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Ladies and gentlemen, good day and welcome to the Quarter 4 and FY '20 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.
Okay. Thank you. Good afternoon, everyone. I welcome you all to our earnings conference call for the quarter and year ending March 31, 2020. I have with me on the call Mr. Rajeev Mishra, our CFO; and Pooja from Pareto Capital, our IR adviser. I hope and pray that all of you and your families are keeping safe and healthy during these challenging times. As you are aware, the outbreak of COVID-19 pandemic has created a short-term disruption in the infrastructure sector. Construction activities came to a halt due to the lockdown imposed across the country. After the lockdown was lifted, we have faced huge challenges due to the labor migration and disruption of supply chain management. As the construction activities commenced, but however there has been considerable pickup in the construction activities in the last 1 month, with execution efficiency moving up to 50% to 70% across various projects. And we are sure that momentum will be gained in coming months to move on the path of accelerated growth. It is important to inform that -- inform the forum that the company has not availed extension of 3 months moratorium on repayment of term loans as facilitated by RBI, and we have cleared all repayments on due dates with the adequate project receivables. I'm proud of the performance our team has delivered in the face of multiple challenges during the year, an extended monsoon season, the ban on construction in NCR region, delayed appointed date because of the ban and unforeseen lockdown. The lockdown was a challenging time for the management as well as the entire team. However, I'm happy the way the team took up the challenge, shown their availability in tough times and performed with zeal to succeed within the permissible guidelines of the government. That's really commendable.During the quarter, we reported a 7.4% year-on-year growth in the revenue at INR 623 crores. The revenue for the corresponding period of last quarter stood at INR 580 crores. The EBITDA stood at INR 101 crores in quarter 4 FY '20 and was up by 8.8% as compared to INR 93 crores in quarter 4 FY '19. Profit before tax grew at a higher rate of 16.4% Y-o-Y to INR 68.5 crores. Profit after tax for the quarter stood at INR 51 crores, up 40% year-on-year as compared to INR 36.7 crores in the corresponding period of previous year. PAT margin grew from 6.3% in quarter 4 FY '19 to 8.2% in quarter 4 FY '20. Now coming to the full year financial performance. The total revenue for FY '20 stood at INR 2,196 crores, an increase of 9.3% year-on-year as compared to INR 2,010 crores in FY '19. EBITDA stood at INR 342 crores with a growth of 13% as compared to the same period last year. EBITDA margin of FY '20 improved to 15.6%. Net profit after tax stood at INR 166 crores for FY '20 as compared to INR 124 crores during the same period last year. With a growth of 34% and the PAT margin for FY '20 stood at 7.5%, up from 6% last year. Total stand-alone debt as on 31st March, 2020 stood at INR 367.5 crores. This includes working capital debt in form of OD limit of INR 72.3 crores, term loans and current maturities of INR 249 crores, which includes the short-term payable under MSME trade receivable discounting system registered of INR 72.89 crores. And the balance amount of INR 46 crores is interest-free on secured loan from [indiscernible]. Our total consolidated debt stands at INR 500 crores, of which INR 149 crores is project debt. Cash and site manners stood at INR 115 crores. Talking of order inflow and order book. During the last quarter, we won 2 new orders. These are all both EPC packages 8 and 9 of Delhi-Vadodara Greenfield project with combined order worth of INR 2,138 crores. Taking these new orders, are orders that stood at INR 7,102 crores as on 31st March, 2020, which is over 3.2x of our revenue. Out of the total order book, 76% are EPC contract and 24% are HAM. In terms of statewide breakup, 53% are from Rajasthan, followed by 18% from Haryana, 14% from Uttar Pradesh, 13% from Telangana and 3% from Maharashtra. The projects which we have completed this year include NHI projects, Manoharpur-Dausa, Uncha Nagla-Dholpur and Tonk-Sawai Madhopur, and both projects of Rajasthan, Balotra-Sanderao.Let me now give you the status of some projects under execution as [ on day ]. I'm glad to share that we have completed around 58% of Rajiv Chowk HAM project, this is Gurgaon-Sohna. If the NCR construction ban on lockdown would not have happened, we would have made such higher progress, much more higher progress in this project. The execution on Hapur-Moradabad EPC contract is also progressing well, and we have completed close to 23% of the work. We have completed close to 24% on Delhi-Vadodara Package 4, which we received at [indiscernible] December '19. In the Narnaul Bypass HAM project, we received the appointed date in this quarter 4 of FY '20 and have completed close to 17%. We have completed close to 26% in our Rewari-Ateli HAM project. Coming to new projects where we are yet to commence the execution and we expect to receive the appointed dates in quarter 2 and quarter 3 of this current financial year. For the Telangana Adani project, we have already mobilized our own [ tire ] resources. We expect to start work there by August 2020. For the Delhi-Vadodara Package 8 and 9, we expect to get appointed date for one in September and another in October. We have signed the contract agreement for Package 8 on 19th June, 2020. Our HAM 4 Rewari-Ateli bypass package 4, the concession agreement has been signed on [ 19th ] June, 2020. The project is under financial closure, and we expect to start execution there by October end. At this point, I would like -- also like to mention that we are in the process of making an exit at our own Goa Airport project. Since this project is undergoing environment and legal hurdles, and we believe that the same would be the best interest of the company, considering the prolonged delay already happened. Coming to the outlook and the guidance. After the lockdown and restrictions were lifted, we have resumed operations at all project sites in a phased manner. We are glad with the progress which we have made, making [ amends ] with all constraints and hopeful of the optimistic future. However, given the bit of uncertainty in the current situation, we believe that it would be too early to give any top line guidance at this point of time. But we believe that positive guidance visibility will be shared in the second quarter considering commencement of execution in new orders, including BV, Delhi-Vadodara Package #8 and 9, Adani projects in the fourth HAM project, which would contribute significantly in the top line of fiscal year 2021. Also, we are targeting additional order inflow of INR 3,500 crores to INR 4,000 crores this year, which will build our order book further and give good visibility. Lastly, our focus continues to be on the profitable growth, and we have achieved that through sustained increase in the margins. We have been very selective in bidding for projects, not compromising on our margin and will continue to do so. That is all from my side. I would now request the moderator to open the call for question answers. Thank you.
[Operator Instructions] We take the first question from the line of Mohit Kumar from IDFC Securities.
Sir, my first question is, so what is the activity level in Q1 FY '21 basically in April, May and June? Has it improved? And how is the activity level compared to last year? And when you see the full ramp-up happening, given all the constraints and all the knowledge and information you have at this point of time?
Sorry, I couldn't get your question. Activity level?
Yes, I'm just trying to figure out what in activity level compared to last year's same quarter in April, May and June? And how do you see the ramp-up happening going forward?
See, as soon as the lockdown was there, it was -- almost everything was closed. But as we commenced our construction activities in person in end of April and the first week of May onward, we saw certain constraints with migrant labors and the supply chain issues. But as of now, we are doing about 50% to 70% is the -- as labor availability as skill labors are a bit of constraint is there, but still we are managing with 50% to 60-plus percentage execution as compared to the last year.
Has anything on ramp up -- so when this ramp up will happen in the...
Things are a bit improving as we are getting the indication from pan-India that all the labors pay arrears where [ with your talk ] of Bihar, UP or Chhattisgarh. The people are approaching back and they are coming to this project site. And we believe that within a month or so, almost 85% to -- and then plus, we would be by the monsoon end, we would be expecting 100% of the -- all whosoever has gone back would be back at work.
[indiscernible] Rewari-Ateli Mandi package 4, have you signed the concession agreement? And I think financial closure hasn't happened, right? And when do you see the appointed date to be declared? What is the [land ] status?
See, everything was on track. As soon as we have signed the concession agreement last week only, we have already applied for the financial closure. We expect that, in principle, within a month or 45 days' time. And by the time, if we are having as of 60% of the land is available, our team is working on that project. We believe that by September end, we would be in a position to get at least 80% to 90% of the land. And finally, we would be submitting our financial closure, and we expect project date by October.
Lastly, on the bid pipeline. So have you seen any increased activity, or let's say, increased trending pipeline, something with -- some indication for NHAI to do the ordering in the next 3 months?
See, as of now, it is quite early to say anything as the government is also struggling as we are also dealing under this tough phase. But yes, government is having a very, say, promising mode that for infrastructure, especially for highway sector. They will be going ahead with the order pipeline, which was -- which could not be done with quarter 4 '20. Now they are having the almost INR 90,000 crores of orders, which are in the bidding stage. And moreover, they are planning more to be bidded during the current year as already given indication in the various con calls -- conference calls.
We take the next question from the line of Jateen Doshi from Axis Capital.
Congratulations on good set of numbers. Sir, my question is regarding the order backlog. So obviously, we have given the breakup in the presentation. So I just wanted to know what is the outstanding order backlog for the Rajasthan [indiscernible] which you cannot see?
I'm so sorry to interrupt. May I please request you to speak a bit louder as your audio is not very audible.
Can you hear now?
That's okay. Yes.
So sir, just wanted to understand the order backlog position. So I just wanted to know what is the auctioning order backlog in Rajasthan [indiscernible], the World Bank funded [indiscernible] and one more project which is also from Rajasthan. So can you give your the outstanding order value of those [ projects ]?
See, we are having -- this was all INR 600 crores of projects, out of which until March '20, we have executed some INR 430 crores of project, INR 430 crores to be very specific. And the balance value where the project is having started because of some land issues, that is about INR 70 crores, they would not be executed at all. They would be all dealt in the supplementary agreement. But then the balance value, which we, as of now, as of 30th of June, again, we would be expecting some INR 60 crores of the work would be done. So you can imagine some out of INR 430 crores, some INR 100 crores of orders were left to be executed in the current financial year, out of which we already executed some INR 60 crores.
So now INR 40 crores is remaining?
Just INR 40 crores is remaining as of now.
Okay. And sir, just one more. This older project of Tata and IRB, [ have you completed those projects if I am not entirely ] [indiscernible]?
No. As of now, as we have already given that the balanced order book, some Tata project is owing just INR 25 crores of work, which is left out, and which will be completed in this quarter 2. And IRB, again, is having some INR 145 crores, INR 150 crores, which will be completed in this current quarter, this quarter 2.
That is [indiscernible] that you're talking about?
Yes, that was the earlier project with Tata. Projects is [ Goa ] Airport and then [indiscernible].
And, sir, one more thing, if you reconcile the order backlog. So last quarter, we had order backlog of around INR 6,159 crores and then you said we have received the new order inflow to [ INR 2,138 crores ]. So sir, if you do that, if you add that and then if you reconcile with the execution of this quarter, almost like INR 622 crores, INR 623 crores, so the order backlog comes at around INR 7,674 crores, while we have given the order backlog of INR 7,102 crores. So there is a [indiscernible].
There has been some minor modification in the -- like in Maharashtra project because of the land problems and few of the projects, it's almost INR 225 crores of orders. We -- there would be dealt in the supplementary agreement or they are going to be terminated. Because we are -- we have already approached completion, and we have already applied the PCOD and the PCOD is likely to be issued very soon within this month. So with that, the completion -- with the completion, which we expect that all are completed, so balance orders, which we could not complete because of the land availability that we have taken out of the balance order book. Coming to Goa project again, we have already say -- as I already given the guidance that we already have, say, approached the client to for exiting of this particular project, so I have taken those 2 numbers out of these balance order book.
Okay. So basically INR 225 crores and INR 190 crores will be removed from the order backlog?
Yes. Yes. Yes.
So that is for balance, INR 150 crores or something like that would be for the change of scope and other project financing?
Yes, minor modifications into contracts.
So this now in the order backlog, INR 240 crores for Maharashtra, [ that is right, sir ]?
Maharashtra, yes, INR 225 crores. There is no clarity on this execution because the land is not available.
No, sir, my question was the order backlog which you mentioned Maharashtra project.
That has been taken out.
Sorry. I'm being [indiscernible], and I'm so sorry on that. In the break up of the presentation, you have shown INR 248 crores of outstanding order backlog.
Yes, after INR 225 crores, it was early INR 1,900 crores something. After descoping this INR 225 crores, this INR 248 crores is balance, which is to be executed.
Sir, can you just give us the equity breakup, which you will invest in the HAM projects this year and next year?
We have already invested INR 91 crores. It is still March 31, 2020. And if you see that the requirement for FY '21, it comes to INR 186 crores. The breakup is for Gurgaon, [indiscernible] we will be requiring some INR 21 crores, which is the balanced equity. For Rewari-Ateli, again, we have already done 50%, then balance, INR 19 crores would be invested here. In Narnaul, we have already -- say, in the current quarter, we have already done INR 55 crores. Total requirement is INR 94 crores. In the Rewari Bypass, it would be INR 52 crores, which will be the required. The way this comes to be -- total comes to be INR 186 crores during the current year and INR 66 crores in FY '22.
That would be only for Rewari, right?
Yes, that would be Rewari Bypass only. A bit of a Narnaul or Rewari-Ateli, like INR 56 crore is the total requirement for FY '22.
Okay. And sir, just last question. Can you just give me the breakup of outstanding mobilization advance as of March and the retention money as in March?
The retention money, which is receivable from all the clients is INR 185 crores. And the mobilization advance which is to be recovered is INR 200 crores plus.
This means we have outstanding with us, INR 200 crores, right, sir?
Yes, that is INR 200 crores. This is mobilized to be recovered during the, say, FY '20 and '21 -- '21 and '22. And the earlier question has been that what exactly is the retention money which is receivable from our clients, that is INR 185 crores.
We take the next question from the line of Ashish Shah from Centrum Broking.
The first question is that when you -- when I look at the cash flows, there is a INR 14.5 crores of loss allowance, which has been there for this year. This was INR 8.5 crores last year. So can you help us with what is this about? And in which quarter particularly this was taken? Was it predominantly in fourth quarter or also somewhere in the previous quarter?
No. It is basically the receivable from GVJ which is almost 3-year plus, and the auditors have insisted that this has to be provided. We have given our go ahead to provide this particular amount. In the last quarter, it was INR 5 crores, quarter 4. And it is -- during the entire year, it is INR 11 crores from GVJ.
Right. So this was for which project, sorry?
This was in 2016. We did about INR 145 crores of job of overlay in Ajmer [only]. Out of this, we, say, about INR 25 crores, INR 26 crores of amount was struck for a long, long period. So that has been provided.
Right. Sir, second question is on the cost, which we have recognized for the Delhi-Vadodara Package 8 and 9. Now if you see the bid values that we had for these projects versus what we see the number in the order backlog, the numbers seem a little lower. So was it that it was...
Basically, it is -- whenever we talk about our top line or execution, it is net of GST. And wherever the orders have been, say, wherever it is bidded, we are getting the letter of acceptance or the agreement is executed with the GST amount inclusive of GST. So that amount, 12% or whatever, it has been, we have just corrected the total order value, which is backlog is net of GST.
Got it. So basically, the difference is only on account of GST?
Correct. Correct.
We take next question from the line of Ankita Shah from Elara Capital.
Sir, my question was, firstly, on the equity inclusion. If I remember in the last call, you had mentioned that the investment for FY '20 was around INR 140-odd crores. But you have invested only INR 91 crores. So is there a change in the schedule there for equity investment?
There was no change at all. INR 140 crores -- we -- what we have done is, on fourth of April, we have done INR 55 crores of equity which was required for Narnaul Bypass, third HAM project. So it got delayed just because of this lockdown, and this last week, it was supposed to be done in the March itself. But it was done in first week of April.
Okay. Okay. So that is the only thing. Otherwise, it remains similar?
Correct. Correct.
Right. So the number for FY '21 is, okay, INR 117 crores less the INR 55 crores, which would have already been...
[indiscernible] the INR 55 crores has been graced for -- it now comes to be INR 186 crores.
Perfect, got it. And sir, in your balance sheet, this contract liabilities number has jumped very significantly. Could you help me [with that]?
Yes. Yes. Please, I will explain it. Basically, contract liabilities is wherever any kind of unbilled revenue. And if all happens, whenever we are nearing any completion of any of the projects. So we are nearing completion in most of all 7 packages in Maharastra projects. If you talk of Tata Projects, again, only just INR 25 crores of work is left out. So in these projects, it's almost 8 to 10 projects are there, This is unbilled format is there with -- change of scope approval is there. Any GST approval, if it is pending at all and all contracts where the final bill are to be claimed. So there -- unless and until the completion is declared by the government, we cannot submit our final bill. So just because of that, there are almost 10 projects, which earlier was only 5 projects. This has come to this higher level.
Okay. And we plan to complete this project in the first half?
We already -- see, most of the projects are already completed. We have completed 6 projects out of these 10 projects. And again, these 4 balance would be completed within next 2, 3 months. So all our claims would be submitted there upon. And we believe that by end of the financial year, we would be in a much, much -- say, we would be getting these all receivables certified and paid.
We take the next question from the line of Mohit Kumar from IDFC Securities.
My question is, sir, given the fact that Goa Airport, have you since...
I'm so sorry to interrupt. May I please request you to speak a bit louder, sir?
Given the fact -- my question is given the fact that the Goa Airport has received the approval for one more year, why have you taken this order out of the order book?
See, with the -- given a green signal to us in the month of July -- January end, we -- this plan to start mobilization. By the time it was Holi and then upon this COVID reason. So that has a bit of a legal complications. And now with the limited resources being available and it would be a big trouble for supply chain, again, to mobilize the entire resources by the time. So that has been the major decision. It would be not fruitful for us to go ahead with taking the project.
Understood. And secondly, sir, on the order inflow, are you targeting HAM or EPC? Do you have any preference of -- is there any number you have in mind or HAM or EPC? The ratio between the order inflow?
As already, we have, during the last 2 years, we have maintained the discipline that our orders, not more than 25% should be HAM and rather most of the order should be EPC. So again, we will be maintaining the same discipline. We would not be very aggressive taking on HAM project, and this is how we will be targeting...
And lastly, given the fact that we have started -- we have moved ahead on our HAM projects. Are we in talks to monetize our asset?
[The earliest one is ] for the monetizing or any [ buyers] Required, we were having a discussion until December or January. Post that, we just believe that at least we should be targeting more on completion of at least 1 or 2 projects. Now we would be looking ahead once this COVID time and then at least positive sentiments are all back. November onwards, when we would be in a position to say, negotiate further or just have a discussion going ahead. Because by that time of March 2021, we would be in a position to nearing completion of 2 of those major projects.
We take the next question from the line of Parikshit Kandpal of HDFC.
Congratulations on achieving strong numbers on the P&L side. I think whatever you had committed, I think, you almost achieved those numbers. My only question was on the balance sheet now. So on balance sheet, we are seeing a deterioration in net working capital and that's happening for last 2 years. So even this year, debtors have gone up and part of net working capital is aided by higher payable days, so payables also have increased. So what is the reason? I mean, just because of the Rajasthan project, we are facing the issue? Or if you can just give a breakup of the data and give a little more granularity on this to be helpful.
Yes. Sure. Basically, out of total debtors, which is in this -- INR 185 crores is the retention money. If you break up like INR 624 crores is debtor. Out of INR 624 crores, INR 270 crores is the receivables from the Rajasthan government [indiscernible] project. See, the clarity on this [indiscernible] project is earlier during the month of March, we had given the revised allocation of INR 158 crore by the state government, and out of that, only INR 30 crores could be paid by the government during the month of March. But -- and that particular time, the lockdown was imposed. So the project remains last. Now again, INR 448 crores is the current year outlay of the government -- Rajasthan government. So they are disposing the entire liabilities of these projects during the current year. And they have already taken into their budget. The only thing is they could not be paid earlier in the month of March. That's why it stood at about INR 271 crores, which is a major, major number.
Okay. [indiscernible] like how much -- [indiscernible]
Yes. Yes. Yes. I was just telling that earlier. We have received INR 60 crores during the current quarter in the month of June.
So you're booking [indiscernible] that is done on billing of INR 60 crores. So this number will again be similar number to INR 274 crores, right?
We already have agreements of INR 60 crores, so this will come to same level now. [ INR 240 crores ] of work is left out, which we expect that we will be completing month -- end of March -- by the month of October -- September, October. Then we see that only during the quarter 2 and quarter 3, we believe that about INR 200 crores would be paid as indicated by the government.
By third quarter of FY '21, you will get around INR 200 crores.
Correct. So by the end of this year, they have given the commitment that the entire budget is there. We just complete the projects and you would be paid off.
So INR 270 crores plus INR 40 crores will become almost INR 310 crores. So INR 310 crores will be a total outstanding or the [value] will be paid in this year.
Correct. Quite right.
So because there's a very big chunky receivable which is making the balance sheet looks very significantly lower in terms of net working capital base.
Just because of this only being, say, these are all projects which are having scattered to almost 380 kilometers to be done. So we don't want to discontinue and then again remobilize ourselves. And we keep on continuing execution now on these projects and that the benefit remains is the profitability remain intact once we have executed this. So it's only -- there's a bit of a challenge that being a government-funded project, government is having a strong conviction that the government is funding those projects. So government do not believe just to back out of these project, if it has been their own fund. Now they are very happy that the government is [ involving ] is funding them, and they are paying us.
It could become a liability side now creditors has gone up sharply again, the INR 346 crores have you filed. So what -- and those also has gone up. So anything you can tell me about, creditors or like what is happening? Why is this amount is going up so significantly?
No. Just majorly, there has been a purchase order, which was issued by IRB where for Hapur-Moradabad project, which we have purchased, we were assigned the task to purchase the aggregate, which was as per our main EPC, it is our free of cost supply. So they assign the task to purchase the aggregate. So this number goes beyond that, except for INR 100 crores of aggregate was purchased by us. So just because of that, the significant of -- the level of this creditor shoots up to 500-something.
But in our purchase, it should be assessed, why should it be liability, I'm not getting it.
Say, purchase of aggregate. In our EPC contract, it is, say, without an aggregate. If aggregate was to be supposed to be supplied by FTV free of cost. This is the kind of agreement which we are having with the IRB in Hapur-Moradabad project. Okay. So in that project, they assigned us the task to manage this purchase of aggregate as well, and they gave us the purchase order for aggregate purchase. So this is how, when we managed to purchase the aggregate creators, they shoot up. Now it has been considerably paid, and now we are, say, almost -- it is coming about at a level of for 400-odd.
No, you purchased [Foreign Language] I'll take this offline one [indiscernible] how much your are -- if you are putting your money, it should be -- I mean, on behalf of IRB and IRB will pay you later, so it should be actually...
It's not actually they're paying us later. It's only that INR 100-odd crores of aggregate, which was purchased by us during the last year. That paid us some amount and this amount remain unpaid. And this is because the big amount is showed there, which is which left unpaid, which is now paid out.
Okay. I'll take this offline. My second question was on the order backlog -- it was the Vadodara packages and the Adani project and the new HAM. So put together, so I wanted to know out of this -- what would be the executable order book out of the INR 7,100 crores as of now?
Sorry, can you repeat your question?
The total order book is INR 7,100 crores. So currently in first quarter, how much of this order book is under execution? So I would believe that these 2 Vadodara projects will not be there. So how much should I remove to this and get a sense that on what -- order book we are currently executing?
These are the 4 projects where the appointed date is yet to be declared, and they are not under execution as of now. So apart from that, some INR 3,700 crores of project are under execution.
Okay. So these are 2 package, the package 4 and 8, both, right?
Package 4 is under execution, all HAM 3 projects, they are under execution, except for a HAM 4, Hapur-Moradabad and Tata IRB. These all projects are under execution, some Maharashtra projects are near and then Jodhpur projects are all there.
So package 8 and 9 at Vadodara is not under execution and Rewari-Ateli is not under...
We are awaiting this appointed date, which we would be quarter 2 end or quarter 3 start.
So this should give a significant execution towards the second half, towards -- more towards third quarter and...
It seems like that during this time of workers and then the labor problem, and the monsoon period. By the time quarter 2 ends, we believe that at all appointed dates, all the projects would be all kicked off, started. And they all should be ramped up in quarter 3 and quarter 4.
We take the next question from the line of Amber Singhania from Asian Market Securities.
Just 2 things. One, if you can help us understand how much land is already available for the 4 projects that we are appointed -- the appointed date is yet to come. Delhi-Vadodara package 8, 9, Rewari-Ateli package 4 in [indiscernible] .
See, in Delhi-Vadodara package 8 and 9, it's almost 46% in package 8 and about 58% in package 9. It is all available. The process of giving the award and then compensation to all the farmers is on. They are not being allowed to sow any crop during this particular monsoon period, current period. So we believe that within the next 3 months, we would be in a position to get at least 90% or 80% plus land as desired by the contract. In Rewari Bypass project at HAM 4, we already had 60% plus land. And we believe that within the next 3 months, it would be 90% plus. And Telangana Adani project always, say, as what we have been placed there for the last 6 months, we're already having some 82% land . And we believe that the appointed date is very soon would be declared, means within a month or so.
Okay. So in all these projects, we don't see any issue in terms of land acquisition?
No. No. Not at all. No.
Okay. Sir, secondly, because of this COVID lockdown and labor migration, is it possible to quantify roughly how much revenue we might have lost during Q4? And how much it might have impacted in Q1 also?
See in Q4, we were running at a very good pace. It was an INR 8 crores to INR 10 crores a day execution was going on. So last 12, 13 days, we lost all that momentum. I believe that about INR 100 crore execution has been lost in quarter 4. And this, again, in quarter 1, as everybody is aware of, the 1 month is totally -- that was totally lost. And we have picked up the activity. And now it is going at about 60% to 70% in quite a few projects. So we believe that we were expecting some INR 600 crores plus of the top line in quarter 1 as for the earlier estimates. So about 50% to 60% would be done.
Okay. And sir, in second quarter, because of the monsoon, generally, we see less activity, so the labor migration might not impact that much. So would it be fair to assume that in Q2, we might be more or less able to achieve the last year's operations as such?
See, we cannot say anything because if the monsoon has been vigorous, nobody can help. Either the labors are available or not. If the monsoon permits us and wherever it has, we have projects in almost 7, 8 states. It is not vigorous that much, we execute at the last year level.
[Operator Instructions] We take the next question from the line of [ Hiten Joshi from Axis Capital. ]
I just wanted to understand on the diversification. So as you said, the airport project has got canceled. So are we looking to
Sorry to interrupt, but your audio is not audible, sir. Requesting you to please speak a bit louder?
I just wanted to understand for this cancellation of the Goa airport project. So have you paid any penalty for that? And are you looking to review for the project?
No. No. There is no penalty as such because it's kind of a win-win situation for both of us. We don't want to lose money just because of delay in -- because of some legal issues, complications going on. And they have -- might have searched they are looking for another alternative contractor because of the monsoon period. In Goa, it has already started. So no activity has been started as yet. So it would -- they need to wait till October. So there's no logic, no fun waiting for -- till that time.
I think we had mobilized so I thought...
It is only just INR 1 crores of mobilization what we have done, what we have spent some plants and some equipments are mobilized. They have been taken back, and they have agreed to pay that particular amount.
So sir, if a project comes again, we might go for -- we might do it again. And sir, in terms of diversification, so water -- transportation project, pipeline and again on the airport. So are we looking to build for these projects? Because I believe there is water distribution to come up...
Yes, there has been certain problem to it. We have already bidded for some RVNL projects already the results are awaited. A few of the things we've already bidded. And we are looking further for water supply as well, looking into the government's focus as of now, they may having -- they might have some different, say, action plan regarding the infra development, now onwards, say, in quarter 2 or quarter 3, we would be having more clarity into it. But we are on to it. Looking to the areas where the diversification really help us would be water sector, railways and...
Are we in -- what kind of projects are track laying? Or what are these projects?
These all a combination of the civil and then track laying and electrification. All sort of projects are there.
How big it is, Sir?
Size is again INR 250 crores to INR 800 crores, that we have already bidded 2 projects of INR 780 crores.
Two projects together, INR 780 crores. Okay.
Yes. That we already bidded. The results are yet to be determined.
So it will come in the next couple of weeks, probably.
We'll take the next question from the line of Shravan Shah from Dolat Capital.
Sir, apart from these 2 projects, any other projects that we have bidded and yet not open?
Definitely, there are 6 more project with the size, 3 of them are having INR 300 crores and 2 of INR 700 crores, and one is, again, I think, INR 150 crores plus in the state of Rajasthan. And we have already bidded those projects, but the results are yet awaited.
So these are NHI EPC or MoRTH EPC?
Three of them are NHI EPC and 2 RVNL and 1 in MoRTH.
Okay. And what other -- are we looking at -- are you looking at some of the projects to be bidded in this month and next month? Or already you've been looking for some...
No. No. This month is already almost just 3, 4 days left. For next month, we believe that the order pipeline of NHI, that is quite long. And we believe that they are not going to do differ those projects, they will be taking a call on taking the bids for those projects.
So broadly, how much do you think would be bidding taking place at NHI level in first kilometer or value terms next month?
The broader pipeline, which could not be bidded in the month of March is about INR 70,000 crores plus. They are all to be bidded. And then again, they have added some projects in their bid pipeline. So we believe in quarter 2 that it's not specifically in the month of July, as again, there's no clarity into it because they've all been extended, say, quite a few times. Now we believe that only those -- that those projects, which, in the month of March, would not be bidded at least in quarter 2.
Okay. And sir, have we -- of ministry and then it has seen that milestone to monthly payment. So have we bidded for any of the projects on monthly? Or have we received any payment?
Yes. Yes, of course. For HAM projects, all the 3 projects we have build, and we've received payment in 1 of the HAM projects. The policy is very much clear, and we were -- we would be billing every month as the government has relaxed in the Atmanirbhar scheme.
Okay. And in terms of the retention money and the performance on...
We have already applied to it. Some certain clarifications were required from the government or the ministry on NHA, they have already been issued. Now the things are moving. They are releasing the bank guarantee. They are releasing the retention, which has been retained as a cash.
So how much of bank guarantee and the retention we expect can be released?
See, for the HAM project, it was about INR 75 crores, which in any case would be released by 30% at the time of 30% completion. Apart from that, some INR 100 crores of retention money BD would be released to us.
Okay. Okay. And broadly, lastly, I think last time you were looking at to increase our nonfund limits. So right now, what is that status? How much is there and how much utilized?
See, we are having unutilized limit of about INR 80 crores as of now. Apart from this, this INR 175 crores BD would be released to us. That is INR 80 crore is unutilized out of the already available limits. But we are expecting that in the month of July or August, we would be signing the joint documentation for further tide up limits, it is of almost INR 125 crores plus.
So that will increase our non-fund limit to?
That would increase our non-fund based limit to about 8 -- INR 980 crores.
Okay. Okay. Okay. And sir, these data and the payables, I think were previously also -- one of my colleagues has already asked. So now in terms of debtors, which has increased significantly. And at the same time, the payables also what you were explaining this IRB purchase order. So right now, what is the status? Have the number debtor from payable days has reduced?
Yes. Obviously, during these 3 months, we have received a lot of, say, money from -- because in debtor we have almost INR 105 crores of debtor room SPV only. So that amount entirely has been received by us because of the lockdown and some of the equity not infused in time, that SPV we have received. So apart from that, within this 3 months, this duration, we have received some INR 500 crores of receivables, which, again, we have built again, but we have received some INR 500 crores.
Okay. But broadly, the number by end of the June would be the similar, the debtor's number?
No. No. That would be much decent.
Okay. And lastly, on the gross rate, I think last time, we were looking at a much lower number INR 295-odd crores. Now we are having the INR 368 crores. So...
I would clarify that the guidance what we have given that it would be INR 12,275 crores. Two things have happened. One is during the month of March, we have purchased the CapEx of our tippers which is the BS IV to BS VI model. So they all were discontinued. So likely to be discontinued, then we are getting the benefit of our INR 4 lacs per tipper. So we added some 450 number of tippers, which we definitely would have been required in this particular FY '21. So that has increased the debt by INR 30 crores, INR 35 crores because the CapEx addition has been INR 35 crores to INR 40 crores for that. So the number INR 295 crores would have been the ideal number. Again, some INR 72.8 crores, if you see that is a -- typically, that is a MSME paid -- payments being given by trend. This was a very short-term borrowing being done because of the arrangement where we are getting the commercial benefits because any of the vendor is being negotiated for the payment of 45 to 50 days or however, 60 to 90 days, he would load his own profit as well as the interest cost. So we are getting some reasonably good discounted rate from this platform, which is about 8.5% to 9%. So there, the commercial saving has been huge. This is a very short-term arrangement, which we have done. So now I would like to just clarify, as of now, as of June, it has come down to just INR 23 crores.
Okay. So total gross rate INR 368 crores has come down to a...
Debt -- Say this INR 73 crores, this INR 72.8 crores like it trends on which I'm talking about, it has been reduced, and it has now to INR 25 crores. Yes.
So the combining things together, all the gross rate, which was INR 368 crores in March, how much is -- as on the -- today?
As of now, it might -- it may be somewhere near INR 290 crores.
Okay. And then the CapEx for this year will be how much, FY '21?
During these 3 months, we have not added any CapEx, and which is likely that we would be adding, say, as earlier, it was some INR 75 crores to INR 80 crores, which was likely to be added. But this year, we don't require much, it would be only INR 40 crores to INR 50 crores of further CapEx addition.
Sir, I understand we are not able to give guidance. So broadly, sir, one thing, can we see a degrowth for the full year on the revenue front in FY '21?
No. We don't see. But again, it depends on just [Foreign Language] . God is [ greater.]
I understand. But for the first quarter margin, we can see a sizable hit or no, we will be able to maintain the margin?
No, these are all projects which we are on with execution and all more soon projects, which we would be starting, the profit margins are really, say, touch wood, they are all good. So we would not be having much of a dent on our margins.
We take the next question from the line of [indiscernible], individual investor.
Congratulations for the improved profit margin in the last year. Sir, I'm trying to again just figure out what would be the top line for this financial year? So just roughly trying to make sense that 4 projects, which are getting into appointed date by, say, Q3 and Q4. So if we take away those 2 projects, then you said balance, INR 3,700 crores are under execution, right, sir?
Yes.
So how much do we expect maybe in Q1 and Q2? Probably, sir, practically speaking, almost we'll be losing 6 months, and we will have full 6 months of progress in this year. So out of the INR 3,700 crores what value is likely to come in the top line for the entire year?
As per the contract duration and as we believe the things are all sorted, that we believe that out of INR 3,700 crores of project, which we are -- these are all under execution, we believe that about INR [22,2100 ] crores would be executed in these projects in this FY '21. And remaining, we believe that whenever we are going to -- likely to receive the appointed date in all the 4 projects in September or October, balance, we expect that would be, say, as we get the appointed date, it would be executed from all those 4 projects.
Yes. So at least 10% in this year can come from those INR 3,300 crores, 4 projects?
Yes. Hopefully, we would be doing that. It can be much more even.
Yes. Okay. Sir, one other thing. Any monetary compensation planned by government under the pandemic? Like any changes or?
No. No signal as such, as of now.
We take the next question from the line of Prem Khurana from Anand Rathi. [Operator Instructions]
I have 2 questions. So one was, so we've recently seen bank rate come down substantially and we have hybrid annuity projects. And I think we still continue to look for hybrid. I mean the gap there has widened, how do we approach hybrid annuities now when these come up for bidding? I mean whenever these come up for bidding. So would that change you -- and would that make you change...
I'm so sorry to end up, but we just lost the line for the management. Requesting you to please hold on. I am just trying to reconnect the management with the call. [Operator Instructions] We have the management. So we have the question from Mr. Khurana.
So 2 questions from my side. So one was, I mean, we've recently seen bank rate come down substantially, and we also have exposure to hybrid annuities. And I'm assuming, I mean the INR 70000-odd crore of award pipeline that you spoke about and was pending at the end of March, and you expect this to come through during Q2 -- last part of that during Q2 would also include hybrid annuities, and you would want to bid for these as well. So given the fact I mean there is this change in the bank rate substantial that, again, how do we approach the hybrid annuities now? I mean, would that make you change your IRR expectation? How do you account for the volatility that we've seen in bank rate or the spread widening that we've seen in the bank right now?
Definitely, as the bank rate has gone as down by 1.4 percentage during the last 3, 3.5 months, and of course, for HAM, any SPV, it would be rather a very tough that it can be bidded for the earlier levels. So government is also having a clear focus in their mind because not much of the [ EPC ] -- this concession would be interested in HAM mode. So they are now switching over to the EPC mode because they will be putting their all profits. And earlier, what 35%, 40% above the bids were there. Now the people would be bidding much higher than that. As losses are there against the bank rate because it has been reduced. So with the government having a clear mindset now that there would be no much bidders into it. So they would be much happy bidding in the EPC mode.
But would that mean, I mean you will get to have lower awarding this year? Because, I mean, obviously, NHI, again, would have to look at their budgets, and then they would have to decide whether they want to stretch their balance sheet or they want to go a little slower in terms of award. Because at least in case of hybrid annuities, they were required to fund only 40-odd and the remaining used to come from the developer in the form of debt and equity. So I mean, if it is as if they were to give out most of these projects on EPC, then our commitment goes up substantially, right? So would that mean, I mean, there could be some lower awarding this year?
Of course, your concern is very clear because it's all -- it's a big debate going on within the government, what exactly would be their mindset going ahead with all the tough time going on than they would be going with the EPC or the HAM BTV mode or the [indiscernible] mode as well as they are very keen on taking [indiscernible] but as well. But there, as indicated various times, they are quite keen on awarding at least 3,500 to 4,000 kilometers, which comes to be nearly INR 1.5 lakh crores.
Got it, sir. And the second question was just a small clarification on the thing that you spoke about earlier. The aggregates that you've acquired on behalf of IRB. So when you get to have these kind of -- I mean, this is not a part of the original agreement with IRB, right? I mean this is additional work that have given you. So would that be rooted through your P&L in form of top line? Or it is just a balance sheet item? I mean you have these receivables dues from IRB...
It has been routed to our profit and loss account. It has been properly purchase ordered, and we have supplied the particular material. We have managed the supply of material, and we build that, and they have paid certain amount, and then it remains unpaid. And now during the current 3 months, we have been paid that amount.
But fair to assume the margins will be somewhat lower than what you charge...
Of course. Because the margin has -- could not be 10%, 12% or 15% in those -- that purchase order a sort of a thing. But at the moment, it's 5% margin.
We take the next question from the line of Rachit Kamath from Anand Rathi.
So I had my first question was on Adani project. You said that earlier yet to get appointed, and we are only mobilized at the site. But when I initially looked at the project size, it used to be INR 951 crores and now when I look at the order backlog, the number is somewhere around INR 905 crores.
Again, they all has been corrected because the order is inclusive of GST. So order amount is inclusive of GST, now what has -- in the balanced order book, what we have done is all entire orders is without the GST. So they are all net of GST.
Okay. So actually, I thought on that before. But then when I look at the geography-wise breakup that the company is giving me for the past 3 quarters, the Telangana state breakup has been kind of producing on a consistent basis. So September '19, it was around INR 941 crores, then it went to INR 934 crores in December. And then this quarter, shown INR 923 crores. So just trying to understand, is there some kind of a not outlook -- mistake or something or what? Because Telangana is only one project?
I could not get the clarity on what your question is regarding. This is very clear that all the projects are having the net of GST. Now they have been corrected for that. So you are seeing some kind of execution being done into that.
I thought that you may have -- even though we will not [indiscernible] both of them some power or power shifting ability to think kind of work something on that front?
I have a question. Can you please speak slightly slow in the telling of what exactly is the query here?
I'm sorry, sir. Can you repeat?
The question is not clear. Exactly, precisely what do you want to ask? I'm not getting you.
I just wanted to know if you have booked any kind of utility shifting work from these [indiscernible] projects?
Utility Shifting.
Utility Shifting?
Yes. For all these kind of projects.
I got your point. Basically, all these EPC or HAM projects, they had this kind of a uniqueness, whatever amount we used to spend for utility shifting as every project requires. So that is being paid to us from the NHI or the client, and that is included as a top line or turnover.
Okay. Sure, sir. And what is the additional award announced mobilization [indiscernible] pick a draw? Collect it?
See, it was all these 4 projects, which we are awaiting the appointed date, we can have a INR 325 crore of foundation in all these 4 projects we are in.
We take the next question from the line of Rita Tahilramani from Invesco Mutual Fund.
So in terms of order inflows, will we be open to take subcontracting order inflows? Or will we stick to taking more central or state government orders?
No. We are more inclined to take as a prime contractor.
Okay. Okay. And second, just a follow-up of Shravan's question. So in terms of debt, you mentioned that the current debt is almost INR 290-odd crores. The receivables coming in from the Rajasthan project also. So will it be fair to assume that the debt at FY '21 end would be somewhere around INR 300-odd crores?
Yes, it can be -- you can take it as INR 300 crores. That is because, see, with the rights on receivables and the other major receivables aligned, then that would be at a much, much lower level.
We take the next question from the line of Shravan Shah from Dolat Capital.
Sir, as you said that now you are giving the order book after the GST, so is it fair to say that the previous quarter order book was including the GST? So can you give the -- all order book of the previous quarters without GST, is it possible or no? Or maybe early number?
No . No. Exactly, say, a few of the orders, they are having net of GST amount and few of the orders were having inclusive of GST. Now it has been clarified. And every quarter end, we would be giving us what we have executed, what we had, say, order book has been added. So there will be much, much clarity on date. These count any positive scope is there, any utility payments are there, everything would be very clear then.
Yes. So now right now, the entire INR 7,100 crores order book is without GST. But let's say, third quarter of last quarter, previous quarter, even the September quarter or the June quarter, some of the orders...
It's not saving, it's not that -- it was a mix of it. Otherwise, now just a big difference is because of the Goa project and INR 225 crores of project being descoped, taken out of this because of the land availability in Maharashtra. So there is a big difference just because of this.
So that's what I'm saying. So is it possible that we can just release of maybe a press release and we can give a "these are the -- our order book numbers as on, let's say, from FY '19 to every quarter, last 4 quarters, excluding GST, excluding the Goa order everything." If it is possible.
Yes. Please ,I will check it.
Well, ladies and gentlemen, there are no further questions. 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 Q4 and FY '20 earnings call. In case of further queries, you may get in touch with Pareto Capital Advisors 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, this concludes this conference. Thank you for joining. You may now disconnect your lines.