Q1 2027 Kalpataru Projects International Ltd Earnings Call

August 11, 2026

Speaker #3: Ladies and gentlemen, good day and welcome to Kalpataru Projects International's Q1 FY27 earnings 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.

Operator: Ladies and gentlemen, good day and welcome to Kalpataru Projects International's Q1 FY27 earnings 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. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kishan Mundra. Thank you, and over to you, sir.

Speaker #3: 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 #3: I now hand the conference over to Mr. Kishan Mundra. Thank you, and over to you, sir.

Speaker #4: Yeah, thanks, Atharba. Good evening, everyone, and a warm welcome to the Q1 FY27 earnings call of Kalpataru Projects International Limited. To discuss these results, we have the management today, which is being represented by Mr. Manish Mohanoth, who is the Managing Director and CEO.

Kishan Mundra: Thanks, Atharva. Hi, good evening, everyone, and warm welcome to the Q1 FY27 earnings call of Kalpataru Projects International Limited. To discuss these results, we have the management today, which is being represented by Mr. Manish Mohnot, who is the Managing Director and CEO; Mr. S.K. Tripathi, who is the Deputy Managing Director; Mr. Sanjay Dalmia, the Executive Director; Mr. Amit Uplenchwar, Director, Group Strategy; and Mr. Ram Patodia, President, Finance, and the CFO. With that, I will hand over the floor to Mr. Mohnot for his initial remarks, post which we will open the floor up for the Q&A session. With that, over to you, sir.

Kishan Mundhra: Thanks, Atharva. Hi, good evening, everyone, and warm welcome to the Q1 FY27 earnings call of Kalpataru Projects International Limited. To discuss these results, we have the management today, which is being represented by Mr. Manish Mohnot, who is the Managing Director and CEO; Mr. S.K. Tripathi, who is the Deputy Managing Director; Mr. Sanjay Dalmia, the Executive Director; Mr. Amit Uplenchwar, Director, Group Strategy; and Mr. Ram Patodia, President, Finance, and the CFO.

Speaker #4: Mr. Ashish Tripathi, who is the Deputy Managing Director; Mr. Sanjay Dalmia, the Executive Director; Mr. Amit Implenchwark, Director, Group Strategy; and Mr. Ram Patodia, President, Finance and the CFO.

Speaker #4: With that, I'll hand over the floor to Mr. Mohanoth for his initial remarks, after which we will open the floor for the Q&A session.

Kishan Mundhra: With that, I will hand over the floor to Mr. Mohnot for his initial remarks, post which we will open the floor up for the Q&A session. With that, over to you, sir.

Speaker #4: With that, over to you, sir.

Speaker #5: Thank you, Kishan. Good evening, everyone, and thank you for joining us today for the KPI Q1 FY27 earnings call. I hope you have all had the opportunity to review our financial results and investor presentation.

Manish Mohnot: Thank you, Kishan. Good evening, everyone, and thank you for joining us today for the KPI Q1 FY27 earnings call. I hope you have all had the opportunity to review our financial results and investor presentation, which are available on the stock exchange and our website. I am pleased to share that we have delivered another strong set of results for the quarter ended 30 June 2026. We registered robust performance across nearly all parameters, including order book, revenue within the constraints, profitability, margins, and working capital, reflecting an excellent start to the financial year. Before I delve into details of our Q1 performance, I want to reinforce a few key messages from the previous earning calls. First, the underlying strength of our business remains solid. This is backed by a robust delivery track record, strong customer trust, and steady demand across all India and diversified markets.

Speaker #5: Which are available on the stock exchange and our website. I'm pleased to share that we have delivered another strong set of results for the quarter ended 30th June '26, with robust performance registered across nearly all parameters, including the order book.

Manish Mohnot: We registered robust performance across nearly all parameters, including order book, revenue within the constraints, profitability, margins, and working capital, reflecting an excellent start to the financial year. Before I delve into details of our Q1 performance, I want to reinforce a few key messages from the previous earning calls. First, the underlying strength of our business remains solid. This is backed by a robust delivery track record, strong customer trust, and steady demand across all India and diversified markets.

Speaker #5: Revenue within the constraints, profitability, margins, and working capital—reflecting an excellent start to the financial year. Before I delve into the details of our Q1 performance, I want to reinforce a few key messages from the previous earnings calls.

Speaker #5: First, the underlying strength of our business remains solid. This is backed by a robust delivery track record, strong customer trust, and steady demand across all diversified, India, and international markets.

Speaker #5: Second, the investments we made in capability development over the last few years are translating into tangible results. This is evident in our improved competitive positioning, as we continue to secure large, complex bids aligned with our focus on improving profitability and margin profiles.

Manish Mohnot: Second, the investments we made in capability development over the last few years are translating into tangible results. This is evident in our improved competitive positioning as we continue to secure large, complex bids aligned with our focus on improving profitability and margin profiles. Third, and the most important, we remain deeply committed to disciplined growth and strict capital management. Our balance sheet highlights excellent financial health anchored by disciplined working capital, a best-in-class leverage ratio, and improved return ratios. This is further validated by a recent credit rating upgrade to AA+/Stable, positioning us among an elite group of large-scale EPC players and giving us strong confidence in our strategy to invest in growth and scale. Moving on to the details of our financial results. KPI maintained its growth momentum, delivering record first quarter revenue, EBITDA, and profitability.

Speaker #5: Third, and most importantly, we remain deeply committed to disciplined growth and strict capital management. Our balance sheet highlights excellent financial health, anchored by disciplined working capital, a best-in-class leverage ratio, and improved return ratios.

Speaker #5: This is further validated by a recent credit rating upgrade to AA+ Stable, positioning us among an allied group of large-scale EPC players and giving us strong confidence in our strategy to invest in growth and scale.

Manish Mohnot: This is further validated by a recent credit rating upgrade to AA+/Stable, positioning us among an elite group of large-scale EPC players and giving us strong confidence in our strategy to invest in growth and scale. Moving on to the details of our financial results. KPI maintained its growth momentum, delivering record first quarter revenue, EBITDA, and profitability.

Speaker #5: Moving on to the details of our financial results, KPI maintains its growth momentum, delivering record first-quarter revenue, EBITDA, and profitability. Our standalone revenue increased by 9% year-over-year to Rs 5,482 crore, while consolidated revenue reached Rs 6,408 crore.

Manish Mohnot: Our standalone revenue increased by 9% YOY to INR 5,482 crores, while consolidated revenue reached INR 6,408 crores. On a comparable basis, adjusted for the base effect of our Brazilian business and road SPVs, KPI's consolidated revenue increased by 9% YOY in Q1 2027. Our profitability growth continues to outpace our targeted levels. Our consolidated EBITDA grew 7% YOY to INR 562 crores. PBT rose 45% to INR 420 crores, and PAT increased 46% to INR 312 crores. At a standalone level, EBITDA rose 14% YOY, while both PBT and PAT grew by 32%. Importantly, our consolidated EBITDA margin expanded by 30 basis points to reach 8.8%, as the PBT margin rose 190 basis points YOY to 6.6%. On a standalone basis, the EBITDA margin reached almost 9%, and the PBT margin was up by 120 basis points to reach 6.6%.

Speaker #5: On a comparable basis, adjusted for the base effect of our Brazilian business and road SPVs, KPI consolidated revenue increased by 9% year-over-year in Q1 2027.

Speaker #5: Our profitability growth continues to outpace our targeted levels. Our consolidated EBITDA grew 7% year-over-year to Rs 562 crore, PBT rose 45% to Rs 420 crore, and PAT increased 46% to Rs 312 crore.

Speaker #5: At a standalone level, EBITDA rose 14% year-over-year, while both PBT and PAT grew by 32%. Importantly, our consolidated EBITDA margin expanded by 30 basis points to reach 8.8%, and the PBT margin rose 190 basis points year-over-year to 6.6%.

Manish Mohnot: At a standalone level, EBITDA rose 14% YOY, while both PBT and PAT grew by 32%. Importantly, our consolidated EBITDA margin expanded by 30 basis points to reach 8.8%, as the PBT margin rose 190 basis points YOY to 6.6%. On a standalone basis, the EBITDA margin reached almost 9%, and the PBT margin was up by 120 basis points to reach 6.6%.

Speaker #5: On a standalone basis, the EBITDA margin reached almost 9%, and the PBT margin was up by 120 basis points to reach 6.6%. This expansion reflects strong operating leverage, an improved business mix, and disciplined working capital management.

Manish Mohnot: This expansion reflects strong operating leverage, improved business mix, and disciplined working capital management. It is important to note that we achieved this robust revenue growth and margin improvement despite early quarter labor shortages due to state elections, slower receivables in the water business, and global supply chain constraints stemming from ongoing disruptions in the Middle East. This performance clearly highlights the resilience of our business and strengthens the foundation for sustainable growth in the coming quarters. Turning to our balance sheet, our consolidated net debt-to-equity ratio stands at 0.1x and ROE remains within our targeted range of 21% to 22%. Standalone and consolidated net debt remains stable QOQ at INR 752 crores and INR 917 crores respectively. We maintained this stability despite higher execution, capital expenditure exceeding INR 250 crores in the first three months, and increased capital employed in the water business.

Speaker #5: It is important to note that we achieved this robust revenue growth and margin improvement despite early-quarter labor shortages due to state elections.

Speaker #5: Slower receivables in the water business and global supply chain constraints, stemming from ongoing disruptions in the Middle East. This performance clearly highlights the resilience of our business and strengthens the foundation for sustainable growth in the coming quarters.

Speaker #5: Turning to our balance sheet, our consolidated debt-to-equity ratio stands at 0.1x, and gross debt remains within our targeted range of 21% to 22%. Standalone and consolidated net debt remains stable quarter-on-quarter at Rs 752 crore and Rs 917 crore, respectively.

Manish Mohnot: Turning to our balance sheet, our consolidated net debt-to-equity ratio stands at 0.1x and ROE remains within our targeted range of 21% to 22%. Standalone and consolidated net debt remains stable QOQ at INR 752 crores and INR 917 crores respectively. We maintained this stability despite higher execution, capital expenditure exceeding INR 250 crores in the first three months, and increased capital employed in the water business.

Speaker #5: We maintain this stability despite higher execution capital expenditure exceeding ₹250 crore in the first three months, and increased capital employed in the water business.

Speaker #5: Regarding working capital, our net working capital has declined by 12 days year-over-year to 94 days for the standalone, and decreased by 11 days year-over-year to 80 days on a consolidated basis in Q1 '27.

Manish Mohnot: Regarding working capital, our net working capital days declined by 12 days YOY to 94 days for the standalone, and decreased by 11 days YOY to 80 days on a consolidated basis in Q1 FY27. Moving to our order book. Our ongoing momentum continues to anchor our confidence, providing strong revenue visibility and reaffirming customer trust in our capabilities. We closed the quarter with our highest-ever order book of INR 66,607 crores. This was supported by robust year-to-date order inflow of INR 7,668 crores in FY27, with an additional L1 position in projects worth INR 7,500 crores. Equally encouraging is the growth across our key business segments. Starting from T&D business, excluding the Fasttel business, revenue like-for-like grew nearly 10% YOY. Year to date in FY27, we have secured orders exceeding INR 4,100 crores and hold an L1 and favorable position in contracts valued at over INR 5,000 crores.

Speaker #5: Moving to our order book, our ongoing momentum continues to anchor our confidence, providing strong revenue visibility and reaffirming customer trust in our capabilities. We closed the quarter with our highest ever order book of Rs 66,607 crore.

Speaker #5: This was supported by a robust year-to-date order inflow of Rs 7,068 crore in FY27, with an additional L1 position in projects worth Rs 7,500 crore.

Manish Mohnot: This was supported by robust year-to-date order inflow of INR 7,668 crores in FY27, with an additional L1 position in projects worth INR 7,500 crores. Equally encouraging is the growth across our key business segments. Starting from T&D business, excluding the Fasttel business, revenue like-for-like grew nearly 10% YOY. Year to date in FY27, we have secured orders exceeding INR 4,100 crores and hold an L1 and favorable position in contracts valued at over INR 5,000 crores.

Speaker #5: Equally encouraging is the growth across our key business segments. Starting with the TND business, excluding the parcel business, revenue like-for-like grew nearly 10% year-on-year. Year-to-date in FY27, we have secured orders exceeding Rs 4,100 crore and hold an L1 and favorable position in contracts valued at over Rs 5,000 crore.

Speaker #5: This is expanding our market presence by onboarding new clients and strengthening our footprint in the high-growth HVDC and GIS substation segment. Globally, the T&D market continues to offer a massive, structurally attractive growth runway across all our target markets.

Manish Mohnot: We are expanding our market presence by onboarding new clients and strengthening our footprint in high growth HVDC and GIS substation segment. Globally, the T&D market continues to offer a massive structurally attractive growth runway across all our target markets. In India specifically, we expect a notable ramp-up in transmission lines and substation capacity to meet rising electricity demand and support the evacuation of renewable energy. The annual addressable market is expected to remain within the range of INR 1 to 1.25 trillion for at least next five years, including incremental opportunities of one to two HVDC projects every year. On the international front, a lack of build capacity is emerging as a critical bottleneck for rising electricity demand across our key markets in Europe, Middle East, and parts of South America. With our differentiated global EPC capabilities and strong international reach, we are uniquely positioned to capitalize on these opportunities.

Speaker #5: In India specifically, we expect a notable ramp-up in transmission line and substation capacity to meet rising electricity demand and support the evacuation of renewable energy.

Speaker #5: The annual addressable market is expected to remain within the range of Rs 1 trillion to Rs 1.25 trillion for at least the next five years, including incremental opportunities of 1 to 2 HVDC projects every year.

Manish Mohnot: The annual addressable market is expected to remain within the range of INR 1 to 1.25 trillion for at least next five years, including incremental opportunities of one to two HVDC projects every year. On the international front, a lack of build capacity is emerging as a critical bottleneck for rising electricity demand across our key markets in Europe, Middle East, and parts of South America. With our differentiated global EPC capabilities and strong international reach, we are uniquely positioned to capitalize on these opportunities.

Speaker #5: On the interactive front, a lack of grid capacity is emerging as a critical bottleneck for rising electricity demand across our key markets in Europe, the Middle East, and parts of South America.

Speaker #5: With our differentiated global EPC capabilities and strong international reach, we are uniquely positioned to capitalize on these opportunities. Meanwhile, LNG segment delivered 8% year-over-year revenue growth, reaching Rs 833 crore.

Manish Mohnot: Meanwhile, LNG student delivered 8% YOY revenue growth, reaching INR 833 crores. LNG has secured orders worth approximately INR 1,500 crores YTD in FY27, bringing its total order backlog to around INR 4,200 crores as of 30 June 2026. Our Buildings & Factories business maintained its upward trajectory, recording a 15% YOY revenue increase in Q1 FY27. We secured record orders worth over INR 2,800 crores till date in FY27. Additionally, we hold an L1 position for around INR 2,200 crores in this business. Our order book for the Buildings & Factories business at the end of 30 June 2026 stands over INR 19,600 crores. We continue to see steady traction in large-scale residential projects from reputed developers, backed by our design build capabilities and strong delivery track record. Additionally, the pipeline remains strong, powered by a wave of public PSU and private industrial CapEx.

Speaker #5: LNG has secured orders worth approximately Rs 1,500 crore year-to-date in FY27, bringing its total order backlog to around Rs 4,200 crore as of June 30, 2026.

Speaker #5: Our buildings and factories business maintained its upward trajectory, recording a 15% year-on-year revenue increase in Q1 2027. We secured record orders worth over Rs 2,800 crore to date in FY27.

Speaker #5: Additionally, we hold an L1 position for around Rs 2,200 crore in this business. Our order book for the buildings and factories business at the end of 30 June '26 stands at over Rs 19,600 crore.

Manish Mohnot: Additionally, we hold an L1 position for around INR 2,200 crores in this business. Our order book for the Buildings & Factories business at the end of 30 June 2026 stands over INR 19,600 crores. We continue to see steady traction in large-scale residential projects from reputed developers, backed by our design build capabilities and strong delivery track record. Additionally, the pipeline remains strong, powered by a wave of public PSU and private industrial CapEx.

Speaker #5: We continue to see steady traction in large-scale residential projects from reputed developers, backed by our design-build capabilities and strong delivery track record.

Speaker #5: Additionally, the pipeline remains strong, powered by a wave of public PSU and private industrial capex. This is further supported by improved demand for commercial office space, data centers, airports, and large-scale urban development projects.

Manish Mohnot: This is further supported by improved demand for commercial office space, data centers, airport, and large-scale urban development projects. In our oil and gas business, execution on our Saudi gas pipeline project is progressing steadily with site activities moving at a strong pace. Despite the ongoing conflict in Middle East, major utilities and asset developers remain optimistic and eager to advance their investment plans. We see strong business momentum building up in Middle East on the oil and gas business, offering multiple growth opportunities across onshore engineering and construction projects over the next few years. Our water business achieved revenue of INR 626 crores, which is in line with our planned execution. Notably, the business achieved a major breakthrough by securing its first order in the high-potential Middle East market for a water treatment project valued at INR 344 crores.

Speaker #5: In our oil and gas business, execution on our Saudi gas pipeline project is progressing steadily, with site activities moving at a strong pace. Despite the ongoing conflict in the Middle East, major utilities and asset developers remain optimistic and eager to advance their investment plans.

Speaker #5: We see strong business momentum building up in the Middle East in the oil and gas business, offering multi-fold growth opportunities across onshore engineering and construction projects over the next few years.

Manish Mohnot: We see strong business momentum building up in Middle East on the oil and gas business, offering multiple growth opportunities across onshore engineering and construction projects over the next few years. Our water business achieved revenue of INR 626 crores, which is in line with our planned execution. Notably, the business achieved a major breakthrough by securing its first order in the high-potential Middle East market for a water treatment project valued at INR 344 crores.

Speaker #5: Our water business achieved revenue of Rs 626 crore, which is in line with our planned execution. Notably, the business achieved a major breakthrough by securing its first order in the high-potential Middle East market for a water treatment project valued at Rs 344 crore.

Speaker #5: Our collections in the water business remain on an improved trajectory, with around Rs 650 crore collected year-to-date, including July in FY27. We expect further improvements in collection intensity in the coming months.

Manish Mohnot: Our collections in the water business remain on an improved trajectory with around INR 650 crores collected year-to-date, including July in FY27. We expect further improvements in collection intensity in the coming months. Growth in our urban infra business is driven by robust execution across metro rail projects with all our TBMs remaining fully utilized. I am pleased to share that we have nearly completed the tunneling work for our first underground metro project in Kanpur, demonstrating our steadfast commitment to execution and timely project completion. Moving forward, we continue to selectively target strategic opportunities into metro rail, tunneling, pump storage, nuclear power, and the international roads and highway segment. In our railway business, our approach remains strictly focused on delivery and project closures while we remain selective with bidding for new orders. To wrap up, I will quickly update you on our guidance for the FY27.

Speaker #5: Growth in our urban infra business is driven by robust execution across metro-rail projects, with all our TBMs remaining fully utilized. I am pleased to share that we are nearly complete with the terminal work for our first underground metro project in Kanpur, demonstrating our steadfast commitment to execution and timely project completion.

Speaker #5: Moving forward, we continue to selectively target strategic opportunities in metro rail, tunneling, pump storage, nuclear power, and international roads and highway segments. In our railway business, our approach remains strictly focused on delivery and project closures, while we remain selective with bidding for new orders.

Manish Mohnot: Moving forward, we continue to selectively target strategic opportunities into metro rail, tunneling, pump storage, nuclear power, and the international roads and highway segment. In our railway business, our approach remains strictly focused on delivery and project closures while we remain selective with bidding for new orders. To wrap up, I will quickly update you on our guidance for the FY27.

Speaker #5: To wrap up, I will quickly update you on our guidance for FY27. In our first four months of the year, our project delivery remained resilient despite the Middle East conflict and initial labor availability constraints.

Manish Mohnot: In our first 4 months of the year, our project delivery remained resilient despite the Middle East conflict and initial labor availability constraints. The prospects for our diversified end markets remain strong, further reinforced by the increasing need for energy security, infrastructure development, and industrial growth. This has led to a meaningful acceleration in order intake, keeping us well on track to reach our targeted goal of INR 30,000 crores of order inflow for the current year. Specifically regarding revenue, we confirm our guidance of at least 15% growth on an annualized basis, and our original guidance for a PBT margin improvement of over 75 basis points remains unchanged. Our operating cash flow remains healthy due to structural improvements in order book and business mix.

Speaker #5: The prospects for our diversified end markets remain strong, further reinforced by the increasing need for energy security, infrastructure development, and industrial growth. This has led to a meaningful acceleration in order intake, keeping us well on track to reach our targeted goal of Rs 30,000 crore of order inflow for the current year.

Speaker #5: Specifically regarding revenue, we confirm our guidance of at least 15% growth on an annualized basis, and our original guidance for a PBD margin improvement of over 75 basis points remains unchanged.

Manish Mohnot: Specifically regarding revenue, we confirm our guidance of at least 15% growth on an annualized basis, and our original guidance for a PBT margin improvement of over 75 basis points remains unchanged. Our operating cash flow remains healthy due to structural improvements in order book and business mix.

Speaker #5: Our operating cash flows remain healthy due to structural improvements in our order book and business mix. This gives us the confidence to maintain our current positive trend in working capital, debt metrics, and return ratios as we move forward in this financial year.

Manish Mohnot: This gives us the confidence to maintain a current positive trend in working capital, debt metrics, and return ratios as we move forward in this financial year. Thank you for your attention. We are now happy to take your questions.

Speaker #5: Thank you for your attention. We are now happy to take your questions.

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

Operator: Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to unmute themselves 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 from 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 from JM Financial.

Speaker #1: Please go ahead.

Speaker #2: Yeah. So, firstly, on the oil and gas business, earlier we had mentioned that we are looking for larger value orders in Saudi, similar to Aramco.

Vaibhav Shah: Yeah. Sir, firstly, on the oil and gas business, earlier we had mentioned that we are looking for larger value orders in Saudi similar to Aramco. Maybe in size could be smaller, but any update on that, and what inflows are we targeting in oil and gas business?

Speaker #2: Maybe the size could be smaller, but is there any update on that? And what information are we targeting in the oil and gas business?

Speaker #3: So Vaibhav, as we said earlier, we are now qualified in oil and gas and in the large utilities in the Middle East, whether it is Saudi, ADNOC, KOC, or Qatar.

Manish Mohnot: Vaibhav, as we said earlier, we are now qualified in oil and gas in the large utilities in Middle East, whether it is Saudi, ADNOC, Kuwait, or Qatar. We have bid for a lot of tenders in those places and some very big ones. The entire tenders in terms of orders have been delayed as of now. We are very confident of making sure that we win a few large projects in the current year. Might not happen maybe immediately in the next few months. But as we stand, we believe that there is a huge opportunity of having orders either from Aramco or ADNOC or Qatar or Kuwait, all in the next three to six months. We have included that in our targeted INR 30,000 crores of order book for the current year. And we believe that it should be in place in Q3, not late part of Q2.

Speaker #3: We have bid for a lot of tenders in this space, and some very big ones. A lot of them, you know, the entire tenders in terms of orders have been delayed as of now.

Speaker #3: We are very confident of making sure that we win a few large projects in the current year. It might not happen immediately, maybe not in the next few months, but as we stand, we believe that there's a huge opportunity of, you know, having orders either from Aramco or ADNOC or Qatar or Kuwait, all in the next three to six months.

Manish Mohnot: Might not happen maybe immediately in the next few months. But as we stand, we believe that there is a huge opportunity of having orders either from Aramco or ADNOC or Qatar or Kuwait, all in the next three to six months. We have included that in our targeted INR 30,000 crores of order book for the current year. And we believe that it should be in place in Q3, not late part of Q2.

Speaker #3: We have included that in our targeted ₹30,000 crore order book for the current year. You know, we believe that it should be in place in Q3, if not the latter part of Q2.

Speaker #2: Okay, so can you tell the quantum of the bids which you have submitted?

Operator 2: Okay. Sir, can you tell the quantum of the bids which you have submitted?

Operator: Okay. Sir, can you tell the quantum of the bids which you have submitted?

Speaker #3: So, Vaibhav, the bids are right, ranging from $100 million to $500 million, right? It's at different levels—difficult for me to quantify exactly which one, you know, is something which the client would award to us.

Manish Mohnot: Vaibhav, the bids are ranging from $100 million to $500 million. It is at different levels. Difficult for me to quantify exactly which one is something which the client would award to us, but they are ranging from $100 to $500 million.

Speaker #3: But they're ranging from $100 million to $500 million.

Speaker #2: Okay, sure. So secondly, on the indoor side, the receivables have been completely received now in Q1?

Vaibhav Shah: Okay, sure. Sir, secondly, on Indore side, the receivables have been completely received now in Q1?

Speaker #3: Yeah, I think in indoor, we have completely zero now.

Manish Mohnot: Yeah, I think Indore, we are completely zero now.

Speaker #2: Okay. Any money you would be infusing now incrementally in ordering FSL or somewhere else?

Vaibhav Shah: Okay.

Manish Mohnot: Always.

Vaibhav Shah: Any money would be infusing now incrementally, either in SSL or somewhere else?

Speaker #3: No, not at all, I think. FSL goes cash positive. They have a refund; they have literally become debt-free as of 30th July. And Indore—yes, the project is closed too.

Manish Mohnot: No, not at all. I think Shree Shubham Logistics goes cash positive. They have literally become debt-free as of 30 July, and Indore, the project is closed. I do not see any reason of any infusion happening in Indore, Shubham, not in the near future, in the long term course.

Speaker #3: I don't see any reason for any infusion happening in Indore or Shubham, not in the near future—maybe in the long term, but not now.

Speaker #2: Okay. And sir, lastly, on the interest cost side, we have seen a sizable improvement in terms of interest cost in the first quarter. So incrementally, that should be a sustainable 100?

Vaibhav Shah: Okay. Sir, lastly, on the interest cost side, we have seen a sizable improvement in terms of interest cost in Q1. Incrementally, that should be a sustainable trend?

Speaker #3: Sorry, incrementally, what was the question? I missed that. Incrementally?

Manish Mohnot: Sir, incrementally, what was the question? I missed that. Incrementally?

Speaker #2: The interest cost was around ₹65–68 crores in Q1. Incrementally, could that be a sustainable ₹100 crores, or may we see a rise in interest cost?

Vaibhav Shah: The interest cost rounded around INR 65 crore to INR 68 crore in Q1. Incrementally, that could be a sustainable trend, or we may see a rise in interest cost?

Speaker #3: No, we should be in this range, you know. Depending upon growth, if working capital slightly goes up, to that extent you'll see some increased cost.

Manish Mohnot: No, we should be in this range. Depending upon growth, if working capital slightly goes up, then to that extent, you will see some increased cost. But as a percentage of sales, we should be in a similar range where we are today.

Speaker #3: But as a percentage of sales, we should be in a similar range to where we are today.

Speaker #2: Okay, so roughly, we will be targeting a sub-100-day kind of working capital for FY27?

Vaibhav Shah: Okay. So roughly, we will be targeting some 100 day kind of working capital for FY27?

Speaker #3: Yes, definitely.

Manish Mohnot: Yes, definitely.

Speaker #2: Okay. Okay. Thank you, sir. Those are my questions.

Vaibhav Shah: Okay. Thank you, sir. Those were my questions.

Speaker #1: Thank you very much. Before we take the next question, a reminder to all participants: To ask a question, please press star and one.

Operator: Thank you very much. Before we take the next question, a reminder to all the participants, to ask a question, please press star and one. We will take the next question from the line of Amit Anwani from PL Capital. Please go ahead.

Speaker #1: We will take the next question from the line of Amit Anvani from PL Capital. Please go ahead.

Speaker #4: Hi, sir. Thanks for the opportunity, and congrats on the good set of numbers. So, first question on the margin. You said you had a 75 bps increment at the PBT level.

Amit Anwani: Hi, sir. Thanks for the opportunity, and congrats for the good set of numbers. So first question on the margin, you said you have been maintaining the guidance of 75 basis points improvement on PBT level. I just wanted to understand, particular to Q1, the operating margin of 8.9%, which segments contributed better margin. I understand by seeing the numbers that there was a favorable mix also this quarter. So, that is one. Second, in your 75 basis points PBT improvement, are you factoring in, and by what segment you are factoring in the improvement in especially the EBITDA margin for the remainder of the year? Yeah.

Speaker #4: I just wanted to understand, particularly with regard to Q1, the operating margin of 8.9%. Which segments contributed better margin? I understand from seeing the numbers that there was a favorable mix as well.

Speaker #4: This quarter, so that is one. Second, in your 75 bps PBT improvement, are you factoring in— and by which segments are you factoring in— the improvement in, especially, the EBITDA margin for the end of the year?

Amit Anwani: So, that is one. Second, in your 75 basis points PBT improvement, are you factoring in, and by what segment you are factoring in the improvement in especially the EBITDA margin for the remainder of the year? Yeah.

Speaker #4: Yeah.

Speaker #3: So Amit, sir, you know, as I've said earlier also, you know, our transmission business, our B&F business, and our oil and gas business, all three of them continue to be delivering you know, EBITDA closer to double-digit levels.

Manish Mohnot: Amit, as I said earlier also, our Transmission business, our B&F business, and our Oil and Gas business, all three of them continue to be delivering EBITDA closer to double-digit levels, and PBT, which are also good. If you look at Water and Railways, while Water at EBITDA level has delivered reasonably good margins, but because of interest cost, they are getting hit at a PBT level. Railways is not doing such good in margin and infrastructure. So three businesses are more at a double-digit level and three businesses at a high single-digit level when it comes to EBITDA. As far as the 75 basis point improvement is there, I think it is a mix of the entire order book, but significant improvement in margins would come from the same three businesses, T&D, B&F, and Oil and Gas.

Speaker #3: And PBT, which is also good. If you look at water and railways, while water at EBITDA level has delivered reasonably good margins, because of interest cost, they're getting hit at a PBT level.

Speaker #3: Railways is not doing so well in terms of margin, and our interest. So, three businesses are at a double-digit level, and three businesses are at a high single-digit level when it comes to EBITDA.

Manish Mohnot: So three businesses are more at a double-digit level and three businesses at a high single-digit level when it comes to EBITDA. As far as the 75 basis point improvement is there, I think it is a mix of the entire order book, but significant improvement in margins would come from the same three businesses, T&D, B&F, and Oil and Gas.

Speaker #3: As far as the 75-basis-point improvement is concerned, I think it's a mix of the entire order book. But significant improvement in margins would come from the same three businesses: T&D, B&F, and oil and gas.

Speaker #4: Understood. So, second, you highlighted the orders coming in from Aramco, ADNOC, and from the geographies of Qatar and Kuwait. So, when you are building in the inflows, can we expect a proportionate increase or a disproportionate increase from these geographies in your inflows in the coming quarters or years, I would say?

Amit Anwani: Understood. So second on, you are excited about the orders coming in from Aramco, ADNOC, and from the geographies of Qatar, Kuwait. So, when you are building in the inflows, can we expect a proportionate increase or the disproportionate increase from these geographies in your inflows in the coming years, I would say? And second, is it only T&D or some other segments in these geographies?

Speaker #4: And second, is it only TND or are there some other segments in these geographies?

Speaker #3: So, Amit, as far as the Middle East opportunities are concerned, I think we continue to be bullish on both oil and gas and T&D.

Manish Mohnot: Amit, as far as the Middle East opportunities are concerned, I think we continue to rate bullish on both oil and gas and T&D. We are present in both these segments as far as Middle East is concerned. We do believe or we are seeing a lot of traction on tenders coming up on both these segments in these geographies. We do believe that we are very well positioned to win some projects in the next three to six months. Would this be disproportionate? Depends on what values of orders we win, but in totality, I think, given our size and scale, they would still be of a reasonable size to make sure that there is good visibility going forward.

Speaker #3: We are present in both these segments as far as the Middle East is concerned. We do believe, or we're seeing, a lot of traction on tenders coming up in both these segments in these geographies.

Speaker #3: And we do believe that we are very well positioned to win some projects in the next three to six months. Would this be disproportionate?

Manish Mohnot: We do believe that we are very well positioned to win some projects in the next three to six months. Would this be disproportionate? Depends on what values of orders we win, but in totality, I think, given our size and scale, they would still be of a reasonable size to make sure that there is good visibility going forward.

Speaker #3: Depends on what values of orders we win. But in totality, I think, you know, they would given a size and scale, they would still be of a reasonable size to make sure that, you know, there's good visibility going forward.

Speaker #4: Understood. So, lastly, on the update for the IPO of LMG, any progress there? Thank you.

Amit Anwani: Understood, sir. Lastly, on the update on the IPO of LMG, any progress there? Thank you.

Speaker #3: So, Amit, we have appointed advisors to look at various options for fundraising at LMG. As of today, we're not in a position to give you any further update on that.

Manish Mohnot: Amit, we have appointed advisors to look at various options of fundraising at LMG. As of today, we are not in a position to give you any further update on that. We have appointed advisors as earlier informed to all of you last year to explore various options of fundraising at LMG. At an appropriate stage, we would be able to give an update to all of you.

Speaker #3: But we have appointed advisors, as earlier informed to all of you last year, to look at and explore various options of fundraising at LMG.

Speaker #3: And it's an appropriate stage. We would be able to give an update to all of you.

Speaker #4: Thank you, sir. Thank you. Thanks for asking.

Amit Anwani: Thank you, sir. Thank you. Thanks for answering.

Speaker #1: Thank you. Participants who wish to ask a question may press star one. I repeat, participants who wish to ask a question may press star one.

Operator: Thank you. Participants who wish to ask a question may press star and one. I repeat, participants who wish to ask a question may press star and one. The next question comes from the line of Bharat Sheth from Quest Investment Managers Pvt. Ltd. Please go ahead.

Speaker #1: The next question comes from the line of Bharat Sheet from Quest Investment Managers Private Limited. Please go ahead.

Speaker #5: I congratulate Manoj and the team, and thanks for the opportunity. Sir, my first question is related to TND. So, apart from the Middle East and India, which other geographies do you think could be growth drivers for our company over the next two to three years?

Bharat Sheth: Hi. Congratulations, Manish Mohnot and team, and thanks for the opportunity. Sir, my question is related, first is your T&D. So apart from Middle East and India, which are other geographies that you think that in next 2, 3 years could be a growth driver for our company?

Manish Mohnot: Bharat, I think from our perspective, even when you look at our numbers today, on the international front, you see that our larger exposure is in Latin America, which is entire Chile, Guyana, that market excluding Brazil. So if you ask me today, I think we stay bullish on all three markets. One is Latam, excluding Brazil. Second is Europe, driven by Linjemontage and the neighboring countries. Third is Middle East. Today for us, our Latam exposure, excluding Brazil, is much higher than Middle East and Europe. Per se today, we stay bullish on all these markets. In the last 3 months, we have become slightly more bullish on the Middle East opportunities because we see a lot of developments happening there. So it is all across the globe if you ask me.

Speaker #3: Bharatbhai, I think from our perspective, even when you look at our numbers today on the international front, you'll see that our larger exposure is, you know, in Latin America—which is the entire Chile, Guyana, that market excluding Brazil.

Speaker #3: So, if you ask me today, I think we stay bullish on all three markets. One is Latin, excluding Brazil. Second is Europe, driven by Lynch and Montage, and the neighboring countries.

Speaker #3: Third is the Middle East. Today, for us, our Latin exposure, excluding Brazil, is much higher than in the Middle East and Europe. So, per se, today we stay bullish on all these markets.

Manish Mohnot: Third is Middle East. Today for us, our Latam exposure, excluding Brazil, is much higher than Middle East and Europe. Per se today, we stay bullish on all these markets. In the last 3 months, we have become slightly more bullish on the Middle East opportunities because we see a lot of developments happening there. So it is all across the globe if you ask me.

Speaker #3: And in the last three months, we've become slightly more bullish on the Middle East opportunities because we see a lot of developments happening there.

Speaker #3: So, it's all across the globe, if you ask me.

Speaker #5: And okay. And for other business, like say oil and gas, apart from the Middle East, this time I think we have also seen some orders in the domestic market.

Bharat Sheth: Okay. For other business, like say the oil and gas, apart from Middle East, this time I think we have also seen some order in domestic market. Is that correct understanding?

Speaker #5: Is that correct understanding?

Speaker #3: No, I don't think we have secured any order in the domestic market in oil and gas. Yeah, we've got a small project, not something big, which is a small project similar to what we were doing earlier.

Manish Mohnot: No, I do not think we have secured any order in the domestic market in oil and gas.

Bharat Sheth: Okay.

Manish Mohnot: We have got a small project, not something big, which is a small project what we were doing earlier. Not very big one, around INR 100 and odd crores. As far as oil and gas is concerned, I think our focus significantly continues to be on the Middle East market. At least from a one to two year perspective, I think that is our biggest opportunity which we want to focus on. Given that last three years, we have delivered on one of the largest Saudi Aramco projects. We started from zero, and we have reached a scale where we have delivered on some of the large projects. So our focus continues to be Middle East, at least on oil and gas for the next couple of years, if not beyond that also.

Speaker #3: Not a very big one, around 100-odd crores. But as far as oil and gas is concerned, I think our focus significantly continues to be on the Middle East market.

Speaker #3: And at least from a one- to two-year perspective, I think that's our biggest opportunity, which we want to focus on. Given that, in the last three years, we have delivered on one of the largest Saudi Aramco projects. We started from zero, and we have reached a stage and scale where we have delivered on some of the large projects.

Manish Mohnot: Given that last three years, we have delivered on one of the largest Saudi Aramco projects. We started from zero, and we have reached a scale where we have delivered on some of the large projects. So our focus continues to be Middle East, at least on oil and gas for the next couple of years, if not beyond that also.

Speaker #3: So our focus continues to be the Middle East, at least on oil and gas, for the next couple of years, if not beyond that also.

Speaker #5: So sorry, I missed one. I mean, earlier we were very strong in Africa also. So, any color on that market, or do you think that is still, I mean, a few years away?

Bharat Sheth: Sorry, I missed one. Earlier, you were very strong in Africa also. So any color on that market, or you think that business is still a few years away?

Speaker #3: No, I think we have a lot of tenders coming from Africa, so it's not that we are not bullish on that. But if you ask me in terms of our priority markets—number one, two, three, four—Africa is number four.

Manish Mohnot: No, I think we have a lot of tenders coming from Africa, so it is not that we are not bullish on that. But if you ask me in terms of our priority markets, number 1, 2, 3, 4, Africa is number 4. It continues to be LatAm, followed by Middle East, followed by Europe, and then Africa. Also, for reasons that Africa now is seeing a lot of competition, whether Indian competition or even Chinese competition. So at times it is difficult to really compete and have projects with our margin standards which we have. But are we bullish? Yes. In my ranking, it will be number 4.

Speaker #3: Right? It continues to be Latin, followed by the Middle East, then Europe, and then Africa. Also, for reasons that Africa now is seeing a lot of competition, whether from Indian competition or even, you know, Chinese competition.

Speaker #3: So, at times, it's difficult to, you know, really compete and have projects with our margin standards, which we have. But are we bullish?

Speaker #3: Yes, in my ranking, it would be number four.

Speaker #5: Okay. So apart from TND, now secondly is building and factory. So how do we see, and how is the whole landscape changing? Are we seeing any kind of change in the landscape on the factory side or building side or is it still the same? I mean, are we still bullish?

Bharat Sheth: Okay. Apart from T&D now, second is the Buildings & Factories. How do we see and how the whole landscape is changing? Are we seeing any kind of a change in landscape, factory side or building side? Or still it is we are bullish?

Speaker #3: So Bharatbhai, as I said earlier, on the buildings and factories side, we are seeing a lot of developments coming up—industrial capex, primarily from PSUs and select private players.

Manish Mohnot: Bharat, as I said earlier, on the Buildings & Factories side, we are seeing a lot of developments coming on industrial CapEx, primarily from PSUs and select private players. PSUs, we have seen a lot of tenders come, whether it is tenders from NMDC, NALCO and all of them, and for which we have qualified. When we plan today, while residential and commercial continues to be very attractive, at least with the large developers where we are doing a lot of work. Besides that, given our expertise in doing data centers, given that we have done two airports now, given that we have done some very large industrial plants, we continue to be very positive on those opportunities also, and we are seeing good traction as compared to what we saw in the previous year.

Speaker #3: So, PSUs, we have seen a lot of tenders come—whether it is tenders from NMDC, NALCO, and all of them—for which we are qualified.

Speaker #3: So when we plan today, while residential and commercial continue to be very, very attractive, at least with the large developers where we are doing a lot of work.

Speaker #3: But besides that, given our expertise in building data centers, given that we have done two airports now, given that we have completed some very large industrial plants, we continue to be very positive on those opportunities also.

Manish Mohnot: Besides that, given our expertise in doing data centers, given that we have done two airports now, given that we have done some very large industrial plants, we continue to be very positive on those opportunities also, and we are seeing good traction as compared to what we saw in the previous year.

Speaker #3: And we're seeing good traction as compared to what we saw in the previous year.

Speaker #5: Okay. Any color on the building and factory side? Also, is there a bit of margin differential between the residential and industrial sides?

Bharat Sheth: Okay. Any color on the Buildings & Factories side, EBITDA margin differential between residential and industrial side?

Speaker #3: No, I think Bharatbhai, there's not a significant differential in terms of, you know, residential versus industrial. At a beta level at least, you know, we all there are typically double digit margins more in the range of 10 to 12 percent.

Manish Mohnot: No, I think, Bharat, there is not a significant differentiate in terms of residential versus industrial at a EBITDA level, at least. They are typically double-digit margins, more in the range of 10% to 12%. Project to project, sometimes it might change depending upon the size of the project, the client, and all of that. On average, I think the entire order book continues to be in the range of 10% to 12% EBITDA margin.

Speaker #3: Project to project, sometimes it might change depending upon the size of the project, the client, and all of that. But on average, I think all this, you know, the entire order book continues to be in the range of 10 to 12 percent EBITDA.

Speaker #5: Okay, great. And capability-wise also, do we need to build further on the industrial side, or do we have all kinds of capabilities already developed?

Bharat Sheth: Okay. Any capability-wise also, do we have to build further in industrial side or we have all kind of a capability we have developed?

Speaker #3: So Bharatbhai, this is a continuous exercise, right? There's nothing which says that we have built everything; you know, it's a continuous exercise. We started from zero—now we are qualified for large-scale projects.

Manish Mohnot: Bharat, this is a continuous exercise. There is nothing which says that we have built everything. It is a continuous exercise. We started from zero, now we are qualified for large-scale projects. Maybe not very big scale projects like some of our large competitors. But we are moving in that direction. Every project we take, we move towards the direction of qualifying for a higher value, and that has been the journey.

Speaker #3: Maybe not very big-scale projects like some of our large competitors, but we are moving in that direction. So, with every project we take, we move towards this direction of qualifying for a higher value.

Speaker #3: And that's been the journey.

Speaker #5: And any update you would like to give on urban infra? And the last question would be on backward integration that we were evaluating.

Bharat Sheth: Any update would you like to give on urban infra? The last question would be on backward integration that we were evaluating.

Speaker #3: No, so urban infra, Bharatbhai, as I said earlier, we have a reasonably good order book today. You know, we restarted this journey four years ago.

Manish Mohnot: No. Urban infra, Bharat, as I said earlier, we have a reasonably good order book today. We restarted this journey 4 years ago. Now we have six TBMs. We have now nearly completed one underground project already. All the TBMs are deployed on two new projects which we got in the last year. We are not seeing many tenders in urban infra in the last few months, but we believe should come up sooner than later. As far as our own business is concerned, we see a good double-digit growth in urban infra in the current year. Going forward, we will keep on exploring opportunities in the underground metro as well as overhead metro in India, and also explore opportunities overseas. Maybe not immediately, but going forward, that is also something which would be on our radar.

Speaker #3: Now we have six TBMs. We have nearly completed one underground project already. All the TBMs are deployed on two new projects which we got in the last year.

Speaker #3: We are not seeing many tenders in urban infra in the last few months, but we believe they should come up sooner rather than later. As far as our own business is concerned, we are seeing good double-digit growth in urban infra in the current year.

Manish Mohnot: As far as our own business is concerned, we see a good double-digit growth in urban infra in the current year. Going forward, we will keep on exploring opportunities in the underground metro as well as overhead metro in India, and also explore opportunities overseas. Maybe not immediately, but going forward, that is also something which would be on our radar.

Speaker #3: And, going forward, we will keep on exploring opportunities in the underground metro as well as overhead metro in India. We will also explore opportunities overseas—maybe not immediately, but going forward, that is also something which would be on our radar.

Speaker #5: Okay, that's the capex side and backward integration that we were looking for.

Bharat Sheth: Okay. And sir, CapEx side and backward integration that you are looking for.

Speaker #3: No, so on the capex side, I think we have targeted a capex of close to ₹800 crore in the current year. And I think we should be on track to do that, if not slightly more than that.

Manish Mohnot: No, sir, on CapEx side, I think we have targeted a CapEx of closer to INR 800 crores in the current year, and I think we should be on track to do that, if not slightly more than that. As far as backward integration is concerned, we have just declared today that we would be setting up a rolling mill in Raipur along with a plant. We are continuously exploring backward integration on various other products within the value chain where we exist today. One of them we have declared, but we are continuously exploring some, and as soon as we have clarity, we will declare further.

Speaker #3: As far as backward integration is concerned, you know, we have just declared today that we would be setting up a rolling mill in Raipur, along with a plant.

Speaker #3: We are continuously exploring backward integration on various other products within the value chain where we exist today. One of them we have declared, but we are continuously exploring some.

Speaker #3: And as soon as we have clarity, we'll declare further.

Speaker #5: Okay, thank you, and all the best, sir.

Bharat Sheth: Okay. Thank you and all the BESS, sir.

Speaker #3: Thank you, Bharatbhai.

Manish Mohnot: Thank you, Bharat.

Speaker #5: Thank you.

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

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

Parikshit Kandpal: Yeah, sir. Hi, congratulations on a great quarter and highly restrictive geopolitical uncertainties. My first question is, we have given order info guidance of 13,000, which we have maintained, and this year maybe we will touch INR 27,000, INR 28,000 crores on revenues. This is a very big base to grow from here on. How are you looking over the next 2, 3 years to grow at least 15% from here? What capabilities, what segments, what market are you looking to add to continue to keep growing at 15%, given that our balance sheet is on a very strong level? We hardly have any debt. Technically, maybe in a year's time it will be debt free. How does one model growth from here on?

Speaker #5: Yes. Yes, sir. Hi, congratulations on a great quarter and navigating highly restrictive geopolitical uncertainties. Our first question is: now, we have given order inflow guidance of 13,000, which we have maintained.

Speaker #5: And this year, maybe we'll touch 27,000–28,000 crores in revenues, which is a very big base to grow from here on. So how are you looking for the next two to three years? Can you grow at least 15 percent from here?

Parikshit Kandpal: How are you looking over the next 2, 3 years to grow at least 15% from here? What capabilities, what segments, what market are you looking to add to continue to keep growing at 15%, given that our balance sheet is on a very strong level? We hardly have any debt. Technically, maybe in a year's time it will be debt free. How does one model growth from here on?

Speaker #5: So, what capabilities, what side coins, what markets are you looking to add to continue to keep growing at 15 percent, given that our balance sheet is not at a very strong level?

Speaker #5: Hardly any debt, technically. Maybe in the near term it will be debt-free. So how does one model growth from here on?

Speaker #3: So, Parikshit, three or four aspects, you know, going beyond the current year to look at growth, and we started working on all of them.

Manish Mohnot: Parikshit, 3 or 4 aspects, going beyond the current year to look at growth, and we started working on all of them. The first aspect is taking a few of our businesses international, which have delivered extremely well in the country over the last one decade. Whether it is water, whether it is urban infra, whether it is larger projects in oil and gas, and whether it is T&D, it is still getting to newer geographies. That is the one thing which we are exploring continuously for the businesses, which could give us much higher growth compared to what we are doing here. The second aspect, as I mentioned earlier, is to look at backward integration wherever we can, which will help us not only achieve higher growth, but also give us profit improvement if we do backward integration on our projects.

Speaker #3: The first aspect is taking a few of our businesses international, which have delivered extremely well in the country over the last one decade, right?

Speaker #3: So whether it is water, whether it is urban infra, whether it is larger projects in oil and gas, and whether it is TL, it feels like we are getting to newer geographies.

Speaker #3: So that's the one thing which we are exploring continuously for the businesses, which could give us much higher growth compared to what we are doing here.

Manish Mohnot: That is the one thing which we are exploring continuously for the businesses, which could give us much higher growth compared to what we are doing here. The second aspect, as I mentioned earlier, is to look at backward integration wherever we can, which will help us not only achieve higher growth, but also give us profit improvement if we do backward integration on our projects.

Speaker #3: The second aspect, as I mentioned earlier, is to look at backward integration wherever we can, which will help us not only achieve higher growth but also give us, you know, profit improvement if we do backward integration on a project.

Speaker #3: Third, within some specific areas, whether you look at BNDEP or you look at urban infra, right, from where we started to where we are today.

Manish Mohnot: Third, within some specific areas, whether you look at B&F or you look at urban infra, from where we started to where we are today. We started from only being residential commercial. Today, we are qualified in data centers, airports, industrial, all of them. All of them together, the opportunity is huge, and we have never looked at it except for a few projects in the past. So within the value chain where we exist, we are qualifying ourselves through our design expertise, through our our execution expertise, through CapEx, to make sure that we can target bigger-sized projects. Our average sized project today is more than INR 500 crores, and we are wanting to see how we can further increase that.

Speaker #3: We started from only being in residential and commercial. Today, we are qualified in data centers, airports, industrial—all of them. Now, all of them together, the opportunity is huge.

Speaker #3: And we have nearly—we have never looked at it except for a few projects in the past. So, within the value chain where we exist, we are qualifying ourselves through our design expertise, through our execution expertise, through capex, to make sure that we can target bigger-size projects.

Manish Mohnot: So within the value chain where we exist, we are qualifying ourselves through our design expertise, through our our execution expertise, through CapEx, to make sure that we can target bigger-sized projects. Our average sized project today is more than INR 500 crores, and we are wanting to see how we can further increase that.

Speaker #3: Our average size projects today is more than ₹500 crores, and we are wanting to see how we can further increase that. So, enhancing the value chain within our offerings, looking at international markets, and backward integration—it's a combination of all three by which we believe that growing at at least 15 percent minimum should not be a challenge, even for the next few years.

Manish Mohnot: So enhancing value chain within our offerings, looking at international markets and backward integration, it is a combination of all three, by which we believe that growing at least 15% minimum should not be a challenge even for the next few years. Besides this, our international subsidiary, Linjemontage, has been on a good growth journey. Last three years, they have done very well. Although currently, we do not see them doing extremely good, but they should also be in good shape to look at further growth opportunities going forward. Combination of all of this and with great opportunity in the market today. All the segments where we are today, whether it is T&D, look at the numbers, including today's newspaper, you would have seen some further CapEx additions being planned. B&F across the segments, oil and gas, Middle East.

Speaker #3: Besides this, you know, our international subsidiaries—Sweden Linge Montage—have been on a good growth journey. The last three years, they have done very well. Although in the current year, we do not see them doing extremely well, they should also be in good shape to look at further growth opportunities going forward.

Speaker #3: So, a combination of all of this and the great opportunity in the market today, right? All the segments where we are today—whether it's T&D—look at the numbers.

Speaker #3: You know, including today’s newspaper, you would have seen some further capex additions being planned—BNDEP across the segments: oil and gas, Middle East. You know, with all of this, we believe that we are getting well positioned to look at larger projects, complex projects, margin-equity projects, and growth should not be a challenge at least for the next couple of years.

Manish Mohnot: With all of this, we believe that we are getting well-positioned to look at larger projects, complex projects, margin-accretive projects, and growth should not be a challenge, at least for the next couple of years. Even where we sit today, if you look at it, we have closer to 2 and a half years visibility on order book, including L1. So where we are today, plus visibility, I see that it is going to be a mix of all of this to make sure that we achieve what we have targeted.

Speaker #3: Even where we sit today, if you look at it, we have close to two and a half years' visibility on the order book, right? Including L1.

Speaker #3: So, where we are today, plus visibility, I see that it's going to be a mix of all of this to make sure that we achieve what we have targeted.

Speaker #5: Another question is, we are already including L1. We have ₹15,000 crore financial year to date. There is a major case for the rest of the year to increase the order inflow guidance.

Parikshit Kandpal: Another question is that we are already including L1. We have INR 15,000 crore in financial year to date. So that would mean the case for the rest of the year to increase the order inflow guidance. Secondly, on the management plans like at Nord and also beyond the pipeline projects, so in terms of capability upgradation, what are we looking at? What kind of further mining can we do with them in terms of new order wins and new capabilities being bundled up to win new tenders?

Speaker #5: And secondly, on the value system class, I have not and I'm also beyond the pipeline projects. So in terms of capability upgradation, so what are we looking at?

Speaker #5: What kind of further mining can we do with them in terms of the order lines, and what new capabilities are being developed to bring in new chemicals?

Speaker #3: So Parikshit, yes, we might have a revision—a further revision—but we'll have to come back to you at the end of Q2. There are a lot of delays happening in some parts of the world in placing orders.

Manish Mohnot: Parikshit, yes, we might have a revision, upward revision, but we will have to come back to you at the end of Q2 because there are a lot of delays happening in some parts of the world in placing orders. We also believe as an organization that given that we have INR 15,000 crore already in hand, we might be able to do better than this. But you have to give us some more time, maybe end of Q2, by which we might be able to revisit our guidance. As far as capabilities in oil and gas is concerned, we continue to keep on further building on process plants, on stations which we are doing on high-end projects, on pipeline projects, all of that. We are expanding through CapEx investment also.

Speaker #3: We also believe, as an organization, that given we have ₹15,000 crore already in our hands, we might be able to do better than this.

Speaker #3: But we'll have to give ourselves some more time, maybe by the end of Q2, by which we might be able to revisit our guidance. As far as capabilities in oil and gas are concerned, we continue to further build on process plants, on stations which we are doing, on high-end projects, on pipeline projects, all of that.

Manish Mohnot: But you have to give us some more time, maybe end of Q2, by which we might be able to revisit our guidance. As far as capabilities in oil and gas is concerned, we continue to keep on further building on process plants, on stations which we are doing on high-end projects, on pipeline projects, all of that. We are expanding through CapEx investment also.

Speaker #3: And we are expanding through capex investment also. Right now, we are not exploring offshore in any form, but onshore, everything from plants to process lines to pipelines is what we are looking at.

Manish Mohnot: Right now, we are not exploring offshore in any form, but onshore, everything from plants to process lines to pipelines is what we are looking at. We have already built a strong team on it, and we already have the credibility. It is only a matter of bidding for the right projects, winning it, and then focused on delivery.

Speaker #3: We've already built a strong team on it, and we already have the credibility. So it's only a matter of, you know, bidding for the right projects, winning them, and then focusing on delivery.

Speaker #5: So, anything on the hydrocarbon side? Hydrocarbon, carbon, new energies—so, anything there we can do?

Parikshit Kandpal: Anything on the hydrocarbon side? Hydrocarbon, new energies. Anything there what we can do?

Speaker #3: So, we have created a small team which is looking at those opportunities. We had also recently bid for some projects for power grid firms, something on BESS.

Manish Mohnot: We have created a small team which is looking at those opportunities. We had also recently bid for some projects for Power Grid from something on BESS. We were not successful in that. But yes, the exploration part has started. But do we have that clarity by which we can say that we will do this much in the current year is going to be difficult. Yes, but we have created a team which have started exploring BESS as well as hydrocarbon projects. But it is just the beginning. Give us some more time before we come back to you with a clear picture on this.

Speaker #3: We were not successful in that, but yes, the explorations part has started. But do we have that clarity by which we can say that we will do this much in the current year is going to be difficult?

Speaker #3: Yes, but we have created a team which has started exploring BESS as well as hydro, you know, carbon projects. But it's just the beginning.

Speaker #3: So give us some more time before we come back to you with a clear picture on this.

Speaker #5: Okay. One last question on KEPL. So I've seen NHI have got some reply from the court. If you can help us understand, like, what was the context and what was the expectation on the awards we could have realized, and now how the scenario changes.

Parikshit Kandpal: Okay. Just one last question on KPIL. I think NTI have got some reprieve from the court. If you can help us understand, for the context and what was the expectation on awards you could have realized and now how the narrative changes, and what kind of worst hit can be possible or could be there on the cash flows, if at all? Everything being provided in the P&L.

Speaker #5: So, and what kind of worst hit can it possibly be—could there be—on the cash flows, if at all? I have everything being provided in the PIR to this one.

Speaker #3: Yeah. So Parikshit, as far as KEPL is concerned, on our books, the carrying value of equity is zero. The entire amount is already provided for.

Manish Mohnot: Yeah. Parikshit, as far as KPIL is concerned, on our books, the carrying value of equity is zero. The entire amount is already provided. We provided it three years ago when we surrendered the asset. This was an arbitration award which we had won. The award has not been fully set aside. It has been set aside on some technical parameters to revisit the baseline assumptions on whatever claims were done. There were some technical issues on saying that whether the cost should be considered A, B, C. That is something which the High Court has said to be revisited. Whatever the award comes, it is only positive for us. There is no negativity in any form.

Speaker #3: We provided it three years ago when we surrendered the asset. This was an arbitration award which we had won. The award has not been fully set aside.

Speaker #3: It's been set aside on some technical parameters to revisit the baseline assumptions on whatever claims was done. So there were there were some technical issues on saying that whether the cost should be considered A, B, C, right?

Manish Mohnot: There were some technical issues on saying that whether the cost should be considered A, B, C. That is something which the High Court has said to be revisited. Whatever the award comes, it is only positive for us. There is no negativity in any form.

Speaker #3: So that's something which has been—which the High Court has said, you know, to be revisited. So whatever the award comes, it is only positive for us.

Speaker #3: There's no negativity in any form. So, we are just going to go back to the drawing board, make sure that the process starts again, and decide what is the technical, what is the, you know, right mechanism to calculate what awards should come to us.

Manish Mohnot: We are just going to go back to the drawing board and make sure that the process starts again and decide that what is the technical, what is the right mechanism to calculate what award should come to us. We would be going under Section 37 against that award, and sooner than later, we would work on that. From a cash flow as well as P&L perspective, there is no negative. It will only be positive as and when it comes. We have not considered this award in any form in our balance sheet or P&L in any form today. Our accounting policy is clear, only once the award finally comes and it is not contested is when we take it. I would not like to quantify the number because the numbers are relatively huge.

Speaker #3: So we would be going under section 37 against that award. And sooner than later, we would work on that. From a cash flow as well as P&L perspective, there's no negative.

Speaker #3: It will only be positive, as and when it comes. We have not considered this award in any form in our balance sheet or P&L as of today.

Manish Mohnot: It will only be positive as and when it comes. We have not considered this award in any form in our balance sheet or P&L in any form today. Our accounting policy is clear, only once the award finally comes and it is not contested is when we take it. I would not like to quantify the number because the numbers are relatively huge.

Speaker #3: Because our accounting policy is clear. Only once the award finally comes and it's not contested is when we take it. So I would not like to quantify the number because the number are relatively huge.

Speaker #3: I can only say that whatever comes to us is only going to be positive and not negative.

Manish Mohnot: I can only say that whatever comes to us is only going to be positive and not negative.

Speaker #5: But did it take care of the debt—your share—because there was a parcel? So, point of standing debt share, and once you realize whatever, in the worst case also, the court verdict is continuous.

Parikshit Kandpal: But will it take care of the bank your share because there is a pattern. Point of standing debt share and once you realize whatever in the worst case also, the court order is continuous. Will it be able to cover up your debt and whether still post that you will have some cash flows left?

Speaker #5: So, will it be able to cover up your debt, and should it also show that you have some cash flows left?

Speaker #3: So Parikshit, technically, we have zero debt on this project today. This project has been taken over by NHEI. We handed it over to them four years ago.

Manish Mohnot: Paresh, technically we have zero debt on this project today. This project has been taken over by National Highways Authority of India. We have handed it over to them four years ago. As per the concession agreement, the entire debt is now to be managed by National Highways Authority of India. Technically, we have zero debt on this project. Yes, there is a contest going on between National Highways Authority of India and us in terms of the calculation of debt, but even in the worst case scenario, we would not have any impact of debt coming on our books.

Speaker #3: And as per the concession agreement, the entire debt now has to be managed by NHEI. So technically, we have, you know, zero debt on this project.

Speaker #3: Yes, there is a contest going on between NHEI and us in terms of the calculation of the debt. But even in the worst-case scenario, we would not have any impact of debt coming on our books.

Speaker #5: Okay. Chandra, thank you. Wish you the best.

Parikshit Kandpal: Okay, sure, sir. Thank you. Wish you the BESS.

Speaker #3: Thanks.

Manish Mohnot: Right.

Parikshit Kandpal: I will get in touch with you. Thanks.

Speaker #2: Thank you. The next question comes from the line of Anuj Upadhyay from Investec. Please go ahead.

Operator: Thank you. The next question comes from the line of Anuj Upadhyay from Investec. Please go ahead.

Speaker #4: Hey, hi. Thanks for the opportunity. I just want to get a sense of how exactly we are dealing on the margin side. In the previous call, you also mentioned that 50% of our order book is exposed or variable in nature.

Anuj Upadhyay: Hey, hi, thanks for the opportunity. Sir, just want to get a sense on how exactly we are dealing on the margin side. In the previous call also, you had mentioned that 50% of our order book are exposed, are variable in nature, and within that, there are certain commodities which have been hedged, but steel and diesel is something the escalation of which can have an impact. Just want to get a sense on those costs, how exactly they are scaling up, and what impact could that have over the near-term margin, say, by Q2 and Q3 kind of a level.

Speaker #4: And within that, you know, there are certain commodities which have been hedged, but steel and diesel are something, you know, the escalation of which can have an impact.

Speaker #4: So, I just want to get a sense of those costs—how exactly are they scaling up, and what impact could that have on the near-term margin, say by the Q2 and Q3 level?

Speaker #3: Sure. Anuj, as I said earlier also, right, on our variable projects or on our fixed-price projects—because the impact comes more on the fixed-price projects—the impact is only on, let's say, diesel and steel.

Manish Mohnot: Anuj, as I said earlier also, on our variable projects or on our fixed projects, because the impact comes more on the fixed price projects. The impact is only on, let's say, diesel and steel, and I continue to be saying that. If you look at the steel prices last 3 months, there's hardly been any movement. Actually, the movement has been more positive than negative for us. That's something which I've been saying historically also. If it moves within a band of +5% to 10%, we can manage through contingencies and reserves, which we always have at a project level. Today, where we are, there's some impact happening on diesel prices, there's some impact happening on aggregate prices in some parts of the country. But is it big enough to have impact on the larger balance sheet? The answer is no.

Speaker #3: And I continue to say that if you look at steel prices over the last three months, there's hardly been any movement. Actually, the movement has been more positive than negative for us.

Speaker #3: So and that's something which I've been saying historically also, you know, if it moves within a band of plus minus 5, 10 percent, we can manage to continue season reserves, which we always have at a project level.

Manish Mohnot: That's something which I've been saying historically also. If it moves within a band of +5% to 10%, we can manage through contingencies and reserves, which we always have at a project level. Today, where we are, there's some impact happening on diesel prices, there's some impact happening on aggregate prices in some parts of the country. But is it big enough to have impact on the larger balance sheet? The answer is no.

Speaker #3: So today, where we are, there's some impact happening on diesel prices. There's some impact happening on aggregate prices in some parts of the country.

Speaker #3: But is it big enough to have an impact on the larger balance sheet? The answer is no. We still continue to be guided on the 75 basis point increase, which we have promised for the current year, quarter one has been much better than that.

Manish Mohnot: We still continue to be guided on the 75 basis point increase, which we have promised for the current year. Q1 has been much better than that. I believe on an annualized basis, we should be in that range even with a 5% to 10% movement in prices from where we are today.

Speaker #3: And so I believe on annualized basis, we should be in that range even you know, with even a 5, 10 percent movement in prices from where we are today.

Speaker #4: Got it, sir. And can you throw some light on the domestic opportunity on the transmission space? You know, we hear there's as you mentioned today also, there was around 50,000 kind of an opportunity which has been discussed.

Anuj Upadhyay: Got it, sir. Can you throw some light on the domestic opportunity on the transmission space? We hear this, as you mentioned today also, there was around 50,000 kind of an opportunity which has been discussed, but any near-term big opportunity which is coming especially on the HVDC side?

Speaker #4: But any near term big opportunity which is coming especially on the HVDC side?

Speaker #3: No, sir. You know, we've said this in the past also. The opportunity in terms of tendering looks very, very attractive when it comes to domestic T&D, whether it is HVDC, whether it is renewable substations—all of that.

Manish Mohnot: No. We have said this in the past also. The opportunity in terms of tendering looks very attractive when it comes to domestic T&D. Whether it is HVDC, whether it is renewable integration, whether it is GIS substations, all of that. We believe that this opportunity in terms of an annualized basis is more in the range of INR 100,000 crore to INR 150,000 crore on an annualized basis for the next five years. We continue to stay very bullish. There are limited players in the market on the EPC side who can deliver such high-value projects, and we are one among them. So we continue to stay bullish. Currently also we have good traction on it. So my view is a INR 100,000 crore plus order release on an annualized basis for the next five years should not be a challenge on domestic T&D in any form.

Speaker #3: We believe that this opportunity in terms of our annualized basis is more in the range of 1 lakh to 1 and a half lakh crores on an annualized basis for the next five years.

Speaker #3: We continue to stay very bullish. There are limited players in the market on the EPC side who can deliver such high-value projects, and we are among them.

Manish Mohnot: We continue to stay very bullish. There are limited players in the market on the EPC side who can deliver such high-value projects, and we are one among them. So we continue to stay bullish. Currently also we have good traction on it. So my view is a INR 100,000 crore plus order release on an annualized basis for the next five years should not be a challenge on domestic T&D in any form.

Speaker #3: So we continue to stay bullish. Current year also, we have good good traction on it. So my view is a 1 lakh crore plus order release on an annualized basis for the next five years should not be a challenge on domestic TND in any form.

Anuj Upadhyay: Got it, sir. And sir, for this quarter specifically, I see the Brazil revenue has fallen steeply. Any reason for that, sir?

Speaker #4: Got it, sir. And so for this quarter specifically, the Brazil revenue has fallen steeply. Any reason for that, sir?

Speaker #3: I think it's zero now, right? We have nearly returned us we have nearly returned us the entire Brazil since all our projects are zero.

Manish Mohnot: I think it is zero now, right? We have nearly written off the entire Brazil. So all our projects are zero, so it is closer to zero now.

Speaker #3: So, it's closer to zero now.

Speaker #4: Oh, got it. Got it, sir. This was quite helpful, sir. Thanks.

Anuj Upadhyay: Oh, got it. Got it, sir. This was quite helpful, sir. Thanks.

Speaker #2: Thank you. The next question comes from the line of Bhavin Modi from Anandrathi. Please go ahead.

Operator: Thank you. The next question comes from the line of Bhavin Modi from Anand Rathi. Please go ahead.

Speaker #5: Hi, sir. Thank you for the opportunity. So I would just like to, you know, sir, what is the, you know, the margin differential between the overseas, you know, order and the, you know, domestic order?

Bhavin Modi: Hi, sir. Thank you for the opportunity. I would just like to know, sir, what is the margin differential between the overseas order and the domestic order? I believe because the overseas order must be fetching good margin. Any color on that?

Speaker #5: I believe, you know, the overseas order must be fetching a good margin. So, any color on that?

Speaker #3: Bhavin, there isn't a specific rule on a margin differentiator. Typically, overseas orders have a higher margin because they carry a higher risk. But it's all, again, linked to a particular client, a particular kind of order, and a delivery time frame.

Manish Mohnot: Bhavin, there isn't a specific rule on a margin differentiator. Typically, overseas orders have a higher margin because they carry a higher risk. But it's all again linked to a particular client, a particular kind of order, and a delivery time frame. There isn't a kind of a rule. So even my international T&D business does EBITDA more in the range of 10% to 12% also, which is what B&F also does. But it is very different when the competition is high versus when competition is low, when it is Latin America versus Middle East versus Africa. As I said earlier, it's typically higher than domestic, but the risks are also high, and to that extent, you need that expertise to make sure that you deliver within that budgeted cost.

Speaker #3: So there isn't a kind of a rule. So on a, you know, even my international TL business does EBITDA more in the range of 10 to 12 percent also, which is what BNF also does.

Speaker #3: But it is very different when the competition is high versus when competition is low, and when it is Latin America versus Middle East versus Africa.

Manish Mohnot: But it is very different when the competition is high versus when competition is low, when it is Latin America versus Middle East versus Africa. As I said earlier, it's typically higher than domestic, but the risks are also high, and to that extent, you need that expertise to make sure that you deliver within that budgeted cost.

Speaker #3: As I said earlier, it's typically higher than domestic, but the risks are also higher. And to that extent, you need that expertise to make sure that you deliver within that budgeted cost.

Speaker #5: Understood. So, second thing, are we open to, you know, the government orders, in terms of a BNF, for example? You know, Central Vista projects. So, are we open to that?

Bhavin Modi: Understood. Second thing, are we open to the government orders, in terms of a B&F, for example, Central Vista projects. Are we open to that?

Speaker #3: Yeah, definitely. If there are good projects where we qualify, we would be more than happy to look at them.

Manish Mohnot: Yeah, definitely. If there are good projects where we qualify, we would be more than happy to look at them.

Speaker #5: Okay. So, we are okay with, you know, having a government client, especially on the BNF side.

Bhavin Modi: Okay. We are okay with having a government client especially on the B&F side.

Speaker #3: No, no. I think we've never said that we will not have a government client. We're more than happy.

Manish Mohnot: No, I think we have never said that we will not have a government client. We are more than happy.

Speaker #5: And third, sir, with respect to the urban infra—so, you know, apart from the elevated, underground metro, are we also open for, you know, projects like coastal road projects, you know?

Bhavin Modi: And third, sir, with respect to the urban infra, apart from the elevated underground metro, are we also open for the projects like coastal road projects, or the elevated road projects?

Speaker #5: So, for the, you know, elevated road projects?

Speaker #3: So urban infra are road project portfolios very, very minimal at a domestic level, and it's not one of our focus areas. If it's a project with tunnels or with, you know, high-end expertise on engineering, it's where we might be focused.

Manish Mohnot: So Urban Infra, our road project portfolio is very, very minimal at a domestic level, and it is not one of our focus areas. If it is a project with tunnels or with high-end expertise on engineering is where we might be focused. But if it is a plain vanilla road project or something like that, we might not be very excited with that.

Speaker #3: But if it is a plain vanilla road project or something like that, we might not be very excited with that.

Speaker #5: Got it. Got it. Yeah, that's it from my side. Thanks.

Bhavin Modi: Got it. Yeah, that is it from my side, sir. Thanks.

Speaker #2: Thank you. Participants who wish to ask a question may press star and one. The next question comes from the line of Arafat from Daulat Capital.

Operator: Thank you. Participants who wish to ask a question may press star and 1. The next question comes from the line of Arafat from Dolat Capital. Please go ahead.

Speaker #2: Please go ahead.

Speaker #5: Yeah. Hi, sir, and thanks for taking the questions. And sir, congrats on a great set of numbers in this tough environment. First of all, my question is, if you look at several EPC players, they posted lower margins in the quarter, impacted by commodity inflation, labor shortages, poor monsoons, and all the logistic issues.

[Company Representative] (Dolat Capital): Yeah. Hi, sir, and thanks for taking my question. Sir, congrats on great set of numbers in a tough environment. So my question would be, if you look at several EPC players posted lower margin in the quarter, in particular commodity inflation, labor shortage, and costs and all the logistic issue. But still, despite that, you guys maintain intact the delivery of 40 basis points higher margin. So what, let us say, is the difference we have in the 40 higher margin, would you say?

Arafat Saiyed: Yeah. Hi, sir, and thanks for taking my question. Sir, congrats on great set of numbers in a tough environment. So my question would be, if you look at several EPC players posted lower margin in the quarter, in particular commodity inflation, labor shortage, and costs and all the logistic issue. But still, despite that, you guys maintain intact the delivery of 40 basis points higher margin. So what, let us say, is the difference we have in the 40 higher margin, would you say?

Speaker #5: But still, despite that, you guys maintain impact below 40 basis points, higher margin. So, what's the difference—let's say, the difference we have in the higher margin industry above 40 basis points?

Speaker #3: Arafat, I would not like to deep dive into, you know, the numbers of some other companies. I can only say that what we have built is all about a diversified order book, a large-scale order book. It is about resilience and a lot of projects, so that if something does not deliver, something else will deliver.

Manish Mohnot: Arafat, I would not like to deep dive into the numbers of some other companies. I can only say that what have we built is all about the diversified order book, is of a large scale order book, is about resilience in a lot of projects, so that if something does not deliver, something else will deliver. It is about having a robust plant operations, which helps us on transmission projects. And it is about deep dive planning, which helps us to make sure that even with external factors, we can still deliver closer to what we have budgeted. Additionally, with that, our working capital focus approach, where working capital is very critical, helps us to make sure that delivery is the big driver. So to us, it is a mix of all of that, along with a CapEx driven approach on growth.

Speaker #3: It's about having a robust plant operations which helps us on transmission project. And it's about, you know, deep dive planning which helps us to make sure that, you know, even with external factors, we can still deliver closer to what we have budgeted.

Manish Mohnot: And it is about deep dive planning, which helps us to make sure that even with external factors, we can still deliver closer to what we have budgeted. Additionally, with that, our working capital focus approach, where working capital is very critical, helps us to make sure that delivery is the big driver. So to us, it is a mix of all of that, along with a CapEx driven approach on growth.

Speaker #3: Additionally, with that, our working capital-focused approach, you know, where working capital is very, very critical, helps us to make sure that delivery is the big driver.

Speaker #3: So to us, it's a mix of all of that. Along with, you know, a CAPEX driven approach on growth, if you see last four years, we have done closer to two and a half, three thousand crores of CAPEX, right, which is a very big number which helps us to deliver on the projects.

Manish Mohnot: If you see last 4 years, we have done closer to 2 and a half, 3,000 crores of CapEx. Which is a very big number, which helps us to deliver on the projects. So it is a mix of all of that which helps us achieve what we have done. Clearly, we also had a lot of challenges in the Q1, including labor. It was a challenge for the entire industry. But when domestic did not deliver, international delivered. When one market did not, something else delivered, and that helped us achieve a balanced growth for the organization as a whole.

Speaker #3: So it's a mix of all of that which helps us achieve what we have done, clearly. We also had a lot of challenges in Q1, including labor.

Speaker #3: It was a challenge for the entire industry. But when domestic did not deliver, international delivered. When one market did not, something else delivered. And that helps us achieve a balanced growth for the organization as a whole.

Speaker #5: Got it, sir. And secondly, sir, are you looking to sell off any non-core assets in the near term?

[Company Representative] (Dolat Capital): Got it. And secondly, sir, any non-core are you looking to sell off in the near term?

Arafat Saiyed: Got it. And secondly, sir, any non-core are you looking to sell off in the near term?

Speaker #3: I don't think we have much non-core left. We have one road asset, which has a life of closer to two years, so it will automatically, you know, be handed over.

Manish Mohnot: I don't think we have much non-core left. We have one road asset which has a life of closer to 2 years, so it will automatically be handed over. And we have Shree Shubham Logistics where we are reducing debt continuously by selling off their own assets. So my view is maybe in the near future nothing except that debt reduction and Shree Shubham Logistics will continue over the next few years also.

Speaker #3: And we have Shubham Logistics where we are reducing debt continuously by selling off their own assets. So my view is maybe in the near future, nothing except that debt reduction and Shubham Logistics will continuously will continue over the next two years also.

Speaker #5: Got it. And then, especially for Shubham Logistics, I just want to understand the overall ecosystem—when you bought that, what amount you invested in, how much is it, and let's say, are you looking to sell?

[Company Representative] (Dolat Capital): Got it. Especially for Shree Shubham Logistics, I just want to understand overall ecosystem, when you bought that, what amount you invested in, how much are looking to sell? Are you making a profit on that? Or what is the investment in the system?

Arafat Saiyed: Got it. Especially for Shree Shubham Logistics, I just want to understand overall ecosystem, when you bought that, what amount you invested in, how much are looking to sell? Are you making a profit on that? Or what is the investment in the system?

Speaker #5: Are you making a profit on that, or is it totally the investment in the system?

Speaker #3: So Arafat, I don't have those details with me. I'll be happy if you can connect with Kunal. I can only tell you that today, Shubham Logistics has close to zero external debt.

Manish Mohnot: Arafat, I do not have those details with me. I will be happy if you can connect with Kunal. I can only tell you that today Shree Shubham Logistics has closer to zero in external debt. They have repaid all banks as of 31 July. As far as Kalpataru is concerned, our investment including equity and loan together would be in the range of 300 plus crores, INR 395 crores, they have just corrected me. The business is doing reasonably well. They are in profitable zone today, and I believe that we are not investing any further capital in it. Slowly this investment value should only come down because we have a lot of assets in that business which we are slowly disposing off.

Speaker #3: They have repaid all banks as of 31st July. As far as Kalpataru is concerned, our investment, including equity and loan together, would be in the range of 300-plus crores, 395 crores.

Speaker #3: They have just corrected me. The business is doing reasonably well. They're in an unprofitable zone today, and I believe that we're not investing any further capital in it.

Manish Mohnot: The business is doing reasonably well. They are in profitable zone today, and I believe that we are not investing any further capital in it. Slowly this investment value should only come down because we have a lot of assets in that business which we are slowly disposing off.

Speaker #3: And slowly, this investment value should only come down, because we have a lot of assets in that business which we are slowly disposing of.

Speaker #5: Got it. And lastly, sir, what kind of opportunity are you looking for in data centers, and what's the project pipeline in that? How's the competition in the overall data center opportunity for you?

[Company Representative] (Dolat Capital): Got you. Lastly, sir, what kind of opportunity are you looking in for data centers? What is the project pipeline in that? How is the competition in the overall data system opportunity for you?

Arafat Saiyed: Got you. Lastly, sir, what kind of opportunity are you looking in for data centers? What is the project pipeline in that? How is the competition in the overall data system opportunity for you?

Speaker #3: So, Arafat, on the data center side, we are today qualified for civil as well as MEP. We have already done two data centers, and we are doing the third one right now as we speak.

Manish Mohnot: Arafat, in the data center side, we are today qualified for civil as well as MEP. We have already done two data centers, and we are doing the third one right now while we speak. We are seeing a lot of tenders which have come up, both by domestic developers as well as some international developers in India. We are bidding for it. My view is that there is a reasonably good opportunity available there, and in the next six to nine months, we should be able to take at least a few projects in that space.

Speaker #3: We're seeing a lot of tenders that have come up, both by domestic developers as well as some international developers in India. We are bidding for these.

Speaker #3: My view is that there's a reasonably good opportunity available there, and in the next six to nine months, we should be able to take at least a few projects in that space.

Speaker #5: Thank you, sir. That's all from my side. Thank you.

[Company Representative] (Dolat Capital): Fine, sir. That is all from my side. Thank you.

Arafat Saiyed: Fine, sir. That is all from my side. Thank you.

Speaker #3: Thanks.

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

Speaker #2: The next question comes from the line of Jainam Jain from DAM Capital. Please go ahead.

Speaker #5: All right. Thanks. Thank you for the opportunity. Sir, given that we have received the first order in the water segment in the Middle East, what sort of opportunity does this open for us in the Middle Eastern market?

Jainam Jain: Thank you for the opportunity. Sir, given that we have received our first order in water segment in Middle East, what sort of opportunities and budget opens for us in the Middle Eastern market?

Speaker #3: So, Jainam, on the Middle East side, in the water segment, we are now qualified with some of the large developers in those geographies where we exist.

Manish Mohnot: Jainam, on the Middle East side, in the water segment now we are qualified with some of the large developers in those geographies where we exist. This is the first project which we have won with a large Middle East developer. There are some more projects coming on everything, on let us say, plants, on pipelines, on a mix of all of that, including water treatment plants. We are bidding for that. Our view is that this is a great opportunity from a two to three-year perspective, and we will be slowly and steadily building that order book so that we can focus on building delivery capabilities along with the order book.

Speaker #3: This was the first project that we have won with a large Middle East developer. There are some more projects coming up—everything from, let's say, plants, to pipelines, and a mix of all of that, including water treatment plants.

Speaker #3: We are bidding for that, and our view is that, you know, this is a great opportunity from a two- to three-year perspective. We'll be slowly and steadily building that order book so that we can focus on building delivery capabilities along with the order book.

Manish Mohnot: We are bidding for that. Our view is that this is a great opportunity from a two to three-year perspective, and we will be slowly and steadily building that order book so that we can focus on building delivery capabilities along with the order book.

Speaker #5: Okay, sir. Sir, are you looking for desalination projects in the Middle East?

Jainam Jain: Okay, sir. Sir, are you looking for desalination projects in Middle East?

Speaker #3: Yes, we are looking at desal projects also in the Middle East, and we are qualified for a lot of them already.

Manish Mohnot: Yes, we are looking at desal projects also in Middle East, and we are qualified for a lot of them already.

Speaker #5: Okay. And how are the margins spending out over there in terms of in terms of water segment over there?

Jainam Jain: Okay. And how are the margins panning out over there in terms of water segment over there?

Speaker #3: I think we just started this journey, and obviously when you start this journey, the margins are not the best for any business. It just started the journey.

Manish Mohnot: I think we just started this journey, and obviously when you start this journey, the margins are not the best for any business. Just started the journey. They are still with positive margins, not necessarily the same level at which T&D and B&F and oil and gas are. But I believe that given that there are limited players only in that segment, in that size and scale, we should be able to get good margins in the long term.

Speaker #3: We are still with positive margins, not necessarily at the same levels as TND, BNF, and oil & gas. But I believe that, given that there are limited players only in that segment, in that size and scale, we should be able to get good margins in the long term.

Speaker #5: Okay. So, generally, we shall contact the projects, whichever we do, in the international markets. Is that a good understanding?

Jainam Jain: Okay. Generally, we subcontract the projects, whichever we do in the international markets. Is that a good understanding?

Speaker #3: No, I don't think we ever subcontract our entire project. There's smaller components of the project where it's sometimes on civil, sometimes on, let's say, fabrication, sometimes on erection, all of that we subcontract.

Manish Mohnot: No, I do not think we ever subcontract our entire project. There are smaller components of the project, sometimes on civil, sometimes on, let us say, fabrication, sometimes on erection, all of that we subcontract, but project as a whole, we never subcontract.

Speaker #3: But as a project as a whole, we never subcontract.

Speaker #5: Okay. And sir, on the water side, on the domestic front, how are we seeing the opportunities coming up?

Jainam Jain: Okay. And sir, in the water side, on the domestic front, how are we treating the opportunity standing on?

Speaker #3: So, on the domestic front, on the water side, as I said in my call, we have seen good traction in collections, though not necessarily what we wanted to.

Manish Mohnot: On the domestic front, on the water side, as I said in my call, we have seen good traction of collections, not necessarily what we wanted to. Even today, if you look at our billed and unbilled, it is more in the range of INR 1,500 plus crore on the water side for work which is done, which is pending. But it is much better than what it was in the previous year. So we expect a lot of collections to improve. We expand this. It is there well in the finance budget, it is visible in all the action of the government. As far as tenders on the domestic side are concerned, we as of now not waiting for any major tenders. We are not seeing major tenders also. But as and when, once our dues are clear and if tender opportunities come up, we will definitely look at that also.

Speaker #3: Even today, if you look at our build and unbuild, it's more in the range of 1,500 plus crores on the water side for work which is done which is pending.

Speaker #3: But it's much better than what it was in the previous year. So, we expect a lot of collections to improve. We expand this. It's there as well in the finance budget.

Manish Mohnot: We expand this. It is there well in the finance budget, it is visible in all the action of the government. As far as tenders on the domestic side are concerned, we as of now not waiting for any major tenders. We are not seeing major tenders also. But as and when, once our dues are clear and if tender opportunities come up, we will definitely look at that also.

Speaker #3: It's visible in all the action of the government. As far as tenders on the domestic side are concerned, we as of now, not bidding for any major tenders.

Speaker #3: We're not seeing major tenders also. But as and when our dues are clear, and if tender opportunities come up, we'll definitely look at that also.

Speaker #3: I'm not so confident that you'll have a lot of tenders in the current deal, but I believe going forward in the next year, you should start seeing tenders on the domestic waterfront also.

Manish Mohnot: I am not so confident that you will have a lot of tenders in the current year, but I believe going forward in next year, you should start seeing tenders on the domestic water front also.

Speaker #5: Okay. And sir, other than the journey, we have a mission. In the on the waterfront, are we seeing any desalination projects in India itself on which we are looking to bid for?

Jainam Jain: Sir, other than the Jal Jeevan Mission on the water front, are we seeing any desalination projects in India currently on which we are looking to bid for?

Speaker #3: As I said earlier, in the Indian market today, we are not bidding for any projects, at least from the six to nine month perspective, because still our collections come back.

Manish Mohnot: As I said earlier, in the Indian market today, we are not bidding for any projects, at least from the six to nine-month perspective, because still our collections come back.

Speaker #5: Okay, sir. Sir, what is the pending order booking journey mission?

Jainam Jain: Okay, sir. Sir, what is the pending order book in Jal Jeevan Mission?

Speaker #3: Closer to ₹4,000 crores. Closer to ₹4,000 crores, out of which a significant portion should get delivered in the current year itself.

Manish Mohnot: Closer to INR 4,000 crores. Out of it, a significant portion should get delivered in the current year itself.

Speaker #5: Okay. And the outstanding receivables?

Jainam Jain: Okay. And the outstanding receivables?

Speaker #3: Build plus unbuild, more in the range of 1,500 crores.

Manish Mohnot: Billed plus unbilled, more in the range of INR 1,500 crores.

Speaker #5: 1,500. Okay. Sir, do you have the status for that sort of question?

Jainam Jain: 1,500. Okay, sir. Do you have the status of that acquisition for-

Speaker #3: No, I don't have that with me right now. You can collect those details from Kunal later.

Manish Mohnot: No, I don't have that with me right now. You can collect the details from Kunal later on.

Speaker #5: Okay, but I'll take my question. Thank you so much, and all the best.

Jainam Jain: Okay. That was my question. Thank you so much, and have a good day.

Speaker #2: Thank you very much. We'll take that as the last question. And I would now like to hand the conference over to management for closing comments.

Operator: Thank you very much. We'll take that as the last question, and I would now like to hand the conference over to management for closing comments. Thank you, and over to you.

Speaker #2: Thank you, and over to you.

Speaker #3: Thank you, everyone. Thank you for attending the call.

Manish Mohnot: Thank you, everyone. Thank you for attending the call.

Operator: Thank you. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your line.

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Q1 2027 Kalpataru Projects International Ltd Earnings Call

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