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Ashoka Buildcon Ltd
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Ladies and gentlemen, good day, and welcome to the Ashoka Buildcon Limited Q4 FY '22 and FY '22 Earnings Conference Call hosted by Anand Rathi Share & Stock Brokers. [Operator Instructions]
I now hand the conference over to Mr. Meet Parikh from Anand Rathi Share & Stock Brokers. Please go ahead, sir.
Thank you, Peter. On behalf of Anand Rathi Share & Stock Brokers, I welcome everyone to the Q4 FY '22 and FY '22 full year earnings call for Ashoka Buildcon Limited.
From the management side, we have Mr. Satish Parakh, Managing Director; and Mr. Paresh Mehta, the CFO, with us. We will start with the opening remarks from the management regarding the industry results. And post which, we will open up for the interactive Q&A. Over to you, sir.
Yes. Thank you, Amit. Good afternoon, everyone. We'd like to extend a warm welcome to everyone on our earnings conference call for quarter ended and year ended March 31, 2022. Along with me, I have Mr. Paresh Mehta, our CFO, on the call. Let me start with highlighting key developments in the financial year 2022. We have finalized the long-awaited equity sale of 6 projects, and we will be able to provide exit to SBI Macquarie, private equity investor, in ACL. We have registered highest ever revenue till date, and we have achieved highest order intake in any financial year and recorded highest closing order book.
Let me give an update on equity sale of ACL projects. As mentioned earlier, we have successfully entered into an asset sale transaction of Ashoka Concessions Limited of 5 SPVs by entering into a share subscription and share purchase agreement with Galaxy Investments II Private Limited, an absolute entity of TKR. The deal to be completed by September 2022, after resuming required approvals from lenders, NHAI and other 11 stakeholders, and completion of certain condition processes. We have received approvals from few lenders and some permissions from NHAI. We're in the process of completing the balance CPs. The deal transfer the entire share capital of these 5 BOT projects including repayment of shareholders loan for an aggregate consideration of INR 1,337 crores. The total proceeds received will be utilized to fascinate the exit of SBI Macquarie from Ashoka Buildcon Limited, allowing SBI Macquarie to exit the company fully other transfer of these SPVs will reduce the consolidated project date of ABL by INR 3,090 crores.
Also, we have executed a share purchase agreement with National Investment and Infrastructure Fund for the sale of 100% equity of Chennai ORR for an aggregate financial consideration of INR 686 crores. Out of INR 686 crores, ABL is expected to receive INR 450 crores. That is INR 250 crores towards loan repayment, and around INR 200 crores towards its 50% equity stake in SPV.
Post this transaction, the company will remain with following major projects in highway portfolio. 74% equity stake in 1 total project that is Jaora-Nayagaon, 3 fully owned annuity projects. That is Hungund–Talikot, Bagewadi-Saundatti, KSHIP and fully owned portfolio of 11 HAM projects.
As mentioned earlier, we are in discussions for the equity sale of Jaora-Nayagaon BOT toll project. Coming to HAM projects. We have executed construction agreement with NHAI, worth INR 1,079 crores for the development of 6-lane access control, greenfield highway from kilometer 162.5 to kilometer 203.10. That is Baswantpur to Singondi, the section of NH-150 on hybrid annuity road under Bharatmala Pariyojana. The construction period is 912 days, and the operation period is 15 years. The total equity requirement of all 11 HAM projects is about INR 1,080 crores, of which we have already invested INR 739 crores as of March 2022.
Coming to our order book. As mentioned, we have achieved a robust order book inflow of around INR 9,793 crores from first April '21 till date. And some of the key and large orders of the above are, we have received LOA from NHAI of INR 829 crores for construction of 6 laning from Belgaum to Sankeshwar Bypass on NH-48 in the state of Karnataka on EPC mode. We have received an LOA for railway electrification order of INR 618 crores in the state of Assam from North Frontier Railway.
We have also received LOA for MCGM. It is INR 1,046 crores for construction of sewage treatment plant based on India technology. And as I said earlier, we have executed a construction agreement with NHAI for INR 1,079 crores for the development of Baswantpur to Singondi which is section of NH.
The breakup of INR 14,731 crores order book as of March 31 is road projects compromised around INR 7,906 crores, which is 58% of our total order book. And among the road projects order book, HAM projects are to the tune of INR 2,454 crores and EPC projects are to the tune of INR 5,452 crores.
Power T&D and others account for around INR 2258 crores, which is approximately 17% of the total order book. The EPC Building segment contributed around INR 2,177 crores, which is 16% of the total order book. While the railway stood at INR 1,236 crores, which is 9% of the total order book. And the EPC order of CGD is around to the tune of INR [ 65 ] crores. The current order book, including the projects received post of March stands at INR 14,633 crores.
Let me reiterate that our focus remains to build strong EPC business in segments of highways, railways, power, T&D and buildings. The current order book of INR 14,633 crores provide us with a good visibility of EPC business growth.
On assets portfolio front, we have already built 11 project portfolio in terms of new project building. Our priority will remain for HAM projects, and strengthen the HAM project portfolio further.
This is all from my side. I will now request Mr. Paresh Mehta to present financial performance of Q4 FY '22.
Thank you, sir. Good evening, everyone. The result presentation and press release for the quarter have been uploaded on the stock exchanges, and on the company's website, too. I believe you all may have had an opportunity to go through them.
Now I would present the financial results for the quarter ended March 31, 2022. Strategic consolidated results, the total income of Q4 FY '22 grew by 15% year-on-year to INR 2,057 crores as compared to INR 1,780 crores in Q4 FY '21. EBITDA stood at INR 632.6 crores in Q4 FY '22 with a margin of 30.8%. Profit after tax is at INR 224.6 crores in Q4 FY '22.
Now coming to the standalone numbers, the total income for Q4 FY '22 stands at INR 1,622.7 crores as compared to INR 1,433 crores in corresponding quarter last fiscal, listing a growth of 30.2%. EBITDA for the quarter was at INR 219.8 crores with an EBITDA margin of 13.5%. The company reported net profit after tax of INR 188 crores in Q4 FY '22.
During Q4 FY '22, BOT division recorded a total collection of INR 269 crores as against INR 261 crores in Q4 FY '21 and INR 257 crores in Q3 FY '22. Total consolidated debt. As of March 31, 2022, we had INR 6,698 crores, of which project debt is INR 5,961 crores, of which INR 3,090 crores stands for project debt of 5 BOT projects.
NCDs stood at INR 250 crores at ACL level. The standalone debt stood at INR 486 crores, which comprises of INR 201 crores of equipment loan and INR 285 crores of working capital loans. Out of the total consolidated debt of INR 6,698 crores, INR 3,090 crores will be transferred along with 5 SPVs of BOT. Post the same transition, effective as per debt would be INR 3,608 crores.
During Q4, the company has initiated sale of its investment in GVR Ashoka Chennai ORR Limited, a joint venture of the company, for which share purchase agreement with an ad has been signed for a consideration of INR 66 crores, subject to certain adjustment specified in the SPA towards its equity investments, loans given and other receivables from the set joint venture. Accordingly, the asset investments along with loans and other receivables amounted to INR 346 crores have been stratified as for sale.
With this, we'll now open the floor for question and answers. Thank you.
[Operator Instructions]
Our first question is from the line of Nikhil Abhianka with Dan Capital.
Congrats on a good set of numbers, first of all. And so I just wanted I had 2 questions. So can you give us a revenue margin and order book guidance for FY '23?
So FY '23 looks very good with the program of -- Ministry of Surface Transport, and they are really very aggressive in the planning around 18,000 kilometers on for NHAI, MRTH, NHIDCL, and state NH together. So we feel we should be able to -- the order inflow should be 10,000-plus in this year, and revenue guidance will remain -- like we should grow by 22%, 25% in this year. Even our current balance order book is also quite significant.
And the margin, sir?
Margins will remain the same what we have been -- already targeting the same margins.
Somewhere around 13% to 15%?
11% to 12%.
11%. Okay. Sir, and so you talked about this Chennai ORR. So will we book any gains through the sale in Q1 FY '23?
We expect the sale transaction to happen Q1, hopefully or latest by Q2. So the moment it happens, there would be possibility of a game book based on the price which we have indicated.
Okay. And sir, any further update on NTPC -- EPC project that we had, did we reach any middle ground with the department?
No. NTPC is -- we are proceeding with all balance works except the modules.
Okay. And one final question, sir. Sir, what is the status of Jabalpur asset sale?
So you're referring to Jaora-Nayagaon asset sale?
Yes, sir.
Yes. So on the Jaora-Nayagaon, we are in talks with the potential investors. And we expect it to close as early as possible. We have 2 investors, Ashoka Buildcon and Ashoka Concessions along with Macquarie as a separate Investor there. So we are negotiating with a potential investment.
Okay. And just if I may add one more, sir, are we looking to add more solar EPC projects?
See, solar EPC, we are -- at present, no opportunities we are looking at. Maybe we will evaluate if it comes across.
Our next question is from the line of Ashish Shah with Centrum Broking.
So first question is on the Belgaum Khanapur project. Over the last couple of quarters, we are not seeing much progress in terms of execution. So just wanted to check what is the status there.
See Belgaum Khanapur actually has a major bypass of 10 kilometers. And this got released only after pre-COD we got. So we got pre-COD at 56%. And now Belgaum pass is released. So we'll see progress in coming quarters.
Sure. Okay. So by when do you think this could get completed? Within '23?
One year exactly from now. So...
Okay. So within -- by and large, within FY '23. Okay.
Yes.
Right. Also on some of the newer projects on the building EPC side, if you can just highlight where we are in terms of being able to start the work, especially [ Maldives ], the Zodiac Hospital one, the sewage treatment project in Mumbai, if you can just highlight.
So all these projects are basically expected to start in Q2. [ Maldives], we are yet to get clearance from Exim Bank to start the project, which we are expecting in Q1 or maybe early Q2.
Zodiac Hospital, again same thing, either we get in Q1 or maybe early Q2. Service treatment, though we have signed the LOA, agreement is yet to be signed, which will happen in Q1. And real project will take off in Q3, Q4.
Okay. And in Maldives, sir, is there any chance of the order getting canceled? I mean because if they're not able to tie up funding, is there any possibility of that project being taken out?
There is absolutely -- we don't see any chance of this project being deleted. It's on priority of government and definitely it will happen.
[Operator Instructions]
Our next question is from the line of Vibhor Singhal with Phillip Capital.
Congrats on great execution again. Sir, my question -- so I got a couple of questions. The first question was in terms of the remaining HAM projects, the 4 packages of Tumkur-Shivamogga and the Kandi Ramsanpalle project. What is the status on these projects? And when do we expect any pre-COD for these projects going forward?
So Tumkur-Shivamogga, TS1 pre-COD is already recommended. TS2, we will get in the end of maybe Q1 or early Q2. TS3 and TS4 are early stage and they have started, may go into next year.
We might have just started there.
I Beg your pardon?
Same is the Kandi Ramsanpalle project also, they're also...
Kandi also we're expecting in Q2, yes, these are all at advance stage of completion, yes.
Got it. Got it. Sure, sir. Also, sir, my second question was on the margins front. I mean this quarter, we saw margins dip slightly but not very sharply up.
So margin front, definitely, there was pressure due to on -- commodity prices going up and also fuel prices going up, which were not exactly matching with the pass-through available in the project. But of late, if you see last 8, 10 days are very positive after government taking certain measures on export and import duties. So steel prices are now coming down to the normal and cement also will follow is what we see. So going ahead, we will be able to retain the projected margins. This is what is...
Got it. And sir, during the course of this 11% to 12% margins in next year, could we see more softening in Q1 or Q2, and then maybe pick up in Q3, Q4? Or do you think next quarter itself should be good enough?
Pickup, see -- normally, pickup happens only in Q3, Q4. So Q1, Q2 will be -- still, Q1 will be good. Q2 is affected by monsoon badly. So it all depends upon how much it affects and which areas it effect. But we will see decent growth in Q1. And Q3, Q4 will be a robust growth year.
Sir, last question from my side. I know it is difficult to predict, and I think there are multiple formations, which are remaining. But any time line that you believe that you would be able to complete the BOT sale deal, and the cash could be in our books, and Macquarie could be provided exit. When do you think this entire thing will get [indiscernible] if I may.
Yes. These are at advanced stages now. So definitely, September is our targeted time lines. But even if a delay happens, it could be another 1 or 2 months. It cannot be more than that.
Our next question is from the line of [indiscernible] with Edelweiss.
So the first question is, what is the pending equity infusion in the HAM projects? And if you can give the year-wise schedule for the equity infusion?
Yes. So total equity to be infused, including the latest 11 projects we have got that is Singondi project. We have total equity is INR 345 crores, of which INR 255 crores will have to be funded in FY '22, '23, and INR 90 crores in FY '23, '24.
Okay. Okay. Got it. And what was the CapEx that we did in Q4? And what is that we planning for FY '23?
So CapEx is almost to the tune of around INR 90 crores. And for '22, '23, 2023, we are expecting a CapEx of approximately INR 150 crores -- INR 125 crores to INR 150 crores.
Okay. INR 125 crores to INR 150 crores. Yes. And for the Q4, can you give the revenue breakup between the segments, like road, power, T&D, et cetera?
So all the -- for Q4, on road sector, the total revenue was INR 1,100 crores. On the power, it was INR 267 crores. On railways, it was INR 136 crores. And other sectors, put together, was approximately INR 50-odd crores.
Sorry, can you repeat?
INR 50 crores.
INR 50 crores. And for railways, you said INR 136 crores, right?
INR 136 crores.
Okay. And what would be these figures for FY '22 as a whole?
For FY '22 as a whole, it will be approximately, for road sector, INR 3,501 crores. INR 410 crores for Power. INR 488 crores for railway, and balance approximately INR 130 crores for others like CGD, Smart.
Okay. And sir, for the Jaora-Nayagaon project, you said that we are in advanced stages of discussion. So any time line by when we can expect this?
As I said, we are under discussions with the investors, and we expect it to be closed in a couple of months' time. It all depends how all things fall in place.
Okay. So could it be expected, at least, FY '23? Or it can spill over to the next year?
It should definitely happen in FY '23.
Okay. That's great, sir. And one last thing, what are the debt levels that you are targeting for FY '23?
FY '23, we being at INR 6,700, and with new projects to be executed. The balance HAM projects to be executed and other. We would be in the range of around INR 700-odd crores -- INR 7,000-odd crores.
Okay. INR 7,000-odd crores. Okay.
[Operator Instructions]
Our next question is from the line of Jiten Rushi with Axis Capital.
Congratulations on super quarter. On the question of the order inflow. So sir, last quarter, we were discussing about the order inflow from the supporting of Ganga Expressway. So any progress on that side, sir?
For Ganga Expressway, we have not participated as an EPC contractor. So we are expecting order inflow from NHAI and other projects.
Any outstanding bills as of now in NHAI or we are -- will be submitting one or...
There are some things under consideration.
And sir, again, on the balance sheet numbers, if you can provide unbilled revenue mobilization advances and the retention money as on March?
Yes, I will do that. One second. So the total debt as of March '22 -- total debtors rather, including hold and retention, we saw INR 1,112 crores. Unbilled revenue is around INR 813 crores. Total receivable is around INR 1,926 crores, against which we have INR 408 crores of advances. And our net unbilled revenue is around INR 613 crores. So...
Sorry, I'm not able to get you. So you said, sir, INR 813 crores. You said debtors, which is including retention is INR 1,112 crores.
In terms of negative and positive impact is INR 613 crores.
INR 613 crores is what?
Unbilled revenue. Net unbilled revenue.
Okay. Net unbilled revenue. Sir, mobilize advance, you said is INR 408 crores, right, sir?
Yes. Yes.
And retention exact number, can you provide, sir?
Retention to INR 232 crores.
And sir, on the quarterly result, you can see other expenditure going up to a largely gross margin decline by 13 basis point, but majorly the EBITDA decline was due to higher than expenditure. And can you also explain the increase in the income in this quarter and the negative tax effect.
Didn't get the question, sir.
Sir, I'm -- my question was on the other expenditure for the quarter was high. Other income was also high, and the negative tax impact. Can you please explain that for the quarter in standalone results?
So other income is higher basically because we have moved from a 2021 COVID period, when went quite a substantial portion of fixed expenses were reduced in 2021, which is now back to normal. There are certain CSR expenditures made in other expenses, which is accounted in this quarter.
On the income side, there are certain write-backs of payables, resulting in additional income. And as I said, on the tax side, there is a saving on tax because we have written off the interest receivable from ACL, which we have written off and that we have taken as a credit in our tax bookings.
So basically, sir, you said other income was high, basically, because of the write-back, which you have done, so what would be that write-back now?
Certain write-backs and certain distillate receipts like insurance.
And what is the CSR expenditure included in other expenditure, which is resulting in the spike?
Around INR 89 crores.
Okay. And the tax saving is because of the interest reverse written off in ACL. So currently we see the tax credit, right, sir?
Right. Right.
And sir, in the opening remarks, you said about the share you receive from the stake sale in Chennai overall at INR 450 crores. So balance is with SBI Macquarie. Is my understanding correct?
No. No, no. This is a 50-50 joint venture with GVR Infra as one of the other partners. The balance will go to the other partners.
Okay. But sir, you mentioned here that we'll be acquiring stake from GVR proposed with the deal will conclude. So then we will be the 100% owner of the SPV. So don't -- won't we get the whole amount? Just want to understand that.
So I mean, this is more of a reconciliation. No doubt, we are going to say it 100%. But ABL will retain INR 450 crores, and balance has to pass through ABL to GVR Infra as considerations to their stake.
So sir, as mentioned in the notes to accounts, this deal has -- is at around 2x price to good, if you add up to your equity receivables and loans given to SPV, right, sir?
Right.
Our next question is from the line of Parikshit Kandpal with HDFC Securities.
So my first question is on the balance sheet. Can you please reconcile this loan item looks like INR [ 1,094 ] crores, which has become zero now?
I'm unable to hear you.
The balance sheet -- stand-alone balance sheet, there is 1 item in the noncurrent asset side, which is loan of about INR 1,094 crores in March '21, which has now become 0. So can you just -- I think this has gone into current assets. So can you just reconcile this?
So this is loans given to ACL, Ashoka Buildcon Limited, which has now become payable as current because we expect the deals to happen and all the accounts to get squared off.
Okay. So this is basically within your investment loans and advances and other equity investments in the ACL portfolio. So that has been transferred now.
Correct.
Right. And this asset as for the Chennai ORR project, right? That INR 425 crores.
Right, sir.
Okay. Sir, the second question is on other income. So now how do we read other income? So on a recurring basis, now the interest which you used to charge on the open advances, so now that will get knocked off. It won't get any more. So on a recurring basis, the other income will largely be the interest on our FDRs and scrappage and all other things, right? I mean there won't be any other item big items here.
Yes. Like other items like receipts like scrap sale, insurance claims. These kind of items would keep on coming in.
Okay. And just one last question on the ACL, sir. So when the transaction closes by September you said, Exim Bank there would be possibly there is a number delay of 2 months, or maybe by third quarter of the financial year. Do you -- and are there further write-offs on account of like the last funding for this portfolio for asset. So if you can just give some color on that?
At present, we have taken account in account all impacts on the deal, which is to happen, and we don't expect any further write-offs.
Okay. And just on this cash inflow, which we're expecting from Chennai ORR, INR 450 crores. So and plus Jaora-Nayagaon which may happen, which will accrue some cash to us. So how do we intend to utilize this cash inflows? Sir, any thoughts there you can highlight in this financial year? How do we intend to distribute this or use this?
So definitely, we will cross the bid when it comes. But definitely, from a planning perspective, this will initially be utilized to give an exit to Macquarie, the initial portion of around INR 200 crores. The balance available will be used for propping up working capital and others -- some other capital structure decision-making, which will happen at the right time.
Okay. So anything like working on some special dividend or some buyback, any plans on that?
That could be a possibility because if that is the surplus cash, there's no point in keeping the cash at the company level.
Our next question is from the line of Deepika Mehta with Axis Bank.
Can you tell me -- I mean this is a basic question, but can you tell me how does the cost of construction change? How -- what was the split earlier? And what is the split now in terms of -- because of the value increase -- price increases? And also because of the change of steel that the government has allowed.
Hello. Yes, if I understand your question correctly, you're asking the impact of price rise, right?
Right.
So normally, all the NHAI projects or MoRTH projects, there is no pass-through, which is linked to Indices of a particular commodity. So now what happens is the industrial don't move in tandem with the market -- so when there is a sudden rise in steel or cement prices, there is definitely an impact on the overall working.
So what normally we follow is we try to delay those kind of purchases. Sometimes the turnover also get delayed. So if you see my -- particularly Q1, it will get slightly affected because of this price rise. Decisions have been delayed accordingly, that is progress has been delayed to see. Unfortunately, it's now favoring us when government has intervened, and they are taking corrective actions.
Okay. Can you can you also tell me the breakup of cost of construction of, say, suppose if it's in highway road product-wise like cement and steel?
So cement and steel should compromise around 30% to 35%, including bitumen. These are the 3 basic prices which affect. Bitumen, steel and cement. And fuel is another component, which normally varies from 10% to 12%.
Our next question is from the line of Alok Deora with Motilal Oswal.
Congratulations on decent numbers. Just to understand this INR 10,000 crores of order inflows which you are targeting. So any bids which we have made, which are yet to open. And from which segments we are looking at these new orders from?
So there are certain bids, which I get to open with around INR 3,000 crores, which includes railways, metros and some energy projects. And order inflow, we are looking from -- of course, from NHAI and MRTH where they have aggressive plan of 18,000 kilometers to be announced as again 12,000 kilometers, which they did last year. Then if you look at railways and metros and semi high-speed railways, they are also going up a good opportunity. Power sector also, distribution programs are now coming up and they are also coming off with large budgets. So all these 3 sectors are going to grow up, a good amount of opportunity.
Sure. And sir, on the margins, I believe you mentioned about margin guidance of nearly 11% to 12%. But if you see the margins now since the last 2, 3 quarters, it's been slightly weaker than that. And -- so how confident are we on the 11% to 12% margin, sir?
See, going ahead, this volatility will be captured in the new bids. So what we are suffering is only on the fixed price contracts. And our fixed price contract, where we are suffering is hardly 10% of the entire order book. So margins will definitely we'll be able to maintain at 11%, 12%.
Our next question is from the line of Alok Deora from Motilal Oswal.
Yes, and congratulations on a good set of numbers. Sir, firstly, just wanted to understand about the console balance sheet. So from what we understand is that roughly the net of the liabilities held for sale and the asset for sale. The remaining balance sheet is what is supposed to be the balance sheet that will continue post the deal. Is that the right understanding? Post the ACL deal?
Right. Right.
And in this case, any -- what would be the adjustment to this balance sheet once the GVR deal is concluded, what will be the changes in that balance sheet, which is there?
What will happen is this asset for sale, which is -- and as set will get knocked up from the balance sheet and some gain will be booked. As you said, it is 2x. So whatever excess we get on the equity will be booked as income side.
So that will flow through to the networks, basically.
Right. Right.
This when we -- you think using the GVR deal is also included in the liabilities held for sale?
No. GVR -- Chennai?
Yes. The Chennai order on top of this INR 6,600 crores, which I understand is with regards to the ACL deal. That is those 5 assets. On top of that, there will also be the Chennai ORR deal, which is not being captured in this balance sheet, right?
No. It is an asset held for sale. It's part of that.
Asset for sale includes the 5 plus Chennai ORR as well.
Right. Right.
Okay. Okay. And so apart from this, I just wanted to check, so I think the earlier participants mentioned regarding dividend and/or buyback. So any -- obviously, we all understand that buybacks are more friendlier than dividends on certain accounts. So any thought process or any requirement that we have, if we want to undertake a corporate action like a buyback, what kind of capital structure do we need to be at?
And what kind of thinking would the promoter have with regards to, let's say -- post this deal, what kind of capital structure we will reach? And what we'll be able to do to reach, let's say, if we need to reduce the debt or something, how will we go about it?
So see, for doing a dividend, I don't think it is a challenge, from the reserves point of view. On the buyback structure, there are certain compliances required to be done for -- post doing the buyback, which we have to see because unless those criteria are fulfilled, we will not be able to.
In case the deal goes through, definitely, we are confident that we would be eligible at least for doing a buyback. And once the buyback is done, it will all depend on what kind of amount of buyback we are looking at. Numbers could be anywhere then -- could not be...
Yes. So currently, sir, on that front, we have around INR 700-odd crores cash in bank with us, and plus I think some small investment part -- what amount -- because we understand it is not an easy amount, easy thing to decide right now. But depending on the order book requirement, the growth requirement and all, what is -- what would all what is the logic of thinking about what would be surplus cash as per us?
Actual, anything above around 50% would definitely be surplus. 50% could be utilized for growing business because we have HAM projects to be taken up radically. So we'll get funded on its own, but seed capital available would help the HAM projects to progress faster. But as you said, whatever settle left out, the 50% should be available for disposal.
So given that current cash balance is around INR 730-odd crores, you are saying after all the deals and everything surplus would be what, roughly around INR 1,000 crores or more, total, including this current cash balance?
Yes. It is -- current INR 730 crores cash balance is at the CFS level, which typically ease what you call -- most of the same is part that which is quite SPVs, If we actually talk of purely free cash balances, it would be in the range of as per 31st March, what we noted at the stand-alone debt of INR 160 crores plus something from the SPV, which is parked there for just received in 31st March, would be around, say, INR 200 crores, of which more than 50% would be for guarantees and other portfolios as lead.
So the cash balance here would be normal approximately INR 50 crores to INR 100 crores, and then any further amount receivable from the stake set.
So what is the tentative amount which we are expecting from the sale towards this cash balance, which it will add, I mean, after netting of all the liabilities and all?
We've really not worked out that unless we cross the bridge as when we came around because there are 3 deals under review. One is the KKR, one is the Chennai ORR, and the third is in case we get into an Jaora-Nayagaon deal.
And we understand you would also have sizable real estate on our balance sheet from the earlier buys that we would have done. Any thoughts on monetizing that at some point over the coming -- I mean any thoughts on that?
We do keep on looking at the positives of monetizing them. We have been doing a few, but in a very small slower pace where we have given out this structure land parcels for development purpose to a developer and a real estate player who is monetizing it. But we are looking out for opportunities.
Yes. On a very rough basis, what would be the sort of size and tentative market value of this real estate, which is line with us in the balance sheet right now, the Pune, Indore, Nashik, all these areas?
Approximately, we have around INR 270 crores of assets as per book value. We should be looking at not less than at least 2x the price, if not more.
Sure. And finally, just on the order book. So we understand, normally, people say that 15% to 20% order book of -- order inflow of their existing year revenues is good to sustain the revenue growth. Now we have a very large order inflow compared to existing year revenue. So what kind of ramp-up in revenues should we expect? And are all the orders that we are showing in our current order book on an active note? And would it imply that, that should be a 30%, 40% CAGR in revenues over the next 2 years?
So this year, particularly, we are expecting around 22% to 25%. And next year, it will all depend upon how the real order inflow stacks.
Sure. But the current order book that we have, does not have anything which is moving slow or dormant or anything like that. Most of it is moving. Is that the correct impression?
The buildings out of particular are slow moving. So they really will pick up in Q3, Q4.
Okay. That is the INR 2,200-odd crores orders, which is there.
Right. Right.
Our next question is from the line of Anupam Gupta with IIFL Capital.
So the question is related to the stand-alone debt which you have reported, sir. In the balance sheet, the debt appears to be INR 559 crores and cash appears to be INR 144 crores. Whereas in the presentation, the number is debt INR 486 crores of debt and INR 162 crores of cash. So where is the difference which is not visible in the reported balance sheet?
So certain debt is certainly to related party debt from our subsidiaries -- or subsidies, basically. So those are not external debt, they're internal debt. So INR 486 crores is the actual external debt.
Okay. And sir, cash -- why is the difference in cash?
So INR 161 crores with cash balance is talking about is approximately around say INR 40-odd crores would be cash received on the last date of the year, which could not be appropriated with the lower accounts. And balance around INR 120-odd crores are cash bank balances, which are leaned out to -- a bank balance leaned out to bankers for guarantees and the nonfund-based facilities.
Okay. Okay. Understand. And the second question is relating to the HAM assets. So you talked about Jaora being under negotiation, but what is the status on monetization of HAM? Will you be taking that up? Or is it already in negotiation for the [indiscernible] of those HAM projects?
We are in discussions, but nothing very concrete at this moment of time. We need to monetize these HAM projects, for which we have received only 1 full COD and other pre-COD already received. Of course, we are eligible to sell them off almost 5 projects are there ready to sell them. But we're just waiting time, I mean, definitely signals which have been coming increase in RBL lending rates establishing a better market price.
Okay. Understood. And then just one last question, sir. In terms of order inflows, when you talk about INR 10,000 crores. So the mix -- if you see the order book mix in terms of roads has come down versus FY '21. Will that be the target mix for FY '22, also? Or will we go back to roads being dominant?
We'll remain road-focused. But how the orders pan out? Because today, we have a large number of players in that market. So we're not very sure what the mix would span out. But definitely, our focus will be roads and highways. So our first preference will be railways, then power and then buildings.
Our next question is from the line of Varun Murli, an investor.
I had a couple of questions. First question, just wanted to check whether, with regards to your deal with KKR, I mean do you see any risks to closure there given the market scenario? And number two, also any update on that -- because last call in -- even in the latest CRISIL rating report, there was mention of some of that arbitration amounts with NHAI. So any update you can provide on those?
So we don't really expect any hindrances in the KKR deal irrespective of what's happening in the market, presently. I think so our markets have been rather buoyant from both perspectives, we have had good toll rate rise also interest rate are there, but they are not as significant, and they're already factored. So we don't really feel much challenges in execution of the KKR deal.
Secondly, on the CRISIL note of arbitration, yes, these are being pursued at NHAI level, some are at arbitration, but many RPAs are also taking them to contribution processes.
Okay. Just one other question that I had -- or in fact, like 2 other questions, if you could bear with me. This whole stand-alone revenue that you have. So what is the percentage contribution that you have on the stand-alone revenue as a result of maintenance that you undertake at these 5 KKR projects and the Chennai ORR project. So just wanted to get some understanding like what percentage of revenue would you be booking because of maintenance activities at these projects?
That could be very miniscule. So these 5 projects, it should not be really significant. Less than -- from a maintenance perspective, not more than 1% -- 1% to 1.5%.
Okay. And my final question. I think I heard you say earlier in the concall that -- where you are giving a debt guidance of INR 7,000 crores. So did I hear that right? I mean because the number looked a bit off given the reduction in debt that is likely to happen over the next year?
Yes. But there are 2 parts. So presently -- and not factoring the debt receipts where they will be powered because most of the debt is term loan debt which have a -- which are typically at SPV level. So I'm not considering deal as part of the estimation of that INR 7,000 crores. And these INR 7,000 crores will be -- new projects we'll be picking up debt. We sent more than that also, and some debt being repaid for the current BOT projects.
Okay. So just so that I get the understanding right, this INR 7,000 crore guidance that you were giving but not assuming the deal, right? I mean because...
Right. Please go ahead.
No. No. That is all that I had.
[Operator Instructions]
Our next question comes from the lines of Mahesh Badam from Nirmal Bang.
Congratulations on good set of numbers. A couple of questions from my side. So firstly, I just wanted to understand, we have received annuity on 2 HAM projects. So is there any -- was there any variation in terms of how much annuity you are supposed to receive, and how much you actually received because of GST?
So we have paid annuity as per the agreement, subject to rescope any, if any. But as for GST the place you see separately from NHI. So suppose INR 100 was to be received, that with INR 112, we have INR 100, INR 12 will be received in the near future. the -- we're starting on the procedure and think we'll receive that same.
So the money that has been received that has been adjusted for GST, right? Or actual receivables, they have not cut the GST, but we have actually raised the bill including the GST.
Yes. We have raised the bill.
So basically, we have received the cash flows that we wanted to, but we still have to pay INR 12 upfront, which we will get it later.
Correct, which we have predict at our GST account, which cash flow for this deal.
Okay. And sir, second one is on the project Baswantpur to Singondi which you mentioned, the project cost is around INR 1,079 crores and EPC portion we have mentioned in order book is INR 790 crores. The difference seems a bit large. So can you just explain that?
It's true that the EPC cost is at [ INR 790 ] so around INR 800 crores against INR 1,079. So balances left at SPV level for taking care of its [indiscernible] as well as its IDC and other expenses.
Okay. Okay. Sir, just lastly, I just wanted to check, how do you see competition in the winning of HAM and EPC this year.
So we still see there is a large number of players participating. So competition is there, and one needs to be very clear and selective about picking up projects.
Okay. So in terms of margins, we would be -- we will have to go to lower margins to get the project. So I just wanted to understand compared to what we've done say previously?
See, normally bid margins are retained, and this all is about engineering around the project. [Foreign Language]. We try to retain those margins. Last quarter, we could get around the MoRTH plus NHAI our orders are to the tune of INR 5,000 crores. So even though there is aggression, there's definitely an opportunity.
Our next question is from the line of Jiten Rushi with Axis Capital.
Sir, my first question is on Jaora-Nayagaon. What is the outstanding equity, including subnet in the project, sir?
The equity is INR 287 crores. There's no other debt.
Okay. And sir, on the balance sheet side, we get the contract...
There is term loan of INR 165 crores from the senior lenders.
INR 165 crores term loan. And sir, on the balance sheet side, we did see contract assets and contract liability -- so contract assets going up significant and contract liability coming down. So can you explain us the change in the underlying items in it, sir, in the stand-alone balance sheet.
Could you go again, contract assets.
Sir, the contract assets and the contract liability, we can see a significant change. So being a stand-alone balance sheet the contract asset is almost gone up [ 4, 5 digits ] [indiscernible] contract level also there is a change from -- wanted to understand what is this change and what are the underlying items in it.
The contract asset is basically unbilled revenue.
Unbilled revenue, okay. So sir, the unbilled revenue this time is high, but probably expect this to come down this quarter? Or how it is?
This has come down as billing happens. And as turnover goes, it will be -- on a pro rata basis, it will remain in that range. But it is from a -- it will come down by approximately INR 150-odd crores.
And sir, on the contract liability, does it include mobilization advance or how it is?
Yes, it includes.
So this increase is because of the higher share of mobilization advance in contract language.
Yes.
Okay. And sir, on the Maldives project, obviously, the project you have received a long time back. So is this a fixed price contract? Or there will be a revision in the contract price as we start the work in Q3, as you said in the opening remarks.
This is a fixed-price contract. But the payments are in dollars, so dollar appreciation has already happened. And more or less, steel prices, which has abruptly gone up are now coming to a normalized level. So still contractor is still very much within the budgeted margins.
So we don't see any risk to the margin.
No. We don't see any risk unless again, we see some erratic price rises.
[Operator Instructions] Our next question is from the line of [indiscernible] with [indiscernible].
I had a couple of questions. Firstly, the WPI inflation over the last 12 to 13 years has risen in double digits. And month-on-month, it has been increased lately to 15%. So does it not cover fixed-price contracts? Or are you baking in these numbers? And then you are saying that it's only the 10% impact on fixed-price contracts.
This double-digit WPI increase definitely is not a factored aspect. But as we have already said, on the revenue side, also, there are certain increases like if it's a overseas contract, dollars are -- dollar rates have improved. So that has insured maintenance of the required margins.
And as we have said, okay, general margins would have been in the range of 11%, 11.5%. We're now estimating around 10% and 10.5%. So there could be a marginal hit up by 1%, 1.5%. It will all depend how these prices continue to -- so at the time of execution, how these prices continue to behave, as you have said that these are looking better off in the coming in the last few days and in the coming few months. So we believe that the margins will continue to remain what we have estimated.
Another question is that NHAI, MoRTH implementing restrictions or increasing restrictions on bidding with respect to net worth or net worth for bidding and those kind of things, which were earlier were it. So this did not -- this is not expected to have any impact on lowering competition or anything.
Is that understanding correct? And one was that we are seeing a strong growth in building and in those segment. So are you basically concentrated towards government buildings and not towards Category A builders which will be throwing up ample growth opportunities because buildings you did not cover much -- you are not as much optimistic in building segment.
So we are focusing building segment, EPC segment, and these are normally government contracts or it could be a private contract, but we are not working for builders as such. It's not a real estate play related to this.
Yes. Okay. And that question with respect to competition, Haven't you seen easing because of tightening of some months from FY '23?
Slight tightening has happened, but that may not completely reduce the aggression in the sector. I think this aggression will remain for some time more.
Our next question is from the line of Abhishek Modi with Emkay Global.
Yes. So my question is the same related to the one asked by one of the previous guys. So you have told the debt level for FY '23 will be approximately INR 7,000 crores consolidated. Post the deal, you will be less than INR 3,600 crores. So the INR 7,000 crores is assuming there is no deal happens. So if the deal happens, what is the...
You're correct. If the deal happens, then we should go down to INR 4,000 crores.
Yes. So instead of the INR 7,000 crores FY '23, it is INR 4,000 crores. So there will be a INR 400 crore jump in consolidated debt.
Yes. That is because new projects are -- HAM projects are being executed. Their debt drawn will be there, that will continue to keep on happening. New projects will be taken, new debt will be taken. As when the HAM projects are also sold up, again, the debt will go down. So it's a continued process.
Okay. Sir, my next question pertains to CapEx. FY '23, if I'm at the CapEx is INR 125 crores to INR 150 crores. For Q4, INR 90 crores. So what is FY '22 total CapEx?
Total CapEx itself is not more than INR 125 crores to INR 130 crores. So let me check that. I'll tell you. I'll come back on that.
Sir, my question was because the 90% of the CapEx is done in Q4, am I right? Assuming it is INR 105 crores, so INR 90 crores on in Q4. So just wanted to have that clarity.
I can get back to you on this.
Ladies and gentlemen, this was the last question for the day. I will now hand the conference over to Mr. Paresh Mehta for closing comments.
We thank you all participants for joining on this call. We are happy to take any further queries if you have. And you may get in touch with us or with Stellar Investor Relationship, our IR archive. So wish you all the best.
Thank you, everyone.
Thank you. On behalf of Anand Rathi Share & Stock Brokers. That concludes this conference. Thank you for joining us, and you may now disconnect your lines.