Q1 2027 Afcons Infrastructure Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to the Afcons Infrastructure Q1 FY27 earnings conference call, hosted by DAM Capital Advisors Limited. 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 the Afcons Infrastructure Q1 FY27 Earnings Conference Call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen only mode. 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. Krishan Muniya from DAM Capital Advisors Limited. Thank you. Over to you, sir.

Operator: Ladies and gentlemen, good day and welcome to the Afcons Infrastructure Q1 FY 2027 Earnings Conference Call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen only mode. 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. Krishna Mundra from DAM Capital Advisors Limited. Thank you. Over to you, sir.

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

Speaker #1: I now hand the conference over to Mr. Kishan Munra from DAM Capital Advisors Limited. Thank you, and over to you, sir.

Speaker #2: Hi, thank you, Ms. Shia. Good morning, everyone, and a warm welcome to the Q1 FY27 earnings call of Afcons Infrastructure. To discuss the results today, we have the management with us, represented by Mr. Subramaniam Krishnamurthy, the Executive Chairman; Mr. Srinivasan Parmasivan, the Managing Director; Mr. Ramesh Kumar Jha, the CFO; and Mr. Hitesh Singh, the Head of Corporate Strategy.

Krishan Muniya: Thank you, Michelle. Good morning, everyone. A warm welcome to the Q1 FY27 earnings call of Afcons Infrastructure. To discuss the results, today, we have the management with us, which is represented by Mr. Subramanian Krishnamurthy, the Executive Chairman, Mr. Srinivasan Paramasivan, the Managing Director, Mr. Ramesh Kumar Jha, the CFO, Mr. Hitesh Singh, the Head of Corporate Strategy. At this point, I'll hand over the floor to the management for the initial remarks. Post which, we can open the floor for the question and answer session. With that, over to you, sir.

Krishna Mundra: Thank you, Michelle. Good morning, everyone. A warm welcome to the Q1 FY 2027 earnings call of Afcons Infrastructure. To discuss the results, today, we have the management with us, which is represented by Mr. Subramanian Krishnamurthy, the Executive Chairman, Mr. Srinivasan Paramasivan, the Managing Director, Mr. Ramesh Kumar Jha, the CFO, Mr. Hitesh Singh, the Head of Corporate Strategy. At this point, I'll hand over the floor to the management for the initial remarks. Post which, we can open the floor for the question and answer session. With that, over to you, sir.

Speaker #2: Now, at this point, I'll hand over the floor to the management for the initial remarks, and post which we can open the question. We can open the floor for the question and answer session.

Speaker #2: With that, over to you, sir.

Speaker #3: Thank you, Kishan. Good morning, ladies and gentlemen, and Krishnamurthy Subramaniam. It's a pleasure to connect with our investors, analysts, and stakeholders as we begin a new financial year.

Krishnamurthy Subramanian: Thank you, Krishan. Good morning, ladies and gentlemen. I'm Krishnamurthy Subramanian. It's a pleasure to connect with our investors, analysts, stakeholders, as we begin a new financial year. Thank you for joining us today and for your continued support and interest in Afcons Infrastructure Limited. I trust you have had the opportunity to review our financial results and investor presentation for the quarter uploaded on the stock exchanges. Joining me today are Paramasivan Srinivasan, Managing Director, Ramesh Kumar Jha, Chief CFO, and Mr. Hitesh Singh, Head of Corporate Strategy. Let me begin with an overview of our financial performance for the quarter. Afcons reported a total income of INR 2,727 crore in Q1 FY27, compared to INR 3,419 crore in Q1 FY26. EBITDA for the quarter stood at INR 263 crore with an EBITDA margin of 9.6%. Profit after tax was INR 30 crore.

Krishnamurthy Subramanian: Thank you, Krishan. Good morning, ladies and gentlemen. I'm Krishnamurthy Subramanian. It's a pleasure to connect with our investors, analysts, stakeholders, as we begin a new financial year. Thank you for joining us today and for your continued support and interest in Afcons Infrastructure Limited. I trust you have had the opportunity to review our financial results and investor presentation for the quarter uploaded on the stock exchanges. Joining me today are Paramasivan Srinivasan, Managing Director, Ramesh Kumar Jha, Chief CFO, and Mr. Hitesh Singh, Head of Corporate Strategy. Let me begin with an overview of our financial performance for the quarter. Afcons reported a total income of INR 2,727 crore in Q1 FY 2027, compared to INR 3,419 crore in Q1 FY 2026. EBITDA for the quarter stood at INR 263 crore with an EBITDA margin of 9.6%. Profit after tax was INR 30 crore.

Speaker #3: Thank you for joining us today and for your continued support and interest in Afcons Infrastructure Limited. Our financial results and investor presentation for the quarter have been uploaded on the stock exchanges, and I trust you have had the opportunity to review them.

Speaker #3: Joining me today are Paramesh and Srinivasan, Managing Director; Ramesh Kumar Jha, CFO; and Mr. Hitesh Singh, Head of Corporate Strategy. Let me begin with an overview of our financial performance for the quarter.

Speaker #3: Afcons reported a total income of ₹2,727 crore in Q1 FY27, compared to ₹3,419 crore in Q1 FY26. EBITDA for the quarter stood at ₹263 crore, with an EBITDA margin of 9.6%.

Speaker #3: Profit after tax was ₹30 crore. While our financial performance for this quarter was lower than the corresponding period last year, several of the challenges we encountered during FY26 continued into the first quarter of FY27.

Krishnamurthy Subramanian: Our financial performance for this quarter was lower than the corresponding period last year, as several of the challenges we encountered during FY26 continued into Q1 FY27. In addition, adverse weather conditions affected the progress on certain marine projects, while land handover at a few project sites advanced more slowly than anticipated. Execution of some faster projects also progressed at normal pace due to labor shortages. A few other projects were impacted by pending clearances. We expect these issues to gradually ease, enabling stronger execution momentum over the coming quarters. During the quarter, we achieved an important milestone. I'm delighted to share that the Mumbai-Pune Expressway Missing Link project was inaugurated on 1 May 2026, marking yet another defining milestone in Afcons' journey of delivering iconic infrastructures for the nation. The cable-stayed bridge executed by Afcons stand as the centerpiece of this landmark project.

Krishnamurthy Subramanian: Our financial performance for this quarter was lower than the corresponding period last year, as several of the challenges we encountered during FY 2026 continued into Q1 FY 2027. In addition, adverse weather conditions affected the progress on certain marine projects, while land handover at a few project sites advanced more slowly than anticipated. Execution of some faster projects also progressed at normal pace due to labor shortages. A few other projects were impacted by pending clearances. We expect these issues to gradually ease, enabling stronger execution momentum over the coming quarters. During the quarter, we achieved an important milestone. I'm delighted to share that the Mumbai-Pune Expressway Missing Link project was inaugurated on 1 May 2026, marking yet another defining milestone in Afcons' journey of delivering iconic infrastructures for the nation. The cable-stayed bridge executed by Afcons stand as the centerpiece of this landmark project.

Speaker #3: In addition, adverse weather conditions affected the progress on certain marine projects, while land handover at a few project sites advanced more slowly than anticipated.

Speaker #3: Execution of some FASTag projects also progressed at a normal pace due to labor shortages, while a few other projects were impacted by pending clearances. We expect these issues to gradually ease, enabling stronger execution momentum over the coming quarters.

Speaker #3: During the quarter, we achieved an important milestone. I'm delighted to share that the Mumbai-Pune Expressway Missing Link Project was inaugurated on May 1, 2026, marking yet another defining milestone in Afcons' journey of delivering iconic infrastructure for the nation.

Speaker #3: The cable-stayed bridge executed by Afcons stands as the centerpiece of this landmark project. Standing as India's tallest road cable-stayed bridge, it's not merely a bridge, but a reflection of Indian engineering capability, determination, and execution excellence under some of the most challenging conditions.

Krishnamurthy Subramanian: Standing as India's tallest road cable-stayed bridge, it's not merely a bridge, but a reflection of Indian engineering capability, determination, and execution excellence under some of the most challenging conditions. We are proud that the Mumbai-Pune Expressway Missing Link project is yet another example of many complex and technology challenging infrastructure projects that Afcons has successfully executed over the decades. We look ahead, we are equally encouraged by the quality of our existing order book, which includes several projects that have the potential to become engineering landmarks in their own right. This reinforces our confidence in the long-term strength of our project portfolio and our ability to continue delivering world-class infrastructure. Alongside engineering excellence, our commitment to safety remains unwavering. Safety is a deeply embedded aspect in our culture and continues to be recognized by leading global and domestic institutions.

Speaker #3: We are proud that the Mumbai-Pune Expressway Missing Link Project is yet another example of the many complex and technology-challenging infrastructure projects that Afcons has successfully executed over the decades.

Speaker #3: As we look ahead, we are equally encouraged by the quality of our existing order book, which includes several projects that have the potential to become engineering landmarks in their own right.

Speaker #3: These reinforce our confidence in the long-term strength of our project portfolio, and our ability to continue delivering world-class infrastructure. Alongside engineering excellence, our commitment to safety remains unwavering.

Speaker #3: Safety is a deeply embedded aspect of our culture, and is continuously recognized by leading global and domestic institutions. During the quarter, several of our projects received the British Safety Council's International Safety Awards, with distinction.

Krishnamurthy Subramanian: During the quarter, several of our projects received British Safety Council's International Safety Awards with distinction. These recognitions are meaningful because they validate the high standards of safety, discipline, and operational excellence that we strive to uphold across every Afcons project. Let me now briefly touch upon broader infrastructure environment. For some time now, geopolitical developments have weighed on infrastructure investments and project award activity across several regions. We remain hopeful that as the geopolitical uncertainties across key regions begin to ease, infrastructure investment and project award activity will gradually regain momentum globally as well as in India. Against this backdrop, we continue to pursue opportunities that align with our well-established risk management framework across our core markets in Asia, Africa, Middle East, and neighboring geographies. Our approach remains selective and disciplined with a clear focus on sustainable and profitable growth. We move through FY27, our priorities remain clear.

Speaker #3: These recognitions are meaningful because they validate the high standards of safety, discipline, and operational excellence that we strive to uphold across every Indian project.

Speaker #3: Afcons' project. Let me now briefly touch upon the broader infrastructure environment. For some time now, geopolitical developments have weighed on infrastructure investments and project award activity across several regions.

Speaker #3: We remain hopeful that, as the geopolitical uncertainties across key regions begin to ease, infrastructure investment and project award activity will gradually regain momentum globally, as well as in India.

Speaker #3: Against this backdrop, we continue to pursue opportunities that align with our well-established risk management framework across our core markets in Asia, Africa, the Middle East, and neighboring geographies.

Speaker #3: Our approach remains selective and disciplined, with a clear focus on sustainable and profitable growth. As we move through FY27, our priorities remain clear. We will continue to focus on growing the order book, improving collections, strengthening cash flows, and further enhancing and strengthening the balance sheet.

Krishnamurthy Subramanian: We will continue to focus on growing order book, improving collections, strengthening cash flows, and further enhancing and strengthening the balance sheet. These initiatives will provide stronger foundation for our growth and long-term value creation. With that now, I invite our Managing Director, Parameswaran Srinivasan, to share his remarks on the business outlook and operating performance. Thank you, gentlemen.

Speaker #3: These initiatives will provide a stronger foundation for our growth and long-term value creation. With that, I now invite our Managing Director, Paramesh Srinivasan, to share his remarks on the business outlook and operational performance.

Speaker #3: Thank you, gentlemen.

Speaker #4: Thank you, Mr. Subramaniam, and good morning, everyone. I extend a warm welcome to all our investors, analysts, and participants joining us today. We sincerely appreciate your continued confidence in Afcons and value the engagement you bring to these discussions.

Paramasivan Srinivasan: Thank you, Mr. Subramaniam, and good morning, everyone. I extend a warm welcome to all our investors, analysts, and participants joining us today. We sincerely appreciate your continued confidence in Afcons and value the engagement you bring to these discussions.

Speaker #4: As Mr. Subramaniam highlighted, the first quarter of 2027 continued to be impacted by some of the factors that affected us during the previous financial year.

Paramasivan Srinivasan: As Mr. Subramaniam highlighted, Q1 FY27 continued to be impacted by some of the factors that affected us during the previous financial year, along with certain execution delays across a few projects due to factors beyond our control. Liquidity conditions remained tight, and collections continued to be moderate during the quarter. We remain actively engaged with our clients at multiple levels to accelerate recoveries and improve cash flows over the coming months. Coming to profitability, we reported an EBITDA margin of 9.6% during the quarter. The moderation in profitability was primarily due to lower revenues during the quarter. As turnover improves across projects, we expect profitability to correspondingly improve over the coming quarters. On the operations front, I am pleased to share that both tunnel boring machines for our Mumbai-Ahmedabad high-speed rail C2 package successfully commenced their initial tunneling drives as per schedule.

Paramasivan Srinivasan: As Mr. Subramaniam highlighted, Q1 FY 2027 continued to be impacted by some of the factors that affected us during the previous financial year, along with certain execution delays across a few projects due to factors beyond our control. Liquidity conditions remained tight, and collections continued to be moderate during the quarter. We remain actively engaged with our clients at multiple levels to accelerate recoveries and improve cash flows over the coming months. Coming to profitability, we reported an EBITDA margin of 9.6% during the quarter. The moderation in profitability was primarily due to lower revenues during the quarter. As turnover improves across projects, we expect profitability to correspondingly improve over the coming quarters. On the operations front, I am pleased to share that both tunnel boring machines for our Mumbai-Ahmedabad high-speed rail C2 package successfully commenced their initial tunneling drives as per schedule.

Speaker #4: Along with certain execution delays across a few projects due to factors beyond our control, liquidity conditions remained tight and collections continued to be moderate during the quarter.

Speaker #4: We remain actively engaged with our clients, at multiple levels, to accelerate recoveries and improve cash flows over the coming months. Coming to profitability, we reported an EBITDA margin of 9.6% during the quarter. The moderation in profitability was primarily due to lower revenues during the quarter. As turnover improves across projects, we expect profitability to correspondingly improve over the coming quarters.

Speaker #4: On the operations front, I am pleased to share that both tunnel boring missions for our Mumbai-Ahmedabad High-Speed Rail C2 package successfully commenced their initial tunneling drives, as per schedule.

Speaker #4: This marks an important milestone for the project, particularly considering the challenges it has encountered over the past year. Having achieved this milestone as planned, we expect the project to move into its next phase of execution, with the TBM main tunneling drives expected to start in the coming months.

Paramasivan Srinivasan: This marks an important milestone for the project, particularly considering the challenges it has encountered over the past year. Having achieved this milestone as planned, we expect the project to move into its next phase of execution, with the TBM main tunneling drives expected to start in the coming months. Coming to order book, I am pleased to share that we have begun FY27 on a positive note with a healthy order inflows of INR 13,219 crores during Q1. With these orders, our order book stood at INR 43,290 crores at the end of the quarter, providing strong visibility for future revenues. As on date, our orders booked for the year stands at INR 15,700 crores, including orders received up to date. With this, there is no order pending to be converted from L1 to that of an order.

Paramasivan Srinivasan: This marks an important milestone for the project, particularly considering the challenges it has encountered over the past year. Having achieved this milestone as planned, we expect the project to move into its next phase of execution, with the TBM main tunneling drives expected to start in the coming months. Coming to order book, I am pleased to share that we have begun FY 2027 on a positive note with a healthy order inflows of INR 13,219 crores during Q1. With these orders, our order book stood at INR 43,290 crores at the end of the quarter, providing strong visibility for future revenues. As on date, our orders booked for the year stands at INR 15,700 crores, including orders received up to date. With this, there is no order pending to be converted from L1 to that of an order.

Speaker #4: Coming to the order book, I am pleased to share that we have begun financial year 2027 on a positive note, with healthy order inflows of Rs.

Speaker #4: 13,219 crores during the first quarter. With these orders, our order book stood at Rs 43,290 crores at the end of the quarter, providing strong visibility for future revenues.

Speaker #4: As of date, our order book for the year stands at Rs 15,700 crore, including orders received up to date. With this, there is no order pending to be converted from L1 to that of an order.

Speaker #4: The healthy order book positions us well for sustained growth over the medium term. As these projects progressively move into the main execution phases, we expect improved operational momentum and a gradual strengthening of our financial performance.

Paramasivan Srinivasan: The healthy order book positions us well for sustained growth over the medium term. As these projects progressively move into the main execution phases, we expect improved operational momentum and a gradual strengthening of our financial performance. It is equally encouraging that these order wins are significant achievements in their own right. The Croatia railway project represents the largest single order ever secured by Afcons. While the Vadhavan Port project provides us with the opportunity to construct the world's second-largest breakwater. These order wins reflect our strategic intent of focusing on large-value complex jobs without compromising on our risk framework. While this is encouraging, we remain equally focused on securing new orders and further strengthening our order book over the year. Our teams continue to actively pursue opportunities across both domestic and international markets, and we remain confident of achieving our full year order inflow guidance of INR 30,000 crore.

Speaker #4: It is equally encouraging that these orders win our significant achievements in their own right. The crucial railway project represents the largest single order ever secured by Afcons.

Speaker #4: While the Wadhwan Port project provides us with the opportunity to construct the world's second-largest breakwater, these order wins reflect our strategic intent of focusing on large-value, complex jobs without compromising on our risk framework.

Speaker #4: While this is encouraging, we remain equally focused on securing new orders and further strengthening our order book over the year. Our teams continue to actively pursue opportunities across both domestic and international projects and markets, and we remain confident of achieving our full-year order inflow guidance of Rs.

Speaker #4: 30,000 crores. This is supported by our healthy bid pipeline of approximately 1.5 lakh crores for the remaining nine months of FY 2027, and 3.96 lakh crores for the next two years across transportation, marine, hydro, underground, water, urban infrastructure, and industrial infrastructure segments.

Paramasivan Srinivasan: This is supported by our healthy bid pipeline of approximately INR 1.5 lakh crore for the remaining nine months of FY27, and INR 3.96 lakh crore for the next two years across transportation, marine, hydro, underground water, urban infrastructure, and industrial infrastructure segments. The pipeline is well-diversified across segments and geographies and consists of projects that align well with our technical strengths and disciplined risk management framework. To conclude, while some of the challenges that affected FY26 have continued into the Q1 of the current year, we remain encouraged by the conversion of key orders and opportunities ahead. We begin this year with a healthy order book, a robust bid pipeline, and a team that has repeatedly demonstrated its ability to deliver complex engineering projects under challenging conditions.

Paramasivan Srinivasan: This is supported by our healthy bid pipeline of approximately INR 1.5 lakh crore for the remaining nine months of FY 2027, and INR 3.96 lakh crore for the next two years across transportation, marine, hydro, underground water, urban infrastructure, and industrial infrastructure segments. The pipeline is well-diversified across segments and geographies and consists of projects that align well with our technical strengths and disciplined risk management framework. To conclude, while some of the challenges that affected FY 2026 have continued into the Q1 of the current year, we remain encouraged by the conversion of key orders and opportunities ahead. We begin this year with a healthy order book, a robust bid pipeline, and a team that has repeatedly demonstrated its ability to deliver complex engineering projects under challenging conditions.

Speaker #4: The pipeline is well-diversified across segments and geographies and consists of projects that align well with our technical strengths and disciplined risk management framework.

Speaker #4: To conclude, while some of the challenges that affected financial year 2026 have continued into the first quarter of the current year, we remain encouraged by the conversion of key orders and the opportunities ahead.

Speaker #4: We begin this year with a healthy order book, a robust bid pipeline, and a team that has repeatedly demonstrated its ability to deliver complex engineering projects under challenging conditions.

Speaker #4: As execution across our existing projects gathers pace, and recently secured orders move into their main construction phases, we expect a gradual improvement in performance over the coming quarters.

Paramasivan Srinivasan: As execution across our existing projects gathers pace and recently secured orders move into their main construction phases, we expect a gradual improvement in performance over the coming quarters. We remain committed to disciplined execution, prudent risk management, and operational excellence while continuing to pursue opportunities that align with our long-term strategies. With our strong technical capabilities, diversified presence, and proven track record, we remain confident in our ability to navigate the current environment and create sustainable long-term value for all our stakeholders. Thank you once again for your continued trust and support. I now hand over the call to our Chief Financial Officer, Mr. Ramesh Jha, to take you through the financial performance in greater detail.

Speaker #4: We remain committed to disciplined execution, prudent risk management, and operational excellence, while continuing to pursue opportunities that align with our long-term strategies. With our strong technical capabilities, diversified presence, and proven track record, we remain confident in our ability to navigate the current environment and create sustainable, long-term value for all our stakeholders. Thank you once again for your continued trust and support.

Speaker #4: I now hand over the call to our Chief Financial Officer, Mr. Ramesh Jha, to take you through the financial performance in greater detail.

Speaker #2: Thank you, sir. Good morning, everyone. Before talking about the numbers, let me reiterate that the company is in the business of construction. The margin in a quarter varies based on the nature, type, and quantum of work executed, so quarterly results may vary in different quarters and may not be indicative of the annual result or trend.

Ramesh Jha: Thank you, sir. Good morning, everyone. Before talking on the numbers, let me reiterate that company is into business of construction. The margin in a quarter varies based on the nature, type, and quantum of work executed, so quarterly results may vary in different quarter and may not be indicative of the annual result or trend. Now, coming specific on the numbers. In this quarter, we have done INR 2,727 crore of total income, which includes other income of INR 56 crore. This is 20.3% down from the previous year, wherein we had done INR 3,419 crore of turnover. This number was also inclusive of the other income. Q1 execution is on the expected lines, as in many projects, there were lack of work front availability.

Ramesh Kumar Jha: Thank you, sir. Good morning, everyone. Before talking on the numbers, let me reiterate that company is into business of construction. The margin in a quarter varies based on the nature, type, and quantum of work executed, so quarterly results may vary in different quarter and may not be indicative of the annual result or trend. Now, coming specific on the numbers. In this quarter, we have done INR 2,727 crore of total income, which includes other income of INR 56 crore. This is 20.3% down from the previous year, wherein we had done INR 3,419 crore of turnover. This number was also inclusive of the other income. Q1 execution is on the expected lines, as in many projects, there were lack of work front availability.

Speaker #2: Now, coming specifically to the numbers, in this quarter we have reported a total income of ₹2,727 crore, which includes other income of ₹56 crore. This is 20.3% down from the previous year, when we had a turnover of ₹3,419 crore.

Speaker #2: This number was also inclusive of the other income. Q1 execution is on expected lines, as in many projects there was a lack of work front availability, and generally, Q1 remains a little bit slow in terms of collection because most of our customers being government entities disburse the annual budget by March, and then devote Q1 to planning and budgeting for the next financial year.

Ramesh Jha: Generally, Q1 remains a little bit slow in terms of collection because most of our customers being government entity, disbursed the annual budget by March, then devote Q1 in planning and budgeting for the next financial year. If we talk from the specific experience of financial year 2026-27 Q1, then we would feel liquidity across market needs significant improvement. Payment related issues in UP Jal Jeevan Mission is still continuing. We have received small amount of payment based on the completed portion of work. Also, we have noticed that across the spectrum, payments are being stretched for some or the other reason. Hence, we are maintaining the balance between execution and liquidity. In FY27, we have booked order amounting to INR 15,695 crores till now, taking the pending order book in excess of INR 45,000 crores.

Ramesh Kumar Jha: Generally, Q1 remains a little bit slow in terms of collection because most of our customers being government entity, disbursed the annual budget by March, then devote Q1 in planning and budgeting for the next financial year. If we talk from the specific experience of financial year 2026-27 Q1, then we would feel liquidity across market needs significant improvement. Payment related issues in UP Jal Jeevan Mission is still continuing. We have received small amount of payment based on the completed portion of work. Also, we have noticed that across the spectrum, payments are being stretched for some or the other reason. Hence, we are maintaining the balance between execution and liquidity. In FY 2027, we have booked order amounting to INR 15,695 crores till now, taking the pending order book in excess of INR 45,000 crores.

Speaker #2: If we talk from the specific experience of financial year 2026-2027 Q1, then we would feel liquidity across market needs significant improvement. Payment-related issues in UP Jal Jeevan Mission are still continuing; we have received a small amount of payment based on the completed portion of work.

Speaker #2: Also, we have noticed that across the spectrum payments are being stretched for some or the other reason, hence we are not maintaining, hence we are maintaining the balance between execution and liquidity.

Speaker #2: In FY 2027, we have booked orders amounting to Rs 15,695 crore till now, taking the pending order book to in excess of Rs 45,000 crore.

Speaker #2: In FY 2027, we are targeting to significantly improve order booking and strengthen the balance sheet by collecting some of the stuck receivables. Uncertainty around economic activity because of war, geopolitical, and related issues continues, so it doesn't make sense to give any guidance in terms of growth.

Ramesh Jha: In FY27, we are targeting to significantly improve the order booking and improve the balance sheet by collecting some of the stuck receivables. Uncertainty around the economic activity because of war, geopolitical, and related stuff continues, it doesn't make sense for any guidance in terms of growth. In terms of EBITDA for the quarter, we have done INR 263 crores, which is 9.6%. This number has also come down by 41%. We had done INR 445 crores of absolute number EBITDA, which was 13% in the previous year, Q1. In our EBITDA calculation, we consider BG commission as part of our operating expenditure. So EBITDA, what we are talking about, is after removal of BG commission as an operating expenditure. This also includes the other income as part of revenue.

Ramesh Kumar Jha: In FY 2027, we are targeting to significantly improve the order booking and improve the balance sheet by collecting some of the stuck receivables. Uncertainty around the economic activity because of war, geopolitical, and related stuff continues, it doesn't make sense for any guidance in terms of growth. In terms of EBITDA for the quarter, we have done INR 263 crores, which is 9.6%. This number has also come down by 41%. We had done INR 445 crores of absolute number EBITDA, which was 13% in the previous year, Q1. In our EBITDA calculation, we consider BG commission as part of our operating expenditure. So EBITDA, what we are talking about, is after removal of BG commission as an operating expenditure. This also includes the other income as part of revenue.

Speaker #2: In terms of EBITDA for the quarter, we have done ₹263 crores, which is 9.6%. This number has also come down by 41%. We had done ₹445 crores of absolute EBITDA, which was 13% in the previous year's Q1.

Speaker #2: In our EBITDA calculation, we consider BG Commission as part of our operating expenditure, so the EBITDA we are talking about is after removing BG Commission as an operating expenditure.

Speaker #2: And this also includes the other income as part of revenue. We have explained earlier also that arbitration interest, foreign currency exchange gain, and miscellaneous income are recurring and very integral to our business.

Ramesh Jha: We have explained earlier also that arbitration interest, foreign currency exchange gain, and miscellaneous income are recurring and very integral to our business. These are factored as other operating income. So for the Q1 period, around INR 57 crores is other operating income, which we have factored in EBITDA calculation. In terms of profit before tax, for this period, we have done INR 51 crores of profit, which is significantly down. We had done INR 183 crores of profit before tax in the previous year Q1. Profit after tax is INR 30 crore, which is also significantly down because we had done INR 137 crores of profit after tax in the previous year, Q1. Profits got impacted because of lower turnover on the overall basis.

Ramesh Kumar Jha: We have explained earlier also that arbitration interest, foreign currency exchange gain, and miscellaneous income are recurring and very integral to our business. These are factored as other operating income. So for the Q1 period, around INR 57 crores is other operating income, which we have factored in EBITDA calculation. In terms of profit before tax, for this period, we have done INR 51 crores of profit, which is significantly down. We had done INR 183 crores of profit before tax in the previous year Q1. Profit after tax is INR 30 crore, which is also significantly down because we had done INR 137 crores of profit after tax in the previous year, Q1. Profits got impacted because of lower turnover on the overall basis.

Speaker #2: Hence, these are factored as other operating income. So, for the Q1 period, around 57 crores is other operating income, which we have factored into the EBITDA calculation.

Speaker #2: In terms of profit before tax for this period, we have done ₹51 crores of profit, which is significantly down. We had done ₹183 crores of profit before tax in the previous year Q1, and profit after tax is ₹30 crores, which is also significantly down because we had done ₹137 crores of profit after tax in the previous year Q1.

Speaker #2: Profits got impacted because of lower turnover on the overall basis. Margins in the individual projects continue to be robust, but because of the lower turnover overall, they could not generate sufficient overall contribution to cover the overhead cost and still have sufficient profit as the company has traditionally been doing.

Ramesh Jha: Margins in the individual projects continue to be robust, because of lower turnover overall, they could not generate sufficient overall contribution to cover the overhead cost and still have sufficient profit, what the company traditionally been doing. We have put lot of efforts towards reducing cost on the possible revenue, that has been partially offset by increase in energy, transport, and logistic costs. Talking about the finance cost, in Q1, we have seen higher average borrowing during the quarter. Because of this, interest cost has gone up. Coupled with this, new interest-bearing advances received during last, say, 12 to 15 months has elevated the interest cost on client advances, taking the overall interest cost up. Currently, 62% of our advances are interest free and 38% of the advances are interest bearing.

Ramesh Kumar Jha: Margins in the individual projects continue to be robust, because of lower turnover overall, they could not generate sufficient overall contribution to cover the overhead cost and still have sufficient profit, what the company traditionally been doing. We have put lot of efforts towards reducing cost on the possible revenue, that has been partially offset by increase in energy, transport, and logistic costs. Talking about the finance cost, in Q1, we have seen higher average borrowing during the quarter. Because of this, interest cost has gone up. Coupled with this, new interest-bearing advances received during last, say, 12 to 15 months has elevated the interest cost on client advances, taking the overall interest cost up. Currently, 62% of our advances are interest free and 38% of the advances are interest bearing.

Speaker #2: We have put a lot of effort towards reducing costs on the possible revenue, but that has been partially offset by an increase in energy, transport, and logistics costs.

Speaker #2: Talking about the finance cost, in Q1 we have seen higher average borrowing during the quarter. Because of this, interest cost has gone up. Coupled with this, new interest-bearing advances received during the last, say, 12 to 15 months have elevated the interest cost on client advances, taking the overall interest cost up.

Speaker #2: Currently, 62% of our advances are interest-free, and 38% of the advances are interest-bearing. This year, we have booked substantial orders, but the corresponding advances have still not come into the company.

Ramesh Jha: This year we have booked substantial order. The corresponding advances have still not come into the company. A large part of this is from the current orders we have backed is from international market, which is interest free. The orders what we have received in domestic market, the interest rates are quite low. We expect the interest cost to go down in the coming quarter. In terms of EBITDA, the depreciation is at INR 83.52 crores, which is 3.06% of the turnover. This quarter, the TBM operations were virtually not there. The accelerated depreciation what we charged was not there in the quarter. In terms of tax, the rate is quite high. If we see the PBT vis-à-vis profit after tax, the tax rate is working out almost 40%.

Ramesh Kumar Jha: This year we have booked substantial order. The corresponding advances have still not come into the company. A large part of this is from the current orders we have backed is from international market, which is interest free. The orders what we have received in domestic market, the interest rates are quite low. We expect the interest cost to go down in the coming quarter. In terms of EBITDA, the depreciation is at INR 83.52 crores, which is 3.06% of the turnover. This quarter, the TBM operations were virtually not there. The accelerated depreciation what we charged was not there in the quarter. In terms of tax, the rate is quite high. If we see the PBT vis-à-vis profit after tax, the tax rate is working out almost 40%.

Speaker #2: A large part of this is from the current orders we have backed, which is from the international market, which is interest-free, and also the orders that we have received in the domestic market—the interest rates are quite low. So, we expect the interest cost to go down in the coming quarter.

Speaker #2: In terms of EBITDA, the depreciation is at ₹83.52 crore, which is 3.06% of the turnover. This quarter, the TBM operations were virtually not there, so the accelerated depreciation that we charged was not there in the quarter.

Speaker #2: In terms of tax, the rate is quite high. If we see the PBT vis-à-vis profit after tax, the tax rate is working out to almost 40%.

Speaker #2: This is primarily because on AFCON's profit what we are paying the AFCON standalone profit what we are paying 25% tax, however in consolidated profit, this has decreased due to some of the close projects, which is in JVs and subsidiary where minor administrative expenses and provisions leading to small losses.

Ramesh Jha: This is primarily because on Afcons profit, what we are paying the Afcons standalone profit, what we are paying 25% tax. However, in consolidated profit, this has decreased due to some of the closed projects which is in JVs and subsidiary where minor administrative expenses and provisions leading to small losses. This has got amplified in this quarter because of lower profit in Afcons. As a result, the tax charge represent a higher percent. Few JVs pay tax rate in the range of 35% to 36%. Second, in some of the overseas locations like Bangladesh, tax is charged on turnover. In such situation, if you don't make profit above the threshold, your tax deductions needs to be charged off. Because Afcons profit was lower, some of the other entities, the administrative expenses leading to lower profitability in those entities, the overall tax rate has gone up.

Ramesh Kumar Jha: This is primarily because on Afcons profit, what we are paying the Afcons standalone profit, what we are paying 25% tax. However, in consolidated profit, this has decreased due to some of the closed projects which is in JVs and subsidiary where minor administrative expenses and provisions leading to small losses. This has got amplified in this quarter because of lower profit in Afcons. As a result, the tax charge represent a higher percent. Few JVs pay tax rate in the range of 35% to 36%. Second, in some of the overseas locations like Bangladesh, tax is charged on turnover. In such situation, if you don't make profit above the threshold, your tax deductions needs to be charged off. Because Afcons profit was lower, some of the other entities, the administrative expenses leading to lower profitability in those entities, the overall tax rate has gone up.

Speaker #2: This has got amplified in this quarter because of lower profit in Afcons. As a result, the tax charge represents a higher percent. Also, a few JVs pay a tax rate in the range of 35% to 36%. Second, in some of the overseas locations like Bangladesh, tax is charged on turnover.

Speaker #2: In such situations, if you don't make profit above the threshold, your tax deductions need to be carried forward. So, because Afcons' profit was lower, some of the other entities had more administrative expenses, leading to lower profitability in those entities. The overall tax rate has gone up.

Speaker #2: In terms of ROC and ROE, we'll talk on the annual number only because it doesn't make sense at this point in time. Specifically on the net working capital, the net working capital is at an elevated level because of funding to the projects, and no material movement in collection of the blocked-up assets.

Ramesh Jha: In terms of ROC and ROE, we will talk on the annual number only because it doesn't make sense at this point in time. Specific on the net working capital, the net working capital is at an elevated level because of funding to the projects and no material movement in collection of the blocked up assets. We are witnessing delays in certification of the work done and release of payment in projects. This has led to increase in uncertified work done, leading to jump in working capital requirement. Generally, this trend remains in Q1. We were expecting some improvement in this quarter. The collections have not moved to a level where you would have expected.

Ramesh Kumar Jha: In terms of ROC and ROE, we will talk on the annual number only because it doesn't make sense at this point in time. Specific on the net working capital, the net working capital is at an elevated level because of funding to the projects and no material movement in collection of the blocked up assets. We are witnessing delays in certification of the work done and release of payment in projects. This has led to increase in uncertified work done, leading to jump in working capital requirement. Generally, this trend remains in Q1. We were expecting some improvement in this quarter. The collections have not moved to a level where you would have expected.

Speaker #2: We are witnessing delays in certification of the work done and release of payment in projects. This has led to an increase in uncertified work done, leading to a jump in working capital requirements.

Speaker #2: Generally, this trend remains in Q1, but we were expecting some improvement in this quarter. However, the collections have not moved to a level where we would have expected.

Speaker #2: Our management is rigorously working towards stuck collection, and we are confident to turn things around this year. In terms of debt, in Q1 the payment issue has continued, and for operations we had to fund the operations.

Ramesh Jha: Our management is vigorously working towards stock collection. We are confident to turn things around this year. In terms of debt, in Q1 payment issue has continued. We had to fund the operations. We have done sizable CapEx payment this quarter. Debt has moved to a higher number. On net debt basis, the debt to equity is around 0.68 times of the net worth. On behalf of Afcons, I thank everyone for attending this call. Now I request the moderator to open the floor for question and answer. Thank you.

Ramesh Kumar Jha: Our management is vigorously working towards stock collection. We are confident to turn things around this year. In terms of debt, in Q1 payment issue has continued. We had to fund the operations. We have done sizable CapEx payment this quarter. Debt has moved to a higher number. On net debt basis, the debt to equity is around 0.68 times of the net worth. On behalf of Afcons, I thank everyone for attending this call. Now I request the moderator to open the floor for question and answer. Thank you.

Speaker #2: Also, we have made sizable capex payments this quarter, so debt has moved to a higher number. On a net debt basis, the debt-to-equity ratio is around 0.68 times the net worth.

Speaker #2: On behalf of Afcons, I thank everyone for attending this call. Now I request the moderator to open the floor for questions and answers. Thank you.

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 1 on the touch-tone telephone.

Operator: Thank you very much. We will now begin the question answer session. Anyone who wishes to ask a question may press star 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while a question queue assembles. The first question is from the line of Aditya Bhartia from Investec. Please go ahead.

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

Speaker #1: If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Bharatia from Investech.

Speaker #1: Please go ahead.

Aditya Bhartia: Hi, sir. In the opening remarks, we spoke about some of the execution challenges getting addressed over the next couple of quarters. Just wanted to check, are we seeing some concrete evidence of that? Are we seeing execution pace picking up across multiple projects? At this stage, it is a bit of a hope?

Speaker #3: Hi, sir. In the opening remarks, we spoke about some of the execution challenges getting addressed over the next couple of quarters. Just wanted to check: are we seeing some concrete evidence of that?

Speaker #3: Are we seeing execution pace picking up across multiple projects, or at this stage, is it a bit of a hope?

Speaker #2: At this stage, we are definitely seeing the symptoms of 'it's all happening.' And some of the issues with respect to land-related matters are getting addressed by proactive activities undertaken by the Maharashtra government.

Paramasivan Srinivasan: At this stage, we are definitely seeing the symptoms of it all happening. Some of the issues with respect to land-related issues are getting addressed by proactive activities undertaken by Maharashtra government. That would result in significant release of lands. Whichever places are there have been regular reviews from the government, which helps in pushing the project ahead. Similarly, in Madhya Pradesh where we have a project also where there is a compensation-related issue is getting resolved shortly. Movement has happened. There also, out of two projects, one project will start moving up immediately. That is what we look. The execution-related challenges with respect to blocked up things is more or less getting over and with geopolitical issues is becoming a little improved as compared to the last quarter. I would put it, things in terms of movement of materials.

Speaker #2: So that would result in significant release of land, whichever places are there. There have been regular reviews from the government, which helps in pushing the project ahead.

Speaker #2: In there are similarly in Madhya Pradesh where we have a project also where there is a compensation-related issue is getting resolved shortly, movement has happened.

Speaker #2: So there also, out of the two projects, one project will start moving up immediately. That is what we look at. Therefore, the execution-related challenges with respect to blocked-up things are more or less getting over, and with geopolitical issues, it is becoming a little improved.

Speaker #2: As compared to the last quarter, I would put things in terms of movement of materials. Though it's a little expensive as compared to the earlier period, it would still be improved in terms of movement of materials for our overseas projects.

Paramasivan Srinivasan: Though it's a little expensive as compared to the earlier period, it would still be improved in terms of movement of materials for our overseas projects. With these two, we do expect there are clear indications that things are moving towards positivity. Q3 and Q4, we believe would see significant uptick.

Speaker #2: And with these two, we do expect—there are clear indications that things are moving towards positivity. Q3 and Q4, we believe, would see a significant uptick.

Speaker #3: Perfect, perfect. That's great to hear, sir. Sir, my next question is on some of the large projects that we are having, like the Croatia project and the Badwan project. For these two projects, when should we expect work to start?

Aditya Bhartia: Perfect. That's great to hear, sir. My next question is on some of the large projects that we are having, like the Croatia project, the Vadhavan projects. For these two projects, when should we expect work to start? Is it that the initial part would be more about designing and to that extent, there'll be lesser revenue accretion and only over a period of time these projects should be picking up pace? If you could indicate us the execution timelines around that. A related question is on the HSR project. How should we think about that in terms of receiving payments in respect of past work that is done and execution pace from here on? Thank you so much.

Speaker #3: And is it that the initial part would be more about designing, and to that extent there will be less revenue attrition, and only over a period of time these projects should be picking up pace?

Speaker #3: If you could kind of indicate to us the execution timelines around that. And the related question is on the HSR project: how should we think about that in terms of receiving payments with respect to past work that is done, and the execution pace from here on?

Speaker #3: Thank you so much.

Speaker #2: With respect to Croatia, we believe that in the current year there will be a minuscule expenditure, and from the next financial year onwards, Croatia will pick up. With respect to the Badwan project, alternative methods are being discussed with the client.

Paramasivan Srinivasan: With respect to Croatia, we believe the current year there will be a minuscule expenditure. Next financial year onwards, Croatia will pick up. With respect to Vadhavan project, alternative methods are being discussed with the client, currently the approach road and also the reclamation-related work is yet to be completed. You would have read in the newspaper about the agitation and all around that. We are working with the client proactively with the thing. Current year, it will only be a geotechnical investigation and design-related work and initial installations. That will only happen in Vadhavan. All others, there are also aggressive push from the government also to see that certain facilities or certain approaches are handed over to us so that we can start the work. Therefore, in both the projects, effectively current year, there will be minuscule turnover.

Speaker #2: And currently, the approach road and also the reclamation-related work are yet to be completed. And you would have read in the newspaper about the agitation and all around that.

Speaker #2: So we are working with the client proactively. With the thing, for the current year, it will only be a geotechnical investigation and related design-related work, as well as initial installations.

Speaker #2: That will only happen in Badwan. In all others, there is also an aggressive push from the government to see that certain facilities or certain approaches are handed over to us.

Speaker #2: So that we can start the work. Therefore, in both the projects, effectively, for the current year, there will be minuscule turnover. With respect to HSR, whatever turnover we have done, all these have been paid for regularly.

Paramasivan Srinivasan: With respect to HSR, whatever turnover we have done, all these have been paid for regularly. The tunneling-related turnover will commence from November, technically. Till that time, the initial drive will happen for about three months. After that, we do expect a good turnover. As we had conveyed earlier also, tunneling carries higher level of turnover. Therefore, as we start tunneling deeper, we'll get into the turnover properly. We are in the final stages of getting the settlement with respect to force majeure done, and most likely it'll get settled in the current quarter.

Speaker #2: And the tunneling-related turnover will commence from November, technically. Until that time, the initial drive will happen for about three months. And after that, we do expect a good turnover. As we had conveyed earlier also, tunneling carries a higher level of turnover.

Speaker #2: So, therefore, as we start tunneling deeper, we will get into the turnover properly. We are in the final stages of getting the settlement with respect to force majeure done.

Speaker #2: And most likely, it will get settled in the current quarter.

Speaker #3: Perfect, sir. That's great to hear. Thank you so much.

Aditya Bhartia: Perfect, sir. That's great to hear. Thank you so much.

Speaker #2: Thanks, Aditya.

Paramasivan Srinivasan: Thanks, Aditya.

Speaker #1: Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. A reminder to all the participants: please press star and 1 to ask a question.

Operator: Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. A reminder to all the participants to press star and one to ask a question. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Speaker #1: The next question is from Shravan Shah from Dolet Capital. Please go ahead.

Speaker #3: Hi, sir. A couple of questions. I was listening to your opening comments and your reply to the first participant's questions. So broadly—let me break it into two, three parts.

Shravan Shah: Hi, sir. A couple of questions. I was listening your opening comments and the reply to the first participant questions. Broadly, let me break it into two, three parts. Do we see Q2 revenue be a Q flat or a lower? When we are saying the H2 would be a better execution, I understand though we are not providing a full year guidance on the execution front, but on a directional front, even if we, let's assume a 20% kind of a growth, is it possible or not? Even if that is possible, for full year, the broad rough, my calculation says we will be a kind of a flattish or maybe a 1% kind of a growth. That's the correct way to look at, or we can see maybe a 5% plus kind of a degrowth for this year.

Speaker #3: So do we see Q2 revenue be a QOQ flat or a lower? And then when we are saying the H2 would be a better execution, I understand though we are not providing a full year guidance on the execution front, but on a directional front, even if we, let's assume a 20% kind of a growth, is it possible or not?

Speaker #3: Even if that is possible, then for the full year, the broad, rough calculation says we will be kind of flattish, or maybe see a 1% kind of growth. That's the correct way to look at it, or we could see maybe a 5% plus kind of degrowth for this year.

Speaker #2: So, see, we have already talked about that. At this point in time, it doesn't make any sense to give any direction on the top line or any profitability-related guidance.

Ramesh Jha: See, we have already talked about that at this point in time, it doesn't make any sense to give any direction on the top line or any profitability related guidance. We are not commenting on the Q2, how it is going to pan out or how the year is going to pan out. But as things stands, things are moving in our whatever expectations we have, and we aspire that we should build a very strong order book in this financial year, and we should also improve the balance sheet this year by way of collecting, by way of reducing our contract assets and receivable, and by reducing our debt. We should be in a very strong position by end of the year in terms of order booking, in terms of financial health. We should ramp up the progress in the financial year 2028.

Ramesh Kumar Jha: See, we have already talked about that at this point in time, it doesn't make any sense to give any direction on the top line or any profitability related guidance. We are not commenting on the Q2, how it is going to pan out or how the year is going to pan out. But as things stands, things are moving in our whatever expectations we have, and we aspire that we should build a very strong order book in this financial year, and we should also improve the balance sheet this year by way of collecting, by way of reducing our contract assets and receivable, and by reducing our debt. We should be in a very strong position by end of the year in terms of order booking, in terms of financial health. We should ramp up the progress in the financial year 2028.

Speaker #2: So we are not commenting on Q2, how it is going to pan out or how the year is going to pan out. But as things stand, things are moving in line with whatever expectations we have.

Speaker #2: And we aspire that we should build a very strong order book in this financial year. And we should also improve the balance sheet this year by way of collecting by way of reducing our contract assets and receivable and by reducing our debt.

Speaker #2: So we should be in a very strong position by the end of the year in terms of order booking, in terms of financial health. And then we should ramp up the progress in the financial year '28.

Speaker #3: Yeah, sir, I understand. But still, again, harping on the same thing, because directionally, when we are saying that in H2, we should see a strong execution.

Shravan Shah: Yeah, sir. I understand. Still, again, harping on the same thing, because a directional, because when we are saying that in H2, we should see a strong execution.

Speaker #3: So my point, my points are listen to me, sir. My point is that because if we will be doing a kind of a flat, because that's what the broad, even if I take a 20% kind of a growth in the second half and maybe a flat in the Q2, that means this will be the fourth year where we will be kind of having a flat revenue from the what we have done in the FY 23 from there till now, we will be having a kind of a flat growth.

Ramesh Jha: So-

Ramesh Kumar Jha: So-

Shravan Shah: My point, sir. Listen to me, sir, my point is that, because if we will be doing a kind of a flat, because that's what the broad, even if I take a 20% kind of a growth in H2 and maybe a flat in the Q2, that means this will be the fourth year where we will be kind of having a flat revenue from what we have done in the FY23. From there till now, we will be having a kind of a flat growth. At the same time, at the flat level, we will be declining. Will FY28 then or maybe FY28 and FY29 would be a so strong, maybe a kind of a 25%, 30% kind of a growth that we are looking at? That's the direction I wanted to understand.

Shravan Shah: My point, sir. Listen to me, sir, my point is that, because if we will be doing a kind of a flat, because that's what the broad, even if I take a 20% kind of a growth in H2 and maybe a flat in the Q2, that means this will be the fourth year where we will be kind of having a flat revenue from what we have done in the FY 2023. From there till now, we will be having a kind of a flat growth. At the same time, at the flat level, we will be declining. Will FY 2028 then or maybe FY 2028 and FY 2029 would be a so strong, maybe a kind of a 25%, 30% kind of a growth that we are looking at? That's the direction I wanted to understand.

Speaker #3: So that's the and at the same time, at the flat level, we will be drawing a declining. So will FY 28 then would be or maybe 28 and the 29 would be a so strong maybe a kind of a 25, 30% kind of a growth that we are looking at.

Speaker #3: That's the direction I wanted to understand.

Speaker #2: So just to answer you, in past, if we see the performance of the company in generally, the Q1 is around say 40, 45% and Q2 remains to be around H1 remains to be around 40, 45% and H2 remains around 55 to 60%.

Ramesh Jha: Just to answer you, in past, if we see the performance of the company in generally the Q1 is around, say 40% to 45%, H1 remains to be around 40% to 45%, and H2 remains around 55% to 60%. Directionally, if you ask me, we are looking at a similar kind of a situation this year also. Q3, Q4 is going to be where we'll bounce back to the levels we were generating earlier. In terms of as the order booking is ramping up and the way we are targeting to reach in terms of financial health, we are looking at a strong FY28 and FY29.

Ramesh Kumar Jha: Just to answer you, in past, if we see the performance of the company in generally the Q1 is around, say 40% to 45%, H1 remains to be around 40% to 45%, and H2 remains around 55% to 60%. Directionally, if you ask me, we are looking at a similar kind of a situation this year also. Q3, Q4 is going to be where we'll bounce back to the levels we were generating earlier. In terms of as the order booking is ramping up and the way we are targeting to reach in terms of financial health, we are looking at a strong FY 2028 and FY 2029.

Speaker #2: Directionally, if you ask me, we are looking at a similar kind of situation this year also. Q3 and Q4 are going to be when we'll bounce back to the levels we were generating earlier.

Speaker #2: And in terms of how the order booking is ramping up, and the way we are targeting to reach, in terms of financial health, we are looking at a strong FY28 and FY29.

Speaker #3: Okay, great. Sir, is it possible to share a couple of balance sheet data points? Because when we are saying—we have mentioned that—I think the debt would have also increased.

Shravan Shah: Okay, great. Sir, is it possible to share a couple of balance sheet data points? When we are saying, we have mentioned that I think the debt would have also increased. If you can specify the, particularly the gross debt, and then the cash level, and also some of the inventory, trade payable data, absolute numbers, and maybe mobilization, advance, retention, unbilled. That will help us to understand how the things are either worsening or maybe at a similar level. That would be helpful.

Speaker #3: So, if you can specify particularly the gross debt, and then the cash level, and also some of the inventory, trade payable data—absolute numbers—and maybe mobilization advance, returns, and unbilled as well.

Speaker #3: So, that will help us to understand how things are either worsening or maybe at a similar level. So, that would be helpful.

Speaker #2: See, generally the balance sheet numbers are disclosed in H1, so maybe in September we'll be coming out with the detailed numbers. So you'll be able to figure out.

Ramesh Jha: Generally, the balance sheet numbers are disclosed in H1, so maybe in September, we'll be coming out with the detailed numbers, so you'll be able to figure out. In terms of Q1 numbers, generally, we have seen almost say last 10, 15 years, we have seen that Q1 numbers will be always lower than the number of annual number, March number. This is the trend. In terms of absolute debt number, we have talked about that the debt to equity is around 0.68 on net debt to equity basis, and numbers have slightly gone down as compared to the March number. The way deterioration happened in terms of, say, receivables or debt number or say, contract assets number in last year Q1, this year, it has not gone that bad.

Ramesh Kumar Jha: Generally, the balance sheet numbers are disclosed in H1, so maybe in September, we'll be coming out with the detailed numbers, so you'll be able to figure out. In terms of Q1 numbers, generally, we have seen almost say last 10, 15 years, we have seen that Q1 numbers will be always lower than the number of annual number, March number. This is the trend. In terms of absolute debt number, we have talked about that the debt to equity is around 0.68 on net debt to equity basis, and numbers have slightly gone down as compared to the March number. The way deterioration happened in terms of, say, receivables or debt number or say, contract assets number in last year Q1, this year, it has not gone that bad.

Speaker #2: But in terms of Q1 numbers, generally, we have seen over the last 10 or 15 years that Q1 numbers are always lower than the annual numbers, or the March numbers.

Speaker #2: So this is the trend. But in terms of absolute debt numbers, we have talked about the debt to equity being around 0.68, or on a net debt to equity basis.

Speaker #2: And numbers have slightly gone down as compared to the March number. But the way deterioration happened in terms of, say, receivables or debt number or, say, contract assets number in last year Q1—this year, it has not gone that bad.

Speaker #3: But sir, unless we give some directional numbers, it would be difficult to kind of quantify what we are saying. So, at least at a gross debt level, what's the gross debt number? And for working capital days, what was it in FY26, and how much increase has happened now?

Shravan Shah: Sir, unless we give some directional numbers would be difficult to kind of quantify what we are saying. At least a gross debt level, what's the gross debt number and working capital days, what was in FY26 and now how much increase has happened? At least.

Shravan Shah: Sir, unless we give some directional numbers would be difficult to kind of quantify what we are saying. At least a gross debt level, what's the gross debt number and working capital days, what was in FY 2026 and now how much increase has happened? At least.

Speaker #3: So at least.

Speaker #2: It is at a it is at a elevated level as compared to a March number. But since we have the auditors have not certified the balance sheet number, it will not be prudent on our part to give those numbers.

Ramesh Jha: It is at an elevated level as compared to March number. Since the auditors have not certified the balance sheet number, it will not be prudent on our part to give those numbers.

Ramesh Kumar Jha: It is at an elevated level as compared to March number. Since the auditors have not certified the balance sheet number, it will not be prudent on our part to give those numbers.

Speaker #3: Yeah, because all other companies also provide— I understand it is an unaudited number. But at least to get a sense, and how one can pencil in the numbers. Unless we have anything on that front, it becomes very, very difficult to kind of pencil in how one can look at the full year and maybe the next year.

Shravan Shah: Yeah. All other companies also provide, I understand it is unaudited number, at least to get a sense and how one can pencil in the numbers. Unless we have anything on that front, it becomes very difficult to pencil in how one can look at the full year and maybe the next year. Political, sorry for that. Diplomatic answer would be difficult to convert into the numbers. That's my suggestion. Thanks.

Speaker #3: So political sorry, for that, diplomatic answer would be a difficult to kind of a convert into the numbers. So that's the my suggestion. Thanks.

Speaker #2: You will be able to calculate these numbers. You look at the March debt number, you look at the March net worth number, and what we are saying is that, at this point in time, the debt to equity on a net debt basis is around 0.68.

Ramesh Jha: You will be able to calculate these numbers. You look at the March debt number, you look at the March net worth number, what we are saying that at this point in time, the debt to equity on a net debt basis is around 0.68. You'll be able to calculate. It's very simple. I'm not spelling out because those numbers have not been audited, so it is not advisable that we talk about on a public forum these numbers. That's the limitation. You can very easily calculate.

Ramesh Kumar Jha: You will be able to calculate these numbers. You look at the March debt number, you look at the March net worth number, what we are saying that at this point in time, the debt to equity on a net debt basis is around 0.68. You'll be able to calculate. It's very simple. I'm not spelling out because those numbers have not been audited, so it is not advisable that we talk about on a public forum these numbers. That's the limitation. You can very easily calculate.

Speaker #2: So you'll be able to calculate. It's very simple. I'm not spelling it out because those numbers have not been audited, so it is not advisable that we talk about these numbers on a public forum.

Speaker #2: That's the limit. You'll be able to very easily calculate.

Speaker #3: But working capital days, sir, we are not saying anything directionally also, whether there is a 10 or 20 days increase or something.

Shravan Shah: Working capital days, sir, we are not saying anything directionally also with how much, 10, 20 days increase, something.

Speaker #2: It has marginally increased from the March number.

Ramesh Jha: It has marginally increased from the March number.

Ramesh Kumar Jha: It has marginally increased from the March number.

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

Shravan Shah: Okay. Thank you, sir.

Speaker #2: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. A reminder to all participants to press star and one to ask a question. The next question is from Bala Subramaniam.

Operator: Thank you. A reminder to all the participants to press star and one to ask a question. The next question is in the line of Bala Subramaniam from Arihant Capital. Please go ahead.

Operator: Thank you. A reminder to all the participants to press star and one to ask a question. The next question is in the line of Balasubramanian from Arihant Capital. Please go ahead.

Speaker #1: From Arihan Capital, please go ahead.

Speaker #4: Good morning, sir. Thank you so much for the opportunity. Sir, are you changing your execution strategy to prioritize liquidity over maximizing quarterly revenue? Basically, limiting execution on projects with elongated payments.

[Analyst] (Arihant Capital): Good morning, sir. Thank you so much for the opportunity. Sir, our execution strategy to prioritize liquidity, over maximizing quarterly revenue, basically, limiting execution on projects, with elongated payments. At the same time, we are focusing on reducing the net debt in this financial via contract asset liquidation. How we are managing this duality, whether slowing down new work to protect cash flow while simultaneously executing existing work to unlock cash, because our order inflow is also more than INR 13,000 crore in this quarter. I'm trying to understand on the execution side how we are prioritizing our existing work as well as new work.

Balasubramanian A.: Good morning, sir. Thank you so much for the opportunity. Sir, our execution strategy to prioritize liquidity, over maximizing quarterly revenue, basically, limiting execution on projects, with elongated payments. At the same time, we are focusing on reducing the net debt in this financial via contract asset liquidation. How we are managing this duality, whether slowing down new work to protect cash flow while simultaneously executing existing work to unlock cash, because our order inflow is also more than INR 13,000 crore in this quarter. I'm trying to understand on the execution side how we are prioritizing our existing work as well as new work.

Speaker #4: At the same time, we are focusing on reducing the net debt in this financial year. We are also working on contract asset liquidation. So, how are you managing this duality—whether slowing down new work to protect cash flow, while simultaneously executing existing work to unlock cash?

Speaker #4: Or how you are, because our order inflow is also more than ₹13,000 crore in this quarter. So I'm trying to understand, on the execution side, how we are prioritizing our existing work as well as new work.

Speaker #2: So you are right that it's a very difficult situation where we need to manage the execution, as well as manage liquidity.

Ramesh Jha: You are right that it's a very difficult situation where we need to manage the execution as well as we need to manage liquidity, and we are not unduly overexposing ourselves with some of the customers. This approach, we are not approaching with all the customers. There are certain customers where we had seen that there were some challenges in those projects, and in those projects only we are taking such kind of stand like, say, project in Bangladesh or some water-related projects. We are giving funds to the project based on the collection that project is generating. Otherwise, excluding these projects, the payments are forthcoming, the projects' cash flows are positive. Such projects we are supporting with wherever there is a temporary mismatch and if there is any requirement for the completion of the project.

Ramesh Kumar Jha: You are right that it's a very difficult situation where we need to manage the execution as well as we need to manage liquidity, and we are not unduly overexposing ourselves with some of the customers. This approach, we are not approaching with all the customers. There are certain customers where we had seen that there were some challenges in those projects, and in those projects only we are taking such kind of stand like, say, project in Bangladesh or some water-related projects. We are giving funds to the project based on the collection that project is generating. Otherwise, excluding these projects, the payments are forthcoming, the projects' cash flows are positive. Such projects we are supporting with wherever there is a temporary mismatch and if there is any requirement for the completion of the project.

Speaker #2: And we are not unduly overexposing ourselves with some of the customers. So, this approach we are not adopting with all the customers. There are certain customers where we had seen that there were some challenges in those projects.

Speaker #2: And in those projects only, we are taking such a stand. Like, say, the project in Bangladesh or some water-related project—we are giving funds to the project based on the collection that the project is generating.

Speaker #2: Otherwise, in excluding these projects, the payments are forthcoming. The projects' cash flows are positive. So, such projects we are supporting wherever there is a temporary mismatch.

Speaker #2: And if there is any requirement for the completion of the project.

Speaker #1: Okay, sir. Sir, I would.

[Analyst] (Arihant Capital): Okay, sir. Sir, our strategic equipment base is nearly INR 4,300 crore, I think, which creates high depreciations as well as maintenance burden. If you look at last few years, our top line's anywhere between INR 10,000 to 13,000 crore range. If you look at our interest cost and our depreciation, it's substantially increased. Is there any thought process or strategic shifting towards asset-light model, where you can lease specialized equipments or to form a JV with equipment providers for some specific mega projects, so that way we can improve our ROE and ROC profiles? What's your thought process on owning most of the equipments as well as moving towards leasing or renting the equipments?

Balasubramanian A.: Okay, sir. Sir, our strategic equipment base is nearly INR 4,300 crore, I think, which creates high depreciations as well as maintenance burden. If you look at last few years, our top line's anywhere between INR 10,000 to 13,000 crore range. If you look at our interest cost and our depreciation, it's substantially increased. Is there any thought process or strategic shifting towards asset-light model, where you can lease specialized equipments or to form a JV with equipment providers for some specific mega projects, so that way we can improve our ROE and ROC profiles? What's your thought process on owning most of the equipments as well as moving towards leasing or renting the equipments?

Speaker #4: Strategic equipment base is nearly 4,300 crore. I think which creates high depreciations as well as maintenance burden. If you look at last few years, our top lines anywhere between 10,000 to 13,000 crore range.

Speaker #4: But if you look at our interest cost and depreciation, it's substantially increased. Is there any thought process or strategic shift towards an asset-light model, where you can, like, lease specialized equipment or form a JV with an equipment provider for some specific mega projects?

Speaker #4: So that way, we can improve our OE and ROC profiles. So, what’s your thought process on owning most of the equipment as well as moving towards leasing or renting the equipment?

Speaker #2: For strategic equipment only, we keep investing. We don't invest in all the equipment—number one. Number two, as we had explained in the past also, outside of India, especially in Africa and all, the cost of rentals is very high.

Paramasivan Srinivasan: For strategic equipments only we keep investing. We don't invest in all the equipments, number one. Number two, as we had explained in the past also, in outside of India, especially in Africa and all, the cost of rentals are very high. The equipment value is sought to be realized in 9 months time in Africa, as opposed to some 48 to 60 months in India. Therefore, in some of those cases also, we do invest equipments on the higher side, and we get commensurate returns as well. Third, in marine, we hold strategic advantage by having a large fleet of equipments, and that is something which helps us in some of backing of marine projects and other thing. Only thing, as last couple of years, our turnover has stagnated or slightly degrown. It creates an impression that it is on the higher side. It is not so.

Speaker #2: An equipment value is sought to be realized in nine months’ time in Africa, as opposed to some 48 to 60 months in India. Therefore, in some of those cases, also, we do invest in equipment.

Speaker #2: On the higher side, and we get commensurate returns as well. Third, in marine, we hold a strategic advantage by having a large fleet of equipment.

Speaker #2: And that is something which helps us in some of the backing of marine projects and other things. The only thing is, for the last couple of years, our turnover has stagnated or slightly regrown.

Speaker #2: It creates an impression that it is on the higher side. It is not so. As we move forward, you will find that we have the asset turnover ratio also significantly improved.

Paramasivan Srinivasan: As we move forward, you will find that we have our asset turnover ratio also significantly improved. We have not invested in any assets which is not of strategic importance. Got it, sir. Thank you.

Speaker #2: So, we have not invested in any assets which are not of strategic importance.

Speaker #4: Got it, sir. Thank you.

Speaker #2: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. The next question is from Abhinav of ICICI Securities. Please go ahead.

Operator: Thank you. The next question is on the line of Abhinav from ICICI Securities. Please go ahead.

Speaker #3: Yeah, sir, thanks for the opportunity. My question is first on the pipeline. You mentioned about ₹1.5 trillion for the next nine months. Can you break that across the segments?

[Analyst] (ICICI Securities): Yeah. Thanks for the opportunity. My question is first on the pipeline. You mentioned about INR 1.5 trillion for the next nine months. Can you break that across the segments?

Speaker #2: Yes, sure. For the nine months, out of this ₹1.5 lakh crore, the major chunk is from urban infrastructure, which for us comprises metro, elevated bridges, and elevated roads.

Ramesh Jha: Yeah, sure. For the nine months, out of this INR 1.5 trillion, major chunk is from urban infrastructure, which for us comprises of metro and elevated bridges and elevated roads. That is around 34%. Marine is 32%. Hydro and underground is 20%. It includes our water business as well. Surface, which is road and railway business, that is 14%. This pipeline is for the next nine months.

Ramesh Kumar Jha: Yeah, sure. For the nine months, out of this INR 1.5 trillion, major chunk is from urban infrastructure, which for us comprises of metro and elevated bridges and elevated roads. That is around 34%. Marine is 32%. Hydro and underground is 20%. It includes our water business as well. Surface, which is road and railway business, that is 14%. This pipeline is for the next nine months.

Speaker #2: That is around 34%. Marine is 32%. Hydro and underground is 20%. It includes our water business as well. Surface, which is road and railway business, is 14%.

Speaker #2: And this pipeline is for the next nine months.

Speaker #3: Understood. And sir, any color on the long-term pipeline you mentioned—about $3.9 trillion?

[Analyst] (ICICI Securities): Understood. Sir, any color on the long-term pipeline you mentioned about INR 3.9 trillion?

Speaker #2: Sure. So, on the long-term pipeline, as MDs mentioned in his speech, our long-term pipeline is close to ₹4 lakh crore. In this part also, the pipeline is evenly distributed.

Ramesh Jha: On the long-term pipeline, as MD sir mentioned in his speech, our long-term pipeline is close to INR 4 lakh crore. In this part also, this pipeline is evenly distributed. Around 36% is from the urban infrastructure space, and surface transport will be around 20%. The hydro business is relatively less, it's around 15%, and the remainder will be marine and industrial.

Ramesh Kumar Jha: On the long-term pipeline, as MD sir mentioned in his speech, our long-term pipeline is close to INR 4 lakh crore. In this part also, this pipeline is evenly distributed. Around 36% is from the urban infrastructure space, and surface transport will be around 20%. The hydro business is relatively less, it's around 15%, and the remainder will be marine and industrial.

Speaker #2: Around 36% is from the urban infrastructure space, and surface transport will be around 20%. The hydro business is relatively less; it's around 15%. The remainder will be marine and industrial.

Speaker #3: Understood. Sir, can you give some details on the urban projects? Which are the big-ticket projects that are coming in the near term?

[Analyst] (ICICI Securities): Understood. Sir, can you give some details on the urban project, like which are the big-ticket projects that are coming in the near term?

Speaker #2: Some of the big-ticket projects, if we can talk about, the Brahmaputra Tunnel is something which is coming up, which is around ₹19,000 crores.

Paramasivan Srinivasan: Some of the big-ticket projects, if we can talk about, is Brahmaputra tunnel is something which is coming up, which is around INR 19,000 crore. There is Dholera connectivity in Ahmedabad, which is about INR 18,000 crore. Many other projects of this size, elevated expressways and other things, are coming in excess of all around INR 4,000 to 5,000 crore. There are number of bridges which are coming up, which is also in the region of between INR 3,000 to 5,000 crore. We have a strong pipeline in the domestic market, and similarly in the international market also, there's quite a good pipeline available to us.

Speaker #2: And there is Dholera connectivity in Ahmedabad, which is about ₹18,000 crores. And many other projects of this size—elevated expressways and other things—are coming.

Speaker #2: In excess of all, around ₹4,000 to ₹5,000 crores. There are a number of bridges which are coming up, which is also in the region of between ₹3,000 to ₹5,000 crores.

Speaker #2: So, we have a strong pipeline in the domestic market. Similarly, in the international market also, there's quite a good pipeline available to us.

Speaker #3: Understood. Sir, my last question is about the depreciation of the TBM. How will that be accounted for?

[Analyst] (ICICI Securities): Understood. Sir, my last question is on the depreciation of TBM. How will that be accounted for?

Speaker #2: So, TBM, we are accounting for as per the Companies Act prescribed rate, and we'll continue to account for those depreciations. Thank you, sir. Thank you.

Ramesh Jha: TBM, we are accounting for as per the company's act prescribed rate, and we'll continue to account for those depreciations.

Ramesh Kumar Jha: TBM, we are accounting for as per the company's act prescribed rate, and we'll continue to account for those depreciations.

[Analyst] (ICICI Securities): Understood. Thank you, sir.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. The next question is on the line of Parvesh Kazi from Novama Group. Please go ahead.

Operator: Thank you. The next question is in the line of Parvez Qazi from Nuvama Group. Please go ahead.

Parvez Qazi: Hello. Yeah. Hi, good afternoon, and thanks for taking my question. Couple of questions from my side. First, what was the CapEx that we undertook in Q1?

Speaker #4: Yeah, hi. Good afternoon, and thanks for taking my question. So, a couple of questions from my side. First, what was the capex that we undertook in Q1?

Speaker #2: Capex. So, in Q1, we have done close to ₹150 crore capitalized. But then, there is a sizable amount in CWIP.

Ramesh Jha: CapEx? CapEx in Q1, we have done close to INR 150 crore capitalized, there is a sizable amount in CWIP.

Ramesh Kumar Jha: CapEx? CapEx in Q1, we have done close to INR 150 crore capitalized, there is a sizable amount in CWIP.

Parvez Qazi: Possible to quantify that? Will it be more or less same as what it was at the end of March almost? I think we had almost INR 900 crore of CWIP, if I'm correct.

Speaker #4: Is it possible to quantify that? Or should we let it remain more or less the same as it was at the end of March? I think we had almost ₹900 crore of CWIP, if I'm correct.

Speaker #2: Yeah, similar number is there.

Ramesh Jha: Yeah, similar number is there.

Ramesh Kumar Jha: Yeah, similar number is there.

Speaker #4: Got it. On the order intake front, we already have one about 15 odd thousand crores this year. So for the year as a whole, fair to say somewhere around 30 odd thousand crores is something that we can look at.

Parvez Qazi: Got it. On the order intake front, we already have won about INR 15 odd thousand crore this year. For the year as a whole, fair to say somewhere around INR 30 odd thousand crore is something that we can look at?

Speaker #2: Yes, ₹30,000 crores—we are very confident of booking that at the minimum.

Paramasivan Srinivasan: Yes, INR 30,000 crore we are very confident of booking at the minimum.

Speaker #4: Sure. And last question to Ramesh R. The other income you mentioned, about ₹57 crore this year—now, I assume forex gains, etc., everything is included in that?

Parvez Qazi: Sure. Last question to Ramesh. Our other income, which you mentioned about INR 57 odd crore this year now, I assume ForEx gains, et cetera, everything is included in that. For the year as a whole, what kind of number that could be? Because, it has come down. We used to have almost about INR 450, INR 470 odd crore of ForEx gain earlier. Now it's reduced. What number could it be?

Speaker #4: In that, for the year as a whole, what kind of number could that be? Because, I mean, it has come down. We used to have almost about ₹450–470 crore of Forex gain earlier.

Speaker #4: Now it's reduced, so what number could it be?

Speaker #2: So, what number are you talking about in other income? Around 450 to 470 crores. It used to be a combination of these factors: arbitration interest, foreign currency gain, and miscellaneous income, and some other items also, like insurance claim and other stuff.

Ramesh Jha: What number you are talking about in other income around INR 450, INR 470 crore, it used to be a combination of these factors like, say, arbitration interest, foreign currency gain, and the miscellaneous income, and some of the other stuffs also like insurance claim and other stuff. Now, for this quarter, the number is low, because we also try to close things in March wherever possible, and the activity also goes up in H2. This year also we'll be in the range of, say, for the year, somewhere around INR 400 or so.

Ramesh Kumar Jha: What number you are talking about in other income around INR 450, INR 470 crore, it used to be a combination of these factors like, say, arbitration interest, foreign currency gain, and the miscellaneous income, and some of the other stuffs also like insurance claim and other stuff. Now, for this quarter, the number is low, because we also try to close things in March wherever possible, and the activity also goes up in H2. This year also we'll be in the range of, say, for the year, somewhere around INR 400 or so.

Speaker #2: Now, for this quarter, the number is low because we also try to close things in March wherever possible, and the activity also goes up in H2.

Speaker #2: So, this year also, we'll be in the range of, say, for the year, somewhere around 400 or so.

Speaker #4: Sure. Thanks, and all the best.

Parvez Qazi: Sure. Thanks and all the best.

Speaker #2: Thank you. Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Paramasivan Srinivasan: Thank you.

Speaker #1: Thank you. The next question is from Atira Banerjee from Nomura. Please go ahead.

Operator: Thank you. The next question is in the line of Aditya Banerjee from Nomura. Please go ahead.

Speaker #3: Yeah, hi. Thanks for the opportunity. So just on the order front, because we've already recorded such heavy orders in closed, what is the upside risk that we'll overshoot the 30,000 order intake target by '27?

Aditya Banerjee: Yeah, hi. Thanks for the opportunity. Just on the order intake front, because we've already recorded a healthy order inflow, what is the upside risk that will overshot the INR 30,000 order intake target by 2027?

Speaker #2: I would say that, first, let us achieve the ₹30,000 crores. Then we will see what upside we are in a position to make.

Ramesh Jha: I would say that first let us achieve the INR 30,000 crore, we will see what is the upside we are in a position to make it. Currently, we are at INR 16,000, we hope as we proceed, we will be in a position to guide you better. Today's guidance is INR 30,000 crore.

Ramesh Kumar Jha: I would say that first let us achieve the INR 30,000 crore, we will see what is the upside we are in a position to make it. Currently, we are at INR 16,000, we hope as we proceed, we will be in a position to guide you better. Today's guidance is INR 30,000 crore.

Speaker #2: And currently, we are at ₹16,000 crore. And we hope, as we proceed, we will be in a position to guide you better, and today's guidance is ₹30,000 crore.

Aditya Banerjee: Understood, sir. Sir, another question that I had was, the overseas projects that we are undertaking, say, between Croatia and all. Between the domestic project and overseas projects, which is likely to have a better margin profile? I understand that it's dependent on the bidding, et cetera, but typically, what's the margin differential between overseas and domestic projects? If you could give a sense on that.

Speaker #3: Understood, sir. And sir, another question that I had was about the overseas projects that we have undertaken—for example, Croatian or others. So, between the domestic project and the overseas project, which is likely to have a better margin profile? I understand that it's dependent on the bidding and so on.

Speaker #3: But typically, what's the margin differential between overseas and domestic projects, if you could give a sense of that?

Speaker #2: So, in overseas projects, we generally make better margins. The margin delta, say, between domestic and overseas, is around 200 to 300 basis points.

Ramesh Jha: In overseas projects, we generally make better margin. The delta in, say, domestic versus overseas is around 200 to 300 basis points, which is higher in overseas market. Whatever project we are targeting in overseas market, the specific margin, we'll not be able to give you what margin we generally target. Domestic market versus overseas market, the margins are better in the overseas market.

Ramesh Kumar Jha: In overseas projects, we generally make better margin. The delta in, say, domestic versus overseas is around 200 to 300 basis points, which is higher in overseas market. Whatever project we are targeting in overseas market, the specific margin, we'll not be able to give you what margin we generally target. Domestic market versus overseas market, the margins are better in the overseas market.

Speaker #2: Which is higher in the overseas market. And whatever project we are targeting in the overseas market, the margins—specific margin—I will not be able to give you, but generally, the margin we target...

Speaker #2: But then, in the domestic market, compared to the overseas market, the margins are better in the overseas market.

Speaker #3: Understood, sir. Those are my two questions. Thanks for the opportunity, and all the best for the coming quarters.

Aditya Banerjee: Understood. Those are my two questions. Thanks for the opportunity and all the best for the coming quarter.

Speaker #2: Thank you. Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. The next question is from the line of Vishal Perriwal from PL Capital. Please go ahead.

Operator: Thank you. The next question is in the line of Vishal Periwal from PL Capital. Please go ahead.

Speaker #5: Yes, sir. Thanks for the opportunity. Sir, in terms of our profit and loss account, what could be the reason for the decline in depreciation?

Vishal Periwal: Yes, sir. Thanks for the opportunity. Sir, in terms of our profit and loss account, what could be the reason for decline in the depreciation? Any link with the revenue that we book or what's the reason behind that?

Speaker #5: Is there any link with the revenue that we book, or how? What's the reason behind that?

Speaker #2: No, sir. Depreciation—there is no link to the revenue. Because, generally, depreciation is a time-related cost. So the number has come down because, as I explained in the opening commentary, in this period, we did not have too much of tunneling-related activity.

Ramesh Jha: No, depreciation, there is no link to the revenue because generally depreciation is a time-related cost. The number has come down because as I explained in the opening commentary, in this period, we did not have too much of tunneling related activity. We have explained in past that we used to do accelerated depreciation on the tunnel boring machine basis, the running meters it used to excavate. This period, hardly there was any TBM related tunneling activity. That is why the number has come down.

Ramesh Kumar Jha: No, depreciation, there is no link to the revenue because generally depreciation is a time-related cost. The number has come down because as I explained in the opening commentary, in this period, we did not have too much of tunneling related activity. We have explained in past that we used to do accelerated depreciation on the tunnel boring machine basis, the running meters it used to excavate. This period, hardly there was any TBM related tunneling activity. That is why the number has come down.

Speaker #2: And we have explained in the past that we used to do accelerated depreciation on the tunnel boring machine, based on the running meter it used to excavate.

Speaker #2: So, this period, we hardly had any TVM-related tunneling activity. That is why the number has come down.

Speaker #5: No, sir. Which means it is linked with the revenue, right? I mean...

Vishal Periwal: No, which means it is linked with the revenue, right?

Speaker #2: No, it is linked with the revenue only to the extent of TVM, which was not there in this quarter.

Ramesh Jha: No, it is linked with the revenue only to the extent of TBM, which was not there in this quarter.

Ramesh Kumar Jha: No, it is linked with the revenue only to the extent of TBM, which was not there in this quarter.

Speaker #5: Okay, okay, fine. And second thing is, in terms of execution, you did clarify in the previous questions. But if one has to pinpoint, our order book is relatively young, at the initial stage.

Vishal Periwal: Okay, fine. Second thing is, in terms of execution, you did clarify in the previous questions. If one has to pinpoint, our order book is relatively young, initial stage, execution could pick up as the quarter progresses. That is one thought. Another is probably there are the delays in the payment from the client, as the clients are delaying, we are not able to pull the money or probably deploy the money back in the working capital and other things which could improve execution. Which one directionally you will pinpoint? I mean, the reason of muted execution.

Speaker #5: And execution could pick up as the quarter progresses, and that is one thought. Another is, probably there are delays in the payment from the client.

Speaker #5: And as the clients are delaying, we're not able to pull the money or probably deploy the money back into working capital and other things, which could improve execution.

Speaker #5: So, which one directionally will you pinpoint? I mean, the reason for muted execution.

Speaker #2: See, as we explained that the order book whatever we have booked till now, say, around 16,000 crores of order, these orders to convert in revenue, it will take some time.

Ramesh Jha: See, as we explained that the order book, whatever we have booked till now, around INR 16,000 crore of order. These orders to convert in revenue, it will take some time. The order what we were having in hand on, around INR 32,000 crore. In such projects, there were a couple of projects which were moving slow. In some of the other projects, there were some land acquisition related issues, or there were some change in scope related stuff. The work fronts were not available. Because of that, there was a muted revenue in this quarter. As things stand, we expect the execution to significantly pick up from Q3 onwards, we'll have a very strong H2.

Ramesh Kumar Jha: See, as we explained that the order book, whatever we have booked till now, around INR 16,000 crore of order. These orders to convert in revenue, it will take some time. The order what we were having in hand on, around INR 32,000 crore. In such projects, there were a couple of projects which were moving slow. In some of the other projects, there were some land acquisition related issues, or there were some change in scope related stuff. The work fronts were not available. Because of that, there was a muted revenue in this quarter. As things stand, we expect the execution to significantly pick up from Q3 onwards, we'll have a very strong H2.

Speaker #2: And the order that we were having in hand, say around ₹32,000 crore, in such projects, there were a couple of projects which were moving slow.

Speaker #2: And then, in some of the other projects, there were some land acquisition-related issues, or there were some change in scope-related matters. So, the work fronts were not available.

Speaker #2: Because of that, there was muted revenue in this quarter. As things stand, we expect the execution to significantly pick up from Q3 onwards.

Speaker #2: And so, we'll have a very strong H2. All these orders, whatever we have booked, and the balance period in this year—whatever orders we are going to book—will give us a very sizable order book for the next financial year, FY28.

Ramesh Jha: All these orders, whatever we have booked and the balance period in this year, whatever orders we are going to book, we'll have a very sizable order booking in our hand matured for construction for the next financial year, FY28. That's where we are looking at that FY28, we'll have a sizable ramp-up in terms of execution.

Ramesh Kumar Jha: All these orders, whatever we have booked and the balance period in this year, whatever orders we are going to book, we'll have a very sizable order booking in our hand matured for construction for the next financial year, FY 2028. That's where we are looking at that FY 2028, we'll have a sizable ramp-up in terms of execution.

Speaker #2: So that's where we are. Looking at that, in FY28 we'll have a sizable ramp-up in terms of execution.

Speaker #5: Okay, okay. Sure, sir. And thanks for the answers. I'll come back in the Q, sir.

Vishal Periwal: Okay, sure sir, thanks for the answers, I'll come back in the queue, sir.

Speaker #2: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. The next question is from the line of Rahul Butra from Anand Rathi Share and Stock Brokers Limited. Please go ahead.

Operator: Thank you. The next question is in the line of Rahul Bhutra from Anand Rathi Share and Stock Brokers Limited. Please go ahead.

Speaker #3: Hello, sir. Sir, my question is regarding the cash flow from operations. Is it negative for this quarter also?

Rahul Bhutra: Hello, sir. Sir, my question is regarding the cash flow from operation. Is it negative for this quarter also?

Speaker #2: No, I didn't get the question. What is that?

Ramesh Jha: No, I didn't get the question. What is that?

Ramesh Kumar Jha: No, I didn't get the question. What is that?

Speaker #3: Sir, cash flow from operations—is it negative for this quarter also?

Operator 2: Sir, cash flow from operation, is it negative for this quarter also?

Rahul Bhutra: Sir, cash flow from operation, is it negative for this quarter also?

Speaker #2: Yeah, so cash flow from operations generally in Q1 remains negative, because in the past also we have explained that customers, what they try to do is, they will try to release all the up-to-date payments in the March quarter.

Ramesh Jha: Yeah. Cash flow from operations, generally in Q1 remains to be negative because in past also we have explained that customers, what they try to do is they will try to release all the up-to-date payment in Q4. Q1, they devote their time for planning and budgeting for the next financial year. There is less activity in Q1 from the customer and payment also remains to be slow in Q1. Cash flow is negative.

Ramesh Kumar Jha: Yeah. Cash flow from operations, generally in Q1 remains to be negative because in past also we have explained that customers, what they try to do is they will try to release all the up-to-date payment in Q4. Q1, they devote their time for planning and budgeting for the next financial year. There is less activity in Q1 from the customer and payment also remains to be slow in Q1. Cash flow is negative.

Speaker #2: And Q1, they devote their time to planning and budgeting for the next financial year. So there is less activity in Q1 from the customer.

Speaker #2: And payments also remain slow in Q1, so cash flow is negative.

Speaker #3: Okay, sir. Thank you.

Operator 2: Okay, sir. Thank you.

Rahul Bhutra: Okay, sir. Thank you.

Speaker #2: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. The next question is on the line of Bhavik Shah from NVEXA Capital LLP. Please go ahead.

Operator: Thank you. The next question is in the line of Bhavik Shah from Invexa Capital LLP. Please go ahead.

Speaker #3: Yeah, hi, sir. So, my question is regarding our JJM order book and receivables. Can you quantify the amount of, say, orders pending in the order book, and how much receivables we are still yet to receive?

Bhavik Shah: Yeah. Hi, sir. My question is regarding our JJM order book and receivables. Can you quantify the amount of the orders pending in order book and how much receivables we are still yet to receive?

Speaker #2: So, in Jal Jeevan Mission, all put together, we have got ₹1,221 crore of total order, of which, from UP, the balance order is ₹510 crore.

Ramesh Jha: In Jal Jeevan Mission, all put together, we have got INR 1,221 crores of total order, in which from the UP, the balance order is INR 510 crore, Madhya Pradesh is INR 414 crore, and Rajasthan is INR 297 crores. Among this, in Madhya Pradesh, we are not having any major problem because whatever work we are executing, we are getting paid. In Rajasthan also, payments are partly coming. Major problem is in UP, where the payments, recent time, they have started making payments because wherever we have completed the last mile connectivity, the payments have started flowing in. It is not that significant corresponding to the receivable we have. In past also, we have explained that in UP we were having close to INR 400 crores of receivable. From there, we have received a very small fraction.

Ramesh Kumar Jha: In Jal Jeevan Mission, all put together, we have got INR 1,221 crores of total order, in which from the UP, the balance order is INR 510 crore, Madhya Pradesh is INR 414 crore, and Rajasthan is INR 297 crores. Among this, in Madhya Pradesh, we are not having any major problem because whatever work we are executing, we are getting paid. In Rajasthan also, payments are partly coming. Major problem is in UP, where the payments, recent time, they have started making payments because wherever we have completed the last mile connectivity, the payments have started flowing in. It is not that significant corresponding to the receivable we have. In past also, we have explained that in UP we were having close to INR 400 crores of receivable. From there, we have received a very small fraction.

Speaker #2: Madhya Pradesh is ₹414 crore, and Rajasthan is ₹297 crore. Amongst this, in Madhya Pradesh, we are not having any major problem, because whatever work we are executing, we are getting paid.

Speaker #2: And in Rajasthan also, payments are partly coming. The major problem is in UP, where the payments—in recent times, they have started making payments because, wherever we have completed the last mile connectivity, the payments have started flowing in.

Speaker #2: But then, it is not that significant corresponding to the receivable we have. So, in the past also, we have explained that in UP, we were having close to ₹400 crore of receivables.

Speaker #2: From there, we have received a very small fraction. So, for all practical purposes, the receivable remains at a similar level.

Ramesh Jha: For all practical purposes, the receivable remains to be in the similar level.

Ramesh Kumar Jha: For all practical purposes, the receivable remains to be in the similar level.

Speaker #3: Understood, sir. And what will be the unbilled amount, sir?

Bhavik Shah: Understood, sir. What will be the unbilled amount, sir?

Speaker #2: So, this amount that we are talking about is a combination of receivable plus unbilled.

Ramesh Jha: This amount, what we are talking about is a combination of receivable plus unbilled.

Ramesh Kumar Jha: This amount, what we are talking about is a combination of receivable plus unbilled.

Speaker #3: Understood, sir. Thank you.

Bhavik Shah: Understood, sir. Thank you.

Speaker #2: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. The next question is from the line of Ashok Shah from Aclavia Invesco Family Office. Please go ahead.

Operator: Thank you. The next question is on the line of Ashok Shah from Eklavya Invesco Family Office. Please go ahead.

Speaker #3: Thanks for taking my question. Sir, we have a very good order book position, but over the last few years, we are facing execution problems or some different types of problems, maybe related to land and other differences.

Ashok Shah: Thanks for taking my question. Sir, we have very good order book position. Over the last few years, we are facing execution problem or some different type of problem, maybe land and everything different. What's the problem, or how we are managing or going to increase the turnover or execution level? What percentage of the sizable order is slow-moving? Can you explain or bifurcate this?

Speaker #3: So what's the problem, or how are we managing, or going to increase the turnover or execution level? Also, what percentage of the sizable order is slow moving?

Speaker #3: Can you explain or break this down?

Speaker #2: See, we have explained in the last quarter's earnings call. On some of the issues which are being factored in, if you look at the overall order book value, roughly around 5.65% is in the slow-moving category.

Paramasivan Srinivasan: We have explained in the last quarter earnings call on some of the issues which is being factored in. If you look at the overall order book value, roughly around 5.65% is slow-moving category, and Bangladesh orders constitute about 2%, and another about 3% constitutes Jal Jeevan Mission orders. These three put together, roughly around 11%, is what we can categorize are either slow-moving or otherwise. In some of the other cases, as we had explained, there have been initial, the right of way and related issues, which is getting resolved. That is why we are saying that Q3 and Q4, it will pick up better. With the proactive involvement of Government of Maharashtra, there have been a lot of improvements in such areas, which in the past had contributed a bit.

Speaker #2: And Bangladesh orders constitute about 2%. And another about 3% constitutes Jal Jeevan Mission orders. So these three put together, roughly around 11%, is what we can categorize as either slow moving or otherwise.

Speaker #2: In some of the other cases, as we had explained, there have been initial right of way and related issues, which are getting resolved.

Speaker #2: That is why we are saying the third and fourth quarters will pick up better. And with the proactive involvement of the Government of Maharashtra, there have been a lot of improvements in such areas.

Speaker #2: Which in the past had contributed a bit. Now, with the proactive involvement, things are getting resolved, and projects will be available for execution. Otherwise, we have already started in the water portion and other things.

Paramasivan Srinivasan: With the proactive involvement, things are getting resolved, and projects will be available for execution. Otherwise, we have already started in the water portion and other things. Land portion also, we will commence in the H2. With that, things will improve. These are the, when nearly about 11% of the orders are slow-moving or other things, and another about roughly about 20% of the orders are in the initial phase, that is where there are challenges in terms of converting it into turnover, which will start improving in the H2.

Speaker #2: The land portion also, we will come on in the second half of the year. So with that, things will improve. So, nearly about 11% of the orders are slow-moving or other such things.

Speaker #2: And another, roughly about 20% of the orders are in the initial phase. That is where there are challenges in terms of converting it into turnover.

Speaker #2: This will start improving in the second half of the year.

Speaker #3: So, it's stated in the call, sir. We do plan to reduce our debt over the years, by March. So, what is the size we are seeing to reduce our debt?

Ashok Shah: As stated in the call, sir, we do plan to reduce our debt over the years, by the March. What is the size we are seeing to reduce our debt?

Speaker #2: Yeah, so debt, we will look at a sizable reduction. And this year, as we said, we had to make payments for some of the capital equipment we have bought. Despite all that, we see that we'll see some improvement. We'll see improvement—the number that we have clocked in FY26; from that number, we will see some improvement.

Ramesh Jha: Debt, we will look at a sizable reduction. This year, as we said that we had to make payment for some of the capital equipment we have bought. Despite all that, we see improvement. The number what we have clocked in FY26, from that number, we will see some improvement. At least there'll be some 5% to 10% improvement from that number.

Ramesh Kumar Jha: Debt, we will look at a sizable reduction. This year, as we said that we had to make payment for some of the capital equipment we have bought. Despite all that, we see improvement. The number what we have clocked in FY 2026, from that number, we will see some improvement. At least there'll be some 5% to 10% improvement from that number.

Speaker #2: At least, you know, there will be some 5% to 10% improvement from that number.

Speaker #3: So, can you quantify the—sorry, sorry.

Ashok Shah: Can you quantify the-

Ramesh Jha: From what?

Ramesh Kumar Jha: From what?

Speaker #2: Yeah, we are looking at debt closing, say, around 3,500 or so.

Ashok Shah: Sorry.

Ramesh Jha: We are looking at debt closing, say around INR 3,500 or so.

Ramesh Kumar Jha: We are looking at debt closing, say around INR 3,500 or so.

Speaker #3: So, it will be reduced by how much at a consolidated level—around ₹300 to ₹400 crores?

Ashok Shah: It will be reduced by how much as a consolidated level? Around INR 300 to 400 crore?

Speaker #2: No, so what we are talking about from FY26, that number, we are looking at a similar number. But then this year, we will be making payment close to, say, around Rs. 700 to 800 crores towards CAPEX.

Ramesh Jha: No. What we are talking about from FY26 debt number, we are looking at a similar number. This year, we will be making payment close to, say, around INR 700 to 800 crore towards CapEx. Despite that, we'll clock the similar number on the debt front. In terms of working capital, the similar amount of improvement will be there.

Ramesh Kumar Jha: No. What we are talking about from FY 2026 debt number, we are looking at a similar number. This year, we will be making payment close to, say, around INR 700 to 800 crore towards CapEx. Despite that, we'll clock the similar number on the debt front. In terms of working capital, the similar amount of improvement will be there.

Speaker #2: Despite that, we will see improvement; we will clock a similar number on the debt front. In terms of working capital, you know, a similar amount of improvement will be there.

Speaker #3: So this 700—sorry, sorry. Yeah.

Ashok Shah: The INR 700 or Sorry. Yeah.

Ramesh Jha: What I was trying to explain that the debt number in absolute terms will be similar number what we have clocked in March 2026. Since we have done, we'll be doing a sizable CapEx this year. In working capital, we will see the improvement. That's where I was saying that we will see around 5% to 10% improvement in working capital. That is bare minimum.

Speaker #2: Right. So, what I was trying to explain is that the debt number in absolute terms will be a similar number to what we have clocked in March ’26.

Ramesh Kumar Jha: What I was trying to explain that the debt number in absolute terms will be similar number what we have clocked in March 2026. Since we have done, we'll be doing a sizable CapEx this year. In working capital, we will see the improvement. That's where I was saying that we will see around 5% to 10% improvement in working capital. That is bare minimum.

Speaker #2: But since we have done, and will be doing, a sizable CAPEX this year, in working capital we will see improvement. So that's where I was saying that we will see around a 5 to 10% improvement in working capital.

Speaker #2: That is bare minimum.

Speaker #3: So, net debt will be reduced by ₹700 crore? Or will it be even lower than that?

Ashok Shah: Net debt will be reduced by INR 700 crore, or it will be lower than that?

Speaker #2: Net debt will be reduced. Net debt will be somewhere around, say, ₹2,700–2,800 crore, kind of a number.

Ramesh Jha: Net debt will be somewhere around, say, INR 2,700 crore, INR 2,800 crore kind of number.

Ramesh Kumar Jha: Net debt will be somewhere around, say, INR 2,700 crore, INR 2,800 crore kind of number.

Speaker #3: Thank you, sir. Thank you, and best wishes for the current year. Thank you.

Ashok Shah: Thank you, sir. Thank you, best wishes for current year. Thank you.

Speaker #1: Thank you. The next question is from the line of Aditya Banerjee from Nomura. Please go ahead.

Operator: Thank you. The next question is on the line of Aditya Banerjee from Nomura. Please go ahead.

Speaker #3: Yeah, hi. Thanks for the opportunity to ask a follow-up question. So, just one clarification I wanted to have: regarding these JV launches and higher taxes that you have mentioned.

Aditya Banerjee: Yeah. Hi. Thanks for the opportunity for the follow-up question. Just one understanding I wanted to have. Regarding this JV losses and higher taxes that you were mentioning about, how are they accounted in the P&L statement? Just wanted an understanding on that.

Speaker #3: So, how are they accounted for in the payment statement? Just wanted an understanding on that.

Speaker #2: So, are you asking about JV accounting, or are you asking about the JV tax?

Ramesh Jha: You are asking about JV accounting, or you are asking about the JV tax?

Ramesh Kumar Jha: You are asking about JV accounting, or you are asking about the JV tax?

Speaker #3: So, tax basically. So, why did the tax go up this year, this quarter? I just wanted to understand where that part is accounted for in the payment statement.

Aditya Banerjee: Tax basically. Why the tax went up this quarter. Just wanted to understand where that part is accounted in the P&L statement.

Speaker #2: Right. So, it goes as a tax. Whatever the JV pays as tax, that goes as a tax in the respective entity. Then, in consolidation, that forms part of tax.

Ramesh Jha: It goes as a tax. Whatever the JV pays tax, that goes as a tax in the respective entity, and then in consolidation, that forms part of tax. Because most of these JVs are forming part of the standalone financial itself, so it gets incorporated in standalone financials as well. Now, specifically, I was trying to explain for this quarter, because in Afcons the profitability was low, in terms of percentage, it is appearing to be around, say, 40%. But the amount, if you see per se, is not that big number. It is around, say, INR four, five crore. Had we had maybe, say, INR 150, 200 crore kind of a profit in Afcons, what we were clocking for so many quarters, this INR four crore will not make that tax percentage a big number.

Ramesh Kumar Jha: It goes as a tax. Whatever the JV pays tax, that goes as a tax in the respective entity, and then in consolidation, that forms part of tax. Because most of these JVs are forming part of the standalone financial itself, so it gets incorporated in standalone financials as well. Now, specifically, I was trying to explain for this quarter, because in Afcons the profitability was low, in terms of percentage, it is appearing to be around, say, 40%. But the amount, if you see per se, is not that big number. It is around, say, INR four, five crore. Had we had maybe, say, INR 150, 200 crore kind of a profit in Afcons, what we were clocking for so many quarters, this INR four crore will not make that tax percentage a big number.

Speaker #2: Because most of these JVs, you know, are forming part of the standalone financials itself. So, you know, it gets incorporated in the standalone financials as well.

Speaker #2: Now, specifically, I was trying to explain for this quarter, because in AFCONS, the profitability was low. In terms of percentage, it is appearing to be around, say, 40%.

Speaker #2: But the amount, if you see per se, is not that big a number. It is around, say, ₹4–5 crore. Had we had, maybe, say, a ₹150–200 crore kind of profit in AFCONS, which we were clocking for so many quarters, this ₹4 crore would not make the tax percentage a big number.

Speaker #3: Okay, but in that case, your tax would have also gone up, right? Like, this wouldn't have been a fixed number, right? This ₹4 crore that you're saying—that would have also gone up in that case.

Aditya Banerjee: Okay. In that case, your tax would have also gone up, right? This wouldn't have been a fixed number. This INR 4 crore that you're saying, that would have also gone up in that case. Just wanted a bit more clarity on that.

Speaker #3: So, just wanted a bit more clarity on that.

Speaker #2: No, so see, in AFCONS, for most of the entities, we are making tax payments in the range of 25% or so.

Ramesh Jha: No. See, in Afcons, most of the entities, we are making tax payments in the range of 25% or so. Just because this quarter, in some of the entities, some of the closed projects entity, we had to incur some administrative costs because, in such entities, we are following up with customers for collections and some other closure aspects are not closed. In such entities, we are required to make ECL provision on the receivables. Because of that, in those entities, we are looking at a loss kind of a situation because the projects are completed. All these administrative expenses, ECL provisions, are coming as only cost, and because of that, the consolidated profitability is coming down, and whatever loss we are incurring in these entities, because of that, the tax rate is going up despite paying, say, 25%, 26% tax only.

Ramesh Kumar Jha: No. See, in Afcons, most of the entities, we are making tax payments in the range of 25% or so. Just because this quarter, in some of the entities, some of the closed projects entity, we had to incur some administrative costs because, in such entities, we are following up with customers for collections and some other closure aspects are not closed. In such entities, we are required to make ECL provision on the receivables. Because of that, in those entities, we are looking at a loss kind of a situation because the projects are completed. All these administrative expenses, ECL provisions, are coming as only cost, and because of that, the consolidated profitability is coming down, and whatever loss we are incurring in these entities, because of that, the tax rate is going up despite paying, say, 25%, 26% tax only.

Speaker #2: Just because this quarter, in some of the entities—some of the close projects entities—we had to incur some administrative costs. Because, you know, in such entities, we are following up with customers for collections, and some other closure aspects are not closed.

Speaker #2: And in such entities, we are required to make ECL provision on the receivables. Because of that, we are looking at a in those entities, we are looking at a loss kind of a situation.

Speaker #2: Because the projects are completed, all these administrative expenses and ECL provisions are coming as the only cost. And because of that, the consolidated profitability is coming down.

Speaker #2: And this, whatever loss we are incurring in these entities, because of that, the tax rate is going up, despite paying, say, 25–26% tax only.

Speaker #3: Got it, got it. That's clear. Thank you. Thanks for answering the question.

Aditya Banerjee: Got it. That's clear. Thank you for answering the question.

Speaker #2: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. A reminder to all participants to press star and 1 to ask a question.

Speaker #1: The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Speaker #3: Hello. Hi, sir. Thank you for the opportunity again. Sir, for CAPEX, you said in this quarter we have done a ₹150 crore CAPEX. But on the cash flow front, this number must be on the higher side.

Shravan Shah: Hello. Hi, sir. Thank you for the opportunity again. Sir, for CapEx, you said in this quarter, we have done an INR 150 crore CapEx. On the cash flow front, this number must be on the higher side.

Speaker #2: Yes. Because some of the amount which was on 31st March, which was in CWIP, for that, we had to make payment in the quarter.

Ramesh Jha: Yes. Because some of the amount which was on 31 March, which was in CWIP, for that, we had to make payment in the quarter.

Ramesh Kumar Jha: Yes. Because some of the amount which was on 31 March, which was in CWIP, for that, we had to make payment in the quarter.

Speaker #3: Okay. But for the full year FY27, we are looking at Rs 700 to 800 crore CAPEX.

Shravan Shah: Okay. For full year, FY27, we are looking at INR 700, 800 crore CapEx.

Shravan Shah: Okay. For full year, FY 2027, we are looking at INR 700, 800 crore CapEx.

Speaker #2: Yes.

Ramesh Jha: Yes.

Ramesh Kumar Jha: Yes.

Speaker #3: And for next year, given till now, whatever the orders that we have bagged, what broader number one can look at in terms of the CAPEX for FY28?

Shravan Shah: For next year, till now, whatever the orders that we have bagged, what broader number one can look at in terms of the CapEx for FY28?

Shravan Shah: For next year, till now, whatever the orders that we have bagged, what broader number one can look at in terms of the CapEx for FY 2028?

Speaker #2: So, in FY28, we are looking at CAPEX in the range of, say, ₹600–650 crore.

Ramesh Jha: In FY28, we are looking at CapEx in the range of, say, INR 600, INR 650 crores.

Ramesh Kumar Jha: In FY 2028, we are looking at CapEx in the range of, say, INR 600, INR 650 crores.

Speaker #3: Okay, okay. And given the depreciation as you said, maybe the from November when the TBM fulfills, we will start. So even in Q2, the similar kind of a 83, 85 crore kind of a depreciation should be there.

Shravan Shah: Given the depreciation, as you said, maybe from November when the TBM will start. Even in Q2, the similar kind of INR 83, INR 85 crore kind of a depreciation should be there. For full year, how much one can look at in terms of the lower depreciation versus FY26?

Speaker #3: And for the full year, how much can one look at in terms of lower depreciation versus FY26?

Speaker #2: No, you have rightly picked it up. As the TBM-related activity starts, there will be a corresponding depreciation coming into play, because the TBMs are in the initial drive and are still sitting in the CWIP.

Ramesh Jha: You have rightly picked it up. As the TBM related activity starts, there'll be a corresponding depreciation coming into play because the TBMs are in the initial drive, and it is still sitting in the CWIP, and once it gets capitalized, then the corresponding depreciation will start coming in. In H2, there'll be a higher depreciation, definitely vis-à-vis this number, what we are looking at in Q1. Correspondingly, revenue will go up, and it is fully factored in all our calculations, what we look at, and it will reflect accordingly.

Ramesh Kumar Jha: You have rightly picked it up. As the TBM related activity starts, there'll be a corresponding depreciation coming into play because the TBMs are in the initial drive, and it is still sitting in the CWIP, and once it gets capitalized, then the corresponding depreciation will start coming in. In H2, there'll be a higher depreciation, definitely vis-à-vis this number, what we are looking at in Q1. Correspondingly, revenue will go up, and it is fully factored in all our calculations, what we look at, and it will reflect accordingly.

Speaker #2: And, you know, once it gets capitalized, then the corresponding depreciation will start coming in. So, in H2, there will definitely be higher depreciation vis-à-vis this number that we are looking at in Q1.

Speaker #2: But then correspondingly, revenue will go up. And it will get it is fully factored you know, in all our calculations what we look at.

Speaker #2: And it will reflect accordingly.

Speaker #3: So, but whatever way, even if we look at the full year depreciation, definitely would be a lower versus FY26 of 450, 4 crore. Because even if we take the 83 crore this quarter and the next quarter also similar number, 160, and then even if peaks up to 130 odd crore, then also this number is it fair to say should be a close to a 400 odd crore or even less than that?

Shravan Shah: Whatever way, even if you look at the full year depreciation, definitely would be lower versus FY26 of INR 454 crore.

Shravan Shah: Whatever way, even if you look at the full year depreciation, definitely would be lower versus FY 2026 of INR 454 crore.

Ramesh Jha: Yes.

Ramesh Kumar Jha: Yes.

Shravan Shah: Even if we take the INR 83 crore this quarter and the next quarter also similar number, INR 160 crore, and it picks up to INR 130 odd crore. Also this number, is it fair to say or should be close to INR 400 odd crore or even less than that?

Speaker #2: See, we will not be able to give you that number. But then, maybe, for all practical purposes, you can consider the FY26 depreciation number.

Ramesh Jha: See, we'll not be able to give you that number. Maybe for all practical purposes, you can consider FY26 depreciation number.

Ramesh Kumar Jha: See, we'll not be able to give you that number. Maybe for all practical purposes, you can consider FY 2026 depreciation number.

Speaker #3: Okay, okay. And for finance cost, this quarter, and end up and the ECL provision, so was there any ECL provision in this quarter? And on the finance cost, how one can look at the finance cost?

Shravan Shah: Okay. For finance costs this quarter and the ECL provision. Was there any ECL provision in this quarter? On the finance cost, how one can look at the finance cost?

Speaker #2: So, as far as ECL provisioning is concerned, we explained last time that we have made a framework for ECL provisioning, which was approved by the board, and, you know, we had taken professional guidance from experts in this particular field.

Ramesh Jha: As far as ECL provisioning is concerned, we have explained last time that we have made a framework for ECL provisioning, which was approved by the board and we had taken professional guidance from experts in this particular field. Basis that framework was devised, and basis that framework, we have started making provisioning from last year, and we continue to do the provisioning on that basis. No specific provision as such in any project because we believe that we don't foresee any such eventuality going forward. Whatever project-specific provisioning we had to do last time on a company basis, if we evaluate, let's say last 20, 25 years, maybe those were aberrations because such instance we never had. It was maybe, say, at max, I can say, 1%, 2% kind of a possibility. We don't foresee going forward such kind of provisioning will be required.

Ramesh Kumar Jha: As far as ECL provisioning is concerned, we have explained last time that we have made a framework for ECL provisioning, which was approved by the board and we had taken professional guidance from experts in this particular field. Basis that framework was devised, and basis that framework, we have started making provisioning from last year, and we continue to do the provisioning on that basis. No specific provision as such in any project because we believe that we don't foresee any such eventuality going forward. Whatever project-specific provisioning we had to do last time on a company basis, if we evaluate, let's say last 20, 25 years, maybe those were aberrations because such instance we never had. It was maybe, say, at max, I can say, 1%, 2% kind of a possibility. We don't foresee going forward such kind of provisioning will be required.

Speaker #2: And basis that framework was devised. And the basis that framework, we have started making provisioning from last year. And we continue to do the provisioning on that basis.

Speaker #2: There is no specific provision as such in any project, because we believe that any such eventuality—I mean, we don't foresee any such eventuality going forward.

Speaker #2: And whatever project-specific provisioning we had to do last time, on a—I mean, company basis—if we evaluate, let's say, the last 20 to 25 years, maybe, you know, those were aberrations.

Speaker #2: Because such an instance, we never had. It was maybe, say at max, I can say a 1% or 2% kind of a possibility. So we don't foresee, going forward, that such kind of provisioning will be required.

Speaker #2: But then, on a prudent basis, we have made a very robust provisioning mechanism. And, you know, taking guidance from professionals—and based on that—we have been making provisions.

Ramesh Jha: On a prudent basis, we have made a very robust provisioning mechanism and taking guidance from professionals, and basis that we have been making provision. As far as finance cost is concerned, as we said that the debts are higher than what was in the March, and in terms of client advances, the interest-bearing advances continues to be on the similar level, what we were having for, say, last 3, 4 quarters, similar numbers. The finance costs are also on the similar line. In terms of average borrowing cost, if you ask me, we have brought it down. We have significantly brought it down. Many high-cost debts we have replaced with low-cost debt. From operational aspects, whatever controls on things we have, we have done our bit and that's where, despite debt going up, the finance cost has not significantly gone up.

Ramesh Kumar Jha: On a prudent basis, we have made a very robust provisioning mechanism and taking guidance from professionals, and basis that we have been making provision. As far as finance cost is concerned, as we said that the debts are higher than what was in the March, and in terms of client advances, the interest-bearing advances continues to be on the similar level, what we were having for, say, last three, four quarters, similar numbers. The finance costs are also on the similar line. In terms of average borrowing cost, if you ask me, we have brought it down. We have significantly brought it down. Many high-cost debts we have replaced with low-cost debt. From operational aspects, whatever controls on things we have, we have done our bit and that's where, despite debt going up, the finance cost has not significantly gone up.

Speaker #2: As far as finance cost is concerned, as we said, the rates are higher than what you know was in March. In terms of client advances, the interest-bearing advances continue to be at a similar level to what we have had for, say, the last three or four quarters.

Speaker #2: Similar number. So, the finance costs are also on similar lines. In terms of average borrowing cost, if you ask me, we have brought it down.

Speaker #2: We have significantly brought it down. Many high cost debts we have replaced with low cost debt. So from operational you know, aspects, whatever control on things we have, we have done on done our bit.

Speaker #2: And that's where, you know, despite debt going up, the finance cost has not significantly gone up. But once we see improvement in collections and all, we'll see a marked reduction in the finance cost.

Ramesh Jha: Once we see improvement in collection and all, we'll see a marked reduction in the finance cost.

Ramesh Kumar Jha: Once we see improvement in collection and all, we'll see a marked reduction in the finance cost.

Speaker #3: Okay, okay. And lastly, in Q1 revenue, can you break it down into domestic and international? What would be the share?

Shravan Shah: Okay. Lastly, in Q1 revenue, can you break it down into domestic and international? What would be the share?

Speaker #2: See, in terms of revenue from the overseas market, as of March, we had shown that the overseas revenue had come down to around 13%. So, in Q1, we are having overseas revenue around 16% from the overseas market.

Ramesh Jha: See, in terms of revenue from overseas market, as in March we had shown that the overseas revenue had come down to around 13%. In Q1 we are having overseas revenue around 16% from overseas market. Domestic is 84%. Now the order mix is changing. At the moment, the order book what we have, we have moved back to around, say, 25% from overseas market and there are a lot of other projects in overseas market we are expecting. We hope that we will go back to 30% from overseas market. That is for minimum. As the order book moves 30% from overseas market, revenue also will go back to 30% from the overseas market.

Ramesh Kumar Jha: See, in terms of revenue from overseas market, as in March we had shown that the overseas revenue had come down to around 13%. In Q1 we are having overseas revenue around 16% from overseas market. Domestic is 84%. Now the order mix is changing. At the moment, the order book what we have, we have moved back to around, say, 25% from overseas market and there are a lot of other projects in overseas market we are expecting. We hope that we will go back to 30% from overseas market. That is for minimum. As the order book moves 30% from overseas market, revenue also will go back to 30% from the overseas market.

Speaker #2: Domestic is 84%. But now the order mix is changing. At the moment, the order book that we have, we have moved back to around, say, 25% from the overseas market.

Speaker #2: And there are a lot of other projects in the overseas market we are expecting. So, we hope that we'll go back to 30% from the overseas market.

Speaker #2: That is for minimum. And then, as the order book moves to 30% from overseas markets, revenue will also go back to 30% from the overseas market.

Speaker #3: Okay. And for balance, whatever we are looking at—close to ₹14,000–15,000 crore kind of order inflow—there also, one can say a sizable portion should be from the international market.

Shravan Shah: Okay. Balance whatever we are looking at close to 14,000, 15,000 crore kind of order inflow, there also one can say sizable should be from the international market.

Speaker #2: Overseas. Yes. Yes.

Ramesh Jha: Overseas. Yes.

Ramesh Kumar Jha: Overseas. Yes.

Speaker #3: Okay, okay, okay. Thank you, and all the best, sir.

Shravan Shah: Okay. Thank you and all the best, sir.

Speaker #2: Thank you.

Speaker #3: Thank you.

Ramesh Jha: Thank you.

Ramesh Kumar Jha: Thank you.

Operator: Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments.

Speaker #1: Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments.

Speaker #2: Thank you very much. Thanks for your continued support, and we look forward to an exciting period ahead. Thank you all.

Paramasivan Srinivasan: Thank you very much. Thanks for your continued support, and we look forward to an exciting period ahead. Thank you all.

Speaker #1: On behalf of TAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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

Paramasivan Srinivasan: The next webinar.

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