Q1 2027 Ahluwalia Contracts (India) Ltd Earnings Call

August 17, 2026

Operator 2: Ladies and gentlemen, good day, and welcome to the Ahluwalia Contracts (India) Limited Q1 FY27 earnings conference call hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudip Hora. Thank you, and over to you, sir.

Operator: Ladies and gentlemen, good day, and welcome to the Ahluwalia Contracts (India) Limited Q1 fiscal year 2027 earnings conference call hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudeep Bora. Thank you, and over to you, sir.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

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

Speaker #1: I now hand the conference over to Mr. Sudeep Bora. Thank you, and over to you, sir.

Speaker #2: Good evening, everyone. On behalf of Ambit Capital, I thank the management of Ahluwalia Contracts (India) Limited for the opportunity to host the Q1 FY27 earnings conference call.

Sudip Hora: Good evening, everyone. On behalf of Ambit Capital, I thank the management of Ahluwalia Contracts (India) Limited for the opportunity to host the Q1 FY27 earnings conference call. To discuss the results, I am pleased to welcome Mr. Shobhit Uppal, Deputy Managing Director, Mr. Vikas Ahluwalia, Director, and Mr. Satbeer Singh, Chief Financial Officer. Now I invite the management to take us through the key highlights of the quarter, post which we will open up for Q&A. Thank you, and over to you, sir.

Sudeep Bora: Good evening, everyone. On behalf of Ambit Capital, I thank the management of Ahluwalia Contracts (India) Limited for the opportunity to host the Q1 fiscal year 2027 earnings conference call. To discuss the results, I am pleased to welcome Mr. Shobhit Uppal, Deputy Managing Director, Mr. Vikas Ahluwalia, Director, and Mr. Satbeer Singh, Chief Financial Officer. Now I invite the management to take us through the key highlights of the quarter, post which we will open up for question-and-answer. Thank you, and over to you, sir.

Speaker #2: To discuss the results, I'm pleased to welcome Mr. Shobhit Uppal, Deputy Managing Director; Mr. Vikas Ahluwalia, Director; and Mr. Sabir Singh, Chief Financial Officer.

Speaker #2: Now, I invite the management to take us through the key highlights of the quarter, after which we will open up for Q&A. Thank you, and over to you, sir.

Speaker #3: Thank you. Good afternoon, everybody. Ahluwalia Contracts India Limited has announced its financial results for Q1 FY27. During Q1 FY27, the company has achieved a turnover of ₹1,125.81 crores and a PAT of ₹11.42 crores, in comparison to a turnover of ₹1,004.88 crores and a PAT of ₹51.11 crores during Q1 FY26.

Shobhit Uppal: Thank you. Good afternoon, everybody. Ahluwalia Contracts (India) Limited has announced its financial results for Q1 FY27. During Q1 FY27, the company has achieved a turnover of INR 1,125.81 crores and a PAT of INR 11.42 crores in comparison to a turnover of INR 1,004.88 crores and a PAT of INR 51.11 crores during Q1 FY26. The company has registered a growth of 12.03% in turnover and de-growth of 77.65% in PAT during Q1 FY27 in comparison to Q1 FY26. EPS of the company for Q1 FY27 is INR 1.70 compared to EPS of INR 7.63 in Q1 FY26. During Q1 FY27, the company's EBITDA margin is 4.29% as compared to 8.59% in Q1 FY26, and PAT margin is 1% as compared to PAT margin of 5.01% in Q1 FY26. The primary reasons for the dip in EBITDA margin are as under.

Shobhit Uppal: Thank you. Good afternoon, everybody. Ahluwalia Contracts (India) Limited has announced its financial results for Q1 fiscal year 2027. During Q1 fiscal year 2027, the company has achieved a turnover of INR 1,125.81 crore and a PAT of INR 11.42 crore in comparison to a turnover of INR 1,004.88 crore and a PAT of INR 51.11 crore during Q1 FY26. The company has registered a growth of 12.03% in turnover and de-growth of 77.65% in PAT during Q1 fiscal year 2027 in comparison to Q1 FY26. EPS of the company for Q1 fiscal year 2027 is INR 1.70 compared to EPS of INR 7.63 in Q1 FY26. During Q1 fiscal year 2027, the company's EBITDA margin is 4.29% as compared to 8.59% in Q1 FY26, and PAT margin is 1% as compared to PAT margin of 5.01% in Q1 FY26. The primary reasons for the dip in EBITDA margin are as under.

Speaker #3: The company has registered a growth of 12.03% in turnover and a degrowth of 77.65% in PAT during Q1 FY27 in comparison to Q1 FY26. EPS of the company for Q1 FY27 is 1.70 compared to an EPS of 7.63 in Q1 FY26.

Speaker #3: During Q1 FY27, the company's EBITDA margin is 4.29% as compared to 8.59% in Q1 FY26, and PAT margin is 1% as compared to PAT margin of 5.01% in Q1 FY26.

Speaker #3: The primary reasons for the dip in EBITDA margin are as under. There has been a finalization of the bill of the AIIMS-Jammu project, which has resulted in a reduction of bill value by ₹29 crores.

Shobhit Uppal: There has been a finalization of the bill of the AIIMS Jammu project, which has resulted in a reduction of bill value by INR 29 crores. This is a cause of dispute, and now that the bill is being finalized, the dispute will be raised through an arbitration process. The adverse impact on this account is 2.6% on our EBITDA. There has been an adverse impact on account of West Bengal and Assam FIR drive and elections. This has led to a reduction of turnover in the projects that are being executed in these states, and it has impacted in higher IBC costs, thereby impacting our EBITDA margins. During this quarter, labor rates have increased significantly in NCR, which contributes nearly 50% to our total portfolio. The minimum wage increase has been to the tune of about 35% to 40%, spanning over unskilled and skilled categories.

Shobhit Uppal: There has been a finalization of the bill of the AIIMS Jammu project, which has resulted in a reduction of bill value by INR 29 crore. This is a cause of dispute, and now that the bill is being finalized, the dispute will be raised through an arbitration process. The adverse impact on this account is 2.6% on our EBITDA. There has been an adverse impact on account of West Bengal and Assam FIR drive and elections. This has led to a reduction of turnover in the projects that are being executed in these states, and it has impacted in higher IBC costs, thereby impacting our EBITDA margins. During this quarter, labor rates have increased significantly in NCR, which contributes nearly 50% to our total portfolio. The minimum wage increase has been to the tune of about 35% to 40%, spanning over unskilled and skilled categories.

Speaker #3: This is a cause of dispute, and now that the bill has been finalized, the dispute will be raised through an arbitration process. The adverse impact on this account is 2.6% on our EBITDA.

Speaker #3: There has been an adverse impact on account of the West Bengal and Assam SIR drive, and elections. This has led to a reduction of turnover in the projects that are being executed in these states.

Speaker #3: And it has impacted higher IDC costs, thereby impacting our EBITDA margins. Then, during this quarter, labor rates have increased significantly in NCR, which contributes nearly 50% to our total portfolio.

Speaker #3: The minimum wage increase has been to the tune of about 35 to 40 percent, spanning over unskilled and skilled categories. This has led to a substantial increase in our wage costs.

Shobhit Uppal: This has led to a substantial increase in our wage costs. There has been an increase in our staff costs, where we have significantly increased our employee base as we have strengthened the organization, mobilized staff resources for our enlarged project portfolio. The net order book of the company as on 30 June is INR 20,663.52 crores, to be executed over the next three and a half years. Total order inflow during FY27 till 30 June 2026, as well as up to date is INR 512.81 crores. We are ready to receive questions.

Shobhit Uppal: This has led to a substantial increase in our wage costs. There has been an increase in our staff costs, where we have significantly increased our employee base as we have strengthened the organization, mobilized staff resources for our enlarged project portfolio. The net order book of the company as on 30 June is INR 20,663.52 crore, to be executed over the next three and a half years. Total order inflow during fiscal year 2027 till 30 June 2026, as well as up to date is INR 512.81 crore. We are ready to receive questions.

Speaker #3: There has been an increase in our staff costs, as we have significantly increased our employee base while strengthening the organization and mobilizing staff resources for our enlarged project portfolio.

Speaker #3: The net order book of the company as on 30th June is ₹20,663.52 crores, to be executed over the next three to three and a half years.

Speaker #3: Total order inflow during FY27 since 36, 2026, as well as up-to-date is ₹512.81 crores. We are ready to receive questions.

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

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

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

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

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from Shravan Shah from Daulat Capital.

Speaker #1: Please go ahead.

Shravan Shah: Hi, sir.

Speaker #4: Hi, sir. Sir, to hi, sir. Sir, to further understand this EBITDA margin because this is 4.3% is kind of a one of the historic lowest margin I understand you've tried to explain but further want to understand in detail.

Sudip Hora: Hi.

Shravan Shah: Hi, sir. To further understand this EBITDA margin, because this is 4.3% is kind of one of the historic lowest margin. I understand you try to explain, but further want to understand in detail. First, you are saying this INR 29 crore for AIIMS Jammu, that the bill which was under dispute, now finalized. So this INR 29 crore we have booked in raw material cost, and which has led to a kind of a 2.6% impact.

Speaker #4: So first, you are saying this ₹29 crore for AIIMS-Jammu—the bill which was under dispute is now finalized. So this ₹29 crore, we have booked in raw material cost, which has led to a kind of 2.6% impact.

Speaker #3: You can say that. This was this was this is under dispute now after finalization of the bill. You know, as you know, the project was completed last year and final billing and its checking was under process.

Shobhit Uppal: You can say that.

Shravan Shah: Okay.

Shobhit Uppal: This is under dispute now after finalization of the bill. As you know, the project was completed last year, and final billing and its checking was under process. Now, during this quarter, Q1, it has been frozen, and now this final bill value has come down by INR 29 crores.

Speaker #3: Now, during this quarter of Q1, it has been frozen and now this final bill value has come down by ₹29 crore.

Speaker #4: Okay. And so.

Shravan Shah: Okay.

Shobhit Uppal: You are right, the clause has been there, but the bill value has come down, the receivables have come down.

Speaker #3: So, you are right—the costs have been there, but the bill value has come down. The receivables have also come down.

Speaker #4: Yeah. But the other part, what you highlighted in terms of West Bengal, Assam, and the labor cost increase—so in the last call, when we did, that must have been known to you at that time. Or, even post the last call, this was the case, and that's why there is a significant impact on the margin.

Shravan Shah: Yeah. But the other part, what you highlighted in terms of West Bengal, Assam, and the labor cost increase. So in the last call, when we did, that must be known to you at that time, or this was even post the last con call, this was the thing, and that is why there is a significant impact on the margin.

Speaker #3: Yeah, the labor the increase in labor was not known at the last during the last call. And it has it is a hefty increase while while there is a labor escalation clause in a few of our contracts.

Shobhit Uppal: Yeah, the increase in labor was not known during the last call. It is a hefty increase. While there is a labor escalation clause in a few of our contracts, quite a few contracts don't have this clause. A lot of our large orders with some large developers, the labor escalation is not there. Post this increase, we have reached out to these clients and submitted claims, if you may say, wherein we are asking for a revision in our item rates, which can lead to compensation on account of the large increase in labor cost. The most significant increase has been in NCR, especially Haryana and UP, where 50% in NCR, 50% of our order book is in NCR. That is why it has hit us in this quarter.

Speaker #3: But quite a few contracts don't have this clause. You know, a lot of our large orders with some large developers—the labor escalation is not there.

Speaker #3: Post this increase, we have reached out to these clients and submitted claims, if you may say, wherein we are asking for a revision in our item rates, which can lead to compensation on account of the large increase in labor cost.

Speaker #3: And so the most significant increase has been in NCR, especially Haryana and UP, where 50% of our order book is in NCR.

Speaker #3: That is why it has hit us in this quarter.

Shravan Shah: Yeah. Got it. So now, given these things we know, in Q2, do we see how much the clients have agreed to compensate or still it will take time? So how one can look at our net in Q2, will the similar margin or can we, because we were looking at double digit, when can we start seeing a double digit from Q3 itself? So for full year, how one can look at the margins?

Speaker #4: Yeah, got it. So so now given these things we know so in Q2 do we do we see how much the clients have agreed to kind of a compensate or still it will take time?

Speaker #4: So, how can one look at net-net in Q2? Will there be a similar margin, or can we—because we were looking at double digits.

Speaker #4: So, when can we start seeing a double-digit margin—from Q3 itself? Also, for the full year, how should one look at the margins?

Speaker #3: So look, you know, there are a number of external factors. One being this radical increase in pricing by the government of Haryana and the government of UP.

Shobhit Uppal: So look, there are a number of external factors, one being this radical increase in pricing by the government of Haryana and the government of UP. It is not possible for us to put a date as to when we will be compensated, whether it will be in Q2. But we expect that, over the next two quarters, some of this compensation will start flowing in. Having answered the first part of your question, the second part, Q3, again, we are hearing rumors about NGT, the impact on account of NGT, government of Delhi and Haryana looking to take stringent measures. While nothing is still out, is there in black and white. But we cannot quantify the impact on our EBITDA of the potential NGT impact. So I cannot tell you whether we will be hitting the double digit in Q3. Q3 is likely to be impacted by NGT.

Speaker #3: So, it is not possible for us to put a date as to when we will be compensated, whether it will be in Q2.

Speaker #3: But we expect that, you know, over the next two quarters, some of this compensation will start flowing in. Coming to the first part of your question.

Speaker #3: The second part, you know, Q3 again, we are hearing rumors about, you know, NGT, the impact on account of NGT, Government of Delhi and Haryana looking to take stringent measures. While nothing is still out there in black and white,

Speaker #3: But we can't quantify the impact on our EBITDA of the potential NGT impact. So I cannot tell you whether we will be hitting double digits in Q3.

Speaker #3: Q3 is likely to be impacted by NGT. How much, we cannot sort of give you an indication today.

Shobhit Uppal: How much, we cannot give you an indication today.

Speaker #4: So at at current juncture, what do you think that the what kind of a margin we can we can look at? Let's say from for the full year or maybe Q3 or when can we start seeing a double digit from Q1, FY28 or still it will be a difficult maybe a one of.

Shravan Shah: So at current juncture, what do you think that the— What kind of a margin we can look at, let's say, for the full year or maybe Q3, or when can we start seeing a double digit from Q1 FY28, or still it will be difficult, maybe one of—

Shravan Shah: So at current juncture, what do you think that the— What kind of a margin we can look at, let's say, for the full year or maybe Q3, or when can we start seeing a double digit from Q1 fiscal year 2028, or still it will be difficult, maybe one of—

Speaker #3: Year has been yeah, this year there have been a few black swan events. One, of course, has been the war. Second, of course, has been this labor pricing has impacted us in a major way because a couple of our projects you know, there are the labor factors as it is are higher because some materials are being supplied by the client.

Shobhit Uppal: This year there have been a few black swan events. One, of course, has been the war. Second, of course, has been this labor pricing has impacted us in a major way because a couple of our projects, the labor factors as it is, are higher because some materials are being supplied by the client or clients. So, it would be fair to say that, this financial year, we are ruling out having a double-digit EBITDA margin.

Speaker #3: For clients. So, would it be fair to say that this financial year we are ruling out having a double-digit EBITDA margin?

Speaker #4: But at what max number can one look at? Let's say, if I have to look at it another way, what is the maximum—because as you highlighted, Q3 also?

Shravan Shah: But at what max number one can look at, let's say, if I have to look at other way, how max, because as you highlighted Q3 also.

Speaker #3: Q2, look, Q2 is an aberration. Primarily, as I said, 2.6 percentage points have been shaved off because of one thing. And that also, you know, it's something that the client at one time had agreed to and now, for various reasons, they've gone back on it.

Shobhit Uppal: Look, Q2 is an aberration. Primarily, as I said, 2.6 percentage points have been shaved off because of, one, this thing, and that also, it's something that the client at one time had agreed and now, for various reasons, they've gone back on it. We are already looking at starting arbitration proceedings. So, we should, whatever we had, what was there in Q1 of the last financial year, we are hoping that we would get back to those margins over the next three quarters. The effect of NGT, that is a rider that I am putting here. We are unaware how much that is going to contribute or hit our margins.

Speaker #3: It will be we are already looking at we are starting arbitration proceedings. So you know, we we should whatever we had what was there in Q1 of the of the last financial year we are we are hoping that we would get back to those margins over the next three quarters.

Speaker #3: The effect of NGT—that is a rider that I am putting here—we are unaware how much that is going to contribute or hit our margins.

Speaker #4: And this, in any way, is also impacting the execution. So whatever we were looking at—15 to 20 percent growth for this year, and even a similar number for FY28.

Shravan Shah: And this in any way is also impacting the execution. So whatever we are looking at 15% to 20% growth for this year, anyone similar number for FY28. So is there any change on the lower side?

Shravan Shah: And this in any way is also impacting the execution. So whatever we are looking at 15% to 20% growth for this year, anyone similar number for fiscal year 2028. So is there any change on the lower side?

Speaker #4: So, is there any change on the lower side?

Speaker #3: No, we still feel there has been top-line growth this time around. We still feel that we will grow at about 12 to 15 percent top-line growth.

Shobhit Uppal: No, there has been a top-line growth this time around. We still feel that we will grow at about 12% to 15% top-line growth.

Shravan Shah: Okay.

Speaker #3: And you know, as per the historical EBITDA margin over the past couple of years, we should be there or thereabouts.

Shobhit Uppal: And as per the historical EBITDA margin over the past couple of years, we should be there and thereabouts.

Speaker #4: Okay. Okay. Some balance sheet numbers are also submitted, so if you can provide—yeah—in inventory data, trade payable.

Shravan Shah: Okay. Some balance sheet numbers, sir. Subish, if you can provide.

Shobhit Uppal: Inventory, debtors.

Shravan Shah: Yeah, inventory, debtors, trade payable.

Satbeer Singh: This is INR 776 crore.

Speaker #3: This is 776 crore.

Speaker #4: 776.

Shravan Shah: INR 776?

Speaker #3: Yes.

Satbeer Singh: Yes, sir.

Shravan Shah: That is the debtors.

Speaker #4: That is the datas.

Speaker #3: Okay. Pardon? That is the data.

Shobhit Uppal: What? Pardon?

Satbeer Singh: That is the debtors we want.

Speaker #4: Data: Trade receivables are ₹776 crore, you say.

Shravan Shah: Debtors. Trade receivable is INR 776 crore, you said?

Speaker #3: Trade payables and data is ₹632 crore, and retention is ₹401 crore.

Satbeer Singh: INR 776 trade payable, and debtors is INR 632 crore. And retention is INR 401 crore.

Speaker #4: Sorry. How much did you say retention is?

Shravan Shah: Sorry, how much you said retention is?

Satbeer Singh: Retention INR 401 crore.

Speaker #3: Retention 401 crore.

Speaker #4: 401 crore. And inventory is?

Shravan Shah: INR 401 crore. Inventory is?

Speaker #3: Inventory, including real estate inventory, is ₹391 crore.

Satbeer Singh: Inventory, including real estate inventory, INR 391 crore.

Speaker #4: 391 crore. And mobilization and unbilled revenue?

Shravan Shah: INR 391 crore. Mobilization and unbilled revenue?

Speaker #3: Mobilization is ₹924 crore, and unbilled revenue is ₹946 crore.

Satbeer Singh: Mobilization INR 924 crore, and unbilled revenue INR 946 crore.

Speaker #4: 946 crore. Okay. That is also staff intake and gross debt and the cash?

Shravan Shah: Okay. That is also sharp increase. Gross debt and the cash?

Satbeer Singh: Debt is INR 2 crore hardly, INR 2.28 lakhs.

Speaker #3: That is, there are two crores—hardly two crore twenty-eight lakhs. And cash and bank balances, including cash and bank balance, are nine hundred twenty crores.

Shravan Shah: Yeah.

Satbeer Singh: including cash and bank balance, INR 920 crore.

Speaker #4: 920 crore. Okay. Okay. Thank you, sir.

Shravan Shah: INR 920 crore. Okay. Thank you, sir.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

Speaker #1: Thank you. The next question is from the line of Vaibhav Shah from GM Financial. Please go ahead.

Operator 2: Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.

Operator: Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.

Speaker #4: Sir, we saw a sharp increase in interest cost in the first quarter. What is the reason for that, and could this be a recurring number in the coming quarters?

Vaibhav Shah: Sir, we saw a sharp increase in interest cost in Q1. What was the reason for that and could this be a recurring number in coming quarters?

Speaker #3: This increase in finance cost is because we have availed a mobilization advance during this quarter for the new project, Central Vista Project. So that's why there is an increase in finance cost.

Satbeer Singh: This is an increase in finance cost due to, we have availed a mobilization advance during this quarter for the new Central Vista project. That is why there is an increase in finance cost.

Speaker #4: So, in coming quarters, it should be a similar number every quarter—15 to 16 crores.

Vaibhav Shah: In coming quarters, it will be a similar number every quarter, 15, 16 crores?

Vaibhav Shah: In coming quarters, it will be a similar number every quarter, 15, 16 crore?

Speaker #3: Yes. Yes.

Satbeer Singh: Yes.

Speaker #4: Interest only 8 percent.

Shobhit Uppal: Interest will be 8%.

Satbeer Singh: It will be 8%, but that more the proportion within revenue.

Speaker #3: Percent, but that's more the proportion—it would seem raised. It will be a similar number. Similar number. The amount will change.

Shobhit Uppal: It will be a similar number.

Satbeer Singh: Similar number. Amount might change a little bit, yes.

Vaibhav Shah: Sir, out of mobilization advance of INR 924 crores, what is the interest bearing portion and the interest rate?

Vaibhav Shah: Sir, out of mobilization advance of INR 924 crore, what is the interest bearing portion and the interest rate?

Speaker #4: Advance of ₹924 crore—what is the interest-bearing portion and the interest rate?

Speaker #3: This is 31 percent. Thirty-one percent.

Satbeer Singh: This is 31%.

Speaker #4: And the interest rate?

Vaibhav Shah: And the interest rate?

Speaker #3: Interest rate, you might say, is around an average of 8 percent.

Satbeer Singh: Interest rate, you might say, around average 8%.

Speaker #4: Okay, so secondly, on Jameson Jersey Park—when do we... what are the challenges that you are facing, and when can the work on the ground begin? Also, what is the revenue expectation for the project in this year and next year?

Vaibhav Shah: Secondly, on Gems and Jewellery Park, so what are the challenges which you are facing and when can the work on the ground begin? What is the revenue expectation on the project in this year and next year?

Shobhit Uppal: So, there is a change in design or requirement happening from the client side. That is why our architectural designing has been done, but that is undergoing a change. I think work on the ground will only begin, it will not happen in this quarter. It is likely to begin in Q3. We are looking at a billing of about INR 100 crores in this financial year.

Speaker #3: So, you know, there is a change in design or requirement happening from the client side. That is why, you know, while our architectural designing has been done, it is now undergoing a change.

Speaker #3: So I think work on the ground will only begin—it will not happen in this quarter. It is likely to begin in Q3.

Speaker #3: And we are looking at a billing of about ₹100 crore in this financial year.

Vaibhav Shah: Okay. Sir, next year?

Speaker #4: Sir, next year?

Speaker #3: Next year, the billing should be tuned to about 450 crores.

Shobhit Uppal: Next year, the billing should be to the tune of about INR 450 crores.

Shobhit Uppal: Next year, the billing should be to the tune of about INR 450 crore.

Speaker #4: So, what is the time frame for completion of the project?

Vaibhav Shah: What is the timeframe of completion for the project?

Speaker #3: It's three and a half years.

Shobhit Uppal: Three and a half years.

Speaker #4: Okay. Okay. And sir, on the CSG project, we have not seen that kind of pickup even in the first quarter. So how do you see the revenue moving over there this year and next year?

Vaibhav Shah: Okay. And sir, on the CSG project, we have not seen that kind of pickup even in Q1. So how do you see the revenue moving over there in this year and next year?

Speaker #3: So, we are looking at an average billing in the nine months after the first quarter to be around ₹40 to ₹45 crore. That is roughly a billing of about ₹450 crore.

Shobhit Uppal: We are looking at an average billing in the nine months after Q1 to the tune of about INR 30 to 35 crores. That is roughly a billing of about INR 450 crores, INR 400 to 450 crores in this financial year, which will be ramped up to about INR 700 crores in the next year.

Shobhit Uppal: We are looking at an average billing in the nine months after Q1 to the tune of about INR 30 to 35 crore. That is roughly a billing of about INR 450 crore, INR 400 to 450 crore in this financial year, which will be ramped up to about INR 700 crore in the next year.

Speaker #3: 400 to 450 crores in this financial year, which will be ramped up to about 700 crores in the next year.

Speaker #4: And sir, what is the main challenge over here? Earlier, we were targeting close to 600 crores this year. So what is stopping us from doing that?

Vaibhav Shah: Sir, what is the main challenge over here? We earlier were targeting close to INR 600 crores in this year. So what is stopping us from doing that?

Vaibhav Shah: Sir, what is the main challenge over here? We earlier were targeting close to INR 600 crore in this year. So what is stopping us from doing that?

Speaker #3: So, we are hopeful that we will still touch about ₹500 crore. As I said, we've done about ₹70 crore in this quarter, and if we do about ₹450 crore in the balance nine months, we are hoping to cross ₹500 crore this year.

Shobhit Uppal: We are hopeful that we will still touch about INR 500 crores. As I said, we have done about INR 70 crores in this quarter, and if we do about INR 450 crores in the balance nine months, we are hoping to cross INR 500 crores here.

Shobhit Uppal: We are hopeful that we will still touch about INR 500 crore. As I said, we have done about INR 70 crore in this quarter, and if we do about INR 450 crore in the balance nine months, we are hoping to cross INR 500 crore here.

Vaibhav Shah: Any project specific issues?

Speaker #3: And as I said sorry?

Shobhit Uppal: Sorry?

Speaker #4: Any project-specific issues over there?

Vaibhav Shah: Any project specific issues over there?

Speaker #3: No, it was—you know, the project is basically divided into two parts. One is the platforms and the station area, and the other is the new buildings which are coming up.

Shobhit Uppal: No. The project is basically divided in two parts. One is the platforms and the station area, and the other is the new buildings which are coming up. Work on the new buildings, which is the LD node, DRM building. The DRM building has started. LD node, we will start now. The client is approving in stages. That is why the work cannot be taken up all at one go. As far as the platforms and station areas go, there we get blocks as per the traffic. That is why it is taking time.

Speaker #3: Work on the new buildings, which is the LD node DRM building—all this, you know, the DRM building has started. LD node will start now.

Speaker #3: The building there, the client is approving in stages. That's why, you know, the work cannot be taken up all at one go. As far as the platforms and station areas go, there we get blocks as per the traffic.

Speaker #3: That is why it is taking time.

Speaker #4: Okay. Okay. And sir, lastly on Central Vista, how is the work on ground going and what revenue are we targeting for FY27 and FY28?

Vaibhav Shah: Okay. And sir, lastly, on Central Vistas, how is the work on ground going and what revenue are we targeting for 2027 and 2028?

Speaker #3: So that's why 20 works. Let me first tell you, there are two buildings which were to be broken there: Nirman Bhavan and Upayog Bhavan.

Shobhit Uppal: FY20 work, let me first tell you, there are two buildings which were to be broken there, Nirman Bhavan and Udyog Bhavan. Nirman Bhavan, completely broken. The foundation casting has begun. In September, we will start erecting the structural steel. Udyog Bhavan was handed over to us about three weeks ago, and 90% of that has been demolished. The demolition will be completed in the next 15 days. We have started the excavation work. A month from now, the foundation works will start in that area also. We are looking at a billing of about INR 700 crores in this financial year.

Speaker #3: Nirman Bhavan is completely broken. The foundation casting has begun, and in September we'll start erecting the structural steel. Upayog Bhavan was handed over to us about three weeks ago.

Speaker #3: And 90 percent of that has been demolished. The demolition will be completed in the next 15 days, and we've started the excavation work. So, a month from now, the foundation work will start in that area also.

Speaker #3: We are looking at a billing of about ₹700 crore in this financial year.

Speaker #4: And sir next year?

Vaibhav Shah: And sir, next year?

Speaker #3: Next year, it would be about ₹1,000 crores.

Shobhit Uppal: Next year it would be about INR 1,000 crores.

Shobhit Uppal: Next year it would be about INR 1,000 crore.

Speaker #4: Okay. And sir, you mentioned that for revenue, you are lowering the budget.

Vaibhav Shah: Okay. And sir, you mentioned that

Shobhit Uppal: We are looking to complete the building which we started where Nirman Bhavan existed, which is about 50% of the job. We are looking to commission it by the end of next year.

Speaker #3: We are looking to we are looking to complete the building which we started where Nirman Bhavan existed. It is about 50 percent of the job.

Speaker #3: We are looking to commission it by the end of next year.

Speaker #4: And the end of the project should be completed in FY29.

Vaibhav Shah: And entire project should be completed in FY29?

Speaker #3: The entire project will be completed in FY29. Yes.

Shobhit Uppal: Entire project will be completed in FY29, yes.

Speaker #4: Okay. And sir, on revenue, you mentioned 12 to 15 percent growth, right? So we are lowering the guidance from the previous call?

Vaibhav Shah: And sir, on revenue, you mentioned 12% to 15% growth, right? So we are lowering the guidance

Shobhit Uppal: Yeah

Vaibhav Shah: from the previous call.

Speaker #3: Yes, it was 15 percent. So we are sticking to that.

Shobhit Uppal: It was 15%, so we are sticking to that.

Speaker #4: Okay.

Vaibhav Shah: Okay.

Speaker #3: As I said, the lower 12, you know, the NGT is something which we are not sure about—what impact that is going to cause.

Shobhit Uppal: As I said, the lower 12, the NGT is something which we are not sure about what impact that is going to cause. So that is why.

Speaker #3: So that is why.

Speaker #4: So, if it is similar to what happened last year, then we could—we may cross 15%.

Vaibhav Shah: If it is similar to what happened last year, then we may cross 15%.

Speaker #3: Yes.

Shobhit Uppal: Correct.

Speaker #4: Okay. Okay. Thank you.

Vaibhav Shah: Okay. Thank you, sir.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

Speaker #1: Thank you. The next question is from the line of Sandeep Sabharwal from r.sandeepsabharwal.com. Please go ahead.

Operator 2: Thank you. The next question is from the line of Sandip Sabharwal from asksandipsabharwal.com. Please go ahead.

Operator: Thank you. The next question is from the line of Sandip Sabharwal from asksandipsabharwal.com. Please go ahead.

Speaker #2: Yes. I think your last conference call happened 15 days after the end of the previous quarter, so it's very difficult to believe that you did not know the impact of the new labor charges, etc., and what impact it would have on your first quarter results, because your results and conference calls typically happen 45 days after the last day of the results season.

Sandip Sabharwal: Yes, I think your last conference call happened 15 days after the end of the previous quarter. It is very difficult to believe that you did not know the impact of the new labor charges, et cetera, and what impact it will have on your Q1 results. Your results and concalls typically happen 45 days, last day of the result season. I have been observing that you have been giving guidance on growth, on margins, et cetera, last many quarters, but I think those have no relevance actually, because the numbers which come out are totally different. Have you any comments to offer on that?

Speaker #2: So, I've been observing that you've been giving guidance on growth, on margins, etcetera, for the last many quarters, but I think those have no relevance actually, because the numbers which come out are totally different.

Speaker #2: So, have you any comments to offer on that?

Speaker #3: Yes, it's a very generic observation that you've given. You have some data, or we can have a separate meeting—our CFO can meet you. I would like to think that we have been more or less in line with the guidance that I've been giving over the past three to four years.

Shobhit Uppal: It is a very generic observation that you have given. Do you have some data? We can have a separate meeting, our CFO can meet you. I would like to think that we have been more or less in line with the guidance that I have been giving over the past three, four years, post-COVID. If you could be a little more specific. While I agree. No, let me complete. Let me address the first part of your query, that whether I was aware or whether we were aware of the impact of the price escalation on account of labor when we did our last investor call. Are you insinuating that I was aware and I hid that?

Speaker #3: Post COVID. If you could be a little more specific. While I agree no no no no no no let me complete let me complete.

Speaker #3: Let me address the first part of your query, which is whether I was aware, or whether we were aware, of the impact of the price escalation on account of labor when we did our last investor call.

Speaker #3: Are you insinuating that I was aware and I hid that? You have some specific data. Do you have some specific data for which you want an answer from me?

Vaibhav Shah: There is no.

Shobhit Uppal: Do you have some specific data? Do you have some specific data which you want an answer from me to?

Speaker #3: Two.

Speaker #2: No. 40, in your last conference call, happened 45 days after the end of the previous quarter. So, I think you had a call on the 15th or 16th of May.

Vaibhav Shah: No, your last conference call happened 45 days after the end of the previous quarter. You, I think, had a call on 15 or 16 May.

Speaker #2: So, are you saying that the new labor charges were imposed on you after the 15th of May, or before the 15th of May?

Shobhit Uppal: Okay.

Vaibhav Shah: You are saying that the new labor charges were imposed on you after 15 May or before 15 May? Was the impact

Speaker #2: Was the impact.

Shobhit Uppal: If you know

Speaker #3: You know, the full month or full quarter or half of the quarter. If you know the nature of our business, if you track this industry, you would know that April, May, and June are traditionally that part of the calendar year where labor isn't in extremely short supply.

Vaibhav Shah: full month or full quarter or half of the quarter?

Shobhit Uppal: If you know the nature of our business, if you track this industry, you would know that April, May, June, are traditionally that part of the calendar year where labor is in extreme short supply on account of various factors. This quarter, this was further exacerbated by a slew of festivals, especially Muslim festivals. 50%, 60% of our labor, skilled labor, or 80% of our skilled labor is Muslim. So the impact on the ground was felt much more, which was very difficult to predict, especially in NCR, especially in Haryana and UP, where government further compounded this issue by increasing the labor cost by 35% to 40% between skilled and unskilled. It was very difficult for us to predict the impact on our costs. Have I spelt out the position clearly?

Speaker #3: On account of various factors, this quarter this was further exacerbated by a slew of festivals, especially Muslim festivals. Fifty to sixty percent of our skilled labor, or 80 percent of our skilled labor, is Muslim.

Speaker #3: Right? So the impact on the ground was felt much more, which was very difficult to predict, especially in NCR, especially in Haryana and UP, where the government further compounded this issue by increasing the labor cost by 40%.

Speaker #3: There was a 35% to 40% difference between skilled and unskilled. It was very difficult for us to predict the impact on our cost. Have I spelled out the position clearly?

Speaker #2: No, not really. Because, when was the increase in labor cost done for you? Was it from the first of April?

Sandip Sabharwal: No, not really. Because when was the increase in labor cost done for you? Was it from 1 April?

Speaker #3: It's an ongoing process. When you are not understanding, then it seems you've not tracked this industry. Please understand, what we are paying today on the ground to a bar binder, or a carpenter, or a mason—that is totally based on demand and supply. And in most cases, over the past two months, it has been more than what the government has mandated.

Shobhit Uppal: It's an ongoing process. You are not understanding. It seems you've not tracked this industry. Please understand, what we are paying today on the ground to a bar binder or a carpenter or a mason, that is totally based on demand and supply, and in most cases, over the past two months, it has been more than what the government has mandated. It's a demand and supply issue. If you track this industry, you would know that. If you don't, we would be more than willing to meet up with you and give you a refresher course.

Speaker #3: It's a demand and supply issue. If you track this industry, you would know that. If you don't, we would be more than willing to meet up with you and give you a refresher course.

Speaker #2: No, no, I don't need a refresher course. There's no need for you to become aggressive on the call. It's just—

Sandip Sabharwal: No, I don't need a refresher course. There's no need for you to become aggressive on the call. It's just

Speaker #3: No, no, I'm just telling you—you are insinuating, in your first question that you asked me, you are insinuating that I have hidden some facts.

Shobhit Uppal: No, I am just telling you. You are insinuating, your first question that you asked me, you are insinuating that I have hidden some facts.

Sandip Sabharwal: I did not.

Speaker #3: You need to articulate your questions better.

Shobhit Uppal: You need to articulate better your questions.

Speaker #2: No, no, I said you have a call in the middle of the quarter. By that time, you should have a fair idea of what's happening in that quarter.

Sandip Sabharwal: No, I said you have a call middle of the quarter. By that time you should have a fair idea of what is happening in that quarter. If you do not have a fair idea of what is happening in that quarter, then any kind of guidance is of no relevance.

Speaker #2: If you don't have a fair idea of what's happening in that quarter, then any kind of guidance is of no relevance.

Speaker #3: Look, I know what guidance I am giving. It is your prerogative to agree to it, believe it or not believe it. I am willing to invest more time with you and try to take you through what impacts my costs on the ground.

Shobhit Uppal: Look, I know what guidance I am giving. It is your prerogative to agree to it, believe it or not believe it. I am willing to invest more time with you and trying to take you through what impacts my costs on the ground. You are the one who is saying you don't need it. What more do you expect from me?

Speaker #3: You are the one who's saying you don't need it. What more do you expect from me?

Speaker #2: No, no, I don't think so. Anyway, there it is.

Sandip Sabharwal: No, I don't need it. Anyway, let it be.

Speaker #3: Let's move on.

Shobhit Uppal: Let's move on.

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

Operator 2: Thank you. The next question is from the line of Vishal Periwal from PL Capital. Please go ahead.

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

Speaker #4: Yes sir. Thanks for the opportunity. Maybe, like you know, yeah, thanks sir. Sir, on this labour, whenever these changes happen, I mean, can this be considered more like a GST-related change—change of law? Will this become applicable, and then same can be passed on to our clients?

Vishal Periwal: Yes, sir. Thanks for the opportunity.

Shobhit Uppal: All right, Vishal.

Vishal Periwal: Yeah, thanks, sir. Sir, on this labor, whenever these changes happen, can this be considered more like a GST-related changes, a change of law? Will this become applicable, and then same can be passed on to our clients?

Speaker #3: So, this is not considered a statutory increase, whereas if a certain component of the increase—for example, if the PF was getting increased—that would tantamount to, or that would be taken as, a statutory increase which the clients would have to necessarily bear.

Shobhit Uppal: This is not considered as a statutory increase. While if a certain component of the increase, say, if the PF was getting increased, the amount of that would be taken as a statutory increase, which the clients would have to necessarily bear. In terms of increase by the government, it's not a statutory increase, I said. But having said that, we are still writing to all our clients and telling them that this increase, coupled with the demand and supply issue. Today labor has become a big issue. Especially over the last 2 and a half months, all our projects, especially in NCR, have been operating at 40% to 50% labor strength. We have reached out to our clients, and they have been sympathetic in at least listening to or going through the numbers that we are presenting to them as to the impact on our costs.

Speaker #3: In terms of the increase by the government, it's not a statutory increase, I said, but having said that, we are still writing to all our clients and telling them that this increase, coupled with the demand and supply issue—

Speaker #3: Today, labor has become a big issue. You know, especially over the last two, two and a half months, all our projects, especially in NCR, have been operating at 40 to 50 percent labor strength.

Speaker #3: So we have we have reached out to a client and they have been sympathetic in in in at least listening to or or going through the numbers that we are presenting to them as to the impact on our costs.

Speaker #3: So we are hopeful that the projects which do not have a labor escalation clause with some of our larger clients in NCR, the client will consider compensating us to some extent.

Shobhit Uppal: We are hopeful that the projects which do not have a labor escalation clause with some of our larger clients in NCR, client will consider compensating us to some extent.

Speaker #4: Okay, okay. And from an accounting point of view, I mean the employee cost that we book in our P&L—does this have an impact of labor, or is it only the HO-related and other things which are part of the employee cost?

Vishal Periwal: Okay. From accounting point of view, the employee cost that we book in our P&L, does this have an impact of labor? Or it is only the HO related and other things which is part of the employee cost? Say one control input or-

Satbeer Singh: No, it has.

Satbeer Singh: No, it has. It has been employed there. It has. You want to answer that? To the extent that such labor is employed by the company, rest, it is included therein. What is not employed and they are into contractors or labor suppliers, that is in the subcontractor or labor costs.

Satbeer Singh: It has been employed there.

Shobhit Uppal: It has.

Speaker #3: It it has. To the extent that such labor is employed by the company rest it is included therein and what is not employed and they are into like a you know contractors or labor suppliers that is in the subcontractor or labor costs.

Satbeer Singh: You want to answer that?

Shobhit Uppal: To the extent that such labor is employed by the company, rest, it is included therein. What is not employed and they are into contractors or labor suppliers, that is in the subcontractor or labor costs.

Speaker #4: Okay, okay. Because what I see from the P&L, it looks like probably a 30 crore kind of impact which is coming from the aims, and if it is getting booked somewhere in the raw material and subcontracting, where the labor cost is also there, then that probably explains the 30 crore impact. The other impact is the employee cost increase—that is impacting much more to our P&L, I think, from what I could gather.

Vishal Periwal: Okay. Because from the P&L, it looks like, I think, probably a INR 30 crore kind of impact, which is coming from the AMAs. If it is getting booked somewhere in the raw material and subcontracting where the labor cost is also there, then that explains probably the INR 30 crore impact. The other impact is the employee cost increase, that is impacting much more to our P&L. I think that is what I could gather.

Speaker #3: That you already answered when the numbers, so yeah, you're right. You know, one-on-one is that 30, there is actually a threefold impact on our data.

Satbeer Singh: That you already answered.

Shobhit Uppal: So, you are right. There is actually a threefold impact on our EBITDA. One is that INR 30 crores. The other is broadly split up into our increased staff cost and increased labor cost.

Shobhit Uppal: So, you are right. There is actually a threefold impact on our EBITDA. One is that INR 30 crore. The other is broadly split up into our increased staff cost and increased labor cost.

Speaker #3: Right? One is that ₹30 crore. The other is broadly split up into increased staff cost and increased labor cost.

Speaker #4: Okay, okay, okay. And maybe one last thing: in terms of the employee cost, is there any one-off, in terms of any bonuses or anything, that has happened?

Vishal Periwal: Okay. Maybe one last thing, in terms of the employee cost, is there any one-off in terms of any bonuses or anything that has happened? It is more like a recurring employee cost.

Speaker #4: It's more like a recurring employee cost.

Shobhit Uppal: No, it is just this, that this should rationalize over the next three quarters because we have ramped up considerably on account of our large projects like Central Vista starting or The Dahlias starting. These are large projects. One is a INR 3,000-plus crore project. One is a INR 2,000 crore-plus project. Also, another project for DLF, which is DLF Downtown, which is also a INR 1,600, INR 1,700 crore project. That project has been delayed owing to design changes. So there, the client is looking to compress timelines. We further ramped up our mobilization in terms of our staffing there. So these large projects, so to say, as their turnover from these projects or their contribution to top line increases, the percentage-wise staff cost will rationalize.

Speaker #3: It's just this that—no, no, it's just this—that this should rationalize over the next three quarters, because we have ramped up considerably on account of our large projects like Central Vista starting or Dahlia starting. You know, these are large projects.

Speaker #3: One is a ₹3,000 crore-plus project. One is a ₹2,000 crore-plus project. Also, you know, another project for DLF, which is Downtown.

Speaker #3: You know, which is also a sixteen to seventeen hundred crore project. That project has been delayed due to design changes. So there, the client is looking to compress timelines.

Speaker #3: We we further ramped up our mobilization in terms of our staffing there. So these large projects so to say you know we as their turnover from these projects or their contribution to top line increases the percentage wise staff cost will rationalize.

Speaker #4: Okay, okay, okay. I think that's all from my side, sir. Thank you very much.

Vishal Periwal: Okay. I think that's all from my side, sir. Thank you very much.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

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

Operator 2: Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Operator: Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah: Hello. Sir, currently the L1, last time we said, INR 1,620 odd crore, the hospital in Delhi and Odisha Government University Bhubaneswar. Out of that, which one got converted into?

Speaker #4: Hello sir. Currently, the L1—last time we said sixteen hundred twenty-odd crore—the hospitals in Delhi and Odisha Government University, Bhubaneswar. So, out of that, which one got converted into LOA and…

Speaker #3: University—no, University, you know, they were asking us to increase our bid validity. We refused because that was a fixed price contract.

Shobhit Uppal: No, university, they were asking us to increase our bid validity. We refused, because that was a fixed price contract. Seeing the volatility and the increase in costs at the ground level, we refused. So that has fallen through. That is no longer live now. RML continues to be live.

Speaker #3: And seeing the volatility and the increase in costs at the ground level, we refused. So that has fallen through. That is no longer live now.

Speaker #3: So, RML continues to be live.

Speaker #4: Okay. So, the ₹512 crore inflow for this quarter—is that different from the RML, which is still L1, or is that the one which got converted into?

Shravan Shah: Okay, so INR 512 crore inflow for this quarter is different from the RML, which is still L1, or that is the one which got converted into-

Speaker #3: RML is still L1. RML has not been translated into a work order yet, so this 512 is different from that.

Shobhit Uppal: RML is still L1. RML has not translated into work order yet.

Shravan Shah: Okay.

Shobhit Uppal: So this INR 512 is different from that.

Speaker #4: Okay. So, the RML value is 700 to 600 crore.

Shravan Shah: Okay. RML value is INR 700, 600 crore?

Speaker #3: No, no, RML is ₹500 crores.

Shobhit Uppal: No, RML is INR 500 crores.

Shobhit Uppal: No, RML is INR 500 crore.

Speaker #4: Five hundred crores. Five hundred crore. Okay. So and and and Kulya what we guided in terms of inflow eight thousand crores. So that remains intact.

Vikas Ahluwalia: INR 500 crores.

Vikas Ahluwalia: INR 500 crore.

Vikas Ahluwalia: INR 500 crore. Okay. In full year, what we guided in terms of inflow, INR 8,000 crores, that remains intact?

Vikas Ahluwalia: INR 500 crore. Okay. In full year, what we guided in terms of inflow, INR 8,000 crore, that remains intact?

Speaker #3: No to be frank we are we are no longer very aggressive. That should come down because you know this volatility both in terms of material prices as well as labor prices we are looking for this to stabilize and as it is our order book is twenty thousand crores plus so you know we are being conservative as far as the rest of this year is concerned.

Shobhit Uppal: No. To be frank, we are no longer very aggressive. That should come down. Because, this volatility, both in terms of material prices as well as labor prices, we are looking for this to stabilize. As it is, our order book is INR 20,000 crores plus. So, we are being conservative as far as the rest of this year is concerned in our approach towards picking up new orders.

Shobhit Uppal: No. To be frank, we are no longer very aggressive. That should come down. Because, this volatility, both in terms of material prices as well as labor prices, we are looking for this to stabilize. As it is, our order book is INR 20,000 crore plus. So, we are being conservative as far as the rest of this year is concerned in our approach towards picking up new orders.

Speaker #3: In our approach towards picking up new orders.

Speaker #4: So maybe ₹4,000–₹5,000 crore for Kulya, we can.

Shravan Shah: So maybe INR 4,000, 5,000 crore for full year.

Shobhit Uppal: Yeah, yes.

Speaker #3: Yeah, it's not—it's not yes.

Speaker #4: Okay, okay, got it. And currently, in terms of the bid pipeline, that will also now be reduced and should be around five to six thousand crore.

Shravan Shah: Okay. Got it. Currently, in terms of the bid pipeline, that will also will be now reduced. It could be a INR 5,000, 6,000 crore.

Speaker #3: Yeah, what I am saying is our bid pipeline—the visibility is there. We will bid only, you know, and we will factor in; we'll not be very aggressive.

Shobhit Uppal: Yeah, what I am saying is our bid pipeline, the visibility is there. We will factor in, we will not be very aggressive. We will factor in the ground realities and these fluctuations, and then bid. We will not bid very aggressively.

Speaker #3: We'll factor in the ground realities and these fluctuations, you know, and then bid. We will not bid very aggressively.

Speaker #4: Okay, okay, got it. And currently, from the total order book, ₹20,000 crore plus, 11–12% will be the fixed price contract.

Shravan Shah: Okay. Got it. Currently, from the total order book of INR 20,000 crore plus, 11% to 12% will be the fixed price contract?

Speaker #3: Yes. 10.34%.

Satbeer Singh: Yes, 10.34%.

Speaker #4: Ten point three four percent. Okay. Okay. Okay. And then, CapEx in Q1—how much have we done? And for Kulya, we are looking at 300 crores.

Shravan Shah: 10.34%. Okay. CapEx in Q1, how much we have done? For full year, we are looking at INR 300 crore. So there also, any slowdown in terms of the CapEx?

Speaker #4: So, is there also any slowdown in terms of the CapEx?

Speaker #3: Yeah, we are looking to reduce the CapEx. For this quarter, it was sixty crores, so that's cool. Yeah, we will reduce it to anywhere between two hundred and twenty to two hundred and sixty crores.

Shobhit Uppal: Yeah, we are looking to reduce the CapEx for the

Satbeer Singh: for INR 60 crore.

Shobhit Uppal: This quarter was INR 60 crore, so that full year we will reduce it to anywhere between INR 220 crore to INR 260 crore.

Speaker #4: Sixty crores. Okay. But but overall in terms of the at at working capital level so there from year on do we see some further pressure will be there or it will remain here or can can improve by year end?

Shravan Shah: INR 60 crore. Okay. But overall, in terms of the working capital level, there, from here on, do we see some further pressure will be there or it will remain here or can improve by year-end?

Speaker #3: That's the we are expecting in this quarter that to be reduced from the existing level. At present it's one hundred and nineteen days and because of we are getting money from the Assam regions and that's we are expecting that to be.

Satbeer Singh: That we are expecting in this quarter, that to be reviewed from the existing level. That present is to 119 days, and because we are getting money from the Assam regions, and that we are expecting that to be at previous quarters level.

Speaker #3: At previous quarter's level.

Speaker #4: Okay, okay. Okay, got it. Thank you, sir.

Shravan Shah: Okay. Got it. Thank you, sir.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

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

Operator 2: Thank you. The next question is from the line of Parvez Qazi from Nuvama Group. Please go ahead.

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

Speaker #3: Hi. Good afternoon, sir. Thanks for taking my call. So, I'm in—the external environment is challenging, there is no doubt about it, both on execution and on the cost front.

Parvez Qazi: Hi, good afternoon, sir. Thanks for taking my call.

Shobhit Uppal: Hi. Yeah.

Parvez Qazi: The external environment is challenging, there is no doubt about it, both on execution and on the cost front. The first question is, we have a relatively lower proportion of fixed price contracts at about 10%-odd. But in general, how has commodity price volatility been over the last, let's say, five-odd months since the Iran war started? And on the ground, how difficult or easy has it been to navigate through these challenges?

Speaker #3: So the first question is I mean you have a relatively lower proportion of fixed fixed price contract at about ten odd percent. But in general how have or how has commodity price volatility been over the last let's say five odd months since the Iran war started and what are I mean on the ground how difficult or easy has it been to navigate through these challenges?

Speaker #3: So, as I mentioned earlier, we are facing the brunt both on account of materials and labor. While labor I've answered in detail, as the questions have been asked since the call began.

Shobhit Uppal: As I mentioned earlier, we are facing the brunt both on account of materials and labor. Right? While labor, I've answered in detail as the questions have been asked since the call began. As far as the material is concerned, its impact is on two parts. One is the price increase, and second is the supply chain getting impacted in terms of the delivery getting impacted because of the war. That has also led to, let me give you an example. Now, we buy a lot of panels, which run into many, many crores. Right? The switchgear is not available. So delivery, which used to take four to six weeks, is now taking three to four months. That is impacting our performance on the ground also. While in between, whenever there was a call for ceasefire or news of ceasefire happening, the prices used to stabilize.

Shobhit Uppal: As I mentioned earlier, we are facing the brunt both on account of materials and labor. Right? While labor, I've answered in detail as the questions have been asked since the call began. As far as the material is concerned, its impact is on two parts. One is the price increase, and second is the supply chain getting impacted in terms of the delivery getting impacted because of the war. That has also led to, let me give you an example. Now, we buy a lot of panels, which run into many, many crore. Right? The switchgear is not available. So delivery, which used to take four to six weeks, is now taking three to four months. That is impacting our performance on the ground also. While in between, whenever there was a call for ceasefire or news of ceasefire happening, the prices used to stabilize.

Speaker #3: As far as the material is concerned, you know its impact is on two counts. One is the price increase, and second is the supply chain getting impacted in terms of the delivery getting impacted.

Speaker #3: Because of the war. That has also led to—let me give you an example. Now, we buy a lot of panels, which run into many, many crores.

Speaker #3: Right. The switchgear is not available. So, delivery, which used to take four to six weeks, is now taking three to four months. That is impacting our performance on the ground also.

Speaker #3: So, in between, you know, whenever there was a call for ceasefire or news of a ceasefire happening, the prices used to stabilize. But the impact, it's been up and down.

Shobhit Uppal: But the impact, it has been up and down. This quarter has been impacted by that also. Coming back to some of our large contracts and labor specifically, say for instance, DLF, there have been changes in design at The Dahlias, which is one of our largest projects. That has also contributed to lesser work being done in this quarter on that project. Our IBC costs have also impacted our margins there. These are some things which have sort of hit us as far as this quarter is concerned. Having said that, geographically, these projects are in NCR. NCR seems to have borne the brunt as far as supply chain issues are concerned also, and labor price increase is concerned also.

Speaker #3: So, yeah, this quarter has been impacted by that also. Coming back to, you know, some of our large contracts and labor specifically—say, for instance, DLF—there have been changes in design at Dahlia's, which is one of our largest projects.

Speaker #3: That has also contributed to less work being done in this quarter on that project. Our IDC costs have also impacted our margins there.

Speaker #3: Right. So so these these these are these are some things which have which have sort of hit us as far as this quarter is concerned.

Speaker #3: Having said that it's a it's a geographically these projects are are in NCR. NCR seems to have gone the brunt as far as supply chain issues are concerned also.

Speaker #3: And labor price increase is a concern also. Hopefully, going forward, I think now that these projects have started in real earnest, we are targeting a billing of, as I said, nearly ₹30 to ₹35 crore every month from Dahlia's.

Shobhit Uppal: Hopefully, going forward, I think now that these projects have started in real earnest, we are targeting a billing of, as I said, nearly INR 30, 35 crores every month from The Dahlias. We are targeting a billing of close to INR 60 crores from Central Vista. We are targeting a billing of INR 25, 30 crores from DLF Downtown, where design issues also seem to be a thing of the past. I think the increased turnover from these projects should sort of help us in sort of getting back to the margins that we were showing over the past couple of years.

Shobhit Uppal: Hopefully, going forward, I think now that these projects have started in real earnest, we are targeting a billing of, as I said, nearly INR 30, 35 crore every month from The Dahlias. We are targeting a billing of close to INR 60 crore from Central Vista. We are targeting a billing of INR 25, 30 crore from DLF Downtown, where design issues also seem to be a thing of the past. I think the increased turnover from these projects should sort of help us in sort of getting back to the margins that we were showing over the past couple of years.

Speaker #3: We are targeting a billing of close to ₹60 crore from Central Vista. We are targeting a billing of ₹25–30 crore from DLF Downtown.

Speaker #3: Where design issues also seem to be a thing of the past. So so I think the increased turnover from these projects should should sort of help us in in sort of getting back to the margins that we had we were showing over the past couple of years.

Speaker #4: Sure. Secondly, in terms of payments, etc., how are things today visibly—let's say compared to what they were six months back—specifically with regards to central government, state government, etc.?

Parvez Qazi: Sure. Secondly, in terms of payments, et cetera, how are things today vis-a-vis, let us say, what they were six months back, specifically with regards to central government, state government, et cetera?

Shobhit Uppal: Central government projects' payments are not an issue. Central Vista just started. We are doing Varanasi, Darbhanga. These are Sports Authority of India projects. There is a project that we are doing, which is a central university in Himachal, where we have not been paid for the last five months because the project has gone over budget. Our bills are lying certified, but the payments are not coming through. Other than that one project, central government projects, we are not having any issue. State government, as Satbeer mentioned, Assam, due to elections, our bills were not getting signed off and payments were not coming. But as of 15 days ago, that process also seems to be getting streamlined, and we have started receiving major chunks of our outstanding dues.

Speaker #3: Central government projects' payments are not an issue. You know, Central Vista just started. We are doing Varanasi and Darbhanga. These are set for Authority of India projects.

Speaker #3: There is a project that we are doing, which is for a central university in Himachal. As you know, we haven't been paid for the last five months because the project has gone over budget.

Speaker #3: Our bills are line-certified, but the payments are not coming through. Other than that one project—central government projects—we're not having any issues.

Speaker #3: State government—as Sadbir mentioned—you know, in Assam due to elections, our bills were not getting signed off and payments were not coming. But as of fifteen days ago, that process also seems to be getting streamlined and we have started receiving major chunks of our outstanding dues.

Speaker #4: Sure. And lastly, I mean, when we look at the business over the last three to four years in general, one would say volatility has increased. I mean, labor is a perpetual problem.

Parvez Qazi: Sure. Lastly, when we look at the business over the last three, four years, in general, one would say volatility has increased in terms of, labor is a perpetual problem. But whether it is NGT, whether it is supply chain issue or even approvals, et cetera, those have become difficult and it is impacting everyone. How are we kind of incorporating it in our risk management framework, especially when bidding for newer projects, so that we can at least contain the impact of some of these issues in future projects?

Speaker #4: But whether it is NGT, whether it's a supply chain issue, or even approvals, etcetera, those have become difficult and it is impacting everyone. So, how are we kind of incorporating it into our risk management framework, especially when bidding for newer projects, so that we can at least contain the impact of some of these issues in future projects?

Speaker #3: So one thing, the more obvious thing that, you know, our experience over the last year, year and a half, whatever the impact on our bottom line, we've seen, the empirical data shows we are actually now putting that as a part of our costing while bidding for future tenders.

Shobhit Uppal: One thing, the more obvious thing that our experience over the last year and a half, whatever the impact on our bottom line we have seen, the empirical data shows we are actually now putting that as a part of our costing while bidding for future tenders. Say for instance, we know there is a huge shortage of carpenters, bar binders, as I mentioned earlier. Our bid prices are now incorporating this. We have virtually doubled our shuttering prices or steel prices and other such similar items where labor is in extreme short supply. Secondly, we are seeing that staff cost, this has become the new normal. Our project staff cost used to be about 3.5%, 4.5%. Now, with extreme increased focus on safety measures, especially with large developers and even government clients, our safety budget we have increased from about 1 percentage point to nearly 3 percentage points.

Speaker #3: You know, say, for instance, we know there is a huge shortage of carpenters and bar binders, as I mentioned earlier. Our bid prices are now incorporating this.

Speaker #3: We have virtually doubled our shutting prices, our steel prices, and other such similar items where labor is in extreme short supply. Secondly, we are seeing that staff costs—now, this has become the new normal.

Speaker #3: You know, our project staff cost used to be about three and a half, four, four and a half percent. Now, with increased focus—extreme increased focus—on safety measures, especially with large developers and even government clients.

Speaker #3: You know, our safety budget—we've increased it from about one percentage point to nearly three percentage points. Our staff cost, we've now started taking in excess of five percent.

Shobhit Uppal: Our staff cost, we have now started taking in excess of 5%. All this is being incorporated in our bids going forward. We feel that this is something that all large construction companies have begun doing. This is how we feel going forward in our newer jobs, quoting and getting these higher rates will help us get back to our historical high margins.

Speaker #3: So all this is being incorporated in our bids going forward. And we feel that this is something that all large construction companies have begun doing.

Speaker #3: And this is how we feel. Going forward in our newer jobs, you know, getting these higher rates—quoting and getting these higher rates—will help us get back to our historical high margins.

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

Parvez Qazi: Sure, sir. Thanks and all the best.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

Speaker #4: Thanks. The next question from the line of Time Between a Security. Go ahead. Mr. Shah, your line has been unmuted. Please go ahead with your question.

Operator 2: Thank you. The next question is from the line of Chandan Shah from Geojit Securities. Go ahead. Mr. Shah, your line has been unmuted. Please go ahead with your question.

Operator: Thank you. The next question is from the line of Chandan Shah from Geojit Securities. Go ahead. Mr. Shah, your line has been unmuted. Please go ahead with your question.

Speaker #5: Yeah. Hi. Can you hear me now?

Operator 1: Yeah. Hi, can you hear me now?

[Analyst]: Yeah. Hi, can you hear me now?

Speaker #4: Yes.

Operator 2: Yes.

Operator: Yes.

Speaker #3: We are somewhat. Yes.

Shobhit Uppal: Yeah, somewhat.

Operator 1: Yeah. My question is on the AIIMS Jammu part. So of course INR 29 crores has not been recognized into the revenue. Do we have anything in terms of unbilled revenue or inventory or any other asset item related to this income that you were talking about?

[Analyst]: Yeah. My question is on the AIIMS Jammu part. So of course INR 29 crore has not been recognized into the revenue. Do we have anything in terms of unbilled revenue or inventory or any other asset item related to this income that you were talking about?

Speaker #5: Yeah, so my question is on the Hims Jambu part. So, of course, ₹29 crore has not been recognized as revenue. Do we have anything in terms of unbilled revenue or inventory or any other asset item related to this income that we were talking about?

Speaker #3: In Jammu, for Jammu per chapter?

Shobhit Uppal: In Jammu, for Jammu per se?

Speaker #5: Yeah.

Operator 1: Yeah.

[Analyst]: Yeah.

Speaker #3: No, no. That project is now closed.

Shobhit Uppal: No. That project is now closed.

Speaker #5: Okay. So, we have booked everything in the expense, but this twenty-nine crore has not been recognized into the revenue because of some—.

Operator 1: Okay, we have booked everything in the expense, but this INR 29 crores has not been recognized into the revenue because of some issue.

[Analyst]: Okay, we have booked everything in the expense, but this INR 29 crore has not been recognized into the revenue because of some issue.

Speaker #3: Yeah, sure. Yes. So, I think what you seem to be asking is: is there a potential for any further hit? No.

Shobhit Uppal: Yeah. I think what you seem to be asking is there a potential for any further hit? No.

Speaker #5: Got it. Got it. Yeah. Thank you so much.

Operator 1: Got it. Yeah. Thank you so much, sir.

[Analyst]: Got it. Yeah. Thank you so much, sir.

Speaker #3: Yeah.

Speaker #4: Thank you. The next question is from the line of Parth Thakkar from JM Financial. Please go ahead.

Operator 2: Thank you. The next question is from the line of Parth Thakkar from JM Financial. Please go ahead.

Operator: Thank you. The next question is from the line of Parth Thakkar from JM Financial. Please go ahead.

Parth Thakkar: Thank you for the opportunity. Sir, depreciation is higher in the first quarter. Can we expect this to be recurring in nature, or it was just a one-time thing?

Speaker #5: Thank you for the opportunity. Sir, depreciation is higher in the first quarter, so can we expect this to be recurring in nature, or was it just a one-time thing?

Speaker #3: Depreciation? Yes, that would be recurring, because the higher capital expenditure in the last two or three years—now, that would be recurring.

Shobhit Uppal: Yes, that would be recurring because the higher CapEx in last two, three years, that now that would be recurring.

Speaker #5: Okay. And can we expect the margins to be double-digit, et cetera, here?

Parth Thakkar: Okay. Can we expect the margin to be double digit in FY28?

Parth Thakkar: Okay. Can we expect the margin to be double digit in fiscal year 2028?

Speaker #3: In FY?

Shobhit Uppal: In FY?

Speaker #5: Twenty-eight. Next financial year. Yes.

Parth Thakkar: '28.

Shobhit Uppal: Next financial year?

Parth Thakkar: Yes.

Speaker #3: As I said we aspire to get there and we are you know hopefully whatever our empirical data has shown us over the last year year and a half we are trying to factor that in in in our in our costing and and bidding.

Shobhit Uppal: As I said, we aspire to get there and hopefully, whatever our empirical data has shown us over the last year and a half, we are trying to factor that in our costing and bidding. So your guess is as good as mine. But as Purvai said, and Shravan also said, this is becoming a number of issues which keep cropping up, like the NGT or labor shortage for that matter.

Speaker #3: So your guess is as good as mine. But as Parvez said, and Sravan also said, you know, this is becoming a number of issues which keep cropping up.

Speaker #3: Like the NGT or labor shortage for that matter. So elections round round the year in some part of the country or the other. So we if there are a number of head headwinds which sort of you know two three years ago these used to be occurring only one or two months in a year.

Operator 2: Elections.

Operator: Elections.

Shobhit Uppal: Elections round the year in some part of the country or the other. So there are a number of headwinds which sort of, 2, 3 years ago, these used to be occurring only 1 or 2 months in a year. Now something or the other happens every other month. So it is very difficult to give a projection or prediction.

Speaker #3: Now, something or the other happens every other month, so it's very difficult to give a projection or prediction.

Speaker #5: Okay. Thank you, sir. That was my question.

Parth Thakkar: Okay, thank you, sir. Those were my questions.

Speaker #3: Okay.

Speaker #4: Thank you. The next question is from the line of Mahesh Patel from ICICI Securities. Please go ahead.

Operator 2: Thank you. The next question is from the line of Mahesh Patil from ICICI Securities. Please go ahead.

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

Speaker #5: Yeah. Hi, sir. Sir, mostly my questions have been answered. Just one query. I think last call we discussed that 89% of our order book has escalation clause for the materials, right?

Mahesh Patil: Yeah. Hi, sir. Sir, mostly my questions have been answered. Just one query. I think last call we discussed that 89% of our order book has escalation clause for the materials, right? In terms of labor also, can we quantify it? How much percentage of our order book value do we have this clause and for the remaining, we have to kind of get it done, especially for NCR.

Speaker #5: In terms of labor also, can we quantify it in how much percentage of our order book value we have this clause, and for the remaining, we have to kind of get it done—especially for NCR?

Speaker #3: We don't have that data as of now, but you can reach out to Sadbir, and we will get back to you on that.

Shobhit Uppal: We don't have that data as of now, but you can reach out to Satbeer. We will get back to you on that.

Speaker #3: No may send mail to me please.

Operator 2: You may send mail to me, please.

Operator: You may send mail to me, please.

Speaker #5: Okay sir. Yeah. Thanks.

Mahesh Patil: Okay, sir. Thanks.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

Speaker #4: Thank you. The next question is from the line of Shubham Harne from Poon Artha Investment Advisors. Please go ahead.

Operator 2: Thank you. The next question is from the line of Shubham Harne from Purnartha Investment Advisers. Please go ahead.

Operator: Thank you. The next question is from the line of Shubham Harne from Purnartha Investment Advisers. Please go ahead.

Speaker #5: Hi sir, thanks for the opportunity. My first question is: how many months of increased labor cost impact is in numbers? Sorry.

Shubham Harne: Hi, sir. Thanks for the opportunity. My first question is, how many months of increased labor cost impact is in number?

Shobhit Uppal: Sorry. I do not understand your question. Could you clarify?

Speaker #3: I don't understand your question. Could you clarify?

Speaker #5: So, the labor cost increase was in the middle of the quarter. Let's say, for one month or one and a half months, we were impacted by the increased labor cost.

Shubham Harne: So labor cost increase is in mid of the quarter, let's say for one month or one and a half month, we got impacted by increased labor cost. So it is a one-month or two-month time period or for the whole quarter?

Speaker #5: So, is it a one-month or two-month time period, or has the labor cost increased for the whole quarter?

Shobhit Uppal: No, no.

Shubham Harne: Labor cost has been increased?

Speaker #3: No, no. For the whole quarter and going forward, you know the labor cost—once the labor price gets increased, it doesn't come back down.

Shobhit Uppal: No, no. Whole quarter and going forward, the labor cost, once the labor price gets increased, it doesn't come back down.

Speaker #5: No, no. That's clear to me, but in the current quarter, for the whole three months, increased labor cost is there?

Shubham Harne: No, no. That is clear to me. But in the current quarter, for the whole three months, increased labor cost is there.

Operator 2: Correct.

Operator: Correct.

Speaker #3: It is.

Shobhit Uppal: It is.

Speaker #5: Okay. So this would be a new base.

Shubham Harne: Okay. So this would be a new base?

Speaker #3: Yes.

Shobhit Uppal: Yes.

Speaker #5: Got it. Second, on the NGT impact: In the last concall, you mentioned that since Central Vista will start, the NGT impact would be minimal for the current year.

Shubham Harne: Got it. Second on NGT impact. In last comm call, you had said that the Central Vista will start, so NGT impact would be minimum for the current year.

Speaker #3: Yeah, on that particular project—no, yeah—on that particular project, the impact that that work will have there, the impact will only be limited to, if at all, because we are trying to get special permissions, will be limited to raw material coming in from other parts of the country.

Shobhit Uppal: Yeah.

Shubham Harne: Now you are saying that

Shobhit Uppal: On that particular project, that work will go on there. The impact will only be limited to, if at all, because we are trying to get special permissions, will be limited to raw material coming in from other parts of the country.

Speaker #5: Okay. So earlier also, the CM assumption, were they correct?

Shubham Harne: Okay. We are also doing extreme assumption work there, correct?

Speaker #3: Yeah, yeah. Central Vista—the work per se on the ground does not stop.

Shobhit Uppal: Yeah. Central Vista, the work per se on the ground does not stop.

Speaker #5: And can you move labor from other projects in NCR to Central Vista?

Shubham Harne: Can you move labor from other projects in NCR to Central Vista?

Speaker #3: Which we will definitely do.

Shobhit Uppal: We will definitely do that.

Speaker #5: Got it. And last question is on EBITDA margins. So two point six percent impact is roughly due to JNK sorry AIMS Jammu issue. Two point six percent.

Shubham Harne: Got it. My last question is on EBITDA margin. So 2.6% impact is roughly due to Jammu issue, 2.6%, while the rest is of raw material and increased labor cost, correct? There is nothing else.

Speaker #5: While the rest is due to raw material and increased labor cost. Correct? There is nothing else.

Speaker #3: And increased staffing cost also.

Shobhit Uppal: Increased staffing cost also.

Speaker #5: Okay. So, increased staffing and labor costs will continue, and material prices will vary. Basically.

Shubham Harne: Okay. Increased staffing and labor cost will continue, and material price will vary, basically.

Speaker #3: Yes. And as material wise will vary and a lot of material costs or volatile material costs is a pass through. Like cement steel that's a pass through.

Shobhit Uppal: Yes, as material price will vary and a lot of material costs or volatile material cost is a passthrough, like cement, steel. That is a passthrough. The major impact, which is what I have been stressing from the beginning of the call, is on account of labor.

Speaker #3: So, the major impact—which is what I've been stressing—is from the account of labor.

Speaker #5: Got it. So, when could we—since this labor cost, material cost—increased material cost, what is the time lag between increased cost and when usually our customers will give that increased labor cost to us?

Shubham Harne: Got it. When could we, since this increased material cost, what is the time lag between increased cost and what usually our customers will give that increased labor cost to us?

Speaker #3: As I think I did say earlier, it would take over the next two quarters for us to sort of—for the client to agree, or for us to get the client to agree, to compensate us.

Shobhit Uppal: I think I did say earlier that it would take over the next two quarters for the client to agree or get the client to agree to compensate us.

Speaker #5: No, material cost has already been agreed upon by the client. Correct?

Shubham Harne: No, material cost already client has agreed, correct?

Speaker #3: Okay.

Shobhit Uppal: That is a passthrough.

Speaker #5: What is the time lag? And what is the time lag to that passing through?

Shubham Harne: Also on material cost, what is the time lag? What is the time lag to that passthrough?

Shobhit Uppal: There are two formulae to this. On the private sector side, there is a base price for cement and steel. Any increase from that base price is compensated to us with every bill. The lag is about 30 days. Right?

Speaker #3: So so there are there are there are two formulae for this. On the private sector side you know there is a base price for cement and steel.

Speaker #3: Any increase on that from the base price is compensated to us with every bill. So, the lag is about 30 days. Right?

Shubham Harne: Okay.

Speaker #5: Okay.

Shobhit Uppal: As regards the government contracts, the escalation is based on wholesale price index, which is released every quarter. So every quarter an escalation bill is proffered based on the index published, and that the government pays.

Speaker #3: Okay. And as regards the government contracts, the escalation is based on the Wholesale Price Index, which is released every quarter. So, every quarter, an escalation bill is proffered based on the index published, and that the government pays.

Speaker #5: Got it. Thank you sir.

Shubham Harne: Got it. Thank you, sir.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

Speaker #4: Thank you. The next question is from the line of Vaibhav Shah from GM Financial. Please go ahead.

Operator 2: Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.

Operator: Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.

Speaker #3: Yeah. So just one thing

Vaibhav Shah: Yeah. Just one thing, you mentioned initially in the call that you are in talks with the clients regarding this higher labor cost. Is it for the 90% of the book which is variable price in nature?

Speaker #2: You mentioned initially in the call that you are in talks with the clients regarding this higher labor cost. So, is it for the 90 percent of the book, which is of a variable pricing nature?

Speaker #3: So primarily, we are in talks with our clients in NCR, you know, a few of our large ones where the impact is sizable. And we are sort of talking to them, showing them what the actual costs are and telling them that it will be very difficult for us to continue to work on old pricing.

Shobhit Uppal: Primarily, we are in talks with our clients in NCR. Few of our large, where the impact is being sizable. And we are sort of talking to them, showing them what the actual costs are and telling them that it will be very difficult for us to continue to work on old pricing.

Speaker #2: Sir, but if they don't agree, then it isn't necessarily that they may comply with this. Right? Or is it in the clause?

Vaibhav Shah: Sir, but if they don't agree, it is not necessary that they may comply to this, right? Or it is in the clause-

Speaker #3: We, we, we, we, we—I agree with you. It's not contractually, strictly going by the contract. They may not.

Shobhit Uppal: I agree with you. It's not contractually, strictly going by the contract, they may not.

Speaker #2: Okay. So, sir, we know that the labor rates are here to stay. You mentioned that we don't expect them to come back down once they are increased now.

Vaibhav Shah: Okay. So sir, we know that the labor rates are here to stay. You mentioned that you don't expect it to come back down once they are increased now. In that case, for the NCR book, there could be a sizable impact on the margins from where we had bid when we won the project?

Speaker #2: So, in that case, for the NCR book, there could be a sizable impact on the margins from where we had bid when we won the project.

Speaker #3: So, wherever the impact is sizable, we've already told the client. You know, there are two parts to this compensation: one is for the work already executed in this quarter, where the impact is already being felt by us.

Shobhit Uppal: Wherever the impact is sizable, we've already told the client that. So there are two parts to this compensation. One is for the job already executed in this quarter, where the impact has already been felt by us. The other is going forward and the potential for the impact on the balance contract. So we are telling the client, either we are giving them various options that, one is the impact till now, they are within their rights to say no. Going forward, we are telling them that either they agree to supply the labor, there are various options that we are discussing with them. All I can say at this stage is that the clients are looking at what we are saying favorably, because they have realized that today their contracts, today one major thing which can make or mar a project is labor.

Speaker #3: The other is going forward, and the potential for the impact on the balance contract. So we are telling the client, either we are giving them various options that, you know, one is the impact will now.

Speaker #3: They are within their rights to say no. Going forward, we are telling them that either they agree to supply the labor—there are various options that we are discussing with them.

Speaker #3: And all I can say at this stage is that the clients are looking at what we are saying favorably, because they have realized that today, in their contracts, one major thing which can make or mar a project is labor.

Speaker #3: And labor is in extreme—especially skilled labor is in extreme short supply.

Shobhit Uppal: And labor is in extreme, especially skilled labor is in extreme short supply. Okay. Got it, sir. Okay. Thank you.

Speaker #5: Okay. Okay. Got it, sir. Okay. Thank you.

Speaker #3: Yes.

Speaker #4: Thank you. The next question is from the line of Madhur Rati from Counter Cyclic Investments. Please go ahead.

Operator 2: Thank you. The next question is from the line of Madhur Rathi from CounterCyclic Investments. Please go ahead.

Operator: Thank you. The next question is from the line of Madhur Rathi from CounterCyclic Investments. Please go ahead.

Speaker #3: Sir, I'm trying to understand that, due to one reason or the other, if we look at our numbers till FY24, the growth was really strong.

Madhur Rathi: Sir, I am trying to understand that due to one reason or the other, if we look at our numbers, till FY24, the growth was really strong. Sir, but after that, even though our unexecuted order book has doubled over the last two years, but somehow the execution is just not moving due to either labor or this or that, sir, but basically, labor is a core thing. It is a part of our business. So, if there is a shortage and everything, NGT and so on, sir, these are all routine matters. Now, sir, the concern is, I hope it is not the case that we will have to pay some penalty to our customers for not executing the projects on time.

Speaker #3: Sir. But after that even though our order book has unexecuted order book has doubled over the last two years. But somehow the execution is just not moving due to either labor or this or that.

Speaker #3: Sir, but basically labor is a core thing for us—it's a part of our business. So, I mean, if there is a shortage and everything, NGT and so on, sir.

Speaker #3: I mean, these are all routine matters. Now, sir, the concern is, I hope it is not the case that we will have to pay some penalty to our customers for not executing the projects on time.

Speaker #3: So till date, Ahluwalia has not paid any penalty to any customer. If you were to go through, we would be more than happy to share historical data, especially over the last two or three years, where projects have been delayed.

Shobhit Uppal: Till date, Ahluwalia has not paid any penalty to any customer. If you were to go through, we would be more than happy to share historical data, especially over the last two or three years, where projects have been delayed. But it has been amply proven and accepted by the client that they have been delayed for no fault of ours. It is not only Ahluwalia Contracts. If you were to do a deep dive into the historical project completion dates of all our peers, you will see there are a number of factors leading to headwinds as far as project execution is concerned. Labor is one thing, and this labor shortage has been building up over the last four, five, six, seven years. Projects have become more and more complex. Projects have increased in scale.

Speaker #3: But it's been amply proven and accepted by the client that they've been delayed through no fault of ours. And it's not only Ahluwalia Contracts.

Speaker #3: If you were to do a deep dive into the historical project completion dates of all our peers, you will see that at the extreme there are a number of factors leading to headwinds as far as project execution is concerned.

Speaker #3: Labor is one thing, and this labor shortage has been building up over the last four, five, six, seven years. Projects have become more and more complex.

Speaker #3: Projects have increased in scale. There are changes happening as we move along executing a project on a month-to-month basis from the client side.

Shobhit Uppal: There are changes happening as we move along, executing a project on a month-to-month basis from the client side, which clients are recognizing. That is why the extension of time is granted on projects, be it on private projects or government sector projects. If you have been covering this sector, you would know all this is a part and parcel of this industry. When we bid for a project, we factor in some delays. But, as I said, there have been a few black swan events over the last two to three years, which are part of the historical data. The impact that has been felt on our bottom line has been more than we could have predicted. It is not only us. If you do a peer-to-peer comparison, I think we have been showing better numbers than some of our peers.

Speaker #3: You know, which clients are recognizing that—that is why extension of time is granted on projects, be it on private projects or government sector projects.

Speaker #3: So if you've been covering this sector you would know all this is a is a is a part. And parcel of this industry. While we while when we bid for a project we factor in some delays but you know as I said there have been a few black swan events over the last two to three years.

Speaker #3: Which are a part of the historical data. The impact that has been felt on the bottom line has been more than we could have predicted, and it's not only us.

Speaker #3: If you do a peer-to-peer comparison, I think we've been showing better numbers than some of our peers.

Speaker #2: Now sir, if we compare BL Kashyap, which is operating in our geography, is a fraction of our size, has a balance sheet nowhere compared to us, and is drowning in debts. As they have grown, in the first quarter their margins—their EBITDA—actually has also grown.

Madhur Rathi: Now, sir, if we compare B.L. Kashyap, which operates in our geography, is a fraction of our size, has balance sheet nowhere compared to us, Browning Index, sir, they have grown in the first quarter. Their EBITDA actually has also grown. I am not able to understand in the-

Speaker #2: So, I'm not able to understand in the...

Shobhit Uppal: Their base is very small. What I am trying to tell you, if you do a comparison which is spread over a larger tract of time, you do a comparison with, say, if you want to do B.L. Kashyap, compare the results for the last two years at least. You are right, their base is very small. When we were at that base, our margin were, as some of your peers would tell you, our margin were 12%, 13%.

Speaker #3: But their base is very small, na? What I'm trying to tell you is, you should do a comparison that is spread over a larger tract of time.

Speaker #3: You do a comparison with, say, if you want to do BL Kashyap, compare the results for the last two years at least. Right? Their base is very small.

Speaker #3: When we were at that base, our margins were, as some of your peers would tell you, around 12–13%.

Speaker #2: Sir, in fact, that was my other question. I remember that two years back, I had asked why our margins declined from low teens to single digits.

Madhur Rathi: Sir, in fact, that was my another question that I remember that two years back when I had asked that why our margins have declined from low teens to single digits. You had said that once the private sector orders become the majority of our order book, then our margins will expand to the previous levels of low teens. Sir, but now our private sector is 62% of our order book, but still our margins have actually declined to single digits.

Speaker #2: So, you had said that once the private sector orders become the majority of our order book, then our margins will expand to the previous levels of low teens.

Speaker #2: Sir, but now our private sector is 62% of our order book, but still our margins have actually declined to single digits.

Speaker #3: As I said, you know, there are a number of factors—or newer factors—which have cropped up in the last two, three, four years.

Shobhit Uppal: As I said, there are a number of factors or newer factors which have cropped up in the last two, three, four years, labor shortage being one. As I said, the projects have become much more complex, increased staffing costs and other IBC costs. These are some things which have hit our margins, which are leading us to, going forward, when we are bidding for large projects, we are factoring the same.

Speaker #3: Labor shortage being one. And as I said, increased projects have become much more complex. Increased staffing costs and other IDC costs—these are some things which have hit our margins.

Speaker #3: Which is leading us to, going forward, you know, when we're bidding for large projects, we are factoring this in.

Speaker #2: Sir. Now lastly sir if we look at our stock price since two thousand eight till now the stock then the stock price was three fifty rupees.

Madhur Rathi: Sir, now lastly, sir, if you look at our stock price since 2008 till now, then the stock price was INR 350, today it is INR 795. So the stock price has grown at less than 5% CAGR, and there have been no dividends also. Sir, so after such a huge underperformance also, we have a cash-rich balance sheet. The stock price has halved since FY20.

Speaker #2: Today, it is 795. So the stock price has grown at less than 5% CAGR, and there have been no dividends also.

Speaker #2: Sir, so after such a huge underperformance, we still have a cash-rich balance sheet. The stock price has halved since FY.

Shobhit Uppal: We are a dividend-paying company. I think we have been paying dividends for the last three to four years.

Speaker #3: Yes, we are a dividend-paying company. I think we've been paying dividends for the last three to four years.

Speaker #2: Sir. It is zero point zero seven percent dividend yield. It is practically irrelevant. My point is different sir. My point is that when our stock price has grown at sub five percent CAGR for the past eighteen years and we have surplus cash on balance sheet then why aren't we doing share buy back?

Madhur Rathi: Sir, it is 0.07% dividend yield. It is practically irrelevant. My point is different, sir. My point is that when our stock price has grown at sub 5% CAGR for the past 18 years, and we have surplus cash on balance sheet, then why are not we doing share buyback?

Speaker #3: The only problem is we don't have enough share buyback. I think I had answered this question during the last call. This sector is facing extreme volatility.

Shobhit Uppal: I think I had answered this question during the last conference call. This sector is facing extreme volatility, right? Our focus is on growing our business. We do not want to use our war chest to buy back our share. At the moment, we want to, going forward. As it is, we are at an inflection point. We are growing rapidly. We have a healthy order book. We want to digitize, we want to become more efficient, we want to invest in machinery to counter or offset the labor paucity. All that, share buyback is not really on the anvil for us. It is not a part of our plan. I did explain this in detail last time around also.

Speaker #3: Right? Our profit is on growing our business. We don't want to use our war chest to buy back our shares. At the moment, we want to, we want to, going forward, as it is, we are at an inflection point.

Speaker #3: We are growing rapidly. We have a healthy order book. We want to digitize. We want to become more efficient. We want to invest in machinery.

Speaker #3: To counter or offset the labor paucity. So, all that—you know—share buyback is not really on the anvil for us. It's not a part of our plan.

Speaker #3: I did explain this in detail last time around as well.

Speaker #2: Understood, sir. Thank you very much.

Madhur Rathi: Understood, sir. Thank you very much.

Speaker #3: Thank you.

Shobhit Uppal: Thank you.

Speaker #1: Thank you. The next question is from the line of Parikshit Kanpal from HDFC Securities. Please go ahead.

Operator 2: Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

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

Speaker #4: Yeah, I showed it. So my question is, yeah. So my question is more on industry—a generic question. So, just on the NCR market, is the 50 percent off of our order book?

Parikshit Kandpal: Yeah. Hi, Shobhit.

Shobhit Uppal: Hi.

Parikshit Kandpal: Yes, my question is more on industry and generic question. Just on the NCR market, this is 50% of our order book. Just wanted to understand how much of our labor cost or how many labor is deployed in that market. Are all these labors currently at minimum wages because you said that there is a demand-supply issue also, so I would understand that there would be a certain percent of the labor which will be above the minimum wages. If you can help us understand the quantification in terms of how many would be under, at just above the minimum wage and how many would be above that, and what is the total quantifiable impact in terms of crores on the profitability or the EBITDA in this quarter because of labor issue in NCR?

Parikshit Kandpal: Yes, my question is more on industry and generic question. Just on the NCR market, this is 50% of our order book. Just wanted to understand how much of our labor cost or how many labor is deployed in that market. Are all these labors currently at minimum wages because you said that there is a demand-supply issue also, so I would understand that there would be a certain percent of the labor which will be above the minimum wages. If you can help us understand the quantification in terms of how many would be under, at just above the minimum wage and how many would be above that, and what is the total quantifiable impact in terms of crore on the profitability or the EBITDA in this quarter because of labor issue in NCR?

Speaker #4: So, just wanted to understand how much of our labor cost, or how much labor, is deployed in that market. And are all these laborers currently at minimum wages? Because you said that there is a demand-supply issue also.

Speaker #4: So I would understand that there would be a certain percentage of the labor which will be above the minimum wages. So, if you can help us understand the quantification in terms of how many would be at just about the minimum wages, how many will be above that, and what was the total quantifiable impact in terms of crores on the profitability or the EBITDA in this quarter.

Speaker #4: Because of labor issue NCR.

Speaker #3: Okay, so just to put a number to this—this may not be extremely accurate, but it will be there and thereabouts—we would have close to about 10,000 to 12,000 people working for us, which I would categorize as labor.

Shobhit Uppal: Okay. Just to put a number, this may not be extremely accurate, but it could be there and thereabout. We would have close to about 10,000 to 12,000 people working for us, which I would categorize as labor, both unskilled and skilled. 70% of this labor would be skilled, which would constitute bar binders, carpenters, masons, electricians, plumbers, and so on and so forth. While the unskilled labor would be at the threshold of the minimum wage, the skilled labor would be in excess of that, excess of the skilled wage declared by the government. It is the skilled labor which is in extreme short supply, demand and supply conundrum that I mentioned. The impact on our projects in NCR per se could vary on our total top line, I am talking about the impact.

Speaker #3: You know both unskilled and skilled. Now, seventy percent of this labor would be skilled, which would constitute bar binders, carpenters, masons, electricians, plumbers, and so on and so forth.

Speaker #3: While the unskilled labor would be at three times the threshold of the minimum wage, the skilled labor would be in excess of that—in excess of the skilled wage declared by the government.

Speaker #3: It is the skilled labor which is in extreme short supply—demand and supply conundrum that I mentioned. The impact on our projects in NCR, per se, would vary on our—from our total top line.

Speaker #3: I'm talking about the impact again—detailed figures that we can get back to you on if you write to him. But it would vary from 2% on some projects to about 5% of the turnover.

Shobhit Uppal: Again, the detailed figures, Satbeer can get back to you on if you write to him. But it could vary from 2% on some projects to about 5% of the turnover where the material is free issue by the client.

Speaker #3: Where the material is free-issue by the client.

Parikshit Kandpal: Do you think in this quarter, particularly in this quarter, what is the quantifiable impact on EBITDA because of the labor increase, minimum wage?

Speaker #4: Do you think that in this quarter—particularly in this quarter—what is the quantifiable impact on EBITDA because of the labor increase?

Speaker #4: The minimum wage increase.

Speaker #3: So on a I had a company level it is about a percentage and a half. One point five percent.

Shobhit Uppal: At a company level, it is about a percentage and a half, 1.5%.

Speaker #4: So this is now permanent in nature. So we start off if there is no escalation given on this account from the customer.

Parikshit Kandpal: Now this is permanent in nature. We start off if there is no escalation given on this account from the customer. We have a 150 basis point hit on the NCR order book because of the labor issues as of now. Is it the right assumption?

Speaker #4: So, we have a 150 basis point hit on the NCR order book because of the labor issues as of now. Is that the right assumption?

Shobhit Uppal: There will be a hit if there is no escalation given, but it would be to the tune of about 1%, because in some of these contracts, escalation is a pass-through, and some of the contracts, the escalation kicks in after a certain amount of time has elapsed on a particular project, which varies from six months to a year.

Speaker #3: There will be a hit if there is no escalation given, but it would be to the tune of about one percent, because in some of these contracts, escalation is a pass-through. In some of the contracts, the escalation kicks in after a certain amount of time has elapsed.

Speaker #3: On a particular project, which varies from six months to a year.

Speaker #4: So, max damage is about 100 basis points. If the client doesn't give us any escalation, we have a hit of about 100 basis points.

Parikshit Kandpal: Maximum damage is about 100 basis point if the client doesn't give us any escalation. We have a hit of about 100 basis points. I think we took a lot of time debating this. I think if this was quantified, it would have been helpful earlier. How do you intend to cover up this side, any productivity cost savings, other measures? How much do you think if the client doesn't give us any escalation, any off lays, any growth which will come in, do you think we can cover a part of this damage?

Speaker #4: So, I think—why—I mean, I think we took a lot of time debating this. I think if this was quantified, it would have been helpful earlier.

Speaker #4: So, how do you intend to cover up this—like, productivity, cost savings, other measures? So, how much do you think, if the client doesn't give us any escalation—so, any offsets, any growth which will come in—then, do you think you can cover a part of this damage?

Speaker #3: Again, you know, it's very—what is happening, as I said earlier, the client is recognizing this. So, what the client is doing, even if we fail on some of the projects, some of our larger clients will look at this favorably.

Shobhit Uppal: Again, what is happening, as I said earlier, client is recognizing this. What client is doing, even if they are, while we fail on some of the projects, some of our larger clients will look at this favorably. But even if they don't, what they've already started doing, the Godrejs of this world, the DLFs of this world, the Signature Globals of this world, they've started announcing incentives which are linked to progress or stage-wise timely completion. You cast a certain number of slabs in a month, they give incentive, right? Which, to some extent, may offset some of these higher costs.

Speaker #3: But even if they don't, what they've already started doing—the Godrej's of this world, the DLFs of this world, the Signature Globals of this world—they've started announcing incentives.

Speaker #3: Which are linked to progress or stage-wise, timely completion. You know, you cast a certain number of slabs in a month—then they give incentive.

Speaker #3: Right? So, which to some extent may offset some of these higher costs.

Speaker #4: So you will gain a part of it through the productivity gains or the site levels which would be ahead of schedule.

Parikshit Kandpal: Okay. You would gain a part of it through the productivity gains or at the site levels, which could be ahead of schedule.

Shobhit Uppal: Exactly.

Speaker #3: Exactly.

Speaker #4: So, yeah. So part of that could be.

Parikshit Kandpal: Yeah. Part of that could be.

Speaker #3: That's why, that's why a lot of you, as I mentioned earlier, should, you know—we'll be more than open to share. Should you, you should do a deep dive.

Shobhit Uppal: That is why a lot of you, as I mentioned earlier, should, we would be more than open to share. You should do a deep dive. This labor problem is a huge problem, right?

Speaker #3: This labor problem is a huge problem, right? But while some of us—I'm sure you have covered this sector, and you've been doing it for a number of years.

Parikshit Kandpal: Yeah.

Shobhit Uppal: While some of us. So I am sure you cover this sector, and you have been doing it for a number of years. We would be more than happy to take you to project sites and show you how we are being impacted. Some of our peers may have recognized that impact this quarter. They will also feel it going forward. Different geography is facing it at different times.

Speaker #3: We would be more than happy to take you to project sites and show you how we are being impacted. Some of our peers may have recognized that impact.

Speaker #3: This quarter, they will also feel it going forward. Different jobs are facing it at different times.

Speaker #4: But the bigger question right now is whether, as one, what was the motivation of the Anahayana government to do this, and if other states start doing it then it becomes a broader level issue on the entire order book.

Parikshit Kandpal: But the bigger question right now is, one was, what was the motivation of the Haryana government to do this? If other states start doing it, then it becomes a broader level issue on the entire order book. So which can exacerbate our overall margin impact. If you can help us understand why it happened first, and then also earlier in the call you said 70% of the labor is skilled. I assume that the hit would not have been there. It would be at the labor which is at the borderline level, right? If you can help us understand what was the motivation behind this, and why was the hit so high if it was only to the part of the labor force?

Speaker #4: So, which can accelerate our overall margin impact. If you can help us understand why that happened, first, and then also, earlier in the call, you said seventy percent of the labor is skilled.

Speaker #4: I assume that the hit would not have been there. It would be at the labor, which is at the borderline level. Right? So if you can help us understand what was the motivation behind this and why the hit was so high if it was only to the part of the labor force, because the...

Shobhit Uppal: Haryana government, sorry.

Speaker #3: Anahayana, Anahayana government... Sorry, go ahead. Sorry. Sorry.

Shobhit Uppal: Haryana government, sorry.

Parikshit Kandpal: Yeah. I am saying it was out of the 100 labor, you said 70 is skilled. So where anyways it is a market-determined pricing. So I assume it will be push and pull which will determine their wages, not the government-mandated minimum wages. It will be more like where the parts was exposed to the minimum level of wages, where you had to align with the government policy at given escalation. So what was the motivation of the Haryana government, and secondly, whether the other states can also now implement this at least for the borderline cases.

Speaker #4: Yeah I'm saying it it was out of the hundred labor you said seventies. It's skilled. So where anyways it's a market-determined pricing. So I assume they would it will be push and pull which will determine their wages.

Speaker #4: Not the government-mandated minimum wages. It will be more like where the part was exposed to the minimum level of wages, where you had to align with the government policy at the given escalation.

Speaker #4: So, what was the motivation of the Haryana government? And secondly, can other states also now implement this, at least in borderline cases?

Speaker #3: So, your first question was: what was the motivation of the government? The Haryana government, over the past one month, has cracked down on RMC manufacturing plants, and today ninety percent of the plants are shut down in Haryana.

Shobhit Uppal: Your first question, what was the motivation of the government? The Haryana government, over the past one month, has cracked down on RMC manufacturing plants, and today 90% of the plants are shut down in Haryana. What is the motivation behind it? Who can say?

Speaker #3: Right? What is the motivation behind it? Who can say?

Speaker #4: Okay.

Parikshit Kandpal: Okay.

Speaker #3: Right? With governments it's very difficult to say. Similarly they have had such a time increase the labor pricing it's it's very while while the the developer lobbies are are talking to the government they may agree to sort of reopen some of these plants but I don't think there's going to be a rollback on the labor pricing.

Shobhit Uppal: Right? With governments, it is very difficult to say. Similarly, they have at such a time increased the labor pricing. While the developer lobbies are talking to the government, they may agree to sort of reopen some of these plants. But I don't think there is going to be a rollback on the labor pricing. It has never happened. It is a very sensitive political issue. So it is very difficult for us to comment. Second thing is, push and pull on the skilled labor is right, but as I said, it is demand and supply. There is a huge shortage of skilled manpower, and whatever skilled manpower is there, the skill levels are down. The buildings are becoming more and more complex. Right? So that leads to low productivity on the project. So that is why our costs are rising.

Speaker #3: It's never happened. It's a very sensitive political issue, so it's very difficult for us to comment. Second thing is, the push and pull on the skilled labor is right.

Speaker #3: But it's, as I said, demand and supply. There is a huge shortage of skilled manpower, and whatever skilled manpower is there, the skill levels are down.

Speaker #3: The buildings are becoming more and more complex. Right? So so it's it's the productivity that leads to low productivity on the project. So this so so that's why the cost our costs are rising.

Speaker #3: That's why I'm saying that you guys should—you know—maybe it would be prudent for you to... We would be more than happy to take you to a project site and show you. It's very difficult to sort of explain all this on an investor call.

Shobhit Uppal: That is why I am saying that maybe it would be prudent for you guys to. We would be more than happy to take you to our project site and show you how. It is very difficult to sort of explain all this on an investor call. But at ground zero, we can show it to you how the impact is happening.

Speaker #3: But as ground zero, we can show you how the impact is happening.

Speaker #4: Just last question: Can you clarify, I mean, is it only for the labor domiciled in Haryana state, or if you, say, pull out labor from AP or Delhi or some other states, do you still have to pay them the minimum wages?

Parikshit Kandpal: Just this last question, can you replace. Is it only for the labor domiciled in Haryana state? Or if you can say pull out labor from UP or Bihar or some other states, you still need to pay them the minimum wages? So how does it work then?

Speaker #4: So, how does it work?

Speaker #3: This is all migrant labor. Labor which works in a particular state. This labor is coming in from Bihar, or Bengal, or Odisha, or Madhya Pradesh.

Shobhit Uppal: This is all migrant labor. Labor which works in a particular state. This labor is coming in from Bihar or Bengal or Odisha or Madhya Pradesh. It is not Haryana labor.

Speaker #3: It's not Haryana labor.

Speaker #4: Okay. It's not a domicile issue. It's more like, I still don't understand your motivation, but anyway, I'll take it offline. Thank you.

Parikshit Kandpal: Okay. It's not a domicile issue. I still don't understand the motivation, but anyways, I'll take it off that. Thank you.

Speaker #3: Yeah. Thank you.

Shobhit Uppal: Yeah, thanks.

Speaker #1: Thank you. Ladies and gentlemen, due to time constraints, we will take that as the last question for the day. I would now like to hand the conference over to the management for closing comments.

Operator 2: Thank you. Ladies and gentlemen, due to time constraints, we will take that as the last question for the day. I would now like to hand the conference over to the management for closing comments.

Operator: Thank you. Ladies and gentlemen, due to time constraints, we will take that as the last question for the day. I would now like to hand the conference over to the management for closing comments.

Speaker #3: Thank you so much, everybody. As I said, for any further queries, please reach out to us, and we'd be more than happy to explain the ground realities to some of you.

Shobhit Uppal: Thank you so much, everybody. As I said, any further queries, please reach out to us and we'd be more than happy to explain the ground realities to some of you, or even if you want to sort of visit our project site to get more clarity. Thank you so much. See you on the next call.

Speaker #3: Even if you want to, you can sort of visit our project site to get more clarity. Thank you so much. See you on the next call.

Speaker #1: Thank you. On behalf of Ambit Capital Private Limited that concludes this conference. Thank you for joining us and you may now disconnect the lines.

Operator 2: Thank you. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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

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Q1 2027 Ahluwalia Contracts (India) Ltd Earnings Call

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