Ladies and gentlemen, good day, and welcome to the Kalpataru Projects International Limited Q1 FY 2025 earnings conference call, hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors Limited. Thank you, and over to you, ma'am. Yeah, thanks, Steve. Good morning, everyone. A warm welcome to Kalpataru Projects International Limited Q1 FY 2025 earnings call. We have with us from the management, Mr. Manish Mohnot, Managing Director and CEO, Mr. S. K. Tripathi, Deputy Managing Director, Mr. Sanjay Dalmia, Executive Director, Mr. Amit Uplenchwar, Director of Group Strategy, and Mr. Ram Patodia, President, Finance and CFO. At this point, I'll hand over the floor to Mr. Mohnot for his initial remarks, post which we'll open up the floor for Q&A. Thank you, and over to you, sir. Thank you, Bhoomika. Just a quick correction in the opening speech. It is now Kalpataru Projects International Limited and not Kalpataru Power Transmission Limited. Bhoomika, you need to change your internal documentation also for that. Good morning, everyone, and thank you for joining us for our earnings call today. It's always a pleasure to connect with all of you. Let me first start with a quick update on the operating context before I get into more details on our performance for first quarter of 2025. We have delivered a noteworthy performance on the revenue front, with sustained earnings in the first quarter of 2025. As most of you are aware, that the first quarter of every fiscal generally has a typical seasonality of low labor availability and delayed collections. However, the severity this time was intense, given general elections, as most of the manpower did not return to the sites timely, leading to lower than expected growth. Secondly, delay in collections from state utilities on back of pending budgetary allocations in the water segment also impacted revenue and collections for water business. Starting July, we have started to see improvement in collections in the water business, and we expect further moderation in debt levels and normalization of working capital in coming months itself. On the brighter side, business visibility remains strong and back of rising demand for electricity, energy transition, and increased focus on infrastructure development. The recently announced union budget also reiterated the government's trust on capital expenditure and infrastructure. This is amply demonstrated from the fact that in first four months of FY 2025 itself, our order inflows, including L1 positions, have reached around INR 12,000 crores. More importantly, nearly 90% of the new orders secured, including the L1 in the recent past, are in Transmission & Distribution and Buildings & Factories businesses. These orders are bid and secured at better margins, which is in line with our focus to improve profitability going forward. Coming now to our performance for Q1. Our consolidated revenue is up by 8.2% to INR 4,587 crores. Four out of our six businesses have generated strong double-digit revenue growth, and particularly our flagship business, T&D, grew by 32% and B&F by 23% in first quarter of 2025. The growth is driven on back of excellent backlog and robust project execution capabilities. I will further detail on each of the segments as we move ahead. We highlighted earlier, we have started the year on a strong footing on the order inflows front. We have secured orders of over INR 7,000 crores till date in FY 2025, and additionally, have L1 of around INR 5,000 crores. Our order backlog is up 21% to INR 57,195 crores at the end of June 2024. Our consolidated EBITDA stands at INR 378 crores with a margin of 8.2%, while standalone EBITDA remains steady at INR 314 crores with a margin of 8.4%. The performance on the EBITDA front largely reflects the nature of the project mix and increased investments in resource augmentation. Additionally, as a part of financial prudence, we generally provide 1.5% of our revenue towards warranty guarantee provision. Starting this year, we've also got JMC business at same level as KPIL. This has led to increase in additional provision of INR 30 crores in Q1. The rise in finance cost is due to increase in working capital intensity and unrealized forex loss of approx INR 17 crores on foreign currency borrowings in our subsidiary in Brazil. Our net debt at standalone level is at INR 2,907 crores. As indicated earlier, working capital intensity started to moderate, and we remain committed to bring net working capital days in our EPC business from the current level of 124 days to below 100 days business by end of 2025. We believe a significant improvement would start from Q2 itself. In Q1 2025, consolidated PBT amounted to INR 137 crores and PAT at INR 84 crores. Similarly, standalone PBT stood at INR 164 crores and PAT at INR 117 crores. The PBT and PAT for Q1 2025 are in line with the revenue and operating trends. Our provision for taxation is at 28.7% in standalone business and 38.7% in consolidated business, which is slightly higher due to mix of revenue profit in international markets with higher tax and donations which are not tax deductible. Moving to segmental performance for the quarter. Firstly, in the T&D business, we have been stating since last few quarters that the outlook for T&D business remains very robust in India and globally, marked by rising demand for electricity, energy transition, and necessary improvements required in the grid infrastructure. Our tendering activity remains robust in India, Africa, Middle East, Americas, and Europe. Our T&D business secured orders totaling INR 3,377 crores, with an additional L1 position of INR 3,900 crores. We expect tendering and ordering momentum to remain strong for balance part of the year in this business. We continue to scale up our T&D business, both in terms of our global reach and capabilities in HVDC substation, design, and engineering, just to name a few. Notably, the new orders received in the last few quarters in the T&D business are at better margins, giving our focus to improve profitability of the business going forward. Our T&D business reported a strong growth of 32% YoY to reach INR 1,843 crores, on back of a solid order backlog in domestic and international markets. Our international subsidiary, LMG Sweden, reported highest quarterly revenue of INR 449 crores with a record all-time high order book of INR 3,076 crores. It also secured its largest ever order of INR 750 crores in Q1. In Brazil, Fasttel's performance has improved on the back of closure of legacy orders. It has reported revenues of INR 230 crores in Q1, with breakeven activity and had an order book of INR 1,200 crores. Our overall T&D order book is well diversified and stands at INR 20,635 crores as of June 30, 2024, providing good visibility for robust revenue growth in 2025 and for next few years. In our B&F business, revenue is up by 23% YoY to reach 1,226 crores. This growth is driven by strong order backlog and a healthy mix of projects. We continue to make good progress by improving our market position in large size EPC projects, and we have secured a large industrial and a prestigious high-end residential housing project this year. This advancement will greatly enhance our capabilities and provide us with good competitive edge going forward. Ordering activity in the B&F business remains robust, with order inflows of approximately INR 2,300 crores and an additional one of over INR 1,000 crores so far in FY 2025. We will continue to be selective for the orders that have better margin, that are lower on CapEx, and have better value addition. We anticipate our B&F business to maintain double-digit growth, supported by healthy order book and solid business visibility. Our water business reported a decline of 22% in revenue to reach INR 704 crores for Q1. As indicated earlier, the business was primarily impacted due to delays in collections from state utilities, given general elections and delay in budgetary allocations. Additionally, shortage of manpower also led to lower progress on several of our large projects. We have taken several initiatives to ramp up execution and improve availability of manpower. Further, collections have started to improve in the water business starting in July itself. With a robust order book of INR 9,800 crores, we are confident that growth momentum will pick up in coming quarters in this business. Additionally, the government thrust on improving drinking water, irrigation, and sanitation continues as the same, which was indicated in the recent budget, and we expect the business to continue its growth trajectory going forward. In our oil and gas business, we reported revenues of over INR 250 crores, with 18% YoY growth. This improvement is attributed to better project progress in domestic and international business. Our order book stands at over INR 8,700 crores as of June 30, 2024, in the oil and gas business. We have mobilized the required resources for the Aramco project and started with design and engineering activities. The progress on the project is expected to pick up in the coming quarters. We are looking to strategically scale up our oil and gas business, both in terms of our capabilities and market reach. In our urban infrastructure business, revenue reached over INR 180 crores, showing a YoY growth of 18%. The growth was slightly below expectations, mainly due to a manpower shortage. We are upgrading our capabilities and execution bandwidth in the urban infrastructure business and are confident that the business will deliver strong performance in the coming quarters. In the railway sector, revenue decreased to INR 242 crores, reflecting our focus on project completion and selective bidding in light of intense competition. We continue to focus on segments like composite rail projects, Metro Rail, RRTS, DFCC, et cetera, in the railway business. In our Road BOOT project, daily revenue increased to a record high of INR 63.6 lakh in Q1 2025, up from INR 61.7 lakh per day a year earlier and INR 60.3 lakh in the preceding quarter. Our combined investment in all three road SPVs stand at INR 7,790 crores, including INR 25 crores provided in Q1 2025, mainly towards debt repayment and major maintenance. We are at advanced stage of divestment of VEPL and are hopeful to complete the signing of the transaction this quarter. In closing, I would like to reiterate our guidance for FY 2025. First, a combination of well-diversified order book, execution expertise, and strong balance sheet gives us confidence to achieve our annual revenue growth guidance of 20%+. Second, business outlook and tendering activities remain robust. In this backdrop, KPIL is focused on orders that have better profitability and higher returns and enables us to improve our capabilities and competitive position. We are targeting order inflows of INR 22,000-INR 23,000 crores for full year 2025. The growth in the order inflows will be led primarily by the T&D and B&F business in the current year. Third, regarding margin guidance, let me reiterate that we expect margins to improve going forward. We believe our PBT margin to be in the range of 4.5%-5% for FY 2025. Lastly, the underlying strength of our balance, of our business model is based on profitable growth and maintaining a strong balance sheet. Going forward, our prime priority is to further strengthen our balance sheet through efficient working capital management, timely project closures, and divestment of non-core assets. We will continue to keep our debt levels aligned with business growth by targeting net working capital below 100 days and interest as a percentage of revenue at 2% on a standalone basis. Thank you for your attention. We can now begin taking questions. 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 your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Subhadip Mitra from Nuvama. Please go ahead. Good morning, and thank you for the opportunity. My question is with regard to the margins. While you have given us a guidance at the PBT level, where do you see your EBITDA margins stabilizing? And do you see a recovery from second quarter itself, or will it be more of a second half story? Good morning. I think on EBITDA margins, we believe we should be at the level of 8.5%-9%. But as I said earlier, we're more targeting the PBT guidance of 4.5%-5%. As far as recovery is concerned, we are seeing recovery coming in Q2 itself, primarily because, you know, collections have started coming in from some of the businesses, and interest costs have started going down, and that will help us achieve our PBT margins, what we have guided. So we should see some recovery in Q2, but a significant recovery should start coming from Q3 and Q4. Understood. Secondly, with regard to the promoter pledge, now that has inched up again. And, you know, we are all aware how this has been a bit of an overhang for the stock in the past. So is there something that we need to be aware about? Is there any pressure on the real estate business because of which this is moving up? And secondly, is there a targeted range where you expect this promoter pledge to be? So I think, you know, promoter pledge currently has not gone up, as compared to what we had seen in the past. From data which is in front of me, the promoter pledge is at 28.8% levels, lower than the 31.5%, which was on 31st March. The promoters have also repaid some of their loan against shares in the last, one month, you know, and, that was already notified by us to, the exchanges. Our understanding from promoters is that pledge will only continue to go down from here, right? And we're already at 28% level, so you should see it only going downwards, and there is no way it would increase at any cost. Understood. Understood. Thank you. That's it from my side. Thank you. Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Yeah, so hi, congratulations on a decent quarter. So you spoke about some of the one-off during this quarter. I think you said some additional provisioning and some donation. So if you can quantify what were the numbers above the EBITDA line? So, Parikshit, you know, Good morning. You are aware that, you know, we always provide at 1.5% as a provision for warranty guarantee for erstwhile KPTL business. We have slowly migrated the erstwhile JMC business to also this level. It was at 0.5% earlier, went up to 1%, and from the current year, it is at 1.5%. Typically, you know, it's a provision which comes back once the project gets closed, right? And today, we have a provision of closer to INR 350+ crores on our balance sheet on warranty guarantee. As far as Q1 is concerned, there was an additional impact of INR 30 crores coming out of this provision, which was budgeted. So let me be very clear, saying that it wasn't something... It was budgeted, and even with that, we believe we should be at margins of 4.5%-5%. So that is as far as the provision is concerned, because now all businesses we are doing it at 1.5%. Okay. Secondly, we had some donations, which, you know, I do not have the exact numbers with me, which were not tax-deductible, which happened in Q1, which was again one-offs, which we shouldn't be seeing going forward. And that's why our tax rates are high. And again, as I said, that was also budgeted, right? So this was not that our targeted numbers changed because of that, but those are all provisions which happened in Q1. ... You said forex loss is about INR 17 crores, right? Above EBITDA. So that is definitely a one-time. So our subsidiary, Fasttel in Brazil, has taken a loan from EXIM, which is hedged for the next five to six quarters in terms of repayment. There was volatility in the Brazilian currency over the quarter end, which has now again come back to reasonable levels, and which had a gross impact of INR 24 crores and the net impact of INR 17 crores in our consolidated numbers. We believe that's more about timing, because we are hedged for the next five to six quarters already for repayment, and you know, this could come back in the next few quarters for sure. Okay. My second question is on the promoter stake sale in this quarter. So typically, what we have seen is that most of the time when promoters stake sale is guarded by kind of covenants on debt. So does it in any way impact our? I mean, has it already like some of the banks would have invoked these covenants, and we need to refinance some of these debts? And if yes, then how or what point of state like we are there in terms of refinancing? Have you already secured the new funding lines, if that has been figured? So, Parikshit, yes, there were covenants on promoter stake levels. I think we have had discussions with the bankers at during the last one month, you know, on this matter, and the bankers have understood and supported us in this process. A lot of covenants have already changed, some of them are getting changed. We did not have any impact, any significant impact on the banking side, although, temporarily for a few weeks there was this conversation and all of that. As we stand today, all our banking lines are fully functional, all our lenders stay committed to us, and we do not see any concerns on that front. Also, the stake sale was primarily, you know, directed towards, a filing of DRHP by our real estate business. We've been given to understand by our promoters that the documentation is at advanced stage and the filing is expected soon. I mean, when you... Thanks for touching that point because if the filing happens, and in case of, say, eventual listing, how does it change the entire promoter pledging on? Because then it becomes like pledge on this company for a loan given to the entity, suppose it gets listed. So how does the pledging change that? You think there's a pathway where the pledge will reduce to zero in that scenario? Our discussion with promoters, over the last few years on this matter has been very, very clear. They believe it will continue to come down and gradually reach those single digits, if not lower numbers in the next few years. Even post-listing, their pledge will continue, or do you think after listing of the real estate entity, I mean, there is no relation between the two in terms of... So do you think that still the KPL will continue to support them through the pledges to the promoter-listed entity? So I do not have the exact timing on that, Parikshit, but our discussion, as I said earlier, is that we've continuously come down. Now, whether will it come down significantly post-listing, or will it happen a few quarters from now, is something detailing which we'll have to discuss with the promoter. But the good part is the guidance is it has to come down, one. Second, if you look at the loan against shares, you know, just like the margin money is closer to four times. It's only closer to INR 500 crores is what is the loans against shares which the promoters have taken, which is like a very low with very high margin money. So I think gradually it should come down. I do not have the exact number which is being told, but gradually going forward, it should come down to a low single digits, if not, closer to zero over the next few years. Okay. This is the last question, sir, on this. So given the kind of growth we are seeing in the segment, both T&D and real estate, both are doing well, and even internationally, you've been able to secure large contracts. So do you think that the balance sheet is adequately funded, and do you think there's any need to raise funds for Kalpataru to maybe take up the growth higher, I mean, to further strengthen the balance sheet to support that kind of growth? Do you think any near-term plans to raise any funding in the company? So, Parikshit, in the near future, in the short future, I don't see any reason why it should be; we should be looking at dilution. But given the growth which is happening and given the kind of opportunities visible, we would definitely reevaluate this getting into maybe in the next few quarters. But as of today, I think we are adequately funded to take care of our existing order book and delivery on that. Okay. And this VEPL and Indore Real Estate, any update? I mean, if you can update us. I think VEPL, you said the, in terms of closing it. So how much quantum of loss funding for the year as a whole will reduce with this? And on Indore Real Estate, or is it pending to be collected, and what is the collection for this quarter? Sure. So I will first speak about VEPL. As I said earlier, on VEPL, we've got some offers. We're in advanced stage on discussion with one large global investor, who's given us a value which is better than what we have invested. The discussion on various shareholder agreements, SPA, SHA, is going on. I personally believe we should be signing the agreement at least in the current quarter. As far as, and as I said earlier, I think we will get much more than, or we'll get more than what we have invested as far as VEPL is concerned. On the Indore assets, you know, our sales in Q1 2025 was around INR 23 crores. Our collection till date is INR 353 crores, and balance to be collected is around INR 147 crores. We have around 20% of shops/residentials which are yet to be sold. We believe, you know, majority of it should be shown in the current financial year itself. Okay. This is just last question, sir, if I may. What is the this investment's total current at the current juncture, what is the total investment in VEPL? ... You're talking about from both equity and debt perspective or only equity perspective, so enterprise or only investment? Both, if you can help us understand both, so much would be. If you look at VEPL, our total investment as far as equity, including all the funding, is closer to INR 386 crores. Okay. The debt on it is around INR 285 crores, in that range. I could be off by a few INR crores, but INR 280-INR 285 crores. When you talk about getting more than equity, then the 386 is the equity you are referring to, or you're referring to the original equity? 386 is equity, 100%. Okay. Thank you, sir. Those were my questions, and wish you all the best too. Thank you. Thank you. The next question is from the line of Prathmesh Salunkhe from PL Capital. Please go ahead. Thank you for, so, thank you so much for giving me the opportunity. Good morning, sir. So sir, my question is a general bookkeeping question. Just wanted to know the order inflow from the Fasttel subsidiary from Brazil. And another thing, the order inflow breakup segment-wise for the current quarter, that is, breakup for INR 3,182 crores, if you could help me with it. Sure. So I think if you look at the breakup for current quarter, the current quarter order book, including what we have declared today, is around INR 7,000 crores. The breakup of that is T&D is INR 3,400 crores, of which transmission domestic is around INR 860 crores, Transmission International is around INR 1,140 crores, and LMG Sweden is around INR 1,373 crores. Our B&F business has got around INR 2,300 crores, and the water business has got INR 1,350 crores. So our order inflow for Q1, including today till now, is around INR 7,000 crores, and that's the breakup, breakup. We've not seen any order coming in Fasttel in Q1. Okay, Fasttel has no order inflow. Got it. Sir, furthermore- Q1 we got that. Sir, yeah, got it. So, sir, further, the L1 position mentioned, which is INR 5,000 crores, if you could give us some more color on it, like which segment dominates the L1 position? In the L1 position, transmission domestic is significant with more than 50%. Transmission international is around 25%, and B&F is around 25%. Buildings & Factories business is around 25%. Okay, thank you so much for the clarification, sir. Good day. Thank you. Thank you. The next question is from the line of Nidhi Shah from ICICI Securities. Please go ahead. Hello. Thank you so much for taking my question. My first question would be on the international order booking. So I understand last year the percentage of international orders inflow was higher, and this year it's lower back to, like, FY 2023 level. So what is sort of your commentary on that? Yes, so, if you look at our order inflow for first quarter, it's 65% domestic and 35% international. But if you look at our order book closing at INR 57,000 crores, it's 55% domestic and 45% international. Mm. We believe that opportunities exist in both domestic and international business. But given that on the international business, we had some very large orders last year, including the Saudi Aramco and a few international orders, the last year's inflow on international was much higher. Mm. Current year, I believe that we should be more in the range of 65 domestic and 35 international, or maybe in the range of 60/40. All right. And my second question would be: what do you think of the pipeline this year for orders, domestic and international? How do you see the competition in bidding? And what do you think overall where this sort of sector is going this year in terms of awarding and bidding? So as I mentioned earlier during my opening speech, I think we are seeing a lot of traction coming in transmission, Buildings & Factories, and oil and gas international. That's something which we continue to be very bullish on. Even water sector, we're seeing a lot of tenders coming, but although they're slightly delayed, given that three, four months of election. So across at least majority of our business, except railways, we see a lot of traction. Competition continues to be there in all segments. I think it's not as much about competition as much as about your ability to deliver in the time frame which you commit. I mentioned this earlier, that this is a scenario where, you know, we need to be selective in picking up orders, because there is a lot of opportunity, but we need to be careful of our ability to deliver, right? So our focus is more on looking at profitable orders across all segments, which will further drive growth getting into 2025, 2026. All right. Thank you so much. Thank you. The next question is from the line of Ashwani Sharma from Emkay Global Financial Services. Please go ahead. Yeah, thank you very much. Good morning, sir. Sir, yeah, just to extend the earlier participants' questions, so we have already done some INR 7,000 crores order inflow, and we have guided for INR 22,000-INR 23,000 crores order inflow. Given the so much of opportunities, I believe that this is number is a little conservative number. Wanted your sense on that. So, I wouldn't call it a conservative more than a realistic number, you know? And I'd just like to pause back and take you through our historical order book growth. Last year our order book closes to double. I think other opening, we were at closer to INR 58,000-INR 59,000 crores. We're growing at 15%-20% for the last two to three years, right? Our business for growth requires all three. One is CapEx, second is labor, and third is a strong delivery team. We believe that there are times where we need to be conscious in terms of looking at those projects with selected clients, where there's a reality in terms of delivery requirements. So that's why our focus is a lot more on, on businesses which we are very strong in, because these are the areas where we believe that profit would go up, because our capability and competency to deliver at the shortest timeframe exists. So I wouldn't call it conservative rather than being realistic, because we are sitting on a 2.5-year order book while we speak. Given the volatility, given the kind of changes in labor law regulations or any of those which, which could come in, it's better at this time to be more realistic rather than being aggressive in terms of growth itself. That's a philosophy the entire senior management has decided. Even with this number which I have given you, visible growth for the next few years still looks at a high double-digit, with improved profitability and improved ROC ratios. That's our largest focus rather than only looking at top-line growth. Right, sir. Sir, what is the kind of CapEx that you are looking for to fund this guidance from the execution point of view? We are targeting CapEx in the range of INR 500-INR 600 crores in the current year, through a mix of, CapEx on the balance sheet plus lease plus a combination of few others. But we're targeting a CapEx of INR 500-INR 600 crores for the current year. We believe that this requirement should reduce in the next year, given that the current year has a lot of CapEx on some other infra businesses which we got large projects last year, and also on staging and checking on large projects, which is repeat, which can be used getting going forward on different projects. So personally, I believe the CapEx numbers should start going down in the next year, but currently it should be in the range of INR 500-INR 600 crores. All right, sir. Thank you very much. Those are my questions. Thank you. The next question is from the line of Arafat Saiyed from InCred Research. Please go ahead. Yeah. Thanks for taking my question. My first question is on the order pipeline. Can you please quantify the, in terms of value, what kind of order pipeline you're looking for next one year? No, I think, as I mentioned earlier, we're looking at inflows in the range of INR 22,000 crores-INR 23,000 crores. And which means typically, you know, we're at different segments. We are at, a ratio of some segment, we do 20%, some per segment 10, 25%. So it is, it looks very healthy in terms of order pipeline, and, even in the transmission business, we see our tenders are closer to INR 50,000 crores being built in the next three to four months. So whether it is transmission, B&F, water, and oil and gas, we will see a huge pipeline in coming in. Our focus is primarily on, on profitable and large orders, and that's why we are keeping our targets at around INR 22,000-INR 23,000 crores for the current year. Fine. Fine, sir. And then my next question also on the, on the divestment of non-core. So can you please let's say, in terms of, let's say, what will happen in FY 2025 and how we are looking for FY 2026 in terms of divestment of non-core? And also, what amount you are expecting from, let's say, this divestment. And again, lastly on, let's say, the likely to be, let's say, gain or burn from this investment over the last, last year, few years you have done. So, you know, our non-core, what we have declared are primarily the road assets, primarily Indore and primarily Shubham Logistics, right? This is what we have declared non-core earlier itself. Out of the road assets, the largest road asset, which is more than 70% exposure, is VEPL, and I said that earlier, that we expect to sign an agreement in Q2 itself on that. The other two assets are very small in value and have a very short duration left from here. So we're not sure whether we'll be selling it or just going through the process of keeping it on books for the next five odd years. Because the investment in those assets are very, very low as compared to what we have on VEPL. So if you look at the total investments in the other two assets, you know, it's if I look at BBEPL, it is closer to INR 91 crores, and if I look at WEPL, it's closer to INR 300 crores. VEPL is something which we are looking at exiting now. As far as Indore is concerned, we believe that we should be out of the entire investment in the next 12 months, as indicated earlier. Shubham Logistics, it will take us some more time. The business is on the revival mode. We are also selling off some of our warehouses and assets which we had. The debt numbers at the Shubham Logistics are continuously coming down, so that's a business, we will not look at divesting in the current year, but focus on it getting into next year or the year after that. So to answer your question, current year is going to be, one road asset and, Indore. Then look at the next two road assets next year, and then look at Shubham the year after next. As far as the answer on saying that, do we expect to get more than what we have invested? Our, our first ballpark belief is that we should be not having any losses on our investments in totality on these assets. Fine. Fine, sir. That's what we get. Sir, lastly, on railway. So basically, if you look at, let's say, railway for you, it's down 45%, while for your competitor also down almost 33%-37%. So any sense on that, let's say that this was largely due to election year, election quarter, or you believe, let's say, going forward also the tender pipeline and that has reduced significantly as your election is largely over. So, let's say, in terms of doubling, tripling, how it's going, if you can guide on that? ... I think on the railway business for the last, you know, couple of years, we've been very given the intense competition in this business. So we have hardly picked up any large orders in the last two years in this business. The business still has an order book, which is around INR 3,900 crores to be delivered. So given that we've not taken any large businesses, we believe that it will continue in a degrowth mode, at least for the current year. Going forward, once the competition comes down, we might have some opportunities in the domestic market. Finally, we are looking at the international market for the railways business, and I'm hoping that, in the next 12- 18 months, we should have some wins coming on the international front also. While we say so, I think current year, next year, as far as railway business is concerned, we do not see growth happening in any form. Fine, sir. That is from my side. Thank you very much. Thanks. Thank you. A reminder to all participants that you may press star and one to ask a question. The next question is from the line of Amit Anwani from PL Capital. Please go ahead. Hi, sir. Thanks for the opportunity. First question on margin, you did highlight it, PBT target margin of 4.5%-5% and 8.5%-9% on EBITDA. Just wanted to understand, what business segments are actually going to, you know, recover on the margin front. And you also did highlighted that, the recent order wins on slightly higher margins. So if you could elaborate more on how, you know, the margin recovery is going to happen now sequentially. Yeah. So, on the margin front, you know, even if you look at, the quarter one, right? I think what we have primarily lost is because of productivity not being achieved due to availability of labor. So it's not that, you know, we had projects which bled or anything. So if you look at the Q1 margin also in standalone, you know, at a PBT, we're at 4.4%. It's not that we have gone down, significantly. So my belief is that all segments which we had budgeted, right, could continue delivering on margins, whether it's B&F, T&D, TLI, all of them. Now that labor has come back, now that collections have started improving in a few businesses, we see productivity also improving from Q3 onwards. Q2 obviously has always had an impact of monsoon, right? It's not any specific segment, it's the business as a whole that we believe that we will continue to deliver on what we have targeted, and that's how it will be more in the range of 4.5%-5%. Sure. So, and second thing on the international versus domestic, you did highlight it, domestic to international, between 65 to 35. So segment-wise, just wanted to understand, in international market, which segment, you know, will be going more aggressive. And, second thing, so you did highlight it, that we have been selective, in terms of taking orders. So how is, our strategy in international markets, with respect to order taking? And which segments, you feel, will contribute more to the international, intake? So even in the current order book, you know, international, significant portion of the international order book comes from the transmission segment, and oil and gas, the large Saudi Aramco project. Going forward, if you ask me in the current year, I think we, we continue to be primarily focused on transmission business, oil and gas in a few geographies, and urban infra in a few geographies. But my own assessment is in the current year, more than 70% of our order inflow should come from the transmission business itself. Okay. Thank you. Thanks for taking my question. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one. The next question is from the line of Bharat Sheth from Quest Invest. Please go ahead. Hello? Hello. Hello. Yeah, am I audible? Yeah, you're audible now. You said, in your initial that LMG, we have seen potential growth- Bharat, you're not audible. Bharat, you're not audible. Sorry, you'll have to- Now, am I audible? Is it clear? Yeah, it's clear now. Sir, in your opening remark, you stated about this LMG, we are looking for an aggressive growth as well as in fossil, we are breakeven. So if you can give a little more color on both those companies? Sure. So I think on Linjemontage, you know, our last six years journey has been very good. The business itself has become three times over the last six years after we acquired, and they paid us a significant amount of our investments back as dividend, as far as Linjemontage is concerned. Today, when we look at, you know, where Linjemontage is in terms of our order book, you know, if you look at the revenue for the Q1, we did it around INR 449 crores, a growth of 84%, as compared to INR 244 crores in the previous year. And also, their order book visibility is so good that we believe that growing at a good double digits should not be a challenge for Linjemontage. They have an order book visibility of around INR 3,000 crores while we speak, which has twofold doubled in the last one year. The markets continue to be bullish as far as the entire Sweden, Norway, Denmark is concerned, and we believe that's an opportunity which we will be focused on capitalizing on. We are today among the top three EPC contractors in that country on the transmission side, with a strong team and a presence across transmission and substation, both in Sweden as well as Norway. So, you know, even on balance sheet, that business has free cash available on balance sheet, so it's like a debt-free business. So EBITDA is equal to PBT as far as that business is concerned. On Fasttel, you know, it was a painful journey over the last three years because of COVID, Brazil, all of that, and historical orders, but we are now out of all the historical orders. Our revenue for Q1 2025 is around INR 230 crores, a growth of around 40% compared to what Q1 2024 we did. Fasttel order book has also doubled. We are sitting at around INR 1,200 crores as of now. We believe that the business will get into profitable mode, getting into Q2, Q3 itself, right? And going into a high growth and margin mode into the next year. So both the businesses today, you know, believe, I believe that, growth is visible, the team is good, the markets look good, and we are conservative, at least, on what not to do in both the businesses. So from a perspective direction, I think we stand committed to those businesses. The opportunity looks good, and growth is visible. For the current quarter, clearly, we had a small setback of effects coming into the Fasttel business, which I just explained in the earlier call, which to me is more a timing issue. It was a net INR 17 crores impact. Otherwise, if you look at Linjemontage, for the current quarter, they have done an EBITDA closer to 4%, closer to 5%. And even Fasttel has done an EBITDA, you know, at the range of 8%-9%, which is what we believe will continue to improve. So even, sir, in Linjemontage, we expect, do we expect improvement in the margin from, say, 4%? Earlier, we were doing 6% kind of EBITDA margin. And kind of a potential in next three year, where do you see this Linjemontage as well as Fasttel? So on Linjemontage, we definitely expect margins to improve getting into Q3, Q4 itself, right? Not even next year. And getting into next year, we definitely should be at 6%, if not higher than that. On Fasttel our EBITDA has been closer to, now it's at around 8.5-9, and we see that going up going forward, because that's a business where, that's a market where 10%-12% EBITDA is common in terms of, you know, T&D projects. So yes, EBITDA margin should go up on these businesses going forward. And next year, for sure, Fasttel will be 6%+. Okay. Thank you, sir, and all the best. Thank you. Thank you. The next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead. Yeah, thanks for the opportunity. So firstly, when do we expect the execution to start for Aramco project in terms of revenue booking? So the execution in terms of team building is fully done. We are closer to 150 people who are already at the site now, 150, and could be even more than that. 150 is when I was there a few weeks ago. The design engineering phase of the project has started fully. In terms of revenue, I think you should see significant revenue coming from maybe December onwards on this project because in design engineering significantly would be done by November, December, and that's when the site activities would start in a big way. As I said earlier, this project does not involve buying of pipes, right? Pipes is a free supply from the client, so it's at the site where the execution, whenever it starts, is when revenue comes in. We believe that Q4, we should start seeing a lot of it, and December onwards, Saudi Aramco revenue and margins should come in. So any guidance on the full year FY 2026 revenue and margins for the project, ballpark? It is difficult for us to give a guidance today, but today we're sitting on a 2.5+ years of order book, right? And given that, the positive environment around, I don't see a growth in having a high double digit, I don't see a problem in having high double digit growth, but I wouldn't like to give the guidance at this stage. Maybe by the end of Q3 or beginning Q4, we would be giving guidance for next year. I was asking for the Aramco project. So Aramco project, I think the delivery is scheduled over 36-42 months. So the peak of that project would be the next 2025/2026 and 2026/2027. So if you ask me in terms of revenue, I think the next 2025/2026, 2026/2027 should be more closer to 70% of the revenue of that project. Ten to 15% might happen in the current year and the balance in the last year. Okay. Okay. Sir, secondly, you mentioned the order inflow guidance of INR 22,000 crores-INR 23,000 crores for FY 2025. So that is on standalone level or consolidated level? I think that is a guidance at the consolidated level, which we are giving, with standalone closer to INR 20,000 crores and the subsidiaries in the range of INR 3,000 crores. Okay. And sir, lastly, in terms of revenue growth for Fasttel and LMG, how are we looking for FY 2025? So I said earlier, I think this question I had mentioned earlier also, both the businesses would grow at a 20%-25%+ for the current year. It could even be higher, but the budgets are at 25%+, and with profit improvements. So I don't see challenges in both the business growth as far as the current year and the next year is concerned. Okay. Thank you, sir. Those are my questions. Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Yeah, thanks for the follow. Look, my question is on, so you highlighted that 70% of inflows this year will be from... So I just wanted to understand, are we looking to increase any capacities on tower side? Are we looking to set up any conductor capacity or cables capacity? ... So I think our manufacturing capacity is in excess of 200,000 tons, and I don't think we need to increase that with the current visibility, at least for the next few years. We are not in the cable and conductors business, so, and we do not have any plans currently of getting into that business. But as far as capacity at the plant side is concerned, we believe that we have enough capacity to take care of our growth requirements. Okay. My second question is VEPL asset monetization. So how do you intend to use the proceeds? Do you think that it will be appropriate to repay the debt of the balance to assets and reduce loss funding? So how are you strategically thinking about utilizing these proceeds? And post, what is the current level of loss funding or support, putting support? I think even in this quarter, you supported 20, in excess of INR 20 crores. So for a year as a whole, how much would be this number? And with monetization, how much that number can come down? Let me first answer the second question. We had guided for INR 70-INR 75 crores support in the current year for the businesses, primarily to repay debt. We believe we should be in a similar range, given the traffic growth. It should only come down and not go up. As far as utilization of proceeds, I think, we have really not gone into that detailing as of now, because after we sign the binding agreement, all the approvals could take any time between three to six months, right? So we will have enough time during that time to decide. Clearly, the proceeds could go either for debt reduction or for growth on CapEx. There's no other way, you know, it's only one of the two, or paying back as dividend to shareholders. It's only one of the three. So it's, it's early for us to start discussing on that, and we've not thought on that as of today. Once we sign the binding agreement, once we start getting approvals, is when we'll be getting into, focusing more on how to use the proceeds. Post-acquisition, how much could be the reduction in debt in the last funding? I mean, is VEPL, are you supporting anything out of the INR 75 crores in VEPL? Because I understand large part is going to the railway line now. So VEPL Q1, we gave around INR 5 crores. So I think we will continue to support in the range of maybe, five odd crores on a quarterly basis, not more than that, unless it's for any debt repayment. So I don't have the exact numbers. So total, all three put together, we paid INR 25 crores, but VEPL was not the highest. The highest was WEPL, which we supported in Q1. So that will continue, I mean, despite this monetization, that INR 75 crores kind of support will continue? Currently, yes, it will, because, you know, as I said, even once we sign it, getting all the approvals is a journey, right? It takes three to six months. So even we are sitting in July, August, we sign it, it could be January, February. So the current year, definitely we believe the support will be required. What is the WEPL debt, sir, right now, I mean, for which you are giving the bulk of the support? INR 107 crores. That's it. I mean, so even if like you get- Yeah, that's what I said. Next couple of years is what the entire debt will be over. If you look at it on a debt basis, the debt on our three assets put together is only INR 425 crores, with INR 285 crores on VEPL, 107 on WEPL, and only around INR 35 crores on BBEPL. So I think the debt support would get over. And after that, we still have a long life. You know, the assets would still have a, one of them has a life of around 18-20 years, one of them seven to eight years, and one of them, again, five to six years. Okay. So. Got it, sir. Thank you, sir. Thank you. The next question is from the line of Teena Virmani from Motilal Oswal. Please go ahead. Hi, sir. My question is related to the execution growth for the company. So Q1 was weaker and it was expected to be weaker also because of labor-related and election-related impacts. But how will execution ramp up in the coming quarters for the standalone entity? Because if railway is going to be weak, so will other segments grow faster than 20% to take care of your full year growth guidance of 20%? I just wanted some of your thoughts on this. Sure. So, in the current year, you know, majority of our businesses are growing at 20% +. So whether you look at T&D, which is transmission domestic, whether you look at Buildings & Factories, you know, which is the entire country, southern as well as the northern and western, whether you look at our international substations or whether you look at water or even infra oil and gas. So if you look at each one of these businesses from a revenue perspective, they build up a good order book at the closure of the last year, right? And there is good visibility going forward also. So all our businesses are growing at anywhere between 15%-25% at individual business level, except railways. So the key growth drivers will be across all business. You know, because oil and gas would, would literally grow at, at maybe 50%+, because the base was small and Saudi Aramco is a big number. T&D was not growing for the last three years. Now we've seen a good order book and good L1, so that business will grow at 25%+. And even in Q1, we have seen transmission grow at, at that numbers, right? Mm-hmm. One of them has a very good order book. Q1 was down because of, as I explained earlier, labor as well as, you know, disconnection issues. But in, in building and factories, we have seen a growth of 23% in Q1 itself, right? And even with labor issues. So obviously, getting into Q2 or Q3, our numbers will be much higher. So at all our businesses, except railway, would grow at more than 20% for sure, on an annualized basis, and that's why we have guided for that number, which is in the range of 20%. And railways also on an annualized basis, will not be a huge de-growth, right? While there'll be a de-growth, it's not that we are looking at reducing into half or something, because they still have a visible order book. And the size is so small that on a larger number, you know, the impact is very minimal. ... Right, right. So water, segment, which was impacted in Q1, water would start growing, in the coming quarters. There you don't see any challenge? Yes. So, given the impact of Q1, would they grow at maybe 20% annualized, could be less, maybe 15%-17%, maybe not 20%, but other businesses will do much better. So even with the Q1 impact, we believe that the overall business, growing at 20% will not be a challenge for the majority of the businesses. Got it. And what are the size of the urban infra projects, where, you, you are required to enter this large CapEx, primarily for the tunnel boring machine and other things? So, what are the sizes, by when these, by when could these projects start contributing to execution? Yeah, urban, so order book is closer to INR 3,000 crores while we speak, with two underground projects and a few overhead projects also. As far as Q1 is concerned, if you may look at that business, that business grew at 18%. They did around INR 181 crores compared to INR 154 crores last year. Urban infra as well as civil international put together, because that's also urban in nature. So I believe that, with a visible order of INR 3,000 crores, they should be growing at more than 35% the current year, because they had a very low base in the previous year. Okay. Okay. And, so will this CapEx, which you have already done this year, as well as, which you've already done the last year, as well as you'll be doing this year, this won't be a significant number in the coming years? So my own belief is that at least on TBM, we, we shouldn't be seeing significant investments coming in, unless we get some good profitable orders in Q3, Q4. But, you know, as I said earlier, it's all about making sure that we get profitable orders, then we can afford to do that CapEx. But in the current order book, I think this would be a big year of CapEx, and CapEx should go down going forward. Right. So this INR 500-INR 600 crores that you're targeting, that is primarily for these urban infra-related projects itself, the CapEx? So it's a mix of all three. It's urban infra, which would be maybe one third of it. It would be the staging and shuttering and form work for business, which would be one third. Then there would be another 10%-15% for the international businesses, given the growth and balance across all other businesses. Got it, sir. Got it. Thank you. That's it from my side. Thank you. The next question is from the line of Ashish Shah from HDFC. Please go ahead. Hello, Mr. Ashish. Your line has been unmuted. Please go ahead with your question. Mr. Ashish Shah, your line has been unmuted. Please go ahead with your question. Hello? Yeah, Ashish. Yeah, so, sorry for this. So, yeah, my, my question was about this, you know, particular event where we were made party to one, you know, dispute in NCLT earlier this month, in respect of one of our terminated projects. If you can just update a little bit context of that event, and also any implications that it may have for the company. Thank you. Sure. So, you know, this was a Kurukshetra Expressway, which, you know, we terminated two years ago, because of the farmers' agitation, and that termination was, you know, the road asset was handed back to NHAI. We had already written off our entire equity on that asset, in 2022, 2023 itself, and today our carrying value is closer to zero as far as this asset is concerned. This entire proceedings were started from the bank against NHAI, where we are party to it. So the bank has gone to NHAI for debt repayment based on, you know, the concession agreement, where banks are eligible for the debt repayment because, it's a termination on account of a default by the, by NHAI. So that's where bankers have gone against them, and we are a party to it. As far as we are concerned, I think we have completely written off our equity on books, and we shouldn't see any impact on it in any form. Finally, on this asset, we also are into arbitration on a couple of... We have right now two arbitrations which are going on, which we expect in the next three to six months some awards to come in, in whatever form. But otherwise, as we stand today, we do not see any hit coming out of this proceedings in any form. Thanks. Sir, in this particular termination matter, has NHAI accepted our argument for termination or that part itself is something that we are arbitrating on? I'll just ask S.K. Tripathi to also speak on this. Yeah, yeah. So, as far as the NHAI is concerned, they have taken over the asset, and they are maintaining the asset. We are out from the asset about 1.5 years back. Now, as far as the debt settlement is concerned, as expected, NHAI will not walk an easy path, and they are giving tough time to the bankers and to us also. But as Manish commented, that we are in the arbitration on these projects, on the termination payment, as well as we are persuading bank also to come on the same platform, and we may see some resolution over, say, next three to six months on this matter. Sure. But as we see it today, there is no impact on the company in terms of any residual liability on the debt repayment? Right. Right. There's no liability. Right, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, this will be the last question. It's on the line of Riya Mehta from Aequitas Investments. Please go ahead. Thank you for giving me the opportunity. I have two set of questions. First, in regard to the supply chain challenges, which we were speaking earlier in quarter, and I think one of your competitors also put up a line for conductors. So are we seeing similar supply chain challenges, and are we looking out for similar CapEx? No, so from a supply chain perspective, at least at a KPI level, while we've seen some delays, I wouldn't say that these are challenges which are impacting project delivery. We've seen some delays of a few months. While we speak today, I think, on a Q1 basis, whatever we had projected in terms of delivery and supply chain has happened at 95%+. And getting into the balance part of the year, based on commitment from all our suppliers, we believe that we will not have challenge in supply chain, at least based on the current environment, whether it's from conductors, insulators or even transformers. As far as our plans for setting up a plant, to look at that option, as I said earlier, we do not have plans as of now, because we believe that the industry already has visible capacity to take care of the requirements of the country. And, to that extent, we would trust our suppliers who deal with us for long enough. So as of today, we do not have any plans to be getting into that business of cables and conductors. Got it. And in terms of P&L, where are we seeing demand, primarily from domestic or international? And domestic, is it majorly PGCIL-led? Yes. So at least in the last six months, we've seen the transmission domestic, more than 90% orders coming from PGCIL. The, and, so that is driving growth in a big, big way. As far as international is concerned, we're seeing opportunities everywhere, whether it is Africa, whether it is Middle East, whether it is Latin America, whether it's the European market, or the Australian market. So we continue to stand bullish on that, and, that's an opportunity which looks very, very attractive as of today. Got it. And, my last question is regards to the workforce challenge which you've faced. So that is, in what layer of employees are we seeing, workforce or an unavailability of labor? Is this from the skilled or semi-skilled or what? I think that's a challenge across the value chain, right? So whether I look at skilled, whether I look at semi-skilled, unskilled, whether I look at international projects, domestic projects, and even supervisory staff, right? I think that's a challenge right now, which is, the biggest challenge for the industry as a whole. Given that, the growth is, coming in the last few years has been very, very huge, right? It was, it's beyond expectations that what, what is coming in now. And, the delivery schedule is only reducing as far as all projects are concerned, right? Some driven by the pressure of the government, some driven by RERA, some driven by, other regulatory requirements. So with- So do we- Delivery... Sorry? Sorry, sorry, go ahead. So given that delivery schedule has reduced and the expectations have only gone up, so I think it's a challenge across the entire value chain. So today, if you ask me, the number one challenge is not order book, not revenue, not growth, not profitability. It's only about resources, resources and resources. Do we tie up with agencies or do we hire directly with or have contractors, or how is the mechanism for manpower? So I think it's a mix of everything, but we hardly use any agencies. It's been more our own team and our contractors who work with us. We rarely use agencies, but it's a mix of everything, depending upon the project, the country, the kind of work, a combination of all of that. Okay. Thank you so much. That's it from my side, and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to Ms. Bhoomika Nair for the closing comments. Yeah, I would like to thank everyone for being on the call, and thanks to the management for giving us an opportunity to host the call. Thank you very much, sir, for answering all the questions, and wish you all the very best. Thank you very much, Bhoomika. Thank you, everyone. Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.