Ladies and gentlemen, good day and welcome to Antony Waste Handling Cell Limited Q3 and nine months FY23 earnings conference call. This conference call may contain forward-looking statements about the company that are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all lines of clients 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 0 on your telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. N. G. Subramanian, Group CFO. Thank you. Over to you, sir. Thank you. Good afternoon and a very warm welcome to everyone present on the call. Along with me, I have Mr. Mahendra Ananthula, our Group President, Operations, Business Development and Diversification, and SGA, our investor relations advisors. Our investor presentation is now available on the stock exchanges and also on the company's website. First, I would like to provide some business update. The essential nature of our service, our diverse customer base and recurring revenue streams provide stability to the business. Over a period of time, this has also proved right and comfortable for us. A word on the macro aspect. Keeping pace with the green energy focus of the world and reducing its carbon intensity, India has planned big for the green energy sector in its national budget. The government announced a slew of measures for the initiatives related to the green fuels, coming green mobility, green buildings and even green equipment. The budget further provides for India's government to provide incentives to urban civic bodies to improve their finances and creditworthiness and help them raise funds through municipal bonds. Attempts through property tax, governance reforms and ring-fencing user charges on urban infrastructure will enable cities to improve their creditworthiness for municipal bonds. These are very good positive news for the sector at large. Since India has an ongoing G20 presidency, its focus on these parameters bodes well for us. On the quarter's performance, the nature of our services and our diverse customer base has helped us to provide a stable revenue line, and this is reflected in the company's reporting a year-on-year 6% growth in its operating revenue at INR 158 crores in the third quarter. This growth being driven partly by organic volumes growth in waste processing, along with the steady state of operations in our CNG operations and also aided to some extent by the new Nashik CNG project, which started operations in December 2022. On the MSW CNG project side, we currently have 16 ongoing projects. The CNG business volumes remain flat on a year-on-year basis at 0.4 million tons in third quarter. As mentioned earlier, our new Nashik CNG has started operations in December 2022. This will add to the volumes growth going forward. Coming to the MSW processing side, the total tonnage processed during the quarter increased by 7% to 0.64 million tons at our MSW processing projects, which include at Kanjur, Pimpri Chinchwad, and the Rajanjada Biomining project. An update on the waste to energy plant at Pimpri Chinchwad, the project is on track, and we expect the operations to start in Q1 of the next financial year. We would also like to address the key point which has underlined this quarter's performance. As you are aware, we work with a lot of municipalities and government agencies in over 14 municipalities to provide integrated solid waste management solutions. This sometimes increases our receivables challenges. The company, under the guidance of its board, has initiated a process of creating a receivable reserve to reflect the nature of our business, which is aimed at providing comfort to the balance sheets and some cushion thereof. We have initiated this process by creating a reserve of INR 14.2 crores in the quarter. As we go along, we hope to refine this receivable reserve calculation based on historical track record of managing receivables and adopting a credit default study in this limited space. On a reported basis, the EBITDA is down at 15.4% margin as compared to 21.9% for the same period last year. On an adjusted front, which is considering only core revenues and excluding impact adjustments and this expected trade block provisioning, the Adjusted EBITDA for the quarter would have been 24.8% as compared to 26.3%, reflecting an almost steady run margin trend. For more color and on the operations and business outlook, let me invite Mahendra to take over. Mahendra has over 30 years of experience in the urban infrastructure and waste management sector, with extensive experience in the areas of corporate strategy, project development, sales, and consulting the waste and water, urban infrastructure. Prior to Antony, he was with SUEZ, where he had played a strong role in the development of the company's operations. Traditionally, it was purely focused on metropolitan cities. It is now diversified geographically and works also in tier one and tier two cities in India. Thank you, AJ, for the introduction. Good afternoon to all. At Antony Waste, the business and strategy have been to be the best in CNG and MSW processing sections. This is exactly what is reflected in the steady growth of our operations over the years. Not to talk about the various contracts that the company has bagged in the due course. Going forward as well, Antony Waste intends to achieve high level of tech clarity in waste management and create a strong, sustainable model. The company is also evaluating strategies to de-risk the business by adding more non-municipal revenue streams. For achieving this, the company has created a strong team to explore the ancillary waste management businesses like the one which the company has bagged recently, in fact last week, namely the processing of construction and demolition waste in Mumbai city. This is a new business segment that we have added in our portfolio. We are happy to let you all know about the details of the significant order, which includes collection, transportation, processing, and disposal of construction and demolition waste in Mumbai city of 600 tons per day. This 20-year concession contract with BMC is worth INR 1,024 crores. That's little over INR 1,000 crores over the 20-year concession period. The sustainable material recovery approach is planned to be used here. It identifies specific C&D materials as commodities that can be reused in new construction projects. This is our first order in this category, and that's why it's a big breakthrough for us. That said, such repeat or multiple orders are testimony to the confidence our clients have in us. We have a head start because we are an integrated solid waste management company and building a strong track record for the future. Our endeavor to implement a circular economy-based process will continue with our emphasis on increasing our sale of RDF, compost, concrete, sand aggregate, and so on and so forth. Talking a bit more about the circular economy and creating sustainable living conditions for the citizens in the cities that we operate, we started a recycling business in Varanasi from the waste collected there since last one quarter. In this third quarter of the year, the recycling activity has been going well, and the company has effectively recycled about 100 tons at its Varanasi site, preventing this waste from ending up in a local landfill. This is over and above our scope defined by the Nagar Nigam, and we are very pleased with the rate at which the project is progressing. We intend to do similar projects in all cities where the company has C&D operations. Keeping with our cluster-focused business approach, the company bagged a seven-year mechanical power sweeping contract from the Sriperumbudur Town Panchayat, a city where we already have an ongoing waste to energy and a collection transportation contract. In this power sweeping contract calls for the supply of four power sweeping machines and the daily maintenance of about 150 km of road length. During the quarter, the biomining activities at our Kanjurmarg integrated waste processing site have progressed very well. Due to the high calorific value of our RDF, demands have been strong, resulting in record RDF sales of over 15,000 tons during the quarter. This trend is looking up based on the response we are getting from our clients. Turning to more of the financial aspects, I will ask Anju to take over from here. Anju, over to you. Thanks, Manisha. Let me share the highlights of our financial performance. For the 3rd quarter of the financial year ending March 2023, the performance on a consolidated basis, the operating revenue front, the revenue has increased by 6% to INR 158 crores as against INR 148 crores in the same period last year. For the 9-month period, the operating revenue stands at INR 474 crores, up 12% on a YOY basis as against INR 422 crores for the same period last year. Increased volumes in both processing and C&D services as well as price escalations has helped drive the part of the increase in core revenue. As mentioned earlier, our Nashik C&D project has contributed only for 1 month of the last quarter. On the consolidated EBITDA front, the company has registered a degrowth of 5% to INR 34 crores in Q3 FY23 compared to INR 36 crores in Q3 FY22, with an EBITDA margin being 15.4%. As mentioned at the beginning of the call, if I were to look at Adjusted core EBITDA, which is excluding interest and ECL provisioning, consolidated EBITDA would stand at 24.8% and compares against 26.3% for the same period last year. In absolute terms, the Adjusted core EBITDA would have been INR 44 crores as compared to INR 42 crores in Q3 FY22. For the nine-month period ending December 2022, the consolidated EBITDA has registered a growth of 7% to INR 129 crores compared to INR 120 crores for the same period last year. The profit before taxes for the quarter stood at INR 19 crores as against INR 23 crores same period last year. For nine months it was INR 84 crores versus INR 79 crores for the same period last year. Profit after taxes is at INR 16 versus INR 19. For the nine-month period it's INR 22 versus INR 65. On the balance sheet side, our net debt to equity as of 31st December 2022 was maintained at 0.4x. The total debt as of 31st December 2022 stood at INR 342 crores, and net debt is at INR 254 crores. The average consolidated borrowing cost for the company for the period ending December 2022 stands at 9.7%. Receivable days as of December 31 stands at 61 days, which if adjusted for the ECL provisioning would still be around 66 days, still better on a sequential basis. That's from our end. Now we can open the floor for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Request you to use handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one. First question is from the line of Faisal Hawa from H.G. Hawa & Co. Please go ahead. Sir, am I to understand that this INR 13 crore-INR 15 crore other expenses increase is due to a provisioning that we have better, which may default in future? Is this the right way to do understand and, you know, we have already, you know, we have lost the money and it will not be coming. Just one second, sir. In this construction of testing, contract that we have, do you see a possibility of also, processing the materials that we collect as waste and, you know, making some, end products out of it? If, if yes, what is the revenue potential for those end products? Third is what, you know, the Union's Finance Minister, Nirmala Sitharaman mentioned a cheaper point of response about Bombay's high FUIs because of the waste at the, you know, the methane gas being released from the dumping yard. This may become a very big issue in the future. How is this company, you know, addressing it so that, you know, before it becomes a large press issue, you know, we are able to process this methane gas and also the waste, you know, on a very proactive before something untoward also will happen. Fourthly, sir, where do we stand on the vehicle scrapping policy? It's completed the budget for us and do we are we going to now go forward with it? Thank you, Mr. Hawa. Let me take the first part, and then I can, then Mahendra can step in for the balance three points. Given the nature of our work, which slow is essential in nature, there is always a time delay in realizing the funds from few of our clients. The company has, after a detailed internal due diligence, initiated a process for creating a receivables reserve, which is in the nature of expected credit loss, aimed at providing for probable delays in receivables. What we are saying is this INR 14.2 crores is not a write-off, it's just a conservative approach of provisioning this money. The reason that has led to us arriving this number is primarily due to factors like, delay in getting work orders, delay in getting approvals for the work order, delays in getting interdepartmental approvals for bill processing and release of funds from pre-agreed sort of central channels. These are factors which is beyond the company's control, stuck in bureaucratic timelines. The company has actually gone ahead and kind of factored this. There's a time delay of releasing the funds, so let us make a provision. These are not write-offs. Let me repeat that. These are basically, I was expecting funds to be released in a particular time zone. This is now getting stretched out, so that is why I'm making a provision. These are not write-offs, and we expect to realize this in the forthcoming, in the forthcoming time. On the other points. On the other point, Mr. Hawa, you asked about the C&D contract. The revenue that we talked about 1,000 odd crores, is only from the tipping fees that we are supposed to get from the clients. The revenue from the sale, of course, to answer your question directly, I mean, yes, the project is about collection and transportation of C&D waste, plus processing into saleable products like sand aggregates, paver blocks, concrete and so on. The 1,000 odd crores is only from the tipping fees. The revenue from the processing fee, processing of the thing is something that is going to be an upside. Okay. What will be the revenue that we are expecting in processing this waste? Yeah. This is what, yeah. We have done a recent study in of this segment. What we have figured out is that this is a new segment that we are trying to create. As of now, we feel in the coming year, in the next one or two years, the revenue from this should be about add to another maybe 10 odd%. Although going forward, the future is very bright. In the next one or two years, you can expect about 10% additional revenue from this end product sale. 10% of the total turnover, finally? For example, let's say in a particular year, our revenue from tipping fees is INR 100 crores, so we can get maybe another INR 10 crores from sale of end products, processing. That, INR 10 crores would be very marginal feedback. It is marginal. That's what I started by saying, it's marginal for the time being, but the demand is picking up and going forward, we expect it to go up. I mean, today we cannot give you a number in terms of how it will be, how much will it be in the next five years. In the next one or two years, we expect definitely more than 10%. Additional 10% from what we have reported. Our feasibility of the project when we bid also is only on the basis of revenue from processing fee. That's purely an upside. Okay. On your question of vehicle scrapping business, I mean, that's a very interesting question. I mean, this is something which is a subject which is very close to our heart. We have made decent progress, and by the end of this financial year, definitely we should be in a very, very advanced stage of announcing to the market about our first vehicle scrapping facility. The revenue from which we expect to accrue from FY25 onwards. We will announce in the next financial year and. Yeah. This financial year. Let's say by in a year from now, which is maybe January, February 2024, we'll be announcing our plan. We'll be implementing it, followed by revenue accrual from maybe March, maybe June or July of FY 2024. About my question of, you know, the waste and the methane that really affected the PTI of the city. My pointed question is that, you know, if God forbid any untoward incident happens and, you know, then we get blamed for it, you know, it could put the entire business at risk. You know, are we taking any, you know, precautions to really address this, you know, before anything of, you know, press coverage or negative feedback comes in? Misha, how are the landfill that we operate, which is basically the Kanjur facility, we have a mechanism wherein we extract the methane and we generate power out of it. The buildup of methane and that leading to the event that we have seen in Deonar is not a possibility at our site. Problem lies with other landfills which are not treated. They are actually dumping grounds. What you are saying is very true, in the sites that is controlled and operated by Antony Waste Group, this is not an issue because we are tapping the methane, we are extracting it, and we are generating power out of the same. Okay. Thank you a lot, sir. I think it makes sense as well. Yeah. Thanks. Thank you. The next question is from the line of Neerav Dalal from Maybank IBG Research. Please go ahead. Thank you for the opportunity. A couple of questions. First, on the construction and demolition waste contract. I missed that. Dalal, sorry. Yeah. Now is it visible? Yes, sir. Yeah. Okay. This is regarding the C&D waste from Mumbai city for 600 tons per day. Just wanted to understand how will be the revenue trajectory of this? We talked about INR 1,146 crores over three years, so would it be equal or I believe this would be based on the tonnage that you pick up every day. If some information in terms of how the revenue recognition here will happen. A related question would be what are the CapEx requirements for this contract? Going ahead as we look at processing of this waste, what are the CapEx requirements here? Where will it be done and things on that? Right. Thank you for your question. As for the C&D, the investment is for this project, the CapEx requirement for this project is about INR 60 odd crores, which is what we'll be doing for both the components, C&D module as well as the processing plant. Both of that we'll be implementing in the year 1 itself. Okay. Okay? As far as the revenue is concerned, as I explained earlier, that the primary revenue stream for us, is the tipping fees. 600 tons per day times the tipping rate is what will be the revenue. As per the contract, we are entitled for a annual escalation. Okay. This will further will increase the future revenue. One is the organic growth of the ton fee, the tonnage, and the escalated tipping fees. Yeah. Just speaking to this, the 600 tons would be optimum waste that we would be carrying, right? It will be gradual over the period. 600 TPD is actually the client's estimate as per the tender and even the small desktop study that we did at the time of bidding. I mean, we have no reasons to believe that it will be significantly higher or lower than 600 TPD. For the time being, we can continue with 600 TPD as a number to assume our future revenue predictions for year 1. Correct. The revenues would start coming from next year? How should one look at from the April, June quarters, or how should one look at this? Nirav, we have a mobilization period of 12 months, one. And second is, the construction debris activity normally is seasonal in nature. During the months of monsoon, the C&D activity kind of drops, and then it picks up during the festival season and the dry season. This 600 TPD is an approximate number over a period of time, one, for the financial year, for example, 12 months period. Secondly, the tender also allows us to plan for a 20%-25% excess to be managed. The facility would be in place to process 600 tons per day plus 25%. The daily tonnage will swing depending upon the market conditions and the seasonal factors. Correct. Just very quickly on staying on this. The builders or the sites, so you would be contacting them or how will this work? Because there'll be multiple sites across. Normally what happens in this section is each local ward officer. When a building is getting redeveloped or anything, they need to get the local ward office approval. That's how the process of flow of information will happen, wherein a particular ward, the ward officer in charge of redevelopment. The builder gets in touch with such people, and they kind of make an estimate of the total tonnages that's likely to come, and they make the builder get in touch with us, and we are supposed to pick up the waste, weigh it at the weighbridge, and give a certificate that this is the tonnage that has been shipped from that particular site. That's how he clears his dues, he clears his responsibility. Is there any, what do you say, any excess or deficiency he needs to answer to the corporation, based on the estimates? Got that. Got that. Just generally in terms of the contracting, how is the visibility that you have? What are the number of contracts that you have bid for? In the C&T, what more are you looking at? Are there other regions where such similar contracts are coming out? I mean, there are. I mean, there are a few projects in the pipeline. I mean, nothing. I mean, they're still in the drawing board stage in a lot of cities, Most of the metropolitan cities are the first one to be off the block. I mean, they are submitting tenders. Focus on the C&T, but, generally in terms of our C&T business. For the C&T business, I mean, you know, notably I would point out, two specific tenders which are, you know, some of our tenders are coming to an end. Those definitely are going to come up. Those are the ones which are our first priority in terms of focus areas. Apart from that, there are a few more cities, especially, in the south zone that we are trying to target. Got it. Today we cannot talk about specific cities, but, I mean, broadly I can say something in the south zone is something promising. Got it. Got it. I will come back in the Q&A if I have more questions. Thank you. Thank you. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors. Please go ahead. Yeah, good evening and thanks for the opportunity. Sir, I have a question on our slide number 22 of the presentation. Just wanted to understand about the accounting. If I go on to slide 22, the current quarter, EBITDA you have mentioned is around INR 34.3 crore. If I add back the provisions which we have done is INR 14 crore, so the EBITDA could be INR 48 crore. Our core EBITDA is INR 30 crore. Is my understanding right that the project business has the EBITDA of INR 18.6 crore? No. The enhanced accounting part, the contract and others also includes revenue from power sweeping and sale of RDF and scrap over there. This would not be the right way of looking at it because that's a decent amount of money sitting there. I would say of the contract and others of INR 64.6 crores of revenue, around INR 48 crores would be my contract revenue purely. The balance being my sale of RDF, sale of compost and sale of scrap and revenue from my power sweeping contracts. Okay. similarly for the nine months, how much it would be out of INR 192 crore? I would say there would be around INR 168 crores would be my contract revenue, sir. INR 168 crore. Okay. For nine months, there would be an EBITDA of around INR 30 crore from the project. Yeah, for nine months, yes, because the EBITDA margin in my project revenue is basically a book entry that we have, which is calculated as a project IRR of around 10.2%. It's just a number that we plug in based on the CapEx that we have done for the Pimpri-Chinchwad and the Kanjur projects. Okay. Just to understand, so let's say once this project starts, from next year onwards, let's say the project revenue which will not be there. Right. This INR 30 crore EBITDA will no longer be there from next year. Correct. What happens is that, from the contract section, the revenue goes up, the project expenses also goes up. Second is you'll see the revenue from core operations starting, that will add to my MSW processing line item. What you see at INR 129.7 crores, that will increase by the processing component which is going to come from those sites. Okay. Okay. Just to understand, currently we have 4 projects I think which are going to come up. one is PCMC. Nashik has already started. Something in Kanjurmarg and NDMC and PCMC also, right? Sorry. Can you repeat that question, please? I think 4 new projects are going to give us the revenue from, let's say this quarter or next year. one is PCMC, Pimpri-Chinchwad. The 2 is Nashik, which already has started. Something is going to come from NDMC and Kanjurmarg as well. The first three points are right. We have incremental revenue coming from Nashik. The incremental revenue from PCMC is waste to energy in the next year. The NDMC contract will be ramped up completely, which is actually ramped up from February 15th onwards. We should be having that completely in our place. The Kanjur facility would be part of my enhanced processing of fresh waste. It's an ongoing project that's not only incremental revenue significantly from my tipping fee section, but there will be incremental sale of RDF and compost. Having said that, these sale of byproducts, they don't enjoy the same margins that I have in my processing side. Okay. Can you just give me the, let's say once all these projects start, the annual revenue potential from PCMC, Nashik and NDMC? We normally don't comment about site-specific numbers, but it will be fair to assume that the Annualized number on a steady state of affairs based on budgetary allocation from the corporations, we will be looking at around INR 80-95 crores annualized contribution comfortably. I mean, I'm not even including NMMCs at 100% scheme. 100 NMMC starts that itself will contribute around INR 95 crores of revenue. We should be knocking up around INR 130-140 crores of revenue on that side. These are conservative numbers over here. Okay. just to conclude. MASIC has already started. PCMC, you said from Q1 FY24. NMMC from when? NMMC should start from February. We already scaled up our entire site. We are pending confirmation from the client to confirm the same. Once that is done, we will have 100% sign-off on that part. Your Kanjurmarg will have incremental revenue from sale of RDF and compost. These are all seasonal e-elements, so that will come in as and when it comes. Now, one more question on the, this PCMC project, Pune, project. I was just going through our past con calls. Just to understand, the CapEx for this Pune project is INR 250 crore, of which, approx INR 50 crore we will be getting the grant and, INR 110 crore we will be seeking debt, and let's say INR 40-50 crore would be through internal accruals. It was mentioned that this can generate INR 65 crore of peak revenue top line. If I assume, let's say 40% EBITDA margin also, then it's around INR 25 crore EBITDA with, you know, around INR 10 crore of amortization and INR 10 crore of interest, then we will be hardly earning like INR four-five crore. The ROE will be in the single digit in this project. Is it a fair understanding? Mr. Doshi, there are two assumptions that can improve on the current. The numbers that you're saying is based on very conservative system. Antony has never executed a waste to energy project in its lifetime, so we have been very conservative and trying to be safe so that we at least cover our base numbers and cost. One. Second is the PLFs that we have assumed when we are arriving at the revenue line is around 75%, PLF. Going by the track record that we have seen in similar plants set up by Hitachi, it can be as high as 85%, and it can even touch 95% during the parts of the project life. Third, more importantly, there is also a de-linking component which is linked to the escalation. If, over the last 2 years, we have seen a significant spike in the cost of fuel and labor cost. That will also add to our top line EBITDA. These are the 3 positive factors which can improve the return dynamics. Yes, point is, why did we bid so competitively is something that we wanted to work with a client who is strong, who pays you on time. The revenue is ring-fenced. My exposure to the state electricity boards are 0. My client pays me, which is Pimpri-Chinchwad Municipal Corporation pays my revenue. These are the conditions that we've taken forward. The CapEx is something which we didn't negotiate and compromise on, so we went with Hitachi Zosen and ECEG. We are paying top dollar for the CapEx. The return that you are saying is for not taking any risk here. Going forward, this will improve when we are able to indigenize certain parts of the construction and we are able to understand the dynamics of running a waste to energy plant. Today, we don't want to compromise on quality and on serviceability, and we don't want to take chances here. These are the numbers that is what we have on the drawing book today. We will revisit this once the plant starts. Okay. Just last one more question. After this provision, how much would be currently more than one-year-old receivables? I think currently more than one-year-old receivables would be less than around INR 40 odd crores. These are all due as and when the project closure happens. The rendering terms clearly state there is a retention money which is retained by the client and released at the end of the project life. Those would be more than 1 years, which is the case with most of our contracts in this scenario. Let's say out of INR 40 crore, if we exclude the retention money, then the disputed amount or the delayed payment- That is just INR eight crores. INR eight crore? Yeah. Okay. Okay. That's it from my side. Thanks. Next question is from the line of Manav Vijay from Deep Financial Consultants. Please go ahead. Yes. thank you very much, sir. Sir, first of all, on the provision that we have made of around, INR 14 crores or so, if you can tell us, in our history so far, how much amount we have written off? We have not written off any money historically. These are the dues which is delayed for us because there are change in the administrator. In most of the corporations, let it be the BMC, Nagpur, Pimpri-Chinchwad or even Navi Mumbai, Thane, for example, Delhi, I mean, we don't have standing committees at these places which can pass the budgetary approval, which can vote on these norms. There is a delay because the very structure of organization is not there. Unless and until the standing committee is elected and they are able to vote and pass the budgetary spend, these things are getting delayed. That is the reason why we have taken a provision. We have not taken any write-offs. These are getting delayed for factors which neither the people in control of the corporation are able to do it, nor is the company able to swing it because the people who are supposed to approve these documents are not in place. Okay. going forward, should we factor in any more, provisions or this is, or should we consider this INR 14 crores as one-off? This was discussed in our board multiple times to have a methodology to approve this expected credit loss, as you call it. I mean, in the past we were very client-specific, very project-specific, but that is not the right way when you're looking at multiple clients. We have around 19 municipal corporations that we work. We need to adopt a methodology. We are looking at an actuarial study to be done in this aspect, especially in the absence of a probability of default risk of municipalities in this area. We are not able to come out with a clear plan, but we are reaching out to experts who can quantify this. Maybe a% or a half a% of the revenue should be set aside. That is something that we are talking about. How to arrive at that ratio is something that we are looking at experts to provide that data to us. What we understand today is based on our reading, this delay is a one-time thing. Never in the history of a BMC, for example, in the last 180 years of its existence, has the budget been passed by the administrator alone. This is only twice in its history that happened. I mean, similarly, these kind of events we don't expect to repeat frequently. We believe this could be a one-off thing, but we will keep revisiting this, whether we need to rationalize this, whether we need to quantify this, whether we need to have a study to prove this and have a methodology to support us. Moving to the next question of basically this new project that we have got of C&D. Now the processing of this waste will be happening at the Kanjurmarg or the BMC is going to give you another piece of land for this? This is not at Kanjurmarg. This is going to be a different site. This is entirely in the western zone. We will be locating a space in the western zone, the western suburb area, wherein this processing will be taken care of. It will be away from the residential zones. Okay. Okay. When basically BMC released this contract, was it only one three-month contract of 600 TPD or there were actually multiple contracts and you, I think Antony got only one contract. There were two packages. One was for the western suburbs, the other one was for the eastern suburbs. We bid for both. We won the western suburbs. There were 2 packages for the contract. Possible to share who got the eastern suburb project? I'm sorry? Possible to share the name of the company for eastern zone project? Metro waste. It's a Pune-based company called Metro waste. Okay. Okay. Fair enough. my next question is, sir, on the NDMC project that we had won last year? Now you just mentioned from the month of February, I would say from this month only, the full ramp up will happen. and it was close to, I mean, a INR 1,000 crore project for a 10-year. From quarter 1 onwards or let's say for FY24, we should be under revenue of around INR 95-100 crores? Yeah. That will be a safe assumption because part of the CapEx was supposed to be procured by the corporation and handed over to us. There was a time delay over that part. Once, the entire asset has been given, we have also built our required asset base. We have already communicated to the client that these are in place, so please allow us to plant the COD. We believe we should be in a position to ramp up the entire facility officially from the month of February onwards. Okay. The last question to you, sir. Every con call we talk about almost a 25, 22-25% kind of a sales growth every year. The variation in the contract can certainly happen. This year in nine months we are running very low in terms of the sales growth. I think we have some five, 6% kind of a growth is what we have been able to do ex of the, ex of the contract revenue. You believe that Q4 you will be in a position to catch up or you will fall short? We never told that we will be growing at 25% year on year every year. We told about 25% CAGR growth because the nature of business that we are, the growth is lumpy. For the 9-month period, I mean, we are already reporting a core revenue growth of 12%. It's not 8% or less than that, one. Second is, over the last three quarters the company has been bagging contracts, let it be the power sweeping contracts in Pimpri-Chinchwad or the Nagpur and now the C&D contract. The company has been bagging contracts. Now, the nature of business is it takes us almost six-nine months or even one year to mobilize the asset and start reporting the revenue. The time of bagging the contract or signing an LOA and the revenue recognition is a time part of it. We are still confident of reporting a CAGR growth of 25% over three-four years. It is not going to happen 25% year- on- year. It will be a lumpy growth, it will be a staggered growth, it will be more of a step-up growth. It's not a linear growth for us. I think you should probably look at the way the EPC companies or the construction companies, I mean, work there. I mean, they are dependent on the government tenders, there are many years when there are hardly any tenders. Then there comes a time when the market is full of tenders. The EPC companies win a lot of contracts and which has a cascading effect on the future revenue in few years down the line when they start including those contracts. We are in a similar business. I mean, dependent on the government for the tenders, because of the multiple reasons which you are probably aware of. I mean, projects often get delayed, but sooner or later they happen. That's how our growth is never a smooth curve. Sure. Thank you, and all the best, sir. Thank you very much. Thank you. The next question is from the line of Richard D'Souza from SJM Mutual Fund. Please go ahead. Yeah, good afternoon. Good afternoon, Richard. Am I audible? Yeah, yeah. Slightly muted. Sir, your audio is slightly muffled. Please use the handset mode. just a minute. Is this better? Please go ahead. Hello. Hi, Richard. Yeah, hi. Just couple of questions from my side. One is you were talking about provisions for, of about INR 14 crores. Just a book-keeping question, what was the exact provision for the quarter, sir? You're mentioning it both for, 15, 14 and for the quarter and the nine months. The entire amount of INR 14.2 is for Q3, Richard. It's not over Q1 and Q2 and Q3. It's only for Q3. Okay. It's only for Q3. Your statement in the presentation was saying it was for Q3 and for nine months. I thought, you know, this 14 was for nine months kind of a thing. Yeah. Even if we strip that off and, you know, calculate your core operating margins, your core operating margins seem to be under pressure. Now, why is that the case while your revenues have been growing at a handsome clip, but your margins seem to be under pressure? Two factors that has led to that, Richard. There's a margin fall year-on-year basis on core operating section by around 160 odd bits. The two factors being higher transportation costs associated with shipment of RDF from our Kanjur site. Second is we have kind of written off all our start-up expenses at the Nashik project. The Nashik project started in the last month of the third quarter. Instead of capitalizing and trying to make it like a deferred revenue expenditure, we kind of wrote it off completely. Most of the cement companies are almost 400-800 km away from the Kanjur site. The initial part of the RDF sale, the transportation has a higher chunk of the cost. It's been a neutral to a negative EBITDA business in the past, but things are improving now. Also because especially for the RDF business, I mean, we are in the growth phase. We are actually trying to make sure the cement companies actually get used to our RDF and switch over from traditional coal to RDF on sustainable basis. This has been especially this year, has been the phase for... and probably even next year, we'll have to spend a lot of time and energy and patience on acquiring customers. Yeah. Just to double-check with you, I mean, RDF as an alternative fuel for cement companies seems to be quite profitable for them because the energy costs have gone up quite a bit. What you're saying is that they're not willing to bear the increased transportation costs or anything like that. It is beneficial for them. I mean, you know, that's true. I mean, you know, the cost of coal definitely has gone up and so on. What it so happened that the cement companies are very, very tough guys to negotiate with. While they are, you know, so while they are negotiating with us, they are negotiating hard. Okay? They're not easy to give us a top, a high rate just because the top, the coal prices have gone up. It's a never-ending battle. We will continue to. The good thing is that as compared to last year, our realization, net realization per ton of RDF has gone up significantly. That's a positive sign. Yeah. To add to that, Richard, historically what has happened is the cement companies were receiving RDF, which was more like a wet mixed garbage, which has not gone well with most of the cement companies. They're very skeptical about the quality and the sustainability of the supply of RDF. That has been one of their main concerns in the past, which we over the last two quarters, three quarters, have been able to address them by consistently supplying them well-shredded and relatively less damp RDF, which is what has been a positive for us. As Mahendra was saying, from a significant negative zone, we are now not only in the neutral but in a positive zone when it comes to pricing for the company. Yes. also to add, so that, so one of the things that we are now talking to cement companies about is to Benchmark the characteristic value of RDF vis-a-vis the coal. On a thermal equivalent, we are trying to price our product on thermal equivalent basis. That's the strategy that we want to adapt and adopt, and, you know, going forward. Okay. Just to break this 160 bits further, I mean, what would you attribute it to this increased transportation cost and what would be the write-off of start-up expenses? I would say bulk of this impact would be my transportation cost because I have actually could be around more than INR 150, this would be my impact from transportation. The start-up cost of Nashik, it's not as significant as my transportation cost. The third quarter we saw is record shipment of RDF, which we couldn't budget in our plan. We couldn't have tie-ups with the appropriate logistics and to supply 15,000 tons so that we could benefit from the pricing. Okay. Okay. Okay. One last question from me. You know, there have been talks basically, of, some large contracts being coming up somewhere in, Delhi region, in Ghaziabad and other, places where there's a methane emissions and all that, and the existing contract, was, I mean, it has ended. Any news on those particular contracts or, are they up for bidding because with the, Delhi elections, municipality elections being over, are they again up for bids or, there is still some time? Not yet, because if you, you probably are aware that MCD had a change, I mean, in terms of, you know, earlier there were 3 different corporations. The unification of the 3 different corporations to 1 common MCD is something which happened, middle of last year or middle of this year, six months ago or so. Came the Delhi elections, in which there is a significant change of guard. The project is still in the drawing board stage, and they have not yet come up. We are following that project closely. As and when it comes up, we'll be one of the senior bidders. Okay. Okay. Okay. Thanks a lot, and all the best for the future. Yeah. Yeah. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all participants in the conference, please limit your questions to two per participant. If you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Ravi Lotha from Agarwal Investments. Please go ahead. Hello? Hello? Yes, sir. You're on. Yes, sir. sir, I want to know, last quarter nearly 10,000 of RDF, and this quarter nearly 15,000 tons of RDF is there. What will be the future capacity, which your company want to ensure? Okay. Okay. Okay. Yes. You know, for us, production of RDF is not the problem because we definitely can produce as much RDF as possible as the demand persists. What I mean is the supply is not the constraint. We are very optimistic that in the next financial year we will at least double the sales of RDF quantity. Okay, sir. Sir, in the last con call, during the Q2, you mentioned that, CWIP is due to the Nashik project equipment purchase. It is not giving to the transfer to the corporation, right? It is to be included in asset. Is my understanding correct? Sorry, which project are we talking about? Nashik project. Nashik, the assets belongs to the company. We don't have to transfer it to the client here. These are the assets completely belong to the company's book. They will be sitting in your plant and machinery system. Sir, earlier you told that, this is actually included in CWIP. It is to be converted into asset and machinery? Yes. This will be converted into assets, in my books of account. Because we started putting them to use from December, so the balance sheet as of 31st of December onwards, the CWIP will flip into plant and machinery. Okay. Okay. Okay. I got it. Thank you, sir. Sir, one last question. If you can give EBITDA margin of each segment in presentation, this will be quite useful for us. I appreciate that, Mr. Lotha, this is slightly commercial, importance for us, and it's something that we, hold on to it. We will not be able to disclose segment-wise, EBITDA margins. Thank you. Mr. Lotha, may we request that you return to the question queue for follow-up questions? I'll take the next question from the line of Bhagwat from Prosperity Wealth Management. Please go ahead. Good afternoon, sir. The question is regarding the income tax demand order received during this quarter. What is the amount of total demand as per the order, and what is the estimate of the same? Yeah. We got an assessment order of done for FY2021, where the total dues payable by the company was around INR 12.6 lakhs. The same has been paid under duress, and the same has been disputed. In the same, the CAT appeals. The total amount demanded and paid is INR 12.68 lakhs for the year. We have not yet received any other assessment orders over any other previous years from the Income Tax Authority till now. Okay. Sir, demand is INR 12.6 lakhs, you are stressing about? Yes. Okay. fine, sir. That's it. Thank you, sir. Yeah. Thank you. The next question is from the line of Ketan Shah, retail investor. Please go ahead. Hi, from the business updates that you share normally on a quarterly basis, we see that in the past 5 to 6 quarters, there is no increase in the volumes of C&D as well as the investment projects. Could you please elaborate on this, you know, why is there no increase in these numbers? What has happened is over the last couple of quarters, the incremental business has been coming from sites like Varanasi and Jhansi, which are on door-to-door unit counts. The tonnage doesn't get reflected in the numbers. Despite the fact that you see the core operating revenue from C&D operations increasing, the tonnages doesn't go because we are billed not on tonnages on all our sites, only on few sites. The data which is auditable and that can be shared is only for those sites where our billing is on a tonnage basis. That is one of the reason why you see that the total tonnage information is almost flat trajectory despite the operating revenue from CAT increasing. We see unless and until the contract specifically tells us that bill me on a tonnage basis, I will be able to add that to my reporting number. Oh, okay. Okay. The second question is the EBITDA margin front, I know again there is a trend of the margins going down for the past three years. What is the expectation going forward? Should we look forward to increasing EBITDA margins in the future? Ketan, over the last 3 years, the proportion of revenue from contract, which has a lower margin business, has been increasing significantly. That is one of the key drag on my reported EBITDA margins. As and when the construction phase of my Pimpri Chinchwad waste to energy gets completed, I would only after that will I be able to see an upward swing on my margins happening because of the absence of this contract revenue, the same being reflected by increase in actual core processing revenues. That will be my tipping point, which will be in FY 24 onwards. Okay. Understood. Another question I had is, you know, from to one of the previous participants' questions on the new contracts, adding revenue. You mentioned that about INR 120 crores will be added. Is this number right? Yes, that is right over an annualized number. They will not come from Q3 or Q4. They will be an annualized number which can come either from Q1 end onwards or from Q2 onwards. My Pimpri Chinchwad, for example, it's we are commissioning end of Q1, it will not run at 70% or 80% PLF. We want to start it around 40% PLF, it's a ramp-up period. We'll not see the entire 100% of revenue recognition in the very first quarter from that particular site, for example. On a steady state of everything being normal, INR 160 crore of annualized revenue is what we can expect from these four contracts that we have bagged. Thank you, Mr. Shah. I'm going to request that you direct your question, okay, for follow-up questions. We'll take the next question from the line of Harshal Patel, retail investor. Please go ahead. Hi. This is Harshal Patel. Would like to understand why we are not presenting segment results. It's very difficult for all of us to understand from which segments we are getting how much margin. That is first question. Second question is. Sorry to interrupt you. Your audio is unclear from your line. Please use the- Yeah, just a minute, please. Hello? Yes, sir. Please go ahead. Yeah, yeah. I wanted to understand that why we are not presenting segment results because from each of the business we are getting different margins, right? As per the Indian Accounting Standard, we have to assess the segment from the perspective of Ind AS 108. First question is on that why we are not presenting segment-wise results, first thing. Second thing, why we are not disclose the amount of income tax demand into the results? That is the second question. Third question is on the accepted credit loss on disputed receivables. Because we have few disputed receivables. We are not making any adjustments towards the time value of money as per Ind AS 109. These are very specific craters which I would like for management to give some update to appropriate, you know, accounting recognition and measurement principles when they are publishing results. Thank you. Yeah. Going with your first question, we don't provide segmental information details for two things. One is the accounting standards clearly define municipal solid waste as a single section, so we don't have to provide any further breakup of the kind of work that we do. More importantly, this is of a very significantly competitive industry wherein if I were to give the Collection & Transportation and the waste processing business section margins openly, then my ability to bid for new contracts and everything will be very much challenged, and this is a public domain area, which is something that we would like to be governed against. That is something that we are looking forward very acutely. On the income tax question, sir, we have just reported the numbers that has been informed to us by the income tax authority. We have neither claimed nor sent orders nor any assessment orders saying that this is the expenses that is being doubted or asked for. As and when we get information from the authorities, the same will be disclosed in the numbers. Third, on the time value of the value or the receivable which is getting stuck or, we are getting hobbled because of the delayed payment, the management is of the view that we would start making an expected credit loss for now and also hire or appoint an actuary to help us identify the best way to go ahead and quantify this amount and have the same disclosure in the financials. We will definitely have that thing in our books, sir. To add to it, when we are presenting other expenses, can we have these two line items like the power into which is a major item of our other expenses, then expected credit loss or any other line item which are major portion. Most of the companies are giving the breakup of other expenses in certain line item. I would request management if they keep on putting more disclosure, then it is better for the you as well as for the investors to understand from the face of the results itself instead of having or keep on explaining over the call. Definitely. Point taken. We will check with our auditors and our systems whether the same thing can be disclosed. If there is anything which stops us from doing that, we'll have the same discussed and we'll have that thing put out either as a schedule or as an action. We'll check and get back to you on that. Thank you. Mr. Pujari, we request that to be the last question. Thank you for follow-up questions. We will take the next question from the line of Faisal Hawa from H.G. Hawa & Co. Please go ahead. Yeah. Do you have any estimate on what are the carbon credits that we have accrued so far in the last few financial year? What is our, you know, view on the carbon credits that is going to now accrue to us with various projects? Do we get any benefit or it will go directly to all the municipalities? Are we renegotiating contracts because these carbon credits will get very valuable? Surely, I mean, carbon credit definitely has come back, has made a comeback. In our Kanjur project, all the carbon credit revenue, if at all it comes, will be accrued to BMC. The only project where we have a substantial stake in the future carbon credit revenue is PCMC Waste to Energy plant, where 90% of the revenue will come to us and 10% will go to PCMC. That is something which will happen only after that project is commissioned. We have already started talking to a few companies to work with us on assessing this revenue. Sir, what are the number of, you know, can you give a quantum as to how many tenders we are now going to bid in the next 60 to seven months? The value of tenders that we are bidding for? I mean, if I had to give a broad number, I mean, you know, probably, 3 to 4 tenders is what we plan to do, especially large ones. I'm talking about only the large ones, I mean, not the medium ones. The real big ones, I mean, would be about 3 to 4 in the next, I would say three to four months. Other than that, we are also actively looking at some of the non-municipal revenue projects. You know, the kind, which Mr. Hawa mentioned about the auto the end-of-life vehicle scrapping facility. That is something which is like a merchant plant. We are currently focusing on some of these non-municipal initiatives. What is the kind of, you know, revenue that you would expect from this, you know, Bangalore, this south-based city which you mentioned? You know, could it be like, almost half the size of, the Mumbai Kanjurmarg, project that you're already having? Sorry, are you referring to the Bangalore project? You referred that there is a south based city contract which you may bag. Okay. It could be a very big one. Would it be commensurate to the Bombay Kanjurmarg project or it will be much smaller? This is actually a C&T contract. Simply speaking, you should not compare it with Kanjur facility, which is a processing facility. Yeah, significantly larger. This would be one of our larger projects. Do you see any type of potential in, you know, redeveloping landfill which is like a regular landfill and, you know, repurposing the land and somehow manage it can be reused again for residential, you know, which is also exactly a very big business. That's again a very interesting question. That's again a very interesting question. I mean, On top of the volume dumping yard being made into a race course. You know, those could be like very big contracts for us. Are we tying up with somebody internationally to, you know, develop this kind of facility? That's a very interesting question because this entire concept of bio-mining is, I mean, I would say the jury is still out whether it is feasible to do that on a sustainable basis in most of our larger cities or not. Having said this, we are very careful that whichever bio-mining project or so-called redevelopment of landfill project that we talk about, which we take up, we have to be very clear about the revenue model. I mean, our belief is that most of the projects, bio-mining projects, are not commercially viable. We are doing one such project in apart from the Kanjur project, we have one such project in Greater Noida. We decided to take that up only because it was financially viable. Even going forward, we will be taking up these bio-mining projects only if the tipping fee rate is viable and the revenue from sale of RDF makes business sense. Okay, thank you so much. Ladies and gentlemen, due to time constraints, we take that as the last question. I now hand the conference over to Mr. NG Subramanian for closing comments. Thank you. Over to you, sir. Thank you all for taking time out and attending this earnings call. We hope everything is we have tried to answer as much of your requirement. We remain confident that our long-term focus on our sustainable growth technology and enhancing focus on the circular economy, transforming our business through technology, and trying to use as much automation as possible to help us in meeting the changing needs of our clients, our customers, and the people that we work around with. I hope we have been able to address all of your queries. For further any information that you need, please try and get in touch either with me or with our investor relations advisors, Pratik or Jigar at Strategic Growth Advisors. Thank you. Thank you. Ladies and gentlemen, on behalf of Antony Waste Handling Cell Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.