PSP Projects Ltd
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Earnings Call Analysis

Summary
Q2-2024

Steady Revenue, Margin Outlook; CapEx and Debt Insight

In a detailed update during the earnings call, the company maintained revenue guidance at INR 2,600 crores despite better numbers, opting to stay cautious. The margin guidance remains at 11% to 13%. They highlighted a work hand of INR 4,898 crores as well as an increased credit facility limit from INR 1,047 crores to INR 1,497 crores and a reduction of the bank margin requirement from 25% to 20%. The full year CapEx is expected not to exceed INR 100 crores, with the company already having spent close to INR 90 crores due to precast side expansions. Debt repayments after project completions could see a reduction between INR 50 crores to INR 100 crores, which will impact short-term borrowing levels.

Earnings Call Transcript

Earnings Call Transcript
2024-Q2

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Operator

Ladies and gentlemen, good day, and welcome to PSP Projects Limited Q2 FY '24 Results Conference Call hosted by JM Financial. [Operator Instructions] Please note that the conference is being recorded. I now hand the conference over to Kenan Patel. Thank you, and over to you.

K
Kenan S. Patel
executive

On behalf of the management, I'm pleased to welcome you all to the PSP's earning conference call to discuss the Q2 FY '24 quarterly financial results.

Please note, a copy of our disclosure is available in the investor section of our website as well as on the stock exchange's website. Anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces.

Now I shall hand over the call to our Chairman for his opening remarks. Over to you, sir.

P
Prahaladbhai Patel
executive

Thank you, Kenan. Good evening, everyone. A warm welcome to the earnings conference call of PSP Projects Limited to discuss unaudited financial results for the second quarter and half year ended 30th September 2023.

We concluded the Board meeting this morning and uploaded the detailed investor presentation on the stock exchange and the website for your review. I hope you got the chance to review the same. I will first discuss the highlights that took place during the quarter.

During quarter 2 FY '24 and H1 FY '24, the company was awarded 9 projects and 14 projects respectively. During the quarter, key projects awarded are commercial building in Gift City, Astral Corporate House Phase III, additional scope of work for construction of Chocolate Plant Phase III for a multinational company in Sanand. Balance from institutional and industrial precast order totaling to INR 42 crores. During the quarter, the company completed 2 projects, 1 of Surat Smart City developments from the command center and -- command center and Adani School in Ahmedabad.

As on 30th September 2023, the outstanding order book was to the tune of INR 4,898 crores, a marginal decline by 4% on year-on-year basis on account of partial execution and completion of ongoing projects in comparison to order inflow. Out of the outstanding order book, the private projects comprises of 48%, while government projects comprises of 52%. As on 30th September 2023, there are 54 ongoing projects, 83 of which are based in Gujarat -- 83% based in Gujarat and 17% in UP. Till date, the company has completed 212 projects in total since inception with 84% private projects and balance with government projects.

During the quarter and half year, the company has received an order inflow of the tune of INR 175 crores and received INR 934 crores excluding GST respectively. During H1 of past 5 years, the average order inflow received by PSP Projects has been to the tune of INR 710 crores except for H1 FY '23, where the order inflow was an increase -- in excess of INR 1.500 crores. In addition, considering the recent orders received by the company, the order inflow as on date stands at INR 958.62 crores. We continue to maintain our guidance on the expected order inflow and nearly INR 3,000 crores in FY '24 considering the robust bill book in place.

During the quarter, the company was bestowed with “Contractor of the year" award for 500 crores or above projects category as well as "Excellence in Construction Sector" award for the project of Development of Shri Kashi Vishwanath Dham by Gujarat Contractors Association Awards & Vibrant Summit 2023.

Now I would like to share the project level updates. Regarding UP projects, during the quarter the revenue booked from UP projects is to the tune of INR 268 crores as on date. The revenue booked is INR 1,183 crores in total. The projects are at an advanced stage and work is going on as per schedule.

Regarding SMC Administrative Building, The project is on track. The drafts are completed. Till September 30, 2023, the company has booked revenue of INR 122 crores from that project. Regarding the dispute with Pandharpur, the Honorable High Court at Bombay Civil Appellate Jurisdiction has appointed two arbitrators as nominated by each party. And the nominated arbitrators in turn have also appointed the presiding arbitrators. And first arbitral tribunal has been formed. Preliminary hearing will be held in coming months for giving instructions to parties on further proceedings in this matter.

During quarter 2 FY '24, revenue from operating grew by 70% to INR 607 crores. The EBITDA grew by 91% to INR 74 crores. The EBITDA margin for the quarter is at 12.2%. The improvement in revenue is a mix of higher execution of our ongoing projects and UP projects being on advanced stage of completion. As per latest statistics, the Indian economy is expected to double in the next 7 years with infrastructure spend to double from estimated INR 66.7 lakh crores between fiscal years 2017 to 2023 to INR 142.9 lakh crores between fiscal years 2024 to 2030.

During the recent visit of PM Narendra Modi in Gujarat, he announced and laid the foundation stone of projects worth [INR 6,909] crores, which will be utilized towards railways and urban infrastructure, smart cities and tourism. There exists immense opportunity for growth for the company in the coming future.

With this I conclude my remarks and now I would like to hand over the call to Ms. Hetal Patel to discuss the financial details.

H
Hetal Patel
executive

Thank you, sir. Good evening, everyone. The financial performance during the quarter ended September 30, 2023, is as below. Quarter 2 FY '24 versus Q2 FY '23. Revenue from operations for the quarter is at INR 607 crores versus INR 357 crores, which is increased by 70% on Y-o-Y basis. EBITDA for quarter is INR 74 versus INR 39 crores, higher by 91% on year-on-year basis. EBITDA margin is 12.15% versus 10.83%. Net profit for the quarter is at INR 39 crores versus INR 23 crores, higher by 71% on a Y-o-Y basis.

PAT margin is at 6.4% versus 6.3%. The revenue generated from 7 UP projects put together was INR 268 crores during quarter 2 FY '24. The cumulative revenue till September 30, 2023, is INR 1,183 crores. The increase in the finance cost from INR 7 crores in quarter 1 to INR 12 crore in quarter 2 is mainly on account of increase in short-term borrowings during the quarter. The increase in depreciation from INR 9 crores in quarter 1 to INR 14 crores in quarter 2 is on account of significant additions in fixed assets to the extent of INR 79 crores during the quarter.

During the half year, the company has incurred CapEx of INR 97 crores out of which INR 51 crores is for precast facilities. The inventory comprises of INR 114 crores of construction materials, INR 83 crores of work in progress and INR 21 crores of finished goods. Increase in other financial assets from INR 297 crores to INR 410 crores is mainly attributable to increase in unbilled revenue of the current projects and earlier years' carryforward out unbilled revenue SDB, Surat project and Kashi project amounting to INR 53 crores and INR 31 crores, respectively, awaiting for the final bill pending certification.

The current borrowing has increased from INR 107 crores as on 31st March '23 to INR 377 crores as on 30th September '23. This number mainly comprises of short-term portion of long-term borrowings INR 58 crores, fund based WCDL utilization, INR 210 crores. FD/OD utilization, INR 59 crores and unsecured short-term borrowing INR 50 crores. The increase in short-term borrowings can be attributable to increase in the level of inventory, increase in the payment of CapEx, addition of fixed assets and increase in level of other financial assets.

I would like to mention to you of the important balance sheet numbers as on September 30, '23. Long-term borrowings, INR 81 crores, including short-term maturities of INR 58 crores. Short-term borrowing of INR 319 crores, excluding the short-term maturity of INR 58 crores. Gross block of assets, INR 513 crores, net block, INR 311 crores, addition during the quarter INR 79 crores. Net unbilled revenue, INR 336 crores. Retention noncurrent portion, INR 123 crores. Retention current portion, INR 48 crores. Mobilization advance, INR 243 crores.

Working capital days are as follows: Debtor days are 69. Creditor days are 65. Inventory days are 37. Total net working capital days are 41. During the quarter, the company was in a position to increase the bank credit facility limit from INR 1,047 crores to INR 1,497 crores, net increase of INR 450 crores. The fund base limits are increased from INR 145 crores to INR 225 crores. And non-fund based limits are increased from INR 902 crores to INR 1,272 crores.

The consortium member bank have also reduced the margin requirement from 25% to 20%. The utilization of limit as on September 30 are as follows: Fund based utilization, INR 210 crores. Nonfund based utilization, INR 725 crores.

As of September 30, '23, the company has total fixed deposit of INR 281 crores. Out of which, lien free deposits are of INR 45 crores, and FD was INR 236 crores are under lien with banks for credit facility. Work on hand as on 30th September '23 is INR 4,898 crores, and detailed bifurcation is available in the uploaded presentation.

That concludes the update from financials. And we are now open for -- open the floor for questions and answers. Thank you.

Operator

[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.

S
Shravan Shah
analyst

First of all, congratulations to the entire team for the best performance. Yes. Sir -- Hetal madam, before asking the question, can you repeat the retention money amount?

H
Hetal Patel
executive

Yes, sure. See, retention noncurrent amount is INR 123 crores and current portion is INR 48 crores.

S
Shravan Shah
analyst

Okay. Okay, okay. P.S., Sir, so, cost is -- on the guidance front. So we were guided INR 2,600 crores revenue for this year. So definitely, we have done a much better number. So is there any chance that we can look at even slightly better number for the second half?

P
Prahaladbhai Patel
executive

Shravan, it still depends on how the overall execution goes on for next 6 months. But probably presently we will not be able to escalate on that but as -- we will try stick to our original projection of INR 2,600 crores.

S
Shravan Shah
analyst

Okay. And then on the margin front, so we normally say 11% to 13%. But now are we getting confidence that 12% to 13% would be a better range?

P
Prahaladbhai Patel
executive

No, still I would like to stick to 11% to 13% because again, I say, it depends on quarter-to-quarter. We see margin is a little bit better in terms of 12.5% because of the projects of UP as well as getting near to completion, except [3 hospitals] which will be getting completed in March. So most of the projects getting completed, so some of the revenues are on hold get converted into bill. So that way that margin may reflect 12.5% plus or minus. So we keep this margin of [11% to 13%].

S
Shravan Shah
analyst

Okay, okay. So sir, on the inflows of INR 959 crores, we have received and we have L1 in INR 102-odd crores or so, so INR 1,050-odd crores, if I consider that, so we are saying that INR 3,000 crores. So if you can help us in terms of the bid pipeline and particularly the Ahmedabad and Delhi railway station redevelopment.

P
Prahaladbhai Patel
executive

The total outstanding doesn't -- bid book is as follows. It is maybe about INR 6,500 crores. Out of this, I will mention some of the major projects. One is AIIMS at Rewari that is INR 1,000 crores. Museum project at Madhya Pradesh which is INR 1,000 crores. Our university project at Baroda, which INR 775 crores. The university project in Lucknow, which is INR 525 crores. Dharoi package Dam package 2, which we already bid it, that is INR 421 crores. Commercial building in Delhi, INR 350 crores. Commercial building in Delhi for a developer, which is INR 300 crores. A community project in Hyderabad which is INR 350 crores. An [infrastructure project] in Ahmedabad, which is about INR 300 crores.

A museum project in Ahmedabad which is again INR 400 crores and airport project at Udaipur which is INR 237 crores. An industrial project in Gujarat that is INR 150 crores. [DVRC] Main building at [Gandhinagar] where we have stood lowest is INR 101 crores. Residential facilities at [Gandhinagar] is INR 100 crores. Other projects about INR 500 crores. So the total is about INR 6,500 crores. And about these 2 railway stations, I think you must be knowing or you have not heard. The railway stations for Ahmedabad, then tenders are already open, and that is given to DR Agrawal, so they stood the lowest. And now we don't have that as a whole -- as a part of our bid book. So we will be bidding for Delhi which are not covered in this INR 6.500 crores, but we will be bidding for Delhi.

S
Shravan Shah
analyst

This Delhi will be the same INR 4,800 crores that we talk about...

P
Prahaladbhai Patel
executive

Yes, yes.

S
Shravan Shah
analyst

So that bid is to be submitted by this month end or December.

P
Prahaladbhai Patel
executive

This month end, maybe it gets extended 10, 15 days, because of Diwali, but presently it is by month end.

S
Shravan Shah
analyst

Okay. Okay. And UP, sir, so whatever is remaining, how much now will be -- so by March, mostly, everything will be over, so INR 308 crores is remaining in UP.

P
Prahaladbhai Patel
executive

Probably, we should be through by March or maybe completion if we can extend up to one month at least. Rest of the things should be closed at -- March end. Maximum it can go, spillover approximately.

S
Shravan Shah
analyst

And then for the SMC Surat how much more in the second half, we can look at in terms of the revenue?

P
Prahaladbhai Patel
executive

Revenue will be the same line because presently it is going at the structure level only. So it will be in the same line what we have done [indiscernible] . Once we are out of the basement, then the other activities start, then the revenue rate will go a little bit high. But presently it is on the structure side only that we will be in the same line.

S
Shravan Shah
analyst

Okay. And any more CapEx is to be done for this year, sir, because we have already done INR 79-odd crores?

P
Prahaladbhai Patel
executive

I think there won't be much, but maybe something may be required at SMC side, but that will be not to a larger extent. Maybe INR 10 crores, INR 12 crores and not more than that.

S
Shravan Shah
analyst

Okay. And lastly for the debt, by end of March, once the UP project will be over, so INR 400 crores combined debt will it reduce and how much it will reduce?

H
Hetal Patel
executive

You're talking about debt?

S
Shravan Shah
analyst

Long-term, short-term combined put together debt.

H
Hetal Patel
executive

Sure, right. If you see, this INR 377 crores comprises our FD/OD also. So that is around INR 60 crores. So that is our own money we are borrowing, so that we may get it transferred. So it will be on the lower side compared to this quarter, once [indiscernible] are over and on the revenue stream.

S
Shravan Shah
analyst

Okay. But it will not reduce by INR 200-odd crores, it will be about INR 50 crores, INR 100 crores only reduction will happen?

P
Prahaladbhai Patel
executive

Yes. So now you can consider that way.

S
Shravan Shah
analyst

Okay. Okay. So the finance cost on quarterly business will remain the same, INR 1,200 crores kind of finance cost run rate will continue?

H
Hetal Patel
executive

More or less, yes, INR 10 crore to INR 11 crores, should be same.

Operator

The next question is from the line of [Nusan Dura] from [Nivesha].

U
Unknown Analyst

Hello, sir. I have a couple of questions. Firstly, what percentage of order book has -- is fixed price contract?

P
Prahaladbhai Patel
executive

Can you repeat the question?

U
Unknown Analyst

What percentage of order book is fixed price? And there are no escalations on all those projects.

P
Prahaladbhai Patel
executive

So probably the fixed price which was mostly at the -- in the projects of UP. But I think rest of the projects, whether it is government or private most of the private projects they carry that escalations of [cement, steel and finishing materials] and pass on. And for other projects like Surat and those projects, these are also covered by escalations through RBI index.

Operator

[Operator Instructions] The next question is from the line of Nikhil Kanodia from HDFC Securities.

N
Nikhil Kanodia
analyst

Congratulations on a great set of numbers. Sir, a lot of...

Operator

Can you please speak out loudly or switch to the handset?

N
Nikhil Kanodia
analyst

Am I audible now?

Operator

Yes, sir, please go ahead.

N
Nikhil Kanodia
analyst

Congratulations on recent set of numbers. Last quarter, you have mentioned that you had taken some approval for the increase in sanction limit up to INR 30 billion, and you are planning to increase it to get some additional INR 5 billion or so. So if you can give us the latest status on the sanctions and the utilization in it from fund based and non-fund based.

H
Hetal Patel
executive

Yes, I have already mentioned in my initial speech, but I'll repeat once again. See, our overall limit earlier was INR 1,047 crores. And this is increased by INR 450 crores. So now the credit facility limits are INR 1,497 crores. So the bifurcation between fund based and nonfund based is INR 225 crores is fund based and INR 1,272 crores is non-fund based.

N
Nikhil Kanodia
analyst

Okay. And what is the utilization?

H
Hetal Patel
executive

Currently, the utilization is INR 210 crores fund-based limit we have utilized. And non-fund based is INR 725 crore.

N
Nikhil Kanodia
analyst

INR 725 crores?

H
Hetal Patel
executive

Yes, INR 725 crores.

N
Nikhil Kanodia
analyst

And sir, what is the bid pipeline do you have currently?

P
Prahaladbhai Patel
executive

Bid pipeline, I already said, it is about INR 6,500 crores plus the Delhi project if you can include, which is INR 4,800 crores itself. So it is near to INR 10,000 crores.

Operator

The next question is from the line of Richa from Equitymaster.

R
Richa Agarwal
analyst

My question was on the investment in the precast facility. I mean, are we done with putting money in that or more expenses are expected? And what kind of revenue potential are we expecting from whatever investment or as a whole precast facility is concerned -- related to, if you could highlight that?

P
Prahaladbhai Patel
executive

See, in last 2 quarters also, we were saying that when we initially made the first factory, we said that there are -- expansion has been done at the mold level, not at the infrastructure level, which we have done in this quarter, which was in the tune of about INR 14 crores, INR 15 crores. And rest, the order which is related to bullet train, that which we have got from L&T, that was a huge requirement of molds, and that was the mold investment, and not in the factory level. And we also constructed a new shed for infrastructure. So probably, we are almost done with whatever we have to invest as of now. There won't be much investment on precast from now on.

R
Richa Agarwal
analyst

Okay. And sir, on an absolute basis, I think your other expenses for this quarter have come down significantly. I mean, correct me if I'm wrong, but I mean, do you expect this in the run rate or is there any special reason why it is relatively low?

H
Hetal Patel
executive

No, there is no specific reason. If you just take -- there are various [days] in which there are some reduction like consultancy expenses as we reviewed. So there are small reductions, which have accumulated to this much difference.

R
Richa Agarwal
analyst

Okay. And going forward, I mean they would remain like this run rate or what was normal in the previous preceding quarter?

H
Hetal Patel
executive

It should be in the same run rate. If you see -- I mean last year also, the other expenses were INR 26 crores and half yearly it is INR 13 crore. So it should be in the same range.

R
Richa Agarwal
analyst

Okay. And sir, just on a year-on-year basis, the promoter stake in the company has come down from 70-odd to 66 -- 70% to 66%. Is further -- I mean, is there a further reduction expected? Or would you be maintaining the stake that you have?

P
Prahaladbhai Patel
executive

No, not as of now.

Operator

The next question is from the line of Vaibhav Shah from JM Financial.

V
Vaibhav Shah
analyst

What was the precast revenue for the second quarter and first half and what is our guidance for FY '24 for precast revenue?

P
Prahaladbhai Patel
executive

Last year, I think we did about INR 75 crores or INR 80 crores. This year we have envisaged about INR 225 crores in precast. But as of now it is not clear about what was revenue exactly from precast because there are some projects, which are being booked in the project side. So now we consider that the precast plant as a facility not as a cost center.

V
Vaibhav Shah
analyst

So you said INR 225 crores for FY '24?

P
Prahaladbhai Patel
executive

Yes. Total, it should be in that range only.

V
Vaibhav Shah
analyst

For UP projects, what would be the total receivables as of September and what is the unbilled revenues for the same?

H
Hetal Patel
executive

Yes, around INR 100 crore is unbilled revenue for UP projects. See basically last month billing is normally in the unbilled revenue, because once they certify the bill and then we get -- we raise the GST invoice. So this belongs to the last month billing. And that is normally outstanding. And we have some outstanding of INR 50 crores of unbilled revenue.

V
Vaibhav Shah
analyst

Okay. And lastly, how do you see the invoices standing out for the SMC projects for FY '24?

P
Prahaladbhai Patel
executive

SMC project just before one investor asked the question, the same question. I said that [indiscernible] now, once we are out of the basement, from my side, I don't see any phase to grow from here because there won't be any other activity related to [civil work side]. So it will purely on structural side, so it will be in the same phase what we have been doing till now.

V
Vaibhav Shah
analyst

For FY '24 the revenue should be around INR 140 crores, INR 150 crores?

P
Prahaladbhai Patel
executive

Yes. In totality, you can consider that.

Operator

The next question is from the line of Bharani Vijayakumar from Spark Capital. Bharani, sir, can you speak a bit louder?

B
Bharanidhar Vijayakumar
analyst

Yes, it is better?

Operator

No, can you please switch to the handset?

B
Bharanidhar Vijayakumar
analyst

Is it better? Yes. Okay, I will go ahead with my question. So the increase in current assets is due to the unbilled revenue from UP project, right?

H
Hetal Patel
executive

I have already mentioned, the increase in current assets is mainly due to unbilled revenue, and that includes the -- increasing the execution of current projects as well as a few of the unbilled revenue of earlier years, which is carried forward. So that has not been converted to GST bills. And that I have already mentioned. It's SDB is INR 53 crores and Kashi project INR 31 crore. So including those amounts, there are -- new bills have been generated.

B
Bharanidhar Vijayakumar
analyst

So including the earlier -- including other 2 projects and UP project, it is around INR 160 crores, INR 170-odd crores increase?

H
Hetal Patel
executive

Yes. There are other routine projects also have increased, but...

P
Prahaladbhai Patel
executive

Major, major you can consider this.

B
Bharanidhar Vijayakumar
analyst

Okay. No, my question is shouldn't we be including this as part of our working capital calculation?

H
Hetal Patel
executive

Yes, you can include. Since it is the part of current assets, so that we can see. You mean to say you want to include in our receivables and all. Because that is not appreciable, because still we haven't raised the bill. Those bills are under certification.

B
Bharanidhar Vijayakumar
analyst

Right. But if I see your cash flow from operations, it is negative. So which is why I'm saying if this is going to be recurring number.

H
Hetal Patel
executive

It is already included. In cash flow, it is already included. If you see other assets movement, that is the other current assets movement only.

B
Bharanidhar Vijayakumar
analyst

Correct. So what I'm trying to tell is if this is going to be a recurring kind of a number in the future also, shouldn't we be including this as part of our working capital calculation?

H
Hetal Patel
executive

Yes, you can. See whatever shortfall is there, increase is there, that much working capital we will be requiring for the -- our [indiscernible].

P
Prahaladbhai Patel
executive

That is only because of these 2 projects were getting delayed because of finalization. Otherwise, generally, the bill does not get delayed to such an extent. Both the cases were a little bit difficult in terms of getting some escalation part also. After Corona for Surat and some pending issues of lump-sum contract at Kashi, which needs to be discussed at the top level. So that has the problem of finalization of the bill. Otherwise in general, whatever unbilled revenue you are considering, that is not something which carries on for 6 to 8 months.

B
Bharanidhar Vijayakumar
analyst

Okay. So we are expecting this to be collected by when?

P
Prahaladbhai Patel
executive

Probably, I think we are expecting any time. This was not the quarter [indiscernible] to go beyond, maybe by next quarter it should get included.

B
Bharanidhar Vijayakumar
analyst

Okay. And then your short-term borrowing will also come down from the INR 377 crores level to what level in your view by end of this year?

P
Prahaladbhai Patel
executive

Maybe there can be decrement of INR 50 crores to INR 100 crores. After getting all the unbilled revenue into cash flow, then that can be -- give us some relaxation in terms of INR 50 crores to INR 100 crores.

H
Hetal Patel
executive

Yes. See, if you see our -- even fund based facilities have also increased from INR 145 crores to INR 225 crores. So now on an average, we will be utilizing around INR 200 crores of our working capital.

B
Bharanidhar Vijayakumar
analyst

Okay. Understood. Final question on CapEx. So full year CapEx, how much will it be, sir?

P
Prahaladbhai Patel
executive

Yes. As of now, we always give the guidance and we stick to that and it is always coming on that average if you consider 3% to 4%. It should be near to INR 100 crores. But as we have already reached INR 90 crores, because of the more CapEx at the precast side. So probably not more than INR 10 crores to INR 15 crores, as I have already answered to some other inventors. So it should be in that range obviously, 3% to 4%.

Operator

[Operator Instructions] The next question is from the line of Ash Shah from Elara.

A
Ash Shah
analyst

I just have 1 question. How much have you invested in the precast facility till date and also cumulatively? And also, I think, we were going to invest in 3 phases. And we have just operated Phase 1 till the last quarter. So now can we -- is it safe to assume that all 3 phases have been activated or have been commissioned?

H
Hetal Patel
executive

Earlier, we have invested INR 110 crores in first phase. And now it is INR 51 crores. So it's around INR 160 crore, INR 165 crore investment in precast. And some expenses -- some assets we may need to buy further going forward.

A
Ash Shah
analyst

Okay. So can we say that the facilities or production capacity has increased from 1 million square feet to 2 million or 3 million square feet?

P
Prahaladbhai Patel
executive

Yes, to the extent you can consider because previously the molds required for beam, column and slab, they were not to that large extent, because we just kept the space for getting those molds at a later stage. Out of which we have almost purchased more than 75% of that requirement. Probably presently, we are having a requirement more on the factory side and the warehousing facility. So it is not converted into square feet output of the precast plant. But it is majorly on the quantity of work we do every day in terms of cubic meter of concrete now. When we go into -- purely into buildings then we would construct purely a residential building or a commercial building, then you can say it has increased to 1 million -- from 1 million to 2 million.

Operator

The next question is from the line of Shravan Shah from Dolat Capital.

S
Shravan Shah
analyst

Sir, so broadly now as you previously also answered. So structurally now it is safe to assume that our gross debt, including working capital and long term will remain more than INR 300-odd crores. So that is one. And second, in terms of the working capital. So 1 is core cash conversion days that is inventory, debtor payable and others. So how do we see? Is there -- those core cash conversion days are maintained at 42, 43 days, but if we look at the others also, is there a possibility of further increasing that and that can lead to a further increase in debt?

P
Prahaladbhai Patel
executive

Last quarter, also we discussed this point, and I was expecting that this should come near INR 30 crores to INR 35 crores. Which is still I'm expecting because, as I said, lastly, because UP is at the stage of completion. And once we get into completion stage, I think, most of the due payment will be on -- due payment will be converted into payment. So that we should be in position to get a better than -- less than INR 40 crores in the near future and that's what I am expecting. So it should not remain -- go beyond from that.

S
Shravan Shah
analyst

Okay. Okay. Got it. And secondly, sir, so definitely this year in terms of the revenue growth would be significantly high, 34%, 35%. But going forward, '25, '26, normally what we used to say, 20%, 25% that we normally aim to achieve. So that will remain the same. So the purpose is to -- why I'm reiterating is for that, we need a sizable order inflow. So that's the point I want to understand.

P
Prahaladbhai Patel
executive

I can't understand your question, Shravan. Can you repeat it?

S
Shravan Shah
analyst

Sir, I'm saying that in terms of the sustainable revenue growth for FY '25, '26 onwards, 20%, 25% if we are targeting that. So for that, we need sizable order inflow, so definitely INR 3,000 crores. Then maybe we need to increase to INR 4,000-odd crores. Are we confident that we can do it? Because currently, definitely, the opportunity is there in Gujarat. We are sizably in March end when UP projects will be over. Our order book will be -- more than 90% would be from Gujarat. So how we are trying to diversify, derisk ourselves, so that at least we should be able to on consistent basis, get the order inflow? Hopefully if we get the Delhi station development, then everything is sorted. So that's the thing I want to understand.

P
Prahaladbhai Patel
executive

There is on order book I have already said there are INR 6,500 crores without Delhi project. There also if you can find there a few project which is to the scale of INR 1,000 crores. So Rewari AIIMS Hospital is INR 1,000 crore. Museum project at -- for Madhya Pradesh is INR 1,000 crores. University project in Baroda is INR 775 crores. So there are a few opportunities which we are expecting. And on the bids which we have already submitted, we are expecting some of the orders -- some of the bids to get converted to order. So still I'm confident we should be in position to reach to INR 3,000 crores, which is 25% more than what presently we have envisaged. Every year when we are envisaging some revenue from 15% to 20%, the same way we keep our order inflow of 20%, 25% plus. I think we should be in a position to maintain our revenue versus order improvement.

S
Shravan Shah
analyst

Okay. So how much value of bids that we have submitted and where still the outcome is yet to come?

P
Prahaladbhai Patel
executive

I think it is more than INR 1,000 crores. INR 400 crores, INR 400 crores, and INR 100 crores, so it is INR 1000 crores -- more than INR 2,500 crores plus, yes.

S
Shravan Shah
analyst

More than INR 2,500 crores bids we have submitted. So these are the 4, 5 projects.

P
Prahaladbhai Patel
executive

Yes, yes.

Operator

The next question is from the line of [Nusan Dura] from [Nivesha].

U
Unknown Analyst

Am I audible, sir?

P
Prahaladbhai Patel
executive

Yes, yes, yes.

U
Unknown Analyst

Just wanted to know that what is the success rate of orders for the company?

P
Prahaladbhai Patel
executive

Usually, we always expect between 15% to 20%. And that's what we have been doing till now at an average of whatever order bid book we have, it converts into 10% to 12% -- 15% to 20%, sorry.

U
Unknown Analyst

Can you repeat, sir? I couldn't understand.

P
Prahaladbhai Patel
executive

15% to 20%. If you say INR 6,500 crores is present order book, we can expect INR 1,200 crore to be converted into -- from bid to the order book.

Operator

[Operator Instructions] The next question is from the line of Devang Patel from Sameeksha Capital.

D
Devang Patel
analyst

Sir, earlier in the presentation, you were giving the total cash and bank balance, including FDs for year end. Can you have a figure for the half year?

H
Hetal Patel
executive

Devang, in the presentation, we just said. You want to -- you need the number...

D
Devang Patel
analyst

The cash you mentioned is INR 281 crores. What is the total cash including FDs?

H
Hetal Patel
executive

Yes. That is as per the cash and cash equivalents, what we are showing. Out of that, it's hardly INR 2 crores to INR 3 crores because we normally don't keep cash in our current accounts and all. We put it in the FD/OD utilization. So including the cash it will be around INR 285 crores.

D
Devang Patel
analyst

Okay. Okay. Secondly, if I look at the cash flow statement and the cash flow is negative. You mentioned the unbilled revenue. Also in the other liabilities items, what was positive INR 32 crores is negative INR 87 crores for this half. So on the liability side, has something reduced for us, mobilization advance or something?

H
Hetal Patel
executive

Mobilization advance there is not much reduction, but the negative -- unearned revenue, which was last year -- as on 31 March, it was around INR 60 crores and this is reduced to INR 23-odd crores. So around INR 33 crores reduction is there in unearned revenue. This amount due to customer.

D
Devang Patel
analyst

From the half year revenue, there is a reduction of INR 88 crores, INR 87.6 crores.

H
Hetal Patel
executive

Yes, right.

D
Devang Patel
analyst

Okay. Moving on, what is your thought process on the bidding strategy, it is going to be an election year next year. Do you see -- foresee a situation that we would want to have a healthy order book pipeline before the election hits and have you kept some leeway for the large station redevelopment project?

P
Prahaladbhai Patel
executive

See, I think the order -- the bid pipeline what we are having today INR 6,500, plus INR 4,000 crores -- INR 4,800 crores of Delhi, it is almost INR 10,000 crores. And on average also since last one year, we have been seeing that it is always become even more than INR 6,000 at any time. So we don't see any slowdown of bids coming from government side or private side, because of election. Even if at the time of election, there will be a disturbance of 1 and 1.5 months. Before that whatever bids which we are having and which we are expecting, maybe that we -- get converted into our transaction of INR 3,000 crores. So I think we don't have to worry about what will happen to election and how the bids will get slow.

D
Devang Patel
analyst

And on the Delhi project size is bigger than Ahmedabad project. And last call, you mentioned you will be participating with someone. Is it going to be the same partnership for this project as well?

P
Prahaladbhai Patel
executive

So you mean to say Ahmedabad Railway Station?

D
Devang Patel
analyst

Yes.

P
Prahaladbhai Patel
executive

I already said that Ahmedabad railway station tender is open and it has gone to DRS. We are no more -- we stood I think third or fourth among 6. Now it is not a part of our bid pipeline.

D
Devang Patel
analyst

Maximum bid capability is INR 2,500 crores and the Delhi project...

P
Prahaladbhai Patel
executive

So that still remains as INR 2,500 crores plus.

D
Devang Patel
analyst

Are we bidding for the project on our own?

P
Prahaladbhai Patel
executive

Bidding for project?

D
Devang Patel
analyst

For the Delhi project, are we bidding on our own as standalone?

P
Prahaladbhai Patel
executive

No, no, no. It has to be a JV because that's the requirement of the project to have experience of bridge, which we do not have. So we need a bridge partner.

Operator

[Operator Instructions] The next question is from the [Piyush], an individual investor.

U
Unknown Attendee

I have a question regarding the -- our UP project is almost on the verge of finishing, I believe. And the remaining projects, whatever left is also Gujarat only. So is there any plan from the management side that you want to diversify from Gujarat to other states or something. I heard of Delhi projects also on this call. Any specific, any thought process on this?

P
Prahaladbhai Patel
executive

No, no, nothing like that. As I've already stated in my bid book also, there is projects of INR 1,000 crores at Rewari. There is a municipal project in Hyderabad. There are 2 development projects, commercial building in Delhi. So it is not like that, but it's a matter of coincident that the UP project, most of the projects are getting completed. See we are bidding on whatever opportunities we are getting in the states of Delhi or UP. One more project, a university project in Lucknow, also I said, which is INR 525 crores. That is also in UP...

U
Unknown Attendee

AIIMS project at which city?

P
Prahaladbhai Patel
executive

Rewari, Haryana.

U
Unknown Attendee

Okay. Got it. So any new projects, you are targeting in the pipeline in UP?

P
Prahaladbhai Patel
executive

Yes, there is one project in UP that is INR 525 crores, it is a university project in Lucknow.

U
Unknown Attendee

Okay. And on second thing, some other participant also asked. The cash flow from operation was negative for half year. Can we expect this will be reversed in full year -- full year FY '24 number? Because this half year, it is around INR 200-odd crores minus something.

H
Hetal Patel
executive

Yes. If you see, the utilization of working capital will reduce, accordingly it will get improved by end of this current financial year.

U
Unknown Attendee

But whatever the unbilled revenue which is there in the September, which will also be billed in the next half year, correct?

H
Hetal Patel
executive

Yes, yes. As sir has said already -- should be over by next quarter.

U
Unknown Attendee

Okay. And how much is the revenue potential from precast facility at the optimum utilization?

P
Prahaladbhai Patel
executive

Currently whatever order presently we are having, we are expecting more than INR 200 crores to INR 225 crores.

U
Unknown Attendee

So last year, we didn't achieve our whatever the number you have given in the guidance, which is around INR 2,100 crores to INR 2,200 crores. And you said in the last previous calls also for this year, we will definitely compensate and do this. The quarter 2 number also looking like that. So what can be the guidance for next half year? This year, what number we will close?

P
Prahaladbhai Patel
executive

It will be -- already declared about INR 2,600 for the total revenue for the whole year.

U
Unknown Attendee

We are on track.

P
Prahaladbhai Patel
executive

We are already on track. If you compare it with quarter-to-quarter and year to year, first two quarters are a little bit less than last 2 quarters. So if you compare both the quarters, both the last year quarters, you will get an idea that most of the revenue in construction site is converted...

U
Unknown Attendee

H2 is always heavy on the revenue side.

P
Prahaladbhai Patel
executive

Yes, H2 is very heavy all the time for all the companies.

U
Unknown Attendee

And sir, last question on order book traction. The current year, we've got some INR 900-odd crores orders. Is this number on lower size as compared to last year? Because I don't know exactly the number how much it was in the last half year.

P
Prahaladbhai Patel
executive

Yes, it is not something which is consistent throughout the year. So the last year it was -- presently we are at the same stage, but last year, first quarter only we got an order of Surat SMC. That was INR 1,350 crores. It depends on the bidding process and it depends on what type of orders are coming in and in which quarter. At the end of the year this year, we are still expecting and we stick to that order inflow of INR 3,000 crores, which I already said that the order book -- bid pipeline which we have is about INR 6,000 crores. We are expecting more than INR 1,000 crores to be converted by December.

U
Unknown Attendee

Okay. So what I understood from you, you're saying full year, you will get an order inflow of INR 3,000 crores.

P
Prahaladbhai Patel
executive

That's what we have envisaged.

U
Unknown Attendee

And you have received INR 900 crores or INR 1,000 crores in H1. So the H2 you are seeing INR 2,000 crore will be expecting.

P
Prahaladbhai Patel
executive

We are expecting, yes. You are right.

U
Unknown Attendee

And sir, so just last point. So what will be our closing order book in FY '24? It will be around INR 5,500 crores to INR 6,000 crores type number?

P
Prahaladbhai Patel
executive

Yes, you see -- the total thing minus INR 2,600 crores, it will be in the range of INR 5,500 crores to INR 6,000 crores.

U
Unknown Attendee

Okay. Perfect. And the margin we expect is around 10%, 12%, that is the guidance you have given earlier also.

P
Prahaladbhai Patel
executive

I already said between 11% to 13%. So it can be 12%, it can 11.5%.

Operator

The next question is from the line of Richa from Equitymaster.

R
Richa Agarwal
analyst

My question is, again, on precast. Like we have incurred certain expenses on molds for the rail project that you suggested. I just wanted to understand what is the fungibility of these kind of molds? I mean considering that these are for the rail project, I mean, is there a possibility that there would be well utilized once the specific project is over? Or do you expect similar kind of orders to come in and this capacity is utilized?

P
Prahaladbhai Patel
executive

The [network] which we are making for bullet train, it is not something which cannot be utilized for road infrastructure. These are the ducts which will be presently used as conveyance for data duct and electrical ducts for bullet train. The same size of ducts can be utilized for drains, storm water drains, and drainage line also. So it is something which can be -- in future also the same molds can be utilized for road infrastructure also.

R
Richa Agarwal
analyst

Okay. And could you also talk about the discipline when it comes to bidding? Because like you said that we were not the L1 bidders and perhaps we ran [fourth or fifth]. So do you see this competition intensifying where margins are being kind of sacrificed and we would still stick to something where we can maintain 11% to 13% margin. If you could talk about the competition in the industry.

P
Prahaladbhai Patel
executive

Competition is there. People are little bit aggressive at some of the projects. But in general, we will stick to our margins, and we will try to maintain our order inflow, because we would not like to enter into that rush of market, where people are much aggressive. So I think we will still try to be maintaining margins and we try to remain in that zone. Maybe the value of the project can be in the range of INR 150 crores to INR 200 crores. We have that capacity to [handle 50 projects] at a time. So no need that we should get aggressive on larger projects just because of the competition.

R
Richa Agarwal
analyst

Yes. I just wanted to understand your thought process on it. And sir, I mean, is there any kind of sense or visibility on when this matter, which is under litigation can be finalized?

P
Prahaladbhai Patel
executive

I think something, actually the arbitrations process as per the government norms now decided. Once the site starts, it has to be completed by -- within 12 months. So probably both arbitrations are not so much complicated. So I would see that the -- both the arbitrations should close within 1 year. And that's what the guideline and the government rules have now decided that no arbitration should be extended beyond one year. But as is expected, it gets converted into finalization in one year.

I think it is over, then we conclude this.

Operator

As there are no further questions from the participants, I now hand the conference over to Mr. Patel. Over to you, sir.

A
Ashish Shah
analyst

On behalf of JM Financial Institutional Securities, I thank you all the participants for attending the call, and thank you to the management for letting us host the call. Over to you, sir, for any closing remarks. Thank you.

P
Prahaladbhai Patel
executive

Thank you. On behalf of the management of PSP Projects, thank you for joining us on the earnings call today. Wishing everyone a happy Diwali and Saal Mubarak in advance. We hope that we have been able to address most of your queries. In case of project queries, you may reach out to our investor relation adviser, Ernst & Young and we will connect with you offline. Thank you, Mr. Ashish for hosting the call. Thank you, everyone. God bless you.

H
Hetal Patel
executive

Thank you, everyone.

K
Kenan S. Patel
executive

Thank you, sir. Thank you.

Operator

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

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