PNC Infratech Ltd
NSE:PNCINFRA
Earnings Call Analysis
Q3-2024 Analysis
PNC Infratech Ltd
The company reported a stand-alone profit of INR 447 crore for the first nine months of fiscal year 2024, representing a 15% increase from INR 390 crore in the same period of the previous year. This yielded a profit after tax (PAT) margin of 8.4%. On a consolidated basis, revenues grew by 8% year-over-year to INR 6,050 crores while the PAT margin was reported at 8.5%.
The company has signed a share purchase agreement for 12 assets split into two phases. The equity value of these breakups range from INR 1,790 crore against an infusion of INR 1,000 crore in the first phase, to INR 1,113 crores against an INR 740 crore infusion in the second phase.
The company has eyes on acquiring new orders worth around INR 8,000 crores by leveraging opportunities from 200 floated projects by various authorities. This projection is despite a slow awarding activity during the first nine months where targets fell short by a significant margin.
Boasting a strong balance sheet, the company’s stand-alone net worth is INR 4,378 crore with a minimal debt of INR 280 crore resulting in a net surplus cash position and a net debt to equity ratio of 0.09x. On a consolidated level, the net worth stands at INR 4,798 crore with a total debt of INR 7,652 crores, translating to a higher net debt to equity ratio of 1.57x.
Leadership anticipates a 10% revenue growth for the full fiscal year and expects to maintain similar growth into the next fiscal year. Additionally, the EBITDA margin is expected to sustain at current levels.
Looking beyond its traditional NHAI highway sector projects, the company is adding water sector projects to its portfolio. With new tenders anticipated in the pipeline, there is an active interest in evaluating these forthcoming opportunities.
The company has revised its planned capital expenditures down from initial projections of INR 100-120 crores to INR 50-60 crores for FY 2024, signalling a more conservative spending approach or efficient use of resources.
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Ladies and gentlemen, good day, and welcome to the PNC Infratech Limited Q3 FY '24 Results Conference Call hosted by Dolat Capital.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Shravan Shah. Thank you, and over to you, sir.
Thank you, Sagar. Good afternoon, everyone. On behalf of Dolat Capital, I am pleased to welcome you all on the PNC Infratech Limited Third Quarter Q4 (sic) [ Q3 ] FY '24 Earnings Conference Call. We have with us Managing Director of the company, Mr. Yogesh Jain, along with senior management team. We will begin with the opening remarks from the management followed by interactive Q&A session.
Thank you, and over to you, sir.
Good evening, everyone. On behalf of PNC Infratech Limited, I extend a very warm welcome to everyone for joining us today on this call.
I have with me Mr. T.R. Rao, Director, Infra; Mr. D.K. Agarwal, CFO; Mr. D.K. Maheshwari, VP, Finance; and Strategic Growth Advisors, our Investor Relations advisers. We have uploaded the financial results and investor presentation on the stock exchange and company's website for your reference.
Initially, I would like to mention key update of the industry, followed by operational development of the company and highlighted -- highlights of financial performance during the third quarter and 9 months of financial year '24, post which we will be happy to answer your questions.
In the interim budget for financial year '25, the government continued its focus on development of infrastructure across these sectors, with a total capital outlay of INR 11 lakh crore, which is 11.1% higher than the outlay for the financial year '24.
Project awarding activity in the roads and highway sector continued to be sluggish in the third quarter of the current financial year also. During the current financial year, so far, the overall length of new contract awarded till November '23 was 2,815 kilometers only, out of the target of 13,000 kilometers set forth for financial year '24. Though it is expected the MoRTH and NHAI will hasten the awarding process from the middle of this month onwards, [ it needs see ] to what extent the awarding target set for the current financial year will be met before the year and before the code of conduct for the general elections comes into force.
However, the awarding activity during the next financial year during financial year '25 is expected to be swift with a large number of new projects. On the education front, there is 10% increase in national highway construction, with 5,248 kilometers completed in November '23 compared to 4,766 kilometers completed during the corresponding period of the last financial year.
There has been significant growth in the toll revenue from national highways increasing from INR 17,759 crores in financial year '15 to INR 48,028 crores in financial year '23. With fast increasing national highways and expressway network in the country and widespread upgradation project being undertaken, the government aims for INR 1,30,000 crore toll revenue by 2030, with an ambitious annual compounded growth rate of 15%.
Now coming to the update on the company. I am delighted to announce a significant milestone for our company in line with our [ multifaceted ] strategic vision, which prioritizes value creation and efficient utilization of operation assets for both reinvestment and shareholder value enhancement. We successfully executed definite agreement with the Highways Infrastructure Trust, which is infrastructure investment trust predominantly sponsored by KKR U.S.A. This deal solidifies our commitment to under locking -- to unlocking our investment and maximizing value for our esteemed shareholders.
This strategic move aligned with our ongoing efforts to fortify our position and contribute to sustainable growth. Under the proposed transaction, the company agreed to divest 12 of its road assets, comprising 11 national highways, HAM assets and 1 state highway BOT assets of approximately 3,800 total land kilometers located in these states of Uttar Pradesh, Madhya Pradesh, Karnataka and Rajasthan.
The enterprise value of transaction is INR 9,006 crores, together with the earnouts translating to an equity value of INR 2,902 crores including cash on the invested equity of INR 1,740 crores. The transaction is subject to meeting certain regulatory and contractual conditions, including obtaining necessary approvals from respective concession authorities and [ vendors ]. This transaction would help the company to further strengthen its balance sheet and would give a large headroom to continue pursuing the company's growth plans.
During the quarter ending 31st December '23, the company received a provisional completion certificate for 2 HAM projects of NHAI located in the state of Uttar Pradesh. The company achieved the financial closure for all 4 HAM projects that were awarded during the financial year '23, which is Prayagraj Kaushambi Highway Package 3 and Package 2, 3 and 4 of Varanasi-Ranchi-Kolkata Greenfield Highway.
Company received LOA for the construction of Western Bhopal Bypass HAM project from MPIDC during third quarter for bid project cost of INR 1,174 crores. Company's strong balance sheet and financial prudence resulting credit rating upgrades, which enable us to secure debt at competitive rates.
Out of the company's 28 fund-based project, 3 are BOT toll projects, 2 are BOT Annuity projects and 23 HAM projects. Aggregate bid project cost of all these 3 -- 23 HAM project is around INR 30,000 crore, which is one of the largest highway HAM project portfolio in the country.
Out of total 23 HAM projects, the company had achieved PCOD and COD for 9 projects. 9 projects are under construction, and 4 projects achieved financial closure. For one project, the company has received the letter of award in January '24.
Regarding equity investment, the [ cumulative ] requirement for the HAM projects which are under construction amounts to approximately INR 3,000 crores. As of December '23, the company already infused INR 1,881 crores, and the remaining equity of INR 1,062 crores is to be invested over the next 2 to 3 years. The internal accruals that would be generated over the next 2 to 3 years should be adequate to meet the -- our equity investment requirements.
As on 31st December '23, the company unexecuted order book stands over INR 17,380 crores, which includes EPC value of about INR 5,580 crores of the 5 new HAM projects secured towards the end of last financial year and recently in the current financial year.
Out of the unexecuted order book, highway and expressway contract contributed around 75% while water project contributes around 25%. The company has achieved notable progress in rural drinking water projects under the Jal Jeevan Mission during the first 3 quarters of current financial year. Till 31 December '23, the company had booked a total revenue of INR 2,383 crores in drinking water segment while, during the third quarter, booked the revenue of INR 533 crores.
Now I would present the result for the quarter ended December 31, '23 and 9 months of financial year '24. Before discussing financial performance, I would like to share that during first quarter of financial year '23, the company received an early completion bonus of INR 37.02 crores, which was included in the revenue for the 9 months of financial of '23. We have moderated the same in key financials for the 9 months of financial year '23 to make the financial performance of 9 months of financial year '24 objectively comparable with the corresponding periods. I would also like to highlight that 9 months of financial year '23 includes revenue of INR 251 crores from Eastern Peripheral Expressway project, which is not adjusted from 9 months financial year '23 financials.
Revenue -- stand-alone revenue for the third quarter of financial year '24 is INR 1,803 crore, which is higher by 11% as compared to INR 1,627 crores in the third quarter of financial year '23.
The EBITDA for the third quarter is INR 239 crore, which is higher by 15% as compared to INR 208 crores in the third quarter of financial year '23. The EBITDA margin for the third quarter of financial year '24 is 13.28%.
The profit for the third quarter of financial year '24 is INR 151 crore as compared to INR 129 crore in the third quarter of financial year '23, a growth of 17% on a year-to-year basis. The PAT margin for the third quarter of financial year '24 is 8.4%.
The stand-alone revenue for 9 months of financial year '24 is INR 5,357 crores, which is higher by 9% as compared to INR 4,909 crore in 9 months of financial year '23. The stand-alone EBITDA of 9 months of financial year '24 is INR 712 crore, which is higher by 12% as compared to INR 636 crore in 9 months of financial year '24.
The stand-alone profit for the 9 months of financial year '24 is INR 447 crore as compared to INR 390 crore in 9 months of financial year '23. With a growth of 15%, the PAT margin for the 9 months of financial year '24 is 8.4%.
Consol revenue of third quarter of financial year '24 is INR 2,047 crore as compared to INR 1,803 crore in third quarter of financial year '23, a growth of 13%. The consol EBITDA for the third quarter of financial year '24 is INR 432 crores as compared to INR 345 crores in the third quarter of financial year '23, a growth of 25%. The EBITDA margin for third quarter of financial year '24 is 21.1%. The consol PAT for third quarter of financial year '24 is INR 185 crore as compared to INR 140 crore in third quarter of financial year '23, a growth of 32%. The PAT margin for the third quarter of financial year '24 is 9%.
The consol revenue for 9 months of financial year '24 is INR 6,050 crores, which is higher by 8% as compared to INR 5,614 crores in 9 months of financial year '23. The consol EBITDA for the 9 months of financial year '24 is INR 1,268 crores as compared to INR 1,152 crores in 9 months of financial year '23, a growth of 10%. The EBITDA margin for 9 months of financial year '24 is 21%. The consol profit for 9 months of financial year '24 is INR 514 crores as compared to INR 475 crores in 9 months of financial year '23. The PAT margin for the 9 months of financial year '24 is 8.5%.
As on 31st December '23, our net working capital cycle is 73 days as compared to 87 days as on 31st March 2023.
Our net worth on a stand-alone basis is INR 4,378 crore as on 31st December '23, whereas total stand-alone debt is INR 280 crore. The cash and bank balance as on 31st December '23 is INR 315 crore. We have a net surplus of INR 35 crore. This translates to net debt to equity of 0.09x.
Our net worth is -- on a consol basis is INR 4,798 crore, whereas total debt is INR 7,652 crores as on 31st December '23. The total cash and bank balance including current investment is INR 1,118 crores. This translates to net debt to equity of 1.57x.
With this, we now open the floor for question-answers. Thank you.
[Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities.
Congratulations for signing the definitive agreement with the KKR. Sir, first question is, how are you going to drive the cash flow from the proceeds? And what is the timeline in which you think you can complete the deal?
Actually, it's only -- we have informed that we have signed a share purchase agreement for 12 assets. There are 2 phase: Phase 1 and Phase 2. In Phase 1, there are 7 assets: 6 HAM and 1 BOT toll. And the second phase, there are 5 assets. In first asset, timeline is August '24, where the enterprise value INR 5,015 crore, and remaining second phase is by December '24, where the enterprise value, INR 3,990 crores.
Equity value of breakup is -- first phase, it's INR 1,790 crore as against our infusion of INR 1,000 crore. And second phase is INR 1,113 crores as against the our infusion INR 740 crores.
What is the utilization of this cash flow, sir?
Majorly in the HAM projects for future...
Understood, sir. My second question is, how do you think about the order inflow outlook given that we are already in February? And it seems -- of course, the pipeline seems to be decent at NHAI. But do you think that the -- in your opinion, that we can have a decent [ kind of ] substantial order flow in the remaining months?
And the next question is that, do you intend to bid for the toll roads?
See, as you all know, the awarding activity, as our MD just now said, has been very sluggish during the 9 months of the current financial year. Even in the month of January also, awarding activity was very, very low. Though the government set a target of 13,000 kilometers, they could not even award even 3,000 kilometers, which is just less than 25%. So the whole industry has the same issue, challenge in getting the new projects.
Nevertheless, as of now, there are 200 project opportunities have been floated by both the NHAI as well as MoRTH and the state government. Here, around 100 EPC opportunities are there for INR 7,000 crores -- INR 70,000 crores and then another 100 HAM opportunities for INR 90,000 crores and 11 [ BOT ] toll opportunities for INR 30,000 crores.
We are evaluating all these opportunities. We expect from the 15th of this month till the end of current financial year or otherwise before Model Code of Conduct kicks in, so the awarding activity would be there. So we are hoping to get some decent order book this year also to the extent of cumulatively around INR 8,000 crores. That's what we are expecting.
With regard to toll projects, and the final model concession agreement or draft concession agreement [ for Karnataka ], we are very carefully evaluating these toll assets because there is a traffic risk is involved, and also, there is a huge investment is involved. We are not so aggressive. We will not be so aggressive in the toll assets. However, we will be carefully evaluating, and based on our detailed traffic studies and financial viability studies and the bankability studies, we will take a call whether to bid or not. If at all if we want to bid, we'll see which is the best project. Accordingly, we'll take a call.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Yogeshji, congratulations on the deal, sir. My question was that with INR 1,740 crores of equity investments, so how much is the pending equity investment in this?
Out of this INR 1,700 crores, sir?
Yes, out of the 12 assets, 11 HAM and 1 toll, can you tell, so out of this INR 1,740 crores investments which you have to make, how much is still pending to be invested?
It's around INR 438 crores, sir.
About [ INR 438 crores ] is there to be invested.
Yes.
But INR 2,902 crore is our [indiscernible], or it will the same only, even after this investment of INR 438 crores? So this INR 2,902 crores of equity valuation, will it increase because we have yet to invest INR 438 crores in this?
No, we have [ confirmed ] entire equity to be infused or to reinfuse, so which is -- this including the INR 2,903 crores, sir.
Okay. So you have to still infuse cash of INR 438 crores, so you will receive INR 2,902 crores, so your net proceeds will be INR 2,902 crores minus INR 438 crores, right?
Right, right, right.
Okay. And just one thing -- one more thing, sir. In this INR 2,902 crores, what will be the total cash? When -- the cut-off date which you have taken for this INR 2,902 crores, sir, what is already the cash which is lying on these assets, 12 assets?
In INR 2,903 crores, cash and bank is INR 375 crores, sir.
INR 375 crores, right?
Yes.
Sir, do use this cash for -- I mean is it unencumbered cash or again [ DEFRA and MMR ]? Or can it be used for funding this INR 438 crores of equity?
This includes everything. This include the [ DEFRA, MMR ] and the free cash.
So you cannot use it for investing INR 438 crores of equity? So INR 438 crores, you have to bring in separately, right?
Yes, yes.
Okay. Got it, sir. Just on the last question, sir, any update on -- beyond the NHAI pipeline, which you are evaluating, I mean, whatever NHAI awards this year for us for the financial year, what are the other segments where you see -- if you can give us some color on the bid pipeline in water, railways, other segments which we are targeting metro and all beyond the existing NHAI awards?
See, beyond the NHAI and beyond the highway sector, the water sector, we are already doing projects, drinking water sector. If the similar kind of project opportunities are coming in the other states are drinking water, that we are looking at those opportunities also. And apart from the highway projects that are being floated by NHAI, MSRDC state government is also coming out with certain highway projects. So we are looking at that opportunity also, evaluating the opportunity.
And water sector, what has happened, the 3 states, which were also floating tenders like Chhattisgarh, Madhya Pradesh and Rajasthan because there was a pause because of the elections held there. Now since new governments are formed in all 3 states, we are looking forward to having some kind of [ updating ] opportunities in water sector in these 3 states. So once the bids are floated, we'll evaluate the opportunities.
Okay. And just, sir, so yesterday, the UP budget was announced. Sir, any major projects you're expecting out of [ that ] budget on the infrastructure side?
Come again, which state?
Yesterday, the UP government announced the financial budget for the year, I think, yesterday or day before yesterday. So any major projects do you expect from the state side beyond the Ganga Expressway, any more projects to come in the next financial year?
See, UPEIDA is what we heard that UPEIDA has commissioned certain studies for the DPR that the full details are not available. But we will see that if some projects are coming up from within the UP, including any opportunities of the state highways, we'll look into it.
And anything on the metro projects in UP? Any metro projects you are targeting in, obviously, Kanpur or any other city, anything coming up?
Yes, some metro projects are coming.
Yes, yes, coming. Expansion of Kanpur network and...
Gorakhpur, Varanasi.
Varanasi and also in Agra also in further expansion of the -- extension of the metro lines which are already there, alignment. So we look at those opportunities also.
The next question is from the line of Shravan Shah from Dotal Capital.
Congratulations on the monetization deal. Sir, a couple of questions. So first, in terms of the -- coming to the guidance front. So 9 months, we have done an 8.3% revenue growth. So what's the guidance for the full year? And for FY '25, what kind of a revenue growth we are looking at?
This year, see, we are looking at 10% for the full year because there was some active and prolonged monsoon during the second quarter and also some other -- this thing. So we have achieved 8.33% as of 9 months. So we are expecting around 10% revenue growth for the current financial year or the previous financial year. And also next year also, we are expecting the similar kind of a growth, 10% over the current financial year.
Okay. And the EBITDA margin will remain the same, [ 13% to ] 13.5%?
Yes, yes. EBITDA margin will sustain the same thing.
Yes. And in terms of the order inflow, sir, when we say that we are looking at another INR 8,000-odd crore to be received, so -- by March. So in this, how much are we looking at NHAI, HAM and any other segment that we are looking at?
Primarily, this will be HAM projects of NHAI and also the EPC projects of highway sector only as of now. We are looking at cumulative of INR 8,000 crores. Out of that, we already got INR 1,174 crores. So another INR 7,000 crores new order book we are expecting before 31st. It will be roughly, say, 50% HAM and 50% EPC.
So sir, let's say, this is relatively less versus what we initially have thought. So let's say, in the next year, even if, let's say, we don't get these INR 7,000 crores also, maybe INR 2,000 crores, INR 3,000 crores less, from next year, how much we can -- so if we get the INR 8,000 crores, how much number are we looking at in terms of the order inflow for next year?
Yes. As our Managing Director has mentioned, definitely next year, the awarding activity will be very active because the projects which NHAI could not be bid out during this year and also the NHAI's allocation and overall capital outlay is very high, INR 11 lakh crores. So we are looking at a very major bidding opportunities in highway sector and also other sectors [ existing ]. So next year, we are expecting an order inflow of not less than INR 12,000 crores.
Okay. Got it. So broadly speaking, so in terms of the -- till March, how much value -- you mentioned the opportunity definitely, but how much value of projects have been already bidded and where the outcome is yet to come? And second, how much more are we planning to bid by March?
See, already, we had submitted 17 bids, comprising 6 HAM projects as well as 11 EPC projects for a total aggregate value of INR 14,000 crores. These bids we have submitted, and we are waiting for the opening of the price bids. So we expect some orders from this INR 14,000 crores.
Apart from that, NHAI, MoRTH and also MSRDC floated bids for nearly 200 projects and with a total estimated cost of INR 1.9 lakh crores. So we are evaluating these opportunities. So definitely, going forward, right from maybe around the second week of February till the end of March, so we'll be bidding this thing. So we expect the order book from these thing also -- these projects also. So as I said, at least INR 7,000 crores of new orders we are expecting before 31st March.
Okay. Okay. And for this, the 3 HAM projects, so 1 we have got the appointed date of FY '23. So remaining 3, when we expect the appointed date? And the recent MPRDC, when the appointed date are expected?
For the one project, we got the appointed date with effect from 1st of February. That Prayagraj Kaushambi MoRTH project. Other 3 projects also, the land acquisition process is in progress, and also, disbursements are being made to the landowners. So we are expecting at least 2 projects before the end of the current financial year.
And in case of MSRDC project, it's a state government acquisition, it's a greenfield. It is not under NHAI, but still land control, everything is under the control of state administration and district administration. There, the progress is good. So that also, we expect second quarter of the -- and before the second quarter, we expect the appointed date for that also. So we don't expect any delay in the declaration of appointed date for MPRDC project because being a state project.
And the remaining 1 or so 2 NHAI, I think, said by March, and the 1 will be in Q1 FY '25?
Yes, yes, yes. Early Q1 FY '25.
And sir, in terms of the equity, what you mentioned that INR 1,062 crores to be invested. So in Q4, how much in FY '25, '26 and '27? And does this include the MPRDC project equity also?
This MPRDC's equity, we have not considered in INR 1,062 crores. The total requirement in January, February, March is INR 118 crores and FY '25 around INR 450 crores and FY '26, INR 360 crores and remaining in the FY '27.
Okay. Got it. Sir, a couple of project-wise order book, if you can help us. I will name the project, and if you can help me the outstanding order book as on December. So, Chakeri-Allahabad?
It is only INR 22 crores, sir.
Okay. Challakere-Hariyur?
INR 110 crores.
INR 110 crores, okay. And Jagdishpur-Faizabad?
Only INR 10 crores. So negligible, INR 10 crores only. Almost [indiscernible].
Aligarh-Kanpur Package 5?
INR 350 crores, sir.
INR 350 crores? Sir, it was...
Only INR 50 crores, 5-0.
Okay, INR 50 crores. Unnao-Lalganj?
Unnao-Lalganj is only INR 80 crores, sir.
INR 80 crores. Meerut-Nazibabad?
Meerut-Nazibabad is INR 42 crores, sir.
INR 42 crores. Okay. And Delhi-Vadodara Package 31, sir?
Almost completed, hardly INR 20 crores, INR 25 crores.
Okay. And the irrigation project is how much?
It is still INR 950 crores, 9-5-0.
9-5-0. And Gaju Village-Devinagar Bypass Package 1C?
1C, INR 330 crores.
INR 330 crores. And Haryana Orbit rail project?
It is INR 770 crores.
INR 717 crores? [ We have ] 7-7-0.
7-7-0.
Okay. And on the balance sheet front, sir, if you can help us with the inventory debtor and payable absolute value as on December?
The debtor [indiscernible] is [ INR 1,810 crores ].
Okay. Inventories?
INR 830 crores, sir.
And the payable is, sir?
Payable is around INR 750 crores.
INR 750 crores?
Yes.
Okay. And mobilization advance, retention money and HAM debtors, water debtors, if it is available?
Mobilization advance is INR 630 crores. Retention is INR 130 crore, 1-3-0.
Okay. HAM debtor and water debtors?
Water debtor was INR 730 crores. Out of that, around INR 220 crore, we realized in the month of January. And the HAM debtor is INR 750 crore.
[Operator Instructions] The next question is from the line of Vishal Periwal from IDBI Capital.
Sir, just wanted to check like a couple of data points that we provide every quarter, you are also open to sharing. So is it possible to keep this in PPT?
PBT?
No, no. What I'm saying like the data point that you're providing, I mean, just before this question, you are open to providing all the data points. So can you include everything in the PPT, like it will just save time and then probably -- just a thought.
Okay. We will look into. So we'll try to include these things in the [indiscernible] from next quarter onwards so that it is available to all the interested parties.
Yes, sure, sir. And then on our -- the deal that we have signed, what do you see a tax implication on this particular thing, the amount of INR 2,900-odd crores. Eventually, how much we will get after the taxes?
[Foreign Language] As on date, we can't say because no net current asset valuation [Foreign Language] at the time of the closing. At that point of time, actual -- we can't...
Got it. Got it. And sir, in terms of phasing that you mentioned, the [Foreign Language] Phase 1 and a couple of assets and then secondly, a couple of assets are there. So is it like the deal is like independent to the phases or probably like both the deals will happen? How exactly it is structured?
Actually, at the time of the initial talking with them and by singing of the nonbinding offer, the projects which were -- we have received the PCOD and COD, we have completed the Phase 1, and projects which were under construction, we have completed in the Phase 2. That was only reason.
In case Phase 2 project [Foreign Language], it can continue in the Phase 1 also. There is no restriction on that also.
Okay. Okay. Okay. So basically, they are independent, but...
Yes. Independent [ conditions ], we have -- especially we have done because at that point of time, they were under construction. Then the Phase 2 out of 5 projects, we have already received the PCOD as on date. So we can consider out of 5, 3 projects in the Phase 1 also. So all the opportunity are with us. There are no restriction [Foreign Language].
We have built in the flexibility in the security purchase agreement. There is an interchangeability is possible, either it can be in 2 tranches or 1 tranche. And the 7 plus 5 also could change, like 8 plus 4 or 9 plus 3 kind of a thing. So that is there.
Okay. And then when this agreement is signed, [Foreign Language] initially whether the other party provides you?
No, there is no signing fee as such. We signed it on 15th of January. There is no signing fee.
Okay. Okay. No, I think -- the reason I'm asking everything is like can a party sign just a Phase 1 and can they like not get into Phase 2 with you later on?
We have signed simultaneously all the 12 assets. FPA, we have signed single.
Okay. Okay. Got it. And last thing -- yes, sorry, sir.
Both parties are interested to sell and purchase all the 12 assets.
Okay. Okay. And then last thing from me is on the awards. I think there were comments from secretary of MoRTH that there will be a new MCA, model concession agreement, will be there and then like they are doing some changes. So I think though, and like as an industry participant, everyone is quite hopeful like next 2 months, there will be awards -- but is it like in terms of steps, if one has to see there will be a new MCA and then the awarding will happen? Or how exactly you are seeing things, sir?
Yes. See, now they have floated about 11 tenders. Out of 11 tenders, they issued a draft concession agreement for the 3 tenders and based on the old requirement. So they have not revised. We expect revised MCA will be issued maybe in a couple of weeks. The award will be based on the new concession agreement -- revised concession agreement only. So the revised concession agreement, they have not issued so far.
Okay. Sir, [Foreign Language] when this came out?
This came out during the month of January and some towards the end of December. But though they have issued the RFP and NAT, the schedules they issued only in the month of January. And very recently, they issued the schedule as well as dropped concession agreement for Guwahati, that is in the -- towards the end of January.
Okay. So -- I mean, basically, everything is recent. So they are still going ahead with the old agreement, and then MCA will further come, and then further, you need to reevaluate everything and then the bidding will happen or how exactly it will happen?
Yes, yes. We have to at least...
They will -- all the bid will be with the new MCA.
Okay. Okay. And this new MCA is for both, is it, sir, HAM and BOT? Or it's only for one?
No, no. It's for HAM -- it's for BOT only.
It's for only BOT.
The next question is from the line of Jiten Rushi from Axis Capital.
Congratulations on the deal with Highways Infrastructure Trust. Sir, my first question is on the Vivad se Vishwas scheme. So we had received approvals from a NHAI of more than INR 750 crores. So when do we expect the claims to be -- the proceeds from the claims?
Yes. This NHAI's offers we received in the month of December, and then we accepted those offers. And post that, there will be a procedure to be followed. The applications what we filed to execute these awards, execution applications as well as the applications filed by NHAI challenging the award under Section 34, these petitions have to be withdrawn.
So we have already withdrawn in 2 matters, execution petition. NHAI withdrawn the Section 34 application in 1 matter. Post withdrawal of the applications, the settlement agreement has to be signed. Within 30 days from the date of settlement agreement, NHAI has to pay the amount to the parties. This is the procedure.
We expect out of 3 -- so far, we accept for 3 projects, 3 awards. So we expect at least 1 or 2 cases should be settled before the end of this financial year. We receive the proceeds.
Sir, this would be, in value terms, how much?
See, total INR 766 crores, the offers what we had accepted. So at least if you combine 2 -- maybe 2 out of 3, maybe something around INR 300 crores could be this year, and the remaining would be next year.
Q1 -- in Q1 FY '25, you can expect the balance.
Maybe. Yes, you can say it's something like 50-50 kind of a thing.
Sir, because we have received one more claim recently of INR 42 crore, that is a different claim [indiscernible]?
Yes, yes, that's because it's not under Vivad se Vishwas. It's a regular kind of a thing. Section 34 application was dismissed and, accordingly, won't be deposited by the respondent with the court. Court has released them INR 42 crores. That is a state government project, Haryana State Roads and Bridges Development Corporation. We receive the amount.
Okay. And sir, coming back to the deal with Highways Infrastructure Trust. So as you said there is a balance equity requirement, so sir, you'll invest on the balance equity requirement before the [ long shot ] date of August -- December '24 for the remaining HAM projects. Is my understanding correct, sir?
Actually, at the same time of the [ log off ] date, total equity were required, but as on date on 31 December, only 94 day outstanding, all these projects. But as on 31st March 2023, where it's by the [ log off ] date, it was outstanding INR 438 crores. We already invested during this year.
So now do you just invest [ INR 90 crores ] balance for additional [indiscernible]?
[ INR 98 crores ] on 31 December in all these projects before closure of the deal.
Closure of the deal, okay. Sir, this is included in this equity requirement of INR 1,062 crore, right, sir?
Yes, yes.
And sir, so by August '24 and December '24, respectively, if you take 2 -- separately, the 2 phase, we have to just finally conclude the deal and the proceeds will follow after the [ long shot ] date that is after August '24 and December '24. Is my understanding correct?
Right, right.
So we can expect the first proceed or first Phase 1 by Q3 and the second one by Q4, if at all, we follow the same structure?
Yes, yes, yes.
Okay. And sir, one more thing, so -- sorry, another thing that, sir, the deal which we have entered. So what will be the outstanding debt as on date?
Actually, we have [indiscernible] in the other manner, what was outstanding, what we have to take because there are certain projects which are under construction, where we have to include the work and we have to take the disbursement. So comply all these things, it was INR 6,479 crores, sir.
But by the time of the day, that can come down because we must have repaid for...
[indiscernible] come down because certain repayment has already been started on all the projects which are under operation.
So then there could be some change in the valuation, right, sir? Okay. Okay. Sir, final thing from my side. Can you give me the toll collection data for the operational toll projects?
Yes. In the Kanpur Highway, it is INR 24 crore in third quarter. Bareilly-Almora is INR 17 crores. And Raebareli-Jaunpur is INR 32 crores. That is annuity amount.
Yes. Annuity [ toll ], sir. And what was the other one, the Narela?
Narela, it is INR 13.6 crore.
INR 13.6 crores, yes. Okay. And sir, on the irrigation project, canal project, so the revenue is not moving, but you said that there could be some movement in Q4. So are we going to -- because now the government -- are we going to hand over -- are we looking to hand over the project or we are going to still persist to complete the project? So what is the thought behind it? Because it's been lagging for quite some time now.
Which one, sir?
Sir, the irrigation project of INR 950 crores, which has been in the order backlog.
See, as of now, we are not executing. Of course, there is a water in the canal system also. We are vigorously pursuing with the government for realization of whatever the build amount. And also then we see because now next 2 months, there will be elections because state government -- state assembly elections are coupled with the general elections. So we'll take a strategic decision with [indiscernible].
So we are taking -- okay. And sir, the final question from my side on the JJM projects. So the outstanding also, what is the targeted revenue for FY '24, '25, '26?
Jal Jeevan, we have already achieved INR 1,350 crores of revenue in the current financial year till 31st December. And subsequently, also we executed more than INR 400 crores as of date. So we are expecting INR 2,000 crores plus revenue in the current financial year and INR 3,000-plus crores at a cumulative rate at the end of the current financial year. And next financial year, we are expecting a revenue of INR 3,000 crores. And the remaining anything will be there, that will be for a commissioning, and other things, they hold 10%, that will be realized during the FY '26.
So basically, you have done INR 1,351 crores in 9 months, and you're targeting almost INR 2,000 crores plus in FY '24, right, sir. That's it from my side. Congratulations and all the best.
The next question is from the line of Vasudev from Nuvama.
Congratulations for the monetization. So most of my questions are answered. I just needed one data point on CapEx. So what is the CapEx that we did in Q3? And how much are we planning for Q4 then?
Actually, we have -- earlier, we have estimated around INR 100 crores to INR 120 crores in the FY '24. But till December, CapEx was INR 35 crores. Now we are changing. It should be not more than INR 50 crores to INR 60 crores in FY '24, sir.
The next question is from the line of Vaibhav Shah from JM Financial Limited.
Sir, what would be the tax implication on the arbitration award that you will receive from the Vivad se Vishwas scheme on the INR 750 crores?
It's a regular tax will be there. Tax implication would be regular.
So 20% or 25%?
25%.
25%, okay. And sir, in the AP project, what is the outstanding debtors that we have as of now? Irrigation project?
Which one?
AP.
Irrigation project is INR 179 crores.
That is a receivable from the government?
Yes.
Okay. And what is the cumulative execution debt we have done in the project till date, around INR 250 crores?
Yes, it will be around that.
Okay. So any time line and when would we be able to recover this amount?
See, we are expecting some part payment before the end of the February and some more payment before the end of the current financial year. But we are crossing our fingers as state government is already in the election mode. And also, there is opacity of funds with the state government. But we are expecting some amount before the end of the current month.
Okay. And sir, lastly, when do we expect to receive PCOD for the remaining 2 HAMs, which are in the deal?
One HAM project, we are expecting before end of this month. And another also, we are trying to get before end of this month. Both the projects, Meerut-Nazibabad as well as Challakere-Hariyur by -- between 15th of February and the 29th of February, we're expecting PCOD for these 2 projects.
As there are no further questions from the participants, I would like to hand the conference over to Mr. Shravan Shah for closing comments.
Sir, before the concluding, just one question in terms of the early completion bonus. So I think we -- in the 2 projects, Mitrasen-Kanpur, where we are expecting a bonus and Unnao-Lalganj, INR 5.21 crores, so when are we going to receive? And what's the value of the early completion bonus?
Sir, see, as you said, Unnao-Lalganj is around INR 5 crores odd and in case of the Aligarh-Kanpur package so, INR 5 crores also, around INR 6 crores. As per the terms of the concession agreement, the bonus, the NHAI will release along with the first annuity.
Okay. So apart from this, there is no project where we are expecting any bonus?
As of now, we are not expecting any bonus for any other projects.
Okay. Got it. And sir, these 3 states where we mentioned, MP, Rajasthan and Chhattisgarh water projects, so any ballpark idea in terms of the size, how much it could be the -- or broader idea?
No. Because see, these states have not floated the tenders. Until and unless they float the -- we know there are certain projects to be executed across these 3 states. But since they have not floated the tenders, owing to elections and the formation of government and all, would not be shared any ballpark figure as of now. Certainly, going forward, once the tenders are floated, that would be helpful to share. So some clarity will emerge maybe during the next quarter.
Okay. And sir, these 4 HAM projects that we received in FY '23, so in the presentation, I can see the EPC value is higher than the BPC value. So what would be the reason?
See, BPC values, exclusive of GST, whereas the EPC value, we are including the GST.
But then also, sir, for the GST, even if we take a 18%, so normally, if I add the BPC plus 18% GST, so the EPC should be closer to 90% of BPC, but it seems the EPC value is much higher.
We'll just relook into. We have not gone through the thing in detail. So we'll share it to you separately, off-line.
Okay. Thank you. Thank you, everyone, and thank you, management, for giving us the opportunity to host the call.
Sir, do you have any closing comments?
Yes, yes. Thank you, everyone, for your participation in our earnings call. In case of further queries, you may get in touch with the Strategic Growth Advisors, our Investor Relations advisers, or feel free to get in touch with us. Thank you.
Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.