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Techno Electric & Engineering Company Ltd
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Ladies and gentlemen, good day, and welcome to Techno Electric & Engineering Company Limited Q1 FY '21 Earnings Conference Call hosted by Asian Market Securities Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Amber Singhania from Asian Market Securities. Thank you, and over to you, sir.
Thank you, Ayesha. Good afternoon, everyone. I hope everyone is safe and sound in this challenging environment. On behalf of Asian Market Securities, I would like to welcome everyone for 1Q FY '21 Earnings Conference Call of Techno Electric & Engineering Company Limited. We have with us today, Mr. P. P. Gupta, Chairman and Managing Director of the company; Mr. Ankit Saraiya, Director of the company; along with their Finance and Investor Relations team.We shall start with some opening remarks from the management about the quarter and the outlook for the year and so on, and then we shall proceed to Q&A session. Over to you, sir.
Thank you, Amber. Very good afternoon, and I welcome everyone to discuss Techno Electric's financial results for the first Q ending 30th June 2020. First of all, I wish everybody to be safe and healthy because that's the order of the day as every time our Prime Minister says [Foreign Language]. So that's very important to take care. Anything said on this call which reflects our outlook for the future or that could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the industry faces or company faces in turn.The results of this quarter are not comparable on a year-on-year basis due to the very -- the impact of the COVID-19. We lost almost around 40 good working days in this quarter, and we still continue to suffer with local lockdowns and the quarantine rules followed by -- differently by different states. The local transportation and air connectivity is still not in place, impacting the movement of people. It has also impacted our vendor and supplier ecosystem. Some of the vendors are still operating at no more than 25%, 30% capacity, particularly in South and West region.Let me quickly highlight our performance, Q1 of the current year. The total revenue stands at INR 170 crores. That is up by 49%, but it is largely a catch-up of the lost share of the fourth quarter. Revenue from EPC stands at INR 151 crore and -- however, I can say that we -- our execution has somewhat picked up, and we are operating at now around 50% capacity since last month, which is expected to improve in coming months.Revenue for the wind segment is dismal at INR 18.7 crores. Only the wind revenue was lower due to, firstly, the [ very ] which started late. Till June, we had produced or generated around 62 lakh units, and we expect to recover it during the rest of the year. The tariff is down by INR 1, as you know, for last 2 years. But it is under appeal with APTEL, and we are very hopeful of getting a favorable order. The company has already availed the GBI benefits as eligible in full. So it is not part of the top line anymore. There has always -- also been a fall in REC prices, as explained in the previous quarter, but I expect the same to recover in the coming quarters.EBITDA for the company stood at INR 44.33 crores as against INR 6.5 crores in March quarter. Operating profit for the EPC segment is at INR 29.42 crores compared to INR 14.97 crore in the March quarter. Operating profit margin stands at 19.5% compared to 12.6% over the previous quarter and around 15% for the whole year.Operating profit for the wind segment stands at INR 40.9 crores. Other income is at INR 13.31 crores. The profit before tax for this quarter is at INR 46 crores approximately. And profit after tax for this quarter is at INR 36 crores. EPS is at INR 3.28 crores. So current investment value in cash and cash equivalents as of June end is around INR 650 crores, with our outlook is INR 400 crore in mutual funds.The order intake stands at around INR 300 crores, which includes as one -- in order from REC for Ladakh region. Unexecuted order book as on date is around INR 2,450 crores, and we'll be able to speak on order intake for the current year more authentically maybe while we discuss Q2 results.We come to outlook. We expect larger business of the -- from the -- basically from the distribution segment and pollution control segment in generating units. Firstly, I'll like to deal this subject in 3 segments: FGD segment, transmission segment and distribution segment. In FGD segment, as per the notification of Government of India, all thermal power plants needs to limit their sulfur emission, NOx and SOx both. Various SEBs and private sector firms plans to implement FGD for about 35-gigawatt capacity, which will be business value of around INR 150 billion in next 2 to 3 years. The overall plan of government is to complete FGD work 123-gigawatt by 2024. In the Budget Speech of 2021, the FM mentioned specifically that the old power plants will be asked to shut down if their emission is above preset norms. We are bidding for 4 projects in FGD, which is for more than 6,000 megawatt, and we are hopeful of winning at least 2 of them.In transmission segment, we expect that there will be a slowdown in the transmission side. It will be lifted to largely evacuation of the renewable power. There is an ongoing TBCB bidding for 66 gigawatts of renewable power of the target of 120 -- 175 gigawatt, which is the -- out of which 50 gigawatt stands already awarded and balance will be catered by around June '21. Against the bid submission date of the 66 gigawatts are being extended continuously and now the final date seems to be October. So we don't see in execution these orders during this year. We plan to bid for 4 projects totaling INR 2,000 crores approximately. The Finance Minister has announced INR 220 billion package to be allocated to the power and renewable sector for the year 2021. We are seeing good interest from large investors and InvIT funds to participate in above bids by making our company as a significant partner. This will enhance our acceleratingess to capital, and that will help us in bidding for more projects aggressively like other bidders.In metering segment, we see the implementation happening more strongly and many new opportunities will emerge. One month back, the smart metering under Smart Meter National Program, which aims to replace conventional meters with prepaid meters, the government scheme is to install around 200 million meters by '24. In the current budget, these smart meters over next 3 years, which will not only help in improving health of DISCOMs by containing T&D but also give consumers a freedom to choose the suppliers. We should mention specific projects that in near future we'll be investing. It's interesting to use -- question -- as 9 lakh meter project in the state of J&K and a project in Northeast, we will be particularly focusing on it.Apart from these, obviously, there are readings in media that government is utilizing this opportunity also as reforming the sector, which are over pending in the disguised name of Atmanirbhar Bharat, which will be longstanding demand. This is holding up the amendment to the Electricity Act, amendment to the tariff policy and elimination of gross subsidy, payment of subsidy directly to the power consumers and a lot of planning being made by CA to give a visibility to the programs over the next 5 years.At the end of the day, we -- it gets rolled out -- what gets rolled out will be more important to all of us. We are very hopeful that power sector is at a crucial juncture and something good should happen going forward. Which segment? We are again facing at which because of the DISCOM being poorer by every passing day and not having money to pay. It has impacted not only the tariff but also the regular payments as per PPAs. We hope to realize our pending payments for the last 2 years by end of September out of the INR 90,000 crore package announced by the Finance Minister through REC, PFC to DISCOMs to be directly paid to the generators' overdues up to March 2020. These dues are already part on the CA website called PRAAPTI, and they have already acknowledged by TANGEDCO. And the Cabinet has already relaxed the eligibility criteria of the DISCOMs to avail this money as early as possible.We are equally now hopeful to receive our delayed payment interest claims as per PPAs, the necessary affirmative regulatory orders for which they have been received after almost 7 years. Additionally, CRC has amended the REC policy, and there is no more floor price and forbiddance price. We are legally contesting this policy as the very premise of the policy is based on the fix and assured return, which stands violated. And not only it is contested by Techno but also by various associations and major renewable power generators. APTEL has stayed the trading of RECs, and we are hopeful of getting a stay on the order or it may be set aside. As some of you know that the very bench in CRC also stand set aside by Supreme Court because of the absence of the legal members and orders were not being legally compliant.In the last quarter, the REC prices have experienced correction basically because of huge issuance of REC to the AP DISCOMs, which I'm pleased to share with you that the same stands nullified post our appeal in APTEL. And this floating at 44 lakh REC stands canceled or nullified. So the available floating REC in the market is no more than 10 lakhs now. So we are very hopeful that in the coming days the REC prices will stand corrected. And at least if policy of CRC is not reversed, still they will be sold no less than INR 1,000 per REC. That is our forbearance price.As committed in last quarter, we will be recovering our last performance of last year's -- we have recovered almost 50% this quarter or more than 50%, and balance shall be recovered in the coming quarter. But we are very hopeful to at least execute 50% of the unexecuted order backlog during this year. And we see the year being a very normal year like '18-'19. So all these damages because of the lockdown and COVID will be matter of the past. And we see not much happening in the next 2 to 3 months.In the coming years, we see strong power sector reforms with focus on efficiency, stable and reliable power supply, cost of power, improvement of overall financial health of the sector. The focus, however, will continue to be on renewable power with related transmission infrastructure as green corridors. The transmission infrastructure is required for 500 gigawatt by 2030. Our thrust on overseas market is also bearing fruits. We are hopeful of bagging the further business from the markets of Africa and Afghanistan. I can share with you that in Kenya, our project was basically making slow progress because the customer has yet not got Parliament approval in Kenya to fund the local portion of 15%, which now stands granted. So the approval process should move fast.With this, I invite questions or more specific details if any one of you wants to know more of it.
[Operator Instructions] The first question is from the line of Bhavin Vithlani from SBI Mutual Fund.
Guptaji, there was a news article that the smart meter project of Techno was actually canceled because of sourcing from Chinese vendor. It would be useful if you could give some more color on this. And along with this, it would be useful if you could give the tie-ups that we have with the foreign companies for SVC, STATCOMs, FGD and the GIS application. So how would these get impacted in the view of the current Atmanirbhar initiative by the government?
You see, your question is very complex and the journey is not and in practice, both. Firstly, I would like to share with you that our order of smart meter is not canceled. What they have taken out is the approval of a Chinese company for the communication part of the project, number one. So now -- although that company has a base in India for the last 10 years and we were sourcing that from the Indian company only, which was set up under Make in India initiative. But nevertheless keeping in view the higher sensitivity, now we have proposed a South Korean company, basically, LG Electronics. They have a company in Korea who does same work. The approvals are awaited. We should be able to get it shortly. Other than that, there is no impact. The order is intact. And it was understood by the customer that definitely taking away this approval will be in a delay of 4 to 6 months, which they have already acknowledged and approved.But in the meantime, we have already completed the work of data centers and data recovery rules both in Srinagar and Jammu. So that is operational now on the part of Oracle and we have taken care of. We are still hopeful that 50% of this work of metering we should be able to do this year and 50% next year. That is how it looks like. But let me tell you many things happen in life, but they sometimes happen for good. The Korean partner is a lot more stronger, agile, cooperative and economical to even Chinese partner also. And they have stronger technologies available with the -- than with the Chinese counterpart as generally believed.In FGD, we have a Korean partner only, which is KC Cottrell, and they helped us in finding this partner, our meter work also. So we are very hopeful things should look up.Now coming part to the STATCOM side, you see this Chinese company operates out of U.K. office, basically, who collaborates with us. And under Make in India initiative, they have set up a factory in India. But still taking all precautions, the company has already applied for approval to the DPIIT Department as per the format issued last week. And we are hopeful to get the approval. Even Power Grid is pushing for it because definitely having more choices make projects more competitive. So these kind of disturbances will happen on the way, like COVID, like Chinese aggression. But ultimately, we have to be self-sufficient in our own maritime capacity. So we are able to take these challenges in our stride and move forward with positivity.
Sure. The second question is on the wind side. What would be the new tariffs? And should we take this as a more sustainable level going forward? You mentioned there was a decline in the tariff last quarter as well. But now this seems to be more as a structural change in the tariff structure.
You see, again, this has become a little complex issue again. Because of the states being -- DISCOMs being short of money and they keep innovating always ways and means how to bring down the tariffs even if it is not based on sound principles of tariff determination. And matter when it comes APTEL, the things don't get disposed of so easily. And particularly in COVID, the courts are only hearing the urgent matters. But still, let me share with you 2 successes: one was this Andhra where we succeeded in getting their RECs nullified; and secondly, today, our legal status name change was pending in APTEL. And today morning only, we got a favorable order that name change is -- new process is not required as per CRC order and the present registration is healthy and applicable. So some things have started moving through the remote operations of the court through videoconferencing. And this tariff issue also, we are hopeful to achieve fast. Because the very tariff with which SECI determines through competitive bidding is a very different platform and not comparable to all-inclusive tariffs as determined by the CRC because the central government tariffs do not include any transmission cost, any losses, any availability issues. So it is almost an inbuilt subsidy of INR 1.15 to INR 1.25 in the process. So they are not comparable. And the state level tariff, in all fairness, should never be less than INR 3 to sustain the viability of the projects. We are hopeful to get the justice. So whenever we get, it will be a bulking up of the past also as we have got in recent past also favorable orders on APPC and all that. Now the regulator in Tamil Nadu is better than the earlier one who got constituted 6 months back, and it has started moving.Like I can share with you 1 success story similarly. That for the interest of delayed payments, we were not getting for the last 10 years and our amount due is almost INR 50 crores in this part. So earlier TANGEDCO was negotiating to 50:50 basis, which also we conducted but they could not honor it. Failing which now regulator has given the orders as per the Supreme Court directive that all PPAs must be honored by the state DISCOMs. So we have got the approval of the payment of INR 50 crore, which may also be forming part on the payment by REC PFC under this INR 90,000 crore package. So something good is happening slowly, but it's -- you keep pushing for and -- but in government, one saying is there, sir, no money gets lost. Someday you get it as you are eligible and you are competent to realize it. So we have not lost any money in last 30, 40 years. We have vigorously followed up by understanding our processes, compliance to the processes and we are very hopeful to recover the last pending in this also.
The next question is from the line of Renjith Sivaram from ICICI Securities.
Yes, can you hear me?
Yes, sir.
Yes, we can hear you, Sivaram.
Yes. Congrats on good set of numbers given the challenging environment. The margins in EPC segment have been really surprising. So any element of one-off in that?
No, basically, it is a cost control, sir. You can say the overheads and salary control of the people, we have achieved an economy of almost about 3% by and large. And this economy may be temporary given the incentive to the employees back that if they achieve the top line of INR 1,100 crores or INR 1,150 crores that is nearly 50% of the unexecuted business, this will be paid back to them as a bonus.
Okay. So the kind of margins which you are expecting for the full year of 15% remains, right?
Absolutely it remains, sir, because that is ingrained in the order value.
Okay. And any -- what's the kind of EPC revenues that we are targeting for the full year?
INR 1,100 crore plus, sir.
Okay. So what's the current order book and order intake for Q1, if you have any?
In Q1, we have booked about INR 300 crore of business, including one L1, which order is expected any day. And secondly, the unexecuted order is about INR 2,450 crores as of June end, out of which we expect to do INR 1,100 crore to INR 1,150 crore this year.
Okay. This INR 300 crore, how much is L1?
L1 is INR 70 crores only, sir. INR 230 crores we have already got in hands, one from Power Grid and one from Sterlite.
Okay. And for the full year, what's our order intake guidance?
Sir, at the moment, guidance is very difficult to give because of COVID many tenders are getting extended. I think by October, we will be in a better place. When we discuss Q2 results, we'll be -- more firmed up guidance. But we definitely expect order intake no less than INR 1,500 crores this year, and it may go -- it may cross INR 2,000 crores also depending on government's push on infrastructure -- on power infrastructure and this will mainly comprise of which we are targeting 2 FGD orders worth about INR 750 crores. And we are looking for, at least, as usual, the transmission business of about INR 500 crores and another metering business of no less than INR 250 crores to INR 500 crores in the distribution segment. So that will be the -- largely the outlook for this year.
Okay. And sir, how much is the money pending with TANGEDCO which is yet to be paid? What is the total outstanding?
INR 150 crores, which we expect to collect from REC now. For the last 2 years, we are not paid, since April '18 to March '20, along with due interest. So it will be around INR 150 crore plus.
So are we planning -- have we taken any provision on this?
Provision means? It's part of our debtors, sir.
Okay. So because you told it's been outstanding for more than 1 year, so is there any provision which has been taken on this outstanding?
No, sir. No. No provision is taken because generally, that has been the practice in the past also that with this kind of backlog payments have been happening with TANGEDCO. But no money gets lost, sir. Ultimately, it gets paid out. But we do plan also down this season to get into a kind of third-party share agreements or merchant power status to our project for which we have already applied to them.
Okay. And sir, last call, you were mentioning 3 packages of STATCOM, of which 2 with Power Grid and one with TBCB. So what is the status of that?
It is still pending, sir. Now it is extended to October. So it should be happening -- Power Grid should be calling these bids by, say, September and on the due for TBCB in October '22, as per...
Okay. And how big are these packages?
They are all INR 200 crore each. Value-wise, they are no big value, sir. It is -- each is INR 200 crore.
Okay. And STATCOM, we don't have a Chinese partner, no? Or is that also a Chinese partner?
It is a Chinese partner per se, sir, but they operate out of U.K. They have been operating out of U.K. Manchester, but their factory is in China, no doubt. And they have a factory in Kolkata now under Make in India initiative. So we have applied for registration with the DPIIT, and we are hopeful to get it down in a month or 2 because Power Grid is also pushing it for approvals to have a better choice.
Renjith, we would request you to please come back in the question queue for any follow-up questions as we have several participants waiting for their turn.The next question is from the line of Rohit Balakrishnan from VRDDHI Capital.
Hello? Am I audible, sir?
Yes, we can hear you, sir.
Sir, first question also when you -- this -- about this STATCOM order that you were talking about, you mentioned in your order book intake guidance of about INR 300 crores, transmission is about INR 500 crores. So you are including the STATCOM order in that? Or even that is not there that it will be over and above?
It will be over and above, sir. Over and above.
Okay. Okay. So -- and sir, in these FGD orders that you mentioned about INR 750 crores, when would -- I mean, have you submitted the bids for that? Or that is still expected to -- I mean you'll not get ahead?
So out of this 2 technical bids are submitted and price bid is awaited. But technical bid is already submitted, sir.
And sir, when do you expect the finalization of the order for these? And this is again, sir -- sorry, this is in West Bengal which you're expecting?
No, Bihar, sir. We are targeting Bihar. These projects of NTPC like Muzaffarnagar, Barauni, one of them we are targeting and another will be in Chhattisgarh with NTPC.
Okay. Okay. And you expect them to be...
And we have also submitted a proposal to DVC in -- for Jharkhand -- the project is located in Jharkhand, Chandrapura, close to Bokaro.
Right. Right. Sir, on -- in your last call, you mentioned that you also won an order of about INR 50 crores, if I'm not wrong, for making Northern Power Grid toll free. So that was included in Q1? Or that is not yet included in the revenue?
No, it is part of Q1, sir. We have got the order already from Power Grid for -- it is not INR 50 crore. It is about, you can say, INR 72 crore approximately for 0 grid fault package in the state of UP.
Okay. Okay. Okay. Sir, one more sort of comment I had. So sir, recently you mentioned in the -- the whole interview in CNBC recently that you talked about that you were expecting the Q1 to be pretty much in line with what was there in Q1 of last year. However, the results were still subdued when you compare it to, obviously, last Q1. Obviously, I understand, sir, this COVID and it's not simply comparable, as you mentioned. But just sir, from your comments in that interview also in your previous interactions, one thing is that the recovery is picking up, sir. So I just want to understand 2 things. One, in terms of recovery, are you still quite confident about that in the next Q2, Q3 onwards? And two, sir, in terms of the specific comment that you have made in that interview for Q1, was there anything that would not be included? And hence, that there were -- because you had mentioned that Q1 of last year we would be able to come very close to that. So I just wanted to just get very specific on that. That's it, sir.
Right. Look, basically, I wanted to say the feel good factor that Q1, as I told you, that we lost 40 days, still local transport not in place. But what I meant was that closer to the bottom line of the EPC business. Whatever decline you see over Q1 of last year and this year is basically the wind segment. We have lost out about INR 15 crore in the wind segment. And that is the difference between this year and last year, INR 50 crore versus INR 35 crore by the March. Rest, we have made up here and there. But nevertheless coming to the top line, I always meant the whole year. That we'll be able to come back to the healthier stocking. Obviously, last year is not the best year in EPC business. That is our basically year of '18-'19. So we'll be back to that level this year. And that growth thereafter from next year onwards.But apart from this, I trust, between you and me, that COVID angle should not last beyond end of Q2, and we should have a lot more freehand in working in Q3 and Q4. I think that is how government will say, unless things really go bad again, which is very, very unlikely to my mind. So we are confident that coming the post rainy season, the -- it's -- Q3, Q4 are always more productive quarters for us, even otherwise. We produce 60%, 65% of the top line in these 2 quarters. So we should be able to catch up with that despite restrictions because Techno have definitely not suffered as much others may because we have a lot of departmental labor with us. So there is no migrant labor with us. So that is what helped us how to come back fast in these projects. The rest is a question of the pace of execution. You see that the requirement of customers must also be as much in place in any project work. So if they push, we will be ready to run. That's what I shared with you.So all seems to be good in the coming quarters. And definitely in competition also, better of the best are getting more favor from the asset owner because he wants to be sure that this project will happen time bound and in quality because that is what determines their returns ultimately. So we do expect a little more business from private sector in the coming quarters this year, in transmission, at least. But overall, I think we are in a very good position, very good shape because of the very merit of the company. We can absorb all these setback, shocks with no greater damage to the bottom line. We definitely will realize bottom line better than last year. And secondly, this one asset is sold out, definitely, if not both, to IndiGrid whose in flow is expected by October. That will also be no less than INR 90 crore for us and a capital gain of almost about INR 45 crore. So that should further give us a bottom line boost and EPS boost of at least INR 3 to INR 4, which will be same repeated next year also post COVID-19. So overall, I think both -- top line and the bottom line both will be growing and remain healthy.
Rohit, we would request you to please come back in the question queue for any follow-up questions as we have several participants waiting for their turn. [Operator Instructions] The next question is from the line of Keshav Garg from Counter Cyclical Investments.
Sir, I wanted to understand about the smart meter, sir. Recently, government is talking about some ADITYA scheme in which smart meters will be installed was INR 2.3 trillion. And moreover, a smart meter national program which speaks to change the conventional meters 28 crore with smart meters. Sir, so all this talk keeps on going on, sir, but since you are a power sector insider, sir, you would know whether actually in near term in the next 1 to 2 years, you really expect some business out of this or it is only talk?
You see, this will definitely happen. But as usual, in India, time line is a casualty. What government conceives in 3 years, happens over 7 years. You take it that way, like FGD. Whatever we talked once for 3 to 4 years, now it is already extended up to 2024, a scheme which was started in '16, '17. So our implementation is definitely not as per the policy announcements. But the direction as announced stay intact. So smart meter is a necessity. It will happen. The question is the finances. When will government make them available, the finance. So even the bodies like EESL, REC, state governments, many are roped into perform this growth. And even national infrastructure fund also is going to fund this program. So I'm sure this program will happen. If not 250 million meters, at least you can take 200 million will happen. If not over 4 years, it will happen over 7 years, but that is going to happen.
Okay, sir. And also, sir, regarding dividend, sir, I just want to say, sir, whenever you feel that you will give, sir, please do a share buyback, sir, because, sir, 43% tax and, sir, 23% tax rate is almost double, so share buyback. And sir, there is a permanent in share buyback that number of shares will reduce. So with the same profits, the earnings per share will permanently increase. Sir, whereas dividend once it is gone, the cash goes out of the company, and that is the end. Sir, so please consider this.
Oh, you are welcome. We will take care, sir.
The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
If you can help us on the cash equivalents, what, at the end of the June, is the corporate bond portfolio? And what is in the liquid mutual fund schemes?
In liquid mutual fund is INR 400 crores with us, another about INR 250 crore is invested in our transmission assets business and another around -- below INR 200 crore is in bonds, which we are recovering about INR 30 crore, INR 40 crore a quarter. So we have taken a call that whatever money comes out of the bond we kept in liquid funds only. And we are not redeploying them at all. So we should be able to come out of this bond liquidity by maybe -- latest by September '21 and earliest by June '21, I'd say. That is how it is going at the moment. So -- and in addition to this wind money we received from REC by September end, that will all be adding to the mutual fund money only because there are no outstanding liabilities against us.
Correct, sir. And sir, the divestment of the BOO transmission assets. Given that we have a contract with the CLP and with the ongoing issues with our neighbor, do you see any possibilities of hiccups? And do we have a plan B from that side, sir?
Absolutely. See, we are not very -- I'm not -- let me not say we, I'm not very hopeful that CLP will secure an approval process although they are still claiming. The asset is getting commissioned in another week or so. It is ready more or less. So if CLP do not get, we are finding strong interest from the other buyers like Adani, L&T Finance as well as from IndiGrid. So the interest is very strong and huge even CDPQ. So I don't think it will be difficulty to replace CLP if they don't go ahead or could not go ahead for any reason. Interest in transmission as it is soft and healthy at the moment.
Sure. But -- yes, could we take that, that the monetization might slip to fiscal year '22 because of this issue?
No, no. If it slips beyond, it will be -- it adds up within the first quarter of '21-'22, not beyond June '21, you can say. If you did not land up between before March '21, then it will -- at best will go up to June '21.
The next question is from the line of Jaineel Jhaveri from JNJ Holdings.
I just wanted to know that the wind assets, I think there was some talk before of selling those assets. So is there -- is it still on the table? And by when would that be expected?
Yes. We have always been looking forward to exit this wind investment. But we first thought 2 years back was that whatever regulatory disputes we have we must settle them so that we realize the fair value of these assets, which we have been successful. But while achieving it, we have created some new issues. That is how this sector is behaving on the regulatory side. So we are hopeful that we will collect these dues of INR 200 crores, which are due to us, INR 150 crores on books and INR 50 crores out of books, which will account only when received from the customer and also create a platform of sales not to the DISCOM but to third party. So once we achieve this by December this year, the exit will be possible in next 6 months. We'll be definitely attempting seriously that before beginning of the next season -- wind season, we are out of this business some way or the other. There will be a serious attempt to that.
And prevalent prices would be still somewhere around INR 5 crore per megawatt?
No, I think we should now scale down the expectation to INR 4 crore a megawatt.
Okay. And also one last question. In terms of the revenue this year, you expect INR 1,150 crores and currently, we are at about 50% utilization. So I'm not able to understand that how -- can we actually go over 100% utilization because how will we finish that much revenue in the remainder of the year?
You see, generally, this business is not equally distributed over the quarters. If you see our track of last 5, 7, 10 years, generally, first 2 quarters are no more than 35% to 40% and last 2 quarters are always 60%, 65% historically in our industry. So we are hopeful to realize that 60%, 65% in full by getting normalcy from October onwards. And in first 2 quarters, we will definitely be aiming to achieve at least 30% out of the targeted 40%, say, around 75% and by some extra effort to compensate this 10% somehow. That is working as a plan B in contingency. Like this quarter has been INR 150 crore, next quarter should be no less the INR 200 crores or plus. And similarly, when we looked on the next 2 quarters, we should achieve at least in those 2 quarters about INR 700 crores. So that is how we like to shape it up.
The next question is from the line of Ankur Sharma from HDFC Life.
A couple of questions. One, just kind of carrying on with the previous participant's question. If you could just talk about the labor availability with you at this point in time versus what it was, say, last year? Is it back to close to normal? How much more time would it take before you get back to normal? And how is productivity? Because what we hear from a lot of other construction companies is that while the labor situation is obviously getting better, productivity is hit because of social distancing, et cetera. So I'm just trying to understand how are things shaping up with us?
You are perfectly right. See, the issue is not the labor availability with us but more is of the utilization of the labors. So that challenge is definitely more. When I say we are using 50%, it means the utilization of the available labor is 50%. So that is what I mean, which from October onwards, we expect to be 100%, nearly 100%. But our sites are fully mobilized. But what we lack is this local transport, air connectivity, better review meetings with the customers, better customer participation on the ground because project work is a high-touch industry, sir, in my classification. You do the very strong interactive part. Unless customer and agency both work together hand-in-glove, you cannot achieve any project in time or ahead of time. That's the basics of this business. And challenges are different in different parts of India when you do it. And it is also linked to the customer maturity also. But nevertheless, we do prepare ourselves in advance as much as possible. Like in metering, when we were getting delayed because of this China when the approval coming in [indiscernible], that peripheral part we have completed already, like data center, data recovery, MDM part so that the end part of the project is in place. What I need to create is now only the face-end of the project. So you swing the schedule by no less than 6 months so that time is not wasted for you. So some of your time is utilized in one way or the other. Rather we start from the face-end or back-end. But ultimately, the closing date of the project has to be retained.
Okay. Okay. That's helpful. Sir, secondly, we heard that there have been some change in the bidding norms from Power Grid side post this whole Atmanirbhar piece coming up to stop equipment imports from China. So I'm just wondering, for us, stuff like transformers or switch gear, et cetera, which we would be needing. For us, it's largely from domestic players. Is it from China? Is it a mix of both? How does our sourcing kind of change? Or is it a mix of both domestic so we won't really -- it doesn't really affect us is what I was trying to understand?
You see, it's a very blended mixed situation in India. You see problem is in last 7, 8 years, a lot of Chinese investment has already happened in India and under Make in India initiative of the very government. Now those capacities, you call it Chinese or Indian, I have no idea, sir. These are all political achievements more than the technological or physical achievements. So these capacities are used in India, like TBEA. Now they are the single largest transformer manufacturer in India. So now can you call it any more, when I say that ATV is an Indian company because it is in India for the last 30, 40 years. So similarly when a Chinese company is in India, why I can't call it an Indian company. It is under Companies Act of India. It is in Constitution of India. It is accountable to all taxation authorities of India. So these are mindset issues. I'm sure once it cools down, all these border tension, everybody will start talking normally and behaving normally. So in excitement, we say many things and create a certain kind of processes which apparently start looking discriminately. But if any of these companies go to High Court tomorrow or Supreme Court, I'm sure they will get a favorable order.
They invested in India, okay?
So it will continue, sir. There is absolutely -- in power sector, when you don't perform what is expected of you otherwise as a total sector to the society, so many vested interest gets created, and we play it differently in different sensitivities. That is what is happening. Ultimately, rather than pushing the very sector to telecom or aviation model, we are still doing a buddy games between us that whose transformer, whose make switchgear, whose make meters. Ultimately, can you imagine any solar power happening in this country without China, sir? If you don't use panels, you will need cells. If you don't need cells, you will need wafers. If you don't need wafers, you will need the precious metals. But ultimately, you cannot ignore globalization, sir. Everything you don't have in India. We don't have an ecosystem in India. Because the demand has been very sparse and scarce, which does not justify the economics of having it. So you will always have some interdependency at some stage or the other. So ecosystem takes its own time to build up. You can't raise the political slogan today and expect that all except for the power equipment has an ecosystem available in the country, whether it is a meter or a transformer or a technology, whatever we talk like STATCOM. Even the European companies don't have STATCOM technology in India. So it all comes from Europe. So someday, Europe will also become untouchable, then what do we do?
Okay. Okay. Fair. And sir, just 1 last thing. On this whole TBCB bids on the RE side, which again, what we understand from Power Grid and couple of other players is that these have been delayed for various reasons. So -- and you also touched on it in your opening remarks that some of these could get tendered out at least to the developers and then, of course, it comes to us. So how much -- or what quantum of size in terms of value of such bids you expect get placed on the developers and, therefore, come to us as an opportunity over the next, say, 2 quarters, say, in FY '21 is what I was referring to?
Sir, this business in tendering process today is about INR 15,000 crore, which was due in June, now extended to October because of COVID and not in place. And immediately following this is another INR 15,000 crore. So last year, they finalized by December, January, the bids of INR 15,000 crore. They take up 50 gigawatts in each slot and their target is 175 gigawatt to be ordered out by June '71 -- '21, sorry, so that these connectivity is available to the generators by no later than June -- March '24. That is the target of the Government of India, 175 gigawatt. So it is being taken up in 3 phases to provide the connectivity. So first 50 gigawatt is already ordered out. The present is 66 gigawatt in process and third will be another 50 gigawatt.
Okay. Okay. Okay. And sir -- got it. And just last one, I'm sorry, again, would be on the debtor’s position, what would be our total debtors? I think you mentioned about some INR 150 crore, INR 200-odd crore from TANGEDCO INR 150 crores, but what would be the total quantum of debtors as of June?
The total debtor is INR 500 crores with us, INR 350 crores on the EPC side and INR 150 crores on the wind side.
Due to time constraints, I would now like to hand the conference over to Mr. Amber Singhania for closing comments.
Thank you, Ayesha. On behalf of Asian Market Securities, we thank everyone for participating in this call, and special thanks to the management for giving us an opportunity to host this call. We would, again, request everyone to be safe and take care of your and your family's health. With this, we close this call. Sir, would you like to add any closing remarks from your side?
Yes, yes. Sorry, firstly, if any one of you could not complete your questioning to us. Please send a mail to us and we will appropriately address your concern. And I would like to thank all of you for joining the conference call. And even otherwise, you happen to be in this part of India when normalcy gets restored, you are welcome to be in our office and have interactive session with us. And we'll have more elaborate session when we take up Q2 because a lot of COVID-related issues should be behind us by then. So in the meantime, I will only wish, please be safe, take care of your family and self, [Foreign Language]. Thank you very much. Take care.
Thank you. On behalf of Asian Market Securities, that concludes today's conference call. Thank you for joining us, and you may now disconnect your lines.