© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Q3 and 9 Months FY '21 Earnings Conference Call of H.G. Infra Engineering Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Harendra Singh, Chairman and Managing Director, H.G. Infra. Thank you, and over to you, sir.
Thank you. Good morning, everyone. I welcome you all to our earnings conference call for Q3 and 9 months of FY '21. I have with me on the call Mr. Rajeev Mishra, CFO; and Pareto Capital team, our Investor Relations adviser. I hope all of you and your families are keeping safe and healthy. I'm happy to convey the phenomenal numbers from this quarter and proud of the performance of our team, who has delivered in this challenging year. The grave outlook, with which we started the year, is behind us. Our relentless focus and hard work has paid us well, and we are looking to end FY '21 on a good positive note. During the quarter 3 of FY '21, we reported revenues of INR 734 crore compared to INR 573 crore in Q3 FY '20. That is a growth of 28% year-on-year. Our focus continues to be on profitability. And in line with that, our EBITDA for the quarter stood at INR 118 crore as compared to INR 88 crore in Q3 FY '20, a 34% year-on-year growth. EBITDA margins grew from 15.4% in Q3 FY '20 to 16.1% in Q3 FY '21. The improvement in EBITDA margin have been driven by better project site efficiencies -- execution efficiencies. Profit after tax for Q3 FY '21 grew at higher rate, that is at 58% year-on-year as PAT stood at INR 66 crore with a margin of 9%. For 9 months FY '21, we have almost touched the revenue of the corresponding period last year, despite the challenges faced during the first 6 months of the year. Revenue for 9 months FY '21 stood at INR 1,500 crore compared to INR 1,573 crore last year. EBITDA stood at INR 244 crore, while EBITDA margin in 9 months FY '21 improved and stood at 16.3%. Net profit after tax stood at INR 113 crore for 9 months of FY '21 as compared to INR 114 crore during the same period last year. And the PAT margin for 9 months FY '21 stood at 7.6%. In addition to focusing on the growth and profitability, our focus has been to maintain a robust balance sheet. In line of this, we have reduced our debt, that is our gross debt as of December 31, 2020, on a stand-alone basis stood at INR 260 crore as compared to INR 368 crore as on March 31, 2020. Cash and bank balances stood at INR 148 crore. Total debtors, excluding retention, which stood at INR 643 crore as on March 31, 2020, has come down to INR 491 crore as on December 31, 2020. Now coming to the order book position. Our order book stands at INR 5,971 crore as on December 31, 2020, with book-to-bill ratio of 2.8 of -- multiple of FY '20 revenues. Out of the total order book, 78% are EPC contract and 22% are HAM projects. I would like to mention here that appointed date of 3 projects, which were awaited in September quarter, out of which we have received appointed dates of 2 DVs packages of 8 and 9, on 7th of November 2020 and 18th of December 2020, respectively, in the third quarter itself. Now we are fully mobilized there and have started the execution at good pace on all the projects. Post third quarter, I feel happy to share that we have also received the financial closure and the appointed date for our fourth HAM and project of Rewari Bypass, that is on January 15, 2021. With this, we have received the appointed date of all the projects, and we are happy to convey that 100% execution of our order book is under execution, that is to scale our growth story. Let me now give you the status of some key projects under execution. I'm glad to share that we have completed around 72% of Rajiv chowk Gurgaon-Sohna HAM project. The execution of Hapur-Moradabad EPC project is also progressing well, and we have completed close to 31% of the work. We have completed close to 47% on the Delhi-Vadodara package-4 project. In the Narnaul Bypass HAM project, we have completed close to 54%. And we have completed around 53% of our Rewari-Ateli HAM project. Now coming to the outlook and the guidance. We continue to remain optimistic of the opportunities in the sector. The government has continued to show tremendous proactiveness in growth, spending and awarding our infra budgets. The government is actively pushing for infra development to revive economy. We are seeing NHAI increasing their bidding activity tremendously, and we too have been actively bidding on multiple EPC and selective HAM projects. Out of the entire bidded projects, the result of close to INR 14,000 crore bids is still awaited. However, we are going ahead to advance plans to bid for another some INR 35,000 crore new tenders, with some blend of about 65% EPC and 35% HAM. And we are well confident of striking additional order inflow of INR 3,500 crore to INR 4,000 crore in this year. In terms of execution, our entire order book is in operation, at the moment, does give us a good visibility for the current and coming quarters. We continue to enjoy a robust 2.8x order book to sales and are confident of increasing this with further tenders. We are in the range of achieving last year's revenue number and are working very hard to surpass that. That is also on my side. I would like to now request the moderator to open the call for question and answer. Thank you.
[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.
Congratulations on a good set of numbers.
Thank you.
Sir, my first question is, sir, of course, we have a huge order book, and we have done phenomenally well in Q3. How we see Q4? And what is the number you're looking for FY '22 in terms of execution, given the current order book? Because most of the orders, I believe we have appointed date for almost all of the projects. Am I right in saying that?
Yes, you are right. We are on to execution to almost 100% of this order of almost INR 6,950 crore. We are saying that the -- first question remains that what we are looking ahead in the quarter 4. We have delivered in quarter 3 significantly, we have improved upon the last year number. That again, we foresee for the quarter 4 as well. And that gives the visibility that we will be surpassing at least this INR 2,200 crore mark, that is something INR 2,300 crore or INR 2,350 crore. That will be our rough guidance that we would be in a position to achieve. And second part is FY '22. With the orders under execution, at present pace of execution, we believe that almost INR 2,800 crore to INR 3,000 crore is a much, much possible number to deliver in FY '22. And again, it depends upon other further orders that we will be taking on in the current year or the next year. It will all depend upon their appointed date as well.
Secondly, sir, on the balance sheet side, you've done an excellent work. I believe there are -- current stand-alone debt has decreased significantly in the past 9 months. Sir, how much the trade receivables as of December '20 is a number you can share? I think by Q2, it was INR 503 crore. Am I right?
The receivable remains without the retention, it's is INR 493 crore, as I have given a number in my speech as well.
Okay, okay. Last one is the competition side on the -- how do you see the competitive intensity in the HAM and EPC? Can you just comment on that? Has the competition increased in the past 3, 4 months? Because we haven't won any order, either something has changed in the environment, macro environment, which is making it difficult for us to win the orders?
For sure. I think with the new [indiscernible] (00:10:16) criteria from -- in both the HAM as well as EPC model were most for NHAI and ministry-funded projects. It is a bit -- the aggression is always -- is all visible now for the last 3, 4 months, it is there. But definitely, we believe that we are now open to, say, almost earlier, it was 7 to 8 states, now we are bidding in almost 12 to 13 states. So clearly and the number to which we are bidding -- number of projects which we are bidding, we are enough to say, we don't want to compromise and sacrifice on our bottom line. And we believe that with the quality orders that INR 3,500 crore to INR 4,000 crore would be the one which blend of HAM and EPC, would be taken in this quarter only.
[Operator Instructions] The next question is from the line of Alok Deora from Yes Securities.
Congratulations on a great set of numbers. Sir, just wanted to understand, we have not won any new projects in the quarter, right?
Yes. In the entire year even.
Entire year, yes. So last quarter, actually, our order book was around INR 6,400 crore, and now it's around INR 6,000 crore, and there has been around INR 700 crore of executions. So has there been any scope change of existing projects? Or how -- what is the difference coming from?
Yes. Broadly, I can mention that, say, during the quarter, we have done INR 735 crore in execution. At the start of the quarter, it was INR 6,444 crore. So ultimately, almost INR 200 crore of new CF (sic) [ FC ] has been approved by the financial projects. They are from HAM and one in EPC. So that is -- there is an increase of about INR 200 crore for that reason. So ultimately, this -- end of the year, INR 5,971 crore is coming from that number only.
Got it, got it. And also, sir, so we are now doing around INR 730 crore of execution on a quarterly basis, and all projects are having appointed date in place now. So execution even in fourth quarter and in FY '22 will be very strong. So we are doing nearly INR 3,000 crore of annualized run rate in a way, and we have order book of around INR 6,000 crore. So it's a little less than what we would like. So what's your view on that? Because now we are significantly dependent on the next 2 months to get some orders.
Yes. Of course, in the last 2 years, you have seen that what we have won during the last 2 years also was in the month of February and March or January. So that expense is there but because not many bids are there, which we already bid, the results are yet awaited. And we are again targeting to bid almost INR 35,000 crore plus. And NHAI is having a long, long bidding pipeline that they have given the indication that the Bharatmala First would be all awarded by this March end or in Q1 of the FY '22. So with that and Bharatmala Second at 7,000 kilometers there, again, the [ BPR ] is at advanced stage. And they would be all targeting that they will be bid into FY '22. So we believe that fairly, definitely, the aggression is quite high, but we would be in a right position that we will take on this number. We believe that it is very well possible.
Sure, sir. Sir, just one last question from my side. So sir, the NHAI awarding even during this first half was pretty okay in terms of -- it grew Y-o-Y basis. So that time, the competition, as you had mentioned in the last quarter was pretty high, so you did not like go on for the margin -- compromising on the margin. But now also, the competition is high, so just how are we getting the confidence that we'll be able to achieve the INR 3,500 crore or INR 4,000 crore of order inflows?
Yes. As I already said that because number of orders, which are in the pipeline and already on the portal that they have invited, but this is a huge, huge number that we have never seen in the last 3 years. It was in '17, '18 only, that was significantly that big numbers were awarded. So that gives the visibility that it's the appetite. Basically, it's not that every company having an appetite. They will see going up beyond their capacity. So with that, there's hope that we would be not compromising on the margins. We would be taking all this ideally INR 3,500 crore to INR 4,000 crore numbers.
The next question is from the line of Ashish Shah from Centrum Broking.
Sir, first question is that which are the projects where you've seen the change of scope, if you can help us with that?
These are, say, 3 HAM projects. All 3 HAM projects, they had attracted few [indiscernible], about INR 148 crore and -- in 3 projects. And then first -- Delhi Vadodara Package 4 also has INR 36 crore of variation.
Okay. So when I look at your order book of September and December and if I try to see the execution, it appears that in Gurgaon-Sohna and Narnaul Bypass, we only had very little or less execution, but that's because of the change of scope impact.
Yes. Basically, say, whatever has been execution, the change of scope, principally, they got approved in the month -- last quarter only. So that is something. Now with all clarity on the change of scope as well as -- the execution is now at a very fast pace. And we believe that all 3 HAM projects where we are -- they are under execution, except for 4 number, this is Rewari Bypass, recently appointed and approved. We are expecting, say, by July to October, all the 3 will be completed.
So there has been no adverse impact on execution in any of the projects, I mean, either because of the farmer agitation around the NCR region or anything. Has any of the project...
A bit of an impact was there in Hapur-Moradabad because aggregate transportation got affected for that. But otherwise, in all the other projects, all 3 projects, we did not have very significant effect. It's just near 0.5% or 1%, that is not a big number.
I know maybe I'm asking for a bit too much of detail, but would you have the number handy of -- on the execution, which you would have done in Gurgaon-Sohna and Narnaul Bypass and some of these major projects?
So yes. During the quarter 3 till now, in Rewari, both projects, HAM projects, we did INR 178 crore; in Delhi-Vadodara, it was INR 152 crore, Delhi Vadodara Package 4; and Hapur, it was INR 135 crore; and in the Gurgaon-Sohna, it was INR 49 crore. So that is almost -- in Adani Mancherial project in Telangana, it was INR 62 crore. So remaining on others.
Sure. Got it. And sir, how much money would we have got from the Rajasthan pending receivables during the quarter?
Now it stood at about INR 120 crore. We received almost INR 145 crore during the last quarter. And one good news is that out of that INR 80 crore is again now released in the month of January, which we have received till date, another INR 80 crore. So only INR 60 crore is left out, not even INR 60 crore, it is almost say INR 45 crore to INR 50 crore is left out.
So that's good to hear, sir, but my question is that if you had received INR 145 crore in Q3, and if you are saying our debtor position is also down, then why would the debt number, the gross debt number, be down only about INR 40 crore, INR 45 crore? I mean I thought that if this much money is received and our debtor position has not deteriorated, then we could see the reduction in debt.
Better you there say, almost INR 40 crore of increase in the inventory because this execution is whatever we have done during Q3. And this is basically all depending on the churning of the inventory. So there is a significant increase in inventory.
The next question is from the line of Shravan Shah from Dolat Capital.
First of all, congratulations for posting the highest ever quarterly revenue, EBITDA and PAT numbers. Sir, once again, coming back to the order inflow part, you said that INR 14,000 crore of worth of projects you bid, so is it possible to break it down in terms of how much is EPC and how much is HAM? And also out of what we are expecting, INR 3,500 crore to INR 4,000 crore inflow, previously, we were saying around INR 2,000 crore would be from the HAM. So will it remain the same?
Yes, we have bid INR 40,000 crore, in that INR 8,000 crore of HAM projects, mainly Delhi Vadodara highway, all 5 packages. And others are all EPC projects, so about INR 6,000 crore where the results are awaited. And within pipeline that we have identified INR 35,000 crore, that there is a mix of HAM and EPC, about INR 15,000 crore of HAM and about 27 -- INR 26,000 crore of EPC. That is roughly coming at INR 40,000 crore that we are looking into for beginning in next 2 months.
Okay. And in terms of the inflow we are looking at, would be out of INR 3,500 crore, INR 4,000 crore, INR 2,000 crore kind of HAM we are looking at?
Yes, of course. As earlier, it was indicated that is INR 2,000 crore plus, so not more than INR 2,500 crore, that depends upon the size of the project. Because we cannot just have a rider that INR 2,000 crore would be INR 2,000 crore. It can be roughly INR 2000 crore, INR 2,500 crore, not more than that.
Okay. And previously, sir, we were saying that we were looking at water and railway also in Jharkhand, Chhattisgarh or any other. So apart from road, any other bid pipeline that we are looking at?
Yes. Of course, in the railways, we have already bid 2 projects. The results are yet awaited. And we identified 3 more projects in Gujarat and Chhattisgarh to be bid. And again, apart from railways, water supply projects in the state of Rajasthan and MP that we have identified, but we are looking for the JV partner that we already are in the advanced stage of discussion. So we'll be looking to bid for those as well in the month of February.
So in terms of the value, this railway, the 2 bided and the 3 more to bid and the water, in terms of the value, railway, how much would be the value and water...
Would be around INR 4,000 crore.
INR 4,000 crore. Railway is at INR 4,000 crore you are saying for 5 projects?
No, railway is at INR 3,500 crore, about INR 1,500 crore is water supply.
Okay, okay. And sir, a couple of data points in terms of the -- what's the now absolute inventory value -- creditor value, mobilization advance, retention money, all these numbers?
Yes, I'm not having entire number, I can give a -- inventory is INR 159 crore. And retention of -- so you're talking about potential receivables, it's about INR 125 crore. INR 491 crore is the debt receivables.
How much is mobilization advance and unbilled revenue?
Mobilization was roughly -- and unbilled revenue is almost same. There is no change it was in September. There's no change.
So that was, you said, around INR 280-odd crore was the unbilled revenue. So it remains the same.
That is almost same. And mobilization advance is almost INR 20-crore plus.
INR 20 crore-plus.
Yes. [indiscernible].
September was INR 253-odd crore, so now it is INR 20 crore-plus.
Correct.
And lastly, on the HAM equity. So now -- till now whatever we have invested, we have given in the presentation. So how much more we are likely to invest in the fourth quarter and remaining in FY '22 and '23?
In the fourth quarter, it was INR 75 crore to be invested. Out of that, in the month of January itself, and as soon as we received the appointed date of Rewari Bypass, we have already invested INR 41 crore, which was 50% of our equity requirement and Gurgaon-Sohna balance requirement. Only now, January onwards is INR 26 crore, which will be required. So ultimately, it's INR 75 crore in quarter 4.
Okay. And in FY '22 and '23?
In FY '22 and '23, it's roughly INR 70 crore and INR 25 crore.
INR 70 crore and INR 25 crore. Okay, okay. And lastly, sir, in terms of the -- now we are doing better in terms of the EBITDA margin, 16% plus. So we were normally guiding 15%. So is it fair to assume that, that would be the bare minimum number we can see maybe on a slightly higher side than the 15%?
Yes, but, of course, it was difficult in the last 3 quarters but post good execution in all 5 projects, almost 35% of the total projects, what we did in last 9 months, the top line is from HAM execution. So that is something which has -- but otherwise, also, average size of the project where we are operating on that has -- operational efficiency has increased to that extent that consistently 15-plus percent numbers are coming. And we believe that there is, as you would say, plus somewhere or the other, some 0.5% possible increase in the EBITDA margin.
And debt level we were previously saying it should be INR 300 crore or less, so we are already INR 260 crore. So by March, we can see even further reduction in debt?
Yes, it is possible, quite possible. But a fair guidance is candid because it all depends upon your receivables and other things. It is INR 275 crore to not more than INR 300 crore, that is very clear. We would be ranging somewhere INR 275 crore, not more than that. But of course, there is a fair possibility it would be reduced now onwards.
And how much CapEx in 9 months we have done? And how much left in the fourth quarter?
So we added some INR 40 crore of new CapEx during the 9 months, and another some INR 15-odd crore will be added within in this quarter, INR 15 crore to INR 20 crore.
[Operator Instructions] The next question is from the line of Jiten Rushi from Axis Capital.
Fantastic numbers.
Thank you.
Most of the questions have been answered. Sir,...
Mr. Rushi, sorry to interrupt, requesting you to please speak a bit louder, sir.
Yes. So a few questions from my side. So sir, just on the receivable part, obviously, we have seen a significant improvement. So now sir, last time we had outstanding receivable from IRB of more than INR 100 crore; Tata Projects, almost more than INR 40 crore; and from Maharashtra outstanding from all projects also almost INR 300 crore; SPV was INR 64 crore. So what is the status now, sir?
It's almost -- in all SPV, it is about INR 80 crore. And Tata again is reduced -- now significantly reduced, is now about INR 32 crore. And IRB and Adani, both together is about INR 140 crore.
INR 150 crore?
INR 240 crore.
INR 240 crore. Okay.
Sorry, INR 140 crore.
INR 140 crore. Okay.
Yes.
So what would be IRB portion? I think it should be -- because we have done significant execution on both these projects. So can you give us a breakup for this? Is this possible?
I'm not having, these are all private players. So altogether is once again, Tata and this altogether is about INR 175 crore. So this is all 2 -- all 3. But I will -- you can just connect later on, we will give you this.
Okay. And GVK, sir, we can say, INR 19 crore is still outstanding, right, sir?
Sorry?
GVK.
GVK in Maharashtra, [indiscernible].
Maharashtra project, that is a part of a written debtor and is unbilled because mostly, we have achieved in quarter 2 but in quarter 3, we could not have a big number, which is received. Again, it's about unbilled and both portions, they are about INR 42 crore, which we would be receiving, I think, in quarter 4 only. Because some certain POS approval where there's a negative change in scope, that approval has gone to ministry for further approval. So there's some guidelines which is now -- earlier it was approved by RO, now they have given the guideline that DG would be approving the negative years.
So now what would be the status of debt because it was INR 2,300 crore was last time and then INR 750 crore was in the SPV figures. So now what is the outstanding order book look for these Maharashtra and [indiscernible] projects now?
Maharashtra only is, with all the supplementary agreement, everything down is about INR 110 crore.
INR 110 crore.
Yes.
So that is only outstanding part. Okay, okay. And sir, on the creditors, you said INR 91 crore, right, sir? It's -- I guess I missed the number.
Where, in Maharashtra?
No, no, creditor. Total creditors is INR 91 crore you said, right, sir, almost?
Total creditor?
[indiscernible]
I missed your number, I think.
So debtor receivable is INR 491 crore.
Okay. Okay. Creditor is...
Almost INR 435 crore, including retention.
INR 435 crore.
Yes.
Creditors is INR 435 crore?
Yes, yes.
So that is -- okay, okay. And debtor receivable is INR 91 crore. And sir, on the Rajasthan projects, so now, obviously, as you said correctly that the receivables are improving by end of this year, the receivables should tension out. What is the outstanding order backlog? Is this INR 107 crore, we should be completing by this year?
[indiscernible] balance?
Yes, yes.
No, I think I already given the last year -- last quarter also, that there's almost INR 70 crore of balance work, which could not be taken up because of land issues where is land is not handed over to us. So we are approaching PCOD for completion for 2 projects. Whatever land has not been handed over, it could be built in the supplementary agreement as we are doing in the Maharashtra project.
Sir, those outstanding orders of Rajasthan of INR 108 crore, of which only INR 40 crore was...
INR 35 crore will be receivable.
Yes, INR 30 crore, INR 35 crore will be receivable, correct.
Okay. And sir, on the railways project, which was canceled because of the -- so what was the issue mainly because of the negotiations? Or any other issues?
As per their estimate, the price was above, almost 10% higher by their numbers. They have asked for negotiations, but we could not negotiate much. So that was the only reason because ultimately, there was no fun that reducing the number ultimately the profit remains to be the main concern that we cannot compromise more on the profit.
And sir, one last question on the bidding pipeline. So you have said that almost INR 35,000 crore as bids. But sir, on the EPC front and also in the HAM front, you have seen that qualifying criteria has come down significantly in almost, a person who has agreed bidding on INR 150 crores to INR 200 crores is qualified to bid for larger projects, ticket sized similar to INR 800 crores to INR 1,000 crores, which can see significant high competition and margin compare [indiscernible]. Sir, how will -- how is our view that how will we compete in this situation?
As already has said earlier that we would not be going for it cost cut as for cost-cutting and aggregation is concerned. But as far as number of bids and the total order pipeline, which they are given the indication and is visible, that is a big, big number. Even if not many players or new players are entering into this bidding for it, but we believe that it is quite feasible that without compromising on the cost-cutting that we would be taking on with 3,000 to 4,000 new orders.
And sir, monetization of HAM project, any updates?
Yes, that is going on. The discussion is already at a very advanced stage. We already had said twice, we have discussed. And we believe that as soon as we are approaching the completion, by the time it could be completed. So these would be completed.
Sir, the completion of Gurgaon-Sohna and...
Jiten, I am -- yes, yes. July to October, we will be completing all these 3 projects. So by the time, by, say, in May or June, we would be in a position to complete the lead of all 3 projects, which we will be completing.
The next question is from the line of Prem Khurana from Anand Rathi.
So two questions from my side, both in a way on growth opportunities. So I think, I mean, historically, we've always shown our intend to kind of have a mix in terms of order backlog. I mean we want to have 25% as HAM and remaining 75% as EPC. But when I look at the bid pipeline that you gave us today and the bids that you've placed, seems like as I mean, eventually, there could be a chance where your HAM would go beyond 25%. I mean in the bids they've already placed 14,000, 8,000 is HAM. And even in case of 35,000-odd of new bids they are looking at there, again, you spoke about 35% of HAM orders, which is higher than 25% ratio, generally that you target, right? I mean -- and historically, I mean your success rate with HAM has been somewhat better than EPC because of the fact that EPC is finding -- I mean, the competitive intensity on EPC side has been on a higher side. So is there any change in the way we are approaching HAM now, I mean, we're fine with having more than 25% of our order backlog as HAM or just a temporary phenomenon and we'll go back to the old strategy where we used to have 25-75 mix?
See, as the numbers which you are saying that we are -- what we have bidded and what we are going to bid, that is all -- it doesn't place any significance that we would be, with a bid strike ratio, all equal in HAM and EPC. That is very clear. But it all depends upon the positive where you can place upon it. So definitely, this is the preferred area or the preferred project. Then only it is to the point where 50% or even 60% chances are that you can win that project. Now going ahead with the execution, which we have already done in last 3 -- 9 months, in fact, there is almost just balance order bank is 22%, as I'm giving an idea about it that in 9 months, we will be completing these 3 mega HAM projects, where execution is almost more than 50% done. So with that, by the time we receive the appointed date for the new HAM projects, which likely that INR 2,000 crores or INR 2,000 crores to INR 2,500 crores, not more than that, we can take. So with that, we've been in the same bracket that about 25%, 30% of HAM and not beyond that.
Sure. And my second question was on water projects. So some of our peers have seen good success in the state of UP and the UP government has given out a number of [indiscernible] water supply projects. And we have been looking for water projects in Rajasthan and MP. I mean you spoke about in your opening remarks or answer to some question. So did we participate in the UP bids or we stayed in...
We did not participate in UP bid. We are looking ahead in the state of Rajasthan as a business [indiscernible] scheme, where 50% of [indiscernible], 50% of state would be the funding arrangement is like that. So we are looking into the Rajasthan project where almost INR 8,000 crores of project to be great in that segment only. And then in state of MP, we are looking ahead. That business -- because these are not a very big size, they are almost INR 200 crores, INR 500 crores and INR 700 crores sizes. We're not bidding in UP.
Does it mean you are not comfortable with the payments in UP? Or what made us kind of to...
No, it's not that because everywhere, it is the same arrangement. Our central format will be funding 50%. Remaining 50% would be [indiscernible].
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Harendra ji, congratulations on very good [indiscernible]. So good to see the execution ramp up.
Thank you.
So my question was -- first question was on the -- I'm keen to know that Rajasthan [indiscernible] nearly covered. But my question is, are there any kind of similar receivables which have seen delays and which could be [indiscernible] in the next couple of quarters and [indiscernible] a large amount of that?
Parikshit, I'm not getting your question. Can it be just...
So my question is, sir, we have received -- so there was one lumpy receivables or Rajasthan receivable, which has been pending for quite some quarters. So are there any similar receivables sitting on the balance sheet, which are expected to get recovered the next couple of quarters? [indiscernible] Sir, where there have been delays from the client in payments, we are expecting that maybe in a couple of quarters, we'll be able to receive it.
Sure, sure. Basically, as you can look to this March 2020 numbers, where almost 4 -- INR 580 crore was the debtor receivable, which has now come down to -- significantly come down to this number. Again, we believe that in Maharashtra that we are looking into negative peers approval, we will be getting this INR 40 crore-plus amount that is likely to be received within the next 2 months. Then again, talking of private receivables, that is not a bit stressed, but we believe that, again, there is fair chances about INR 50 crores, INR 55 crores would be the likely number, where we will be eased out. So with the top line, which we have achieved last year is was INR 630 crores, where it was INR 580 crore was a debtor number. And this time, it is INR 490 crores out of INR 734 crores what we did in quarter 3. So we believe in quarter 4, there is likely chances that INR 100-odd crore would be [indiscernible] possibility that would be all reduced. And now the debtor would be coming at about INR 400 crores, even if we execute the about, say, about INR 800 crores and INR 900 crores in a quarter.
Good to hear that. But my only question was that we are funding about -- so we went about INR 100 crores of debtors are past due, to some extent, which currently you were funding from your balance sheet. And these projects are nearing completion or in advanced stages, and this will come back to you maybe in the fourth quarter?
Yes, yes. Quite right.
Okay. And out of this, you said INR 40 crores is from Maharashtra and about INR 60-odd, 50-odd -- balance will be INR 50 crores. IND 50 crores will be private debtors?
Sorry?
So out of this INR 100 crores, what will be the private debtor's amount?
No, almost 50% would be private. That is what I'm saying that about 50% of the private would be received. And this government, [indiscernible] government already in merchant control. In January itself, we have received INR 80 crore.
Yes, that I heard. So this -- basically, the private is INR 60 crores is about overdue faster pace, so we'll get that.
The project where we have already completed those works, but certain peers approval are yet awaited. We believe that within next 2 months, it would be all received.
Okay. So you will be quite strong on liquidity side than maybe by the year-end?
Yes, yes, yes.
Mr. Parikshit Kandpal, sir, sorry, sir. But may I please request you to rejoin the question queue for your follow-up as we have people waiting for their turn. The next question is from the line of [indiscernible] from [indiscernible] Capital.
Congrats for the good set of numbers. Sir, am I audible?
Yes, yes. Go ahead.
Yes. So my question pertains to -- if I look at your working capital terms versus industry, if I look at closely, then last 5 years, our payable days has -- basically our payable days has jumped quite significantly. Like inventory, we are managing very well relative to industry. So I'm trying to understand your thoughts on how are we managing this? And going forward, how should we look at? Because if you look at payable days, say, prior to FY '18 where the payable days was some 30 days. Now it's around 80, 85 days. So I'm trying to understand that as well as the inventory part. If you could help us how you are managing inventory related to what industry is doing? Their average inventory days is over 30, 35 days versus we are managing quite -- managing it at sub-20 days. So just if you can elaborate on that.
No, no. As you are saying, the inventory days, definitely, we have seen that there is an increase in the inventory. But whatever turnover we have increase, that is matching up with a good control on the inventory. Again, with the payable days and the receivable days, there is a drop in the receivable days. And then payable days also, as this is all earlier, it was from the INR 435 crores of top line we did in quarter 2, and there was more than INR 500 crores. Now it is at about INR 400-something crores, INR 435 crores, almost. So that has been significantly increased -- decreased. So -- but again, it all depends upon how we deal with our performs and with these vendors. So it is not going to be a big change in the payable days.
No, my question is not, let's say, this quarter or this year or last year. But what I'm looking at, our payable days for last 7 years, if I look at FY '14, '15, '16, '17, our payable days were in the range of 25 to 30 days. That has jumped up to, say, 85, 90 days, right? And that has progressively been increased. So FY '18 was 55 days, FY '19 was 65 days and FY '20, it ended up at 85 days. So I'm just trying to understand why o are payables are rising, while inventory, we were able to manage it at 20 days, around?And on inventory, if I look at industry peers, similar...
We are saying, inventory is much more in -- under command and...
In control, still a lot of payables are higher.
But you are concerned about the payable days?
Yes, yes.
That is a good part, I think. That is not a good concern -- bad concern that whatever we believe that whatever our vendors are satisfied, connected with us.
No, no. It's not a concern, but given we handle cement or steel or some basic stuff where generally, industry doesn't get credit, at that same line, we are getting good credit terms from our suppliers. So I was just trying to...
Almost INR 70-odd crores of bulk material is being, say, purchased on this credit line only. That is bitumen, cement, diesel, so that sort of. So that has now significantly increased. The 30 days credits are available with us for 30 or 45 days, that range. So that is how it is a big number. Other vendors are all okay. And I think, I would be having -- some more clarity can be given once you can connect offline at any point of time.
Yes. Sure, sure. That will be great. If I can connect with Pareto and -- at least on this -- yes, yes.
The next question is from the line of Giriraj Daga from KM Visaria.
So a couple of questions from my side. First, what is the CapEx you're looking for FY '22?
INR 42 crore will be added in 9 months.
No, I know. But I'm looking CapEx number for FY '22.
FY '22 is always INR 70-odd crores, this range would be there from INR 60 crores to INR 70 crores, INR 75 crores.
Okay, okay. Secondly, a bit broader question, sir. So over the next -- let's say, we get the guidance for next year INR 2,800 crores to INR 3,000 crores. Is it dependent on some order win in the quarter 4or it's only with the existing order...
See, actually, this is a number which is quite possible with the orders which are under execution, which is 100%, okay? So we do not -- we hadn't any numbers, which would be taken on as, say, during the current year or the next year. We have not added those numbers.
Okay. Last question from my side. If I had to look at your company 3, 4 years down the line, what do you think the mix would like between road and non-road? And how do you see that playing out?
Between what?
Road and non-road?
Okay. But other than the highway sector, you were talking about it?
Yes, or HAM road segment and within railway, water and other things, which are the non-road segment.
Yes. Definitely, we are looking into water suppliers, water sector and railway sector. And we believe that over a period of next 1, 1.5 or 2 years, it would be 15% to 20% that we can take on with the diversified orders, other than roads.
The next question is from the line of [ Sagar Naik ] from [indiscernible] Well.
So this was in terms of...
Sir, I'm sorry to interrupt. Requesting you to please speak a bit louder, sir. Your audio is not audible.
Hello? Am i audible now?
Yes.
Yes.
So this was in terms of bad debts. So if you look at your bad debts for the last 2 years as a percentage of PBT, so they come to around 4% and 6% versus if you analyze the listed peers, they range in between 1% to 2%. So what would be the reason for such a high level of bad debts? And second, if going forward, are you looking to reduce this?
So the bad debt, what you are saying, we have provided, that is what you're talking about? What numbers we have provided?
Yes. Provision plus actual balance...
Provision done doesn't mean that it is a bad debt. Provision done basically, there is something which was expected for in the time line, pertains receivables were there. So we had internal policy that within a time line of, say, 1 year or 2 years waiting for that at that time, then we can provide it. And we have provided, but even then we have realized because from GVK, we have provided INR 19 crores but we have received -- over the last 6 months, post-COVID, we have received almost INR 6 crores. So it's not bad debt, basically.
Okay. So major of this has been reversed, you're saying?
It's not that it has been totally reversed, but we are maintaining a balance to it that wherever the receivables are going beyond a certain time line, then we provide certain amounts of it as far as our internal policy as with the auditors' discussion. Bad debt. Yes, I can very [indiscernible].
Okay, okay. And second question would be just long term, what is the road map that you have? So in your presentation, you've given 2015, what we were and 2020, what we are. So same slide, if we have to present for 2025, what are your targets? That would be my last question.
That is really next 3 years long, long period where we can just not foresee right now. But definitely, as I have given the indication that we would be diversified almost 10% to 15%, 20% of the diversification into new sectors. And over a period over the next 2 years, that is our number. And then next year, '22 has already put the orders under execution. We believe that about 2,800 to 3,000 under execution. And with some new orders inflow slightly in this year as well as next year, it gives that 15%, 20% is the quite possible and ideal growth, which we would be able to achieve over a period of next 2, 3 years.
The next question -- we take the next question from the line of Shravan Shah from Dolat Capital.
Yes, sir. Sir, just trying to understand, broadly, as you have said in your opening remarks that most of the Bharatmala Phase 1 would be awarded in next -- maybe by June. So how much still now, anything this year in terms of the kilometers have awarded? And secondly, if we think of -- if we are thinking that most of the projects in Bharatmala 1 would be awarded, are we also thinking that whatever the projects we get, definitely, the execution may happen over the next 2 to 3 years, but down the line in next 1, 2 years, as we are saying only 15%, 20% kind of a non-road, don't you think that in next 2 to 3 years, our base in terms of the revenue would be higher, so maybe we have to think of to venturing into the other segments maybe slightly aggressively?And at the same time, in terms of the -- what is our qualification as a stand-alone to bid for railway and what are -- how much a single project we can bid on stand-alone?
I will go by first number, what you are saying that all Bharatmala first would be awarded, that they are an the indication that by June. The reason behind the opening or easing out the qualification that is inviting the other small players as well, so that is concentration to few limited players. So that is all government policy or internally they have devised because they would be awarding, say, at least next 2, 3 years, about 11,000 kilometers of -- from NHA itself. It's a Bharatmala Phase 2 and Phase 1, about 7,000 kilometers of Bharatmala Phase 2 and for 4,000 of balance orders that is of Phase 1. So that is a big, big number. That -- really, they believe that it would be not having, say, as far as limited players that they are open to many small players as well, and they have eased out the prequalification. That is one. So it doesn't give that there is limited opportunity in road for coming next 2, 3 years. It is there. The factor-wise diversification, definitely, we are looking further with 15%, 20% in the ideally 1.5 to 2 years that we would be taking on with, say, not very aggressively for railways, water supplier or an airport or the metro, definitely next 2 years. But then, what you are saying is the prequalification as highway and railways, there are having a similar kind of qualification. We do not have any challenge in it. Water supply, definitely, unless and until we are having a tie-up about a joint venture, then we would be going ahead with that. But again, metro with the Gurgaon-Sohna project completed, we would be having a wider qualification. There would be -- we would be -- we can bid for railway [indiscernible], our high-speed network, those kind of projects. So this will give us fairly good, say, opportunity to us that diversification would be quite possible.
Okay. So broadly, at today's -- currently, how much qualification we have for railway and water on a stand-alone basis?
It is almost INR 1,000 crores. This is the same number as we have done the deal count, that is the same number. So about INR 1,000 crore of qualification that is available with us. Definitely, water supply is very limited, INR 150 crores of project, that is a very small project that we can -- we are qualifying because of the limited size of project which we have done earlier. But going ahead, it would be, once we get the counties, the qualification would be all build up.
The next question is from the line of [ Satish Kumar ], retail investor.
First of all, congratulations for the great company growth. And compared to northern states, our preferences in southern state is comparatively lesser, it seems. Do we have any strategic plan to increase our project presence in southern states also, like Tamil Nadu and other?
No. I think we already indicated that earlier, we were concentrating on the 9 states. Now we are now added all 5-odd states, like Chhattisgarh, Jharkhand. We already bidded Chhattisgarh and Tolovana, Andhra, Karnatka and Punjab, even in Himachal. So that is all what we have already bidded, a few projects on that. So we are open to that. Where are the projects, wherever with the law and order, but Tamil Nadu, definitely, we are not interested as of now, Kerala, Tamil Nadu.
The next question is from the line of Dhiral Shah from PhillipCapital.
Congratulation for a good set of number.
Thank you.
Sir, what is the reason for the cancellation of tender by INR 8 crores, sir, in which we were INR 11 crores?
It was high as per their estimated a was 10% high. And though they called for negotiation, but we want to negotiate to that extent. Definitely, it was hitting our margin. That was the only reason.
Okay, okay. And sir, out of the overall total bid pipeline, what -- how much would be the L1?
No, no. As of now, the results are yet awaited. So we are not having, say, any project where we L1. As of now, there is no project.
Okay. And sir, what kind of order inflow guidance you are expecting for FY '22?
I said that about INR 3,500 crores to INR 4,000 crores.
[Operator Instructions] The next question is from the line of Rachit Kamath from Anand Rathi.
Yes. Am I audible now?
Yes.
Sir, actually, my question pertains to the state-wise order backlog number. So when I look at the Haryana order backlog, we see that revenues have jumped from almost -- so the order backlog number, that was around INR 967 crores at the end of September. It's now showing around INR 1,300-odd crores for the Haryana at the end of December '20. So this shows that the order backlog has jumped somewhere around INR 347 crores quarter-on-quarter. So I just wanted some clarification that even after -- even including that you had INR 200 crores of kind of changing scope and you would have also had some execution during the quarter in these projects, so I just wanted some clarity as to what are...
So I'm not having the entire details of that. We will come back to you. But definitely, to see us is all in Haryana only, some of INR 200 crores. But that again, it's not -- I think earlier, it's -- this Rewari bybass, it would have been skipped out, fixed. I can only get back to you once we can have a clarity and have seen that.
Sure. Sir, my second question was pertaining to just for some more clarity on my side on the data number. So of INR 491 crores that we have, we said that the INR 80 crores was savings from the SPVs, INR 120 crores is from the -- your -- this Rajasthan project, INR 30 crores was basically from -- INR 32 crores is from Tata projects, and then we also had IRB and Adani for almost on INR 140 crores. So just a balance amount for the balancing INR 491 crores [indiscernible]?
INR 140 crores is inclusive of Tata projects. And there is a project which we have skipped out like deliver there, we are executing all 3 projects. Next year, again, it's about INR 100 crore.
Okay. So delivers will be -- again will be INR 100 crores. So basically INR 140 crores inclusive of INR 32 crores, right?
Yes, yes, yes.
Okay. So basically, the balance would be your NHA projects, the other projects?
And then NHA, majorly, is INR 100 crores, all 3 major projects which we are operating as of now. And remaining, I think, some INR 30-odd crore is from others.
Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Harendra Singh for closing comments. Over to you, sir.
Thank you, everyone, for your participation in our Q3 and 9 months FY '21 earnings call. In case of further queries, you may get in touch with Pareto Capital or feel free to get in touch with us. We look forward to interacting with you in next quarter. Thank you.
Thank you. On behalf of H.G. Infra Engineering, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.