Q3 2025 Adcore Inc Earnings Call

November 13, 2025

as a reminder all participant lines will be in the listen, only mode and there will be an opportunity for you to ask questions after the presentation concludes

Operator: As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and then zero on your touchtone phone. I now hand the conference over to Mr. P. Ramakrishnan from Larsen & Toubro. Thank you, over to you, Mr. Ramakrishnan.

Should you need assistance during this conference call please signal an operator by pressing star and then zero on your touchtone phone.

I now hand the conference over to Mr. P. Rama Krishna from Lassen and toubro. Thank you. And over to you Mr. Rama Krishna.

Uh, thank you Darwin. Uh, good evening, ladies and gentlemen, have warm welcome to all of you to the Q3 9 months fee, 26 earnings call of last name and 2 bro.

P. Ramakrishnan: Thank you, Darwin. Good evening, ladies and gentlemen. A warm welcome to all of you to the Q3 9 months FY 2026 earnings call of Larsen & Toubro. The earnings presentation was uploaded onto the stock exchange and on our website around at 6:45 PM. I hope you had a chance to take a quick look at the numbers and the presentation details as well. I will first walk you through the important highlights for Q3 FY 2026 in the next 20 to 25 minutes or so. Post which, we will take questions. Please note that when the Q&A session starts, I will also have with me our Deputy Managing Director and President, Mr. Supranam Sharma. Before I begin the overview, the disclaimer from our end.

the earnings presentation was uploaded onto the stock exchange and on our website are out at 6:45 p.m.

I hope you had had a chance to take a quick look at the numbers and the presentation details as well.

I will first walk you through the important highlights for Q3 FY 26 in the next 20 to 25 minutes or so, uh, post your post, which we will take questions.

Please note that when the Q and a session starts, I will also have with me our Deputy managing director and president Mr. Subban Sharma.

P. Ramakrishnan: The presentation which we have uploaded on the stock exchange and our website today, including the discussions we may have on the call today, may contain certain forward-looking statements concerning L&T's business prospects and profitability, which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward-looking statements. I would request you to go through the detailed disclaimer which is available in slide two of our earnings presentation that we have uploaded available. I will start with a brief overview on the economic conditions in India and the Middle East, which are key markets for the company, especially for its projects and manufacturing businesses. The Indian economy continues to demonstrate resilience, supported by steady growth conditions and easing inflationary pressures.

Before I begin the overview, the disclaimer from our end the presentation, which we have uploaded on the stock exchange and our website today including the discussions, we may have on the call today may contain certain forward-looking statements concerning lnt business prospects and profitability which are subject to several risks and uncertainties and the actual results could materially differ from those in such forward-looking statements.

I would request you to go through the details disclaimer which is available in slide 2 of our earnings presentation that we have uploaded a while ago.

I will start with a brief overview, on the economic conditions in India, and the Middle East which are key markets for the company especially for its projects and Manufacturing businesses.

The Indian economy continues to demonstrate resilience supported by Steady growth conditions and using inflationary pressures.

P. Ramakrishnan: The Q2 GDP growth printed at 8.2%, a six-quarter high and underpinned by robust performance in the projects, manufacturing, and the services sectors. The full year real GDP growth for FY 2026 is projected at 7.3%. The inflation dynamics have also improved with CPI easing materially. The RBI now anticipates CPI inflation at 2.9% for Q4 FY 2026. The continued emphasis on capital outlays remains likely with indications of calibrated reallocations towards strategic sectors such as defense. Additional funding support for urban redevelopment and infrastructure modernization is anticipated, reflecting the government's broader focus on strengthening urban capacity and service delivery. Private CapEx in India through 2025 remains supported by residential and commercial real estate activity, increasing investments into digital infrastructure, data centers, and the power sector that including renewables as well.

The Q2 GDP growth printed at 8.2% a 6 quarter high and underpinned by robust performance in the projects and uh manufacturing and the services sectors.

The full year, real GDP growth for Phi. 26 is projected at 7.3%.

The inflation Dynamics have also improved with CPI easing, materially the RBI. Now anticipates CPI inflation at 2.9% for Q4 F5. 26.

The continued emphasis on Capital outlays remains slightly with indications of calibrated, reallocations towards strategic sectors such as defense.

Additional funding support for urban Redevelopment and infrastructure modernization is anticipated reflecting. The government's broader focus on strengthening carbon capacity and Service delivery.

Private capex in India through 2025 remains supported by residential and Commercial Real Estate activity.

P. Ramakrishnan: Private CapEx in India through 2025 remains supported by residential and commercial real estate activity, increasing investments into digital infrastructure, data centers, and the power sector that including renewables as well. Semiconductors are emerging as a new age CapEx theme supported by policy initiatives and announced project pipelines. Within manufacturing, CapEx continues in sectors such as cement, broadly reflecting domestic demand and capacity requirements. CapEx in iron and steel and other base metals continues to be influenced by capacity expansion and modernization plans and a supportive medium-term demand outlook.

Increasing investments in 2 digital infrastructure data centers.

And the power sector that including Renewables as well.

Semiconductors are Imaging as a new age, capex team supported by policy initiatives and announced project Pipelines.

P. Ramakrishnan: Semiconductors are emerging as a new age CapEx theme supported by policy initiatives and announced project pipelines. Within manufacturing, CapEx continues in sectors such as cement, broadly reflecting domestic demand and capacity requirements. CapEx in iron and steel and other base metals continues to be influenced by capacity expansion and modernization plans and a supportive medium-term demand outlook. The global economy is entering calendar 2026, with growth expected to remain modest at roughly the 3% range. The United States is anticipated to continue outperforming other major advanced economies, supported by relatively accommodative financial conditions. Though some moderation in momentum is likely as fiscal support gradually tapers off. The growth in the Euro area and Japan is expected to remain measured.

Within manufacturing capex continues in sectors, such as cement, broadly reflecting domestic demand and capacity requirements.

Capacity, 9, and steel. And other base Metals continues to be influenced by capacity expansion and modernization plans. And the supportive medium-term demand Outlook.

The global economy is entering calendar 2026 with growth expected to remain modest at roughly the 3% range.

P. Ramakrishnan: The global economy is entering calendar 2026, with growth expected to remain modest at roughly the 3% range. The United States is anticipated to continue outperforming other major advanced economies, supported by relatively accommodative financial conditions. Though some moderation in momentum is likely as fiscal support gradually tapers off. The growth in the Euro area and Japan is expected to remain measured. Turning on to the GCC region, the growth is expected to remain a relative buoyant in 2026, with real GDP expansion projected in the 4 to 4.5% range. In Saudi Arabia and the UAE, capital deployment remains oriented towards priority transformation agendas, including large-scale investments in digital and AI-enabling infrastructures such as data centers and cloud capacity, alongside ongoing urban development and infrastructure initiatives.

The United States is anticipated to continue our performing other major advanced economies supported by relatively accommodative Financial conditions.

Those some moderation in momentum is likely a fiscal support gradually. Take us off.

The growth in the Euro area and Japan is expected to remain measured.

Turning on to the GCC region.

P. Ramakrishnan: Turning on to the GCC region, the growth is expected to remain a relative buoyant in 2026, with real GDP expansion projected in the 4 to 4.5% range. In Saudi Arabia and the UAE, capital deployment remains oriented towards priority transformation agendas, including large-scale investments in digital and AI-enabling infrastructures such as data centers and cloud capacity, alongside ongoing urban development and infrastructure initiatives. The region is also seeing sustained investment momentum in gas and renewable energy projects reflecting long-term energy diversification goals. Having covered the macro landscape, let me now share a few important highlights for the quarter with respect to L&T. Number one, L&T Realty. The parent, Larsen & Toubro, has initiated a transfer of its realty business undertaking to L&T Realty Properties Limited, a wholly-owned subsidiary, through a slump sale under a scheme of arrangement subject to regulatory approvals.

The growth is expected to remain uh relative by and in 2026 with real GDP expansion. Projected in the 4 to 4 and a half percent range.

Ongoing Urban Development and infrastructure initiatives.

The region is also seeing sustained investment momentum in gas and renewable energy projects reflecting long-term energy diversification goals.

P. Ramakrishnan: The region is also seeing sustained investment momentum in gas and renewable energy projects reflecting long-term energy diversification goals. Having covered the macro landscape, let me now share a few important highlights for the quarter with respect to L&T. Number one, L&T Realty. The parent, Larsen & Toubro, has initiated a transfer of its realty business undertaking to L&T Realty Properties Limited, a wholly-owned subsidiary, through a slump sale under a scheme of arrangement subject to regulatory approvals. This marks the start of a phased consolidation of all real estate assets into a unified platform, positioning L&T Realty for greater scale, agility, and financial strength to capitalize on India's real estate growth.

Having covered the macro landscape. Uh, let me now share a few important highlights uh for the quarter, with respect to L&T.

P. Ramakrishnan: This marks the start of a phased consolidation of all real estate assets into a unified platform, positioning L&T Realty for greater scale, agility, and financial strength to capitalize on India's real estate growth. Point number two, the precision engineering and systems business of the company entered a strategic partnership with General Atomics Aeronautical Systems to manufacture medium altitude, long endurance, remotely piloted aircraft systems RPAS in India. Under this partnership, L&T will participate in the upcoming 87 MALE RPAS program of the Ministry of Defense, where L&T will be the prime bidder and General Atomics, the technology partner. Point number three, the heavy engineering business of the company has signed a memorandum of understanding with the US-based nuclear energy solutions provider, Holtec International's Asia Arm, to offer design and build solutions for heat transfer equipment.

Number 1, L&T reality. The parent class 1 and 2 Grow has initiated a transfer of its reality business undertaking to L&T. Realy properties limited uh wholly on subsidiary through a slum sale under a scheme of arrangement subject to regulatory approvals this marks, the start of a phase consolidation of all real estate assets into a unified platform. Positioning L&T reality for greater scale, agility and financial strength to capitalize on India's real estate growth

Point number 2.

P. Ramakrishnan: Point number two, the precision engineering and systems business of the company entered a strategic partnership with General Atomics Aeronautical Systems to manufacture medium altitude, long endurance, remotely piloted aircraft systems RPAS in India. Under this partnership, L&T will participate in the upcoming 87 MALE RPAS program of the Ministry of Defense, where L&T will be the prime bidder and General Atomics, the technology partner. Point number three, the heavy engineering business of the company has signed a memorandum of understanding with the US-based nuclear energy solutions provider, Holtec International's Asia Arm, to offer design and build solutions for heat transfer equipment.

The Precision Engineering and systems business of the company entered. A strategic partnership with General. Atomics Aeronautical Systems to manufacture medium altitude long endurance, remotely piloted aircraft systems rpas in India.

Under this partnership lnt will participate in the upcoming 87. Male rpas programme of the ministry of Defense, where lnt will be the prime Builder and general atomics, uh, the technology partner,

Point number 3, the heavy engineering business of the company has signed a memorandum of understanding with the us-based, nuclear energy solutions, provider whole Tech International Asia.

To offer design and build solutions for heat transfer equipment.

P. Ramakrishnan: This collaboration is intended to provide advanced solutions for nuclear and thermal power plants worldwide, with a particular emphasis on heat transfer technologies for conventional power plant islands and balance-of-plant systems. Number 4, data center business. The data center business has announced the rebranding of its business as Larsen & Toubro-Vyoma. The brand will spearhead L&T's expansion into hyperscale data centers across key Indian metros, including Mumbai, Chennai, and Bangalore, with facilities designed to support high-performance computing and advanced data storage requirements. Point number 5. The company has earned the coveted honor of being the only Indian corporate featured among the top 200 environmental firms globally in the latest list of top environmental firms published by the New York-based Engineering News-Record. Lastly, the company's MSCI ESG ratings was upgraded from BBB to A in November 2025.

This collaboration is intended to provide Advanced solutions for nuclear and thermal power plants worldwide with a particular emphasis on heat transfer Technologies for conventional, power plant islands and balance of plant systems.

Number 4 Data, Center business. The data center business has announced the rebranding uh, of its business as last season and to grow bioma, the brand will spearhead lnt is expansion. Into hyperscale Data Centers across key Indian metros, including Mumbai Chennai, and Bangalore with facilities designed to support high performance Computing, and advanced data storage requirements.

Part number 5, the company has earned the coveted honor of being the only Indian corporate featured among the top 200 environmental firms globally in the latest list of top environmental firms published by the New York based engineering News News Record.

Lastly, the company's msci ESG ratings was upgraded from Triple B to a in November 2025.

P. Ramakrishnan: Lastly, the company's MSCI ESG ratings was upgraded from BBB to A in November 2025. I will now cover the various financial performance parameters for Q3 FY26. We witnessed our highest-ever quarterly order inflows in Q3 FY26 of INR 1,356 billion, recording a 17% growth year-on-year, led by a strong ordering momentum witnessed across both India and overseas markets. Out of the total order inflows in Q3 that I just now stated of INR 1,356 billion, the projects and manufacturing order inflow constituted INR 1,164 billion, up by 18% on a Y-o-Y basis. Of this INR 1,164 billion of order inflows of the projects and manufacturing segment, the domestic orders were at INR 620 billion, up 30%. International orders constituted balance INR 544 billion, up 7%.

I will now cover the various financial performance parameters for Q3 F5 26.

P. Ramakrishnan: I will now cover the various financial performance parameters for Q3 FY26. We witnessed our highest-ever quarterly order inflows in Q3 FY26 of INR 1,356 billion, recording a 17% growth year-on-year, led by a strong ordering momentum witnessed across both India and overseas markets. Out of the total order inflows in Q3 that I just now stated of INR 1,356 billion, the projects and manufacturing order inflow constituted INR 1,164 billion, up by 18% on a Y-o-Y basis. Of this INR 1,164 billion of order inflows of the projects and manufacturing segment, the domestic orders were at INR 620 billion, up 30%. International orders constituted balance INR 544 billion, up 7%.

We witnessed our highest ever quarterly order inflows in Q3 fee. 26 of rupees 1356 billion recording a 17% growth year on year. Led by a strong ordering momentum witnessed across both India and overseas markets.

Out of the total order inflows in Q3 that I just now stated of rupees 1356 billion the projects and Manufacturing order, inflow, constituted rupees 1 1, 1 64 billion up by 18% on a y, on by basis.

Of this rupees 1164 billion of water inflows of the projects and Manufacturing. Uh, segment. The domestic orders uh, were at rupees 620 billion up 30% and international orders. Uh, constitute, the balance rupees 544 billion up 7%.

the group revenues grew 10%, why on why led by steady progress across most of the businesses

P. Ramakrishnan: The group revenues grew 10% Y-o-Y, led by steady progress across most of the businesses. The project execution levels remain broadly in line with expectations, barring a few sector-specific challenges. The projects and manufacturing portfolio margin improved by 50 basis points Y-o-Y to 8.1%. As of December 2025, the net working capital to revenue ratio improved to 8.2%, reflecting an improvement of 450 basis points on a Y-o-Y basis. Our recurring PAT at INR 44 billion reported a strong growth of 31% Y-o-Y. The reported PAT for Q3 FY2026 was at INR 32 billion, down by 4% Y-o-Y, owing to a onetime impact of INR 11.9 billion arising from the new Labour Codes legislation.

The project execution levels remain broadly in line with expectations barring a few expect sector specific challenges.

The projects and Manufacturing portfolio. Margin improved by 50 basis points. Why? And why to 8.1%

As of December 2025 the networking Capital to revenue ratio improved to 8.2%, reflecting an improvement of 450 basis points on a Y and Y basis.

Our recurring path at rupees 44 billion, reported a strong growth of 31% by on why.

526 was at rupees 32 billion down by 4%. Why on why owing to a 1-time impact of rupees 11.9 billion arising from the new Labour Court, uh, legislation?

Our return on Equity as on 31st December 2025 is at 16.5% and is up 40 basis points, Y and Y.

P. Ramakrishnan: Our return on equity as on 31 December 2025 is at 16.5% and is up 40 basis points Y-o-Y. The return on equity includes an impact of almost 110 basis points arising from this onetime provision on account of labor code. Now, I move on to the individual performance parameters. During the quarter, our group order inflows stood at INR 1.36 trillion, registering a Y-o-Y growth of 17%, driven by the sustained traction across our key businesses. Within this, the projects and manufacturing portfolio crossed the INR 1 trillion order inflow mark for the first time, with order inflows of INR 1.16 trillion, up 18% Y-o-Y, underscoring a broad-based demand environment across both domestic and international markets.

The return on Equity includes an impact of almost 110 basis points. Arising from this 1-time provision on account of Labor Court.

Now, I move on to the individual performance parameters.

During the quarter, our group order inflows, stood at rupees 1.36 trillion registering a y on my growth of 17% driven by the sustained traction across our key businesses within this. The projection manufacturing portfolio crossed the rupees 1 trillion order inflow marked for the first time with order inflows or rupees 1.16 trillion up 18%. Why on why underscoring a broad-based demand environment across both domestic and international markets?

P. Ramakrishnan: The growth in the P&M portfolio was driven primarily by strong domestic inflows, which grew 30%, as I said earlier, and international inflows up 7% Y-o-Y. The increase in domestic order inflows was led by hydrocarbon, CarbonLite Solutions, and the buildings and factories businesses. The growth in international orders was supported by the renewables and power transmission and distribution sub-segment. During the current quarter, international orders accounted for 47% of the projects and manufacturing portfolio, compared to 52% in the corresponding quarter of the previous year. Now, moving on to the prospects pipeline. Our prospects pipeline is at INR 5.92 trillion for the near term vis-à-vis INR 5.51 trillion at the same time last year, representing an increase of 7% on a Y-o-Y basis.

The growth in the PM. Pnm portfolio was driven primarily by strong domestic inflows, which grew 30% as I said earlier and international inflows up 7 uh 7%. Why and why?

The increase in domestic order inflows was led by hydrocarbon carbon light Solutions and the buildings and factories businesses.

The growth in international orders was supported by the Renewables and power transmission and distribution sub segment.

During the current quarter International orders, accounted for 47% of the projects and Manufacturing portfolio. Compared to 52% uh, in the corresponding quarter of the previous year.

Now, moving on to the prospects pipeline.

Our prospects pipeline is at rupees, 5.92 trillion for the near term Visa. We rupees 5.551 trillion at the same time. Last year representing an increase of 7% on a y on why basis

the increase in the prospect's pipeline is mainly led by carbon light Solutions and the Precision Engineering and systems businesses.

P. Ramakrishnan: The increase in the prospects pipeline is mainly led by CarbonLite Solutions and the precision engineering and systems businesses. The broad breakup of the overall prospects pipeline for the near term is as follows. Infrastructure: INR 4.02 trillion, which is almost in line with the previous year number of INR 4 trillion. Hydrocarbon segment: INR 1.26 trillion vis-a-vis INR 1.44 trillion last year. CarbonLite Solutions: INR 0.40 trillion vis-a-vis less than INR 0.01 trillion last year. The high-tech manufacturing segment is at INR 0.42 trillion as compared to INR 0.07 trillion last year. Moving on to the order book. The order book is at INR 7.33 trillion as on December 2025, up 30% as compared to December 2024.

The broad breakup of the overall prospects pipeline for the near term is as follows.

Infrastructure rupees 4.02 trillion, which is almost in line with the previous year, uh number of rupees 4 trillion.

Hydrocarbon segment rupees 1.26 trillion Visa V rupees 1.44 trillion last year.

Carbon light Solutions rupees 0.40, trillion Visa V less than 0.01 trillion last year.

The high-tech manufacturing, uh, segment is at rupees 0.42 trillion as compared to rupees 0.07 trillion, uh, last year.

Moving on to the order book, the order book is at rupees 7.33 trillion as on December, 25 and up 30% as compared to December 24th.

In terms of composition approximately 92% of the total order book is from the infrastructure and the energy segments.

P. Ramakrishnan: In terms of composition, approximately 92% of the total order book is from the infrastructure and the energy segments. In terms of geographic mix, 51% of the order book is from domestic market and 49% relates to international jobs. The breakdown of the domestic order book of INR 3.76 trillion as of December 2025 comprises central government jobs share being 12%, state government and local authority share at 22%, PSU or state-owned corporations at 30%, and private sector at 36%. It is worth mentioning here that the private sector share has risen meaningfully from 21% in March 2025 to 36% in December 2025, supported by strong traction in the thermal power sector, storage systems, residential and commercial real estate, and emerging opportunities for building capacities in ferrous and non-ferrous space.

While in terms of geographic mix 51% of the order book is from domestic market and 49% relates to International jobs.

the breakdown of the domestic order book of rupees 3.76 trillion as of December 25th, central government jobs, share, being 12%, state government and local authorities, share a 22% PSU or state-owned corporations at 30% and private sector at 36%

Set.

It is worth mentioning here that the private sector. Share has risen. Meaningfully from 21% in March 2025 to 36% in December 2025 supported by strong Traction in the thermal power sector storage systems residential and Commercial, Real Estate, and emerging opportunities, for building capacities in, Ferris and non-ferrous space.

Out of the international order book of rupees 3.57 trillion around 75% uh is from the Middle East.

P. Ramakrishnan: Out of the international order book of INR 3.57 trillion, around 75% is from the Middle East. With respect to additional details on our order book, around 10% of the total order book is funded via bilateral and multilateral agencies. In addition, as of December 2025, slow-moving orders constitute roughly 3% of the overall order book, while INR 10 billion worth of orders were deleted during the quarter. Further details are available in the accompanying presentation slides. Coming to revenues. Our group revenues for Q3 FY 2026 stood at INR 714 billion, registering a year-on-year growth of 10%, with international revenues constituting 54% of the total group revenues during the quarter. The growth in the high-tech manufacturing, energy projects, and the IT&TS businesses drove the overall revenue growth.

With respect to additional details on outer book, around 10% of the total order book is funded by bilateral and multilateral agencies.

In addition, as of December 2025 slowem, moving orders, constitute roughly 3% of the overall order book. While rupees 10 billion worth of orders were deleted during the quarter.

Company, presentation, slides.

Coming to revenues our group revenues for Q3 fee. 26 stood, at rupees 714 billion registering a high on why growth of 10% with International revenues constituting 54% of the total group revenues during the quarter.

The growth in the high-tech manufacturing energy projects, and the it and TS businesses, drove the overall Revenue growth.

P. Ramakrishnan: The revenues from the projects and manufacturing business for Q3 FY 2026 is INR 523 billion, up 11% over the corresponding quarter of the previous year. Moving on to EBITDA margin. Our group level EBITDA margin, excluding other income for Q3 FY 2026, is 10.4% as compared to 9.7% in Q3 of the previous year. The improvement in EBITDA margin is primarily driven by operational efficiencies across businesses. The EBITDA margin in the projects and manufacturing business portfolio for Q3 FY 2026 is at 8.1% and shown an improvement almost by 50 basis points from 7.6% in Q3 of the previous year. This progress is in line with our assessment at the start of the financial year. The details will be covered when I elaborate on the performance of each of the segments.

The revenue from the projects and manufacturing business for Q3 fee. 26 is rupees 523 billion of 11% over the corresponding quarter of the previous year.

Moving on to EPA margin. Our group level epita margin excluding other income for Q3 fee. 26 is 10.4% as compared to 9.7% in Q3 of the previous year.

The Improvement in EPA margin is primarily driven by operational efficiencies across businesses.

The Evita margin in the projects and manufacturing business portfolio for Q3 fee. 26, is at 8.1% and shown an improvement. Almost by 50 basis points from 7.6%, uh, and in Q3 of the previous year,

This progress is in line with our assessment at the start of the financial year. The details will be covered when I elaborate on the performance of each of the segments.

P. Ramakrishnan: Our recurring PAT for Q3 FY26 at INR 44 billion was up by 31% on a year-on-year basis. The increase in recurring PAT is reflective of improved activity levels, operational efficiencies, and efficient treasury management. Reported PAT for Q3 FY26 is at INR 32 billion, down by 4% over Q3 of last year due to this one-time material increase in provision for employee benefits on account of the new Labour Codes legislation. The group performance P&L construct, along with the reasons for major variances under the respective function devs is provided in the presentation. Coming on to working capital. Our NWC to sales ratio has improved from 12.7% in December 2024 to 8.2% in December 2025, mainly due to an improvement in the gross working capital to sales backed by strong customer collections during the last 12 months.

Our recurring Pat for Q3 fee 26, eighty rupees 44 billion uh was up by 31% on Y and Y basis. The increase in recurring, Pat is reflective of improved activity levels. Operational efficiencies and efficient treasury management

Reported Pat for Q3 fee 26 is eighty rupees 32 billion down by 4%, over Q3 of last year. Due to this 1 time material increase in provision for employee benefits on account of the new Labour Court legislation.

The group performance penal construct, along with the reasons for major variances under the respective function debts is provided in the presentation.

Coming on to working capital. Our NWC to sales ratio has improved from 12.7% in December, 248.2% in December 25. Mainly due to an improvement in the gross working capital to sales backed by strong customer collections during the last 12 months.

P. Ramakrishnan: Our group level collections, excluding the financial services segment for Q3 FY 2026, is INR 642 billion vis-a-vis INR 591 billion in Q3 of the previous year. With continued focus on customer collections, our cash flow from operations, excluding financial services in Q3 FY 2026, was at INR 79 billion as compared to INR 21 billion in Q3 of the previous year. Our group cash flows, excluding financial services, has been given in the annexures alongside the reported cash flows for the entire group to enhance the clarity on the cash flow movements. Finally, trailing twelve-month return on equity for Q3 FY 2026 is 16.5%, as compared to 16.1% in Q3 of the previous year, an improvement of 40 basis points.

Our group level collections excluding the financial services segment for Q3 fee, 26 is rupees 642 billion Visa. We rupees 591 billion in Q3 of the previous year. We continued focus on customer collections. Our cash flow from operations, excluding Financial Services in Q3 fee. 26 was at rupees 79 billion as compared to rupees 21 billion in Q3 of the previous year.

Our group cash flows, excluding Financial Services has been given in the lectures. Alongside the reported cash flows for the entire group to enhance the clarity on the cash flow movements.

Finally trailing 12 month return on equity for Q3 fee. 26 is 16.5% as compared to 16.1% in Q3 of the previous year and Improvement of 40 basis points.

P. Ramakrishnan: Trailing twelve month ROE, excluding the impact of this one time labor court provision, stood at 17.6%. Broadly in line with the target of 18% that we have set ourselves to during this last year, that is FY 2026 for the Lakshya plan. Very, very briefly, I will now comment on the performance of each business segment before we give our final comments on our outlook for FY 2026. We start with the infrastructure segment. The infrastructure order inflow grew 26% in Q3 FY 2026 on a Y-o-Y basis, driven by strong domestic private sector demand spanning residential and commercial buildings, semiconductor fab plants, data centers, minerals and metals, solar PV plants, and transmission lines. These together account for nearly 55% of the domestic orders for the quarter.

The trailing 12 month, Roe excluding the impact of this 1 time uh labor Court provision uh stood at 17.6%, broadly in line with the target of 18% that we have set ourselves to during this last year. That is Phi. 26 for the laksha plan.

Very, very briefly. I will now comment on the performance of each business segment before we give our final comments on our outlook for Phi 26.

We start with the infrastructure segment, the infrastructure order inflow group, 26%, in Q3 fee, 26 on a y on why basis driven by strong domestic private sector demand spanning residential and commercial buildings. Semiconductor Fab plants, data centers minerals, and metals solar PV plants and transmission lines.

These together account for nearly 55% of the domestic orders for the quarter.

The order book of this segment is at rupees 4.24 trillion, as of December 2 5,

P. Ramakrishnan: The order book of this segment is at INR 4.24 trillion as of December 2025. The book build for infra is around 26 months. Like I mentioned earlier, our order prospects pipeline for infra for the near term is INR 4.02 trillion. Similar levels as the same of December 2024. This infra prospects pipeline of INR 4.02 trillion comprises of domestic prospects of INR 2.61 trillion and international prospects of INR 1.41 trillion.

The book bill for infra is around 26 months.

Like my, like I mentioned earlier our order prospects pipeline for infra for the near term is rupees, 4.02 trillion, similar levels as compared to similar levels as the same of 2030, December 24.

Prices of domestic. Prospects of rupees 2.61 trillion and international prospects of rupees 1.41 trillion.

P. Ramakrishnan: The sub-segment breakup of the total order prospects in Infra is, comprises of Transportation Infra share at 19%, Heavy Civil Infrastructure share of 19%, Water and Effluent Treatment share of 18%, Buildings and Factories at 15%, Power Transmission and Distribution 11%, Renewables 9%, and Minerals and Metals 9%. The revenue for the quarter for the Infrastructure segment registered a modest growth of 5% on a Y-o-Y basis. The domestic market saw subdued progress due to slowdown, mainly in the Water and Effluent Treatment projects business. However, the execution momentum remained strong in the international portfolio. Our EBITDA margin in the segment was at 6.1% in Q3 FY 2026, as compared to 5.5% in Q3 FY 2025, with the uptick largely driven by stages of completion across projects.

The sub-segment breakup of the total order prospects in infra is uh, comprises of Transportation infrastructure at 19%. He receive will infrastructure, share of 19% water and effluent treatment. Share of 18% buildings and factories at 15% power, transmission and distribution, 11% Renewables 9% and minerals and metals 9%

The revenue for the quarter for the infrastructure segment, registered, a modest growth of 5% on a y on by basis.

The domestic Market saw subdued progress due to slow down uh, mainly in the water and effluent treatment, projects business, however, the execution momentum remains strong in the, uh, International portfolio.

Our Aida margin in the segment was at 6.1% in, Q3 a526 as compared to 5.5% in Q3 and 525 with the uptick, largely driven by stages of completion across projects.

Moving on to the next segment, that is energy projects, which primarily comprises of hydrocarbon and the carbon light Solutions business.

P. Ramakrishnan: Moving on to the next segment, that is energy projects, which primarily comprises of hydrocarbon and the CarbonLite Solutions business. The order inflows in this segment were robust at INR 460 billion in Q3 FY 2026, compared to INR 388 billion in Q3 of the previous year, supported by ultra mega orders across both hydrocarbon and CarbonLite Solutions. During the quarter, the hydrocarbons offshore wind business secured an ultra mega order to supply offshore HVDC converter stations to a leading European renewable energy operator. In the CarbonLite Solutions business, we have received letter of award intent for an ultra mega order from a major Indian private sector utility operator.

The ordering flows in this segment were robust at rupees 460 billion in Q3 fee. 26 compared to rupees 388 billion in Q3 of the previous year supported by Ultra Mega orders, across both hydrocarbon and carbon light Solutions.

during the quarter, the hydrocarbons offshore wind business secured an Ultra Mega order to supply offshore, hvdc converter stations to a leading European renewable energy, operator

In the carbon light Solutions business. We have received letter of award intent for an Ultra Mega order from a major indian private sector utility operator.

P. Ramakrishnan: The order book of this energy segment is at INR 2.48 trillion as of 25 December 2025, with the hydrocarbon order booked at INR 1.83 trillion and the CarbonLite Solutions order booked at INR 0.65 trillion. We have an order prospects pipeline of INR 1.66 trillion for this energy segment for the near term, comprising of hydrocarbon prospects of INR 1.26 trillion and CarbonLite Solutions prospects of INR 0.40 trillion. The CarbonLite Solutions order prospects are largely domestic, whereas the hydrocarbon prospects are largely from outside of India. The Q3 FY2026 for the energy segment stood at INR 127 billion, reflecting a steady 15% growth and underscoring execution progress on a larger order book.

The order book of this energy segment is at rupees 2.48 trillion. As of December 25th, the hydrocarbon order book at rupees 1.83 trillion and the carbon light Solutions order book at rupees 0.65 trillion.

We have an order prospects pipeline of rupees 1.66 trillion for this energy segment for the near term, comprising of hydrocarbon, prospects of rupees 1.26 trillion and carbon light Solutions, prospects of rupees 0.40 trillion.

The Carbonite Solutions, Auto prospects are largely domestic. Whereas the hydrocarbon prospects are largely from outside of India,

The Q3 fee 26 for the energy segments to that rupees 127 billion reflecting a steady, 15% growth and underscoring execution progress on a larger order book.

P. Ramakrishnan: The energy segment margin in Q3 FY2026 is at 5.9%, as compared to 8.3% in Q3 of last year. The margin decline in the hydrocarbons business is primarily due to cost overruns in a few competitively priced domestic and international projects. As highlighted in previous earnings calls, these projects are in their terminal execution phase and are expected to conclude over the next few quarters, during which margins will remain soft. This is already factored into our P&M margin guidance for FY2026. The CarbonLite Solutions margin is reflective of a significant share of revenues from jobs which are yet to cross the margin recognition threshold. Moving on to the high-tech manufacturing segment comprising of the precision engineering systems and heavy engineering businesses. The order inflows in heavy engineering moderated due to project deferrals.

The energy segment margin in Q3 fee. 26 is at 5.9% as compared to 8.3% in Q3 of last year. The margin decline in the hydrocarbons business is primarily due to cost overruns in a few competitively priced domestic and international projects. As highlighted in previous earning calls these projects are in their terminal execution, phase and are expected to conclude over the next few quarters during which margins will remain soft.

This is already factored into our PM margin guidance for Phi 26. The carbon light Solutions margin is reflective of a significant share of revenues from jobs which are yet to cross the margins recognition threshold.

Moving on to the high-tech manufacturing segment, comprising of the Precision Engineering Systems and heavy engineering businesses.

The order inflows in a engineering moderated due to project deferrals in the previous business. The decline in order inflows was primarily on account of a high base in the previous year.

P. Ramakrishnan: In the PE business, the decline in order inflows was primarily on account of a high base in the previous year. The order book of this segment is INR 379 billion as of 25 December, with the PE order book at INR 315 billion and heavy engineering order book at INR 63 billion. Our order prospects pipeline for the near term in this segment is INR 237 billion, comprising of INR 190 billion of precision engineering prospects and the remaining INR 46 billion from heavy engineering business. The segment revenue at approx INR 33 billion registered a strong growth of 34% Y-o-Y, driven by execution ramp-up in the PS system business. During the quarter, favorable job mix and operational efficiencies in the heavy engineering aided segment margin improvement.

The order book of this segment is rupees 379 billion as of December 25, within 315 billion and heavy engineering order booked at rupees 63 billion.

Our order prospects pipeline for the near term. In this segment is rupees 2% billion, comprising of rupees 1, 190 billion of Precision Engineering prospects and the remaining rupees 46 billion from heavy engineering business.

The segment Revenue at aprox, rupees 33 billion, registered a strong growth of 34%. Why on why driven by execution ramp up in the PA system business during the quarter? Favorable job, mix and operational efficiencies in the heavy engineering 8, segment margin Improvement.

P. Ramakrishnan: Moving on to the next segment, which is the IT and the Technology Services segment, which this comprises largely of the two listed entities, LTIMindtree, and LTTS, and as well as our newly incubated businesses of digital platforms, data centers, and semiconductor design. The revenues for this segment is INR 135 billion in Q3 FY2026, registering a growth of 12% on a Y-o-Y basis. Operational efficiencies and the Forex tailwinds drives the segment margin improvement. I will not dwell too much on this segment as both the companies in the segment are listed subsidiaries, and the detailed fact sheets are already available in the public domain. We move on to L&T Finance Limited, which is forming part of the financial services segment. Here again, the detailed results are already available in the public domain.

The next segment which is the it and the technology Services segment which this comprises largely of the tool listed entities, LTI Mind Tree uh and LTS and as well as our newly incubated, businesses of digital platforms data centers and semiconductor design.

The revenues for the segment is rupees 135 billion in Q3 fee. 26, registering a growth of 12% on a yon web basis, operational efficiency. And the Forex Tailwind drives, the segment margin Improvement. I will not dwell too much on this segment as uh both the companies in the segments are listed subsidiaries and the detailed fact sheets are already available in the public domain.

P. Ramakrishnan: Very briefly, the Q3 witnessed the highest ever quarterly retail disbursement and improved collection efficiency as well as asset quality. The financial services business has achieved 98% retailization of its loan book in December 2025. The return on assets remain healthy at 2.31% for Q3 FY 2026, and adequate capital is available in the balance sheet to pursue growth in the medium term. Moving on to the development projects segment. This segment includes the L&T Hyderabad Metro and the power development business, comprising of the 1,400 megawatt coal-based power plant at Nabha in Punjab.

We move on to Identity Finance limited, which is forming part of the financial services segment here. Again the detailed results are already available in the public domain but very briefly the Q3 witnessed the highest ever quickly. Retail dispersement and improved collection share uh, collection efficiency and as well as asset quality.

The financial services business has achieved 98% retail of its loan book in December 2025.

The return on assets. Remain healthy at 2.3% 2.3 1% for Q3 526 and adequate capital is available in the balance sheet to pursue growth in the medium-term.

Moving on to the development projects segment, this segment includes the lnt hydrobat metro and the power development business, comprising of the 1400 megawatt, coal based power plant at NABA in Punjab.

P. Ramakrishnan: Within L&T Hyderabad Metro, the higher average fares following the 25 May fare hike contributed to the revenue growth and margin improvement, with the average fare per passenger rising from INR 38 in Q3 FY 2025, rupees to INR 47 in Q3 FY 2026. The average daily ridership during the quarter stood at 4.14 lakh passengers as compared to 4.45 lakh passengers in the same period of last year. As a result of this, L&T Hyderabad Metro reported a net loss of INR 1.85 billion in Q3 FY 2026 as compared to a net loss of INR 2.03 billion in Q3 of the previous year. As mentioned in the previous earnings call, L&T has reached an in-principle understanding with the government of Telangana for the acquisition of its entire stake in L&T Hyderabad Metro.

Uh, within LT hydrobat Metro the higher average pairs following. The May 25 Fahrenheit contributed to the revenue growth and margin improvement with the average. Fare for passenger. Rising from rupees 38 in Q3 fi25 rupees 2, rupees 47 in Q3 fee, 26.

The average daily ridership during the quarter stood at 4.14% as compared to 4.45% in the same period of last year.

As a result of this L&T hydrobat Metro reported a net loss of rupees 1.85 billion in Q3 F by 26 as compared to a net loss of rupees 2.03 billion in Q3 of the previous year.

as mentioned in the previous earnings call, uh L&T has reached an in principled understanding with the government of Telangana, for the acquisition of its entire state in L&T Hyderabad, Metro

P. Ramakrishnan: Under the proposed terms, the government of Telangana will pay INR 2,000 crore towards L&T's equity investment and assume the metro's entire debt of around INR 13,000 crore. The declines in decline in revenues of Nabha Power was mainly on account of lower power demand, while the margin improved to due to cost efficiencies. I move on to the last segment, which is others. This segment largely comprises Realty, Industrial Valves, Construction Equipment and Mining Machinery, and Rubber Processing Machinery. The segment witnessed robust order inflows, during the quarter, with L&T Realty recording its highest ever presales in a quarter of approx INR 50 billion. During this quarter, L&T Realty had a successful launch of its L&T Green Reserve Noida project, which recorded a presales of INR more than 40 billion in its first week of launch.

Under the proposed terms, the government of Telangana will pay rupees 2,000, CR towards lnt is equity investment and assume the Metro's entire debt of around 13,000 Crescent.

The declines in decline in revenues of NABA, power was mainly on account of lower power demand. While the margin improved to due to cost efficiencies,

The last statement which is others. This segment lastly comprises reality industrial walls, construction equipment, and Mining machinery and rubber processing missionary.

The segment witnessed robust order inflows. Um,

During the quarter with L&T, realy recording, its highest ever pre-sales in a quarter of aprox rupees 50 billion.

During this quarter, L&T realy had a successful launch of its L&T. Green Reserve Noida project which recorded a pre-sales of rupees more than 40 billion in its first week of launch.

P. Ramakrishnan: The segment revenue at INR 25.9 billion recorded a 55% year-on-year growth, primarily driven by a higher handover of residential units in the Realty business, which also led to segment margin improvement. Before we conclude, let me cover the guidance on the various parameters for FY 2026. On order inflows, our 9 months order inflow has seen a strong growth, 30% year-on-year, based on a strong CapEx momentum. Based on the 9-month performance and the healthy prospects pipeline for the near term, we will be exceeding the 10% order inflow guidance for FY 2026. On revenue, the group revenue grew by 12% in 9-month FY 2026 and is broadly in line with our estimates. We expect the customary ramp-up in project execution during Q4 and are reasonably confident of achieving our full-year revenue growth guidance of 15%.

The segment Revenue at rupees 25.9 billion recorded at 55%. Why on, why growth primarily driven by higher Handover of residential units in the reality business which also led to segment margin Improvement.

Before we conclude, let me cover the guidance on the various parameters for Phi, 26.

On order inflows, our 9 months order inflow has seen a strong growth 30%. Why on why based on a strong strong capex momentum

Basis, the 9-month performance and the healthy prospects pipeline for the near-term. We will be exceeding the 10% order, inflow, guidance for Phi 26.

On Revenue, the group Revenue grew by 12% in 9 months fee 26 and is broadly in line with our estimates. We expect the customary ramp up in Project execution during Q4 and are reasonably confident of achieving a full year. Revenue growth guidance of 15%,

P. Ramakrishnan: On margins. Our projects and manufacturing EBITDA at 7.9% for 9 months of the current year is in line with the target that we have set ourselves at 8.5% for the full year of FY26. Lastly, on working capital. We had earlier guided the net working capital revenue of 12% by March 26. However, with stronger collection intensity and improved contractual terms, our net working capital revenue has improved sharply to 8.2% as of December 25, and we expect to close the year with a revised target of around 10%. With this, I complete. Now we can take Q&A. I also, as I indicated to you earlier, our Deputy Managing Director and President, Mr. Subramanian Sarma, will be also there in the call.

8.5% for the full year of 526.

Lastly on working capital. We had earlier guided the networking Capital revenue of 12%, by March 26th.

However, with stronger collection intensity and improved contractual terms. Our networking Capital Revenue has improved sharply to 8.2% as of December 25th the year uh, with a revised Target of around 10%.

P. Ramakrishnan: Now we can take Q&A. I also, as I indicated to you earlier, our Deputy Managing Director and President, Mr. Subramanian Sarma, will be also there in the call. It would be good that if you can put all the strategic questions before this call and take advantage of his presence. Any bookkeeping questions, you can, maybe take it towards the later part, or you can connect independently with me or the IR team. Thank you.

P. Ramakrishnan: It would be good that if you can put all the strategic questions before this call and take advantage of his presence.

With this uh I complete uh now we can take Q&A. I also as I indicated to you earlier uh our Deputy managing director and president Mr. Subban Sharma will be also there in the call. Uh, it would be good that if you can put all the Strategic questions uh before this call and take advantage of his presence. Any bookkeeping questions, you can uh maybe take it to the towards the later part. Or you can connect independently with me or the IRT. Thank you.

Subramanian Sarma: Any bookkeeping questions, you can, maybe take it towards the later part, or you can connect independently with me or the IR team. Thank you.

Thank you very much.

We will now begin the question and answer session.

Operator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Anyone who wishes to ask a question, may press star and 1 on the touchtone telephone

if you wish to remove your test from the question queue, you may press star and 2

participants are requested to please use handsets while asking a question.

Ladies and gentlemen, we will now wait for a moment while the question to you assembled.

Our first question comes from the line of Mohit Kumar from ICICI security, please go ahead.

Good evening sir and congratulations on another steroid quarter.

Mohit Kumar: Good evening, sir. Congratulations on another stellar quarter. My first question is on the Kuwait. At the beginning of the fiscal, we are very positive on the Kuwait prospects, right? We understand a few orders have got canceled. Question is, are you still positive for the next fiscal for Kuwait or coming quarters? Do you think the second related question is that even if the project comes back, do you think this will come at a much lower scope and size?

My first question is on the, on the, on the quest. At the beginning of the fiscal, we are very, very positive on the quest, prospects, right? We understand the few orders have got canceled. The question is, what are? Are you still positive for the next fiscal for coat or coming quarters? Do you think the, uh, the second rated question is that

Uh, even if this project comes back, do you think this will come at a much lower scope and price?

okay, I understand my here, the first of all, I think as we clarified in

Communication. Um, this

Subramanian Sarma: Okay. This is Sharma here. First of all, I think as we clarified in our earlier communication, these Kuwait orders were not part of our order book. I think let me clarify that. Nothing changes in terms of what is there for our Q4 order inflow, prospects, pipeline, et cetera, et cetera. Having said that, yes, it is a bit of a disappointment that some of those projects where we were where we had participated in the competitive bidding and we are L1, have been sort of canceled for a simple reason that the budget they had for each of these projects, we always knew that when we are bidding that we are far above the budget. Something has gone wrong in their system.

Great orders were not part of our order book so I think let me clarify that so nothing changes in terms of what is there for our quarter 4 order, inflow Prospect pipeline, etc, etc. Having said that? Yes, it is a bit of a disappointment that uh that some of those projects where we were uh when we had participated in the competitive building and we are

Subramanian Sarma: They were trying to get the additional funds, but I think that was becoming difficult for them, so they have canceled it. These projects cannot be canceled because these are strategically important projects. These are very important for maintaining their production as well as for meeting their targets. They'll come back. They've already started working on it. There will be some minor tweaks, but this will come back. I think we are very positive that all of these tenders will be out this year, this calendar year, and they'll get awarded this year. Since we have demonstrated our competitiveness in the previous bidding, I am positive that we will maintain our competitiveness in the forthcoming bid also. Nothing really lost, except that we have lost some time.

L1 have been, uh, have been sort of canceled for a simple reason that that, that the budget they had uh, for each of these projects, we always knew that when we are building that we are far above the budget, something has gone in the wrong wrong, gone wrong in their system. And and they are trying to uh, get the additional funds, but I think that was becoming difficult for them. So they have canceled it. But uh this project cannot be canceled because this is a strategically important project. These are very important for maintaining that production as well as for meeting the targets. So they'll come back, they are already started working on it. There will be some minor tricks but this will come back and I think we are very positive. That all of this tenders will be out this year, this calendar year and they'll get awarded this year. And um, and since we are demonstrated our competitiveness in the previous bidding, I am positive that we will maintain our competitiveness in the forthcoming bit also. So,

Nothing, nothing really lost uh, except that we lost some time.

Mohit Kumar: Understood. My second question is on the revenue growth guidance. I think we're at the beginning of the year, we're given 15% revenue growth guidance. Given that the 9-month, our order or our revenue growth is slightly around 10, 12%, do you think are we still holding on the 15% revenue growth guidance?

Understood my second question, is on the revenue growth guidance. I think you had at the beginning of the year, we were given 15% of New Growth guidance. And given that the 9-month or order or Revenue growth is in slightly around 10. 12%. Uh do you think we still are still holding on to the 50% Revenue growth guidance?

Subramanian Sarma: Mohit, I think I, while I was concluding my presentation, I gave a update on the revenue guidance itself. Q4 has always been the most busiest quarter for the projects and manufacturing business portfolio. We continue to retain our guidance of 15% for the full year, and we are reasonably confident that Q4, the way we have planned, the execution momentum will be at a fast-forward space, both for the infrastructure... For all the segments in the projects and manufacturing space. That is baked in.

So mhm. I think I buy like was concluding my uh, presentation. I gave a update on the revenue. Guidance itself. Uh Q4 has always been the most busiest quarter for the projects and manufacturing business portfolio.

So we continue to retain our, uh, guidance of 15% for the full year, and we have reasonably confident, that Q4. The way we have planned, the execution momentum will be at a fast forward space. Uh, both for the information for, for all the segments in the projects and Manufacturing space.

That is baked in.

Understood sir. Thank you and all the best. Thank you.

Thank you.

Mohit Kumar: Understood, sir. Thank you and all the best. Thank you.

Capital, please go ahead.

Subramanian Sarma: Thank you.

Operator: Thank you. Our next question comes from the line of Sumit Kishore from Axis Capital. Please go ahead.

Sumit Kishore: Good evening. Exceptionally strong performance on order inflows, the working capital improvement is also quite remarkable. My first question is with oil hovering around $60, $65, what is your outlook on bid lease if oil prices remain at these levels? If it persists at this level, do you foresee any prospects getting pushed out? Also, the second part of the question is if you can comment on the execution that we have seen in the quarter, specifically in hydrocarbons, with such a large order backlog, maybe 11% for the quarter appeared a bit low. I know we shouldn't look at quarterly numbers, still it appeared a bit low. How long can the margin pressure in hydrocarbons specifically persist?

Uh, good evening uh uh uh exceptionally strong performance on order inflows and uh, the working capital Improvement is also quite remarkable. My first question is with oil. Uh, moving around 6065 uh what is your outlook on weekly cap oil prices remain at these levels? If it persists at this level to 4C, any prospects of getting pushed out, uh and also uh uh the second part of the question is if you can comment on the execution that we have seen uh uh in the quarter specifically in hydrocarbons with such a large order, backlog maybe 11% for the quarter if you had a bit low. I know we shouldn't forget quarterly numbers but still it appeared a bit low. Uh and how long can the margin pressure in hydrocarbons specifically purchased uh, while you have called out that it will be weak in second half of the fiscal, but how long can this persist uh based on your evaluation of the

Sumit Kishore: While you have called out that it will be weak in second half of the fiscal, how long can this persist, based on your evaluation of the hydrocarbon order backlog? Thank you. Hello? Hello, am I audible?

Hydrocarbon water backlog. Thank you.

Hello.

Subramanian Sarma: Yeah, yeah. You are audible. Sorry. Sharma here again, I think, I was talking about oil prices globally. Whatever is happening, I think it's good that oil prices have held their price range around $60, $65, which is a positive development in my view. From every conversation I'm having with the senior executives of all these national oil companies, I think everyone believes that the oil will be price range bound in that $60 to $65. As such, the capital allocation for the projects which are of interest to us will remain unaffected. Because if at all there is a drop in oil prices, it will, you know, have a impact on some non-essential projects.

Hello, am I audible, sorry, sir my are again, I think, yeah, I was talking about oil prices globally, whatever is happening. I think it's good. That oil prices have held their price range around $60 $65 which is a positive development, in my view and from every conversation I'm having with the senior Executives of all this National oil companies, I think everyone believes that the oil will be priced, uh, range Bound in that 60 to 65 dollars. And as such uh, uh, the capital allocation for the projects, which are of interest to us will remain unaffected unaffected. Because if at all there is a drop in oil prices it will you know have a impact on some non-essential projects but our projects which are important for maintaining production and enhancing the production. Uh they are pretty much uh well on track so I don't

Subramanian Sarma: Our projects which are important for maintaining production and enhancing the production, they are pretty much well on track. I don't see any impact of the oil prices. I mean, asset is stable and even if there is a slight drop, I don't expect any significant impact on the pipeline of opportunities. That is one part. Second thing is that margins, yes, I think there is some, like we are saying, it's a portfolio project. Sometimes some projects, it's a pacing issue as well as some projects, sometimes have some challenges. I expect hydrocarbon business to come back on full strength maybe two or three quarters from now.

Don't see any any impact of the oil prices. I mean, I said to this table. And, and even if there is a slight drop, I don't expect any, uh, significant impact on the, um, uh, pipeline of opportunities that is 1 part. Second thing is that margins? Yes, I think there is some like we have said, it's a portfolio of projects, Sometimes some projects. It's a facing issue as well as some projects. Uh, sometimes have some challenges

Uh I expect um hydrocarbon um business to come back on full strength. Maybe uh 2 or 3 quarters from now.

P. Ramakrishnan: Sumit, just to add, I did emphasize that the margin guidance of 8.5% remains the effort for taking into account that we have had a push good 9 months, despite the fact of hydrocarbon margins having moved southward this year. I stated earlier, as Mr. Sharma also reiterated, that we expect some of these, I would say stress projects to get closed in the near term, and margin should move northward hopefully next time, after some quarters.

Sumit Kishore: Yeah, that was very clear. My second question is, in relation to the subdued performance, in the domestic infra segment in terms of growth, mainly dragged down by water, as you have pointed out. Is there any clarity on what is happening in water? How long can this drag, sort of continue for the domestic infra business on growth? The next DFC is not going to get awarded anytime soon. The next high-speed rail is not gonna come anytime soon. What is the outlook for the domestic infra business?

So Sumit just to add, I did emphasize that the margin guidance of 8.5 uh remains uh the effort for taking the account that we have had a good 9 months despite the fact of hydrocarbon margins. Having moved Southward this year as I stated earlier uh, as Mr. Sharma also reiterated that uh we expect some of these. Uh I would say stress projects to get clothes in the near term and margin. Should move northward hopefully next time, uh, after some quarters. Yeah, that was very clear. Uh, my question is uh, in relation to its a good performance, uh, in the domestic infra segment in terms of growth mainly track down by water as you have pointed out. So uh, is there any Clarity on what is happening in water? How long can this track uh, sort of continued for the domestic in business on growth? The next DFC is not going to get awarded any time soon. The next time, Israel is not going to come anytime soon.

So what is the outlook for the domestic in uh, uh business?

P. Ramakrishnan: I did mention, Sumit, that the order prospects pipeline, as we typically talk about, is only for the balance period of the year. As it stands now, the prospects pipeline for in infra, which is for another three or four months, still is at the same level. The more important thing, it comprises of domestic prospects of INR 2.61 trillion. I reiterate, the important thing in the prospects pipeline, especially for domestic is concerned, is that we are now slowly looking at a higher share of private sector prospects. Of course, there are certain large projects of the government which possibly should get announced maybe after the budget session is all done.

P. Ramakrishnan: We are fairly certain that this year has been a good mix of both public and private order inflow in the domestic side that have helped us, and that is something we believe we should continue into the near term. Coming to the first part of your question as far as water is concerned, yes, certain projects which have been under the central plan funded, some of these projects have faced headwinds in terms of fund allocation. To that extent, I would say we have also calibrated our execution momentum in this segment, to the extent of funds that we receive. Had this fund allocation been normalized, had we witnessed the growth of revenue in the infra segment would have been more.

Certain projects, which have been under the, uh, the central plan funded, uh, some of these projects have faced headwinds, in terms of fund allocation and to that extent, I would say we have also calibrated our execution momentum in this segment, uh, to to the extent of funds that we received had this uh, fund allocation been normalized. Had we witnessed the growth of Revenue in the infrastructure would have been more

Thank you and the show all the best.

Thank you.

Sumit Kishore: Thank you, and wish you all the best.

Our next question comes from the line of amiti from PL Capitol, please, go ahead.

Operator: Thank you. Our next question comes from the line of Amit Anwani from PL Capital. Please go ahead.

Amit Anwani: Hi. Thank you for the opportunity. Again, harping on the water business. What was the kind of growth in Infra as we can understand it was 5% for Q3 also because of the impact of water. If we adjust that, what kind of growth was there in the ex of water business in Infra for 9M to 9M. I can see there is still water opportunity you have highlighted in the prospects for Infra, roughly about 18%, which is INR 65,000 to 70,000 more. Are we looking for more conversion? All these orders which we are including in the prospects, how the terms are different than what currently we are executing and calibrating?

Hi, so thank you for the opportunity for again, hoping on the water business. So uh, what was the kind of uh growth in in, as we can understand those 5% for Q3 also because of the impact of water if we exist that, uh, uh, what kind of growth was there in, in the, uh, acts of water business, in, in pra for 9 a.m. to 9:00 a.m. and uh, uh, I can see there is, uh, still uh, water opportunity. You have highlighted in in the prospects for intra roughly about 18%, which is 65 to 70,000 more. So are we looking for more conversion and all these orders which we are including in the prospects? Uh, how

all the terms are different than what, currently we're executing and calibrating

P. Ramakrishnan: I think you had two questions, Amit. Let me put it from a statistics perspective that suppose if the water segment was not there as part of the infrastructure portfolio, then the revenue growth that we have demonstrated at 5% on a growth rate would have been actually a little more higher to almost 8% to 9% growth. We have consciously because of the projects not getting funded, so the execution momentum has come down. Because of that, the growth in revenue has been modest at an overall segment level. As far as the order prospects is concerned, I did talk about 720 billion INR of order prospects, which is there for the near term.

Perspective that suppose, if the water segment was not there. As part of the infrastructure portfolio, then the revenue growth that we have demonstrated 5% on a growth. It would have been actually a little more higher. So almost 8 to 9% growth because we have consciously because of the projects not getting funded. So the execution momentum has come down and uh because of that the the growth in Revenue has been modest at overall segment level.

P. Ramakrishnan: Depending on the type of projects and the underlying funding, we will be bidding according to what we feel should be the right way. Due care is being taken to ensure that we don't get blocked into working capital because of absence of funding.

As for the order, prospects is concerned. I did talk about 720 billion rupees of order prospects, uh, which is there for the near term, uh, depending on the type of projects and the underlying funding. Uh, we will be bidding according to what? We feel should be the right way. But, uh, do you care is being taken to ensure that we don't get into blocked into working capital because of absence of funding

Amit Anwani: Right. So on module...

Right. I have no more point. I wish to add uh uh and in fact the internally also we have split the water business into domestic and international.

P. Ramakrishnan: Also one more point I would like to add.

P. Ramakrishnan: Also one more point I would like to add. In fact, the internally also we have split the water business into domestic and international. We are now putting a lot more focus on the desal plants and water transmission projects that are coming up, opportunities that are coming up in the Middle East largely. We do believe that in the near term, some amount of international water projects also would come up as a ordering opportunity for us. Thank you.

Amit Anwani: Yes.

P. Ramakrishnan: In fact, the internally also we have split the water business into domestic and international. We are now putting a lot more focus on the desal plants and water transmission projects that are coming up, opportunities that are coming up in the Middle East largely. We do believe that in the near term, some amount of international water projects also would come up as a ordering opportunity for us.

Uh, and we are now putting a lot more focus on, uh, the diesel plans and water transmission projects that are coming up opportunities that are coming up, uh, in the, uh, Middle East. Largely and we do believe that uh, in the near term, some amount of International Water projects also would come up as an ordering opportunity for us.

Thank you.

Subramanian Sarma: Thank you.

Amit Anwani: Sir, on PNN margin, which you guided for 8.5%, and you did highlighted that we have already factored in the cost pressure for your legacy orders. Is it the correct understanding that we can be eyeing for, once these orders complete, as you said, three, four quarters, we'll be eyeing for a meaningful margin improvement, since these orders would be out and new orders getting executed. Some color on medium term margins, since we saw some improvement this quarter. Since legacy orders will be out, what is the things lying ahead in terms of margin?

Sir on on pnm margin, which you guided for 8.5% and you deny that we have already factored in the cost pressure for your legacy orders. So is it the correct understanding that we can, uh, be eyeing for? Uh, once these orders are complete, uh, as I said 34 quarters, uh, will be adding for the meaningful margin Improvement. Uh, uh, uh, uh, since this orders would be out and new orders getting executed, so some color on on, uh, medium term margin since they. We saw some improvement this quarter. But, uh, since Legacy orders will be out, uh, what is the, uh, things uh, line at in terms of margin?

Subramanian Sarma: Amit, I think it has been always our practice that we give guidance for all the major parameters for the year, okay? Mr. Sharma alluded to the fact that the hydrocarbon margins being subdued in the current year is because of two, three projects, both domestic and international. I also wish to assure you that these projects are at the final stages of completion, and hopefully the margin uptake would be seen sometime maybe after two or three quarters into the next year. How much of that will add up to margin segment, kindly wait till we close FY 2026 and taking the assessment, because the budgeting for all the company will start in the next month or so. We should be in a better position to give you guidance for FY 2027 and beyond sometime in May.

P. Ramakrishnan: Amit, I think it has been always our practice that we give guidance for all the major parameters for the year, okay? Mr. Sharma alluded to the fact that the hydrocarbon margins being subdued in the current year is because of two, three projects, both domestic and international. I also wish to assure you that these projects are at the final stages of completion, and hopefully the margin uptake would be seen sometime maybe after two or three quarters into the next year. How much of that will add up to margin segment, kindly wait till we close FY 2026 and taking the assessment, because the budgeting for all the company will start in the next month or so. We should be in a better position to give you guidance for FY 2027 and beyond sometime in May.

So Amit I think it has been always our practice that we give guidance for all the major parameters for the year. Okay, and Mr. Sharma alluded to the fact that the hydrocarbon margins being subdued in the current year is because of 2, 3 projects, both domestic and international. I also wish to assure you that these projects are at the final stages of completion. And hopefully the margin uptake would be seen sometime maybe after 2 or 3 quarters into the next year. But how much of that will add up the margin segment? Kindly wait till we close fee 26 and taking the assessment because the budgeting for all the company will start in the next month or so, we should be in a better position to give you a guidance for Phi 27 and Beyond sometime in May,

Amit Anwani: Right. Lastly, sir, on the media article of Chinese player probably getting allowed for the BTG orders, any assessment you guys have done in terms of impact it could have if this is really happening?

Assessment, you guys have done in terms of impact. It could have, if this is really happening.

No, I think it is a little bit.

that concern, because

Subramanian Sarma: No, I think it is a little bit misplaced, that concern because as we understand from the policymakers, the elements of allowing Chinese players is not for the full equipment. It is only for certain components. In fact, we had done that advocacy also to allow us to import some of the special alloys which are required for the thermal power plant, which was not earlier allowed. That I think is permitted. In reality, I think it does not affect. In fact, it still protects us, and we see a good positive opportunity unfolding in the next subsequent quarters with the thermal power plant, with BTG being manufactured in India.

Uh, as we understand, um, uh, from the uh, policy makers, uh, the the, um, elements of or allowing Chinese players, is not for the full equipment. It is only for certain components. In fact, we had done that advocacy also, to allow us to import some of the special Alloys, which are required for the, uh, thermal power plant because not earlier allowed. So, so that I think is permitted. So, in, in, in reality, I think, uh, it does not affect in fact, it still protects us and we see a good positive opportunity unfolding uh, in the subsequent quarters with the thermal power plant.

With BTC being manufactured in India.

Understood sir, thank you so much. Sir. All the rest.

Thank you.

Amit Anwani: Understood, sir. Thank you so much, sir. All the best.

Operator: Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, you are requested to please restrict yourselves to one question only. You may rejoin the queue if you have further questions. Our next question comes from the line of Aditya Bhatia from Investec. Please go ahead.

Ladies and gentlemen, and all of the management is able to address questions from all participants in the queue. You are requested to. Please restrict yourselves to 1 question only, you may rejoin the queue if you have further questions

Our next question comes from the line of Aditya Batya from investing. Please go ahead.

Aditya Bhatia: Hi. Good evening, sir. Just wanted to understand about the TenneT order. How many packages have you already recorded until now, and how should we think about the opportunity going forward?

Aditya Bhartia [Co: Hi. Good evening, sir. Just wanted to understand about the TenneT order. How many packages have you already recorded until now, and how should we think about the opportunity going forward?

Um, hi. Good evening, sir. Uh, so just wanted to understand about the 1080 order. Uh, how many packages, uh, have have you already recorded until now and how should we think about, uh uh uh uh, about the opportunity going forward?

Can you repeat that question?

Subramanian Sarma: Can you repeat that question, Aditya, please?

P. Ramakrishnan: Can you repeat that question, Aditya, please?

Aditya Bhatia: Sir, about the TenneT order.

Aditya Bhartia [Co: Sir, about the TenneT order.I think there are six packages of that. Just wanted to understand how many packages would we have recorded until now. Is it fair to assume that all six packages would be coming to us as a replacement contractor or could others be also involved in this?

Subramanian Sarma: TenneT.

Aditya Bhatia: I think there are six packages of that. Just wanted to understand how many packages would we have recorded until now. Is it fair to assume that all six packages would be coming to us as a replacement contractor or could others be also involved in this?

Uh, sir about the 1080 order? Uh, um. Uh, I think the, the there are 6 packages of that, just wanted to understand how many packages, would we have recorded until now, and is it fair to assume that all 6 packages would be coming to us as a replacement contractor or could others be also involved in this.

yeah, we have

Again, we have a pre.

Subramanian Sarma: See, we have Sharma here again. We have a framework agreement. Like you said correctly, we have 12 gigawatt, that means 6 packages of 2 gigawatt each. Currently what we have included in our order inflow and which will then generate revenue is 2 of those. Then, we are in discussion with the third and fourth with the customers, and we'll have to see when it happens. When they call off, then we will, we will advise you, and we will include that in the order flow. As and when they get called off, we will include that in our order inflow. We have a potential for all 6. Yeah.

Agreement. And like you said correctly, we have 12 gigawatt. That means 6 packages of 2 gigawatt age. Uh currently what we have included in our order in flow and which will then generate revenue is 2 of those. Um,

And then, uh, we are, we are in discussions with the, uh, with the third and fourth with the customers, and we'll have to see when it happens. When they call up, then we will, uh, we will, uh, advise you and we will include that in the order clothes. So, as and when they get called out, uh, we will include that in our order in flow but we have a potential for all 6. Yeah.

So, so does that mean that?

Aditya Bhatia: Understood, sir. Does that mean that it is almost kind of confirmed that we'll be getting the third or fourth packages or is there some negotiation that is due? How does it work?

Aditya Bhartia [Co: Understood, sir. Does that mean that it is almost kind of confirmed that we'll be getting the third or fourth packages or is there some negotiation that is due? How does it work?

Uh it it is almost kind of confirmed that we'll be getting the third or fourth packages or is there some negotiation uh that is how does it work?

Subramanian Sarma: It does work means that we have been selected for the whole program, right? There are certain, you know, timing wise, the customer has to decide when he wants to call off which project. We'll have to wait. I think when they call off, we will have a secured position. Until he calls off, we are as a proven policy, we are not counting it.

No, it does. Work means that we have been selected for, uh, the the whole program, right? So but then there are certain, uh, uh, you know, timing wise, the customer has to decide when he wants to call up, which project so we'll have to wait. So, but I think when they call out then, uh, we have an we, we will have a security position, but until he calls off.

Uh, we are as a prudent policy, we are not counting it.

Aditya Bhatia: Understood, sir. Understood. My second question is on the margin erosion that we have seen on the hydrocarbon side. You mentioned that there are certain orders wherein we are seeing cost overruns. Just want to understand roughly when would we have won these orders. Is it that competitive intensity was very different at that time and it has subsequently improved? How are you seeing the whole scenario out there?

Aditya Bhartia [Co: Understood, sir. Understood. My second question is on the margin erosion that we have seen on the hydrocarbon side. You mentioned that there are certain orders wherein we are seeing cost overruns. Just want to understand roughly when would we have won these orders. Is it that competitive intensity was very different at that time and it has subsequently improved? How are you seeing the whole scenario out there?

Subramanian Sarma: Yeah, yeah. I mean, see, most of the projects which are a part of the legacy project in the portfolio have been secured during the COVID time or post-COVID time. We had a huge Ukraine War issue, and then we had a bunching effect. I think, unfortunately, I think many things kind of coincided, and we are getting through those. I mean, I think one by one we are handing over. Like I said before, I mean, two, three quarters we should be out of it.

100 sir, understood? And my second question is on, uh, uh, uh, the margin erosion that we have seen on the hydrocarbon side. Uh, you mentioned that there are certain orders wherein we are seeing cost overruns just want to understand roughly. Which when would we have won these orders? Is it that competitive intensity was very different at that time. And it has subsequently improved. Uh, so how you think the, the whole scenario out there? Yeah, yeah, yeah, I mean, see, most of the projects, which are a part of the Legacy project in the portfolio, everything, uh, uh secured during the co time or postco time. And then we had a huge Ukrainian War issue. And then we had a uh 1 Thing, a fact. And I think, unfortunately I think uh many things uh kind of coincided and we are getting through those. I mean I think 1 by 1 we are hand

Handing over uh like I said before, I mean 2 3 quarters, we should be out of it.

Aditya Bhatia: Understood, sir. Just one last question. We are now getting some orders like metro contract that we announced today. Some of the other orders are also of really large size. Is it fair to assume that execution timelines going forward would be longer than what we have seen historically?

Aditya Bhartia [Co: Understood, sir. Just one last question. We are now getting some orders like metro contract that we announced today. Some of the other orders are also of really large size. Is it fair to assume that execution timelines going forward would be longer than what we have seen historically?

Understood and just 1 last question. Uh, we are now getting, uh, uh, some some orders like Metro contracts that we announced today, uh, um, uh, some of the other orders are also of really large size. So, is it fair to assume that execution timelines? Uh, uh, going forward would be longer than what we have seen historically.

Subramanian Sarma: No, I mean, generally this, I mean, this is, you cannot generalize this because every project will have its own timeline. I mean, they are in the range. I think depends upon the complexity of the project. Some of them have too much of tunneling and boring, it will be longer and depends on how much the land has been already acquired. There are various parameters to look at. I don't think it will be appropriate to generalize, but they are all in the typical range.

Tunneling and and and boarding. So then it will be a longer and depends on the how much the land has been already acquired. So there are various parameters to look at, uh, I don't think it will be appropriate to generalize but they are all in in in the in the typical range.

Uh, just to add to what Sharma G just now spoke. I did comment that the book Bill infra or

26 months.

P. Ramakrishnan: Just to add to what Sharma ji just now spoke, I did comment that the BookBuild Infra order book is 26 months. That includes today's press release of an order that was secured in the previous quarters. Okay? The average order book execution period for hydrocarbons is around 29 months. For the CarbonLite Solutions, it is around 48 months.

Specific release of order that was secured in the previous quarters. Okay. The average, uh, order book execution period for hydrocarbons is around 29 months for the carbon like Solutions, it is around 48 minutes.

48 minutes. Thank perfect. Thank you so much sir.

Aditya Bhatia: 48 months. Perfect. Thank you so much, sir.

Aditya Bhartia [Co: 48 months. Perfect. Thank you so much, sir.

Thank you. Our next question comes from the line of Mohit Pandey from City, please. Go ahead.

Yeah.

Operator: Thank you. Our next question comes from the line of Mohit Pandey from Citi. Please go ahead.

Mohit Pandey: Yeah. Is on margins for the international portion of E&C in light of the commodity price movement. I understand steel is the most important commodity for us, which has not seen as much price movement. For the other commodities, how should one think on the impact on the fixed price international orders that we have on the backlog?

When is on March, uh, for the international portion of entc in light of, uh, the commodity price movements. I understand still is the most important commodity for us, which has not been as much, uh, price movement, but for the other Commodities, how should, uh, uh, 1 think, uh, on the impact on the fixed price International, uh, orders that we have on the backlog?

Generally speaking. Uh, like you rightly said, I think our biggest exposure is on Steel.

Subramanian Sarma: Generally speaking, like you rightly said, I think our biggest exposure is on steel in terms of commodity, mostly on the international projects. Steel, fortunately, has been pretty stable. You know, there has not been much volatility at all. In fact, if at all, there has been little bit of a downward pressure, not upward pressure. Our risk is generally between the time we submit the bid till award. I mean, that is a place, that is a time period where we are little bit exposed. Otherwise, after we secure the job, we try to one way or the other hedge, either by placing the order quickly or doing some pre-engineering and placing the orders or having some pre-bid agreements. I'm not expecting major exposure to the commodities itself.

Uh, in terms of commodity um mostly on the international project and still, um, fortunately has been pretty stable you know there have not been much volatility at all. In fact, if at all there has been a little bit of a downward pressure not um, upward pressure and uh and um our risk is generally between the time we submit the bit till award. I mean, that is the place that is the time period where we are a little bit exposed. Otherwise after we secure the job, we try to to to 1 way or the other Edge, either by placing the order quickly or doing complete engineering and placing the orders or, or, or, or having some pre-bid agreements. So, I I'm not expecting major exposure to the Commodities except copper and nickel has been little bit volatile. But, uh, that again, we'll have a, um, uh,

Subramanian Sarma: Copper and nickel has been little bit volatile, but then again, we'll have a policy of hedging as quickly as possible. We also allow some contingency in our estimate. We know how the fluctuation is. Unless like Ukraine kind of thing, Ukraine-Russia War kind of situation happens, I think rest of the volatility we are able to manage.

Policy of hedging, uh, as quickly as possible. And um, we also allow some contingency in our estimates. Uh, we know how the the fluctuation is, unless unless like kind of thing, okay? And Russia War kind of situation happens. I think rest of the volatility, we are able to manage

Uh, understood and specifically on the Renewables in the Middle East. Given silver tends to be an important part there. Um,

Mohit Pandey: Understood, sir. Specifically on the renewables in the Middle East, given silver tends to be an important part there, how to think about that.

Subramanian Sarma: I think most of the price risk we have already naturally hedged. We have passed it on to the customer. We had one issue a couple of years back. After that, we have taken a very, how to say, practical approach or a prudent approach. We have passed on that risk to the customer. All our renewal projects, we are subjected to very limited risk in terms of commodity.

how to think about that, uh, renewable contracts. Uh, uh, I think most of, the price risk we have already naturally, as we have passed it on to the customer and 1 issue, a couple of years back after that, we have taken a very, uh, Proctor for a practical approach or a prudent approach. We have, uh, passed on that risk to the customer. So all our renewal projects. Uh, we are subjected to very limited risk, in terms of commodity,

And the execution risk, no material price? Yeah, yeah, yeah.

P. Ramakrishnan: Only execution risk. No material prices.

Subramanian Sarma: Yeah, yeah.

Mohit Pandey: Understood, sir. Sir, secondly, just a clarification. The 3% slow moving orders-

Subramanian Sarma: Also, I think some of the large contracts we secured from Qatar and all has also got a designated item, which means that some of the price risk is with the customer.

Subramanian Sarma: Also, I think some of the large contracts we secured from Qatar and all has also got a designated item, which means that some of the price risk is with the customer. Even in international contracts, we are seeing a trend where the customer is willing to accept some amount of price risk. For not all items, but for certain items which are more or less like what I would say, volatile.

Understood sir, sir and secondly, uh, just a clarification. So, the 3 persons flow. Also, also, I think some of the large contracts you secured from Qatar and all has also got uh, um, designated item which means that some of the price risk is with the customer.

And even in international contracts, we are seeing a trend where the customer is willing to to accept some amount of price risk.

Mohit Pandey: Understood.

Subramanian Sarma: Even in international contracts, we are seeing a trend where the customer is willing to accept some amount of price risk. For not all items, but for certain items which are more or less like what I would say, volatile.

But not all items but but certain items.

like what I would say volatile

Understood sir.

Mohit Pandey: Understood, sir. Sir, secondly, a clarification on the slow moving parts of the backlog, the 3% that was mentioned, that would be primarily water projects. Is that understanding right?

P. Ramakrishnan: Yeah. It's a combination of largely water projects. Of course, there are certain projects that we secured last year, but the right of way clearances has not been provided. Consequently, they have been classified as slow moving. I wish to tell you, it is not a source of worry as at this juncture.

Sir uh secondly. A clarification on the slow moving parts of the backlog. The 3% that was mentioned, that would be primarily Water Project. Is that understanding, right? Yeah. It's a combination of largely water projects. Of course, there are certain projects that we secured last year but the right topic clearances has not been been provided. So consequently, they have been classified as slow moving, but I wish to tell you it is not a source of worry as at this juncture.

Okay, okay.

All right sir. Thank you so much and wish you all the best. Thank you.

Thank you.

Mohit Pandey: Okay. Okay. All right, sir. Thank you so much, and wish you all the best. Thank you.

Ladies and gentlemen, you are requested to, please restrict yourself to 1 question only, you may reach out to you if you have any further questions.

Operator: Thank you. Ladies and gentlemen, you are re-requested to please restrict yourselves to 1 question only. You may rejoin the queue if you have any further questions. Our next question comes from the line of Puneet Gulati from HDFC. Please go ahead.

Our next question comes from the line of Punnett pulley from HSBC. Please go ahead.

Puneet Gulati: Yeah. Thank you so much, and congrats on great numbers. My first question is on the Middle Eastern order book. Assuming oil prices remain where they are, do you foresee a potential for higher project offering into this year, calendar 2026 and this fiscal 2027? Also, how do you think about your market share in Middle East? Do you see more room for it to grow from where you've already reached?

Do you foresee a potential for higher project offering into this year, calendar? 26, and this fiscal 27. And also how do you think about your market share in Middle East? Do you see more room for it to go from where you've already reached?

Subramanian Sarma: Generally speaking, I think the overall atmosphere is quite positive. There is a strong pipeline of opportunities in various countries within the Middle East, like with the Saudi, Qatar, and UAE. Also in Kuwait, we'll come back again, as I spoke earlier. We are seeing there's a good momentum there, and we have a good presence. I think in terms of market share, we are ourselves bit selective depending upon the type of projects and our competitiveness, and also the terms of the contract. Overall, we are maintaining a decent share.

P. Ramakrishnan: Also in Kuwait, we'll come back again, as I spoke earlier. We are seeing there's a good momentum there, and we have a good presence. I think in terms of market share, we are ourselves bit selective depending upon the type of projects and our competitiveness, and also the terms of the contract. Overall, we are maintaining a decent share.

Like, generally speaking, I think the overall atmosphere is quite positive. There is a strong pipeline of opportunities, and various countries within the Middle East, like, with this, with Saudi, Qatar UAE, and also in Kuwait, will come back again as I spoke earlier. So, um, so we are, um, yeah, we are seeing like, um, that's a good momentum there. And we have a good presence. And I think, in terms of market share, um, we are ourselves with Selective, depending upon the type of projects and our competitiveness. Um, and also the terms of the contract. Uh, overall, we are maintaining a decent share.

Okay, and on the private sector orders that have.

Increased. Do you foresee higher margins and better. Working capital, and control their

Puneet Gulati: Okay. On the private sector orders which have increased, do you foresee higher margins and better working capital control there?

P. Ramakrishnan: Generally, I think, yes, private sector, by, you know, if you in comparison to public sector, are more favorable to working capital.

Subramanian Sarma: Generally, I think, yes, private sector, by, you know, if you in comparison to public sector, are more favorable to working capital.

Generally I think yes private sector uh by uh you know, if you in comparison to public sector or more favorable to working capital payment terms or employ a little bit more favorable, there's more flexibility when we are negotiating total Milestone event.

Puneet Gulati: Payment terms are.

P. Ramakrishnan: Payment terms are.

P. Ramakrishnan: Yeah, payment terms are always a little bit more favorable. There's more flexibility when we are negotiating.

Subramanian Sarma: Yeah, payment terms are always a little bit more favorable. There's more flexibility when we are negotiating.

Okay, understood that's all. Thank you so much.

Thank you.

Puneet Gulati: Shorter milestone even.

P. Ramakrishnan: Shorter milestone even.

P. Ramakrishnan: Yeah.

Subramanian Sarma: Yeah.

Puneet Gulati: Okay. Understood. That's all. Thank you so much.

The next question is from the line of ibrani V from a vendor spark. Please go ahead.

Operator: Thank you. The next question is from the line of Bharani V. from Avendus Spark. Please go ahead.

Am I audible? Yes, you are audible. Yeah.

Bharani Vijayakumar: Am I audible?

Bharanidhar Vijayakumar: Am I audible?

Uh, on this domestic Prospect of 2.61 trillion, how much would the private to be part of it.

P. Ramakrishnan: Yes, you are.

Operator: You are audible, sir.

Bharani Vijayakumar: yeah. On this domestic prospects of INR 2.61 trillion, how much would private be part of it?

Bharanidhar Vijayakumar: yeah. On this domestic prospects of INR 2.61 trillion, how much would private be part of it?

Sorry, can you repeat that question?

Of the domestic process. We mentioned now of 2.61 trillion how much will be private

P. Ramakrishnan: Sorry, can you repeat that question?

Roughly around 35%.

Bharani Vijayakumar: Of the domestic prospects we mentioned now of INR 2.61 trillion, how much will be private?

Bharanidhar Vijayakumar: Of the domestic prospects we mentioned now of INR 2.61 trillion, how much will be private?

P. Ramakrishnan: Roughly around 35%.

Bharani Vijayakumar: Okay. Related to domestic prospects and overall infrastructure prospects, which has been flat, we have been strong in the past in segments like heavy civil, of course, water, and even transportation infra. Right now, of course, water is slowing down, and we are not very confident on the domestic prospects on transportation infra, heavy civil, et cetera. What is our likely outlook for these segments for FY2027? Of course, we will continue to do well on private and on Middle East, but just your thoughts on FY2027 outlook and order inflow from our traditional stronghold areas, especially in India.

Bharanidhar Vijayakumar: Okay. Related to domestic prospects and overall infrastructure prospects, which has been flat, we have been strong in the past in segments like heavy civil, of course, water, and even transportation infra. Right now, of course, water is slowing down, and we are not very confident on the domestic prospects on transportation infra, heavy civil, et cetera. What is our likely outlook for these segments for FY2027? Of course, we will continue to do well on private and on Middle East, but just your thoughts on FY2027 outlook and order inflow from our traditional stronghold areas, especially in India.

Okay. Uh, related to domestic prospects. And overall infrastructure prospects, which has been flat, um, we have been strong in the past in segments, like heavy civil. Um, of course water. Um, and even transportation is an infra, but, um, right now, of course, water is slowing down and, um, we are not, uh, very confident on the domestic prospects on transportation and infra heavy civil, Etc. So, what is our likely, uh, outlook for these segments for fur 27? Um, of course we will continue to do well on private and on Middle East, but um, just uh your thoughts on effort 27.

Outlook and order info, um, from our traditional uh uh stronghold areas especially in India.

P. Ramakrishnan: Bharani, if you track the domestic order inflows in last year also, actually we had a drop. Okay? I think that's the credit of our business model. That's if certain segments, for whatever reason, there is a pause, okay, there are other segments which we cater to is showing a revival. Insofar as infrastructure segment is concerned, domestic, we have seen sustained traction coming back in B&F and minerals and metals. If there has been, of course, water projects prospects are there, but given the payment terms and the conditions and all, we have been a little more careful in pursuing those opportunities.

So, if you track the domestic order inflows in last year also, actually we had a drop. Okay. But I think that's the credit of our business model. That's if certain segments, for whatever reason, there is a pause. Okay? There are other segments which we cater to is showing a Revival.

P. Ramakrishnan: The fact is that there are two other segments which are seeing a clear case of revival, and we feel that this revival will potentially, I would say, offset some of the muted or subdued opportunities in very large, heavy civil and transportation infra projects. We do believe that the government maybe in the first February budget announcement, will kickstart the growth momentum back into taking large projects. That will hopefully, you know, compensate for the subdued business conditions insofar as CapEx is concerned. Private sector is showing distinct revival in many sectors, which I also highlighted during my earnings presentation.

In in so far as infrastructure segment is concerned. Domestic, we are seen sustained traction coming back in BMF, and minerals, and metals. So if there has been, of course, water projects prospects are there, but given the payment terms and the conditions and all, we have been a little more careful in pursuing those opportunities. But the fact is that there are 2 other segments, which are seeing a clear case of Revival. And I, we feel that this level will potentially have a, a, a, I would say, will offset some of the muted, or subdued opportunities in very large, heavy civil, and transportation in projects, but we do believe that the government in the maybe in the first February budget announcement will Kickstart the growth momentum back into taking large projects and, uh, that will hopefully, you know, compensate for the subdued, uh, uh, business conditions in so far as capex is concerned. But private sector is showing distinct Revival in many sectors, which I also highlighted during my, uh, earning

Please, uh, presentation.

Bharani Vijayakumar: Okay. My second question is on the new ventures like electrolyzers, data centers, batteries, and semiconductors. Can you update on what has been the CapEx so far in each of these segments and what more would happen or in some sense, what is the total CapEx expected and how much we have already done in these subverting?

Bharanidhar Vijayakumar: Okay. My second question is on the new ventures like electrolyzers, data centers, batteries, and semiconductors. Can you update on what has been the CapEx so far in each of these segments and what more would happen or in some sense, what is the total CapEx expected and how much we have already done in these sub-verticals?

Okay. Uh my second question is on the uh, new Ventures like electrolytes data centers batteries and semiconductors, can you update on what the has been? The capex so far in each of these segments and what, uh, more would happen or in some sense? What is the total capex expected? And how much we have already done in these?

P. Ramakrishnan: Okay. As of now, we have almost 32 megawatts of capacity of data center, out of which 14 megawatts is up and running. Another 18 megawatts will get commissioned by the end of this fiscal year. The total CapEx investment in the data center is roughly in the range of INR 1,000 odd crores. Okay? So far as semiconductor is concerned, most of the spend that we are doing is still on what you call the investments into creating design-led semiconductor chips. Okay? We are in touch with the multiple sectors in this particular segment, customers. Whatever spend is happening, most of that is actually getting washed through the P&L itself for both semiconductors.

P. Ramakrishnan: Okay? We are in touch with the multiple sectors in this particular segment, customers. Whatever spend is happening, most of that is actually getting washed through the P&L itself for both semiconductors.As far as electrolyzer is concerned, we have already actually made a perfect design of a more or less 100% indigenous 4 megawatt stack. We are now slowly upgrading it to 8 megawatt stack, and we do expect a lot of opportunities to come in the near term.

P. Ramakrishnan: As far as electrolyzer is concerned, we have already actually made a perfect design of a more or less 100% indigenous 4 megawatt stack. We are now slowly upgrading it to 8 megawatt stack, and we do expect a lot of opportunities to come in the near term.

We are doing is still on. What do you call the investments into creating? Uh, uh, design Le semiconductor chips. Okay, we are in touch with the multiple sectors in this particular segment, customers and what our spend is happening. Most of that is actually getting washed through the pnl itself, or both semiconductors. And as far as electrolyzer is concerned, we have already um, actually made a perfect design of a more or less 100% indigenous 4 megawatt stack. We are now slowly upgrading it to 8 megawatt 10 megawatt stack and we do expect a lot of opportunities to come in the near term.

Okay, yeah, I'll take it off. Okay, thank you.

Thank you.

Bharani Vijayakumar: Okay. I'll take it above. Okay. Thank you.

Bharanidhar Vijayakumar: Okay. I'll take it above. Okay. Thank you.

The next question is from the line of Atari from JP Morgan. Please go ahead.

Operator: Thank you. The next question is from the line of Atul Tiwari from JP Morgan. Please go ahead.

Atul Tiwari: Yes, thanks a lot and congrats on great set of numbers. Just one question on thermal power opportunity. Over the past one year, obviously, your orders have also benefited a lot from thermal power projects. As of now, you know, over next two, three years, how many gigawatts of the total market size you see in the pipeline from the states and the central and the private utility?

Yes sir, thanks a lot and congrats on great set of numbers. So just call 1 question on thermal power opportunity. Uh, over the past 1 year, obviously, your orders have also benefited a lot from, uh, from my power project. So, as of now, you know, uh, over next to 3 years. How many gigabytes of the total Market size? You see, uh, in the pipeline from the states and the Central and the private uh reality.

P. Ramakrishnan: Yeah, I mean, I think the, yeah, it's a bit a pleasant surprise for us also that how the market is developing in the thermal power plant.

Subramanian Sarma: Yeah, I mean, I think the, yeah, it's a bit a pleasant surprise for us also that how the market is developing in the thermal power plant. It's been good news for us, and we booked quite a bit of orders. Going forward, we believe that overall, I think, the country will still add about maybe 15 to 20 gigawatts in next 2 years or so. We will still see a 4 to 5 gigawatt opportunity for us as a minimum in the coming years.

Subramanian Sarma: It's been good news for us, and we booked quite a bit of orders. Going forward, we believe that overall, I think, the country will still add about maybe 15 to 20 gigawatts in next 2 years or so. We will still see a 4 to 5 gigawatt opportunity for us as a minimum in the coming years.

Yeah, I mean I think the the, the yeah, it's a bit bit pleasant surprise for us, also that how the market is developing and the thermal power plant. Um, and uh, it's been good news for us and, uh, we booked quite a bit of orders. And going forward, we believe that, um, overall I think, uh, the countries will still add about maybe 15 to 20 gigawatts in next uh, uh, 2 years or so. We, we still see uh, uh, 4 to 5 gigawatt opportunity for us as a minimum uh, in the coming years.

Okay.

Atul Tiwari: Okay, sir. Sir, what proportion of the total order book today will be at fixed price, and what proportion will have a price variation clause of some kind or other? Hello. Sir, if you're speaking, you're not audible at the moment.

And uh, What proportion of the total out of book today will be at 6:15 and What proportion will have a price variation Clause of some kind of order.

Sir, if you're speaking, you are not audible at the moment.

Sorry.

What I meant is that the the fixed price constitution of our order books is in the range of 55 to 45%.

Subramanian Sarma: Sorry. What I meant is that the fixed price constitution of our order book is in the range of 55 to 45%.

55 to 49. Okay, thank you. Thank you. I fixed price. 45% is variable.

Okay. Okay. Thank you.

Atul Tiwari: 55 to 45. Okay, sir. Thank you. Thank you.

Thank you.

Subramanian Sarma: Five is fixed price, 45% is variable.

Atul Tiwari: Okay. Okay. Thank you.

Our next question is from the line of Priyanka biswas. From JM Financial, please go ahead.

Operator: Thank you. Our next question is from the line of Priyanka Biswas from JM Financial. Please go ahead.

Uh, thanks for the opportunity and congratulations to the team.

Priyankar Biswas: Thanks for the opportunity, and congratulations to the team. My first question is, sir, what I understand is that you had previously highlighted, like in the past call as well, that there was a significant drag down due to the monsoon, particularly extending even well into the Q3 as well. Had it been, let's say, a relatively normal monsoon and leaving the water part aside, what could have been, what is the amount of work that you may have lost in the domestic space, in terms of execution?

Uh, so my first question is, uh, this is what I understand is, uh, that you were previously highlighted, there was a significant, like, in the past in, uh, call as well. That there was a significant drag down due to the monsoon particularly, extending even well into the 3Q as well. So had it been, let's say a relatively normal Monsoon and leaving the water at uh part aside. So what could have been uh what is the amount of work that you may may have lost in the domestic space? So in terms of execution,

so,

Subramanian Sarma: Priyanka, in fact, in the month of October itself, I did mention that October also could see some amount of slippages, given the fact that the monsoon in some parts of the country where we are having projects got extended. Correct? This I think I clearly remember this. I wish to tell you, Q4, we believe, I mean, I don't think there are any climatic events that are foreseen...

P. Ramakrishnan: Priyankar, in fact, in the month of October itself, I did mention that October also could see some amount of slippages, given the fact that the monsoon in some parts of the country where we are having projects got extended. Correct? This I think I clearly remember this. I wish to tell you, Q4, we believe, I mean, I don't think there are any climatic events that are foreseen disruptive. Consequently, we do see a normative Q4 for almost all the segments, be it domestic or international.

In fact, in the month of October itself, I did mention, that October also could see some amount of slippages given the fact that the mountain in some parts of the country where we are having projects got extended. Correct. This. I think I clearly remember this. But I wish to tell you Q4 we believe I mean I I don't think there are any events that climatic events that are

Posting disruptive. So consequently, we do. See a normative Q4 for almost all the segments be domestic on International

Priyankar Biswas: Disruptive.

Subramanian Sarma: Disruptive. Consequently, we do see a normative Q4 for almost all the segments, be it domestic or international.

Priyankar Biswas: Sir, what I meant is, like, because of this, let's say monsoon drag, let's say had it not been there in this Q3, what sort of growth maybe we could have achieved? If you can give some color.

Subramanian Sarma: It's difficult, Priyanka, to talk about 5% growth that we had in infra segment for Q3, where how much that could be. I don't think. It's not possible to put a number to that.

P. Ramakrishnan: It's difficult, Priyanka, to talk about 5% growth that we had in infra segment for Q3, where how much that could be. I don't think. It's not possible to put a number to that.

So what I meant is like because of this uh let's say Monsoon drag. So let's say, had it not been there in this Q3 what sort of growth maybe we could have achieved. If you can give some color Priyanka to talk about 5% growth, uh, that we had in intra segments, for Q3 where, how much that could be. I don't think it's not, it's not possible to, uh, put a number to that.

Priyankar Biswas: Sir, if I just squeeze one more in. Like, I understand that 2 packages for offshore HVDC were booked in this particular quarter. What could be the rough quantum of that?

So uh, what would be the rough Quantum of that?

Subramanian Sarma: It's ultra mega. It's ultra mega project is more than INR 15,000 crore EQ at.

P. Ramakrishnan: It's ultra mega. It's ultra mega project is more than INR 15,000 crore EQ at.

Priyankar Biswas: Okay. Like, since you have given the prospects as well, for hydrocarbons, like, for this three and fourth, which you are in discussions, are it there in this year's prospect, or should we be thinking of it more from a next year prospect? That's my question.

Okay. Okay. Uh, okay. So and, uh, like since you have given the prospects as well, uh, uh, for hydrocarbons, uh, so like for this 3 and forth which you are in discussions, added there in this year's Prospect, or should we be thinking of it more from a next year? Prospect next year? Next year. Nothing in Q4.

Thank you sir Xtreme clear.

Subramanian Sarma: Next year, next year. Nothing in Q4. It can happen early next year.

Thank you.

Priyankar Biswas: That's very clear. Yeah. Thank you, sir. Extremely clear.

Our next question is from the line of Amit mahawar from UBS. Please go ahead.

Operator: Thank you. Our next question is from the line of Amit Mahawar from UBS. Please go ahead.

Amit Mahawar: Yeah, thank you. Sharma, I just have two quick questions. First is on Middle East. Now we basically by far have the best competition this year that we had in last, you know, more than 15, 20 years in Middle East. Do you think next two years, significantly the competition from Korea and particularly Europe/US, can come back? Any color there? If you can help us understand next two years if on the P&M core, you know, share of Middle East is going to be more than maybe 50% in next two years. That's first, sir. Thank you.

Yeah, thank you. I just have 2. Quick questions first, is on Middle East. Now we basically by far have the best uh competitive position.

But, we had a lot, you know, more than 15, 20 years, in Middle East. Do you think, uh, next 2 year, uh, technically, the competition for Korea in particularly Europe. Showed us, uh, can come back any color there. Uh, and, and if you can help us understand next 2 years, keep on the pnm and core, um, you know, share of Middle East is going to be more than um, maybe 50% the next 2 years. That's first sir. Thank you.

Subramanian Sarma: Well, competition, you see, it, we have been operating in the same environment for the last few years. Chinese are there, Koreans are there, Europeans are there. Sometimes even for smaller contracts we have the locals. I think landscape in terms of competitiveness is not changing much. On the contrary, I would say that we have established ourself quite well. Customers prefer us to win the jobs, and sometimes even the competitors are coming and seeking partnership with us. I don't think nothing as much has changed. It will remain pretty much the same. If at all, it will be little bit positive for us in the next two years. What was the second question you said?

Well, in competition, they said, we have been operating in the same environment for the last few years. Um, Chinese are there, Koreans are there Europeans are there, uh, sometimes even for smaller contracts, you have the locals. So I think landscape in terms of competitiveness is not changing much.

Um, on the country, I would say that we have established ourself quite well. Uh, the customers prefer us to win the jobs and sometimes, even the competitors are coming and seeking partnership with us. So, I don't think, uh, nothing as much has changed. I will remain pretty much the same. Uh, if at all it will be a little bit positive for us in the next 2 years,

Amit Mahawar: The share of core top line P&M top line.

Subramanian Sarma: Yeah, no, I think it, I mean, it's very difficult to put a number because it depends on what happens in the Middle East in relation to what happens in the domestic. I mean, I think, the good news is that I think we are growing well and will continue to grow. I think we are very confident about it.

Uh, what was the second question you said um, the share of code top and I think it, I mean it's very difficult to put a number because um uh it depends on what happens in the Middle East, in relation to, what happens in the domestic. I mean I think uh the good news is that I think we are growing well and we will continue to grow. I think we are very confident about it.

Amit Mahawar: Very clear. Second quick question is, if the current slowdown in some segments in domestic market, particularly water transportation, sustain for the next one and a half year, do you see the risk of? You know, not exactly like the COVID risk, but the time course delays which are difficult to pass on next year. If it improves, I understand. If it sustains for the next 1 year, we will have to evaluate it sharper, sir. That's it. Thank you.

Subramanian Sarma: You know, not exactly like the COVID risk, but the time course delays which are difficult to pass on next year. If it improves, I understand. If it sustains for the next 1 year, we will have to evaluate it sharper, sir. That's it. Thank you. We do not think that water thing will last that long. I mean, they should get resolved. It is a bit unfortunate that there has been some kind of suspension of the work in those areas because of the payment issues. We are continuously in dialogue with the government, and maybe within a quarter that should get unlocked and things should start moving. I don't think we should draw any different conclusions from that. Yes, sir. Thank you and good day.

Um, very, very fair. And second a quick question, is, if the current slowdown in, um, some segments in domestic Market, particularly water transportation sustained for the next 1 and a half year. Do you see the risk of, uh, you know, not exactly like the co risk but the time cost delays, which are difficult to pass on next year if it includes I understand. Uh, but if it sustains for the next 1 year, uh we will have to evaluate it shortly.

Subramanian Sarma: We do not think that water thing will last that long. I mean, they should get resolved. It is a bit unfortunate that there has been some kind of suspension of the work in those areas because of the payment issues. We are continuously in dialogue with the government, and maybe within a quarter that should get unlocked and things should start moving. I don't think we should draw any different conclusions from that.

Gotcha. Thank you. You do not think that water thing will last that long, I mean they should get resolved it is a bit unfortunate that there has been some kind of suspension of the work in those areas because of the payment issues. But uh we are continuously in dialogue with the government and uh maybe within a quarter that should get unlocked and things should start moving.

so, I don't think we should, uh,

Uh, draw any different conclusions from that.

Thank you sir. Thank you and good luck.

Thank you.

Amit Mahawar: Yes, sir. Thank you and good day.

Our next question is from the line of Goldman Sachs. Please go ahead.

Operator: Thank you. Our next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.

Pulkit Patni: Sir, thank you for taking my question. My first question is, I understand the impact of a depreciating rupee on your services business. How should we understand the impact of a depreciating rupee on your core EPC business in light of margins? I mean, just some broad guidelines would be helpful. That's question number one.

Uh sir, thank you for taking my question. So, my first question is, uh, I understand the impact of a depreciating group you on your services business. How should we understand the impact of of a depreciating rupee on your core Etc business in light of margins? I mean, that's some broad guidelines would be helpful. That's question. Number 1.

so, should I take it now or

another question also,

Subramanian Sarma: Should I take it now or are you going to put another question also?

Pulkit Patni: Oh, okay. My second question is, similarly, while we understand that, you know, you hedge commodities, et cetera. Even in the commodity market, the movement has been quite drastic in the last couple of months. Are we able to hedge all of that or we could expect some bit of negative impact of that in the next, say, couple of quarters or so? Those are the two questions.

Oh okay my my second question is similarly, while we understand that, you know, you hedge Commodities Etc but even in the commodity Market, the movement has been quite drastic in the last couple of months.

Uh, so uh, are we able to hedge all of that or we could expect some bit of negative impact of that, uh, in the next couple of quarters or so? Those are the 2 questions.

Subramanian Sarma: Okay. The first part I will respond. As far as FX risk is concerned, Pulkit, I think you might never heard from us, at least I can recall, never have I ever commented that our margins are up or down because of exchange rate variations. Because it is because of the very proactive and timely hedge practices that we do to ensure that project risks are covered, at least for financial risk part, that is on the exchange rate side. Okay. As and when the projects are secured, and if the international projects or even domestic projects having lot of Forex outflows, we have a mechanism by which we are able to cover the contracts at the rates at which they were estimated while bidding for the project. That is how it is being done.

P. Ramakrishnan: Okay. The first part I will respond. As far as FX risk is concerned, Pulkit, I think you might never heard from us, at least I can recall, never have I ever commented that our margins are up or down because of exchange rate variations. Because it is because of the very proactive and timely hedge practices that we do to ensure that project risks are covered, at least for financial risk part, that is on the exchange rate side. Okay. As and when the projects are secured, and if the international projects or even domestic projects having lot of Forex outflows, we have a mechanism by which we are able to cover the contracts at the rates at which they were estimated while bidding for the project. That is how it is being done.

So the first part, I will respond. As far as FX risk is concerned. Um, pulkit. I think human never heard from us. At least I can recall, never have I ever commented that our margins are up or down because of exchange rate, variations, because it is because of the

the very proactive And Timely hedge practices that we do to ensure that project risks are covered, at least for Financial Risk, part, that is on the exchange rate side,

Subramanian Sarma: We have not. In fact, even for the ITTS companies, some part of the exchange rate depreciation, has flown into their P&L. Also I would like to say they also have a layered hedging process, and that process has been consistently followed to ensure that the margins are not substantially impacted by adverse exchange rate movements. The same applies for the project part of the business as well. Coming to commodity prices, Mr. Sharma did allude to steel and other places, but I think he will respond more. I mean, I think like I said, see, you have to understand that when we are bidding for these jobs, we do quite a bit of substantial amount of pre-bid engineering work. We have a reasonable amount assessment of the quantities.

P. Ramakrishnan: We have not. In fact, even for the ITTS companies, some part of the exchange rate depreciation, has flown into their P&L. Also I would like to say they also have a layered hedging process, and that process has been consistently followed to ensure that the margins are not substantially impacted by adverse exchange rate movements. The same applies for the project part of the business as well. Coming to commodity prices, Mr. Sharma did allude to steel and other places, but I think he will respond more.

Lot of Forex outflows. Uh we have a we have a mechanism by which we are able to cover the contracts at the rates at which they were estimated while bidding for the project and that is how it is being done. So we have not, in fact, even for the its companies uh some part of the exchange rate depreciation uh has flown into their pnl but also I would like to say they also have a layered hedging process and that process has been consistently followed to ensure that the margins are not substantially impacted by adverse exchange rate movements. The same applies for the project part of the business as well.

Subramanian Sarma: I mean, I think like I said, see, you have to understand that when we are bidding for these jobs, we do quite a bit of substantial amount of pre-bid engineering work. We have a reasonable amount assessment of the quantities. Like I said, I think our open exposure is only for the bid submission to bid award date, I mean, if we are successful. Once we are awarded, then we, based on the different commodities and their volatility, we go and hedge those commodities based on the estimates we have already done. Now, that could be left unhedged portion could be maybe 5%, 10% as part of the engineering development. I mean, but that is not very significant because that gets covered through contingencies.

Subramanian Sarma: Like I said, I think our open exposure is only for the bid submission to bid award date, I mean, if we are successful. Once we are awarded, then we, based on the different commodities and their volatility, we go and hedge those commodities based on the estimates we have already done. Now, that could be left unhedged portion could be maybe 5%, 10% as part of the engineering development. I mean, but that is not very significant because that gets covered through contingencies.

Now coming to commodity prices uh Mr. Sharma did allude to steal another places but I think he will respond now. Yeah I mean I think like I said, see you have to understand that when you are bidding for this job, we do quite a bit of substantial amount of free Bid engineering work. So, we have a reasonable amount assessment of the quantity. So, like I said, I think our open, um, exposure is only, uh, for the big submission to bid award date. I mean, if you are successful. And so, once you are awarded, then we uh, based on, um, the different Commodities. And that volatility we go and hedge. Those Commodities based on the estimates, we have already done. Now what could be left unhedged portion? Could be maybe 5 10 as part of the engineering development, I mean, uh, but that is not very significant because that gets covered through.

Sure, sir. So, these high commodity prices right now is something that you are not that worried about

No.

Pulkit Patni: Sure, sir. These high commodity prices right now is something that you are not that worried about?

Perfect, thank you so much.

Thank you.

Subramanian Sarma: No.

Pulkit Patni: Perfect. Thank you so much.

Our next question comes from the line of India from please go ahead.

Operator: Thank you. Our next question comes from the line of Aditya Mungia from Kotak. Please go ahead.

Aditya Mungia: Yeah. Thank you for the opportunity. I limited to 1 question. Mr. Sharma, you talked about certain projects that you win are more strategic in nature. If I were to be kind of thinking through your entire overseas ordering that has happened, let's say in the last 1 year, how much of those would you classify into areas which are more strategic for your customers? I'm just trying to get a sense of what part is then remaining, which is at risk, in case electric road moves further down. Just trying to get a sense of your exposure to strategically important excess flash projects within the last 1 year on the overseas side.

Aditya Mongia: Yeah. Thank you for the opportunity. I limited to 1 question. Mr. Sharma, you talked about certain projects that you win are more strategic in nature. If I were to be kind of thinking through your entire overseas ordering that has happened, let's say in the last 1 year, how much of those would you classify into areas which are more strategic for your customers? I'm just trying to get a sense of what part is then remaining, which is at risk, in case electric road moves further down. Just trying to get a sense of your exposure to strategically important excess flash projects within the last 1 year on the overseas side.

Yes, thank you for the opportunity. I limited to 1 question. Um, uh uh, Mr. Talked about certain projects that you win are most strategic in nature.

if I were to be kind of thinking through your entire role seeing that has happened like say in the last 1 year,

How much of those would you classify into areas, which are more strategic for your customers?

I'm just trying to get a sense of what part is then remaining, which is at risk. In case, let's recruit moves further down. Just trying to get a sense of the exposure to strategically, important excess slash projects during the last 20 years.

Subramanian Sarma: Actually, in fact, if you look at it, what we have won, I mean, most of the international projects are in the oil and gas sector. It is in the renewable sector. Some of them are now in the critically important infrastructure like data centers and things like that. I would classify them, all of them are very strategically important. I mean, they are not going to be sort of impacted by the oil prices. Oil and gas projects, as I said, will continue regardless of where the oil prices are. Renewable projects is and the data center projects are deliberate plan of all these countries to gradually invest to prepare themselves for the energy transition.

On the overseas effects actually. In fact, if you look at it, what we are 1. I mean most of the international projects are in the oil and gas sector, it is in the renewable sector and some of them are now in the uh uh critically important, uh infrastructure, like data centers, and things like that, and I would classify them. All of them are very strategically important. I mean, uh, and they are not going to be sort of impacted by, um,

Uh, the oil prices because oil and gas projects. As I said will continue regardless of where the oil prices are.

Subramanian Sarma: Renewable projects is and the data center projects are deliberate plan of all these countries to gradually invest to prepare themselves for the energy transition. I think they are also building up their alternative energy portfolio in a very calibrated way. All of them are very strategic. We are not in those, See, only those, non-strategic projects are some highway projects, some motorway projects, some beautiful building, some aspirational building or some tourist center development. We are not involved in any of those.

And renewable projects is, uh, and the data center projects are deliberate plan of all these countries to gradually, uh, invest, uh, to prepare themselves for the energy transition. So I think they are also building up their Alternative Energy portfolio in a in a in a very calibrated way. So all of them are very strategic.

Subramanian Sarma: I think they are also building up their alternative energy portfolio in a very calibrated way. All of them are very strategic. We are not in those.

Aditya Mungia: Understood.

Subramanian Sarma: See, only those, non-strategic projects are some highway projects-

We are not in those see, only those non-strategic, projects are some Highway projects, some Motorway project, some beautiful buildings, some aspirational buildings, or some tourists and the development. We are not involved in any of those.

Aditya Mungia: Mm-hmm.

Subramanian Sarma: some motorway projects, some beautiful building, some aspirational building or some tourist center development. We are not involved in any of those.

That's clarifying. Some, thank you so much for this time.

Thank you.

Aditya Mungia: That clarifies. Thank you so much for your response.

Aditya Mongia: That clarifies. Thank you so much for your response.

That was a class question. Ladies and gentlemen, I would now like to hand the conference over to Mr. Please. I'm Krishna for closing comments, look at you sir.

Operator: Thank you. That was our last question, ladies and gentlemen. I would now like to hand the conference over to Mr. P. Ramakrishnan for closing comments. Over to you, sir.

Thank you everyone for attending this call at the late hour. It was a pleasure to interact with all of you. Good luck and wishing you all the very best. Thank you. Thank you.

P. Ramakrishnan: Thank you everyone for attending this call at the late hour. It was a pleasure to interact with all of you. Good luck, and wishing you all the very best. Thank you.

Thank you.

Aditya Bhatia: Thank you.

Subramanian Sarma: Thank you.

On behalf of Lassen and toubro that concludes this conference. Thank you all for joining us. You may now disconnect your life

Operator: Thank you. On behalf of Larsen & Toubro, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

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