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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good afternoon, ladies and gentlemen. I am Levan, the moderator for this conference. Welcome to the conference call of Ircon International Limited, arranged by Concept Investor Relations to discuss its Q3 Nine Months FY '20 results. We have with us today Shri M.K. Singh, Director of Finance. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Shri M.K. Singh for his opening remarks. Thank you, and over to you, sir.
Very good afternoon to everybody, all the participants of the conference call. We are very happy to tell you that our CMD Shri S.K. Chaudhary has been able to spare time and be here with us. So I will hand over for the opening remarks to Shri Chaudhary. And thereafter, I will pitch in wherever required.
Yes, good afternoon. And I'm S.K. Chaudhary, Chairman and Managing Director; and along with me is Mr. M.K. Singh, Director of Finance of the company. I welcome you all to the conference call to discuss our financial performance for quarter ended December 2019. First, I would like to give you a short brief about our company, then I talk about the financial performance of the company, and then we can take up the questions.So Ircon, as you all know, is a leading turnkey construction company in public sector, known for its quality, commitment and consistency in terms of performance. Ircon is a specialized construction organization and covering entire spectrum of infrastructure sectors, like railways, highways, substations and tunnels, bridges, et cetera. The company operates not only in a highly competitive environment, but also in difficult terrain and regions in India and abroad, and is an active participant in prestigious nation-building projects. So far, completed more than 300 infrastructure projects in India and more than 180 projects [ outsourced ] in 24 countries.The company has strong order book of INR 32,000 crores approximately as of March -- as of December 31, 2019. And out of this, the railway portion is INR 30,000 crores and highway portion is around INR 1,900 crores roughly. Then there are the other things, which are 2 minor, like electrical works and buildings. 84% of -- in this -- what we find is the orders, which are from railway-related works. The key strength of the company is that is to diversify into various infrastructure sectors as an established player in the field of railways and highway construction.The broad geographic coverage has helped the company to diversify into all form of concessional construction like [ BBA 40 ], EPC, HAM and annuity through either single or in joint ventures or through SPVs. I am delighted to share that after a successful financial year 2019, the company has continued its growth journey in the third quarter of financial year '20. All major segments have shown continuous growth in revenue profitability. And as a result, we have been able to maintain healthy, sustainable margins.The financial performance is as under: our income from operations stood at INR 1,132 crores as compared to INR 1,215 crores in Q3 FY '19. EBITDA for the quarter increased by 2.4% to INR 117 crores from INR 114 crores in corresponding quarter last year. EBITDA margin stood at 10.34% in quarter 3 FY '20 as against 9.4% in '19. Profit before tax is at INR 158 crores in quarter '20 as compared to INR 147 crores in same quarter, with an increase of 7.3%. PAT increased considerably by 34.7% to INR 138 crores as compared to INR 102 crores as compared to the same quarter last year. PAT margin stood at 12.23% of Q3 FY '20 as compared to 8.45% in Q3 FY '19.The EPS for the quarter stood at INR 14.72 compared to INR 10.93 as compared to the same quarter last year.For the 9 months in this financial year, the revenue from operations on a stand-alone basis is INR 3,414 crores as compared to INR 2,880 crores, witnessing a growth of 18.5% as compared to corresponding period last year. The company's EBITDA for 9 months stand at INR 347.01 crores as against INR 220.58 crores in financial year '19 -- 9 months, a growth of 57.3%. EBITDA margin for this 9 months is 10.16% as compared to 9 months of last year's 7.65%. PAT, in this 9 months is at INR 367 crores as compared to INR 349 crores in last financial year in 9 months. PAT margin stood at 10.76%. The earnings per share is around INR 39.06.This brings me to the end of my comments. Now I would like to leave the floor open for questions. We'll try our best to answer all of them. Thank you.
[Operator Instructions] The first question is from the line of Chintan Sheth from Sameeksha Capital.
Congrats for the good set of numbers. Sir, one question on the slower execution. You explained a heavy snowfall in J&K project and heavy rains in Western region, which impacted our revenue booking. Can you quantify the amount of revenue we couldn't execute this quarter? And how have we shaped up executing the balance in 4Q in the coming quarters?
It has affected around INR 200 crores, INR 250 crores of turnover in this quarter because of the rains and snowfall. But we'll make it up, and our numbers will be somewhere around 20% of last year's operating turnover. And we'll catch up and we'll touch somewhere around INR 5,300 crores to INR 5,400 crores as a total turnover of this year against the INR 4,400 crores which we did last year. So there is going to be around 1,000 -- INR 900 crores to INR 1,000 crores increase in the turnover. We'll catch up in this quarter. We are already catching up.
Right, right, right. And sir, inflows so far, railways, because of the policy nomination, projects-related policy was being drafted very recently. How do you see going forward in terms of inflows we are targeting this year and next? That is one. And secondly, on the toll assets, or 2 toll operating assets we have, how has been the toll collection post RFID update, post FASTag policy came in -- not policy, but FASTag being installed in most of the...
First question, I will answer. First question is the work on nomination basis on railways. In the last 1 year, railway was formulating a policy on giving the works on competitive basis on PMC charges. The policy decision has been taken. The documents have been prepared by them. Now they will be inviting these best provider from the PSUs, who are doing the railway construction works. And in this scenario, we'll be much beneficial as Ircon is working just like any construction organization in any department, which works. We are not a totally government department; though we'll be very happy that if this -- we were, in fact, one of the people who are trying to get it on PMC charges on a competitive basis. And the margins, we feel we'll be able to retain the margins. And the business also will be more competitive to others. It will be -- it also depends because railways said that it also depends on many factors on execution capability, technical capability and other things in which we are best among all the PSUs. Hope you don't find any difficulty in this.The second question is for your toll collection. Toll collection is quite nice. And the first one, Soma Toll, Ircon Soma Tollway Dhule to Pimpalgaon which we are doing. The collection is quite handsome, is around INR 200 crores will be, I think, in this year.
How much? INR 100 crores?
INR 200 crores. And in Shivpuri Guna, another toll, which we are operating, we'll be touching somewhere around between INR 95 crores to INR 97 crores in between that toll collection. That is also quite good.
And sir, follow-up on the nomination part. How much of the bidding railways have asked for currently? Total...
They are now asking. There was an electrical event for this railway electrification, doubling and tripling are not been given to any PSU in the last 1 year. The last financial year, it was totally on hold. So now they -- all the projects, which have already been sanctioned by the government of India. Those projects will be definitely -- they're already in process of inviting bids. So most probably by March, they will invite and they'll finalize by April.
Okay. And sir, on the nomination part, any change in the advances which we used to get from the railways for the project?
So that is still -- that they will give.
They will give. It won't change...
That -- they have given that it will be given in advance. There is no issue at all.
It won't affect our working capital requirement?
No, no, not at all.
The next question is from the line of David Pitan from HSBC.
Can the management give an update on where they are with the Malaysian order that was spoken about in the last couple of quarters? And also on the Sri Lankan order?
You see, in Sri Lanka, recently, the government has changed. The Prime Minister -- President has been elected. The Prime Minister has been appointed, and they're going through some elections in April. So after this, the call will be taken by them on priority of -- their priority. The earlier priority of the government is -- was different, and now the new set of politicians have come. Their priority is different. So they will come out with the tenders and we'll be definitely bidding for them. We are already in touch. The people have visited in Sri Lanka, and the officers from the Sri Lankan government have visited our office. So that is intact, but I think it will only be somewhere in the month of May, not before that.As far as Malaysia is concerned, Malaysia, again, there is a slight issue. You might have read the palm oil issue and other issue. So that issue is keeping the things on hold. Otherwise, we are on an advanced stage of talks. On 20th of this month, the people from Malaysia are visiting our office for taking the things further. Hope we will be able to close the deal.
Okay. And what's the ticket item on Malaysia? How big is the order?
The order is quite big.
$1 billion.
I'd say somewhere around $1 billion. So that's what we are talking. And they were, in fact, quite keen, but something happens which are beyond our hand. So something happened, some statements and also that created a problem. But anyway, we'll be trying to close it. In the meantime, we have also visited Ghana. And Ghana government is also keen for because some line of credit was available there. And in -- recently, our team was also in Jordan, where we will be able to close some deal shortly.
Okay. And can you give me on how many orders have you awarded in the last quarter?
The orders, as you know, that our figure is almost in the same range, is around INR 32,000 crores. The orders we have, how we convert our order book into executable order book, is when because these projects, so when we award them, the project to the contractors, then only we take them to the order book. We still have orders in hand, which are to be -- come to the executable stage.Like, for example, we have a project of INR 5,500 crores of BRPL. This is a project, which is a joint venture project in state of Chhattisgarh. So this project, some issues with the Chhattisgarh government, some issues of environment. Until then, they are not cleared. Order is in my hand, but it is not in executable order book. Same thing is in portion of Sikkim and Rangpo. We have awarded orders of -- out of INR 7,000 crores, orders of around INR 4,000 crores have been awarded. So INR 3,000 crores is pending there. So if you put together all these things, so we have an order of approximately...
INR 52,000 crores.
INR 52,000 crores. Out of that, INR 32,000 crores only are under execution.
Okay. Understood. And I've got a couple more questions on the Bandra PMC. So can you give me -- can you just shed some light on what's happening on that front?
Yes. Bandra, the issue was with the sharing of some revenues with the MMRDA. So with the railway authorities, we're talking to them on the previous sum agreements signed with the MMRDA. So those issues have been resolved. And now we have asked a time from commission of MMRDA where we are ready to share the sum of the revenue with them from the project development. And hopefully, it will be cleared. The consultant has been appointed for doing the traffic study, approaching of plot and the product mix, what will be made there, commercial or residential. So this thing is already finalized. Hopefully, that once this agreement is signed, then we'll invite the bids, fresh bids. And then people will be much interested for taking it. Well, this is the only age of sharing of revenues. That's all.
And that would be still be based on a PMC fee of 10% of the overall construction cost?
That is the -- now the options are 2. They say you take a PMC fees of...
8%.
8% plus 1% of selling this thing or you become a partner with them for joint development. So we will decide at what will be done. Most probably, we are happy in PMC not as a joint developer. So we'll find some developer and we'll do their PMC for this project. This is -- so far, this is the opinion in the Board of Directors, and we'll see when that actual issue comes in hand.
And then are you still maintaining a 14% to 15% EBITDA margin for next year?
Yes, definitely. Definitely, our numbers are increasing. Our growth will be what is around 19% to 20% this financial year, and definitely the same in the next financial results, maybe slightly more.
Okay. Where do you see yourself, I mean, given the infrastructure push from central government, where do you see in terms of your top line growth. Is it above...
See, there's about INR 102 lakhs crores of investment going to take place in infrastructure. Out of that, 32% -- INR 32 lakhs crores approximately. So INR 19 lakhs crores in roads, and INR 13 lakhs crores in railways is going to take place in the sector in which we operate. So INR 32 lakhs crores in 5 years. And we feel that we will be definitely one of the major players in executing these orders.
The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.
Congratulations for a good set of results. Sir, my question is, in the annual report, this is when you will be seeing -- there are 2 sets of operations, which we have given, there are 1 set of projects that are that we call is joint projects under joint operations. And then we have joint ventures also. So what are these projects that are under joint operation? Can you just explain?
Actually, as of now, we do not have any project under joint operation. I'm M.K. Singh. CMD had to leave for some engagements. So if -- everybody, please accept my good afternoon. And I will be talking to you from this moment onward.And so coming back to the difference between the joint venture and joint operations, joint venture is obvious. But so far, as joint operation is concerned, as on date, we do not have any project. Earlier we had, which was called unincorporated JV. And that project we were doing in Bangladesh, we were making a bridge in consortium with Afcons. So that project, we call a joint operation project without actually legalizing the structure into a JV.
Okay. So as of today, we don't have anything on the joint operation?
We do not have any consortium arrangement. But in National High Speed Rail Corporation, we have entered into a consortium agreement, again, joint operation, so to say. Then we will be bidding as a part of the joint operation team of the companies.
Okay. And sir, CMD sir was mentioning about the tollway projects, and he mentioned about Soma and Shivpuri Guna Tollway. If you can elaborate on others also because there is one Ircon PB Tollway. How much tolls we are going to collect from that?
Yes. I mean correctly pointed out by Mr. Chaudhary, the CMD, these 2 projects are now quite mature, Shivpuri Guna as well as PB Tollway. This Bikaner-Phalodi, we have started. We got the provisional commercial operational date from February last year. There are still a lot of patches, which are under construction. For example, 2 ROVs are still under construction, fully commissioned in that sense. So the tolling is yet to pick up to the extent we had hoped for. But as seeing the trend since last 1 year, it is giving us a toll of around INR 44 crores per year.
Okay. And sir, as of today, how much equity and loan that we have invested in our joint ventures?
So far as equity is concerned, up to FY '20, Q3, we have invested INR 1,000 crores of equity and loan of INR 1,437. And that makes a total of INR 2,400 crores. But let me just also add that we will be very soon replacing all these loans with third-party loans from financial institutions within this quarter.
So basically, these JVs will take the loan from the third-party and repay our loan to us?
Exactly. Even the SPVs, which are wholly owned by us, they also will be replacing the loan, which we have given internally from Ircon to them. That will be replacing by bank loans.
And the financial ties for these bank loans are already being done?
Yes. At least in 2 projects, we have already done it.
Okay. And one more thing, sir. I just wanted to ask, in our project cost, these commodity prices, steel, cement and everything is -- should be a major portion. And the impact on commodity prices also gives an impression that turnover has decreased. So from next time, in the presentation, if you can give us some volume data like kilometers of doubling done or kilometers of electrification done, it will help us in comparing the results, because the fluctuation in commodity prices also affects our top line.
So just for the sake of clarification, I may add to what Mr. Chaudhary has told. Actually, if you see the 9-month period for the current year and 9-month period of the last year, there is an increase of 17.22% in the turnover also. Only for 1 quarter, there is a reduction of INR 41 crores out of INR 1,251 crores. So it's a very, very temporary phenomenon. And as explained, because unfortunately, the winter extended a little beyond our expectations in the third quarter. And that has had its impact on the turnover. Otherwise, we do not see any letdown in the turnover at any point of time in future.
And sir, we are building -- we had built 1 mall and 1 commercial space in Delhi and Gurgaon. So if you can give us an update on that. What kind of rental income do we expect from that?
Well, so far as Gurgaon structure is concerned, that is a multi-story building, which is costing around INR 80 crores to us. And this will be complete in all respects by 31st March, 2020. After that, we have got many feelers who want to either purchase it out right or take it on long-term rent or long-term lease. So Gurgaon is a very well-owned asset by Ircon. That is how we look at that.So far as Noida mall is concerned, we have floated a tender for giving it on rent for 21 years' period. And we have got very encouraging response to the tenders of -- for the Noida mall also. We have got all big names who are operating in Delhi area or NCR area. They have all shown interest. And hopefully, within the months' time, we should be able to finalize the tender. As revenue, rental revenue will be roughly around 3.5% in case of Noida.
3.5% of...
Of the construction costs, including land, that is INR 277 crores.
Okay, 3.5% of INR 277 crores.
And that's the rental per month.
And my last question, sir. This bidding policy, which government has come up with, and now all the 4 PSUs will bid for the projects. Now CMD sir was saying that this should be finalized by March. So what could be the bid size that we are looking at in this bid? Because I -- my understanding is INR 25,000, INR 26,000 crores is the amount that needs to be spent in 1 year. So the project size could be much larger.
That's true. In fact, let me just start by saying that in absence of this biddings policy, which they have just announced, Ircon was one of the greatest loser in terms of getting work from Ministry of Railways. So now having seen the light of the day, the circular is definitely going to increase and brighten our chances of getting projects from them very, very positively. And we expect around INR 7,000 crores to INR 8,000 crores of project of railways to be won by Ircon in next 3, 4 months.
Okay. And so total amount of bid size...
Total, I will just give you an idea. Total CapEx budget for Indian railways is INR 1.6 lakh crores. Out of that, roughly INR 80,000 crores would be on the infrastructure. And rest of the money would be from procurement, coaches, local, et cetera, where we don't have any interest. Out of INR 80,000 crores, roughly 60% to 70% of the work, so INR 55,000 crores of work, they will be doing in-house by their construction organization, right? Of that, INR 25,000 crores, they would bid out. And since we are [Audio Gap] so we hope to get at least INR 6,000 to INR 7,000 crores, INR 8,000 crores of work after the bidding.
We'll move on with the next question that is from the line of Aman Thadnani (sic) [ Aman Thadani ] from Consortium Securities.
Sir, my first question is related to the subsidiary that is IRSDC, which is now jointly managed by us in RLDA and RITES. So sir, I want to understand that what is the business model over here. And what are the sources of revenue for IRSDC?
Okay. See, so far as IRSDC is concerned, it has been interested with the job of refurbishing and remodernizing the stations and, at least, the important ones. To begin with, they have concentrated on 50 stations. The model is the PPP model, where they will be giving the surplus land in the station area for commercial development. And in lieu of that, they want the developer to make the mandatory passenger area and railway user's area, free of cost. That is the model. And also, they will be permitted to charge user development fee for the better facilities, which they will create. That is what has been announced by Chairman of Railway Board yesterday.
Okay. So sir the -- we read an article wherein approximately INR 50,000 crores will be spent on railway station development in the year FY '21. So what kind of revenue can we expect from IRSDC?
See, that is a wrong reading of the figures. INR 50,000 crores is the total amount which they have envisaged in redevelopment of stations in Phase 1. And that includes 400 stations at the most, but 50 stations in first phase, they will develop. So INR 50,000 crores is essentially spread over 4, 5 years, not for FY '21. That is the first clarification. In the current year, that is for FY '21, since I am a member of the Board in IRSDC, so let me tell you that roughly their expenditure would be to the tune of INR 7,000 crores, INR 8,000 crores, not more than that.
And what sorts of -- what sort of revenue can we expect if we would be spending around INR 7,000 crores INR 8,000 crores?
So there[Audio Gap]for the lease premium given by the developer. Now if a developer comes, he gets the commercial land. In lieu of that, he has to develop the mandatory area of the station and also pay premium to IRSDC. Now those premiums, which will we accruing to IRSDC, 10% of that IRSDC can retain, and the rest has to be passed on to Ministry of Railways. That is the model.
Okay. And sir, my second question is, since limited competition has been introduced, and we have a subsidiary by the name Ircon Infrastructure, which is into consultancy, same as RITES. So what sort of order inflow can we expect in that subsidiary?
Actually, just to remind all the [Audio Gap] IrconISL is normally into non-railway areas, mostly in the consultancy. Because RITES [Audio Gap] consultancy in the railway areas. Having said that, there is no hard and fast rule that IrconISL will not go into consultancy. But most of the work, which we get from railways, we get it on a turn-key basis, which includes consultancy. And we don't see a larger role of IrconISL in railway projects.
Okay. Got it, sir. And sir, lastly, sir, one of the international projects, that is the Abu Dhabi project, wherein the last quarter, you said that, that would be finalized or we will be receiving an answer from them. So what is the status on that?
The answer we have received, and we have not been successful.
The next question is from the line of Santosh Hiredesai from SBICAP Securities.
Sir, you had talked about monetizing your investments in Ircon Soma and other road projects. I just wanted to get a status on the scene. Where are on that?
Yes. In fact without disclosing the name of the entity, we have entered into an MOU and a firm agreement with the financial investor who wants to buy our equity in most of the road SPVs, which we have built, for which we have got an approval of our Board of Directors to start discussions with them and divest our equity or our investment into most of this, subject to NHAI rule permitting us to do that. So in case of Shivpuri Guna and these 2 HAM projects which we are doing, we intend divesting 49% of our equity very soon, and very soon means maybe 6 months. And so far as [Audio Gap] is concerned, both the partners have consented in principle to divest the entire equity to the same financial partner who has been selected.
Any indicative sort of numbers that we -- I mean, have in mind in terms of how much we'll be able to record...
Actually, this is too early to put a number on the divestment money which we are likely to get. Too early, actually, there has been not even initial preliminary valuation of the whole thing.
And sir, secondly, if you can give some color on the status of this coal connectivity projects? Where are we on those projects?
In coal connectivity project, as all of you are aware, that we have 5 JVs which we have. Now in the first JV that is CERL, Chhattisgarh East Railway Limited, 30-kilometer extra line will be commissioned by 31st of March this year, 44 kilometers was commissioned last year. So we'll be completing roughly 75 to 80 kilometers by end of this financial year. And in CEWRL, the financial closure has happened. The agreements are there to be signed with [Audio Gap] banks. In JCRL financial closure has happened. In MCRL, the -- there is no requirement of financial closures. In fact, the respective partners are willing to put in their money and telling MCRL to do the work as a deposit work. BRPL, we are going slow, for the simple reason that there is 1 unfortunate case where it has been made out that extra money has been paid for the acquisition of land by the District Collector. So the state government is grappling with that. So in the BRPL, we are still stuck, not moved much. But in this, but in the rest 4 JVS, we are right up there. And hopefully, we should be able to progress further in coming quarters.
Sure. So CERL, I understand is partly operational, right? And you expect it to be...
Yes, yes, that's true.
Here in -- if you can help us with the metrics in terms of how profitable or whatever metrics, if you can just share in terms of CERL?
See, so far as seen from Ircon perspective, we've got around 12% of the project cost by way of our fee. And our investment into that is 5.2% of equity. So that is from the equity perspective. Now so far as profitability of the SPV, because of the operation phase is concerned, it is not -- it is too early to do that because this 30-kilometer, unless it is completed, there is no continuity in the connectivity to the level we desire. So after this only, we should be able to do a financial analysis and see how it has been performing.
Understood. So how much equity, if you can just help us. I mean, in the past, I guess, you've given us, I think from INR 85 crores to INR 100 crores is what I think is the total equity in this project, right?
In the CERL, there's equity of INR 122.58 crore.
The next question is from the line of Ankit (sic) [ Ankita ] Shah from Elara Capital.
Sir, wanted to check the number of equity invested of INR 1,000 crores up to FY '20, Q3 that you mentioned. Is only roads or it includes railways projects?
It includes coal connectivity as well as road projects and others also like IrconISL, IRSDC.
Okay, everything. But if you could help me with only roads, what are the numbers?
Only roads is INR 552.92 crores.
INR 592 crores?
INR 552.92 crore.
INR 552.92 crores. And there is some loans also given too?
We have given loans internally. That is consisting of INR 1,348 crore. And this is what I was talking, we will be replacing this loan with the third-party financial institution loan.
Got it. And sir, on the margin front, I mean, we've done around 10% in the first 9 months and...
No, EBITDA at PBT level is 14.17%, if I remember well.
I'm talking about EBITDA level, sir.
Yes, EBITDA at PBT level is 14.15% -- at 14.15% for 9 months.
Sir, you are including other income.
Sorry. Core EBITDA, you're talking? Okay.
Yes, sir.
Yes, that is 10.16%.
Yes sir. So this -- so when you're guiding for a 14% to 15% EBITDA margin number. Is that in relation to this 10.2% number that you have...
No, that is in relation to including other income.
Okay. So on the core EBITDA level, how do you think this number...
Last year, it was 7 [ Audio Gap ] It is 10.16% for the 9-month period.
Correct. So how is it likely to shape up for '21?
I think it should be in double digit, at least.
Okay, okay, around 11%, 12%?
First, we have already bottomed out in terms of core EBITDA number, percentage. Because there's nothing less we can get, and with foreign projects, maybe -- I mean, hopefully, we should be able to get this number much higher.
Okay, So what do you think -- I mean, only if we get new more of foreign projects? Will that help improve the EBITDA?
So, because in the domestic market, you have a very, very stiff competition. In foreign projects, things are a little more profitable. And actually, when you have an element of negotiated rates. If you can land up with some negotiated rate, then the EBITDA really brightens up.
So what would be your pipeline of international projects that would help this uptick going forward?
As a...
Because you said all this has gone out?
CMD? We have a signaling tender, in which we are preparing our papers for sending to Sri Lanka. That is a new project, which we are looking at, roughly around $50 million. Then we have signed an MOU and also some projecting in African countries. Zambia, Ghana. And also in Jordan, we have recently gone. So out of these 3 projects, we expect, at least 2 of them to come up.
And that would be of what size?
So far as this rail line, Jordan, how much? Jordan would be roughly...
INR 5,000 crores.
INR 5,000 crores. So roughly -- Jordan would be $800 million. Then in Zambia and Ghana, the projects are roughly of $1.5 billion taken together.
Dollars?
Yes, I'm talking about dollars.
Zambia and Ghana, $1.5 billion each?
Yes -- no, no, taken together.
Okay, together. And by when are all these projects of at Sri Lanka and African projects likely to get finalized, in your estimate?
Sri Lanka would be through -- it's a small project of $50 million. Could be through in the next 3 months. So far as others are concerned, 6 months down the line.
Six months okay, okay. And now if you see, I mean, in the first 9 months, our international revenues have actually declined almost around 20%. So it's more of domestic projects only right now, which are firing?
Sustaining, yes.
Yes, 25% growth on your domestic revenues.
That's right.
I mean, so going forward, these are likely to contribute more to...
Actually, there should have been a little more revenue, but for the payment terms, which we have in 1 or 2 foreign projects, one project, which we are doing in Bangladesh, there, though we have done the expenses, we have done the work, but we haven't been able to recognize this as a revenue because of certain formalities yet to be completed. So it won't be as bad as it is in this quarter.
Got it, sir. And also sir, I heard the management saying that they're looking at more BOT and hybrid annuity projects going forward from NHAI. So what is the kind of pipeline that you're looking at? And how much projects do you think you can gather in the next 3 months or so?
I think insofar as highways are concerned, we are more interested. I mean, our primary interest lies in HAM projects, and the secondary in BOT. EPC, we can't, we risk [Audio Gap]that. So if I had a HAM project, [Audio Gap] a series of what is 10 projects where we'll be participating in next 10 days. And I hope -- we hope to get at least INR 3,000 crores to INR 3,500 crore projects, at least 2 projects, out of 10, 12, where we are participating. And that should be our exposure in the HAM in next 3 months.
The next question is from the line of [ Pad Agarwal ] From Purnartha Financial Advisers (sic) [Purnartha Investment Advisers].
Just a small -- clarification question. So Mr. Chaudhary, am I audible?
Yes, you are.
So Mr. Chaudhary said that the top line for the full year will be around INR 5,300 crores or INR 5,400 crores so that could turn out to be the revenue growth of around 10%, 12%. But he said it would be for the full year, 18% to 20%. Just I'm missing something or?
Yes. Because last year, revenue was INR 4,400 crore.
INR 4,800 crores, if I am not wrong.
I mean see, you -- stand-alone, I'm talking.
Okay, stand-alone.
On competitive, it will be more than INR 5,300 crores.
So the INR 5,300 crores top line that...
I'm talking of only the turnover, not the other, not the total income. I'm excluding the -- total income will be INR 5,500 crores INR 5,600 crores even this year.
No, so that INR 5,300 crore guidance that has been given for stand-alone?
Yes, stand-alone and only the turnover.
Okay, okay. And secondly, on the loan that are subsidiary and JV loan that will be converted into the bank loan. So what will be the estimated amount of that, INR 1,000 crore or something?
Yes, INR 900 crore by end of this financial year. [Audio Gap] as my financial investment, I will come out of that.
Okay. So any particular -- what would we be doing with this cash that we have on the balance sheet the INR 900 crores, will you be bidding for HAM projects or something like that?
That's a happy headache to have.
The next question is from the line of Hardik Jain from ISJ Securities.
Sir, two questions. One, you mentioned about the Ircon Shivpuri Guna Tollway and PB tollway. You mentioned about INR 9,500 crore of toll. Last year, Shivpuri Guna did a loss of INR 30 crore. If you can just give us a 9-month figure? How much is the loss or is it turnaround?
Just a minute. Shivpuri Guna. Yes, this is operating turnover. The operating turnover for 9 months for Shivpuri Guna last year was INR 23.58 crores minus. Sorry, loss, this is loss.
Turnover.
Turnover Was INR 73.15 crores and loss was INR 23.58 crores.
9 months.
Shivpuri Gunah.
[Foreign Language] 9 month.
And then last year's churn. What was it last year?
15-something. 15-point-something.
I think I will to come back to you with the figures. He doesn't have it ready.
If you don't have last year, it's fine, if you can just give 9-month figure?
Yes. The 9 months for the current year is, operating turnover is INR 73.15 crores. Okay. And PVT churn is minus INR 23.58 crores.
And for PB Tollway?
For PB Tollway, it is INR 59.94 crores is the operating turnover and PVT is minus INR 14.48 crores.
Okay. Do you expect it to get turnaround?
Well, the amortization of the intangible asset. This loss is very notional, by the way. Yes. So less it is considered as actual loss. Let me clarify because of the amortization expenditure has been shown as much more higher.
Okay. So cash flow-wise, you are saying that it is from profit.
Correct.
Okay. And...
Cash flow-wise it is a profitable -- much, much profitable business.
Okay. And in annual report, there is an intangible asset of worth INR 1,300 crore, what is this?
That is [ PBTL ] and this year was -- and, this Shivpuri Guna and [indiscernible] during construction period, we -- whatever work has already been done, that we show as intangible.
Okay. And last question, sir. I think yesterday's interview, you were mentioning that this quarter, we have some INR 20 crore of income tax refund and some INR 45 crore of gain from Algeria project.
Actually, yes, let me clarify that. Of course, at PAT level, that has shown a profitable PAT because we had a refund of INR 20 crore. But also, we had a refund of INR 84 crore in the same period. So yes, INR 84 crore was the refund, which we got last year also. So if you compare the PAT, this year, we have only INR 20 crore of refund from income tax. So far as INR 45 crores from Algeria is concerned, it is the turnover. We had not booked it as a turnover because of some problem, which they made in the payment. So we booked the expenses but not the revenue at that point of time, which has come now in this quarter.
Okay. So this is not just one-time gain. There's...
This is one-time.
This is the margin, which was before.
Yes, this is essentially the actual revenue obtained from the work done but received this year, and that is why [Audio Gap] expenses were booked last year only because we had done the work already.
We'll move to the next question that is from the line of Parimal Mithani from Credential Investments.
I just wanted to know, sir, one of your competitors is going to put equity into Indian railway station development. Can you highlight what is the valuation that have been taken by them sir?
Actually, so far as RITES and us are concerned, we operate in totally different areas, so just to say when we go out of state, we are not competitors in that sense, number one. Number two, actually, the requirement of equity by IRSDC is much larger as somebody was asking, INR 50,000 crore is lined up for expenditure and so on. So they require a lot of -- a little bit of equity. Hence, Ministry of Railway has asked them to pitch in with a equity to some extent. So they have also now decided to put in equity worth 24% of the total equity into IRSDC, bringing down our 50% equity holding to 26%, and their being 24%. That is number one. Number two, the valuation is at par even though the valuation has been done for the share at INR 11.84 crores but their Board of Directors, that is RITES' Board of Directors have requested IRSDC to consider issuing the share at par instead of at the increased value.
Okay. Sir, second question is, can you highlight what are the number of stations for redevelopment? And what is the agreement between the Rail Authority Development and IRSDC in turn? How are they -- taking into consideration that will highlight, what are [ salient ] feature for that?
I'm sorry, I couldn't get your question. Come again?
Rail Land Development Authority has 51% stake in this, in IRSDC, right?
50%.
Yes, 50%. But then so what is the agreement? Because if my understanding is correct, they own majority of the land and the stations around for development. So what is the agreement between IRSDC and Rail Land Development Authority?
Okay, okay. See there [Audio Gap] functions given to RLDA and IRSDC. IRSDC is meant to develop stations and the station area, whereas RLDA is primarily responsible for non-station area development and commercial exploitation of non-station area. However, since the station development is such [Audio Gap] some of the stations have been given lately to RLDA also so that they can also pick in with the station development work. But primarily, 90% of the station development continues to be with IRSDC. Only 5%, 10% would trickle into RLDA.
The next question is from the line of Ravi Naredi from Naredi Investments.
Sir, I would like to know this order book of company's INR 32,000 crores in how many years to be completed?
Hopefully, if we go by this speed, we should be able to complete in another 4 years.
So why we take so much time to complete in the 4 year?
Actually, all of you should appreciate that most of the infrastructure work, which is linear in nature, half of the period is spent on the drawing board, clearances, permissions, land acquisitions...
[Operator Instructions] Ladies and gentlemen, the line with management has got disconnected. Please stay connected while we reconnect the management. [Technical Difficulty] Ladies and gentlemen, thank you patiently holding. We now have the lines of the management are connected. Over to you, sir. Mr. Naredi, may you repeat your question for the benefit of the management?
Just I would like to know why is 4 years we will take for this completing these projects? That's my question.
Yes. So as I was in the midst of explaining that most of the [Audio Gap] projects in Indian context, that is railway line, et cetera. Of course, in highways, we take now flat 2 years because that is the requirement of NHAI. So far as railways, typically, for a 100-kilometer length, you require 4 years of work in which 2, a good 2 years will be spent on the drawing board in the sense you have to obtain various clearances, Ministry of Environment, Forest, State Government, then land acquisitions and rehabilitation, et cetera. And then to top everything, all the drawings, et cetera, so technical and specific that they need a high degree of scrutiny in railway system. And that is the first 2 years, a good 50% of the time is spent on the drawing board. That is why it takes at least 4 to 4.5 to 5 years.
I see, okay. And sir, this investor presentation, we have given. If you mention the order book position and everything, it can be more a helpful for investors.
Done, done, that is noted for compliance. We will do that from -- we'll put it on our website.
The next question is from the line of Mayank Goel from SBICAP Securities.
Yes. Just 2 questions. One, on the tax side. As you said that this quarter, we received a refund of INR 20 crore. So if I remove that, then for the quarter, we have an effective tax rate of 25%. But in the first 2 quarters as well, we were above 35%, 34%, 35%. So just wanted to know that this tax rate change, will it not benefit us? So should we not have a 9-month effective tax rate of 25%, excluding the refund portion?
Yes, reduction in tax from 34.94% to 25% now has been effective in September '19, that is Q2. The tax in -- the tax in Q2 is on lower side due to the cumulative effect.
Sir, if I'm not wrong, in Q2, the tax rate was 36%
34.94%. Sorry [ 18% ].
Deferred tax. There is a deferred tax also.
Actually, if you see the note, there is an element of deferred tax also.
Okay. Sir, for our...
Note #6. Yes, if you go through that, in case you have something else you can mail it to me, we'll clarify.
So for the full year basis, considering the new tax regime, what can be our effective total tax rate for the year?
I think 25%? Yes, 25%, it will be roughly 25% only.
Okay. And sir, so one more bookkeeping question. Can you help us with the amount of own cash and client cash as of December end?
INR 532 crores is our own cash to end of December end, and -- December end -- INR 536 crores, sorry, INR 536 crores, and client cash is INR 2,255 crores.
INR 2,255 crores, okay.
The next question is from the line of Chintan Sheth from Sameeksha Capital.
On RLDA loan, how much is pending as of December?
Actually, we pay it annually. So quarter-on-quarter, there won't be much difference in the RLDA loan. Okay. Right. So last year, we have paid INR 898 crore. And this year, again, we'll be paying how much?
[indiscernible] '19.
But it was pertaining to last year as well. So first installment was INR 898 crore. This year also, I think the same amount, a little less, INR 860-odd crores.
And again, with -- on a consol basis, we will have around INR 900-odd crore of debt that coming from the SPV level, right? Because we are retiring, we are getting our loans back, internal loan back and we will be...
Correct, correct.
So kind of -- it will be -- INR 860 crores or INR 900 crores will kind of offset each other out.
Yes, yes, they will offset.
Right. And sir, in terms of the coal linkages, one we mentioned, CERL, is one the verge of completion. Can you just highlight in terms of kilometers, how much is pending in CERL of the 70 kilometers, or we need to construct?
Just a minute, CERL.I think yes, 131 kilo -- route kilometer, what we have to do in CERL. Out of which, 80 kilometer we'll be doing in the current year.
Okay. Okay. And it will start operation...
It started operation in 44 kilometers already. So for 44 kilometers, coal travels on my SPV track and then it joins Indian Railways. From 1st April, the coal will travel 80 kilometers on my track and then join Indian railways. After that, it will drive 131 kilometers and then join Indian Railways and so on.
Okay. And sir, can you comment the kilometer-wise on CERWL or other coal linkage project as in total length of the projects? If you can?
Yes. I think, see -- I hope you understand the nuances of the route kilometer and track kilometer. Track kilometer is essentially track laid in meters irrespective of the distance. So we may have 10 kilometers of track and 1 kilometer linear length. So I will give you a route kilometer, which is essentially the -- so CERL-I is 131 kilometers, CERL-II is 62.5 kilometer. CEWRL is 135-kilometer and CERL is 68. And BRPL, as I said, we are going slow on that. The CERL is 49, total is 585 kilometer -- route kilometers.
585 route kilometers.
Yes.
Okay. And sir, lastly, on dividend, we already declared around a payout of around more than 30% of the 9 months profit. Similar rate, we should expect for the full year or much higher? Similar to last year's payout?
I will rather not answer this. Let there be something to rejoice in future.
Ladies and gentlemen, that was the last question. I now hand the conference over to the management for their closing comments.
So thank you very much for sharing your thoughts and asking questions, which are also a guide to all of us in the management. Let me also share the happiness that today, in the share market, our share has done very well, thanks to all the investors and all the support extended by the entire share community and people who are involved in the financial market. So it has been a tremendous [Audio Gap] seeing the share crossing the IPO price after a long time. So today is a happy day for us. And thank you so much. Thank you, [ Irfan ] from Concept IR for organizing this conference call. And I will pay my gratitude to all the analysts who have taken their time out and listened to me and my CMD very patiently. There would be lot of questions, I'm sure, but you can get back to us through e-mail, et cetera. We are always open, and we'll be always interested in showing all kinds of help or all kinds of information, we'll be very happy to share. Thank you so much.
Ladies and gentlemen, if you have any further queries, you may send an e-mail to gaurav.g@conceptpr.com or irfan@conceptpr.com. I repeat it gaurav.g@conceptpr.com or irfan@conceptpr.com. So that will conclude our conference for today. Thank you for joining us, and you may now disconnect your lines.