NCC Ltd
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NCC Ltd
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Ladies and gentlemen, good day, and welcome to Q4 and FY '24 Results Conference Call of NCC Limited, hosted by JM Financial.
[Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Shah from JM Financial. Thank you, and over to you, Mr. Shah.
Yes. Thank you, Manhav. On behalf of JM Financial, I welcome everybody to the Q4 and FY '24 Earnings Conference Call of NCC Limited. We have from the management today, R.S. Raju, Director, Projects; Shri Sanjay Pusarla, Executive Vice President, Finance and Accounts; and Shri Neerad Sharma, Head of Strategy and Investor Relations. So I hand over the call to the management now for their opening remarks, after which we can begin the Q&A. Over to you, sir.
Hi. Good evening, everyone. At the very outset, I thank each of you for taking out time to attend this interactive meeting. As you are already aware, I have with me, my colleagues, Mr. R.S. Raju, Director Projects; and our CFO, Mr. Sanjay Pusarla. About 15, 20 minutes back, we have uploaded the results on the stock exchange website and on investors presentation as well. Hope you have been able to download the presentation and go through the numbers. As you are aware, we have declared an excellent set of numbers for the fourth quarter and for the financial year 2024. I will hand over to Mr. R.S. Raju.
Good evening to all of you. Thank you, Mr. Vaibhav Shah. Before we read about finances, our financial figures for the company for the QR and 12 months FY '24. Smooth I want to give introductory remarks. So thank you, Mr. Vaibhav Shah. Good evening, ladies and gentlemen. A warm welcome to all of you to the Q4 [indiscernible] FY '24 Investor Seminar of NCC Limited.
The presentation containing the performance of Q4 Fy '24 and 12 months was uploaded on the stock exchange website and to our website -- and in our website. Now I will take you through the key highlights of the fourth quarter. And thereafter, we will take you the questions and and answers.
So before meeting, there is a disclaimer of the presentation that we have uploaded on the stock exchange and our website yesterday, including the discussions that we will have in this call, contains our may contain certain forward-looking statements relating to NCC Business prospection profitability, which are subject to several risks and uncertainties. And actual results may materially differ from those in such forward-looking statements.
Now coming to the current period, all of it that this is a general election year and Lok Sabha elections are completed in some parts of the country and the remaining parts, the elections are going to be held in a couple of days. These elections followed based on a [indiscernible] listed elections in the year 2024, may how and impact our order booking, but a keeping back on progress of the NCC business.
Before going to result, just I want to mention about the significant matters to taking place in the [indiscernible] and more specifically in the fourth quarter. The SPA smart meters, you are aware that the company has taken 3 small metro products value of INR 7,403 crores. Out of 3, 2 projects we required in corporate as previous and accordingly, we now incorporate 2 SPV for 2 projects rolling INR 5,300 crores. The work sharing represents [indiscernible] scale, the SPV has given a contract value of INR [ 3,660 crores ] by retailing at SPV level of INR [ 2,095 crores]. The equity tie-up for these 2 projects is in good progress and investment banker has shown interest to invest and the management will decide the priorities in a couple of weeks. As far as [indiscernible] is concerned, we already approached advance and SBA caps as recommended are application to SBA, and we expect the sanctioning a couple of days from the SBA.
As far as [indiscernible] smart meter project is concerned and [indiscernible] green lights to all already started the work and erection is done for some sample testing later. The sample testing is in progress by the client. And other major projects we can [indiscernible] this Jal Jeevan mission projects. There is a good progress in exertion of the Jal Jeevan Mission projects in UP and these products contributed significantly in Q4 and 12 months in the top line.
Under the total loss of INR 69 crores, we have executed up to March 24, about 53%. It may take another one day to complete the major part of Jal Jeevan projects, second phase and third phase and [indiscernible] project. You know that we received a latest project INR 3,802 crores a year back, we received but now we receive in amount of clearance to proceed further for reducing of the project. So already other facilities are mobilized and to in in '24, '25, these products are expected to report a good progress.
NCC Vizag Urban. We have received INR 52 crores in '23, '24 and another INR 65 crores we received in the April, May '24 and aggregating to INR 119 crores in the EBITDA. The balance of INR 35 crores against sale concentration, we accept to receive in '24, '25 and apart from that one, we also expect to receive under INR 150 crores initially low from the buyer of the project.
Sembcorp, you are aware that the arbitration has been an award for a total amount of will be INR 198 crores, out of which we received INR 102 crores and [indiscernible] INR 45 crores pending. And both the companies went to the -- again, court on the second [indiscernible] report and regarding the outcome, it takes some more months tomorrow.
As far as JP project is concerned, there is no any major change. And we have about INR 701 crores orders at the beginning of the -- the value has come down to INR 598 crores related to the Capital City projects. As far as Vizag are concerned, we have INR 267 crores, the value of business at the beginning of the year. Now it has come down significantly to INR 67 crores, a decline of nearly INR 200 crores in the month period of the year-end review. So similarly, the outstandings have come down from INR 157 crores to INR 147 crores. And another significant matter taken place is sentiment of TAQA. All these quarters, you will have to tell about the status of the TAQA. And in the last meeting also, we express that [indiscernible] settlements are in progress.
Now the settlement enticement is reached between 2 parties, according to the settlement, we refer to pay INR 175 crores on installment basis of INR 90 crores was made in March 24 and balance INR 85 crores variable in 2 installments in '24, '25.
On account of the settlement, there is an impact on P&L of NCC cycle INR 55 crores and [indiscernible] are in Q4. In the PTTL, another [indiscernible] lending related to the PTTL or associated companies. The lenders of PTTL made a claim in NCLT, [indiscernible] PTTL. In fourth quarter, we have received a settlement of outcome of NSA and they deposited in the consortium brand account for the distribution to all the lenders. All the lenders are given more in segregate and accordingly, the CTL pending is now closed.
And another transaction is an NCC [indiscernible] VP. A lot are aware that the [indiscernible] has invested 37% in NCC. At the same time, NCC Cycle has invested its equivalent to that in the form of [indiscernible] only continuing. So in fourth quarter, and CSL has acquired the investment from JBS as a result. And [indiscernible] also has 100% subset of NCCL. [indiscernible] sale consideration to redebt OCDs and NCC IHA. So these are the major significant transactions taking place in couple months as well as in the fourth quarter.
Now coming to the fourth quarter performance, the first I will discuss on the order book. Other book at the beginning of the year, we now INR 50,244 crores. And in fourth quarter, we received INR 6,045 crores and in fourth quarter, we exported INR 5,949 crores. As a result, the closing order book now stands at INR 57,586 crores, has invested INR 50,244 crores showing a growth of 15%. So we targeted for the year, the new order is about INR 6,000 crores, but company receivables are INR 27,283 crores relative lower than its plan. So the other good government period is INR 17,991 crores.
Similarly, the [indiscernible] side increased significantly from INR 578 crores of last year to INR 780 crores.
In the year '23, '24, we secured 35 number of orders. So this is about the order book. Now I want to brief our operating and financial performance of NCCL for the Q4. On a stand-alone basis, the company reported a revenue of INR 5,500 crores against [ INR 4,057 crores ], a growth of 26%. The revenue primarily driven by the building division and the palatial divisions, which came down driven by the UP Jal Jeevan project mostly. The gross profit reported at INR 771 crores against INR 634 crores, a growth of 22%. Similar to gross profit margin reported is 14.2% against 15.8%, a decline by 1.7%.
The company has posted an EBITDA of INR 510 crores as against INR 424 crores, an increase of 20% against corresponding quarter previous year. The PAT reported on INR 188 crores against INR 178 crores, an increase of 6% over corresponding quarter. The EBITDA margin reported 9.4% against 10%.
The other income reported for this quarter is INR 42 crores as against INR 31 crores. Turning to the cash flow stand-alone Q4 -- on a stand-alone basis, the fourth quarter, the cash flows of INR 1,146 crores generated from the operating activities has against INR 1,123 crores year-on-year. The net cash flows is the investing activity is INR 148 crores against cash flow generated INR 55 crores.
The net cash flow using financial activity is INR 615 crores against INR 1,082 crores. Now coming to the 12 months stand-alone operating results. The company reported a revenue of INR 18,459 crores against INR 13,504 crores, a growth of 37%. The revenue increase is primarily due to more revenue from building and electrical divisions, again, which in turn, again, good progress on the Jal Jeevan Mission project. The gross profit reported as INR 2,590 crores signed INR 2,170 crores, a growth of 19%. The gross profit margin 12 months is 14.14% against 16.2%. The adjusted gross profit margin for the almost period, is 15.7% against an adjusted margin of 15.52% of the previous year. We know that in the second quarter, some major impact that happened on account of in [indiscernible]. As a result, we have workout adjusted margins. So the adjusted gross profit margin when compared to the previous year, there is a decline, but the decline is only to the extent of 0.45% for the previous year. The company has posted an EBITDA of INR 1,648 crores, ages INR 1,343 crores, easing a growth of 23%. The EBITDA margins reported is 8%. Adjusted EBITDA is 10% as against to same 10.06% for the corresponding period of previous year. It means there is no any big change in the EBITA margin on an apple-to-apple comparison. PAT reported at INR 651 crores against INR 569 crores. PAT margin, 3.4%, but adjusted PAT margin is 4.57% as against 4.2% of the previous year.
Cash flows for 12 months on a stand-alone basis, nearly INR 1,248 crores generated from the operating activities has against INR 870 crores of the previous year. So the net cash flow [indiscernible] the investing activity is INR 333 crores against INR 132 crores. Net cash flows within financial activity is INR 707 crores against INR 749 crores. So the above cash flows indicate that there is a significant increase in the operating cash flows from INR 873 crores to INR 1,298 crores in '23, '24, which shows the kind of collections and the kind working management [indiscernible] the company. So that is about the stand-alone. Now I want to brief consol Q4. This quarter reported a turnout of INR 6,550 crores against INR 4,980 crores at a growth of 31%. So the gross profit reported as INR 851 crores agains t INR 692 crores, a growth of 23%. So the gross profit margin reported is 31.1% against 13.8%. The EBITDA reported [ INR 324 crore ] at INR 462 crores, a growth of 20%. Now the PAT reported at INR 210 crores against INR 185 crores, a growth of 14% was the corresponding quarter of previous year. Looking at 12-month consol. The 12-month period reported a turnover of INR 20,971 crores as against INR 15,701 crores, an increase of 34%. But gross profit reported INR 2,780 crores as against INR [ 2,306 crores ], a growth of 19%. EBITDA reported [indiscernible] INR 183 crores against INR [ 145 crores ], a growth of 22%. The PAT reported at INR 711 crores as a INR 610 crores, a growth of 17%.
So I briefly touched about the group companies. There are 2 companies actively reporting the top line and big profits. One is [indiscernible], another one is NCC Urban. So in this 12 months period, [indiscernible] has reported turnout of INR 1,829 crores as against INR 1,780 crores of the previous year. Similarly, Alcorcon has reported a turnover of INR 389 crores as against to INR 370 crores in the corresponding 12 months of the previous year. So the water group companies reported a turnover in this 12-month period is about INR 2,533 crores as against to INR [ 2,199.78 ] crores, a growth of 15%. So the stand-alone company reported growth of 37%, and the group companies reported in the top in growth of 15%.
Coming to the balance sheet. In this investment, the investments in this quarter increased from INR 875 crore to INR 1,033 crores, which on account of the equation of the sites from the [indiscernible]. Net CapEx. In fourth quarter, we have spent to this INR 114 crores. In the 12 months period, we have spent about INR 249 crores.
Inventories. The inventories slightly increased in the 12 months period from -- so this INR 1,078 crore to INR 1,434 crores, about INR 356 crores and this increase in this period is in line with the increase in the volume of activities. [indiscernible] ratio has declined by INR 150 crores in 1 month period from INR 2,945 to INR 2,791 crores, though there is an increase in the top line. The trade receivable days for the year-end review significantly come down to 57 days from 87 days, almost a lowest in the decade. Retention money is also significantly come down from INR 1,930 crores to INR 1,595 crores, a decline by about INR 425 crores, which is in turn due to receipt of settlement demand from Sembcorp.
Unbilled revenue. Unbilled revenue increased from INR 3,255 to INR 3,083 crores, an increase of 20% as recognized increase of 37% in the top line
By [indiscernible]. On the [indiscernible] UBS in terms of percentage of turnover has come down from 24% to 21%. There is a significant improvement in working capital days from 102 days to 76 days, lowest in the decade. As a percentage of turnover is reported 20% of sales revenue as against 29% of the previous year.
In terms of value, the kind of working capital come down from INR 3,870 crores to INR 3,700 crores despite increase in activity by 36%.
Debt. The debt has come down from third quarter to fourth quarter by about INR 400-plus crores and stands now at INR 1,005 crores. Compared to the opening debt of the year, there is a slight increase of INR 25 crores in the debt. So in the previous investors call meeting, we said that the debt may stand at INR 12,300 crores or so by the year-end. But now it stands at INR 10,000 crores because of the good collections will happen from the clients in the March 24.
This decreased from INR [ 2,010 ] crores to INR [ 2,111 ] crores, a decline by about INR 440 crores.
So there is no increase in debt, but there is a decrease in mobilization advance. We source that more companies working capital management.
As we come to the ratios. The loss reported for FY '24 is 14.4% as against 13.4% of the previous year. Similarly, the [indiscernible] network that is [indiscernible] reported 13.56% as against to 12.95%. On a consolidated basis, the growth reported is 15.77% as against 14.11%. The other significant matter of take here is the trade rating. We received an enhanced freight rate in EE- from the K ratings. So with this, we expect further improvement in the products that arm loans, our working at loans, [indiscernible] cost, we are expecting some improvement in the cost point of view. The last but not least item is about the guidance. We have given our guidance for order book for the FY '23, '24 at INR 26,000 crores, whereas we have achieved INR 27,283 crores. And top line, we are going to guide a growth of 20%, but we achieved 30%. So for the year, '24, '25, we give a guidance [indiscernible] about [ 28 to 2,000 ] considering the present market environment, but clearly, the actions followed by the -- some state assembly elections. And the top line growth guidance about 15% plus as against 20% debt even in the last year. Similarly, for the EBITDA margins, we've already seen about the margins of the margins. So we expect the margin -- a better margin, 9.5% to 10%. However, these numbers are subject to impact of the elections, if any. This is about the brief on the NCC Q4 and 12 months operating results. Now the session is open for participants of their questions quoting and we answer the questions.
[Operator Instructions]
We have our first question from the line of Mohit Kumar from ICICI Securities.
Congratulations on a good set of numbers. My first question is on the margins. Our margins used to be 12%. It has been declining by -- from 12, but you're guiding again for a softer -- softer margin, again, 50 basis point correction looks like given the order book, do you think any chance of margin surprise in FY '25? And are we targeting a slightly higher number as you go forward, maybe a couple of years, hence for you expect a better margin, more than 10%.
As about the margins, now the company's focus is on to secure more orders and other sales orders. And the India market is a competition. And to get the orders, we have to compromise at 1% or 2% at grasping level. So this is an experience of the last 2, 3 years as the result company decided on its philosophy to get more orders and do more turnover. And as a result, a 3% [indiscernible] a 3% growth company reported on the top line. And those gross par margins are lower, but ultimately maintain that bottom level margins at PBT [indiscernible] improve the margins at the table. That is the focus we are making. But the companies in the plan, we are making an improvement in the net profit margins year-on-year, at least by 50 basis points in every year.
So like that, the company management philosophy is there. So accordingly, the business model is there. So the gross profit and EBITDA margins as a result last year reported 10%. Now again, 9.5% to 10% to we have given us guidance.
So as far as ARPU booking is concerned, this year election period, and definitely 5 to 6 months period, every company lose in getting the orders. We don't know how the things take place. But we have given 22,000 is the minimum benchmark to secure. So if things there is no impact, good impact on top of the elections. So we may get more others, but a minimum of 10,000 to 20,000 is the what the company has kept.
If I may add a couple of things. Yes, yes. Firstly, this is also a function of the competition prevailing in this space as the space gets more competitive, generally, the price levels tend to go down. But I think it is better to look at the profits, the PAT or PBT, whatever that you're referring in terms of absolute numbers, I mean crore. Then you will see a clear direction that we are moving northwards always. And going forward, the guidance that we have shared with you, that is 9.5% to 10% is for the current year, that is FY '24, '25. Going forward, next couple of years, our intention is always to keep the innate moving.
Understood, sire. My second question, sir, what are the CapEx and equity invested for FY '24? And what is the guidance for CapEx and equity investment in FY '25?
In FY '24, we spent about INR 285 crores. And for the FY '25, we are targeting to spend about INR 250 crores.
Just on the CapEx side, on the equity side, sir, equity investment in the subsidies?
Yes. Equity investment, it is a risk between INR 100 crores to INR 175 crores depends upon the requirement and progress of the we recently received the smart meter projects on SPV.
So total number will be below less than INR 2 billion for FY '25 for everything? Am I right, sir?
Yes.
We have our next question from the line of Shawn from Dolat Capital.
A couple of clarification and data points. Sir, if you can repeat the retention money number of mobilization number and loans to associates and subsidiary. Sir, I need a data point on retention money as on March mobilization advance and loans to subsidiary and associates.
Yes, one minute up, we are repeating it, okay? Please note down. The retention money INR 1,405 crores, some mobilized in advance is INR 2,311 crores. Other item you asked please?
Loans to subsidiaries and associates.
It is standing at INR 509 crores.
2,509.
No, no, no. 509. I think we'll repeat again for your benefit. Retention money has gone down some INR 1,930 crores in the last year to INR 1,505 crores. And mobilization advance, it has gone down from INR 2,755 crores to INR 2,311 crores, okay? Loans has come down from INR 549 crores to INR 509 crores.
So total investment in subsidiary associates, including investment and loans now is INR 1,544 odd crores.
Yes, right.
Okay. Okay. And sir, a couple of clarifications. You mentioned the TAQA settlement. So in this fourth quarter, how much we have INR 55 crores, you mentioned, this is booked in other expense or where it has been booked?
It was shown as an exceptional item.
Got it. And the prior year tax of INR 36.82 crore in FY '24, is that entirely in the fourth quarter or ...
It is not entirely for quarter, it is a [indiscernible] of 12 months.
Okay. Got it. And sir, now how many you look at in terms of the base level and in terms of the finance cost for this for '25.
As announced cost now for the current year in terms of customer base works out to about 53.23. The interest cost for the year '23, '24. And for next year, we expect we expect some 30 to 40 basis points direction.
Okay. So as a percentage of revenue, we are seeing some reduction in the poll. So does that mean on absolute level also INR INR 595 crores of finance cost will reduce in FY '25?
The same level about INR 120 crores in that level would be there, there won't be any significant change.
Okay. And on the working capital and the debt level, how it will look by end of FY '25?
So we are targeting now, we have [ INR 2,005 crores ] and we are targeting to reach INR 500 crores by end of '25.
And working capital, any other improvement possible?
Working capital, in terms of working capital, there's yes, still 2, 3 days reduction would be there. But in absolute terms, there's something amount getting increased 15% plus growth, but in terms of days or in terms of percentage, a little reduction we expect.
We have our next question from the line of Parikshit Kandpal from HDFC Securities.
Congratulations on a good quarter. So my first question is on the stake purchase of 37% for INR 240 crores. So can I understand the rationale behind this? And how did you arrive at INR 240 crores of concentration? And what are the assets, balance assets in this entity?
We see the world transaction. Originally, the transaction taken plus some 6 years back. At that time, there is a pre understanding out there. At the time, the EPL is a partner in our NCC power company. So at that time, basing on the restrictions or conditions, we use the GP sales to transfer to the [indiscernible] cost. And in terms given the stake in our NCCHL equaled to that amount, the rights we have given to a [indiscernible] 70% stake in the NCCHL. At the same time, the NCCHL has invested a similar amount to [indiscernible] form of NCC or [indiscernible] debentures in the [indiscernible]. So in what -- in all the books, the transactions are continuing for this -- in the last 5, 6 years. We are waiting for the wrapping of this transaction for a period of time.
Now in the current year, we have taken up this exercise and at the same time describing of the transaction, canceling the closing of the transaction. So we reacquired the uptake of the 10% from UPL at [indiscernible] price. It is not the market to our time and price and other things.
On the same amount, the huge for redeeming the debentures issued by them to the NCCHL. This is between the -- among the 3 companies, this transaction has taken place. It is nothing more or less a prep of transaction -- or transactions increase and certain projects in the books or [indiscernible]. As a result now, NCC has become 100% to a subsidiary of NCC. There is no profit. There is no loss in the transaction. It's not priced.
This is not really a new transaction. This is something that we have just affected. This was an agreement that we entered into several years back.
But is it a cash or a noncash item, sir? Is it a cash ratable or noncash item is the closure of ...
The fact is the matter is you are aware that long back, we had 1 power set, and we wanted to sell that power set to Sembcorp, the acquirer. But due to some permissions, we could not sell because we had to transfer all the colink and everything. That is the reason this arrangement was made between us and the [indiscernible]. So in other words, this is just the unwinding of -- the preagreement pre-agreed milestones. So this is just a sort of paper transaction if you prefer that word, there is no cash involved in this.
What I wanted to check cash on noncash item.
I hope that answers your question.
Sir, secondly, on the order pipeline, I mean, though, given that almost half of this year will go around the lean government formation and is expected to be delayed, but which sector -- I mean, are you looking at new sectors to compensate for the shortfall and are you looking at solar projects, so, to build up the order book. Are you open to take subcontracting works for beauty toll projects from other leading developers? Because I think you don't invest in equity-intensive projects in both segments. So any sense on how do you intend to make up for the shortfall?
Yes. But see, the prospective pipeline of the projects, which we expect to come up for bidding all the elections, we continue to see a very healthy pipeline. And at least in 3, 4 major verticals in which we are present in a major way, for example, our Buildings division, our transport division the water division, the electrical T&D, we continue to see a very healthy pipeline of projects. So and then in light of that fact, if you have -- you must have noticed that we have sort of toned down our order inflow guidance for the current financial year.
These 2 verticals that you are talking about solar EPC and doing plain vanilla kind of contract for the BOT players. We have looked at this space in the past. But it doesn't really make sense for a company of our size, our cost structure to really get into those kind of businesses. But if a suitable opportunity for the [indiscernible] itself, in front of us, we are open to look at this possibility. But not to say that these 4, 5 verticals in which we have a lot of exposure, we expect a healthy pipeline of projects to come up for delay. There may be a delay a quarter year or quarter there. But we think this award should pick up post the election July August? You have in the order on hand -- and that said, we have a very -- we have one of the highest order books that is already available with us. That gives us visibility -- even if there is a delay, let's say, a quarter here or there, we have more than sufficient amount of orders already available with us to execute. All that we need to do is to go out and execute.
Okay. And just the last question. Now we have settled a lot of historical clean rating at like 7, 8, 10 years. Now I think you did mention about Pandiri project and Dan project where [indiscernible] you mentioned about NCLT claims. So any more further write-offs or diminution in value and exceptional item expected in FY '25. So if you can quantify anything more coming in from future settlements?
Any last ticket item pending to the...
At the moment, we do not foresee anything which is material, okay? Even if it is there, small things may be there, but nothing material we are foreseeing now for the year FY '25.
[indiscernible] Impact this last year, that is FY '23, '24 has been a year of cleanup. If you really -- you are a person that tracks the company closely, last 5, 6 years, whenever we got an opportunity to interact either with that investor or analyst. We got asked this question, what is happening to Sembcorp. What is happening to TAQA, -- what is happening to this [indiscernible] real estate divestment, we are happy to report that in a single year, we have cleaned all these things. We have put all these demands to rest. So we are sort of starting with a relatively clean slate now.
And this cost nothing is to be written off, right? -- felt settlement, which you spoke about in Q1.
Nothing, nothing more. [indiscernible] settlement we reached with NHI. That is a settlement, which has been agreed with the consortium of lenders also. And this has been set [indiscernible] paid to the lenders, and the case is completely sated now.
And just on the [indiscernible] how much is pending to be received both equity on board as part of that impairment.
INR 33 crores is the equity part that we have to receive, the debt would be about INR 350 -- close to INR 350 crores.
When does the debt gets paid off?
The next 2 years. That is -- our target is March 26.
We have our next question from the line of Ketan Jain from Avendus.
Yes. Sir, what is the rate of interest are you seeing it financing smart meter projects.
It is between 9.5% to 10%. And the term sheets are now under discussion with the lenders question.
We have our next question from the line of Prem Khurana from Anand Rathi Shares and Stock Brokers.
Congratulations on a good set numbers. Sir, I joined a little late, the sorry, if questions are a repeat. In terms of the smart weakening orders, we were supposed to have a partner in place which would have reduced capital intensity. So any progress there? Have you been able to kind of find any part now? Where are we in terms of stage of discussions with the partner.
Yes, we can invest in smart meters. According to our calculations, the equity investment requirement of our growth post crores. or the 2 products which are being handled by the SPVs. And the other project anyhow, it is doing by. So this 2 projects by equity investment, it is about INR 500 crores. This moment, when NCC is looking partly to impact from its loan and partly from the others. And the discussions are also taking place -- have taken place already with the investment bankers and investment banks are sold in past to invest. But we have not decided to moderate how much more, what is the premium those [indiscernible] will take place in another couple of weeks.
But then I mean, we want to do it, it is not that we would be very particular about the valuation and or we want to have certain premium.
[indiscernible] discussion and interaction. So we enter the investment bankers. We also prepared the models and paperwork, everything we have done. But Nomarartis management is deciding a couple of days basing on the requirement.
Second, I mean if you could help me reconcile the cash flow. I mean, I was looking to kind of understand the noncore parts a little better. So this quarter, and [indiscernible] you said you've paid INR 90-odd crores to TAQA and the balance would go next year, INR 85-odd crores will go to TAQA next year.
Yes.
And how about the NHI [indiscernible] came and then went to the lenders, right? So now that I mean -- we do not benefit or lose out on any cash because of that settlement or the claim?
Yes. There is not any benefit of that one. only some expenses to be incurred with the banks that are already observed in the year '23, '24.
and the Sembcorp money came in Q3 or Q4?
Q3, we [indiscernible] that money.
Okay. And about [indiscernible] was there any money which was received during Q4 or it came after Q4? I mean April or May, I think you said in your opening remarks, you received some INR 65-odd crores.
By bank. No, it does a realistic adviser. We have real estate money, we received some point and some amount we received in the April and May 24. Here the INR 65 crores, we are receiving INR 67 crores we received in April and May 24.
Mr. Khurana, all the equity payments that we had to receive from them has come, but INR 33 crores. So about INR 200-odd crore equity that we had to get from the buyer, we have already seen minus INR 33 crores.
And the loan amount that is due, I mean it still continues to carry that coupon rate and that is supposed to receive.
Right. But that is something that is expected to come back to us in next 2 years' time, March 26. In this year also, they promised to pay INR 850 crores against loan beside this equity more.
The other thing is the agreement that we have signed with the buyer has a clause that says that there is a escrow account that is going to get opened, whatever real estate sales which are done for this project comes to this account. So sort of the kind of secured payment for us.
But I'm not sure how would this work I speak to you on this offline because I thought the money needs to go in an escrow account, which would be rented through the RERA account and then on the and it needs to be utilized in it?
Mr. Khurana, we have made a kind of agreement. I would be happy to discuss this with you post this call.
Sure. No problem. And just 1 last if you could help with the UBR number, please. I mean I missed that number.
21% of the revenue is the [indiscernible].
UBR number he is asking. It is 21% of the revenue. The INR 3,800 crores is there in the books as of March 31, '24 and it is -- works out to 21% of the turnup, and they declined from 24% to 21% in this year.
We have our next question from the line of Anupam Gupta from IIFL Securities.
Just 1 question on the execution guidance, which you have said 15% revenue growth. So so far, during the election period, have you seen any impact on execution to date.
Mr. Gupta, it is a sort of forward-looking kind of statement. We have not really finalized the numbers for the quarter.
Not for the quarter, for the year only, sir. For your guidance is 15% that is fine, but given the order book, it ideally can be higher. So is it taking the election part of it? Has it so far has an impact on execution at all?
Yes, there is some kind of impact because of the elections in the last 1, 1.5 months, the activity is because primarily NCC [indiscernible] on the government, okay? The equity was going on and the payments and all who are not being released on time, okay? So there is definitely an impact because of this.
Elections are still midway, Mr. Gupta. Still it will take time for us to thoroughly assess because we are not really working on 10, 15, 20, 30 sites. We have a lot of sites to really work that or out. But there would be some impact. But whether that impact is minus 20%, 10% or minus 30%, that is difficult to assess at this point of time. I would be happy to answer that question post the call at the time of the first quarter call.
And sir, 1 question related to the equity investment review, you said of which can be up to INR 175 crores for this year. So will this number change once you have a partner for the smart meter projects? Or is this your share, which you'll put definitely in this.
This stage, we cannot say there is possibility once the partner going again, I understand if you partner.
Yes. Mr. Gupta, it is not really a call that we can take on our we are talking about a partnership, partner will also come to the table with some preconditions, he would also -- there are people who are wanting to have only 26%. There are people who are wanting to have 50%. There are people who are wanting to have -- so it really finally boils down to the partner that we really decided to get into an agreement with and what are the terms and conditions who is going to take this console level of debt on its balance sheet.
So this is something that we have to really negotiate and decide. And we have still not reached that milestone. Once we are close to that milestone, we would be happy to share that with you.
Sure. And just 1 final clarification. CapEx, you said for this year would be INR 220 crores, right? Or is it a different.
250.
And there is 1 more project which we are executing, that is GMR project that GMLR project also, there is a requirement for TBM mission, but that is expected to come only in March '25 at end of April 25. That's the region we have not kept that in the current year.
We have our next question from the line of Vaibhav Shah from JM Financial.
So out of a total cash of INR 1,044 crores, what would be the margin money.
INR 650 crores. You are asking margin money with the banks?
Yes.
What is your question? Mr. Shah?
So what is the margin money out of the total cash of INR 1,044 crores.
INR 660 crores, 6-6-0.
Okay. And sir, out of the guidance of INR 250 crores for CapEx, it includes the smart meter which is on our books, right?
The smart meter process does not require any significant amount of CapEx.
In terms of CapEx, right for that particular project it is not [indiscernible] on our books?
In the CapEx, there is not any significant requirement only INR 5 crores or INR 10 crores, INR 20 crores on will be the small net projects, the missionary kind of a requirement, INR 1,000 crores.
And talking about the equity investment that we have to do in the white on our books, we are part with the project.
You're talking about the equity investment or you're talking about the CapEx.
Equity investment for the Bihar projects, so that should come in CapEx, right, which is on CapEx.
Just a normal quality of working capital. So for a profit, generally, we comp the working capital. So we consider it is any further or money required, we draw in department working capital from our routine banks.
Okay. So could you tell the amount ballpark on that? That would be required over the lifetime for that project.
I don't think we require much amount because we have got the mobiles advance also, okay? So in the initial year, we may not require because even we have to instant that initial 25,000 meters test, then we have to start starting the balance work. So probably in this year, we may not require much of the amount.
We have a follow-up question from the line Shravan Shah from Dolat Capital.
Sir, my question has been answered.
We have our next question from the line of Saket Kapoor from Kappoor Co.
Yes. Congrats to the team and congratulations on a very steady set of reported numbers. If you take the other items, really a very great set of numbers there. First of all -- Yes, you can hear me? When we look at the note number note number we find that revenue from operations for the current year have a negative impact of INR 199 crores. So taking this into account, the total impact is around INR 240 crores for this quarter. The exceptional itemline items should be taken out.
Could you please repeat your question?
So when we look at the consolidated notes to accounts, Note #7, you speak about revenue from operations for the current year is a negative of INR 199 crores.
Yes.
For the year as a whole, it is 199. Okay. I got my answer.
That happened in quarter 2. Mr. Kapoor, if you recall, this relates to the same cost settlement, we have made this announcement in the second quarter and the presentation in the investor presentation, if you go to the Slide #16, that explains without this adjustment, how the numbers look like.
Sir, you spoke about the UP SWS project execution [indiscernible] paid, that is we executed around INR 6,000 crores for this year. So what's the time what is the pending size pending order size? And how are the receivables for this project? And Q4 number, if you could give in the absolute number terms, sir?
Okay. INR 4,000 or INR [indiscernible], the total [indiscernible] INR 16,800 crores, INR 1,900 crores. By March 24, we excluded 53% of the value of the others, and the 47% remains, out of the INR 16,700 crores and roughly about INR 8,000 crores or INR 7,000 to INR 7,000 crores should be there. Right.
For the March quarter, sir, can you give the execution number for this budget to only the absolute number?
The March quarter, it is INR 1,555 crores.
And the preceding quarter, the December quarter was?
81.
So in each quarter, roughly INR 1,500 crores is going on. So it turned into 6,000. So roughly, we may be able to complete by March 25 INR [ 1,500 ] crores you may call it may fall in '25, '26. It depends upon how the movement has declined a bit because the general action is there and also the state as is also there in UP. We are the 2 big [indiscernible]. So if not title is there, apparently, 90% of the product should be completed by March 25.
Sir, why have the dividend at being lower this year, sir, if you could answer? Yes, the second question only, sir. while the dividend payout lower base time, sir, even after improved numbers and improved cash flow.
Repeat it.
The dividend payout as a percentage of profitability, has been maintained at last year's level. Although the profitability has improved, the cash flows have improved significantly, why has the dividend being kept at the same level as it was last year?
Being an the strategies, management and the Board decided to go 10%, to maintain the same thing. Payout around [indiscernible] year.
There is a good payout ratio is also the 20% to 22% payout ratio there. And wait for next couple of years, we have still a lot of things to do a very excellent set of numbers next year. And who knows, we might have some very interesting plans for the shareholders in the next couple of years.
We have a next question from the line of Parikshit Kanthal from HDFC Securities.
There is one clarification. These 3 smart metering projects, 2 are under the PV and the equity investment mode and the Bihar 1 is under the EPC mode, right?
Right.
Bihar is in NCC only.
On all these projects essentially Mr. Parikshit, similar kind of projects more or less similar kind of fragment for all these projects, similar kind of payout, similar kind of duration. The only difference is in the state of Maharashtra, they have as per the contract conditions, we were expected to form 2 STB. And these projects have been awarded in the SPV. The other state that is behave, it is a similar kind of project, but they have not asked us to really incorporate a separate SPV. This has been awarded to the listed parent company. That's the only difference. Otherwise, more or less the projects are similar.
So that means that while you are investing INR 500 crores in equity in that space. So what -- I think what paws asked the same thing I wanted a clarification. So what would be the investment or equity investment required for the hard projects?
We are not talking about equity investment for Bihar. I do need equity investment in the first place. If it order is directly placed on a company, why do you need equity investment in the first place? You need investment working capital, we have to procure meters, you have to taste meter, you have to install meter and you have to demonstrate the successful connectivity and the billing cycle starts for each of the village. There are milestone payments, so you don't really need equity invest in PV. So that's the reason. We increased the money form of working capital.
Sir, your returns and revenues come over the like concession period, right? And you are investing a short-term working capital to finance the purchase of the inter which will be you revenues over the life of the project.
Let me take a couple of minutes of your time to explain how the project is getting to get financed. Firstly, there is a handsome amount of mobilize an advance in all these projects. If you really consider these 3 projects, it would be about INR 1,000 crore advance Secondly, in these projects, you have to really take about 25,000 meters in the first 7 months. Once the meters are tested, once they are fully commissioned, the you start installing the remaining meters. And then when you install the remaining meters, the revenue cycle starts what is essentially meant this post 7 months. In the next month, let us say that we are able to installed 1 lakh meters, 5 lakh meters or 2 lakh meters, the revenue cycle for those meters would start.
It is not that we have to wait for 27 months, and then the revenue sale for all these meters would start.
In the past to 3 years, nearly 60% of the order value nets complete gain. -- and the revenue gets reported and also the margins also gets reported on the first 3 years. The balance 40% only relates to the import or any model only in the fourth year to that takes place. That's right. I hope that answers the question.
How do you calculate INR because last time you mentioned about IRRs and equity investments, a little bit of confusing that 2 projects you are financing through equity structure on to working capital and the revenues accrue because these smart meter it as a gross [indiscernible], right? That's CapEx.
Could you please repeat your question?
Will these smart meters sit on your robot as your assets or will be especially the Bihar one. So will we sit on your -- the gross block on your asset? Or like how do you treat that on the asset side?
It will not go to as a gross block. As per the Ind AS, we need to create this as a financial asset financial block. It will be in the financial effect.
Okay. I'll separately discuss this with you, but I understood now that coming to the financial results.
We have our next question from the line of Mohit Kumar from ICICI Securities.
So one of your clarification, sir, is Bihar project is similar to the other market port? Are there difference between the contract.
The only mode of award of the contract is different. Essentially, all these 3 projects under the same flagship scheme of the Government of India, that is RDS. The scheme gives the state the right, how do they really intend to place the order. So that is the only difference. Essentially the nature of the project, the revenue model, everything remains decent. It's part of the same scheme of the Government of India, that is RDS.
Yes, are the payment is different for the Bihar or are similar.
By and large, similar.
Understood, sir. I'll take it offline.
We have our last question from the line of Shravan Shah from Dolat Capital.
Sir, out of this INR 57,536 crores order book as on March, what's the revenue of the SPV or the subsidiary. So what's the stand-alone order book as on March.
About 90% to 90% is stand-alone, about 9% is [indiscernible].
Sorry, sir, do you have any specific number?
Yes. Out of INR 57,536, 5,693 is towards subsidiaries.
INR 5,695 crores. Yes.
Ladies and gentlemen, that was the last question for today. And I now hand the conference over to Mr. Vaibhav Shah for closing comments.
Sir, the last question from my side. Sir, what is the profitability award projects for FY '24? [indiscernible] INR 71 crores.
Now in [indiscernible], the profitability is 4% to 4% of the product value at SPV living. So for FY '24, what would be the fact?
As percentage, again, we point to after volume, there won't be any expenses only the income tax and after [indiscernible] income tax3% to the mix at a levy. 2.9% also. That means roughly about INR 50 crores, INR 60 crores should be there at stateline distributable 1 is to partner in [indiscernible] 2 partners. We hope in [indiscernible]. We get the 2% of the fact of INR 50 crores about INR 30 crores.
Okay. Okay. on behalf of JM Financial, I would like to thank everybody for participating in this call. Also a big thank you to the management for allowing us to host the call. Sir, for any closing remarks from your side?
Okay. Thank you, Mr. Vaibhav and also thanks to all the participants of this investors call NCC in at Q4 after 12 months. So a good night to all of you.
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.