Ahluwalia Contracts (India) Ltd

NSE:AHLUCONT

Q4-2025 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to the Ahluwalia Contracts India Limited Q4 FY '25 Earnings Conference Call hosted by AMBIT Capital Private Limited. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Sameer Thakur. Thank you, and over to you, sir.

[Unknown Attendee]

Good evening. On behalf of AMBIT Capital, I thank the management of Ahluwalia Contracts India Limited for the opportunity to host your Q4 FY '25 earnings call. We have the following members of management with us today: Mr. Shobhit Uppal, Deputy Managing Director; Mr. Vikas Ahluwalia, Director; and Mr. Satbeer Singh, Chief Financial Officer. I now hand over the call to the management, Mr. Shobhit Uppal, Deputy Managing Director, to walk us through the quarter. Thank you all, and over to you, sir.

[Shobhit Uppal, executive]

Thank you so much. Good evening, everybody. Ahluwalia Contracts India Limited has announced its financial results for Q4 FY '25. During Q4 FY '25, the company has achieved a turnover of INR 1,215.84 crores and a PAT of INR 83.16 crores in comparison to a turnover of INR 1,163.66 crores and PAT, excluding exceptional items of INR 54.91 crores during Q4 FY '24. The company has registered a growth of 4.48% in turnover and 51.44% in PAT, excluding exceptional items during Q4 FY '25 in comparison to Q4 FY '24. EPS of the company for Q4 FY '25 is INR 12.41 as compared to the EPS of INR 8.20, excluding exceptional items in Q4 FY '24.

During Q4 FY '25, the company's EBITDA margin is 10.17% as compared to 8.96% in Q4 FY '24 and a PAT margin of 6.74% as compared to PAT margin, excluding exceptional items of 4.67% in Q4 FY '24. During FY '25, the company has achieved a turnover of INR 4,098.62 crores and a PAT of INR 201.5 crores in comparison to a turnover of INR 3,855.29 crores and a PAT excluding exceptional items of INR 230.61 crores during FY '24. During FY '25, EPS of the company is INR 30.08 as compared to an EPS of INR 34.42 excluding exceptional items in FY '24. During FY '25, the company's EBITDA margin is 8.34% as compared to 10.08% and the PAT margin is 4.85% as compared to 5.93% in FY '24. The net order book of the company as on 31st March 2025 is INR 15,775.08 crores to be executed over the next 2 to 2.5 years. Total order inflow during FY '25 stood at INR 8,436.69 crores and the order inflow during FY '26 thus far is INR 396.50 crores -- sorry, this order inflow is till 31st March. At present, we are L1 in 2 projects aggregating INR 1,796 crores. Thank you. We are ready to take questions now.

[Operator]

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

[Shravan Shah, analyst]

A couple of questions. So sir, first on the execution front. So now how one can look at the execution growth for this year FY '26 and also if you can specify this INR 1,796 crores L1 orders, which are this? And how much order inflow are we looking at for the entire year of FY '26?

[Shobhit Uppal, executive]

Shravan, your second question first. INR 1,796 crores, these are 2 orders. One is a university in Bhubaneswar Odisha with the state government. This is about INR 1,000 crores. And the other is the MIDC project in Mumbai, which is about INR 700-odd crores. As regards to your third question, the targeted order inflow should be on the similar lines, about INR 7,000 crores to INR 8,000 crores in this financial year. As regards the revenue guidance, about 15%. Shravan, I've answered your question. Anything else?

[Shravan Shah, analyst]

Yes. Sir, in terms of the EBITDA margin, so this quarter, definitely, we have done 10% plus. How one can now look at for FY...

[Shobhit Uppal, executive]

As I said in my last con call, slow moving orders are behind us. Almost all projects have taken off, and we have a healthy order book. So there will be a double-digit margin in this financial year.

[Shravan Shah, analyst]

Okay. Got it. And also a couple of data points. First, mobilization advance, retention money and unbilled revenue?

[Shobhit Uppal, executive]

Yes. Mobilization advance is INR 639 crores and retention is INR 387 crores and [indiscernible] INR 812 crores.

[Shravan Shah, analyst]

Unbilled revenue?

[Shobhit Uppal, executive]

INR 390 crores.

[Shravan Shah, analyst]

INR 390 crores unbilled revenue.

[Shobhit Uppal, executive]

Yes, yes, yes.

[Shravan Shah, analyst]

Okay. And CapEx for FY '26 is?

[Shobhit Uppal, executive]

About INR 200 crores.

[Shravan Shah, analyst]

Okay. Okay. So any specific projects where we are likely to see a higher CapEx, and that's why we are seeing a INR 200-odd crores?

[Shobhit Uppal, executive]

So we have signed recently a lot of orders for high-rise buildings. So there is this aluminum or specialized system shuttering. That will involve a CapEx and plus there's going to be a large CapEx on the projects, these such high-res like the ones we signed for DLF, specialized machinery like cranes, are going to be deployed. That is why a higher CapEx. In this year also, we have done a CapEx of about INR 190 crores. So it will be on similar lines.

[Shravan Shah, analyst]

And lastly, the Gems and Jewellery Park and the CSMT railway station. So last time we said we are looking close to [indiscernible] in FY '26. So -- and particularly, the Gems and Jewellery Park where have we started work and how one can look at the revenue in FY '26?

[Shobhit Uppal, executive]

No, in CSMT, we are looking at a target of about INR 400 crores to INR 500 crores in this year. As far as Gems and Jewellery Park is concerned, we are still awaiting clearances from the department to break ground.

[Shravan Shah, analyst]

So when it will start...

[Shobhit Uppal, executive]

We are still not clear. Probably it will be in Q3 FY '26.

[Shravan Shah, analyst]

Then the revenue should be on the lower side and despite that, so if I remove this, then we have to do a significant uptake in terms of execution for other projects to reach a 15% kind of a growth?

[Shobhit Uppal, executive]

As it is in our projection of revenue, we have taken just about INR 150 crores from Gems and Jewellery Park, which if it -- even if it begins in Q3 in H2, we should be able to meet that.

[Operator]

The next question is from the line of [indiscernible] Jain from ICICI Securities.

[Unknown Analyst]

Sir, my first question is on the update. Is there any update on Delhi NGT issues?

[Shobhit Uppal, executive]

No, there is no specific update, but we are hoping that with the same ruling party both at the state and the center, this time, the pain should be considerably lesser more so because the state government has already started taking steps to curb pollution. So we are hoping that like -- unlike last year, when we lost approximately 2 to 3 months, 2 months in Q3 and nearly a month in Q4 of FY '25. This year, the pain will be considerably lesser. So the impact on our production should be much lesser.

[Unknown Analyst]

Okay, sir. And sir, my second question is, what is sort of bid pipeline which we are seeing in FY '26? Like are there any major opportunity in terms of projects, which is sort of going to help us in increasing our backlog?

[Shobhit Uppal, executive]

So the bid profile and pipeline is similar to what it was in the second half of last year. We are seeing substantial growth in projects, residential projects, high-rise residential projects in various parts of the country, especially metros, even in Tier 2 cities like, say, Bhubaneswar, Patna, et cetera. So that is one area. Secondly, airports is another area for us. And then housing also on the government side and educational projects, both on the government side and the private sector side.

[Unknown Analyst]

Okay, sir. And sir, my last question is despite having a strong book-to-bill ratio of 3.8x, like we are still looking at a revenue growth of 15%. Sir, what is actually stopping us from achieving a higher number on that end?

[Shobhit Uppal, executive]

Two things. One, we are being cautious as we always are, primarily because labor is an issue, and it's just becoming more and more of an issue. Especially in and around the festive seasons, which traditionally is the best construction period. But our experience over the last couple of years is that labor goes back home, it depletes, then a lot of this labor, especially skilled workforce comes from Bihar, which is going to -- the state is going to go for election in the month of October. So that will impact project performance across the country because all skilled -- most of the skilled workforce comes from Bihar.

[Operator]

The next question is from the line of Lakshminarayanan K from Tunga Investments.

[Lakshminarayanan K G, analyst]

I have a few questions. First is on [indiscernible].

[Operator]

Sorry, Mr. Lakshminarayanan could you please [indiscernible] while asking your question?

[Lakshminarayanan K G, analyst]

Hello?

[Shobhit Uppal, executive]

Yes, much better now.

[Lakshminarayanan K G, analyst]

Two questions. See, one is if I just look at the current assets, the trade receivables have increased from INR 604 crores in FY '23 to almost INR 784 crores in FY '25. So when you classify these trade receivables as current assets, 2 questions, why there has been a quantum jump in that? And then over what period these receivables can be got? Like what is the policy the company has on under current assets trade receivables?

[Satbeer Singh, executive]

I think debtors are INR 785 crores and current assets. In comparison to 31st March '24, this was INR 746 crores. I don't think so there is a quantum jump.

[Lakshminarayanan K G, analyst]

No, no. I'm just comparing from FY '23, it was INR 604 crores to almost INR 784 crores in the last 2 years. So is it in line with your expectations?

[Shobhit Uppal, executive]

Yes, it is what Satbeer is saying that if you see FY '24 and FY '25.

[Satbeer Singh, executive]

Yes, exactly. It is almost similar.

[Shobhit Uppal, executive]

INR 740 crores to INR 75 INR 85, right? And there has been a corresponding jump in turnover also. So it is in line with...

[Lakshminarayanan K G, analyst]

And the second question is that what percentage of our order book, excluding the CSMT is item rate and how much is EPC?

[Shobhit Uppal, executive]

We will -- before the end of this call, we'll get back to you. We don't have that as a ready number, right? If we exclude CSMT, what is the EPC. So to give you an accurate answer, give us some time. Before the end of this call, we'll get back to you.

[Lakshminarayanan K G, analyst]

Got it. And the third question is that what percentage of -- I mean I see that around INR 180 crores of CSMT has been -- work has been done. And in your own, I think you had mentioned that there has been a delay due to various agencies issues. Now when do you think this project will get over because we are already having a delay. So I just want to hear your thoughts on that.

[Shobhit Uppal, executive]

So as I mentioned in my answer to, I think, Shravan's question, we are looking at doing an output of about INR 400 crores to INR 500 crores this year, this financial year. So the total value is around INR 2,000 crores. So it would -- I think totally, it will take anywhere between 2 to 2.5 years to complete this job.

[Lakshminarayanan K G, analyst]

So maybe FY '28 or '29, it would end?

[Shobhit Uppal, executive]

I think FY -- yes, if you take 2 years from now, it's '28, FY '28.

[Lakshminarayanan K G, analyst]

Got it. And question pertaining to the same project. Since it's an EPC project and what kind of cost escalations you have actually built in because it's an L2 project and L1 project. So I just want to understand how we have ring-fenced risk in terms of delays and in terms of cost overruns, what kind of mitigation we have done there?

[Shobhit Uppal, executive]

So we've -- our investments on the project in terms of machinery and other significant resources has already been done. Secondly, we have, like, say, significant raw materials like stone, chips and sand. We've bought a quarry, which we are using to feed this and other projects in Mumbai. Thirdly, we've set up our own fabrication units near the execution site, which are helping us control the expenses, not only the timely delivery, but also expenses. So we've taken -- put in place a slew of measures, which will help us mitigate most of the escalations. Rest we've factored in our projections.

[Operator]

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

[Vaibhav Shah, analyst]

So firstly, on the CSMT project. So over the last time, we had guided for INR 750 crores of revenue for FY '26. So what is stopping us from achieving that number for this year? And are the design issues back now and design is clear now or still there are some lingering issues?

[Shobhit Uppal, executive]

Most of the design issues have been resolved. But in a project as complex as this, as I had mentioned last time, it's very difficult to get all issues resolved more so when the nodal agency, RLDA is also a comparatively new agency unlike the CPWDs and the NBCCs of this world. That is why while the construction has begun in right earnest on the ground, but there continue to be issues. This is a large project, which not only involves structure, but it also involves finishing items. While structural issues have been, to a large extent, concluded, but a lot of finishing items or design issues still remain. So we are working on that.

Secondly, work or productivity on the ground or production on the ground is dependent on as and when closures or block closures are given to us. This year, substantially, we are looking to work on the greenfield aspect of the project where new buildings are coming up, whereas the stations and concourses, that will be taken up in the latter half of this year and the majority of that will be done in the next financial year. Hence, a bit of a downward trend on the revenue guidance that we are giving on this project for this financial year.

[Vaibhav Shah, analyst]

So as far as this number is concerned, INR 400 crores to INR 500 crores, that should be largely secured now or still there is some risk to that number as well for FY '24?

[Shobhit Uppal, executive]

So that's largely secured.

[Vaibhav Shah, analyst]

Okay. Sir, secondly, on the margins front, so we saw a good margin in Q4 at around 10.2%. So what drove that margin? Any one-offs or what drove that?

[Shobhit Uppal, executive]

No, no. If you recollect, during my last con call, I had mentioned that most of the slow-moving projects were behind us. NGT was behind us. And we had signed the fresh orders at decent margins. So -- and I had projected that we would be hence forth looking at double-digit margins. And this should continue through this year.

[Vaibhav Shah, analyst]

Okay. Okay. Sir, secondly, on the Medical College Chhapra, so has there been any change in scope because it was earlier, I think order book was 0, now it is around INR 160-odd crores.

[Shobhit Uppal, executive]

Sorry, repeat your question. You're saying...

[Vaibhav Shah, analyst]

Medical College Chhapra in Bihar. Earlier, the order book was 0 and now there is a INR 160 crore order book as per the presentation. So has there been any change in scope and also the value of the order has increased. Earlier, it was around INR 450 crores, INR 470-odd crores. Now it is INR 600-plus crores.

[Shobhit Uppal, executive]

So there were certain government approvals awaited. There were extra works, which were being added. So that came during the last quarter. That's why this size of this order has gone up.

[Vaibhav Shah, analyst]

And that should be completed in this year, FY '26? [indiscernible]

[Shobhit Uppal, executive]

It will be completed in the next 6 months.

[Vaibhav Shah, analyst]

Okay. Sir, lastly, on the working capital side. So any issues in particular state or any authority where payments are being stuck or have been delayed?

[Shobhit Uppal, executive]

Not to my knowledge. No. Our -- 2 states were worrying us, which was West Bengal and Bihar. Bihar, the issues were cleared. Last time around, I had mentioned that. And West Bengal also, at the moment, we are executing no government projects there. Our projects have been completed. And most of our payments have been received.

[Vaibhav Shah, analyst]

So working capital should be a similar number in FY '26 as well?

[Satbeer Singh, executive]

It is 88 days.

[Vaibhav Shah, analyst]

88 days. Ahead also, it should be similar...

[Satbeer Singh, executive]

That has to be similar.

[Vaibhav Shah, analyst]

Okay. And sir, lastly, of the mobil advance you mentioned, what would be the interest-bearing portion?

[Shobhit Uppal, executive]

It's 40%.

[Operator]

The next question is from the line of [indiscernible] from Credence Family Office.

[Unknown Analyst]

Hello, am I audible?

[Satbeer Singh, executive]

Yes, you are.

[Unknown Analyst]

All right. Sir, I'm new to the sector, and I had a couple of questions. So firstly, I was seeing that unlike your peers, you will not diversify into longdestation projects like building tunnels or dams, irrigational facilities, underground metro, et cetera. Basically, you are primarily focused on buildings. So could you please explain why you have never thought of diversifying?

[Shobhit Uppal, executive]

Our skill set has been developed around buildings and factories. And people who followed our company know that we are risk averse. We have -- we want to grow conservatively, and that's what we've been doing all these years. We want to continue to remain a zero debt company. And that is primarily what is preventing us from going into higher risk areas.

[Unknown Analyst]

All right, sir. And secondly, in the past con calls, we have emphasized on reducing our dependence on mobilization advance and instead utilize our internal accruals better. However, your mobilization advance has grown by 21% Y-o-Y from INR 528 crores in FY '24 to INR 639 crores in FY '25. So could you please explain the rationale behind this growth?

[Shobhit Uppal, executive]

No. So if you look into the fine print, what I have been saying in my last few calls is that the mobilization advance from the public sector side or on government projects is interest-bearing, which we are continuously reducing our dependence on. The increase in mobilization advance, which you see is from the private sector side, which is interest free.

Have I answered your question? We have said only 40% of our total mobilization advance is interest-bearing, right? If our public sector order book is close to 60% -- 41%, public sector, right? So it is only -- and on all those -- most of those projects or newer projects, we are not availing the mobilization facility, which the client is offering us because it is interest-bearing. That -- those projects, like, say, Varanasi Airport, we are funding from accrual -- internal accruals. And if you see our interest cost, our finance costs have also come down.

[Satbeer Singh, executive]

Interest-bearing debt was 58% last year. Now this is 40%...

[Shobhit Uppal, executive]

What Satbeer is saying last year, interest-bearing advance was 58%. Now it is 40%. So it's come down, and it will come down further.

[Unknown Analyst]

Okay, sir. And sir, just one last question. There's a trade receivables write-off of approximately INR 14 crores. So could you please let me know which party this is in regard with?

[Satbeer Singh, executive]

Can you repeat your question, please?

[Unknown Analyst]

Yes, sir. So sir, there's a trade receivables write-off of approximately INR 14 crores. So could you please explain which party this is in relation with...

[Satbeer Singh, executive]

Logix.

[Shobhit Uppal, executive]

Yes, this is -- I think the receivable write-off is from Logix and JP, 2 of our clients, where NCLT, the companies have been taken to NCLT.

[Satbeer Singh, executive]

It should be a larger number [indiscernible]. No, how much...

[Shobhit Uppal, executive]

It's about INR 15 crores. These 2 parties. Logix [indiscernible] and JP.

[Operator]

The next question is from the line of [indiscernible] from CAO Capital.

[Unknown Analyst]

Sir, I used to follow this company like 20 years back. And even as recently as like 5, 6 years back, just before corona, you guys used to be 12%, 13% EBITDA margins. So now it's very heartening to see that you are guiding for double-digit margins. But when will we go back to those historical numbers of 12%, 13%? Is it, sir, do the business circumstances prevent us from reaching those levels? Or is it just a matter of time?

[Shobhit Uppal, executive]

The world has moved on. It's changed a lot pre-COVID, post-COVID. I don't see 12%, 13% margins happening in the near future. It's been -- it's taken an enormous amount of effort to even get back to double-digit margins, right? Yes. The industry is sort of booming, if I may say so, because now we are seeing both private sector and public sector CapEx happening. But there are myriad problems which afflict this industry, primarily our overdependence on labor, right? That continues to be the case, and labor is in extremely short supply.

So I don't think we are going to reach 12%, 13% margins till such time that there is greater standardization and greater dependence on -- or greater use of industrial techniques in what we do on our project side. That I don't think is going to happen in the short term. But I'm confident that now with Ahluwalia being a preeminent name and especially in the private sector, there being limited players, we should be able to sustain a double-digit margin right through.

[Unknown Analyst]

Understood, sir. Sir, the second question is also a related one. So if I look at the last 3 years, so '23, '24 and '25, if I look at the employee expenses, they've gone from INR 200 crores to INR 351 crores and other expenses from INR 47 crores to INR 85 crores. So can you point out what are the biggest reasons for that? So FY '24, I understand you had extremely high growth that year. And last year, there was obviously the problems that we know. But still the costs jumped quite a bit. So were there any particular reasons behind this? Or was it just that because you lost so much time because of the NGT issues and other issues that the costs are looking big because of the absence of revenue growth? How should I understand this, sir?

[Shobhit Uppal, executive]

So primarily, the costs were looking big. As you see, our staff cost in this quarter has come down because revenue has gone up, right? Secondly, we had -- because we were well stocked up, the order inflow was large. So we had correspondingly also increased the staff to execute the order backlog of about INR 15,500 crores. So now going forward, as we pick up speed, this cost is -- in terms of percentage of revenue is further going to come down, pushing up...

[Unknown Analyst]

Sir, what are our capabilities in terms of handling execution for year? So peak execution that we can handle, assuming no interruptions, no elections, nothing. How much can we execute in a year? Assuming against a theoretical scenario where all permissions are on board, like everything is there, how much can we execute, sir, based on the current cost base that we have?

[Shobhit Uppal, executive]

It's a totally new question. You have me kind of at a loss for words because such a situation will never occur. But as I said, I have projected 15% growth. This can go up to in an ideal circumstance where there is no inertia, be it at the state level or at the central level, and we are totally well stocked up as far as labor is concerned, we can do nearly 30% growth.

[Unknown Analyst]

Okay. Okay. Okay. And sir, in terms of these cost items, sir, how much should we -- so 15% revenue growth, I understand. Variable costs, obviously, will scale up with the execution. But the fixed costs, sir, how should we -- what kind of inflation are you seeing in those?

[Shobhit Uppal, executive]

So when you say fixed costs, you're talking about...

[Unknown Analyst]

You say employee expenses and other expenses, sir?

[Shobhit Uppal, executive]

So employee expense, we are -- last year also, even though we were hit by slow-moving projects, where the average increments or increase for staff cost was about 15%. And going forward, if this industry continues to boom and seeing the skill shortage or shortage in even engineers for engineers and managers, I think this will go up by another couple of percentage points.

[Unknown Analyst]

Right, right, right. So I hope this starts reflecting in the pricing for you guys, right? Sooner or later, you will have to pass this on.

[Shobhit Uppal, executive]

No, we are passing it on already. If we wouldn't have passed it on, how would we have achieved a double-digit growth in our profits. This is the time to pass it on. As I said in my answer to the earlier question, that there is a paucity of good construction companies, especially on the private sector side, where the focus on quality and safety is very, very high. We are now -- not only us, the entire ecosystem is demanding international standards. Even the buyers want the end product to be at par with -- especially in the metros to be at what they see when they travel abroad to the Western countries. So there are only a handful of contractors who are equipped to do that.

[Operator]

The next question is from the line of Sam from Merus Investment Managers.

[Samyak Jain, analyst]

A couple of bookkeeping questions. First is, I see that the other income has substantially increased in F '25. So if you could just help us understand with what are the main components of other income in FY '25?

[Satbeer Singh, executive]

Other income majorly increased due to -- basically, it consists of interest on [indiscernible] that is INR 45 crores. And besides that, INR 8 crores, we have written back the suppliers outstanding.

[Samyak Jain, analyst]

Got it, sir. And secondly, could you help us with the interest on mobilization advance, the interest amount? [indiscernible]

[Satbeer Singh, executive]

Interest on mobilization advance basically -- this has been increased from INR 18 crores to INR 24 crores this year. This is INR 24.91...

[Operator]

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

[Shravan Shah, analyst]

Sir, both L1 INR 1,796-odd crores when we are likely to get the LOA?

[Satbeer Singh, executive]

I think it will take about 30 to 45 days.

[Shravan Shah, analyst]

Okay. So considering the Godrej project that is INR 397 crores and plus this L1, so around INR 2,200-odd crores that we have already received. And just if you can specify the overall -- how much value of projects that we have already bidded and where bid is yet to open?

[Shobhit Uppal, executive]

Shravan, I don't have that handy with me. We will get back to you with that figure. Satbeer will separately give you that figure, okay? Sorry, the order pipeline is healthy. And just to kind of reiterate my point, which I made in my earlier answer, is that we expect a similar order inflow as we had last year to the tune of about INR 7,000 crores to INR 8,000 crores. So going forward, maybe another INR 5,000 crores in this year in addition to this INR 2,000 crores or INR 2,100 crores.

[Shravan Shah, analyst]

Got it. Got it. So that's what I just wanted to understand. Is there a possibility that we can even do a INR 10,000 crore plus kind of order inflow? So just trying to see where we can see a further uptick in the growth in execution maybe in FY '27, '28. So just trying to understand.

[Shobhit Uppal, executive]

Let me not give you a number, but let me tell you that we are -- at the moment, order booking is not an issue. We are being aggressively would by clients because as I said earlier, there is a paucity. There are only a handful of large construction companies who are capable of delivering complex large-scale projects across the spectrum of the building industry. So I think we should -- the order inflow should be healthy enough in this year. [Foreign Language]

[Shravan Shah, analyst]

Sir, is it fine now?

[Shobhit Uppal, executive]

Yes, it is fine. Yes.

[Shravan Shah, analyst]

Yes. I was saying, sir, order pipeline currently would be INR 25,000 crores around?

[Shobhit Uppal, executive]

I think the order pipeline should be about INR 15,000 crores.

[Shravan Shah, analyst]

Okay. Got it. And sir, is there a way that currently we are having a significant cash flow is there, INR 90,000-odd crores. We are saying that we will not use the -- for government projects, the interest-bearing mobilization advance. Also, is there a way that we can even start reducing the subcontract expenses, which as a percentage of revenue, if I see, is close to 29%, 30-odd percent. So is there a way -- so just trying to understand, is there a way that we can even inch up maybe 0.5%, 1% margin?

[Shobhit Uppal, executive]

I don't think it would be accurate to say that we can use our cash reserves to get down the subcontractor percentage. But what we are actively looking at is using our reserves to better control the supply chain, both in terms of pricing and timely delivery, which consequently will help the margins only.

[Shravan Shah, analyst]

Okay. Okay. And also currently, the private is close to 58% of order book, although we -- our aim is to have a 50%, 50% government and private. So it is just the timing gap and that's why it is, but that stand remains it is? Or is there a possibility that we may see maybe government share would be 40%?

[Shobhit Uppal, executive]

Shravan, you've seen us in the past. We want private sector government sector unless the margins are comparatively lower even on big ticket orders. So our focus over the next year or 2 years will remain on private sector. So I think 60-40 short term, 60% towards the...

[Operator]

The next question is from the line of [ Bhavin Modi ] from Anand Rathi.

[Unknown Analyst]

Sir, my first question is with respect to the order inflow this year. Do you have a breakup of how much is the new additions and how much is the change in scope? Would it be possible to provide that number?

[Shobhit Uppal, executive]

No, it would be not be possible. We will have to get back to you on that. Change in scope is going to be very little. I think if you heard the earlier question, there is about increase in Chhapra [indiscernible] less, but new order inflow.

[Unknown Analyst]

Okay, sir. Sir, second is how much of the order addition has come from the private sector?

[Shobhit Uppal, executive]

Our total order book is 58% towards the private sector. As far as the percentage of the new order inflow, we will get back to you before the end of this call. Out of [indiscernible] is out of INR 8,400 crores new order inflow in this financial year, how much is private sector? Is that your question?

[Unknown Analyst]

Right. Yes. Second thing, I may have missed on this topic, but I just wanted to understand out of this order book, which is there, how much is the fixed price contracts and how much is cost plus contract where we can get the benefit of escalation?

[Satbeer Singh, executive]

Fixed price contract is 11%.

[Unknown Analyst]

And sir, in case of escalation embedded contracts, so how much of -- what are the fees that is available escalation like labor cost, material cost, any percentage that you can give us?

[Shobhit Uppal, executive]

Government contracts, there is a formula or there are 2 formula. One is for material, one is for labor. These are standard formula, and there is a base price or base index, which is mentioned for material as well as labor. And the escalation is paid based on the periodic indices, which are released by the government, be it [indiscernible] escalation on volatile materials is -- there is a base price, like cement and steel, aluminum, even block matter, there is a base price, RMC, there is a base price which is provided in the tender. Any variation from that base price is a pass-through. We get compensated for that. As regards labor on some contracts, even in the private sector, the labor escalation is calculated based on the index, which is published by the government.

[Unknown Analyst]

Okay. Got it. And sir, the last question, sir. Since we have the project of railway station redevelopment. So are we looking for new opportunities first? And second is, sir, since now like we are [indiscernible] and the government is now focusing on [indiscernible] training opportunity. So are we looking for some [indiscernible] projects from that side?

[Shobhit Uppal, executive]

It would not be prudent for me to comment on our bidding capacity or how we're looking to increase our business going forward. Let me leave you with the thought that what we've been doing for the past few years, we'll continue to do that. Since we are present in the entire spectrum of the building industry, whichever segment of this industry does well, be it industries like we are seeing a bit of an uptick in industrial growth, we will look to focus on that. If we see -- we are already doing airports. If we see large value airport projects coming up, we'll bid for that, be it private sector or public sector. At the moment, there is a lot of focus on residential. So we are looking at adding residential projects to our portfolio.

[Operator]

The next question is from the line of Vasudev from Nuvama.

[Vasudev Ganatra, analyst]

Sir, can you just give us some updates on the DLF project, Tata Memorial and the Signature Global project?

[Shobhit Uppal, executive]

So we're doing 2 projects for DLF. One is a housing project in Sector 63 in Gurgaon, which is well underway. We are logging a run rate of close to about INR 25 crores to INR 30 crores every month there. And we are slated to complete that project by the third -- by September, October '26. As regards the commercial project, about 6-odd million -- 6.5 million square feet commercial project that we are doing on Delhi Gurgaon Highway, that we have just begun construction because they had gone into redesigning mode based on new portal provisions. So we've just begun construction. And starting next month, we should be logging a run rate there of about INR 25 crores to INR 30 crores there also every month.

As regards the Signature Global project, that also the site has been handed over to us. And we are -- since last month, we are doing a turnover of about INR 15 crores to INR 20 crores every month. Going forward, this will be maintained in this year. As regards Tata Memorial project, that project is also moving fine, and we are doing a billing of close to about INR 8 crores to INR 10 crores, which is expected to be ramped up to INR 15 crores to INR 20 crores starting next month.

[Vasudev Ganatra, analyst]

Sure, sir. And sir, how is the competitive intensity looking like in the private and the public spaces?

[Shobhit Uppal, executive]

Public sector intensity is high. Private sector, as I mentioned earlier, there are only a handful of contractors for large jobs. When I say large, I mean INR 400 crores, INR 500 crores plus.

[Operator]

The next question is from the line of Nirvana Laha from Badrinath Holdings.

[Nirvana Laha, analyst]

Given that we are looking at 15% revenue growth and you mentioned, I think, INR 200 crores of CapEx, just wanted your thoughts on how interest cost and depreciation could look like for the next year? Because last year also, I mean, this year, we did significant CapEx but the depreciation has sort of remained flat Y-o-Y. So some light on that.

[Satbeer Singh, executive]

Depreciation that is as flat because of last year impairment also [indiscernible] so that's why there is a flat because earlier this is including impairment value, but this year, impairment value has been reduced and that's why the depreciation cost is flat. And what finance cost. Finance cost has basically due to -- this is INR 48 crores to INR 58 crores, basically due to increase in mobilization advance. Increased in mobilization advance and interest has been increased from INR 18 crores to INR 24 crores.

[Nirvana Laha, analyst]

Sure. So the component of interest cost for you is...

[Satbeer Singh, executive]

[indiscernible] Basically, one is interest on mobilization advance and another factor is if you have -- if you know about Ind AS 116, that's unwinding of interest on license fees we take to our [indiscernible] and other basically right-to-use assets that including all these interest is around INR 5.64 lakh. And another is basically bank guarantee charges and other working capital interest is around INR 22 crores.

[Nirvana Laha, analyst]

Sure. So if revenue grows by 15% and the mobilization advance component remains at 40%, the interest-bearing part the interest cost will grow slower than 15% you estimate? Or will it track the revenue growth?

[Satbeer Singh, executive]

That's why -- because last year, we have taken the advance in the last moment in February, March, like CST project. That's a major advance, which is INR 200 crores. Yes, we have taken in February, March. That's why the interest cost has been increased in this year.

[Nirvana Laha, analyst]

Okay. Okay. And sir, you mentioned that there was a write-back of INR 8 crores in other income, right? Other than that, everything was interest income related?

[Satbeer Singh, executive]

Yes.

[Nirvana Laha, analyst]

Okay. So INR 48 crores of other income was in the normal course of operations, right?

[Satbeer Singh, executive]

Other income is basically...

[Shobhit Uppal, executive]

Sorry...

[Satbeer Singh, executive]

Total INR 55 crores other income, it includes INR 5 crores.

[Shobhit Uppal, executive]

INR 48 crores...

[Satbeer Singh, executive]

Interest on [indiscernible]. Yes.

[Operator]

The next question is from the line of Rajat Setiya from ithought PMS.

[Rajat Setiya, analyst]

Sir, with regards to CSMT, what is the deadline to complete this project?

[Shobhit Uppal, executive]

As I said earlier, this would be around -- it will take about 2, 2.5 years to complete this job.

[Rajat Setiya, analyst]

Okay. And sir, is this the original time line or it has already...

[Shobhit Uppal, executive]

It's an extended time line. As we have been mentioning, there have been delays on account of design and design approvals.

[Rajat Setiya, analyst]

Okay. And sir, if there are any additional costs because of this delay, I mean, delay has already happened and it may happen again in the future given the complexity of the project. Will we be compensated for any additional costs that happen because of this.

[Shobhit Uppal, executive]

It's too early to say. It's too early to say. We -- obviously, we will be -- as we are moving along, we are keeping the department informed. But as it happens in public sector contracts or government contracts, these are issues which are generally resolved towards the last stage of the project. At the moment, we are focused on getting our design approval so that we can march full steam ahead.

[Rajat Setiya, analyst]

Sure. And by when do we expect to regular run rate of clocking any...

[Shobhit Uppal, executive]

No, I did mention, if you heard my answer to a few earlier questions, this year, we are targeting a INR 400 crores to INR 500 crores output from this project.

[Rajat Setiya, analyst]

Yes, sir, I heard that, but I think my question is, by when do you think we are going to begin clocking some monthly run rate on this project?

[Shobhit Uppal, executive]

It's already happening. It's already happening. It's already happening. And as I said, the greenfield aspect of the projects, the approvals are in place now, and we should be logging -- this month onwards, we should be doing a billing of INR 15 crores to INR 20 crores, which will keep increasing. And the whole year, it will be anywhere between INR 400 crores to INR 500 crores...

[Vikas Ahluwalia, executive]

You have to understand one thing. [indiscernible] here, that it's a very complicated project, given the nature of it that it's one of the largest running railway stations of the country and the footfall is immense here. So frankly speaking, my friend, it would be wrong to expect that it is going to get some huge monthly turnovers because it has taken us a while also to understand this that the permission will come in phases. Although we have planned for the whole thing, the design is getting approved for the whole thing, but it's like one platform at a time. And it is wrong to also expect you guys are for [indiscernible], for example, -- it's wrong to expect that we shut down 4 platforms. You understand what the chaos it will be.

But yes, whatever -- I'm not going to say that the railways is holding back or anything, they are doing maximum. I'm not going to say that wrong. The portion, as Shobhit said, that is now moving full steam ahead.

[Rajat Setiya, analyst]

And in terms of margins on this project, do we expect similar margins in double digits as for the company? Or you think it will be a different kind of a project in terms of margin?

[Satbeer Singh, executive]

It will be different.

[Vikas Ahluwalia, executive]

I mean let's not try to -- while projecting -- giving you guys projections, we have factored in a slightly lower margin for this job.

[Rajat Setiya, analyst]

And sir, in terms of -- is it possible to share? I mean, we were L1 here, but would have been the L2 gap?

[Vikas Ahluwalia, executive]

It's there in the public domain. It's been talked about often. So the gap was sizable. But yes, it was sizable.

[Rajat Setiya, analyst]

And sir, did we talk about Edition 66 project that was in the previous quarter's presentation, but not in this one.

[Satbeer Singh, executive]

Sorry, come again?

[Rajat Setiya, analyst]

There was a Project Edition 66 in previous quarter's presentation, but it wasn't mentioned in this quarter's presentation.

[Vikas Ahluwalia, executive]

I'm surprised...

[Shobhit Uppal, executive]

Part of our order book. It's a sizable -- it's the Smartworld project. It's there. It should be there. It's a part of our total order book, and we have a substantial portion of that job still left. So it's there.

[Vikas Ahluwalia, executive]

We will share any kind of detailed order book, but he's saying it's not there in the presentation. That's...

[Shobhit Uppal, executive]

Presentation he's saying is a summarized presentation. If you go through a detailed order book list, it will be there...

[Rajat Setiya, analyst]

And what's the status on that?

[Shobhit Uppal, executive]

So that is roughly, if memory serves me right, is a INR 600 crore job, and we have done, I think, INR 70 crores to INR 80 crores worth of billing there. So...

[Satbeer Singh, executive]

As I said, substantial [indiscernible] that's moving fine.

[Operator]

The next question is from the line of [ Vishal Periwal ] from [ Antique Stockbroking ].

[Unknown Analyst]

Sir, I think based on our monthly construction schedule, we have given a guidance of almost like 15% for this year. So how the numbers look like for FY '27 for us?

[Satbeer Singh, executive]

FY '27. -- too far ahead. Don't make us look so far ahead, but it will be similar.

[Unknown Analyst]

No. So the reason why I'm saying is like initially, you mentioned the order book that we have, it's almost like 2, 2.5-odd years. So which means like around annually, it could be like INR 6,200 crores, INR 300 crores sort of revenue. But yes, 50% of our orders are still in initial stage, so some bit of pickup and then probably a peak of it in '27. So given that scenario, probably 25%, 30% sort of revenue growth or maybe like INR 6,000 crores sort of thing for FY '27, is it achievable or not?

[Shobhit Uppal, executive]

As somebody asked, one of the questions that was asked was if everything goes well, there is no slowdown from any government state or center, there is no labor shortage. What do we expect to grow at? I said 30%. So yes, if things remain -- the industry keeps on moving forward. There is no cash shortage. There is no sort of international event which impacts our economy. There is no reason why we should not be eyeing INR 6,000 crores in the subsequent year, FY '27.

[Unknown Analyst]

Okay. So for this, perquisite could be like 15%, if we are achieving, then probably that could be the number for '27?

Then probably a pickup is happening in each of our orders.

[Shobhit Uppal, executive]

Yes.

[Operator]

The next question is from the line of Anil [indiscernible] from [indiscernible].

[Unknown Analyst]

Just one clarification I need. In between, I think somebody asked about that write-off of advances to the tune of INR 15 crores. Just want to know whether all the outstanding advances from those 2 clients have been provided for? Secondly, whether there is any scope to recover this amount? And third, during which quarter have you provided for this, sir, if that is possible to share?

[Satbeer Singh, executive]

We have written off in this quarter. This is around INR 12 crores we have written off and there are INR 2 crores is a provision on ECL basis. And out of this, majorly, we have told that the Logix and JP projects are there. But still, we are looking to legal remedies and might be there -- might be [indiscernible] there.

[Operator]

Ladies and gentlemen, due to time constraints, that was the last question for the day. And I would now like to hand the conference over to Mr. Sameer Thakur for closing comments. Over to you, sir.

[Unknown Attendee]

Thank you. I'll hand over the call to Mr. Shobhit Uppal for any closing remarks. Over to you, sir.

[Shobhit Uppal, executive]

Thank you. Thank you, everybody. Thank you for joining in, and look forward to speaking to all of you in a few months' time. Thank you so much.

[Operator]

On behalf of AMBIT Capital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.