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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'm [ Belsia ], moderator of NCC Q2 FY '23 Earnings Conference Call, hosted by DAM Capital Advisors Limited. [Operator Instructions]. Please note, this conference is recorded. I would now like to hand over the floor to Mr. Mohit Kumar from DAM Capital. Thank you, and over to you, sir.
Thank you, [ Belsia ]. On behalf of DAM Capital, we welcome you all to the NCC Q2 FY '23 Earnings Call. From the management side, we have with us [ R.S. ] Raju, Director of Projects; Sri Krishna Rao, Executive Vice President, Finance and Accounts; Sri P.V. Vijay Kumar, Vice President; Sri Neerad Sharma, Head of Strategy and Investor Relations; and Sri K. Durga Prasad, General Manager, Finance.
Without much delay, I'll hand over the call to the management for the opening remarks, which will be followed by a Q&A session. Over to you, sir.
Yes. Good afternoon, everyone. This is Vijay Kumar, Head of Finance and Vice President. I welcome all of you for the H1 FY '23 Earnings Investors Call. I thank you all for taking time to attend this. So before we start, I'll read out a brief disclaimer and then we shall go into the subject.
The statements made here or in the presentation uploaded by the company are to our best of our knowledge, and any forward-looking statements are subject to certain factors beyond control of the company officials and management. And hence, the audience are advised to use their discretion in their own analysis accordingly.
Now we shall go into the taking the performance of the company for this Q1 into account. I'll briefly start with opening remarks followed by Q&A. I have my colleagues, Mr. R.S. Raju, Director; CFO, Mr. Krishna Rao, [indiscernible] Finance, Durga Prasad; and Mr. Neerad, Head of Strategy and Investor Relations are present in this call, who will take your questions. [Operator Instructions] We'll start now.
So internationally, almost all economies are showing certain pain points in a major or minor way. We are in a peculiar situation arising after COVID, coupled with the global tensions causing supply chain disruptions.
Our appearance in economies are like -- we are seeing them now after several years, a decades of gap. In their own way they are structured.
During this peculiar troubled times, India has shown its resilience in bouncing back. If you observe main drivers of Indian economy, it is topped by infrastructure construction spending, followed by consumer spending, which is since picking up, thanks to the cost-cutting effect of government spending and improved CapEx program across the states.
The gross CapEx formation in FY 2022 has shown up nearly 16%, while government [indiscernible] embarked on various programs like Pradhan Mantri Awas Yojana, with an estimated budget of INR 48,000 crores [indiscernible] with an estimate budget of INR 60,000 crores, et cetera.
Meanwhile, private consumption expenditure as an indicator for demand in the economy, that contributes the most to the GDP, grew at 7.9%. It is clearly now -- it's a play of CapEx coupled with private consumption. The good part of it is the economy needs to be matured, and it still offers a good growth revenues.
As you see, India surpassed England as fifth great -- fifth largest economy in the world. This is the moment the companies which have good business mix like NCC, which is into building, water, electricity, roads, mining, et cetera, well positioned to capture all the opportunities in different segments.
NCC with a size of INR 40,000 crores [indiscernible] in all these segments remain as one of spearheading companies income segment. Global inflation forecast is expected to be in the range of 8.8% in FY '22 and have not shown much abatement during FY '23.
The primary reason is a floor effect of [ coveted ] measures undertaken by various nations. The money supply has been substantially induced into the economies to support the civic life. The balance sheets of Federal Reserve or European central banks have expanded by 110% and 88%, respectively between January 2020 and December 2021, while our [indiscernible] balance sheet grew up nearly [ 36% ], respectively. It helped us to stay behind the inflation bank.
However, we are also importing the effect of inflation into our economy, arising due to supply chain disruptions, falling rupee due to hike in interest rates in the West, [indiscernible] dollar flight and impacting current account deficit.
Towards this end, RBI tried to address the problem by increasing the repo rate cumulatively by 190 bps between May 2022 to September '22. As a consequence, the rate of interest across the banks have arisen. I may mention here that at NCC, the average rate of interest from April 1, 2022 to -- it was 8.6%, [ 8.7% ] as on September '22. And most of our working capital has remained in the form of working capital demand loan.
So while average BG and LC commissions rates remain at the same level so far. So we are ready to see the full impact of interest rate side.
While this being -- so the global hike in commodity prices seem cling on because the levels were not restored compared to previous year due to fears of recession in large economies like China, U.S. England, et cetera. The experienced management and well contractor structure ensured many of the costs not to slip beyond limited levels, even with the whole industry and the economy are showing visible slippages in costs.
Coming to the last part of my briefing, we remain bullish in our economy, considering the infrastructure spend-driven growth.
The Indian economy will grow at an average GDP growth of 6% during 2022 to 2030. On the other hand, China and U.S. will have average GDP growth of 2% and 2.7%, respectively. So the high investment rate, which matches some of the peaks of earlier years, continues to be supported by CapEx of central government, which cumulatively in the current year has reached INR 230,000 crores to until August 2022, 35% higher than the level of corresponding period of last year.
However, the input price volatility is still a concern and conditions prevailing internationally like Ukraine war, stringent lockdown conditions followed by China and possible recessionary trends in major economies do determine the delta in which economy will swing. I'll now pass on to my colleague, Mr. R.S. Raju, Director, to bring out salient features of our financial performance to you. [Operator Instructions].
Thank you, Mr. Vijay Kumar. Good afternoon to all of you. I'm R. S. Raju, Director of Projects. I will brief about the performance of the NCC at consolidated, touching about the performance of the group companies individually. Thereafter, I will hand over to [Technical Difficulty].
Ladies and gentlemen, kindly stay connected while we connect the management team back on the call.
Shall I go?
Yes, sir.
Okay. The group-level performance of the company, so I will read out the performance of the company for the second quarter. Company has reported a revenue of INR 3,405 crores as against INR 2,601 crores of the corresponding quarter of the previous year, a growth of 31%, has reported a gross profit of INR [ 518 ] crores as [ against ] to INR 435 crores, a growth of 19%. The company the gross profit margin level this quarter reported 15.4% against to [ 15.9% ], a decline of about 10% in this quarter.
All of you know that there is a dramatical change in the metal price as compared with the previous year. Prices went up like anything from the previous year, starting from third quarter and up today, end of the last year. And also some of the commodities still increased in the first quarter of the current year. But now the prices of commodities started coming down, some of the products, but not all commodities.
As a result, the company achieved in the gross profit margin in the second quarter happened. The company has reported EBITDA was INR 310 crores against to INR 266 crores, a growth of 16%. And so it did happen in the EBITDA level from 10.3% to 9.2%, about 1% dip happened at the EBITDA level, the reasons are more or less same. I come to the net profit, reported INR 131 crores, against to INR 114 crores, a growth of 15% on plain comparison.
But when you take out the exceptional item, what we reported in the second half of the previous year, about INR 31 crores, the net operating profit as compared to -- reported for this quarter is INR 131 crores as against to INR 83 crores of the corresponding quarter of the previous year, resulting a 57% growth in the net profit.
Coming to the quarter-on-quarter, there is not much variation, almost all the results are flat right from the revenue to the bottom line. As far as individual company's performance is concerned, all companies together reported a turnover of INR 368 crores and a profit of INR 9.33 crores.
There are 2 companies that are reporting that turnover in a significant level. And the third one is our [indiscernible] that is reported at INR 13.77 crores. Our [indiscernible] is concerned has reported INR 82 crores as recognized to INR 147 crores of the corresponding quarter of the previous year.
And other big company [indiscernible], it is an upcoming company, reported a turnover of roughly INR 280 crores as against INR 228 crores of the corresponding period of the previous year. There is a significant growth happened in this company. As far as property is concerned, there is not any significant change.
We have reported a INR 9.33 crores as against INR 9.64 crores because there is no significant range in the top line. When we come to NCC Urban, individual company-wise, though there is a fall in the turnover compared to the corresponding part of the previous year, in the previous year in the same quarter, some -- additional revenue booking has happened because of the internal accounting policies and certain projects, so mature for the recognition of income.
As a result, more income is reported in the corresponding quarter of the previous year. But to compare profit margin level, there is a significant improvement happened in the profit margins of the NCC Urban infrastructure limited. First quarter also reported a growth in the profits. Second quarter also reported some more growth in the profits. And in this quarter, has reported a PAT of 15% as against 10% of the corresponding quarter of the previous year.
Similarly, when you come to the other company, [ Gold Mining ] Private Limited, there is increase in the top line from INR 228 crores to INR 280 crores. And EBIT also, there is an improvement from INR 8.9 crores to INR 11 crores. And PAT, this company reported INR 8.2 crores against INR 6.7 crores of the first point in quarter of the previous year.
Here, the important point to note here is the group companies earlier [ reason ] to report losses because of various secular problems associated with those companies.
And now gradually, the business, we have closed in some of the group companies. And the inflows are happening from those companies in terms of monetization of the assets, both equity as well as the loans. Looking forward, we are not expecting the company's report on losses in the group company level and both Urban and as well as NCC and [ Gold Mining ] companies report profits as a result that consolidated profit increases year-on-year.
Earlier, always at the group level, the group-level profit is [ greater ] than the stand-alone profit. But now the situation changes, gradually the consolidated profit more for the external profit, which helps ultimately the imported good EPS and good return at work.
Consolidated debt standing at INR 2,002 crores as of 30 September INR [ 1,053 ] crores, an increase of probably INR [ 250 ] crores in the second quarter. And CapEx has increase in INR 74 crores. Basically, the increases belongs to the parent company, and there is no increases in the group companies either debt or CapEx.
The cash flows for the second quarter generated from operations is around INR 8 crores and used for investing activities, INR 64 crores, gain generated from financing activities about INR 15 crores. So this is about, in general, the performance of the company at the consolidated level.
Going forward over the company, we expect that company grows further because of the positive outlook for the [indiscernible] and restructuring of the company's monetization of the investments and the loans.
As a result, loss-making companies will not arise. The further cash flows happen from the group companies into the [ present ] company. As a result, the capital employed in noncore business comes down and the capital employed in the core business increases as a result of the overall return on capital employed increases, going forward.
Company has now adequate resources to handle any expansion as contemplated year-on-year. [ Organization ] bandwidth also the company increases to -- on what the market opportunities into the company's business.
So we expect a positive aspect going forward for the company, and it was back the level of 2018, '19, where we reported INR 12,000 crores plus revenue. Thereafter, certain setbacks happened to the company. As a result, some degrowth happens, followed by the, again, COVID impact, and now the company is, as compared, in good position.
And going forward, it reports growth year-on-year. So this is about the group company level. Now I'll hand over to Mr. Krishna Rao to brief about the stand-alone finances.
Good afternoon. Order book summary. Order set beginning of the financial year, INR 39,361 crores. Orders received in 6 months, INR 7,117crores. Value of the work executed during the 6 months, INR 6,458 crores. Order book stands at end of the 6 months, INR 40,020 crores. Major orders received during Q2 is HLL Infra Tech Services, this is to building fund by central government during this 27 months, and the value is INR 946 crores.
Next up is rural water supply and the sanitation Vidisha. This is to Water division and the funding by state government. Duration is 24 months, value of the order INR 910 crores. The last executive engineering PWD capital, [ Guwahati ], order is to Building division, funded by state government, duration 48 months, value is INR 393 crores.
We have also received orders in October and November up till -- for Water division, we have received 2 others. One is from Orissa and Gujarat, valuing INR 1,056 crores. And for Electrical division, it is INR 321 crores, totaling to INR 1,377 crores.
The operating performance at stand-alone level. Revenue for the quarter is INR 3,037 crores compared to the corresponding Q2 INR 2,223 crores, achieved a growth of 37%. And the gross profit achieved for the quarter is for INR 493 crores as against the corresponding quarter of INR 397 crores, achieved a growth of 22%.
There is a slight improvement in the gross profit compared to Q1, 0.04%. EBITDA INR 289 crores as against the corresponding quarter of INR 237 crores, achieved a growth of 22%. PAT for the quarter is INR 122 crores. And once we eliminate the exceptional item in the corresponding quarter, the PAT is going to stand at 73%, growth achieved is 67%.
The salaries and administrative expenses, there is a slight increase, INR 25 crores and administrative 9% compared to the revenue growth of 37%, is normal. And interest and finance charge, there is a slight increase because of the BG and LC's more utilization.
Cash flow generated for the quarter from operations is INR 51 crores, and the cash flow used is equivalent amount INR 51 crores. Cash flow from financing activities is INR 50 crores. As a result, net increase in cash, cash equivalent is INR 50 crores as against the corresponding quarter of 32% net increase in cash.
The receivables compared to Q1 increased to INR 2,792 crores, an increase of INR 397 crores. And the debt collection period stand at 95 days as against March, 97 days. There is a slight improvement. And the debt position is at the beginning of the quarter, INR 1,707 crores, we have utilized it because of the growth of the business, more working capital to INR 78 crores. Debt position at the end of the Q2 is INR 1,985 crores.
With regard to the loans investment and advances from the subsidiaries, we were able to collect INR 15 crores, INR 13 crores from NCC Urban infrastructure and INR 2 crores from Nagarjuna Construction International. As a result to that extent of INR 15 crores, there is a reduction in the exposure to the group companies.
Retention money stands at INR 1,925 crores, slight increase by INR 37 crores. Unbilled revenue remains at the same level, INR 2,895 crores, marginally because of the more LCs and BGs increased it from INR 534 crores to INR 551 crores increased by INR 17 crores. Borrowings, I have mentioned that increased to INR 78 crores. Retention money is slightly increased from INR 1,121 crores to INR 1,147 crores, INR 27 crores increase.
Mobilization advance, there is a decrease by INR 15 crores, stands at INR 2,006 crores. CapEx in the second quarter is INR 93 crores and the first quarter is INR 56 crores, totaling to INR 148 crores. This is all about the stand-alone financial results.
Yes. We can start the Q&A session. [Operator Instructions].
[Operator Instructions] First question comes from Shravan Shah from Dolat Capital.
Congratulations on a good set of numbers. Sir, my first question is in terms of the guidance. So now are we going to give a formal guidance. So in the first half, we have done 46% revenue growth, so how do we see for the full year? And you have already mentioned in terms of that growth will be continuing year-on-year, going forward. So first is on the revenue guidance and second is in terms of the EBITDA margin, how do we see an order inflow for the year, how do we see?
Yes. As far as the growth is concerned for the current year. The past 6 months, the company reported about 45%, 46% growth, but the thing to be noted here is that pre-COVID level is there in the first half year of the previous year. And in the previous year, there is a ramp-up in the top line as improvement has happened post-COVID.
As a result, in the previous year, third and fourth quarter also company reported a significant level. As compared to the first half year, certainly, this growth, 45%, is growth reported.
But the same level of growth would not be there because last year, second half already reported a level of INR 2,700 crores [ INR 2,800 crores ] level of turnover by the company. So basing on the current scenario, when we reveal [ this orderly ], and we expect a further 20% growth in the second half year. And overall growth of 30% is maintainable for the company for the year in the fall.
And you also asked about the year-on-year, again, next year also, probably understand that the growth of the growth. That's okay, the next year onwards already decided to give the guidance in the beginning of the year itself. Since already substantial period is over this one, and there is no -- and management decided at this point of time, it is not advisable or not good to give in between the guidance, but expected number of good levels is 30% over the previous year.
And on the EBITDA margin and order inflow and the date which has increased close to INR 800 crores stand-alone in the first half, so how do we see by year-end?
And the order flow already happened about INR 7,117 crores. and some more orders also we received in the October month. And [ orders ] are there in the pipeline. So basing on the total pipeline in the other sectors, roughly INR 10,000 crores already is there.
And for the year as a whole, we expect the growth of [ 50% ] in the part of book. And thereby, the order book, our booking for the year would be around INR 16,000 crores. As far as EBITDA is concerned, now the company has reported EBITDA of how much? 9.2%.
9.6%.
9.6%. And going forward, we expect a further improvement from this 9.6% level. And we expect that we touch the 10% of the EBITDA level.
Lastly, on the debt level front, sir, so which has increased INR 800 crores -- it has increased INR 800 crores. So by year-end, do we see further -- some improvement in working capital and the debt level to come down?
Yes, you're right. And now the company had taken a big size of projects, and there is a ramp-up in the executional level. Majority of the projects are in mobilization, mobile -- reached at 20%, 30%, 40% levels. And we augmented the total execution levels.
As a result, we pumped about INR 800 crores into the projects to achieve this [ 30% ] level of growth. Generally, in the construction, in the first and second quarter, the working capital cycle increases and the funds goes into the deposits.
But third and fourth quarter, the collections improved as a result of the debt also. In third and fourth quarter, decline happened general -- historically can you verify. And for this year also, we expect the reduction of -- from INR 800 crores to INR 700 crores to INR 600 crores.
As a result, the debt position comes down by the year-end from the present level of INR 900 crores, INR 800 crores. We expect about INR [ 250 ] crores, INR 300 crores or so. So from this level of cost improvement, we expect by the year-end.
And the next question comes from Nikhil Abhyankar from DAM Capital.
Sir, we have already sold our Vizag land, and we were supposed to receive the second tranche of installment. So have we received it till now? So can you just give us...
We have not received. But during the last meeting, they sought for the 3 months of grace period. And there, we expect the payment in the December of -- in the third quarter. And the next tranche also, we get by March.
Okay. So all INR 5 billion will be received by March?
Not all, not all. Out of 3 tranche spending, 1 tranche we expect in December and another tranche in March and 1 tranche likely to skip into the next year.
Okay. So just to clarify, sir, around INR 375 crores we will receive it this year. One we have already received...
No, no, there is not a schedule of payments. I explained about the equity part, whatever the equity are INR 50 crores, INR 50 crores like that, they are tranches. But as far as the loan is concerned, that is outstanding is about INR 320 crores is there. That loan as for the agreement is payable up in the '22, '23 and [ sought ] in the '23, '24. The deadline for the total loan repayment is 24th March.
Okay. Understood. And sir, what is the status on receivables from Andhra, sir?
As Andhra is concerned, there is a good improvement about the collections from the Andhra. And the -- now, the exposure as far as Andhra is also concerned, has come down dramatically to [ INR 3,053 crores ].
As far as payments are concerned, in the current year -- in the 6-months period, we had INR 202 crores we collected. And in October also, we received INR 34 crores.
As a result, the long-pending receivables from the world projects has come down dramatically. And about new projects that [ in about ] they are going and the payments are coming. And in the new products, some pending are there, some 4, 5 months receivables related to the ADB -- on the ADB projects and another one is on AP project. And the PAT we are also expecting in this quarter. Otherwise, the payments relating to the old projects, particularly relating to the capital city projects, where 2 segments are there.
One is roads, other one is buildings. One needs, to that extent, pendings are there. In the building spot, again, some improvement has happened. The government asked for us to complete the housing -- the multi-storey houses for the [indiscernible] and other things. And payments are also there making for the project.
So net-net, there is a good direction, it happened hardly INR 150 crores to INR 200 crores, spending should be there relating to this capacity project.
Understood, sir. And sir, just one last book keeping question. So I did not get the exact figures earlier. So the retention money is INR 1,925 crores. Unbilled revenues INR 2,895 crores. Mobilization advance is INR 2,006 crores. And sir, what is the loans to contractors?
Loans to contractors, INR 1,433 crores.
[Operator Instructions]. Next question comes from from MAS Capital.
Just wanted to understand what's the share of government in the INR 40,000 crore order book that we have? And a continuation to that question, are we going to focus on any of the upcoming infra themes like airports, hospitals and data centers?
Our business is primarily from the government sector. When I say -- when I use this word government sector, I'm talking about central government, their agencies as well as state government and their agencies. So primarily, the exposure that we have is from the government business. Coming back to these 2 sectors. We are actively participating in all the upcoming airport bids. In fact, we have recently completed this Guwahati Airport about a couple of months back, and we are currently already in the process of completion of this Lucknow Airport. And Patna is also in very advanced stage of construction. So we do participate in these sectors.
Sir, anything in the data center space?
Data center, primarily the projects which are coming up in data center is on the development mode. So we are very selective in that segment as we speak. So you have to have your equity, you have to develop and then rent it out to the various IT and IT services company. So we are currently starting this segment, but we have not participated in any of these bids as we speak.
Next question comes from Yash from Elara Capital.
Sure. So first question, could you throw some light on the international exposure? I know it's very insignificant as of now, but I would like -- could you give the exposure amount? How much has been received or how much payment is yet to be received?
As far as international is concerned, and the construction business, we have stopped and almost all the products are [ over ]. Only one project is left for about INR 30 crores to INR 40 crores.
In Qatar Petroleum.
In Qatar Petroleum. That will be completed by March of this year. As far as payments are concerned, we had to get a balance of INR 80 crores to INR 85 crores from the international LLC company, out of which in the current year, another INR 35 crores to INR 40 crores we expect by March and balance in the second year. Certain receivables are there for the international LLC company related to the 2 projects. That would happen to pay this amount back to the NCC.
Okay. Also, could you give the revenue and the order book breakup for each and every sector?
Yoy are asking [indiscernible] sector. Okay. Our CFO, Krishna Rao, will tell the numbers. And until you -- we tell you about the end figure the -- order book as of 30 September, 92, division-wise. You are asking revenue?
Revenue as well as order book growth. And if you could just give the year-on-year comparison for revenue that also will be good, last.
Yes. Revenue in 6 months, Building division stands at INR 3,195 crores, represents 49%. Order book at the end of September, INR 25,269 crores is -- constitutes 63%. Roads, INR 432 crores, stands at 7% of the revenue, closing order INR 714 crores, represents 2%.
Water and [ Environment ] revenue for 6 months is INR 1,374 crores, represents 21%. Closing order stands at INR 6,797 crores, stands 17%. Electrical revenue is INR 528 crores, stands at 8%. Closing order book is INR 2,365 crores, 6% of the total order book. Irrigation turnover is INR 202 crores, is 3%. And the order book at the end of 6 months is INR 1,080 crores, 3%. Mining turnover is INR 687 crores, represents 11%. And the order book at the end of the half year, INR 3,357 crores, 9%. Other is the minor, INR 35 crores. Order book is INR 235 crores. Thank you.
Also, I mean, I wonder the quarterly breakup, you gave the 6-month breakup for revenue dividends, so could I get the quarterly one for this quarter as well as the same quarter last year?
6-month numbers so we are ended -- we'll send in the letter, please.
Next question comes from Deepak Poddar from Sapphire Capital.
Yes. I just wanted to understand, I mean -- yes. I just wanted to understand, in your opening remarks, you mentioned about that the full impact of rate hike is still left kind of to come into our interest cost. So just wanted to understand what is the incremental cost in rupees crores we are talking about in terms of our interest [ outgrow ]?
Yes, the [ branch ] cost for Q2, it stood at INR 123 crores. While in Q1, it was INR 108 crores. So for H1 together, it puts up -- it goes up to INR 230 crores compared to INR 220 crores in the previous year in H1.
Yes, that I know. I mean...
You're asking the reason?
Sir, I'm asking -- not the reason. I'm asking, what is the incremental, I mean, interest full impact. I mean you said the full impact will come in coming quarters, right, in terms of higher interest cost. So what is the incremental interest cost one can expect, going forward, when this full impact comes?
See, the -- from May to -- from April to September, there have been 4 hikes, which is aggregating to 190 bps, whereas we have seen only 10 bps increase in our fund-based leverage, and there is no increase in nonfund-based limits. So the hike in interest rate is yet be known, how much it is going to be -- in which rate it is going to be is yet to be known. Once the renewals happen, what we predict is as far as the fund-based interest rates are concerned, possibly it might go another 0.4% to 0.5% with a full-year impact. And nonfund-based, we really don't see much of increase. Maybe at the maximum, we can see 0.1% or 0.2%.
Okay. So on an average, our interest cost can increase by about 0.3%, 0.4%, right? I mean, overall?
On average, that is a safe zone to consider that.
Okay. And this quarter-on-quarter increase in interest cost is because of higher debt levels?
Not only high debt level because the company operations are increasing as a result of the quantum of BGs and quantum of LCs increase. The [ past ] of BGs and [ past ] of LCs is more there than this debt [indiscernible] is not increase only the debt in this quarter increased about INR 270 crores, INR 280 crores.
Next question comes from Saket Kapur from Kapoor & Co.
Sir, firstly, just a small understanding. You mentioned a 30% -- yes. Sir, you mentioned a 30% growth on the top line, we have done for the first half. This should be the outlook of execution for H2. Is that understanding correct, sir?
No, no. For the first half year, we reported a growth of 45%, okay? For the year as a whole, when you ask for the year as a whole what the growth was for the previous year when you come to that point, we said that 30% growth we expect for the year as a whole for the previous year.
Okay. So on a top line of INR [ 1,100 ] crores, we are expecting a growth of 30%?
Yes, you're right.
See, we do not have a specific pointed figure from the Board as a guidance. These are certain things. So looking to the past region, we can resume in the same [ region ].
Correct. And last -- you were completing the sentence.
Yes. Now what ultimately we mean here is 30% overall growth for the year compared to the previous year.
Sir, and outside the total proportion of INR 40,000 crores, how much is the operation and maintenance contract part as a revenue? And for the first half, how much we have booked on the O&M part?
In this order book, this random part, particularly the big product, what we received from the -- this [indiscernible] Mumbai water sewerage project, where a big content INR 1,800 crores is there that we have not included in the order book as the revenues happens after some time, after 5 years, 6 years.
So we are not including it in this one. When in this order book, [ penny ] small, small [ wind-up ] products are there, roughly 5% to 6%, 7% would be there.
Okay. Out of total book of INR 40,000 crores INR, 1,800 crores is attributable to that Mumbai project part in that. I think it's 7 to 8 years down the line that will start...
This O&M contract that my colleague has just talked about has not been accounted for. This project will take about 6 years to get developed. Then the O&M will start. That will continue for about 16 years, the value is about INR 1,600 crores.
So in the order book that we are talking about of INR 40-odd thousand crore, all that we have accounted for from this project is about INR 3,833.
Sir, you mentioned the cost of fund at 8.65% is the blended cost for us?
Yes. Blended cost for all products.
And we see it going up by another 0.35 basis points going at. That is what our expectation is?
That is what safely we can assume.
Okay. Sir, when we look at the cash flow [indiscernible]?
8.68%.
Sir, when we look at the cash flow part, we find the income tax payment to the tune of INR 99 crores for the first half. So this INR 99 crores is totally attributable for this fiscal year? Or do we have a prior-period item also being said for this quarter, out of the INR 99 crores?
It's tax payment, advance tax. Tax payment, maybe you're asking the income tax payment?
Yes, yes. Yes, the net income tax paid refunded line item, which was INR 99 crores.
No, no, that is INR 99 crores, which is a deduction. Generally, we won't pay any money for the tax from our end, 2% to [indiscernible] that client deduct from our [ RABs ]. And also, they direct the 2% from the advance payment also.
The liability is different. The advance is different. Generally, the payment water we made are to the Income Tax Department is higher than the -- my tax liability. So in [ corporate ] as a second source towards the liability of the company for the first half year, that comes roughly about to INR 60 crores.
INR 72 crores.
Yes, that is the liability. And what we thought is about the advance payment.
Okay. And last question, sir, about this investment property and investment property under construction, what are these 2 line items -- the investment property of INR 185 crores and investment property under construction at the tune of INR 103 crores?
Under construction means it is still under progress. Still under progress. Primarily, this is the Jubilee Landmark, where the products in [indiscernible] developers, where we have the -- some part as a land owner. And the investment property means whatever completed flats or other that represent the -- that line item represented in that quarter.
Okay. So this INR 185 crores is the inventory, which in the form of investment in property that we are getting and INR 103 crores is we are holding the land parcel on which the property will be developed?
Some more land properties and some more completed flats. Roughly, we have about INR 70 crores to INR 80 crores of flats which are the sales. And the amount of that sale is happening in the first and second quarter, and the balance is about to the land pockets.
So this INR 103 crores you will realize over a period of time?
This is over a period of time. This is also we realize about the properties there that is also we realize. If you see that on the numbers, last year, by March '22, we have INR 160 crores. Now it has come down to INR 143 crores, about INR 17 crores we are realized in the first 2 quarters. Similar realization also would be there in the next 2 quarters.
On the other incomes and knock-out, you mentioned that last year had an other income compound of INR 32 crores. So when we look at the consol part, the other income component was INR 20 crores for September '21. And for this quarter, it has gone up to INR 32 crores. So if you could explain what were you trying to convey, sir?
The other income also represents partly the profit, what we earn on the sale of the property, what just now we discussed that one. And other income also represent the dividend payment, what we received from the -- one of the subsidiary company, [ PCMPL ]. So these are the two elements, which are on the high side compared to the earlier period.
Sir, you were knocking out some INR 30 crores in your earlier -- in your opening remarks, you were knocking out some INR 30 crores other income, thereby saying that the profit would have been -- yes.
Other income exceptionally that is the active INR 31 crores, what we are not now...
exceptional income, right.
We have a follow-up from Shravan Shah from Dolat Capital.
Sir, two questions. First is in terms of the group exposure, so currently, we have a INR 1,292-odd crores. So by year end, how do we see how much this exposure will be reducing?
One second. About INR 187 crores, we expect in this current year. In terms of loan and in terms of equity, both put together, we expect INR 200 crores odd on that INR 80 crores INR [ 83 ] crores, and the total exposure risk INR 1,446 crores at this moment. And about INR 219 crores we expect to realize by March. The exposure comes down to INR 1,200 crores by March end.
Sorry, sir, as on September, the group exposure is INR 1,292 crores? Or the number is higher?
I talked about from March '22.
Okay, okay. Okay. So from March '22, we are expecting close to INR 200-odd crores to be reducing?
As estimated those.
Yes. Second is in terms of the CapEx we mentioned. So in cash flow, it shows INR 125-odd crores, but you said INR 148-odd crores we have done in first half. So how much for the full year we are likely to do the CapEx at a stand-alone level?
INR 225 crores.
INR 225 crores.
Full year.
Okay. And lastly, in terms of the retention money you mentioned, is it INR 1,852 crores or INR 1,925 crores?
Yes, INR 1,925 crores.
Okay. Okay, which is the -- on the asset side, INR 1,925 crores?
Yes.
Okay. Okay. Okay. And then other income, now should be on the stand-alone should be slightly coming down. So from INR 32 crores, INR 33 crores that we have seen in the fourth and second quarter. So it should be now reducing in the third and fourth quarter?
Other income. No more or less in the same level could be there.
We have a follow-up question from Nikhil Abhyankar from DAM Capital.
Sir, we had earlier mentioned that the run rate for [ JMM ] orders in FY '23 would be somewhere around INR 30 billion, if I'm not wrong. So how much have we done in H1? And what is the guidance for the remaining year?
What? Can you please repeat this question, please?
Sir, what is our run rate [indiscernible]
[indiscernible] right?
And what is the guidance for FY '23?
[Foreign Language].
No, you are talking about [indiscernible], right?
Yes. Yes.
Yes, we have achieved a turnover in Q1 INR 646 crores. And in Q2, INR 814 crores. In 6 months' time, it is INR 1,460 crores. So, so far, we have achieved all the projects together, 27%. So balance order book stands at INR 7,861 crores.
Okay. And can we expect similar execution in H2?
Similar or a little more than the past 6 months also, we have it.
Okay. And sir, our tax rate is low in Q2. Any specific reasons?
Repeat please.
The tax rate in this quarter is lower at [ 19% ].
Income tax.
And tax rate [indiscernible] explain. In the current quarter, we have received some payments from the Income Tax Department relating to certain long pending [ displace ] we did the department, and we [indiscernible] other from the [indiscernible] and we received about INR 10 crores to INR 14 crores. As a result, the tax rate has come down for this quarter.
Next question comes from Chandra [ Murali ], an individual Investor.
What about the pending cases that has been long pending [indiscernible] 2?
Two cases are there. Now as far as [indiscernible] case is concerned, the arbitration proceeding is more or less is [ over ] there at the end state, in the next [indiscernible] 2 months, the balance proceedings takes place. Basing on the project scenario, we expect an order in the March '23.
And about the second case Tata is still -- is in progress. But for the amicable settlement, the dialogues are happening between 2 companies and one round discussions over in the last month. And there is a hope to get a [indiscernible] settlement. And the settlement is another 6 to -- 6 months time that case gets closed.
Okay. What [indiscernible] is there any cash outflow from the company? I mean have your provided everything...
As far as Sembcorp is concerned, we are not expecting any cash outflow. And we expect a cash inflow of INR 650 crores to INR 700 crores with Sembcorp. As the stock is concerned, yes, there is an outflow. For that one, we made a provision in the books of account, roughly about INR 100 crores to INR 120 crores outflow over the year.
Okay. If that is the case, it's only the positive expectation of about some INR 600 crores, even the worse case scenario, am I right?
Correct. That's right. And this liability falls on NCC Infra Holdings Limited. And Infra Holdings Limited get similar amount from its subsidiary that is from the Company Limited from [indiscernible] that is [indiscernible] that project getting closed in another 1.5 years. And inflow of about INR 100 crores is there from the company. That company utilized that INR 100 crores for the Tata's settlement.
Next question comes from Prashant [ Asarawala ], an individual investor.
So my question is [indiscernible] do around 12% of the [ EBIT ] margin. And now we are at 9% of [ EBIT ] margin. So how do you expect to what kind of [indiscernible] what kind of margin you can expect for H2?
Your voice is not very clear.
You're asking about EBITDA margin?
Yes, for second half and for the next year, if you can...
So second of -- we expect second half an increase from the first half year. It would be standard 10.2% to 10.3% level. As a result, for the year as a whole, we expect 10% to EBITDA.
Okay. And like other income, like what kind of other income we can expect, going forward? Like it's come down to INR [ 132 ] crores, right, per quarter.
We already answered, the same level and bearing about 5% to 10% .
Okay. So it's like -- it's a onetime kind of thing, right? Other income is like -- we can expect it for quarter, right?
They're not onetime items. They represent other income, represents my interest income on the -- in the loans given to the group companies, number one. The interest on the margin money is what I have with the banks now. Some rental income would be there. Net income is there, the profit and the sale of the properties are there. They're not a sort of unexceptional items. If the activity grows, then all the other income gets -- grows.
Right. So if we take out the profit on the sale of the property, what kind of other income we can expect quarter-on-quarter?
If we take out this...
Yes. Like if we take out this profit from the sale of the property, right, that can be onetime, right? So what kind of other income we can expect [ every quarter ]?
[ For a ] year ago, INR 10 crores to INR 15 crores would be there, the profit on sale of property.
Okay. So like we used to do kind of like 180 -- like we have moved in -- last year, we had [indiscernible] INR 270 crores average in the quarter [indiscernible] so like -- if we can take a of INR [ 150 ] crores, we can expect INR 250 crores kind of fee like yearly?
What is that -- your question is not clear. Voice is also breaking.
Okay. All right.
Okay. All right. Yes. We are reaching the closing part of the meeting now. Maybe we'll take another one or two questions, that's all. Please cooperate.
That will be the last question for the day. I would now like to hand over the floor to management for closing comments.
Thank you, everyone, for your patient listening. And we are available to you by [ mail ]. In case you have any questions, you can always reach us. Thanks, once again, for taking time and attending the call.
Thank you all.
Thank you.
Thank you.
Thank you.
Thank you, sir. Ladies and gentlemen, this concludes our conference call for today. Thank you for your participation and for using [ Dusaba's ] conference call service. You may disconnect your lines now. Thank you, and have a pleasant day.