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NCC Ltd
Earnings Call Analysis
Q1-2025 Analysis
NCC Ltd
NCC Limited has kicked off the fiscal year 2025 on a strong note, achieving a turnover of INR 4,747 crores in the first quarter, marking a remarkable 23% increase year-over-year. This positive momentum is reflected in their earnings before interest, taxes, depreciation, and amortization (EBITDA), which rose to INR 439 crores, up from INR 380 crores during the same period last year.
The company recorded a profit after tax (PAT) of INR 200.74 crores, a significant jump of 24% compared to INR 162 crores in the previous year. When viewed on a consolidated basis, the total turnover reached INR 5,558 crores, reflecting a 26% increase, with EBITDA climbing to INR 478 crores, up from INR 409 crores.
As of the beginning of the fiscal year, NCC Limited had an order book of INR 57,536 crores. Although they received orders worth INR 408 crores in the first quarter, they have executed projects that reduced the order book to INR 52,626 crores. The strong order pipeline continues to be a focal point, with management guiding for order bookings in the range of INR 20,000 crores to INR 24,000 crores for FY 2024-2025 and a 15% growth target in order booking.
The company reported an EBITDA margin of 9.3% for the quarter, slightly below the anticipated range of 9.5% to 10% for the fiscal year. However, management remains optimistic about achieving the targeted margin of 9.5% due to operational efficiencies and better project execution in the remaining quarters.
The first quarter's operations were somewhat hampered by the election period in India, affecting the speed of payments and project execution. However, as payments lag will improve, the company expects to see a positive shift in cash flow and project advancement. During July, incoming payments of approximately INR 500 crores are anticipated, which could help alleviate the working capital constraints experienced at the quarter's close.
The new government in Andhra Pradesh is signaling a recommitment to infrastructure projects, providing NCC Limited with an advantageous position to regain and restart critical projects that had stalled. The recent budget allocations included INR 15,000 crores for Capital City projects and an additional focus on infrastructure, suggesting a favorable environment for upcoming orders post-election. Management mentions that they expect to see about INR 300 crores materialize from pending payments tied to current projects.
At the quarter's end, NCC's debt increased due to typical industry patterns, rising from INR 1,005 crores at the end of March to INR 1,819 crores. Despite this increase, management noted a slight decline in finance costs year-over-year, which dropped from 3.45% to 3.25%. Moving forward, the company is confident in their revenue growth target, with potential to exceed the guided 15% due to strong project execution and anticipated new orders.
In the real estate segment, while NCC's contributions are minimal compared to their overall revenue (less than 1.5%), they continue to pursue profitable developments. The quarter indicated a small drop in assets from INR 743 crores to INR 716 crores compared to the previous year. Management remains selective in bidding for low-margin projects, opting to prioritize higher-margin opportunities across their main operating segments.
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Ladies and gentlemen, good day, and welcome to NCC Limited Q1 FY '25 Earnings Conference Call hosted by JM Financial. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Vaibhav Shah. Thank you, and over to you, sir.
Yes. Thank you, Deepika. On behalf of JM Financial, I welcome everybody to 1Q FY '25 Earnings Conference Call of NCC Limited. We have from the management today, Shri R.S. Raju, Director Projects; Shri Sanjay Pusarla, Executive Vice President, Finance and Accounts; and Shri Neerad Sharma, Strategy and Investor Relations. I hand over the call to the management now for their opening remarks. Over to you, sir.
Okay. Thank you, Mr. Ashish Shah -- Mr. Vaibhav Shah, sorry. Good evening, ladies and gentlemen. A warm welcome to all of you into the Q1 FY '25 Investors Earnings Call of NCC Limited. The presentation containing the performance of Q1 FY '25 was uploaded on the stock exchange website and to our website. Now I will take you through the key highlights of the first quarter. And thereafter, we will take you to questions-and-answers.
The interaction is broadly divided into 3 following sections. In the first quarter, I will talk about a brief overview of the business environment and prospects for our company. In the second part, our CFO, will brief about the financial performance of the company for the first quarter. In the third quarter, we will attempt to answer all your questions and [indiscernible].
Before going to the details, the usual disclaimer of the presentation that we have uploaded on the stock exchange and our website today, including the discussions that we will have in this call contains or may contain certain forward-looking statements relating to NCCL business prospects and profitability, which are subject to several risks and uncertainties and actual results may materially differ from those in such forward-looking statements.
Now when you come to the guidance, we have given a guidance for order booking in the range of INR 20,000 crores to INR 24,000 crores for FY '24, '25. The order pipeline of NCC is very strong at this moment and we expect that the company will achieve the given guidance for the order booking. We have given a guidance of 15% growth in order booking, against which, in first quarter, we achieved 23% despite the elections and steep, high temperatures at various places. Therefore, we are confident to achieve guidance even for FY '25 for [indiscernible] booking.
With respect to the margins, the company achieved 9.3% EBITDA margin in Q1 as against guidance given for a range of 9.5% to 10% for the year as a whole. So going forward, we expect to reach 9.5% EBITDA margins.
Coming to the earlier visit to discuss AP projects, now all of you are aware that there is a change in the government in AP. So NDL-led government is there now. And particularly, the earlier Telugu Desam Party relation, it is a broad development to infra development nature of the government. So when you get the -- the prospects in the AP now, so there is a positive outlook with respect to the AP projects now. The orders relating to Capital City 4 years back, now there is a chance to restart of those orders. Further, the pending payments relating to the projects awarded by 2019 going to be metilated in a couple of months. With this, there is an overall positive outlook with respect to AP projects for the company from the growth perspective.
Further, in the recent budget, all of you are aware that what -- INR 15,000 crores specific allocation made for the development of the Capital City projects and further the other allocations were also given for the infra development across Andhra Pradesh. So with this, the NCC company have good opportunity to again restart the works and to realize the whole pending amounts.
Similarly, in the union budget, a threshold allocation often given by INR 26,000 crores for infra development and INR 22,000 crores funds for Bihar state. In Bihar state, NCC is doing already several works. So here also, we have the chance to get the order besides the orders from all over India. About the debt of the company, as far as that is concerned, there is an increase in debt from that of the previous year by about INR 8 crores, INR 10 crores. So there are 2 primary reasons for increasing the debt. The first one is, generally in construction industry, the debt increase in the first and second quarters and comes down in third and fourth quarter. The second reason is because of elections, there is a slow process in releasing bills and allocation of funds by the clients. So -- but in subsequent months in July '24, the company has received about INR 500 crores payment spending in the first quarter. With this, the debt question also now comes down.
For our NCC Vizag Urban Infra arm in the first quarter, we received an amount of INR 67.25 crores relating to the sale of our equity investment and a balanced investment of INR [indiscernible] crores, we expect to resume in 2 to 3 months period.
Now I will hand over the mic to Mr. Sanjay, our CFO, to take up the second part detailed brief on the operating and financial performance of the company.
Good afternoon, everyone. This is Sanjay Pusarla, EVP and CFO of NCC Limited. I'm going to give you a brief on the performance of the company at the stand-alone level and the consolidated level. At the stand-alone level, the company has achieved a turnover of INR 4,747 crores, which is 23% higher when compared to the same quarter of the last year. Similarly, in the case of EBITDA also, there is an improvement and the EBITDA for this year first quarter is INR 439 crores as agonist INR 380 crores in the previous year. Similarly same, PAT also, there is an increase of about INR 38 crores, that is INR 200.74 crores in the first quarter of '24-'25 as against INR 162 crores of the last year. There is an increase of about 24% in the PAT level.
For the consolidated level, the turnover at the consolidated level is INR 5,558 crores as against INR 4,407 crores, showing an increase of 26%. And at EBITDA level, the increase is 21%. Current year, it is INR 478 crores as against the previous year, INR 409 crores. PAT level attributable to the shareholders, the current year it is INR 210 crores, to INR 209.92 crore precisely against INR 173.54 crores, which is a 21% increase. And the order book position, as on the beginning of the year, the order book was INR 57,536 crores and we have received an order of INR 408 crores in the first quarter after the execution -- after eliminating the execution in the first quarter, the order book stands at INR 52,626 crores as of the end of June '24.
And coming to the trade receivables, as it was explained earlier, the debt position has little bit increased because of the first quarter. As it is in the nature of the construction industry, the first quarter, that level will be a little higher. Besides that, because of these elections, the corrections were little hampered and relations were slowed down. So the debtors stands at INR 3,654 crores as against INR 3,063 crores as on same date of the previous year. And compared to the 31st March, it was almost like INR 900 crores higher when compared to 31st March. The debtors collection period as at June '24 stands at 86 days as against to 57 days of 31st March. But when you compare with the same period of the previous year, it was 82 days. That means it is 86 days in the current quarter. I recognized the 82 days are the same period of the last year.
So coming to the advances, like mobilizing advances there is an increase by INR 100 crores and it stands at INR 2,425 crores as of the end of March '24. And the interest-bearing advances of which 72% of the advances will be interest-bearing about INR 751 crores, and the average interest works out to 9.5%, which is less than what it was there as on March '24, which is 9.72% and a year before, it was 10.72%. The advances -- the interest rate -- the average interest rate has come down almost like 22 basis points when compared to March '24.
And I'll be explaining about the unbilled revenue. Unbilled revenue as on 30th June is INR 4,719 crores as against INR 3,859 crores in March '24 and which is 25% of the turnover when compared to the previous year where it was 21%, and this year, it is 24%. The increase in the unbilled revenue is due to the reasons which we have explained before. There was slowdown in the billing process that all these things were clear in the month of July.
So as regards to debt position, I think Mr. Raju has already explained to you that the debt as on 30th June '24, is INR 1,819 crores as against INR 1,005 crores as of the end of March '24, showing an increase in debt utilization by INR 814 crores. So the finance costs when we compared with the last year, the finance costs have come down from 3.45% to 3.25%. The gross finance cost is INR 153 crores and the net finance cost after eliminating the income and in terms of interest is coming to INR 132 crores, which is 2.8% in the first quarter of this year when compared to the same period of the last year at 3.03%. The interest cost is coming down to this extent.
So now the session is open for question and answer.
[Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities.
Yes. My question is on this -- on the new government. Do you think the old projects can be revived meaningfully? If I think correctly, I think orders worth INR 100 billion got canceled last time in 2019?
Now there are 3 parts we can discuss about the AP projects. In 2019, the government has canceled certain others. And this at the same time, they abandoned certain orders, they have not canceled those orders, but they are in the force. And certain orders they are to continue. And we have been continuing those orders. About the Capital City projects, it's there in the force now. But only the amounts are outstanding from the client, works are going on, but they have not canceled those orders. So those orders since Capital City now coming up , so we have every chance and government also asked us to restart those works. But whether we take up those projects at the given [indiscernible] other things is a big question to see. So therefore, lot of discussions takes place between the client and the NCC and basing on the conclusions, those are roughly at this moment, we can see about INR 5,000 crores. Those orders may restart.
About order cancel, that is, again, a different outlook. Second, the government, again, will come up with new pickup or they may revive those orders and how they are going to be, at this moment we cannot talk on that term, but we have to wait for some time to have more clarity about the government conclusion on that one.
Understood, sir. My second question is on the order inflow. We started with a very, very soft quarter in Q1 in terms of order inflow. While you've seen that some of your competitors have received a decent amount of order inflow, especially post June, how to think about the order prospects for the balance of the year? And which are the segments where you are more positive compared to last year?
Yes. So in the first quarter, about order pipeline concern, we have a strong order pipeline and we have some orders waiting for the LOAs order. So once those LOAs comes, then in the first half year, whatever the guidance we have given and mostly, we achieved the guidance for even first half of year also. So for the year as a whole, at this moment, company is confident to achieve the whatever guidance given for the order booking.
The next question is from the line of Shravan Shah from Dolat Capital.
Yes. Sir, just to clarify in the sense that we are saying that a 15% revenue growth for this year and 23% we have already done. So is there a possibility that this number or growth of 15% can even go up to 18%, 20% for this year?
Yes. That one basing on the present what progress has taken place in the first quarter, there are chances, but in the third and fourth quarter, the order -- the invoice booking out of the new orders to secure in the year '24-'25 needs to be seen, isn't it? We have not got any orders into our books of accounts when we are waiting for the LOAs. So bearing that one definitely 15% plus would be there, the invoice booking in the remaining quarters. In the second half year, at that time, we can comment on that one about the -- how the third and fourth quarter progress. At that time, again, we will confirm you on that one.
Okay. And on the margin front, in the presentation, we said that 9.5% to 10%, but in your opening remarks, you said, 9.5%. So slightly on the lower band of the margin. So that's what we are seeing, whatever the orders that we have won and we are about to execute where we are likely to see a slightly lower margin, and that's what we are saying, maybe we can achieve a lower band of 9.5% of EBITDA margin?
Yes. So in the guidance, what we've given 9.5% to 10%, the range we have given. So the first quarter, we achieved about 9.33%. So as a result, at this movement, the minimum range band, whatever is there, 9.5%, we are confident to 9.5% level. And again, more and above 9.5%, we have to wait and see about third and fourth quarter results.
And sir, L1 orders of 2 MSRDC and 1 on other projects, the value is close to INR 8,700-odd crores, if you can reconfirm?
Yes. It's INR 1,500 crores.
Yes. Okay. And sir, just a couple of data points on the balance sheet front. So inventory data, retention money and loans and investment to subsidiary and associate?
Can you please recall what you are asking?
Yes. inventory, trade payable, retention money and total investment in subsidiary and associates?
Inventories as on 31st March is INR 1,400 crores and as on 30th June is INR 1,300 crores, okay? Retention money is INR 1,500 crores as on 31st March, and it is INR 1,532 as on 30th of June, okay? And investments is INR 1,033 crores as at the end of March '24, and at the same level even as of 30th March...
So what was the loan numbers, which was INR 500-odd crore as on March to subsidiary and associates?
INR 509 crores as at the end of March, and that was INR 473 crores at the end of the first quarter now. There is a reduction.
And trade payable as on June?
Trade payable as on June INR 5,481 crores against INR 4,966 crores as at March.
Okay. And lastly, possible the CapEx, how much we have done and for full year, how much we are looking at?
Full year, we were budgeting around INR 250 crores, and we have done around INR 51 crores as of the end of first quarter.
So this does not include the J Kumar JV TBM?
TBM, we have already told in the last year itself that when it is coming, it will be added in the CapEx additionally.
The next question is from the line of Parvez Qazi from Nuvama Group.
Sir, you mentioned that on certain projects in Andhra, the payment is still pending. So what would be the quantum of such payments which we are still yet to receive?
Now, there are 2, 3 parts are there. The first quarter is about the funds brought an account of the Capital City projects are about INR 150 crores. And the running projects are about INR 350 crores or INR 400 crores are there. So now already, the dialogues are taking place to the government, and we expect nearly INR 300 crores to metalize in a couple of weeks. Out of that one, thereafter, some clarity will be known about the continuation of the projects.
Some of the ports are already running. There is a change in the government and what the priorities of this government from that of the earlier government, what works they ask us to continue, what works they give the priority, basing on the priority, some of that will come. But as far as the pending payments are concerned, we expect about INR 300 crores to metallize in couple of weeks.
Sure. So when we say that INR 350 crores to INR 400 crores is on account of running projects, these are also in Amravati and running or these are projects in the rest of the states?
In the rest of the places, these are the projects which are running in the rest of the places. Other than [indiscernible] and Amravati projects. They are called -- they are medical colleges and APS MIDC projects.
Sure. What would be the cash level at the end of June?
INR 140 crores.
INR 140 crores, I guessed the number, right?
Yes.
Sure. And last question, it would be great if you could update us about the status of the Jal Jeevan Mission project and also the Smart Meter project?
About the Jal Jeevan projects, by end of June '24, we have completed 60% of the projects. And the balance, we have over INR 6,000 crores as on the stake. And by March '25, we expect to complete about 95% of the projects. About the Smart Meter projects, Bihar project is one, already we issued other supplier for meters and supplied the meters, about 80,000 meters supplied and 65,000 meters we installed and also the software system is also installed into that one. Now the client is verifying the system that was properly synchronized with the IT system and [indiscernible] system. The checking is over. And our department or division is expecting this clearance from the client in a month's time.
So thereafter, once the clearance comes, we will continue to install the meters. That is about this Bihar road project. We have also done the mobilization advance of the first lot to spend for the project. And about the Maharashtra State 2 packages are concerned, there is -- now the client changed, priorities changed that one. And they've given priority to install with the meters at the offices rather than at the total remote villages.
Installation at the offices means it is in a scattered place and the progress of the installation will be low. So in first 2, 3 months, the progress will be low. And once the government gives the clearance to install in the total village, then the progress will pick up. So thereby, we expect that Q2 and Q3 may not be the good progress and in Q4, we expect to pick up the progress on that front.
Do you expect any impact of the Maharashtra election on this approval sector?
Certainly, we are also cautiously moving on that one. We are not aggressively moving, keeping the elections ahead. And this way, we will also want to do as per the client go in this slow pace because heavy uncertainity would be there when elections are there and even if [indiscernible] as per bill process, payments are concerned, there are some uncertainties. So we are going a little bit slower as far as Maharashtra projects are concerned. And the rest of the things, what are the requirements are there, that we are doing, except buying and installing the meters.
The next question is from the line of Prem Khurana from Anand Rathi Shares.
Sir, 2 questions. So one was with respect to Dhaka settlement that we had achieved some time back. I mean, INR 175 crores is the number that we're supposed to Dhaka and INR 90 crores was paid last quarter itself. So what's the status on the balance amount, has it being paid or it is still to go?
We have paid the second installment of INR 45 crores which is due in June and the third last installment is due in December. And we expect to pay on time as scheduled.
Sure. And sir, secondly, I'm not sure if you -- I mean, in your opening remarks, I joined a little later, so please pardon me, I mean, if it is already answered. But -- I mean, we were looking to have a partner for our smart meter business. I mean, any progress there that you could share with us?
For the 2 SPV projects we wanted to open a partner, right, wherein we were willing to give away 50% sort of economic interest. So have we been able to identify any partner and what sort of dilution we would be willing to [indiscernible].
I think Mr. Raju, my colleague, has already brought to your attention the fact that for the Maharashtra project, which is in SPV, we have decided to go a bit slow. That said, we have initiated discussions with couple of potential investors. So as and when the pace of the project picks up, we should be in a position to finalize the partner.
Sure. So the plan stays, but then over the time, you would want to make some progress before you go ahead with the plan?
That's right. Because at the end of the day, there is a mobilization advance. And we have to raise the equity when we have to really procure those meters in bulk. For that, we need the money. So currently, as Mr. Raju brought to your attention, we are going a bit slow. As and when this picks up pace, we will have a partner on board.
Got it. Any thoughts on -- I mean, how many vendors are we dealing who are going to procure meters? I mean, given the fact that there were many orders of the same nature, I'm not sure if the industry has that sort of capacity to be able to kind of produce those many meters. So how is the situation? I mean, I'm sure, I mean, you have already assessed the situation and which is why you would have taken the orders, but I mean, if you could share your thoughts -- I mean, how easy or difficulty is it to be able to find a vendor?
This a big question. Now vendors are there in the market, and it is not a big challenge for the company to procure the meters identifying this one. But a lot of work is going on with the brand. Ultimately, what we look for is reliable quality and lower price, these are the primary object to us. So on that, a lot of exercise is going on. And further, to keep the progress, already we are [indiscernible] and the suppliers supplying the data. But going forward, it would go in a different manner, it depends on one supplier. So like that, the exercise is going at this moment which is not correct to detail vendor mention and and other things.
Mr. Khurana, if I may add my true sense to your question. In this project, the ownership rates with us for about a decade or so. So at the end of the day, we are responsible for the performance of the meters for a decade. And in most of the tender, the conditions talk about some kind of technology platform, not a name of the vendor XYZ, ABC or so.
So if there are plenty of vendors available in the market, we have to also keep in mind the fact that to how long these vendors should be in a position to support the maintenance of these meters, operations of these meters for about a decade's time. So the technology platform is available and there are a lot of people who should be able to qualify for the SLAs which are required for the performance of these meters. So we will decide at the right point of time. But I don't think that is going to be a challenge for us.
And then one last bookkeeping question. If you could help me with the bank balance number? You gave the cash number, but if possible, the bank balance number, please?
INR 140 crores cash on cash equivalents as of 30th June '24 and recognition to INR 489 crores of March '24.
And sir, margin money deposits, how much would that amount if you could share, please?
INR 694 crores now.
INR 674 crores?
INR 649 crores.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Congratulations on a decent quarter. Sir, my first question is on the AP ordering. So if I remember correctly, at the peak, you had an order book close to about INR 18,000 crores from AP. So directionally, how do we see the ordering happening in AP? Do you seen that over the next 3, 4 years, there could be a big catch up because in last 4, 5 years, nothing much has happened from the ordering point of view? So how substantial can this opportunity be for you?
Mr. Parikshit, could you please repeat your question? Is it about EP or is it about the market as a whole?
I'm talking only about AP and in the peak of your order book AP was contributing about INR 18,000 crores to the total overall order book. So just wanted to understand from the point of next 3, 4 years, how do you think...
Yes, your voice is not very clear to us. Could you speak a bit louder? But by the way, I have understood your question. So I would answer this question in 2 parts. Firstly, it is premature to talk about what kind of projects are really coming for bidding, what is the competition, what is the size of the project and who are the people who are finally going to qualify. So there are a lot of -- so we will cross the bridge when we get to it. At this point of time, it is really difficult to even estimate what kind of projects are coming, what is the size, nature, vertical. So we'll cross the bridge when we get to it.
That said, the second thing that I wish to bring to your attention is we are not a company that is currently dependent on only one state, AP or X, Y or Z. You must have seen in the investor presentation that we have uploaded on our website, we are a Pan-India company. We have projects from almost all the states. And we are quite confident to go to any state of the country wherever good projects are available to bid for the projects, bag the projects and execute the projects. Specifically coming back to the AP, once the projects are announced, then we should be in a position to really talk about a possible number, whether that may be the top contributing state or the second top contributing state or the fifth, that time hasn't come as we speak.
But given your current -- I think what is -- if you can yourself reveal what is the current inflow guidance? I think you spoke about INR 20,000 crores to INR 25,000 crores for inflows of this year, right?
Yes. Let me repeat, the inflow that we have shared with the Street is a band, it's time for a change. That is INR 20,000 crores to INR 22,000 crores.
Okay. And you're not expecting any meaningful contribution in this to come in from AP?
It may come, may not come. The kind of media reports which are coming out that the government itself is trying to study, which are the right projects to start...
No, that I understand, sir. I mean, in your assumptions, you are not building a big order inflow from AP in these numbers. So 20. So if anything comes from AP, could be a positive surprise on this number, right?
Of course, of course. When we shared these numbers with you way back in mid-May, we did not have all the development available with us. So the guidance that we have shared with these trades in all these states, minus AP, if you prefer, you could say that.
Okay. So my second question is on the entire transmission and distribution opportunity. So what is the play for us there? Do you think now with Power Grid giving large orders on [indiscernible] side, do you think we'll participate in that? Or we will focus on lower voltage segment, maybe more on RBS's opportunity and state utility side? So if you can highlight the opportunity and the play for us there?
See, there are 3 kinds of opportunities which are coming. Though we have done a lot of projects on HT side also, we have the qualification for 400 kV transmission line, even higher transmission line. We have also done 220 kV. So we have -- but those kind of projects which are really coming for bidding are some kind of boot kind of model in which you have to invest some equity, come into some debt. So we are actively looking at those projects. But I think the prime activity currently is happening in the [LB] space. That is RDSS scheme. RDSS scheme is a signature project of the Government of India, well funded. The total outlay available is more than INR 3 lakh crore. The funding is already in place largely by PFC and REC. So I think that is the main chunk of the market that we are currently focusing upon.
And last question for now, most of the Indian players are of similar size like [indiscernible], and all. So my question was more on the opportunity which they are playing in T&D on 400 kV and above, 400, 765, 850 kV, that was there. And related to that, do you -- again, are you revising your international strategy? Do you think that now it's time to revisit and start also looking at opportunity international market or India -- or you think that India is sufficient wherein you can still grow in domestic orders?
Currently, we are not focusing any international market. We think this market is sufficiently large for us to give us the inflows that we really need for short to medium term. So currently, our focus continues to be the construction market in India.
And just last thing, if you can help me understand what is the pending real estate payments on the land we have sold in Vizag?
That is INR 33 crores. That is the equity part, and there would be the loan part that is expected to come to us in the next couple of years. I repeat, the equity portion, the pending payments from the client is about INR 33 crores. And then we are expecting to get the loan back in the next couple of years.
What is the amount, sir, total loan amount pending?
INR 377 crores to be accurate as of 30th June.
And this is expected by when, INR 377 crores, any revised date or when is...
Next 2 years.
Next 2 years, okay. And this balance INR 33 crores is expected when?
In this quarter, a couple of months.
The next question is from the line of Dhananjay Mishra from Sunidhi Securities.
All my questions have been answered. Just one question on the AP part. So given the past experience we had, although you said that this incumbent government is pro-development and Central is also supporting this year or maybe next 4, 5 years they are going to support, state government and some more projects will come. But in terms of our exposure, would you like to be selective in AP given the past experience or you will be aggressive in bidding project in AP?
Let me answer your question a little differently. Being a listed company, we have a committee of the Board ERM and we look at the state-wise, vertical-wise risk very carefully. So not only for the AP, for any state or any vertical for that matter, we do not really believe in going aggressively just bidding for the sake of bidding, bagging a project for the sake of bagging a project. We never have followed that strategy, and we continue to have the same stance as far as the aggressive bidding is concerned.
The next question is from the line of Nidhi Shah ICICI Securities.
I know that you've already answered a couple of questions on the order book, but I still wanted to know the LOAs that you said you will be receiving. What is the amount of that, that is pending, #1? And how much do you think could be clear in this coming quarter from that? That's my first question.
I mean, that order book, we have already explained you earlier that about INR 8,500 crores is the orders which are in the pipeline. And we are expecting those orders to get matured maybe in this quarter.
Okay. So you are expecting the entire balance to be matured in this quarter?
As on date, it is the expectation, and we have to wait and see.
Yes, Ms. Shah, that said. This is a prerogative of the client. When the client intends to award the order, then only we get it. It doesn't really depend on the kind of efforts that we make. We might prefer to have it tomorrow morning, but they may not be in a position to award. So hopefully, in next -- this quarter or maybe next quarter, we are quite hopeful to get those projects.
And you also -- of course, the PPT mentions the order inflow for the first quarter. But in the last 2 months of -- since this quarter has started, have you received any new orders?
You're talking about the second quarter?
Yes, second quarter. Have we received any orders in the second quarter?
We have not received and even if we receive, we would first submit that to the stock exchange. As we speak, we have not received. All that we have is what we have shared in the PPT.
I'm sorry, Ms. Shah, maybe please request you to return to the question queue for follow-up questions.
The next question is from the line of Vishal Periwal from Antique Stock Broking.
Sir, in this quarter presentation, so the order book has a composition of mining as one of the segment. So is that fair to understand that order book, which is mining will be executed within this year and like a 12-month time frame?
Yes. Now the order book, whatever we have given in the order book is for a period of 3 years. So that is executable in 3 years period. At this moment, the progress in that project is going well. And whatever now we considered in the budget of FY '24, '25 from the company are on the project [indiscernible]. And the order book we go on increase every year since it is a long-term project of 25 to 30 years. So whatever value given in the book that projects 3 years value.
Okay. The 8% is 3 years. Got it. And maybe one clarification. In the initial part of the commentary, you did mention that Andhra roughly like INR 5,000-odd crores worth of project could [indiscernible]. So this project, they are part of our order book or they have been dropped and then further they can come back as an order inflow for us?
It is not there. It is not there in the present order book that we have dropped early.
The next question is from the line of Shravan Shah from Dolat Capital.
Yes. So to continue, sir, if this INR 5,000 crores comes up, so our order inflow that we are looking at INR 20,000 to INR 22,000 crores plus this INR 5,000 crores, if it comes back and plus if AP anything more comes up, so that's the way one can look at it?
Already that spot was explained by my colleague. In the budget to no orders, we consider from Andhra Pradesh. So now if any order comes, generally it participates in the order book. So again, this INR 20,000 crores to INR 22,000 crores, there is no hard and fast rule, that figure also varies, it downward may vary and upward may vary even without Andhra Pradesh. So when Andhra Pradesh is there, there is a positive outlook to book more orders than what we gave in the guidance.
Got it. Got it. And sir, in terms of the debt level which you have mentioned that it normally increases in H1 and then it reduces. So by end of FY '25, how we look at in terms of the stand-alone gross debt level?
So now according to -- our plan is to stand at INR 500 crores debt level by end of FY '25.
Okay. Okay. Got it. And in terms of the -- this Sembcorp, we were supposed to get INR 47 crores. Have we received it?
No, it is not received, and there are certain issues for which the Sembcorp went to the court and at the same time NCC also went to the court. Once the court proceedings are over, then only the result will come aboard that payment. It will take some time.
The next question is from the line of Vaibhav Shah from JM Financial.
Firstly, you mentioned that our exposure to AP, so receivables would be around INR 150 crores for Capital City and for running projects around INR 300 crores to INR 400 crores. The total amount is roughly INR 500 crores to INR 550-odd crores. What was this amount as of March '24?
The same level. They was no change in the first quarter. Since the elections have taken place in AP, no significant change taken place from that of March '24 and June '24.
So we expect this INR 550 crores to come down to around INR 200-odd crores in the next couple of weeks?
Not couple of weeks totally, some progress is there. Gradually, first they may release INR 100 crores, thereafter another INR 100 crores like that will be taking place. By end of second quarter, some clarity will come. By end of third quarter, some more amounts also may get released.
The next question is from the line of Saket Kapoor from Kapoor & Company.
Firstly, when you mentioned about order intake of, say, INR 20,000 crores to INR 22,000 crores, what is our big pipeline out of which we are looking at the conversion rate of INR 20,000 crores to INR 22,000 crores,?
Mr. Kapoor, we have a very healthy prospective pipeline of projects close to INR 2 lakh crore. It's a prospective pipeline of projects, but it depends at what time client intends to award which project. So this is a function of the time and the decision-making cycle of the client, but we continue to have a very healthy pipeline of prospective projects for the next 12 to 15 months.
And sir, what is our O&M component in the order book?
What do we mean by O&M component? Okay, O&M, Operation and maintenance.
Now in this order book, for all the major orders, for all the major debts what we secured in the last 2 years, particularly the Malad water treatment project, the GMLR project, the electrical project. In all the projects, whatever O&M part is there, that we have excluded in the present order book. That only is taken in this order book as and when project is completed, as and when we start the O&M, that is the policy of the company. As such for all these major projects, O&M content is not there in the present at book. But in some of the other small size of orders, INR 300 crores, INR 400 crores, INR 500 crores of orders, we have one year O&M some INR 20 crores, INR 30 crores, small amounts, they will be there in the order book along with the main order value.
Okay. But just to harp on it. So for revenue from operation at a consol level, what is the O&M component there?
Okay. From the O&M content, we can take about 10% -- 4% to 5% of this major order book will be there.
So the revenue of INR 5,500 crores has an O&M component of INR 550 crores you mean to say?
That's INR 400 crores to INR 500 crores.
INR 400 crores to INR 500 crores. Sir, when we look at the order book data in the various verticals, irrigation part is very, very small, only 2%. So can you allude to the factors, is there not enough work in the irrigation sector? Or what is the reason for a very small order book?
Yes, yes. You are right. Unfortunately or fortunately, the irrigation continues to be a state subject. There have been few awards. But this is not a very focused business area for us. We have 4 large focus areas or divisions. Irrigation is a very small business for us and depending on the experience that we have had in the sectors in the past, in the last 2 decades or so, we are not -- we are very selective. Let me say that, we are very selective in bidding for irrigation projects.
In the irrigation project, there are a lot of permissions, forest clearance. These projects are in very vast areas. This involves many times, states. So we are very selective in this space. That said, there are 4 large divisions that I take this opportunity to share with you, which are giving us the orders that we really need. The first one is the Buildings division, the second one is the Transportation division, the third one is Water division and the fourth one is Electrical T&D. So these 4 businesses are the focus areas for us. And I have already shared with you the fact that we have a very healthy prospective pipeline of projects. And we are very happy to concentrate on the sectors that we think are profitable, sustainable for us in the long term. I hope that answers your question.
Yes, sir. Sir, a small concluding point. I think so this time, it is mentioned in the notes also that the Board has even approval -- principle approval for amalgamation of NCC Infrastructure Holdings. So if you could just share your thought process on this procedure? Although the rationale has been mentioned, but why have this timing being selected now? And if you could give some more color.
NCC IHL is a wholly owned subsidiary. That is the reason we thought, okay, we will merge that into this. Two things which we were thinking to achieve. One is under tax benefits, okay, by getting the dividends into the main company, so that they can get exempted when -- because of the dividend declaration by the main company. So the second one is on the administrative control and cutting down of the cost and also limiting the number of entities. These are the advantages we thought, okay, we'll have it when we have the merger of the -- amalgamation of this NCC IHL with NCC.
Sir, concluding point on the major projects under execution, you alluded to the fact of UP project component having INR 6,000 crores of unexecutable portion that will get executed by this financial year. However, in your presentation, Slide #23, you allude to the fact of INR 1,635 crores as survey design drawing and construction, multi-group villages, scheme supply -- water supply scheme in Agra. So if you could explain my understanding, where I'm getting it wrong?
No, no, no. I will explain. I will try to explain this question to you. We are executing Jal Jeevan Mission project, different kind of projects. There are 2 broad buckets of this Jal Jeevan Mission projects. The first bucket of projects is about the household, primarily rural portable water connections to the households. This is the first part. So we are executing this project.
As well as, we have bulk water supply projects. We have bagged 2 large projects in the Agra, Firozabad, in these 2 places. So in this slide, what we intend to do is to share with the investors and analyst community, the broad span of projects that we are executing. This is not a total number. If you add these projects with all the value of the projects, this is not INR 52,626 crores. What we intend to do here is to highlight what are the signature marquee projects that we are currently executing. Just to give a sense of the span of the complexity, the different verticals, the projects that we are currently executing. That is what the intent is.
Okay. And for the UP projects, sir, can you give the number? What is the execution amount we have executed for Q1? You have given INR 6,000 crores will be spread over the coming 3 quarters. But how much have we done in terms of the billings? Ma'am, let me complete.
We had total order value of about INR 17,000 crores from this mission. We have already executed about 60% to 70% of the project. What remains to be executed in the next 3 quarters is about INR 6,000 crores of the project. To answer your question, how much have we done in the first quarter, INR 1,212 crores. I repeat, what we have done in the first quarter is INR 1,212 crores.
And for Q4, what was the number, sir?
Last year, we have done about INR 6,000 crores.
Total. Total. Whole year, we have done INR 6,000 crores last year, which is there in the investor presentation of the Q4.
Okay. Quarter do you have, sir? I want to just understand the scale of execution.
Then it would be close to INR 1,400 crores to INR 1,500 crores per quarter. That is what makes it INR 6,000 crores for the whole year. So in any quarter, depending on the billing cycle, milestone of the projects, execution of the projects, so these factors. But broadly, it would be anywhere close to INR 1,200 crores to INR 1,600 crores every quarter.
And lastly, the on the MBO, sir, do you want to ...
Sir, I apologize for the inconvenience.
For MDO, if you want to give any understanding of how the annual revenue...
Sir, please join the queue.
The next question is from the line of Prachi, Business Standard.
Sir, this is regarding the Real Estate segment. I would like to know would like to comment on the reduction of assets. It was INR 743 crores in June 2023, the quarter ended June 2023, and it was INR 716 crores in the [indiscernible] quarter. So what would you say about it? And also, I would like to know profit after tax consolidated in the Real Estate segment in comparison with the last year?
Repeat me the second part?
Profit after tax consolidated in comparison with the last year, the Real Estate segment?
Your question is about MP's Urban -- repeat me your questions.
The first part is, sir, about the Real Estate segment assets which reduced on a year-on-year basis? And the second part is profit after tax consolidated in the Real Estate segment in comparison with the last year?
So the current quarter reported profits of INR 7.38 crores against turnover of INR 75.35 5 crores. Same time, the profit, INR 7.38 crores against INR 10.08 crores of the last year. The change -- the variation in the profitability depends upon the mix of the products. There are 2 parts of projects are going on. Again, in the second quarter real estate project, there are several projects. The profit margins vary from project to project.
And also, the profit margin vary from the other projects, we are also taking up development on a construction basis, some of the real estate projects from the others. So it depends upon the [indiscernible] of the projects quarter-on-quarter and year-on-year. The other question is about the reduction in the real estate assets. So as we develop the land pockets and as we book the income into the profit and loss account, the value of investment also gradually comes down.
So you are asking investment by NCC? Investment for NCC you're asking?
Yes, sir. I just wanted to know about segment assets, the reduction.
Within the last quarter compared results, investment by NCC -- okay, that difference -- the buybacks of this share is taking place in the last quarter of the last year, the difference in the buyback of shares. And we got the money on account of buyback of shares. As a result, the investment has come down from INR 242 crores to INR 29 crores.
Sir, the last question, the vision -- future outlook about -- especially in context with Amravati in the Real Estate segment and the order book of this segment?
Could you please repeat your question, ma'am?
Sir, your future outlook in this Real Estate segment, particularly in context with Amravati and the segment's order book in the coming days?
Yes. There are 2 parts to your question. Firstly, the Real Estate business that we have reported in our investors presentation is a very small business at the group level that is less than about 1.5% of our revenue. So that business is a real estate business. What we do here is we acquire land, and we develop apartments, villas, commercial spaces, and we sell this to our clients, same clients. So that's a very small business.
In Amravati, what we have tried to do in the past or what possibly we may get to do in the future is the contracting business. It has nothing really to do with the real estate business that we have reported. Our contracting business is our bread and butter. What we do really here is we get the contract from the clients and construct whatever is required to be constructed. So in Amravati, we hope to wait those construction contracts. That may be a Real Estate business for the government or the ministry is not for us.
Ladies and gentlemen, that was the last question. I would now like to hand over the conference to Mr. Vaibhav Shah. Please go ahead, sir.
Sir, just one question from my end. Sir, out of our stand-alone order book of around INR 47,625 crores as of June, what would be the value of those smart meter contracts taken in the stand-alone book?
About 2,000 -- that smart meters where you participate in the standalone order book.
What that would be in value terms?
INR 3,300 crores is considered in our standalone order book related to the smart meters.
And in consol, how much you have taken?
INR 927 crores.
So consol is lower? Consol book is lower?
Yes.
Okay. Any closing remarks on your end?
Thank you very much, Mr. Shah for hosting this call for us. We take this opportunity to thank you and the investors and broad analyst community that participated in this discussion. Thank you very much.
Thank you all.
Thank you. Thanks a lot. We can disconnect now, right?
On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you. Thank you.