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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Ircon International Limited Q4 FY '22 Analyst Conference Call. [Operator Instructions] I now hand the conference over to Ms. Mamta Samat from Perfect Relations. Over to you, ma'am.
Thank you, Diksha. Good afternoon, everyone, and thank you for joining us on Ircon International's Q4 FY '22 Analyst Conference Call. Today, we have with us the senior management represented by Shrimati Ragini Advani, Director Finance; 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 would now request Shrimati Ragini Advani for the opening remarks. Over to you, ma'am.
Thank you. Good afternoon, everyone. This is Ragini Advani. I have recently joined as Director Finance of Ircon. Unfortunately, CMD could not be here due to some prior scheduled engagements at ministerial level. So I welcome you all to this conference call for financial results of Ircon for the quarter 4 of FY '21/'22 and the full year results of FY '21/'22. I have with me today, Shri B. Mugunthan, he is our Chief Financial Officer and ED Finance. And I also have with me our technical ED, Mr. A.K. Goel. We have uploaded a detailed presentation on the stock exchange for your reference. Hopefully, all of you have been through it. We've had a stupendous performance as far as our results go.
Ircon has booked the highest ever operating turnover on stand-alone as well as consolidated basis. Our order book as at 31st March 22, stands at INR 43,758 crores with about INR 3,000 crore worth of orders being added in quarter 4 itself. As all of you are aware, Ircon is moving to an environment of competition. So almost 45% to 50% of our order book is on a competitive bidding basis. We strongly as management believe that Ircon is well placed to keep these orders and to continue winning such kind of orders even in a competitive environment. And we are completely geared up for such kind of environment going forward. During the quarter, Ircon has incorporated 3 more subsidiaries in highway projects and 1 for execution of a solar PV power project. So in total, Ircon has now 11 subsidiaries, including 10 wholly-owned subsidiaries. Ircon has also won an international order amounting to about INR 1,800 crores in Myanmar in quarter 4 of FY '21/'22. This is a road project, received under line of credit assistance from MEA Government of India. As regards financial performance of the company on a consolidated basis, in respect of quarter 4 FY '21/'22. Our income stands at INR 3,011 crores as against INR 2,513 crores in the corresponding Q4 of FY 2021. Revenue from operations stood at INR 2,953 crores as against INR 2,424 crores. PAT, it was reported at INR 242 crores as against INR 170 crores. Core EBITDA remained almost flat at INR 213 crores, vis-a-vis INR 218 crores for the corresponding Q4 quarter of previous year. PBT stood at INR 221 crores as against INR 276 crores for the corresponding period. Earnings per share has gone up to INR 2.57 per equity share as against INR 1.81 per equity share for the Q4 of FY 2021. This is vis-a-vis our face value of share being INR 2 per share. As regards to dividend, Board of Directors has recommended a final dividend of INR 0.65 per equity share. This is subject to approval of shareholders. We have already declared interim dividend cumulative of INR 1.85 per equity share. And with this, we are giving a good yield to our shareholders from a dividend perspective. Now without taking much more time, I would like to open the floor for Q&A session. Thank you.
[Operator Instructions] We take the first question from the line of Mr. Vishal Periwal from IDBI Capital.
One, I mean like I think order book continued to move strength-to-strength. So in terms of execution, how do you see -- because in this year also, we have done pretty strong set of execution, particularly in the fourth quarter. So how do you see this for FY '22 -- FY '23, sorry?
Yes. So as you are aware, our order book is about INR 43,000 crores. And depending upon the project duration, we would be having end-to-end project execution period in certain projects of about 2 years and in certain about 4 years. So given the fact that we have a very strong order book and a very strong technical team within Ircon with our subcontracts, et cetera, also being in place for most of these order books. We do hope to execute a good number in FY '22/'23 as well. In fact, god willing and if COVID was not to prevail, I think we should be surpassing the turnover for FY '21/'22.
Okay. No. I mean given the order book, which is there, so I think probably from like an investing community would expect some sort of growth -- probably strong set of growth. So would you like to give a number for that, like maybe a range here will be helpful.
So we expect a 10% to 15% growth in our top line vis-a-vis FY '21/'22.
Okay. Okay. And second, on this quarterly result, I think on a reported basis, the margins -- EBITDA level margins were a bit on the -- on the lower side. So if you can highlight any one-off which was there and in terms of margin, like how do you see this for FY '23?
Yes. So what has happened is there are a couple of factors because of the EBITDA margin for this quarter has taken a hit. One, of course, to certain onetime provisions that we have done on certain jobs. And second, what has happened is that we -- I mean, if you were to compare quarter-to-quarter, the corresponding quarter of the previous period has had some income on account of claims, which we won, and those are gone on extraordinary income that reflected in our turnover as well as other income in the previous period. So if we were to take out these abnormalities, then we are pretty much in line with the quarter-to-quarter results in terms of our EBITDA margin.
Okay. So maybe a recurring basis, if had this one-off not been there what would have been a margin? Or maybe if you can give like what exactly the quantum is in terms of crore or something.
Yes. So we've had a quantum of about this time of provision of about INR 60 crores as a one-off number.
Okay. And this is booked in fourth quarter, the complete.
That's right.
Okay. So based on the estimates, so do you think this is spill over, any further provisions required or anything for the next quarter.
As of now, I think we've taken care of everything up to 31st March. So the spilling over is not expected. So going forward, I think we should be able to continue with our robust EBITDA margins, given the ETC segment in which we operate.
Okay. Sure. And in terms of investments, I think you mentioned like a couple of subsidiaries are being formed to take care of the road project, which you have won. So what sort of equity investment that you expect to put in FY '23 or FY '24, any number that we have worked that.
So we are expecting to put in about INR 300 crores of funds, whether through equity or interest-free loans in FY '22/'23 in our new ventures that we've just announced as some of the previous ones where the equity is still to be given on a pro rata basis.
Okay. So this INR 300 crores of equity, just repeating this INR 300 crores of equity that we plan to put in right?
Yes. Equity along with quasi equity.
Quasi equity. And this will include even the solar project, 500 megawatt, this INR 300 crore or it is over and above that solar.
Yes. This includes the investment that we envisage to make in the solar project also in FY '22/'23.
Okay. Sure. Last thing from my side. In terms of our bid pipeline. Would you like to give some color like how -- I mean, maybe a broad quantum, how much project that we have bidded or probably any in terms of key projects that we are looking -- I mean we have participated and probably the announcement could come probably in next quarter or maybe 6 months? Anything that you'd like to highlight?
I mean while I may not go on a particular project basis. But yes, we are actively continuing to bid in railways as well as highways [indiscernible] project and especially with the high speed and dedicated freight corridor, initiatives were coming forward. We do expect to get some more business there. And again, I mean, if things are good, we should be able to generate about additional order book of anywhere between INR 10,000 crore to INR 15,000 crores going forward in FY '22/'23 as well. But mind you, all this is going to be more on a competitive basis and on a lump sum price basis.
Okay. Okay. So I think typically, in nomination, I understand like the margins were -- I mean, a lot of pass-throughs were there, but your margins used to be like a little on the lower side, if I see -- maybe if I can just say like since RVNL is doing the same work and their margins are 5.5%. So in a competitive bidding, can we say that margins you can achieve maybe like double-digit sort of margins?
There are a couple of factors for it, to be very honest. One, of course, we are all aware that the Ukrainian war has resulted in increase in a lot of commodity price increase -- the kind of EPC that we do steel, copper, even the impact of crude oil and the diesel, petrol prices all have impact on our business. So if we were to quote lump-sum right now in a competitive environment and assuming that things stabilize in terms of the commodity pricing. Then we should be able to get margins similar to the margins that we have in a cost-plus model. I mean, again, it really depends on the environment going forward. But otherwise, it could be other way around also. I mean if God forbid, if the prices of these commodities reach a new high and there is a timing difference in terms of the time at which we bid versus when we actually execute. This could take a toll on our margins going forward. So this is something, in fact, which we as management are very careful now. And accordingly, 1 is you have to win the jobs also in competitive environment and yet take care of this kind of ambiguity. So to that extent, it's going to be a challenge going forward, but we are gearing up for it. And we are sure we should be able to continue, as I said earlier also, we should be able to continue on the EBITDA margins that we've been doing for the past few years.
Right. Maybe last thing from my side. I think out of this 40, 3,000-plus kind of order book that we have reported in PPT. It's safe to assume, right? Nomination projects. Everything is a pass-through for us. 54% of order book is a pass-through in terms of cost inflation?
Pretty much.
Okay. And in bidding out of this 46%, how much will be pass through?
In bidding, there is a price variation formula, which is there in many of the projects or contracts. But again, it is not apple-to-apple. So the actual price that you give on a subcontract vis-a-vis the price that you get after the formula, it could go up and down depending upon the parameters that are given in the formula. But as of now, the analysis that we did in-house, we should be able to capture all our costs practically.
Okay. Okay. Yes. I mean maybe quarterly difference will be there. But any number that you will put -- like what is the fixed price contract in this INR 44,000 crores order book?
So since we have a variation clause in our contracts, so whatever contract value we are giving right now, is the lump-sum price or the fixed price that we quoted as of now. And based on the price variation formula, that would be an upward revision in the contract filing.
Right. No, no. I mean, what I was trying to understand is, is there any -- in this order book, is there any proportion of probably a quantum, which is fixed price in nature?
What you're trying to say is it does not have price variation at all.
Right ma'am, right ma'am.
Yes, yes. So that would be miniscule, almost less than 1%.
We take the next question from the line of Mohit Kumar from DAM Capital.
Is it possible to lay out the ordering opportunity from Indian Railways? That's the first question. The second question is that have you given the tenders already awarded for our 2, 3 Road project, which you won in the FY '22?
And also on the solar contract has the award been given?
So -- as far as the tenders for road are concerned, we have given out partially, let's say, 50% of the tenders have been given out. And 50%, we are still in the process. And what was your next question as far as solar is concerned.
Yes. Solar.
Yes. So solar, we are in the process of -- we signed a PPA and we are also in the process of land acquisition. As far as the tendering is concerned, it should be happening in the next quarter.
Understood. And the ordering opportunities on the railway side, how do you see it in FY '23?
As far as the ordering opportunities you are saying going forward, right?
Yes. Yes.
The new business that we will get in the current financial year from railways.
Yes.
So I mean, would you mean just ministry government of railways? Or do you include the IC and the DSC as well?
Yes, all put together, if you can lay out separately.
All put forward, I think we should again be targeting something like 80% of our business from railways, if not more.
We are expecting INR 15,000 crores of order inflow. Is that number right?
So we are already at the order book of INR 43,000 crores. We expect to get anywhere between INR 10,000 crores to INR 15,000 crores in FY '22/'23. So out of that INR 10,000 crores to INR 15,000 crores, about 80% should be again from railways.
We take the next question from the line of Shreyans Mehta from Equiris.
Ma'am, if you could throw some light in terms of execution of a couple of our key projects for the quarter.
Okay. In terms of -- would you like to know in terms of the turnover that we've done.
Yes. And also coming from the key projects.
Yes, yes. So in terms of our turnover, I mean, I'll just speak out some of the projects. So it's J&K rail project Banihal where we have done about INR 1,878 crores of turnover this year. Then we have done Sivok-Rangpo project about INR 1,000 crores; DFC project, about INR 687 crores; Vadodara Kim way INR 400 crores; Katni grid separator as well as Katni-Singrauli Doubling projects combined should be about INR 650 crores. And then Chhattisgarh CEWRL project about INR 300 crores. Then Agartala-Akhaura rail link about INR 220 crores. And CEWRL project Chhattisgarh project of about INR 205 crores.
INR 205 crores.
Yes. So this is the broad top 10 jobs you can mention.
Sure. Sure. Sure. I'll just take it offline.
This should contribute about [ 80% ] of my total turnover stand-alone.
Okay. Got it. Got it. Got it. Sure. My second question pertains to, I mean, again, dwelling on the EBITDA margin. Even if I -- this for the INR 60 crores odd number, If you see why we are still at 6%.
So yes, actually, there are 2 things. INR 60 crore is an adjustment in this quarter for the one-off provisions that we did and about INR 70 crore is the number that we need to adjust from the Q4 FY 2021 for the one-off income that we got that quarter.
Right. No, I got that fine. What I was trying to understand again if we see on a quarterly basis largely 8, 10 quarters, the margins have been continuously declining. So is it fair to assume that the current quarter margins would be margins, which will continue going forward?
Yes. So -- I mean, the fact is there are -- I mean, apart from these one-off quarter-to-quarter differences that we can have, depending upon some extraordinary claims or some provision entries. But the fact is that, as I was mentioning earlier as well, we are picking up jobs on competitive basis and on lump-sum basis. So while there is a price variation formula, we will need to see going forward given the current scenario, how much of it are we actually able to recover. Going forward, I do see margins to be on a train. So we will attempt to have margins similar to the levels that we have right now. But to say that they will improve in the future, the answer may not be yes as of now.
Okay. Okay. Okay. Got it. So now, just to dwell more upon this, what might happen, we might see increase in turnover, but in terms of profitability, we see easily flattish or probably engage as margins go down, we might also see a degrowth.
In terms of percentage, yes, in terms of absolute terms, yes, our profit would be marginally increasing. Because obviously, the turnover is going high substantially, yes. So cash buildup will be there. But in terms of the percentages, yes. It could be at similar levels or maybe going forward, I'm talking from a long-term perspective, the margins could come down a little bit.
Got it. Got it. Sure. Sure. And ma'am, in terms of depreciation, I mean, this quarter, it's slightly on a higher side. Any particular reason for that?
So is this a particular item that you're telling me? Because what we have also done is we've shifted our asset from PPE to investment property to the extent of INR 56 crores. And so also the corresponding depreciation. This should be more of a reclassification entry, if that's what you're saying.
Got it. So from a margin perspective for FY '23, FY '24, the run rate is in the range of INR 6 to 7-odd crores on a quarterly basis.
Sorry, what would be INR 60 crores, INR 70 crores.
Depreciation would be around INR 6 crores to INR 7-odd crores on a quarterly basis?
Depreciation number for us is about INR 28 crores on a yearly basis.
No, I'm talking about the quarter. Okay. So probably, if I put it the other way around for FY '23, it could be in the range of around INR 25 crores to INR 30-odd crores, right?
That's right. That's right. It should remain in that range only about INR 26 crores, INR 27 crores.
Got it. Got it. Got it. And then if you could just further break up the investment, which you've given of INR 300-odd crores, how much would be going for the roads and how much power.
Yes, just a second -- yes. So I mean, in solar -- so solar should be about INR 25 crores and as far as my remaining are concerned, it would be -- railways should be about INR 50-odd crores. That is mainly in Chhattisgarh. Also the 130 committed in JCRL and Mahanadi INR 13 and INR 52 crores. So you can say about INR 100 crores in coal and about INR 20 crores, INR 25 crores in solar and the balance on road.
So roads we are talking about an investment of roughly around INR 150 crores to INR 200 crores next year?
Yes. Yes.
And similar amount for FY '24?
So the amount that I mentioned to you is for FY '22, '23.
Right. So I just wanted to understand for roads. I mean from a 2-year perspective, how much more investment should be lined up?
Yes. So roads, I think we would be -- I mean other than these 3, 4 projects where we should be giving how much more INR 300 crores, INR 400 crores. Yes, so INR 300 crores more is something that you should expect going forward.
Sure. Sure, sure. And then 1 last question pertaining to our investment in the joint venture, which we had for the IHRDC is we've been given to understand that the entire entity has been asked to close down. So has we recover that investment from them?
So what is happening is, right now, IRCC is being asked to be closed down and all their assets are supposed to be taken over by railways RLDA. That is in process -- and depending upon the valuation, we've already engaged a value add for it. Based on that valuation, I think it should be in the current financial year, if not in the first quarter. Maybe in the second or third quarter, we should -- we're taking accordingly the value for it. But there should be an upside. I don't see any downside there on our face value.
We take the next question from the line of Viraj Mithani from Jupiter Financial.
Yes, I have -- I would like to understand this order book of INR 43,000 crores would be executable over what period of time?
On an average 4 years. 4 to 5 years.
4 to 5 years, the whole order book would be executable, right? And you'll be people in generating the orders and this, the cycle will go. Is it correct to say?
Yes, absolutely.
And can you give a breakup of this order book, INR 43,000 crores in terms of percentage would be enough, right?
So in terms of -- would you want to split between railways, highways, how do we want it?
Yes, yes. That's what railways, highways, solar.
So railways is about 80%. And highways is about 17%. And that makes it to 97% and the 3% is balance or other.
And regarding this net profit for the bottom there is really like a flat or going down and not big. How will it pan out because of this commodity inflation, the other factors right now. What you said I just want your sense on that.
Sorry, could you repeat your question? I didn't get it.
I would -- I'd like to sense on your net margins, given the problems of commodity inflation, Ukraine war, going forward over, will the planning rate be in a flattish there or will be falling down further. So for me our net margins.
As far as my EBITDA and PBT margins are concerned, as I mentioned earlier as well, we expect them to be flattish. And over a long-term period, slightly squeezing given the fact that our competitive mix in the order book is going up. So it's in a competitive environment at times one has to take call which is -- it may take a slight toll on the margins.
Okay. And then my last question is till what price of contracts are protected. Of course, there is a price variation in commodity or the steel or copper like what, 5%, 7% up or down? Or beyond that, the contract doesn't work, how does it work?
No, no, no. So there is no such thing. There is a price variation formula, which basically takes into account several factors. So based on those factors, the -- you get the value -- I mean, the change order of your contract value. So it includes many components. So there would be labor related, there would be an overall inflation. There would be a commodity-related variation as well. But there is no such thing that if steel price was to go by 50%, then the project will not hold good any longer or it will be shelved. That is not the case.
My question is how do we protect ourselves like because the commodity pricing developing then...
Yes. So what we try to do is in maximum contract, we try to pass on the same terms and conditions to our contractor, and that acts as a natural hedge for us. Then, of course, the second is one has to do a more efficient planning while executing the projects. So you know exactly what quantity is required when. And if you know that this is a period where the prices are high, you would rather go for a smaller quantity right now and order more subsequently when the price would stabilize. So there is a full technical team which is looking into all these aspects. And so you could have some changes in your execution strategy to make sure that we do not incur loss on this account.
We take the next question from the line of Mr. Vipul Shah from Sumangal Investment.
So a lot of questions have been asked regarding EBITDA margin. So I'm coming back to the same. So -- so can you guide what sort of sustainable EBITDA margins we can expect over the next 2 to 3 years if all things remain equal.
So I think we should be able to get about 8% EBITDA margin going forward. There could be a plus minus 1% there. So if one was to look at a range, it would be anywhere between 7% to 10%. But my own personal view is that going forward, the sustainable margin should be in the range of around 8%.
So what should be the EBITDA margin in nomination projects? And what should be on the competitive building projects?
So what has been happening is that even the nomination basis projects, I mean everyone gets aware based on competition, that what is the kind of margins that are flowing in the industry. So even in the [indiscernible] someone, one of your colleagues was also mentioning, there is quite a bit of negotiation to keep a tab on the margins. So going forward, whether it is nomination or whether it is competition, that should be the range. It will really depend. I mean, in nomination that we were hopeful to get another 1%, 1.5% extra could be in few projects on competition, we may go 1, 1.5% lower as well.
Okay. All the best.
So margins in mind, we would be strategizing our bid as an and submit in going forward and even on a competition basis.
And lastly, ma'am, you said you have won a project in Myanmar, right?
Yes.
So there is a lot of political instability and I think there are sanctions. So we are not affected by any sanctions on this.
Yes. So what has happened is this is a government of India MEA induced project. So to that extent and all our payments are in dollars. Okay. And this is -- the payments are by EMEA. So we are protected from those sanctions. And as far as the -- what you were mentioning in terms of geopolitical environment in Myanmar, yes, we are aware of it. It is a challenge because of which MEA Government of India government of Myanmar -- everyone is very focused on this project and all kinds of security as well as all kinds of other arrangements, which need to be taken care of in this environment. They're all being properly planned and being used during execution.
We take the next question from the line of Saket Kapur from Kapur & Company.
Firstly, in your order inflow, you have mentioned about the Mumbai Higher speed rail amounting to INR 5,143 what are the pillars on the down in terms of the -- where are we in terms of laying the execution of this project and what portion of the total pie have we been affected to out of the total project work.
So this INR 5,143 is our portion of order book only. But as far as the execution is concerned, I will hand over right now to my ED work, and he will tell you exactly where we are in this project.
Good afternoon. Because we'll be doing the main track work on [indiscernible] like what you call it that is done by another civil contractors. So we are likely to get the site by end of March, April. So our work will -- mostly it will be taken up in the next financial year. So this year, we are buying our equipment and raise that material only. So physical execution mostly will be taken up in the next financial year. Then we will reopen the site. And actually, we will be getting the site around April. So we'll be starting our work physically from that. Prior to that, all our concurrent will be completed whatever required by that time.
What kind of investment will it entail?
Yes. investment, I think maybe more than INR 1,000 crores, we have to purchase rail [indiscernible] material, we'll be purchasing it. As per our requirement, we'll be investing some orders will be placing and some material will come this year.
And what has been the fund release from the party who has released the order?
We did the mobilization advance up to 10% you are allowed we have availed I think about 5% advance we have already taken. So we'll be taking some 10% we allowed up to mobilization advance against the like INR 5,000 crore -- INR 500 crores, we'll be taking the mobilization advance and balance will be using our funds also.
And here also, sir, the margins are in the same vicinity, 8% to 10% EBITDA margin?
That's a competitor bidding, yes, because.
yes, it is in the similar...
Because it is 1 of its projects, 1 of its kind. We don't have any...
The advantage of this project, it gives us a big PTR to execute more such projects going forward.
PTR means?
Past track record -- and one, it's easy for us to showcase this by taking other initiatives forward.
When we look at your cash flow and the tax outgo, the tax outgo for this income tax rate for this year comes at around INR 33 crores. If you could explain what is our tax rate and how does this work out?
So see, in terms of our tax, we are basically at that 25.168% corporate tax rate. But in terms of the reason why we've had a better pack this time, vis-a-vis the 25% rate receivables are categorically look at is because we have had some dismissal of our pending income tax cases. These are relating to some previous years, and we've had an income to that extent, which is adding on to my PAT currently.
No, my point was, ma'am, when we have done this provision on a consolidated level, it is around INR 186 crores. And if you take this around -- if we take the knock of deferred tax, it is around INR 100 crores. But in actual, we are seeing only INR 32 crores. That was my -- just to make the account the actual cash outflow is only INR 32 crores. That is significantly lower than what the provisions have been.
So what you are saying is that as far as my actual cash outflow is concerned, what you think is it's INR 96 crores is what I've shown this year. Is that what you're saying?
Ma'am in the cash outflow, I have found the total outgo is only INR 33 crores, wherein if I look at the P&L, the tax provisioning done for this year on a consolidated basis is INR 186...
So we also have TDS deducted by our clients, and that's taken into account while completing the overall income tax for the year.
Yes. Correct. Okay. So that will account for...
Essentially, what happens is I pay an advanced tax every quarter. I have my TDS deducted, and then I do a year-end provisioning. Typically, that year-end provisioning gets offset by my TDS and advance tax that I have paid over the period. So TDS purchase not a cash outflow, but a lesser cash that we received from the client while I'm getting my receivables. So that movement probably gets recorded in your movement in working capital and not in your tax.
Okay. That is the reason why it is not reflected.
Yes, yes.
Okay. And one more -- and in terms of the solar project also I think INR 1,960 crores that we are setting up. Where is the location and where are the -- what is the -- when are we going to start the work on ground.
Yes. So I will ask my CFO, ED Finance, because you're directly looking into this project to answer this question for you.
This is Mugunthan. So as far as the location is concerned, we are putting it in the Pavagada solar park. This park already has an installed capacity of about 2.1 gigawatts. So we have at -- in Karnataka. So we have selected that as the location of these.
And it's plotted by the state government?
Yes. The solar park is plotted by state government, but there are no more plots there now. So now we'll have to go in for leasing of the land from the farmers.
Sir, I'm not getting you sir, come again?
So basically, what he is saying is that this is a land in Karnataka. And this particular order that we took was under IREDA scheme. And as far as the land is concerned, the discussions are ongoing with the farmers in that area, a particular area for leasing of the land on a long-term basis.
Okay. So the authority who has plotted is IREDA?
IREDA, yes.
And that is our ex-checker is IREDA only, they will be paying us for the project.
They'll only give VGF funding. The project has to be funded by the promoter by the developer.
As far as tariff is concerned, that will come from...
Tariff has been fixed by MNRE at INR 2.45. And based on -- that is the maximum saving at which we can enter into PPA. So we have already signed the PPA with railways.
So ma'am, here, what is our scope of work? What are we are installing the solar panels. We are sourcing the panels from ex-party and installing them? Or what is the scope of work there for us?
Scope of work is you have to put up the entire facility, take all relevant approvals for connectivity and then sell the plant and maintain the plant for a period of 25 years.
We are a developer cum operator for this through our JV.
Okay. Then it will be an annuity project for us, BOT.
Like a BOT project.
Okay. So when will we start earning from this?
2024, the projects will be completed, August 2024.
Okay. And what would be the annual revenue post that could be booking under the income that had.
This is a 500-megawatt plant and the tariff is about INR 2.45. So we can share the value with you. But in terms of the parameters, even you can look that out. It's a 500-megawatt, it will have, of course, some capacity utilization factor and the tariff...
[Operator Instructions] We take the next question from the line of Shreyans Mehta from Equiris.
Just 1 clarification to the previous participant. You have said that EBITDA margins long term when you see it at around, say, 8-odd percent. Just wanted to clarify, is it including the other income or that would be excluding the core EBITDA margin you're talking about?
Core EBITDA margin.
Core EBITDA margin, right?
Yes, yes. Core EBITDA margin. With other income, it would be 10 plus.
We'll take the next question from the line of Parimal Mithani from Credential Investments. .
Ma'am, I just wanted to update in terms of previous con call, you have said that you are trying to monetize some of your JVs like the road JV which you had [indiscernible] can you give me an update on what's the status of that. Because I think our international -- national pipeline we're going to put money into it and where are we right now on that.
Yes. So there was some kind of ambiguity on how to go about monetizing these kind of our assets. But recently, the cabinet has taken a decision to empower respective Board of Directors to recommend and undertake disinvestment of the subsidiaries and JVs. So this has just come in May '22, this moat.
And the detailed guidelines as well as procedures are yet to be announced by DIPAM. So once that is in place, we shall take cognizance of that and start making efforts towards asset monetization.
And ma'am, could [indiscernible] of this, what will be the monetization level be if you can -- is the value same or the value will be appreciated...
So I mean, I think it's too preliminary to comment on it. We will obviously assume that it should not deteriorate -- but I think maybe we'll be able to answer this better in the next quarter or maybe half year down the line.
Okay. And then second thing, in terms of the Jammu and Kashmir, which is one of the vital projects that you're doing currently, right?
Yes.
So what I understand is the margins there are supposed to be in the range of 10%.
Yes.
Are we having any impact on that because it's a critical project in terms of nationwide as well as defense wise. So are we having any pressure or the margins there impact [indiscernible]?
No, no. We are absolutely comfortable when we are -- I mean that project is running well. Rightly mentioned, so we are not at any which way is affected in terms of our margin...
And 1 last question, ma'am [indiscernible] level besides the client that would be much better.
I'm sorry, I couldn't understand. If you can repeat the question, please.
The cash at company level -- the company-owned cash basically as of 31st March.
The cash -- so the company level cash after taking off the funds which we had earmarked for clients as well as for projects it should be about INR 1,000 crores as at 31st March 22.
[Operator Instructions] We take the next question from the line of Vishal Periwal from IDBI Capital.
I think you just mentioned that the company-owned cash is INR 1,000-odd crores, including the projects and the client money. When you say project...
Excluding the client money and the project funds.
Excluding, yes. Sorry, excluding. So does this mean like INR 300 crores that we plan to invest in this year has already taken out from this INR 1,000 crores.
No, no. So this 300 will go from the INR 1,000 crores. But in this year, we will also be making more profit, right, to get set off somewhere because our profit numbers are in the range of INR 500 crores to INR 600 crores. So even if we were to take out dividends, there should be an aggregation from profit as well.
Got it. And can you give some color on this international project that we have won this INR 1,800 crore Myanmar you mentioned, in terms of 2, 3 things, like what kind of margins that you see to make in this? I think you mentioned that the earnings from this will be in dollars. So the ForEx is like we are taking care and then margins, the ForEx who is taking here. And then last thing, in terms of the payment touchdown, is it similar to what like typical NHAI norms are? Or how exactly it is.
No, no. So this is not an NHAI norms. This is, in fact, like any of the lump-sum contracts. So nothing to do with the BOT or a HAM kind of a model. As far as dollar payments are concerned, since it enrolls margin for us. And this is -- as I mentioned, it is an NEA driven project and in a difficult geopolitical terrain.
So the margins are good there. And as far as my hedging is concerned, because I'm getting my money in dollars and given the rupee U.S. depreciation as well as the fact that a lot of my subcontracting would also be in dollar terms. So it should -- if at all, it should add to my value, it will not reduce my margins... Yes. Did you get the answer or it got dropped off somewhere.
Members of management, this is the update I just wanted to confirm. Yes. So we have the lines disconnected. We move on to the next question from the line of Parimal Mithani from Credential Investments.
Just a follow-up question ma'am. In terms of [indiscernible] which is there and which if I understand from the IPO side, it was for a duration of 4 years. What is the status on that? And can you assess how do we -- because I think the loan was for Indian Railways -- a pass through vehicle. Can you just give me the update on that.
So the situation pretty much remains the same. There were certain issues between Mumbai Metropolitan Regional Development Authority as well as some Municipal Corporation of Greater Mumbai with Railways. And those issues are still under discussion. We do see them getting resolved soon. And until such time that the issues are not resolved, the MOU between MRDA RLDA and Ircon is supposed to be extended going forward that we've updated or modified MOU with time line change should be executed, I think, in this quarter itself.
So in terms of only when those issues are resolved, can we go ahead appointing a developer, so purchase everything is staple [ fodder]. From Ircon books perspective, I mean, as you rightly mentioned, I mean, we basically have taken loan from IRFC and giving it to RLDS that way, we are not affected by this delay directly per se.
But then are we getting the consultancy fee for this thing because that was -- is it revised or is the same level between...
Yes. So we'll be getting the consultancy fee after we've appointed the developer. There was some fixed amount of fee, which we were supposed to get initially to be adjusted subsequently that we have received partly and partly we shall be getting on timing of this updated MOU, a fee to take care of our expenses. But in terms of the percentage fee that we were supposed to get that we'll only get after the developer...
[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for the closing comments.
Yes. Thank you. Thank you, Diksha, for moderating the same. And thanks to Perfect Relations for organizing this call. I would like to pay my sincere regards to all analysts and investor friends who've taken out their time out of the busy schedule to have this interaction with us. We would be happy to connect with you even on a one-to-one basis if required, but any further queries that you would have and take it forward. Thank you so much once again.
Thank you, everyone, for joining this call. You may now disconnect your lines. Thank you.