Q1 2027 KEC International Ltd Earnings Call

August 11, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the KEC International Limited Q1 FY27 earnings conference call. 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.

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

Speaker #1: From the management today, we have Mr. Vimal Kejriwal, MD and CEO, and Mr. Rajiv Agarwal, CFO. I now hand the conference over to Mr. Vimal Kejriwal.

Speaker #1: Thank you, and over to you, sir.

Speaker #2: Thank you, Alaric. Good morning, everyone, and welcome to the KEC International Q1 earnings conference call. Let me begin by sharing an overview of the operating environment, followed by our performance during the quarter and business-wise updates.

Vimal Kejriwal: Thank you, Alaric. Good morning, everyone, and welcome to KEC International's Q1 earnings conference call. Let me begin by sharing an overview of the operating environment, followed by our performance during the quarter and business-wise updates. In the Middle East, our Dubai manufacturing facility and the execution of all ongoing projects continue to operate near normal on the ground. The region accounts for approximately 25% of our overall order book and L1 position. While tendering activity remains strong across the region, we are witnessing some delays in the finalization and award of new orders. Cash flows remain stable, and we continue to be optimistic about the medium to long-term outlook, supported by sustained investments in grid expansion, regional interconnections, grid resilience, renewable energy integration, and reconstruction initiatives. While on-ground execution continues across our sites, we continue to face challenges on the supply chain and logistics.

Speaker #2: In the Middle East, our Dubai manufacturing facility and the execution of all ongoing projects continue to operate near normal on the ground. The region accounts for approximately 25% of our overall order book and L1 position.

Speaker #2: While tendering activity remains strong across the region, we are witnessing some delays in the finalization and award of new orders. Cash flows remain stable, and we continue to be optimistic about the medium- to long-term outlook, supported by sustained investments in grid expansion, regional interconnections, grid resilience, renewable energy integration, and reconstruction initiatives.

Speaker #2: While on-ground execution continues across our sites, we continue to face challenges in supply chain and logistics. Shipments, especially from Europe, China, and India to the GCC countries, which had come to a standstill earlier, have gradually resumed, albeit with some delays.

Vimal Kejriwal: Shipments, especially from Europe, China, and India to the GCC countries, which had come to a standstill earlier, have gradually resumed, albeit with some delays. This has resulted in slower execution on certain projects on the supply side. Freight costs, including war-related surcharges, insurances, et cetera, remain elevated, though they are expected to moderate over the coming weeks. This also had a cascading increase on logistics, fuel, and power costs, also in the manufacturing facilities in India. We are working closely with our supply chain partners to minimize these disruptions and are also engaging with our customers to recover these additional costs. Procurement or project execution may get deferred until customer alignment is achieved on recovery of the additional costs, resulting in revenue margin timing impact. These challenges impacted execution during Q1 and are expected to have a spillover effect on Q2 also.

Speaker #2: This has resulted in slower execution on certain projects on the supply side. Freight costs, including war-related surcharges, insurance, etc., remain elevated, though they are expected to moderate over the coming weeks.

Speaker #2: This also had a cascading increase on logistics, fuel, and power costs. Also, in the manufacturing facilities in India, we are working closely with our supply chain partners to minimize these disruptions and are also engaging with our customers to recover these additional costs.

Speaker #2: Procurement or project execution may get deferred until customer alignment is achieved on recovery of the additional costs, resulting in revenue margin timing impact. These challenges impacted execution during Q1 and are expected to have a spillover effect on Q2 also.

Speaker #2: Coming to Q1 performance, despite a challenging operating environment, we delivered a resilient performance by maintaining revenues, strengthening our order book, reducing debt, and continuing to build a healthy pipeline for future growth.

Vimal Kejriwal: Coming to Q1 performance, despite a challenging operating environment, we delivered a resilient performance by maintaining revenues, strengthening our order book, reducing debt, and continuing to build a healthy pipeline for future growth. We delivered revenues at INR 5,024 crores, marginally higher than Q1 last year. We have delivered a PBT of INR 90 crores with PBT margins of 1.8%, and our PAT stands at INR 73 crores. Our performance could have been better, but for the continued geopolitical disruption in the Middle East, shortage of labor, and calibrated execution of water projects owing to delays in payments. The labor situation has started improving from June 26 onwards. Delay in legal closure of disputes for settlement of claims in transportation and metro projects also impacted the profitability.

Speaker #2: We delivered revenues at Rs 5,024 crore, marginally higher than Q1 last year. We have delivered a PBT of Rs 90 crore, with PBT margins of 1.8%, and our PAT stands at Rs 73 crore.

Speaker #2: Our performance could have been better, but for the continued geopolitical disruption in the Middle East, shortage of labor, and calibrated execution of water projects owing to delays in payments. The labor situation has started improving from June 26 onwards. Delay in legal closures of disputes and settlement of claims in transportation and metro projects also impacted the profitability.

Speaker #2: On the order intake front, we secured new orders of over Rs 6,300 crore across T&D, Civil, Renewables, Cable and Conductors, and Transportation businesses. Additionally, we have an L1 position of almost Rs 3,000 crore, predominantly in the T&D business, which is expected to be awarded in the near future.

Vimal Kejriwal: On the order intake front, we secured new orders of over INR 6,300 crores across T&D, Civil, Renewables, Cable and Conductors, and Transportation business. Additionally, we have an L1 position of almost INR 3,000 crores, predominantly in the T&D business, which are expected to be awarded in the near future. We have a diversified and strong order book of INR 37,697 crores as on date. Including the L1 position, our order book and L1 stands at over INR 40,000 crores. On the debt front, net debt including acceptances have been reduced by over INR 150 crores to INR 6,568 crores in June 26 from March 26, supported by free cash flow generation. This reduction in debt has also translated in a lower absolute interest cost compared to Q4 26.

Speaker #2: We have a diversified and strong order book of Rs 37,697 crore as on date, including the L1 position. Our order book and L1 stand at over Rs.

Speaker #2: 40,000 crores. On the debt front, net debt including acceptances has been reduced by over Rs. 150 crores to Rs. 6,568 crores in June '26 from March '26, supported by free cash flow generation.

Speaker #2: This reduction in debt has also translated into a lower absolute interest cost compared to Q4 '26. The debt could have been further reduced but for the delay in realizing significant collections from Afghanistan, which we now expect to materialize in Q2, as well as higher inventory levels due to delayed dispatches from the Dubai factory, as well as some raw materials storage amid ongoing Middle East disruptions.

Vimal Kejriwal: The debt could have been further reduced, but for the delay in realizing significant collections from Afghanistan, which we now expect to materialize in Q2, as well as higher inventory levels due to delayed dispatches from Dubai factory, as well as some raw materials storage amidst the ongoing Middle East disruptions. On specific businesses, T&D, the business achieved revenues of INR 3,217 crores, higher than last year. The revenues could have been better but for the supply chain constraints in Middle East. On the order intake front, the business secured orders of INR 3,600 crores across India, Middle East, Africa, and the Americas. In India, we secured repeat orders from leading private developers, including a significant order in the rapidly growing HVDC segment. We continue to witness a robust opportunity pipeline in this space.

Speaker #2: On specific businesses, TND, the business achieved revenues of Rs. 3,217 crore, higher than last year. The revenues could have been better but for the supply chain constraints in the Middle East.

Speaker #2: On the order intake front, the business secured orders of Rs. 3,600 crores across India, the Middle East, Africa, and the Americas. In India, we secured repeat orders from leading private developers, including a significant order in the rapidly growing HVDC segment.

Speaker #2: We continue to witness a robust opportunity pipeline in this space. We have already participated in multiple packages in the Barmer Rajasthan HVDC scheme and expect additional schemes to be floated during the course of the year.

Vimal Kejriwal: We have already participated in multiple packages in the Barmer Rajasthan HVDC scheme and expect additional schemes to be floated during the course of the year. We have also secured our first transmission line order for evacuation of power to a data center in Western India from a private developer. This order marks an important milestone for the T&D business in supporting the power infrastructure needs of the growing data center segment. We are also engaged in discussions with other data center developers for similar opportunities. In addition to PGCIL and other private developers, we have started bidding for three new developers during the quarter. In international, we are witnessing a gradual revival in the African market, reflected in the recent win of a significant transmission line order that further strengthens our presence in the region.

Speaker #2: We have also secured a first transmission line order for evacuation of power to a data center in Western India from a private developer. This order marks an important milestone for the T&D business in supporting the power infrastructure needs of the growing data center segment.

Speaker #2: We are also engaged in discussions with other data center developers for similar opportunities. In addition to PGCell and other private developers, we have started bidding for three new developers during the quarter.

Speaker #2: In International, we are witnessing a gradual revival in the Africa and African market, reflected in the recent win of a significant transmission line order that further strengthens our presence in the region.

Speaker #2: We have also expanded our tower supply business by securing a substantial order in the Middle East, opening up a sizable new market beyond our presence in the Americas, Australia, and Europe.

Vimal Kejriwal: We have also expanded our tower supply business by securing a substantial order in the Middle East, opening up a sizable new market beyond our presence in the Americas, Australia, and Europe. In SAE, the business achieved revenues of INR 450 crores, a strong growth of 25% year on year. We continue to witness strong momentum in order flows with new orders of over INR 1,650 crores for the supply of towers, hardware, poles, and engineering services across the US, Mexico, and Brazil, an increase of nearly four times compared to last year. These orders include the largest ever tower supply order from the US, reflecting the growing momentum in the American T&D market. With these orders, the order book and L1 position has been scaled up to a record level of over INR 3,800 crores.

Speaker #2: In SA, the business achieved revenues of Rs. 450 crores, a strong growth of 25% year on year. We continue to witness strong momentum in order flows, with new orders of over Rs.

Speaker #2: 1,650 crores for the supply of towers, hardware, poles, and engineering services across the US, Mexico, and Brazil—an increase of nearly four times compared to last year.

Speaker #2: These orders include the largest-ever tower supply order from the US, reflecting the growing momentum in the American T&D market. With these orders, the order book and L1 position have been scaled up to a record level of over Rs.

Speaker #2: 3,800 crores. In line with the strategy of diversifying our product portfolio and expanding into new markets, we continue to make encouraging progress. In Brazil, we successfully executed our first pilot order for mining structures, opening up opportunities beyond the power transmission sector.

Vimal Kejriwal: In line with our strategy of diversifying our product portfolio and expanding into new markets, we continue to make encouraging progress. In Brazil, we successfully executed our first pilot order for mining structures, opening up opportunities beyond the power transmission sector. In Mexico, we expanded our international footprint by securing an order for the supply of structures for a solar project outside Mexico. On the manufacturing front, following the successful capacity enhancements at our facilities in Dubai, Jaipur, and Jabalpur, we completed the expansion of our Butibori facility in Nagpur in Q1. With this, our global manufacturing capacity has increased to 483,800 metric tons. These capacity additions further strengthen our manufacturing capabilities and position us well to cater to the growing demand for transmission infrastructure across both domestic and international markets. The overall tender pipeline in T&D continues to remain robust across both domestic and the international markets.

Speaker #2: In Mexico, we expanded our international footprint by securing an order for the supply of structures for a solar project outside Mexico. On the manufacturing front, following the successful capacity enhancements at our facilities in Dubai, Jaipur, and Jabalpur, we completed the expansion of our new facility in Nagpur in Q1.

Speaker #2: With this, our global manufacturing capacity has increased to 483,800 metric tons. These capacity additions further strengthen our manufacturing capabilities and position us well to cater to the growing demand for transmission infrastructure across both domestic and international markets.

Speaker #2: The overall tender pipeline in T&D continues to remain robust across both domestic and international markets. In India, the sector continues to offer a strong multi-year growth opportunity, driven by rising power demand, accelerated renewable energy capacity addition, grid modernization, and the increasing need to address grid congestion through expansion and strengthening of the transmission network.

Vimal Kejriwal: In India, the sector continues to offer a strong multi-year growth opportunity driven by rising power demand, accelerated renewable energy capacity addition, grid modernization, and the increasing need to address grid congestion through expansion and strengthening of the transmission network. With a robust tender pipeline, we see significant multi-year opportunities ahead and remain well positioned to capitalize on this growth. The international T&D market continues to present a strong growth outlook supported by robust transmission investments across the Middle East, a recovery in Africa, expanding opportunities in Americas, CIS, and the SAARC regions, and increasing infrastructure demand driven by renewable energy integration and the AI-led data center boom. Our diversified global positions us well to capitalize on these opportunities. With a healthy order book and L1 in T&D of over INR 25,000 crores, we are confident of delivering significant growth in the T&D business.

Speaker #2: With a robust tender pipeline, we see significant multi-year opportunities ahead and remain well-positioned to capitalize on this growth. The international T&D market continues to present a strong growth outlook, supported by robust transmission investments across the Middle East, recovery in Africa, and expanding opportunities in the Americas, CIS, and the SAAC regions.

Speaker #2: An increasing infrastructure demand, driven by renewable energy integration and the AI-led data center boom. Our diversified global position presents us well to capitalize on these opportunities.

Speaker #2: With a healthy order book and L1 in T&D of over Rs 25,000 crore, we are confident of delivering significant growth in the T&D business.

Speaker #2: In Civil, we delivered revenues of Rs. 993 crore for the quarter, a growth of 6% year-on-year. While execution has progressed across multiple sites, growth was slightly lower owing to labor shortages arising from the election period and delays in customer payments in the Water segment.

Vimal Kejriwal: In Civil, we delivered revenues of INR 993 crores for the quarter, a growth of 6% year-on-year. While execution has progressed across multiple sites, growth was slightly lower owing to the labor shortages arising from the election period and the delays in customer payments in the water segment. During the quarter, we successfully commissioned the Bheden Water Supply Project in Odisha, which was inaugurated by the Honorable Prime Minister Shri Narendra Modi. This landmark project will provide safe and reliable drinking water to 166 villages through 58,000 household tap connections, creating a meaningful social impact. During the quarter, the business secured multiple orders for L1s of over INR 1,400 crores in the Buildings and Factories vertical from reputed clients. The Civil business has widened its presence in the automobile segment with an order from one of India's leading automobile manufacturers, adding a marquee client to its portfolio.

Speaker #2: During the quarter, we successfully commissioned the bed and water supply project in Odisha, which was inaugurated by the Honorable Prime Minister, Shri Narendra Modi.

Speaker #2: This landmark project will provide safe and reliable drinking water to 166 villages through 58,000 household tap connections, creating a meaningful social impact. During the quarter, the business secured multiple orders and took L1s of over Rs.

Speaker #2: 1,400 crores in the Buildings and Factories vertical from reputed clients. The Civil business has widened its presence in the automobile segment with an order from one of India's leading automobile manufacturers.

Speaker #2: Adding a marquee client to its portfolio, the business continues to strengthen its presence in the high-rise residential segment, expanding its customer base with a prestigious order in Northern India.

Vimal Kejriwal: The business continues to strengthen its presence in the high-rise residential segment, expanding its customer base with a prestigious order in Northern India. It is also well-positioned to secure another order from a repeat customer, reflecting our strong execution capabilities and customer confidence. With these wins, KEC is now constructing approximately 80 high-rise buildings for marquee clients across the country. Our geographic footprint extends with a strong presence in markets such as Mumbai, Gurugram, Pune, Goa, Bangalore, Hyderabad, and Kolkata. During the quarter, we further strengthened our Civil leadership capabilities through onboarding of senior talent. Looking ahead, with the labor situation gradually normalizing, a sharp focus on execution, a robust order book, and L1 of over INR 10,000 crores, we are confident that the Civil business is well-positioned to deliver healthy growth over the coming quarters. Our Transportation business has accrued a revenue of INR 259 crores for the quarter.

Speaker #2: This also is well positioned to secure another order from a repeat customer, reflecting strong execution capabilities and customer confidence. With these wins, KEC is now constructing approximately 80 high-rise buildings for marquee clients across the country.

Speaker #2: Our geographic footprint extends with a strong presence in markets such as Mumbai, Gurugram, Pune, Goa, Bangalore, Hyderabad, and Kolkata. During the quarter, we further strengthened our civil leadership capabilities through onboarding of senior talent.

Speaker #2: Looking ahead, with the labor situation gradually normalizing, a sharp focus on execution, and a robust order book and L1 of over Rs 10,000 crore, we are confident that the Civil business is well positioned to deliver healthy growth over the coming quarters.

Speaker #2: Our transportation business has achieved revenue of Rs 259 crore for the quarter. The business continues to focus on execution of new orders and completion of ongoing projects.

Vimal Kejriwal: The business continues to focus on execution of the new orders and completion of ongoing projects. During the quarter, the Honorable Chief Minister of Maharashtra inaugurated the Mumbai Metro Line 2B section between Mandale and Diamond Garden, where KEC executed the ballastless track works. The business has also secured new orders over INR 250 crores in the technologically advanced automatic block signaling segment. The business has successfully implemented Kavach across 667 route kilometers and is currently executing deployments across an additional 780 RKM of the railway network and over 3,000 locos. We continue to actively pursue opportunities in Kavach, technologically advanced metro systems, and tunnel ventilation projects. Going forward, our focus remains on accelerating project closures, improving working capital efficiency, and selectively pursuing high-value domestic and international opportunities to drive profitable growth. Our Cables and Conductors business has accrued a revenue of over INR

Speaker #2: During the quarter, the Honorable Chief Minister of Maharashtra inaugurated the Mumbai Metro Line 2B section between Mandale and Diamond Garden, where KEC executed the ballastless track works.

Speaker #2: The business has also secured new orders worth over Rs 250 crore in the technologically advanced Automatic Block Signaling segment. The business has successfully implemented coverage across 667 route kilometers and is currently executing deployments across an additional 1,780 RKM of the railway network and over 3,000 locos.

Speaker #2: We continue to actively pursue opportunities in technologically advanced metro systems and tunnel ventilation projects. Going forward, our focus remains on accelerating project closures, improving working capital efficiency, and selectively pursuing high-value domestic and international opportunities to drive profitable growth.

Speaker #2: For cables and conductors, the business has achieved a revenue of over Rs 600 crore, a stellar growth of 57% year-on-year, driven by robust demand across the infrastructure, power transmission, and industrial segments.

Vimal Kejriwal: 600 crores, a stellar growth of 57% year-on-year, driven by robust demand across the infrastructure, power transmission, and industrial segments. We also continue to witness steady inflow of orders for supply of both cables and conductors. On the new product front, elastomeric cables are slated to commence production in this quarter, followed by the commissioning of the EDM plant in the next quarter. These investments are expected to strengthen our specialty product portfolio, improve our product mix, and support long-term margin expansion. In the renewables business, we secured new orders of INR 800 crores from an existing customer during the quarter. These include prestigious projects in both the wind and solar segments. We are now executing solar and wind energy projects with a cumulative capacity of over 600 megawatt.

Speaker #2: We also continue to witness a steady inflow of orders for the supply of both cables and conductors. On the new product front, elastomeric cables are slated to commence production in this quarter, followed by the commissioning of the EBM plant in the next quarter.

Speaker #2: These investments are expected to strengthen our specialty product portfolio, improve our product mix, and support long-term margin expansion. In the renewables business, we secured new orders of Rs.

Speaker #2: We secured ₹800 crore from an existing customer during the quarter. These include prestigious projects in both the wind and solar segments. We are now executing solar and wind energy projects with a cumulative capacity of over 600 megawatts.

Speaker #2: In addition, the 1-gigawatt solar projects for IRCON in Karnataka and NTPC in Rajasthan, commissioned recently, are operating successfully at their rated capacity. The outlook for the renewable business remains highly encouraging, driven by sustained investments in clean energy, grid modernization, and the increasing focus on reliable and dispatchable power solutions.

Vimal Kejriwal: In addition, the 1 gigawatt solar projects for IRCON in Karnataka and NTPC in Rajasthan, commissioned recently, are operating successfully at their rated capacity. The outlook for the renewable business remains highly encouraging, driven by sustained investments in clean energy, grid modernization, and the increasing focus on reliable and dispatchable power solutions. We continue to engage with leading wind OEMs for strategic partnerships to strengthen our presence in the wind segment. With our expanding execution capability and growing project portfolio both across wind and solar, we are confident that the renewable business will become a significant contributor to KEC's long-term growth. In the oil and gas pipeline business, we have initiated the merger of our wholly owned subsidiary, KEC Spur Infrastructure, with KEC International. Post the merger, the oil and gas pipeline portfolio will be integrated into our Civil and Hydrocarbon segment, enabling a more unified approach towards hydrocarbon projects.

Speaker #2: We continue to engage with leading wind OEMs for strategic partnerships to strengthen our presence in the wind segment. With our expanding execution capability and growing project portfolio across both wind and solar, we are confident that the renewables business will become a significant contributor to KEC's long-term growth.

Speaker #2: In the oil and gas pipeline business, we have initiated the merger of our wholly owned subsidiary, KEC Spur Infrastructure, with KEC International. Through the merger, the oil and gas pipeline portfolio will be integrated into the civil hydrocarbon segment, enabling a more unified approach towards hydrocarbon projects.

Speaker #2: Going forward, we see significant opportunities to expand our hydrocarbon business across both domestic and international markets. In conclusion, our performance during the quarter reflects the resilience of our diversified geographical portfolio. While we continue to face certain near-term challenges, we believe these are largely transitory, with supply chains gradually normalizing, labor availability improving, a strong order book, and L1 position of over Rs.

Vimal Kejriwal: Going forward, we see significant opportunities to expand our hydrocarbon business across both domestic and international markets. In conclusion, our performance during the quarter reflects the resilience of our diversified geographical portfolio. While we continue to face certain near-term challenges, we believe these are largely transitory. With supply chains gradually normalizing, labor availability improving, a strong order book and L1 position of over INR 40,000 crores, a robust tender pipeline exceeding INR 2 lakh crores, and encouraging opportunities across both domestic and international markets, we remain confident of delivering stronger execution and improved financial performance over the remaining quarters of the year. Thank you. We are now open to take questions.

Speaker #2: Rs. 40,000 crores, a robust tender pipeline exceeding Rs. 2 lakh crores, and encouraging opportunities across both domestic and international markets, we remain confident of delivering stronger execution and improved financial performance over the remaining quarters of the year.

Speaker #2: Thank you. We are now open to take questions.

Speaker #1: Thank you. 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.

Operator 3: Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press * and 2. 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 Vaibhav Shah with JM Financial. Please go ahead.

Operator: Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press * and 2. 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 Vaibhav Shah with JM Financial. Please go ahead.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Vaibhav Shah with JM Financial.

Speaker #1: Please go ahead.

Speaker #3: Yeah, so firstly on the standalone performance, we saw EBITDA margin declining to almost 4-odd percent for Q1, and PAT was negligible. So what was the reason for that at the standalone level?

Vaibhav Shah: Yeah. Sir, firstly, on the standalone performance, we saw EBITDA margin decline to almost 4% for Q1 and PAT was negligible. What was the reason for that at standalone level?

Speaker #2: Vaibhav, as you have seen our numbers, T&D obviously is at a higher margin, and Railways and Civil have been negative. And that is in the standalone.

Vimal Kejriwal: Vaibhav, as you have seen our numbers, T&D obviously is at a higher margin and railways and civil has been negative, and that is in the standalone. A large part of our T&D is also in the consol piece. This is the major reason why the standalone is showing much lower numbers as compared to the consol.

Speaker #2: TND is a large part of our TND, and is also in the console piece. So that is the major reason why the standalone is showing much lower numbers as compared to the console.

Speaker #3: Okay. So, may we expect the TND to pick up from Q2 onwards, or should it be in the second half?

Vaibhav Shah: Okay. Do you expect the T&D to pick up from Q2 onwards, or should it be in H2?

Speaker #2: There should be some pickup happening in Q2. I think the problem in Q2 in TND in India is there because of very heavy rainfall, especially in Gujarat where most of our projects are right now concentrated.

Vimal Kejriwal: There should be some pickup happening in Q2. I think the problem in Q2 in T&D in India is there because of very heavy rainfalls, especially in Gujarat where most of our projects are right now concentrated. But clearly Q2 will definitely be better on standalone.

Speaker #2: But clearly, Q2 will definitely be better on a standalone basis.

Speaker #3: Okay, so secondly, you mentioned about the stuck receivables in Afghanistan and GJM. What is the quantum of receivables from Afghanistan and GJM, and can you split the GJM receivables between both MP and Orissa? And how do you see the inflows coming in?

Vaibhav Shah: Okay. Secondly, you mentioned about the stuck receivables in Afghanistan and JJM. What is the quantum of receivables from Afghanistan and JJM? Can you split the JJM receivables in both MP and Odisha, and how do you see the inflows coming in?

Speaker #2: I don't have the split numbers, but the total receivable should be around ₹800 or ₹900 crore, of which around ₹400 to ₹500 crore are sort of overdue.

Vimal Kejriwal: I do not have the split numbers, but the total receivable should be around INR 800 to 900 crores, of which around INR 400 to 500 crores are sort of overdue. Balance are pending certification, etcetera. If things happen, we have been talking with everyone, including the state governments and the central governments, and the assurance is that funds have now been released, so we will keep our fingers crossed. In fact, in the month of July and August till date, we have received around INR 110 crores or so between the two states. I do not have the exact number, the dues are equally split between Odisha and MP. As far as Afghanistan is concerned, we have around roughly INR 300 crores of money which is due for payment for some time, and it has to come from ADB.

Speaker #2: Okay. Balances are, you know, pending certification, etc. So, if things happen, you know, we should be—we have been talking with everyone, including the state governments and the central government, and the assurance is that funds are now being released.

Speaker #2: So we will keep our fingers crossed. In fact, in the months of July and August till date, we have received around ₹110 crore or so between the two states.

Speaker #2: I don't have the exact number. I think the dues are equally split between Orissa and MP. As far as Afghanistan is concerned, we have around...

Speaker #2: Roughly ₹300 crores of money, which is due for payment for some time, has to come from ADV. We have been getting repeated assurances that we should get the money—it was supposed to come in Q1.

Vimal Kejriwal: We have been getting repeated assurances that we should get the money. It was supposed to come in Q1, now they have told us Q2, so I think it is a matter of time. I think if we are lucky, let me put it, that we should get it in Q2 itself. Otherwise, definitely Q3. That is a large amount, INR 300 crores without any outflow against it. So that will help us in improving our debt situation, which did improve a little bit in this quarter.

Speaker #2: Now that they have told us Q2, I think it's a matter of time. I think if we are lucky, let me put it that way, we should get it in Q2 itself.

Speaker #2: Otherwise, definitely Q3. And that's a large amount—₹300 crores—without any outflow against it. So that will help us in, you know, improving our debt situation, which did improve a little bit in this quarter.

Speaker #3: So lastly you mentioned that in the previous call that we are targeting 120 days by September and 110 days by March. In terms of overall working capital so if we receive this 300 crores from Afghanistan and another 3 400 crores from GJM then also we have to achieve that target we need another improvement as well.

Vaibhav Shah: Sir, lastly, you mentioned in the previous call that we are targeting 120 days by September and 110 days by March in terms of overall working capital. If we receive this INR 300 crores from Afghanistan and another INR 300, 400 crores from JJM, then also to achieve that target, we need another improvement as well. So what could be that lever to reach towards that 120 days?

Speaker #3: So, what could be that lever to reach towards that?

Speaker #2: I think these two should be decent and will help us decently. Also, I did mention that we had a higher inventory level in Q1.

Vimal Kejriwal: These two should be decent, will help us decently. Also, I did mention that we had a higher inventory level in Q1. One is partly in our Dubai factories because there was some balancing equipment, etcetera, which did not reach there, which have now reached, so that is one. Secondly, in our cable business also with all the uncertainty on the plastic side, etcetera, we had increased our raw material, etcetera, and finished good also, so now they are getting going. I think maybe around INR 200, 250 crores should get released from the working capital side without the debtors also. I think we are pretty okay with the numbers, what we are talking about.

Speaker #2: One is partly in our Dubai factories because there was some balancing equipment, etc., which did not reach there, which has now reached. So that is one.

Speaker #2: Secondly, in our cable business also, with all the uncertainty on, you know, the plastic side, etc., we had increased our raw material, etc., and finished goods also.

Speaker #2: So, now they are getting going. So, I think maybe around ₹200–250 crores should get sort of released from the working capital side, without the debtors also.

Speaker #2: So, I think we are pretty okay with the numbers, what we are talking about.

Speaker #3: Okay, okay. So, lastly, on interest cost, we have seen some reduction on a QOQ basis. So incrementally, this should be ₹200 million on a quarterly basis for the entire year.

Vaibhav Shah: Okay. Sir, lastly, on interest cost, we have seen some reduction on a QoQ basis. Incrementally, this should be running around quarterly basis for the entire year?

Speaker #2: No, it should be much less than that. This quarter we had 3.3%, largely because a lot of cash came in at the end of the quarter.

Vimal Kejriwal: No, it should be much less than that. This quarter we had 3.3%, largely because a lot of cash came in in the end of the quarter. While the absolute borrowings went down by the quarter end, I think in April/May it was elevated. Our expectation is that against the 3.3% which we did, we should be around 2.3% or so for the whole year. Our total interest should be around INR 600 and odd crores. That is our expectation.

Speaker #2: So, while the absolute borrowings went down by the quarter-end, I think in April and May it was elevated. So our expectation is that, against the 3.3% which we did, we should be around 2.3% or so for the whole year.

Speaker #2: Our total debt should, interest, should be around 600-odd crores. That's our expectation.

Speaker #3: Okay, okay. Thanks a lot, sir. I will call back in.

Vaibhav Shah: Okay. Thank you a lot, sir. I will follow back in touch with you.

Speaker #2: Thanks Vaibhav. Thank you Vaibhav.

Vimal Kejriwal: Thanks, Vaibhav.

Speaker #1: Thank you. The next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.

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

Speaker #3: Good morning sir.

Sumit Kishore: Good morning, sir.

Speaker #2: Morning Sumit.

Vimal Kejriwal: Morning, Sumit.

Sumit Kishore: My first question is in relation to your 25% order book in Middle East. Could you speak about the composition of this order book, the challenges that you faced in terms of execution? Excluding Middle East, what would have been your revenue growth? Just trying to understand the impact here.

Speaker #3: This is in relation to your 25% order book in the Middle East. Could you speak about the composition of this order book and the challenges that you faced in terms of execution?

Speaker #3: So excluding the Middle East, what would have been your revenue growth? Just trying to understand the impact here.

Speaker #2: So Sumit, 25% of the order book is broadly, I'd say, equally divided between Saudi and UAE. So that's the basic—so when you say 25%, it's almost ₹10,000 crores.

Vimal Kejriwal: Sumit, our 25% order book is broadly, I will say, equally divided between Saudi and UAE. That is the basics. When I say 25%, it is almost INR 10,000 crores, so INR 5,000 each between the two countries. Very broadly, maybe 1% or 2% here and there. That is one part of it. On challenges, we are not seeing anything significant on the ground. Project executions are going on. I think in the last 4 months, we have commissioned three or four projects during these 4 months, and a lot more is happening. I think the problem is twofold. One is the logistics costs have gone up, fuel costs have gone up, so local operating costs have gone up significantly, which is reflected in the margins. We are in touch with the client, etcetera, and let us see what happens.

Speaker #2: So, 5,000 each between the two countries. Okay. Very broadly, maybe 1 or 2% here and there as well. Okay. That's one part of it.

Speaker #2: On challenges I I we are not seeing anything significant on the ground. So project executions are going on I think in the last four months your commission three or four projects during the these four months and and a lot more is happening.

Speaker #2: I think the problem is twofold. One is that logistics costs have gone up. Fuel costs have gone up. So local operating costs have gone up significantly, which is reflected in the margins.

Speaker #2: We have been in touch with the client, etc., and let us see what happens. But since the costs are being incurred, they're getting booked immediately.

Vimal Kejriwal: Since the costs are being incurred, they are getting booked immediately. That is one part of it. The second part is on the supplies, so typically, 25% to 30% of our revenues come from supplies items. We are seeing a significant challenge on the shipping side with the ports under attack or so. Vessels from China, Europe, and even from India are difficult to get and then also the rates have gone up. Whatever is impacting the quality of revenue, we have been deferring it for some time. Hopefully, the situation is slowly normalizing, so it should come back maybe by the end of this quarter or so. We will keep our fingers crossed on this. The major impact is not on the physical execution, but towards the supplies which go into the projects.

Speaker #2: That's one part of it. The second part is on the supplies. So, typically, you know, 25–30% of our revenues come from supplies items.

Speaker #2: So we are seeing a significant challenge on the shipping side, with the ports under, you know, attack or so. So vessels from China, Europe, and even from India are difficult to get, and also the rates have gone up.

Speaker #2: So, whatever is impacting the quality of revenue, we have been deferring it for some time. Hopefully, the situation is slowly normalizing, so it should come back maybe by the end of this quarter or so.

Speaker #2: We'll keep our fingers crossed on this. So the major impact is not on the physical execution, but towards the supplies which go into the projects.

Speaker #3: Okay. So essentially, revenue growth excluding the Middle East would also have been flattish, just like we have seen on a year-on-year basis for KEC at the consolidated level.

Sumit Kishore: Okay. Essentially, revenue growth excluding Middle East would also have been flattish, just like we have seen on a year-on-year basis for KEC International at consolidated level in Q1.

Speaker #2: So, I think the revenue growth was slightly, I'll say, impacted in India T&D, and also civil, because of labor on the civil side.

Vimal Kejriwal: So I think the revenue growth was slightly, I will say, impacted in India T&D, and also Civil because of labor in the Civil side. India T&D, I think we are still seeing a huge headwind in terms of ROWs, whether it is Rajasthan, whether it is Gujarat. I think those are two major states where we are operating majorly because all the renewable projects are there, so most of our projects are in that side. So that is one issue. I think slowly, it is getting resolved. Gujarat has come out with a new scheme where they have increased it twice of market value. So I hope that we will start seeing a lot more movement on the India T&D side.

Speaker #2: India TND, I think we are still seeing a huge headwind in terms of ROWs. Whether it is Rajasthan or whether it is Gujarat, I think those are two major states where we are operating, mainly because all the renewable projects are there.

Speaker #2: So, most of our projects are on that side. So, that's one issue. I think, slowly, it is getting resolved. Gujarat has come out with a new scheme where they have increased it to twice or thrice the market value.

Speaker #2: So I hope that we will start seeing a lot more movement on the India T&D side.

Speaker #3: Okay. On the FY26 call, you had indicated an expectation to grow revenue by 12 to 15%. You also mentioned an order inflow of ₹300 billion, but you had not given any specific margin guidance.

Sumit Kishore: On the 2026 call, you had indicated an expectation to grow 12% to 15% in revenue terms, order inflow of INR 300 million, and you had not given any specific margin guidance. Would you like to revisit your guidance for the fiscal?

Speaker #3: Would you like to revisit your guidance for the fiscal?

Speaker #2: Oh, I think we are okay with the guidance. I think only on the revenue side we were 12 to 15, so it will depend upon what happens in the world.

Vimal Kejriwal: I think we are okay with the guidance. I think only on the revenue side, we were 12% to 15%, so it will depend upon what happens in the war. I think maybe half a 1% here and there, but I do not think there is anything major for us to worry because we have an order book of turnover of INR 40,000 crores. So Q3, Q4 typically are good for execution. So I think right now we are pretty okay with our guidance.

Speaker #2: I think maybe half of 1% here and there, but I don't think there's anything major for us to worry about, because we have an order book plus L1 of ₹40,000 crore.

Speaker #2: So Q3, Q4 typically are good for execution. So I think right now we are pretty okay with our guidance.

Speaker #3: Okay. And finally, in your civil segment, how much is water as a percentage of your order book now? And.

Sumit Kishore: Okay. Finally, in your Civil segment, how much is water as a percentage of your order book now?

Speaker #2: I think

Vimal Kejriwal: Yeah, go ahead.

Speaker #3: Yeah, and basically, with the headwinds or working capital challenges, what is the outlook on execution there? And particularly within Civil, I think you had expressed the expectation of ₹80 billion of order inflow in FY27.

Sumit Kishore: Yeah. Basically, with the headwinds or working capital challenges, what is the outlook on execution there? Particularly within civil, I think you had expressed the expectation of INR 80 billion of order inflow in FY27. How much of that would be particularly from water?

Speaker #3: How much of that would be particularly from water?

Speaker #2: We have not taken anything from water, first of all. Secondly, I think on the order book, we are roughly around ₹1,200 or ₹1,300 crores in water.

Vimal Kejriwal: We have not taken anything from water, first of all. Secondly, I think on our order book, we are roughly around 1,200 or 1,300 crore in water. So that would be, let's say, 13% to 14% of our order book. I think for the balance numbers, I think we are pretty okay. We have got a large tender pipeline for civil. So we are not too much worried. There is enough and more work happening, especially on the residential and the commercial piece of it, and continued work, a lot of inquiries from the metals and mining. I don't think we are seeing too much on other sectors, but at least on this sector, there's a continuous inquiries coming on.

Speaker #2: So, that would be, let's say, 13–14% of our order book. I think for the balance numbers, we are pretty okay. We have got a large pipeline, a tender pipeline for civil.

Speaker #2: So we are not too much worried. There is enough and more work happening, especially on the residential and the commercial piece of it.

Speaker #2: And continued work—a lot of inquiries from the metals and mining sector. I don't think we are seeing too much in other sectors, but at least in this sector, there are continuous inquiries coming in.

Speaker #3: Okay, thank you, and wish you all the best.

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

Speaker #2: Thanks Sumit. Thank you.

Vimal Kejriwal: Thanks, Sumit. Thank you.

Speaker #1: The next question comes from the line of Parikshit Khandpal with HDFC Securities. Please go ahead.

Operator 3: The next question comes from the line of Parikshit Kandpal with HDFC Securities. Please go ahead.

Operator: The next question comes from the line of Parikshit Kandpal with HDFC Securities. Please go ahead.

Speaker #3: Yes, sir. Hi. Congratulations on a decent quarter in a tough environment. So, my first question is on the standalone revenues and the profitability. If I do simple math, it's almost close to about ₹3,900 crores of revenue, and you've reported 4% EBITDA. Historically, this business had a 10% margin, but assuming we take even an 8% normalized margin, it's a ₹311 or ₹300-odd crore EBITDA.

Parikshit Kandpal: Yes, sir. Hi. Congratulations on a decent quarter in a tough environment. My first question is on the standalone revenues and the profitability. If I do simple maths, at almost close to about INR 3,900 crores of revenues, and you have reported 4% EBITDA. Historically, this business had 10% margin, but assuming if we take even 8% normalized margin, it is a INR 311 or INR 300 odd crore EBITDA, so we are shortfall of almost INR 150 crores. Lastly, this loss is coming from which segment within the order book?

Speaker #3: So, we are short by almost ₹150 crore. So, this loss is coming from which segment within the order book?

Speaker #2: It's difficult to quantify which exactly, but it's primarily coming from our transportation and civil business. That's where the shortfall is coming from. TND is doing reasonably well, I would say.

Vimal Kejriwal: It is difficult to quantify which exactly, but it is primarily coming from our transportation and civil business. That is where the shortfall is coming. T&D is doing reasonably well, I would say.

Speaker #3: But Civil, we were approaching high single-digit margins, so what's happening in Civil now? Why has Civil turned negative?

Parikshit Kandpal: But civil, sir, we were approaching high single-digit margins, so what is happening in civil now? Why civil has turned negative?

Speaker #2: I think, no, no, it has not turned negative. I think the issue we have been discussing is that we have got a few old metro projects and all that.

Vimal Kejriwal: No, it has not turned negative. I think the issue what we have been discussing is that we have got a few old metro projects and all that. I can give you example. I have got four metro projects, two in DMRC, two in Chennai Metro. One of the DMRC project was commissioned sometime back. The second one is ready for commissioning since, I think, last June. The client has not taken over. Chennai Metro, the same thing. One of them is ready for commissioning for I do not know how many months now. And it is not been commissioned for whatever reason because somebody is not available, or I do not know what is happening. And because of that, what happens is that the client will not take over, you are supposed to maintain, so virtually you end up spending almost INR 10 crores per month on each project.

Speaker #2: I can give you an example. I have got four metro projects—two in DMRC and two in Chennai Metro. One of the DMRC projects was commissioned some time back.

Speaker #2: The second one is ready for commissioning since, I think, last June. Okay. The client has not taken over. Chennai Metro is the same thing. The project—one of them—is ready for commissioning for, I don't know, how many months now.

Speaker #2: And then it's not been commissioned for whatever reason, because somebody is not available or I don't know what's happening. And because of that, what happens is that you, the client, will not take over.

Speaker #2: You are supposed to maintain. So, virtually, you end up spending almost ₹10 crore per month on each project. All these are going in the expense account.

Vimal Kejriwal: All these are going in the expense account. You will make a claim and all that, but so that is where it is continuing, and I think it is a saga which is, I do not know what to say about it. Hopefully, we are now hearing that they will get commissioned, and they are stuck for commissioning because the second part is not getting ready or something else has happened and all that. So that is where this is happening. When you say that we are going towards a higher margin, it is a fact on all the new orders are all profitable, and we are pretty okay with them. It is a question of as soon as we are able to close the tap on these orders, we will start seeing a turnaround.

Speaker #2: You will make a claim and all that. But जब आएगा तब आएगा. But आज की तारीख में उसको बिल करना, डेबिट करना पड़ता है.

Speaker #2: So that's where it is continuing, and I think it's a saga which is—I don't know what to say about it.

Speaker #2: Hopefully, we are now hearing that they will get commissioned, and they are stuck for commissioning because the second part is not getting ready, or something else has happened, and all that.

Speaker #2: So that's where this is happening. When you say that we are going towards a higher margin, it's a fact that all the new orders are profitable and we are pretty okay with them.

Speaker #2: It's a question of, you know, as soon as we are able to close the tap on these orders, we will start seeing a turnaround.

Speaker #3: When we talk about the line of sight—so I mean Q1 is a 150-crore shortfall. If I annualize it, it's almost 600 crores on a standalone basis.

Parikshit Kandpal: When we talk about the line of sight, so, Q1 is INR 150 crores of shortfall. If I analyze, it is almost INR 600 crores on standalone. So where does it end? What is the order backlog right now from all these troublesome projects which are underfunded or maybe are loss-making? So what is the pending cost to completion or maybe extra cost which you need to cover up? So if one has to look at which quarter down the line we will turn profitable and move towards 8%, 10% standalone margins. So if you can give some color on that, will be helpful.

Speaker #3: So where does it end? I mean, what is the order backlog right now from all these troublesome projects, which are underfunded or maybe loss-making?

Speaker #3: So, what is the pending cost to completion? I mean, or maybe extra cost which you need to cover up. So, if one has to look at it, which quarter down the line will we turn profitable, move towards 8-9% standalone margins?

Speaker #3: So if you can give some color on that, it will be helpful.

Speaker #2: Difficult to give it today. And on the second part, or the first part—on the order book—these are not in the order book because they are all completed projects.

Vimal Kejriwal: Difficult to give it today. On the second part or the first part on the order book, these are not in the order book because they are all completed projects. They do not have any backlog of orders except one CMRL project, which will get completed in maybe next 6 months, where we may have an order book of INR 100 crore to INR 150 crore or so. Rest of all are not there. As I said, they are completed, ready to hand over, everything is done. They are not in the order book. I will not be able to give you exact numbers, but I do think that this quarter also, Q2 also would remain in a similar line, maybe 50 basis points here or there. That is the way at least Q2 will be there.

Speaker #2: They don't have any backlog of orders except one CMRL project, which will get completed in maybe the next six months, where we may have an order book of ₹100 to ₹150 crore or so.

Speaker #2: The rest of them, as I said, are completed and ready to hand over. Everything is done, so they are not in the order book.

Speaker #2: I cannot be able to give you exact numbers but I do think that you know this quarter also Q2 also would remain in a similar line maybe 50 basis points here or there.

Speaker #2: But that's the way, at least Q2 will be there. Q3, Q4 would depend upon what happens also in West Asia, because most of the projects of West Asia, many of them are in my standalone.

Vimal Kejriwal: Q3, Q4 would depend upon what happens also in West Asia, because most of the projects of West Asia, many of them are in my standalone.

Parikshit Kandpal: Okay. The other part is that one thing which is there on the civil side and the transportation side now. Secondly, challenges which are coming up on the freight and the commodity side. Steel, aluminum, so prices are going up. Is there a case when in the T&D business, which was supposed to be high margins, now starts seeing headwinds on the margins because of all this conflict, and they will start reporting lower margins and traditionally our aspiration to reach high single digit margin gets pushed out maybe by a year or a couple of years?

Speaker #3: Okay. So, the other part is, there is one thing on the civil side and the transportation side. Now, secondly, challenges are coming up on the freight and the commodity side.

Speaker #3: So steel's, aluminium's prices are going up. So is there a case where in the T&D business, which was supposed to be high margins, now starts seeing headwinds on the margins because of all these conflicts, and they'll start reporting lower margins? And directionally, our aspiration to reach high single-digit margin gets pushed out, maybe by a year or a couple of years?

Speaker #2: TND I am not seeing too much of a challenge on a double on on a double digit margin. Okay. We we have I think enough cushions available.

Vimal Kejriwal: T&D, I am not seeing too much of a challenge on a double digit margin. Okay? We have, I think, enough cushions available. A lot of them are hedged already. I do not think we are too much worried about it. Okay? T&D, I think we are okay. Steel and all that, what has happened is that the costs have come down again, especially on the plates, et cetera, and angles. Aluminum, we have some exposure, but I think we have enough time to look at it. Are we worried? No, I do not think we are significantly worried about maybe 50 basis points here and there. But our view is that T&D would probably continue to be in double digit or maybe very close to double digit, going forward.

Speaker #2: A lot of them are hedged already, so I don't think we are too much worried about it. Okay. TND, I think we are okay.

Speaker #2: Steel and all that, what has happened is that the costs have come down again, especially on the blades, etc., and angles. So, aluminium—yeah, we have some exposure, but I think we have enough time to look at it.

Speaker #2: Are we worried? No, I don't think we are significantly worried about maybe 50 basis points here and there. But our view is that TND would probably continue to be in double digits, or maybe very close to double digits, going forward.

Speaker #3: And what about the other segments—civil, transportation, and others—if you can give some color on that?

Parikshit Kandpal: What about the other segments, civil, transportation, others that you can give some color on?

Speaker #2: They, they, they are still negative. Okay. So, that's where the overall numbers are under pressure.

Vimal Kejriwal: They are still negative, okay? So that's where the overall numbers are under pressure.

Speaker #3: Any guesstimates from which quarter you think the margins turnaround will start happening? I mean, if you have to give—if someone has to hold you to it and get a call—which quarter will we see the turnaround happening?

Parikshit Kandpal: Any guesstimates of from which quarter do you think the margins turnaround will start happening? If someone has to hold you and give a call, then which quarter we'll see the turnaround happening. Will it happen in FY27 or now we look at maybe towards FY28, start of FY28 where the margin turnaround will start happening?

Speaker #3: So, will it happen in 527, or should we now look at maybe towards 528, the start of FY28, where the margin turnaround will start happening?

Speaker #2: No, I think the margins will keep on inching up. Where and how they eventually reach, I have no numbers to give you today.

Vimal Kejriwal: No, I think the margins will keep on inching up. Where and how they attempt to reach, I have no numbers to give you today, okay? But do we think we'll get into double digit and all in FY27? No, not possible.

Speaker #2: Okay. But do we think we'll get into double digits and all in FY27? Not possible.

Speaker #3: 28, high single digit, starting at 28?

Parikshit Kandpal: 28, high single digit starting 2028? I think Q1-

Speaker #2: Seeing high single-digit growth in '28 should be possible. Yes.

Vimal Kejriwal: See, high single digit in 2028 should be possible. Yes.

Speaker #3: Thank you. Those are my questions. I mean, the biggest worries are on the margin side now because that impacts the CFO and CFO.

Parikshit Kandpal: Sure, sir. Thank you. Those were my questions. The biggest worry is on the margin side now because that impacts this CFO and CFO-

Parikshit Kandpal: Sure, sir. Thank you. Those were my questions. The biggest worry is on the margin side now because that impacts this Chief Financial Officer and Chief Financial Officer-

Speaker #2: I thought your biggest worry I thought your biggest worry was on working capital which you're not asking.

Vimal Kejriwal: I thought your biggest worry was on working capital, which you are not asking.

Speaker #3: Yeah, yeah. So eventually, CFO leads to working capital and then how working capital gets impacted. So, it flows down from profitability. But anyway, I mean, that's a challenge right now.

Parikshit Kandpal: Yeah. Eventually CFO leads to working capital and then how working capital gets impacted, so it flows down from profitability. But anyways, that is a challenge right now that I am not able to grapple with.

Parikshit Kandpal: Yeah. Eventually Chief Financial Officer leads to working capital and then how working capital gets impacted, so it flows down from profitability. But anyways, that is a challenge right now that I am not able to grapple with.

Speaker #3: I'm not able to grapple with it. Yeah. Thank you, sir.

Vimal Kejriwal: Thanks, Parikshit. Thank you so much.

Parikshit Kandpal: Yeah. Thank you, sir.

Speaker #1: The next question comes from the line of Jenum Jen with DAM Capital. Please go ahead.

Operator 3: The next question comes from the line of Jainam Jain with DAM Capital. Please go ahead.

Operator: The next question comes from the line of Jainam Jain with DAM Capital. Please go ahead.

Speaker #3: Thank you for the opportunity. Sir, I wanted to understand how we see the opportunity in the data center EPC business in terms of competition, margins, and what is the right to win in that segment?

Operator 2: Thank you for the opportunity. Sir, I wanted to understand how do we see the opportunity in data center EPC business in terms of competitions, margins, and what is the right to win over in that segment?

Jainam Jain: Thank you for the opportunity. Sir, I wanted to understand how do we see the opportunity in data center EPC business in terms of competitions, margins, and what is the right to win over in that segment?

Speaker #2: Jenum, it's a difficult business in the sense that what we are seeing is that, although there are large opportunities there, traditionally we are seeing developers breaking up the orders into various smaller sections.

Vimal Kejriwal: Jainam, it's a difficult business in the sense that what we are seeing is that although there are large opportunities being there, but traditionally we are seeing developers breaking up the orders into various smaller sections. They are slicing it into different places. Very few, I will say hyperscalers are there who are willing to give orders for your civil as well as MEP and all together. Typically, most of them break it up on the high, low. So we are not seeing large orders coming in from most of the clients. A few exceptions are there. Right to win for us is that we can do civil as well as we can do MEP together, and that's what is being pitched. So I think hopefully we will see some wins happening on data centers maybe next quarter.

Speaker #2: You know, slicing it into different—very, very few, I'll say, hyperscalers are there who are willing to give orders for your civil as well as MEP and all together.

Speaker #2: Typically, most of them break it up on the high and low, you know, so we are not seeing large orders coming in from most of the clients.

Speaker #2: A few exceptions are there. The right to win for us is that we can do civil as well as we can do MEP together.

Speaker #2: And that's what is being pitched. So I think hopefully we will see some wins happening on data centers maybe next quarter. The market is large but as I said that that there's too much of too many players with small I'll say ticket sizes which is creating a problem overall.

Vimal Kejriwal: The market is large, but as I said that there is too many players with small, I will say ticket sizes, which is creating a problem overall. But for me, the interesting part, Jainam, in data center is more coming on my T&D side, where we are seeing inquiries coming in where the data center may get built in 15 to 18 months, but then the lines and the power supply, et cetera, are becoming challenged in some places, which is why we announced that we got a private order now. We are seeing developers like US also resorting to having their own connectivity, et cetera. So I think that is also very interesting.

Speaker #2: But for me, the interesting part in data centers is more on my T&D side, where we are seeing inquiries coming in. You know, the data center may get built in 15 to 18 months, but then the lines and the power supply, etc.

Speaker #2: are becoming challenged in some places, which is why we announced that we got a private order now. We are seeing developers like us also resorting to having their own connectivity, etc.

Speaker #2: So, I think that is also very interesting.

Speaker #3: Okay. So we have been pursuing opportunities in the US for the US data center as well, especially in the TND segment.

Operator 2: Okay. We have been pursuing the opportunities for the US data center as well, especially in the T&D segment.

Jainam Jain: Okay. We have been pursuing the opportunities for the US data center as well, especially in the T&D segment.

Speaker #2: I'm not pursuing for the US, but we got some large orders, and we had a lot of inquiries there, which are also from private developers in the US who are supplying to data centers.

Vimal Kejriwal: I'm not pursuing for the US, but we got some large orders, and a lot of inquiries are there, which are from also private developers in US who are supplying to data centers.

Speaker #3: Okay. And sir, how about the competition? How is it panning out in this data center business?

Operator 2: Okay. And sir, how about the competition? How is it panning out?

Jainam Jain: Okay. And sir, how about the competition? How is it panning out?

Vimal Kejriwal: In which area?

Operator 2: In this data center business.

Jainam Jain: In this data center business.

Speaker #2: Data center में बहुत मुश्किल है. It's very fragmented. You know, it's region-wise and all that. Each region has got different players, so it's difficult to say who are there.

Vimal Kejriwal: Data center, it is very fragmented. It is region wise and all that. Each region has got different players. It is difficult to say who are there. But otherwise, if you look at the bigger players, it would be people like Tata Projects and L&T, et cetera.

Speaker #2: But otherwise, if you look at the bigger players, it would be people like Tata Projects and L&T, etc.

Speaker #3: Okay, sir. And sir, what would be the civil TAM issue we have to compare with? So, right now we have got an order in the T&D space, right, for data center?

Operator 2: Okay. And sir, what would be the civil time, if we have to compare it? Right now we have got order in the T&D space, right? For data center. How about the civil segment for data centers?

Jainam Jain: Okay. And sir, what would be the civil time, if we have to compare it? Right now we have got order in the T&D space, right? For data center. How about the civil segment for data centers?

Speaker #3: How about the T&D? How about the civil segment for data centers?

Speaker #2: So, right now, we don't have a single order in data centers. We have finished all—we have finished five data centers in the last couple of years.

Vimal Kejriwal: Right now we do not have a single order in data centers. We have finished five data centers in the last couple of years. We have bid for a few of them, which is why I said that hopefully by next quarter, we should at least have a few orders in the civil side on the data centers.

Speaker #2: We have bid for a few of them, which is why I said that hopefully, by next quarter, we should at least have a few orders in the civil side on the data centers.

Speaker #3: Okay. But sir, if you have to quantify, I mean per mega, or if it's available on a per mega basis.

Operator 2: Okay. But sir, if you have to quantify, I mean, per mega or if it is available on a per megawatt basis.

Jainam Jain: Okay. But sir, if you have to quantify, I mean, per mega or if it is available on a per megawatt basis.

Speaker #2: Typically, our size would be around ₹10 crore per megawatt or something like that. But बहुत मुश्किल है because, Jenum, what happens is every developer gives in a different format.

Vimal Kejriwal: Typically, our size would be around INR 10 crores per megawatt or something like that.

Operator 2: Okay, sir.

Jainam Jain: Okay, sir.

Vimal Kejriwal: Because, Jainam Jain, what happens is every developer gives in a different format. So it's difficult to put numbers. Each tender has got a different number.

Speaker #2: So, it's difficult to put numbers. You know, each tender has got a different number.

Speaker #3: Okay. Okay. Sir, my last question is on the Jal Jeevan Mission side. What is the current pending order book, and how much of the receivables are stuck over there?

Operator 2: Okay. Sir, my last question is in the Jal Jeevan Mission side. So what is the pending order book currently, and how much receivables are stuck over there right now?

Jainam Jain: Okay. Sir, my last question is in the Jal Jeevan Mission side. So what is the pending order book currently, and how much receivables are stuck over there right now?

Speaker #2: We have an order book of roughly around ₹1,300 crores or so pending. Gross debtors would be around ₹800–900 crores. I think ₹400 crore or something is due for payment.

Vimal Kejriwal: We have order book of roughly around INR 1,300 crores or so pending. Gross debtors would be around INR 800, 900 crores. I think 400 or something are due for payment, so we hope that will come in.

Speaker #2: So, we hope that will come in.

Speaker #3: Okay, sir. That answers my question. Thank you so much, and all the best.

Operator 2: Okay, sir. That answers my question. Thank you so much and all the best.

Jainam Jain: Okay, sir. That answers my question. Thank you so much and all the best.

Speaker #2: Thanks Jenum. Thank you.

Vimal Kejriwal: Thanks, Jainam. Thank you.

Speaker #1: The next question comes from the line of Amit Anwani with PL Capital. Please go ahead.

Operator 3: The next question comes from the line of Amit Anwani with PL Capital. Please go ahead.

Operator: The next question comes from the line of Amit Anwani with PL Capital. Please go ahead.

Speaker #3: Hi, sir. Good morning. Thank you.

Amit Anwani: Hi, sir. Good morning. Thank you for the opportunity.

Speaker #2: Hi Amit.

Speaker #3: Good morning.

Vimal Kejriwal: Hi, Amit. Morning.

Speaker #1: The first question you highlighted was about the delays in conversion. So, I wanted to understand—is this more so with the domestic market or the export market?

Amit Anwani: First question, you did highlight about the delays in conversion. Just wanted to understand, is it more so with the domestic market or the export market, particularly Middle East? Second, you have highlighted INR 2 lakh crore pipeline, INR 1 lakh crore for T&D and INR 1 lakh for non-T&D. Within INR 1 lakh of T&D, how much you are really factoring in from the Middle East market? Third, what is the expected inflow now amid whatever is happening because we are already four, five months in the financial year? For full year, what is the expectation of inflows on? Yeah.

Speaker #1: Particularly in the Middle East. And second, here you highlighted a ₹2 lakh crore pipeline—₹1 lakh crore for T&D and ₹1 lakh crore for non-T&D. So, within the ₹1 lakh crore for T&D, how much are you really factoring in from the Middle East market?

Speaker #1: And third, what is the expected inflow now, Amit? Whatever is happening, because we are already four or five months into the financial year. For the portfolio, what is the expectation of inflows?

Speaker #2: So, Amit, when we talked about the delay in conversion, it was primarily the West Asia market—primarily. We have bid quite a few projects in Saudi, UAE, and Oman.

Vimal Kejriwal: Amit, when we talked about delay in conversion, it was primarily the West Asia market. Primarily, okay. We have built quite a few projects in Saudi and UAE and Oman. In fact, we are L1 in a few of them. But the conversion is taking its time. It is not that it is unduly delayed, but it is taking time. Okay. But the tender pipeline is there. In fact, now also we just saw some new tenders getting announced even yesterday, also in the Middle East. I think we are not worried about it because tenders are getting announced even now. So there has been some talk saying will there be scaling down? I do not think there is a scaling down because continuously projects are coming up. To me, that is the basic thing as far as West Asia is concerned.

Speaker #2: In fact, we are L1 in a few of them. But the conversion is taking its time. It's not that it's unduly delayed, but it is taking time.

Speaker #2: Okay. But the tender pipeline is there. In fact, even now we saw some new tenders getting announced—even yesterday—in the Middle East.

Speaker #2: So I think we are not worried about it because tenders are getting announced even now. So, you know, there has been some talk saying, will there be scaling down?

Speaker #2: I don't think there is a scaling down, because continuously projects are coming up. So, to me, that is the basic thing as far as West Asia is concerned.

Speaker #2: As far as order, I'll say when you look at the order intake, when we had said 30,000 or so, roughly I'll say 60 to 65 percent would be from the T&D market.

Vimal Kejriwal: As far as order, I will say when you look at the order intake when we had said 30,000 or so, roughly I will say 60% to 65% would be from the T&D market. I think international is around 9,000 to 10,000, right?

Speaker #2: And I think international is around 9,000 to 10,000, right? Yeah. So I think our international expectation was that we'll be between 9,000 to 10,000 in terms of order intake.

Rajeev Aggarwal: Yes.

Rajeev Aggarwal: Yeah. I think our international expectation was that we will be between 9,000 to 10,000 in terms of order intake. A significant part of it would obviously come from West Asia.

Speaker #2: So, a significant part of it would obviously come from West Asia.

Speaker #1: Right, sir. Second, on the cables business—you have done very strong, and probably for a few quarters, performance has been quite strong. So, what's the capacity now? And with Electromeric, are you seeing more growth happening?

Amit Anwani: Right. Second,

Vimal Kejriwal: Yeah

Amit Anwani: on the cables business, you have done very strong and probably a few quarters performance has been quite strong. What is the capacity now? With Electromech, are you seeing more growth happening? Are you seeing more CapEx lined up in cables? We are seeing other fair play cables or conductor players has still been front loading the capacity. That is one. Second, any thought on the exports of cables also to the US market? What are the margins which you are currently making in the cable business?

Speaker #1: Are you seeing more Capex lined up in cables? Because we are seeing other cable or conductor players have still been front-loading the capacities.

Speaker #1: That is one, and second, any thoughts on the exports of cables also to the US market? And what are the margins which you are currently making in the cable business?

Speaker #2: So, typically, our exports have been roughly around, I’ll say, ₹200 crore last year. Okay. And we obviously want to expand the sale. Okay.

Vimal Kejriwal: Typically, our exports have been roughly around, I will say, INR 200 crores last year. We obviously want to expand the same. With the specialty cables coming up, I think by Q4 we should have increase happening in our export market. I do not think we have very large CapEx programs. We normally have been spending around INR 75, 80 or maybe INR 100 crores in cables every year. Last 3 years, we have spent INR 300 crores. A large CapEx will happen if we decide to expand our EHV, which we have been looking at it. Once we see the demand stabilizing, maybe we will put in a larger CapEx. Not immediately. Could be next year or something, but I think it is still on the drawing board. Otherwise, INR 50, 75 crores we keep on spending.

Speaker #2: So with the specialty cables coming up, I think by Q4 we should see an increase happening in our export market. I don't think we have very large capex programs. We normally have been spending around 75, 80, or maybe 100 crores in cables every year. In the last three years, we have spent 300 crores.

Speaker #2: A large Capex will happen if we decide to expand our EHV, which we have been looking at. So once we see the demand stabilizing, maybe we will put in a larger Capex.

Speaker #2: Not immediately; it could be next year or something, but I think it's still on the drawing board. Otherwise, ₹50–75 crores we keep on spending, so we may add some—we will definitely, I think, add some capacity on our aluminium conductor side, more specialized products on HTLS, etc.

Vimal Kejriwal: We will definitely I think add some capacity on our aluminum conductor side, more specialized products on HTLS, et cetera. That is the way we are looking at cables. The margins have been okay. I think they are around 5% right now, almost 200 basis points still below the market. With the specialty cables coming up, I think the margin will start inching up. That is the expectation.

Speaker #2: That's the way we are looking at cables. The margins have been okay—I think they are around 5% right now, almost 200 basis points still below the market.

Speaker #2: With the specialty cables coming up, I think the margin will start inching up. That's the expectation.

Speaker #1: Right. So what's the capacity, or probably the peak revenue, you can achieve with the fixed assets you have?

Amit Anwani: Right. What is the capacity or probably the peak revenue you can do with the fixed asset you have?

Speaker #2: I don't have the capacity in terms of kilometers and all that, but I think we can do around ₹3,000 crores with the current assets, without any more capex.

Vimal Kejriwal: I do not have the capacity in terms of kilometer and all that, but I think we can do around INR 3,000 crores with the current assets without any more CapEx.

Speaker #1: Right. So lastly, what was the deferment, I would say, or probably you were not able to book it as revenue because of the Middle East conflict? And the overall expectation now in terms of the full-year growth, and yeah.

Amit Anwani: Right. Lastly, what was the deferment, I would say or probably you were not able to book it revenue because of the Middle East conflict, and the overall expectation now in terms of the full year growth, I think this will help.

Speaker #1: So, I think this will help.

Speaker #2: So, Amit, for the full year, we are still saying what we had said last quarter—around 12 to 15 percent growth should be feasible today.

Vimal Kejriwal: Amit, full year, we are still saying what we had said last quarter, around 12% to 15% growth should be feasible today. Middle East, I think the number would be around INR 300 crores or so for the quarter.

Speaker #2: For the Middle East, I think the number would be around 300 crores or so for the quarter.

Speaker #1: Right, and is it that this is also probably dragging growth this year, or is this something which is recoverable in the subsequent quarter?

Amit Anwani: Right. That is also probably dragging the growth this year, or this is something which is recoverable in the subsequent quarter for this year?

Speaker #2: No it would it would definitely be recoverable. This is not a product sale that it is lost. It's a it's an EPC number so whatever has not happened in this quarter and what did not happen in Q4 also ultimately all of that should happen which is why despite having a flat quarter this year we this quarter we are still saying that we will maintain our growth.

Vimal Kejriwal: No, it will definitely be recovered. This is not a product sale that it is lost.

Amit Anwani: Right.

Vimal Kejriwal: It is an EPC number, so whatever has not happened in this quarter and what did not happen in Q4 also, ultimately all of that should happen, which is why despite having a flat quarter this quarter, we are still saying that we will maintain our growth.

Speaker #1: Right. Thank you, sir. Thank you for answering my question. Bye.

Amit Anwani: All right. Thank you, sir. Thank you for answering my question. Bye.

Speaker #2: Thank you.

Vimal Kejriwal: Thank you.

Speaker #1: The next question comes from the line of Sudeep Bora with Ambit Capital. Please go ahead.

Operator 3: The next question comes from the line of Sudip Bora with Ambit Capital. Please go ahead.

Operator: The next question comes from the line of Sudip Bora with Ambit Capital. Please go ahead.

Speaker #3: Hello. Thank you for the opportunity sir. So I wanted to understand on the SAE Towers business. So the current set of fixed assets that we have so in terms of the revenue potential what like how much can we execute in a year and what is the utilization percentage maybe you can throw some light on that.

Sudip Bora: Hello. Thank you for the opportunity, sir. Sir, I wanted to understand on the SAE Towers business. The current set of fixed assets that we have, in terms of the revenue potential, how much can we execute in a year? What is the utilization percentage? Maybe you can throw some light on that.

Sudeep Bora: Hello. Thank you for the opportunity, sir. Sir, I wanted to understand on the SAE Towers business. The current set of fixed assets that we have, in terms of the revenue potential, how much can we execute in a year? What is the utilization percentage? Maybe you can throw some light on that.

Speaker #2: So I think it's difficult to give a number because it would depend upon what type of product you make, but broadly, I'll say around ₹2,000 crores could be the utilization based on today's fixed assets. But we have been adding a little bit here and there.

Vimal Kejriwal: I think it is difficult to give a number because it will depend upon what type of product, what you make. But broadly, I will say around INR 2,000 crores could be the utilization based on today's fixed assets. But we have been adding little bit here and there. It may go up slightly, but 2,000 is a number which you can take.

Speaker #2: Okay, so it may go up slightly, but 2,000 is a number which you can take.

Speaker #3: Okay.

Sudip Bora: Okay.

Sudeep Bora: Okay.

Speaker #2: And the utilization is is reasonably okay. I think we are now at at full at almost at a full capacity. You can always add something by adding extra shifts and all that.

Vimal Kejriwal: The utilization is reasonably okay. I think we are now almost at a full capacity. You can always add something by adding extra shifts and all that. But broadly, I think we are at 100% now.

Speaker #2: But broadly, I think we are at 100 percent now.

Speaker #3: Okay, so the current order book from this particular segment is around ₹3,800 crores. So that would be delivered in a matter of, say, one and a half to two years, right?

Sudip Bora: Okay. The current order book from this particular segment is around INR 3,800 crores. That would be delivered in a matter of, say, one and a half to two years, right?

Sudeep Bora: Okay. The current order book from this particular segment is around INR 3,800 crores. That would be delivered in a matter of, say, one and a half to two years, right?

Speaker #2: Yes. Typically typically those markets you get orders much in advance at least 12 months in advance. Okay. So that that's the way that's the way it works in the Brazil and the US market.

Vimal Kejriwal: Yes. Typically, those markets, you get orders much in advance, at least 12 months in advance. Okay. So that's the way it works in the Brazil and the US market.

Speaker #3: Okay, got it. And typically, what would be the margins from this business, the tower manufacturing at SAE Towers?

Sudip Bora: Okay. Got it. And typically, what would be the margins from this business, the tower manufacturing, SAE Towers?

Sudeep Bora: Okay. Got it. And typically, what would be the margins from this business, the tower manufacturing, SAE Towers?

Speaker #2: I think SAE is close. I think it's almost double-digit right now.

Vimal Kejriwal: I think SAE is close. I think it's almost double digit right now.

Speaker #3: Okay. Double digit right sir.

Sudip Bora: Okay. Double digits, right, sir?

Sudeep Bora: Okay. Double digits, right, sir?

Speaker #2: Yeah. Yeah. Yes.

Vimal Kejriwal: Yeah.

Sudip Bora: Yes. Okay. Sir, for FY27 on the order inflow guidance, typically from your T&D, how much are we expecting?

Sudeep Bora: Yes. Okay. Sir, for FY27 on the order inflow guidance, typically from your T&D, how much are we expecting?

Speaker #3: Okay. Sir, for FY27, on the order inflow guidance, typically from your T&D, how much are we expecting?

Speaker #2: We have said that we should be around 60 to 65 percent, or either 60 to 70 percent. So, out of 30,000 crores, if you take it...

Vimal Kejriwal: We have said that we should be around 60%, 65% or either 60% to 70%. Out of 30,000 crores, if you take it, roughly it would be INR 20,000 crores, maybe a little bit here and there.

Speaker #2: Roughly, it would be ₹20,000 crore—maybe a little bit here and there.

Speaker #3: Okay, got it. Thank you, sir. Those were my questions.

Sudip Bora: Okay. Got it. Thank you, sir. Those were my questions.

Sudeep Bora: Okay. Got it. Thank you, sir. Those were my questions.

Speaker #2: Thank you Sudeep.

Vimal Kejriwal: Thank you, Sudip.

Speaker #1: The next question comes from the line of Arafat with Daulat Capital. Please go ahead.

Operator 3: The next question comes from the line of Arafat with Dalat Capital. Please go ahead.

Operator: The next question comes from the line of Arafat with Dalat Capital. Please go ahead.

Speaker #4: Yeah. Yeah. Hi sir, thanks for taking my question. So my first question is on, let's say, if you see apart from the Middle East and labor challenges—now we are seeing a labor challenge; now that's sorting out—and Middle East also, let's say in the next couple of months we will get some clarity on that.

[Company Representative] (Dolat Capital): Yeah. Hi, sir. Thanks for taking my question. My first question is on, let's say if you see apart from the Middle East and labor challenges, now we are seeing a labor challenge now sorting out and Middle East also, let's say in next couple of months, we will get some clarity on that. Which are the other factors need to watch out in the near future to get back to, let's say, 15% annual growth and EBITDA margin of 8%?

Arafat Saiyed: Yeah. Hi, sir. Thanks for taking my question. My first question is on, let's say if you see apart from the Middle East and labor challenges, now we are seeing a labor challenge now sorting out and Middle East also, let's say in next couple of months, we will get some clarity on that. Which are the other factors need to watch out in the near future to get back to, let's say, 15% annual growth and EBITDA margin of 8%?

Speaker #4: So, which are the other factors to watch out for in the near future to get back to, let’s say, 15 percent growth and an EBITDA margin of 8 percent?

Speaker #2: It's difficult to say because these are the two major factors which we are seeing. So once they are out of the way, obviously the margin should improve.

Vimal Kejriwal: Difficult to say, because these are the two major factors which we are seeing. Once they are out of the way, obviously the margin should improve. Other thing we have always been talking out is that we have got lot of arbitration and other issues which are going on, especially on the railway side. If something really adverse happens, then it could have some impact. But I think to me it's a little bit of a far fetch, but since you asked a specific question, I'm giving an answer. Otherwise, with West Asia and labor situation getting resolved, I think a large part of the headwinds will go away.

Speaker #2: The other thing we have always been talking about is that we have got a lot of arbitration and other issues which are going on, especially on the railway side.

Speaker #2: Okay. If something really adverse happens, then it could have some impact, but I think to me it's a little bit of a far-fetched scenario. But since you asked a specific question, I'm giving an answer.

Speaker #2: Otherwise, with West Asia and the labor situation getting resolved, I think a large part of the headwinds will go away.

Speaker #4: Got it, got it. And secondly, which are the slow-moving projects in the railway and water segments, and any sense on that? By when are we expecting to get out from these projects and get back to normalized margins?

[Company Representative] (Dolat Capital): Got it. Secondly, on which are the slow-moving project in railway and water projects? Any sense on that, by when we're expecting this to get out from this project and get back to normalized margin?

Arafat Saiyed: Got it. Secondly, on which are the slow-moving project in railway and water projects? Any sense on that, by when we're expecting this to get out from this project and get back to normalized margin?

Speaker #2: So, for railways, most of the slow-moving projects are at 95-97% closure and all that. So it's a question of when the railway gives a block or when they approve the design of the depot, etc.

Vimal Kejriwal: So railways, most of the slow-moving projects are at 95%, 97% closure and all that. It is a question of when the railway gives the block or when they approve the design of the depot, et cetera. They will get completed. Water, we only have two states where we are working, MP and Odisha. But Odisha, I think we have got six or seven projects. So all of them are at various stages of completion. Our expectation is that if cash flow happens regularly by this year end, we will have maybe two projects still continuing post-March.

Speaker #2: They will get completed. Okay. We only have two states where we are working: MP and Orissa. But in Orissa, I think we have got six or seven projects.

Speaker #2: So, all of them might be at various stages of completion. Our expectation is that if cash flow happens regularly, by this year-end we will have maybe two projects still continuing post this—post March.

Speaker #2: Otherwise, most of them should be completed within this year.

Rajeev Aggarwal: Otherwise, most of them should get completed within this year.

Speaker #4: Got it sir. Got it.

[Company Representative] (Dolat Capital): Got it, sir.

Arafat Saiyed: Got it, sir.

Speaker #2: Thank you Arafat. Thank you.

Rajeev Aggarwal: Thank you, Alapant.

Speaker #4: Yeah, yeah. And then lastly, if you can just give any guidance on working capital days for FY27.

[Company Representative] (Dolat Capital): Yeah. And sir, lastly, if you can just give any guidance on working capital days for FY27.

Arafat Saiyed: Yeah. And sir, lastly, if you can just give any guidance on working capital days for FY27.

Speaker #2: No, Rajiv. I think we are talking about 110 days of working capital at the end of the year.

Rajeev Aggarwal: I think we are talking about 110 days for working capital at the end of the year.

Speaker #4: Okay. Thank you, sir. That's it from my side.

[Company Representative] (Dolat Capital): Okay. Thank you, sir. That's it from my side.

Arafat Saiyed: Okay. Thank you, sir. That's it from my side.

Speaker #2: Thank you. Thank you.

Rajeev Aggarwal: Thank you.

Operator 3: The next question comes from the line of Priyankar Biswas with JM Financial. Please go ahead.

Operator: The next question comes from the line of Priyankar Biswas with JM Financial. Please go ahead.

Speaker #1: The next question comes from the line of Priyanka Biswas with GM Financial. Please go ahead.

Speaker #5: Hi sir. Thanks for the opportunity. Hi sir. Sir, coming back to this working capital question—just trying to visualize sort of a road map on, let's say, the working capital reduction.

Priyankar Biswas: Hi, sir.

Rajeev Aggarwal: Hi, Priyankar.

Priyankar Biswas: Thanks for the opportunity. Hi, sir. Sir, coming back to this working capital question. Just trying to visualize a roadmap on, let's say, the working capital reduction. Whatever I heard from the call. First of all, you are going to get, if not in the next quarter, let's say in the coming two, three quarters, at least let's say INR 300 crore from Alapant, right? That is the first point. Secondly, from the water, what I understand is right now the current dues are INR 300 crore to INR 400 crore. You should ideally receive that as well. Then there is this inventory build that had happened in West Asia, so there should be some unwinding also. These are the plus factors that I have.

Speaker #5: So whatever I heard from the call. So first of all you are going to get let's say if not in the next quarter let's say in the coming two three quarters at least let's say 300 odd crores from Afghanistan right.

Speaker #5: That is the first point. And, secondly, from the water, what I understand is that right now the current dues are ₹300 to ₹400 crores. So you should ideally receive that as well.

Speaker #5: And then there is this inventory build that had happened in West Asia, so there should be some unwinding also. So, these are the plus factors that I have.

Speaker #5: So if you can give a cumulative factor, like taking everything together, what should be the working capital reduction if we take all of this? And then finally, also, this JJM still has around ₹1,300 crore of order book left, is what I understand.

Priyankar Biswas: If you can give a cumulative factor, like taking everything together, what should be the working capital reduction if we take all of this? And then finally, this JJM still has like INR 1,300 crores of order book left, is what I understand. So in the individual projects, what sort of completion on an average you have got there? And to complete this entire INR 1,300, to run down this entire INR 1,300 crores of let's say orders, what sort of costs would be required? This is what I wanted to know.

Speaker #5: So, in the individual projects, what sort of completion on average have you got there? And, to complete this entire ₹1,300 crore—so, to run down this entire ₹1,300 crore of, let's say, orders—what sort of costs would be required?

Speaker #5: So, this is what I wanted to know.

Speaker #2: Rajiv, so Priyanka, as you rightly said, I think these are some of the levers that are available with us to reduce the working capital.

Rajeev Aggarwal: Priyankar, as you rightly said that I think these are some of the levers that are available with us to reduce the working capital. See, overall reduction, what we are looking at in the current financial year is roughly about INR 1,200 crore debt reduction. At the beginning of the year, we were at about INR 6,700 crore, and what we are guiding is by March, we should reach to about INR 5,500 crore. So apart from the two or three levers that you just counted, apart from that, there are, let's say in Saudi, we are closing few projects which were started about two and a half years back. These projects will also get closed and then we will be able to recover at least 50% of the retention money on physical closure.

Speaker #2: So, the overall reduction we are looking at in the current financial year is roughly about ₹1,200 crore in debt. At the beginning of the year, we were at about ₹6,700 crore, and what we are guiding is that by March, we should reach about ₹5,500 crore.

Speaker #2: So, apart from the two or three levers that you just counted, apart from that, there are—let's say in Saudi, we are closing a few projects which were started about two, two and a half years back.

Speaker #2: So these projects will also get closed, and then, you know, we will be able to recover at least 50 percent of the retention money on physical closure.

Speaker #2: So, 50 percent comes at the time of physical handover, and 50 percent comes after the six-month period. So, at least the first part of it we should be able to collect.

Rajeev Aggarwal: 50% comes at the time of physical handover and 50% comes after the. At least the first part of it, we should be able to collect. These are basically, largely. And then another item that we are looking at is in railways, there are few claims which have been decided positively in our favor in debts and arbitration. We are hoping that with the intervention of the client and with the client negotiation, et cetera, we should be able to recover some of the claims. Additionally, we are also looking at closure of all the projects, as Vimal alluded sometime earlier, that we are towards the 90%, 95% closure of these projects. We are hoping that these projects will get closed and we should be able to collect the retention money.

Speaker #2: So these are the, you know, basically largely—and then another item that we are looking at is, in railways there are a few claims which have been decided positively in our favor in DABs and arbitrations.

Speaker #2: So we are hoping that, with the intervention of the client and with the client negotiation, etc., we should be able to recover some of the claims.

Speaker #2: Additionally, we are also looking at closure of all the projects, as Vimal alluded to sometime earlier, that, you know, we are towards the 95 percent closure of these projects.

Speaker #2: So, we are hoping that these projects will get closed and, you know, we should be able to collect the retention money. So, these are the few, let's say, levers which are available with us and which we are confident that we should be able to, let's say, realize and be able to reduce our working capital debt to about ₹5,500 crore.

Rajeev Aggarwal: These are the few lever which are available with us and which we are confident that we should be able to realize and able to reduce our working capital debt to about INR 5,500 crore.

Speaker #5: Sir, for these water-related projects, like the ₹1,300 crore order book that you are speaking about, what would be the cost to complete it?

Priyankar Biswas: Sir, for this water-related project, like the INR 1,300 crore order book that you are speaking about, what would be the cost to complete it? What I'm trying to assess is how much further losses can be there, or cash outflows can be there to, let's say, teach and fix the entire JJM book.

Speaker #5: So what I'm trying to assess is how much further losses can be there, or cash outflows can be there, to, let's say, kitchen sink the entire JJM book.

Speaker #2: No, as Vimal said some time back, you know these water projects are profitable. The only challenge is that, because we have a large outstanding which is there, we have deliberately, let's say, slowed down the execution.

Rajeev Aggarwal: As Vimal sometime back said that these water projects are profitable. The only challenge is that because we have a large outshining which is there, we have deliberately slowed down the execution, although the construction is going on full force. What is happening is that supply items, we are actually doing it need-based. Depending on the project requirement, we are supplying those items like DI pipes and valves and other things. Those are the items which are. But I think these projects are all profitable, and they are around 8% to 10% margin at various stages. I don't see there is any challenge in terms of the cost structure or the profitability of this project.

Speaker #2: Although the construction is going on full force, what is happening is that, you know, supply items—we are actually doing it need-based. So, depending on the project requirement, we are supplying those items like DI pipes and valves and other things.

Speaker #2: So those are the items, but I think these projects are all profitable and they are, you know, let's say, around 8 to 10 percent margin at various stages. So I don't see there is any challenge in terms of the cost structure or the profitability of these projects.

Priyankar Biswas: Okay, sir. If I may just harp on that. Afghanistan, you said that in the next couple of quarters, let's say you will get 300 odd crores. Right? If I heard it correctly.

Speaker #5: Okay, sir. And if I may just harp on that—so, Afghanistan—you said that in the next couple of quarters, let's say, you will get about ₹300 crore, right, if I heard it correctly?

Rajeev Aggarwal: Yeah.

Speaker #5: Water in, let's say, the next half—like 300 to 400 crores—you are saying is the current deal. So you should be able to, let's say, recover that, but of course there would be some new dues also that will come over.

Priyankar Biswas: Water in, let's say, the next half, like INR 300, 400 crores you are saying is the current due.

Rajeev Aggarwal: Sure

Priyankar Biswas: you should be able to recover that. But of course, there would be some new dues also will come over. What is realistically, what should be the collections in water, the next collection? Today the due is INR 300.

Speaker #5: So, what is realistically, like, what should be the collections in water in the next collection? So,

Speaker #2: So, Priyanka, we are expecting, let's say, roughly about ₹300 to ₹400 crore, for which the cost has already been incurred. So, if what we are hearing from the government is that water from the Jal Jeevan Mission has started getting released…

Rajeev Aggarwal: Priyankar, we are expecting, let's say, roughly about INR 300 to INR 400 crore for which the cost has already been incurred. What we are hearing from the Government is that water from the Jal Jeevan Mission have started getting released. If that really happens, then whatever overdues are there, we should be able to collect, that is roughly about INR 300 to INR 400 crore. And whatever the next revenue is happening, we will incur the cost and we will be, let's say, regularizing the collection from the water segment in the remaining part of the year.

Speaker #2: So, if that really happens, you know, then whatever overdues are there, we should be able to collect—that is roughly about ₹300 to ₹400 crores—and whatever the next, you know, revenue is happening, we will incur the cost and we will be, let's say, regularizing the collection from the water segment in the remaining part of the year.

Speaker #5: Okay, now that is clear. Also, you mentioned the Saudi Arabia project and, let's say, the railway claim. So, the Saudi Arabia project should lead to how much inflow?

Priyankar Biswas: Okay. That is clear. Also, you said about this Saudi Arabia project, and let's say the railway claim. Saudi Arabia project should lead to how much increase, rough ballpark, if 50% of the retention comes there, cash inlet, roughly?

Speaker #5: Rough ballpark, if 50 percent of the retention comes here, that's cash inflows.

Speaker #2: So, we are expecting, between Saudi and some of the projects in the Middle East, that we should be able to collect easily ₹300 to ₹400 crore there.

Rajeev Aggarwal: We are expecting between Saudi and some of the projects in the Middle East, I think we should be able to collect easily INR 300 to INR 400 crore there. That is what we are expecting. Because in Saudi, there is a lot of execution which is also happening. Let's say, our assumption is that with the collection of this INR 300, INR 400 crore, although the overall retention may not really come down, but there will not be further investment at the time of execution of these revenues.

Speaker #2: So that is what we are expecting because in Saudi there is a lot of execution which is also happening. So you know we will we will not be let's say what our assumption is that with the collection of this 300 400 crores although the overall retention may not really come down but there will not be further investment in the in in at the time of execution of these revenues.

Speaker #2: So that will ease out the working capital. Yeah.

Priyankar Biswas: So

Rajeev Aggarwal: That will clean up the. Yeah.

Speaker #5: And what about the claims in the railways? So, how much has been decided, let's say, preferably for us?

Priyankar Biswas: What about the claims in the railway? How much has been decided with the miserably for us, roughly?

Speaker #2: We are expecting roughly about ₹200 crore to realize in this current financial year. We have already, let's say, got the award for about ₹150–160 crore already. It all depends, you know, on how much we are able to negotiate and how much we are able to realize from the customer.

Rajeev Aggarwal: Claims, we are expecting roughly about INR 200 crore to realize in this current financial year. We have already, let's say, got the award for about INR 150, INR 160 crore already. It all depends how much we are able to negotiate and how much we are able to realize from the customer. That all depends on that. But our expectation is, let's say between now and March, we should be able to realize between INR 150 to INR 200 crore from the claims.

Speaker #2: So that all depends on that. But our expectation is, let's say, between now and March, we should be able to realize between ₹150 to ₹200 crore from the claims.

Speaker #5: Okay, sir, just squeezing one more in. We had heard during the early parts of this West Asia crisis that the GCC governments were probably discussing about, let's say, reducing the amount of retention.

Priyankar Biswas: Okay. Just squeezing one more in. We had heard during the early parts of this West Asia crisis that the GCC governments were probably discussing about, let's say, reducing the amount of retention in T&D projects. Has any statement taken in this direction yet, or is it still something that they sometimes talk but not yet implemented?

Speaker #5: In the TND project, have any steps been taken in this direction yet, or is it still something that is sometimes discussed but not yet implemented?

Speaker #2: So Priyanka, we have not seen any reduction happening in the retention amounts, but what is also happening is that there is a little bit of easing of general payments.

Rajeev Aggarwal: Priyankar, we have not seen any reduction happening in the retention amounts. What is also happening is that there is a little bit of easing of general payment. Like otherwise, if they are paying 70%, you can ask them, saying, "Isko thoda badha do." In one case, I know they agreed to pay 95%. In some cases, they change the billing breakups, et cetera, to allow you to claim faster on your progress bills. I do not see any major thing, but what we have seen in retention is that the release of retentions has been fast-tracked, not the percentage. The percentage remains 10% in UAE and 20% in Saudi, and 30%, 35% in Kuwait. But at least in Saudi and also Dubai, we have seen that the payment of retention as and when it is due, has been actually fast-tracked, much faster than what we had expected them to pay.

Speaker #2: You know, like otherwise if they are paying 70 percent, you can ask them, saying, 'Isko thoda bada do.' In one case, I know they agreed to pay 95 percent.

Speaker #2: In some cases, they change the billing break-ups, etc., to allow you to, you know, claim faster on your progress base. I don't see any major thing, but what we have seen in retention is that the release of retentions has been fast-tracked, not the percentage.

Speaker #2: The percentage remains 10 percent in UAE, 20 percent in Saudi, and 30 to 35 percent in Kuwait. But at least in Saudi and also Dubai, we have seen that the payments of retention, as and when it is due, have actually been fast-tracked—much faster than what we had expected them to pay.

Speaker #5: Okay, so that's very well understood. So these may be the levers that can hopefully, let's say, reduce the debt by at least ₹1,000–1,200 crore.

Priyankar Biswas: Okay. Very well understood. This may be the levers that can hopefully, let us say, reduce the debt by at least INR 1,200 odd crores.

Speaker #2: Yeah, yeah. I think Priyanka, if I can summarize what Rajiv said: you know, basically, some money from Afghanistan, some money from closed projects, okay, a little bit of reduction in working capital, inventory, etc. I think there are three. And if water comes in—when I say water, ₹400 crore is beyond the normal payments.

Rajeev Aggarwal: Yeah. I think, Priyankar, if I can summarize what Rajiv said. Basically, some money from Afghanistan, some money from closed projects. Okay. A little bit of reduction in working capital inventory, et cetera. I think that is three. If water comes in, when I say water, 400 is beyond the normal payment. Say, whatever normal they pay, we are reinvesting in the business. But your outstanding old one, let us say that old one is revolving, but it has a INR 300, INR 400 crores, which is there. If that comes in, then that put together, we are talking about INR 1,000, INR 1,200 crores of debt reduction. Yeah.

Speaker #2: Say whatever normal they pay we are reinvesting in the business. But your outstanding old one let's say an old one is a is revolving but that's a 300 400 crores which is there.

Speaker #2: If that comes in, then that's that put together, we are talking about ₹1,000–1,200 crores of debt reduction. Yeah.

Speaker #5: Okay, so that was also my side. Thanks for the comprehensive response.

Priyankar Biswas: Okay. That was all from my side. Thanks for the

Speaker #2: Yeah. Thank you.

Rajeev Aggarwal: Thanks, Priyankar. Thank you.

Priyankar Biswas: Yeah.

Rajeev Aggarwal: Thank you.

Speaker #1: The next question comes from the line of Nipur Khemka with CD Equisearch. Please go ahead.

Operator 3: The next question comes from the line of Nipun Kemka with CD Equisearch. Please go ahead.

Operator: The next question comes from the line of Nipun Kemka with CD Equisearch. Please go ahead.

Speaker #5: Yeah. Hi, sir. So, yeah. Is there some way that you can bring down your net working capital by tinkering, let's say, with the nature or type of the ETC orders we get, and how willing are you people to do that?

Nipun Kemka: Yeah. Hi, sir.

Nipun Khemka: Yeah. Hi, sir.

Rajeev Aggarwal: Hi, Nipun.

Nipun Kemka: Is there some way that you can bring down your net working capital by tinkering, let's say, with the nature or type of the EPC orders which we get, and how willing are you people to do that?

Nipun Khemka: Is there some way that you can bring down your net working capital by tinkering, let's say, with the nature or type of the EPC orders which we get, and how willing are you people to do that?

Speaker #2: It's not a question of how willing I am; it will ultimately be a question of whether the client is willing to agree to it.

Rajeev Aggarwal: So it's not a question of how willing I am. It will ultimately be a question of whether the client is willing to agree to it. I'll tell you, a simple example is we recently negotiated a contract where we told the client that we'll not work with less than 20% advance. The client has finally, in an exceptional case, agreed. Or the earlier question from Priyankar was on can you play with retention? So there are places where you're going and talking with the client, saying, "We don't agree for cash retention." So typically, in some of the private clients, especially on civil, these negotiations are possible. T&D, at least on Power Grid or Middle East and all that, which are standard tender conditions, there it does not work out.

Speaker #2: Let me give you a simple example. We recently negotiated a contract where we told the client that we will not work with less than a 20% advance.

Speaker #2: Okay. The client has finally, in an exceptional case, agreed. Earlier, Priyanka had asked a question about whether you can play with retention. So, there are instances where you go and talk with the client, saying, you know, we don't agree to cash retention.

Speaker #2: So, typically, with some of the private clients, especially in civil, these negotiations are possible. TND—at least on power grid, or, you know, in the Middle East and all that, where standard tender conditions are there—it does not work out.

Speaker #2: You can always go and negotiate on particular contracts and say, 'कि मेरे को इसका पैसा जल्दी चाहिए.' You know, don't wait for the entire billing to happen, etcetera, etcetera.

Rajeev Aggarwal: You can always go and negotiate on particular contracts and say, "Mereko iska paisa jaldi chahiye." Don't wait for the entire billing to happen, et cetera. So these are contracts which you need to. Obviously, we always ask for the moon, but data kya hai wo it would depend on individual client. But I can say one thing is, generally, if you ask me a comment, payment terms are improving. I can say that both in civil T&D private, I am seeing them improving. Power Grid also, in some cases, have now input different interest them in advance. So like interest earlier, Power Grid used to charge interest on advances. Now they have made it interest free. So, generally, I'm saying, I'll make a sweeping statement that we are seeing improvement in payment terms or payment cycle.

Speaker #2: So these are contracts which you need to—obviously, we always ask for the moon. But data क्या है, वो it would depend on individual client.

Speaker #2: But I can say one thing is, generally, if you ask me a comment, payment terms are improving. I can say that both in civil, T&D, and private, I am seeing them improving.

Speaker #2: Power Grid also, in some cases, has now improved if I interest them in advance pay, right? So, like, earlier Power Grid used to charge interest on advances.

Speaker #2: Now they have made it interest-free. So, you know, generally—generally, I am saying, I'll make a sweeping statement that we are seeing improvement in payment terms or payment cycle.

Speaker #5: Okay. Okay. And how much of your current order book pertains to orders with, let's say, high execution complexity, and in some way have some high entry barriers to that?

Nipun Kemka: Okay. How much of your current order book pertains to orders with, let's say, high execution complexity and in some way we have some high entry barriers to that?

Nipun Khemka: Okay. How much of your current order book pertains to orders with, let's say, high execution complexity and in some way we have some high entry barriers to that?

Speaker #2: It's very difficult to say high complexity, because I know we have got a couple of orders which were on a single negotiation basis, because the client felt that no one else could do it.

Vimal Kejriwal: Very difficult to say high complexity, because I know we have got couple of orders which were on a single negotiation basis because the client felt that no one else can do it. Now, whether it is complexity or difficult to execute, difficult terrain, very difficult to say because most of the orders are still on a tender basis. Okay. Excellent. Very difficult because and we would have built in the cost and all that in our this. There are not too many entry barriers if I can say, except for the very large projects. We have seen entry barriers in the private sector when they are doing, where they pick and choose whom they want to give. That's where the entry barriers in a way come in.

Speaker #2: Now, whether it is complexity or difficulty to execute in difficult terrain, it is very, very difficult to say because most of the orders are still on a tender basis.

Speaker #2: Okay. So very difficult because it's and we would have built it built it the cost and all that in our this. There are not not too many entry barriers if I can say except for the very large projects and we have seen entry barriers in the private sector when they are doing where they pick and choose whom they want to give.

Speaker #2: That's where the entry barriers, in a way, come in.

Speaker #5: Got it, got it. And lastly, if I may ask, we have a current order book of about ₹40,000 crores. How much of it would be from the Adani Group specifically?

Nipun Kemka: Got it. Lastly, if I may ask, we have a current order book of some INR 40,000 crore. How much of it would be from the Adani Group, specifically?

Nipun Khemka: Got it. Lastly, if I may ask, we have a current order book of some INR 40,000 crore. How much of it would be from the Adani Group, specifically?

Speaker #2: Overall, I don't think we give individual numbers, but it will be, I think, close to maybe 5 percent or less as of now.

Vimal Kejriwal: Total, I don't think we give individual numbers, but it will be, I think close to maybe 5% or less as of now.

Speaker #5: Close to 5 percent. Sorry.

Nipun Kemka: Close to 5%, sorry?

Nipun Khemka: Close to 5%, sorry?

Speaker #2: Yeah, but it would be spread across T&D, Railways, Civil, and all that—across all the businesses.

Vimal Kejriwal: Yeah. But it would be spread across T&D, railways, civil, and all. Across all the businesses.

Speaker #5: Okay. And what was the insured last fiscal?

Nipun Kemka: Okay. And what was the in Q last fiscal?

Nipun Khemka: Okay. And what was the in Q last fiscal?

Speaker #2: From Adani? I don't have the exact number, but I think we got one—one or one HUDC—and one, I think we got two or three orders from them.

Vimal Kejriwal: From Adani?

Nipun Kemka: Yeah.

Nipun Khemka: Yeah.

Vimal Kejriwal: I don't have the exact number, but I think we got one HVDC, and I think we got two or three orders from them. So must be close to INR 1,000 crore or slightly more than that. Around that number, you can take it.

Speaker #2: So, it must be close to ₹1,000 crore or slightly more than that. Around that number, you can take it.

Speaker #5: Okay, okay. So not much, not much. Okay, that answers it. Okay, thank you. Thank you so much.

Nipun Kemka: Okay. So not much. Okay. That answers it. Okay. Thank you so much.

Nipun Khemka: Okay. So not much. Okay. That answers it. Okay. Thank you so much.

Speaker #1: The next question comes from the line of Vebhav Shah with JM Financial. Please go ahead.

Operator 3: The next question comes from the line of Vaibhav Shah with JM Financial. Please go ahead.

Operator: The next question comes from the line of Vaibhav Shah with JM Financial. Please go ahead.

Speaker #3: Yeah, so thanks for the follow-up. I have only one question: Are we guiding anything on margins for this year?

Vaibhav Shah: Yeah. Thanks for the follow-up. So only one question, are we guiding anything on margins for this year?

Speaker #2: No. Not yet.

Vimal Kejriwal: No, not yet.

Speaker #3: Okay. But we should see it improving quarter by quarter, every quarter now, or will Q2 be weaker?

Vaibhav Shah: Okay. But we should see it improving quarter by quarter every quarter now, or Q2 would be weak?

Speaker #2: That, at least from Q3 onwards... Q2—I mean it will not be that low, but I don't see a significant increase happening right now.

Vimal Kejriwal: At least from Q3 onwards. Q2 it will not be that low, but I do not see a significant increase right now happening. See, it will all depend when the war ends, honestly. Okay. But I admit that we have not given a guidance, but yes, you are right, there has to be an improvement.

Speaker #2: See it will all depend when the war ends honestly. Okay. But I I mean that we are not given a guidance but yes your your you're right that it has to there has to be an improvement.

Speaker #3: And for '28, we may see it being better than '26?

Vaibhav Shah: For 2028, we may see it being better than 2026?

Speaker #2: 100 percent.

Vimal Kejriwal: 100%.

Speaker #3: Okay. Okay. Thank you sir.

Vaibhav Shah: Okay. Thank you, sir.

Speaker #1: The next question comes from the line of Sakit Kapoor with Kapoor Company. Please go ahead.

Operator 3: The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Operator: The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Speaker #3: Yeah. Namaskar, Vimalji, and thank you.

Saket Kapoor: Yeah. Namaskar Vimal ji, and thank you for the-

Speaker #2: Namaskar. हम लोग आपको ढूँढ रहे थे। बोले, कहाँ हैं आप? बोलिए।

Vimal Kejriwal: Namaskar Saket ji.

Saket Kapoor: Thank you, sir. In the cable segment, sir, you have mentioned about some new product introduction in your investor deck.

Speaker #3: Thank you sir. Thank you. Sir, आपने ये जो you in the in the cable segment sir you have mentioned about some new product introduction in the in your in your investor deck.

Speaker #3: So, if you could just explain to us what kind of potential these products have, and then I'll ask my follow-up.

Vimal Kejriwal: Yeah.

Saket Kapoor: If you could just explain to us what kind of potential these products have, and then my follow-up.

Speaker #2: देखिए, ultimately our view is that these products should add around ₹300–400 crore of revenue, सब मिला के. Okay. How it pans out is a new product, लेकिन उम्मीद यही है कि इससे ₹300–400 crore का हमारा next year में revenue बढ़ेगा.

Vimal Kejriwal: Ultimately, our view is that these products should add around INR 300, 400 crores of revenue, all together. Okay. How it pans out is a new product. But the hope is that it will increase our revenue by INR 300, 400 crores in the next year. That is the size. These are specialized products used for ships and all that, the soft rubber cable, treated. What is the other thing in this? Some of these, like EBM, et cetera, may not add too much in revenue, but what will happen is your insulation and all that reduces. So your costs will go down, your margins are supposed to improve, especially on your LT and HT cables.

Speaker #2: That is the size. These are specialized products used for ships and all that, you know. जो soft rubber, bare rubber cable है, ये treated है.

Speaker #2: इसमें दूसरा क्या है, some of these, like EBM etcetera, may not add too much in revenue, but क्या होगा कि उससे आपका insulation वगैरह कम हो जाता है.

Speaker #2: So your cost will go down; your margins are supposed to improve, especially on your LT and HT cables.

Speaker #3: Right, sir. So these elastomatic cables are for shipbuilding, के लिए जाएगा ship.

Saket Kapoor: Right. So these Electromech cables are for the shipbuilding, ship-

Speaker #2: हाँ, मतलब, मतलब कई जगह यूज़ होता है, डेटा सेंटर्स में होता है, काफी जगह पे इस्तेमाल होता है। जहाँ पे थोड़ा सा फ्लेक्सिबल वगैरह होता है and all that.

Vimal Kejriwal: It is used in many places. It is used in data centers. It is used in many places where there is a little flexibility and all that.

Speaker #2: No.

Speaker #3: Okay, sir. Currently, sir, we are running the cable at optimum. So, this 600 revenue can easily be annualized at 2,400–2,500 for the year, or will we have a higher number?

Saket Kapoor: Okay. Sir, currently, we are running the cable at optimum, so this INR 600 revenue can easily be, we can annualize it at INR 2,400, INR 2,500 for the year, or we will have a higher number?

Speaker #2: It could be more than that. मैंने पहले answer दिया था, आप शायद सही नहीं कि our revenue could be around ₹3,000 crores. लेकिन क्या है, साकेत जी, उसमें ultimately metal plays a role.

Vimal Kejriwal: It could be more than that. I gave the answer earlier, you may not be there, that our revenue could be around INR 3,000 crores. But Saket ji, ultimately metal plays a role in that. Today, if aluminum is 3,500, it becomes 2,400, so obviously the per kilometer price will start coming down. But based on numbers today, I think we can do around INR 3,000 crores with the present capacity.

Speaker #2: आज अगर aluminium ₹3,200 का ₹2,400 हो गया, तो obviously the per kilometer price will start coming down. But based on numbers today, I think we can do around ₹3,000 crores with the present capacity.

Speaker #3: Okay, sir. Now coming to our financial results, आप जिसे बता रहे थे कि second quarter में भी कोई बहुत material change नहीं दिखेगा.

Saket Kapoor: Okay. Sir, now coming to our, the financial result, as you were saying that in the Q2 also, not much material change will be visible. Sir, as investors, what should we expect now from KEC International going ahead? Because these are not the numbers which KEC International is associated to. Neither these operating profits nor these margins, all these are exceptional. So now, in this phase we are in terms of the execution as well as the financial results, what is the path to profitability or improvement in profitability going ahead as per your understanding? Sir, you are at a long helm here. So this time that is going on now, how much more impact is it going to have on our financial results?

Speaker #3: But sir as investors हम अभी क्या expect करें कि कई चीजें going ahead क्योंकि these are not the numbers which KEC is is associated to.

Speaker #3: Na ye operating profits, na hi ye margins, ye sab exceptional hai. To abhi hum jis phase mein hain, in terms of the execution as well as the financial result, what is the path to profitability or improvement in profitability going ahead, as per your understanding, sir?

Speaker #3: You are, you are at a long helm here. तो ये, ये जो अभी समय चल रहा है, इसका और कितना खूब प्रभाव रहने वाला है, sir, हमारे financial result.

Speaker #2: तो साकेत जी, अभी हमने जवाब ये दिया था कि next year से तो margin improve होना चाहिए। इस quarter में भी, इस quarter से भी, हमने बोला कि आगे number नहीं दिया है, but बोला है कि भाई, margin में improvement तो अभी से तो होगा ही होगा।

Vimal Kejriwal: Saket ji, now we have answered that from next year the margin should improve. In this quarter also we have said that the number has not come forward, but we have said that the margin improvement will happen from now onwards. There were 2, 3 negative things in this, which we are calling headwind. One is that no one expected the war, that it would happen, and it would last so long, and its Strait of Hormuz would be closed, this would be done, that was not the expected impact. So it is having a major impact on the revenue and the order book. Every day it is being said that it will close today, it will close tomorrow. Hopefully, if it closes in Q2, we will start seeing improvements happening in Q3 onwards. And there is a lot of talk of rebuilds in it.

Speaker #2: Okay. इसमें जो जो देखिए negative दो-तीन चीजें थीं, अभी जो हम headwind बोल रहे हैं। एक तो लड़ाई का, किसी ने उम्मीद नहीं की थी कि लड़ाई होगी और इतने लंबे चलेगी। और इसका उस trade पर, almost बंद कर देंगे, ये कर देंगे।

Speaker #2: That was not the expected impact. So, उसका एक major impact हो रहा है revenue पे और order book में. रोज बात हो रही है कि आज बंद हो जाए, कल हो जाएगा.

Speaker #2: Hopefully अगर Q2 में बंद हो गया तो we will start seeing improvements happening in Q3 onwards. Okay. और उसमें काफी सारा rebuild वगैरह की बात हो रही है.

Speaker #2: तो अगर वो होता है तो there could be a tailwind coming from orders in that area. Okay. और normally हमने ये देखा है कि लड़ाई के बाद के जो orders होते हैं उनमें margin ज्यादा होती है.

Vimal Kejriwal: If that happens, there could be a tailwind coming from orders in that area. Normally, we have seen that the orders after the war have higher margins. Typically, we have seen this because most of them are fast track and we can do those projects. This is one thing. The second is that whatever order book we had taken in railway and civil, and earlier we had taken a civil order book of zero to INR 10,000 crore. So some of the orders were obviously at a challenging margin. So those orders are now coming to an end. So as your old orders keep finishing, the revenue from new ones will keep increasing. The word you used, adverse effects, that will go away. So I think by the end of this year, hopefully we will start seeing a much more positive thing.

Speaker #2: Typically हम ने देखा है, because most of them are fast track and we can do those projects, एक तो ये है. दूसरा, जो हमारे railway में और civil में जो भी हमने order book लिए थे, और पहले civil को zero से 10,000 करोड़ का order book लिया है.

Speaker #2: So, some of the orders were obviously at challenging margins. So those orders are now coming to an end. जैसे-जैसे आपके पुराने orders खत्म होते जाएंगे, नए का revenue बढ़ते जाएगा.

Speaker #2: Jo jo shabd aapne istemal kiye na, khub prabhav wagairah, wo wo nikalte jayenge. So, I think by the end of this year, hopefully, we will start seeing a much, much more positive thing.

Speaker #2: The other thing was on the working capital, जो EPC में ज्यादा ही प्रभाव होता है. राजीव जी ने भी explain किया आपको कि ₹1,000-1,200 करोड़ हम कम कर देंगे.

Vimal Kejriwal: The other thing was on the working capital जो EPC में ज्यादा ही प्रभाव होता है। राजीव जी ने भी explain किया आपको कि ₹1,000-1,200 करोड़ हम कम कर देंगे। तो आपको क्या है कि एक तो EBITDA margin देखना चाहिए और आपको PBT भी देखना चाहिए। You will also start seeing a positive impact coming at the PBT level also. Plus जैसे-जैसे हमारा Middle East वगैरह का revenue बढ़ रहा है, तो हमारा tax rate और efficient हो रही है, क्योंकि वहां के taxes कम हैं थोड़े। तो जब बाकी लोग 30%, 35% tax भरते हैं, हमारा 20%, 22% होता है। तो overall मिलाकर अगर आप PAT वगैरह का improvement देखेंगे तो definitely you will find some improvement happening.

Speaker #2: तो आपको क्या है कि एक तो EBITDA margin देखना चाहिए और आपको PBT भी देखना चाहिए। You will also start seeing positive impact coming at the PBT level also.

Speaker #2: Plus, जैसे जैसे हमारा Middle East वगैरह का revenue बढ़ रहा है, तो हमारा tax rate और efficient हो रही है क्योंकि वहाँ के taxes कम हैं थोड़े।

Speaker #2: तो जब बाकी लोग 30-35 प्रतिशत टैक्स भरते हैं, हमारा 20-22 प्रतिशत होता है। तो ओवरऑल मिला के अगर आप PAT वगैरह का improvement देखेंगे, तो definitely you will find some improvement happening.

Speaker #1: Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Vimal Kejriwal for the closing remarks.

Operator 3: Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Vimal Kejriwal for the closing remarks.

Operator: Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Vimal Kejriwal for the closing remarks.

Speaker #2: Thank you, everyone, for your continued interest. Thank you so much.

Vimal Kejriwal: Thank you everyone for your continued interest. Thank you so much.

Speaker #1: Thank you sir. Ladies and gentlemen, on behalf of KEC International that concludes this conference call. Thank you for joining us and you may now disconnect your lines.

Operator 3: Thank you, sir. Ladies and gentlemen, on behalf of KEC International, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.

Operator: Thank you, sir. Ladies and gentlemen, on behalf of KEC International, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.

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Q1 2027 KEC International Ltd Earnings Call

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