Capacite Infraprojects Ltd

NSE:CAPACITE

Earnings Call Analysis

Record Quarterly Revenue and Profit Growth

Capacit'e Infraprojects achieved a historical milestone with its highest-ever quarterly revenue and profit after tax, signaling an era of robust growth. Their revenue increased to INR 481 crores in Q3 FY '24 from INR 443 crores in Q3 FY '23, while profit after tax (PAT) improved to INR 30 crores from INR 23 crores, reflecting a margin increase to 6.1% from 5.1%. Despite a marginal decrease in 9-month revenue, from INR 1,352 crores to INR 1,333 crores, and PAT, from INR 74 crores to INR 69 crores, the company's strengthened liquidity position and diverse order book promise a bright future with healthy, sustainable growth.

Record Quarterly Performance and Project Momentum

The company reported its highest quarterly turnover, EBIT, PBT, and profit after tax to date, signaling strong operational momentum. With project execution accelerating, these improvements were partially reflected in Q3 and are expected to fully impact Q4 and subsequent quarters. The pipeline of orders remains solid, and the company saw substantial orders totaling INR 1,725 crores over a nine-month period.

Financial Indicators and Profit Margins

Revenue from operations increased from INR 443 crores in Q3 FY '23 to INR 481 crores in Q3 FY '24. Profitability metrics such as EBITDA and EBIT margins improved over the quarter, while PAT for Q3 FY '24 increased to INR 30 crores from INR 23 crores in Q3 FY '23, with PAT margins also seeing a rise to 6.1%. However, over a nine-month timeline, both revenue and profits observed a slight decline with PAT margin decreasing to 5.1% from 5.4%.

Debt Management and Order Book Status

The company's gross debt stands at INR 345 crores, with a gross debt-to-equity ratio of 0.27, and a net debt of INR 190 crores with a net debt to equity ratio of 0.15x. These figures exclude a recent capital infusion. Working capital cycle has improved, dropping from 152 days to 123 days, as the company aims to further decrease this cycle. Moreover, the standalone order book is robust at INR 9,670 crores.

Working Capital and Expected Collections

There is an anticipation of collecting INR 500 crores in Q4, and working capital has been well-managed with INR 225 crores tied up from State Bank of India. Additionally, it is expected that the company will receive INR 100 crores of retention money, contributing to the reduction of the debt level by approximately INR 75 crores over the next 12 months.

Growth Forecast and Margin Guidance

The company is aiming for a 25% growth in the upcoming period and is not attributing this to reduction in input costs but to lowered indirect costs as a result of increased revenue. Guided EBIT margins remain at 12.5%. In terms of revenue, the aim is to consistently achieve INR 200 crores per month, with a target of reaching quarterly revenue of INR 800 crores in the midterm. The expected growth rate for the next financial year is approximately INR 2,400 crores.

Sectoral Focus and Order Acquisition

On the government side, there are opportunities for commercial buildings, healthcare, hospitals, and medical colleges, along with developments in police housing and residential projects. These areas form the focus for the company's bid pipeline, with about INR 10,000 crores of bids anticipated over the next several months. The company has also indicated having an L1 position in an order valued at around INR 500 crores.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the Capacit'e Infraprojects Limited Q3 and 9 Months FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Before we begin, a brief disclaimer. The presentation which Capacit'e Infraprojects Limited has uploaded on the stock exchange and their website, including the discussions during this call contains or may contain certain forward-looking statements concerning Capacit'e Infraprojects Limited business prospects and profitability, which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward-looking statements. I now hand the conference over to Mr. Rohit Katyal, Executive Director, Capacit'e. Thank you, and over to you, sir.

[Rahul Katyal, executive]

Good morning, everyone. On behalf of Capacit'e, I welcome everyone to the Q3 and 9 months FY '24 earnings conference call of the company. Joining me on this call is Mr. Rajesh Das, CFO; Mr. Nishith Pujary, President, Accounts and Taxation; and Mr. Amit Porwal from our IR team. I hope everyone has had an opportunity to look at our results. The presentation and press release have been uploaded on the stock exchanges and our company's website. The current quarter has been a milestone quarter in the company's history as we achieved highest ever quarterly revenue and profit after tax. Over the past few years, while our order book size has expanded significantly, the projects under execution are reduced, leading to higher revenue contribution per project, better management and improved margin profile. The overwhelming response to our INR 200 crores QIP depicts institutional investors' continued confidence in our business model. We are embarking towards a higher growth pace backed by a diverse order book from distinguished clients in both public and private sector. The equity infusion and additional tie-up of nonfund-based limits from banks has improved our liquidity position significantly. This, coupled with execution ramp-up across projects will help us further improving our working capital cycle and profitability. With a healthy order book and sustained order inflow and our documented expertise and executing and delivering projects on time, we are optimistic that we shall witness a healthy and sustainable growth. Key updates. The company achieved its highest quarterly turnover, EBIT, PBT and profit after tax. We believe the momentum will continue. The project ramp-up has gained significant momentum, reflected partially in Q3 numbers and shall reflect totally in Q4 of the current financial year and onwards. The order bid pipeline and inquiries remain strong from both private and public sector clients across segments. We are witnessing overall positive and healthy shift towards quality contracting companies. The company has already received orders worth INR 1,725 crores during the 9-month period ended 31st December '23. Consolidated performance highlights for Q3 FY '24. Revenue from operations stood at INR 481 crores compared to INR 443 crores in Q3 FY '23. EBITDA for Q3 FY '24 stood at INR 89 crores compared to INR 90 crores in Q3 FY '23. EBITDA margin for Q3 FY '24 was 18.5%. EBIT for Q3 FY '24 stood at INR 63 crores as compared to INR 56 crores in Q3 FY '23. EBIT margin for Q3 FY '24 stood at 13% as compared to 12.4% in Q3 FY '23. PAT for Q3 FY '24 stood at INR 30 crores, as compared to INR 23 crores in Q3 FY '23. PAT margin for Q3 FY '24 stood at 6.1% as compared to 5.1% in Q3 FY '23. Consolidated performance highlights for 9 months FY '24. Revenue from operations for 9 months FY '24 stood at INR 1,333 crores as compared to INR 1,352 crores in 9 month FY '23. EBITDA for 9 months FY '24 stood at INR 243 crores as compared to INR 275 crores in 9-month FY '23. EBITDA margin for 9 months FY '24 stood at 18% as compared to 20% in 9 months FY '23. EBIT for 9 months FY '24 stood at INR 163 crores compared to INR 167 crores in 9 months FY '23. EBIT margin for 9 months FY '24 is at 11.4% as compared to 12.3% in 9 months FY '23. PAT for 9 months FY '24 stood at INR 69 crores compared to INR 74 crores in 9 months FY '23. PAT margin for 9 months FY '24 stood at 5.1% as compared to 5.4% in 9 months FY '23. Gross debt stood at INR 345 crores, with gross debt-to-equity ratio at 0.27. Net debt stood at INR 190 crores with net debt to equity at 0.15x. These figures do not include the infusion from QIP, which happened in the early part of January '24. The working capital cycle stood at 123 days in Q3 FY '24 as compared to 152 days in Q2 FY '24. We are focused towards meaningful reduction in the working capital cycle during the current financial year and going forward. The company continued its focus on increasing execution across projects. Order book on a stand-alone basis is INR 9,670 crores as on 31st December '23, public sector accounts were 65%, while private sector accounts were 35% of the total order book.

Thank you. Now the floor is open for questions if you have.

[Operator]

[Operator Instructions] The first question is from the line of Dhananjay Mishra from Sunidhi Securities.

[Dhananjay Mishra, analyst]

Sir, am I audible?

[Rahul Katyal, executive]

Yes, you are.

[Dhananjay Mishra, analyst]

Congratulations on delivering improved quarterly performance. So can you give some detail in terms of key orders, which contributed in quarterly revenue in this quarter? And also how is the billing happening in terms of monthly billing for CIDCO and collection figures at present? And thirdly, in key order, which will be contributing for next financial year in terms of revenue.

[Rahul Katyal, executive]

Yes. So practically, all the ongoing projects have contributed in this quarter. Project-wise details can be taken from our IR department, Mr. Amit. We see significant improvement in quarter 4 across projects. So there is no one single project, which will stand out as contributed, whilst CIDCO will be the biggest contributor on volume basis. MHADA has started contributing INR 17 crores to INR 18 crores per month. Raymond was contributing INR 22 crores. M3M is contributing about INR 13 crores to INR 14 crores. So all projects across the company are delivering at nearly 90%, 95% of the projected revenues, and we expect this to continue into quarter 4, which would again be the highest revenue grossing quarter in the company's history.

[Dhananjay Mishra, analyst]

So what is the annual contribution you're expecting next year for CIDCO in terms of overall revenue?

[Rahul Katyal, executive]

We are expecting INR 600 crores to INR 750 crores of revenue from CIDCO in the next financial year.

[Dhananjay Mishra, analyst]

Okay. So monthly run rate is -- we have reached INR 50 crores or something in this quarter?

[Rahul Katyal, executive]

Our monthly run rate is INR 35 crores, but it will be INR 50 crores from April onwards. We should be close to INR 45 crores in March of this financial year.

[Dhananjay Mishra, analyst]

And secondly, this data number is looking, I mean, on a higher side because first 9 months, we have a kind of flattish in terms of revenue, and we are at close to INR 740 crore. So I mean, which project we are expecting? I mean, you are saying that this is going to improve. So from where you are expecting more collections happening?

[Rahul Katyal, executive]

We are expecting the collection of INR 500 crores cumulatively in quarter 4 of the current financial year. As we speak to you, this number has already come down significantly.

[Dhananjay Mishra, analyst]

Okay. And what is the big pipeline size for us right as of now?

[Rahul Katyal, executive]

Over the next 5 months, we'll be bidding for projects worth [indiscernible] crores in the public sector, private sector will be an invitation and more probably will be repeat order from existing clients.

[Dhananjay Mishra, analyst]

How much you said bid pipeline numbers?

[Rahul Katyal, executive]

INR 29,000 crores was identified. How much the company bids will depend on the order wins over the next 3 to 4 months.

[Dhananjay Mishra, analyst]

Okay. And all these tenders will be finalized in next 6 to 12 months?

[Rahul Katyal, executive]

Yes. These days tenders are kept pending beyond 2 months. So that's a positive sign in the public sector. So the bidding will be more for CPWD, PWD or various states. And therefore, we don't expect the bidding time line to our time line to be more than 2 months, whether we will get it or anyone else gets it.

[Operator]

The next question is from Pratik Bandari from Art Ventures.

[Pratik Bandari, analyst]

Am I audible?

[Rahul Katyal, executive]

Yes, please.

[Pratik Bandari, analyst]

Sir, can you just do a bifurcation of your order inflow in the 9-month FY '24 in terms of the current quarter, that is Q3? And what you are expecting as an order inflow in Q4?

[Rahul Katyal, executive]

We have given a target that INR 2,200 crores will be the total order inflow for the full year financial year '24. We have been on track on that. We already are L1 in 1 major project. A lot of that should complete our yearly target. However, if you remember last year, instead of INR 2,000 crore, we had an order inflow of INR 3,400 crores. So such thing happens in a construction company. And therefore, you have to see the order book over the last 2.5, 3 financial years rather than looking at a quarter or a half yearly period. However, answering the question in quarter 4, we expect 2 repeat orders from existing clients. This is not a commitment. This is the indication which the client has given us, and we expect maybe one project to be awarded from the public sector side in Q4 current financial year.

[Pratik Bandari, analyst]

All right. And like do you have any plans to do a QIP in the next financial year?

[Rahul Katyal, executive]

I don't know. But I just mentioned, we did a QIP after 6 years in January. That is more than sufficient. We have already tied up our limits with the banks. So there is no question of doing any further QIP.

[Pratik Bandari, analyst]

Okay. And do you see the margins to be maintained in the same range? Or do you see them to be improving in the financial year '25? And what would be the revenue growth in terms of financial year '25? If you can throw some color on that?

[Rahul Katyal, executive]

We definitely know that 25% growth is given, number one. Number two, the margins are not because of any input cost reduction, but because of indirect costs coming down due to increase in revenue, there definitely will be an improvement in EBIT and PAT of the company.

[Pratik Bandari, analyst]

So what would be the range of the margins in that case?

[Rahul Katyal, executive]

We have always guided you for 12.5% EBIT. If there is an improvement on that, it should be appreciated.

[Operator]

The next question is from the line of Shreyans Mehta from Equirus.

[Shreyans Mehta, analyst]

So sir, now that the funds are in place, how do you foresee the fourth quarter playing out? And as you highlighted, probably we are targeting 25% growth in F '25. So is it contingent on any further fundraise or this much funds which we have currently will be enough to sustain that 25% growth?

[Rahul Katyal, executive]

The liquidity position is more than comfortable. We'll be taking care of the revenue increase not only for the next financial year, but beyond that, okay? So there is no plan of raising any further equity. I clarify, no further equity, whether prior QIP or whatever other more in the foreseeable future. With the tie-up of INR 225 crores from State Bank of India already in place.

The bank guarantee limits about 60% have already been tied up. The remaining tie-up will be done from UBI and PNB in the current quarter itself, later by maybe 15th of April. So even from the nonfund-based requirement, we foresee that the bank currently requirement up to June 25 would have been tied up, which not only will ensure the growth momentum, both in revenue and in order book, but also will maintain our very strong liquidity, whether in form of working capital limits or free cash on balance sheet of close to INR 100 crores at any given moment of time.

[Shreyans Mehta, analyst]

Sure. And sir, any -- I mean, if you could highlight fourth quarter, what would be the run rate?

[Rahul Katyal, executive]

We do believe that from February onwards, the company should start grossing INR 200 crores of revenue. And therefore, definitely, we should be close to INR 600 crores, if not better than that.

[Shreyans Mehta, analyst]

Got it. And on top of it, we are eyeing, so we should be closing the year at, say, closer to INR 1,800-odd crores and 25% growth next year?

[Rahul Katyal, executive]

So 1,900 plus is given as I see at the moment, when I speak to you. 25% is INR 2,400 crores. And if you do INR 600 crores, there is no question why we will not do INR 2,400 crores next year. That's given.

[Shreyans Mehta, analyst]

Got it. Got it. Got it. Sure, sir. Secondly, sir, this quarter, the margins were on a higher side. And so were there any provisional reversals or anything at the EBITDA level?

[Rahul Katyal, executive]

Nothing. As your revenue will increase, your indirect cost as a percentage of revenue will fall, resulting in better margin profile.

[Shreyans Mehta, analyst]

Got it. Got it. Got it. Sure. And sir, in terms of our CapEx, how much have you done till 9 months and fourth quarter and how much was for the next year?

[Rahul Katyal, executive]

Just give me a second. The fourth quarter addition has been about INR 6 crores. So the total addition in the full year have been lesser than INR 30 crores. And our target was to put it -- maintain it below INR 45 crores so that we can have free cash, and that is what exactly the company has been focused on and doing.

[Shreyans Mehta, analyst]

Got it. And sir, any number for next year?

[Rahul Katyal, executive]

INR 45 crores. If there is any change, we will intimate in the next conference call.

[Shreyans Mehta, analyst]

Sure. Sure. And sir, last question from my side. CIDCO, as you highlighted probably INR 600 crores, INR 750-odd crores for F '25. What should be the number we should be looking for the MHADA project?

[Rahul Katyal, executive]

MHADA, currently is at INR 16 crores plus. Two more buildings are starting at capacity at a stand-alone level. That should start from April, May. Therefore, starting July, you can easily anticipate a revenue of INR 20 crores up till October and from October onwards, INR 25 crores per month.

[Shreyans Mehta, analyst]

INR 25 crores per month. Sure, sure. That's it from my side.

[Operator]

The next question is from Parvez Qazi from Nuvama Group.

[Parvez Qazi, analyst]

So my first question is regarding the working capital mix that you just alluded to. So post our QIP, what is the kind of working capital limits, both fund-based and non-fund base that we have tied up? And what is it that we plan to later doing in the near future?

[Rahul Katyal, executive]

The total asset limits, excluding CIDCO and MCGM are INR 113 crores as assessed by State Bank of India. Out of these, the fund-based limits have been totally tied up. And out of the remaining INR 400 crores gap, INR 225 crores has been tied up from State Bank of India as non-fund and the remaining INR 175 crores will be in place in March from Punjab National Bank and UBI. The proposals are already in their respective head offices.

[Parvez Qazi, analyst]

Okay, sure. And I mean, you did talk about that we will be able to bring our debtors, levers down when all these working capital limits are in place. So let's say, and here down the line and after, let's say, posting a 25% kind of revenue growth, what is the kind of base levels that you anticipate at let's say end of FY '25?

[Rahul Katyal, executive]

You see on the gross level, already the debt is at INR 310 crores, as I speak to you, you are visualizing -- this is apart from the INR 125 crores that the company carries in cash and INR 150 crores of the deposit with the company has. So as I talked to you, the net debt is not there with net debt company is net debt free. Now what is the company's intent to go debt free over the next 7, 8 quarters. Now how that will happen since we have the guarantees in hand, before 30th June of this financial year, the company will be getting back INR 100 crores of its retention money. INR 100 crores of retention money will do 2 things. It will bring down the creditor level or it will bring down the debt level. All right. Number two, we will now be in a stronger position to claim our advances against new orders though it will be a liability on the balance sheet, but it will definitely bring down the debt level because that money will be passed in the line of credits with the consortium member banks. So with -- on overall answering the question, we do see that there will be a reduction in debt -- gross debt of close to INR 75 crores over the next 12 months, if not more. However, gross debt is a figure of the entire borrowings. We have not reduced it by the cash carried by the company in the current accounts of the company. So answering your question, there will be a meaningful reduction of INR 75 crores on gross level. Obviously, the company will carry free cash apart from that.

[Parvez Qazi, analyst]

Sure. And in terms of your bid pipeline, what are the major segments, et cetera, where we are targeting? I mean in terms of segments, I mean, that as we belong to hospital buildings or these are private sector office orders, what kind of orders are we talking about?

[Rahul Katyal, executive]

So the traction is very strong across the segments of the building segment. So at the moment, on the government side, Central Vista will offer opportunity for commercial buildings. CPWD, PWD are offering a lot of opportunity on the health care, hospital and medical colleges side.

The traction in PMAY where in another 1 crore of houses have been added by just the central government in the recent interim budget will draw up the opportunity as well. There is strong traction for police housing. We see bids of close to INR 10,000 crores happening over the next 4, 5 months. So answering your question, there is traction across. The company obviously will look at commercial and health care with more keenness, but that in no way means that we will be ever to residential projects. We -- as you are aware that we have some of the best clients in the private sector as well. And all of them are looking at serious growth in the coming year and the next 4, 5 years. And obviously, their growth will translate into our growth proportionately.

[Parvez Qazi, analyst]

Lastly, you mentioned about being L1 in order. So what is the size of that?

[Rahul Katyal, executive]

It's about INR 500 crores plus.

[Operator]

The next question is from Parikshit Kandpal from HDFC.

[Parikshit Kandpal, analyst]

Congratulations on a good quarter, sir. Sir, my first question is on this fundraise of INR 200 crores. So we have an order book of INR 9,670 crores. So just wanted to understand -- so pre-fundraise and post-fundraise. So what would have been the impact on execution just because of these funds being not there? So at what level of like we would be under servicing our execution on this order book and with this ammunition now with us. So immediately, what could be the recoiler on the execution to the normalized level with this funding?

[Rahul Katyal, executive]

So the first target is to have a run rate of INR 200 crores plus per month, which we are extremely hopeful of achieving from this month itself, number one. Number two, not only the fundraise, but the tie-up of bank limits also means that we shall have our retention close to INR 200 crores with us starting February and ending June. Maybe we can achieve that by May itself. So these 2 things are put together means that we are well equipped very easily in the midterm to achieve quarterly revenue of INR 800 crores. I am not guiding you for INR 800 crores. I said we are well equipped in the midterm to achieve a quarterly revenue of INR 800 crores. So as I speak to you, INR 600 crores is given. We have guided for 25% growth. And definitely, we'll be trying to better that from both because all the projects currently under execution are fully ramped up from equipment perspective, resource perspective. And whatever projects are in the initial stages of start, they will get ramped up in this quarter itself. So that next year, our targeted revenue of 25% growth minimum is achieved, and that can be visible from the first quarter itself.

[Parikshit Kandpal, analyst]

This 25% growth, so this midterm means what your targeted growth. So it will be more targeted towards second half of financial year '25. So some of the quarters, maybe third quarter or fourth quarter will start hitting between now INR 600 crores to INR 800 crores?

[Rahul Katyal, executive]

INR 600 crores will be hitting in the first quarter itself. Second quarter, it's depending on monsoon, but we should in all probability do INR 600 crores in quarter 2 of the current financial year itself. Quarter 3 and quarter 4, you will see a ramp up. However, I am maintaining a 25% growth for the next financial year, which is approximately INR 2,400 crores plus.

[Parikshit Kandpal, analyst]

Okay. So just on the ordering bit, again, I mean, we have had a...

[Rahul Katyal, executive]

I can't hear you.

[Parikshit Kandpal, analyst]

Just on the -- is it better now? Can you hear me now?

[Rahul Katyal, executive]

Yes. Yes.

[Parikshit Kandpal, analyst]

So just on the ordering bit, I mean we have seen some of the peers like banking a lot of orders. So just because of this funding not being in place, have we lost the market share and now we are with this funding and the money is coming back from retention and all. So are we well equipped to now frequently ramp up and shows growth over the next 3, 4 quarters and get back our market share?

[Rahul Katyal, executive]

You are aware that I've always maintained over the years that the revenue ramp-up does not happen purely on the order book, but it happens is that you have 25 projects and can you do INR 15 crores revenue per project. That does not mean that if some project gives an opportunity of INR 50 crores per month, we will not do that. So with today, the number of projects being 24, we are well poised to take another 5, 6 projects. Yes, availability of bank guarantees will help significantly. And we have started building strongly across segments. That's number one. Number two, 4 projects, which can add a revenue of, let's say, INR 60 crores per month. That is the first target, which obviously takes your company's revenue to INR 250 crores per month, if that is what you are trying to reach at. However, there has been no sluggishness in taking any order. You know that RLDA, certain smaller players came and took the projects. Four such contractors have already abandoned the project and it has been -- it is up for recall. Our company will participate along with other mature contracting companies. So there is no hurry. Your company's order book on stand-alone is INR 9,600 crores. So there is no need to go and pick up any order, which adversely impacts your EBIT or PAT or other PAT or cash profit. So there is enough opportunity, the big pipeline as I just mentioned, over the next 5 months, identified by us is INR 29,000 crores. There is significant opportunity to add a couple of thousand crores within this period and at the pricing at which we and our mature peers are working at. So that is what the focus of the company is.

[Parikshit Kandpal, analyst]

But comparing in FY '23 or '22 in the 9 months FY '24, so I understand the bid pipeline is -- must have been much higher, but our participation rate or actual bid submitted. So was it like significantly down, if you can quantify how much you would have bid for FY -- 9 months FY '24 versus what was available to bid?

[Rahul Katyal, executive]

You see that last year, we had a target of INR 2,000 crores order inflow. We had an inflow of INR 3,400 crores orders. If you add INR 3,400 crores to the current 9-month period of INR 1,725 crores, that crosses INR 5,200 crores.

So as it is on a continual basis, we are much higher than our target. In the private sector, there is no bid pipeline or bidding activity. It's always on invitation. You are aware of that. And we are looking forward to 2 more repeat orders in the current quarter. And therefore, we have not participated for any new client, except what clients we already have in the current financial year, except one addition of M3M. Point number two, in the government side, we have not participated too much in the first 9 months because we were not in a position to collect advances.

Now with the bank guarantee limits in being in place, we are in a position to claim advances. And therefore, the bidding intensity will increase month-on-month starting immediately. And therefore, I just mentioned that whatever bids pipeline we have identified, but those will be the projects we will be bidding for in the coming 6 months - sorry, coming 4 months.

[Parikshit Kandpal, analyst]

Okay. So basically, there is an upside risk to your info guidance as some of these government contracts come at your margins and you are able to convert them into wins?

[Rahul Katyal, executive]

Private sector continues. Government sector, we still have not recognized INR 3,000 crores of MHADA projects. So you have to keep that in mind. And MHADA project at the JV level, we are executing INR 65 crores per month.

[Parikshit Kandpal, analyst]

But this INR 29,000 crores, how much will be public and private in this your estimate on that?

[Rahul Katyal, executive]

This INR 29,000 crores only public sector. Private sector will be repeat order basis. We still believe that over the next 6, 7 months, how much ever we may say no, we should at least have INR 1,000 crores plus from the private sector alone.

[Operator]

The next question is from the line of V.P. Rajesh from Banyan Capital Advisors.

[V.P. Rajesh, analyst]

Just one question. When you start bearing debt coming due? Is it this year in fiscal '25 or is it going to be the year after that?

[Rahul Katyal, executive]

Can you please be a bit clear, I did not understand your question.

[V.P. Rajesh, analyst]

The debt that you have taken from bearings a few years back. I just wanted to know when does that mature? Because that was a very high interest rate -- so are we planning to repay it? Or are we going to...

[Rahul Katyal, executive]

It has already prepaid in November or October sometime. So there is no bearing outstanding in our books. It's prepaid 1.5 years in advance.

[Operator]

The next question is from the line of Aditi from Flute Aura.

[Unknown Analyst]

Sir, most of my questions have been answered. I just had one small query on depreciation. So from what I can see is in the last 2 quarters, basically current and the last one, we have seen around INR 27 crores of depreciation expense. But quarter 3 of FY '23, we had a one-off of INR 34 crores. So can I assume that the depreciation will be stabilizing at these levels of INR 26 crores, INR 27 crores?

[Rahul Katyal, executive]

Absolutely.

[Operator]

Next question is from Subrata Sarkar from Mount Intra Finance.

[Subrata Sarkar, analyst]

No. All my questions have been answered.

[Operator]

We'll move to the next question. Next question is from Yash Modi from Ashika Group.

[Yash Modi, analyst]

My question was with regard to the credit rating upgrade now that we've got the INR 200 crore pro-QIP money. What is the status on the credit rating upgrades from the agencies if you have heard from them?

[Rahul Katyal, executive]

So the credit rating issue was related to bank tie-up, which has happened. QIP raise is an additional bonus. The documents have been provided to the rating agencies. And they're on the job, you should hear from us very soon.

[Yash Modi, analyst]

Sure. And sir, what kind of interest rate savings are we looking at from this? Because I guess you paid back some high-cost NCDs from the money raise. So what kind of interest cost saving can we look at from Q4 onwards?

[Rahul Katyal, executive]

On absolute level, you will see reduction in the finance cost from the next financial year. The exact quantification will -- can be taken from our IR team.

[Operator]

[Operator Instructions] The next question is from Faisal Hawa from HG Hawa & Company.

[Faisal Hawa, analyst]

Sir, is it the right statement to make that from here on, we can actually choose our orders according to payment conditions of the customer and even the -- we can also -- with our past experiences, we can also be very strict on EBITDA criteria. So -- or it is not that simple?

[Rahul Katyal, executive]

So the private sector, we have already done that across. So we have gone 100% project specific. No funds of our working capital infused to Project A can be shifted to Project B. If some client does not pay, the project will automatically be put on hold. So that's very clear. As far as choosing the project, that is what we have been doing over the last 3 years, as the double blow of ILFS and COVID couldn't have been sustained, all right? So that's exactly what we are doing. We are averse to taking any project which will negatively impact our overall EBIT or PAT or cash back margins. And yes, we have delivered a lot. All mature clients, the order books are full. So all have the opportunity to pick and choose.

[Faisal Hawa, analyst]

And sir, will we be committed not to go -- not committed, but most probably will not go outside Mumbai because these assets...

[Rahul Katyal, executive]

No, no, that was a strategy which we had explained during COVID period. The clients had not paid us for 9 months at a stretch in private sector. Subsequently, now we are there in Gujarat Gift City, constructing the headquarters of IFSC, International Finance Service Center. We are there in Delhi NCR. In Delhi NCR, we are already there in Noida with a INR 450 crore contract. And you will see the contribution from these 2 states increasing significantly over the coming quarters. It was never the intention to come back only as a Mumbai-based player. We were there present in 7 major cities. And the focus is that to grow more in the same cities, but in a more healthier manner over the next 2 to 3 years. So we are already there in 3 geographies and our contribution from these geographies will continue to grow.

[Faisal Hawa, analyst]

Sir, 2 more questions. One is that, what part of our private sector order is without material that just on -- what part of our private sector orders are without materials, where we are just on a labor base and the materials are supplied by the...

[Rahul Katyal, executive]

So about INR 800 crores to INR 900 crores worth of orders are without the value of concrete and steel.

[Faisal Hawa, analyst]

Okay. And one more is that, I mean, just any kind of escalations and all are now built up so we cannot be really held by that...

[Rahul Katyal, executive]

Escalations.

[Faisal Hawa, analyst]

Yes. Like any cement prices rising or -- payment orders that could be difficult to get.

[Rahul Katyal, executive]

No, no, no. We are -- all our government -- CIDCO is full pass-through. MHADA is escalation based on steel and cement and oil and WPI. So cement escalation. Now MCGM, we have that. So all the projects what we are executing, there is no question of picking up any project without price variation plus.

[Faisal Hawa, analyst]

And sir, can you maybe 2 steps that you have taken -- no, rather you are unburdened by the finance problems. Can you give me 2 steps that we have taken to really improve our execution on a quarterly basis because with so many orders, there are deadlines and plus the market is awaiting very good exhibition from our end. So can you give us 2 steps?

[Rahul Katyal, executive]

Sir, we have now just pressed our pedal of execution. And as I told you, you will see that in the current quarter itself. You have seen partially in the last quarter. We have gone to 482. And that more so is the resultant of the ramp-up from mid-November to end of December after having prepaid the bearing debt in totality. Now with the QIP funds in place, you will see a serious ramp up in quarter 4 of the current financial year, and that ramp-up will continue over the next financial year. And if you consider only INR 600 crores per quarter next year, you will be there delivering a 25% plus growth year-on-year.

Now we are committed towards that. That is the guidance already given. So there is no, nothing fancy which the company needs to do. The company has been executing projects. It has to ramp up the speed, which is already done, number one. Number two, we will be overtly responsible while choosing our private sector clients. These are 2 things that the company has been doing. We'll continue to do. And obviously, the other safeguards like keeping the debtors under control in the various government and private sector clients.

[Faisal Hawa, analyst]

So mainly, it was the finance, which was really burdening up and keeping us behind. So that's been solved. So I mean, what you're saying is you need not actually -- most of the systems were in place, but it was finance, which was bothering us.

[Rahul Katyal, executive]

Absolutely. If you are -- INR 100 crores of retention cannot come in INR 100 crores or advances cannot come, then you have to grow only as per your cash flow availability. With additional cash on bank guarantees now being available, your growth has to accelerate by 25%, 30% minimum.

[Operator]

The next question is from the line of [ Nupur Banka ] from Stellar Asset Management.

[Unknown Analyst]

Am I audible?

[Rahul Katyal, executive]

You're not audible, ma'am. I cannot hear you.

[Unknown Analyst]

Am I audible now?

[Rahul Katyal, executive]

Yes.

[Unknown Analyst]

This is my repeat question. Actually, I just wanted an update regarding our current 9 months order book? And what order book do we expect closing the financial year in total?

[Rahul Katyal, executive]

We already have received orders over INR 1,725 crores. We should close the current financial year with INR 2,200 crores of additional orders inflow for the current financial year.

[Operator]

That was the last question in queue. I would now like to hand the conference back to Mr. Rohit Katyal for closing comments.

[Rahul Katyal, executive]

I would like to thank once again all of you all for joining us on this call today. We hope that we have been able to answer your queries. Please feel free to reach out to our IR team for any clarifications or feedback. Thank you, and see you next quarter.

[Operator]

Thank you very much. On behalf of Capacit'e Infraprojects Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.