week of this month around INR 2,900 crores. Rajasthan, also around INR 2,000 crores, a bit unsure there. So I think there are lesser in size, but we are focusing these prices this time. As a token, we got a bigger one so that's the -- and I think as of now, you asked, Shravan, as of now, how many bids which you are trying to [Indiscernible] at this place in the pipeline kind of thing. I think at present, a few big places in the Tamil Nadu region of the -- that NHAI, they are not yet open. So except there are very few bids of both, we don't have anything on pipeline for this matter. Also, the pipeline projects, also we are looking at. And some maps also we are looking at. In Rajasthan, like some pipelines that in are after. From that, we have North Eastern product India, we have some Tamil projects, around INR 1500 crores sized project, which we are trying to focus and the joint ventures, we are even starting with our old partner portal engineering, we are discussing in continuation. And STW also we have in continuation with discussions. And even we are trying some discussions with NCC. So the plan we have a solid drive that we are making to enter in all these and try to get a good shape. And I can say that I'll do all right the efforts, whatever it happens, it is on.

[Shravan Shah, analyst]

Yes. Sir, just to understand, are you saying that you are...

[Kamidi Reddy, executive]

We will be able to make whatever required order.

[Shravan Shah, analyst]

Yes, sir. Sir, just trying to understand further a bit more, a few -- you mentioned you have placed a few bids. So if you can specify how many projects and what's the value and in which segment we have already placed where the outcome is yet to come?

[Kamidi Reddy, executive]

Actually, the margin by the way, name should have grown, there are three bidding sightings. There were [Indiscernible] all that things earlier.

[Shravan Shah, analyst]

Okay. And from the road side, particularly, so you already mentioned in terms of the irrigation of three states and the value. But from the road side, broadly, how much are we looking at in terms of the planning to bid now? And then in terms of the competition, so do you think that this -- whatever the road projects that we are trying, will it be mostly in the HAM or in the EPC? Because still given the last order already there from the NHAI side, so there will be more competition in the EPC space.

[Kamidi Reddy, executive]

Yes. Actually, the concern some Maharashtra bits are there, which are our EPC rate. But I think if you look at the EPC market concerned, there is no healthy kind of margins that are available in India -- in any of the state government concerned or in the concerns with NHAI also. So here, more that come out with some tenders, they are also -- they are mostly of nature or EPC only but NHAI is coming up with a cap. So as of now, listing the right the hauls. So hopefully, the pipeline even I told about some projects. They are also in the amateur only. So we can hope to get some credit from HAM only as of now. As I said, the Maharashtra project is in the state government. Some MSR projects are also there. There are EPC mention. We are trying our best in that.

[Shravan Shah, analyst]

Okay. And now coming to -- on the revenue part. So last time, we said that we are looking at close to INR 900 crores to INR 2,000 crores kind of a revenue from irrigation, but this quarter, broadly the -- there is less or nothing kind of a revenue in this quarter. So whatever the outstanding INR 1500 crores, INR 1600 crores or irrigation order book is there. So how one can look at in terms of the revenue for this year and next year?

[Kamidi Reddy, executive]

So revenue is concerned. The order book is about say, INR 8,000 crores.

[Shravan Shah, analyst]

Sir, I'm specifically asking...

[Kamidi Reddy, executive]

I take in 2 years' time. So more or less, we are seeing with figures of [Indiscernible] during the August and July. So that, we are a little bit shaky. But otherwise, we are -- overall good will be good in the year. And we'll try to take it whatever we are losing in the rainy season. In the second, third, and fourth quarter.

[Shravan Shah, analyst]

Yes. I was mostly asking -- my major question was on the irrigation front. So this quarter in terms of revenue booking was nothing. So whatever the outstanding…

[Kamidi Reddy, executive]

In irrigation, it's again, we can even pick up some elections. So there should be some other strength, which is likely to happen in irrigation. So we are hoping this month or the next month, it by 15 onwards, whatever the remit we get, depending on that, we'd like to gear up the things. That's what we are thinking. And I think revenue booking in irrigation has not happened in this quarter, that is renewing... Actually in this quarter, actually, we actually irrigation around 25%. That is close to INR 200 crores. And we did around 45%. And our growing we did around 27%. So INR 200 crores, INR 210 crores, whatever we did in [Indiscernible] for irrigation [Indiscernible] part of the balance of INR 800 crores to INR 900 crores revenue definitely will come through the irrigation, but that will definitely subject to what the some reason. There is outstanding of our most as of now, around INR 690 crores, including billed and unbilled also. So we expect that definitely there will the run [indiscernible] from the permit, then definitely, we will achieve the revenue that we have projected.

[Operator]

Thank you. Next question is from the line of Sandeep Agarwal from Naredi Investments. Please go on.

[Sandeep Agarwal, analyst]

So my question is, so Magadi-Somwarpet project basically progress is only 2% to 3% this quarter. So any specific reason?

[Kamidi Reddy, executive]

Yes. So, Magadi-Somwarpet, the land is not available for another 49 kilometers. Rest assured is concerned, we have already applied for PCOD and the PCOD is approved by the engineer -- I mean, the site engineer has approved that. But there is some ADB clearances required. So it was sent to ADB for clearance. Once it comes down, I think they were going to announce the PCOD any completion certificate for that. But around 49 kilometers still pending out of which big and pieces they were providing around 2 kilometers, 3 kilometers. So that's why the progress is less Magadi-Somwarpet. But another good peer is that around 700 kilometers, they get handed over on 10th of this month. 5 days back. So now we are getting up in the area. There's a full bypass there. It's there. And they are reading out -- they are taking some technical in 200 kilometers, which is in the complete forest. They want to go into existing roads instead of going for the greenfield dynamite there. So that is going to a little bit -- if they take that decision, another 12 kilometers will come into the hand. So that's the reason, sir, there is no progress. And the primary concern, that means [Indiscernible] concern, we got PCOD, and there is bits and pieces are left over. So I think 7 km, 7.5 kilometers they are provided in the past 4 months, and we have almost completed. And they are now requesting us to do around 0.5-kilometer length in explorative. And another, there is an approach to the ramp underpass. That is in the state head. So those areas where if they hand over, we have to do it, I think it's only INR 20 crores, INR 25 crores worth of work is spending. That's it. We will be doing it in 2, 3 months. Most of it, I think the benefit, we got some bonus also around INR 2 crore bonus, I think. We're also confident [Indiscernible].

[Sandeep Agarwal, analyst]

Okay. So my next question is regarding -- so our 3 new projects. So what are the cumulative equity investment requiring these projects and recorded in that sense?

[Kamidi Reddy, executive]

Actually, for our -- we have existing five projects of some market following the three new projects and system purchase. It could be recurring was initially it is INR 732 crores. Out of that, INR 404 crores is already infused. Balance around INR 330 crores. We expect that this balance for FY '23-'24 in around INR 145 crores. And for FY '24-'25, it will be around INR 160 crores and balance in the FY '25-'26.

[Sandeep Agarwal, analyst]

Sir, my question is regarding 3 new projects to be...

[Kamidi Reddy, executive]

Equity requirement will be around INR 245 crores. So this year, actually, FY '23-'24, we may have to cut to invest in this year. But the gain on the availability of the appointed date exiting, you will see most really, you can see 50% in the next year only and balance 25% in the balance two years.

[Sandeep Agarwal, analyst]

Okay. Sir, last one is, sir, CapEx low for the financial year, '24, '25 next -- currently and next year?

[Kamidi Reddy, executive]

For this year?

[Sandeep Agarwal, analyst]

CapEx for the current year and next year?

[Kamidi Reddy, executive]

Current year first quarter, we did actually CapEx of around INR 33 crores. And we expect that this year, CapEx will be in the range of around INR 100 crores to INR 120 crores because it's definitely subject to availability of the retaining of good orders in the irrigation and other sector. But definitely, we expect that because these 3 projects also mean experts in at maybe somewhere in the end of this year. So there may be not much requirement for the CapEx in this year at INR 100 crores to INR 120 crores. And next year is definitely base in incoming of the order inflow we have to plan next year.

[Operator]

Thank you. Next question is from the line of [indiscernible] Investments. Please go ahead.

[Unknown Analyst]

Just to clarify, 2 questions. One is on the account side. This top line of June last year included the 3 projects that were sold to Cube, right?

[Kamidi Reddy, executive]

Pardon, sir?

[Unknown Analyst]

Okay. So first question is the top line of the revenue and EBITDA on June 21, that is June quarter last year. Those included the 3 projects sold to Cube. Am I right?

[Kamidi Reddy, executive]

Yes, correct. Yes, it is there.

[Unknown Analyst]

So that means that this Y-o-Y comparison of INR 980 crores is not really comparable because this quarter, you would not have those 3. Am I right?

[Kamidi Reddy, executive]

Definitely, sir. These 3 projects are not there in this Q1 FY '24, yes.

[Unknown Analyst]

So then can you please give us comparable growth rate of EBITDA and revenues comparable to last year. Instead of INR 980 crores, what would it have been?

[Kamidi Reddy, executive]

But generally, sir, what is happening the whole project is not there. Other projects will add in this year, like -- this year, we have started to close that is there in this year. So definitely, when we present the financials, we put in the financial margin project-wise as a company overall basis. So last year, the 3 projects was not there. But this quarter, this -- our Kerala project was there, and [Indiscernible] was there. So definitely, we cannot compare. We can compare as a company as a whole.

[Unknown Analyst]

Okay. Sir, the second question was related to your guidance. Last call, you had said INR 4,000 crores top line for this year? And what would be the guidance for the margins?

[Kamidi Reddy, executive]

Margin is definitely -- because right now, we...

[S. Vaikuntanathan, executive]

Market is coming down, sir. So it's still bit of taking it will be there that we are expecting. But I think it could be relative of 2% to 2.5%. Provided that the input material variations are not there.

[Unknown Analyst]

I'm sorry, I did not understand the answer. Are you saying literally 2% to 2.5% lower or higher than last year?

[Kamidi Reddy, executive]

2% to 2.5% lower because the irrigation payments are likely to not -- actually we're heading towards election. So we hope irrigation payment will not be that even they are now irregular, but that still new stopped during the election period. That's what we are thinking. Apart from that, another reason the most problematic thing is that they could not solve the problem with the townhouse project, which is in bad loans and all. So regarding that, we are a little bit worried as of now. So it is a little bit not favorable. And to an extent nobody is going to focus on these issues, I think, I believe. But I think in a couple of months, whatever you get, you will get, we are trying to recollect or as much as possible and keep ourselves in on, which we are tied. So that's why I say the 2% to 3% could be -- we are expecting there should be some downtrend towards that. But concern is most probably provided this variant still will not go further down depending on the steel cement as well fuel prices and all.

[Operator]

Thank you. Next question is from the line of Vasudev from Nuvama Wealth Management. Please go on.

[Vasudev Ganatra, analyst]

My first question is how is once are –

[Operator]

Hello, Vasudev, can you hear us?

[Vasudev Ganatra, analyst]

Yes. So my first question is how much is our pending receivables from the Telangana government?

[Kamidi Reddy, executive]

So the spending receivables as of today is around both good and to build and build around INR 690 crores...

[Vasudev Ganatra, analyst]

Okay. And can you please help me with the debt and the cash levels at the standalone level?

[Kamidi Reddy, executive]

Standalone debt is 0 as of 30 June, and cash is around INR 85 crores as of 30th June.

[Vasudev Ganatra, analyst]

Okay. And sir, if you can just speak a bit more on a diversification plan. So you already said that we're looking into more segments. So what is the exact progress over there and something more on that?

[Kamidi Reddy, executive]

Yes, in relate to the first question I've answered about our entry into the various states in irrigation as well some tunneling projects also, we are focusing on and North East part of India. Some pipeline projects in Rajasthan, we are looking at irrigation projects in MP, Telangana, and Rajasthan. And MSR is a new area for us. We are now time and entry into -- it is all over in this. And apart from that, we will examine the metros and now there is no solid case that has come before us so we will be in the open for that. And the availability on the projects also we will look at a little bit closely on that. Earlier, we were only limited to add as well. But now upcoming wherever the items are happening, we will focus on that.

[Operator]

Thank you. Next question is from the line of Faisal Hawa from H.G. Hawa and Co. Please go on.

[Faisal Hawa]

The ROC and the ROE for this quarter in our company? And secondly, sir, are we excluding any orders which have not been finalized from the final order book? Because if I remember correctly, the order book was INR 9,200 crores in March and today, you have said it is INR 6,200 crores. And third is sir, are the mines that we had bought in Kerala contributing now to reducing our process costs for the blue bottles?

[Kamidi Reddy, executive]

What's that? Kerala?

[Faisal Hawa]

In Kerala, we have bought the mine for our raw material requirements. So are they now contributing to reducing our cost and increasing our EBITDA margin?

[Kamidi Reddy, executive]

Yes. Actually, what is happening earlier, we have started procurement with INR 19 per CFC in Kerala. Now it's gone to INR 32. We are a little bit out of control. But actually, the problem is with the one quarry we have acquired and it is doing almost around 80%, 85% efficieny. But the other one, we are able to do only 60% efficiency because in nice times, they are allowing in the -- working in those quarries, the Mungari area. So that quarry, they're not allowing in the night time but local. We are even pursuing the matter with seriously return this iteration as well in a state administration also. And the NHAI is also pursuing the matter with store -- if anything happens, it okay, otherwise, we are trying to buy certain aggregates. I think the of 30%, 35%, we'll have to buy it.

[Faisal Hawa]

But it would have given us at least 2 to 3 percentage points more on EBITDA for this project itself?

[Kamidi Reddy, executive]

Of course, sir, that bidding number, I think it is contributing pretty good time on that.

[S. Vaikuntanathan, executive]

In your question as return of price and return on equity is around 18%, sir, as of June. And as far as ARR is concerned, we INR 6,500 crores, that excludes this ARR book of and so year-to-year do the financial concerned. If we include this EPC which around INR 1,800 crores, it will be around INR 8,000 crores order book as of...

[Faisal Hawa]

From the previous participant's question, actually, I think his question was that the last year's revenue included our sales of the projects to Cube. So that was a onetime event. So if we remove that sale of the projects to Cube, what is our growth in sales in this first quarter?

[S. Vaikuntanathan, executive]

So actually, two things because we are doing EPC from that product. As far as P&L is concerned, one of the profit we earn from us wants below item. We want to [Indiscernible] company. So what you want to say that it is the are sold to keep the EPC or what we did in the Q1, that has been added in the last year. And other products like in Kerala and the pursuit [Indiscernible] Q1 FY '24.

[Faisal Hawa]

Sir, will our debt reduce further in the coming quarters? Because... No, no, on a consolidated basis.

[Kamidi Reddy, executive]

The control was consolidated debt is contained basically of our [Indiscernible] project and Pune project. Once we are already working with the different investors are monetized of the effect. So the Pune, we already told in the previous presentation, we are working on that, but we are not giving any positive response from the investor. But as far as Pune and our new and poses is coming, we are getting the positive response from the investor. And definitely in the due course actually, we may enter the monetization of these assets. Once we monetize on the projects, our debt will significantly further reduce.

[Faisal Hawa]

Monetize in this financial year, sir?

[Kamidi Reddy, executive]

[Indiscernible] we are having the discussion with the past investors, and we may do it in this financial year, definitely, we can expect it.

[Operator]

[Operator Instructions] Next question is from the line of Jiten Rushi from Axis Capital. Please go on.

[Jiten Rushi, analyst]

So my first question is on the joint venture which you had highlighted. You are having a joint venture port...

[Operator]

Sorry, can you please speak a little louder.

[Jiten Rushi, analyst]

Okay. On the joint venture, which you highlighted, you are having joint venture with Patel Engineering, NCC, and one more entity. Can you name the one entity and we are having joint venture for...

[Kamidi Reddy, executive]

I said this earlier. We are trying genuine in various projects to be entered from irrigation transfer. Irrigation, we are already having the experience in dam construction as well somehow transaction is not complete yet. It is 90% completed, then the certificate is considered as completion certificate for us. So for that matter, as such, all the dams canal we have pipelines and certain specialized work in dams, we will be needing some joint ventures. So which we are we are finely 3%. We had three agencies. We are in discussions with which I told you. It's one with Patel Engineering Limited, and second one is NCC, and third one is SCW.

[Jiten Rushi, analyst]

SCW, okay.

[Kamidi Reddy, executive]

Yes.

[Jiten Rushi, analyst]

And sir, this tunneling work in Northeast, we can do it independently or it would be in joint venture?

[Kamidi Reddy, executive]

Some in project, we don't have the expedite. So we will be doing with the partnerships,

[Jiten Rushi, analyst]

Partnerships. But work will be done 100% by us, probably that could -- that is the thought process?

[Kamidi Reddy, executive]

Yes.

[Jiten Rushi, analyst]

And sir, also on the irrigation project, as you said, that comp were still pending and we are targeting a revenue of almost INR 900 crores. Obviously, we have booked some -- your book revenue of 23%, INR 200 crores plus this quarter. So are you confident of achieving this revenue or you will slow down your execution probably...

[Kamidi Reddy, executive]

There is a bit of dilemna which we have I think, but the government we have spoken, I think, a week ago with the people. They are very keen, and they want us to do the somehow pump supply from a ton of 100 billion to...

[S. Vaikuntanathan, executive]

Have clear and [Indiscernible].

[Kamidi Reddy, executive]

Also bigger clearance from NGT now, setting that they are very built now but payments they're expressing, yes, we'll do it, but we don't have any solid accurate final balance

[Jiten Rushi, analyst]

Basically, we'll continue in terms of our work?

[Kamidi Reddy, executive]

I look at our own risk factor and do it.

[Jiten Rushi, analyst]

Sir, what happens if our cash has come down and probably then we'll be looking for working capital loan in a couple of months? I mean that can give that another option for us if at all?

[S. Vaikuntanathan, executive]

Thing as far as cash is concerned, definitely we're -- the receivables are around INR 880 crores out of that and receive around INR 650 crores are there. So that we will not -- we have not done the debt from the bank were to save our IDC. So definitely, when cash requirement is there, so far, we are able to manage with our internal approvals. And definitely, then require the money we will over dissent from these and take them on. Cash concern is another issue because receivables are there, which can be liquidated in the 1-month time only. So we are not really seeing any definitely, there is any possibility of that cash will be cases where the summaries.

[Jiten Rushi, analyst]

Got it. And sir, last question. So you said that you helped to procure aggregates for the Kerala project from outside for 30%, 35%. So you said that cost of aggregate plus cubic feet have gone up from INR 19 to INR 32. Did I understand correctly, sir?

[Kamidi Reddy, executive]

Rent, sir?

[Jiten Rushi, analyst]

Sir, you said that you are outsourcing aggregates from outside 30%, 35% for the Kerala project. So you said that the cost of aggregates per cubic fit has gone up. And that is what you are trying to say?

[Kamidi Reddy, executive]

Yes, sir. Exactly. The feeling is that earlier, we enjoyed we bought the new quarries in that area. We only to keep the aggregating control, the two quarries for two projects we put out. There the requirement of each project is about 20 lakhs metric tons. We will -- while buying also, we were very well known that we will have to procure certain percentage from the market. So having given a thought that at least you have a captive quarry, so your project will be controlled in the market. So initially, we started with it works very well, but later the other projects are also added in the region of a different projects answer to pick up and we really want to aggregates from the local people. So local people, they started raising their demands, and from INR 19 regard to INR 32 as of now. And even that as an availability is a big question because whenever there is rain, they'll announce a red zone, then that time, we'll have to keep the quarry shut down because of environmental rule. And one quarrying in the Manjari area, we are operating a quarry, where we are only allowing the day. Night time, we are not allowed to do the quarrying operations as well, crushing operations. Generally, we do it in daylight, then we are having a good production – it will meet our ratio requirement. So with all this around 30% to 35%, we have to guide in the local market. So we are even tapping the permission from Tamil Nadu government also because we have completed the project, where we have around about 2 lakh metric ton we have, if we want to transport it to the railway -- so the commission is under progress. Once they give the proposition, we will be capping those were and which is falling very cheaper -- I think INR 30, the market price is there. Now we are within INR 30, we are able to reach the site by railway from Tamil Nadu. So it's okay, is a position, which we are trying also.

[Jiten Rushi, analyst]

Right, sir. Sir, last question. Sir, you have identified future projects which you're trying to participate or going to participate in future in multiple sectors. So can you highlight the total size, which you're going to build for in next coming 6 months from road, irrigation. more pipeline tunneling and in various states or MSRDC. So what is the size we are going to participate or in terms of value?

[Kamidi Reddy, executive]

Around 49,000 now in the pipeline, meaning I can see the list of selected projects.

[Jiten Rushi, analyst]

This is for NHAI we are talking about or total?

[Kamidi Reddy, executive]

For the total. All put together.

[Jiten Rushi, analyst]

And NHAI would be how much?

[Kamidi Reddy, executive]

NHAI pipeline, if you look at it, the pipeline is around INR 70,000, INR 80,000 crores if I recall there. But with all the postponements in all and we are -- our selected projects is only around INR 20,000 to INR 25,000 crores in this. I think yes, we have only 13, 14 projects. We said focusing in this month or upcoming month. Maybe we will add some more in future and irrigation are all concerned, yes, it's about, say, INR 45,000 we are now looking at it.

[Jiten Rushi, analyst]

INR 45,000 res to INR 55,000 crores. That's all on my side. Thank you. All the best.

[Operator]

[Operator Instructions] Next question is from the line of Prem Khurana from Anand Rathi.

[Prem Khurana, analyst]

Sir, I think somewhere in your remarks you said…

[Operator]

Prem, your audio is not coming clear. Can you please speak through the handset?

[Prem Khurana, analyst]

Is it better now?

[Operator]

Thank you.

[Prem Khurana, analyst]

Yes. So sir, I think in your comments somewhere, I mean you said the Telangana government needs to engage with the bank for the payments for the pumphouse project, which is very waiting for that clarity to come through to kind of go ahead with the pumphouse part. So could you please elaborate on this? What exactly is I thought, I mean, this project is funded and the money is supposed to come from the bank and the wayside disbursing money. So why is it that the incremental disbursements are taking time?

[Kamidi Reddy, executive]

Actually, sir, that there is some grant amount which need to be paid by the state government, that is one problem apart. Another problem is to start that debt ratio -- RMB limit, it's gone beyond the expectations or other limitations given by the state government. So those are the areas, the state government is very serious on these guys. So the bank has a little bit stopped that funding and they need to sort out that issue. Once that is sorted out, these payments are likely to happen.

[Prem Khurana, analyst]

Sure.

[Kamidi Reddy, executive]

Yes, the Telangana government -- so that's what I said, we had a meeting with the state government personnel. They said if the banks are not paying, they wanted us -- in fact, they wanted us to go ahead with the pump supply and erection of the pump. We said we at almost INR 200 crores, we have to place as an investment. We were a little bit scared, we told them. Then they were -- the opinion that if not, it is paid through the bank, we will directly pay from a stage entity. That's what they were assuring kind of that, which we need to a little bit take a call on this and go ahead.

[Prem Khurana, analyst]

Sure. So maybe planning to place the order with BHEL for these pumps. So and you were waiting for the government to kind of extend your confirmation that you're allowed to go and open your LCs. Fair to until the time you get to have clarity from the comfort from government that yes, you go ahead, open the LCs and we'll pay you in time 'till then you will go a little slow at least on this procurement part, you would still continue over the seven-part only? Or you could go and invest from your pocket and get the equipment required for the...

[Kamidi Reddy, executive]

We are going at the increased processing and all that because pricing also there is a lot of expedition overhead. So we are talking to the government. And in fact, with the ESP and all that to it that we used retail also, but seeing that the supplier of the compensate and then we take. So we will not stop, it really a little slower but we will not stop.

[Prem Khurana, analyst]

Okay. Okay. And the JVs that you spoke about with the NCC pertains ends that you intend to have for the projects. These would only be for PQs or the work will also be shared. I mean…

[Kamidi Reddy, executive]

No, no, no. Only, we will still pay [Indiscernible].

[Prem Khurana, analyst]

Okay. so you will pay some sort of royalty and keep the entire...

[Kamidi Reddy, executive]

That to the comfort of them otherwise it will be done by us.

[Prem Khurana, analyst]

Sure. And just one last book you could share the consolidated debt and the consolidated cash balance, please?

[S. Vaikuntanathan, executive]

The consolidated debt is INR 575 crores, sir.

[Prem Khurana, analyst]

INR 575 crores, you said?

[S. Vaikuntanathan, executive]

Yes, yes.

[Prem Khurana, analyst]

Okay. And how much is the cash?

[S. Vaikuntanathan, executive]

Consolidated cash will be around INR 100 crores.

[Prem Khurana, analyst]

Sorry, how much?

[S. Vaikuntanathan, executive]

INR 100 crores, sir.

[Prem Khurana, analyst]

INR 100 crores.

[S. Vaikuntanathan, executive]

Yes.

[Prem Khurana, analyst]

So INR 85 crores stand-alone and control is INR 100 to INR 115 crores of cap?

[S. Vaikuntanathan, executive]

Yes.

[Prem Khurana, analyst]

Okay. But sir, I think when I look at our presentation, it seems -- I mean we received a good amount of grants in this quarter from NHAI towards the construction activity, and we also infused some money in these projects, right, around INR 110 crores.

[S. Vaikuntanathan, executive]

INR 100 crores, yes.

[Prem Khurana, analyst]

And the number that you gave in terms of 45% of the total top line has come from HAM, which essentially would mean I mean almost INR 400-odd crores per of number that you would have booked in terms of revenues. But I mean, then ideally, the receivables from hybrid annuity SPV should have come down, right? Because you've done INR 400 crores worth of work and SPVs at INR 110 crores from you and significant money come from grant. So why is it that the exposure to SPV has gone up or there's hardly any cash balance in the SPV?

[Kamidi Reddy, executive]

Sir, there's under amination MSA will pay only grant of 40%. But EPC player has to get this to get money from the bankers and they put their equity. And then we will make a [Indiscernible] contractor. So NHAI, what are the money we are receiving from NHAI is not position to clear the entire SPV. To balance our balance, 60% for the allocated up for equity and debt. So definitely that we have to rather debt on it that only they can be favorable to pay up to the EPC contractor. But as of June and July, we don't have the debt in the books. But as of now, again now because now cash position is coming down because we are not able to add in the receive from the irrigation. So we'll start taking disbursement from the bank in saying the EPC contractor.

[Prem Khurana, analyst]

Sure. So I have a few more questions on this and I'll take it offline. Thank you.

[Kamidi Reddy, executive]

Okay, thank you.

[Operator]

Thank you. Next question is from the line of Deepesh Agarwal from UTI Asset Management. Please go ahead.

[Deepesh Agarwal, analyst]

Yes, good morning, gentlemen. My first question is, there seems to be a lot of opportunity coming up of pump hydroelectric projects. Given our experience in the water and medication domain, would we be eligible to participate in those projects? And if yes, would we be looking at those projects?

[Kamidi Reddy, executive]

Ideally, we will just get to look at it. We did because our point enter is our partner is already into hydro, and we will see some excluding the possibility.

[Deepesh Agarwal, analyst]

Understood. Secondly, if I see your comments, a lot of projects we're looking at are outside the southern region. So what is tying -- is it our urge to diversify? Or is it that in a further reason there are not much project? And secondly, what would be the implication on our profitability out given we earn a better margin in the certain project because of the mobilization?

[S. Vaikuntanathan, executive]

Better, we say, rather looking at the margin that it is to keep at least to lubricate for us -- we need or low. So where we want to go now...

[Deepesh Agarwal, analyst]

Understood. Thank you.

[Operator]

Thank you. Next question is from the line of Deval Shah from JM Financial. Please go on.

[Deval Shah, analyst]

Yes. Sir, did we receive any money from Telangana government in the year-to-date?

[Kamidi Reddy, executive]

Transition from June this quarter, we will receive from Package III, total around INR 180 crores for the payment we received from the Telangana government during this year actually.

[Deval Shah, analyst]

In Q2?

[Kamidi Reddy, executive]

From April. From April to as of currently.

[Deval Shah, analyst]

So the outstanding amount is INR 690 crores or INR 650 crores, and that is as of June or currently?

[Kamidi Reddy, executive]

That is as of currently, INR 650 crores what we told in the last quarter as of May about INR 690 crores we are telling as of today.

[Deval Shah, analyst]

Good. Okay. And secondly, sir, on the rate pipeline side, you mentioned that INR 14,000 crores is a big pipeline. So out that high was 25% just in irrigation?

[S. Vaikuntanathan, executive]

This pipeline is generally using first center in artist part of India, very able that crores only just now in is concerned, it is alliance. So going forward, we'll look at it, sir, but we would like to understand how that this goes and what sort of margins we said it's kind of testing water.

[Deval Shah, analyst]

Okay. And sir, lastly, what is your EBITDA margin guidance for FY '24?

[S. Vaikuntanathan, executive]

FY '24. So yes, I've really said that around 2.5% to 3% depends on irrigation cash inflows. It may increase or go down. I mean, it may be, as we are giving earlier or it may go down by 2% to 3% less down the irrigation in this thing. Provided that [Indiscernible], maintenance fee, all in these prices are in control and accepted.

[Deval Shah, analyst]

Okay. Thank you.

[Operator]

Thank you very much. I now hand the conference over to the management for closing comments.

[Kamidi Reddy, executive]

Thank you all for joining us on this call. Please reach out to our Investor Relations Consultant, Strategic Growth Advisers, or us, directly, should you have any further questions. We can now close the call. Thank you.