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Ladies and gentlemen, good day, and welcome to the NCC Limited Q1 FY '24 Earnings Conference Call hosted by JM Financial Institutional Securities Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Ashish Shah from JM Financial Institutional Securities Limited. Thank you, and over to you, sir.
Yes. Thank you, Darwin. A very good evening to everyone. On behalf of JM Financial, I welcome all of you to the first quarter FY '24 earnings conference call of NCC Limited. Today, we have from the management, Shri R.S. Raju, Director, Projects; Shri Sanjay Pusarla, Executive Vice President, Finance and Accounts; Shri. Neerad Sharma, Head, Strategy and Investor Relations.So over to the management for opening remarks, and we will follow by a Q&A after that. Thank you.
Okay. Thank you, Mr. Ashish Shah. Good evening, ladies and gentlemen. A warm welcome to all of you into the Q1 financial year '24 investors conference call of NCC Limited. The presentation containing the performance of Q1 FY '24 was uploaded on the stock exchange and in our website at around 11 a.m. today.Now I will take you through the key highlights of the quarter, and thereafter, we'll take you to the question and answers. So as usual, the disclaimer before briefing on the Q1. The presentation that we have uploaded on the stock exchange and our website [ yesterday ] including the discussions that we will have in this call, contain or may contain certain forward-looking statements relating to NCCLs business prospects and profitability, which are subject to several risks and uncertainties and actual results could materially differ from those in such forward-looking statements.So before going to the Q1 results, just I will touch about 2 lines about Indian economy. All of you are aware about global economy passing through difficulties, particularly severe inflation, but India has remained as stable despite the global impacts. The first quarter key performance indicators indicating the sustainable expansion in Indian economy. The growth momentum is likely to continue on a stable [ ready crop ] production, expected normal monsoon, softening of cost of materials and services. So as seen from the reports, the healthy balance sheet of all banks and corporate supply chain normalization followed by [ replanning ] and uncertainties conditions and favorable for continued CapEx cycle in sectors like infrastructure, power, defense, et cetera.So now I will brief the operating and financial performance of NCCL for the Q1 FY '24. This quarter, we believe that the company performed well in various performance parameters. So as far as order book is concerned, the company secured good amount of orders INR 8,154 crores, a growth of 83% over corresponding quarter of the previous year. The major orders received in this quarter are given in the presentation uploaded in the website.Among those, an order from Haryana International Horticulture Marketing Corporation Limited, an EPC mode value of INR 2,199 crores; second one, State Water & Sanitation Mission, Government of Uttar Pradesh. So another one is from [ Adani ], a value of [ INR 1,144 ] crores, Navi Mumbai International Airport. So the order book as of 30 June, '23 stands at INR 54,110 crores, highest ever recorded.Our order book is well diversified and spread across the real-estates. Right now, we have the 31% of orders from UP, where both UP and Central Government given priorities with adequate fund allocations.So coming to the operating performance of our consol. So first, I will brief on the consol performance of Q1 FY '24. This quarter reported a turnover of INR 4,407 crores as against INR 3,351 crores, achieved a growth of 32% over corresponding quarter previous year. The gross profit reported as INR 626 crores as against INR 501 crores, a growth of 25%. The GPM reported 14.3% as against 15.1%. The EBITDA reported INR 409 crores as against INR 308 crores, a margin of 9.34% against same margin of 9.27%. The PAT reported as INR 174 crores against INR 130 crores, an increase of 34% over the corresponding quarter of previous year.If you come to the group companies performance, besides NCCL parent company, in the group companies, PCMPL has reported more turnover of INR 466 crores as against INR 265 crores in the corresponding quarter. And NCC Urban has reported a turnover of INR 74 crores as against INR 88 crores. The total group companies turnover reports in this quarter is INR 541 crores as against INR 361 crores, a growth of 50% on quarter-on-quarter basis. Sorry, it is year-on-year basis.PCMPL, this is one company doing the MDO type of business, mine development and operation, along with [ DGF ] where we have a 51% stake. And this company started about 5 years ago and achieved almost whatever required milestones to be achieved by this time, all are in place and accordingly, the [ operations ] are going smoothly. But now some of the important milestones like for clearances from the power plant and getting the power plant into the operation, these are the milestones. And 90% of these milestones are completed and 10% still remaining and we expect the handing over of power plant by the power department to take place in couple of months. Once that plant comes to this one and the total land which are required for the operational project up to 30 years is -- it will be in the control of the MDO.Now come to the stand-alone financials. On a stand-alone basis, the company reported a revenue of INR 3,866 crores against INR 2,990 crores, a growth of 29%. The revenue increased primarily due to more revenue from buildings and electrical division, which -- in turn good progress in UP Jal Jeevan Mission projects. The gross profit reported at INR 588 crores as against INR 465 crores, a growth of 27%. Gross profit margin this quarter is 15.3% against 15.7%. But here, there is a dip of 0.4% in the GPM. But effectively, there is no change in GPM in Q1 compared to the corresponding quarter of previous year. Once we exclude the onetime item of claim INR 11 crores accounted in the Q1 [indiscernible] previous year. The company has posted an EBITDA of INR 381 crores against INR 281 crores, registering a growth of 35%. In terms of percentage, the EBITDA is 9.9% against 9.5% in the corresponding quarter of previous year. So there is a 0.4% increase is reported -- the increase in EBITDA primarily on account of increase in revenue. PAT reported as INR 162 crores against INR 120 crores, an increase of 35% over corresponding quarter of previous year.So the net profit margin reported is 4.2% against 4% and EPS reported as 2.58% against 1.97%. So as far as gross margin is concerned, the input prices, if you see that in the Q1, it is observed that there is a reduction in some of the input prices, but still some of the products, the decline has not happened. And some products -- some input prices like aggregates, sand and cement and this ready mix concrete, some increase still is there in those products and we believe that the decline whatever happened can be seen more in the Q2 since the decline gradually happened not at the beginning of the quarter.Come to the cash flows. On stand-alone basis, the cash flows used in the operating activities is INR 123 crores against INR 521 crores on year-on-year basis. The net cash flows used in investing activities is INR 37 crores against INR 111 crores on year-on-year. So the net cash flows from financial activity is INR 203 crores against INR 478 crores year-on-year. You may have observed that there is significant improvement in both operating cash flows and investing cash flows, which results in reduction in debt year-on-year and the reduction in working capital days. That is about operating performance.Now moving on to balance sheet, some of the items I will touch upon. So the CapEx increase in this quarter, hardly INR 27 crores. The inventories increased by INR 168 crores from the previous quarter, which is in line with the increased volume of construction activity. Trade receivables increased only by INR 82 crores, which -- hardly -- as against 29% growth in turnover, which reflects improved collections from the clients. The unbilled revenue stands at INR 3,679 crores as against INR 3,225 crores. The increase is in line with the increase in construction activities.Coming to the liability side, the debt is increased from INR 980 crores to INR 1,306 crores, an increase of INR 326 crores. Generally, in the construction industry, the collections are lower in the first quarter. As a result, the debt increase in the first quarter of every year, but the quantum of increase in Q1 is much lower than the normal increase happened in the last couple of years. Mobilization advance is increased from INR 2,755 crores to INR 3,323 crores.So about segment results, I want to touch. Now the management of NCCL and Board decided to provide segment results from the first quarter onwards of FY '24 in order to disclose more information to the investors about the focus of NCCL in long term on construction and real estate businesses. The segment results were uploaded in our website and put in the stock exchange portal.We have broadly classified the total business into 3 segments. The main segment is construction, represents 98%. Second segment is real estate, represent 1.6%. And third segment is others, like BOT projects, it represents 0.3% of the total revenue. So in these segment results, the assets used in the core construction business works out to INR 15,484 crores, represents 87%. Basing on segment results, the ROCE in construction works out some -- around [ 85% ], which is higher than the normal ROCE what we report from the financial statements of the NCC stand-alone balance sheet.Coming to the future outlook of the company. So the order book of INR 54,110 crores contains larger sized projects than what we have in earlier years. Now in the current first quarter, we have received [ 12 numbers ] projects, value of INR 8,154 crores, average ticket size of INR 679 crores. So the order, what we received from Mumbai, [Technical Difficulty] INR 3,833 crores received a year back. And now it requires lot of permissions before starting of the project. So almost all the permissions were obtained and these permissions as per the contractual conditions of the -- under conditions, we're required to submit to the High Court -- Supreme Court and take the clearance from the court. So in a week's time, it is going to be submitted, all these documents are ready. So we expect the permissions in a month's time, and therefore, the work can be taken up in 2 months period. But already, the mobilization works like the mobilization of the equipment, manpower and other things are in place. So the big project may be started in November or December. And thereafter, these projects will start to post revenue into the results.The next biggest project is UPs Jal Jeevan Mission project, INR 16,500 crores. Now picked up the progress and reported substantial turnover, nearly 30% in first quarter of financial year '24. We believe that this project reports substantial turnover going forward, which ultimately helps the company to reach its guidance of 20% growth given for the year '23-'24. The management is also very confident to achieve its revenue guidance of 20% for the FY '24.As far as cost of construction margins are concerned, we believe that we have seen the softening of the majority of input prices in the first quarter, and we expect the softening continues, basing on the global inflation and Indian inflation decline trend. There is a latest news that there is a cooling in place in the U.S. in the month of July '23.There is a good amount of orders in the pipeline, and the company also secured about [ INR 1,919 ] crores in July month and the details of which we have uploaded into the website. So basing on the strong order book, we believe that the company going forward maintains the growth journey in the years to come.So this is all about on the company side and rest of the things like NCC Vizag Urban, Sembcorp, TAQA, investment group companies, AP projects in the -- during the question-and-answer session, we will address whatever the required clarifications so that to save the time at this moment.So now over to the Mr. Ashish.
[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.
Congratulations on robust performance and also appreciate detailed presentations. And I hope this presentation continues. Sir, my first question is now considering the -- including the L1 of GMLR and July INR 1,900 crore order inflow, we have received close to INR 13,160-odd crore inflow. So by year end, how much more are we looking at? Can it be a INR 20,000 crore plus kind of order inflow? And will it also lead to what we are guiding, that 20% revenue growth? Can it be more than 25% kind of a revenue growth for this year?
Yes, Mr. Shah, about this order book, the opening in the Q1 is very encouraging and the pipeline are -- is also good. So basing on the momentum what we have, definitely, the INR 20,000 crores plus orders we expect to receive in this year '23-'24. And about the guidance, management is confident to achieve the 20% whatever guidance is given. And further increase from 20%, that is depends upon by how much time the new orders -- the -- really report the revenue after completing the beginning for all these permissions, approach and other things, since there, the big number sizes of orders are coming.
Okay. And in terms of the -- now the margin also, can we start seeing improvement in margin? And for full year, can we see a 10.5% kind of a margin? Or will it remain at this kind of a 10% margin -- EBITDA margin?
Yes. About the EBITDA margin -- about the new projects, we have that facility to enhance the margin. But the order book, what we have, it contains -- there are 2 parts of orders, one is pre-COVID orders and post-COVID orders. As far as pre-COVID orders are concerned, there is a pressure on the margins because the time overrun and as a result, the expenditure, whatever now incurring, so it is not getting fully absorbed. As a result, some further margin is there for the pre-COVID projects. So as a result, the margins, there is a possibility of a little, 0.2% or so at EBITDA level. And at the net profit level, last time we said that, one, we expect about 0.5% improvement over the previous net profit margin.
Okay. And last two -- one data point, what is the retention money? And in terms of the -- if the momentum continues, can we see the same 15%, 20% kind of revenue growth next year also, FY '25?
Yes. The company plans to maintain that 15% plus growth in the turnover. And since we have a strong order book at this moment, it is possible to achieve that kind of growth.
Okay. And retention money, as on June?
June, there is no difference in the retention money, in the first quarter also, whatever figure we saw as of 31 March remain in the same level except to [ sometime to '24 ] sales.
[Operator Instructions] The next question is from the line of Faisal Zubair Hawa from H.G. Hawa & Company.
Sir, congratulations on such a good turnaround that we have done with the company. So do we have any kind of expectations from Telangana government for any irrigation orders going forward? That's one. And secondly, sir, how do you see HAM projects coming up in irrigation also, because there are some states which are talking about having HAM projects in irrigation? And third is, sir, what -- how do you see the NHAI pipeline going forward? Will we also participate in BOT projects apart from HAM projects in NHAI?
Yes, yes. So you have asked 3 questions. Firstly, we are already executing a project in irrigation sector for the Telangana government. The project is already very much live. Going forward, the HAM projects are not only coming in irrigation. They are now becoming more popular in other segments of the infrastructure market as well. But we continue to be very selective on HAM projects. We do bid for a few projects on HAM model in roads. And going forward, we see a lot of opportunities coming up, about 50% of the market size from NHAI and MORTH, which is expected to be get awarded on HAM or BOT mode. So we are allied to the opportunities. And as and when we are able to identify a good project, we will definitely decide to bid.
Sir, my specific question with regards to irrigation was whether we will get more orders from Telangana government?
We have to see. See, irrigation, otherwise also, irrigation continues to be a relatively small division for us. So we are a bit selective in irrigation projects.
See, generally not focused in irrigation projects in Telangana. Earlier also, we don't have any big projects or occupying any good amount of orders of Telangana. And NCC is not particular to go for the irrigation because at this moment, NCC have a good order book. So it is looking at different type of projects and irrigation, we are not focusing that much because seeing the budget allocation and other things. Generally for irrigation projects, the budget allocation, there is -- uncertainty is there. So as a result, generally, we are not that much focused or keen to quote the irrigation projects.
Irrigation continues to be a state subject, talking specifically, though there is a new scheme that is launched by the central government, [ Pradhan Mantri Gramin Sinchayee Yojana ]. But the allocation is -- continues to be very small. We are very selective. This is not really a focus division for us. We are very much interested in other verticals where so many good high-value big projects are coming up for bidding. So we are more focused in that segment of the market. Okay?
The next question is from the line of [ Ramanan ] from MK Ventures.
A couple of questions from my side. One is, as you left it to us to ask the question, where are we on Sembcorp and also on the receivables from the Vizag subsidiary landfill? That's one. And second is, what would be our overall L1? How much would be L1 and how many projects, like for what quantum of projects?
Okay. Now about Sembcorp, earlier also we have expressed about the status. Now the Sembcorp arbitration process is over and order is under dictation and accordingly, the time line given to them is September next year. Before that, they're supposed to [indiscernible] order. So we expect the order anytime in the September month. About Vizag Urban, now the amounts -- we have not received any amount in the first quarter. The amounts which they agreed to pay is one installment in September and second installment in December and third installment in March. So at this moment, since already last time we expressed certain [ deals ] after what happened to the new party, because of the delays, some process, they are also seeing certain difficulties to take forward the business. As a result, some slippage is there in the releasing the payments. So as on date, about INR 500 crores outstanding is there, both for the equity and as well as the loan payment. So these are the 3 installments they agreed to pay. As far as...
Will we get interest on this? Will we get interest on the delays?
Yes, along with interest they pay, along with interest. So...
Is there any risk of this getting more -- further delayed or the deal not going through, any risk is there?
At this moment, as originally scheduled, that was not taken place. So now they are asking extension of time. So we agreed only in this September, December end of March. So we hope that in those times, they pay, but there is an uncertainty is also there. We can't say that 100% to take place that one, based on seeing the real estate momentum in that particular location. These are real estate, generally, it depends upon several factors.As far as L1 orders are concerned, yes, we have number of L1 orders, but -- L1 and pipeline orders are there. But we will not disclose the value and other things before getting the LOAs and before putting into the website.
The next question is from the line of Ankita Shah from Elara Capital.
Sir, could you highlight some of the key projects which we have bid? And where -- the awarding is yet to get completed or yet to be announced? Some of the big projects that we are looking, which are a part of our pipeline?
Ankita, this is Neerad. See, firstly, we were already aware about this project in which we are L1, this Mumbai project, right, GMLR. So that project, we are just L1 and it's a sort of very forward-looking kind of a statement to talk about the projects in which we are planning to bid or we are L1 or we are targeting. It's a sort of forward-looking statement, but let me add a color. So in a normal course of business, whenever we have the qualification, whenever we have the risk appetite, we will bid for all big projects, but it would be a little premature to talk about which projects we are targeting, whether we are going to win those projects or not.
No, I completely understand whether we win or not, but just to understand how big is the pipeline and which are the key projects which are in the pipeline. We may or may not get it, that is a different thing. But I just want to know which are the projects in the pipeline for this financial year, given that we are not very sure whether how many projects will come out for bidding in this year, given that we have an upcoming election. So that is -- was the purpose why I asked.
See, Ankita, I would like to then answer this question a little differently. I would like to talk about these schemes, for example, the big signature schemes of the government of India like RDSS. So a lot of projects are coming in different states. If you want, I can identify 6, 7 big states in which these projects are expected to roll out. The JJ Mission continues to be a very active pipeline of projects. So as and when the opportunities come up for bidding, we try to see the projects, try to understand what the project is all about, where is the project, those kind of risk analysis we will do. And then we will decide to bid for the project. It is really not right platform to talk about all the future projects that we are planning to target. Does that answer your question?
The next question is from the line of [ Chandramouli ], an individual investor.
Sembcorp, you said that by September, you will come to know. So what is the amount that we receive, sir, if things go fine?
I will answer this. [ Chandramouli ], this is really a judicial process, and we should not be really sitting in judgment as to what the possible judgment is going to be. All -- I think it is sufficient to say that we have put forward arguments, we have submitted all the documents that we thought are helpful. Now let us leave it to the judges, the wise panel, to take a final call. And let us wait for a couple of months. We expect a final decision by September end.
What about the other one, sir, TAQA?
It's sub judice really. My dear friend, it is not the right platform to talk about or rather setting judgment on a possible judgment.
I'm not asking about judgement. You clearly answered. I'm talking about the other one which is pending?
Mr. [ Chandramouli ], as far as about the TAQA, a long pending case is there. But in the recent past, there is some progress on the TAQA discussions. So there are 2, 3 line of discussions held with TAQA. And we are trying for amicable settlement, and we hope that the amicable settlement will be reached in 2 to 3 months' time. There is a good progress on the TAQA issue and also in a positive manner to the NCCL. We will let you know once the next progress and all happens.
The next question is from the line of Shravan Shah from Dolat Capital.
Sir, but in both the cases, Sembcorp and TAQA, net-net, we will not be having any cash out-go, rather whatever the amount, though we will not mention the amount, but at least we will get some cash amount. That's the way one can look at?
In case of Sembcorp, we will definitely get some cash amount.
And for TAQA, do we have to pay some cash amount?
In TAQA, some payment requirement would be there. But there would not be -- it will not affect any of the financials. The adequate [ closing ] whatever we made, and we expect that the case gets settled within that amount.
Okay. Okay. Second is in terms of the debt level, though, we mentioned that it has increased INR 1,300 crores. But by year-end, will it be lower than INR 800 crores?
Yes. Now there are several issues out there to determine at this moment. So basing on the normal -- in normal course of business, yes, there is a possibility. But there are several issues which are required to take place like Sembcorp, if Sembcorp -- and Vizag Urban -- and then beyond the normal course of business, certain issues are there, which really gives an inflow but we don't have any such uncertain outflows out there. At the same time, the company is looking for big growth, so looking for the bigger sized projects. So when it is looking for bigger project -- sized project, generally some type of initial investment may require. So it depends upon how the kind of orders and other things. But in principle, basing on the normal business, yes, certainly some more amount by the year-end comes down.
Okay. And for NCC Urban Vizag, INR 500 crores we need to receive, but this year, how much -- if everything goes as per plan, 3 installment, how much are we planning to get?
No. In NCC Urban, you are asking isn't it?
Vizag.
Vizag Urban, INR 150 crores is the amount to receive in the year '23-'24.
Okay. Okay. Okay. Got it. And in the presentation, sir, while we -- when we talk about the net debt, we have taken only INR 271 crore cash versus cash flow in the balance sheet. When we saw in the other slide in the presentation, it is INR 804 crore.
No. There are certain deliberations and opinions on that one as we have another INR 500 crores margin money deposits. But these are -- the margin money deposit we kept under the unencumbered deposits. So for certain purposes, we take them and for certain purpose, we eliminate. So in such analysis, cash and bank surplus, now we are excluding the margin money deposits. That figure we can share now.
Okay. Okay. And any broad idea in terms of the -- just to -- reconnecting the previous participant question. Broadly, how much amount of projects that we have bid and where the outcome has yet not come?
Outcome? The bids outcome?
Yes. Where we have bid and the outcome has not come? The final outcome has not been announced.
Amount of bids. You're asking amount of bids?
Yes, how much value of projects we have bid? Let's say, INR 40,000 crores, INR 50,000 crores we have bid and still the outcome has not announced.
Okay. That would be there around INR 25,000 crores to INR 30,000 crores, with changes, moment to moment, to that one.
And this would be largely in the building and the transport segment?
May we request you to please rejoin the queue for follow-up questions. And the next question is from the line of Nikhil Abhyankar from ICICI Securities.
Sir, we were L2 in Ahmedabad and Mumbai railway station redevelopment project. And I think Ahmedabad and Delhi will be retendered. So when should we expect the tenders?
You're talking about Ahmedabad. Delhi, this pre-bid meeting is already done. And the revised tender documents are expected to be issued shortly. The Ahmedabad, I believe, they are again trying to rework the estimate. As you are aware, the last time the tender had come and we did participate in that tender, that was subsequently canceled. So that is also planned shortly in next, let us say, next about a quarter's -- in the next 3 months' time.
We will be participating alone or in a JV?
We have the qualification in all these tenders, we participate on our own.
Okay. Okay. And these are the large railway stations. So any opportunities in the smaller railway station development tenders?
There are so many. In fact, to be -- there is about 500-odd railway stations, which are planned for the redevelopment. So the pipeline is very healthy, very strong.
Will we look at the smaller ticket projects?
Yes, it takes time really. It takes time. And some projects, as you are aware, because you are tracking the sector, some projects are also coming on PPP mode, like Vijaywada and a couple of other locations. So the pipeline continues to be very healthy. And -- but it takes time for the client to really develop the project, approve the design, then issue the tender documents. But as and when a reasonably sized project come up for bidding, we will definitely participate. We have the qualification, and we do have the expertise to execute these kind of projects.
Understood. And sir, the second question is regarding RDSS. So we are already -- we are winning orders as well for the infra development portion of it. But will we be participating in smart metering orders as well?
Yes, yes, yes. We will be. It's an inherent part of the RDSS scheme. If you really talk about the market size, there are about 25 crore meters which are expected to be installed. Only about a couple of crores have been awarded. So we are -- we will definitely participate in these projects as well.
Sir, have we then finalized from where will we source these meters and everything?
We have to, we have to. There are so many meter manufacturers in the market in India, outside India. So we will definitely finalize the agreement with them and then bid for these projects. Incidentally, we have participated in these projects in the past. But unfortunately, we were not successful, but we have participated in a few bids in the past -- last 6 months, let's say.
Okay. So is it allowed to import smart meters for these projects?
See, when we talk about smart meters, we have to again look at this -- there are 3, 4 important parts of these smart meters, knockdown meters, the smart part, the GSM part. So some -- it depends. Whosoever is able to meet Indian standards, then those meters can be imported as well. But there are so many big manufacturers in India as well -- Make in India. So why to really look outside India when good quality meters at attractive price points are already available in India.
The next question is from the line of Parvez Qazi from Nuvama Group.
Congratulations for a great set of numbers. So my first question is regarding our exposure to subsidiaries. What would it be at the end of the Q1?
The exposure in the subsidiary comes in the Q1, there is no any significant change, and there is no any increase in investments, barring INR 1 crore or INR 2 crores change in the investments. So at this moment also there are no any loans to group companies. Only the Vizag Urban, but it's not a group company now, that amount needs to get to the new buyer of that company. But going forward, we have the plans and some part of the amount which supposed to get from international [indiscernible], some part of the amount we expect in the second quarter. And other than that one is another BOT project is there in NCCIHL that is going to be completed in a year's time. At that time, again, some capital buyback or some [Technical Difficulty] and at that time, we expect some inflow from that company. So by year-end, some INR 50 crores to INR 100 crores reduction we expect in the group companies.
Got it. And what is the kind of CapEx that we envisage to incur in FY '24?
We plan -- we've given in the budget, in our internal, we plan about INR 275 crores. So in the first quarter, hardly, we spent about INR 27 crores, INR 28 crores. So it depends upon the CapEx -- spending of CapEx, it depends upon the quantum of kind of projects.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Congratulations on a good quarter, sir. So my question is on your exposure to Karnataka project. So if you remember, there was a media item where they have said that all the works will be stopped in Karnataka. So did we face any impact on account of that? Any of our work stopped because of that?
As now in Karnataka, you know that we have 3 major projects among the others, this metro from city to airport, the metro projects. These only 3 projects put together around INR 2,150 crores are there. These projects are going on. And other projects, after the post elections, some slowness is happened because of the new department and the new ministries and verifying the priorities and other things. But a weeks back, they issued a GO canceling the orders whatever issued earlier. So thereby now the normal position, again coming to the normal position. So during this 3 months period, there is a slow, but not completely stopped the works, there is slow momentum because of the certain payments not happened. So going forward, we hope that the things go as usual. And moreover, these 3 metro projects required more amount in the Karnataka projects.
So what will be the work's -- value of the works where they have been impacted because of this decision of the government?
The total value of works would be around INR 4,000 crores, out of this INR 2,000 crores, these metro projects and other projects, 7 to 8 projects in which, again, some 3 projects we received about -- in the fourth quarter and third quarter of the last year. So those works we also received the mobilization advances.
Okay. Second question around -- so when do you expect the LOA for the GMLR project?
Repeat, please?
The GMLR project which you won, JV with J Kumar, so when do you expect to get the letter of amount and when do you expect...
That is normal. That is generally in days and in a month's time before a month, generally they take place. We cannot precisely tell what [Technical Difficulty] but in normal course, generally -- so basing on the priority of the work by the client. So we can expect 15 days to 1 month time, that LOA.
And the work is expected to start in October this year. So Mr. R.S. Raju says, in about a month's time or so, we should be able to get the LOA.
We will continue with your next question, which will be from the line of [ Shubhav Shah ] from JM Financial.
Sir, our mobilization advance of INR 3,300 crores, so what is the interest-bearing portion and what is the rate of interest?
Now at this moment [ INR 250 crores ] issue is there, interest-bearing and noninterest-bearing.
And the rate of interest?
Average 10% is there for all the projects.
Okay. And sir, our CapEx guidance of INR 265 crores, INR 270 crores, does it include the CapEx for the tunneling project?
No, no, no. This is excluding tunneling project, what CapEx we generally budgeted our plan for this year, excluding the type of major machinery-oriented projects.
And you had said that. Mr. Shah, I take back to the last call that we had in the May when Mr. R.S. Raju had commented specifically that this is a general CapEx, if we are able to get some high big ticket, this kind of project tunneling, we will have to consider extra CapEx. So this statement was categorically made at that point of time also in the last week of May. And I think that was made very clear that this would be over and extra this CapEx of INR 275 crores.
Okay. And sir, how would be accounting for this project? So it would be a one line item or line-to-line basis?
I have not understood your question. Are you talking about the JV?
Yes.
Yes, yes. The -- our share would be approximately 50%. So if you want to talk in terms of value, it would be close to INR 3,000 crores.
So accounting in P&L, how will it be? It is line-to-line consolidation or...
Generally, that modality is not yet reached. It depends upon after getting the LOA and the formation of joint venture and after reaching the understanding -- work sharing understanding. Generally, according to my pre-understanding, the work will get shared about 50:50. So when the -- get work shared, only to the extent of INR 3,000 crores, the revenue recognition takes place.
Okay. Sir, what was our JJM revenue in first quarter? And what is the annual guidance for FY '24?
Which project?
JJM.
Jal Jeevan Mission projects. In the first quarter, projects reported about INR 1,200 crores, only 30% of the Q1 turnover. And in the rest of the quarters also, they report around INR 4,500 crores to INR 4,600 crores. And in the -- for the year as a whole, about INR 5,800 crores to INR 6,000 crores, we expect the revenue from those projects.
Okay. Sir, lastly, are we qualified for the pumped hydro projects? And are we looking to bid for such projects in future?
Most of those pumped power storage projects are coming on PPP mode, most of them really. So as of now, we are not really bidding for this kind of investment projects. But if we are able to tie up with a good partner and he is able to bring the equity, then we might decide to really bid for the project. We are just studying this sector as we speak.
The next question is from the line of Prem Khurana from Anand Rathi Shares.
Congratulations on good set of numbers this quarter. I mean, when I look at the way we have been able to manage in terms of order addition over the last 15-odd months, it seems to have been very, very good for us. Just if you could talk about the competition that you witness these days. I mean the kind of orders that we've been able to manage, would you say, I mean this has come because your success ratio with these orders would have gone up or the opportunity size has gone up in a big way, which is, I mean, every one and anyone is able to then get orders these days?
Mr. Khurana, the infrastructure sector, I mean, it has always been very, very competitive. And we cannot really talk about the competition in a generic manner. In different verticals, there would be different competitors. And in some projects, we will have better qualification, we are maybe in a better geared up to execute those kind of projects. So we target those kind of projects really, but competition continues to be healthy. It is -- I mean -- but in different verticals, we are not only present in one vertical. In different verticals, generally, the competition would also vary.
Sure. But sir, any number that you would be able to share, like, say, I mean 3, 4 years back, I mean your success ratio, on an average, I mean, across the sectors, success rate was about, let's say, 10-odd percent, you've bid for 100 and you were able to find success with 10. What would that number be today? I mean, if you want to kind of give it a guess?
We then again need to dig down in each of these verticals. There are different players who are -- for example, I mean, just to add some color to your question, if we talk about the highways -- roads and highways, the people who are active there are quite different from the people who are competing with us, let us -- we just touched upon JJM, Jal Jeevan Mission or water vertical. The people who really compete with us in our electrical, T&D, would be drastically different from the people who compete with us in, let us say, mining division. So the competition -- we need to really dig down to each of these verticals and then talk about the competition. I would prefer to take this, Mr. Khurana, offline with you.
Sure, sir. And the second question on, if you could share the Andhra Pradesh exposure with us I mean in terms of order backlog, how much is it today and then the balance sheet exposure as well, please?
Andhra Pradesh, the order backlog is about some INR 3,000-odd crores -- INR 3,400 crores is the order backlog.
Okay. And sir, how much would this be the old orders, I mean, which were moving a little slow first and you used to pace out as per the payments that you used to receive?
In this order book, about -- some projects, they have budget allocation and those projects are in progress. But some projects, they do not have any budget allocation, payments are also pending quite some time. Thereby, we have also stopped those projects and waiting for the payment to progress on those projects. As far as capital city projects are concerned, there is an improvement as far as bank guarantees are concerned, we have collected INR 100 crores on the capital city projects where some INR 200 crores plus pending is there earlier. And the outstanding, you know that one from capital city projects have come down to INR 150 crores. And in this quarter, there is no any further collection happen on the capital city projects, the same figure continuing, but we're pursuing with the AP government and they are putting a proposal about issue of the bonds for all the contractors to whom the government to have the [indiscernible] relating to the capital city project. But as per the projects, we have brought down the exposure, and we have picked these big, big projects where budget -- 100% budget allocation is there. So at this moment, the exposure is INR 3,350 crores in order book.
The next question is from the line of Saket Kapoor from Kapoor Company. As there is no response from the current participant, we will move to the next question, which will be from the line of Shravan Shah from Dolat Capital.
Sir, fund-based, nonfund-based limit last time, what we have talked about, INR 15,200 odd crores. Is it the same? And how much is utilized?
Nonfund-based limits, we have about INR 1,000 crores or so are the limits availability. And the fund-based limits, hardly we have INR 2,200 crores and utilization is there about [indiscernible].
Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to Ashish Shah for closing comments. Over to you, sir.
Yes. Thank you, Darwin. On behalf of JM Financial, I would like to thank everybody for participating in this call. And a special thank you to the management of NCC for giving us the opportunity to host this call. Sir, any closing remarks from your side? You may please go ahead.
Yes. Thank you all for eagerly participating in our earnings call. And I thank you all, once again. If you have any further questions and queries, you can -- you are welcome to contact Mr. Neerad Sharma, who is heading the investors and also CFO, Mr. Pusarla Sanjay. Thank you all.
Thank you. On behalf of JM Financial Institutional Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.