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Good afternoon, ladies and gentlemen. I'm Momita, moderator for the conference call. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Mr. Mohit Kumar from DAM Capital. Over to you, sir.
Thank you, Momita. On behalf of DAM Capital, I welcome you all to the Q4 FY 2022 Earnings Conference Call of Welspun Enterprises. We will start with a brief introduction, followed by Q&A. To start the proceedings. I'm handing over the call to Mr. Abhinandan Singh, Head, Investor Relations, Welspun Group. Over to you, sir.
Thanks, Mohit. Good afternoon, everyone. I welcome all of you to the Q4 and Full Financial Year FY 2022 Earnings Call of Welspun Enterprises Limited. Present along with me today on this forum are Mr. Ajay Hans, Managing Director and CEO; and Mr. Sanjay Sultania, Chief Financial Officer, Welspun Enterprises. You had already received the company's results, and that is also available in our filings with BSE and NSE and the company's website, welspunenterprises.com, who has financial results and more information.
I would like to point out that a copy of our disclosures are also available in the Investors section of the website of the company as well as in our filings with the exchanges. Do note that anything said on this call, which reflects the outlook towards the future or which should be construed as a follow-up statement must be seen in conjunction with the risks that the company faces.
As usual, we will start the forum with some opening remarks by our leadership team, and then we will open the floor for your questions. Should you have any queries that remain unanswered after this earnings call, you can reach out to us. The e-mail addresses are all available both in our filings as well as on our website.
With that, I would now like to hand over the floor to our Managing Director and CEO, Mr. Ajay Hans, over to you.
Thank you, Abhinandan. Good afternoon, everybody, and thanks for joining in. I hope everyone is staying safe and healthy and taking necessary precautions even as the prevalence of the COVID appears to have been abated. As you would have seen, we have reported a robust operating and financial quarter 4 with strong execution in some of our major HAM and EPC projects. This performance was driven by accelerated execution in several of our key projects, including Aunta-Simaria and Varanasi Aurangabad road project as well. And also in our UP JJM water project.
Our order book too remains very healthy, currently at around INR 8,400 crores, out of which road projects are at about INR 5,950 crores and the balance INR 2,500 crore contributed by water segment. I am delighted to share that this order book also reflects an additional contract worth INR 1,430 crores, excluding GST, awarded to us recently in the current quarter, which was announced on 30th of April 2022. This repeat order is an additional work awarded from Soma Indus Varanasi Aurangabad Tollway project.
I'm particularly pleased to observe that along with our strengthened EPC order book, our development portfolio is also progressing quite well with 6 out of 8 projects achieving PCOD and COD. And those are now revenue-generating projects.
We received a provisional certificate for commercial operations in one of our flagship projects, which is the Mukarba Chowk to Panipat BOT toll project during Q4. And post PCOD, toll collection in this project have commenced from 6th of April 2022. We take great pride in sharing our Honorable Union Minister for Road Transport and Highways, Mr. Nitin Gadkari, recently inaugurated and dedicated to the nation these 2 projects, the Mukarba Chowk to Panipat BOT project on 4th of April 2022 and the Chikhali-Tarsod HAM project on 24th of April 2022. And he acknowledged our contribution to nation building and the superior quality, which is comparable to international standards.
During the quarter under review, the company received the completion certificate of Gagalheri-Saharanpur-Yamunanagar HAM project from NHAI on 10th of February 2022. Welspun Enterprises has a diverse portfolio in roads and water and wastewater projects with a pan-India footprint now. Our going ahead and with our focus on building on order pipeline in the roads and water segment, we are also exploring opportunities within their high potential subsegments. With visible government trust on improving and expanding on infrastructure sector, particularly in the road and water and wastewater sector, the opportunity is huge for an infrastructure player like us.
With this, I now hand over the call to Mr. Sanjay Sultania, our CFO, to share the key highlights of our financial performance. Over to you, Sanjay.
Thank you, Ajay, and good afternoon to all of you. And I'm sure everybody is in a good state of health as we have already [ passed from ] COVID. And I'm thankful to Ajay that he has given a very good journey that we have started as a new team as a management from the last quarter, more particularly. And I believe this quarter has been particularly exciting and exciting in the sense from the [indiscernible] perspective and perspectives from the business side, the company achieving PCOD and COD and our largest project Mukarba Chowk-Panipat has started [indiscernible] though we got the PCOD on 31st of March, which is the last day of the financial year. And I am very glad and very happy to state that this quarter sequentially has done better from the previous quarters. We believe the momentum will stay on as we have built up two large projects, Varanasi Aurangabad our water side UP Nal Se Jal scheme.
Now coming back to the financial highlights for this quarter and for the full financial year. As I'm sure you must have seen the filing from the websites, the results of the company is known to you. However, as for the [ ready reference ], the company's revenue during quarter four FY '22 has more than doubled from the previous quarter. As we have made in the last earning call, we knew why the last quarter was slightly depressed. And we also talked about then from this quarter to next quarter, the revenue momentum is going to be a [ step up ] and the revenue will continue to [ follow on ] from now on.
In Q4 FY '22, we have a revenue of INR 467 crores, which is -- as I said, which is more than double from the previous quarter. On the back of the strong execution, the robust top line growth has also resulted in significantly better margins with EBITDA for the Q4. This is INR 85 crores compared to INR 22 crores in Q3. And the retail EBITDA margin in Q4 FY '22 improved against all previous quarter. And accordingly, it's translated to the PAT as well from last quarter from INR 6 crores to INR 53 crores.
If you see, look at it on the full year basis, the company reported a stand-alone revenue of INR 1,307 crores in FY '22 in comparison to INR 1,410 crores reported in the previous year. EBITDA was at INR 182 crores in the current financial year, which is FY '22, as against INR 198 crores FY '21. We were basically in line with the last year margins and slightly short of the last year revenue. And we are moving up. And the Q3, as we discussed last time, because of that, the overall full year revenue and slightly EBITDA has been impacted, otherwise it has been a good year for us. And I can see the momentum going up. So from this quarter onwards, we are also seeing the same momentum maintaining.
Now when I come to the consolidated performance, revenue for quarter 4 FY '22 was INR [ 455 ] crores as against INR 242 crores in Q3. Consolidated EBITDA during Q4 FY '22, INR 126 crores as compared to INR 57 crores.
EBITDA margin improved as compared to previous quarter, as we have seen in the stand-alone because the stand-alone impact directly gets [indiscernible] into the console as well. Consolidated PAT at Q4 FY '22 was INR 65 crores as compared to INR 33 crores in Q3 FY '22.
On the balance sheet side, on the stand-alone, I would like to point out to all my -- please all my investors sitting on the call today, our analyst that the company has not raised any additional debt during the last financial year that is FY '21-'22 on a stand-alone basis.
And I come into the regard to the consolidated financials on the full year basis, the revenue was INR 1,401 crores against INR 1,538 crores as against FY '21. Consolidated EBITDA was -- during FY '22 was INR 323 crore as compared to INR 306 crores in FY '21. EBITDA margin improved as we discussed during the stand-alone [ quarter ] and in the stand-alone margins. The same way the margins have been shown to the console as well. And consolidated PAT for FY 22 was INR 126 crores as against INR 130 crores in FY '21. So we see the company on the financial front was in line with the last financial year. But sequentially, from the quarter, last quarter, we are growing up, and we expect the same kind of momentum in the coming quarter as well.
And now this is all from my side. We can now open the floor for questions-and-answers, please. We are happy to answer from my side as the Chief Financial Officer; and we have Mr. Ajay Hans, MD and CEO of the company also. Any questions are welcome, please. Thank you very much.
Momita, can you please start the Q&A session please?
[Operator Instructions] So our first question from Mr. Rohit Natarajan from Antique Stock.
Sir, if I understand, 2/3 of our order backlog comes from this Varanasi PC water project and Aunta-Simaria. What exactly is the execution pattern for these projects in FY '23 and '24? Are we staring at very strong numbers in FY '23 and '24? Could you give us some guidance on what the execution would look like?
Yes. Rohit, I would like to say that the new project that is Varanasi Aurangabad is fully mobilized now. And as far as Aunta-Simaria project is there, this is under execution, and we are looking forward to complete within next financial year. And Varanasi Aurangabad, the previous project, what we got in sometime September, October. Now we've got an additional order on the same stretch. Previously, we got [indiscernible] 36 kilometers and additional 38 kilometers have been added on the same stretch and contractors are more or less mobilized. So we see a good revenue building up in the next financial year, current financial year and the next financial year.
So this water project UP Nal se Jal, these are typically short cycle orders. So the execution over there also should be, ideally speaking, very strong, right?
Yes. This -- okay, this is short-cycle project, but the volume of this project is very high. We are almost covering 2,500 villages under the scheme. So right from identifying the source and delivering up to the individual residents of 2,500 villages of project. So you can understand the spread of this particular project.
So this budget is also more or less mobilized. The revenues have started coming in. And -- but it is coming in phases. So as I said, around 40% of the work is available, work funds is available, another 60% will be available to us in next 6 to 8 months period of time. So the cycle is around 18 months for each phase.
Rohit, in addition to that, in the Nal Se Jal scheme what is happening, the consolidated order book is not being booked at a single day because this is booked on the scheme by scheme, so it's kind of a rolling targets of completion and finishing. It is not that we got the order of INR 2,000 crores today, and I have to complete in 18 months. As the schemes get approved, the order book is getting added. So [ INR 2,500 crores delays ] is getting added. So from the date we signed the agreement, the time clocks from there. So it's kind of revolving target there.
So if I put up all these projects together, so would it be fair to make an assumption that INR 2,500 crores of execution, can we see that in FY '23?
Rohit, it's very difficult to point out, but I would like to [ say that ] -- from the last call, Q3 call, we have been speaking. And Q4, we have already seen, which is completely project in our table that we are seeing an upside started happening, and we see the same kind of momentum on the coming quarters as well. And a hard crore number to predict, it is very difficult at this point of time to say or to comment. But the only confidence which I wanted to give that these 2 new projects have started, we got an additional order of close to INR 1,430 crores on the same stretch, which would give me an ease of execution according to those same stretch. All these favorable points, points out that the coming financial year could be better than the last financial year.
Sure. Sir, this nonavailability of sand was impacting your [ TN ] project. What exactly is the situation over there, sir? Is it like smooth sail as of now?
Yes, there were some issues in that state for sand as well as the [ earth ] material. However, some solutions have been worked out, and we have started progressing on these projects. So this also -- project is also fully mobilized now. So we expect that we should be doing a good turnover from this project also. Discussions are happening on a daily basis with local government as well as state government. So we hope to do much better now.
Yes. Sir, as of now, what is the bid order pipeline looks like? I mean, what is the target for next year's order inflow part?
Look, we are bidding for projects very selectively. We are not going in open competition. However, like areas where we are targeting this EPC road, EPC water and wastewater sector. And opportunities are huge. So we will be continuously bidding selectively.
Sir, are there any big ticket projects like MCGM water projects that we've been talking about for a while, so that -- is that project there [ on cards ]? Or do you have any ring road projects or something of that sort, any big ticket numbers that you're looking at?
We have bid for a few packages of MCGM for this wastewater treatment plant, and these are expected to -- these biddings and things are happening under the control of Supreme Court. So we are looking forward to -- we are targeting and looking forward to get some package awarded to us in near future.
Sure, sir. And finally, sir, if I may ask 1 question. What is the status of your -- given that 6 out of 8 road projects are already in PCOD stage, what is the status of the asset monetization part? Could you throw some color on it?
Yes. Rohit, this is Sanjay here. As we have been saying, we said in the last quarter also. So continuously, yes, we are looking for asset monetizations because we're looking for recycling of cash as well. So there's nothing concrete that I can say with you as of now. And I would request -- I would say that whenever we come to any conclusions, more discussions are happening with the finished one, but nothing [ concluded ] yet. Once we get conclusion, we'll come back to definitely.
Sure, sir. Just a follow-up on that. I understand that we are almost like invested INR 1,000 crores into the HAM projects. This is more to do with equity, but is there a loans and advances figure, if that I can get it from you?
Can you please repeat the questions, Rohit?
I'm looking at the total investment exposure, which is equity plus loans and advances to the road projects that you have in your portfolio.
Yes. You're looking at the numbers?
Yes, what is the number, sir? I'm asking for the equity plus loans and advances in your -- all the road projects.
Yes. If you see, Rohit, we put together loans and advances in equity, you keep it in 1 bucket. Thus, we have already invested by March 2022. It got close to about INR 2,100 crores.
[Operator Instructions] Our next question from Mr. Nikhil Abhyankar from DAM Capital.
I've got a couple of questions. So sir, can you please confirm whether you were in Brihanmumbai water treatment project? And what was the quantum of it? And do you think that, that will be finalized this time?
These are substantial-sized wastewater treatment plants. We have bid for 3 projects. And under the supervision of Supreme Court, we look forward that it should get awarded within this month or maximum in next 2 months.
And the quantum of it, sir?
That, I cannot share as of now as it's under bidding and final results are awaited.
Sure, sir, no problem. And sir, what is the status of Mukarba Chowk-Panipat, how much toll do you expect? And how much toll was there in April '22?
Yes. This is the very first month of operation. So it is in the range of INR 80,00,000 to INR 85,00,000 on a daily basis, and we expect to grow as we move forward.
And any expectations for FY '23 from it, sir?
So, Rohit, this is Sanjay here. As you know that we have started [ accruing ] from April 6, 2022. On average, as Mr. Ajay said, we are in the range of around INR 80,00,000 to INR 85,00,000 at least per day. And our expectation is beyond INR 1 crore per day because now [indiscernible] are going on. So there are a lot of [indiscernible] and we are looking at controlling that [indiscernible] which will fit us, the revenue much better what we are having today.
Sure. And 1 more, sir. How much investment do you have in oil and gas block as of FY '22?
This is in the range of around [ INR 300 crores to INR 375 crores ] as of now.
Okay. And sir, how do you see the environment for order interest in the coming year?
As we have already informed that we have a very healthy order book, and we will be improving quarter-on-quarter and we will be bidding selectively for new projects in these areas of road, water and wastewaters. So we expect a good growth looking at the size of our company as well as the kind of projects we are looking at.
Okay, sir. And 1 last question. Is there any plan to monetize assets and any time line for it?
Say it again, please?
Is there any plan to monetize -- monetization of assets?
Yes. As we said that we are under discussion with various people, there is nothing concrete, but we are looking for asset monetizations of our completed assets. We have a portfolio of about 6 [indiscernible] out of it. As far as time line is concerned, it's very difficult to comment on a time line. But yes, discussions from various people are happening. Once it gets concluded, we will come back to it.
Next question from Mr. Jiten Rushi from Axis Capital.
The first question was on the water projects of Jal Jeevan. So these are, what I understand, are these fixed-price contracts?
These are fixed price contracts with the escalation on certain items in built-in.
So these are most of the item contracts. So what I understand is almost 80% is commoditized. So do we see any margin impact? Yes, as you said, [ there is this summer ] but because of the rising raw material costs, any margin pressure you are expecting in these contracts going forward?
Look, there are 2 major components. One is steel pipes and other is HDPE pipes. Now HDPE pipe escalations are covered through resin rate, which is specified. And as far as the steel prices are concerned, these are fixed. However, based on our execution strategy, we have tied up for these pipes at the start of this particular project. So we are safe in terms of that escalation as of now for the current loss of the orders which have already been received, and we are executing. In the future, whatever [ going to get right ], we will see the price adjustments at that particular time.
So as you said that as and when the DPR gets approved and the contract gets signed, the work and in the villages starts. So this, you're talking about the whole order backlog wherein you had entered into a contract with the supplier, what I understand is correct?
Right. That's correct.
Sir, you said steel pipes and the other thing which is used is what you said, sir? I forgot.
I said whatever lots we have finalized the contracts, on that, we have already placed orders at right at the start of the project. So we are safe on these escalations.
No I understand. You said there are 2 commodities, which are...
HDPE. For HDPE, there is a base price of resin specified in the contract. And the prices are linked with the resin. So as and when -- at the time of buying these particular things, that adjustment is available in the contract.
That is 100% pass-through, what I understand.
Yes, that is 100%.
Yes, obviously, we'll increase the [ item by rates ]. Sir, the second question on the margin front, what I understand was the quarter 4 has been like we are seeing a bit jumping in margins. So what -- is there a change in mix or in terms of revenue?
Hello? Can you hear us?
Yes, sir. Now I can hear you. Sir, yes, so on the margin front. Yes, you were seeing a bump up in the margin for the quarter, what I understand. So any change in the revenue mix this quarter? And what could be the steady state margin for the stand-alone business going forward?
This is Sanjay here. Whatever jump in the margin we have seen in the quarter 4, this is not basically, as you said, about the project mix right? We are [indiscernible] to see [indiscernible] with the large 2 projects which we have started in the Q4, this Varanasi Aurangabad and UP JJM. That has helped us to improve the margin.
And secondly, what has happened is that the projects which are under the [indiscernible] stage, the various project may be under COD, PCOD, with the cost completions of these projects, which has been -- we have [indiscernible] when we do the reconciliations. So that impact has also favored us in this quarter. So [indiscernible] margins, I've seen better.
Okay. Sir, on the road segment, what would be the margin pressure? Because we are doing most of the HAM projects and our EPC contract, we are subcontracting the EPC work. So how is the agreement between yourself and the subcontractors in terms of this cost pricing pressure? Who will bear the margin yourself or the contractor or how is this entered into?
Your concern is right here that commodity prices are really rising, and they are rising in a very unprecedented move. The price of [indiscernible], the price of steel, the price of cements,across the commodity prices are rising up. In our project, like for water, Mr. Ajay Hans has already explained to you in 1 of the projects is our Varanasi Aurangabad project because the execution has started. So going forward -- because it is a fixed price contract, going forward, there could be some margin pressure on this particular project. Otherwise, in other projects, we are largely protected from the escalation of commodity prices, rising of commodity prices.
But that escalation could go only till 40%, right, sir? HAM project because the escalation is covered probably 40% of the project because you are getting the money initially at 40% in the construction period. So you could only pass through to the stand-alone entity up to 40% of these price increase and 60% has to be paid by the parent or something like that, right?
Yes, that is correct. Escalation is covered for 100%, but 40% is [indiscernible] but largely, the impact is not much because we are covered under escalation for the HAM project.
So what I understand, even the subcontractor whom you are hiring, they also get the escalation 100%, right, on your side?
More or less on back-to-back arrangement because we want to be fair with our subcontractors. So whatever we are getting, we are also open to pass on to them.
Sir, just last question. So what would be a steady-state margin for probably next year? Obviously, '24 is too far away but at least for FY '23, any budgeted analysis done by the management for next year or year after that?
See, as far as margin is concerned for '22, '23 or '23, '24, it is difficult to predict, but we believe that it should be in the line of what yearly EBITDA margin that has come out in FY '22 because we haven't [ confirmed ] our 2 large projects in this quarter that give us a signal that whatever EBITDA margins we have seen in the -- for the whole year in FY '22 that's -- that, in my view, should get reflected in the coming quarters.
Right. Last question on my side is on the interest cost rising scenario. So what is our expectations for the older projects? Obviously, we have done some refinancing, I'm assuming at a lower rate. So any -- are these projects coming up for again, refinancing the repo change at the stand-alone level? Also, the interest rates can go up, which can impact the IRR in the interim. So -- and we are targeting to sell some assets. So any view on that or because it has caused not much impact overall.
No. See, if you see on the stand-alone basis, some of the loan, which -- because we have not drawn any loan, as I said, in '21, '22, whatever we drawn previously. To some extent, we are protected because the reset has not started. It will take some time to start the reset, but yes, there can be [indiscernible] because 40 bps RBI increase. But for our HAM projects, which are already completed projects. There, we have an uptake. Then on the annuity, we get the interest. If the rising is happening on the cost side, it will happen on the revenue side as well.
Those are linked to the old agreement like [indiscernible] plus 3% unlike...
Yes. [indiscernible] will come on this -- yes, so the [indiscernible] will come on this side, the [indiscernible] will come on that side also.
You mean to say [indiscernible]?
[indiscernible]
Okay, sir. Fantastic. Sir, just on the bid pipeline, you highlighted something. But any concrete awarding, are we expecting from [indiscernible] in Q1 in terms of the value terms outstanding pipeline, the outstanding tenders in Q1?
See, as of now, we don't have any outstanding tenders as far MHI is concerned. Because we are very comfortable with the order book is concerned for the visibility of next 2 to 3 years. And this MCGM tender, [indiscernible] we are hopeful to get 1 project out of it. Once we get it, our order book becomes very healthy. Basic visibility of next 2 to 3 years. As you will see, we have a strategy of [indiscernible] so we will see and evaluate getting anything in the road and wastewater sector, we will continue to do that. But if you ask me today, you don't have any pipeline with NHAI? No.
Sir, any guidance, inflow guidance, from your side for this year?
I didn't get your question.
Sir, order inflow targets in terms of value this year and mix?
No, we have not specifically targeted, but we will be continuously exploring good opportunities. And whatever comes, we have capacity to execute. So we will take it.
Next question from Mr. Meet Parikh from Anand Rathi.
So I just have 1 question. Regarding the equity requirement, which we have provided in the press release, we are supposed to invest around INR 203 crores in the next 1 to 2 years. Can you give a breakout in terms of how much is going to be invested in FY '23? How much is going to be invested in FY '24? And how much is required for the HAM projects and the BOT toll asset?
See, whatever money we require to invest in equity in the coming years, the major 1 is one of the BOT, which we are looking to complete in this financial itself, close to about [ INR 200 crores ], we are looking at investing into that entity in the BOT projects, and the balance will come on a fragmented there's no onetime because the SNRP project is another one. Other one, all our projects and equity are fully subscribed. So the SNRP project [indiscernible] getting progress, we will start putting in equity. It may take 1 year to 2 years [indiscernible] of time depending on the project completions team.
So if I can [indiscernible], sir. INR 100 crores from the BOT project for this FY '23, [indiscernible] there will be some segmented investment of the HAM projects and the balance will go into FY '24?
Yes, yes.
[Operator Instructions] We have a follow-up question from Mr. Rohit Natarajan from Antique Stock.
Yes. My question is on -- towards the strategy part. Now that there is a change of guard that we see. The top management has changed to a large extent, Mr. Hans has taken over. Is there a strategic road map for how this company's execution order backlog and how the balance sheet would look like maybe, say, over the next 3 to 5 years as such? Are there any thoughts given on that?
Yes. We definitely have a strategy, and we are looking forward to grow big. And accordingly, we will be proceeding for identifying very specific project opportunities, and we are expanding our management in line with that. Previously, we were doing projects which were more of HAM and more on subcontracting. Now EPC going forward is a thing. So we may be developing some in-house facilities, in-house capabilities also. So we'll be looking at all directions to expand in the near future and continuously move on improving our top line, bottom line in the coming years.
Sir, if I understand, if you could give some color on those numbers, like how the execution and top line will grow from [indiscernible] are you looking at INR 4,000 or INR 5,000 crores of execution over the next 3 to 4 years, is that the number you have in mind? Also, would you -- you said that you're looking more to do with EPC opportunity as such. So how will be the order backlog mix would look like? Will it be largely driven by your water-based projects? Or will there be an optimal mix of road and water? Any color on that?
Going forward, we are looking forward at a ratio of 50-50, 50% road, 50% water and wastewater. And looking into our current order book, which is around INR, 8,500 crores, plus some orders are under pipeline looking into that, we need to execute these projects in a time frame of 3 to 3.5 years going forward, so you can estimate what kind of numbers can come in. And projects are fully mobilized. So definitely, we will be -- with our execution capabilities, we should be able to do it in within these time frames.
I got that part, sir, within the current order backlog, you can do execution in 3 years and maybe peak execution of INR 3,000 crores can be achieved. But I'm talking about something much bigger than that. I mean, have you given like what should be ideal capacity for the backlog look like? I mean, are you looking at a bigger number, say, INR 12,000 crores of order backlog moving up the execute...
Like what I've already shared, we have capacities available. So looking into the project bandwidth and the specialty of the project, we will be definitely exploring. [indiscernible]
Okay. Yes. On the asset-heavy business model part, you were keen to explore some railway station development opportunities in the past. What is the situation over there?
That is still under exploring stage. We have done some studies. We have engaged some consultants to carry out those studies, but it is still not the reality. As and when the opportunity comes, we are definitely looking in exploring these railway opportunities.
So on 1 side, you say EPC is your focus as such. But strategically, you are open even to explore these kind of opportunities?
Absolutely. EPC is going to be there. But developmental projects will also be there. Asset-based project will also be there. But as far as the execution strategy is there, we would like to be asset-light.
Next question from [ Mr. Saket Kapoor ] from [ Kapoor Company ].
Sir, firstly, when we look at the other income part, if you could explain the nature of the other income component that forms a substantial part of our profit.
Saket, this is Sanjay Sultania here. You're talking about other income on a stand-alone basis or you're looking at on the consolidated basis?
I'm looking at the consolidated number, sir. The other income for 31st March at [ INR 173 crores ].
Yes. So the other income are basically -- there are 2 parts. One part is the -- if you see in our subsidiaries, all subsidiaries under the service contract on agreement. And these services, service [indiscernible] we build the financial assets and the interest on these financial assets are being accrued in the company, which gets reflected in other income. Apart from that, interest on any amount lying in [indiscernible] that was also part of that. And whatever we are going to receive an interest on the financial asset, that is the major component of the income from other income.
So when we look at -- as a percentage when we look at the revenues for the year at INR 1,401 crores and keep the other income separately, then the margins are not there. I just wanted to understand, do they form the part of the revenue from operations only and they have only been plugged separately?
No. See, other income are always separate given because see my stand-alone also, we -- even our press release, we have given revenue from operations separately and other income separately.
Okay. Sir, when we speak about this [ Nal Se Jal ] part of the story, what is the -- how much have we executed for this year? What is the pending order book? And this state, sir, are we executing these orders, sir?
Look, like we have informed 2 projects and almost new projects that Varanasi Aurangabad, UP JJM, these are substantial-sized projects, and we have just started execution in last 1 and 2 quarters. And we have to execute in the time frame of 2 to 3 years with these 2 projects. Can you repeat the second part of your question please?
Sir, I was looking for the Nal Se Jal part. I mean, what is the total size of the order book currently pending? And which stage are we operating currently for the Nal Se Jal scheme?
So as per the total allocated villages to us, our value is around INR 2,500 crores. So project is -- we have executed to the tune of around 10%. Rest is balanced to be executed.
And which states are we covering, sir? Villages are from which state?
Okay. These are 5 major districts in UP, Jaunpur, Sant Ravidas, Ambedkar Nagar, Amethi and Bulandshahr.
Okay. And the total value is INR 2,500 crores?
Altogether is INR 2,500 crores. Major works are in Jaunpur and Sant Ravidas.
Okay. And the scope of work is from the drinking water, tap water at the entire ecosystem, sir?
Yes, the source of water is underground. We are sourcing this through to tubewell arrangement and then treating it and storing it on elevated storage tanks and then distributing it to the various villages through the pipeline and ultimately up to the tap in individual houses, the responsibility is ours. And we also have the responsibility of overhead for next 10 years.
And lastly, sir, what was the execution part, how much have we executed out of the total Nal Se Jal scheme?
Last year, Nal Se Jal scheme saying that we have just mobilized the project, and we have started picking up in the last quarter in the range of about INR 110 crores that we have executed in Nal Se Jal. For the revenue side, but the project is fully mobilized, and we have a lot of materials. They are already mobilized works are opening in it. So from this quarter onwards, the revenue will be seen much bigger in price than the previous quarter.
Okay. So can you give some ballpark number what would be the execution for this year, sir, out of this INR 2,500 crores order book?
Look, these are the initial periods of starting of the projects, but we're looking forward to do good numbers. But as of now, yes, as we come across various issuance problems, we are trying to resolve those and move forward.
And sir, in this scheme, are we also subcontracted with other players? And have we also seen an optic fiber cable company where they are also coming up with a huge order there in the Nal Se Jal scheme for the state of Uttar Pradesh covering around 500 villages. So they have put the order book at around maybe -- I'm not getting the number right now. So are we a subcontractor to them also, we are working with companies like [indiscernible] also in the Nal Se Jal scheme? Or are we solely building the project?
Look, we have created our own setup for this project. Most of the supplies are done by us directly. For the execution portion, we are hiring recruited contractors and the local contractors, and that's the way we are moving ahead on this. So whatever respective portions of electrical, if any OFC or if any electrical portion is there, we'll be adding specialty steel electrical contractors.
Okay. And on the finance cost part, sir, we find finance cost to be higher as a percentage of sales. So what is our understanding on the same? And how is this, the number, going to shape up as a percentage of our revenues? For this quarter -- for this year, it is INR 140 crores on a top line of INR 1,400 crores.
The finance cost is going to be the -- remain same, barring some repayments, which will come in this financial year, it is going to remain to be the same.
Sir, is it 10% of the revenue?
It can't be linked to the revenue because different projects are having different cash flows, like EPC projects are having much better cash flow.
We have we don't have to see in relation to the revenue, what we have to see how much borrowing that we have done. And as I said in my opening remarks also in '21, '22, we have not done any borrowings. And regarding some repayments, which might happen -- repayment in this financial year, we are very much [indiscernible] cost is concerned. And then this, the revenue pick up, the percentage might be [indiscernible] also.
Okay. And last 2 points, what is our cost of fund currently?
Cost of fund would be -- yes, this -- it is in the range of 7.5% to 8%.
7.5% to 8%, that is likely to increase going forward, now the interest rate cycle moving up.
I don't know whether it was on the call or not, discussing on this point. As I said in the stand-alone basis, more or less, we have got the reset is happening later part of the year. So we might not be having much impact on the cost side, because of the interest pressure. And the other side of the hand side, as we explained earlier in the call, we are protected by the interest on revenue, which we are -- that will nullify the cost raise.
And a small point, sir, in this segment revenue, we have a mention of this oil and gas separately. So what is the significance of this line item being mentioned and the revenue being [indiscernible] there?
There's no revenue from oil and gas at this moment. This is just only on the investment side that we have been investing into oil and gas. There's no revenue at this moment. We are expecting revenue to improve from the financial year '25, '26. That is the expectation.
And where have been the investment made, sir? If you could give more color...
I didn't get you.
Sir where have you been the investment made in the oil and gas sector?
We have given the details in the -- presentations, which is available on the website. The [indiscernible] is given, you can refer to that.
Now I would like to hand over the floor to Mr. Ajay Hans, MD and CEO of Welspun Enterprises for closing comments.
I would like to once again thank all of you for joining us this call today. Your questions were insightful, and I appreciate your interest in Welspun Enterprises. The Q4 financial year '22 has been a strong one, and we remain committed to uphold our operational excellence. I look forward to speaking to you once again during next quarter. Meanwhile, please feel free to reach out to Abhinandan or Sanjay for any clarifications or feedback. Thank you all.
Thank you very much.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using [indiscernible] conference call service. You may all disconnect your lines now. Thank you, and have a good day, everyone.