Power Mech Projects Ltd

NSE:POWERMECH

Earnings Call Transcript 2023-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Q2 FY '23 Earnings Conference Call of Power Mech Project Limited, hosted by Nirmal Bang Equities Private Limited. [Operator Instructions]. I now hand the conference over to Mr. Prasheel Gandhi from Nirmal Bang Securities. Thank you, and over to you, sir.

[Prasheel Gandhi, analyst]

Thanks, Stephen, and good afternoon to all. Nirmal Bang Securities Private Limited, welcome the 2Q FY '23 Earnings Conference Call for Power Mech Project Limited. From the management team, we have Kodandaramaiah SK, Director and Business Development; and Mr. Jami Satish, CFO. I now hand over the call to management for their opening remarks, post which we can take Q&A. Thank you, and over to you, sir.

[Jami Satish, executive]

Yes. Thank you. Good afternoon, friends. This is Satish. I have with me Mr. SK Kodandaramaiah, Director, Business Development. We welcome you all to the earnings call, quarter 2 and H1 FY '22/'23. I'll take a few minutes to update on the financial performance for quarter 2 and first half '23. The performance for quarter 2 and H1 FY '23 is in line with our targets and continue to be healthy. The overall target set for the year is on track, and it's more likely unachievable. FGD ordering process and project modulation already started, revenue booking from FGD expected to start from quarter 4. The revenue from FGD will be in addition to our set overall target for this financial year. The reported total income for quarter 2 FY '23 is INR 174 crores. This is all-time execution for Power Mech in its journey during quarter 2 of any financial year. The EBITDA is around INR 90 crores and PAT is INR 44 crores, whereas quarter 2 of previous financial year, the reported total income was INR 544 crores. The reported EBITDA was INR 63 crores and PAT was INR 27 crores. On a year-on-year basis, total income has shown a growth of almost 42% with the growth of the revenue, the EBITDA is on a growth of 43% and PAT has grown by 62%. The revenue mix for quarter 2 FY '23 is as follows: [ Erixon ] business has contributed INR 161 crores, civil business, including railway, water projects, ATC, contributed almost INR 367 crores. Operational maintenance contributed INR 226 crores. Electrical business, INR 17 crores and other income, it's around INR 3 crores. First, during quarter 2, a last financial year, Erection business contributed INR 106 crores. Civil business contributed around INR 223 crores, operational maintenance, INR 188 crores, electrical business, INR 23 crores and other income, it was around INR 5 crores. Domestic business has contributed almost 87% and the rest 13% has come from the overseas business. The mix between power and non-power stands at 63% and 37%. We have seen growth across all the segments, except Electrical business, where the company is conscious of its growth in electrical space because of so many regions. [ Wine ] business has grown by 21% and contributed almost 29% of the total business. Similarly, the total reported income for first half H1 FY '23 is INR 1,523 crores. EBITDA is around INR 175 crores and PAT is INR 83 crores, whereas during last -- the first half financial, the reported total income was INR 1,172 crores. EBITDA was INR 134 crores and PAT was INR 59 crores. On a year-on-year basis, total income of H1 has grown by almost 30%. And with the growth of revenue, the EBITDA has grown by 31% and PAT has grown by 42%. The revenue mix for first half FY '23 is as follows. Erection business contributed INR 313 crores. Civil business, including railway water, INR 743 crores, INR 422 crores, electrical business, INR 39 crores and other income added INR 5 crores. Similarly, during first half of last financial year, Erection business did around INR 243 crores. Civil business contributed INR 507 crores. [ O&M ] contributed INR 361 crores. Electrical business contributed almost INR 51 crores and other income, it was INR 11 crores. During H1 of current financial year, domestic business has contributed 85% and 15% has come from the overseas business. And power sector, the revenue from power mix is almost 62% and non-power is almost 38%. Execution bandwidth has seen growing quarter-on-quarter basis with the incase of in-house resources, manpower strength, equipment and robust order book. The company is also expecting good amount of order booking and education cycle to improve in the international market Mr. Sajja Rohit is adding the international business. And within Mr. [ Sinha Rao ], who has joined as MD and CEO for the international operations, we are joined from [ Sofjan Poland ] is a good hand to strengthen the international operations, and the target is more on the operational maintenance business to supplement both on the domestic and international business. The company is well set to execute projects now in a range of approximately INR 750 crores to INR 250 crores in a quarter and also expecting gradual improvement in quarter-on-quarter basis, retaining its core competence in O&M and mechanical pie. Coming to the other line items. Depreciation cost as a percentage to revenue remained lower side due to planned CapEx spending Similarly, finance cost as a percentage and also as the absolute number remained controlled on account of improved working capital cycle and cash flow. Overall working capital cycle still improving for the period due to change in the customer mix. Net current days, excluding cash and cash equivalent. Now it's ranging around 138 to 145 days during the period. This is expected to improve further. This was around 50 days 153 days on 31st March 2022, and it was 205 days as on 31st March 2021. So we have seen significant improvement in the net working capital days, and this is expected to improve further. Moreover, the operating cash flow for the period stands at INR 62 crores post, which is a cost development. And the average monthly collection continued to be in the range of INR 262 crores to INR 300 crores, and this is expected to move slowly to INR 350 crores per month collection. And coming to the debt side, the gross debt and net debt remained controlled in spite of growth in the business and the robust order book increase. The gross debt stands at INR 481 crores, and the net debt is almost INR 292 crores. So it has come down as against to close to gross debt and net debt, it was EUR 320 million. So we have seen reduction in good there. The order backlog for the company as on today stands at INR 24,036 crores. This is including MDO. And the order backlog, excluding [ Motes ] at INR 4,282 crores. Up to date, during the current financial year, the company added new orders of INR 7,445 crores. And for the entire year, the company has set a target of INR 10,000 crores of new order additions. As included, the [ Elevate ] order book is around INR 960 crores, which is close to INR 1,000 crores. And we need to plan for new orders of INR 600 crores during the next 4 months. We are more confident we'll reach the target of INR 10,000 crores operation this year. So the company has set strong visibility for its 3 years growth because of the strong order book and quarterly run rate is quite healthy. Quarter 4 of last year between INR 950 crores. And this year, the way it looks like the bandwidth is well set to achieve INR 750 crores to INR 20 crores, INR 50 crores. So the rest are in build. So the present order book gives a play- visibility for next 3 years. I now request Mr. SK Kodandaramaiah to add a few more market opportunities before we get into Q&A. Thank you.

[Sudha Kodandaramaiah, executive]

Yes. Thanks, Satish, and thanks, [ Nikanor ] for this call. And that was for the fine input what we have given for the first half of the results of the company for this that was a nice upload. And coming back to some of the other developments, business growth, then the marketing side and also various opportunities and how the company will be taking forward these opportunities. Let me give you a brief. I think on a broad basis, the order backlog was at the end of the last year, INR 854 crores. 55 crores has gone up to INR 4,782 crores jump up nearly 67%. I think this is mainly driven by the huge order what we got from [ Adani ] for the core of 846 megawatts of PV jobs in 4 plants. Now in the segment was changes in the mechanical installation business was INR 1,550 crores because of this Adani, it has gone up to INR 7,796 crores. The civil or backlog of INR 5,842 is more or less the same. And the O&M side, it is from INR 124 crore crores, it is now out of nearly INR 1,000 crores. And electrical has slightly gone up from INR 118 crores to INR 48 crores. And the business mix, as Satish has said, domestic is still predominant because of the so many investments coming, particularly in the government sector. Then some as private sector also, that is almost 97% and the international is 3% as per the backlog of the versions of INR 14,078 crores. Now the power sector business to non-power sector, what was -- we had predominantly made the growth in the noncore sector due to the shortfall in the core in the last 5 years. I was standing power to non-power sector of [ 250, 41.5% to 58.5% ]. Now the things have changed in favor of the power sector because of the hefty opportunities coming up. Now the power sector business was 63% and then the non-COVID 37%, at INR 9,487 crores and the [ overhead ] INR [ 5.95 ]. No, these are the major features as far as the auto backlog and other aspects. Now the major orders what we have received in the first half are the Adani as I told you, INR 50, INR 164 crores. And then in [ Kodaira INR 191 ] crores, then got the balance work, which was awarded on a risk purchase basis to another contract to INR 105 crores. The FGD [ Claverin ] non-China about INR 119 crores, then PE shared in the Western region, INR 113 crores. And then recently, we have taken some tracks and towers in the weather also centralized way, but nearly INR 41 crores. And the one build repair work from Adani in the -- are about INR 50 crores. And more importantly, on the O&M side, there are many jobs which were taken mainly on the repair maintenance capital as nearly 50 to 60 packages in different plants. And the all quick turnaround orders, that is around INR 160 crores. Going down the line, what I can say is that the O&M side, yes, we are handling major projects. And then we have seen the first half, the revenue has come to about INR 422 crores.And there are opportunities we are fasting in the Mundra, [ Prada ] for the renewable and then opportunities in the very 3 to 6 to 600 megawatts, then [ Gatto ] 660 megawatt, the into 8-megawatt arena and also a couple of other projects. And there are focus, as Satish has said, Mr. Sias who has come for the supporting the [ yoga ] project. The India side, we are trying to give a lot of push in the Middle East. That has been seen some uptrend in terms of capital ass, maintenance jobs. And AMC job is on pipeline. We have already mobilized for got out nearly about nearly INR 100 crores, and that work the agreement has to be signed shortly. And then the opportunities wise, we are also looking at non power opportunities going down apart from the power sector. and various other factors. And as an input, which I have shared earlier also, there is a wind component in the Adani order after completion of the job since the additional INR 200 crores -- sorry, INR 21 crores. And the drinking water projects also what we are handling as on today, that also will have a on component once they are completed that both comes to INR 80 crores to INR 100 crores. Now that is how we are going to further see how to consolidate the indem business. And then the major work, which is -- the state of the major work on body 2to 60 megawatt. We have completed about 15% out of INR 345 crores. Baxter while job, 25% around INR 36 crores, Savalle have completed almost 70% of the work that is due in to 60-megawatt Btus. Then Yadadri is going very well. That is a large project. I'm telling on INR 813 crores. We have done 60%. Then Dangote a completion of $76 million. The Main Bangladesh tint 660 megawatt, that is also going pretty on a fast track basis. INR65 crores were completed at 75%. And the environment channel is about 90%. I'm now thinking what rural is getting a lot of Philip and then the progress is pretty taken up with the mobilization and the procurement activity started. And nearly 2,000 villages DPR have been completed. And now about 3% of our work has been completed, and we hope to get a revenue of plus INR 100 crores every month in the rest development. And then further, it can go up based on the DPR approval and the further orders regularized. Then the road projects also the 780 crores, 35% work has been completed. Now other than FDR 660 crores, the initial orders we have received for the inviting and technological equipment on the. And that should help us to focus on the engineering and then further ordering for the balanced packages and civil structural, mechanical and also many of the other auto items. And the other input, which has done recently is that their latest system is BRL Metro project, that is a shed construction for the maintenance before in Bangalore. That is about INR 427 crores. This we are doing in JV partnership with the rights and that work also is expert to take up in BCF and some revenue will come. Now what I can say is that the balance opportunities we are following nearly around INR 15,000 crores in the current year, which includes FGD packages in about 3,000 for about INR 3,500 crores. And then water projects over INR 2,500 crores in UP into other places. And then railway maintenance shops that is metro shop, metro jobs, maintenance shares about INR 500 crores and railway jobs in [ Nellore, Surat and Kasia ] about nearly INR 100 crores and about INR 6,000 crores of growth projects are there. Therefore, the prediction, what Satish has rightly mentioned about the future growth should be pretty strong.Now with the current backlog of INR 14,078 crores and the build position about INR 960 crores, I think we are pretty well placed to reach a target of nearly INR 10,000 crores. And assuming with the projected turnover of INR 3,600 crores, perhaps the end of the year, backlog will stand at INR 15,000 crores. I think that, that should give you a good dip start for the revenue growth for the next year and the opportunities which will come up in the future also. And perhaps the focus will be on the FGD jobs, the infrastructure box job, railway work than metro projects because there is a lot of growth in the metro projects -- and then the maintenance George has come up in the FGD side also. And the investment, which is coming further in the drinking water schemes, almost 50% has been provided and there are a lot of opportunities coming taking what also we are pursuing many projects. And then railway multi-mall terminals and then in material handling packages, there can be many number of opportunities. In fact, the national infrastructure pipeline has been a great booster for the investment and organization like Carmean many other things which are greatly benefited by these investments coming up, and this should continue to flow in the next couple of years also. And that's what I can say. We should be able to maintain a sustained growth. Maybe next year, we should be targeting around INR 8,000 crores on a tensility basis, and that should be the trend in the future also. Thanks all of you, and we can follow up to the question.

[Operator]

We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of [ Riya ] from Equitas Investments.

[Unknown Analyst]

My first question would be in regards to sensor concentration of Civil and the order book is increasing. What margin profile do we look for the coming quarters...

[Jami Satish, executive]

See now we have seen some improvement in margin profile. So more or less, this year, we are seeing this number to be continued for quarter 3 and quarter 4. There could be small margin improvement, okay. This is a trend we are expecting going forward in the short run.

[Unknown Analyst]

Okay. Yes, please. In terms of working capital, since our execution will be higher in the next 2 quarters, what fresh levels can we go up to?

[Jami Satish, executive]

Sorry, can you repeat?

[Unknown Analyst]

What working capital are we looking for, for the H2 since our execution would be higher?

[Jami Satish, executive]

Yes. See, the receivable base now it's ranging around 75 to 80 days. There could be some improvement. In terms of the holistic, if you take the overall working capital second, now it's working around 143 to 145 days. this cycle, we're expecting to continue, and there would be some improvement, maybe 135 to 138 days. That is the net current base, that's what we're expecting. And the existing order book, most of the projects we have already mobilized. So normally, we need 2 months working capital there to mobilize the project. Most of the products we have already mobilized. And for this FGD Adani project, which we have got recently, -- so we have got a provision for Advance, which is interest-free, 10%. So needs will drop. We'll see that this project is a sustained cash flow model. So going forward, it's expected to come down. The net current is maybe in the range of 130 or 35 days during the end of this year.

[Unknown Analyst]

Okay. And from the execution since we have a good order book right now. So how -- what education can we reach up to? Is there any capacity constraints in terms of number of people or anything like that?

[Jami Satish, executive]

Actually, we are adequately staffed. In fact, as on today, we are having nearly 30,000 sum total in-house in the O&M also, we are having a substantial team, mainly about 1,000 people -- 11,000 people. And then the direct labor and the indirect labor -- directed IRB-direct also is adequately staffed. In fact, the -- as far as the staffing and the redeployment of the man for is concerned, our incremental job out of what we are getting, we have seen it. I think now Adani is going to be a major order, and then this [ Barsejob ]. We have to take it up. And then other wind jobs are already ongoing jobs were also well. And this way will be success able to fill up in the resources required, both on the adored then supervision in the equipment side. And some of -- many of the jobs have you seen and age the status of the or many of the jobs is at a later stage of 50%, 60%, 70%, 80% completed. And that is how these projects gets redeployed, and we don't anticipate any major problem in deploying all these resources, and we'll be able to execute that.

[Unknown Analyst]

Okay. So we have adequate resources in place?

[Jami Satish, executive]

Yes, yes. All set for good numbers going ahead.

[Operator]

The next question is from the line of Deepak Poddar from Sapphire Capital Management.

[Deepak Poddar, analyst]

A very good set of numbers. And so I just wanted to understand first up on the execution front. Now we were talking about FY '23 and INR 15,000 crores is the order backlog we are targeting. And generally, in a particular year, we generally execute 38% to 40% of our starting order book. So ideally, if I go by that calculation, we are looking at INR 5,600 to 5,700 execution FY '24. So is that something that we are also looking at in terms of the education level next year?

[Jami Satish, executive]

Yes. No, what I can say, see, there is a mix of orders in there are short-duration contracts, long-duration contracts then there are different types of schedules for different contracts. And that 40% norm can be there. And what we can say is that from INR 2,720 crores to we have achieved -- we are going to achieve nearly INR 3,000 crores. And that is because of the increase in some of the jobs where we are doing some materials also is included. And many of these jobs, what we are going to do has got some material content, particularly done job is there and then the bema job also we'll be there, some of the other segments also. Therefore, what we can carefully say is that with the schedules committed to a customer and the resources available, we should be able to exceed at least 5% growth in the next year with a INR 15,000 crore backlog. With a 15% growth... INR 5,000 crores. Revenue, we can exceed INR 5,000 crores of revenue next year. Fair enough. Understood.

[Deepak Poddar, analyst]

Okay. Understood. And sir, if you see our order book -- order backlog, we have seen a tremendous jump in our order backlog like if you see our FY '20 order backlog was INR 2,500 crores. And today, we are at about INR 24,000 crores. Obviously, it includes the NBO, which is 25 years contract. So how do we see that opportunity over the next 3 years, if I have to talk in terms of order book backlog? Do you see more such MDO contracts coming into play for us? So some understanding, if you can provide how do you see next 3 years in terms of the order book like this INR 24,000 cargoes INR 50,000 crores…

[Jami Satish, executive]

I think that's a very interesting question. You see... The MBO type of jobs, there is a lot of message in the country. And for example, in Coal India, they have -- they're going to scale up their production to plus 1,500 million tonnes by 2030 and from the percent 7,700 million tonnes. And there many of the mainsail handling plants, they are not mechanized fully and MBOs are not there. And as on today, they have only done about 100 million tons -- 100 million men operations and for India is in the course of awarding 1 million tonnes. -- that only affects the 25%, 30% of the entire endeavor requirement. And now on the coal mining also, it is getting privatized, a lot of other players, private was also entered. And MDI is going to be an important operation. They present Mowat we are going to do is to take effect from 24 and 25 beginnings. We anticipate at least we'll another 3 jobs we can target it. And that is also concerned by the fact that we are handling many similar jobs in terms of EPC and construction contracts in Formica, Alvira and Khurja, and we are acquiring a lot of expertise in these jobs. And by that time, we will be able to now start working on the Mothe or on the further jobs will be well placed.

[Deepak Poddar, analyst]

Okay. So we do anticipate another 2 to 3 MDU...

[Sudha Kodandaramaiah, executive]

I think that is on a very optimistic side, at least to 1 or 2, we'll definitely take it because that will give a recurrent revenue generation for the 20, 30, 35 years. So I think I expect Satish also to add more points on this. Yes. [ Deepak ], this year is INR 10,000 crores, so it will leave a good number of opening order book for next year. So the order book target for the cash contracts, okay, for next year, maybe in the range of INR 8,000 crores because that will again leave a healthy order book for FY '24. And thereafter, the MDO KBB quote-based project will start. Now the thought processes like FY '23, '24, we have kept a target of INR 8,000 crores and 25 million a number of INR 9,000 crores. So by 25, 26, we'll see that this MDO also gets okay, metalized and we see the ground activity start and the revenue booking starts. Thereafter, because this project, it's been almost 2, 3 years, we have put efforts to get a design site project after considering all the remit factors. So if all goes well, we may look one project based upon the progress of KBC, but not immediate because the order book is quite full. But given a chance, if we get an attractive price, we may add one more project...

[Jami Satish, executive]

Yes. Okay. But what you said, we are looking at order inflow of about INR 8,000 crores for next year... FY '21... FY '24, we are targeting order booking of INR 8,000 crores and 25, maybe in the range of INR 9,000 crores... Similar to what we are doing -- we are targeting order inflow this year ideally? But this year is slightly higher because of Adani, but maybe next year, we may not need INR 10,000 crores. So this will leave -- if you take even 36% to 38% conversion, which is slightly higher side. And by the time we won the -- okay, the pie will make -- may touch to INR 1,400 crores to INR 1,500 crores. So if you see next 3 years, okay, the blended -- we have got a very clear visibility and the backlog order book was INR 8,000 crores and there after INR 9,000 crores. That will leave a very good order book to execute. So I think FY '26, we need to take a call how to consolidate and where to grow and we have...

[Sudha Kodandaramaiah, executive]

Satish, let me add a few things on this. You see the NIP, which is going to INR 111 lakh crores of investments, we are seeing the benefits for the company, actually last another 4 years minimum. And there is a lot of investment called to come up in the private sector in the steel segment, nearly $158 billion and associated jobs will comp jobs. And then the -- there is going to be residual investment in the power sector to fill up the gap for the base or operation, another 10,000 megawatts as planned, apart from the ongoing 24% megawatts of implementation. And then the infrastructure side and the railways investments of nearly INR 10 to INR 13 lakhs per 13 lakhs overall under very year 15, 15, nearly INR 2 lakhs, that is also continues to be there the next 7, 8 years. And in fact, FDD, now the FGD investment has -- commissioning has been postponed to 2022. Therefore, that will come up more also on the new projects also get FDA those to also will come up. Now in the drinking water, infrastructure, roads, railways and on the other segments, what we have done the divestation of the last couple of years, we'll sustain that with better margins because of the expertise gained. And moreover, the international market because of the variety reasons, there was a slowdown in investments, particularly in the Middle East, that investment is going to pick up, and there is a huge investment. And rest of Rita, good opportunity where we have started working in Algeria and the like Trane is there, and there is an many places are there. And then Moa -- now Africa is going to be a good investment destination because of a lot of growth needs actually. Therefore, the export market, domestic vendor market, domestic infrastructure business and the FTD residual work balance, there balance ordering of 80% megawatts. And they're drinking what also new schemes will come up in surface drinking water also, that also we are going to participate. Therefore, there is no shortage of opportunity to 4 years. And as I said, private investment is going to come in a big way later. It has to follow the government investment in the steel sector, infrastructure sector, minerals, metals and petrochemicals various areas. And all these areas, we established our presence and that could give us a lot of way. And this extension of this subsidy, this will, again, opens up opportunities for next 2 years. We can target some more projects. And on top of that, the -- okay, the power thermal, we thought like there could be slowdown, but debate looks like there is at least a strong visit for next 5 years. So this will also draw some good opportunity for us.

[Deepak Poddar, analyst]

Yes, yes. That's quite interesting. And my final one query, it's -- I think we have mentioned in the past that due to our legacy orders, we are finding it difficult to improve upon our EBITDA margin. Now assuming that by fourth quarter, all the legacy orders will get executed. So any thought process on what margin uptick one can see FY '24 at a higher execution level and we are through with our legacy alternate...

[Unknown Executive]

Yes. See, there is high probability that the margin pool should improve which we are witnessing even quarter 2, there should be gradual improvement. But having said that, the FGD, which is a large contract, okay, that we are expecting 10% to 11% -- excluding FGD, we are seeing some growth in the margin profile with the -- with the quantum jump. Second is like, yes, some of the projects where they are losing the royalty for the PQ and all, now we're quoting ourselves, that will also help to some extent to improve the margin profile. So maybe 24, 25, 34 first half, we'll see how the conversion of pets happening. So that will -- the execution we have to see in what extent we're converting Adani. So that will decide the blended margin. But we are sure that there will be some improvement in margin for a while, but the extent that all we have to see maybe 6 to 8 months how the it is getting converted.

[Deepak Poddar, analyst]

And that will happen in the first half of FY '24?

[Unknown Executive]

No. We are expecting that to happen quarter 4. So FY '24. No, no. The FGD, the billing is expected quarter 4 of the -- and if at all, there is a rise, we have kept a target of INR 2,600 crores for this year, plus some conversion happening from the FGD. If that doesn't happen, then it will spill over to quarter 1 of next year. So next 2 quarters, maybe quarter 4 or maybe quarter 1 of next year, we'll have more flat in terms of the conversion for FGD... The INR 400 crores of…

[Operator]

[Operator Instructions]. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

[Dixit Doshi, analyst]

Actually, most of my questions have been answered. Just one question from when the MDU project will start recognizing revenue. Sir, quarter 4 24 -- okay, FY '24, okay quarter 4, we are expecting INR 40 crores to INR 60 crores of revenue booking taking the rate of INR 886 per tonne, but now the rate of substance has gone up because of the escalation, okay? So that may go up to INR 70 crores or INR 80 crores. Per quarter.

[Unknown Executive]

Yes. And 25, so it may go up to INR 250 crores and INR 26, we are expecting close to INR 400 crores, INR 450 crores.

[Dixit Doshi, analyst]

Okay. And the margins in this segment will be higher?

[Unknown Executive]

Yes, sir, there is some investment and there is some CapEx. So we quoted at a price of almost a 20% at EBITDA level because there is some depreciation element also. But with the revised price, the margin profile will again improve. The price which we quoted at INR 886 storage stands at almost INR 1,300 to INR 1,400 plus. So there is a high probability that the margin profile may further improve, sir. We'll see how it's turning up. And how much we are going to invest in this... It's INR 360 crores over 2.5 years, and it will be a combination of term loan and equity at SPV level.

[Operator]

The next question is from the line of Abhishek Poddar from HDFC Mutual Fund.

[Abhishek Poddar, analyst]

Sir, regarding this order outlook of INR 8,000 crores for INR 240 and INR 9,000 crores for 25. So if you look at this year, we had a very large order of INR 7,000 crores coming from Adani. So if we take that out from INR 10,000 crores, then the rest of the order is about INR 3,000 crores. So I'm trying to understand that this bridge between 8,000 and 3,000, 5,000 additional number next year. Any large orders you're looking at, sir, or overall?

[Unknown Executive]

Yes. No. I think one was an exception. But what I can say is that, see, if you look at the opportunities, what we follow every year, we follow between INR 250 crores to INR 1,000 crores to INR 40,000 crores. That is the type of BD development, where the crop standard take in all the segments. And the -- this -- the INR 8,000 crores of the competency is coming from the sustained balance porting to be done in the FTD, nearly 81,000 megawatts is there we will try to focus on a couple of megawatts maybe 3,000 to 4,000 megawatts. Then water projects are also there. That is bringing water projects and surpassing what projects and over and metro projects for example, Metro, we entered in a good way, that is a major break to what we have taken. I mean there are very where metro expansion is going up from I think it will go up to double up the number of stations and the mega in more and also the inventory shops needs and all. And there, we are already bidding for a couple of projects in Bangalore also. Therefore, this is a mix of what I can say, traditional business in the new units, whatever is going to come up maybe on the thermal side and then the O&M continue to be -- we are trying to enhance the profile in the momentum in the non-power sector also and then in the international business also. And then in the infrastructure side, there is a combination of road projects, railway projects, linking water projects and then metro projects. No, the basket has gone up. And then electrical, we are cautiously being what we can do, but we are not anything, but recently, we have taken a top of maybe INR 80 crores also. Therefore, there is a scope for -- we have established a benchmark of INR 10,000 crores. We are going to establish it. And with more opportunities, perhaps we will be we'll be looking at oppose nearly INR 40 crores to INR 50,000 crores in the next year. To that extent, we'll be focusing it and that should not be a 20%, 25% is not a challenge in all these pet. Yes. Just to summarize, sir, the operation and maintenance point both domestic and international, with the orders, which is going to be renewed and that put together itself is coming close to INR 1,000 to INR 1,100 crores. as some of the FDD follow-up orders where we are negotiating, that may get spillover to quarter 1 of next year because multiple inquiries are coming, negotiation is going on. That itself is anticipated to be close to 2 or 3 projects, maybe INR 1,500 crores to INR 700 crores. On top of that, last 2 years, we have been a little slow in international mechanical space because of [ Kowa ]. Now the team is quite active. Mr. Rohit and Srinivas, that extends you traveling to see the -- we can revise the opportunities, multiple opportunities out there. In the mechanical space in international itself close to INR 500 crores to INR 600 crores of copper, which we have already identified. On top of that, the Metro and railway, we are already in discussion with multiple plays. We're expecting the way we did this year for Bangalore Metro, we're expecting to add 1 more project next year that will come close to INR 600 crores -- on top of that, water and STP, we had a good amount of addition. So maybe next year, we may add INR 750 to 800 okay, maybe 2 projects. And our regular -- the mechanical power related, it's expected to be close to INR 800 crores, INR 900 crores. So the opportunity is quite large.

[Abhishek Poddar, analyst]

Okay, 800 crores seems to be 100% achievable. Understood, sir. Sir, so if you look at our next year, you're looking guiding for revenues of INR 5,000 crores or in excess of that. So if we push a little forward and look at 25 and given the order backlog will again increase in '24 as well, could we look at the INR 6,000 crores to INR 7,000 crores of revenue in '25 and I'll be ready for it, sir?

[Unknown Executive]

It's quite possible, sir, the reason being is used itself, we need to add almost INR 2,000 crores plus. But we are well set now. The quantum is plus, but it's spread in 5 projects because of the sale component all, it looks to be a larger quantum. The single contract itself, we need to execute both the supply and direction and the civil put together will add INR 2,000 crores. Yes, it's quite possible, so we have to do that.

[Abhishek Poddar, analyst]

Understood. And sir, on the margin side, if you can a little bit help us understand because you stated that O&M will double from here, how does that benefit the margin? And this 11% EBITDA margin that you reported in 1H, how should we see that in 2,425?

[Unknown Executive]

Yes. Sir, I will -- let's understand the margins and how it works for Power Mech -- see & -- as we all know, like this keeps higher margin compared to the mechanical, civil and electrical file, okay. Now the experience been in election, we used to work at 13.5%. But last 2, 3 years, it has come down to 11%, 11.5% because of the price has come down, okay? Still, of course, we were losing 2% to 3% to buy the PCs. -- last 3, 4 years, we have spent almost 2% to 3%, which was a stake impact to our EBITDA margin. But now we are able to bigfoot directly, okay, porte-sustained to bid for projects. So that can be same. But having said that railway, water and some of the civil projects, the competition intensity is a bit high. Working 1 or 11.5% is, I could say, a bit of challenge. Now on top of that, FGD, we are expecting in the range of 10% to 11%. That is possible for Power Mech has it been for some other plays, maybe slightly low because we have our renowned equipment, land power resources and all. Now with the improvement of business and the top line, there is a high property that the margin profile should move forward to 11.5% to maybe 12%, 12.5% gradually. But what we're trying to say, sir, now FGD will play a significant pie in our revenue profile. If it bots at 10 or 10.5, 11, then the blended will again look to be 12% or 11.8% to 12%. So what we're trying to say is maybe next 6 months, this trend of existing margins may slightly go up. And once the FGD starts, we need to see how much of margin we are able to convert. So maybe next 6 to 8 months, we'll have more clarity to what extent margin profile can be ramped up. But we are sure that the existing purpose should improve gradually.

[Abhishek Poddar, analyst]

And sir, the concern on MGD that you are stating. So the commodity prices have softened in the last 2, 3 quarters instead have taken the orders. So there should be a tailwind only from the company side, at least in the MGD.

[Sudha Kodandaramaiah, executive]

Yes. See, what we have done in the pricing side and you have got certain production also from [ an to ] furnish. One is that the permit award cost is nearly INR 33 lakhs. In fact, if you look at the preoil level and other things, it has been 40 to 50 lakh -- it is a quantum jump in the megawatt cost. I think that has already been pushed for the material. And the second aspect is that most of the contracts on the supply side is the -- at in terms of whatever we feel it is based on the building space and the terms negotiated on back-to-batch suppliers, that is on the supply chain. Therefore, in that way, we are definitely coring of the -- many of the risks in that to the suppliers also. And the other aspect is that, as Satish has rightly said, we have got no capability for executing 25% of the one, 20%, 25% the work on the rate. That should also help us. This is how we are structuring the 3D. And we don't anticipate any major fiction for the already the steel prices or reach below the fleet levels what we had potentially. And perhaps with the tie-ups, what we have made with the vendors, that protection should give us excluding...

[Abhishek Poddar, analyst]

Understood, sir. Sir, just one more question, last question. Regarding the Angra project, there was a INR 50 crores stuck. Any status update on that? And when do you expect to recover this money?

[Unknown Executive]

But the good part is now it's all been stressed they're put in the budget. And the challenge is they are constant of the cash flow. Since a few months, we are struggling that how it gets approved in the cabinet and they put in the budget that part is completed. Now they need to release the payments, and this is not expected to happen in one single bullet payment. Maybe every month, will slow some amount. We are expecting -- if all goes well, December, we should expect at least INR 8 crores to INR 10 crores. And it would take at least 6 months to realize the entire amount, sir.

[Abhishek Poddar, analyst]

So sir, this will also help reducing this working capital days to 130, 35 days you are talking about, that is also getting accounted...

[Unknown Executive]

No, sir, I've not taken that part because this is one line item where inspect of our much efforts, the time lines, we don't have much control -- if this comes, it will help, to some extent, okay, to improve further. But I'm talking about excluding the [ Arafat ].

[Operator]

[Operator Instructions]. The next question is from the line of [ Shin George from GI Financial Service ].

[Unknown Analyst]

Am I audible?

[Unknown Executive]

Yes.

[Unknown Analyst]

First question is a... Can you give us like exact... How much that... Approximate...

[Unknown Executive]

Mr. [ George ] in between we lost your audio.

[Unknown Analyst]

Yes. So my question is for the FGD order from Adani. So how is the revenue forecast for the coming quarters? You see the total contract is structured between 18 to 13 months after we individually start the kickoff date for various projects. Now we have started with 1 or 2 positions. Then other projects has to follow based on the advances what we have done you draw No, in a way, the first 1 or 2 quarters, the revenue will be low, actually, because the engineering work has to be an order has to be done. That's what [ Sator ] selling perhaps the revenue to going from the end of this quarter -- end of this year. But next year, we should be able to have substantial this one, conversion on that process. And next 2 years, perhaps that should be the way we will be able to complete this there.

[Unknown Executive]

Okay. So for Q4, it is INR 400 crores, if I'm right. No. What I can say is that the 2 plants we have now taken up on more. Other plants we have to take up because we have not done that advance. And then the engineering kickoffs have not started. -- dates have not started. And that is effort to start shortly. But once we start it, these 2 projects will be in the focus. Therefore, in this year, end of the quarter, it -- we don't want to give any feat because there are various aspects we have to point engineering and oral. And there, the documents are being prepared for the rate execution work also. Therefore, that's probably the normal first 4 to 6 months, the revenue can be low and some revenue we expect in the last quarter.

[Unknown Analyst]

Okay. So approximately how much would be the amount any idea on that?

[Unknown Executive]

Yes, it can be maybe around INR 200 crores to INR 300 crores. It may slightly go up, but it depends because we're expecting that conversion to happen in quarter 4. But if at all, there is a slippage, then it will go to quarter 1 of next year.

[Unknown Analyst]

Okay. Understood. Yes. And how about the Bangalore Metro order -- the recent order…

[Unknown Executive]

Erode has already got it. We have to say an agreement by 25th of November. The initial kickoff meeting has taken place for INR 427 crores as soon as the kickoff meeting starts. But revenue generation on that, we are not factored this now, but some conversion should happen in the fourth quarter. It's INR 490 crores size of the contract and our share is INR 422 crores. And the modulation part already started. We will be -- we'll start building revenue booking from January onwards. January, February, March, we could see INR 35 to INR 45...

[Operator]

Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for their closing remarks.

[Jami Satish, executive]

Yes, [ Rama ] Yes. I think thanks, everybody. We are in a very interesting time and a lot of expectations are also there. And we have got many things to do with the challenge of execution, but there are a lot of opportunities. And the company is well geared up for the execution model, and we have got the [ where ] and we have demonstrated in many cases, we were enhanced exemestane we have done in the previous years also. And with the resources available and the opportunities available, I'm sure that the next 2, 3 years will be quite bullish for our organization, both in the growth in terms of AR bookings and then conversion of the orders and also improvement in the margin. And I wish these things will go forward. Thank you much.

[Sudha Kodandaramaiah, executive]

Yes. Thank you all. Thank you.

[Operator]

Ladies and gentlemen, on behalf of Nirmal Bang Equities, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.