Patel Engineering Ltd
NSE:PATELENG

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NSE:PATELENG
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Earnings Call Analysis

Q3-2024 Analysis
Patel Engineering Ltd

Company Poised for Steady 15% Revenue Growth

In the latest earnings call, the company portrayed a picture of disciplined expansion and cautious optimism. A gross book of INR 1,100 crores for Plant & Machinery, along with a 4,500-strong workforce, supports a 4-month working capital cycle. The diluted EPS has leaped from 0.32 to 0.87 year-on-year, while the debt/EBITDA ratio has improved from 4.18 to 3.26. Executives highlighted a focus on reducing interest expenses and liabilities, aided by strategic sales of land parcels. Revenue is expected to grow by around 15% in coming years, underpinned by solid government spending in the sector. The company is harnessing this momentum while maintaining a debt level conducive to growth, with plans to reduce debt over 3 to 4 years. However, they indicated that growth can be seasonal, making it hard to predict quarterly fluctuations but maintained confidence in upholding a 9-month growth trend into the full year.

Enhanced Earnings and Strengthened Balance Sheet Indicate Growth

The company has shown significant improvement in their financial performance, with diluted EPS from continuing operations increasing formidably from 0.32 in Q3 FY23 to 0.87 in Q3 FY24, echoing a healthy trajectory for earnings. Debt to EBITDA ratios also improved from 4.18 to 3.26, illustrating a more robust balance sheet. Amidst this fiscal fortification, the firm expects revenue growth to be around 15% in the upcoming years as a result of steady government spending and positive industry outlook.

Strategic Engagement in Government Schemes and Arbitration Awards

The company is actively engaging with government initiatives such as the Vivad se Vishwas Scheme to settle pending disputes, which is anticipated to relax some financial constraints and enhance working capital for future projects. Additionally, a notable sum of 52.88 crores was reported as an arbitration award from the previous quarter, with expectations to receive this money in the upcoming year, contributing to the income stream.

Prudent Capital Management and Project Portfolio

Careful reduction in interest costs, a result of improving top lines without an escalating interest burden, further bolsters the profit margins. The understanding of project costs, especially for pump storage and small hydro projects, is crucial as they vary between 3 to 5 crores per megawatt, affecting the firm’s capital allocation strategy.

Maintaining Stability in Margins and Managing Future Debt Levels

Operational margins are projected to remain in the healthy range of 13 to14 percent. Despite a decrease in the debt-to-equity ratio to 0.65, management intends to sustain current debt levels rather than aggressively reduce them, aiming at leveraging working capital debt for growth.

Funding Strategy and Promoter Holding Status

An enabling provision for a Qualified Institutional Placement (QIP) of up to INR 500 crores has been set in the board, designed to reduce overall interest costs as the company gears up for project expansions post-elections without the need for additional debt. No immediate plans have been disclosed to adjust the current promoter holding of roughly 39.5%.

Exceptional Items and a Shift from Real Estate

A one-time loss of 15.97 crores was accounted for due to inventory-related issues with a real estate project; the executive team has made it clear that no further real estate development projects are underway, indicating a cessation of similar losses moving forward.

Human and Physical Capital Expansion Reflects Flourishing Business

Over the past two years, the company has substantially increased its headcount and equipment base, signifying strong order inflows — a clear testament to the company's growing operational scale and capabilities.

Earnings Call Transcript

Earnings Call Transcript
2024-Q3

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Operator

Ladies and gentlemen, good day, and welcome to Q3 FY '24 results conference call of Patel Engineering Limited hosted by Kirin Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Vaishnavi Ambokar from Kirin Advisors. Thank you, and over to ma'am.

V
Vaishnavi Ambokar
analyst

Thank you. On behalf of Kirin Advisors, I welcome you all to the the conference call of Patel Engineering Limited. From management side, we have Mrs. Kavita Shirvaikar, Whole Time Director and CFO; Mr. Rahul Agarwal, Head Strategic Finance; Mr. Aditya Bajaj, Investor Relations. Now, I hand over the call to Ms. Kavita Shirvaikar, over to you ma'am.

K
Kavita Shirvaikar
executive

Thank you ma'am. Good evening ladies and gentlemen. I sincerely welcome you all in this Q3 FY'24 earnings call of Patel Engineering Limited. We have uploaded the presentation summarizing the performance of Q3 FY'24 and 9 months and the press release along with the results on the stock exchange for your ready reference.

Before I get in the details of the numbers, let me give you some insight on the industry scenario and the impact of the latest budget on the sector. India is one of the largest growing construction markets in the world, largely driven by infrastructure projects and infrastructure development stands as a major contributor for realizing the India 2047 vision.

In the recently announced interim budget, a significant increase in the outlay for infrastructure to INR 11.11 lakh crores for the upcoming financial year has been proposed, which is an 11% increase over the last year accounting for around 3.3% to 3.4% of the total GDP of India. [indiscernible] development of nationwide infrastructure is turning every region into an active contributor to the expanding economy and the spending is expected to further increase in coming 3 years.

The Indian Government has been promoting investment in the renewable industry, especially in the hydropower sector to achieve a balanced energy mix and reduce dependence on fossil fuels, hydropower plays a pivotal role in the integration of renewable energy into the national grid, providing great stability, peak load management and energy storage capabilities.

The country has set a target at the COP 26 of achieving 500 gigawatts of non-fossil fuel based energy by 2030. This is the world's largest expansion plan in renewable energy. The installed renewable industry capacity, including large hydro has increased by around 128% since 2014. Hydropower currently accounts for around 47 gigawatts, which is about 11% of the total installed power capacity in India. Around 27,000 megawatts of hydropower projects are expected to be announced in the coming few years.

These projects are currently at various stages of survey and investigation in under final clearance stage. The government is also increased it's focus on hydropower [indiscernible] projects. [Technical Difficulty] commissioned on fast track thereby accelerating the growth of India's renewable energy capacity. As for the ministry update, there are 39 hydro PSPs of 47 gigawatts [indiscernible] by the year 2029, '30. [Technical Difficulty]

Operator

Ladies and gentlemen, the management line has been disconnected. Please wait while we reconnect.

[Technical Difficulty]

The management line has been reconnected.

K
Kavita Shirvaikar
executive

So now coming to Irrigation and Water segment. The aim is to provide water supply to all households in the next few years through schemes like the Jal Jeevan mission. In the interim budget, there has also been allocation of around INR 70,000 crores for the Jal Jeevan mission. So we see huge potential in the coming few years in all segments of infrastructure development and especially in power, water and tunneling sectors where the company has a dominating presence.

Now coming to the order book of the company. It currently stands at around INR 19,000 crores. These are orders where we will declare the lowest bidder for 2 teams in an irrigation project by Maharashtra Krishna Valley Development Corporation. Our share in these orders is around INR 175 crores. And subsequently, these have been now been converted to [ LOA ] in the current quarter.

Due to the election period, new order inflow has remained subdued in the last quarter, but we expect the same to pick up at a faster pace in FY'25 post the general elections.

Now coming to the composition and breakup of the order book, which is around INR 19,000 crores. 61% coming from hydro sector, 21% from irrigation sector, around 11% from tunneling projects and 3% is road; and rest 4% from others.

Out of that, 62% of our order book is from central government PSUs, which are AA, AAA rated entities and around 35% is from state government and balance 3% is for project in [ Nepal ]. On the execution and operation front, we are happy to announce one of our most prestigious and challenging project Sela Pass tunnel project, which is the world's largest V-line tunnel at an altitude of around 13,000 feet located in Arunachal Pradesh, which is nearing completion. The project is being executed for Border Roads Organization, BRO and the tunnel once commissioned will provide all weather connectivity in the region of Tawang, Arunachal Pradesh. The local people tourist visiting the district as well as the armed forces will also get benefited.

So with the outlook and focus of the government on infrastructure and increase in budget allocation for this year, we expect a large number of projects to come up for bidding in FY'25 post the elections and expect our order book to grow at a good pace in the coming few quarters.

Let me now take you through the performance of the company in the quarter, which has been reasonably good and we have continued the growth momentum on a year-on-year basis. On a consolidated basis, revenue from operations for Q3 FY'24 is INR 1,061.01 crores, which is up by 11% from INR 954.63 crores in the corresponding quarter in the previous year. This is due to strong order book growth and well execution of projects.

Operating EBITDA for the quarter is INR 142.09 crores. Net profit up by 260% at INR 40.24 crores for the quarter as compared to INR 19.48 crores in the corresponding previous period. On a consolidated basis, 9-month revenue stands at INR [ 3,293 ] crores, which is up by 19% from INR 2,686 crores in the previous corresponding period. Operating EBITDA is up by 15.31% at INR 452.72 crores as against INR 392.61 crores. Net profit at INR 140.7 crores, which is up by 100% year-on-year from INR 70.4 crores.

On a standalone basis, revenue from operation in Q3 FY'24 is at INR 1,052.3 crores, which is up by 13.2% from INR 929.39 crores in Q3 FY'23. Operating EBITDA is up 10.73% at INR 144 crores against INR 130.7 crores in the previous year. Net profit is up 100% at INR 42.9 crores as compared to INR 21.4 crores in the corresponding previous period.

9-month revenue on a standalone basis stands at INR 3,155 crores, which is up by 20.2% from INR 2624.94 crores in the previous corresponding period. Operating EBITDA is 18.6%, which is up at INR 432.53 crores as against INR 364.4 crores and net profit at INR 214.99 crores, which is up by 200% from INR 71.7 crores in the previous corresponding 9-month period.

The sector-wise breakup for the revenue. From Hydro, it is 50%; irrigation 16%; from tunneling sector, it is 18%; from road and others, it is 16%.

Now moving on to the debt position. The consolidated gross debt as on 31st December 2023, stands at INR 1,965.89 crores against INR 1,992.32 crores as on 30th September 2023. Total advances from clients as on 31st December '23 is INR 794.89 crores versus INR 910.7 crores as on 30th September 2023. Present cash and bank balance as on 31st December is around INR 120 crores. The consolidated debt-to-equity ratio has improved from 0.67 as on 30th September to 0.65 as on 31st December '23. Recoverable debt is around -- working capital, debt is INR 1,151.99 crores and balance sheet term debt is around INR 800 crores, which is expected to be repaid only 3 to 4 years. [indiscernible] cost on consolidated basis is around INR 88.9 crores, which has reduced as compared to Q3 FY '23 as compared -- which was INR 105.3 crores.

Our gross book of Plant & Machinery as on 31st December '23 is around INR 1,100 crores. Total employee base is at around 4,500 employees. Our net normal working capital cycle is around 4 months that is 116 days. On a consolidated basis, our diluted EPS from continuing operation has improved from 0.32 for Q3 FY'23 to 0.87 in Q3 FY'24. And debt/EBITDA has improved from 4.18 to 3.26 year-on-year basis.

Further, I would like to update you that the company has filed for various settlement amounts under the Vivad se Vishwas Scheme, which was launched for the settlement of pending disputes related to government contracts, which was under ongoing arbitration. We expect to realize some of these arbitration awards through this scheme and we release your bank guarantees, which are given earlier for part release of arbitration awards earlier. Same is expected to be reviewed in the last quarter. Receipts from this scheme will help us lighten the balance sheet and also augment working capital requirements for upcoming [indiscernible].

Overall, we remain positive on the outlook of the sector and enough government spending that's reflecting steady growth in our revenue. We expect our revenue to continue to grow around 15% in the coming years. That was a small brief from our side. And now our team shall be happy to answer any other questions you all may have. Thank you very much.

Operator

[Operator Instructions] The first question comes from the line of Tejas Shah from Unique Stockbro.

U
Unknown Analyst

How is the pump storage demand coming up? And what will be -- out of the total project cost, what is the normal our share of cost? And what is the future on the pump storage if you can highlight.

R
Rahul Agarwal
executive

This is Rahul here. So pump storage projects, a lot of projects are expected to come up because pump storage projects are small hydro projects in that sense and where the construction period will be smaller. And overall size of a project depend varies is upon between INR 3 crores to INR 5 crores per megawatt.

U
Unknown Analyst

Okay. And it means the full share will be ours or it's part of the share?

R
Rahul Agarwal
executive

So pump storage, I mean, we'll do civil work. So majority of the work in there is civil work itself.

U
Unknown Analyst

Okay. And how are we analyzing the land parcels monetizations if you can throw some light on that?

R
Rahul Agarwal
executive

So we are looking at land parcel monetization, but not focusing too much on that right now. We have land parcels and good land parcels, which we believe that in future upcoming time, the value will increase. But we are still looking at some good offers, if we are getting offers for upfront payment then only we look at it. Right now, we are getting some offers for doing a development agreement or something which we are not much keen on.

Operator

And the next question is from the line of [ Yashwanti ] from Kojin.

U
Unknown Analyst

Congratulations for the good set of numbers. So my first question is with regarding the order book of around INR 19,000 plus crores. So what is the [indiscernible] time for us being how much revenue we can expect year-on-year?

R
Rahul Agarwal
executive

So our book-to-bill ratio is around 4 to 5 years.

U
Unknown Analyst

The second question is with regarding to our debt. Currently we have BBB+ rating. So when it has been done and when we expect it to be done next -- how about the process over there?

R
Rahul Agarwal
executive

So post March results, mostly we'll have to go back to the rating agencies.

U
Unknown Analyst

Our debt-to-equity has come down 0.65. What is company's target going forward? Where do it [indiscernible] down and how much time it will take?

R
Rahul Agarwal
executive

See debt -- we have been reducing debt, and now we have to build the growth will target to not reduce debt that drastically, but we would like to maintain the debt or even increase only working capital debt.

U
Unknown Analyst

Okay. And our current rate of interest on the long-term loan.

R
Rahul Agarwal
executive

Sorry, I just missed it.

U
Unknown Analyst

I just wanted to know what is our current rate of interest on the long-term loan?

R
Rahul Agarwal
executive

Current rate of interest -- our average rate of interest is around 11%, 11.5%.

U
Unknown Analyst

[indiscernible]

R
Rahul Agarwal
executive

Sorry, your voice is not coming that clear.

U
Unknown Analyst

What is our working capital cycle?

R
Rahul Agarwal
executive

Around 4 months.

U
Unknown Analyst

And sir, if I may ask one more question. What is the outlook you would like to give going forward on our operating margin. Where are they headed?

R
Rahul Agarwal
executive

So we would maintain similar margins around -- between 13%, 14% that range.

U
Unknown Analyst

That is for Q4 or even going forward?

R
Rahul Agarwal
executive

Going forward also, we would like to maintain these margins.

Operator

And the next question is from the line of Nikhil Malik from Vale Investments.

U
Unknown Analyst

Yes, am I audible?

R
Rahul Agarwal
executive

Yes, sir.

U
Unknown Analyst

Sir, my question is from Slide 46, which is on the arbitration. So can you give us some time line when -- I mean, do we expect something for the next quarter or, let's say, FY'25?

R
Rahul Agarwal
executive

So you're talking about the arbitration award...

U
Unknown Analyst

Which is in our favor.

R
Rahul Agarwal
executive

Right there are -- out of that, there are some things which are under Vivad se Vishwas, so we expect some monies to get realized from there. And then post this is over next year, then we'll start focusing on the court side also whatever is left.

U
Unknown Analyst

Okay. But I mean, do we have a time line that in this quarter?

R
Rahul Agarwal
executive

INR 150 crores to INR 200 crores is what we expect by next year.

K
Kavita Shirvaikar
executive

By March, we would expect around INR 150 crores to INR 200 crores to be realized. And going forward, next 3 to 4 years, we expect to...

R
Rahul Agarwal
executive

Realize the balance funds.

U
Unknown Analyst

Okay. And sir, my second question is, actually, I have been following the con calls and from the past to 1 year or even more. I think we are talking about land monetization -- the whole year has passed out. And I mean, do we have any concrete on the monetization part?

R
Rahul Agarwal
executive

So last -- this year, there has been not much keen interest coming up first 2 land parcels, which we are looking to sell. There are two land parcels, which, as I said, that we want to hold and for valuation improvement in the future. And there are other land parcels, but being this year went into like we have some land parcels in Telangana, there were elections there. So not things are moving much. Elections got completed in November. So maybe after general elections, things will -- everybody will be clear because we are looking at upfront cash. We are not looking at doing a transaction where we do some sharing and then we wait on that developer to give us money later.

U
Unknown Analyst

Right. Because sir, the opportunity cost is what we are paying as interest for the whole year. So I mean, that's the opportunity cost we are paying. So I think you are taking care of that.

R
Rahul Agarwal
executive

Yes, see it's the interest -- the debt was never taken for real estate. It was only a plan to monetize real estate and reduce the debt. But that is anyway being serviced from our normal operations.

K
Kavita Shirvaikar
executive

So if you see our interest cost net to net as compared to last year, it has been reduced. Overall, if you consider debt plus contracted advance, we have -- overall the liability has reduced.

R
Rahul Agarwal
executive

So we are reducing the interest obligations and the total amount payable, which includes client advances and debt. So that is happening from normal operations. But in the past, we have sold land parcels quite a bit to reduce the debt. Now whatever land parcels we have, we'll sell, but we just don't want to sell at distressed price.

Operator

[Operator Instructions] The next question is from the line of [ Ananya Swaminathan ] from [ C Square ]

U
Unknown Analyst

We have seen good improvement in our net profit margin in Q3 and 9 months as well. So can we see the same improvement to continue going forward?

R
Rahul Agarwal
executive

Our top line is improving, and our interest costs have not been going up. In fact, it has come down. So yes, in that sense, that improvement will come.

Operator

And the next question is from the line of [ Dr. Ashok Nyayadhish ] from HLL.

U
Unknown Analyst

Can you hear me?

R
Rahul Agarwal
executive

Yes, sir.

U
Unknown Analyst

My question is the agenda of the meeting -- today's meeting, there was a point of raising funds by QIP. What is the update on that?

R
Rahul Agarwal
executive

So we are taking an enabling provision in the Board because post elections, we expect a lot of orders to come in and we may need funds to deploy for augmenting the working capital for these projects. And hence, we have taken a provision. And at the right time, we'll try to raise funds.

U
Unknown Analyst

So no decision has been made on that point now. Is it?

R
Rahul Agarwal
executive

So the decision is only made is that we have taken an [indiscernible] provision in the Board that [indiscernible]

U
Unknown Analyst

And what would be the size of that QIP?

R
Rahul Agarwal
executive

So we have up to INR 500 crores is what we have taken in the board.

U
Unknown Analyst

Okay. Will that reduce the interest cost on the overall debt?

R
Rahul Agarwal
executive

Yes. So it will help to reduce the overall cost because for new projects we will not be required them to raise more for debt. So it will be a combination.

U
Unknown Analyst

And my next question is the -- what I see is a very low promoter holding. Do you have any plans to increase the promoter holding?

R
Rahul Agarwal
executive

The promoter holding is around 39.5% right now. So -- and promoter last year, [indiscernible]. So right now, there is no plans for promoter to increase the holding.

Operator

[Operator Instructions] The next question is from the line of Tejas Shah from Unique Stockbro.

U
Unknown Analyst

On the raising of funds and I think you answered. If you can just say, INR 500 crores is fine, but what is the price that you are looking anything above INR 100 crores or anything ballpark figure that you might have it in your mind, if in you want to raise fund at the right price, not at INR 40 crores, INR 50 crores, INR 60 crores [indiscernible].

R
Rahul Agarwal
executive

No, no. Obviously, nothing is decided. It will be based on whatever is the market pricing and the guidelines for the pricing when we come up with the issue.

U
Unknown Analyst

Okay, fine. And can you throw some light on the arbitration awards? I don't know if somebody asked the same question, If you can throw some light on arbitration awards. How much are we trying to get within this quarter? And are we going to get more orders this quarter, but being election near, maybe last time there was a talk the orders will get postponed after election only.

R
Rahul Agarwal
executive

So we may get before that also, but we expect majority of the orders coming after elections only.

Operator

[Operator Instructions] The next question is from the line of R.K. Khandelwal, an individual investor.

U
Unknown Attendee

Can you hear me?

R
Rahul Agarwal
executive

Yes, sir.

U
Unknown Attendee

The profit of this quarter include INR 52.88 crores of arbitration awards received. Whether this amount is actually received or only provided? And if not received, then what is the expected time to receive?

R
Rahul Agarwal
executive

So, this is for an arbitration award, which we received in the last quarter. And we expect that, that money will be received in the next year or so.

U
Unknown Attendee

Whether this award is final or subject to further appeal by other party?

R
Rahul Agarwal
executive

Sir, any -- all awards arbitration awards is always -- the other party can put an appeal, but it's an international award. So I mean the history says that it is only a time process to realize the money.

U
Unknown Attendee

And now in exceptional items, there is a loss of INR 15.97 crores, is return of some projects. How this is exceptional? Because this may be of our routine matter. And if this loss is arises -- whether this type of loss can be arises further also, if you can throw some light on this?

R
Rahul Agarwal
executive

No, actually, this is for a real estate project, which we completed in Hyderabad. The project was a bit delayed and the project got completed. So whatever the unsold inventory was there -- thus whatever sold inventory there, on that, we had to book losses.

U
Unknown Attendee

Whether this type of loss will continue in some other projects also?

R
Rahul Agarwal
executive

No, we are not doing any other real estate development project.

K
Kavita Shirvaikar
executive

It is onetime exceptional.

R
Rahul Agarwal
executive

This is a onetime exceptional loss only.

Operator

And the next question is from the line of [ Yashwanti ] from Kojin.

U
Unknown Analyst

Sir, we have seen over the last 2 years, like from FY'21 to FY'23, we have seen almost we had doubled our counts for the employees. Also the equipment base has increased. That is clearly indication of a good order inflow, which is happening at company's end. So what has been the development for the first 10 months of the FY'24? Have we added any staff or the talent on the Board? And how are the things happening at the company's end?

R
Rahul Agarwal
executive

So see, we have been growing. I mean, a few years back, our order book was almost half of what we have today. So yes, and accordingly, we have been growing our employee base and equipment base also. And we have to get ready to take the upcoming orders which are expected in the renewable energy sector where we operate. So there are a lot of projects expected to come up, and we are geared up to take them. That's why we have taken equipment and employee and everything so that we are ready to educate.

U
Unknown Analyst

Okay. Sir, and out of the INR 19,000-plus crore order book, what was the net we have listed in the current year?

R
Rahul Agarwal
executive

So I think this year, we have got some LOAs of around INR 3,700-odd crores.

U
Unknown Analyst

The first 10 months, we have received LOA of INR 3,700 crores, right, sir?

R
Rahul Agarwal
executive

INR 3,700 crores LOA later for what have come. There were some projects which were L1 earlier, but the award have come in this year.

U
Unknown Analyst

Okay. And sir, can you please throw some light on our export endeavors? What are our international segments? And how are we moving and our strategies over there?

R
Rahul Agarwal
executive

So international projects, we are only executing a couple of projects in Nepal. Yes, and it is more of projects which are strategically important for India only because the energy will come to India like that.

U
Unknown Analyst

Okay. We are trying any other countries to expand our presence? Do we see any opportunities around?

R
Rahul Agarwal
executive

There are barriers, but yes, we are right now a lot focusing on India only.

K
Kavita Shirvaikar
executive

And based on the opportunity, we may see we [indiscernible]

U
Unknown Analyst

Okay. Okay. So what are other strategies to mitigate the risks coming in from the infrastructure projects?

R
Rahul Agarwal
executive

Strategy is very clear that a lot of projects are going to come up, and we will take projects selectively, obviously, [indiscernible] everything. And we'll take a handful of projects so that we keep growing at CAGR of around 15% at least.

U
Unknown Analyst

Okay. Any steps has been taken, like what we had done it in the last year for exiting from the non-core business. So any specific industry existing in the business? And are we doing anything on this business?

R
Rahul Agarwal
executive

So whatever land bank and all we have, we will try to keep selling them.

U
Unknown Analyst

And other than land bank, any other non-core business which we have?

R
Rahul Agarwal
executive

I don't know. We are not doing any other non-core business currently.

U
Unknown Analyst

So the monetization of the land bank will take another 1 year. We can see that 1 year also as the opportunity comes in.

R
Rahul Agarwal
executive

Yes, not exactly 1 year because there's huge land parcel, maybe 2, 3 years. But yes, every year, something, something will happen.

U
Unknown Analyst

Okay. So what are your plans to reduce debt in the next financial year?

R
Rahul Agarwal
executive

See if you have to grow at the pace which we are looking at. So then if we are able to maintain this debt with the growth, that is the first thing which we are looking at. And then if as and when monies get realized from arbitration awards and all then we'll try to see if we can reduce the debt from that. Anyway, we have term debt of around INR 800 crores, which [indiscernible]

K
Kavita Shirvaikar
executive

Get repaid over the period of 3 to 4 years.

U
Unknown Analyst

Okay. And what is your outlook for Q4? Would you be able to maintain the Q3 level?

R
Rahul Agarwal
executive

You're talking about Q4. So, on a full year basis, we have...

U
Unknown Analyst

Q4 of FY'24 as compared to the Q3 of FY'24.

R
Rahul Agarwal
executive

See, quarter-on-quarter, it is very difficult to judge that because our business is a little seasonal that way. On an overall year basis, we can say that 15%, 20%, whatever growth we are there for 9 months, we will be able to maintain.

U
Unknown Analyst

Okay. And we expect the same growth momentum to continue even for FY'25, 15% to 20% growth rate?

R
Rahul Agarwal
executive

Yes, 15% is something which we are looking at as we should be able to do.

Operator

And the next question is from the line of Chirag Shah from White Pine.

C
Chirag Shah
analyst

Yes. First question is there's feels to be some pressure on margins, both Y-o-Y as well as Q-on-Q. So any specific thing to know, it's more driven by mix?

R
Rahul Agarwal
executive

It's only driven by the mix executed right now.

C
Chirag Shah
analyst

Okay. Second is, if I have to ask you that as compared to your -- at the beginning of the year versus today, but compared to your expectation, how is the order flow for yourself or as well as the industry. Because you are aware that it's an election year. So there has to be some -- so you would have been subduing your expectations? So is it online or there has been significant slowdown from the government side on awarding orders?

R
Rahul Agarwal
executive

See, being election year, yes, it was extra to be subdued itself. We had expected that we could have received a few more orders. But then yes, it is only a shift. It may happen after 6 months.

C
Chirag Shah
analyst

And last question is, as on date what is the -- what -- the contract that you have put a bid, which you think will come up in next 12 months or in next 6 months or post election 6 months, so what is that pipeline that you have, if you can just highlight to indicate something on that side?

R
Rahul Agarwal
executive

Sir, pipeline-wise, I would say that almost INR 2 lakhs crores of work is there in pipeline.

C
Chirag Shah
analyst

No, that's for the industry, you will not put everywhere, right, where you've already bid, but -- and you are expecting announcements. I'm not asking future pipeline, what we have already bid and which you expect, what is that number if you can indicate?

R
Rahul Agarwal
executive

Don't have that exact number, but we can give you that we are expecting our order book to grow at around 15%, 20% year-on-year at least for next year.

Operator

And the next question is from the line of Rakesh from Bahana Equity Advisors LLP.

U
Unknown Analyst

I just wanted to ask one question. In other expenses, I'm seeing a INR 71-crore figure and year-on compared is INR 43 crores. So can I know the jump? Is it any one-off over there?

R
Rahul Agarwal
executive

You are talking about other expenses, right?

U
Unknown Analyst

Yes, correct.

R
Rahul Agarwal
executive

No, there is nothing one-off as such. There is nothing one-off as such. Yes, it is all normal expenses only. Only the operations have improved. So maybe that expense has come this year.

Operator

And the next question is from the line of Aashka Trivedi from Kedia Securities Private Limited.

A
Aashka Trivedi
analyst

Sir, am I audible?

R
Rahul Agarwal
executive

Yes, yes.

A
Aashka Trivedi
analyst

So sir, my question is on the International Arbitrable Tribunal Award, which we received. So we have already like provided for INR 55.2 crores of the value. And this is the partial final award as stated in the notification file on December 30. So what is the full amount of the award we are expecting in this case?

R
Rahul Agarwal
executive

See, we do not have exact value. What is remaining is award for the costs incurred and for -- during the course of the arbitration. So that may not be too much in quantum.

A
Aashka Trivedi
analyst

Okay. So like 100 -- like -- because it has been stated that equivalent to USD 40.22 million as on February 2015. So does it have any relation with the leftover amount of the award or no?

R
Rahul Agarwal
executive

No. See, $40.2 million is what would we got. Out of that, so we had certain receivables from the subsidiaries. After setting that off and cost of funding taken for the arbitration and any future costs to be incurred for enforcement of this award, all that has been netted out by booking for the income of INR 52 crores.

A
Aashka Trivedi
analyst

Okay. So sir, can we assume that we have received the majority part of this award?

R
Rahul Agarwal
executive

Not -- money is not yet received.

K
Kavita Shirvaikar
executive

This is just an award that we recieved.

A
Aashka Trivedi
analyst

Yes, yes. I mean what we have provided for the majority part.

R
Rahul Agarwal
executive

Right.

K
Kavita Shirvaikar
executive

Right.

Operator

The next question is from the line of Rakesh Arora from Go India Ventures.

R
Rakesh Arora
analyst

Congrats on decent set of numbers. I just wanted one question. So what's your current bidding pipeline? And as you are expecting more order flow in the future, so -- but -- currently, how much we are bidding and how much bid capacity we have left with?

R
Rahul Agarwal
executive

See, in terms of bid capacity, we have enough capacity to increase our order book to -- by 15%, 20% in next year.

R
Rakesh Arora
analyst

Okay. And what's your current bidding we have done in terms of size?

R
Rahul Agarwal
executive

So see, that is a continuous process. I don't have an exact number on that. But yes, I mean what we can say is that we are expecting our order book to grow by 15%, 20% from the current levels in the next year post execution.

Operator

That was the last question. I would now like to hand the conference over to Ms. Vaishnavi Ambokar for closing comments.

V
Vaishnavi Ambokar
analyst

Thank you, Tushar. Thank you, everyone, for joining the conference call of Patel Engineering Limited. If you have any queries, you can write us at research@kirinadvisors.com. Once again, thank you everyone for joining the conference call.

Operator

On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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