Q1 2027 Patel Engineering Ltd Earnings Call

August 11, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to Patel Engineering Limited Q1 FY27 Earnings Conference Call, hosted by Valorum Advisors. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day and welcome to Patel Engineering Limited Q1 FY27 earnings conference call hosted by Valorem Advisors. 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, Ms. Jain.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Ms. Purvangi Jain from Valorum Advisor. Thank you, and over to you, Ms. Jain.

Speaker #2: Thank you. Good morning, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorum Advisors. We represent the investor relations of Patel Engineering Limited.

Purvangi Jain: Thank you. Good morning, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Patel Engineering Limited. On behalf of the company and Valorem Advisors, I would like to thank you all for participating in the company's earnings conference call for the quarter ending on 30 June 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision.

Speaker #2: On behalf of the company and Valorum Advisors, I would like to thank you all for participating in the company's earnings conference call for the quarter ended June 30, 2026. Before we begin, let me mention a short cautionary statement.

Speaker #2: Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.

Speaker #2: Such statements are based on management's belief, as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements when making any investment decision.

Speaker #2: The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. I would now like to introduce you to the management team joining us on today's call.

Purvangi Jain: The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management team joining us on today's call. We have with us Ms. Kavita Shirvaikar, Managing Director, and Mr. Rahul Agarwal, Chief Financial Officer. Without any delay, I request Ms. Kavita to start with her opening remarks. Thank you, and over to you, ma'am.

Speaker #2: We have with us Ms. Kavitha Shiraikat, Managing Director, and Mr. Rahul Agarwal, Chief Financial Officer. Without any delay, I request Ms. Kavitha to start with her opening remarks.

Speaker #2: Thank you, and over to you, ma'am.

Speaker #3: Thank you, Purvangi. Good morning, everyone, and thank you for joining us today for the Patel Engineering Q1 FY27 earnings call. I would like to welcome all our shareholders, investors, and analysts, and thank you for your continued trust and confidence in Patel Engineering.

Kavita Shirvaikar: Thank you, Purvangi. Good morning, everyone, and thank you for joining us today for Patel Engineering Q1 FY27 earnings call. I would like to welcome all our shareholders, investors, and analysts, and thank you for your continued trust and confidence in Patel Engineering. We have uploaded our investor presentation and financial results on the stock exchange, and I hope you have had an opportunity to review them. I will take you through the key business and operational developments during the quarter, our industry outlook, and the opportunities we see ahead. Following this, our CFO, Mr. Rahul Agarwal, will take you through the financial performance in greater detail. Let me begin with the performance for the quarter. We have started FY27 on a positive note with continued momentum in both execution and profitability.

Speaker #3: We have uploaded our investor presentation and financial results on the stock exchange, and I hope you have had an opportunity to review them. I will take you through the key business and operational developments during the quarter.

Speaker #3: Our industry outlook and the opportunities we see ahead. Following this, our CFO, Mr. Rahul Agarwal, will take you through the financial performance in greater detail.

Speaker #3: Let me begin with the performance for the quarter. We have started FY27 on a positive note, with continued momentum in both execution and profitability.

Speaker #3: For Q1 FY27, our consolidated revenue stood at ₹1,281 crore, representing a growth of approximately 4% year-on-year. More importantly, our profit after tax increased by 24.5% to ₹93.5 crore.

Kavita Shirvaikar: For Q1 FY27, our consolidated revenue stood at INR 1,281 crore, representing a growth of approximately 4% year on year. More importantly, our profit after tax increased by 24.5% to INR 93.5 crore, compared with INR 75.1 crore in Q1 FY26. The improvement in profitability reflects better operating performance and continued focus on execution and cost discipline. While the first quarter is seasonally relatively moderate for the infrastructure sector, we remain confident about the trajectory for the year with a large contribution to growth expected in the second half. Coming to our order book and business development, as of 30 June 2026, our consolidated order book stood at INR 14,636 crore. The order book remains well-diversified, with hydropower contributing 62%, irrigation 17%, tunneling 4%, and roads and urban infrastructure accounting for the balance 17%.

Speaker #3: Compared with ₹75.1 crore in Q1 FY26. The improvement in profitability reflects better operating performance and continued focus on execution and cost discipline. While the first quarter is seasonally relatively moderate for the infrastructure sector, we remain confident about the trajectory for the year, with a large contribution to growth expected in the second half.

Speaker #3: Coming to our order book and business development, as of June 30, 2026, our consolidated order book stood at ₹14,636 crore. The order book remains well diversified, with hydropower contributing 62%, irrigation 17%, tunneling 4%, and roads and urban infrastructure accounting for the balance 17%.

Speaker #3: This mix provides us with a strong foundation for sustained execution, while also giving us exposure to some of the infrastructure segments where we believe the medium- to long-term opportunity remains particularly attractive.

Kavita Shirvaikar: This mix provides us with a strong foundation for sustained execution while also giving us exposure to some of the infrastructure segments where we believe the medium to long-term opportunity remains particularly attractive. In addition to our existing order book, we currently have approximately INR 9,000 crore of bids under evaluation. More importantly, we have identified a near-term opportunity pipeline of approximately INR 60,000 crore, which we intend to actively pursue over the coming months. Our approach remains focused on selective and disciplined bidding, with a clear emphasis on project quality, execution feasibility, and appropriate returns, rather than pursuing growth at the expense of profitability. We believe the combination of our existing order book with under evaluation and identified opportunity pipeline gives us good visibility for the coming years. Another important development during the quarter was the upgrade in our credit ratings.

Speaker #3: In addition to our existing order book, we currently have approximately ₹9,000 crore of bids under evaluation. More importantly, we have identified a near-term opportunity pipeline of approximately ₹60,000 crore, which we intend to actively pursue over the coming months.

Speaker #3: Our approach remains focused on selective and disciplined bidding, with a clear emphasis on project quality, execution feasibility, and appropriate returns, rather than pursuing growth at the expense of profitability.

Speaker #3: We believe the combination of our existing order book, bids under evaluation, and identified opportunity pipeline gives us good feasibility for the coming years. Another important development during the quarter was the upgrade in our credit ratings.

Speaker #3: In June, our long-term credit rating was upgraded to stable from A-, while our short-term rating was upgraded to A-1 from A-2. We view this as an important recognition of the improvement in our financial profile, balance sheet discipline, and overall business fundamentals.

Kavita Shirvaikar: In June, our long-term credit rating was upgraded to A Stable from A Minus, while our short-term rating was upgraded to A One from A Two. We view this as an important recognition of the improvement in our financial profile, balance sheet discipline, and overall business fundamentals. Let me now turn to execution, which remains the core of our business. During the quarter, we continued to make steady progress across our key projects with several important milestones achieved. In hydropower, our execution at the Subansiri Lower Hydroelectric Project continues to progress well. With four units already operational, the project is currently contributing 1,000 megawatt of clean energy to the national grid. During this quarter, concreting works of unit 7 commenced, while execution across the remaining units continued to progress steadily.

Speaker #3: Let me now turn to execution, which remains the core of our business. During the quarter, we continued to make steady progress across our key projects, with several important milestones achieved.

Speaker #3: In hydropower, our execution at the Subhansari Lower Hydroelectric Project continues to progress well. With four units already operational, the project is currently contributing 1,000 megawatts of clean energy to the national grid.

Speaker #3: During this quarter, concreting works for Unit 7 commenced, while execution across the remaining units continued to progress steadily. We remain on track for all eight units to become operational during this financial year.

Kavita Shirvaikar: We remain on track for all eight units to become operational during this financial year, which will be an important milestone not only for the project, but also for Patel Engineering, given our long-standing involvement in its execution. In J&K, our Kiru and Kwar HAP project also witnessed strong execution momentum. At Kwar Dam, concreting has crossed the 50% mark, while we also achieved the interdependent milestone of handing over the draft tube unit 1 to the E&M agency. At Parnai HEP, we successfully completed the installation and erection of the roof truss structure for the powerhouse building. In Bhutan also, work has commenced at the Dozuling Hydropower Project, further strengthening our presence in the region and creating opportunities for participation in the larger packages of the project. Another significant milestone was achieved recently at our Sleemanabad Tunnel in Madhya Pradesh, where we successfully completed the tunnel boring breakthrough.

Speaker #3: This will be an important milestone not only for the project, but also for Patel Engineering, given our long-standing involvement in its execution. In J&K, our Kiru and Kwar HEP projects also witnessed strong execution momentum.

Speaker #3: At Kwar Dam, concreting has crossed the 50% mark. We also achieved the interdependent milestone of handing over the draft tube for Unit 1 to the E&M agency.

Speaker #3: At Parne HEP, we successfully completed the installation and erection of the roof truss structure for the powerhouse building. In Bhutan also, work has commenced at the Dorjeeling Hydropower Project, further strengthening our presence in the region and creating opportunities for participation in the larger packages of the project.

Speaker #3: Another significant milestone was achieved recently at our Slimanabad Tunnel in Madhya Pradesh, where we successfully completed the tunnel boring breakthrough. The 11.95-kilometer irrigation tunnel is currently the longest irrigation tunnel in India.

Kavita Shirvaikar: The 11.95-kilometer irrigation tunnel is currently the longest irrigation tunnel in India. The project involves highly challenging tunneling conditions and was executed using two massive TBM. The successful breakthrough is a significant achievement for our tunneling capabilities and further demonstrates our ability to execute technically complex, large-scale underground infrastructure projects. Once completed, the project is expected to provide irrigation to approximately 2.4 lakh hectares across six districts, supporting agricultural development and improving water security in the region. Looking ahead, we remain constructive on the infrastructure opportunity in India. We believe the next phase of India's infrastructure development will be driven by large, technically complex and capital intensive projects across hydropower, pump storage, tunneling, irrigation, and urban infrastructure segments, where Patel Engineering has established capabilities and a strong execution track record. In hydropower and pump storage, the opportunity remains particularly significant.

Speaker #3: The project involves highly challenging tunneling conditions and was executed using two massive TBMs. The successful breakthrough is a significant achievement for our tunneling capabilities and further demonstrates our ability to execute technically complex, large-scale underground infrastructure projects.

Speaker #3: Once completed, the project is expected to provide irrigation to approximately 2.4 lakh hectares across six districts, supporting agricultural development and improving water security in the region.

Speaker #3: Looking ahead, we remain constructive on the infrastructure opportunity in India. We believe the next phase of India's infrastructure development will be driven by large, technically complex, and capital-intensive projects across hydropower, pump storage, tunneling, irrigation, and urban infrastructure.

Speaker #3: Segments where Patel Engineering has established capabilities and a strong execution track record. In hydropower and pumped storage, the opportunity remains particularly significant. India has an estimated exploitable hydropower potential of around 133 gigawatts.

Kavita Shirvaikar: India has an estimated exploitable hydropower potential of around 133 gigawatts, of which approximately 50 gigawatts has been harnessed so far. This leaves a substantial opportunity for future development. Similarly, the government has set out an ambitious roadmap for 100 gigawatts of pump storage capacity by 2035, which we believe can create a sizable multi-year opportunity for EPC players with relevant capabilities. We have already seen several large projects moving forward. The union cabinet recently approved the 1,200 megawatt Kalai II Hydropower Project in Arunachal Pradesh, with an outflow of approximately INR 14,000 crore, as well as the 1,720 megawatt Kamla Hydropower Project with an outlay of approximately INR 26,000 crore. The 1,000 megawatt Nai HAP has also received a positive recommendation for environment clearance.

Speaker #3: Of this, approximately 50 gigawatts has been harnessed so far. This leaves a substantial opportunity for future development. Similarly, the government has set out an ambitious roadmap for 100 gigawatts of pumped storage capacity by 2035.

Speaker #3: Which we believe can create a sizable multi-year opportunity for EPC players with relevant capabilities. We have already seen several large projects moving forward. The Union Cabinet recently approved the 1,200 megawatt Kalai 2 hydropower project in Arunachal Pradesh, with an outlay of approximately ₹14,000 crore.

Speaker #3: As well as the 1,720-megawatt Kamla Hydropower Project with an outlay of approximately ₹26,000 crore. The 1,000-megawatt Nayingar HEP has also received a positive recommendation for environment clearance.

Speaker #3: In pumped storage, the 1,100-megawatt Peli Malai pump storage project in Tamil Nadu has received clearance, further demonstrating the increasing focus on energy storage as part of India's evolving power mix.

Kavita Shirvaikar: In pump storage, the 1,100 megawatt Pennimalai Pumped Storage Project in Tamil Nadu has received clearance, further demonstrating the increasing focus on energy storage as part of India's evolving power mix. Bhutan also remains an important market for us. We believe this is an important development as it creates visibility for the larger packages of the project to move towards tendering. In tunneling, the expansion of high-speed rail infrastructure and the government's focus on improving all-weather connectivity in the Himalayan and northeastern region should create substantial opportunities. Recently cleared INR 1,198 crore Zoji La Tunnel for all-weather connectivity to Ladakh is one example of the scale of opportunities emerging in this segment. Similarly, in roads and urban infrastructure, we see a healthy pipeline of large projects. NHAI has initiated preparation of the DPR for the proposed second Mumbai-Pune Expressway, estimated at approximately INR 15,000 crore.

Speaker #3: Bhutan also remains an important market for us. We believe this is an important development, as it creates feasibility for the larger packages of the project to move towards tendering.

Speaker #3: In tunneling, the expansion of high-speed rail infrastructure and the government's focus on improving all-weather connectivity in the Himalayan and Northeastern region should create substantial opportunities.

Speaker #3: The recently cleared ₹1,198 crore Fortula Tunnel Project for all-weather connectivity to Ladakh is one example of the scale of opportunities emerging in this segment. Similarly, in roads and urban infrastructure, we see a healthy pipeline of large projects.

Speaker #3: NHI has initiated preparation of the DPR for the proposed second Mumbai-Pune Expressway, estimated at approximately ₹15,000 crore. Maharashtra is also advancing several major urban and regional connectivity projects, including underground road infrastructure in Pune and projects worth approximately ₹22,000 crore in the MMR region.

Kavita Shirvaikar: Maharashtra is also advancing several major urban and regional connectivity projects, including underground road infrastructure in Pune and projects worth approximately INR 22,000 crore in the MMR region. In irrigation and water infrastructure, the proposed 64-kilometer dam across the Gulf of Khambhat in Gujarat, currently estimated at approximately INR 1.2 lakh crore, is another example of the scale and complexity of projects being contemplated. While these projects are at different stages of development, they demonstrate the depth and breadth of the opportunities pipeline available to companies with the capabilities to execute large and complex infrastructure projects. Alongside growth, we remain equally focused on strengthening our balance sheet and improving capital efficiency. As part of our stated strategy of monetizing non-core assets, during Q1 FY27, we completed the sale of a INR 27 crore land parcel in Telangana.

Speaker #3: In irrigation and water infrastructure, the proposed 64-kilometer dam across the Gulf of Khambhat in Gujarat, currently estimated at approximately ₹1.2 lakh crore, is another example of the scale and complexity of projects being contemplated.

Speaker #3: While these projects are at different stages of development, they demonstrate the depth and breadth of the opportunities pipeline available to companies with the capabilities to execute large and complex infrastructure projects.

Speaker #3: Alongside growth, we remain equally focused on strengthening our balance sheet and improving capital efficiency. As part of our stated strategy of monetizing non-core assets, during Q1 FY27 we completed the sale of a 27-crore land parcel in Telangana.

Speaker #3: We will continue to evaluate opportunities to unlock value from non-core assets, with the objective of supporting our balance sheet and improving overall capital efficiency.

Kavita Shirvaikar: We will continue to evaluate opportunities to unlock value from non-core assets with the objective of supporting our balance sheet and improving overall capital efficiency. To conclude, we believe Patel Engineering is entering FY27 with a strong foundation. We have a healthy and diversified order book, a significant pipeline of opportunities, improving credit metrics, and continued execution momentum across our key projects. Our focus remains firmly on profitable growth, disciplined bidding, timely execution, and prudent capital allocation. Based on the visibility we have today, we remain confident of achieving approximately 10% revenue growth in FY27, with a significant portion of this growth expected to come through in the second half of the financial year. More importantly, we believe the opportunities emerging across hydropower, pump storage, tunneling, irrigation, and urban infrastructure provide a strong basis for sustainable growth over the long term.

Speaker #3: To conclude, we believe Patel Engineering is entering FY27 with a strong foundation. We have a healthy and diversified order book, a significant pipeline of opportunities, improving credit metrics, and continued execution momentum across our key projects.

Speaker #3: Our focus remains firmly on profitable growth, disciplined bidding, timely execution, and prudent capital allocation. Based on the visibility we have today, we remain confident of achieving approximately 10% revenue growth in FY27, with a significant portion of this growth expected to come through in the second half of the financial year.

Speaker #3: More importantly, we believe the opportunities emerging across hydropower, pumped storage, tunneling, irrigation, and urban infrastructure provide a strong basis for sustainable growth over the long term.

Speaker #3: We remain committed to building Patel Engineering as a stronger, more resilient, and increasingly value-focused infrastructure company. With that, I will now hand over the call to our CFO, Mr. Rahul Agarwal, who will take you through the financial performance in greater detail.

Kavita Shirvaikar: We remain committed to building Patel Engineering as a stronger, more resilient, and increasingly value-focused infrastructure company. With that, I will now hand over the call to our CFO, Mr. Rahul Agarwal, who will take you through the financial performance in greater detail. Thank you.

Speaker #3: Thank you.

Speaker #1: Thank you, Kavita. Good morning, everyone, and welcome to the earnings call. I will now take you through the company's financial performance for Q1 FY27.

Rahul Agarwal: Thank you, Kavita. Good morning, everyone, and welcome to the earnings call. I will now take you through the company's financial performance for Q1 FY27. On a consolidated basis, our revenue stands at INR 1,281 crores compared to INR 1,233 crores in Q1 FY26. Operating EBITDA has improved with a margin of 14.02% compared to 13.4% in Q1 FY26. PAT has increased by 25% almost and stands at INR 93.5 crores compared to INR 75.1 crores in Q1 FY26. On a standalone basis, the revenue is INR 1,274 crores compared to INR 1,224 crores in Q1 FY26. Operating EBITDA is INR 176 crores with a margin of 13.82%, compared to INR 158.8 crores with a corresponding margin of 12.97% in Q1 FY26. Profit after tax is INR 82.74 crores compared to INR 69.48 crores in the corresponding period last year, up by 19.09%. Revenue breakup sector-wise, hydropower contributed to 68%, irrigation 15%, tunneling 13%, roads, urban infrastructure and others 4%.

Speaker #1: On a consolidated basis, our revenue stands at ₹1,281 crore, compared to ₹1,233 crore in Q1 FY26. Operating EBITDA has improved, with a margin of 14.02% compared to 13.4% in Q1 FY26.

Speaker #1: PAT has increased by almost 25% and stands at ₹93.5 crore compared to ₹75.1 crore in Q1 FY26. On a standalone basis, the revenue is ₹1,274 crore compared to ₹1,224 crore in Q1 FY26.

Speaker #1: Operating EBITDA is ₹176 crore with a margin of 13.82%, compared to ₹158.8 crore with a corresponding margin of 12.97% in Q1 FY26. Profit after tax is ₹82.74 crore, compared to ₹69.48 crore in the corresponding period last year, up by 19.09%.

Speaker #1: Revenue breakup sector-wise: Hydropower contributed 68%, irrigation 15%, tunneling 13%, and roads, urban infrastructure, and others 4%. Consolidated debt as of June is around ₹1,293 crore.

Rahul Agarwal: The consolidated debt as of June is around INR 1,293 crore, up by around INR 100 crores in the quarter due to increase in account of utilization of additional working capital limits for new projects. Client advances stands at INR 615 crores compared to INR 622 crores as of March. Debt equity ratio is around 0.28. Breakdown of debt, working capital debt is INR 969 crores, term debt is INR 324 crores, and net working capital days around 137 days. That concludes the financial overview. We are now happy to take any questions that you may have.

Speaker #1: Up by around ₹100 crore in the quarter due to an increase on account of utilization of additional working capital limits for new projects. Client advances stand at ₹615 crore compared to ₹622 crore as of March.

Speaker #1: Debt-equity ratio is around 0.28. Breakdown of debt: working capital debt is ₹969 crore, term debt is ₹324 crore. And net working capital days are around 137 days.

Speaker #1: That concludes the financial overview. We are now happy to take any questions that you may have.

Speaker #2: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone.

Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Rahul Shah with Eternal Capital. Please go ahead.

Speaker #2: If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.

Speaker #2: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Rahul Shah with Eternal Capital.

Speaker #2: Please go ahead.

Speaker #3: Yes, so firstly, thank you so much for the opportunity, sir, and congratulations on the good set of numbers. On the knowledge front, I had my question.

Rahul Shah: Yes. Firstly, thank you so much for the opportunity, sir, and congratulations on the good set of numbers. On the numbers front only I had my question. The PAT, I saw that grew by 25%, compared to the revenue growth, that was just 4%. Beyond the operating leverage, how much of this divergence is coming from the, let's say, finance costs or taxation? What should we as investors consider a normalized PAT growth trajectory?

Speaker #3: So, the PAT—I saw that grew by 25%, and compared to the revenue growth, that was just 4%. So, beyond the operating leverage, how much of this divergence is coming from, let's say, finance costs or taxation?

Speaker #3: And what should we, as investors, consider a normalized PAT growth trajectory?

Speaker #1: Look, finance costs have come down during the quarter, you know, compared to the corresponding quarter by almost ₹10 crore. So, this is on account of reduction of debt in the last year.

Rahul Agarwal: The finance cost has come down during the quarter, compared to pre-corresponding quarter by almost INR 10 crores. This is on account of reduction of debt in the last year. We expect the finance cost to continue on a reduced level. Corresponding to that, EBITDA margin is around the same, 13% to 14%, so no major change in that. This is only majorly which has contributed to the increase in profits.

Speaker #1: So, we expect the finance costs to continue at a reduced level. Correspondingly, EBITDA margin is around the same—13 to 14%.

Speaker #1: So, no major change in that. So this is the only major factor which has contributed to an increase in profits.

Speaker #3: Okay, correct. And on my second part, regarding the PAT growth trajectory, how much can we expect on that?

Rahul Shah: Okay. Correct. On my second part, PAT growth trajectory, how much can we expect on that?

Speaker #1: Yeah. So see, our current year estimates, which is there are around 10% growth with a EBITDA of 13, you know, 13 to 14% with similar interest costs every quarter.

Rahul Agarwal: Yeah. See, our current year estimates, which is there around 10% growth with an EBITDA of 13% to 14% with similar interest costs every quarter.

Rahul Shah: Got it, sir.

Speaker #1: Yeah.

Speaker #3: And my second question is on the order book front. So we have an order book of almost ₹14,500 crore. I would just like to know the execution timeline for this existing order book, and how much of this order book can be converted into revenue over the next three years.

Rahul Agarwal: Yeah.

Rahul Shah: My second question is on the order book front. We have an order book of almost INR 14,500 crore. I would just like to know the execution timeline for this existing order book and how much of this order book can be converted into revenue over the next three years.

Speaker #1: So, this we are expecting to execute over three years.

Rahul Agarwal: This we are expecting to execute over three years.

Speaker #3: So any numbers?

Rahul Shah: Any numbers?

Speaker #1: Yeah, almost. There's a book-to-build ratio of around three only right now.

Rahul Agarwal: Yeah, almost it has a book-to-bill ratio of around 3 only right now.

Speaker #3: Okay, perfect. Got it. And one last question, if I can just squeeze this one in: Is the current order book sufficient to support double-digit revenue growth without requiring a material acceleration from new order wins?

Rahul Shah: Okay, perfect. Got it. And one last, if I can just squeeze this one. Is the current order book sufficient to support a double-digit revenue growth without requiring a material acceleration from new order wins, or would you have to win a lot more?

Speaker #3: Or would you have to win a lot more?

Speaker #1: So, see, we are targeting around ₹8,000 crore in new orders this year, and with that, we are expecting 10% growth in the current year and 15% in the following year.

Rahul Agarwal: So see, we are targeting around INR 8,000 crores new orders this year. With that we are expecting a 10% growth in the current year and 15% in the year corresponding. So for growth, we will obviously need new orders, which we are fairly confident to get.

Speaker #1: So, for growth, we will obviously need new orders, which we are fairly confident we will get.

Speaker #3: Noted, sir. That answers all my questions. Thank you so much.

Rahul Shah: No, that answers all my questions. Thank you so much.

Speaker #2: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Viraj Mahadevia.

Operator: Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Viraj Mahadevia with Moneycontrol. Please go ahead.

Speaker #2: With money growth, please go ahead.

Speaker #4: Congratulations, Mr. Writer and Rahul, on the excellent results and the very helpful opening speech. You know, in the past quarters, or past year, you had about ₹150 crore plus of exceptionals in the last two financial years.

Viraj Mahadevia: Congratulations, Mr. Shirvaikar and Rahul on the excellent results and the very helpful opening speech. In the past quarters or past year, you had about INR 150 crore plus of exceptionals in the last 2 financial years. Can you give us a view of what those were exactly, and are they likely to occur in any way going forward and especially in FY27?

Speaker #4: Can you give us a view of what those were, exactly, and are they likely to occur in any way going forward, especially in FY27?

Speaker #1: So, we don't anticipate exceptional items coming this year. That was mostly on account of, you know, last year, for Vivas Vishwa settlements and some write-down of investments.

Rahul Agarwal: We don't anticipate exceptional items coming this year. That was mostly on account of last year for Vivad Se Vishwas settlements and some write-down of investments.

Speaker #4: Right. Okay. And no more exceptionals expected this year?

Viraj Mahadevia: Right. Okay. No more exceptionals expected this year?

Speaker #1: Yeah, yeah. We don't expect.

Rahul Agarwal: Yeah. We do not expect.

Speaker #4: Okay, great. You mentioned the land parcel sale of 27 crores. Is that right, in Telangana? Is this the 430 acres of land in Telangana?

Viraj Mahadevia: Okay, great. You mentioned the land parcel sale of INR 27 crore, is that right? In Telangana? Is this the 430 acres of land in Telangana?

Speaker #1: No, no, no. No, no.

Rahul Agarwal: No, it is 27 acres, sorry, and INR 26 crore.

Speaker #5: It is 27 acres, sorry. And ₹26 crore.

Speaker #4: Oh, 27 acres. So you still have another 400 acres in Telangana?

Viraj Mahadevia: Oh, 27 acres. So you still have another 400 acres in Telangana?

Speaker #1: Yeah, yeah. We have some land and parcels in Telangana.

Rahul Agarwal: Yeah. We have some lands and parcel in Telangana.

Speaker #4: Okay. And are there any other land parcels moving towards sale discussions? The Electronic City conveyor, Tamil Nadu, etc.?

Viraj Mahadevia: Okay. Are there any other land parcels moving towards sale discussions, the Electronic City, Panvel, Tamil Nadu, et cetera?

Speaker #1: Yes, we are in discussion for other land parcels as well.

Rahul Agarwal: Yeah, we are in discussion for other land parcels also.

Speaker #4: Great. Do you think you'd use the proceeds to become term loan debt-free by the end of FY27?

Viraj Mahadevia: Great. Do you think you will use the proceeds to become term loan debt-free by end of FY27?

Speaker #1: So this year's target for non-core is between ₹150 to ₹200 crore. We are fairly confident of achieving it.

Rahul Agarwal: This year, target for non-core is between INR 150 to INR 200 crores. That we are fairly confident to achieve.

Speaker #4: Okay, great. I'll come back with more questions. Thank you.

Viraj Mahadevia: Okay, great. I will come back with more questions. Thank you.

Speaker #2: Thank you. The next question comes from the line of Rajiv Rupani, an individual investor. Please go ahead.

Operator: Thank you. Next question comes from the line of Rajiv Rupani, an individual investor. Please go ahead.

Speaker #1: Yeah. Thank you for the opportunity. My first question was on the promoter pledge. Now that our rating has improved, what update can we have on the promoter pledge?

Rajiv Rupani: Thank you for the opportunity. My first question was on the promoter pledge. Now that our rating has improved, what update can we have on the promoter pledge? By what percentage will it get reduced going forward in the next three months, four months, six months?

Speaker #1: By what percentage will it get reduced going forward in the next three months, four months, six months? So, Rajiv, we are, you know, the promoters and ourselves, we are all in, you know, discussions with the lenders.

Rahul Agarwal: Rajiv, the promoters and ourselves, we are all in discussion with the lenders and we are hopeful that this year we will get a substantial reduction.

Speaker #1: And, you know, we are hopeful that this year we will get a substantial reduction. So, sir, I know that we are in discussion, but this has been ongoing for a long time.

Rajiv Rupani: Sir, I know that we are in discussion, but this has been since a long time. We need the clarity that by, let's say in the next six months, what percentage will it get reduced?

Speaker #1: So we need clarity by, let's say, in the next six months—what percentage will it get reduced? I don't have an exact number, but right now, if I'm not mistaken, around 85% to 90% of the shares are pledged.

Rahul Agarwal: I do not have an exact number, but right now, if I am not mistaken, around 85% to 90% of the shares are pledged. We expect that to come down by at least 15%, 20%.

Speaker #1: So, we expect that to come down by at least 15 to 20 percent. Okay, that is helpful. And my next question was on that real estate project, Patel's Mondo.

Rajiv Rupani: Okay. That is helpful. My next question was on that real estate project, Patel Mondo. I think there are three towers. I would like to know, out of the three towers, is the OC been received, number one? How many flats have been sold in the two towers? What about the third tower? Is it lying vacant or what is to be done?

Speaker #1: So, I think there are three towers, and I would like to know, out of the three towers, how is the OC being received?

Speaker #1: Number one, how many flats have been sold in the two towers, and what about the third tower? Is it lying vacant or what is to be done?

Speaker #1: The OC is expected. There is some litigation, which is there, so we are expecting a closure very soon. After that, the OC will be received.

Rahul Agarwal: The OC is expected. There is some litigation which is there. That we are expecting a closure very soon. After that, the OC will be received. The third tower was a service apartment tower. As soon as the OC is received, that can be occupied. That is ready to be done and just to be occupied once the OC is received.

Speaker #1: The third tower was a service apartment tower. As soon as the OC is received, that can be occupied. That is ready to be done.

Speaker #1: And just to be occupied once the OC is received. So, sir, by when can we expect the OC to come? Approximately? So, we are hopeful it should come in this financial year.

Rajiv Rupani: Sir, by when can we expect the OC to come approximately?

Rahul Agarwal: We are hopeful it should come in this financial year.

Speaker #1: Okay. But there are reports that, despite there being no OC, there are people staying in those two towers? Is that correct? People have taken possession for fit-outs and all.

Rajiv Rupani: Okay. But there are reports that despite non-OC, there are people who are staying in that two towers. Is it correct?

Rahul Agarwal: People have taken possession for fit outs and all. I am not sure about whether they are staying, but they have taken possession.

Speaker #1: I'm not sure about whether they are staying, but they have taken possession. Okay. And I wanted an update. This 27 acres, which we have sold. So we had 430 acres on the outskirts of Hyderabad.

Rajiv Rupani: Okay. I wanted an update, this 27 acre which we have sold. So we had 430 acres in outskirts of Hyderabad. So out of that, this 27 acres have been sold. Am I correct?

Speaker #1: So, out of that, these 27 acres have been sold. Am I correct? That's correct. Yeah. So, sir, I think for ₹1 crore an acre, we have sold.

Rahul Agarwal: That is correct.

Rajiv Rupani: Yeah. So sir, I think for INR 1 crore an acre we have sold. So is not the price too low?

Speaker #1: So is the—is not the price too low? No, it was in the outskirts. Even if it's in the outskirts, I think the price—Hyderabad being an important destination and with a lot of development going on—the price of ₹1 crore seems to be too low.

Rahul Agarwal: No, it was an outskirt.

Rajiv Rupani: Even if it's an outskirt, I think the price, Hyderabad being an important destination and a lot of development going on, the price of INR 1 crore seems to be too low.

Speaker #1: No, sir. It is based on market value.

Rahul Agarwal: No sir, it is based on market value.

Speaker #2: Thank you. Mr. Rupani, please rejoin the queue for more questions. The next question comes from the line of Rohit Joshi, an individual investor. Please go ahead.

Operator: Thank you. Mr. Rupani, please rejoin the queue for more questions. Next question comes from the line of Rohit Joshi, an individual investor. Please go ahead.

Speaker #3: Yeah, hi sir. Am I audible?

Rohit Joshi: Hi, sir. Am I audible?

Speaker #1: Yes.

Rahul Agarwal: Yes.

Speaker #3: Yeah. Hi, sir. Thank you for the opportunity. I just want to ask, given the company's strong positioning in the Hyderabad segment, how are you balancing things between getting new or larger Hyderabad projects and the historically long execution timelines that come with them, along with all the clearances, risks, and everything?

Rohit Joshi: Yeah. Hi, sir. Thank you for the opportunity. I just wanted to ask that given the company's strong positioning in the hydropower segment, how are you balancing things between getting new or larger hydropower projects and the historically long execution timelines that come with it, along with all the clearances, risk and everything?

Speaker #1: So, see, there are, if you see the, you know, changes has happened a lot in the, you know, overall approval process and everything. The government is taking all approvals, MOEF clearances, land acquisitions, et cetera, before awarding the projects.

Rahul Agarwal: If you see, changes have happened a lot in the overall approval process and everything. The government is taking all approvals, MoEF clearances, land acquisitions, et cetera, before awarding the projects. That is why you would have seen the projects getting awarded a bit delayed. But once it is awarded, the projects are not taking that time as it was taking earlier. For example, the Subansiri project, a 2,000-megawatt project, is near the verge of completion in the last five, six years, which is unheard of.

Speaker #1: So that's why you would have seen the projects getting awarded a bit delayed. But once it is awarded, the projects are not taking as much time as they were taking earlier.

Speaker #1: For example, the Subansiri project, 2,000-megawatt project, is near the verge of completion in the last five or six years, which is unheard of.

Speaker #3: Okay, sir. Thank you. And, sir, my next question was: What is the minimum margin and cash flow profile that you are targeting now when you are bidding for newer projects in the future?

Rohit Joshi: Okay, sir. Thank you. My next question was that, what is the minimum margin and cash flow profile that you are targeting now when you are bidding for newer projects in the future?

Speaker #1: So, we expect to maintain EBITDA margins between 13% and 14%.

Rahul Agarwal: We expect to maintain our EBITDA margin between 13% and 14%.

Speaker #3: Okay. Okay, sir. Yeah, that's all. Thank you.

Rohit Joshi: Okay. Okay, sir. Yeah, that is all. Thank you.

Speaker #2: Thank you. Next question comes from the line of Viraj Mahadevia, Money Group. Please go ahead.

Operator: Thank you. Next question comes on the line of Viraj Mahadevia with Moneycontrol. Please go ahead.

Speaker #4: Hi, Rahul. Q1 last year, you all did 13.4% margins. That's moved up to about 14%. Do you think we get back to 15% anytime soon, given the operating leverage and greater scale likely over the next year or two?

Viraj Mahadevia: Hi, Rahul. Q1 last year, you all did 13.4% margins. That has moved up to about 14%. Do you think we will get back to 15% anytime soon, given the operating leverage and greater scale likely over the next year or two?

Speaker #1: Hey, Viraj, I cannot confirm on that because, see, the competition and et cetera has increased. If you have seen, last year, a large project went down with.

Rahul Agarwal: Viraj, I cannot confirm on that because, see, the competition and et cetera has increased. If you have seen last year, one large project went

Viraj Mahadevia: Right

Rahul Agarwal: down with us.

Speaker #4: Right. Right.

Speaker #1: So, we don't see the margins improving that much. Obviously, we keep on working on various value additions and, you know, how to improve and reduce the cost and all.

Viraj Mahadevia: Right.

Rahul Agarwal: We don't see the margins to improve that much. Obviously,

Rahul Agarwal: We don't see the margins to improve that much. Obviously, we keep on working on various value additions and how to improve and reduce the costs and all. But still, we are confident to maintain our existing margins.

Rahul Agarwal: we keep on working on various value additions and how to improve and reduce the costs and all. But still,

Speaker #1: But still, we are confident that we can maintain our existing margins.

Rahul Agarwal: We are confident to maintain our existing margins.

Speaker #4: Understood. And are there any plans, given that the company should be fairly close to net debt neutral by, certainly, 2028, and even 2027? Your net debt to EBITDA will be very manageable.

Viraj Mahadevia: Understood. Any plans, given the company should be fairly close to net debt neutral by certainly 2028, and even 2027, your net debt to EBITDA will be very manageable. Given the promoter shareholding of 30-odd%, any consideration to do buybacks using the spare cash and also give out ESOPs to senior management? Is that being contemplated at all at the board level?

Speaker #4: Given the promoter shareholding of, you know, 30-odd percent, is there any consideration for buybacks using the spare cash, and also for giving out ESOPs to senior management?

Speaker #4: Is that being contemplated at all at the board level?

Speaker #1: See, buybacks we will consider once we close the debt. So, you know, it may take another maybe two years, three years to reduce the majority of the debt.

Rahul Agarwal: See, buybacks, we will consider once we close the debt. It may take another maybe two years, three years to reduce the major of debt. ESOP, we have an ESOP trust, so management will consider on that.

Speaker #1: ESOP, we have an ESOP trust, so management will consider that.

Speaker #4: Right. Okay. Thank you.

Viraj Mahadevia: Right. Okay. Thank you.

Speaker #2: Thank you. Next question comes from the line of Ravi, an individual investor. Please go ahead.

Operator: Thank you. Next question comes on the line of Ravi, an individual investor. Please go ahead.

Speaker #5: Hello, sir. Am I audible?

[Company Representative]: Hello, sir. Am I audible?

[Shareholder] (Private Investor): Hello, sir. Am I audible?

Speaker #1: Yeah.

Rahul Agarwal: Yeah.

Speaker #5: Thank you for this opportunity. I have one question: as execution accelerates across the existing order book, how much incremental working capital and project-level capex will be required, and how does the management intend to fund it?

[Company Representative]: Thank you for this opportunity. I have one question that, as execution accelerates across the existing order book, how much incremental working capital and project-level CapEx will be required, and how does the management intend to fund it?

[Shareholder] (Private Investor): Thank you for this opportunity. I have one question that, as execution accelerates across the existing order book, how much incremental working capital and project-level CapEx will be required, and how does the management intend to fund it?

Speaker #1: See, what we expect is that, you know, whatever working capital will be required—yeah, there will be some client advances to be taken against submission of bank guarantees or surety bonds.

Rahul Agarwal: See, what we expect is that, whatever working capital will be required, there will be some client advances to be taken against submission of bank guarantees or surety bonds. So that should suffice. Plus maybe some working capital borrowings of INR 100, INR 200 crores may be needed in between.

Speaker #1: So, that should suffice. Plus, maybe some working capital borrowings of ₹100–200 crore may be needed in between.

Speaker #5: Right, sir. Right. Okay. And should investors expect this to be funded primarily through internal accruals, asset monetization, project-level debt, or additional corporate borrowing?

[Company Representative]: Right, sir. Right. Okay. Should investors expect this to be funded primarily through internal accruals or asset monetization, project-level debt or additional corporate borrowing?

[Shareholder] (Private Investor): Right, sir. Right. Okay. Should investors expect this to be funded primarily through internal accruals or asset monetization, project-level debt or additional corporate borrowing?

Speaker #1: Yeah, yeah. So it should be through that only, yeah.

Rahul Agarwal: Yeah. So it should be

[Company Representative]: Okay

[Shareholder] (Private Investor): Okay

Rahul Agarwal: linked to that only, yeah.

Speaker #5: Okay, okay. So, okay. And one last question. The Q1 operating margin improved to 14.02 percent from 13.40 percent. How much of this improvement is structural versus project mix or timing related?

[Company Representative]: Okay. One last question, that Q1 operating margin improved to 14.02% from 13.40%. How much of this improvement is structural versus project mix or timing related?

[Shareholder] (Private Investor): Okay. One last question, that Q1 operating margin improved to 14.02% from 13.40%. How much of this improvement is structural versus project mix or timing related?

Speaker #1: It's mostly project mix only. See, our average margins will remain around 13–14%, depending upon what portion of work is executed in the quarter.

Rahul Agarwal: It is mostly project mix only. See, our average margins will remain around 13%, 14%, depending upon what portion of work is executed in the quarter.

Speaker #5: Right, sir. Okay, and one last thing. As larger Hyderabad projects move into more intensive execution, should we expect margins to remain around current levels, or to normalize?

[Company Representative]: Right, sir. Okay. And one last thing. As the larger hydropower projects move into more intensive execution, should we expect margins to remain around current levels or to normalize?

[Shareholder] (Private Investor): Right, sir. Okay. And one last thing. As the larger hydropower projects move into more intensive execution, should we expect margins to remain around current levels or to normalize?

Speaker #1: See, there is competition pressure, but we are working because we have past experience. We are working towards optimizing various processes, and hence we are confident to maintain these margins.

Rahul Agarwal: See, there is competition pressure, but we are working because we have past experience, we are working towards optimizing various processes, and hence we are confident to maintain these margins.

Speaker #5: Okay. Okay. Right, sir. Thank you.

[Company Representative]: Okay. Right. Thank you.

[Shareholder] (Private Investor): Okay. Right. Thank you.

Speaker #2: Thank you. The next question comes from the line of Pija, an individual investor. Please go ahead.

Operator: Thank you. Next question comes from the line of P. Eja, an individual investor. Please go ahead.

Speaker #6: Hi, thank you for the opportunity. My simple question is, we have been observing myself also getting into new areas of work, timing, and sort of open infrastructure work.

P. Eja: Hi. Thank you for the opportunity. My simple question is, given the 12 weeks, with me also getting into new areas of work, mining and more of open infrastructure work. Sir, management would be ahead that a very large chunk of opportunities where there are lesser people to execute is dredging. Dredging both on land as well as in water. Are we ever considering looking into, in case we are so good at tunneling, because it is more complicated than dredging. Are we considering to get into this and get a large pie or some small pie also would be very significant with good margins. That is one question. Second, of course, about the arbitration cases, which says more than INR 1,000 crores, which we have won. What is the fate of that?

Speaker #6: I'm sure management would be glad that a very large chunk of opportunities, where there are fewer people to execute, is present—both on land as well as in water.

Speaker #6: So, are we ever considering, in any case, we are so good at channeling, a little more complicated chunk, I think. Are we considering getting into this and getting a large pie, or even some small pie also would be very significant with good margins?

Speaker #6: That's one question. And second, of course, about the arbitration cases. This is more than ₹1,000 crore, which we have won. What is the fate of that?

Speaker #6: Are we likely to get some of that awarded during the current financial year, or within two years? Your thoughts on that?

P. Eja: Are we likely to get some of that realized during current financial year or within 2 years? Your thought on that.

Speaker #1: So, thank you. so we are dredging works. We are looking also for those works. We have, so you know, whether either to get a loan or with an JV with other people, as far as, arbitration is concerned, so we are consistently following up on the arbitrations and considering the arbitration and land sale only we are considering 150 to 200 crore monetization in this year.

Rahul Agarwal: Well, thank you. We have dredging works. We are looking also for those works. Whether either together alone or with a JV with other people. As far as arbitration is concerned, we are consistently following up on the arbitrations and considering the arbitration and land sale only, we are considering INR 150 to 200 crore monetization in this year.

Speaker #6: Yeah. And so, especially the ones that we have won, if they are not into prolonged litigation, especially with the public sector undertakings, we still have some of them which are willing to settle.

P. Eja: Yeah. Especially the ones that we have won, if they are not into prolonged litigation, especially with the public sector undertakings. We still have some of them which are willing to settle.

Speaker #6: Boom.

Rahul Agarwal: PSUs generally will take it through litigation at all levels. Whether it is district court, high court, Supreme Court, unless there are some schemes. Last year and before that there were some schemes, we settled. Yeah.

Speaker #1: So PSUs generally will take it through litigation at all levels—so whether it is district court, High Court, or Supreme Court—unless there are some schemes.

Speaker #1: So last year, and before that, there were some schemes of letter. Yeah, if—

Speaker #3: So, wherever there is a possibility, we are exploring settlement. Otherwise, we'll have to go through the normal route, like through court.

Kavita Shirvaikar: Wherever there is a possibility, we are exploring the settlement. Otherwise, we will have to go through the normal route, through court.

Speaker #1: Okay.

Speaker #6: That's tough luck.

P. Eja: Best of luck.

Speaker #1: Yes. Thank you.

Rahul Agarwal: Thank you.

Speaker #6: Great set of numbers achieved this time.

P. Eja: Great set of numbers achieved this time.

Speaker #3: Thank you.

Kavita Shirvaikar: Thank you.

Speaker #2: Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Viraj Mahadevia.

Operator: Thank you. A reminder to all the participants that you must press star and one to ask a question. Next question comes from the line of Viraj Mahadevia with Moneycontrol. Please go ahead.

Speaker #2: With Money Grow, please go ahead.

Speaker #4: Hi, Rahul. What were the receivable days for Q1 of this year?

Viraj Mahadevia: Hi, Rahul. What were the receivable days for Q1 of this year?

Speaker #1: Receivable days are between 40 and 45.

Rahul Agarwal: Receivable days is between 40 to 45.

Speaker #4: And that continues to remain steady, including in all your new contracts, right? Because that's a marked improvement from your receivable days of 100-plus a few years ago.

Viraj Mahadevia: That continues to remain steady, including in all your new contracts, right? Because that's a marked improvement from your receivable days of 100 plus a few years ago.

Speaker #1: Correct.

Rahul Agarwal: Correct.

Speaker #4: Great. And what's the execution looking like in terms of revenues for Q2 so far, and have the erratic rains played any spoilsport in your revenue booking?

Viraj Mahadevia: Great. What's the execution looking like in terms of revenues for Q2 so far? Has the erratic rains played any spoilsport in your revenue booking?

Speaker #1: See, Q2 generally, because of the monsoon, is a bit, you know, slower.

Rahul Agarwal: The Q2 generally because of monsoon is a bit.

Viraj Mahadevia: Correct.

Rahul Agarwal: Slower.

Speaker #4: Correct. Slower, yeah.

Viraj Mahadevia: Slower, yeah.

Speaker #1: So, it should be in line with the past only.

Rahul Agarwal: It should be in line of the past only.

Speaker #4: Okay. So no major upsets.

Viraj Mahadevia: Okay. So no major upsets.

Rahul Agarwal: There are few ups and downs, but it should be okay.

Speaker #1: What I mean is, there are a few ups and downs, but it should be okay.

Speaker #4: Okay. And can you highlight a little bit more detail on the cost optimization that you've talked about in the past? What's being done? Is it a pilot project?

Viraj Mahadevia: Okay. Can you highlight a little bit more detail on the cost optimization that you've talked about in the past? What's being done? Is it a pilot project? Has it been rolled out across multiple sites? What is likely to be the savings on an annualized basis starting this year and next year?

Speaker #4: Has it been rolled out across multiple sites? What is likely to be the savings on an annualized basis, starting this year and next year?

Speaker #1: See, we are implementing IoT at various projects, which is helping us, you know, in controlling the consumption of diesel and other costs. So that is one.

Rahul Agarwal: We are implementing IoT at various projects, which is helping us in controlling the consumption of diesel and other costs.

Viraj Mahadevia: Right.

Rahul Agarwal: That is one. We are also looking at various new equipment which comes with AI-enabled and IoT-enabled things so we can track the execution, improve wherever processes we can.

Speaker #1: And then we are also looking at various new equipment, which comes AI-enabled and IoT-enabled, so we can track the execution and improve processes wherever we can.

Speaker #1: So, these are the steps we're taking to give a number to them. It is difficult. That is why what we are saying is, even though, you know, the competition is increasing and the otherwise margins may reduce, we are trying to maintain those margins of 13-14%.

Viraj Mahadevia: Right.

Rahul Agarwal: These are the steps we are taking. To give a number to them, it is difficult. That is why what we are saying is, even though the competition is increasing and otherwise margins may reduce, but we are trying to maintain net margins of 13%, 14%.

Speaker #4: Understood. There are two large projects coming up in Arunachal, from what I understand, and in Hyderabad. Have we bid for those? Are they split into multiple packages?

Viraj Mahadevia: Understood. There are two large projects coming up in Arunachal from what I understand, in hydro. Have we bid for that? Is that split into multiple packages? Are we likely to bid for all of it or part of the packages, and what value?

Speaker #4: Are we likely to bid for all of it or only part of the packages? And what is the value?

Speaker #1: So, see, what we have bid is around ₹9,000 crore, and another ₹60,000 crore, which is in the pipeline. So this includes large packages in Arunachal and, you know, other states.

Rahul Agarwal: See, what we have bid is around 9,000 and another 60,000, which is in pipeline. This includes large packages in Arunachal and other states, and we would be bidding for the packages.

Speaker #1: And we would be bidding for the packages.

Speaker #4: So, Arunachal, we have bid for 9,000 so far. Out of 20 times 2, or out of 20?

Viraj Mahadevia: Arunachal we bid for 9,000 so far out of 20 times two or out of 20?

Speaker #1: So, out of the 9,000, what we have bid so far is—overall, I think the maximum majority of that would be in Arunachal and the Northeast only.

Rahul Agarwal: So 9,000 what we have bid so far is overall, I think maximum majority of that would be in Arunachal and the Northeast only.

Speaker #4: Right. Okay. And when are the outcome of these bids likely? By Diwali this year?

Viraj Mahadevia: Right. Okay. When are the outcome of these bids likely, by Diwali this year?

Speaker #3: Hopefully, yes.

Kavita Shirvaikar: Hopefully, yes.

Speaker #4: Okay, great. Thank you. Thank you. Great performance.

Viraj Mahadevia: Okay, great. Thank you. Thank you. Great performance.

Speaker #1: Thank you.

Rahul Agarwal: Thank you.

Operator: Thank you. Next question comes from the line of Raj Shah, an individual investor. Please go ahead.

Speaker #2: Thank you. Next question comes from the line of Raj Shah, an individual investor. Please go ahead.

Speaker #5: Hello. Hello. Am I audible? Yeah, yeah. Good morning, sir. I basically have a question on the verticals front. We have verticals like hydropower, irrigation, tunneling, and all.

Raj Shah: Hello?

Rahul Agarwal: Yeah.

Raj Shah: Hello, am I audible?

Rahul Agarwal: Yes.

Raj Shah: Yeah. Good morning, sir. I basically have question on the verticals front. We have verticals like hydropower, irrigation, tunneling, and all. For FY27 as well as FY28, which exact vertical you see will be the growth driver for the company, and what will be the revenue split overall, if that is the thing?

Speaker #5: So for FY27 as well as FY28, which exact, you know, vertical do you see will be the growth driver for the company? And what will be the overall revenue split?

Speaker #5: If that is the thing.

Speaker #1: We are order booked around 60%—60, 62% is Hyderabad. So, you know, that will almost be the kind of split for revenues also, we expect.

Rahul Agarwal: We have order booked around 60% is hydro. 60%, 62% is hydro. That will almost be the kind of split for revenues also we expect. Rest is all split between irrigation, tunneling, and others. Irrigation is around 15%, tunneling is around 10%, and roads and urban infrastructure is balance. Maybe quarter on quarter it may vary, but on a 2-year basis, if you see similar mix may be there.

Speaker #1: The rest is all split between irrigation, tunneling, and others. Irrigation is around 15, tunneling is around 10, and roads and urban infrastructure is balanced. So.

Speaker #1: Similar. You know, maybe quarter-on-quarter it may vary, but on a two-year basis, if you see a similar mix, maybe there.

Speaker #5: Okay. So what about the new orders that we are going to get? In that also, are you going to see higher, you know, hydropower or irrigation side more?

Raj Shah: Okay. What about the new orders that we are going to get? In that also you're going to see higher hydropower or irrigation side more, or it might change?

Speaker #5: Or, it might change?

Speaker #1: See, there are many projects coming in Hyderabad PSP, so that will continue to be a large focus. Plus, there are projects in tunneling also, urban infra also, high-speed rail, everything.

Rahul Agarwal: There are many projects coming in hydro PSP, so that will continue to be a large focus. Plus, there are projects in tunneling also, urban intra also, high speed rail, everything. We are looking at all. Depends which project comes first. Focus will remain on these all segments.

Speaker #1: And we are looking at all. So, I mean, it depends, you know, which project comes first. But the focus will remain on all these segments.

Speaker #5: Okay, sir. So, the second question I actually have is on the JV. So, on the JV front, what kind of revenue are you seeing?

Raj Shah: Okay, sir. Second question actually I have is on the JV. On the JV front, what kind of revenue are you seeing? What kind of cash distribution would you see to PEL and all? That is something that I would like to know more.

Speaker #5: Like, what kind of cash distribution would you see to PEL and all? So, that is something that I would like to know more about.

Speaker #1: So, on the JV front, there are some projects being executed in JV where we take our share of revenues and profits.

Rahul Agarwal: JV front, there are some projects getting executed in JV where we take our share of revenues and profits.

Speaker #5: Okay. I mean, okay. Sure. Thank you, sir.

Raj Shah: Okay. Sure. Thank you, sir.

Speaker #2: Thank you. Next question comes from the line of Rohit Joshi, an individual investor. Please go ahead.

Operator: Thank you. Next question comes from the line of Rohit Joshi, an individual investor. Please go ahead.

Speaker #6: Yeah. Hi, sir. Thank you for the follow-up opportunity. I just had one question: for the government and PSP projects that you have, how much capital is currently locked up in retention money, security deposit, and contractual balances?

Rohit Joshi: Yeah. Hi, sir. Thank you for the follow-up opportunity. I just had one question that for the government and PSU projects that you have, how much capital is currently locked up in retention money, security deposit, and contractual balances?

Speaker #1: So, see, we have retention—almost 5% for every contract. And almost ₹150 crore to ₹250 crore is there as retention on the balance sheet.

Rahul Agarwal: We have retention almost 5% for every contract and almost between INR 200 to 250 crores is there as retention on the balance sheet.

Speaker #6: Okay. And what is the average timeline for its release?

Rohit Joshi: What is the average time frame for its release, sir?

Speaker #1: So, we generally get it released at the end of the project, but some projects allow us to withdraw against bank guarantees.

Rahul Agarwal: We generally get it released at the end of the project, but some projects allow us to withdraw against bank guarantees.

Speaker #6: Okay, okay. Thank you. Thank you so much.

Rohit Joshi: Thank you so much.

Speaker #2: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Rajiv Rupani, an individual investor.

Operator: Thank you. A reminder to all the participants that you may press star and one to ask question. Next question comes from the line of Rajiv Rupani, an individual investor. Please go ahead.

Speaker #2: Please go ahead.

Speaker #5: Yeah, thank you for the opportunity again, sir. So, I had a follow-up question on the land bank monetization. Since we have sold partly and you have mentioned that up to ₹150 crore worth of land bank will be sold, can we assume that the next lot of the land bank which will be sold will be from Hyderabad only?

Rajiv Rupani: Yeah. Thank you for the opportunity again. Sir, so I had a follow-up question on the land bank monetization. Since we have sold partly and you have mentioned that up to INR 150 crores worth of land bank will be sold, so can we assume that the next lot of the land bank which will be sold will be from Hyderabad only to monetize the rest of the amount in this year?

Speaker #5: So, monetize the rest of the amount in this year?

Speaker #1: No, no. We are working on various land parcels. We can't say exactly which land parcel will happen.

Rahul Agarwal: No. We are working on various land parcels, so we exactly cannot say which land parcel will happen.

Speaker #5: Okay. So the balance amount, which is from other land bank also—is that what you’re saying?

Rajiv Rupani: Okay. So the balance amount which you tend to sell can be from other land bank also. Is that what you are saying?

Speaker #1: Yeah. Yeah.

Rahul Agarwal: Yeah.

Speaker #5: Okay. And my next question was that in your presentation you've talked about the near-term opportunity of various projects. So last time you had mentioned that this year the following projects will come up.

Rajiv Rupani: Okay. My next question was that in your presentation, you talked about the near-term opportunity of various projects. Last time you had mentioned that this year the following projects will come up, Sawalkot, Kalai II, and Kamla. Have they opened up and have we bid for the same?

Speaker #5: Sawalcot, Kalai 2, and Kamla. So, have they opened up and have we bid for the same?

Speaker #1: No, no. Bidding is still to happen.

Rahul Agarwal: No. Bidding is still to happen.

Speaker #5: Bidding is still to happen for this. And what about the, the other four, that is Upper Karnali, Upper Sub Subansari, Kirithai, and Italian? So that is when when will these come up for bidding?

Rajiv Rupani: Bidding is still to happen for this. What about the other four, that is Upper Karnali, Upper Subansiri, Hirithai, and Italin? When will these come up for bidding?

Speaker #1: So, see, these are at various stages of clearance from the government. So we expect that, you know, these should also come this financial year. But that depends upon various clearances, because NHPC will now take, you know, maximum clearances upfront before coming out with the tender.

Rahul Agarwal: These are at various stages of clearance from government. We expect that these should also come this financial year. That depends upon various clearances because NHPC will now take maximum clearances upfront before coming out with the tender.

Speaker #2: Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of the question and answer session. I now hand the conference over to the management for closing comments.

Operator: Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to the management for closing comments.

Speaker #5: Thank you all for joining. For any follow-up questions, you can write to us or to the Valorum Advisors, who are our IR consultants. Thank you.

Rahul Agarwal: Thank you all for joining. Any follow-up questions you can write to us or through Valorem Advisors, which are our IR consultants. Thank you.

Speaker #6: Thank you.

Kavita Shirvaikar: Thank you.

Operator: Thank you. On behalf of Patel Engineering Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

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Q1 2027 Patel Engineering Ltd Earnings Call

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