PNC Infratech Ltd
NSE:PNCINFRA
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Ladies and gentlemen, good day and welcome to the PNC Infratech Limited Fourth Quarter FY '23 Earnings Conference Call hosted by Equirus Securities.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. Jainam Shah from Equirus Securities. Thank you, and over to you, sir.
Good evening, ladies and gentlemen. On behalf of Equirus Securities, I'm pleased to welcome you all on the PNC Infratech Limited 4Q FY '23 Earnings Conference Call. We have with us the management team of the PNC Infratech, represented by Mr. Yogesh Kumar Jain, Managing Director and Senior team members. We also have with us, Investor Relations team of Strategic Growth Advisors.We will begin with opening remarks from the management followed by interactive Q&A session. Thank you, and over to you, sir.
Good afternoon, everyone. On behalf of PNC Infratech Limited, I extend a very warm welcome to everyone for joining us today on this call. I have with me: Mr. T.R. Rao, Director, Infra; and Mr. D.K. Maheshwari, Vice President, Finance; and Strategic Growth Advisors, our Investor Relations Advisors. We have uploaded the financial results and investor presentation on the stock exchanges as well as company's website for your reference. Initially, I would like to mention key updates of the industry, followed by key operational development of the company and highlights of financial performance during quarter 4. And financial year '23, post which we will answer your questions.Highway construction activities were impacted in financial year '23 on account of prolonged monsoon and other factors beyond control of contractors and concessionaires. Till February '23, on the 8,064 kilometers of National Highways constructed in the country as against the set target of 12,000 kilometer of [ to abort ]. However, highway construction activities have stopped since January '23, and [ came around ] to remain at elevated levels till January '23. [ At the ] airport, we missed the awarding target of 6,500 meters in financial year '23 by over 1,000 meters as several projects with due date scheduled effect [ March '23 ], the effort may take 2, 3 months.
Sorry to interrupt you, sir. There is disturbance on the management line. Let me just quickly check on that. Thank you, sir.Yes, sir please go ahead.
Yes, please.
Yes. Now, Ministry of Road Transport and Highways as we said they announced its plan to abort 12,000 kilometers of highway and construct around 12,500 kilometer [Technical Difficulty]Hello?
Sir, please go ahead. Go ahead, sir.
Yes, yes. The average daily toll collection through fast tag in December '22 reaches INR134.4 crores with single day highest collection of INR144.2 crores on 24 December '22. The growth in traffic revenue mainly due to increase in economic activities during the second half of financial year '23 and hike in usual periods.Now coming to updates on the company. During the fourth quarter of financial year '23, the company achieved financial closure for 1 pending HAM project, 4-laning of Sonauli-Gorakhpur by its due date. If they have a closure -- financial closures for all these 7 HAM projects awarded to the company during financial year '22 have been achieved. We are happy to share with you that NHAI [ Delhi ] has appointed for all above 7 HAM projects and accordingly construction activities got underway at all these project. 7 HAM projects would contribute substantial EPC revenue to the company in financial year '24 and '25. The company received provisional completion certificate for Koilwar To Bhojpur as well as Bhojpur to Buxar EPC project from NHAI.The company also received provisional completion certificate for Chakeri-Allahabad HAM project in financial year '23. The company's robust balance sheet driven by prudent financial acumen has led to continuous upgrade in the credit ratings, which have helped the company to raise the debt capital at competitive rates. The company has divested its entire stake of 51% in its one of the subsidiary company, namely Ferrovia Transrail Solutions Private Limited to BF Infrastructure Limited, which was formed for construction of 66 long track and track-related works of dedicated Easter Freight Corridor project for value of INR132 crores. This [ had ] project completed in all the aspects in JV with BF infrastructure.On business development front, the company has been [indiscernible] and received letters of acceptance from NHAI for construction of 6-lane Greenfield Varanasi-Ranchi-Kolkata Highway and project package #2, 3 and 6. For bid project cost of INR891 crores, INR1,113 crores, and INR1,250 crores respectively. The company also received letter of acceptance for construction of 4-laning of Allahabad for some distance of NH-731a for EBIT project cost of INR819 crores from MoRTH. Aggregate bid project cost of 4 HAM project secured in financial '23 comes to INR4,083 crores.All the above 4 HAM projects are to be constructed in 24 months and operated for 15 years post-construction. Apart from 4 HAM projects, the company also became lowest bidder and received letter of acceptance of design and construction of civil works for 25.9 kilometer long new Broadgate double railway line. It's connectivity to Indian Railway network as part of Haryana Orbital Rail project for contract price of INR771.5 crores, from Haryana Rail Infrastructure Development Corporation in financial year '23. Total value of new business secured by the company in financial year '23 is INR4,855 crores.Moving on to operational and financial performance of the company. At present, the company had a total 23 ongoing mandates in various [ company ] formats, including BOT (TOLL), BOT (Annuity), HAM. Out of these 23 projects, we have 18 HAM projects with an aggregate bid budget cost of INR24,590 crores. Out of 18 HAM projects, we achieved CoD and PCoD for 6 projects and remaining 12 projects are under construction. In terms of equity investment, the total requirement for all [ BOT and HAM ] project is approximately INR2,440 crores, out of which we have already included INR1,253 crores till March '23. And the dividends will be infused over next 2 years. The internal accruals that would be generated over the next 2, 3 years should be sufficient to fund the equity investment. If recently secured 4 new HAM projects are also taken into consideration, total HAM portfolio could be of 22 projects with an aggregate bid project cost of INR28,673 crores.Our attributed order book on 31st March '23 is over INR15,600 crores, which does not include value of 4 new HAM projects and 1 EPC product secured recently. Out of the total order book, over INR15,600 crores, the Highway and Expressway on that contributed around 67% in water projects contribute around 33%. In rural drinking water under JJM, the company has booked a revenue of INR1,033 crores till 31st March '23, which include INR108 crore revenue book during the previous financial year. During the financial year '23 total INR925 crores revenue has been booked from drinking water supply projects. As the government signs cover agreement of approved scheme progressively for execution during the financial year '23, the business executive will work as on 1st April '23 is around INR4,500 crores and cover agreement for all the remaining scheme are expected to be signed during the current financial year.Now I would present the standalone and consol results for the quarter and financial year ended March 31. Revenue for fourth quarter of financial year '23 is INR2,115 crores, which is higher by 10%. EBITDA for fourth quarter is INR281 crores, which is higher by 25%. EBITDA margin for fourth quarter of financial year '23 is 13.3%. Profit for the fourth quarter of financial year '23 is INR184 crores, which is higher by 33% on year-to-year basis. Profit margin for the fourth quarter is 8.7%. Revenue for financial year -- stand-alone revenue for financial year '23 is INR1,061 crores, which is higher by 12%. EBITDA for financial year '23 is INR954 crore, which is higher by 21%. EBITDA margin for financial year '23 is 13.5%. Profit for financial year '23 is INR611 crores, which is higher by 37%. Profit margin for financial year '23 is 8.7%.
Sorry to interrupt, sir.
Yes.
Please hold the line.Yes, sir, go ahead.
We can start?
Yes, sir.
Consol revenue for quarter 4 of financial year '23 is INR2,305 crore, which is higher by 4%. Consol EBITDA for fourth quarter of financial year '23 is INR411 crores. EBITDA margin for quarter 4 is 17.8%. Consol PAT for quarter 4 of financial year '23 is INR146 crores. PAT margin for quarter 4 is 6.3%. Consolidated revenue for financial year '23 is INR7,956 crores, which is higher by 10%. Consolidated EBITDA for financial year '23 is INR1,600 crores, which is higher by 4%. EBITDA margin for financial year '23 is 20.1%. Consol PAT financial year '23 is INR658 crores, which is higher by 13%. PAT margin for financial year '23 is 8.3%.On the stand-alone balance sheet side, as on 31st March 23, our net working cycle is 87 days. Our net worth on a stand-alone basis is INR3,942 crores as on 31st March '23, whereas total stand-alone debt is INR337 crores, including INR137 crores for equipment funding [ debt ]. The total cash and bank balance as on 31st March '23 in INR293 crores. We have a net debt of INR44 crores. Our net debt to equity is 0.11x. On consol side, our net worth is INR4,285 crores, whereas total debt is INR6,282 crores as on 31st March '23. The total cash and bank balance, including current investment is INR1,017 crores net debt to equity of 1.4x.With this, we now open the floor for question and answer.
Thank you very much. [Operator Instructions]. Our first question is from the line of Shravan Shah from Dolat Capital.
Sir, before asking any questions, I need a couple of data points, and then I will ask the questions. So first off, [ we have ] mobilization advance, retention money, HAM debtors, Water debtors?
The retention money in March '23 is INR131 crores, and mobilization advance is INR329 crores.
Okay. HAM debtor or Water debtor.
And SPV debtors is INR1,079 crores.
INR1,079 crore. Okay. That's why the debtor has increased Okay. [Technical Difficulty] JJM debtors?
EPG debtor INR826 crores.
Mr. Shah, may we request you to use the handset while asking questions.
Actually, I'm using it. [Technical Difficulty]. Sir, Water debtor how much did you say? JJM debtors?
JJM was INR375 crores.
INR375 crores. Okay. And unbilled revenue is how much, sir?
Shravanji most of the debtors, whether this Water or SPV, we have realized in the month of April and mid of May. Major part of this outstanding of debtors.
Okay. So the data as on April or as on now [Technical Difficulty] stand-alone has reduced to how much, sir?
Since on 31st March, the debtor [ dealer ] 99 days, and [ get we feel ] as on date it will be around 78 to 77 days.
Okay. Sir, unbilled revenue is how much?
That is INR52 crores, sir.
INR52 crores. Okay. And now I need the project-wise order book breakup. So first is Chakeri-Allahabad. So, as of March, I need the order book. Hello? Sorry, Chakeri-Allahabad INR72 crores?
INR70 crores, yes. INR70 crores.
70, okay. Then Challakere-Hariyur?
Challakere-Hariyur INR293 crores.
INR93 crores. Lucknow Ring Road Package 1?
Lucknow Ring Road, INR110 crores. INR110 crores.
INR110 crores. Jagdishpur-Faizabad?
INR154 crores.
INR154 crores. Aligarh-Kanpur Package 5?
INR256 crores.
INR256 crores. Unnao-Lalganj?
INR464 crores.
INR464 crores. Meerut-Nazibabad?
INR238 crores.
INR238 crores. Delhi-Vadodara Package 29 and 31.
It is 29 negligible INR33 crores, and 31 is INR160 crores.
So has it increased the scope because last time we said INR22 crores, so now we are saying INR160 crores? 31, Package 31.
Delhi-Vadodara?
Delhi-Vadodara in December -- package 31, you said INR160 crores. In December, it was INR22 crores.
29 was INR22 crores.
Sorry, sir?
29 [Foreign Language].
[Foreign Language] March, INR160 crores?
Yes, yes.
So that is an increase in scope?
Yes, there's some [ consignment ], slightly increased [Foreign Language]
Okay. And sir, [Foreign Language] irrigation project, how much is the value?
INR979 crores, outstanding.
INR979 crores. Okay. And so, so the -- all the 4 water projects put together is INR5,700 crores. And the last one is -- yes, go ahead.
Hello?
Yes. Sir, you were saying something. I said that all 4 water projects is put together is INR5,767-odd crores.
Right, right.
And Gaju Village-Devinagar bypass package 1C is how much order book?
INR597 crores.
INR597 crores. Okay. Now coming to the question part. So first in terms of the broader guidance, [ if you go ] for the FY '23 was lower than what we were looking at INR8,000 crores, INR10,000-odd crores. So INR4,855 crores. I hope, this is the EPC value that we said in the opening remarks. So now for FY '23 in terms of revenue, margin, order inflow, what's the guidance?
In FY '24, as of revenue, we are expecting around 15% growth. And in case of order book, we took around INR10,000 crores.
Maybe between INR10,000 crores to...
INR10,000 crores to INR12,000 crores.
INR12,000 crores, new order book.
Okay. And margin will be the same 13.5% that we guided?
Should be 13% to 13.5%.
Okay, 13% to 13.5%. Okay, got it. And in terms of the -- including the 4 new -- so the 4 new HAM, first of all, when are we likely to get the appointed bid? And for guiding this 15%, how much -- roughly we are taking the revenue from these 4 new HAM projects? And what's the equity value equity to be invested in these 4 new HAM?
The equity, [ and EPC ] requirement around INR500 crores is a new 4 HAM projects, and as usual part can discuss in the fourth quarter of FY '24, we can reduce some [ points ]. It will take around 6 months to start the work.
We need to execute the condition agreements, expect execution of consignment in the month of June, then we'll have 5 months for the financial projects. Post that [indiscernible] and all, so in the fourth quarter of FY '24, we expect some area marginal 4 HAM projects.
Sorry to interrupt. Thank you for the answer, sir. Mr. Shravan Shah, may we request that you return to the question queue for follow-up questions, as there are several participants waiting for their turn. Thank you.Our next question is from the line of Mohit Kumar from ICICI Securities.
Congratulations on a good set of numbers. My first question is, sir, how do you see the tender pipeline at this point of time? And are you confident that the tender opportunity from NHAI will pick up for the rest of the year? And the related question is, do you think that we need to build and scale up other EPC segment because our road -- our dependence on road is too high, and that is limiting our opportunity size?
If you see, during the FY '23, NHAI planed to award more number of projects. Many projects were supposed to give the bids before 31st March, but quite a few projects did defer, so nearly 40 to 45 projects [ first pick-up is ] 31st March, now they are now scheduled to be received between June-July. This is one of the regions, what our sources being targeted in to FY '23, now we could not [Technical Difficulty] much. So there is a robust pipeline is available, NHAI. In NHAI now more than 100 projects are there, both on EPC and HAM. HAM is the media team, 75% HAM based projects and 23% EPC-based projects nearly INR1 lakh crore worth of projects are there. [Technical Difficulty] taking these project some [Technical Difficulty] INR10,000 crores to INR12,000 crores.Apart from this, we are also targeting some projects, they surface, but that's in U.P. under Phase 4. So U.P. government SWSM [ demoed ] a bidding up for 14 projects and a bid value of around INR15,000 crores, we are evaluating those bids. That is another area apart from 4 we are pursuing to secure. And we are hopeful that we should be able to secure around 10 projects in FY 24.
My second question is that large part of our orders came from Uttar Pradesh. I think, it's around 90%. Do we think -- do you think we need to rethink our portfolio and diversify to other states? Because dependence on one state is just too high.
Yes, you see in the last year we secured 5 projects, out of 5 projects 3 projects are in Bihar, Varanasi, Kolkata, all 3 packages falling in Bihar. And one package we got from Haryana Orbital, as a part of Haryana Orbital Rail Corporation, it is located in Haryana. So only one project that is Prayagraj Kaushambi is there in U.P. HAM projects. So we are also looking now the new opportunities spread across the country. We are looking at other states other than U.P. also with a real focus. So we -- all this endeavor to deconcentrate our risk to be in U.P., so that will be there. We are hopeful of some projects outside U.P. also during the FY '24.
Our next question is from the line of Noel Vaz from Union Asset Management. [Operator Instructions].
Yes. Actually, I just have one question. So now that we have kind of our mix in the order book for road projects is likely to move slightly lower going forward, if they are in for diversification of the order book, then what kind of all institution rates should we see for FY '24 or even say in '25 onwards?
Come again?
We are expecting around 15% growth in this financial year.
Okay. But the execution time lines for the non-road projects are similar to road projects?
Yes, yes.
Yes, yes.
We are targeting revenue for financial year '24 is around INR2,500 crores from Water Supply sector.
Remaining.
Okay. That includes remaining from roads.
Okay. Yes, understood. So water supply, this is same as irrigation or this is more of urban infrastructure?
This is drinking...
Rural drinking water supply.
Drinking water supply. Okay, fine. I just wanted to confirm
Thank you. Our next question is from the line of Nikhil Kanodia from HDFC Securities Limited.
Am I audible?
Yes, yes.
Yes. Sir, the thing that during the previous -- some of the previous questions, your voice is not -- was not audible. So pardon me, if I am repeating these questions. So my first questions -- a set of questions is on the guidance front. So what will the guidance from revenue from the Water segment for the year?
Your question. Can you repeat, please?
Mr. Kanodia, may we request you to use the handset, as the answer as the audio quality is not very clear, while asking the question.
Is it any better now?
Yes.
Yes, sir. Please go ahead.
What is the revenue guidance from Water segment for FY '24?
INR2,500 crores is the revenue segment from FY '24.
Okay. And sir, you have guided for 15% revenue growth for FY '24 with EBITDA margins in the range of 13% to 13.5%, right?
Right. Yes.
Sir, what would be the order inflow guidance for the year?
It is around INR10,000 crores to INR12,000 crores.
Okay. And sir, what would be the equity infusion? Like you mentioned there is some equity requirement for the 7 as well as the new 4 HAM assets, so FY 2025, what would we be the infusion?
Around INR540 crores, sir.
INR540 crores is for FY '24, right? Hello?
Yes, yes.
Yes, sir. So if you can give the entire equity infusion like within what time it would be done, like FY '24, INR540 crores, then FY '25?
INR450 crores. INR450 crores, sir.
Okay. And the balance would be in FY '26?
Yes.
Okay. And sir, what is the CapEx guidance that you are giving for FY '24?
FY '24, we are expecting a INR100 crores to INR120 crores, sir.
And you'll be maintaining your NWC days there?
It should reduce as compared to 31st March.
Okay. And sir, what would be your debt levels?
Presently it is 99 days, we are expecting about 75 to 80 days.
May we request you to rejoin the question queue for follow-up questions as there are several participants waiting their turn. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to 1 or 2 per participant. Should you have a follow-up question, we would request you to rejoin with queue.Our next question is from the line of Parikshit Kandpal from HDFC Securities.
Congratulations on a good quarter, sir. My question is on OpEx monetization. So we have INR2,400 crores of equity requirement now, INR1,200 crores we have invested and another INR500 crores we have to invest in new assets. But nothing is coming up, nothing is happening on the monetization front. Some of our peers have already monetized assets, and we have been telling every quarter that we'd monetize, monetize, but nothing is happening. So what is the issue, sir? I mean what are we facing -- any challenges in monetization, a concern on valuation? So where is the deal got stuck basically? We want to understand that.
We are continuous to give highest priority to monetization of operational assets or unlocking its equity and debt, and it's balance sheet. So in the first lot, total 12 projects floated for monetization, including 11 HAM assets and 1 BOT (Toll) asset, which would have a total debt of over INR6,900 crores and total equity of INR1,700 crores. Now Strategic Advisors' agent for running the monetization process and [ MBO ] received from 4 are under evaluation.Under discussions and negotiations in case we find valuation of our reasonable [ escalation ]should be -- would be provided to the selected investor for conducting due diligence followed by execution of definitive agreements. So we expect to conclude this process divestment before the end of financial year '24, I think.
So, we are in very early stages as of now. So you are saying actually it will take 1 more year for this to complete?
Mr. Kandpal it's like that. See, we are we are on the process. We are very keen and we're very eagerly going for that. Already you received the MBOs. Now we are evaluating and shortly once we give a go ahead to the selected investor, then followed by the due diligence, the due diligence also we're asking them to quickly do it in an expeditious manner. So then a definitive agreement will be signed, before the calendar year. And before we would see even third quarter, then followed by the [ pro-jos ] and other things. So we are looking forward to have everything completed and unlock our equity before the end of the current financial year. So we have 2 things are lagging behind our peers. And we start all HAM assets. And by the time all this 11 HAM assets would have received the final CoD also, and locking periods also have been completed. So there should not be any issue in transferring the assets.
Okay. I wish you all the best, that we expeditiously close this deal by Diwali or third quarter, so that would help us unlock a lot of value. My second question is on the Jal Jeevan Mission projects now. So we have been somehow lagging behind again on execution. So the guidance which we have given earlier also have not been -- the number is below INR1,000 crores even this year. So next year, we are saying in FY '24 that INR2,500 crores. So how confident are we on closing these in this year? And also, if you can touch upon what is the big pipeline in the JJM segment for us?
See, in the Jal Jeevan Mission what has happened. These projects are spread across various places, there are 3,000 locations we need to do with an average revenue of INR2.25 crores at each location in each scheme. The geographical spread in the one thing.And also, as we move ahead, if you see that in FY '23, in the first quarter, we could be able to do only INR80 crores, whereas in second, we have done INR160 crores. In the third quarter we have done INR270 crores. In the fourth quarter, we have done a worth of INR415 crores. So we are progressively improving our progress and work done. So in a year, we closed at INR925 crores. So going forward, we are confident of completing INR2,500 crores work in the FY '24. Because from INR80 crores to -- we scaled up to INR415 crores as you get on new projects. As of now, work is -- our of 2,885 schemes, work is going on at 2000 locations. And at the 450 locations, we already started providing drinking water to the rural household, and we got the certificate from the Har Ghar Jal certificate for quite a few. So we are confident we'll be able to do around INR2,500 crores worth in FY '24 and then remaining in FY '25. So from improved -- so we scaled up to INR415 crores in the 4 quarters of FY '23.
And what is the bid pipeline, sir?
Hello?
Bid pipeline?
What is the bid pipeline of Jal Jeevan?
As I mentioned, INR14,000 crores worth of projects are bid out by Jal -- this SWSM of Government of Uttar Pradesh. So the bid due date is 3rd June -- 2nd June. So we'll be bidding those projects. So we expect around INR1,000 crores worth of new business from the water sector in this quarter. Going forward, in case any new projects comes up in many other states, then we'll evaluate those opportunities and see whether we can bid for those projects also in FY '24
Sorry to interrupt, may we request that you rejoin the queue for follow-up questions as there are several participants waiting their turn.Our next question is from the line of Jiten Rushi from Axis Capital.
Congratulations on good set of numbers. Sir, first on the debt numbers. On the balance sheet, the debt number is around INR450 crores. So you said in the opening remarks, the debt number at the stand-alone level, INR337 crores. So are we missing anything?
Pardon?
Sir, the borrowings in the balance sheet, the number seems to be higher than what you said in your opening remarks. So the number is around INR450 crores, and you said in the opening remarks like INR337 crores. So there is the lag?Actually, working capital loan is INR200 crores, term loan is INR127 crores, that is INR337 crores, remaining in the unsecured loan taken from the SPVs. So that is why the total amount is INR440 crores. Borrowing is INR337 crores only, sir. So, this unsecured loan has been repaid back to SPVs?
Yes. No, it's still outstanding.
How much, sir?
It is INR140 crores.
So any -- so what is the reason why we have taken this unsecured loan from the [ SPV], any reason for that or?
So there is a surplus in that SPV, there is no debt in that SPV.
Which SPV, sir?
That is Delhi-Narela Industrial Estate and Kanpur-Lucknow-Ayodhya. That was the only project, that will be completed, and Delhi-Narela Industrial Estate those are senior debt in that project, SPV.
Can you give me, sir, the toll numbers now, sir, for the SPV, including the Narela Industrial Estate?
The Narela Industrial Estate was INR14.37 crores in this quarter, and MP Highway were INR12.46 crores. Kanpur Highway were INR23.5 crores. And Bareli is INR14.37 crores -- I'm sorry Narela is INR10.35 crores.
INR10.35 crores?
Narela was INR10.56 crores.
INR10.56 crores. Right, Bareli you said INR14.37 crores?
Right.
And [ Rae Bareli ] is an annuity asset. Got it, Got it.
That is INR32.1 crores.
Yes. Sir, on the railway projects, so we have received the project from Haryana. So when do we expect the execution to start in this project? And how is the payment cycle from the government from that region?
Yes, yes. This execution is already started there. Now earth work is going on, it's 26 kilometer long civil words for the broad gates, double broad gates. The Haryana government -- what we were told that Haryana government is getting funds from the NDB, New Development Bank. So they're getting funded from them, so they promised that there should not be any issue for the pre-payments and other things.
Thank you. Mr. Jiten Rushi, may we request you to rejoin the queue for follow-up questions.Our next question is from the line of Nikhil Abhyankar from ICICI Securities.
Sir, my first question is, given our higher concentration towards HAM has improved. So are we looking at any segmental diversification? And id yes, then which all segments?
As we had already have diversified into road sector. As you said, as we had already mentioned, 33%, our order book is -- unexecuted order book is there, water supply and irrigation, and 67% is from roads and highways. Similarly, our revenues also would be also like that 33% from this water supply and irrigation, and -- see as a part of diversification, we also did this Haryana Orbital Rail Corporation project. So many state governments are coming out with similar kind of a Orbital Rail, Metro Rail kind of a thing, light rails projects across the country. So that is another area we are looking at and we secured one project from Haryana Government. So wherever there is some synergy and particularly with respect to road work. This Haryana is a -- we have synergy over there. And in the water sector also, we look forward to have new projects. If other state governments also come out with similar porters, both rural drinking water, ground as well as surface water.
Okay. And sir, of the INR12,000 crore order inflow that we are targeting, can you give us the target for each segment for FY '24?
See, it would be around 70%, you can say, 70% from the roads and highways and 30% from the non-road sector.
Sorry to interrupt. May we request Mr. Abhyankar to join the queue for follow-up questions. Requesting all participants to stick to 1 to 2 questions per participant.Our next question is from the line of Vaibhav Shah from JM Financial Limited.
Yes, sir. Sir, for the Badadal-Maradgi S we had received 18, 28 December '22, but the execution for the quarter is 0 for the project. So any particular reason why the execution has not started? Hello?
Pardon, which?
Which project?
Badadal-Maradgi.
Akkalkot?
Hello? Can you hear me, sir? Hello?
There the work has started. Akkalkot project, what we call it as Akkalkot to Karnataka's Telangana state border. So, there work has started. So in this quarter, we'll be raising invoice towards the [ micro limits ].
Okay. Okay. Sir, and secondly, you gave a guidance of INR2,500 crores of revenue for the Water segment for FY '24. So does that include irrigation project as well?
See, irrigation project, we don't expect secured with revenue there, because we have another hardly 1.5 months working time there, because once in the July, if they leave the water inside a canal system. So this goes up to again, January end of '24. So this is mainly -- significantly from Water sector only, there will be some marginal amount from irrigation.
Then we had a time line of around 3 years for the project. So the completion is March '24. So has there been extended from the client?
We had already applied for extension of time quoting that very limited working period is available. So we had already asked for an extension time of 2 years beyond 2024.
We move to our next question. Mr. Vaibhav Shah, we would request you to join the question queue for follow-up.Our next question is from the line of Deepika Bhandari from Phillip Cap.
Congratulation on good set of numbers. Sir, first thing, I just beg your pardon -- I think, I missed, the equity requirement. Can you bifurcate the requirement for FY '24 and '25?
FY '24 to INR540 crores and FY '25 to INR450 crores.
INR450 crores Okay. Also can you give me a geographical breakup for order book, exact data for the year ending FY '23? What was the U.P. percentage? And Bihar and Haryana?
Calculated. We'll share you. We'll share you separately. We share with you.
Our next question is from the line of Prem Khurana from Anand Rathi Shares.
Sir, just to understand our receivables a little better. I think, we've seen significant jump during the quarter and a large part of this seems to be because of our own SPVs, hybrid annuities which are under construction. So is it that we are ourselves delaying drawdowns in these SPVs and because we were sitting on some cash. And I mean, obviously, and the cost of borrowing for the stand-alone entity would be somewhat better than SPVs. Is it that, I mean, we are intentionally delaying the drawdown? Or you're seeing delayed disbursals by these lenders or the bankers?
[ Out of ] lenders, actually, we have executed around INR400 crores of newly 7 HAM projects in the month of February and March. For that, we have taken the disbursals subsequently in the month of April and May. So in the starting -- for taking the disbursement, it takes around 30 to 40 days.
Okay. Sure. Sir, but anyway if we adjust with this INR400 crores, we still would have more than INR600 crores, INR700 crores of number due from SPVs. So would this be the number? I mean, if you were to run the same run rate in terms of revenues, and this is the number that we need to kind of settle for or I mean, this could go down?
It will go down, certainly.
Okay. And second, if you could help us understand. So when I look at our -- the P&L for the year, we've grown pretty fairly good. I mean, in terms of top line profitability again, has been fairly stable. But for some is, our employee cost is down. I mean, since we are growing, I was under the impression that you would have more people come onboard and work for you. How do I explain the employee costs going down? Are we I mean trying to kind of have more of mechanization of automation, which is where the manpower requirement has come down? Or was the last year number of a one-off?
Actually, percentage-wise, it will go down, because of the around INR1,000 crores, we have executed Water project, where the element of labor is much more than this...
Machinery.
Machinery.
Sir, our absolute number is down.
Through a sub-contractor. That is also to sub-contractor.
Okay. And just one last from my side, I mean, if you could help with the EPC potential for these 4 hybrid annuities and you've given us a bid project cost, I mean, if you could help us with the EPC part of the total number? How much would be the EPC, which would come in our stand-alone books, I mean, on order backlog side?
Around INR4,500 crores or something. INR4,000 crore.
INR4,500 crores?
Yes, yes. We are -- since we are in the process of.
So far, we have not finalized.
Okay. Sure, I have a few more, I'll come back in the queue. All a very best for future.
Our next question is from the line of an Uttam Kumar Srimal from Axis Securities Limited.
Congratulations on good set of numbers. Sir, have you received any bonus in this quarter? Early completion bonus in this quarter?
No.
No, not this quarter.
We have not -- in the fourth quarter, there were no borders.
Okay. And sir, any bonus that we are expected to receive in this year from any of the projects?
See, 1 or 2 HAM projects we expect to complete before schedule of time, particularly Aligarh-Kanpur Package 5. So then for that project, we expect to receive bonus during FY '24.
Okay. So can you quantify the amount, sir?
See, until unless we know the data of PCoD, then what is the scheduled days is, then the bonus will be calculated accordingly. We can't say right now, but we give certain amount of bonus from that particular project.
Our next question is from the line of Shravan Shah from Dolat Capital.
Yes, sir. Sir, just to clarify, you mentioned in terms of the monetization that you expect that the definite agreement likely to be signed before December and deal to be completed by FY '24. Does that mean that are we also expecting the entire cash to be received before FY '24 ends?
Yes.
Yes. Entire conservation amount of equity, we expect to receive. That is our target. We are endeavoring towards the thing.
We move to our next question. Our next question is from the line of Nikhil Kanodia from HDFC Securities Limited.
Sir, all our questions have been asked -- answered.
Our next question is from the line of Prem Khurana from Anand Rathi Shares.
Sir, on monetization efforts that are underway for 12 assets, the 4 prospective buyers that you have in place and all these are interested in all the 12 buses or they want to take it as if I mean, they have -- let's say they like some asset, they will wait for these 4, 5, 6, 7 assets? Or you want to sell this as an entire single booking?
They are for all 12 projects.
They are interested in all 12 assets.
Our next question is from the line of Jiten Rushi from Axis Capital.
Just harping on the monetization thing only. So sir, are we also thinking of an alternate process of invit. We have seen [ certain investments ] in the past, in this 4 prospective buyers discussion, call gets called off. Then are we looking for any invitation option also in alternate? Are we working towards it or we are looking only for a complete exit?
For these 12 assets, as of now, we are not looking at, because we received good response from the potential buyers for the toll assets. Out of these 12 assets, 7 assets are already operational, only 5 assets will be operational in next 3 to 4 months. So we -- at this point of time, we are not looking at alternate thing for these 12 assets. Going forward, as we have remaining fund-based assets, we'll look at that option.
Which is the toll asset, which you're looking to sell? I just forgot. Can you just help me with the names?
Bareilly Almora project, it's a BOT Toll of state.
Any targeted valuation you're looking for in terms of the book venue like what is the -- because we seen a strong valuation coming from the recent lease, which is almost 1.5x and above any targeted valuation that we are targeting in terms of project?
We are looking at a very reasonable valuation, [ it is based on ] because we can't disclose the figure as of now. See, talks are going on with the investors through our Strategic Advisor. So some clarity would emerge maybe next 10 days. So then anyhow we'll share with the exchanges and then we'll come to know once we sign the agreements.
We move to our next question. Our next question is from the line of Shravan Shah from Dolat Capital.
Sir, just a humble if I understand there are many questions people are asking, but at least allow the participant to complete the question, so it seems like insulting the person to cut in between or rather we should be sharing all the basic data in the presentation so that we should not be asking all this basic question and asking the relevant proper question on the business and strategy. So that's the humble request even before just we are about to ask the questions, or in between the guy seems to cut the client, this should not be happening. That's a humble request.So now my question is on the bonus part, I was just clarifying last time we were talking about INR15 crore bonus we were looking in Aligarh-Moradabad in the fourth quarter. So what's the status on there? Mumbai-Nagpur, we were expecting, but some decision from the Authority, then we were expecting Delhi-Vadodara package 29, 31. So, so all these 4 projects now there will be no bonus or do some bonus will come?
See, in case of Aligarh-Moradabad, what we expected bonus would be realized by 31st March, because the final bill completion and there are change of PAU people at NHAI headquarter, there many changes have happened right from CGM down to the manager, people have moved and new set of people have come. So the process is getting delayed.And second thing, in case of [ DAV ] 29 Delhi-Vadodara, because of some hindrances and other part, even today, 150 meter length of land is not available. But anyhow will be completing that purple project by the scheduled time, we don't expect any bonus there 29, because the delays happened beyond our control.In case of DAV 20 -- 31, there's a lot of HD high-tension power lines are going on. Again, there is a delay in shifting of these things despite our best efforts, the things are not happening because of some latency from NHAI side and other things. So there also, whatever bonus we expected that did not get in.
We have completed more than 90% work
Yes, yes. There also we completed more than 90% work. In case of DAV 29, we completed almost 100% of work ex-the land hindered.In case of Nagpur-Mumbai, the government has not taken decision, again, there is political change in the state government in the land, so they are not taken final decision yet.
So net-net, nothing to come as a bonus not for even Aligarh-Moradabad also the INR15 crore, very less probability that the bonus to come.
No, no. See...
We may get in Aligarh-Moradabad, no doubt about it. And we are also expecting some Aligarh-Moradabad Package 5.
HAM project.
HAM projects.
Okay. Second is on the JJM, we say INR2,500 crores revenue in FY '24. So this INR2,500 crores, so if I just look at the -- in terms of the order book, so excluding the irrigation part, if I remove, so INR5,700 crores out of the INR2,500 to be done in FY '24 and the entire remaining should be to INR3,200-odd crores should be in FY '25? Or it will extend to even FY '26?
Entire by '25.
FY '25, we'll be able to complete, except normally, they keep some amount retention amount and other things. Otherwise, we will complete our works in FY '25.
Okay. And then the irrigation, you mentioned till January because of the rains and water to be in the canal very, very marginal revenue to come and the deadline will be extended to FY '25 or '26?
FY '26 figures, we asked for 2 years of extension, we asked for, so last [ month ] we applied to Water resources to the government.
Okay. And in terms of the HAM requirement, whatever you mentioned, that is only for 18 HAM projects. So the 4 HAM projects where we said INR500 crores more equity. So assuming, as you mentioned, [ appointed ] by December this year, then how much equity to be infused from that in this year and FY '25 and '26. So broadly INR1,700-odd crores, if you can help me break up in '24, '25, '26?
Next, the total equity requirement including on the 4 HAM project is INR1,690 crores as on-date. So around INR540 crores FY '24, and INR460 crores FY '25. FY '26, it's INR365 crores and remaining INR327 in FY '27.
Okay. Okay. FY '27. Got it.
Our next question is from the line of Deepesh Agarwal from UTI AMC.
I have just one question. If I look at your segmental reporting, it seems the margin on the Water segment, the EBITDA is quite high versus although the Water margins were at almost like 17% for the year versus 10.8% [ for '22 ]. Is it a sustainable margin for Water? And if that so, with the share of Water revenue going up next year? Why do we still stick to that 13%, 13.5% guidance?
It will maintain around 16% to 17%.
Okay. So if the Water share goes up in our revenue margin will ideally have an upside risk, right?
Mr. Deepesh Agarwal, sorry to interrupt. May we request you to use the handset, please? The audio is not very clear.
Yes. So my question is, is the share of Water segment goes up and it's a higher margin. So ideally there should be upside risk to our guidance on the margin of 13%, 13.5%.
The guidance overall is 13.5%, yeah.
Guidance is around 13.5%, average.
It may vary around 16%, 15% to 17% Water. But that part is very -- one-third portion of the turnover.
Yes. Understood.
Our next question is from the line of Jainam Shah from Equirus Securities Private Limited.
There are no further questions. So sir, we would request you for some closing remarks.
Yes. Thank you, everyone, for your participation in our earnings call. We have uploaded the presentation on our company's website as well as on exchanges. In case of further queries, you will get in touch with the Strategic Growth Advisors, our Investor Relations Advisors, or feel free to get in touch with us. Thank you very much.
Thank you. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.