PSP Projects Ltd

NSE:PSPPROJECT

Ladies and gentlemen, good day, and welcome to PSP Projects Q1 FY '25 Earnings Conference Call, hosted by Avendus Spark. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the 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. Bharanidhar Vijayakumar from Avendus Spark. Thank you, and over to you, sir.

Thanks, Manav. Good evening, everyone. Welcome to the 1Q FY '25 earnings call of PSP Projects. From PSP projects, we have Mr. P. S. Patel, Chairman, MD and CEO; along with Ms. Hetal Patel, Chief Financial Officer. Without further ado, I'm handing it over to the management, Kenan Patel, Company Secretary of PSP Projects to give initial remarks and post which the management by P. S. Patel Sir would give their initial remarks, post which we will open it for Q&A.

Over to you, Kenan.

Thank you, Bharanidhar, and good evening, everyone. I'm pleased to welcome you all to PSP Projects Limited earnings call for the analysts and the institutional Investors to discuss the Q1 FY '25 financial results. Please note, a copy of disclosure is available in the Investor section of the website as well as on the stock exchange. Anything said on this call which reflects the outlook for the future, for which it could be considered as a forward-looking statement must be reviewed in conjunction with the risk that the company faces.

Now I shall hand over the call to our Chairman, sir, for his opening remarks. Over to you, sir.

Thank you, Kenan. Good evening, everyone, and warm welcome to quarter 1 FY '25 earnings conference call of PSP Projects Limited. As on quarter 1 '25, the outstanding order book was to extent of INR 5,890 crores as year-on-year growth of year in question. During quarter 1 FY '25, the order inflow was to the extent of INR 297 crores, major order distribution was INR 229 crores for the construction of Palladium Mall at Surat.

During the quarter, the company clocked a revenue of INR 612 crores, 20% year-on-year growth. The EBITDA was INR 73 crores, 14% year-on-year growth with an EBITDA margin at 12 percentage. Let me start by highlighting the project level update across the major ongoing projects. Surat Municipal Corporation, as we all are aware, after the election, there was a little bit scarcity of labor in the first quarter. And presently, also, there is little bit disturbance since last 15 days because of huge rain in Gujarat. So Surat municipal Corporation Highrise building project is going on well [indiscernible] fully mobilized. As such we have reached to third floor of the -- above the basement and probably still we expect that now the project will go smoothly.

Dharoi Dam, we have both the facilities are now again after the -- during this monsoon a little bit disturbance must be there, but labor force is sufficient and the project is also going in the full force. Gati Shakti Vishwavidhyalaya almost we are through with the excavation and foundation and everything. So now the [indiscernible] full labor is available and we can go for the full [indiscernible]. Sports complex almost [indiscernible] part of the project is over. We have already completed a CMD block, VMD block and AMC block is in personal focus, and we expect the project to be complete by October or November maximum, but the [indiscernible] time line for the project is October, but probably it may go extended up to 1 month or 2 otherwise the project is on track.

The majority of the orders that is 70% of the orders are either awarded or received later in quarter 4 FY '24. And several projects such as INR 399 crores Sabarmati River Front, INR 333 crores of Fintech Building GIFT City, INR 260 crores of Human and Biological Science Gallery at Science City.

The projects are currently under the initial phase of execution and shall pickup pace starting of quarter 2 FY '25. As far as our projects are concerned, all projects are working as per as execution cycle and none of the projects are struck up or slow moving at the moment.

Our current bid pipeline is to tune of INR 6,000 crores. We are confident and optimistic to achieve our order inflow guidance of FY '25. Our key focus for the financial year will be on smooth expectation of all our ongoing projects and depth of our order book with new projects in building space. We recently concluded projects, the company has become eligible to build a project across the sports complexes, tourism projects, airport projects, railway stations, [indiscernible] projects, real development -- real estate development project, etc. We foresee a decent order inflow and our time focus remain on execution and delivering the project in a timely manner.

With these, I conclude my remarks and would like to handover the call to our CFO, Ms. Hetal Patel to take you through the financial highlights in detail.

Thank you, sir. Good evening, everyone. The financial performance during the quarter ended June 30, 2024, is as below. Quarter 1 FY '25 versus quarter 1 FY '24. Revenue from operations for the quarter is at INR 612 crores versus INR 510 crores, increased by 20% on a Y-o-Y basis. EBITDA for the quarter is at INR 73 crores versus INR 65 crores, increased by 14% on Y-o-Y basis. EBITDA margin is at 12% versus 12.69%. Wage profit for the quarter is at INR 34 crores versus INR 37 crores, reduced by 7% on Y-o-Y basis. PAT margin at 5.56% versus 7.13%. During the quarter, company has booked revenue of INR 64 crores from SDB project and with this total cumulative revenue from SDB project is arrived at INR 1,960 crores. Unbilled revenue of INR 53.80 crores has been built now and an invoice with a gross value of INR 117.89 crores with GST INR 139.11 crores is submitted to the client during the quarter.

As on June 30, 2024, receivables from SDB stands at INR 225.37 crores. In the fourth week of July, company has received INR 104 crores against the first trench as per the settlement agreement entered with the SDB. The additional revenue from the SDB has largely contributed to the increase in EBITDA margin. But at the same time, company has to incur higher expenses at the UP side due to escalation in material prices and site roadways and change in scope of work to the extent of INR 25 crores during the quarter, which affected the EBITDA level to that extent.

Further project awarded in quarter 4 '24, that is RVNL IFRS received Fintech Building, Dharoi Dam, Science City, et cetera, are at the initial stage of the execution and did not much contribute to the EBITDA. The consolidated revenue generated from 7 UP project was INR 10 crores during quarter 1 FY '25. Cumulative revenue is INR 1,469 crores. Out of total tension credit facility of INR 1,497 crores, company utilized INR 974 crores, including fund-based utilization of INR 206 crores and INR 523 crores available for utilization.

Bank guarantee issued to SDB project for INR 78 crores, both received back during the month of June. And to that extent, the utilized limit was released. As on June 30, '24, the company has totaled fixed deposit of INR 264 crores, out of which lien free deposits of INR 47 crores, SDB worth INR 209 crores are under lien with banks for credit facilities and SDB worth INR 8 crores are given to the security -- as security deposit to the client. Work on hand as on June 30, '24 is INR 5,890 crores. Detailed bifurcation is available in uploaded presentation. That concludes the update on financials, and we are now open for the question-and-answer session. Thank you.

[Operator Instructions] Our first question is from the line of Shravan Shah from Dolat Capital.

Ma'am, how much EBITDA margin we have booked on INR 64 crores SDB revenue in this quarter?

See, basically, there are not much expenses, yes, but we have to incur certain administrative and some maintenance expenses also and some legal expenses. So around INR 9 crores to INR 10 crores we have to incur. So you can consider INR 54 crores as the EBITDA margin.

So entire INR 64 crores revenue is this kind of flow to the EBITDA margin?

No, no, INR 54 crores, 5-4.

5-4. Okay. So that means if I remove that, then the core EBITDA margin comes at 3.5%. So how do we now look at -- so two things to understand, as you mentioned, the INR 25 crores extra that we have spent on the UP Medical projects. So anything left to be more spent or any other projects where we have to do extra expenses because this 3.5% core EBITDA margin is, I think, of historical low EBITDA margin. So how do we understand now?

Shravan, you're absolutely right, 3.5% is lower what we expect ever. But as I said in the December quarter also, the first -- last quarter from January to March, we were in the process of ending. There were few materials which were yet to be purchased and yet to be installed as far as [indiscernible] is concerned. [indiscernible] cost has gone for higher on energy side. All these 3 months, again, the project was to be completed by March, but during this process of first quarter of earning however everything a little bit of the cost and overhead has also gone high.

Third part was more related to some of the quotes which were -- which we were not touching, there was -- because there was a little bit technical conclusion in terms of whether scope was in our scope of work or not. That was also to be executed because that was more or less hampering the overall process. So all put together, [indiscernible] INR 20 crores to INR 25 crores, which has majorly impacted on the EBITDA margin. And this is the last maybe what we can consider. For that, we can have expensive more than INR 5 crores, INR 10 crores, plus on the last quarter -- on the next quarter.

Otherwise, none of the projects [indiscernible] these types of expertise. But all other projects are in and this is what I always envisaged and I was expecting because, as I said, the project started initially in the month of March '21 just after corona and there was no escalation on this project and [indiscernible] escalation, which we never expected to such a large extent on the project. The time line has gone a little bit high. So all put together, this [indiscernible] quarter, but we assure it will not happen much longer, so we expect other projects.

So now onwards, in terms of the -- our earlier guidance of 10% to 11% EBITDA margin, can we -- that start seeing from the second quarter itself?

Yes, we can expect, but I too expect as I said there can be some expenses to the last quarter, which is the replacing quarter for UP. So there can be some expense, but not to this extent, but that can interfere some scope otherwise we can expect 10% to 11% of all [indiscernible] projects.

Okay. And in terms of the revenue level, so excluding this SDB, so core level, it is 7.5% kind of a growth, if I look at. So we were looking at last time, say, it 15% kind of growth. So if I remove this INR 64 crores and the core, so we are still maintaining that 15% revenue growth on the core level at revenue?

See INR 2,008 crores, which is what we have thought of for this year, and I definitely feel that we should be in position to reach to INR 2,800 crores.

Okay. Okay. Great, sir. A couple of things. First, actually, if you can help me in terms of the bid pipeline, how bid pipeline and a couple of the major projects uptake. And then I have a bookkeeping data points.

So I think we have already said that there is about INR 6,400 crores of bid pipeline. Out of which, there is one commercial project of INR 1,800 crores in Noida; power plants at Raipur and Raigarh at INR 700 crores; industrial plant at Sanand, INR 500 crores; Residential Building at North Delhi, INR 400 crores; Delhi Transportation colony at Delhi [indiscernible], INR 445 crores; Development of Indore Railway Station, INR 450 crores; Residential Project at Mumbai, INR 400 crores; Industrial Plant at Sanand, Ahmedabad, INR 300 crores, Iconic Road Development per year, INR 250 crores; Sabarmati Riverfront Infra project at Ahmedabad, again INR 250 crores; Commercial [indiscernible] INR 400 crores; Highrise Building at Gurugram, INR 450 crores; and Corporate Office at Surat is INR 100 crores. So total INR 6,400 crores, and out of which in Gujarat, it is about 25%. Other states, it is 75% [indiscernible].

And for full year in terms of order inflow...

Sorry to interrupt Shravan sir. May I request you to please rejoin the queue as there are several participants waiting for their turn. [Operator Instructions] We have our next question from the line of Ketan Jain from Avendus Spark.

Sir, my first question is on the margin. Given the first quarter margin at [indiscernible], what margin can we expect for the whole year basis adjusted for the SDB receivables?

See now receivable is not going to impact on the margins, but only the receivables because they are already good. So whatever margins we have always been in [indiscernible] which will be in the range of 10% to 11%.

So you're saying 10% for the rest of the 3 quarters?

Yes.

We can expect that?

Yes.

Okay. Sir, my second question is on how much money is yet to be received from Surat Diamond Bourse and when will we receive it? Like what is the time line?

Yes. We have still to receive INR 121 crores from SDB, and mainly time line will be by end of like October '25. So they will try to pay it earlier, but latest by October '25, they will be paying us. There will be [indiscernible].

Okay. But is there any dates in between when they will receive or they can give it at any time between from now until October 2025?

[indiscernible] time every quarter and they have given the clear time line on which year they have to payment [indiscernible]. And so it is on the predefined time, but the time has been diverted till October '25. If their sales of the office goes little bit faster, they can give us early, but these are the latest results which they have -- latest time lines they have given.

Understood, sir. So my last question is, there was a project commercial building at GIFT City of INR 118 crores, which was there in the last presentation. It is not there. What is the status of it now?

INR 180 crores?

INR 118 cores, 1-1-8, commercial building at...

$118 crores order received or in the [indiscernible] slide?

In the order backlog slide, it is not there in this quarter.

Yes, see, we are mentioning high-value projects only in that order -- sorry, that presentation. So that has fallen below. That remaining order value has fallen below.

[Operator Instructions] We have a next question from the line of Aditya from MSC Capital Partners.

Just have a couple of questions. So when we look at UP, so UP, we booked INR 10 crores on an expense of INR 25 crores. Q2, what is the expenses and revenues that we are looking at?

See, UP, now the work is not left too much. It will be in the range of INR 25 crores to INR 30 crores which we have to build. So probably, the overhead and if anything which has been left out, which we have to pay more on part of the execution, I presently expect that, obviously, there cannot be more difference between INR 5 crores and INR 10 crores.

Okay. Understood. And sir, we recently raised an equity around of INR 244 crores. So -- and we also received some money from Surat Diamond Bourse. So what would be our debt outstanding as on date?

Yes. So basically, this SDB money we have received in the first week of July, so that is not included in numbers. Yes, we have utilized around INR 200 crores of fund-based facility and that includes some LCBD discounting of around INR 70 crores. So once we have paid off, we have utilized certain amount for our routine working capital requirement.

So the debt has reduced by how much? If you can just quantify that number?

Yes. I have already said it's around INR 200 crores we have used fund-based facility.

We have our next question from the line of Vaibhav Shah from JM Financials.

Sir, previously, you had mentioned that the pending receivables from SDB should be coming by March '25. So that has been delayed to October '25, correct?

No, I think that can be a mistake because right from the first day, it was more than 12 months, but I was saying -- that was my mistake. It has never been agreed as March '25. [indiscernible] because final agreement, which we have received on that time when we settled the whole issue, it is still October '25. That I said just because they agreed by -- they said me orally. They will try to make sure that it is being done before March '25 if their offices are sold as per their thought.

So is there any scope of further delay or October '25 is the final deadline?

No, no, no. It is -- that is to be finally agreed. And [indiscernible] offices are not sold, they are paying it.

Okay. So irrespective of the sale of offices, they will be paying us money by October '25?

[indiscernible] related to our requirement that they can give us early. If the offices are not sold until October '25, they are committed for October '25.

Okay. Okay. Sir, and secondly, what would be the outstanding debt as of June '24? As of March, it was around INR 455 crores.

Yes, I have already mentioned bank borrowing is around INR 200 crores.

So we have repaid almost INR 250 crores?

Yes. In that, we can add the INR 60 crores of directors' loan is -- was still outstanding as on 30th June, but now that has been repaid out of the receipts from SDBs.

I didn't get Madam. Directors' loan you mentioned?

Yes, INR 60 crores directors' loan which was outstanding as in March. So that was still outstanding as on 30th June, but that has been repaid once we received the money, INR 100 crores from SDB.

As on June closing, it would be INR 260 crores, but now it is INR 200 crores?

Yes, right.

Yes.

We have our next question from the line of Navid Virani from Bastion Research.

So firstly, just wanted to understand about the SDB receipts. So if my memory serves me correct last time we -- and that there are INR 220 crores to be received from the Surat Diamond Bourse. Is that understanding right?

INR 420 crores?

INR 220 crores, INR 220 crores.

INR 220 crores, yes, that's right. INR 225 crores.

Okay. And I think that was including GST, INR 225 crores. So currently, if I'm able -- so currently we are able to reconcile INR 185 crores, so INR 64 crores we have already received and INR 120 crores something which we are expected to receive going forward by October '25. So I couldn't understand where the rest of the amount went over? Can you just reconcile it for me?

No. See, we just received INR 104 crores, right? And still INR 121 crores is to be received in 4 tranches. So out of that INR 104 crores, we have repaid INR 60 crores of loan of directors. That's what we were saying.

Understood. That's helpful. And last question I had was, again, regarding the UP project. So sir, if I was able to understand your answer to the previous question, right, you are saying that we are still expecting an INR 5 crores to INR 10 crores kind of a pressure more on EBITDA in Q2. Is that understanding correct?

Right.

[Operator Instructions] We have a follow-up question from the line of Shravan Shah from -- we have our next question from the line of Deepesh Agarwal from UTI AMC.

Yes. So if I adjust the Surat Diamond impact and the write-off which you have taken in the UP project, so your EBITDA may come around to INR 40 crores, which could be a recurring EBITDA. If I look at -- compared to your revenue, that gives us almost like a 7% kind of an EBITDA margin. So what was wrong during the quarter?

As I said, it is more related to the expenses and the escalation which incurred. And whenever you are booking the bids, it is more related to cost to complete. Our cost of completion has gone a little high. Overheads has gone a little high. We were not expecting too much work to be carried out in the month of this first quarter. So that overhead has also prolonged and escalations on MEP site has impacted the cost. And some of the scope, which we are a little bit confusion whether it is a part of the contract or not, also has to be executed because we wanted to close the project and get out of it and had over the projects, all put together has impacted to this extent.

These expenses are more to do with UP or beyond UP also?

No, no, it is absolutely for UP.

So if I make that UP adjustment also of INR 20 crores which Ma'am mentioned, then also your margins are most significantly on a lower side.

No, if we not put that INR 25 crores, it will be in the range of 9%.

Yes. See, basically, INR 73 crores is the total EBITDA. If you remove INR 54 crores contribution from Surat, so around INR 19 crores to INR 20 crores is the -- from the regular provision. So if we add back that expense, it will be INR 45 crores we can say. And that margin comes to around 8% to 9%. And as we already mentioned, during the quarter, we have started high-value projects which were awarded in quarter 4. So this major project impact also because we are on the initial stage of that execution, it should not generate that much EBITDA. So that also contributes to the lower side EBITDA margin.

Okay. So incrementally from Q2, given UP is largely that we should move towards that 10%, 11% margin with guidance?

Right.

[Operator Instructions] We have our next question from the line of Aditya Pal from MSE Capital Partners.

Sir, just want to understand, historically, we were anywhere between 11% to 12% if I look at over the last 4, 5 years of data. And now we are guiding anywhere between 10% to 11%. What has changed as the labor cost increase, are we bidding for contracts more aggressively? So I just want to understand what is the management's thought process on this?

See it is not about the overall cost which has gone high. There are a few risks -- on an EPC project or there are few risks on a contracting firm, when the things are not falling exactly to what we expect. So some of the projects may get extend, your overhead may can go high. During some season, there is no labor, so the workforce is -- due to workforce you are not getting the revenue based on your overheads. So keeping all these risks, it is better to have consideration of 10% other than 11% and 12%.

Understood. Sir, what I'm able to understand that nothing has changed. Is it that you're guiding it lower so that we are able to match the expectations?

Yes, you can consider that way.

Understood. And sir, I also wanted to understand, so now that we move -- so excluding UP -- UP is done and dusted. Excluding UP, now when we move to the higher margin of the -- in the project fees, so the EBITDA will -- EBITDA margin will come up from here, right? Is that fair to understand?

You should consider -- you should not consider that way, but we should consider to the extent of 10% to 11%, which I already said because, as I said, a gentleman already mentioned that in the first quarter, the projects which were actually given in the last quarter of '24 could not gear up in the first phase of the construction and could not generate EBITDA. So such types of risks, we can't envisage all the time, and this may impact the overall EBITDA margin on an average level, so we are considering it at 10%.

Understood. And sir, can you give me a bit color on when can you see that you will start to see new fresh order inflow from?

Which order fresh inflow? New orders?

The orders that you've spoken about, when can we see at least a number of orders...

Yes, yes, see, there are few orders which we are expecting to come -- get in the present near to closer. So we expect 1 or 2 orders maybe -- it is in next 15, 20 days or maybe [indiscernible].

We have our next question from the line of Saif Sohrab from ICICI prudential.

Sir, first question is on Precast. Can you help us with currently, how is the order book on Precast side? And what new orders are you looking at and the utilizations of Precast currently?

See, presently, the last -- compared to last year, the overall market, we have Precast is good. Last year, we were able to do about 12 lakhs square feet of warehousing facility. We are now focusing a little bit more on building sites. We have 1 or 2 orders on building sites, which we are going to execute in this year. So in general, if I say the Precast business is now gearing up. At the same time, some of the large corporates like Reliance, Adani, these people are also now considering Precast as the acceptable technology to move faster because there is always a little bit failure on the project because of the consistency of labor availability and the seasonal issues. So I am a little bit positive now and factory is going out with full force now. We are having sufficient orders. I don't know the exact figure. I will come back to you what is the exact order inflow of Precast.

But how much would be the current utilization level, sir, for Precast?

I think this year, we were able to make a revenue of INR 180 crores out of Precast. So probably, this year, we should be in the range of INR 200 crores to INR 250 crores.

Okay. And sir, second question, just if you can repeat about the UP projects and going ahead in 2Q, what do you expect both on revenue and expenses and that would be a net impact on EBITDA?

See, revenue side, I think that we don't have to book bidding more than INR 30 crores from here. On expensive side, still I expect that because the overheads are still the same, a little bit overheads gone down, but all the buildings are under the -- in process of ending over. So the impact which we have got for this quarter will not be that much impact on the second quarter, but maybe maximum 5, maximum 10, it will not be there. And any other projects except UP, there is no issue related to price issuing or your overheads going high. So things will be clear by second half.

So balance revenue would be INR 20 crores, INR 30 crores. And again, that balance expenses, overheads, which maximum you would incur as -- you would book as NPL would be?

Maybe an extra cost of INR 8 crores to INR 10 crores. So we see this INR 20 crores to INR 30 crores, which can be INR 30 crores to INR 40 crores maybe in the range of expenses.

Sorry, expenses, what range you mentioned? And is it INR 20 crores to...

INR 30 crores to INR 40 crores.

We have our next question from the line of Shravan Shah from Dolat Capital.

Sir, a couple of data points. So on the balancing front, so I need the retention money, mobilization advance, unbilled revenue and then the debtors inventory and creditors as on June.

See, we haven't yet finalized the balance sheet number. It is more or less the same. On the unbilled revenue, it has reduced because INR 53 crores of SDB, we have transferred to GST receivable amount. Otherwise, most of the data -- other data [indiscernible]. We haven't yet finalized exact number.

Okay. So unbilled revenue as on March was INR 442 crores. So you are saying so out of that -- how much is lower INR 64 crores?

See -- yes, INR 53 crores was included in unbilled revenue and that we have billed. As I have already mentioned, along with INR 64 crores additional revenue, we have billed INR 53 crores also and total GST invoice of INR 117 crores we have issued to the client.

Sorry, Ma'am, but, normally because these are the relevant data just to understand in terms of how the balance sheet and the working capital is moving because that's the way we normally used to share for last so many quarters. So I'm not able to understand what's the -- not studying this basic balance sheet numbers?

We haven't yet audited those numbers. At this time we haven't finalized those figures. Because normally, what happens is if we arrive at after adding the retention, which is already, all these numbers [indiscernible] because balance sheet, we're not required to be given. But yes, we can share you at a later stage.

But if I look at from the June -- from the March to now in terms of the working capital days, which was around 35-odd days. Has that increased...

Shravan, we can have a separate call with you to understand whatever you want, we are still open to anything you want to ask. But don't make it confusion at that time when she is not ready, please.

Okay. Okay. Got it. And -- Okay. So all the data points. And now in terms of the CapEx, how much we have done in the first quarter and how much we are looking at for full year?

Yes, we have done around INR 17 crores in the first quarter. So as we are putting this into the Board, so we have these numbers and INR 17 crores, we have already given. And you can take it -- multiplied by 4 or more or less around INR 60 crores profited CapEx during the year. INR 17 crores.

Okay. And in terms of the now the -- we have repaid the debt, so just to even clarify on that part also because it seems -- the previous participant have asked, but you mentioned that INR 200 crores is a gross debt as on June. Out of that, we have repaid INR 64 crores Directors loan. So now that number is close to INR 136 crores. If everything is...

No, I'll just correct it. It is INR 260 crores debt as on June -- 30th June. We have pain INR 60 crores once we received with the SDB, and -- which is INR 200 crores. But as of today, see, it is like billed discounting facilities and what we are utilizing. But it will change every day. We cannot say today also, it will be the same amount [indiscernible] capital requirements.

Okay. And in terms of now the debt has reduced, so this quarter, we were having the INR 13-odd crores kind of finance costs similar to the last quarter. So how do we see in terms of this number of finance costs going forward?

Yes. It is reduced by around INR 1 crores. It should have been reduced. But if you see finance cost also includes bank guarantee charges. So this time, we have issued bank guarantees of all those new projects. So other -- with earlier projects, bank guarantee charges already continued and this additional new projects, high-value projects, bank guarantee charges have also with the finance cost. So to that extent, that has been on higher side.

So similar INR 13 crores kind of a run rate can continue for remaining 3 quarters, or will it reduce?

Yes, we can see.

It will be little bit less.

It will be a little bit less In terms of this SDB bank guarantee also because we have already received back as on 30 June. So from July onwards, that charge will not be there. And to some extent, other charges also -- other bank guarantees we may also receive [indiscernible]

Okay. Just trying to understand, I thought that this will reduce by about -- to INR 6-odd crores, INR 7-odd crores on quarterly basis. So that will not be the case.

No, no. See, because what happens, we are utilizing this FDOD facilities also, right? So that interest also comes in finance cost. At the same time, we look this FDOD -- this FD income in our other financial issues. So if we net off that, then it will be on a similar case.

Okay. And sir, this Surat project, so for the last, almost 1.5 years is already there. It has in terms of the revenue booking just INR 192 crores. And even this quarter also, it was just INR 25-odd crores. So this year -- full year, in 9 months, how much more revenue are we looking to book from this Surat project?

I think it will be in the range of -- total project, I think we should be in a position to book in INR 350 crores to INR 400 crores because now the finishing item has started and we have moved to 4 basement and 4 stories of podium level. Now we are moving towards [indiscernible] floor. So now all the activities have now been finalized, samples are already approved. So the other activities and MEP will fall in line. So we should expect INR 300 crores to INR 400 crores.

So -- and the next, sir, FY '26, will it be significantly higher, INR 600 crores kind of a number?

Yes, lastly, it will be there.

We have our next question from the line of Vaibhav Shah from JM Financial.

Sir, for UP project, what would be our outstanding receivables? And do we expect to -- do we have any claims for that project or there would not be any claims on that project once we complete the project?

Presently, there is -- as of there won't be any claim, but there is one issue which is related to area, which is under discussion, which we are thinking that it will be positively solved. Otherwise, outstanding today is in the range of INR 100 crores.

The receivables are INR 100 crores?

Yes. And that is basically because some issues related to PMC going on strike since last 2 months, their orders were not extended. So they will not certifying our bills although the bills have been placed on time. So today also, I had talked to the [indiscernible] regarding the same. So we are hoping that this issue should be solved in a week or so. And some of the receivables can be received in 15 days.

And sir, you mentioned that there was also a change in scope, which led to a higher cost...

No, it is not about changing scope. It is not about changing. I saved the technical confusion in terms of scope. So it is more related to understanding of the documents wherein there was an issue related to -- we have to provide services for equipment. They have asked for equipment also. Some places, it was related to [indiscernible] and some in the mode of payment, it was related -- paid on the services for the equipment. So due to that confusion, we have to carry out the work. And if we stop -- we were not doing until now, but we are -- as the projects are getting delayed in terms of running over, so we have initiated that part. That's what I mean to say in terms of change of scope.

So we don't expect a relief from their end in momentary terms?

Again, pardon me.

We don't expect them relief from their end for this change in scope. We have to incur on our books, the cost?

Yes. Presently, it is on our books. yes.

So we are contesting for that? Or it could be this way only?

We are contesting, but we -- as the work was getting suffered in terms of [indiscernible] because that would relate to my defect liability. So presently, we have carried out the work. And we are carrying out against the contest. But as of now, we are expecting -- it is in our [indiscernible].

And what would be the quantum of that?

I think it is about INR 13 crores to INR 14 crores.

Okay. And sir, overall -- on the UP project, on overall post-completion basis, what margins would we be making on the project entirely and what we are targeting at the time of bidding?

See each project has a different, different margins and different, different costs. So presently, what we possible for to give an individual profit and the overall profit.

Okay. And sir, lastly, what would be your order inflow guidance? Is it should be 3.5 or we are changing it for the entire year?

Yes, it's 3.5 and we should be able to reach to 3.5.

And our year-to-date inflow is INR 230 crores, right?

This quarter?

Yes, this quarter?

Yes, yes, it's INR 230 crores.

We have our next question from the line of Rushabh from RBSA Investment Manager.

Sir, we are seeing the semiconductor industry coming up in Gujarat. Sir, are you participating in any of these bids or discussion with any of the players for EPC services?

I think Tata people contacted us. So later on, this project has been now allotted to Tata, this Tata Electronics people has given that total 20 projects to Tata projects. And there was one inquiry from Tata project related to Precast, not on the project side, but on the Precast side, there was an inquiry.

Okay. Sir, are we seeing any big orders that in the next 6 months or something, INR 800 crores, INR 1,000 crores order, but it's been some time not any big orders?

We are expecting -- there's some few projects of that size in our bid.

We have our next question from the line of Jiten Rushi from Axis Capital.

Sir, my first question is on SMC project. So as you said, there was a labor issue and the issue still continues. So do you see any cost because -- and whether you'll be able to complete the project on time or there will be some penalty because we are seeing the same in UP? So any escalation or anything which we have covered with price escalation?

No, see SMC is covered with escalations related to RBI Index. So there is no issue related to escalation neither there is an issue related to penalty because the project is going on track. Only the issue was related to that May -- April and May when there was a little bit 40% less labor. Otherwise, things are under control.

Sir, 30% less labor, right, sir?

Yes, yes.

And sir, in terms of the Precast facility, any thoughts on the Phase 2 expansion? As you said that capacity utilization will be almost, say INR 60 crores INR 70 crores -- 70%?

No, no, see we are not utilizing -- as such, we have utilized only 60% to 65%. So we are trying to increase more orders. Still, we haven't expected to [indiscernible].

So basically, probably, in next 2 years' time, probably you may reach 70%, 80%, then you can look for Phase 2, right, sir?

Yes, yes.

And sir, any guidance in terms of FY '26 revenue and margin because we understand this year has been -- first quarter was...

Jiten, we have already said guideline, we have already given [indiscernible] and we have already said it will be in the range of 10%.

No, no I'm asking for the -- year after '25, FY '26, can we expect a better run rate?

So we are sure that we should be in position to grow from -- each year by 10% to 15%.

10% to 15%. And margins should be improving going forward?

Yes, margins should be in that range. But the bidding value will not be same.

The last question for today will be from the line of Navid Virani from Bastion Research.

I just needed one clarification, sir. So is it fair to assume that all our projects, which are now a part of our order book, has escalation clause built in and UP project was the only exception.

Most of the projects which we are doing today is the carries that escalation. So if it is a government project, that carries through RBI index escalation or if it's a private project is a D grade project. So that was the only project which are not having any escalation related to cement, steel, material or labor.

Ladies and gentlemen, that was the last question for today. And I would now like to hand the conference over to the management of PSP Projects for closing comments.

Thank you all for joining us on our earnings conference call today. Thank you for the support and trust in us. We hope that we have been able to address most of your queries. In case the further queries, you may reach out to our Investor Relation adviser, Ernst & Young and they will connect with you offline. Thank you, Bharanidhar bhai and Avendus Spark for hosting our call this quarter. Thank you, everyone, and God bless you.

Thank you, everyone.

Thank you. On behalf of PSP Projects, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.