Hello, everyone. On behalf of Equirus Securities, I welcome you all to Q3 FY 2021 earnings conference call of Antony Waste Handling Cell Limited. From the management, we have with us today Mr. Jose Jacob, Chairman and Managing Director, Mr. Shiju Jacob, Executive Director, and Mr. N.G. Subramaniam, Head of Accounts and Finance. I now hand over the call to Mr. Jose for his opening remarks, post which we can open the floor Q&A session. Over to you, sir. Good evening, a very warm welcome to everyone present on call. Along with me, I have Mr. Subramaniam, head of finance and accounts, and SGA, our investor relations advisor. I hope and pray that you and your families are safe and healthy and secure in this pandemic season. We have uploaded our investor presentation on the stock exchange and the company website. Firstly, I would like to welcome our new shareholders and congratulate every shareholder of the company, that is employees, customers, business partners, investment bankers, and others who made IPO listing successful. We were delighted to see such a strong response of our IPO of 9.52 million equity shares of face value of INR 5 at an issue price of INR 350 per equity share. The breakup of these shares consisting of fresh issue of 2.7 million equity shares and an offer for sale of 6.8 million equity shares. Our shares are listed on BSE Limited and National Stock Exchange of India Limited on January 1st of 2021. This is our first conference call, and therefore, I would like to give a brief introduction of our company business and industry it is catering to, that is municipal solid waste. When we talk about Indian municipal solid waste management industry, we are the leading player with an established track record of around 20 years, providing full spectrum of MSW services, which include solid waste collection, transportation, processing, and disbursal service across India, majorly catering to municipalities. We are also amongst the very few players who have pioneered in MSW collection and transportation sector. We have in-house expertise in landfill construction and its management in a scientific manner. We are focused on the emerging waste management area like waste to energy, and now more importantly, in the area of bio-mining of legacy waste. Moving on to three broad business area, that is municipal solid waste collection and transportation projects. This service involves door-to-door collection of municipal solid waste from households, commercial establishments, and other bulk waste generator from a designated area like the community bin, through primary collection vehicles like compactors, dumper placers and tippers, and transportation of this material to the processing facility, transfer station, or a landfill disposal site. These contracts are tendered out by municipal authorities and normally have a tenure of seven to 10 years. Municipalities invite tender for either the whole of the city or part of a city. Currently, we have 12 such ongoing projects in this service. As I mentioned, these are typically multi-year contracts and an average outstanding duration of ongoing contract is approximately eight years. These contracts have inbuilt price escalation model as a fixed or linked to components of the Wholesale Price Index and are linked to the minimum wages of that particular state, which provides adequate protection for our operating margins. Second business is we have MSW processing projects. These projects involve sorting and segregation of municipal solid waste received from the municipality. Both these contracts, like C&T and MSW process, are mutually exclusive contract, so they are two separate contracts. The waste processing involves composting, recycling, shredding, and compressing of the waste into RDF, which is Refuse-Derived Fuel, or generating power from the landfill gas as required. Currently, we have two large ongoing projects. Normally, tenure of such contracts are longer, which is around 21- 25 years. One of our processing projects is at Kanjurmarg, Mumbai, which has a concession period agreement till 2036, and the second one is at Pitlochry, Inchworm, and has a concession agreement till 2040. Third business is contract and other service, which involves mechanized road sweeping with deploying of power sweeping machine, manpower, comprehensive maintaining consumables, safe disposal of waste required for completion of the cleaning operation of the designated area. We have four such ongoing mechanized sweeping projects with an average outstanding duration of approximately seven years. As of today, we have undertaken more than 25 projects, of which 18 are ongoing projects. During our journey of two decades, we started the business with waste collection and transportation and progressed to solid waste management, working with more than 40 municipal corporations. We have come a long way in the field of solid waste management with adoption of latest technology and innovation. By doing this, we have shown that we are not just pioneers in solid waste collection and transportation, but also have a rich experience in municipal solid waste processing. Our Kanjurmarg project is the largest single location waste processing plant across Asia. The project tenure is of 25 years, starting from 2010 till 2036. The technology we have is bioreactor landfill with a capacity of 6,500 tons per day and sanitary landfill of 250 tons per day. We have a material recovery and composting facility capacity of 1,000 tons per day. Currently, we have a gas to energy, where the landfill gas is converted into power of 0.97 MW, and we are planning to double this capacity soon. Currently, the power generated is used for captive consumption. Presently, we handle more than 5,000 tons of waste per day in Kanjurmarg facility, which is approximately 60% of total waste generated in the city of Mumbai. This project has been designed with 207,500 tons per day. Since start, we have processed approximately 7.63 million tons of waste at this site. For the current fiscal year, till January 2021, we have processed around 1.23 million tons, which compare against 1.59 million tons handled in the whole last year. I'll briefly share a few highlights on the Indian municipal solid waste service industry. The industry size is estimated to be INR 50 billion. Increasing population, higher urbanization would lead to higher per capita waste generation in India. Urbanization coupled with changing lifestyle patterns, increasing disposable income, have paved way for consumerism and has also contributed to higher waste generation in urban India. Over last few years, along with urbanization, we have also seen our industry turning more towards technology changes like mechanized primary waste collection and sweeping, GPS-enabled vehicles, and RFID-enabled bin tracking system, et cetera, to bring in more efficiency and transparency. This bodes well for a technology-driven municipal solid waste service player like us. Various initiatives taken by our government, like Swachh Bharat Mission, to keep India clean and focusing on hygiene has led to multi-fold increase in spending on solid waste management by various municipal corporations. These initiatives have taken a new shape in this budget with an allocation of more than INR 1.4 lakh crore over a period of next five years towards Urban Swachh Bharat Mission Two. This is expected to drive the Indian municipal solid waste industry towards a more efficient collection, transportation, and processing of solid waste. Municipal Solid Waste generation is expected to grow at a CAGR of 9% from 2020 to 115 million tons per annum by FY 2025. The Municipal Solid Waste management market, which is currently estimated at INR 5,000 crore in FY 2020, is expected to reach around INR 9,800 crore by FY 2025, with a CAGR growth of 14.4%. As an organization, we are constantly striving on improving environment, social, and governance parameters, which is ESG. We have an ESG policy approved by our board that identifies focus material areas for reasonable stewardship that impact our business activities. We see a significant tailwind and are confident that growth momentum will continue through coming period of all our businesses. I now hand over the conference to Mr. Subramaniam, Head of Finance. Very good evening to all the participants. I will share the highlights of our financial performance. This is the second consecutive quarter where we have demonstrated operational flexibility in a very difficult operating environment. We are committed to holding on to operational efficiency and even improving on them and the cost savings as the volumes turn positive again. For Q3 FY 2021, the performance on consolidated basis, the company has reported an operating revenue of INR 118 crore as compared to INR 106 crore in Q2 FY 2021, reflecting a growth of 12% on a quarter-on-quarter basis, led by growth in waste collection and processing. When we talk about operating revenue, we talk about MSW collection and transportation revenue and MSW processing revenues here. The total revenue, which includes contract income from construction accounting as per Ind AS 115 and others, which include sale of compost, sale of RDF, and sale of scrap, that total revenue has actually increased by 6% to INR 127 crores in Q3 2021, as compared to INR 120 crores in Q2 FY 2021. EBITDA is up by 11% sequentially to at INR 37 crores versus INR 33 crores earned in Q2 2021, with a margin at 28.6% versus previous quarter's 27.4%. The improvement in margins is driven by consistent and continuous efforts to control our project costs and improve overall operational efficiency. The profit before tax stood at INR 22 crores for Q3 2021, as against INR 18 crores in Q2 2021, which is up by 23%, with a PBT margin at 17.1%. Consolidated profit after tax stood at INR 19 crores for Q3 as against INR 18 crores for Q2, which is up by 9% sequentially with a PAT margin at 15.3%. Coming to business-wise performance, the MSW C&T revenue is up by 12% at INR 81 crores. The growth is on account of increases in volume handled, which rose by 8% in Q3 versus Q2 2021. The MSW processing revenues up by 10% at INR 36 crores as compared to INR 33 crores in Q2. This improvement in waste processing volumes by 11% in Q3 versus Q2 resulted in this growth in this business. On the balance sheet front, our net debt to equity as of 31st December 2020 is 0.5x, an improvement over the 0.6x level as of March 2020. Total consolidated debt on our books as of December 2020 stood at INR 202.8 crores. Cash and bank balances is approximately around INR 40.9 crores, reflecting a net debt level of INR 161.9 crores. Net worth of the consolidated entity is at around INR 336 crores. The current receivable days as of 31st December 2020 stood at 60 days versus 64 as of March 2020. We shall continue to endeavor to reduce this further. That's all from my end. Now I'm opening the door for Q&A. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. The first question is from the line of Isha Savla from Arya Securities. Please go ahead. Hello. Yes, sir, good evening. I have a couple of questions. My first question is, can you give some idea about MSW industry, and what are the parameters that shows that this industry will grow, and how can you benefit from it? I just spoke about the industry, because of Swachh Bharat at PAN India level. Presently, in the past, it was more conventionally handled. Manual handling was huge, and manual handling of waste has to reduce. Another thing is, as I said, municipal solid waste PAN India level is around INR 5,000 crore business. We believe that in next five years, it will go to INR 9,800 crore. Most of the municipalities are privatizing their operations because there's a pressure from Swachh Bharat Abhiyan, and there's a team which comes from the central government to evaluate their performance, and they are given ranks based on that. Due to which they need to improve the present waste management system. That is the reason there's lot of bids coming up PAN India level and it's an opportunity for us. Okay, sir. Sir, I wanted to ask you about the Swachh Bharat Mission that was started earlier. How have we got benefit from that? Also now in the budget, urban Swachh Bharat Mission 2.0 has been announced. How that would be helping us? Our business, the municipal solid waste business, has been evolving. In the past, wherever collection, transportation or waste process, we had to bring in our capital 100%. With Swachh Bharat Mission, they are willing to invest around 40% and maybe more also in future. That is a good opportunity for us because our debt will reduce and our investment for the CapEx, suppose if it is INR 50 crore CapEx, around 40% comes from the government. In certain cases, what we have noticed is like, recently we won one contract where almost 100% CapEx were funded by the government. This will definitely help our industry because, less capital has to be put in, which will be supported by Swachh Bharat Mission, where money will be put in such type of projects. Okay, sir. My last question would be on the technology front that how well advanced are we, and what are the scope of improvement that you are looking going ahead? Thank you. We believe in bringing the best of ideas and technology in our business. In Kanjurmarg, we have brought in bioreactor technology, which is predominantly operational in America. We bought in waste composting technology, where entire metal recovery facility was imported from U.S. and even the composting technology, which is a SCADA system, manual handling is almost negligible, due to which we are producing high quality compost and there's a good demand for those compost. We are selling around close to 2,000 tons per month of compost. We always look out for the best technology, best idea, and our collection transportation, we have RFID on our bin which is tagged, we have GPS, we monitor here, and we have entire ERP system for a very strong process in the operations. All this has benefited. That is what. Even waste to energy, we have tied up with a company for our EPC who has built around 120 such plants worldwide, and they are running very well. We always evaluate and that's our strength. That is the reason we have done well in last 20 years. Okay, sir. Thank you. That's it from my side. Good luck for Q4. Thank you. Thank you. The next question is from the line of Anurag Patil from [Roha]. Please go ahead. Good afternoon, sir. Just wanted to understand, as you mentioned that currently you are working on 18 sites. Are there any pipeline for the new sites that are under bidding or contracting? Next 12 months, we are very excited because a lot of bids coming up in all the A-rated municipalities. As you know, because of the pressure from the central government and this evaluation for all the municipality and to get better ranking, all the municipalities have floated tenders, and we are confident that we'll be getting a good share of this business. We just don't go and bid. We do proper due diligence with the corporation. We check their finances, and if the money is there, then only we bid. We always look to a criteria of 20% return on equity, and based on that, we bid so that we keep the company safe and we make a good amount of profit. Okay. Typically, in terms of years, what is the duration of the contract? Transportation is approximately eight years, which is where we do collection and transport of municipal solid waste from house to house, and waste processing is typically from 21-25 years. Okay. This Kanjurmarg site we have for longer duration? Yeah, we have Kanjurmarg, Pimpri-Chinchwad, Insaur also, sir. To add on that, waste processing projects are normally, as Jose mentioned, of a really long duration of 20-25, where the entire cities or the bulk of the city's waste gets processed at a single location. That is why the tenure is longer. For Collection and Transportation, it averages from seven to 10 years. That's what the life of an asset is, and that's how it's been tendered currently. Okay. Another question is, sir, if you see, all the municipalities normally who give this contract, they already have a contract either to you or someone else, right? Since the period of the contract is seven to eight years minimum, normally, what is the periodicity in which this contract come for renewal? Like every year, 10 proposals or across India or 15 or 20 kind of renewals or the bidding comes in the thing? I will tell you one thing. About 75% of Municipal Solid Waste in India is not scientifically processed. It is just openly dumped, 75% of entire Indian waste. All this has to be done scientifically. Therefore, the law centers going to come in next 10-12 years. We may not wait for somebody to renew or something. There's a huge opportunity in waste processing side. As far as Collection and Transportation, many municipalities, they are collecting and transporting in a very conventional way. They used to use garbage dumpers, with manual labors and all that. They are also in process of privatization and modernizing their existing system. There is an opportunity, and recently we won one or two contracts where, about seven, eight months back, where the municipality had not privatized. They had small operators, but they went for a modern system. There's a lot of modernization happening in pan India, at least. Okay. Got it. Normally, any contract that you got it, so what is the payback period and how much amount that you need to invest to execute that project? Traffic and execution. It depends upon each and every project because the tender would specify the kind of work. It will be very difficult to give you a thumb rule to that extent. For example, a Collection and Transportation can be purely primary Collection and Transportation to the disposal site, to a door-to-door Collection to a disposal site. The tender can also include road sweeping as part of the tendering. Normally, what we see for Collection Transportation is a fixed asset turn of around 1x-1.25x, is what we have seen historically. That is a kind of a CapEx that needs to be done. These projects are of seven to 10 years, after that, there is no need to put incremental CapEx unless and until the tonnage increases around 25%-30% over and above the estimated lengths. Okay. Understood. In the presentation, slide number 27, you mentioned the revenue from operations based on the current projects. You had given financially at FY 2022, FY 2023, FY 2024, but the numbers were missing. Yeah, because this is a very annuity-based model. When we are talking about revenue, these are the contracts that we already have. The increase in the revenue is from escalation and from tonnage. We are estimating that these would keep on growing at an incremental pace. We have just left it at that because these are all actual contracts that we have. These are not any incremental new contracts that we are getting. These are all on the same numbers. Irrespective of whether you get the new projects or not? Yes. Irrespective of we are bagging new contracts, this is what my trend line will be. Okay. It's just a diagrammatical presentation, not the numbers that you have given. Yes. Okay. Thanks. Thanks, and all the best. Thank you. Reminder to the participants to ask a question, you may please press star one. The next question is from the line of Roop Shobroy from Vector Delta Securities. Please go ahead. Hello. Yeah. Yes. I have a couple of questions. First one is that, what are the different geographies that you plan to track now? Presently we have in Maharashtra, we have in north. We have no problem going, spanning the length. Our idea is when we win a contract, we have a strategy of cluster-based businesses. We try to win the cities nearby, which will reduce our cost overheads, and that is the strategy we look at. By the same time, we are open to bid any part of India as long as it fits in our financial due diligence, where the municipality is doing well. They're financially funded, and based on those, we go and bid. Otherwise, we have no issue going to any part of India. Okay, any new municipalities you're planning to work with? Yeah, there are a few of them in line, and we are looking at that. Okay. Second is that any new order to be started in the coming quarters that would add to our revenues? Currently we have bid for a couple of contracts. Once we bag a contract, normally what happens is even if we bag a contract, there is a lead time around three to six months for mobilization of the assets. Even if we sign an LOA today, it will take six months for us to generate the revenue out of it. Yes, we are definitely in talks with a few municipalities. They are in the tendering stage. We have already submitted few tenders. Once we get awarded something, then we will definitely be informing you guys on that. How confident are you to bag those orders? A decent amount of time and effort is spent by the company when we bid for a contract. Our strike rate is normally higher to that extent. A decent amount of time goes in doing a micro plan study, the road plan of that area, understanding the best judicious mix of assets that needs to be deployed, the potential increase that can be captured. A micro plan to that extent needs to be done, and then a costing gets worked out, and then we sit and understand the potential for looking at the exigencies of growth in that particular geography, and then accordingly we bid. Given the very scientific approach that the company adopts in bidding, our strike rate has been high, and we always approach that method. If we get a contract at a particular price, we definitely are sure of our margins and our return on equities and stuff. If the pricing is not correct, we don't rush into such contracts. Okay. Thank you. That was helpful. Thank you. The next question is from the line of Anupam Gupta from IIFL. Please go ahead. Good evening, sir. Couple of questions. First is, what is the status of the increase in stake for the two subsidiaries, for Kanjurmarg and PCMC? Sorry, can you repeat that question, Anupam? The stake in the two subsidiaries was going to increase because of the conversion of. Oh. preference shares. See, the new Companies Act kind of clearly says that the transfer of shares cannot be done in a physical format. It has to be in DEMAT. Because of the corporate action pending documents to be received from our Brazilian partner, this has been kind of delayed by a quarter, and we are expecting the team to visit Bombay by the end of this month or maybe the early part of March. We'll get that thing moving. Okay. Secondly, for the PCMC CapEx, what is the revised timeline? I think there's a month delay during this time after the IP, but what is the timeline for start of CapEx and completion of CapEx? Anupam, yesterday we had a board meeting wherein the rights issue was completed. We are moving the INR 40 crores of the IPO proceeds from Antony Waste to AG Enviro as the equity component, and that will be pushing down into the system. Accordingly, we have informed the lenders. There will be a pro rata disposal of loan and the equity. The CapEx has already been initiated. The work has already started. It will go full throttle by the end of March onwards. We expect the timeline of commencement of activity to be around 18 + two months of construction phase. We would be completing our construction in the same time. Okay, basically end of 2022 broadly. End of 2022 and maybe mid of 2023 actually, because that's 18 months construction phase. Okay. Understand. Yeah. That's it. Thank you. All right. Thank you. The next question is from the line of Priyanka Singh from Aditya Securities. Please go ahead. Good afternoon, sir. I had couple of questions. Before starting, I would like to thank for a very detailed presentation. It is really very helpful. Coming on the question side, can you share some more details about your Kanjurmarg site, and what is the scope to increase the business activities at this site? Kanjurmarg, as I said, we are presently receiving around 5,000 tons, and the plant capacity is around 7,000 tons, it can increase. As years pass by, as per the contract, the waste capacity, we'll be taking in more waste. We have two technologies there. One is bioreactor landfill, where the waste is put in a cell and it is decomposed. Based on that, we produce landfill gas. With the landfill gas, presently we are producing electricity of close to 1 MW, which is used for captive consumption. Going forward, we are looking forward to increase those capacities. If there's excess capacity, we can sell at the rate of INR 3.50. As per another 1,000 ton, we have a technology where we have metal recovery facility and composting system. Whatever the organic fraction, we convert that into high quality compost, and it is sold to a fertilizer company like IFFCO and RCF. What we have noticed is lot of demand, and we are planning to increase that capacity, too. Going forward, as the waste generation increases, our revenue also will increase. Just to add a bit of color on that, the revenue pattern is on a per ton basis. For every ton of waste that enters the Kanjur facility, we charge the corporation on a per ton basis, and the revenue from sale of compost, RDF, recyclables are all ancillary and additional, and adds to our bottom line. Okay, got it. Also, can you explain how does this bidding process happen? Usually this is a technical and commercial bid, and it is quality-cum-cost based bidding. There's ranking and marking for the bidding process, and there's a technical qualification, and only those bidders who have past experience of waste collection, transport of waste processing is qualified. There's an entry barrier, and based on that, only those operators who have such experience can bid. Also nowadays, they are giving marking because they want good operator to take up the contract. It is not purely lowest bidder types. Municipalities are going forward to give contracts to companies who's technically number one, and the marking, and based on the certain formula, they award the contract. Most of these bids are prepared by top four, top five consultants in the country, because being a long-term contract, the municipality prefers or wants to have good operators. We have a technical bid. First is expression of interest, then there's a technical bid, and then thereafter financial bid is open. Okay, got it. Lastly, when you say that revenue from operations based on current projects will be growing for the next few years, so what could be the reason behind the same? Is this because of the escalation clause or something? Partly. Historically, over the last 20 years, what we have seen is the tonnage increases in a particular geography. For example, in cities like Navi Mumbai and Bombay, there is an organic growth in tonnage that we have noticed over the last couple of years, and also the escalation which kicks in. The escalation is linked to the minimum wage in certain contracts. They are also linked to the HSD component of the fuel. Those things adds to the contract. It's a combination of organic increase in tonnage plus your escalation that kicks in. Okay, got it. Helpful. Thank you, sir. Thank you. Reminder to the participants to ask a question, you may please press star and one. We have the next question from the line of Dipesh Keshar from Ekta Securities. Please go ahead. Yeah, hi sir. Sir, your tonnage has improved sequentially. Can you give a guidance like how it is like what the pre-COVID levels, in the Kanjurmarg and in the C&T operations, please? Dipesh, we will not be able to give you site-wise performance, but what we have seen is generally, since June, July onwards, there has been a significant increase in tonnage. From August onwards, it's almost strongly back. I mean, the commercial activity and waste generation from the areas that we service has improved significantly. Are we out of the woods? The answer to that is cautious yes. We are still around -3% to -5% from our pre-COVID levels in certain cities. We have seen a very good traction from the beginning of this year, so maybe the Q4 would show that we are finally out of the woods. Okay. Sir, your revenue share of C&T segment has increased in the nine months period and the processing has come down. Just wanted to understand what kind of revenue share do you target over the next two, three years? Dipesh, this was predominantly in Q2 and Q3. If you look at the nine-month number, the Q2 and Q3 were the worst of the COVID. The waste generation has sharply declined in the two processing zones that we had, Bombay and Pimpri-Chinchwad because the waste generation has declined sharply. That is why you see a significant shift in the C&T versus waste processing. Going forward, we will be going back to our historical trend lines of around 50%-55% of C&T and around 45%-50% of processing tracking. Okay. How many processing contracts do you plan to, because I think one is already in the pipeline, right? Are you bidding for more processing contracts, or will you bid only for C&T right now, and maybe after the PCMC starts, you will start bidding for new processing contracts? Sir, we are definitely looking at a mix of contracts right now. There is also a lot of bio-mining contracts that's coming up, which is basically mining of legacy waste in cities. A lot of cities have waste dumping grounds, actually, like in Greater Noida, Delhi, Bombay, Bangalore. You go to any city, they already have a dumping ground. The corporations in those cities are actually looking at ways of excavating and kind of rejuvenating that spaces. We will be looking at a lot of different mix of projects. The key criteria for us is it should match the threshold of the returns that we want, and of course, the quality of the corporation's finances. These two things are right, we will definitely go for a contract, but it will be a mix of both C&T and processing. Dipesh, good part is because of this Swachh Bharat and all, they are willing to fund the CapEx in processing also. If they are funding about 75%-80%, we will definitely look into those projects because it is asset light, and it's better. That's a very good thing, and we are looking for such contracts. Got it, sir. Yeah. You said the EBITDA margin in this quarter, though, was better, like sequentially it is better. For the nine months period, obviously our revenues were lower because of the COVID time and the margin is also lower. How do you see the margin shaping up for the next few quarters? Dipesh, the reason the Q3 margins were better than Q2 is a factor of two things. One is during Q2, a lot of auto ancillary entities were not working, so we could not get decent amount of spare parts and everything, which was that. My costs were kind of squeezed out. There was a start-up expenses of Varanasi which came in in Q3. That's why you can see some change in my EBITDA numbers for the nine-month period. Going forward, our margins would be tracking the historical levels of around 28%-30%. With higher processing being added, we will definitely be moving towards the upper range of 30% than the other one. That is great, sir. Last question, Jose sir. In your presentation, you mentioned that the user fee collection in Noida, right? Just want to understand how that is shaping up. Are the users actually paying you the fees? Do you think this model is scalable in other cities as well? That will considerably reduce your collection risk. What we have noticed is whenever we are going to collect user fee, they are paying, most of them. What I understand and most of the municipality, when I meet, I tell them that the user collection model will reduce the stress on the municipality on their finances. This model can definitely replicate in many municipal areas where the citizens are very well to do, and they want to pay for such services. Going forward, I believe that pan-India level, this user fee model collection will be implemented. Got it, sir. Thank you, and all the best. Thank you. The next question is from the line of Saurabh Agrawal, Regional Investor. Please go ahead. Hello. Thank you for the opportunity. I would like to ask, what are the entry barriers in our? As said, there's a quality cum based bidding process. First, most of the bids, they have expression of interest. In that they have entry barrier, like only those operators who have certain experiences, like who have lifted 1,000 tons or 2,000 tons per day, or who have processed some X amount of tonnage of waste. Thereafter, there's a technical evaluation where marking is given based on the previous operations and all that. Afterwards, the financial bid is open. Of late, they are giving marking. They award contract to operators who is the technical number 1, and they don't check that he has to be lowest also. That is part of the trend. There's a formula fixed for that. Things are changing, and most of the municipality are having consultant, top four or top five consultant to prepare such tenders. Most of the bid are as per international standards, which also is helping us. Okay, that was helpful, sir. I would like to know, are we interested in business in East India? Like right now in the ongoing projects, I didn't find any business in East India. Why is it so? I would say like many municipalities are in the process of preparing bids because it was all traditionally, conventionally done, collection, manual loading, and all that. They were not aware there's good private operators and all who can really do good job. They are now in the process of modernizing. Before I told you also, 75% of municipal solid waste is just dumped openly anywhere here and there. Now because of legislation and the courts are after all the municipality that they have to modernize their current collection system and waste processing. Due to which a lot of bids are coming up, and there's a good opportunity going forward for us. Okay, thank you. That was all from my side. All the best. Thank you. The next question is from the line of Anupam Gupta from IIFL. Please go ahead. Yeah, thanks for the opportunity again, sir. Just wanted to get your sense on the waste collection trend. You have given the numbers for 3Q. What is the trend we are seeing in the fourth quarter, both for processing as well as for C&T? We would be progressing. These projects are more like an annuity model for us. What you see for a quarter is normally a reflection of what is expected to be going forward. We have if we bag a contract for seven years or 10 years, the performance is very simple. Our job is to pick up the garbage generated from particulars, they're transported, and we bill the corporation. These are long-term, almost like an annuity kind of a model. It has a very high predictability in the revenue generation and in the cost structure. Right. We don't believe in giving the near term or a short term earnings guidance. What I was referring to was, in your view, was 3Q fully recovered in terms of waste for both processing and C&T? Versus 3Q, if it was not fully recovered, will 4Q see some significant or slightly higher growth than what the normal should be? Q3 C&T operations has recovered significantly, but it's still not near the pre-COVID levels, if that is what you wanted to understand. Yes, we are still not at the pre-COVID levels in the collection transportation area. In waste processing, we are almost back to pre-COVID levels. Okay. Basically, fourth quarter can still see some uplift from that angle as the recovery happens for C&T. Yes. Okay. Understood. Thank you. Thank you. The next question is from the line of Nitin Gadge from Green Capital. Please go ahead. Hi, good afternoon to Shiju and Jose, and welcome to the Indian capital markets. My question is strategic in nature. In 2012, 2013, and 2014, you had done one project for the Delhi NCR, and now if I look at this spread of projects and all your current assignments, your spread of Delhi NCR strategically should increase, right? The governments in Delhi NCR in terms of state government, central government, there's a huge potential working with NDMC, MCD. Can you just talk a little bit about strategic viewpoint of the company in terms of how to enter the north and take away more of the market share there in terms of waste management, because it's a great opportunity. Thank you. In the north, as you said, most of the municipalities are preparing the bids. The bids are not yet out. They are in the process, and definitely we are looking, and we have won a few contracts there, which you might have seen. There's a lot of potential there, and we definitely will be bidding. As you know that during the COVID period, most of the municipalities were very busy in managing this issue of the pandemic, and they didn't have time to prepare bids. Now they are all in the process of bid making tenders. Definitely, we look forward to bid those municipalities in the north. Okay, do you work more also with the resident welfare associations because they are prime objectors of giving out waste management and segregation in colonies and in areas, or do you only work with the municipalities? We have a specific job. We work with the municipalities, and our contract is with the municipalities. Okay. We have also seen a higher kind of an activity and engagement that's happening at the grassroots level, especially in certain cities where a closer association at bulk generators is a possibility, which is there in the offing. Okay, great. That's all from my end. I think that from an INR 1,000 crore market company, we should aim to become an INR 10,000 crore market company. You are in a great industry and space. Please create wealth for your investors and continue to have the faith. Thank you. Thank you. Thanks for your wishes. Thanks. The next question is from the line of Saurabh Shah from QIC Investments. Please go ahead. Yes. Hi, good evening, gentlemen, and thanks for taking my question. The first question is just very basic. On slide 27, you've given your 10-year number of projects and revenue history. I just wanted to understand what happened between 2015 and 2020 for the sharp jump in revenues, which is almost fivefold. There's been a very small increase in the number of projects. Is it that this is the time during which we have won some big projects from some of the bigger municipalities? If that is the case, which one are these? As I said, because of lots of Swachh Bharat Abhiyan at pan-India level, and every municipality wants to modernize, and due to which, we are the right spot and we are getting an opportunity to win lot of contracts. That is one of the reasons we are winning. Anything else you want to add? Yeah. What has happened is also the nature of the contracts and the size. The privatization of the Municipal Solid Waste has taken a glacial pace in India. It's only in the last couple of years we have seen a large number of cities privatizing the work. The scope of work and the Size of the contracts have been remarkably higher over the last four to five years. That is what you see in the number of projects that we had in 2010, 2015. They were smaller projects and smaller sizes. What we are now seeing and what the company has capitalized is bigger contracts with select clients with a very good financial profile. That is what the trend will be for the company going ahead. Okay, thank you. Secondly, some of the past projects that we had, which you have highlighted on one of the other slides, what was the reason for us either to not win the bid or somebody else getting the contract away from us? If you can sort of just help us understand what are the competitive dynamics in the industry and who are your main competitors. In the past, we used to take contracts where the size was small. Now our strategy is to bid into only those municipalities where the waste generation is around 200 tons per day. There's a minimum level of tonnage to be produced, and another thing is, we would like to bid with a 20% return on investment. Yeah, you can go ahead please. We look at this 20% ROE and also the municipalities where the waste generation should be at least 200 tons per day, because there is much bigger size of municipalities where we have better opportunities. All the past projects are, in a way, willingly given up, either because of the scale or the financial parameters not being met. Exactly. These were smaller contracts, and we felt that there were so many other contracts coming up which were fitting our criteria, both operationally and financially, that we went with letting go of the old contracts and bagging newer contracts. Okay. Who are our main competitors? There are very few large organized players in the industry. Some of them would be companies. All of them are unlisted. We have Ramky Enviro is one of them. There is BVG, there is Global Enviro. They're very regional specific players, but the nationwide exposure would be very few. Okay. Just looking at the current projects, is there a move from municipalities that over time they want the same company to be sort of doing the C&T sweeping and the processing as well? Is that a trend that is visible? Because in some cases, unless I've misunderstood this, Pimpri and Kanjur, where you have your MSW processing, are you also doing all of the other waste management for those municipalities as well? Municipalities, usually they like to have separate contract for collection and transportation and waste processing. Because giving one single contract for the entire process from C&T to waste processing is a little bit of risk for the municipalities. Also, most of the operators also don't want to do that. That is one of the reason we have separate, but maybe one or two contracts they have given and that's I think somewhere, but most of the municipalities are looking to have two different contracts. One of the reason is collection and transportation contracts are typically 7-10 years, where the life of the asset is not more than 10 years, and waste processing is 25 years. Awarding these two contracts is a complex issue for the municipality. Okay. Yeah. For two. You said that even the operators don't prefer to do end to end, given a choice. Even you would prefer to not expose yourself too much to a same municipality. Is that the case? That is also the case, and another thing is it's a complex thing. Your vehicle life is only for 10 years, and it's a problem for municipalities to award 25 years contract, even for collection and transportation. Okay. They could easily give a 25-year contract, right? It would just mean that you modernize your fleet after 10 years or nine years or whatever after the useful life. Okay, I mean, if that is the norm, that's fine. Finally, you all haven't broken up, but at least just qualitatively if you could explain, in the three business lines, what is the profitability like for us between C&T, processing, and others? Hi, NG here. That is very competitive and a very pricey information, so which we'll not be able to share at this stage. No, I'm not looking for numbers. Even if it is possible to share which one is more or less profitable, just at least grade them if you could. I would not be able to give you any direction in that space. Fine. My final question is that you mentioned that your growth from existing comes from increase in tonnage over time as urbanization and I guess practices improve and escalation. What is this escalation amount typically? Is it linked to an index? Because you mentioned that it's linked to the minimum wage in the state, but I guess other than that there are fuel costs, et cetera, a lot of other things are going. What is this escalation linked to? The tender clearly says that for any waste management, waste processing, and collection transportation, the main operating cost would be labor and fuel. The tender clearly mentions that there is a weightage that's assigned to the rate which is awarded. A certain percentage of the rate is assigned to the fuel component, which is the HSD component of the Wholesale Price Index, and a certain component is assigned to the minimum wage of that particular state. Any change which happens gets reflected on the rate that has been awarded to the operator. In the past, these kind of calibrations were done on an annual basis, but over the last five years, we have seen that the frequency of calibration has significantly improved. In certain contracts, it's on a quarterly basis, and in certain contracts, it's even on a monthly basis. That is a kind of an escalation matrix that's being awarded. Basically, if fuel prices, let us say, were to go up by, let's say, INR 10 a liter over the next three months, in the ensuing quarter, you would get that sort of compensated, and your pricing would go up to that extent. Is that fair? Yes. That understanding is right. Basically, there will be a mismatch at the most for one month to three months, but otherwise, you should get back into the sort of linked pricing. Yes. These are very project specific. Certain times it's on the same month itself, certain times takes its accordingly lead time. Across the board, your payment terms are 60 days for all your clients and all municipalities across projects and geography? It's different for different geographies, but yes, the weighted average. Since it's a service industry, and we are in essential services, our payment cycles are very much in line, and it's improving further on. We have seen the fact that even during COVID times, and we were among the frontrunners there. We had managed to be on the ground throughout the entire period. Receivables, even during these tough times for the corporations and for the companies like Antony, was still been on good grounds. 60 days is what we have been working. It's come from 64 to now it's 60. We are constantly working and kind of trying our best to kind of bring it even closer to maybe 45 or 50. That's the target that we are working internally. Okay. Thank you very much. This is a very helpful call. Wish you all the best. Thank you. Thank you.