Sterling and Wilson Renewable Energy Ltd
NSE:SWSOLAR
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
330.5
822
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Sterling and Wilson Renewable Energy Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to Sterling and Wilson Renewable Energy Limited Q4 FY '24 Earnings Conference Call.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Thomas Mathew, Head Investor Relations, for his opening remarks. Thank you, and over to you, sir.
Yes. Good morning, everyone, and welcome to our Q4 FY '20 earnings call. Along with me today, I have Mr. Amit Jain, our Global CEO; and Mr. Bahadur Dastoor, our CFO; and SGA, IR advisers. We will start the call with the key operational highlights for the year and quarter and outlook by Mr. Amit followed by the financial highlights by Mr. Bahadur, post which we'll open up for Q&A. Thank you, and over to you, Amit.
Thanks, Sandeep, and a warm welcome to all the participants on this call. I would like to give a quick update on our business operations and outlook on the solar industry, Beginning with our order book. We have been able to build on the order booking momentum in FY '24 and closed the year at approximately INR 6,023 crores of order inflows totaling approximately 3.3 gigawatt. New order inflows have jumped 37% in fiscal compared to when with booked orders of INR 4,387 crores. Our domestic order inflow continue to remain a key contributor, and it has grown approximately 10% to INR 4,854 crores compared to INR 4,387 crores last year.
We won 2 international U.S. orders in FY '24 from Spain and Italy, respectively, and these mark our first international orders after a gap of nearly 3 years. These international orders are in line with our revised matrices, and we remain derisked from the module price exposure in these [ stocks ]. Looking at Q4 in isolation, we have received 2 orders for INR 488 crores, including being declared L1 for a floating solar in [indiscernible]. This is our second floating solar project we have won this year. And the scope of what includes [indiscernible] and EPC. Our second project in Q4 was from enfinity in italy for a EUR 20 million project. This project is 45 megawatts. The scope of what include design [indiscernible], excluding the PV modeling and transformer construction erection testing and commission.
While we had anticipated a strong Q4 for new order spend in line with our [ 9-month ] performance last quarter with 2 large domestic projects have got delayed, pushing them into FY '25 pipeline. So we are expecting orders from our repeat customers and some of the PSUs, which have now got pushed into April. Our unexecuted order book stands at INR 8, 084 crores with approximately 85% constituting domestic orders. Our UOV continues to grow rapidly and coupled with its strong balance sheet, we are expecting to be able to capture a large share of the domestic solar EPC market.
In terms of the outlook, our active order pipeline, which comprises projects with high visibility of being bid out in FY '25, look pretty robust, and we look to maintain a strong win ratio in the projects that we bid. We are actively pursuing projects [indiscernible] gigawatt in India and 5 gigawatts in other international geographies. The Nigeria MoU was announced in September '22 and we continue to work with various holders in finalizing the EPC agreement for the project. Given the size and the complexity of the project, it has taken longer than expected, but considerable progress has been made in the last few weeks, and we remain confident for finalizing the [indiscernible] in near future.
The spillover of orders from Q4 FY '24 and the big pipeline for FY '25 give us a lot of confidence that the order book for FY'25 will be higher than what we have achieved in FY '24. With the expected addition of orders from RIL and Nigeria in FY '25, we expect the order booking year to be very exciting. As stated in earlier calls, we debate that lumpiness in order inflow is to be expected with EPC company like ours and time lines for [ achieve closure ] could vary depending on a host of factors, including finalization of contractual terms, financial closures, et cetera.
Our O&M outlook continues to improve. And we have seen our portfolio grew 7.6 gigawatts as of March 2024. The benefits of the large portfolio is expected to be improved in the coming quarters. Our EPC pipeline will continue to feed a large portfolio of O&M projects over the next 12 to 18 months. Moving to the industry outlook. India continues to remain a very vibrant market and they are on multiple large solar EPC projects beginning to take off with issues around land transmission, et cetera, getting addressed by the states and century government. Gujrat and Rajasthan continue to be in the forefront in the terms of new latcolar projects, and we have a strong established space, which we hope to leverage on.
Module prices continue to remain very low globally and the time remain right for more projects to come on stream aided by lower LCOEs, which should translates into more work for the EPC players like us. With a strong balance sheet, that has been achieved this year, we remain well positioned to take the strong industry growth in both domestic and international markets. With this, I will ask Bahadur to take you through the consolidated financial highlights. Thank you very much.
Thank you, Amit. [indiscernible]
Sir your audio is not very clear, sir.
Am I clear now?
One moment, sir. Ladies and gentlemen, please stay connected while we reconnect the management line. Ladies and gentlemen, we have the management line reconnected. Sir, you can go ahead.
Okay. I trust I'm better audible now. Despite the challenges we faced in FY '24, we are happy to finally move back into profitability, which was achieved in Q4 FY '24. We closed FY '24 with a top line of INR 3,034 crores, which was 51% higher than the previous year. Gross margins came in at 10.3%, aided by our domestic EPC business which has been the key driver of once in FY '24. With our sustained efforts on reducing overheads, we have rationalized overheads to INR 333 crores this fiscal, and we were able to navigate back into positive EBITDA territory in FY '24, closing the year at INR 54 crores. High interest expense in the first 9 months affected our bottom line, and we closed the year with a loss of INR 210.7 crores.
Our Q results have begun [ to at the ] execution pace pickup of our unexecuted order book which as of today stands at INR 8,008 crores and is almost 65% higher than last year. With liquid constraints easing post the QIP and the UOV largely comprising new projects with good margin profiles we hope to maintain our profitability and growth going forward. In terms of Q4 performance, revenue from operations for the quarter ended March was INR 1,178 crores aided by a pickup in domestic EPC execution, and our gross margin came in at 10.5%. Our Q4 EBITDA came in at INR 59 crores and EBITDA margin of 5 points which is beginning to more reflect our steady state margin profile. While our PBT was INR 33.7 crores, our Q4 PAT was lower at INR 1.4 crores due to a noncash deferred tax charge in our books of almost INR 32 crores due to the unabated losses now being absorbed in the stand-alone, which had a profitability of over INR 120 crores.
Segment-wise, domestic EPC continues to operate approximately 10.3% gross margin, while international EPC margin was 9.8% in Q4. O&M margins during the quarter was 15%. Coming to the balance sheet. Fixing our balance sheet in FY '24 has been a key achievement for us. Our net debt as of March 2024 was INR 116 crores, compared to nearly INR 2,000 crore net debt in the previous fiscal. We do not have any debt repayments till Q3 FY '25, which have not been taken care of by placing fixed deposits. and liquidity situation continues to improve. With this, we can now open the floor to questions and answers.
[Operator Instructions] The first question is from the line of Rahul Jain from JM Financial.
Sir, congratulations on the profitability in Q4. My first question is on the bid pipeline. The bid pipeline has declined from 40 gigawatt quarter to 30 gigawatts currently. So what has been the reason for this decline, whether the orders has been tendered out? Or is it the actual reduction?
No. Actually, the bid pipeline has not reduced, but we are focusing on the [indiscernible] are the focus markets where which we indeed concentrate on that has been indicated as a bid line for the company. So this 30 gigawatt, which we anticipate will definitely be floated out without any delay in this particular year and will be [indiscernible] quarters. So solar market is growing internationally, and there is no question of reduction of the bid pipeline.
Sure, sir. Sir, my second question is -- so now with the things in place, what is your outlook on the international orders? I mean, which countries or regions can see ordering in the next 2 years? And how are we placed in this low case?
So right now, our increased focus is on Middle East, Africa and European markets. These markets are growing strongly, and we are going to focus on these particularly 3 markets in coming 2 years.
Sure, sir. On the Nigeria order, I mean, what is the -- when I see the Nigerian currency Naira has depreciated significantly since the time we have signed the MoU. Is this the reason why we are facing delays in closing the negotiations of design and EPC and finalization? Or is it just there are several moving parts, as you said, on the finalization.
No, actually, that is -- the movement in Naira is not the reason because our contract was always has been dollar. So it is a USD contract and nothing has to do with the movement of Naira and it has no impact on us. So there has been some other bureaucratic changes, as I indicated last call also because of the NBFC got merged with the Ministry of power and some of the other issues which we were sorting out with them. So which all we have, I think we have finalized the contract negotiation with NTPC. So there is no issues on that part. And in the last few things have moved considerably, and we are very, very confident to finalize the Nigeria order very, very soon.
So can we expected by our Q2 itself?
I would not like to give a date but we are expecting to conclude that very soon.
Sure, sir, my last question will be, what are you guiding for in FY '24 in terms of order inflow? And will you stick to the guidance [ of percent gross ] margin and fixed cost of around INR 250 crores, INR 300 crores for the year. Also now onwards, what will be the interest cost?
So I think part of the question will be answered by Bahabur and part I will address. So I think Bahadur you can start and then I will pitch in.
As the interest cost is concerned, right now, we are having approximately INR 400 crores of term debt, of which INR 25 crores has already been paid. Another fee has been earmarked by fixed deposits. On the remaining INR 328 crores, the interest cost would range between INR 30 crores to INR 35 crores on an annualized basis. Unless out of free cash flows, we end up prepaying it. This would be more or less the range of interest for the year.
Sure. Sure, sir. And on the guidance on order inflow, gross margin and fixed cost as a last?
Order -- as far as the gross margins are concerned, we'll be maintaining our historic gross margin which we have been maintaining our international and domestic projects. And as far as the order book is concerned, we are expecting close to order book of INR 8,000 crores this year in FY '25, which we expect to close.
Order inflow you meant, right?
Yes, order inflow.
The next question is from the line of Shivani from Monarch Networth Capital.
My first question is on the order book of FY '24. What percentage is the legacy order? And what is the margin profile for [indiscernible]?
Can you do it louder? I missed part of your question. Can you repeat that?
Yes, sure. I wanted to ask that the order book that we have of close to INR 8,000 crores. What is the margin profile filed for those orders?
Our margin profile would be consistent to the margins that we have declared. And as far as your question in terms of legacy orders, I trust you mean the old orders which were loss making. They have all been provided for Shivani. So over there, the total quantum would be in the region of INR 70 crores to INR 80 crores in this INR 8,100 crores.
And my second question is on the other financial assets, other current financial assets and other current assets. What amount is the indemnity amount that's comprised in such numbers?
The total indemnity receivables, which are there in various places, which are in trade receivables, other financial assets and other current assets are approximately INR 900 crores.
The next question is from the line of Kunal Shah from DAM Capital.
Sir, congratulations on a good set of numbers.
Sir may I request you to use your handset. You're not very audible, sir. The line for Mr. Kunal Shah has dropped. Maybe move to the next participant. The next question is from the line of Deepak Berswani from Swan Investments.
Sir, just wanted to understand in terms of the order inflow, you mentioned this year, we are looking at INR 8,000, and also, we mentioned about we are very excited about our order flow from the [indiscernible] side as well. Just wanted to understand if you can throw some light in terms of contribution from the Reliance in this year. And also this INR 18 crores also includes some contribution from the [indiscernible].
So actually, the INR 8,000 crores, which we are guiding is excluding Reliance and Nigeria order book. So this is pure play which we are getting from other parties by bidding in domestic and international market. So INR 8,000 crores doesn't include Reliance and [indiscernible].
Okay. If you can also give us some understanding in the how should we look into the order inflow from you [indiscernible] in this year?
Can you repeat this question again, your voice is breaking.
If you can throw some -- if you can also give some understanding in terms of the order into contribution, we are looking from the Reliance in [indiscernible]. How should we look [indiscernible] for the current year?
So as we have repeatedly stated on our like previous investor calls that discussions with Reliance in progress and they have a huge rollout plan. But at this point of time, I would not like to guide on any numbers with respect to Reliance. We are expecting to conclude orders soon, and it is going to be a huge rollout.
Okay. And sir, in terms of the [indiscernible], this year, we did a revenue of INR 210 crores. I mean, going on, how should we look into this O&M revenue trajectory? Given there has been sharp improvement in the O&M portfolio or order book.
I'm really sorry, but I'm not able to hear you.
Mr. Beswani may I request you to use your handset, sir, you are not audible bill, sir. The line keeps breaking sir?
Is it better?
Yes, sir, please go ahead.
Yes. In the terms of the O&M revenues, we did a revenue of INR 210 crores in this year. How should we look into this trajectory going ahead?
We are looking at close to INR 270 crores this year in O&M revenue.
Okay. And from a tax rate perspective, I think this year, we had some deferred tax expenses, tax asset. I mean, going ahead, what would be the respective tax rate we would be looking at out? Or this is just a onetime exercise?
See, we had made certain provisions on unabsorbed losses a couple of years ago. Those reversed because on a stand-alone basis, we had a profit of over INR 120 crores. This is a noncash adjustment on reversal of carryforward losses. We do not have much carryforward losses now because we have stopped providing for it from FY '23 and onwards. So this, as I mentioned, noncash. It will be significantly lower, if at all, in the next year. The tax rate continues to be [ 25.-odd ] percent, and we have carryforward losses would absorb a bulk of whatever will be our next year's profit on a stand-alone basis.
Okay. So put it all together, sir, what would be the effective tax as a whole?
The effective tax rate for the next year I'm not in a position to give you any guidance because the calculation will depend on how much of deferred tax gets charged, and that is also on a stand-alone basis. Suffice to say, the actual current tax outflow will not be much due to absorption of cover losses.
Okay. And sir, in terms of the finance charges, we mentioned on the debt of INR 300, there would be an interest expense to the extent of 30% to 35%.
INR 35 crores. Yes.
And in terms of the BG charges and other charges, what outflow we should build in?
No, BG and LC charges are already built into the project cost. Therefore, the project margins that we have guided is after that.
[Operator Instructions] The next question is from the line of Kunal Shah from Dam Capital.
Congratulations on a good set of numbers. So my first question, you did mention that a couple of the projects were pushed back, which were from Q4 to, let's say, Q1 this year now. Could you sort of quantify what would be the quantum of those? And are those just domestic or international projects both?
So projects are domestic and they're in excess of 3 megawatts for the projects we are talking about which got pushed out. So that's -- because they are going to repeat customers as well as some [indiscernible] projects, which we are hoping to conclude in March, but we're now expecting either the [indiscernible] or first half of May, we should be moving ahead with those orders.
You mentioned 3 gigawatts, right?
Yes. that's included if the pipeline is there, it was out -- so we hope to get concluded very soon.
Okay. And this 3 gigawatts, again, would be broadly about DOS into end? Sort of how to read it, like our mix of both?
The orders which we are pursuing in domestic orders are like DOS.
Understood. Understood. And if you could just give some guidance with respect to the closing order book of this INR 8,000-odd crores. broadly, how much would be the revenue conversion in F '25 from the same?
So I will give you the revenue guideline in 2 parts. The first part is UOVs. This is INR 8,000 crores. So we expect to convert out of that INR 6,000 or to INR 7,000 crores of revenue out of the unexecuted order book. And we expect to -- like we have given guidance of INR 8,000 crores, excluding the Reliance and Nigeria, from which we'll be converting 25% to 30% into parallel. So revenue breakup will be in 2 parts on unexecuted order book and then is the book and bill part.
This is very helpful. And also in terms of this commodity costs going up in the recent time. So one, is there any impact on the current ongoing orders? And two, will there be recalibration in terms of future bids, considering those?
So whenever we bid, we take current prices into account. So all other bids when we bid out we participate on the current prices. And as soon as we receive the orders, the orders are placed immediately. So when we book, so there is no impact, we take current market price into account. And as soon as we receive the order. So we are totally protected from those metal or product price fluctuations in the market. And I don't think it is going to impact at all going forward or whether it will be [indiscernible] calibration of the prices.
Understood.Understood. And one last one from me. So you -- in the last call mentioned that there were some challenges in terms of the ability to tap nonfund-based limits during the early part of the year given the balance sheet positioning which obviously has improved now. But because of those constraints, have you caused , is there any sort of time line delay to commission the order backlog, which was starting F '24 or everything seems to be on time?
So I will start off and then Amit can join as far as the commissioning aspect is concerned. We had expected a rating upgrade to happen during the quarter. Unfortunately, that has taken longer than expected. The rating upgrade is expected shortly, which will be a significant improvement over the previous one, is what we believe. However, that has taken the entire quarter, post which there will be discussions with banks for limit upgrades, and we are quite positive on that front. But this entire rating remaining in D for the quarter has caused constraints in terms of revenue, which could have been accomplished in Q4. As far as how it has affected the progress of projects, I'll just let Mr. Jain comment on that.
So as far as the project revenues, we were expecting to realize more revenues in Q4 which was impacted, but we expect that moving forward, that will be sorted out.
Understood. Understood. And sir, just one last one, if I can just push in you've spoken of this O&M business, particularly, but over the last 4 or 5 years, whatever be the conditions, the portfolio has been between the 6.5 to 7.5 sort of gigawatts, right? I mean, the O&M portfolio. So going ahead, how do we sort of see this scaling in that sense? And also, do we start targeting the O&M bid as well from here on?
Yes. So I will answer both the parts. So as you see, our domestic order book is growing. So as far as the domestic order book -- a major contribution is coming from big PSU bids, which contains the provision for 3 years of compulsory O&M part. So when our [indiscernible] portfolio, which is 4 gigawatts when it comes into action, which will straight away contribute huge chunk to our O&M portfolio. So you will see a significant growth in O&M portfolios because year-on-year, will be delivering projects and adding it to this portfolio. So if you presume that every year, and it's a cycle of 3 years. So the portfolio will be constant at least for the period of 3 years and every year, we are getting multiple gigawatts into that. So this one portfolio is going to grow significantly. So you will see a rapid addition to our portfolio.
So in the next phase assumptions, 4 gigawatt [indiscernible] portfolio that being straightaway added into our portfolio. And this year, we are targeting, again, huge pipeline. So year-on-year, this will keep getting added and portfolio is going to grow significantly. As far as [indiscernible] is concerned, we are working on that part, and we are considering it very seriously how to enter [indiscernible]. So that we are seriously planning to enter.
The next question is from the line of Jal Hawa from SG Hawa & Company.
So sir, in the previous cycle, have you seen any kind of increasing due to solar panel prices going down? And does the crude prices going up also have an effect on -- in solar panels or solar projects being sped up for bidding and project execution?
Can you repeat again? Mr. Hawa last part of your question?
So how are we seeing some connection between crude prices also going up and solar panel projects being set up for bidding?
Yes. So actually, the first part are you saying about the module prices pull down. So definitely, this is a very, very positive change and LCOEs have come down. So whatever we have seen projects rollout or the project closure getting expedited. And we see the market, but the numbers which we are putting in, there definitely are going to go up. So we are going to see far more project closure. As far as the crude price is concerned, we said this -- the renewable generally has started and irrespective of crude prices, it will keep moving. However, from the energy security practice for more geographies is getting impacted by higher crude prices, we will see far more momentum in this direction. So energy security along with the revolution of the renewable energies, both the factors together is going to drive the market towards the higher trajectory.
So sir, why is our guidance for order inflow like INR 8,000 crores. Ex-Reliance and Nigeria, but it's still looking very tepid because means that we are almost the only player or one of two players who can do 1 gigawatts projects in India. So any comments on that?
So we want to be like -- frankly speaking, we have been very conservative, but whenever we are giving guidance. And that is based on INR 8,000 crores we have guided. So whatever the current bids are there, but we are expecting to bid this number. So this is the guidance for the time being from our side.
Secondly, as there are now some players who are having the ambition to go above 1 gigawatt? Are we seeing any kind of pressure on our personnel being approached or some attrition? Because we did some -- see some announcements during this quarter. Sorry, the last quarter on one or two recognitions at our end and also we are hiring some more people for [indiscernible] projects.
Yes. So we have a very robust leadership pipeline and our execution and d[indiscernible] stuff continues to be very, very strong. So as per manpower and organizing [indiscernible] concerned, we don't see any threat or any pressure on that side. So we have well-placed mechanisms in place with respect to the supplementing and developing manpower to carry out the volume of work and the growth path or the growth projection gap. So there is no concern sat on that front. We are fully geared up and our system based on our projections, we keep adding and developing utilization accordingly. So we are pretty excited place on that particular front.
So sir, just as a vision, and I would love all you to set on any kind of figures. But what do you see if you could be a potential revenue that [indiscernible] item could be having 3 to 4 years down the line?
We can confirm it again, we can expect a growth of 15% to 20% on a CAGR basis every year. This [indiscernible]. So this is the guidance we have given for the revenue as well as the order book. And on that basis, we can expect. But we are growing to see the market expansion significantly in some areas.
Alluding to is without Nigeria and Reliance, right.
Yes. Okay. So 15%, 20% CAGR for next 3 to 4 years, provided we do not get [indiscernible] from Reliance and Nigeria.
Let's not put it so, negatively. We're just putting a positive statement of factor.
No, yes. No, I understood. And secondly, sir, is there any progress on this battery storage and any R&D that we are doing or we have any kind of inputs from the Reliance side on how to execute these projects?
So actually, the company already has capability to review EPC project for battery energy storage system. We have executed similar projects in Africa, and we were bidding for these projects in multiple geographies. And we expect this market to come up significantly in India, for which we have -- which has not been factored into our projections so far. We expect this market to grow significantly and we have in-house capabilities to address this market. So because we started working many years back on this particular best part, and [indiscernible] technology is not, and we can address test projects, including any technology in any geographies also we are fully geared up on that.
Sir, we will remain negative working capital for even this 15%, 20% growth over the next 3, 4 years? Or there may be more inclusion funds through equity?
Business model will remain the same. The business model will remain in. We are going to be asset-light and negative working capital demands.
And definitely, no equity additions. I think.
We missed that question.
Sir, may I request you to rejoin the queue for follow-up questions, please. The next question. [Operator Instructions]. The next question is from the Land from HSBC.
I joined a bit late. Is there any indicator from Reliance as to when the work will start flowing to? And will you be the sole execution for those projects?
So I think I have already answered that question in the beginning of the call. We start moving on with the Reliance. And we remain the front runner, runner for the execution of the portfolio. It's not -- and we expect the significant portion of the complete rollout to be done that [indiscernible].
And would you also be executing wind for them?
Pardon?
Would you also be executing wind projects for them?
Yes. So all the options are under discussion. And as and when we finalize, we'll integrate you around that.
Okay. Understood. My second question is if you can talk about availability of modules that LMM is now in place. Is there any risk to execution or pace of execution given that there could potential shortage of capacity on the module side? Or are you well listed there?
Significant capacity addition is happening in India. And I don't challenge on that particular front. With the respect to EPC rollouts, whatever orders in hand, all the developments have secured groups. Even PSUs have secured models. So I don't have any concern and don't see any impact coming on our execution portfolio.
The next question is from the line of Nikhil Abhyankar from ICICI Securities.
I got dropped on the call earlier. I'm not sure whether you've answered this question. So sir, what portion of our current order pipeline is hydro projects?
Is what? Which project?
Hybrid projects.
Hybrid projects. So hybrid projects -- right now I will not put a number to that, but we'll see that particular portfolio growth in the coming years.
So right now, there is no number, it is not included in the pipeline?
Right now, it's part of the pipeline, but I would say like I do not like to put a number because developers are also taking call on various factors, how much? How much battery? So based on the various configurations that number keeps changing. That's why we have not put a number to that.
Sure. And also, sir, we have -- so are we also looking to get into pure wind EPC because some of the OEMs have taken to more of an equipment supply approach only. So is there an opportunity which you are seeing and which we can look at?
So we will do wind without land. And but of course, the OEM will be supply footprint, but we will not be taking responsibility for the land, which is rare. So we'll be going only and only where the land [indiscernible] not in our portfolio.
Okay. Land is not. So will we be bidding in the PSU bids, something like NTPC or someone?
So all the PSUs we take all from case-to-case basis. So how is our competitiveness and how well we are placed and whether all the risk metrics are getting complied to. And then accordingly, we decide for average bid. So this is the [indiscernible] to bid.
Okay. And sir, just a clarity on the revenue guidance that you gave earlier. So you mentioned that out of the INR 8,000 crore order book that we have, around INR 60 crores to INR 70 crores will get executed there. Am I right?
No, no. Not INR 60 , INR 70 crores. INR 6,000 to INR 7,000 crores from the unexecuted order book will be executed this year. We are expecting to book INR 8,000 crores of order this year, out of which 20% to 30%, 25% to 30% will be converted into revenue and all the numbers are excluding Reliance and Nigeria.
Okay. So without Reliance and Nigeria, around INR 90 billion to INR 95 billion of revenue guidance for next year.
Yes, whatever. I'm not putting a hard number to it, but [indiscernible].
[Operator Instructions] The next question is from the line of Aejas Lakhani from Unifi Capital.
Could you specifically speak about the receivables of the surety bonds that had got enforced by the contractor, the invocation of those bank guarantees of about INR 400 crores, the litigations that were going on and specifically state where we are in that journey?
All of those items are presently lying as current assets. The management has taken legal views or export us to determine whether there is any provision required, and the decision was there is presently no provision that is required against each of those banks.
Okay. But could you tell me what is the update in the courts because you're in this pattern in the courts. Has there been a hearing? When is it likely? When can we get the notification is or what time lines?
Amit, would you like to -- this question since you're handling this front?
Yes. So as far as the time lines are concerned So we are expecting because legal process is always a lenghty process. So some of the cases are coming up for hearing in second end quarter and some are coming in the Q4. So that's how it is panning out, but there are always development and there can be some delays with respect to that. But as Bahadur alluded to earlier, we have consulted or hired a law firm, most reputed law firm, its international law firms for all our cases we have taken opinion of [indiscernible] technical experts and who we are very, I think, favorably placed in all those litigations.
Okay. The next question is all your participant had asked about the need for maybe another fund raise in the next year, your thoughts on that? And if you could just provide some clarity that when Nigeria comes through as you stated that you're confident, how should we understand the ordering in that the conversion to revenue, the time lines associated, the cost, the scope of work, if you could just give some more understanding of that.
As far as the fund raise is concerned, we do not see any need for any fundraise. Working capital is negative. Operations are profitable. There is cash flow from operations if you see the cash flow that we have presented. So we do not see any need for a fundraise. As far as Nigeria, I think Mr. Amit has already answered the question. But in case, Amit, do you want to just follow up anything.
No, as Bahadur has alluded, we have already answered the question that we closely with Nigerian authority, the very positive developments have taken place in last few weeks, and we are expecting it to conclude it very soon.
Okay. Could you quantify that over period because the time lines have moved. So over what [indiscernible] execute this? Will it be still spread out over 2 years. What would be the quantum that we may get in the first year, second year. Could you give color on that?
We will give color once the order is finalized. As of right now, it was a 2-year project. It continues so.
The next question is from the line of Subash from Value Investments.
My first question is about you mentioned that there would be an upgrade, right, on your rating upgrades. So after the rating ...
May i request you to use your handset. There is a slight disturbance from your line.
Are you able to hear me now?
Yes, sir, please go ahead.
Okay. So you mentioned about the ratings upgrade happening soon, right? So I wanted to know after the ratings upgrade, I think there will be no need to pledge the promoter business because in the last quarter, you take some loans from the banks for the projects, I think there were some [indiscernible].
Firstly, that is incorrect. -- there are no shares of the promoters that have been pledged to take any loans from the banks in the last quarter pertaining to this company. In fact, in the last quarter after the [indiscernible], we have gone and reduced debt. The rating upgrade is expected shortly. And as soon as it is there, we will make the announcement to the stock exchanges.
Okay. And also on the segmental revenue, I see you have EPC business and also the O&M and the operational maintenance. So do you have any plans to build your IPP portfolio like individual power producing?
I will start off. We are not developers. So we are essentially in the space of EPC, whether it is EPC for solar EPC for a hybrid project and O&M. We have no plans to be an IPP.
Got it. Sir, my last question would be on the conversion of revenue on your order book. So you mentioned that 25% to 30% of the INR 8,000 crores will be converted to revenue? Do you mean that is only for FY '25. I could not understand clearly if you explain what is the conversion of revenue?
On the revenue conversion part, there are two parts. I will state again, under unexecuted order book value, which is like INR 8,000 crores is our UOV Out of that INR 6,000, INR 7,000 crores will be converted into revenue. The fresh order inflows, which are attributable to INR 8,000 crores. Out of that, we expect 25% to 30% will be coverted to the revenue. So revenue conversion will be of these 2 parts. One is the order book, which is in hand and what will be booked during that year. So these 2 put together will consume the revenue and this is excluding Reliance and Nigeria.
Okay. And if I could push just one more question. So about your margins, I see the EBITDA margin is 5% and the net margin is a little bit lower. So compared to the smaller repeaters who show net margins of over 10%. Like do you have plans to improve the margin? I clearly understand this is a very good turnaround considering the losses that you have posted previously, but I would like to understand about the future margins.
We will continue to maintain our historic margins. And with the economies of scale and portfolio going up, definitely, there will be improvement on the margin. But I don't like to comment on other DTC players, but we have been in this market for long, and we have consistently delivered margins, which will continue to do so in the domestic market revenues.
The next question is from the line of Darshul Pandia from [indiscernible] Capital.
Sir, what have -- have you paid any debt in this quarter?
You're talking about debt repayment?
Yes.
Yes. So whatever was the debt repayment, which was scheduled, it was a commercial paper of INR 100 crores and a term debt of INR 25 crores has been paid on time.
So INR 125 crores of debt has been paid.
Yes. But that was anyway earmarked with fixed deposits. So you'll see a change in the net debt situation.
And sir, any guidance for overheads for this year, what will be the overhead for this year?
No. We do not -- we will keep it consistent. We don't want to give any kind of guidance at this stage.
The next question is from the line of Rahil Shah from Crown Capital.
Just one question on the EBITDA margin. What can we expect going forward for FY '25?
May I request you to speak up, sir your audio is very low.
Just one question on the EBITDA margin. What can one expect going ahead, FY '25? And it would be really helpful if you could explain the improvement quarter-on-quarter as well. How does company see the margins shape up?
So as we have given the revenue guidance and the gross margin guidance. We are not presently in a position to give an EBITDA guidance because we wouldn't want to do so. You can fairly well calculate it. How it flows quarter-on-quarter will depend on the pace of execution of various projects across every quarter.
Okay. So please can you repeat the gross margin guidance? I joined the call late.
Yes, the gross margin, we said were consistent with the gross margins which we have reported.
For the entire year?
Year-end quarter are fairly consistent.
The next question is from the line of Danesh Mistry from Investor First Advisors.
Congratulations for a better result. I just had one -- was regarding our working capital. If you were to see the conso working capital there's been a great improvement. Just want to understand, there's been an increase in the trade payables a bit versus last year. So is this something that we can expect this on an ongoing basis? Or is it just project end date kind of balance sheet year kind of number? That's it from my end.
Sure. Thank you. You will see that a lot of the revenues have happened in this quarter. And especially in the month of March, leading to an increase in trade. Similarly, there is an increase in trade receivables plus unbilled, which like other financial assets. If you see the two of them in combination, it is consistent with what is there even in the previous year. So the reason for -- whilst one is shown on the face and the other is shown in the schedule on the receivable side, the trade payable shows up straight on the face, which is why it looks inconsistent, but which is not the case.
The next question is from the line of Parth Agarwal from Bastian Research.
My one question is on -- so what has been a historical order book win ratio? If you can highlight that part.
So see, historic in the domestic market, what we have seen when that trend in last few quarters is market share is 30%, and our CSPs target is close to 50%. So we have been very, very successful and wherever the PSUs tenders we have participated more than 50% and overall market, our addressable market share is 30%.
So you're bidding for 30 gigawatts of project and assuming INR 1.5 crores per megawatt, it comes to around a size of INR 60,000 crores order books that you're bidding for. So don't you think probably the order book [indiscernible] should be close to rather than INR 8,000 crores on the opposite INR 10,000 or INR 12,000 crores?
Could you repeat your question again?
So if you are bidding for 30 gigawatts of this year, right? And with a win of
Audio is not clear. I request you to speak up, sir?
Is it better now?
Yes, sir, please go ahead.
Okay. I'm saying that with the 30 gigawatts of order book bid that you're going to this year in FY '25. And with 30% of success ratio of win ratio that you have. So don't you think your -- probably your INR 8,000 crores of order inflows should be more than INR 12,000 odd-crores?
So see, the majority of the domestic market is the U.S., in which like [indiscernible] megawatt approximately with [indiscernible] and INR 1.3 crores per megawatt was tracker. So this is the dominant market with some tenders coming out with modules. So with respect to that, we have estimated a number and given out to you, this number can like significantly improve as we go along the year. But we have kept the guidance to INR 8,000 crores at this point of time.
Okay. That's helpful. And just last question from my side. recover gross margins used to be 14%, 15% level. And as you've guided that you're expecting around 10%, 11%, which you currently have clocked this quarter and this year. So any reason why you're expecting your gross margin to be lower than what historically it has been?
Our gross margins have always been historically in the 10% to 11% range. 14% has been when we have gone opportunistically into certain geographies where we have made high margins. However, if you go consistently year from year, it has always been in the range of 10% to 11% and not 14%.
Before the next question comes up, since this is being asked repeatedly, I thought I'll just reiterate the [indiscernible]. We do not have any equity fund planned for future. And just to put out the revenue expectation out of the UOV of INR 8,000 crores, we expect to close INR 6,000 crores to INR 7,000 crores. And out of the new order inflow of INR 8,000 crores, coincidentally, both are INR 8,000, the second INR 8,000 crores is without Reliance and without Nigeria. We expect to close between 25% to 30% of that. Hence, you can set up the UOV and book and bill, the revenue right now that we are expecting is between INR 8,000 crores to INR 9,000 crores other than reliance other than Nigeria. I just thought I will summarize this because this is being our repeatedly.
[Operator Instructions] Our next question is from the line of [indiscernible] from Niveshaay Investment Advisory.
I had this question on the EBITDA margin side. So what is the EBITDA margin that we earned in this quarter in the international markets?
We don't give EBITDA by region. The overall EBITDA is about INR 54 crores, which is what has been earned for the year and which is fairly similar to what we have got in the quarter as well.
Correct, sir. I wanted to understand on the fixed cost. So let our revenue increases by a certain percentage. What are we expecting that number to be in terms of employee costs or other expenses. Will there be a multiplier to it?
Our employee costs and other costs are not related to the increase in revenue. And we are not expecting the overheads to go up significantly from what has already been given for the current financial year.
Correct, sir. I also had this doubt related to ALLMs. There were problems of unavailability of good quality modules when AALMs was initially introduced and that is a deferred. Do we expect to face any similar problems going ahead?
Could you repeat again?
So when the [ ALM ] was introduced initially, there were some issues related to quality of the [ ALM modules ]. So are we expecting any similar kind of situations in future?
No, I don't expect any sub question. I already answered this question. So with respect to ALM, because all the big industrial houses and fairly the [indiscernible] manufacturers coming into market, and their modules are being punished with latest technology. So I don't have any concern on availability or quality of the module, and it will not impact project execution going forward. So there's no conservation on that at all.
Sorry to interrupt. May we request that you return to the question queue for follow-up questions, as there are several participants waiting for their turn. Our next question is from the line of Aryan Mehta from Mehta Investments.
Looking at the balance sheet, the other current liabilities have nearly build year-over-year. What is the reason for this?
Mr Mehta, I'll just answer your question shortly. If you have any other questions you can ask in the [indiscernible].
No more questions.
So I'll take the next question, and I will give you answer shortly.
This is the only question I have.
Okay, sir. Mr. Mehta, the management will answer your question. We move to the next question. The next question is from the line of Raj Rishi from DPL.
There was a report which suggested that annual opportunity for solar in india.
Sir may we request you to use your handset? May i request to speak a little louder.
There was a report recently that suggested that the Indian EPC solar opportunity from now to 2032 is around INR 65,000 crores per annum? You agree with a report, this kind of opportunity?
Opportunity, it can be like the valuations are arrived at considerate value. So what we project is the BOS value for the project for this market. But I don't know on what basis this number is calculated, but we expect market to be significant in the range of 25 gigawatts going 50% to 20%. So from that basis, we can calculate the number. So I don't know whether the EPC has been calculated on the turnkey basis for the whole project cost. So that is very difficult to comment on that particular number.
So sir, like your assessment of your opportunity, the market address our side would be what? From now to, say, next 7, 8 years per annum? In India?
So this year, what we have projected, we are projecting around INR 25 crores to INR 30 crores, INR 25,000 crores to INR 30,000 crores and growing 15% to 25% CAGR depending upon how the whole system, ecosystem is panning out.
This is the Indian opportunity for you?
It is indian opportunity.
Which includes everything, Reliance and everything?
No, no. That's was exluded Reliance and like others and so Reliance whatever numbers we are talking about here, whether our own projections or the big pipeline is excluding the Reliance.
I will just answer Mr. Mehta previous question. The increase in other capabilities is essentially because of advances received for projects to the tune of almost INR 900 crores.
The next question is from the line of Ashish Soni from Family Office.
Sir, what are the few challenges you will see in the execution in next couple of years?
Come again, could you repeat your question?
Challenges, what do you see in terms of execution? Because everything I see is looking great in terms of tailwinds anything, but what -- according to your other challenges you might face in the execution?
Execution challenge like what we had foreseen that the talent market is going to be [indiscernible], so which we had already started addressing. So with respect to even the field workers as well as a path training initiatives which needs to be taken. So we are carrying out the technical development of our people and the project execution people. So that part is already happening. But I don't see with respect to any other , we are fully to handle the pipeline, which is it is growing and I don't see any significant challenge on that particular part.
And one more question. Regarding geographies, international geographies, any reason you're not focusing on U.S.?
Basically, what we are finding that these markets where we are strong and the portfolio has grown significantly. So we have chosen to address domestic market in a big way and markets in Middle East, Africa and Europe, where we can have far better contracts and much better margins. So that we have decided for the time being in the short term to took up in these markets.
Ladies and gentlemen, that was the last question for today. With that, we conclude today's conference call. On behalf of Sterling and Wilson Renewable Energy Limited, that concludes this conference. Thank you for joining us, and you disconnect your lines.