Good day and welcome to Afcons Infrastructure Limited Q2 and H1 FY27 earnings conference call hosted by Anand Rathi Share and Stock Brokers 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhavin Modi from Anand Rathi Institutional Equities. Thank you, and over to you, Mr. Modi. Ladies and gentlemen, Yes, thank you. This is Bhavin Modi from Anand Rathi Institutional Equities. Good morning everyone and a warm welcome to the Q2 and H1 FY27 earnings calls of Afcons Infrastructure Limited. To discuss the results today, we have the management with us, which is represented by Mr. Srinivasan Paramasivan, the Managing Director, Mr. Ramesh Jha, CFO, Mr. Hitesh Singh, the corporate strategy head. Now at this point, I will hand over the floor to the management for the initial remarks. And post which we can open the floor for the question and answer session. With that, over to you, sir. Thank you, Bhavin. Good morning, ladies and gentlemen. Our financial results and investor presentation for the quarter and half year ended September 26th have been uploaded on the stock exchanges. And I'm sure you had the opportunity to review them. Let me begin with a brief overview of our performance. For FY— Q2 FY27, Afcons reported a revenue of ₹2,906 crores, EBITDA of ₹316 crores, with an EBITDA margin of 10.9%. And profit after tax of ₹41 crores. For the first half year, revenue stood at ₹5,633 crores, EBITDA at ₹578 crores with an EBITDA margin of 10.3%, while profit after tax stood at ₹71 crores. At the same time, our order booking continued to strengthen. During H1, we secured orders worth close to ₹16,000 crores, taking our total order book to ₹43,086 crores. This excludes L1 orders. As on date, for the year, our intake is close to ₹19,500 crores excluding L1 orders, with an identified project pipeline of around ₹80,000 crores for financial year '27, bids under evaluation, and several opportunities at different stages of tendering. We remain on track towards our full-year order inflow guidance of ₹30,000 crores. These wins have strengthened our order book and provide healthy revenue visibility for the coming years. Let me now address the operating performance. Our Q2 performance was lower than the corresponding period last year. The constraints that we discussed in our Q1 call have evolved differently across projects. Land handovers are progressing at the affected sites and certain approvals and clearances have moved forward. These are important developments because they should enable higher activity at these projects during the second half. While these developments are encouraging, our endeavor is to deliver higher level of execution. We remain focused on translating the improving project environment into stronger operating performance in the periods ahead. Not everything has moved at the same pace. Liquidity and collection remain challenging, and execution on the Jal Jeevan Mission project in UP continues to remain gradual. Let me assure you, we are managing the issue project by project with particular attention to execution readiness, client interfaces, collections, and cash flow. Our objective is to address the issues within our control and be ready to accelerate execution as the remaining constraints are resolved. Against this background, our Q2 performance was broadly in line with our expectations. On the positive side, both tunnel boring machines at the Mumbai-Ahmedabad High Speed Rail project are progressing in line with the schedule, and our teams remain focused on achieving the planned execution progress. We have also achieved significant progress at our Greater Malay Connectivity Project. The final segment of Tilamalai Bridge connecting Vilimalai Island to the capital, Malé, was completed during the quarter, marking a significant step forward to the project. It is the largest infrastructure project funded by India outside the country. It will, upon completion, stand as an engineering marvel and serve as an important catalyst for connectivity and economic development across Greater Malé region. Beyond the execution progress discussed, we also achieved project milestones. Phase 2 of Mitapur-Sipara elevated corridor was inaugurated by the Honorable Chief Minister of Bihar during the quarter. The corridor is expected to reduce travel time between Mitapur, Mahuli, and Punpun for approximately 1 hour to around 15 minutes. The engineering capabilities execution discipline, and safety systems that underpin these achievements also continue to receive recognition from leading industry institutions during the period. Afcons was named Construction Contractor of the Year at the 16th Construction Week Awards, while several of our projects received safety awards and recognitions from domestic and international institutions. Turning briefly to the business environment, the infrastructure opportunity in DR remains healthy, although the pace of project awards remains uneven and competition is intense in certain segments. Internationally, geopolitical tensions in West Asia continue to affect logistics and the cost of certain inputs on some of our projects. We are addressing this through advanced procurement, alternate sourcing, and close coordination with clients, suppliers, and logistics partners. As I look to the second half of the year, I see clear priorities for us: accelerating execution where the necessary funds are and approvals are available, improving collections and cash generation, and mobilizing new projects faster to make us ready for growth in the next financial year. Our execution visibility for H2 is better today than what was at the beginning of the financial year. Based on the visibility, we expect execution in the second half to be stronger than in the first half. Let me conclude with one point. We are very confident of achieving the provided order book guidance of ₹30,000 crore and beyond. Our H1 performance was largely on expected lines. And we remain focused on translating the improved visibility into enhanced execution and execution into collections and cash flows. The strength of our order book, diversified project portfolio, and healthy pipeline continues to provide confidence in our long-term growth outlook. While our immediate priority remains driving execution and cash flow delivery, I would like to thank our clients, employees, partners, investors, and all other stakeholders for their continued trust and support. I now invite our Chief Financial Officer, Mr. Ramesh Jha, to take you through the financial performance in greater detail. Thank you. Thank you, sir. Good morning, everyone. Before talking on the numbers, let me recreate Company is into business of construction. The margin in quarterly— quarter varies based on the nature, type, and quantum of work we executed. So quarterly results may vary in different quarters and may not be indicative of annual results or trend. Let me begin with the revenue number. For the half year ended, we have done ₹5,633 crores of top line against last year H1 top line of ₹6,520 crores. Showing a degrowth of 13.6% year-on-year basis, whereas in Q2 we have achieved top line of ₹2,906 crores. Versus ₹3,101 crores in the previous year Q2. This is 6.3% degrowth in top line over the previous year Q2. Both H1 and Q2 execution is on the expected lines. As we have already explained that in many projects there were lack of work front availability and 2nd quarter was a monsoon quarter which remains to be relatively soft quarter. Pace of the execution is also a manifestation of stretched payment across few projects where certification and payments are not happening. We had explained in Q1 earning call that generally Q1 remains little bit slow in terms of collection, but then things pick up from Q2 onwards. But this year we are feeling that the customers are continuing with the stretched liquidity. And we strongly feel liquidity across the market needs significant improvement. Payment-related issues in UP Jal Jeevan Mission is still continuing. We are receiving small payment based on certain threshold of percentage. which they have defined, uh, of the overall work once that is completed. We reiterate that across the spectrum, payments are being stretched for some or the other reason. Because the executing agencies, the government, the various state governments, or the executing agencies do not want to borrow from banks. We are aware that banks are influxed with liquidity, but these entities, they do not want to borrow, but they want to stretch the contractor's payment as they may be getting reflected as creditors in their respective balance sheet. So we do not want to go overboard in terms of, you know, funding any project, and we want to maintain a healthy balance between execution and the liquidity. We are maintaining a very healthy liquidity situation as far as company's treasury is concerned. Now moving to, uh, Uh, to the guidance we have talked about, in FY 2027 we have booked order amounting to ₹19,437 crores till now, taking the pending order book in excess of ₹47,000 crores. In FY 2027, we are targeting to significantly improve the order booking and improve the balance sheet by collecting some of the stuck receivables. Uncertainty around the economic activity because of war, geopolitical and related stuff continues. So we have held back any guidance in terms of growth for that for the time being. Uh, we'll reinstate the guidance once we see a broader uncertainty around this, when it goes away. Uh, in terms of EBITDA, uh, for the quarter Q2, we have done ₹316 crore, which works out to be 10.9%. As against, we had done ₹401 crores, uh, in the Q2 of '26, the last year, where we had done 12.9%. And on the half-yearly basis, we have done ₹578 crore, which works out to be 10.3%. Uh, in, in our EBITDA calculation, we consider, uh, we have considered BG commission as part of our operating expenditure. So EBITDA, what we are talking about, is after removal of BG commission as a expenditure. Uh, also we have included other income. Uh, the other— we have explained earlier also that the arbitration interest, foreign currency exchange gain, and miscellaneous incomes are recurring and very integral to our business. Also, there are corresponding expenditure to earn these other income which has been factored in operating expenditure. Hence, these are— these incomes needs to be factored as part of the operating income to consider the EBITDA margin. So far, uh, we have in H1, we have ₹326 crores of total operating income which we have factored. Uh, In terms of profitability, uh, the profit before tax in the quarter, we have ₹82 crores, which works out to be 2.8% as compared to previous year Q2, wherein we had done ₹149 crores at 4.8%, and for the half year we have done ₹133 crore, which is 2.4% of the total top line, whereas last year we had done ₹333 crores at 5.1% of the PBT. Profit after tax during the quarter, uh, it is ₹41 crore for the, for the quarter and ₹71 crore in the H1 FY27. Correspondingly, last year we had done ₹105 crore in last year Q2 and ₹242 crores of profit after tax in the H1 last year. Now profits got impacted because of lower turnover on the overall basis. Margin in our individual projects continue to be robust because— and but because of lower turnover overall they could not generate sufficient overall contribution to cover the overhead cost or the fixed cost and still leave sufficient profit. You know, what traditionally the company used to generate profit, I am talking about. We have put a lot of efforts towards reducing cost on the possible revenues, and that you will see that some of the other costs like manpower costs and other costs has gone down, but that has been partially offset by increase, increase in energy, transport and logistics, finance, and provisioning cost. Now I would just like to clarify here that in other costs you might have noticed that there is a significant increase in, in other costs which is largely towards the ECL provisioning we have done, uh, and because of that, this— the— during this quarter, the other cost has gone up. Uh, we have, we have put in place a new ECL matrix There is, there is an automatic provisioning if the period of outstanding receivable or the contract asset changes from one bucket to another, and, and we need to, we need to provide ECL on that. We have certain arbitration receivable which we are negotiating for settlement. We have provided for some discount negotiation possibility because we are looking at if we can realize those, uh, those arbitration awards by giving some discounts. So towards that, we have made a provision. Third, in Middle East, we have certain outstanding, uh, in one of the subsidiary, and, uh, we had been like, you know, for this financial year, we have set up a task force which is following up with all the customers. And, uh, in our interaction in Middle East with the customers, with banks, we have got very negative feedback around one of the location where we have got outstanding. So in order to, uh, you know, in future we are not giving you any surprise, we thought that it would be prudent to make a provision. But when we realize— and not that, you know, we will be leaving that receivable, we will be following up— once we realize, then, you know, a lot of these receivables may, uh, needs to be reversed. So we need to see how things progress and then basis that we will take the call. But at the moment, we have— we thought that it would be prudent to make such conservative provisioning. Now talking on the specific finance cost, that finance cost has also increased for the quarter as well as for the half year. We have seen higher average borrowing during the half year. Because of this, the interest cost has gone up. Coupled with this, interest-bearing advances— more than 40% of our overall advance, uh, is interest-bearing. So because of that also, the interest cost towards client advances has gone up currently. Of the total advance, currently around 59% of the advances are interest-free and 41% of the advances are interest-bearing. This year we have booked substantial order, but the corresponding advances of those new orders have not come yet. For the, uh, till, you know, Q2 financials we have prepared, we have big amount of advances lined up for collection, and that will change the working capital scenario significantly. Interest-free advances will help us in reduction in the finance cost as we move forward. Because, uh, of the advances we are looking at collecting, uh, for the new project, 60% of the advances are interest-free. Depreciation during the quarter, we had ₹181.51 crore, which works out to be 3.22% of the turnover. Tax also this period it was higher, which is almost a 46% of the PBT. This is primarily because an Afcons profit, we are paying 25% tax. However, in consolidated profit has increased— has in the consolidation, the profit has decreased due to provisioning, uh, as just explained, in one of the overseas subsidiary. And, uh, and that was done, you know, primarily based on the local market feedback and the geopolitical scenario in that market. So And also in some of the closed projects which are in joint venture, uh, we are required to make ECL provisioning, and, uh, you know, that also takes the consolidated profit down. As a result, consolidated profit has reduced, but 25% tax on Afcons profit, which is far higher than the consolidated number, has, uh, works out to be the higher tax percentage on the consolidated profit. Other factors contributing— in some of the JVs, we pay tax in the range of, say, 35 to 36% in some JVs. And in overseas locations like Bangladesh, the tax is charged on turnover. And in such situation, and if you are not making profit in, say, in a place like Bangladesh, the tax, they, they do not, they do not have any provision of refund. So that needs to be charged off. As an expenditure in tax. So because of all this, there is an increase in tax. Uh, ROCE, I'm not talking about because we'll see this number. At the moment, it is around 8. 8.2-8.3%. We'll talk about, uh, when we see the number annually. Uh, in terms of net working capital, the net working capital number is, uh, for the half year, 147 147 days. Network— networking capital is at elevated level because of funding to the projects and less than expected collection of blocked-up assets. We are witnessing delays in certification of the work done. And release of payments in projects. This has led to increase in uncertified work done, leading to jump in working capital requirement. Generally, this remains the trend in H1. Uh, we have seen that last, say, 4 years, the working capital requirement in H1 is in anywhere between 800 to 1,000 crore, and this year also remains to be the similar situation. Uh, so this is not— no different from the previous year. As we have booked significant order this year and corresponding advances will come in next 6 months, uh, we are also working towards realization of some of the stuck receivable. Hence, we are confident that there will be significant improvement in, uh, networking capital or other metrics going forward. In terms of debt in H1, payment issues has continued and operations have been funded. Also, we have done sizable CapEx payment during this period. So debt has moved to ₹4,765 crore on a gross basis, and on net basis it is ₹4,050 crore. On net basis it is around— the debt equity works out to be around 0.74 times of the net worth. We are maintaining a very healthy liquidity in terms of funds and also in terms of bank guarantee, uh, limit availability. Uh, if I talk about the cash flow from operations, cash flow from operations is negative in the first half, which remains to be the trend every year. As I told that say, uh, we have seen that last 4 years also there was a similar negative cash flow in the range of, say, ₹800 to ₹1,000 crore. However, this year we can inform you that in next 6 months we are likely to receive substantial amount of advances on the already secured jobs. Also, we are likely to receive stuck receivables which we have targeted this year. So in an overall probability, we will see a significant improvement in cash flow from operations in H2, leading to an overall annual number correction for the cash flow from operations, debt reduction, net working capital number reduction. So, uh, this is what from my side on behalf of Afcons I thank everyone for attending this call. Now I request the moderator to open the floor for question and answers. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchtone phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Bhartia from Investec. Please go ahead. Hi, good morning, sir. So you spoke about execution pace picking up in second half. So just wanted to kind of clarify, are we looking at it on a year-on-year basis year-on-year basis, uh, that revenue decline would be lesser, or are we speaking about in absolute terms that let's say we have done around ₹5,500-odd crore of revenues in first half, second half should be materially higher than that? Second half would be definitely higher than the first half. That much we can say for certainty. Sure, sir. Um, also, if you could give us some indication, uh, about high-speed rail project, how's the execution going on that? Uh, what kind of revenue accretion should we be looking at it, uh, in, in second half as well as next year? And if we are, uh, given that we have already gotten decent amount of orders in first half, plus we are L1 for a few contracts as well. How would you look at, uh, revenue growth from the perspective of next year? Next year, as we conveyed to you earlier also, we do expect about 20 to 25% growth from that of current year. Number one. Number 2, with respect to high-speed railway project, as in the earnings call we mentioned earlier in the previous quarter, Both the tunnel boring machines have come. And that has been put into operation, and as we call initial drive with respect to one tunnel boring machine is completed, regular working has started. With respect to second tunnel boring machine, initial drive is likely to get completed in the month of November. We are on track to achieve the budgeted number in, uh, high-speed railway project for the current year. Understood, sir. So my second question is on the ECL provisioning that we've done. Uh, no, I could not understand what is really the change that we had put in. Uh, because from my understanding, ECL provisioning always is based on buckets, and as soon as a contract asset or a receivable moves from one bucket to another, there is provisioning that is required. So what was the change that was being done this particular quarter? No, so, uh, what earlier the practice we were following was based on the previous experience of different buckets, whatever provision we had done in past, or we had experience of any receivable going bad, basis that the provisioning used to happen. From March 2026 onwards, what we have done, we have now, rather than looking at, uh, the past trend, what we have done, we have defined that any, any receivable which moves from, say, a 6-month to 6— more than 6 months, then more than 1 year, more than 2 years— likewise, we have bifurcated. And basis that, there will be automatic provisioning rather than looking at the previous. So this has called for an enhanced provisioning now going forward. If you compare our ECL provisioning, what is appearing we have looked at that number with other industry players, you will find that our provisioning is far higher than the others. Now, so that— so this is one change. And as I explained you that we have, we have formed a task force in the company. We are looking at some 15-odd projects where the amounts are stuck, and that task force is on a continuous basis interacting with the customer. There are many projects which is in overseas location. People are visiting, they are meeting the concerned team, and they are taking feedback how it is going to get materialized. Now, in that endeavor, in the Middle East, the feedback we got from the bankers and overall geopolitical situation, it was not very encouraging. So then we thought that let's make the provision at this point in time, and as things materialize, then we will see how to go about on the ECL provisioning. So there will not be any surprise going forward. Rather, it could be a positive surprise. And 2, we have— we are also— we have received some 3-4 arbitration awards which we are on a constant basis in the same exercise we are discussing with the customer. Uh, on a suo moto basis, we have made this provision towards this. We'll be, you know, it will give us some headroom for negotiation so that we can realize the cash quickly. At the moment, we are not seeing that, you know, anybody has asked for any discount, but then from our end, we thought that it would be better we keep it so that it gives us the, you know, flexibility. We can quickly conclude the deal. So that's where we have made the provision. If we realize all that amount, there could be a reversal. Sure, understood, sir. And, and what had really warranted this change of, uh, kind of increasing, uh, uh, the way we are creating provisions? Because we had a one-off kind of provisioning in 4th quarter as well. Uh, now if we are fairly confident that we should be receiving these amounts, uh, then why change the rate at which provisioning gets created? Because see, the amounts are outstanding for, you know, the, the period of outstanding is higher, and once that outstanding receivable moves to a certain bucket basis that bucket, we are making provision. The rate, whatever, you know, is defined for that particular bucket. Sure, sure, understood, sir. One, just one last question, uh, uh, on Pune Ring Road, has there been any progress? Uh, are we anticipating that project award, uh, in, in the, in the near term? Which one's Pune Ring Road? We expect, uh, maybe Q4 it could get awarded because tender, uh, has already been floated. With 45 days deadline for submission. And after the submission, then it will take about a month for them to evaluate and give. So, uh, we do expect the award of Pune Ring Road job in Q4. Sure, thank you so much. As this thing, as this is a fresh bid, depending on who is the L1, that will get awarded. And we are quite confident. Understood, sir. Thank you so much. Thank you. Thank you, Aditya. Thank you. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. The next question is from the line of Shravan Shah from Dolat Capital Private Limited. Please go ahead. Uh, hi sir, a couple of questions. Uh, so just wanted to get a clarification that for next year FY28 when we are saying that we are looking at, uh, 20-25% kind of a revenue growth, and even for the second half, we are saying confident that the things will, will improve. Uh, on the execution front and obviously on the entire working capital payment, everything, uh, and, and also the mobilization. So then why not to give a guidance for the second half or maybe for the full year of FY27. So What, what is— what stops us to give a guidance on, on the revenue and the margin for, for second half or maybe for full year of FY27? Uh, that we are confident for FY28, but we are not confident for the second half of FY, which is very immediate, and one month is already passed for this quarter. You see, I see what we have explained is, uh, the, the guidance which was held back because of, you know, the geopolitical situation. There were challenges related to energy availability at many project sites. Because of that, we had held back. See, even when we speak today, we are experiencing, uh, in place like, say, Bangladesh there is a challenge of availability of energy, and we are facing challenges in terms of the logistics for sending material to places in overseas location. So considering that, we, we do not want to get into a situation where we factor something and then things go haywire. Uh, you know, as we, you know, we have now expecting that situation should improve in terms of geopolitical situation. And once we see that the uncertainty around that is, you know, done away with, we'll, we'll be reinstating back the guidance. Uh, but then, sir, if, if when we are saying FY28 we will look at 20-25%, but if we don't know the base, uh, then also that also contracts So some sense in terms of where we can look at the ₹5,300 crore revenue that we did in 1H? Uh, could it be a ₹6,000 crore, ₹6,500 crore, ₹7,000 crore, less than, higher than? Some, some idea on, on that front. Is this 20-25% number we are talking about— we are talking about that number from the full year of March '26. Okay, from March '26 we are looking at a 20-25% growth in FY28. Okay, okay, got it. Uh, and second, sir, on, on the margin front, so, uh, 2-3 things to, to, uh, get a clarification. What was the ECL provision for, for Q2? Uh, second, uh, so my understanding is it would be around 86-odd crore kind of a number would be there. Uh, so even if we remove that also, uh, then also the margin for what the second half, not as per you but as per the reported, is this close to a kind of a 6.7%. Which is given the similar revenue 1Q and Q2, uh, it is, it is significantly lower versus 9.4% as per the reported Uh, so, so still, uh, not able to understand, uh, what is impacted the, the margin in, in this, uh, second quarter. And related is Now how we can look at the arbitration? So whatever till now we have got, so in 3rd and 4th quarter, how are we, are we looking at the arbitration amount? Because that will change up significantly in terms of the margin for us. No, see what, uh, I mean, the way we have to look at it is, uh, in terms of, uh, top line, when we do say around, say, ₹2,400-2,500 crore kind of a top line at that number, uh, we will not be— we— it— that, that gives you a kind of breakeven kind of a situation because the fixed cost, whatever you are incurring that will remain fixed. Now incrementally, over and above those numbers, say around ₹2,400-2,500 number, we start generating margin. If we look at the gross margin we are generating is around 35%, uh, maybe say 10-20 basis points, uh, here and there. So we are— we generate that, uh, 35%, uh, margin on the, on the gross profit basis. incrementally. You know, every ₹100 crore we'll be generating another, say, ₹35 crore, and that adds to the, uh, your EBITDA margin, to your profitability. Now what we are trying to say that H2, we will have a better number than what we have done in H1. And that's where we are trying to give you a confidence that in, uh, for the full year, we are looking at a correcting the situation as far as the margins are concerned. Now specifically, you are talking about the, the H1 number you are talking about. Maybe, you know, the difference we are having— we have explained that we include other income also as part of our, our operating income, and that's where we are having difference. Maybe you are looking at the number excluding the other income. If you look at the standalone Afcons profitability, that will give you a sense that we are generating— the projects are generating sufficient margin because as I explained that in one of the overseas entities we had to make ECL provision and that has pulled the overall profitability down. So, sir, total ACL provision in Q2 in console is how much? 86 odd crore? No, it, uh, in Q2 it is higher than that. See, uh, the, the CapEx number we have talked about for the FY27 and 28, that number remains to be the same. It is, it is not going to change. We are looking at for FY27 CapEx in the range of ₹700 crores, and in FY28 around, say, ₹650 crore. That number remains to be the same, and, uh, Uh, can you specify the number? Uh, I'll give you that number. Maybe, um, I'll give you that number offline. Okay. And, uh, 2-3 data points on the CapEx front. We have already done ₹700 crore, so previously we were looking at ₹700-800 crore for this year and, uh, ₹600-650 crore for next year. So how, uh, one can look at now? And in terms of the gross debt level, uh, Uh, we were looking at a kind of a ₹3,500 crore similar number of In terms of debt, we had talked about that FY27 will be on gross debt basis will be around ₹3,500 crore. On net debt basis, it will be around, say, ₹2,750-2,800 crore. Uh, that number will remain. I think important point in debt one needs to understand is, uh, we will have of the, of the, uh, March '27 debt a significant portion will be a term debt towards the CapEx. The working capital debt will come down. Mr. Bhandari, do you have any follow-up questions? Mr. Bhandari, we're not able to hear you. As there is no response, we move on to the next participant. The next question is from the line of Shriram Kapoor from Jefferies. Please go ahead. Hi, sir. Thanks for the opportunity. Just a couple of questions. You mentioned, you know, your order book is excluding L1 orders. So would you be able to, you know, quantify and give us some detail on what these L1 orders are that you currently have? There are a couple of orders in Europe aggregating to around 4,500— around 4,000 crores. Between 4,200 crores, 2 projects, we are L1. Got it, sir. And by when do you expect, uh, you know, conversion of this? And more or less, when you look at it on the 30,000 guidance, Europe, it takes a little longer time to convert into order as compared to other markets. Therefore, we have not considered this in FY27. We do expect it in FY28. That Got it, sir. Um, and secondly, you know, in your last quarter you mentioned a couple of big-ticket, uh, projects coming up such as the Brahmaputra Tunnel and Dholera Connectivity in Ahmedabad. Um, you know, about 18,000-19,000 crores worth of projects. So any update on, on these tenders, uh, you know, how we are positioned in these? Uh, it won't be appropriate to discuss individual tenders, but as MD sir mentioned, we are fully confident that we'll achieve our guidance of ₹30,000 crores. Pune Ring Road is already being discussed in the previous question. Brahmaputra also, the tenders are out. So if everything goes fine, the, the award for that project should also happen this year as well, considering we will be L1 there. And for other projects, there are certain big-ticket projects which are in the pipeline, and we are fairly confident considering our strike rate and various considerations, we will achieve that target. Got it, sir. And, uh, if I could ask, you know, you've maintained your ₹30,000 crore order flow guidance for this year, uh, but, you know, you know, we're almost, you know, 7 months in, and looking ahead to FY28, Uh, you know, directionally, maybe you don't have to quantify the guidance, but directionally, do you see that this ₹30,000 crores is largely a function of, you know, a lot of bunching up of orders from last year and maybe next year the quantum could come down, or do you expect this to continue growing, um, in terms of order flow in FY28-29? From last year, only one job we got. ₹1,500 crores of Crocia, and all others are fresh jobs. Okay, so it may not be appropriate to look at bunching up of orders from the previous year. And as opposed to ₹7,500 crores of Crocia, we already have about ₹4,200 crores of other European jobs in the pipeline, which is marginally less, I would put it. So for the next year order book guidance, we would say it will be too early to say, and for the year we will achieve first and then we will come back to you with guidance for next year. However, we'll keep in mind our book-to-bill ratio and other risk factors. Even if there is a large availability, we'll make sure that we'll take the projects which we can deliver. So all those factors will prevail. Got it, sir. And just, you know, lastly, you usually give a, you know, 2-year prospect pipeline. You split it between your businesses and between domestic export. If you could just share those numbers. Sure, we'll do that. So for the remaining, uh, H2, our pending, uh, pipeline which we see is around ₹80,000 crores and which is spread across segments. Hydro is around 35%, marine also 35%. Surface, which is road and rail, is relatively less, around 10%. And urban infrastructure is 20%. For the next year, that is FY28, uh, and plus this quarter, which means around 6 quarters, the total pipeline, uh, the total TAM for us is ₹3.6 lakh crores. Again, equally spread across segments at 20% in hydro and underground, 27% in marine and industrial, 20% in surface and surface transport, and around 32% in urban infrastructure. And in terms of geography, 65% of this pipeline is domestic and 35% is outside India. Got it. Thank you, sir. Thank you. The next question is from the line of Bhavik Shah from Invexa Capital LLP. Please go ahead. Yeah, hello sir, am I audible? Yeah, you are audible. First question is regarding the provisioning. So sir, is it fair to say like in the coming quarters as well we will see an increased provisioning? No. Okay, so this is a one-off, uh, which, uh, which will get corrected in the coming quarters, right? So as I explained that even these provisioning what we have done, uh, we have explained that we are, uh, at a very advanced stage of certain arbitration award realization, and we thought that let's have something in hand so that we can, if there is a requirement to offer some discount, we will be able to offer and we can get the amounts realized. So we don't foresee going forward there will be any requirement. And even if we are able to realize this amount, there will not be— maybe, you know, we, we can look at, uh, you know, correction in the provisioning. And 2, in one of the overseas subsidiaries, we had to— based on the market feedback, we had done the provisioning, but then we'll be following up with the customer for realization of that. And basis the progress, we will take call how to go about on the provisioning. 3rd, newer arbitrations also, when we get arbitration award, we'll keep some cushion for negotiation. Understood. So what is the receivables outstanding from these debtors, like, which have been provisioned or which have been provided for in this round? The additional ones. So what is the total amount of the receivables outstanding we have? Uh, ladies and gentlemen, we have lost the connection for the management. Give me a moment while I have them back in the conference. Thank you for your patience. We have the management line back again in the conference. Mr. Shah, please go ahead with the question. Uh, yes, uh, so what is the receivables outstanding from these subsidiaries or projects which have been provided for in this round, like of the total receivables? The total receivable, it would not be appropriate to give the number, but we have, we have made sufficient provision and we don't foresee that there will be any further requirement of any provisioning. Understood, sir. So in JJM, uh, we have explained in past that in JJM we are doing project, uh, at 2-3 locations, but the difficulty we are facing is in UP only. The pending order book in UP is around ₹474 crores now, uh, which the discussion what we had with the customer, they are expecting us to complete 75% and then after that they will, they will release that payment. So we going forward, we are going to execute. We will take the whatever percentage we have completed to 75%, we'll get the realization, and then we will with that money we'll try to complete. As far as outstanding is concerned, we have got ₹372 crores in UP outstanding. We have realized some amount of payment in last 2-3 months, but the amount realization is small. But I think the going forward, the way forward we are looking at, it will not be, uh, you know, a significant chunk getting released. We will have to progressively complete 75%, and against that we'll get the realization of payment. So outstanding is ₹372 crores, or we have realized ₹372 crores till now? So outstanding amount is ₹372 crores. This amount we had talked about in past, it used to be in excess of ₹400 crore. But then gradually they have released some payment, and now going forward we have got a plan we have discussed with the customer. They are looking at completing certain segment which progressively we will complete, we'll cross the threshold of 75%, and once we complete, they will release the payment. Great. And sir, you told that some projects are seeing slowdown from the customer's end. So, uh, which are these projects and which you see will pick up execution in H2? Also, see, uh, slowdown in the sense what we have talked about. One, we have talked about that the payments are getting, uh, stretched. So that we are seeing that it is across the spectrum, that kind of a trend we are seeing. In second half, the execution pace picking up. We have talked about in, uh, in past that in some of the Maharashtra projects there were certain land acquisition related issues. There were certain design-related aspects which had to be changed. So, uh, those has already been completed, and going forward we will be looking at Q3, Q4, uh, faster pace of execution. Also, some of the projects which is into offshore marine-related projects, which generally slows down in, in monsoon season, we'll see a pickup there. Okay, sir. All the best. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Mudit Bhandari from IIFL Capital Limited. Please go ahead. Yeah, thank you. Um, sir, for the last few quarters we have seen this in terms of various projects, like either change in scope like you recently mentioned in terms of either design-related or any other issues or pending clearances, either in terms of land acquisition or any other clearances. So, um, As we speak till now, whether the work has actually started over the projects that we are talking about, since it's been some time that aggregation is yet to start. Now the work was happening in the— in those projects, work was happening. See, please understand that the project we are talking about are long stretch projects, you know, it runs into kilometers. So the customer had given certain land with which we had commenced the work. Certain land they had to acquire, and there were certain challenges in the acquisition, or maybe, you know, during the course on some aspect of the project there is a change in design. So, uh, as I explained that those aspects, uh, we have already crossed. And going forward, we'll be looking at a faster execution in the entire stretch of the project. So we were already working in those projects. Got it, sir. And when we say in terms of delays in receivables due to uncertified bills, and, uh, so how that has panned out since if you look at September numbers that, um, it still feels elevated. So any progress till date? Uh, can you just explain once again? So when we say that, um, there would be improvement in collection in the second half, so, um, till now if you have seen any major collection been realized post-September till now, or, um, any other, um, in terms of interactions that you have seen, that in terms of visibility of improvement of collection? See, one, uh, see, there are 3 aspects to it. One, what we are saying is the work done we are doing, the customers are taking time in certifying and releasing the payment. I'm not saying that they are not releasing. What I'm saying is they are stretching the payment. That is one. So whatever work done we are doing, we are getting it, and going forward also we'll get. So when we are talking about any number for the March we have factored in this kind of a stretched payment. 2, what we are talking about is we have got certain, uh, stuck receivable which we have to, uh, we have to receive. So say we have completed the project, so some places the retention is to be released. Likewise, so those collections we had set a target for this financial year. We had set the target for first half also. We have seen a substantial movement in first half, and we are in the close interaction with the customer. We are quite confident that the number the target we have set for this financial year, we are going to achieve that number. So that will give us a big boost in terms of fund, you know, getting into the company from the stuck receivable. So that will bring down the say receivables or contract asset, and then that will also help in reduction of debt, net working capital, and, you know, that will aid to the cash flow from operation. The third aspect we are talking about is the new projects we have won now, for those projects there is an eligibility of mobilization advance. So till we have finalized the September accounts, we have not realized those advances. Those advances are going to get fructified in, say, Q3 and Q4. So that is also going to aid the fundability for the company, and that's how we are saying that we will see an improvement in, uh, cash flow from operations. Um, got it, sir. And lastly, uh, when you said that our other cost has, uh, 3 other things including ECL provision, arbitration receivable provision, and Um, one overseas subsidiaries provision. So is it possible to quantify this amount to get, uh, the correct run rate of other cost? As I explained that ECL provision, uh, we have done— we— because, you know, we have, we have moved to a new ECL provisioning matrix basis that we have done the ECL provisioning. And they'll not be as such, you know, you'll be able to extrapolate that, uh, ECL provisioning for the remaining period because, you know, that was some on certain specific aspects we have made that. Uh, provisioning. Now, uh, going forward, I don't think that, you know, there'll be a similar ECL provisioning in, say, Q3, Q4, or maybe, you know, future period. Even on this provisioning aspect, what we have done If we see the collection is happening, then maybe, you know, we can, we can, we can see, uh, you know, we'll see how do we take this ECL provisioning. Uh, okay, okay, got it, sir. Anyway, I was asking in terms of correct other cost, but that's fine. Thank you. Next question is from the line of Bala Subramanian from Arihant Capital. Please go ahead. Good afternoon, sir. Uh, thank you so much for the opportunity. Uh, so actually, uh, tunneling, uh, turnover technically starts in this Uh, November onwards, uh, if you look at our depreciation, anywhere between, uh, 85-90 crore range, but historically nearly 120 to 130 crore range, I think. Whether once that DPM-related tunneling activities will ramp up, whether, uh, the depreciation run rate will hit nearly 120-130 crore per quarter range, sir. Yeah, uh, so you are right, the depreciation will go up, and as the TBM starts operating, you will have, uh, uptick in the in the turnover and also the contribution, because the TBM-related tunneling we have explained in past that it generates a higher contribution margin. So you are right, it will— the depreciation will go up, but at the same time it will also take the top line up and it will also contribute more margin. Okay, sir. Uh, sir, is there any risk on that Vaadwan, uh, court execution side? Because, uh, the Vaadwan is restricted to geotechnical investigation. and design due to land reclamation handover delays and public agitations. So what are the risks we have? Are we protected in terms of contractual or escalation clauses or equipment compensation, uh, in both sides. In Vadwan Port, there are 3 aspects. One is our own execution. 2 is approach. The approach— one project is being handled by NHAI, the project is handled by Vadwan Port only. Both are already delayed. And with respect to our work, we have already started geotechnical investigation. We have not faced any local issues so far. And, uh, on— we have kind of engaged locals also wherever needed, all that. And, uh, but the issue would remain without the approach being handed over to us, which is contractually to be handed over to us. Uh, there is going to be a challenge for a full-scale working. So clients are in discussion with us. Uh, for Alternative methods of doing the work. Which is something currently under discussion, as this forms part of follow-up of projects in the Pragati portal. There could be specific discussion around that. The alternatives are being discussed as to how to get the work going, not confining ourselves only to geotechnical and design. And in terms of extension of time and other areas, we don't find any issues, but the issue could come up on the execution side. Till the alternatives are frozen and cost related to the additional work is frozen. So to that extent, the turnover could be less till that time, but we are working on the geotechnical based on which designs and all we will complete. Yes, sir. Yes, sir. Sir, my last question, uh, on that Croatia railway project side, if you look at under international market, uh, supply chain related challenges and material availabilities, uh, is still there. Uh, once, uh, what is that expected peak revenue contributions from this project, uh, whether it will start from FY28 or FY29, and how the supply chain has been localized, uh, to protect, uh, the margin side. If you look at on the export side, generally 200 to 300 basis point higher margin compared to our domestic projects. Uh, still, uh, we are in that same side to get higher margins compared to our domestic projects. But on this project, typically international projects don't have a pass-through mechanism. Fortunately, in this project, beyond 10%, the escalation is compensable. And the 10%, we have already taken appropriate provisions, so we don't foresee any issue on profitability. Revenue will start in FY28. I got it, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants: to ask a question, please press star and 1. Next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Uh, hi sir, uh, just, uh, 2-3 things, uh, to clarify. Uh, sir, we are looking at a mobilization advance to be received in the second half where we are— we have received recently. The ₹19,500 crore order inflow. Uh, so how much, uh, are we looking at broadly in terms of the mobilization advance for in the second half? See, uh, it would not be appropriate to give you a specific number, but then I can tell you that generally in our project we are eligible for 10%. In some projects there is a 15% advance possibility also. But at the same time, the entire amount is not disbursed at— in all projects in, in one go. In some project it is given at one go, in some project it is given initially they will give 5% and then subsequently they will give another 5%. Once you utilize the 5%, then they will give you the subsequent 5%. 5%. I can tell you, uh, with certainty that we are looking at a very sizable number of advance in the, uh, in the next, uh, next half. Okay, got it. Uh, second, sir, yeah, uh, this contract asset, so particularly the unbilled revenues of ₹6,200 crore, part of current assets, and 2,000 crore, uh, kind of a part of, uh, non-current assets. So this 8,200 odd crore, so have we seen any, any kind of a certification post-September till now in last 35-odd days, uh, have this number came off? Or maybe because of the ongoing execution, this number is broadly the similar— the old one is getting certified but the new one is also getting added? Yeah, so you are right, it remains to be the trend, but then our endeavor is to bring it down. And, uh, maybe, you know, we'll see this number, uh, at the year end. There is a full, uh, effort that we should bring it down. Okay, got it. And on, on the arbitration and the other income part, so, uh, till now whatever we have received in terms of arbitration Uh, do we expect— is there any, any arbitration claim the way we have 183 crore in Q2, in 3rd quarter or a 4th quarter? Any, any likely given till now, whatever the situation we have. Uh, see, I mean, these are all, uh, you know, semi-judicial process, and we'll not be able to pinpoint that, you know, we'll be receiving or not receiving. There are various cases we are fighting, and the company is putting its best foot forward know, to defend its position in the arbitration. So there are many cases which is there. Whether, you know, that is going to get fructified in Q3, Q4, it will be difficult to give answer. So, so if we, if we, let's say if we exclude that, then, uh, uh, how one can look at the other income in the second half, the run rate that we have normally, 60-70 odd crore, uh, that run rate, uh, is, is, uh, to, to be continued in the second half? It will be, yes. Okay, okay. And, uh, Yeah, uh, yeah, uh, and on the finance cost, so given the obviously the, uh, date has increased, uh, so excluding the bank charges, the current ₹136 crore kind of a quarterly run rate, uh, will it be higher in the, in the second half? Or given the way we are looking at the reduction in the working capital leading to a reduction in the gross rate, but will that impact will be in the, in the Q4 onwards or maybe 1Q onwards? But this run rate, or maybe it would be increasing the finance cost at least in the second half? See, this finance cost, what we are looking at, I don't think that, you know, from, uh, from, from this kind of a run rate, it is going to go up. Only thing is incrementally if we back project and if we are required to, you know, if the bank guarantee utilization goes up, there will be increase in the bank guarantee cost. But as far as the borrowing cost is concerned, I don't think that, you know, this is going to— we are going to cross the kind of run rate we have clocked, say, in H1. Okay, okay, got it, sir. And then last, just a clarification, the L1 order with what we have mentioned, ₹4,200 crore, so that is not part of ₹19,500-odd crore, uh, the YTD order received. So that is where we have received the LOA, and this is the separate one, ₹4,000. Yeah, so 19,400, we have got the confirm order. This, uh, L1 order we have talked about, this 4,200 odd is not counted in that. ओके ओके बॉटिक सर थैंक यू एंड हैप्पी दिवाली थैंक यू थैंक यू वेरी मच Thank you. Next question is from the line of Yogesh Doshi, an individual investor. Please go ahead. Good afternoon, sir. Yeah, good afternoon. सर, एज़ लेमेन इन्वेस्टर, आह वुड लव टू नो फ्रॉम यू दैट, आह वी आर इनटू एक्सट्रीम इंजीनियरिंग businesses. So can we not, um, have payment schedule in an extreme way? How many cases we are fighting We are very competitive to European companies in terms of our margin. We are one of the best engineering company in India. For every good project, we have some arbitration or legal issues. Can't we have a board with a legal strong point so that our payment schedule is not delayed? And if it is delayed, then compensated with interest, because as, as we are paying interest for our borrowing for that particular project, can you please guide me whether this extreme engineering is supposed to have extreme measures of collections. Thank you so much. Thank you. The point what you are making is well made. There are some projects, especially some overseas projects, where delays in payments are compensated with interest. Domestic projects, barring exceptions, generally there is no interest loss. And it is not that for a complex project there are separate contract terms. It is not so in India as of now. Currently it is all on pure L1 basis. First of the jobs had come in India with 60% technical, 40% commercial. First time it has come under QCBS now. So going forward, if that comes in, then technical will get a weightage So even if somebody is not L1 in terms of price, they would get as the lowest evaluated bidder. But in terms of payment terms, that is something which is more or less fixed under the Government of India procurement guidelines in most of the times. Therefore, their changes in the payment terms may be difficult. And another difficulty in these things, in arbitration, barring some, uh, I would say some employers or some states Other places. Ladies and gentlemen, the management line has been disconnected. Please hold while we get the management back. Ladies and gentlemen, thank you for patiently holding. We have management connected. Over to you, sir. And Yogesh? Yeah. Yes, sir. I can hear you, sir. On, on payment terms, it remains uniform, but mostly guided by the Government of India procurement guidelines. And, uh, in terms of QCBS, first of the projects, one or 2 projects have started coming. We need to see how it is taking shape. And therefore, just because we do complex project, we don't get a premium in the domestic market. In the international market, many places it is QCBS. And, uh, where, uh, technical, uh, proposal gets significant weightage and based on which you are not necessarily required to be L1, and, uh, in terms of pricing. But if you are a lowest evaluated bidder based on technical and commercial score you will get it there. Also payment terms, whatever is the standard payment terms, that remains. Therefore, the— for complex project, there are separate, uh, payment terms. For other projects, it's a normal payment term. That kind of a differentiation is not there. Both domestic and interact. So, um, sir, how, how can we, um, I mean, make ourselves unique, or how an investor can get a premium or pay premium to our company's market cap if it is equal to everyone. I mean, the payment cycle or projects See, uh, just to, um, uh, make my point, if I am buying Afcons Infrastructure and so many other infrastructure, uh, EPC companies. Why should one pay premium to Afcons Infrastructure despite of this much of arbitration, legal issues, and Um, net margin or gross margin is very much similar. So traditionally— no, uh, let me complete, sir. Please, please. The Sapurji Group and Afcons are known as the best EPC companies overall in the world. But if we can't insist, uh, the payment schedule with Indian government, we should be little choosy about taking all the projects where you feel that payment can be an issue. We should be only concentrating and focusing on projects where we see the payment cycle and the promise of facilities are good enough. Instead of having ₹50,000 crores of orders, we can have ₹25,000 crores of orders for next 2 years. Anyway, we are doing only ₹10,000-12,000 crore orders. We can choose among the projects, no? Traditionally, yeah, if you look at the Why Afcons is held at a premium? One, corporate governance. Second, if you look at profitability in the infrastructure segment, Uh, in normal circumstances, we have always been at the higher end of the profit spectrum. An EBITDA margin in excess of 11-12%, I don't think most of the construction companies achieve. You, you are aware of yourself. As you are an investor, you know these things. And, uh, third, there is a huge international recognition which adds to the intrinsic value, even though it may not necessarily convert into transactional value. So at some stage, if, uh, some stocks have moved like stocks, uh, some of the other stocks have moved to a like a portfolio stock. At some stage, Afcons could also move into your portfolio stock. That is what we expect. So therefore, taking that into consideration, I think in our assessment, Afcons would continue to be a premium segment. As you know, Afcons is the 8th largest player in marine in the world. 12th largest player of bridges in the world. These are not my statistics, these are Engineering News Record USA statistics. Okay, and we are the one— we are the only company for 11 years in succession, we have been adjudged as the most admired or most innovative knowledge enterprise at India level, Asia-Pacific level, and global level. And taking all that into consideration, it is for the individual investors or the group of investors to decide what kind of premium one can avail or all that. I cannot comment on that. Thank you so much. Thank you, sir. Thank you for enlightening, uh, individual shareholders. With this confidence. Thank you very much. Thank you, thank you very much. Yeah, happy Deepavali to you all. Thank you. Happy Deepavali and, uh, very happy and prosperous New Year. Thank you. Thank you, sir. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference back to management for closing comments. Thank you very much. Happy Deepavali and Happy New Year to you all. As conveyed to you, we are looking at a 20 to 25% growth in FY28. And the second half will be better than first half. We stand by our guidance of ₹30,000 crore of order book, and we are looking forward to exciting times back. Thank you. Thank you very much. On behalf of Anand Rathi Shares and Stock Brokers Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.