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PSP Projects Ltd
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Ladies and gentlemen, good day, and welcome to PSP Projects Limited Conference Call hosted by SMIFS Limited. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Lokesh Kashikar. Thank you, and over to you, sir.
Thank you, Manav. Good evening, ladies and gentlemen. On behalf of SMIFS Limited. I'm pleased to welcome you all on the PSP Projects Q4 FY '24 and FY '24 Earnings Conference Call.
From the management side, we have Mr. P. S. Patel, Chairman, Managing Director and CEO and Ms. Hetal Patel, CFO of the company. I will now hand over the floor to Mr. Kenan Patel, Company Secretary, for a disclaimer and then the management will have the opening remarks. This will be followed by an interactive Q&A.
Thank you, and over to you, sir.
Thank you, Lokesh. Good evening, everyone. I'm pleased to welcome you all to PSP Project Limited earnings conference call for analysts and institutional investors to discuss Q4 FY '24 and FY '24 financial results. Please note, a copy of disclosure is available in the Investors section of the website as well as on the stock exchanges. Anything said on this call which reflects outlook for the future or which can be considered 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 sir, for his opening remarks. Over to you, sir.
Thank you, Kenan. Good evening, everyone. A warm welcome to [indiscernible] earning conference call of PSP Products Limited. We concluded the Board meeting this afternoon. I hope you got the chance to review the financial results and investor presentations uploaded on the stock exchange and website.
Financial year 2024 has been an interesting year with the company with several aspects. I'm happy that the company has come out with satisfactory performance in this year [indiscernible] update before I move to the quarter highlights.
Company closed the financial year with the highest ever outstanding order book of INR 6,029 crores and a year-on-year growth of 20%. During the year, the company received highest ever order inflow to the team of INR 3,498 crores, which is excluding GST. We had expected an order inflow in excess of INR 3,000 crores, and we have clearly achieved our order input guidance for this financial year.
Till date, the company has completed 222 projects in total. Since inception, we [indiscernible] private projects and [indiscernible] government projects. During April 2024, the company successfully raised INR 244 crores by the way of qualified institutional placement and successfully placed with market, domestic mutual funds and FIIs participating in the issue.
My heartfelt gratitude to all the investors who participated and showed a long-term trust in the company's growth story that is yet to unfold. We are confident of our journey efforts from here and remain dedicated and committed to deliver to the best of our abilities in the interest of our stakeholders and employees. I am happy to share that pertaining to our ongoing litigation with Surat Diamond Bourse on 15 May, 2024. And out of court settlement admin reached between the company and SDB on the basis.
Constructive dialogue, discussion and negotiation, [indiscernible] resolving all the disputes between the party. Under the settlement that SDB has agreed to PSP is a total amount of INR 617 crores and above our INR 1,790 crores already certified by them. With this settlement, the total approved and project value amounts to INR 1,960 crores, excluding GST.
Till now the company has recorded a revenue of INR 1,896 crores in the accounts. And now the remaining [indiscernible] crores will be recorded upon the receipt of the [indiscernible] from SDB. We expect to receive 50% of the due payment within 30 days on the balance [indiscernible].
During the year, the company completed 17 projects. The major projects completed were construction of Money Plant High Street in Ahmedabad, Reliance Corporate office in Ahmedabad, construction of Adani International School in Adani Shantigram, construction of [indiscernible], Surat Smart city development, command center, [indiscernible] projects, [indiscernible] 4 different locations in Gujarat.
During the year, the company was awarded 27 projects, and major projects started were, development of [indiscernible] region as a world-class sustainable tourist and pilgrimage destination Phase 1 and 2, Construction of Gujarat Biotech Research Center, construction of Gati Shakti Vishwavidyalaya at Baroda, Sabarmati river fund Phase 2 Ahmedabad, construction of Fintech [indiscernible] building at Gift City, Gujarat, Women and Biological Science Galleria at Science City Ahmedabad, Gujarat, street beautification at Gandhi Nagar. Construction of Commercial Building in Gift City, Gandhinagar.
Overall, on the financial performance of the year, the company closed the financial year at the highest ever revenue of INR 2,262 crores, which is 28% year-on-year growth. The revenue in the company has grown at 30% CAGR over the past 7 years. EBITDA at 22% and PAT at 17% CAGR growth. The EBITDA margin for the year remained [indiscernible]. The impact in margins in FY '24 as a whole was largely on account of what the [indiscernible] projects put together.
These were repeated on track and the company did incur certain additional actions during the course of the project without impacting the margins. Newly awarded major projects as [indiscernible] building, Sabarmati River pump, road and development project. Gati Shakti University, pent up building in big city. That are at the initial phase of construction and hence, you can see it's a marginal impact coming in terms of even in [indiscernible].
For FY '25, considering the bid book and the upcoming projects I expect an order inflow nearly INR 3,500 crores. As far as our ongoing projects are concerned, all our projects are working as the execution cycle and none of the [indiscernible] are stuck or slow moving at the moment. You are all aware the company is bidding for the projects in building space across ticket size and states. We are confident to gradually move up the value chain and increase the projects of higher ticket size gradually over a period of time. Our bid book is spread across projects in states of Madhya Pradesh, Odissa, Delhi [indiscernible]. We look forward to participating in India's growth story by playing our positive role in the development process.
With this, I conclude my remarks, and now I would like to hand over the call to Miss Hetal to take us through the financial details.
Thank you, sir. Good evening, everyone. The financial performance during the quarter and year ended March 31, 2024, on stand-alone basis is as below.
Quarter 4 FY '24 versus quarter 4 FY '23. Revenue from operations for the quarter is at INR 649 crores versus INR 729 crores, decreased about 11% Y-o-Y basis. EBITDA for the quarter is at INR 52 crores versus INR 78 crores, reduced by 33% Y-o-Y basis. EBITDA margin at 7.98 versus 10.67. Net profit for the quarter is at INR 15 crores versus INR 46 crores, reduced by 67% on Y-o-Y basis. PAT margin is at 2.3% versus 6.3%. Decrease in profitability pertaining to EBITDA margin is mainly attributable to [indiscernible] employee benefit expense and other expenses as compared to quarter 4 of FY '23. Decrease in PAT margin is mainly attributable to a decrease in EBITDA margin, increasing finance costs and depreciation. Finance cost has increased due to increase in borrowings compared to quarter 4 of FY '23. Increase in depreciation is mainly due to additional CapEx incurred during the whole year.
We'll brief about this year's financial results, FY '24 versus FY '23. Revenue from operations for FY '24 is arrived at INR 2,462 crores versus INR 1,927 crores, which has increased by 28%. EBITDA for the year is INR 262 crores versus INR 225 crores, which is higher by 16% on Y-o-Y basis. EBITDA margin is at 10.62% versus 11.68%. Net profit for the year is at INR 124 crores versus INR 133 crores, which is reduced by 7%. PAT margin is at 5% versus 6.8%.
The revenue generated from 7 UP projects put together was INR 26 crores during quarter 4 FY '24. Cumulative revenues till March 31, '24 is INR 1,459 crores. During FY '24, company has incurred CapEx of INR 160 crores including INR 2.88 crores of [indiscernible] capital work in progress. CapEx income for pickup facilities amount to INR 29 crores. Just like to mention a few important balance sheet numbers as on March 31, '24.
Long-term borrowing INR 95 crores, including short-term maturities of INR 54 crores. Short-term borrowing is INR 360 crores, excluding short-term maturities of INR 54 crores. Gross flows of asset is INR 559 crores, and net block of assets INR 321 crores. Additions during the quarter is INR 16 crores and additions during the year is INR 148 crores.
Total CapEx income from [indiscernible] is INR 201 crores, including INR 2.8 crores for capital work in process. Net MD revenue is INR 442 crores. Retention noncurrent portion is INR 104 crores. Retention current portion is INR 50 crores. Mobilization advance is INR 135 crores. Inventory stands at INR 316 crores, which comprises of INR 107 crores of construction material, INR 187 crores of work in progress, and INR 22 crores of finished goods.
Working capital base are as follows: Debited base at INR 50 crores, credited base at INR 62 crores, inventory base at INR 47 crores, and total net working capital base at INR 35 crores. Out of total sanctioned credit facilities of INR 1,497 crores, company has utilized INR 1,031 crores and INR 466 crores available for utilization. Fund-based utilization is INR 247 crores and non-fund-based utilization is INR 784 crores.
As of March 31, '24, the company has total fixed deposit of INR 249 crores. Out of which, [indiscernible] deposits are INR 32 crores, [indiscernible] INR 209 crores under [indiscernible] and actually [indiscernible] crores are given as security deposits [indiscernible]. Work on hand as on March 31, '24, is INR 6,049 crores. Detailed bifurcation is available in the [indiscernible] presentation.
That concludes the updates on the financials, and we are now open for the question and answer session.
[Operator Instructions]. We have our first question from the line of Shravan Shah from Dolat Capital.
Sir, first, I wanted to understand, particularly just a broader guidance on the revenue and margin front. So we'll want to understand more on the margin going forward, particularly given the 8% margin -- EBITDA margin that we have in the fourth quarter. Previously, we used to say 11% to 12% kind of a margin. So will we come back to that level and that too from the Q1 FY '25 itself, given that we will be having a higher other expenses for the QIP? And also if you can specify how much on the other expenses will be there for the QIP in the Q1 FY '25?
Shravan, first of all, let me correct you about 12%. We have been talking to you on 11% and 12% for 6 months. And I think the last 2 quarters, I've been saying between 10% and 11% because I already explained about the EPC contract. There is always a valuation of 1% or 2% in terms of operational [indiscernible] In terms of the cost which we have not considered in the [indiscernible] sometimes if you have to carry on with the tenders that have been built in a very fast track mode [indiscernible] 20 days.
So this year also, we'd like to maintain our margins. [indiscernible] And in terms of revenue, I still say that it would be a revenue growth of about 15% [indiscernible].
Okay. And so only the 15%, so will it -- the recent order inflow in terms of the pickup in the execution, is it taking time because -- otherwise, we should be growing at least 18%, 20% plus kind of a number. So -- or we will revise the number once we have 1 or 2 quarters?
So that's always the possibility that we are reaching for the first 2 quarters, that has been nearby order inflow. Because, presently, the [indiscernible] about in the range of INR 4,000 crores to INR 5,000 crores. So whenever we get earliest order, we bill the first 2 quarters, that that can also be revised. But at the same time as the last year impact of about INR 100 crores [indiscernible] which we don't because of some of the projects we got at the last days after [indiscernible] last 2 quarters, couldn't start immediately, and like we are at the initial stage, the reason is, it would not have been generated. The same thing should not be -- the same thing can have happen this year also. We will be getting maximum order in the last 2 quarters, then we can -- we may not have a revenue -- the projections which we have guided. But presently, I can assure you about 15% next [indiscernible] .
So then one can think of the higher execution in the FY '26, 1 year down the line?
See, it is either both way. Again, I will come back to because projections about execution is always not possible 100% by looking to our last 2 years of experience. Both the years, we fall short of INR 100 crores. And this year also, there are so many uncertainties during the course of the project, whether it's only because [indiscernible] there are so many approvals. Sometimes there is a labor issue. sometimes there is a monsoon issue, the consistency of construction, it is very hard to predict all the time.
But yes, looking to the pace at which we are growing and looking to the pace at which we have execution capability, we can assure you that this will be in the same range, but probably next year also, if the order book is 2x or 3x, then you -- then say there can be more revenue that doesn't leave the order book is our 2x. I think any order book beyond 2.5x can give you a better revenue rather than sticking to the revenue which I'm saying today.
Okay. Okay. Got it. Secondly, in terms of the -- how much the other expenses will be higher in the 1Q for the QIP particularly? How much will be there?
The QIP Expenses will not be [indiscernible] in the P&L number significantly.
Okay. Okay. Got it. And sir, just in terms of the CapEx and the working capital, particularly because previously, even this year, it seems to be slightly on the higher side. We used to say 3% to 4% of revenue. But if I look at the last 4 years, that average comes at 5.2%. So how we look at the CapEx for next 2 years?
I think -- I think you must have heard during the call of April balance sheet bifurcated both the CapEx done on the record side and second on the company side. If you see on the company side, it is INR 76 crores, that's still within the range of 3%. So I would have always say that it should not go beyond 3% to 4%. But here, the CapEx is going a little bit high because depending on [indiscernible] always require some CapEx, then we have an order. So [indiscernible] company which you have to prepare depending on the size of the order and the delivery time line. So that's the only reason this CapEx has gone a little bit high. Otherwise, you can still [indiscernible] of CapEx of the revenue, which we usually do and we go into the standard practice, which we have an experience also with classic 7 years. So it should be within that range only.
And sir, now the debt level post the INR 244 crore QIP. So the current INR 445 crores debt, how much it has reduced and how now one can look at in terms of the -- both by end of FY '25, how the debt level and the finance cost for the full year from close to INR 50-odd crores, which we have reported in FY '24?
Yes. So basically, out of the [indiscernible], we have already repaid INR 188 crores of the debt, which was on a maximum utilization as on 31st March. So currently to that extent that amount has reduced. And going forward, we will be using it as and when required for any future projects.
So compared to FY '24, definitely, the utilization of [indiscernible] facilities will be on the lower side. And in the same day, finance cost also may be due to [indiscernible].
The next question is from the line of Parikshit Kandpal from HDFC Securities.
[indiscernible]
Sorry to interrupt Mr. Parikshit, we are unable to hear you.
No. Your voice is not clear at all.
Parikshit sir, may we request you to please rejoin the queue. We are unable to hear you.
The next question is from the line of Vaibhav Shah from JM Financials.
Sir, in terms of SDB money, so you mentioned that INR 85 crores should come in 1 month, right?
No, it will be in the range of INR 100 crores because 50% of the amount [indiscernible] INR 225 crores, which has been final amount with GST. So INR 100 plus crores will be given within the next month, within these 30 days. We are working for the final [indiscernible] so that 50% we can expect in 1 month and 50%, this can be extended to 1 month.
So INR 220 crores including GST and ex of GST is INR 170 crores.
Yes, yes.
So basically INR 170 crores is the amount which [indiscernible] additionally approved over and above that certified value of INR 1,790 crores. We have mentioned in the presentation, we communicated, and we have booked INR 1,896 crores of revenue as of 31 March '24. So additionally, to make a total revenue of INR 1,960 crores, we'll be booking INR 64 crores additionally. And in total, we will be receiving around INR 224 crores including GST which will include the amount outstanding on balance sheet.
With retention.
Yes. With retention.
So total amount -- so 100 would be -- would come in 1 month and the pending should come in FY '25 only or it may go to '26 as well?
See, probably will be getting the maximum within the FY '25 only because they are waiting for some of the sales to be done. If those sales are done, they can pay -- they agreed to pay within 6 months. And it is the delay -- there is a delay in sales of their offices which are left, that can go maximum for a year.
Okay. And sir, secondly, in terms of margin, so we booked around 8% margin in Q4. So it was entirely on account of increased cost in the UP project?
Yes, maximum, we can say because we would say the total UP projects have started [indiscernible] 7 projects, it was started around 14 sites. And the infrastructure [indiscernible] created and at the last moment, at whatever speed we have to generate. [indiscernible] a little bit extra and we have to pay extra money on purchase side also because some of the MEP materials [indiscernible] These orders were just after March '21. The impact of Corona came up maximum after March '21. So that was also one of the reasons that markets have fallen usually because of UP.
So are we planning to book any claims in future after the completion of the project?
No. As I said, there is no plan as of now. [indiscernible] contract. So there is no plan of [indiscernible] may be related to the project.
So our initial margin estimate was a bit higher when we book for the -- when we bid for the project? And it has not panned out accordingly? Is that the right understanding?
It is both way. It is both way when we planned it, it was only in the range of 10% to 11%. But later on, it [indiscernible] impact of 4%, 5% overall. We have not made a loss, but in general debt, the overall margin has gone a little bit down. And the maximum impact has come in the last 2 quarters because now that some projects are almost under completion. We have ended over about 90% buildings, only 3 hospitals, which we have to hand over, which probably we are trying to hand over by June end.
So we may see some impact in June quarter as well, alternating to UP projects in terms of margins or everything is done?
Yes. See, it cannot be on margin -- on UP side because it's a general impact on the total projects, whatever we have carried also, there will be some impact, but not on a major site, but yes, at the company level, there will be some impact, and the overall in the company [Indiscernible].
The next question is from the line of [indiscernible] from Avendus Park.
[indiscernible]
Can you speak a little bit louder?
Yes. is it better?
Yes, yes. Fine now.
Yes, 2 questions. One, on the lower margin in 4Q due to expenses being higher in the UP projects. So what are the reasons? Is it these hospital projects? And what is the total size of this order, all put together?
See, it was total INR 1,478 crores in total, whatever we are doing on the medical college, hospitals and universities. So that was the total size of the project. But the project total numbers are 7, and all the 6 medical colleges, the location of medical college and the medical hospitals are at a different location about 9 to 10 kilometers from each other.
So on this INR 1,478 crores projects, we are going to earn a lower margin. Is that my understanding right?
Perfectly right.
Okay. And we are telling initially with the 10% to 11%, but it could be lower. But how much lower will it be in this project?
That we can conclude in this last quarter when we conclude and final completion and the final bills which we have submitted.
My second question is on FY '24 operating cash flows, which has come in at a negative number. Can you give me an understanding why that is the case?
Yes, sure. So if you look at the movement in working capital number, we have increased inventories. And at the same time, there is an increase in other assets also and there is a decrease in other liabilities. For example, mobilization advance that was around INR 245 crores last year, which has reduced to INR 135 crores. So that has impacted our net cash generated from operating activities, which has resulted into INR 226 crores negative.
And what is this increase in other current assets?
Yes, that is other assets -- that is mainly unbilled revenue. Unbilled revenue was INR 257 crores last year, and that is since last few quarters, this unbilled revenue is around INR 400 crores. As I already mentioned, we signed -- as on 31 March '24 unbilled revenues is INR 442 crores.
We have our next question from the line of Devang Patel from Sameeksha Capital.
Sir, you mentioned earlier that private historically has been 85% of our projects. If I look at the order book now, government is almost 70%. Also we've now almost nearly 100% [indiscernible] from private historically to the government, does this impact our margins because you work for government projects on tender basis, et cetera?
No, it is not absolutely about that we will take the government percentage in the total order book that is on high. It is majorly that the -- this percentage, whether it is 50-50 or 60-40 or 30-70, we can't predict throughout whole year. It is a process where in private company, the investments are coming a little bit less. We are not working too much on the developer side because there is a huge work to come in the development side. But as far as the corporate companies are concerned and the industrial infrastructures are concerned, the hospitals are concerned, we [indiscernible] private clients.
But, the government, we will always know that -- now we even know that the economic growth of the country so far that the government projects are going to get, come on larger scale, so that's how the percentage has gone a little bit high. And margins are not related to whether it's a private or government. Of course, private has a different margin, but at the same time it [indiscernible] also. Because each private project has a different requirement of the client in terms of quality, safety, and [indiscernible].
On a similar note, if you are moving on the ticket sizes and now we are qualified for INR 2,700 crores, would that be margin accretive if you get large ticket size orders?
No, it is not like that, but it may happen in -- the large ticket size project where your overheads can come down a little bit low because your revenue per month can go high. That can only -- but the project time lines are strict to whether -- whatever [indiscernible] like UP, where the timeline [indiscernible] reach up to 30 months. These type of things can increase your -- reduce your profit as the overhead [indiscernible] extended for further 12 months.
Okay. Sir, finally, on the settlement amount, we had already booked in our accounts already INR 140 crores was there, but the cash flow we'll get is INR 170 crores. We effectively only getting INR 28 crores additional, whereas the claims you had raised or I think about INR 430 crore, INR 440 crores. So why such a lower settlement with Surat Diamond Bourse?
So, that's an individual call. Where in the -- overall the margin -- whatever we have claimed, we have received INR 103 crores out of which we were expecting INR 100 crores more. But as we wanted to get out of this issue because that was giving a bad impression to the company also. So we have concluded INR 103 crores total. About the bills -- bill part which was already booked and INR 103 crores [indiscernible] as a part of the settlement.
Would we actually -- since you are thinking of the settlement, did we really need to do the QIP? Because the UP project issuance will also start coming up in the first half. So our working problem -- working capital problem will get sort of sorted. Did we really need to dilute really?
[indiscernible]
Did you need to dilute really in this last quarter? You could have waited for some more time, our debt would have gone down with...
That's again a call, which personally has its own perception, what should I do and what should I not do. But at that time, we were feeling the pressure of working capital cycle and the interest cost was going a little bit high. So we still took that call. But when we were going ahead with the court matters and everything, there were also suggestions from so many investors also that we should come out of this issue and we concentrated more on the execution side. So it's a fair call which we -- I feel and I have taken.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Can you hear me now? Hello.
Yes, sir.
Yes. So my first question is to Hetal ma'am. What was the total revenue booked from the UP projects in FY '24?
Yes. Sorry, I don't have that number right now. But as of today, we have, in total, booked INR 1,433 crores.
But you don't have number for FY '24?
Yes. Yes, sorry. We have INR 1,459 crores in total.
In FY '24, you don't have the number.
Yes, right now, I don't have the number.
Okay. Okay. My second question is, sir, on this. You have done -- the ma'am was telling the net block and the gross block breakup. So now this Precast facility substantially like even was too close to about INR 200 crores. So just wanted to know what has been the contribution to revenues? Because if I see the net block of INR 321 crores, gross block is INR 200 crores. I don't have the net block number, but I assume it's significantly high. So in terms of asset term and revenue, so how do you see the potential of Precast contribution towards revenue? What has it contributed in FY '24? And what were the margins you booked on that?
See, as far contribution is concerned, I think the first 2 years were that -- this is a new technology, which was going up and now presently what we are seeing is there is a huge inquiry and huge requirement from everywhere with this whether it's an industry. We have worked for Nestle also. We're also quoting for with Tata also. We're also quoting for Coca-Cola also. So everywhere now Precast is going up in terms of industry.
Warehousing, we have -- I have already declared that this quarter we have completed 3 warehouses. In totality, I think last year, we did about 12 lakh square feet of warehousing facility. So now this technology should move ahead and we should be in a position to ask for better margins also. So now the [indiscernible] and people have trusted now.
So of course, you are right that the overall gross block, of about INR 200 crores, and that's the reason. But I think we should be in a better position than next year wherein we'll be able to generate good revenue from this type. Because it's a mixed revenue so we are not able to give you the exact revenue. Because some of the projects are our captive but usually in some of the projects where individual projects which are done only 2% or 3%.
Sir, over the next 2, 3 years, what is your business plan on this INR 200 crores of CapEx can give you? What kind of revenues or asset turns?
I think within the next 3 or 4 years, we should be in position to generate minimum year-on-year growth of about 25%, 30% from what we are doing today. And maximum we can generate revenue up to INR 350 crores to INR 400 crores, maybe after 1 year or so.
INR 400 crores of revenue, okay. My second question is on sir, UP projects and SDB. So what is the total pending receivables yet to be recovered? And what is the total pending order books? So I think SDB there is no pending order book, but -- so you told me correctly, INR 200 crores is yet to be received from them in terms of collections or cash coming into you, including the GST and your share will be about INR 170 crores excluding GST. So that INR 170 crores of cash to come in from SDB. So if you can tell me what is the total pending collection from UP? And what is the total order book yet to be completed?
I think in UP it is no more than INR 40 crores or INR 50 crores. And some portion is from Kashi Vishwanath that is INR 20 plus crores. So I think these are the major we can say if these are the pending amounts which we are to receive this year.
From medical colleges, what is the pending from medical colleges? And once -- I wanted to know how much cash inflows were expected to receive because now SDB is settled. So is it right that you will receive INR 170 crores of cash from SDB over the next 1 year, 1 month, within 1 month, you get INR 100 crores and balance will come by the end of this year? And secondly, what is the pending receivables from UP Medical College, which are yet to be realized?
From UP Medical Colleges and hospitals, both together, if you see, around INR 80 crore is the outstanding receivable. And the number which you were asking, the revenues from the whole year, I have just got the number that is INR 741 crores, we have booked on the whole year, UP revenue.
UP revenue, right ma'am. Okay. Got it. So -- and collections from SDB, is that INR 170 crores which you will receive in this year?
Yes.
Okay. That's a cash income of INR 170 crores?
Basically INR 170 crores is a claim amount. We will be receiving INR 225 crores including GST.
So INR 170 crores excluding GST, that is inflow which will come in and UP, another INR 60 crores -- INR 80 crores. So that will take the number to close to about your share, excluding GST will be INR 170 plus, INR 80 crores, right? So INR 250 crores of cash will come in, in the company?
Yes.
Okay. Got it. So that should take care of your net cash -- I mean, the debt will then go to zero. I mean, you've already reduced the debt. So with this money coming in, your debt will now -- you'll again become net cash company, right?
Yes, we can say.
We have our next question from the line of Rushabh from RBSA Investment Managers.
Sir, we have given a guidance of 15% revenue growth for this year. Historically, we have been growing at 20% plus over a longer period of time. So is it that we've been conservative this year and maybe FY '26 onwards you'll -- looking at targeting 20% plus growth if you can share some thoughts.
We cannot state that it is purely conservative, but it is a conscious call which since last 2 years of experience at the execution pace, I'm not 100% being attributed to the company itself because there are so many other factors which impact on that. It depends on the order inflow also.
As I already said, that if you order inflow is majorly before 6 months, first 2 quarters, then it makes a difference that it can go beyond 15%. But if your order inflow is in the last 2 quarters -- majorly order inflow is in the last 2 quarters, there can be different scenario. So that's what I am saying that on the minimum side, I'm saying 15%. It can go up or down, up only, but it depends on how the new orders are coming within next year.
Sir we have observed that certain, let's say, the 3 high-value projects like the Varanasi airport, Gems Park and hospital project, they have gone to the same competition. So have the players become more aggressive in the current scenario? So what is your reading here?
See, it is not like that somebody is quoting on aggressive side so we also start bidding on an aggressive side. Still we are going cautiously and we expect to have an order inflow of about in the range of INR 3500 crores last year also. We thought of going for INR 3000 crores and we reached INR 3,498 crores. So probably we should go and concentrate on the pace that we are going on. And even if that order inflow is little bit less, it's not about going on a dynamic bidding model.
Any big order are you expecting in this year, INR 700 crores, INR 800 crores plus in FY '25?
Can you pardon me, what's the question?
Any big order that are we expecting this year, which are say INR 800 crores plus order in FY '25?
Yes, there are a few orders. We are already bidding for one of the large projects, about INR 2,000 crores. I will not name the project now, but being [indiscernible] New Delhi and we are bidding for that project. So there will be some few large orders on which we are bidding. So now already, we are bidding for more than INR 350 crores to INR 400 crores. So there can be projects which are [indiscernible] some INR 800 to INR 1500 crores.
Okay. Sir, any update on the Pandharpur arbitration? What is the update there, we have not heard since long?
Bhiwandi, I think cross examination is going on. So probably once the cross examination of some -- that site is over further it can take 2 or 3 months for the final conclusion on the arbitration side. And Pandharpur is yet to start. Pandharpur cross examination has to start. So probably, we can say 6 months from here for Pandharpur.
Sir can you just share the bid pipeline?
Sorry to interrupt, sir. May I request you to please rejoin the queue. The next question is from the line of Navid Virani from Bastion Research.
All my questions have been answered. Just one question on the bid pipeline. Can you please give the sense of what is the current bid pipeline? And also if you can name the large projects along with the value, that will be helpful.
See, I already said that the bid pipeline is in the range of INR 5,000 plus crores. So I [indiscernible] project in Delhi, which is INR 2,000 crores. There is one AIIMS, New Delhi project of INR 445 crores. There is an academy cum residential project for Tata Institute at Hyderabad INR 350 crores. Highrise building towers for the [ Milk Union ] developer at Bangalore of INR 350 crores. Sabarmati Riverfront project in Ahmedabad about INR 300 crores. So most of them [indiscernible] projects are within the range of INR 250 crores to INR 300 crores. So it is about 10 to 12 projects. So major, I already mentioned, it is [indiscernible] INR 450 crores, INR 350 crores, INR 360 crores and INR 300 crores. So I think, you got my point.
We have a follow-up question from the line of Shravan Shah from Dolat Capital.
Sir, just to clarify, you said that our bid pipeline is INR 4,000 crores to INR 5,000 crores, and that includes the INR 2,000 crores of one Delhi project and raised whatever you mentioned 4, 5 projects. So that also is INR 1,200 crores, INR 1,500 crores so INR 3,500 crores.
Shravan, the total is exactly INR 5,746 crores. I will name each and every project because it is a big list. So I didn't mentioned it, but you can hear now again. Commercial project at Delhi is INR 2000 crores. AIIMS, New Delhi is INR 445 crores. Academy cum residential project for Tata Institute at Hyderabad INR 350 crores. Highrise residential tower building of Bangalore, INR 350 crores. Sabarmati Riverfront INR 300 crores. Industrial projects at Sanad INR 300 crores. Industrial projects at [ Mumbai ] is INR 300 crores. Sports complex at Gandhinagar INR 250 crores. [indiscernible] project at Ahmedabad is INR 250 crores.
Residential project at Mumbai INR 200 crores. Outer project at Bangalore INR 150 crores. State beautification of GMC Gandhinagar INR 100 crores. Highrise residential building at Ahmedabad INR 225 crores.
Corporate offices Torrent INR 80 crores and residential project of charitable trust INR 70 crores and other projects is INR 390 crores. So this totals to INR 5,546 crores.
And sir, this SMC, Surat project. So in terms of the execution, is there any problem because since the last one year, we have just booked close to INR 160 crores, INR 170 odd crores kind of a revenue. So in this year, FY '25, how we are looking at in terms of the execution for this project?
Shravan actually this was a 4 regional project. These were the first 4 regional projects, which we were doing. So the majorly the structure was under -- major structure was underground. Now we have already reached to first floor and probably once we reach to the [indiscernible] from the podium level, we'll be in better position to complete the RCC structure in this year.
So in terms of the revenue perspective, can we look at INR 600 crores, INR 700 crores, kind of a revenue from this project in FY '25?
I think I have to come back because usually on structure side -- there should be about INR 300 crores plus -- INR 300 crores to INR 400 crores and on the amenity side how much they can give, they give us a clearance. I'm not sure because we usually what happen when the structure is almost completed, at least the blazing part and the ceiling part if it is considered we can reach up to at least INR 500 crores.
Okay. And in terms of the deadline, this project is supposed to be now completed by?
Actually the timeline is 36 months, but we are trying plus the monsoon period there given so probably, we should be in a position to complete it by 36 months. We will not ask for traditional monsoon period, which has been allowed in the total timeline of the project.
And the projects that recently we have received, particularly in the last 6 months. So in terms of the execution, will it start contributing execution from this quarter or next quarter itself or it will take time to start booking...
No. I think only one project of [ INR 275 crores ] in Science City that is we are waiting for EC because that is museum. Also another projects which we have declared till March end are under the execution, just started. So mobilization is over and some of the project the excavation is going on. So we can say that we expect -- that has already started except one.
Yes. Because what I'm trying to still understand is that in terms of the overall -- because last 2 years, we have recorded a lower revenue, INR 100-odd crores. Now again, last time, we were looking at INR 3,000-odd crores kind of revenue in FY '25, but the 15%, if I look at then, it is still on the lower side. So rather, we should -- we would have done or guided on the higher side. Because another INR 170-odd crores is on the lower side. So that's the worry...
Shravan, the basic problem which we've also considered and when you see the peer companies also, most of the peer companies are having an order book of maybe 3x or 4x whatever revenue they are generating. That's what when we have a track record of generating revenues and we had an order -- outstanding order of 2x only. So probably, that is also one of the reasons that we should -- consulted on the size of the project.
But when we talk about projects, it is always 2 years or 2.5 years. So if we have a better order input this year then we can go beyond 15%. But by looking to my past 2 years' experience, growing at a pace of 20-plus or 25%-plus on which we can manage should be order inflow on a major side. It should be about 2x to 3x that can give you revenue of whatever you're seeing is more than 20% or 25%.
Because at the same time, even 1%, 1% lower EBITDA margin because, initially, we used to say 11% to 13%, then now we are saying 10% to 11%, so INR 100 crores, INR 200 crores lower revenue plus 1%, 2% lower margin. So that is actually having a decent impact on the PAT level. So that's the only worry I'm trying to understand.
Yes, your understanding and your doubt is very -- I can understand and by looking to my 2 years of experience I'm seeing what I already cleared you. See what we should concentrate is [indiscernible] order, same order book should always be more than 2 years. And at the same time, when your order book is more than 2x or 3x, construction phase will go high and because the overhead is going to remain the same. So that will automatically add to your margins and automatically add to your growth also.
Okay. And last, just a clarification. [indiscernible] in the previous reply, we said that by end of FY '25, we hope to be a net cash company. So the date, we will be having a very, very minimal date.
That's right. And that's what we are expecting provided we get all the money which we have just discussed about, INR 50 crores to INR 80 crores from UP Projects and INR 225 crores from Surat.
We have our next question from the line of Uttam Kumar from Axis Securities.
Sir my question pertains to UP project. You executed 2 large projects in UP that is hospitals and Kashi Vishwanath. So what has been your experience in executing project outside Gujarat? And I just wanted to understand whether you are more comfortable in executing project inside Gujarat rather than going outside Gujarat?
See it is not about the comfort. Now companies are able to operate anywhere out of Gujarat. So I can understand version of your question.
Sir just wanted to understand there has been delay in receiving payments and all that from major projects and that has also impacted our revenue and margin also this quarter.
Exactly. So it was not because we were in UP that the project got delayed. It was about EC of the project and time of the project. At the start of the project in some of the project there light [indiscernible]. So a little bit project did start late. And there were some issues related to foundation also because the EPC projects all the responsibility lies on the contractor. So that was also one of the reason. But it is not because of the state that because in Gujarat, we can make it faster project. I mean UP, we are not able to do it faster. We have already done a faster project of Kashi Vishwanath in UP. It depends on the type of the project.
My question is to Hetal madam. What would be our depreciation this year, FY '25 -- overall depreciation?
Yes, it is already in the -- yes, in total, we have around INR 60 crores of depreciation.
No madam in FY '25?
Sorry, next year you mean to say?
Yes.
Yes. See it will depend on the additions of the next year. And at the same time, let's say, see it will more or less continue on this level, which we are having right now. With FY '24 depreciation will be bad, but it may increase if looking to the future additions of the [indiscernible]
I think [indiscernible] [ Manav ] how many questions are waiting?
Yes, sir.
How many more questions are there?
Sir, we have 3, 4 questions more.
Mr. Satish, are you there?
Originally, Surat Diamond Bourse, how much was our claim? And how much have -- we have received that we have already mentioned, but how much was originally our claim?
That also we have declared several times. I think it was in the range of INR 450 crores to INR 500 crores. That was related to retention, that was related to billing, that was related to claims. So out of that INR 500 crores, we have concluded to INR 225 crores.
INR 225 crores, okay. Just wanted to understand now with this resolution happening. Will we wait for -- I mean, that makes us easily be able to bid for projects from Gem and Jewelery Export Promotion Council like the one of the manufacturing facility, which they are planning in Navi Mumbai?
Gem and Jewelery project I think already we started [indiscernible] tender we've submitted and [indiscernible]. There is no Gem and Jewelery project coming new. If there is a new project, I'm not aware of.
Okay. Okay. And going forward, how much potentially growth do we see in sales growth for the coming next year?
15%, I've already discussed.
Okay. And how much of the ROE this year?
It is already there in our presentation, you can have a look at it.
I'm not knowing the exact figure, you can look at the presentation.
We have our next question from the line of Parikshit Kandpal from HDFC Securities.
So Hetal ma'am, you mentioned that the contribution from this UP project for INR 741 crores to the revenue this year. So I was just doing math so I think P. S. sir that the margins were expected as 11% but maybe we have booked 5%, 6%. So if I do that 5% EBITDA on that, it comes to INR 37 crores on INR 741 crores. And if I adjust for the full year EBITDA of INR 261 crores on the rest of the revenue, which is ex of UP and EBITDA is INR 224 crores and EBITDA margin is 13.5. So now going ahead, we don't have any sizable projects contributing a large portion of revenue maybe in FY '25, but still we are guiding at 10%, 11%, while the adjusted for UP project is still done 13% in FY '24. So if you can just comment on that.
So basically, if you are talking about the FY '25 impact of UP, so that will be -- we'll be able to know only if we conclude the project.
So now the overall sales, Parikshit, is not so high. I think it will be in the range of INR 40 crores to INR crores less. So there won't be much impact, but that cannot be on the same margins, which we have been expecting. So that much impact can be there, but it won't be on a larger scale.
No, no, sir I think next year, you don't have too much to book from UP, right? I mean you hardly have any order book left in UP so...
Yes, that's what we are talking -- we're talking about first quarter only. We are not talking about other quarters.
But ex of UP this year, you had margins of almost 13.5%. So while you're guiding at 10%, 11% margin when next year, UP won't be there. So I think you are guiding much lower in terms of EBITDA margin?
See it's not only because I'm guiding 10% and 11% because it has got -- if you see this year's also, the overall cost related to overexercise also it will be little bit high. Because on the construction side, the cost which we require on the [ lower ], previously, we were able to manage at 3.5% to 4%. This year, we have been doing at 5%.
So incremental cost of the staff and the overall labor cost has also impacted this year. So such types of impact can impact in the future also. So that's why I'm saying it should -- we should target between 10% and 11% of course the tendering process will still remain on the range of 12% and 13%. And the guideline has to be a little bit lower side that's the reason I'm saying. And that's what we are experiencing since last 2 years. A little bit [indiscernible].
So basically, you are looking at the [ recency bias ] of a UP project, which makes you -- maybe on the lower side of the margin band. But since such a large project will not be there in revenue contribution next year, it will be more diversified across projects. Certainly, margins could be better, but you are still sticking to a lower size?
Yes, yes, you can say that.
We have our next question from the line of Devang Patel from Sameeksha Capital.
Sir, on the Kashi Vishwanath Dham project also, we had some INR 30-odd crores of pending dues, if you can please update us on that?
It's still under process because of the restrictions since 2 months there has not been any movement. So probably after election, we will be positioned to give you right time. But it has been discussed twice with the government secretary level. So possibly, it should move in the next 2 months.
Okay. Sir and on the Precast revenues, if you can indicate what is the profitability right now? And when can we reach the 14% plus margins on that?
See, presently, we can't have that individual figure for Precast fund because it is both related in some of the projects which we are doing as a [indiscernible] converted by client as a Precast. So there is no separate order. But in general, yes, we can think about 14%, 15% margin in future because now the technology has been understood well by the market. And more and more inquiries are coming from industrial side. We are able to supply here from -- Precast from here to [ Kandla ] also.
Lastly also, we had some order from Adani. And we are also bidding INR 450 crore budget of Adani which is purely Precast. So such types of project will come in future, and that can give you a better margin. When there is a shortfall of labor and there will be a shortfall cum seasonal issues related to project commitment, Precast is the best way to give you on-time delivery and with less availability of labor and consistent throughout the year.
Will it be fair to say that Precast could have also depressed our margins this year because the margins would have made would be lower than our construction margins?
No, no. We can't say that there is a little bit marginal impact because we don't have a revenue of this year. It must be in general, if I say it should be in the range of INR 200 crores. So if there is any drop in margin of 1% or 2% and in least we cannot expect the total [ INR 2500 crores ].
So it's not that way. But yes, this Precast technology as we are developing, we are also in the position of investment. So probably now after 2 years, people have understood it very well. So probably we will be in a better position for asking a good rate in future.
Sir in INR 400 crores of revenue, what will be the continuing CapEx in the business for molds. Because for every new project you might need new molds?
No, it is not like that. As far as industrial projects are concerned or as far as the residential projects are concerned, our facilities full and final. Last 2 years, we have been able to invest majorly. On the building side, we had expanded this into double size, and that was purely on the infrastructure side, that an order from L&T where we required a new mold otherwise as far as building is concerned, we have sufficient molds. Or on the building side, even if we have to expand, we have on 1, 1 line pending. So that will be not more than 15, 20 molds.
Okay. Sir, lastly, the Gujarat Biotechnology Project, I think we announced in October, there, we've not seen any execution yet. Is that project on track?
No. We just came up on track last month only because there was no basement. But when the GIFT City -- project approval in GIFT City, they required a basement. So concluding on the cost of the basement and adding on the order side and then the approval of the old plant has just concluded before 15, 20 days, and we are presently in the excavation stage.
Can we conclude now or we have to continue?
Sure, sir, as you say.
No, no if Vaibhav has a last question, we can go. But if the other person has a single question, then Vaibhav already talked to me. So you can ask [indiscernible].
The next question is from the line of Vaibhav Shah from JM Financial.
So one question from my end. So what would be the Precast order book and revenue for FY '24?
So it is not -- we are not able to visualize the order of Precast because as I said, this business is under -- in the process of development. So every year, it is increasing. So this year also, as I said, we are bidding for INR 150 crore project for Adani.
So if such types of 1 or 2 projects can continue then it will be a different story. So it is very difficult to conclude on that part. But yes, if you can grow some INR 200 crores to INR 250 crores and INR 300 crore and INR 400 crores for the next 3 years, that's possible with the facility we have.
FY '24 revenue could be closer to INR 200 crores from Precast?
Yes, minimum.
There are no further questions. I would now like to hand the conference over to Mr. Lokesh for closing comments. Over to you, sir.
Yes, thank you. And on behalf of SMIFS Limited, I thank all the participants for attending the call. At the same time, I thank the management for giving us the opportunity to host the call. So over to [indiscernible] for any closing remarks.
Thank you. On behalf of SMIFS Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.