© 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.
Good day, ladies and gentlemen, and welcome to the Q2 FY '23 Earnings Conference Call of Ircon International Limited hosted by Perfect Relations Private Limited.
[Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Ms. Mamta Samat from Perfect Relations. Thank you, and over to you, Samat.
Thank you, Michelle. Good afternoon, everyone, and thank you for joining us on Ircon International Limited's Q2 FY '23 Analyst Conference Call. Today, we have with us the senior management represented by Shri Yogesh Kumar Misra, Chairman and Managing Director; Shrimati Ragini Advani, Director Finance; and Shri B. Mugunthan, Chief Financial Officer and Executive Director of Finance.
Before we begin, I would like to say that some of the statements that will be made in today's discussion may be forward-looking in nature. We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session. I will now request to Shri Yogesh Kumar Misra for the opening remarks. Over to you, sir
Yes. Good afternoon. Thank you, Mamta. And good afternoon, everyone. I'm Yogesh Kumar Misra, Chairman and Managing Director, Ircon. On behalf of my team, I extend warm welcome to you, and thank you for your presence today at the Ircon International Limited Earnings Call for Q2 FY '23. I would also like to express our heartfelt gratitude to each 1 of you for your continued patternage and confidence in us over these years. I have with me Shrimati Ragini Advani, Director, Finance; and is Shri -- and Mr. Alin Choudhary, our Finance -- Chief Finance Officer. We hope you had a look at our detailed presentation that is uploaded on our stock exchanges. As far as results go, we have had a good start this fiscal year. Let me just take you through the financial performance of Q2 FY '23. The company has outperformed year-on-year basis and delivered operating revenue of INR 2,239 crores, which is 47% higher compared to Q2 FY '22. The profit after tax of INR 174 crores in Q2 FY '23, is 38% higher when compared to the same period last year. Core EBITDA increased to INR 214 crores vis-a-vis INR 149 crores for the corresponding quarter of previous year. Profit before tax stood at INR 226 crores as against INR 169 crores for the corresponding period. Earnings per share has gone up to INR 1.85 per equity share as against INR 1.34 per equity share as compared to previous quarter of last fiscal on a face value of INR 2 per share.
Our order book as on September 30, 2022, stands at INR 40,020 crores, comprising 51% orders, which we have secured on a nomination basis. And the rest, 49% have been secured on competitive bidding. The orders are spread across the railway, highway bridges and other segments. At present, 93% of our order book is domestic and the rest 7% is international. Ircon currently has 11 subsidiaries, including 10 wholly owned subsidiaries, comprising 9 road and highway SPVs. Apart from 11 subsidiary companies, Ircon also has 7 joint venture companies, including 5 whole connectivity companies, which are joint ventures with coal companies.
So without taking more time, I would like to open the floor for question-and-answer session. I would just like to make one more statement that considering that the first 2 quarters are not the best quarters for any construction company. So our performance is seen in that context is even more satisfying. Thank you.
[Operator Instructions]
We have the first question from the line of Dikshit Doshi from Whitestone Financial Advisors.
Congratulations on good numbers. My first question is regarding this current order book of INR 40,000 crores. How do you see the execution time line over how many years it will be executed?
Are you able to hear me?
Yes. Yes.
So if you see our last year's revenue and the projections that we have for this year, this order book should be sufficient for next 3 to 4 years.
Okay. Okay. And considering the H2 is always the best quarters, we can easily cross INR 9,000 crores this year?
Definitely, we will -- I think our margins will go up by 25% to 35%, which would make it about INR 9,500 crores to INR 10,000 crores. This is our expectation, of course, subject to everything else remaining normal through out the rest of the year.
Okay. My second question is regarding the order wins. So how much order win we had in H1?
This year, our focus has been on basically kick starting all our projects, which we had acquired last year. Last year, we acquired about projects worth about INR 15,000 crores. And they were in new areas, very like the high-speed rail, like the solar projects like the express way. So we are right now focusing on giving a good start to these projects, we have done financial closures for all our road SPVs. In high-speed railway also, we have done the initial part, designs, we've set up casting yards and factory for this lab. So we are basically focusing more on that. And so in orders, we have -- and because there was a volatility in the market, so we have not gone aggressively for securing more orders. But still, we have managed to get about INR 331 crores worth of orders in the H1. So as compared to last year, of course, it is not much. But we have focused more on EPC tenders and we have not gone very aggressively because the market has been very volatile.
Yes. And any target you have for H2 in terms of fresh order wins or anything you mentioned that how many bids we would be tendering?
No, bids we have tendered in H1 also. But as I said, like we did not tender any bid for HAM projects. We did tender some bids for EPC contracts. So in the next -- I mean, in the H2, we would definitely target submitting bids for at least INR 10,000 crores. And -- but then we would be a little conservative in the sense that the market is very volatile. The commodity prices are still fluctuating. So we would not be going very aggressively.
Okay. Now my second question is, as you rightly mentioned that the commodity prices and also there must be competition also in the tendering. So how do you see the margins in the orders where we have won through bidding process? Because now our order book is like 50-50 on nomination and bidding projects. So how is the margin? Or do you see that this 9%, 9.5% margin is sustainable even in the projects where we have bidded?
Yes, I think I can assure you from what we have seen, like we have finalized our EPC contracts for the highways. So we are quite sure of maintaining that margin of 9%, 9.5% core EBITDA. And -- so we are confident of maintaining -- I mean, sorry, core EBITDA, about 8.5% to 9%. And on consolidated, which is a margin of 9.5% is what we expect to maintain even with the bid out projects. Even in cost-plus projects, see, the cost-plus projects, there is a problem, there is a cap on the total margin that you can make. So our projects were normally cost plus 8%, cost plus 9%. So that way, the margins that we were actually able to achieve were in that range only. So even in competitive bidding, we have quoted and won by that kind of margin, and we hope to maintain that.
Okay. And one last question, and then I joined back in the queue. In terms of JVs and subsidiaries, can you just mention how much equity and that we have invested in those JVs? And any further plans of investment in next 1 year?
Yes. We have already invested equity of INR 1,166 crore. And interest and quasi equity of -- and we have also invested INR 803 crores as the quasi equity. And in this year, we still have about INR 1,100 crores that we will be investing in our JV projects.
We have the next question from the line of Balasubramanian from Arihant Capital.
Congratulations for good set of numbers. Sir, right now, railway is expanding [ finder ] railway stations, what kind of opportunities do you have? And last time when railway projects are canceled, what is the update on that? These are my 2 questions.
So railways is going ahead with the EPC tenders for their infrastructure projects, including station development. We have seen some of those projects, and we have also bid like Chandigarh-Baddi, we have built. But then the competition is immense. And now the bidders are putting at very, very thin margins. So we are working on other EPC contracts, which are going to come up in the near future. I'm not sure about the contract that you are talking about, which got canceled, which one was that?
So sir, I'll come back into the queue. I'll check it properly.
Okay. Okay.
We have the next question from the line of Nalin Shah from NVS Brokerage.
At the outset, I would like to congratulate the management and the MD and CEO for the excellent set of numbers turned out for Q1 and Q2, both. And once again, I would like to say that you out performed exceedingly well. I have very small 2 questions. One, you already answered partly my question that current year guidance is INR 10,500 crores to INR 10,000 crores kind of top line. In the Q1, you had also guided that the net margins will be in the region of about 7.5% to 8%. So I just wanted to check whether we are well on track to achieve that margins also. That was my first question. And my second question is that what is the kind of dividend distribution policy, the company will follow if there is any policy which has been decided, so you can throw some light on that.
Yes, the margin guidance that I had given, we will be able to maintain that. So our profit after tax is going to be in that range, 7.5%, okay? So I don't think any further pressure on that. And what was your second question?
Dividend.
Dividend, right? So dividend, we are going to follow the DPE guidelines. And we are going to give the maximum which is -- which can be paid, which is 55% of net worth or 30% of PAT. So whichever is the higher figure, that much dividend we'll be able to pay last year, maybe we had paid quarterly, but this year, maybe we will be doing it certainly before -- I think in the third quarter, we should be able to give the interim dividend. And then finally, later the final dividend. But it will be -- we will have no problem in giving the dividend that we have been giving historically.
[Operator Instructions]
Yes. Can you hear me now?
Yes, yes, we can.
Yes. Sir, my second question is -- other question is ranking these investments in JVs. So if I see our quarterly profit from associate, it's hardly around -- it's hardly around INR 15 crores so even if I go by this run rate, it will be like INR 60 crore, INR 65 crore annual profit, whereas we have invested almost INR 2,000 crores plus. So how do you see the profitability improvement in the JVs?
See, our most the JVs are right now in construction phase. So we are now gradually finishing some of them, like we finished the Chhattisgarh East Railway, almost 90%. We recently completed the Mahanadi Coal Railway Limited. Then our earlier -- the earlier JV of highways, which was ISTPL, that is performing, that is giving good profits, and that has been able to give us good dividends last year also. And this year, we hope to get the same. So because there are -- many of the JVs are still in construction phase, and therefore, the profits or the dividends are going to come in future.
So ISTPL like the dividend for, half yearly dividend that we have already received is INR 26 crores. So -- but other coal companies, they will also start giving like this Mahanadi Coal Railway, this should -- although this will take maybe a year or 2, but the traffic on this is going to be more than expected right from day 1. We have just commissioned this line and the coal rigs are moving on that. So maybe we'll be able to achieve profits and then these JVs can then start giving dividend to us.
Okay. And any plan of exiting any JV in road or any other project?
See, existing JV, we are exploring the options because it's not easy to do that. Going -- we are exploring InvITs or we are also exploring other means. And we hope to take some kind of decision in the near future. But right now, we do not have any concrete plan to disinvest from these JVs or existing?
Okay. And one last question from my side. So you mentioned that we have win around INR 330 crore orders in H1, can you just mention that how many bids we must have participated in terms of value?
So both these projects are basically nomination projects. One is from Mahanadi Coal Limited. They have given us -- because we were working on -- in URISA near that line. So because we finished this project in this month only, in November only. So they have given another project to us, which is worth about INR 250 crores. And the second one is also a siding project, which the South Eastern Coalfields have given. So although the Railway Ministry has stopped giving orders to us on nomination, but we are still able to get orders on nomination from the Ministry of External Affairs for some strategic projects like we got for Myanmar. And a similar way we are able to get from some coal companies or some other companies. And these 2 are projects which are like that.
Okay. Just to understand on this nomination-based orders from railway. So 2 things I want to understand that, obviously, you -- as you have mentioned that many people are aggressively bidding for the projects and at very thin margins. And same way, and that is the reason I feel that in H1, we have not gained any orders. So how do you see in future because they're -- private sector are now allowed to participate on the railway tenders. So how do you see -- I mean, let's say, if we execute a INR 10,000 crore order book in any given year, can we get the fresh orders of INR 10,000 crores just to keep our order book at INR 40,000 crores, INR 45,000 crores.
Yes. I think -- see, the projects that Indian Railways is right now tendering are in the range of INR 600 crores to INR 800 crores. And if you see our last year's figures, the high-speed railway contract we got on competition only. So we got -- there were L&T also, they are in the same package, C7 package we got in competitive bidding, the highway projects Mumbai-Vadodara, Delhi-Mumbai Expressway, those also be secured on competitive bidding. So we don't see any problem in continuing to do that. See earlier because we also had projects on nomination. So we used to -- the larger share was for nomination projects. Now it's going to -- a larger share is going to be for the bid-out projects, but we are now selectively going to bid so that we are able to maintain our margin. So we'll go selectively for some projects, like we are building for some tunnel projects in Jammu and Kashmir, highway tunnel projects, which are large value projects. Normally, our margins and our competitiveness is there in large value projects. So we will still continue to eye them and continue to secure them wherever we can. As I said, right now, the market is very, very competitive. So we are still submitting bids, but we are not going very aggressively.
Okay. And can you just mention the figure that in H1, how much projects railway must have opened the bid?
I don't have that figure right now.
Aprox broad range?
No, railway would have definitely bid out maybe INR 5,000 crore worth of contracts, including the station projects. Station development also is a project which we looked at and we try it, but then it's -- the -- right now, the tenders that are coming up, the margins are very small. The time lines are very tight, and they are not greenfield projects. They are going to be a big problem. They will require huge manpower and there will be huge risks to the contractor. So we have decided to stay away from them. We have not participated in any of the station development projects. But in future, we will. And I hope that things will also change. Railways may also from their experience, they will also start bidding with the more realistic estimates and more realistic time lines.
We have the next question from the line of Shreyans Mehta from Equirus Capital.
Congratulations on a very strong set of numbers. Sir, a couple of questions from my side. One is, in terms of guidance, we are guiding firstly around INR 9,500 crores to INR 10,000-odd crores for this year. So how do you foresee the FY '24?
FY '23, '24, we should be able to be -- maybe we will not achieve this kind of an increase of 25% to 30%, but we would still be able to achieve this kind of revenue figures.
So sir, anywhere between 15% to 20% growth?
I cannot say right now because we have to see how the projects that we have taken. It has to come from the projects which are now in the initiation stages, like the high-speed railway project there are issues there. Like you have to purchase material from Japan, the companies are -- they are delaying supply. So it will depend on how those projects go. Our new projects, how do they go? And that's why I'm saying I cannot give us guidance right now. But I think we can -- we should be able to achieve at least the, I would say, the numbers that we have for this year.
Got it. Got it. Got it. Sure. Sir, second question is in terms of the solar power project, which we have taken. So does the INR 1,100-odd crores, which we need to invest has been considered in that?
Yes, it has been considered.
Sure, sure. And sir, I mean if I consider look at our cash levels and the investments which we need to do, so at current junction, the dividend amount, which is left is roughly around INR 500-odd crores. Is that the right way to look at?
No. The dividend amount required as maybe I don't think it's going to be INR 500 crores. Our PAT would be in that range, right? Our PAT would be in that range. So we will still have some cash left for us after paying the dividend.
Okay. No, no, I'm just trying to arrive at the dividend amount, which you can pay because I mean, we have roughly around INR 1,500 crore, INR 1,600 crore of cash which is available as of now.
No, it gets -- as I said, it gets -- it gets calculated from the net worth and the 30% of PAT or 5% of net worth. So in there, we -- I think we hope to arrive at a figure of close to INR 250 crores.
Got it. Got it. Got it. Sure, sir. And sir, lastly, on the operating margins, the core operating margins stand at 7.2%. So just wanted to understand what led to such an improvement? And is this sustainable for at least, say, next 1 to 2 years?
The 7.2%, where did you get that figure?
Excluding the other income.
Okay. Yes, yes. Yes. That is -- as I said, that is the kind of margin we are looking at. That is the kind of margin we are left with even in a cost-plus project. So even in -- so in competitive bid-out contracts also, we have seen because we are now working on that. We have prepared our estimates. We have gone ahead with appointing our vendors, everything. So now we think we are pretty sure that we'll be able to maintain those margins.
We have the next question from the line of Jinesh Kothari from HDFC Securities.
Am I audible?
Yes.
Congratulations for having a good quarter and excellent set of numbers. And I had a couple of questions regarding our international projects. So as far as I can see that international projects haven't contributed much to our revenue in the first half of the year. So how are we looking at the second half revenues from the international projects?
See, our projects in international -- on the international side are right now in Srilanka where there was an economic crisis. So we were not able to -- although we are ready. Our team is there, our plant and machinery, everything is there. but we were not able to take up because the economic condition did not permit even we could not get diesel there. So that's why the revenue did not come from there. From Myanmar also, there is a problem. The area that we are going to work is insurgency prone, and right now, the situation in the -- at least in the H1 quarter, the situation was not very conducive for us to go deep inside the territory and start working. We have tried to mobilize. And we hope -- I think within this month, we should be able to mobilize at least towards the end of -- both ends of the project, 1 on the Indian side of the border and other side. So some revenue we should be able to get from there. Bangladesh and Algeria are -- our projects are nearing completion. So not -- the revenue will come, but not too much. So basically, we're looking for more foreign projects and based on which our foreign income can go up. But Jinesh in H2, if we are able to manage the Sri Lanka and Myanmar projects well, we should be able to get a decent revenue from our foreign projects also.
Okay. Okay, sir. And my second question was regarding the debt number. So we have raised the project finance debt last year. So are we looking at any monetization of those projects and reducing the debt on consolidated numbers?
So yes, my Director Finance will answer this question.
Yes. So as far as debt is concerned, yes, we have raised it on the FPV balance sheet as well as the joint ventures. They are purely on project financing basis. There is no liability whatsoever on our stand-alone Ircon balance sheet. As regards monetization is concerned, we have started with the baby steps where we are trying to see what would be the best model for us and which all projects can we go ahead in terms of monetizing immediately and what over a long period of time. So we will be doing it over a period of time, but maybe not immediately. It will not be done in FY '23, but we started looking at that direction.
We have the next question from the line of Abhishek Maheshwari from SkyRidge Wealth Management.
Congratulations. First question...
Mr. Maheshwari, we're not able to hear you properly.
Am I audible now?
Yes.
Yes. So my first question is regarding the order book. So just in terms of scalability because we have around 3 years' worth of revenue predictability, right, with the kind order book. So do you have any internal targets? So maybe, say, around 1, 1.5 hour ago, RVNL analyst from different -- came on television, they said that there's an external target of INR 1 lakh core order book. So even -- do you even have a target like a INR 50,000 crore order book, something like that?
No. I think INR 1 lakh crore order book, I don't think -- are you talking about RVNL, even I don't think they will be able to achieve. They already have a large order book of nomination projects, which they still have this.
So maybe they are able to that we secured about INR 15,000 crore worth of projects last year, which was the highest ever secured in any year in our history. So the order book of INR 1 lakh crores is not what we are looking at. But yes, we will look at an order book increase of at least 10% to 20% every year. And -- but then we are not going to compromise on margins. That is what we have decided. And -- so we will look selectively at projects to see that wherever we are able to secure those minimum margins that we are looking at, then only we are going to go out and bid.
But sir, in terms of competition because competition is ...
Mr. Maheshwari, sorry to interrupt you, we are not able to hear you.
Okay. Am I audible now?
Yes. [Operator Instructions]
We have the next question from the line of Bajrang Bafna from Sunidhi Securities.
Congratulations for a great set of numbers. Sir, we were predominantly working on a nomination basis, now we have started outright bidding. So in terms of resource mobilization, in terms of workforce, in terms of different departments that we need to execute these critical projects like bullet train and the newer areas that you just talked about. So can you guide us how we are prepared for executing the projects on our own rather than the nomination business that we were doing some time back, and that will be really helpful, sir?
Yes, I'm happy you asked that question because, yes, that is why we are -- we have taken a pause, and we are in the process of doing that. So like one project of dedicated freight corridor, which we which we are doing, where we imported -- we have mobilized almost machinery worth INR 100 crores of our own. And we have our own manpower, trained them to do the track work. And so we are doing that now, and we will be able to do that in any project in future, and that will give us a competitive edge also.
The same thing we are going to do in the high-speed railway where the contract for track laying of INR 5,000 crores to INR 5,100 crores is with us. So we are importing plant and machinery from Japan. Wherever required wherever we are -- we have to develop local vendors. We are doing that. And we are going to -- we have mobilized a large number of engineers as per the requirement, who will be trained by the Japanese people. So only they can work on the project.
So in fact, we will be -- we will have that first-mover advantage in the sense that we will have manpower trained fire the Japanese who are allowed to work on such projects, and that is how we're going to take up the high-speed track project. Similar way, we are now thinking of earlier, our tunneling projects were where it was cost plus. We were only getting a fee for the project management. But then now we are going to do joint operations. We are trying to have strategic joint ventures. And we will try to do joint ventures maybe own some more plant and machinery and have technical manpower who will be actually doing the job. So once we have those people with us, those kind of resources with us, we will also be able to -- will become more competitive and maybe our margins also we can improve.
So we are working in that direction because the earlier model, when we were given the work on nomination, we were not allowed to do anything on our own because we had to work -- we had to get our fee on a market-determined price. So we had to tender out for everything that we did. We could not do anything on our own. Now we have changed our approach. And now we are gradually going ahead and trying to do a lot of activities on our own. So we will have those kind of resources ready within a year or 2 for taking up more such projects.
Got it. Got it. And just one statement that you made that we want to grow our order book 15%, 20% every year. But now you see that this year, perhaps we have not got much in the first half and second half though we are trying, but how we will be securing, let's say, INR 10,000 crores, INR 15,000 crores worth of orders every year, where everything is going to be more and more on competitive bidding. And we are not fully prepared right now in terms of those departments, whether it is a procurement department or it is execution department and all those things, which normally, any EPC companies having at this point of time. So if you could just guide on that, it will be really helpful.
See, I think from the first question itself and my answer to that, you would probably be able to guess that. See, we are in a transition phase. We were not geared to take up, although we were -- Ircon was always working on projects on competitive bidding like in Malaysia, our project was on bidding in other countries in Bangladesh. And there, we are working like any other EPC contractors. But that portfolio was much smaller. Most of our projects were a nomination where we could not develop those kind of resources, which we need when we have to do the work on our own. So we are in a transition phase. That's why I said my guidance for the order book would be lower initially. But as we are able to develop confidence and have more resources available with us, more trained people, more machinery. We would go for more projects. And I think then we can think of increasing our order book in a big way.
We have the next question from the line of Pranay Khandelwal from Alpha Invesco.
Congratulations on great set of numbers. I just wanted to know, like, do we have -- can you elaborate on the opportunity around the railway station redevelopment program the other station scheme?
Yes. See the railway station development. Of course, there have been a change in the approach of the railways like earlier, they were going on PPP for most of the station projects, they even tried to do bidding on the Swiss Challenge method and then they started doing the EPC tenders. And now again, it has been announced that some of the bigger projects will come up PPP. So it's going on. We are watching and we are also -- like we have studied some of the projects which are going to come up or which are in the pipeline. And we will take a call when those projects are bid and how they are bid, at what, as I said, right now, the time lines that they are expecting are too tight and their estimates or their budgets are much on the lower side. And they are all -- as I said, they are not greenfield project. Most of the stations are going to be brownfield projects, and we are doing like we are working on Shalimar and Santragachi Project in Kolkata. So we know the kind of problem that we face, where the trains are running, the passengers are moving. You -- working there is a totally different ballgame. So we will be entering this sector, but then at a suitable time when we think that all those things have been taken care of.
Okay. And other question would be that do we have any idea of how many tenders like similar tenders of railway development, station development will be -- the railway will be giving out for this year?
No. I -- as far as I know, maybe it would go from -- between INR 5,000 crores to INR 10,000 crores worth of projects they will be bidding out other than the PPP. PPP, I still have -- I am not sure because that policy was suspended for some time and all projects were coming only on EPC. But it has been announced again that some of the bigger stations, they are going to take up in PPP. So they are going to be large projects like the New Delhi Station, Bijwasan Station, Mumbai and all. So there, it's not -- we will have to go for strategic joint ventures. And so as I said, we will take a call when these tenders are at the stage at which we really know how they are getting bid out. What kind of margin, what kind of time line, what kind of numbers are going to be there to bid for that.
Sir, one last question. Considering the current scenario that we're moving from nominations to outright bidding, what -- can you guide us regarding the margins as such?
I think I've said earlier in response to earlier questions, we will be able to maintain the margins of 7.5%, 8% in future also for bid-out contracts. And these were the margins which we're getting in any case on cost-plus contracts also.
Okay. And can you just give us any insight regarding the competitiveness in the industry right now in this bidding side?
See, I can only tell you like we have recently bid out for a project of the EPC tender of railways, which is Chandigarh-Baddi and there were 16 bidders in that same project, okay? So you can imagine the kind of competition, which is happening. And because it is being done by the railway for the first time. So there are a lot of new comers, who would come and they would burn their hand and then probably later on, they will start bidding sensibly. So we don't want to join the bandwagon of the companies who work or who bid with half bit kind of knowledge and then end up in losses or end up in serious problems later on. So we -- as I said, we will be bidding sensibly and with keeping our margins intact, and we are sure. We have seen that in the past, we are able to still get projects. There are projects, which we are still able to get at our price at -- with our margins and taking care of most of the risks. So it's not that it is impossible to do that. But I think my -- the number that I gave you of 16 bidders in a INR 600 crores or INR 800 crores worth of contract, that would give you the kind of the competition which is happening. And EPC tenders of highways also, you would know. There are many bidders and the quotes are below the estimates. So those kind of things we are not going to do. But we still hope, we have got projects on bidding in the past, and we have secured margins on that, like Vadodara-Mumbai project, Expressway, we finished this year and we earned a good margin on that. That was on a competitive bidding from National Highway Authority of India.
So similar way, I think -- so we have this year -- last year also, we secured 4 more highway projects on HAM. And there also, we expect to earn a decent margin. So we will be continuing to do that, but we will not join the bandwagon of the smaller players coming and quoting at unreasonable prices or unrealistic prices.
Okay. And we just also wanted to understand this one thing that is RLDA, the only sole authority that is looking after the bidding process or like different zones also take part in this, like South Zone and Western Zone.
So RLDA, most of the station development programs have been given to the zonal railways. So there are only some larger projects, which are being done by RLDA. So -- but then the zonal railways also have a fair number of EPC contracts, which they are tendering out.
[Operator Instructions]
The next question is from the line of Parimal Mithani, an individual investor.
Can you hear me?
Yes.
I just, kind of question in terms of your margins, which has improved quarter-on-quarter. Could you be able to maintain this margin profile going ahead from here?
Yes, I'm pretty sure we will be able to maintain our margins going ahead. I don't see any major issue on that.
Even in terms of commodity costs and all the dividend, demand and base margin?
Yes. That's why I said we are not going into high-risk contracts, and that is the reason we have not secured many projects in the first half of this year because we are not going into very high-risk contracts or contracts where there are -- there is competition, which is unreasonable. But then we have seen, we get opportunities, enough opportunities to get projects, typically larger projects where the competition is with the big companies who also have similar kind of overheads as we do. And there, we are able to compete with them. So we will continue to explore such contracts and so that our margins don't get affected.
And sir, this will be across railway, highways and all the other projects or it is just railways project?
Yes, yes, this is going to be across all the projects, the highways, railways and the foreign projects also.
Okay. So to say, we'll be protecting margin going on from here, right sir?
Yes, yes, yes.
And sir, secondly, in terms of dividends. Last year, you always given a dividend period of 40%, close to. Are you going to reinstate that 30% or so how -- because last year, I think you gave a 17% payout to the shareholders.
See the dividend as we pay is the higher of 30% of PAT or 5% of net worth. So normally, 30% of PAT is lower. So the 5% of net worth is what governs the dividend payout, which last year was about 40%, right? So we are going to, I think, maintain the same. These are the guidelines of the Department of Public Enterprises. So we will able to meet that, if not exceed that.
Okay. And sir, recently, there was an article in one of the business joint in terms of dedicated freight corridor, which have a consortium with Tata Projects and with Mitsui. And it has been -- the project has been what you call taken away from Tata Project which are consortium there. Can you update on the status, what is -- because they are -- going to be affected by any liabilities on that?
See we have 3 packages, which we had won from dedicated freight corridor, CTP 11, 12 and 13. So internally, we decided to do some of these packages individually with the others providing some minimum support. So like CTP 12, we are in advanced stage, and we would be completing it maybe early next year. And CTP 13 also, Tata Projects, of course, the Mitsui is the lead partner, so the Japanese company is a lead partners. That also is going reasonably well. There were some disputes in the third package, which the CTP 11, which is mainly falling in the urban area of Mumbai because this is a package which is connecting JNPT to Vaitarana. And here, there will -- there are a lot of land issues. There are a lot of encumbrance issues and that were not -- even now, even on date after award of the contract, I think more than 3, 4 years have passed, DFC has not been able to give the entire land encumbrance-free, many, many issues. So there are disputes in that. And the consortium has received some notices, but then we are -- and I think that matter is sub judice. It is not finally decided that they're going to terminate or do anything on that part. Right now it is sub judice. I can only say that.
Mr. Mithani does that answer your question? Mr. Mithani ? As the current participant is not answering, we move on to the next participant. And the question is from the line of Ajit Darda from Nirzar Securities.
I have 2, 3 questions, sir. The first one is, can we expect more JVs and partnership with local regional companies going ahead and be more efficient for competitive bidding, sir?
Yes, of course. We have a very good experience of working all even big and small companies within the country, and even in foreign countries. So -- and we have successfully done projects in Bangladesh, in Algeria, and many other places. So right now for bigger-sized projects, and with the kind of risk that each project brings, it is always good to go with a good partner and that increases the efficiency, that takes care of the risks involved because you're not single one who upon was taking the risk. So we will definitely look at more projects in joint ventures or strategic partnerships with other companies.
Both local and international projects, sir?
Yes, yes. Because see, like in the dedicated freight corridor, the requirement was that the lead partner has to be a Japanese company. So we joined lined with Mitsui & Company, who is our lead partner. In the high-speed railway project, there is no such requirement, but there are a lot of things which have to be done by -- only by Japanese companies or companies having experience in high-speed railway. So we have to go ahead and join with them. Of course. Yes. So that way, project to project, we see where we can go out and bid alone, or where we need to get joint venture partner before bidding or we need to get a partner after the bidding that way. So we have to see what is the most efficient way of doing it. And that's what we hope to do in the future.
Understood. Sir, one more question on -- like how much loan or advance have they given to subsidiaries or JVs? And any sort of concern regarding recoverability of that amount or any provisioning required?
So what we have given is essentially a loan in the form of quasi equity, so equity or quasi equity is well within the overall project financing norms of 70:30, 75:25 or 80:20. The only loan which we have given extra is temporary to certain SPVs. That is a marginal number of about INR 130 crores. And that is an interest-bearing loan which should come back over a period of time. So there is no provisioning requirements.
Okay, sir. And last one. Sir, any land assets that we are planning to monetize?
Right now, no. We had been given 1 land parcel in Mumbai, which we were expected to monetize. But then -- right now most of such work is being done by RLDA and that was for a period of 3 years, and that involved signing of MOU or agreement between the railways and the state government and then the MMRDA. So that has not fructified and therefore, we -- that was the only big land parcel that was passed on to us. It was -- and the money that we paid to the railways was had come as a pass-through entry from the Indian Railway Finance Corporation. And that has been repaid. And most likely, this will go back to the railways to be developed by RLDA. So other than that, we have some assets on which we have constructed building, like in Noida and Gurgaon. So those assets, we have leased out long term, and we will be earning revenue out of that. Right now, we are -- we have no plans to dispose that.
Okay. Okay. And what is -- any amount for the lease rent, sir?
Like one, I don't have all of them. But like I can tell you, there is 1 mall in Noida, which we have given with a INR 25 crore upfront payment and INR 8 crores per year lease rent. Similarly, there's another building, which we have given to GST. And that also the lease rent would be in this range. So there are other buildings as well. Some are -- we are still trying to lease out or rent out to earn regular revenue from there. But there are 2 buildings at least big one, which we have rented out already, and these are long term and they want to give us good revenue.
[Operator Instructions]
We have the next question from the line of Chiranjeev Desai from Hindsight International LLP.
My question is with regarding equity market valuation of the company, which is a languishing at single-digit multiples. And the share price is mostly trading at par or below the book value. So is there any plan to correct it through means such as buybacks or inviting sovereign wealth fund or other high-profile investments?
So I mean our share price was in the range of INR 39 to INR 40 for quite long time. But if you see it has picked up over the last few days. And today, it is in the range of INR 53 per share. In terms of performance, as you all are aware, we are doing our level best. And I think we are exceeding the expectations. In terms of the actual share price movement, as we all know, in case of public sector companies, many other factors play a role in terms of actually increasing or decreasing the share per se, 73% shares are still held with Government of India. And primarily, the decision are taken by them in terms of any significant movements, in terms of investments, disinvestments or anything that they have in mind for the shares. But nevertheless, as management of the company, we are trying to outperform as much as we can and get the value addition to the share at the market capitalization of the company.
Right now, we are trading above our issue price. We had been trading at below the issue price for some time. Right now, we are more than that. And if the market remains bullish, maybe we'll see good price in the next few weeks or months.
Thank you. As that was the last question for today, with that, we conclude today's conference call. Thank you for joining the conference call of Ircon International Limited. You may now disconnect your lines. Thank you.
Thank you. Thank you, Mamta.