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NCC Ltd
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Ladies and gentlemen, good day, and welcome to the NCC Limited Q3 FY '23 results and future outlook discussion hosted by Centrum Broking Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. [ Ashish Shah ] from Centrum Broking. Thank you. Over to you, sir.
Yes. Thank you, [ Rowed ]. On behalf of Centrum Broking, I welcome everybody to the NCC Limited Q3 FY '23 Results Conference Call. Today, we have from the management, Sri R.S. Raju, Director Projects; Sri [ Vishnu Varma ], Director, Projects; Sri P.V. Vijay Kumar Vice President, Finance; Sri [ Niraj Sharma ], Head Strategy and Investor Relations; Sri [ Sivas ], Chief General Manager, Finance and Accounts; Sri C.K. Durga Prasad, General Manager, Finance; Sri [ S.M. Raju ], Deputy General Manager, Finance and Accounts and Sri [ Sheri Surendra ], Assistant General Manager, Finance.
So I'll hand it over to the management for their opening remarks, and after which we'll have a Q&A session. Over to you, sir. Thank you.
Good morning, everyone. This is Vijay Kumar, Vice President, Finance. We -- I welcome everyone to the NCC Q3 FY 2023 Earnings Investor Call. I thank each one of you for taking time to attend this.
Before we start, I'll read out a disclaimer and then we should go into the subject. The statements made here are in the presentation uploaded by the company or to a best of knowledge are true and any forward-looking statements are subject to certain factors beyond control of the company officials and management. And hence, the audience are advised to use their discussion in their own analysis accordingly.
Now we shall go into taking the performance of the company for this Q3 into account. I'll briefly start with the opening remarks followed by Q&A. I have my colleagues, [ Mr. Subrata Director ], need that Head Start again, Investor Relations; [ Mr. Tukua ], GM Finance; [ SLVRaj ],DGM Finance and Accounts; and [ Mr. Suren Dara ], present in the call who will take your questions.
Concerning the time limitation, we request the audience to limit to 1 or 2 questions so that everybody gets an opportunity within a given limited time. Let us start now. I think I'll start with the opening remarks.
We are in a particular situation in the economic history now. The perils economies are like we are seeing them now after several years or decades of cap in their own rate they are structured. It all started with economic induced contraction of the global output followed by Russia and Ukraine conflict, leading to a worldwide surge in inflation. The central banks across economies led to a federal reserve led by the press responded by a synchronized policy rate hike to curb inflation. Rate hike by the U.S. Federal do capital into the U.S. market causing the U.S. dollar to associate.
Again, [indiscernible] this led to the widening current account [ efficiand ] increased inflation prices on the net importing economies like us. The rate hike and persistent innovation has led to the lowering of global growth forecast for 2022 and '23 by the IMF in its October [ 2012 ] update a full economic. Added to this, the problems of [ Canes ] economy further contributed to beginning of the growth forecast, with inflation persisting in advanced economies and the central banking at further rate hikes, downside risks to the global economic outlook of related.
However, despite all these issues, agencies worldwide continue to project India the fastest-growing major economy at 6.5% to 7% in FY 2023. So this optimistic growth forecast in part from the resilience of the [ Ringland ] economy seen in the rebound of private consumption seamlessly replacing the export stimuli as a leading driven growth. The uptick in private consumption has also given a boost in production activity resulting in an increase in capacity utilization of our sector.
Internally, almost all the economies are showing certain pain points in a major or minor way. [ Recatilization ] horizon of the COVID, coupled with global tensions causing supply chain disruptions. During specular trouble times, India has shown its resilience in bouncing back. If you observe main drivers of Indian economy stop by infrastructure construction spending followed by construction follower spending which has since pick up picking up thanks to the cost-cutting effect of government spending and the improved CapEx program across the states.
Total investment in infrastructure is planned to be around like [ 4.5 ], [ 4.1% ] of GDP. So this is our very well for in the sales as a whole.
In 2022 -- 2023, the states also have budgeted an increase in cash outlay by 28%. So as per RBI report, Union budget 2023 capital investment has also increased by 33% to INR 10 crores. So this is pertinent to note that at this level of spending, we are -- our nominal GDP will be at the rate of 10.5% growth. And the companies like NCC, which are into multifold operations like in water, electricity road, mining and all their. So well positioned to capture all the opportunities that are happening in the various segments of infrastructure in India.
So NCC book size of INR 41,862 crores of order book of all the segments remain as one of the spearheading companies in construction segment. I'm coming to my last part of the fee. We remain pleased our economy considering intrusive spend driven growth. The Indian economy will grow at average naval growth in double digits from 2022, 2030. The high investment rate, which matches some of the peaks of earlier years continue to be supported by CapEx of central government.
I now pass on this to my colleague, Mr. [ Supras ], Director, to bring our calling features of our financial performance to you. As I said, please consider a chance to others to and choose and limit your questions without reputations.
Thank you, Mr. Vijay Kumar. Good morning to all of you. Best I take to you of order book. Thereafter, consol company performance and thereafter stand-alone performance. And thereafter, I briefly touch about the balance sheet items. But I restrict some important points. And thereafter, if anything, you people require grow but not clarity those items. So if we come to the order book in the current quarter, the company secured about [indiscernible] crores.
And further, in January month, also, the company secured [indiscernible] crores. so the total orders for the 9 months period, we take about INR 12,612 crores. So if you take up to January 23, that got longer so-called secured by the company. INR 14,367 crores. So we have about INR 3,000 crores as on date. So we source that in the current 9-month period, the order booking is relatively better than the previous years.
Now the order book with all these things stands at INR 1,852 crores. So if you come to the performance of the company on a consol level, has reported a turnover of INR 3,904 crores [indiscernible] INR 3,033 crores, an increase of 29%. In the earlier quarter, [ Simao ] served about the growth is about plus 40% is there. And now the growth of the third quarter reported at 29%. The gross profit margins in terms of absolute terms, increased from [ INR 464 ] crores to INR 626 crores, a growth of 25%.
In terms of [indiscernible] margin percentage it has come down from 16.27% to 15.38%. Further, the reasons already we explained in the first 2 quarters because of the material input prices compared to the previous year. There is an increase happened, but softening is happening from the second quarter onwards. But compared to the previous year 9 months, still the prices -- the commodity and good prices are still higher than the prices we prevailed in the first 9 months of the previous year. As a result, the margins impacted there.
Now comfortably EBITDA. We increased from INR 276 crores to INR 376 crores. But in terms of percentage, there is also an increase in the EBITDA from 9.11% to 9.64%, [indiscernible] increase happen at EBITDA. Coming back to the pad. There is a significant improvement happened in the pad level, about more than 100% jumped from INR 76.04 crores to INR 150.7 kilo crores. So in terms of percentage, the net profit is increased from 2.2% to 4.04% and comes to the EPS. Also there is almost a double increase happened from 1.3 to 2.5x. This is upon on the year-on-year basis. And the slide I mentioned about the quarter-on-quarter. If you take the quarter-on-quarter, there is an increase in the revenue by [ 15% ] from INR 3,400 to INR 3,904 crores. And gross profit also increased has about 518 to 626, a 21% increase.
And EBITDA also increased from INR 310 crores to INR 376 crores. And in terms of percentage from 9.11 to 9.64 that increased from INR 131 crores to [ INR 150, 7.70 ] crores, about 20% growth. So in terms of percentage from 3.8% to 4%. So this is a boring third quarter performance relating to the core year-on-year and quarter-on-quarter.
Now coming back to the 9 months comparison performance of the 9-month performance comparing with the same corresponding period of the previous year. The revenue increased from INR 7,717 crores to INR 10,660 crores or 38% growth. And gross profit increased from [ INR 1,060 ] crores to [ INR 16.5 ] crores, a 30% growth. But the gross profit decline from 16.47% to 15.66% for the same reasons what I explained just now. EBITDA increased from INR 754 crores to INR 994 crores. EBITDA percentage -- there is a decline from 9.84% to 9.43% for 9 months are concerned, but third quarter comes, some increases have happened.
At increased from INR 440 crores to INR 418 crores, or 74% increase in the 9 months of operations. In terms of percentage, it has increased from 3.12% to 3.19%. EPS also increased from 3.9 to 6.7. So this is the [ consol ] company performance. And within the consol company, there are 2 to 3 group companies are there bearing the stand-alone. And before going to this standalone, as I will touch briefly about the other company's performance.
Now all group companies together reported a turnout of INR 134 crores against [ INR 39 ] crores, an 88% jump in the group company turnover outsole. And the as reported is INR 8.4 crore, [indiscernible]s loss INR 14.55 crores in the corresponding to the previous year, in which there are 2 companies primarily reporting the turnover. One is the MD [indiscernible] minning project, a subsidiary company called us [ utomited ] which reported a turnover of INR 468 crores in this quarter [indiscernible] INR 249 crores of the responding quarterly previous year.
NCC reported INR 66 crores [indiscernible] to INR 89 crores. The decline happened in the turnover per company this quarter. [ Obico ], [indiscernible] cities and annuity payment more or less similar for all the quarters, INR 14.31 crores, now agreed [ INR 13.75 ] crores.
Similarly, the [ PAT ] from the -- on the [ PAT ] group companies. [indiscernible] reported INR 13.86 crores, INR 7.3 crores of the last year. [ NSS ] reported INR 9.8 crores [indiscernible] [ are born ] Board reported 3.16 against to INR 5.32 crores. This is about the group, primarily these 3 companies. In terms of turnover and the profit.
Now we're coming back to our stand-alone. First one is third quarter performance. In third quarter, the revenue of stand-alone increased from INR 2,724 crores to INR 3,370 crores, an increase of 24%. And gross profit, an increase of 28% from INR 463 crores to INR 587 crores. So of course, in terms of margin, rougher margin a decline from 17.73 to 17.13 -- no, sorry. Gross profit also increases happen from 17.13% to 17.73%.
So the EBITDA increase happened from INR 293 crores to INR 349 crores, a growth of 19%. In terms of percentage, increasing decline is an EBITDA from 10.93% to 10.53% and increased from INR 91 crores to INR 150 crores, a 65% growth in the [ PAT ]. So in terms of percentage, it has increased from 3.34% to 4.45% and EPS from 1.49 to 2.41. So this is about the performance and third quarter. Indeed, third bottom all the already about to direct cost ex in terms of gross profit margin, only the 2 elements which are interesting to note here what it has cost.
In this quarter, the interest cost reported INR 137 crores gates smart of the year or this the reason is primarily by increase in the debt level. That is one. And the other one is the increase in the interest borrowing cost, it has a little impact barring part. You know that the increase is happening in the borrowing for all the companies.
But in terms of percentage, it has declined from 4.27% to 4.1% because of increase in the volume of the operations. In the metal cost also this time, we have seen some steep increase [ carton ] is because of the combinations even with the company. Now Employee cost in terms of percentage has slightly some in terms of percentage, of course, in terms of a solute always when the activity is going on, that won't and other things going on. But as far as operating expenses have declined compared to the previous year.
Now quarter-on-quarter in this immediate quarter comparison, the revenue increased from [ INR 3,037 ] crores to INR 3,370 crores from the second quarter to third quarter, what I'm explaining. The gross profit margins increased from INR 483 crores to INR 487 crores or 22% increase. Gross profit margin increased from 16.09% to 17.17%. and EBITDA increased from INR 289 crores to INR 349 crores to 21% growth from the mid previous quarter. EBITDA in terms of percentage also, there is an increase from 9.62% to 10.53%, and increased from [ INR 142 ] crores of the previous quarter to INR 150 crores in the third quarter, about 23% increase. So in terms of percentage, increase happened from 4.01% to 4.45%. This is about the 3 months performance and 9 months refers performance in the broader line. The revenue increase from [ INR 6,859 ] crores to [ INR 9,396 ] crores, about 27% growth.
Similarly in the gross profit, the 28% increase happened. In EBITDA, 26% increases happened. And in the [ EBITDA ], 59% increase is happened. EPS rose to 6.3 from 4.05. So that is a 9-month performance. And the important the balance sheet items comes to the debt. So in this third quarter, the debt has come down from INR 1,985 crores to INR 1,940 crores, a decline of INR 39 crores. So you observed that in the last 2 quarters, the steep increase has happened in the debt. For that one, there is a good reason. There is a big, some pieces happened in the activities earlier, it is a INR 10,000 crore company in the previous year. But now the 30% growth is said and a 40% increase in the volume of activities increased in the 2 quarters as a result. The resources like working capital also increased but not in the proportionate level. So as a result, the debt level increased in the first 2 quarters. But in the third quarter, a decline started, decline happened about INR 39 crores.
And going forward, we expect that the debt further declined in the fourth quarter by about INR 200 crores to INR 300 crores, it must have INR 600 to INR 700 crores by March end '23.
In group companies also, there is no debt. Almost all the companies have become debt-free. So barring INR 15 crores that is there in the NCC company-company. So the same level what we don't understand or the same level is in the group company to date. And coming to the CapEx and in the first 2 quarters also you have seen, there is a significant increase in CapEx. It indicates how the activity is increasing in the company. On [ par ] with the increase in activity, the CapEx as increasing. In the third quarter also, the company spent INR 95 crores for the CapEx for the 9-month period, the CapEx were INR 243 crores. So in Q4, the expected CapEx would be around INR 32, 44. It may not be the same level. So it may be around INR 32 crores to INR 40 crores.
So the investment properties 1 item is the balance sheet has come down from INR 233 crores to INR 230 crores, about INR 33 crores in decline in the 9 months. But in third quarter, a decline is up INR 16 cores. So some of the paid receivables. So some down from INR 2,792 crores to INR 2,675 crores by INR 117 crores. Despite the increase in the volume, despite increase in the revenues turnover, but the trade ratio still stands at almost a same level with [indiscernible] initiates how the collections of the company in this quarter as well as in the past 2 quarters.
The debt solution period has come down from 97 to 91 days in 9 months. Investments, there is no change in investments in the 9 months period of the third quarter. But coming to the loans, the loans there has come down from INR 401 crores to INR 391 crores in the 9-month period in some of these small companies have repaid the loans like [ Antion ] and [indiscernible] [ Internationals Women ]. But the major part, we supported so the NCC is a rates [indiscernible], first, we supposed to get the sale consideration and what to is supposed to get the sale consideration in December quarter, we have not received that one December quarter. That's the defer by another 1 or 2 months. So that we expect to receive in this quarter what trends supported to we get by December 22.
Come to the other income. And you might have seen, there is an increase capping the [ ringtone ] the increase primarily on account of the -- the sale of 1 land property happened in the third quarter. It represents about INR 18 crores. And also at the same time, sale of this class, the already properties are there within NCC. So that represents about INR 11 crores, together INR 29 crores is the core other income.
The interest income is about INR 17 crores and also dividend income of INR 6 crores and the business income INR 5.4 crores, not together about INR 57 crores what we repeated the call order. So the major element is profit on sale ARPU or the land and there's well as the other plants.
Coming to the AP project. More continuing Q3 from [indiscernible] INR 60 cores, amount to relate in third quarter or some down either for an [indiscernible]. The total current year assets come down of AP projects now that some projects which are moving slowly and some projects, particularly the capacity products, there is no movement. But all products to other in the current 9 months period, the current.
Excuse me, as the line for you had -- is you are in audible at this moment, sir. Ladies and gentlemen, please stay on the line while we reconnect with the management.
[Technical Difficulty]
Ladies and gentlemen, we have reconnected with management line. Please go ahead, sir. Sir. You may begin with the content.
Shall I start?
Yes, yes. Go ahead Sir.
So I'm in the subject of AP Projects. So in the AP projects, some improvement happened in the collections in the 9 months period of the current year as a result of the outstanding current assets including the trade issue is work in progress and other [indiscernible] have come down. And in the 9 months period, over INR 200 crores amount to we have relayed, as a result, the amount has come down by INR 200 crores.
So there are 2 parts on this running projects, and other one is [ stock ] projects. The running projects production or happened from the of the March in 22. And in the [ stock ] projects, the amount outstanding at [indiscernible] outstanding has come down from INR 107 crores to INR 64 crores after adjusting the moderation advances. So we have also other aspects like for material cost, working capital and other things as an value people [indiscernible] will clarify.
So with this, our remarks ended and you can talk about the questions and to answer by a team of people are availability and they answer the appropriate things to the quoting.
Thank you very much. [Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.
Congratulations on a good set of numbers. So first question is on the in the margins to happen Q-o-Q. Do you think this can sustain over next to the next quarter and FY '24, given the even decline in commodity prices. That's first question. And second question is on the revenue guidance. I think we had given 30% growth outlook for FY '23, do you maintain that?
So your question is about the margins and other one is about the revenue...
Revenue outlook. Yes.
So the second one first will answer about the revenues. So whatever we know we indicated in the previous call also 30% to our internal to 30% is maintainable and the [ Techie ] made the year-end 30% growth. And as far as margins are concerned, there is a study increase there is a decline happened in the first quarter and also in the fourth quarter of the last year. But now there are study increase to happen in the margins. It is along with the softening of the metal commodity prices happening in the market. So in the fourth quarter also, we expect another 10 to 20 basis points improvement in the margins.
The bigger question is that can you go back to our 11% margin, margin which used to do earlier?
But the thing is the outside market, how the market moves. -- but such a common is moving in 1 direction. So the commodities are moving another direction that is one. And number 2 is there is also a competition in the market. Now the company taken a stand that to report more volumes. So when you want more volumes and you want more growth, 20% to 30% growth. Naturally, we have to compete. We have to get at the completive prices the tenders. As a result, certainly 0.5% to 1% margin sacrifice would be there at the time of [indiscernible]. So all these things are very important. But at a level, ultimately, gross more margin, if there is a decline, but that level, the company is starting to maintain 5% plus. That is the thing.
Okay. So one more question, how much you mined in Q3 in [ Pachwara ]? And how do we expect it to ramp up over the next few quarters?
Yes. [ Pachwara ] is doing well in both our policy to ramp up, and it reports more than what it reported in the third quarter. And going forward, also, it has good prospects to report more and more turnover. Here, it is the [ turbo ] mining, the rated capacity is 15 million tonnes a year. It is already now touching in this month.
And in next year, it's supposed to produce 15 million tonnes. So 15 million tonnes thereafter that are now in a steady manner, except relations and other things. So in the next year, the company reports the rate capacity, 15 million tonnes, it has geared up to produce on core certain extent, only the things only from the client side. If the client also provides everything then the company has no problem to produce 15 million tonnes call every year.
Understood. [indiscernible] all the best. Thank you.
The next question is from the line of Shravan Shah from Dolat Capital.
Sir, before asking the question, humble request, if you can reduce the time for your opening remarks and allow more questions from the participants. It would be a great -- that's a simple humble request.
My question is on in terms of the order inflow, you mentioned that we are in INR 3,000 crores. So if I add that, then INR 17,400 crores order inflow is debt how much more we can look at in this quarter? And what about the next year, can the similar kind of INR 15,000 crores, INR 18,000 crores inflow is possible. So because of that, the related thing is that in terms of the revenue growth, definitely this year, we will be looking at 30%. So next year, a similar 15% kind of growth on the top line front if possible?
Now for the current year, as you said, 17,000-plus after including the loan later up there. And there are good possibilities to reach INR 20,000 crores also in this by March 23. As far as the [indiscernible] is concerned, as the company has its own plan strategic plans to increase the turnout year-on-year for which definitely the order book also in previous because the company has planned, and it is expanding and all entering into new verticals. So next year also the similar level or a little bit more than the similar as also is positive.
Okay. Okay. Second is a couple of data points I need, sir, on the balance sheet side. So what is the gross date inventory number, data's number, cash balance, payable, mobilization advance, unbilled revenue, returns on money and the group exposure?
Many numbers. I think number. Definitely -- we'll -- thank you for your suggestion and some of the numbers we read out. And trade receivables already explained [ INR 2,600 ] crores. Unbilled revenue, INR 3,486 crores. Retention money, INR 1,900 crores. And the debt already indicated INR 1,945 crores. What are the other numbers you want?
Cash balance, payable number, mobilization advance?
Cash balance, INR 131 crores. Margin money deposits, [ partly ] grows.
Sorry, mobilization advance last quarter, it was INR 2,006 crores. So what's the number this time?
INR 2,081.
INR 2,081. Okay. Trade payables, sir?
INR 3,436.
Okay. And the group exposure in terms of the loans and loans, you said INR 391 crores. So investment is how much -- or you can give the total exposure in terms of the investment?
So, we have the same number, INR 895 crores, invest as...
INR 895 crores. Okay. And the last one is in terms of the order book -- of the existing order book, INR 1,862 , how much is the subsidiary mining order that is the [ Pachwara ] mining. So I just wanted a stand-alone order book number.
INR 2,000.
Okay. Okay. That's it from my side and all the rest.
We have the next question from the line of Ash Shah from Elara Capital.
Am I audible? Yes.
Yes, you're audible.
First of all, congratulations for great set of numbers. So first of can you just give me the revenue breakup from different segments for this quarter?
Okay. Yes, you can consider these figures. Revenue for this 9 months [indiscernible]
Yes.
The buildings INR 3,942 crores. Transportation [ INR 1,065 ] crores. And here, we reclassified the earlier segments or divisions, we made the buildings and the roads into buildings and transportation. As a result, all the works of these players and metros, they are classified from the buildings into the transportation. To this extent, some difference would be there from that of the earlier numbers and the current 9 months numbers. And [ competitive ] Water and Railways, the revenue is INR 2,227 crores, [indiscernible] are INR 787 crores, irrigation 248, mining INR 1,243 crores, others INR 62 crores, international 7 totaling to INR 10,102 crores. This is the revenues for the 9 months period.
And one more question was on the Bangalore Metro side. So there were news reports that there was some [indiscernible] that happened. So can you just provide some color on if there is any inquiry or if there's any stop in a fork or on that front?
Yes. Good morning. This is [ Leebed ]. First of all, this is a very unfortunate incident. This includes loss of life. This is a very, very unfortunate incident. We understand that our client has already appointed a couple of experts to study analyze and come out with the possible lapses. So as we speak, we are deeply engaged with the client and as and when we receive any more information on this subject, we would be happy to share with you.
So to continue, is the work alone or has it been stopped right now?
Currently, I think nothing is going on, but they are taking a view they have -- they possibly want to change a couple of design points. So it will take some time, but we have no reason to believe that it won't move forward, but it will take some more time.
And how much will it contribute to our existing order book, if you could just provide a brief number or something?
See, the total order book for these 3 packages are INR 2,167 crores. There are 3 packages in Bangalore Metro.
The next question is from the line of [ Vasu Bel ] from Nuvama.
Just 2 data-related points, what is the execution that we did in 9 months, including the international orders? And if you can give the order book split segment, right?
No. Already we given...
Just now the figures have been given.
9 months revenue figures we're given. If you want beyond that anything, you please ask us.
So if you can give order book split based on different segments?
Okay. Segment-wise, and figure as of 31st March '22. The [ INR 1,862 ] crores, we will give this. The buildings, INR 2,089 crores, transportation, INR 4,418, water and railways, INR 8,814, electrical INR 3,429, irrigation, INR 1,773, mining INR 3,003, others INR 2,029, internationals INR 7, totaling to INR 241,862.
Okay. And sir, what is the status of our [ Golden ] machine project?
What is the?
[indiscernible]
About 25% of the execution happened for the water projects we received and gradually increasing quarter-on-quarter the execution. In fourth quarter also, we expect about INR 800 crores or so by this year and about 35% to 40% of the value of the orders will be completed.
The next question is from the line of Prem Khurana from Anand Rathi Shares.
Congratulations on very good numbers. So my question was with respect to the [ Wie ] land sale. I think we was supposed to the payments, but we gave them an extension last quarter and seems as a we've given them extension one more time. So I mean, the agreement that we have with the buyer, does it have any end date in terms of -- I mean, beyond which you won't give them any extension because I think we were supposed to see some money in September and there was some due in December, but September, we did not receive any money in December again. I mean, you said they have sought extension for another 2-odd months.
And fair to the transaction does not carry any is because we've already received some payment [ INR 150 ] crore first branch what you see?
Yes. Now in the initial first 5, 6 months [indiscernible] since it is a big land pocket. And after they've taken out of that one and they carried out their due process. And what are the shortfalls are there those shortfalls also from our side have taken time to complete those things. As a result, some delays happening to take to carry out their restate process for what they initiated. As the results, some delays happen for which, along with them, some part of that [indiscernible] also happened from our side.
As a result, they requested us to report on the payment. So we report the payment. Now we supposed to come by [ December 31 ] that has not come. Now in this month, February month, they should to pay that amount. And by March quarter on other stage, we expect to get. And for this rare delay is happening on the delay amount the grade to pay the interest.
Okay. Even on the equity part or only on the loan?
Also interest equity post spend, on [indiscernible] is clear, then the go to the loan part the loan part linked with the project performance. So the moment is [indiscernible] sales out of the sales are more 70% to 80% amount they put into the [indiscernible] to clear our law. There is a mechanism originally in the green top.
Sure. And sir, on [ Andra ] exposure possible to share in terms of how much of the total exposure in terms of order backlog? And how would the split between, let's say, capital, the projects that are still not moving for us and the orders which are going good for us now and we are realizing payments on a regular basis. That will be all from my side. Thank you.
The book of the [ Amara ] now stands at to INR 5,000 crores earlier, about INR 18,000 crores [indiscernible] or gradually has come down. And we are sticking to that level of earnings, and we are not taking bearing this 100 projects, depending [indiscernible] funding is there. When it 2 projects we have taken. And the projects quarter earlier taken, which are under the erosion, including the [ AP ] 4 projects. So adding this capital products are going, but not at the speed which is supposed to go, but a little floorboards are going. So at this moment, roughly about [ INR 55 crores ]
And how much would be capital city in this INR 5,000-odd crores.
In the capital city now there are no -- virtually, there are no -- we have removed those other capital city assets from the outroll, earlier you know, that [ 18,000 ] North costs are there. So understanding the scenarios on the new government, we have removed those capital city product orders one live one other peer that is [indiscernible] quarter that we [indiscernible] some 50 to 100 would be there, but we are excluding and they are also releasing the payments.
Sure. Sir, just one last, if I may, please. I think there was this announcement by Chief Minister of the State [ Andra ], wherein they have decided on the capital city now? I mean why is that as the capital city. So how would that impact the pace of execution at the existing order backlog because now they'll be focused on why that is right? I mean, if it is we've decided that we will go with [ Vizag ]. So how would that change the execution for us on this INR 5,000-odd crore number?
Now that was the changing of capital city for the last 2 years, but the capital city at this moment, so we don't count any other related capital city in our order book.
Okay.
So [indiscernible]a also explain about the [indiscernible].
See, these 2 incidents are not related. This shifting of new capital to [ Baja ] was an announcement that was made in the past. The projects, the projects that we are doing in the AP are not related to capital city projects. In the past, we have removed these projects from our order book. So as we speak, the orders that we are executing there are all moving orders maybe that is slower pace. But it has nothing to really do with the capital city projects that we had taken a couple of years back.
The next question is from the line of Nikhil Abhyankar from DAM Capital.
That's a good set numbers. Can you give us any status on the cost [ arbitration ] ratio?
Yes. Last time also, we told that now the final round of arbitration now the schedule in the February month. So in the February month of final ground, hearings would be completed, and we expect the final outcome by May or 2.
May or June next year. And the proceeds that we are expecting are somewhere around INR 600 crores, INR 700 crores?
That depends upon the outcome. We will be positive feeling on that one since we have the good grounds come good merit points.
Okay. Sir, have we started the execution at [ Malat ] sewage treatment plan?
Has started. All the ablation works and other planning design far more is for his licenses approvals, the alters are going on. Physical of work may take another 1 month or so.
There is a lot of design and engineering involved. We launched the project of this complexity. So currently, the project is in that stage. Once that hurdle is crossed, then the question comes up really starting the construction. That will take a couple of months time.
Understood. And just a final question, sir. Of the 150-odd billion order inflows that we have received around INR 95 billion has been from the quarter segment. So do you see this trend continuing this year and as well as the next year given that the [ GGM ] capital outlays remains the same for next year?
We're talking about the [ judge over ] mission, right?
Yes.
So currently, we see very healthy order pipeline in [ JJ Mission ]. There are a lot of projects who have identified Villages. They are doing the preparatory work required. And the order pipeline is very healthy. But as you are aware, we have already very good exposure to [ JJM ]. So we look at the projects carefully where these projects are coming, how is clients really positioned to roll those projects out. And accordingly, we decided to bid. But the order pipeline continues to be very healthy.
Understood, sir. Just a final question, sir. I'm missed out on the inventory -- the quantum of inventory sitting as of December '22. Can you just keep that? Inventories December '22.
INR 916 crores.
Thanks a lot, sir.
The next question is from the line of Ashish Shah from Centrum Broking.
Sir, first question is on the donation part, which you mentioned. Could you just quantify how much was that amount in the third quarter? And what was the nature of this donation?
Those things okay. Those details, so I can't say this moment the [ motives ] [indiscernible] to total several dimentions this year around INR 30 crores to INR 40 crores.
Okay. Sure. Secondly, sir, there is also a note which mentions the survey operations and income tax in the last quarter. So any update that you'd like to share. What has been the further development on that aspect?
No, they come in the month of November '22. So now there is so many regularities happen in the market after the new [ GST ] comes. So in the [ GST ], certain irregularities sort of happened and then vendors are done something, some cables happen with the [ GST ]. As a result of the supplier we under the services and deploy level, so many small, small suppliers are there. And basing on the last 2 years, certain regularities taken place at our vendors and so as a result of the [ GST ] department also conducted a survey of this information, and we have provided the information and other things.
But here is a thing to be noted here is as for the [ GST ] provisions, if the vendor failed to comply with the [ GST ] provisions, if the Phase 2 deter the ability, ultimate the recipient is also responsible to pace the [ GST ] liability. As a result, I am the end user. So department has come to us the water input tax credit they mentioned in their bills since they are not a their [ GST ]. So don't take that input as credit into your books of accounts. We are not eligible to use that input as it like that, the [ GST ] department has indicated us.
So after the row service study and correcting information from the vendors and other things. After proving that we are more served at the [ GST ], we force it to remove.
Excuse me. Sir, you are not audible, sir. Are you on the line?
Ladies and gentlemen, please stay connected. We will reconnect with the management.
[Technical Difficulty]
Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, sir.
Yes. So as a result of this [ GST ] irregular as happened at various so the subcontractors and [indiscernible]. Now NCC posted to reward the input as credit to saying that it is not equal input as credit.
Now a product [indiscernible] information, again in comprises wants to verify about the details of such vendors and they have come to our office and asked us to provide the details. So some of the information, they are corrected at the time and some of the information out of the as which requires some time and to we are correcting and comparing that information and some more information is yet to submit. And at the [ water department ] also water in from the [ porter ], they are also carrying out the proceedings. So we expect another 2, 3 months, the kind of penalty of the survey will be known. As on this date, nothing is there.
Sure. Sir, if you can just quantify the amount that we are talking about, the input credit, which has not been allowed, at least even temporarily?
About [ INR 82 ], INR 85 crores.
INR 82 crores, 85 crores. Sure, sir.
We have the next question from the line of Saket Kapoor from Kapoor Company.
Yes. Just in continuation to the [ GST ] input credit part. So that amount of INR 82 crores, INR 85 crores whenever would be asset and would be directly flowing to the bottom line, sir, what would be the treatment sir, of the same going ahead?
INR 85 crores is correctable from the vendors. When vendor is not charged. Ultimately, the liability goes to them and we have a the devited to them and we have corrected some of the amount [indiscernible] amount [indiscernible] in the pay will certain [indiscernible]. Some more, and some of them are most under collection from the vendors.
So that is lying in the pay payables segment, would be that credit would when it would be square from the payable segment. It will not be plowing through the P&L part. Correct, sir?
That is correct.
Sir, coming to the margin outlook part but you mentioned that going ahead as the business size improve and be looking for other working [indiscernible] we are looking at PBT margins of 5.5%. We did above 6% for this quarter. So if you could clarify what is our margin outlook going ahead in terms of the 30% growth in revenue that is expected for FY '23 over last FY '22.
So growth is concerned, 30% is achievable for the current year. And the margins are concerned, admitted in the last 3 quarters out there and some improvement to quarter-on-quarter happen. And in both quarters also better margins will appear particularly as the [indiscernible] levels. But together, it may not be 5.5 but the year as a 4 but fourth quarter, it may be a 5% or so. So because R&D operations affected with the increase in prices in the 2 quarters. We cannot recoup all these things at a time. So but in the next year, there is a good chance of to further improve from 5%.
Sir...
Can you rejoin the queue. If you are..
I'm just taking what are -- only that correction to -- no project.
All right. So go ahead.
We posted 6% PBT number for December quarter. So we are expecting a decline for the fourth quarter or it will be in line?
The [ EBIT ] margin?
Yes, [ EBIT ] margin sir.
EBIT margin improvement would be there from the third quarter.
For the third quarter. Okay. So then the improvement is on 6% base there. The base for Q3 is 6%. So it would be plus or not of 6%, the [ PBT ] number -- margin number.
Your question is not clear actually.
I will tell you.
Yes. Sir, the [ PBT ] for the December quarter is INR 241 crores on a revenue of [ INR 394 ] crores. That works out to around 6%. Correct me there. So for the fourth quarter, the margins -- the [ PBT ] margin will be not worth of 6%. This is what we are anticipating?
We expect more than 6%.
Correct, sir. And other expenses, so you please clarify once again, what is the reason for the increase in other expenses from INR 71 crores to INR 111 crore Q-on-Q basis. And year-on-year also.
Already, I explained in my initial remarks and also someone also as report increase on that term. We already 2x explain that one.
Okay. No issues, sir. I'll come in the queue, but -- and thank you very much, there for a very elaborate call.
Okay. Thank you.
Ladies and gentlemen. Will take the last question from [ Manish Shah ], an individual investor.
Sir, I wanted to ask about this [ Danla ]Metro project. What will be the future impact due to this future orders.
It is difficult to assess at this point of time. At the end of the day, as per contract, we are responsible to the client. And we understand that the client is also investigating what are the possible lapses and host part. So it is very difficult to quantify. We are really -- nobody really knows they have appointed we believe, a couple of consultant design experts. So unless until we received a formal communication from the client, there is very little that we can add at this point of time.
But this is the second incidence with us in the metro thing. So in future also, we'll get metro orders or we have been stopped by bidding for Metro major orders.
As we speak, there is no change in the contract that we have signed with the client. If there is any communication, if there is anything new that we know, we would be happy to share with you. Thank you very much.
Thank you, sir. Thank you very much.
Everyone. I think we'll end this call. We thank Centrum Capital for taking the lead in arranging this call, and we thank each one of you for taking time on attending this call. Please do reach us in case you have any further queries separately.
Thank -- thank you all.
Thank you all the participants.
I now hand the conference over to Mr. [ Ashish Shah ] for any closing remarks.
Yes. So we'd like to thank the participants for attending this call. And thank you, management for taking us host this call.
Thank you.
On behalf of Centrum Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.