PNC Infratech Ltd
NSE:PNCINFRA
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Ladies and gentlemen, good day, and welcome to Q1 FY '24 Post Results Earnings Conference Call of PNC Infratech hosted by IDBI Capital.This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.[Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Vishal Periwal from IDBI Capital. Thank you, and over to you, Mr. Periwal.
Yes. Thanks, Nirav. Good afternoon everyone. I welcome you all for the PNC Infratech Limited post result earnings call with the management. From the management team of PNC, we have with us, Yogesh Jain Ji, Managing Director; T.R. Rao Ji, Director, Infra; and D.K. Maheshwari Ji, Vice President, Finance.As usual, we'll have an opening remarks from the management and followed by the live Q&A session. Thank you, sir. Over to you.
Yes. Good afternoon, everyone. On behalf of PNC Infratech Limited, I extend a warm welcome to everyone for joining us today on this call. I have with me Mr. T.R. Rao, Director, Infra; Mr. D.K. Maheshwari, Vice President, Finance and Strategic Growth Advisors, our Investor Relations advisors.We have uploaded the financial results and the investor presentation on the stock exchange as well as company's website for our -- your difference. Initially, I would like to mention key update in the industry followed by key operational developments of the company and highlights of financial performance during quarter 1 of financial year '24, post which we will be happy to answer your questions.According to industry reports, road construction as well as projects awarding activity slowed down during quarter 1 of financial '24. As per industry reports during quarter 1 of financial year '24, a total of 611 kilometers new projects only awarded and total length about 2,250 kilometers road constructed. As per recent MoRTH announcement, road construction target for the year '23-'24 had been revised from 12,500 to 14,000 kilometers. Similarly, 12,000 kilometer target set for award of new projects during the year '23-'24. Considering the [ MVCS ] target set forth for financial year '24 and bidding process has still not picked up indeed. Pace of bidding and awarding activity with authorities are expected to be intensified during the second half of financial year '24.As part of National Highways Authority of India's monetization plan NHAI [indiscernible] under Toll-Operate-Transfer model for TOT 13 and 14 bundles for an aggregate length of 300 kilometers and operation period of 20 years each. NHAI is in the process of awarding project packages of 610 kilometers along Varanasi-Kolkata highway with an estimated project cost of INR 35,000 crores. After completion of this highway, the current travel time between Varanasi and Kolkata is expected to be reduced by 50%. I am pleased to share with you that our company secured 3 packages out of 14 packages of this highway floated so far by NHAI on [indiscernible].Transport ministry proposed to deploy advanced technology, global navigation satellite system or GNSS to completely do away with the various toll plazas. As GNS system will enable gateless plaza, vehicles will no longer have to halt at plazas. The technology consultant appointed by IHMCL for the mandate are already working on it.Now coming to updates on the company. Our company signed concession agreement for the 4 recently secured HAM highway projects secured in financial year '23, having an aggregate bid project cost of INR 4,083 crores. The [ above ] mandates includes Package 2, Package 3 and Package 6 of 6-lane greenfield Varanasi-Ranchi-Kolkata highway of NHAI and Package 3 of 4-lane highway from Singraur-Uphar to Baranpur-Kadipur-Ichauliof NH31 of [ MoRT ]. It is near to Prayagraj. Company's strong balance sheet, financial prudence, constant credit rating upgrades enable company to secure debt to competitive rates.Now moving on to the operational and financial performance of the company. The company is currently having 27 BOT toll, BOT annuity and HAM assets. Company's fund-based portfolio of 27 projects comprise 22 HAM project with an aggregate bid project cost of INR 28,673 crores. Out of 22 projects, company completed and achieved PCOD and COD for 7 projects, 11 projects are under construction and 4 projects are under development.With regard to equity investment, cumulative requirement for the 22 HAM projects are known to be around INR 2,900 crores. As of June '23, we have already infused INR 1,716 crores and the remaining equities to be infused over the course of next 2, 3 years. The internal accruals that would be generated over the next 2 to 3 years should be adequate to meet the above equity investment requirement.Now moving to our order book as of 30, June '23, our unexecuted order book stands at INR 14,900 crore, which does not include EPC value of about INR 4,000 crore of the 4 new HAM projects secured recently. Accordingly, unexecuted order book value would be about INR 19,000 crores. Out of the above, total unexecuted order book, highway and express contract contributes around 72% and water projects contribute around 28%.The company has achieved notable progress in rural drinking water projects under the Jal Jeevan Mission, JJM, during the past 2 quarter. Till 30 June, '23, the company has booked a total revenue of INR 1,454 crores under JJM. The revenue booked during the quarter ending 30 June, '23 in the water segment was INR 421 crores.Now I would present the result for the quarter ended June 30, '23. Before discussing financial performance, I would like to share that during quarter 1 of financial '23, the company received an early completion bonus of INR 37.02 crores, which was included in the revenue. We have not taken the above into the consideration mix financial performance of quarter 1 of financial year '23, objectively, comparably with first quarter of financial year '24.Revenue of first quarter of financial year '24 is INR 1,861 crores, which is higher by 8% as compared to INR 1,721 crores in first quarter of financial year '23. The EBITDA for the first quarter is INR 245 crores, which is higher by 11% as compared to INR 221 crores in quarter 1 financial year '23. The EBITDA margin for the first quarter of financial year '24 is 13.2%. The profit for the first quarter of financial year '24 is INR 157 crores as compared to INR 130 crores in the first quarter of financial year '23. A growth of 21% on year-to-year basis, the PAT margin for the first quarter of financial year '24 is 8.4%.Consol revenue of quarter 1 of financial year '24 is INR 2,092 crores as compared to INR 2,016 crores in quarter 1 financial year '23 with a growth of 4%. The consolidated EBITDA for the first quarter of financial year '24 is INR 436 crores. The EBITDA margin for quarter 1 of financial year '24 is 20.9%. The consol PAT for quarter 1 '24 is INR 181 crores. The PAT margin for the first quarter of financial year '24 is 8.6%.As on 30 June, '23, our net working cycle is 83 days as compared to 87 days as on 31 March, '23. Our net worth on standalone basis is INR 4,098 crores as on 30 June, '23, whereas total standalone debt is INR 489 crores.The total cash as bank balance as on 30 June, 2023 is INR 186 crores. We have a net debt of INR 303 crores. This translates to net debt to equity of 0.17x. On consol basis, our net worth is INR 4,476 crores, whereas total debt is INR 6,774 crores as on 30 June, '23. The total cash and bank balance include current investment is INR 943 crores. This translates to net debt to equity of 1.46x.With this, we now open the floor for question-answer.
[Operator Instructions] First question is from the line of Shravan Shah from Dolat Capital.
Sir, first is on the -- just going back to the guidance, what we have talked last time, 15% revenue growth, 13%, 13.5% EBITDA margin and order inflow INR 10,000 crores to INR 12,000 crores. So out of that, 30% from non-road. So all these numbers stand -- remain same or any change?
As regard our growth is around 10% to 15% which we have informed in the last quarter. And EBITDA margin will continue in the 13% to 13.5%. And the [ contract win ] in FY '24 is little around INR 10,000 crores.
Okay. And what about the [Technical Difficulty]?
Shravan, sorry, but your voice is breaking. Can you please come in a better reception area?
Is this fine now?
No, it's still breaking.
First thing, out of that, what are we looking at from non-road order inflows?
We still maintain around 20% to 30% from non-road sectors and around 70% to 80% from the roads and highways sector.
Okay. And sir, in terms of the monetization [Technical Difficulty].
Shravan, sorry to interrupt you, but your voice is breaking very badly. I will request to rejoin the queue again. Next question is from the line of Ashish from JM Financial.
Congrats on good performance. Sir, wanted to check on this non-highway, so what is it that we are looking for, which segments we'll look to get this maybe about INR 2,000 crores to INR 3,000 crores of inflows?
See, water will continue to be one of the sectors, which we are looking at. And also, we'll be looking at the projects like railways. As you know that we got one Orbit Rail project last year for INR [ 755 crores ] in Haryana. So similar kind of projects like rail, metro rail or whatever we see. So that is one area we are looking at. Apart from the water sector, which we are already working and other state governments also coming out with projects under JJM. So we are looking at those opportunities as a part of our non-road sector.
Okay. And sir, given that -- I mean, we were expecting a little front-ended ordering report in the early part of the year to come into the orders, but we are already in mid-August, and we're still to see anything concrete happen.
Ashish, sorry to interrupt you, but your voice is coming muffled. Can you please speak through the handset?
Yes, give me a second. Yes, is it better now?
Yes, it is better now.
Yes, sir. Okay. So sir, what I was asking is that, given that there has been a delay in the ordering this year as well, so is there any risk in terms of the target for the awards? Or you think this INR 10,000-odd crores can be still managed?
It can still be managed because the government has fixed a target of 12,000 kilometers of highways to be awarded during the financial year FY '24. Even though the awarding activity slowed down in Q1 and even till date it is still slowed down, so what we expect that this will pick up during the second half of the current financial year. So we are still hopeful of getting INR 10,000 crores of new projects during the current financial year.
Even we have already submitted 9 bids, that amounts around...
[ INR 11,000 ] crores of bids are under evaluation. We submitted for 4 HAM projects and 5 EPC projects, which are under evaluation. So as of now, we don't see any issue in the project development as well as the targets.
So second half will be better.
Right, sir. Sir, just the last thing. Some specific projects, if you can update in terms of status. One is the Haryana Orbital Rail. By when do we expect that project to commence? Are all the land and other ROW-related issues taken care? And secondly, what is the status for the JJM? We earlier were looking at something like INR 2,000-plus crores of revenue for FY '24. We seem to be on track, but just checking on that number again and also on the AP irrigation canal project.
First thing, Haryana Orbit Rail, we executed the contract agreement in the month of May, then we commenced the work there and work is going on. In the last week only we started to [Technical Difficulty] also. There is no issue with the land. So we feel that this project will be on track as per the time line set forth in the contract document. And the second thing, we are maintaining the same thing, INR 2,000 crore plus revenue under the Jal Jeevan Mission. So in the first quarter, we received INR 400 crores plus revenue. Maybe second quarter, there will be slight dip, given the intense monsoon and widespread monsoon swells. But we should be able to achieve INR 2,000 crores plus [Technical Difficulty]. Third, with respect to AP canal, as of now, as you know, that one would be able to do only 5 to 6 months work. Now water is being flown into the canal system. So almost [indiscernible] works. And this year, again, we'll commence the work during the next working season. And also, we are looking forward to have some payments because we have not received any payments so far from them.
Sir, any number you'd like to leave us, how much execution to expect in the AP irrigation project this financial year?
This financial year, we are expecting around INR 100 crores maximum.
Around INR 100 crores. Sir, this [Technical Difficulty] project becomes very, very long tenured, right? I mean it was a INR 1,000 crore project where...
[Technical Difficulty] end of the year till April 2024 because of the limited working season availability and also there is a -- we have already slowed down, and we've written a letter to them, saying that because paucity of funds and other things. So this project can take longer time.
Next question is from the line of Mohit Kumar from ICICI Securities.
Congratulations on a very, very good set of numbers. My first question is, sir, can you update us on the monetization, where we are right now? And are we confident that we will close this in next couple of quarters or by end of fiscal year '24?
Actually, earlier, we have informed in the last call, the company continue to give highest priority to the monetization of operational assets, therefore, unlock its equity and deleverage its balance sheet. In the first level, total 12 projects [ voted ] for monetization, including 11 HAM assets as 1 BOT toll asset, which would have a total debt over INR 6,900 crores and total equity of over INR 1,700 crores. Strategic advisor retained for running the project and interested buyers submitted their loan binding offer for the said assets.
Okay. Understood. So we expect this to be -- to be finalized in next couple of quarters. Is that a fair assessment?
Yes, yes, yes.
My second question is, sir, on the tender pipeline for NHAI. How is it looking like at this point of time? Do we see the number of more than INR 1 lakh crore?
See, NHAI already floated tenders now. Tenders are already floated, which is coming around to...
Sir, sorry to interrupt you. Yogesh sir, may I request you to come little closer towards the mic.
Yes. NHAI already floated RFP for over 68 projects that comprising EPC and HAM, that is costing around more than INR 65,000 crores for bidding. Bid due dates for the above projects are staggered up to 31, October '23.
Yes. And post that also, we have another 5 months, November, December and 3 months in the next calendar year. So that's another [indiscernible]. As you said, the pipeline would be around INR 1 lakh crore during the current financial year.
My last question is, how has the land acquisition progressed on the 4 projects -- 4 road projects, which we have won recently, especially the Varanasi-Ranchi highway?
See, in terms of Varanasi-Ranchi highway, NHAI already issued 3G, more than 70% 3G has been done. Now it is the 3H which has to happen, the deposited money [ in the ] designated accounts and only 3H has to happen. So they're taking up with their respective state governments to expedite the process of 3H so that the disbursements are distributed to the landowners and the land is taken into possession. So we hope that this should happen before the appointed date and the conditions, what is available to NHAI, including 5 months [Technical Difficulty].
So by end of Q3, we should be able to start the work. Is that a fair assessment?
Because we signed just now...
So it will take around 5 months time.
Yes, yes, 5 months. Maybe Q4, we'll be able to start the preliminary works.
Next question is from the line of Jiten Rushi from Axis Capital.
Sir, firstly, bookkeeping question. If you can give us the details of the outstanding order backlog for the projects, which I may ask. So sir, the outstanding order backlog for Lucknow Ring Road 1, Delhi-Vadodara Package 31 and 29?
Ring Road is complete -- already completed. And DV 29 is already completed and 31 balance amount is around INR 100 crores.
Okay. And then on the other HAM projects of Chakeri-Allahabad, then Challakere-Hariyur, Unnao-Lalganj, Jagdishpur, Aligarh-Kanpur [indiscernible] and Meerut-Nazibabad?
Chakeri-Allahabad is almost completed, it is only INR 34 crores remaining. Then Meerut-Nazibabad is INR 165 crores, Challakere, INR 227 crores and...
Challakere, you said INR 227 crores, right, sir?
Yes.
And Unnao-Lalganj?
Around INR 300 crores.
And Sir, this Jagdishpur? and Aligarh-Kanpur Package 5?
Aligarh-Kanpur Package 5, around INR 150 crores. Jagdishpur-Faizabad is around INR 90 crores.
And sir, this canal project, still the status quo is INR 979 crores, there's no change, right?
Well, we have executed this in this quarter, around INR 14 crores so the outstanding INR 964 crores.
And sir, the EPC value of this 4 HAM project, where we have signed the concession agreement should be almost like 85% of the BPC. That is a fair assumption?
85% to 90% I think.
No, no, 85% of the BPC, of course, but BPC doesn't include GST. Likewise, EPC also -- that also will not include GST.
Sir, can you give us the equity breakup because at the start of the call, you said balance equity requirement. Can you give us breakup for the next 2 years? How are we planning?
For 18 projects, we require INR 2,440 crores. And for remaining new project, INR 500 crores, total requirement around INR 2,900 crores, and we have already executed INR 1,716 crores till June '23. So we require only INR 1,228 crores in next 2, 3 years.
So can you break up, sir? 9 months, '25-'26?
FY '24, you can take around INR 80 crores, '25 will be around INR 450 crores, '26 will be around INR 350 crores and remaining on FY '27.
Okay, INR 80 crores will be 9 months. Got it. And sir, what is the toll collection at the operational assets, if you can highlight?
Yes. Toll collection MP highway it was INR 12.3 crores in first quarter. And Kanpur highway, around INR 26.5 crores. And Bareilly Almora, INR 16.2 crores.
And Narela?
Narela, It was INR 12.5 crores.
Rae Bareli is the annuity project. Right, sir.
That is INR 32 crores.
INR 32 crores, yes. And sir, on the other breakup, if you can give like CapEx incurred in Q1 and the targeted CapEx for full year and mobilization advance retention and built debtors, inventory and payables?
CapEx, we are expecting FY '24, around INR 100 crores to INR 120 crores. And out of that INR 13 crores, we have already taken in the first quarter and the retention as on 30 June is INR 120 crores and advances from clients is around INR 490 crores.
And unbilled, if any?
Unbilled amount in 30 June, around INR 53 crores.
And if you can share the debtors inventories and payables?
Debtors almost same in the month, it is 93 days, which we already uploaded in the presentation. And in case you want the breakup, EPC is around 43% and 56% HAM outstanding.
In value terms, if you can give, otherwise it's okay, I think inventory and payables, if possible.
We will share.
Next follow-up question is from the line of Shravan Shah from Dolat Capital.
Yes. Sir, [Technical Difficulty] Unnao-Lalganj order book and Meerut-Nazibabad order book is how much?
Unnao-Lalganj is around INR 300 crores, unexecuted. And Meerut-Nazibabad is INR 165 crores.
INR 165 crores. And Gaju Village-Devinagar bypass, that is the package 1C?
1C is INR 480 crores.
And Haryana Rail, the value will be the same, INR 772 crores?
Yes. Right, right.
Okay. And water debtor sales, how much, sir, out of -- EPC [Technical Difficulty], but how much is JJM debtors?
As on 30 June, it was around INR 400 crores, but mostly, we have recovered during this July and August. Presently it will be around INR 250 crores.
Okay. And inventory and trade payables would be how much? So last March, it was -- inventory was INR 764 crores. So what would be the broader number as on June?
Inventory, as on 30 June, around INR 880 crores.
And trade payable would be?
Around INR 600 crores, sir.
INR 600 crores. Okay. And sir, when we say that in terms of the HAM monetization, so we'll -- so just to clarify 2 things. One, we'll definitely -- we are saying it will be done in [Technical Difficulty]. But in terms of the cash payment or cash received from the buyer, when are we going to get the money from them?
We are expecting in this financial year.
Okay. Okay. The entire money we are expecting to get in this FY '24 only?
Yes, yes, yes.
Okay. sir, any water projects -- you said that we are looking at, so is it anything left in UP or the MP1 we are now going to bid for?
One project is left in UP under Phase 4, around INR 950 crores. Apart from -- the projects that are coming up in the States of MP, Rajasthan and also other states.
Okay. Okay. And in terms of the bonus, sir, still that Aligarh-Kanpur Package 5 and INR 15 crores of Aligarh-Moradabad that we have already received -- INR 15 crores we have received and this Aligarh-Kanpur is pending?
No, no. In case of Aligarh-Moradabad, we're yet to receive the bonus because the final bill and other things to be settled. So we are talking to them. In case of Aligarh-Kanpur Package 5, so once COD is declared, then we'll exactly know what will be the early completion bonus for the particular HAM project.
Apart from any other bonus that, this year, we can expect?
See the details -- the HAM projects -- but this financial year, as of now, we are not expecting any bonus. If you -- going forward, if you complete any new ongoing HAM projects ahead of schedule, then we'll be able to get the bonus.
Shravan, sorry to interrupt you. I'll request you to join the queue again for a follow-up question. Next question is from the line of Ankit from JHP Securities.
Am I audible?
Yes.
I just want to confirm one thing. So in last quarter, you had given a guidance of 10% to 15% in terms of revenue and EBITDA margin around 13% to 13.5%. So in current quarter, you are already making EBITDA margin of around 21%. So why the guidance is such that? So it is on the consolidated or it is on standalone basis? The guidance?
It is standalone basis.
Okay. It's on standalone basis?
The guidance what we had given last year is on standalone basis only, 13% to 13.5%. Last quarter, Q1 also, it is around that only.
Next question is from the line of Prem Khurana from Anand Rathi.
Sir, my question was with respect to the JJM opportunity in Uttar Pradesh, Phase 4. I think last time, the figure that you gave us, it was supposed to be almost a INR 15,000-odd crores sort of opportunity. And I think earlier in your comments, you said or mentioned around INR 950 crores, which is pending. So does it mean that the balance is already awarded? And I mean, if it is awarded, does it mean we couldn't get any orders? So would that mean the competition has gone up? Or how should we kind of consider this that we couldn't secure any order from almost INR 14,000-odd crores of number that was bid in the recent past?
That is correct. The balance projects have been awarded. See, the projects -- majority of the projects comprising the distribution network, which we have not focused in the past, because already we are doing distribution networks for [ 2,880 ] gram panchayats. So we focused upon the certain quarter and including the cross country pipeline and [indiscernible] and all. There is a limited number of projects, but we couldn't get the -- any of these projects because of the steep competition. So one project is there, so we'll be trying for that.
Okay. And so from our existing bids how many [ BPRs ] would have been approved by now and the work has started? So how many more are yet to be approved from the existing...
Out of 2,880, almost 2,750 BPRs have been approved and seen. So as of now, we have a total workable projects of INR 6,500 crores. If you take out INR 1,500 crores nearly, as on date, we have completed more than that. So around INR 5,000 crores less. So here, we are expecting INR 2,000-plus crores and remaining what we would be able to execute in FY '25.
Sure. And just one last question from my side. So sir, when I look at our segment performance, right, and thank you for giving us a break-up between road, EPC and water. So what I realize is and what is evident from the numbers is essentially, the road seem to be kind of declining. So in this quarter when I compare it on a Y-o-Y basis, we seem to be down almost around 12%. And when I look at the last year number as well, the growth that we delivered was because of water and road was largely flat. When do you see the situation to change wherein the roads again would become a larger share? I mean, it still is a larger share, but then it doesn't appear that the growth driver for the time being and growth seems to be the -- water seems to be the only growth driver. So where -- I mean do you see this situation will change wherein road again will start growing and we would also get to that support from water, which is when both the segments would drive growth rather than 1 of 2 segments driving growth?
See, the growth will be on a balance and kind of [Technical Difficulty] only. See, what has happened in the road sector, some of the projects we were on the [indiscernible], like what our MD mentioned, DAV 29, LRR, AKP5 and also we completed Bihar and all. So again, what has happened now the 7 HAM projects, now they are picking up. So we started the last quarter and now there is a picking up and they'll have a peak during the next quarter and coming quarters, 2 quarters. So road continue to be our flag bearer, road will continue to be the focus area. So definitely, the margin -- the revenue as well as the EBITDA margin will improve. Maybe there's going to be some temporary kind of aberration during this particular quarter. But otherwise, road will remain to be our main focus area and also revenue contributor.
And one just lastly, with your permission, please, I mean this is more sort of bookkeeping kind of question. So when I look at our depreciation number, possible for you, and I mean I'm not sure if you have that number readily available with you or not, possible for you to break it down between how much of this is because of the road and how much is attributable to the water segment? So the idea was to try and understand the water margin a little better because when I look at the segment margin, water is doing around 15-odd and I'm assuming these are EBIT margins, so wherein we would have adjusted depreciation. So would that...
Water, we don't have any major machinery deployed. Certainly, the depreciation in the water sector is very insignificant when compared to where we deploy heavy machinery. So practically, water, we have not deployed any plant and machinery except kind of [indiscernible] and other things. Even the dredging of boats and all done by expert agencies using their own boats and their own rigs and they do it. So it is not on the company books.
And then how should I look at margins? Because, I mean, in roads, we tend to take that equity infusion requirement as well and despite that, the margin -- segment margin are lower and with water, which is pure play, at least you are able to get access to mobilization advances as well as hardly any CapEx, but it seem to be generating much better margins. So how should I reconcile whether there's -- wherein -- I mean there's water which is generating more with lower capital intensity and then road is generating less?
No, no, once these new projects, new road products are picked up, see, the cost of thing now -- marginal cost would be less when we have a higher revenue from the road sector. And even despite of the depreciation and other things, road will continue to a 13% to 13.5%. EBITDA will sustain in the road sector alone. So this is a -- now -- as of now, as I said, that depreciation is almost nil in the case of water, it is showing optically. But going forward, there should not be any issue in the road sector also. So that also on a standalone basis, still will have a 13% to 13.5% once these new projects and the ongoing completing projects also would be adding some amount and all several projects are in full sail, which we started sometime in the beginning of this year.
Prem, sorry to interrupt you. I'll request you to join the queue again for a follow-up question. [Operator Instructions] Next question is from the line of Nikhil from HDFC.
Sir, I had a question. Last quarter, you said that you have identified around 11 HAM and 1 EPC for monetization. So where are we -- like what's the position as on date on the monetization front?
Yes, that is as my colleague mentioned, the same thing, 11 HAM assets, and 1 BOT toll asset. Out of 12 assets, already we have a completion for 6 assets, one more asset also in COD and this same portfolio will continue.
So you're expecting monetization of the plants and all those things by the year-end, right?
Yes, yes, yes.
Okay. And sir, on the JJM revenue for the full year, you mentioned INR 2,400 crores or INR 2,000 crores?
That is above INR 2,000 crores.
Okay. And sir, the 4 new HAM assets that you had won in the last year, so what is the expected appointed date for them?
We are expecting appointed date for these projects during the fourth quarter of this current financial year.
Okay, sir, understood. And sir, what will be the current [ rate ] pipeline?
There are so many -- NHAI floated already over 68 projects that includes EPC and HAM, both, that around -- that is costing around INR 65,000 crores.
Next question is from the line of Mohit Kumar from ICICI Securities.
My question is, are you looking to refinance the existing debt of the completed road project? And what are the opportunities which are available?
We are already working on monetization. So we are not thinking that.
Debt is in a sustainable level only. As we mentioned, during the course of our speech, that it is 1.41, which is a sustainable kind of a thing. Post monetization, this will further get reduced, we are expecting it will be below 1% -- below 1.
Understood, sir. My second question is, sir, what are the kind of tie-ups, the debt tie-ups that you're looking for the new projects? And what kind of money is available and at what rate and reset?
We have already tied up with the bank. We have -- in principle, we have already received the sanction of all the 4 projects and the final sanction is under process.
It will be there separately.
Is there any possibility to raise bonds, sir?
Pardon?
Is there a possibility to raise -- to tie up the debt in the bond market?
No, we are taking the long-term debt from the banks.
Understood. What are the reset debt, sir? One year or it's more than 1 year?
One year.
Next follow-up question is from the line of Jiten Rushi from Axis Capital.
Sir, on the bid pipeline, you highlighted that you have bid for INR 11,400 crores which can open for the next couple of months. But sir, anything which you can highlight on the non-road segment as we are also targeting INR 2,000 crores to INR 3,000 crores of inflows from metros, rail and water supply? So what are the particular bids which are outstanding as of now? And any upcoming bids which you can give in terms of value from various states, if possible?
See, what we had already submitted 11 bids, 5 HAM and 6 EPC, most of them are highway sector only, and except, there is one major bridge is there -- elevated structure is there, over INR 3,000 crores, others are from the highway sector only.
Okay. So 11 bids plus 1, 12 bids, that is what you are trying to see, right?
11 bids, that includes the elevated corridor of INR 3,000 crores.
And these are all NHAI?
NHAI, MoRTH, both are there.
Sir, interestingly, sir, this time, MoRTH, we have started participating in -- competitor or participating in the MoRTH projects. So what kind of pipeline do we see? Because we have already got 1 project and -- so what kind of view you can give towards the MoRTH pipeline? Because NHAI is always big pipeline -- large pipeline. But on the MoRTH, what kind of pipeline you see other than NHAI where we can participate?
See, I'll tell you. If you look at 12,000 kilometers roads to be awarded during the FY '24, that is what target set by the ministry, 50% by NHAI, 6,000 kilometers, and the remaining 50% by MoRTH and NHIDCL, infrastructure development corporation, to do this Bharatmala and other things in the border roads. So this time, MoRTH is also coming out with bids on their own. And we see some kind of a substantial amount of pipeline from MoRTH also.
So basically, we can see around INR 30,000 crores, INR 40,000 crores from MoRTH also other than INR 65,000 crores of NHAI?
We've not really assessed to what would be the value in terms of estimated costs, but we should be around that only.
So that is again a big positive for us in terms of inflows.
Yes, yes, yes. Because earlier also, we executed successfully 2 MoRTH projects, executed through state departments...
And sir, anything on railways or metros and state highways this year which you can throw some light on?
We are expecting some bids from the Maharashtra government also, from MSRTC, that is costing around INR 30,000 crores.
So when you have to submit this bid, sir?
Prequalification document is already submitted. And we're expecting...
RFPs -- maybe next couple of months, RFP should be there. Bids floated by MSRTC in the state of Maharashtra.
Likely awarding would be November, December, probably.
Yes, yes.
We'll participate in all the projects? We are qualified to participate in all the projects?
Yes. Majority of them [Technical Difficulty] are few, and we are qualified.
Next question is from line of Ash Shah from Elara Capital.
Sir, you mentioned about the Jal Jeevan Mission bid. So can you just give some value on that? So you said, apart from Uttar Pradesh, you are participating in MP and Rajasthan. So if you could provide some color on what is the total value size of those projects that you're looking to bid or something like that?
See, some of the bids are there already floated, and some of the bids yet to float because, again, under JJM. So exactly value growth how can we have, but we'll share with you separately.
Next question is from the line of Uttam Kumar Srimal from Axis Securities.
Sir, my questions pertains to competitive intensity, both in HAM as well as the EPC projects because one of your competitor, [indiscernible] said that they are basically bidding for higher EPC project over INR 1,000 crores. So how do you see the competitive intensity currently, both in EPC as well as in HAM?
And on a relative terms, definitely, competition in EPC is more than HAM because HAM requires a 60% investment by the concessioner. So certainly, competition in the EPC is more. And similarly, competition in the lesser value of the work is more when compared to competition with the higher value of works, because even EPC also, if you have a larger works of INR 3,000 crores to INR 4,000 crores, it would require some kind of working capital. Similarly, in case of larger HAM projects, 60% of the debt and equity has to be infused by the concessioner. So that also require credibility with the banks and vendors. So this, as simple as that, more -- size is more, less is the competition and the investment is more, less is the competition.
So you are also looking to bid for higher EPC projects, more than INR 1,000 crores, something like that?
See, if -- our preference would be that. In case, given the basket of projects, our focus would be on higher value, both in terms of HAM as well as EPC.
Okay. And sir, are you also looking to bid for rail station redevelopment projects because government has just come with INR 24,000 crores of projects for rail station redevelopment? So what's your take on that?
We are evaluating the opportunity. So we have not taken any call on that. So we'll share with you once we have some kind of findings of our internal evaluation
[Operator Instructions] Next question is from the line of Vishal Periwal from IDBI Capital.
Sir, on the margin front, I think if we look at on 15% growth rate and plus we are targeting better revenues from JJM projects, which is a higher margin. Now -- but our guidance on the margin is still the same. So I mean, just trying to understand like are we conservative enough on the guidance front or probably it can surprise on upside, the 13.5% that you guided?
If you see the JJM total portfolio of JJM is around INR 7,000 crores, what we achieved around INR 1,400-plus crores, which is just 20%. Now it will be premature to say that JJM will have a higher margin and all because the items are there, we are executing. The situation will crystallize only once we reach more than 50% of the JJM whether JJM projects are giving higher margin and all. But overall margins, still we are maintaining at 13% to 13.5%. That includes both JJM as well as road sector. So it would be too premature to say that JJM should be giving higher margin until and unless we attribute at least more than 50% of the order book available under the JJM.
Okay. Sure, sir. And second question is on, I mean, like the road sector opportunity. I mean the opportunity remain, but within that, on a quarterly basis, we are seeing not much of big pipeline or probably like the bids are not coming. So at a sector level, can you share like, it is more to do with like NHAI or probably anything that you can highlight? That'll be helpful.
Actually, pipeline is there. Even pipeline was there even in the last financial year also, because the NHAI wants to ensure that land is in place before award of the projects and other internal issues and all. See, these bid due dates are continuously getting postponed. See, whatever bids they plan to bid before the 31 March, '23, they postponed to first quarter, and now first quarter again, further they postponed to second quarter. So pipeline is there, both with NHAI and MoRTH. Because of their some internal shoes, and they also want to have a land in place. So the bid dates are getting shifted from time to time. Otherwise, there is enough pipeline. Because see, once they set a target of 12,000 kilometers of road, so then they have to do, it comes to around INR 2 lakh crores kind of a thing. So they have to award. That's why, as our MD said during his speech, the intensity of award would be much higher during the second half of the current financial year. Because until and unless they don't bid, they don't bid out an award. So they would not be in a position to achieve the target of INR 12,000 crores before the end of current financial year.
Okay. Okay. Sure, sir. And in terms of -- just on the first question, which I just asked on the margin and coming on the revenue contribution, so irrigation, as a sector or probably like other than roads, so in FY '24 itself, it will contribute more than 30%, and that will be continuing even in the next year?
See, as you said, INR 2,000-plus crores, and last year, we had around -- 15%, our revenue guidance comes to around INR 8,000 crores. So INR 2,000 crores plus would be, I'd say, around roughly around 25% to 30% from the non-road sector and 70% to [Technical Difficulty] are road sector for the current financial year.
Next question is from the line of Nikhil from ICICI Securities.
Just a couple of questions, sir. Sir, our water margins have dipped Q-o-Q. I know -- I understand Q4 is always a better quarter for execution. But should we expect our margins to become, again, go back to 17%, 18% levels for water by Q4? EBIT margins, I'm saying.
Yes, in the second quarter, since because, as I mentioned, the monsoon is very intense and also very active, because -- our fixed costs will remain same, whereas revenue would be lesser than what we have achieved in the Q4 and Q1. So we need to see how this -- whether this 16%, 17% to be able to sustain or not, because of the low volume of -- low revenues in the Q2, because of the monsoon.
Okay. And sir, just one more question. We will receive somewhere around INR 2,500 crores of cash, and we have an equity investment requirement of around INR 1,100 crores. So will the excess go entirely to reduce the debt?
Let us see. Actually, we have INR 1,200 crore equity requirement of the existing project. As MD sir had told, we are also going to bid and we are expecting around INR 10,000 crores in this year. So we require the equity to be infused in those projects.
[Technical Difficulty] CapEx will be there.
As there are no further questions, I will now hand the conference over to the management for closing comments.
Thank you, everyone, for your participation in our earnings call. We have uploaded the presentation on our company website as well as on our exchanges. In case of further queries, you may get in touch with the Strategic Growth Advisors, our investor relations advisors. So feel free to get in touch with us. Thank you very much.
Thank you very much. On behalf of IDBI Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.