Ladies and gentlemen, good day and welcome to Kalpataru Projects International Q3 FY25 earnings conference call hosted by DAM Capital Advisors. 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 call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital. Thank you, and over to you, ma'am. Yeah. Good morning, everyone, and a warm welcome to the Q3 FY25 earnings call of Kalpataru Projects International Limited. We have the management today being represented by 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. I'll now 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. Good morning, everyone, and thank you for joining our earnings conference call for the quarter-ending December 24. I'll start with a quick update on the operating context, followed by the key highlights of the quarter. The operating environment continues to be riddled with challenges related to labor shortage, geopolitical issues, and stretched working capital in the water business. In this backdrop, we continue to focus on scaling up our execution and improve our competitive position. I'm happy to share that we have delivered a strong performance for Q3 '25 with robust revenue growth, healthy margin levels, record all-time growth, and noteworthy improvement in working capital. In Q3 '25, we have delivered consolidated turnover of INR 5,732 crore, with a YOY growth of 17%. Similarly, at the standalone level, revenue growth was 16% for Q3 '25. The growth in revenue was led by strong execution and healthy order backlog in the T&D, B&F, and oil and gas business. In Q3 2025, T&D business delivered strong growth of 42%, B&F business was up by 26%, and oil and gas recorded YOY growth of 123%. The sluggishness in the water business has led to impacts on the overall growth. Selection from JJM projects continues to remain slow. However, with the recent announcement in the union budget for 100% tap water coverage and allocation of INR 67,000 crore for FY 2025-26, we expect speedy recovery in collections and improved execution in coming quarters. Our EBITDA grew by 13% at consolidated level and 17% at standalone level in Q3 2025. Our EBITDA margin for Q3 2025 remains healthy at 8.4% at consolidated level and 8.3% on standalone basis. Our consolidated PBT grew by 5% YOY to INR 202 crore. At standalone level, PBT was up by 12% YOY to INR 218 crore with a margin of 4.5% for Q3 '25. In Q3 '25, we faced some constraints in margin improvement due to lower revenue in the water business, the depreciation of the Brazilian Real impacting USD-denominated loans and parcels, and higher maintenance spending on road SPVs. We continue to remain on track to improve our margin going forward. Our net debt at consolidated and standalone level has turned down significantly, both as a result of QIP and efficient working capital management. Consolidated net debt declined by 27% QOQ to INR 2,694 crore and standalone net debt is down by 35% QOQ to ₹1,820 crore as of 31st December 2024. Our net working capital days decreased by six days QOQ to 112 days at the standalone level, while at the consolidated level, net working capital days were down by four days to 94 days. We managed to keep our finance costs at a percentage of sales at around 2.2% at the standalone level, despite significant capital employed in the water business. This very well indicates our focused approach on ensuring robust working capital management and maintaining a strong balance sheet. We continue to focus on improving our competitive position with an equal weightage on ensuring that fundamentals of our business remain strong. The strength in our business model is underpinned by a diversified business profile, disciplined capital management, and proven execution capabilities for large size EPC projects. The same is reflected from the solid response which we received to our QIP issue in December 2024. Our QIP saw participation from multi-domestic and international investors. On the order and flow front, we have secured orders worth INR 20,185 crore, including the INR 824 crore announced yesterday. Additionally, we have a healthy L1 position with over INR 2,500 crore, mainly in the domestic T&D business. The majority of this order wins and L1, nearly 80%-90%, are from our flagship T&D and B&F business, which gives a reasonable confidence of the execution and improved margin levels going forward. Notably, in Q3 2025, we have strengthened our competitive position by securing prestigious orders in the HVDC space, major orders won in Sweden, large-sized B&F orders from a reputable developer, and further expanded our reach in the metro rail segment with securing orders from Nagpur Metro. On the capability front, we achieved first breakthrough from our TBM in the Kanpur Metro Line 2 project. Additionally, numerous mechanical and technology initiatives on the civil construction side are helping us to improve our productivity and lead time for slab casting. We continue to invest in CapEx in line with our robust order backlog, improve business visibility, and our philosophy of owning our own construction equipment in order to be competitive and have better control on execution. Coming to the order backlog, our order backlog has a record high of INR 61,429 crore as of 31st December 2024. We have a fairly diversified order book, providing us with good visibility on the execution and growth going forward. We remain positive on the opportunity pipeline in power transmission, residential commercial buildings, airports, metro rail, and international oil and gas projects. Moreover, the traction in the domestic and global T&D market remains robust on the back of our multi-decade opportunity led by a widening gap between demand and supply of power, grid upgradation and modernization, push for renewables, and improving electrification in developing markets. This represents a good opportunity for KPIL going forward. On the international subsidiary front, LMG Sweden revenue has doubled YOY for Q3 as well as 9M FY25. LMG's order book is at an all-time high of INR 3,143 crore. In fossil fuels, we have achieved revenue growth of 18% for Q3 and 35% for 9M FY25. Our fossil order book stands at around INR 1,000 crore as of December 2024. In our road BOOT project, per day revenue reached INR 64.3 lakhs in Q3 2025, compared to INR 56 lakhs in similar quarter last year. We are working towards closure of the VEPL transaction in FY26. Before I conclude, I would like to highlight our specific performance in the water business. Over the last five years, our water business has grown from INR 642 crore to INR 3,500 crore, reflecting a healthy CAGR of 52%, with healthy margins and working capital consistently below 100 days. At the start of this year, our water business had an order book exceeding INR 10,000 crore, with a projected revenue of over INR 3,700 crore for the year and a nine-month revenue target of more than INR 2,700 crore, with reasonable margins and efficient working capital days. However, in Q1, we faced challenges as payments from clients were delayed due to budget constraints, impacting our targets. Despite these challenges, we made a conscious decision to continue executing projects as slowing down or stopping work would have had wider implications on cost and profitability. Over the past nine months, we have infused approximately INR 1,000 crore on this business. With the budget allocation now in place, we expect cash flows to start improving in Q4 2025 and Q1 2026. In the water business, from January onwards, we have realized over INR 240 crore, and we anticipate collecting the remaining INR 500-700 crore, which is already built, in Q4 or Q1 2026. While we remain cautious in the short term on this water business, we are confident about our long-term growth prospects. Finally, looking at the outlook, execution across most businesses, including T&D, B&F, oil and gas, and urban infrastructure, is expected to remain strong going forward. We are targeting growth of 15%-20% in Q4, with margins expected to be around 5% at the PBT level at the standalone level. Similarly, consolidated performance is also expected to show significant improvement. Before I conclude, we believe that had the water business issues not been there, we would have reached our targeted numbers of 15%-20% growth in the current year. And we also believe that this should be behind us soon for us to catch up on our projected growth going forward. With that, I conclude my opening remarks and open the floor for Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on a touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Sumit Kishore from Axis Capital. Please go ahead. Good morning, sir. My compliments on a strong overall execution performance in the quarter and strong inflow performance as well. My first question is on the water segment. Of the INR 100 billion Rupee s order backlog, how much is under the Jal Jeevan Mission? How much is under other irrigation or other water segments? You mentioned some improvement in the directional velocity on collections, but how should we be looking at this segment for Q4 and the next financial year in terms of execution? And you also made comments on the JJM allocations in the budget for FY 2026. So how soon is the improvement going to be visible? That's my first question. Good morning, Sumit. Our JJM allocation out of our order book is closer to 75%-80%, and the balance would be from other utilities. As I mentioned in my opening remarks, we have seen traction, already some traction in January, but we still have closer to INR 700 crore of unbilled or billed, certified, uncertified, lying with various water utilities. We believe that that should start coming in from March onwards, or it could even go to April, May, depending upon when the budget allocation is actually done by the center. Post the budget, our discussion with all the water utilities has been very positive because now it's a clear roadmap given in the budget by our Honorable Finance Minister on the entire segment in terms of both capital allocation and the goal of achieving 100% taps to the entire country. So as I said earlier, while we remain cautious in the short term, given the huge capital deployment which has happened, but from a long-term medium and long-term perspective, we remain very, very confident about this business. Okay. The second question is, when we evaluated your Q3 result, we possibly saw a higher net interest cost during the quarter than what we expected. The other income was down sharply quarter on quarter at the consolidated level, while the interest cost was up 9% quarter on quarter. The QIP happened around 18th December, so the benefit might have been for a few days. But shouldn't the net interest cost now improve? Your net debt is also down about ₹ 10 billion quarter on quarter. Was there any one-off in interest? No, I do not think we had any one-off in interest. As you rightly pointed out, getting into Q4, obviously, interest costs would come down given that you've got the QIP proceeds and given that there's some recovery happening on the water business also. So our Q3 interest costs had no one-offs. It was primarily driven by the capital deployed in the water business, as I said earlier, and the growth in revenue which happened in Q3. And definitely, as a target, we should be below 2% of interest costs in Q4, and that would be a target going forward also. Got it. Those were my questions. Thank you, and wish you all the best. Thank you. Next question is from Mihir Manohar from Carnelian Asset Management. Please go ahead. Yeah, hi. Thanks for giving the opportunity. I wanted to understand on the water side, what is the total spending which is there on the water, and how much is billed and how much is unbilled? Some color around that. Also, you mentioned, I think, INR 240 crore has been received in Jan, right? And I mean, the expectation is that by either April or May, some collections should materialize. So I mean, I just wanted to understand, how does it work? Is there a central authority who pays it? Is it more granular, or is it just one single authority or three single authorities who are paying it? Just wanted to get your color around that. Sure. Good morning, Mihir. Mihir, our total billed, which is certified, lying in the finance, is closer to in the finance department of the various utilities, is closer to INR 450-500 crore. There are another INR 250-300 crore which are in the process of reaching the final stage. With the water, typically, in all the utilities, there are six to seven levels of approval. So believe it, by the end of February or maybe by beginning March, we should have that number in the range of INR 700 plus crore as far as billed lying at the various utilities for payments, only for budget allocation. Your second question, yes, we have received INR 240 crore, but that's not only in January. That's January and February YTD. So it's the data as of day before yesterday. These INR 240 crore have come across various utilities. We've got good collections coming in from Odisha. We've got good collections coming in from MP. We've not seen much traction right now happening in UP, but Odisha and MP, we've seen some traction in January and February. As I said earlier, our discussion with all the utilities, post the budget, has been very, very positive, and they believe that it could happen the collections could be paid in March or later in February, depending upon when the budget allocation happens. Got it. Understood. So out of INR 700 crore, how much would be UP on a pro rata basis? In order book, my UP order book is closer to 40% of my order book. So I'm just using a benchmark that 40%-50% would easily be UP. I don't have the exact details, but just using the benchmark of order book, 40%-50% would definitely be UP. Got it. Understood. My second question was on the profitability for the subsidiary. When we see profitability for the subsidiary for this quarter, now this number is like consolidated minus parent. When I do the balance number, which is subsidiary as well as JVs, the EBITDA margins for 3Q FY25 were at 8.5% versus 10.7% on a YY basis. Even for nine-month, this is like 9.1% versus 10.3% on a YY basis. And this is like consolidated minus parent. So I mean, just broadly wanted to understand how should we see the profitability of our subsidiaries improving from here on, and why should that happen? Some color around that. Sure. Mihir, the standalone to consolidated has four or five critical components, right? And I'll first give you the macro picture and then get into specifics. One is Linjemontage, which is Sweden. I think they have done very well both on revenue as well as profitability. Second is our road assets, where we have had a dent on profitability in Q3, primarily because of focus on O&M in a big way, given that it's more strategic in nature and given that we also have plans to divest a few of them. Third is Fasttel Brazil, where we had losses coming in primarily due to the devaluation of the currency on the USD loans given by Exim India. This does not have an overall impact in the long run because on an overall basis, at an organizational level, we are net export surplus, so it's more a timing issue. Shubham has been more at a break-even level, so we have not had an impact there. So what has had a dent in the Q3 is only been two. The primary dent has been the broader devaluation in currency and the losses on the road assets, primarily on O&M. Going forward, we believe that the losses on road assets should come down given that collections have also improved, and we are divesting the largest road asset in the next few quarters itself. Going forward, we also expect that broader losses to be coming down because current fees come back from 6.2 levels on 31st December. It's already back to 5.7 levels while we speak now. So we believe that it's more a timing issue. So our whole belief is that going forward into next year, the consolidated should only be better than standalone and not be worse in any form. Hello? Yes, that's it from my side. Thank you. Thank you. Next question is from Parikshit Kandpal from HDFC Securities. Please go ahead. Yes, sir. Hi. Congratulations on a decent quarter. So my first question is on the India T&D leads. So if you can help us understand how much has been the total wins which has been announced by the utilities and how much is pending award for the EPC or the equipment players as per your understanding. Parikshit, if you look at our T&D order inflow in the current year, it's around INR 6,000 crore. Our actual inflow is around INR 5,300 crore, and we have L1 in INR 1,750 crore. Plus, I think we have bid for project worth around INR 4,000-INR 5,000 crore, which should all get decided in the next two-three months. From my perspective, including L1 today, we are at around INR 7,000 crore as far as domestic T&D is concerned, and INR 2,000-INR 3,000 crore. I'm including L1, and INR 2,000-INR 3,000 crore is what we have already bid, which should get decided in the next maybe month or maybe later April. Typically, we've been around 20%-25% of the market share. While I don't have the exact details of everyone else, but I'm assuming that for the space where we are, the order inflow could have been in the range of INR 35,000-INR 40,000 crore in the last six months, out of which we are at around INR 7,000-INR 7,500 crore. How is the bid pipeline looking for the year, next year, and maybe over the next two, three years when we have large numbers being spoken on by the government? So in your own understanding and estimate, how is the pipeline looking for FY 26 and in the near term, two to three years? I think the pipeline is looking extremely good, right? And if you go back to the history, the last four years, we've been very bearish on this pipeline, but now it's looking extremely good because if you even look at the projects floated by REC and PFC in their websites, if you look at the kind of details which Power Grid has given for their CapEx, if you look at the projects already identified, when you get into tendering in the next six months itself, I think the pipeline looks like growing by at least or even double in the next year. The next two years look very good from a pipeline perspective and then after that from execution perspective. So we have presented that in our presentation also. So $2.5-$3.5 trillion is what we're expecting by 2029. It's driven by everything: renewable energy, connection system upgrades, and capacity addition. To us, we look at this business going at minimum 20%-25% from a next three-year perspective, and we expect the next 12-18 months to be very, very good in terms of order inflow. Again, on this business, our biggest challenge continues to be labor availability, and that's why we would like to be also cautious at times in terms of the European projects, which have very stringent delivery timelines. We remain very optimistic, if not bullish, on this business as of now. So what is the HVDC pipeline, sir, in the near term? Say next one year, which all projects do you think can come in the market and get awarded? At the beginning of the year, we were looking at HVDC of around INR 50,000-INR 60,000 crore, right? Is what we had looked at, out of which I think around INR 25,000 worth of projects have already been awarded. So I would see another INR 20,000-INR 30,000 crore happening in the next three to six months minimum. Okay. Just last question on the margins, sir. So when do we know the share of new orders have been increasing, and T&D as a share has been going up. So when do we expect to revert to double-digit margins? Any guidance on how the FY25 revenue and EBITDA would be and what margins would be for the next year? What kind of growth and margins you have been making? So as I mentioned in my call earlier, we are targeting to reach closer to 5% margins at the PBT level in Q4 itself, and I don't see us going down from there, at least for the next couple of years, given the heavy visible order book today. So at a standalone level, you should see margins reaching closer to 5% in Q4 itself. And I mentioned that in my opening speech itself, with a 15%-20% growth minimum on top line also. So I believe that we should be at this as a minimum level going into the next year, but obviously, for the next year numbers, we will have more clarity once our budgets are fully frozen, and we come back in May post our Q4 numbers. EBITDA on double-digit? Any guidance on EBITDA reaching double-digit margins? So I think we've stopped riding on EBITDA for the last couple of years. We are focusing a lot more on PBT, so definitely EBITDA should improve in relation to where it is today. But given that our leverage is so low in every terms, we focus more on the PBT guidance going forward. Okay, sir. Sure. Thank you, and wish you the best. Thank you. Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Bharat Sheth from Quest Investment. Please go ahead. Hi. Good morning, Manishji. Good morning, Bharat Sheth. Sir, I missed the water business part, which you said that in Q4, how do we really look at full year and next year? So Bharat, in Q4, we will continue to focus on projects which are under closure in the water business and also start refocusing from the next year perspective as we expect cash flows to come in sooner than later. We have closer to INR 400-INR 500 crore of bills lying at the final stage for payments, another INR 200 crore which are at stages where it will reach the final stages. So as I said earlier, we will be still cautious in the short term in this business in terms of taking new orders and focusing a lot more on execution. It might be only this quarter that we might be cautious, but getting into next quarter, given that the budget allocation is done and the vision by the finance minister, Honorable Finance Minister, was very clear, we believe that we should be going back to that double-digit growth in that business from next year onwards. So Q4 still looks slightly not very good because out of, we've just got INR 230 crore out of whatever INR 700 crore of bills lying there. I'm hoping that this will improve by March, but this could even get to April, May once the budget is finalized and allocated by the center. So earlier, I mean, if you can give working capital intensity, which earlier in water business, kind of you are operating at negative, you are very nominal level. So to what extent it has now gone up, I mean, in net working capital cycle? So water business has been one business which has been very, very efficient on working capital if you forget this year, right? They've been working at days which have been more in the 60-90 at times, less than 60 days. The current year, they've gone up to in excess of 140 days while we speak, right? And for reasons known to all of us, we believe that this business for the last five years was more in the 60-90 days, and we believe that getting them back to that would be very easy once we get our collections back. But currently, there's that big impact on our both working capital days as well as our debt position, primarily driven by non-collection on that business. Okay. And how do we, sir, I mean, O&G and B&F PBT margin going ahead? And how much is actual for the nine months, and where do we see it stabilizing? So if you look at our Linjemontage business, there's been a very stable business in terms of EBITDA margin, always in the range of 4%-6%, and EBITDA is typically equal to PBT because they hardly have any interest cost. Correct. If you look at our numbers from a nine-month perspective on Linjemontage, our revenue is around INR 1,300 crore, which is double in terms of from INR 64 crore to INR 1,337 crore. EBITDA has gone up from INR 22 to INR 64 crore in the same period. So EBITDA is around 4.8% as far as Linjemontage is concerned. If you look at Fasttel, our revenue has gone up from INR 560 crore to sorry, from INR 560 crore to INR 755 crore in nine months, and our EBITDA has gone up from INR 656 crore in the same nine months. PBT is negative. PBT also has improved. We had a negative INR 43.5 crore last year. It's only INR 16 negative this year, but the reason is the INR 16 negative is primarily due to the currency devaluation, which we believe is a timing impact. Okay. And sir, I mean, one more quick question. In this quarter, particularly, our other expenses have shot up, Q2 substantially. So any one-off there or? No, I don't think there's been a one-off there. It could have slightly gone up for maybe specific reasons driven by growth only. Bharat, I've not seen any one-off there to the best of my knowledge, but I can ask my team to come back to you. So I think it's only in relation to the growth and nothing more than that. I mean, on guidance side, LMG will remain around 5% kind of PBT margin, 4.5%-5%. Fossil, where do we see PBT margin? I believe on guidance trends going into the next year, Linjemontage margin should definitely reach more towards 5.5% plus from 4.8% at the EBITDA level in the current year. As far as O&G is concerned, our aim is to improve the EBITDA margin from as low as 1% to 7% in the current year, and we believe it will stay at this level of 7% to 8% going forward also. PBT margin would be approximately? PBT margin as far as LMG and Linjemontage is concerned would be more in the range of 3.5%-4%, and Fossil will try and break even because more in the range of 1%-2% because the interest cost is much higher. Water will also start making money. Is that fair understanding? Yes, definitely. To be very frank, Bharat, water was completely beyond our control. We really worked hard to reallocate resources to other businesses to achieve our targeted growth because for the last five years, we have never had these issues of payment. You could see the budget numbers also. The last five years, INR 60,000 crore, this year, only INR 22,000 crore allocated to the water business at the central level. This was completely beyond our control, but now with the budget allocation back, we're reasonably confident that this business should start delivering both growth and margin getting into the next year. Sir, can you give some color on the international T&D as well as oil, gas, and railway? So we stay bullish on all international T&D, oil and gas, urban infra, all three businesses. As said earlier, I think we'll see both growth and margin improvements in all three businesses. As far as railways is concerned, we've been very cautious on this business for the last two years, and we would like to be like that. I don't see any growth happening in the railway business, at least for the next year. But definitely, we don't see any margin deterioration happening in that business going forward. Okay. Thank you, and all the best, sir. Thank you. Participants who wish to ask questions, please press star and one. Next question is from Chinmay Kabra from Emkay Global Financial Services. Please go ahead. Yeah. Hi, sir. So just really wanted to understand what would be the typical timeline for the repayment of borrowings against the INR 7.5 billion that we have kept separately from the QIP? I think we've already started that process. A significant portion of that, so the repayment of borrowings also includes repayment of working capital payments and short-term loans and NCDs. I think we have already started that process, and a significant portion of that would have already been done by 31st December because it's working capital, and that's why you can see our net numbers have gone down. So it's nearly fully done. It's not nearly, I would say fully done because it's just repaid our working capital and some of our CPs and some of our short-term loans which we had. And even some NCDs, I remember some NCDs also we have repaid. High-cost NCDs also we have repaid in December or early January. Understood, sir. So factoring in the payments that we have done in the recent quarter, what is the net working capital guidance that we are building in for Q4 and going ahead as well? Do we still maintain it to reach approximately the 100 days? Yes. We're still targeting it to reach 100 days, and hopefully, we will be there. Even without water collection being significant in Q4, we're still targeting to be in that 100-day level at a standalone level and consolidate maybe 90, if not below 90-day level. Understood, sir. Coming to the railways segment, so just really wanted to understand how is the execution going ahead in railways? I mean, we do see the sustained degrowth even in this quarter, and going ahead also, we are building in a decline for FY26 as well. So just really wanted to understand that from when can we see a growth in the railway segment, and how is the current tendering opportunities coming up? So from our perspective, I don't think we see any bullishness in that business for the three-fourths segments where we are, right? Whether it is electrification, whether it is civil in terms of expansion, whether it is metro electrification, we are not seeing very bullishness in that business, primarily for three reasons. One, there's a lot of competition coming into that business. We see 20-plus players competing in the majority of the tenders. Second, the businesses have gone back decentralized to the various zonal railways. We had created CORE which is dismantled, and now it's gone back to zonal railways. So the functional style in terms of the size of orders, all of that has become very different. And third, with competition, the margin profile is not exactly where we want to be. So personally, from a two-year perspective, I don't see that business growing in any form. The good part is our order book is limited to around INR 4,000 crore on that business, so it's not very high from our order book and delivery perspective. Parallelly, we're exploring international opportunities in that business in five or six countries at a global level. We've got the synergy closer to saying that we should be signing or doing something soon, but I believe getting into the next year, maybe Q2, Q3 of next year, we should be targeting a win at the international level. So from a two-to-three-year perspective, we continue to be very cautiously optimistic in this business with minimal growth, or I would say with negative or zero growth. But yet, margins do not look like deteriorating further from here as far as that business is concerned. Understood, sir. So just if I can take one last question. So coming to the EBITDA or the PBT level, or if I can look at it on a segmental level, T&D, B&F, and oil are the only contributors in terms of the expansion. Meanwhile, railways and water will continue to be a laggard, if I can summarize it. So I think I will summarize it differently. T&D business would continue with the largest growth, followed by B&F and oil and gas. Oil and gas is going to have a lower base going forward. I also expect urban infra to do very well in terms of the revenue growth because they started with a low base, and they have a very good order book and good visibility going forward. So the only business where I believe we might not do well is railways in terms of revenue growth. Even on water, we believe that next year would see very good revenue growth because we have a healthy order book, and now cash flows are visible, given that the budget has given so much allocation. So getting into next year, except railways, I think all businesses should be at a double-digit minimum growth, if not very high double-digit. Understood, sir. Those were my questions. Thank you very much. Thank you. Participants who wish to ask questions, please press star and one. The next question is from Vaibhav Shah from JM Financial. Please go ahead. Yeah. Sir, how much have we infused into road assets in Q3 and nine months? So I think just before I give you the exact number, our majority investment in road assets has been primarily to repay debt because majority of the road assets' debt happens done in the next two, three years. Full payment has to be done in the next two, three years. Our total investment in the last nine months is around INR 69 crore on all three assets or all three assets put together. In Q3, we have invested closer to INR 30 crore. Didn't get it. 59 or 69? 69. 69. Okay. And sir, how much do we expect for the entire year, this year and next year? So my belief is that Q4 also, we should see investment closer to the same INR 29-30 crore because there's investing in O&M as well as some repayment of debt on VEPL. It should be in the similar range. Going forward, it should only come down. So for example, if we do INR 100 crore this year, going forward, I don't think we should be doing more than INR 50 crore if the VEPL is generated by Q2. So going into the next year, we'll come back with exact numbers, but my own belief is it should be less than 50% of the current year. Okay. Sirs, I missed one number. For L&G, you said that EBITDA margin has been around 5.5%, and for Fossil, around 7% in nine months. For L&G, I said EBITDA margin in the range of 4%-6%, it was 4.8%. The exact EBITDA margin I gave was 4.8% in L&G. Fossil, 7.4%. Road assets were negative, and there are some international subsidiaries like Saudi where we had some losses. So L&G is 4.8% nine months, and Fossil is 7.4% EBITDA nine months. For L&G, what is the guidance for 26 in terms of margins or our target? We still have to finalize the targets for next year, but I personally believe that this number should go up by at least 100 basis points getting into the next year because their current order book is much healthier than what we had in the past. Okay, and sir, secondly, we have seen some degrowth, and though it is a very small number in the overall scheme of things in the urban infra side, so the growth can be much, much higher in 2026 and 2027? Yeah. We definitely expect the growth to be much higher because we've got two large projects in the last six months which will get converted to revenue going forward. So definitely, in the next year, I see this business going up by 20%-25%, if not more than that because they have a lower base. They might even go closer to 40%. Sirs, in terms of order inflows, are we confident of looking for some growth in FY26 as well? Maybe a 10%-15% growth on the current base because YTD number is quite strong right now, and we are on track to achieve the 25 guidance. So we will be coming back to the guidance for 26 later part of this year. But as we stand today, if I look at the majority of our business, transmission domestic look, we look like very bullish. Transmission international looks bullish given that opportunity in Africa, Middle East, and I don't know what's back. B&F, given by residential, commercial, data centers, airports, a lot of vendors, so that also we stay bullish. Urban infra focus has been on select space where we're seeing a lot of traction. Water should be coming back given the budget allocation. So I don't see challenges. But in terms of exact numbers, you'll have to give me a few more months to come back and give a target for the next year. Okay. Thank you, sir. Those were my questions. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your touchtone telephone. Next question is from Samarth Khandelwal from ICICI Securities. Please go ahead. Hello. Am I audible? Yes, Samarth. Yes, sir. Congratulations on a very good execution this quarter. My question is on the non-core assets. Specifically, what has been the update for Indore assets in Q3?C Some of Indore assets, what is unsold is primarily last building inventory which is with us. We believe that the OC of that building could come in any time now. It could be a few days. It could be a few weeks, not beyond that. Our sales team has indicated that the moment the OC comes, we would be able to sell out the entire inventory within a period of 60 days, not even beyond that, because the other four towers are sold off and people have come occupied all of that. So my own view is in the next three to four months, we should be getting back our entire investment on Indore, maximum 90 days after we get the OC. We're just waiting for OC and before March, actually, we believe we will be able to sell off the entire thing. So it's just a matter of time, which is days, weeks, and not even months. So by March, if not May, we should be done fully in terms of selling off the entire inventory in Indore. And cash flows coming in later before June 25th. Right. Sir, my last question is on, I read a news article saying Kalpataru Limited has received IPO nod from SEBI. So how will that impact our company? I also read that news article the way you read it. I do not see any impact on our business in any form because as far as we are concerned, there are two different organizations, and Kalpataru Limited is a separate organization in every form. So I do not see any impact in any form. If at all, it would be a positive impact, but no negative impact on any form from the IPO plans of KL Limited. Thank you, sir. Thank you for answering my questions. All the best. Thank you. Before we take the next question, a reminder to participants to please press star and one to join the question queue. Next question is from Gaurav Uttrani from Axis Capital. Please go ahead. Thank you for the opportunity, sir. So we have seen that order inflow has been largely driven by T&D segment, and other segments like B&F and all are largely flat on a year-on-year basis if you look on a nine-month basis also. So is it like we are selective in taking order for the B&F? And we have also seen there's an order inflow in railway segment of almost at least INR 64 crore. So what sort of orders we are taking in railways? As you mentioned that we'll be very cautious in the segment going forward. Let me answer the last question, sir. First, railways orders we have taken are primarily on metro electrification. So these are overhead metro lines for which electrification projects we have taken. These are reasonably good margins to be delivered in the next few years. So they are much better in terms of margins compared to what we have now. As far as being cautious on order books, yes, I think that's been our strategy always because our biggest challenge is resource allocation, whether it is resource in terms of labor availability, resource in terms of CapEx, in terms of working capital, all of that. Today, the way the environment is, we see much better opportunity in T&D on everything, on profitability, on ability to deliver, on plant utilization, resources as well as labor. Our focus is trying to focus on large projects in Buildings and Factories and primarily also looking at large projects in T&D. But while we say so, it's not that we have not been focused on the B&F business. That business has also done reasonably well in terms of revenue growth, but that business is very labor-intensive and CapEx-intensive. So we are focused on much larger-sized orders instead of looking at orders of INR 200, INR 300 crore, and we believe that there is a huge opportunity for large-sized orders going forward. So it's just a strategic call for the time being, but in terms of bullishness, I think both the businesses, we are equally bullish getting into the next year. Got it, sir. And sir, if we talk about the railway segment specifically, so our order book, which was outstanding like at INR 3,700 crore, that remains largely flat. So are we seeing still challenges in execution for that legacy projects or backlog which already we have, which is being on our working capital and margins? And when do we expect that to get over, say, in terms of next quarter or say for the next six months? If I look at the railway business, the railway business has one large order in Bangladesh and then domestic orders. We have not seen many challenges on execution on the domestic orders, but the Bangladesh order book, the Bangladesh project which we had, obviously got stalled for four, five months for reasons known to all of us. It has picked up back in terms of revenue, but still not to those levels which happened before the Bangladesh debacle which happened. To answer your question, I don't see challenges in the Indian order book. We are on track in terms of delivery. Bangladesh was a setback in the current year, not significant from a larger perspective, but a setback from a railway perspective, and we expect that to start improving from next year onwards. Okay. And sir, which international territory would we be targeting in railways, as you mentioned earlier? Primarily the African zone. Primarily a lot of countries in Africa. That's all from my side. Thank you. Thank you. Participants who wish to ask questions, please press star and one. The next question is from Bhoomika Nair from DAM Capital. Please go ahead. Yes, sir, so I just wanted to understand how the oil and gas order in the Middle East from Aramco is progressing. I know it is, yet we got it at the end of last year. The execution timeline is elongated, but nevertheless, just wanted to understand how has your experience been? What margins are we seeing on that project? How is the working capital? If you can throw some light on that project, sir. Sure, Bhoomika. Bhoomika, on the Saudi projects which we got last year, we have still not reached our threshold of 10% to recognize margins. We would be reaching that threshold in the current quarter. We are on track to achieve our targeted numbers for the current year. Next year, out of the $800 million on that project, we believe that closer to 40% would get delivered in the next year, and the balance should go into the year two and three. In terms of margins, I think these are high single-digit margin business, as we said earlier also, and we believe we should be able to achieve that. In terms of working capital, since we just started the business, it's still in that range of 50-60 days, but typically, international order book working capital always is less than 50 days. But we've just done less than 10%. We've just reached the 10% level in February when we speak about it. So I do not see any challenges. The biggest challenge in any Saudi Aramco project is to make sure that the initial things in terms of setups, in terms of third-party facilities, in terms of client requirements, are all done. It's all done. The pipes have been received by us. We have started the welding already, and it's on track as far as our internal targets of achievement are concerned. So I do not see much challenges. We will see good numbers coming from that business getting into this quarter itself and the next seven-to-eight quarters. Amit, do you want to add something? No, I think, yeah, that's next year should be, now that the stage is set, as Manish mentioned, the current facilities for camp, etc., ready. The mainline welding has started. So now is when the pace picks up, and hopefully, the next four, five months will be good visibility in terms of what the cap actually executed at that. Got it. So when you say high single-digit margins, that means on the EBITDA side, right? Yes, on the EBITDA side. Okay. Okay. Got it. So the other thing is on Fasttel. The order intake has been fairly muted in the nine-month period. Are we being cautious a little bit on our end to kind of not take too many orders? What is the outlook in terms of growth there? Because, as you mentioned, the working capital and thereby interest is higher, which is where the profitability is getting impacted. So how are we seeing that both revenues, margins expanding, and thereby a turnaround? Where you spoke about Fasttel, that from next year, we should see a break-even to 1-2% PBT margin. What will drive that, and how do we see that progressing thereafter? Bhoomika, I think you've got that right. While we're very bullish on Linjemontage in terms of both revenue growth and margin, we continue to be cautious as far as Fasttel is concerned, both from a political perspective and the country's own economic perspective and our ability to take that order book to a different level. We will be cautiously optimistic on bidding for projects there. We do not expect huge revenue growth coming in Fasttel in the next year because we have seen good growth in the current year. But our intent would be slowly to improve margins and get back to the standard levels of the historical level. Yes, you're right. We will be cautiously optimistic, and the focus would be not revenue, but margin improvement getting into the next year. Okay. Okay. And lastly, on the B&F side, the order backlog remains heavy. We've seen these inflows as well. Now, are you seeing any improvement because there was a bit of a slowdown in terms of private capex? Anything you can throw on the ordering activity out there? So we've not seen any slowdown in the B&F ordering in the last two or three years, right? So maybe private CapEx at a country level could be different, but when I look at B&F, whether it is residential, commercial, data centers, airports, even industrial plants of large PSUs, we have seen good traction. So to me, the business looks very attractive from at least two- to three-year perspective, not even beyond that, right? So you're seeing all large developers doing large-scale projects. Thanks to their, our cash flow looks very healthy because money comes in much faster than required. Our ability in terms of having a huge CapEx base helps us in terms of delivering orders before time. So we've not seen any traction coming down in this business in any form, Bhoomika. Okay, sir. Got it. Got it. I'll come back in the question queue, sir. Thank you. Thank you. Next question is from Parikshit Kandpal from HDFC Securities. Please go ahead. Given that we had weakness in the water segments for FY25, what kind of guidance? I mean, is there any revision in the guidance, or will we be able to deliver that 15% growth for FY25? So if I look at our growth for nine months, it's closer to 10% at a standalone level, right? Q4, we believe that we should be in the 15%-20%, inching towards the 20% revenue growth levels. So if I look at consolidated, obviously, we would be limiting the growth to 12%-13%, and the shortfall, if at all, is only in the water business, where instead of doing a number of INR 3,700 crore which we had planned, we might restrict ourselves to INR 1,600-INR 1,700 crore only. So the entire shortfall of closer to INR 2,000 crore would be in the water business. Had that shortfall not been there, we would have been very closer to achieving our 18%-20% revenue growth for the year. Right now, we believe we should be more in the range of 13%-15% for annualized basis on a consolidated basis and standalone maybe 12%-13%. Absolutely. And next year? We'll be very cautious of 15%-20%, both standalone and consolidated. For next year? For the current year. Next year is something which will come back, but given the healthy order book, we should be doing very well. But we'll come back on the next year's numbers by the end of Q4. Just on the standalone debt, if we are able to materialize the pending receivables from the JJM, so where do you see FY25 ending in terms of standalone net debt? So current year, as I said, standalone, we still have a huge outstanding on JJM, and I mentioned that earlier also. So current year, except water business, every business has done well on whatever we had projected, right? So in the next two months, I don't see significant improvement in revenue coming on the water business. Next year, with the budget allocation, there should be no reason why that business should not be even going at 20%-25%, if not better than that on a lower base of current year. I think earlier before the merger of JMC, we had plans of making Kalpataru net cash. So now the combined business, what kind of peak debt do you think for delivering 15% kind of a growth should be there in FY26, FY27? So any plan, any sense on whether we can become net cash over the next two, three years? You know, there were two philosophies which we were driving. One was reducing that debt, which we have consistently reduced through working capital management and QIP. But finally, we have been also pushing our CapEx significantly. You look at our CapEx for the last four years, including now, the number is in excess of INR 2,500 crore. So the focus was that, given the huge opportunity, should we be looking at keeping our net CapEx zero, or should we be looking at building a balance sheet for the future? So we have tried and managed both of them. So while the debt levels are under control, our net debt will be equivalent to EBITDA very soon, if not, we have already reached there. And the CapEx has been significant. So we balanced that, looking at the long term, and not even focused on only one of the two parameters. So you'll try to maintain net debt one time? That is what the guidance is? Yes. So as I said earlier, our focus will be more on net booking capital debt below 100, and that would drive a lot of our debt numbers as well as working capital numbers. Over the next one year, what kind of monetization conversion can happen? I mean, we have already entered into definitive agreements for road assets. Both from Indore and from the road assets and from the balance claims, the arbitration claims in your favor. If you can help us break up these three things in terms of how much potentially receipts could be from these three revenues. So I'd be happy to guide on Indore as well as Bhopal, which we have already signed off. The claims is something which I would not be able to guide because claims is a long process. So Indore and Bhopal, we definitely expect closer to INR 500 crore to come from both of them, net including debt in calendar year 2025. And also, water receivables, which have been overdue, should be a huge surplus. So that could be another INR 500-plus crore, which could be a positive. As far as claims are concerned, as I said earlier, I don't want to give a target because these are all driven by long-run processes and can't be driven by a specific target. But definitely, on Bhopal, Indore, and water backlog, we should see INR 1,000 crore plus improvement in cash flow getting into the next year. Debt reduction because of Indore and water? Yeah, like we said. Yeah, that's what I said. Indore, water, and BPL. I said give you all three, right? Okay. So you're talking about debt including debt and inflows. It should be INR 1,000 crore in the reduction. And how much of this would be debt out of the INR 1,000 crore? This is the equity component I've given you. There's a further debt component reduction on VEPL, which will be closer to INR 350 crore. What is the number? Sorry. Let me look. INR 250 crore. Sorry. Okay. So INR250 crore will get knocked off from your consolidated debt? Yes, please. Okay. And what is the total value of the claims which are in our favor? So I'm not asking about what you realize, but what is the total claims available, arbitration claims in our favor? I will not be able to give you that number today because a lot of that is confidential in nature, and a lot of them include interest component or other components. It's a significant number, but as a rule of corporate governance and ethics, we typically do not disclose this number unless the claims are finally realized. Okay. Just the last thing on that, so pledging. So any stance on any guidance from the promoter now that the IPO is almost near? So directionally from here on, how do you think the pledging shares will play out? I think we'll have the same guidance which we had in the end of Q2, that pledge will only come down, and we've seen pledge come down in Q3 also. So if you look at the pledge level, we are at around 24% levels while we are now, from as high as 15% a few years ago. So the guidance to us is exactly what it was in the past of seeing that the pledge levels will only come down going forward and not go up. Okay. Sure. So thank you. Thank you. Next question is from Uttam Kumar Srimal from Axis Securities. Please go ahead. Good morning, and thanks for the opportunity. So my question pertains to CapEx guidance. So how much CapEx we have incurred this year, and what would be our CapEx guidance for FY25 on its own and for FY26? So I think we have already incurred a CapEx in excess of INR 450 crore for the current year. We expect CapEx to be more in the range of INR 600-INR 650 crore on the balance sheet in the current year. Going forward next year, we expect CapEx to be below the current year because this year had a significant CapEx coming from TBM and significant CapEx on B&F. It should definitely be lower than this year, but the exact numbers I think we'll be able to give you once we have finalized our business plan. Okay. And then I come into the urban infra business since this constitutes only 5% of our total order book. So what kind of growth you are building in urban infra business, particularly on the side of metros? Because already we have got two projects. So where do you see this urban infra business panning out in the next two to three years? We are late entrant in this business, although we did some components seven or eight years ago in terms of Delhi Metro and Bangalore Metro, but last four, five years, we've not done much. Only in the last two years, we have got traction again. And in the last two years, the team has already built an order book closer to INR 3,000 crore, what we speak as of now. We believe there's traction in everything on metros, the underground metros, where we see good traction, overhead line metros where we see good traction. We see traction coming in urban cities as well as second-tier cities, and we believe that getting into the next few years, this looks like a very good opportunity. In terms of growth, I expect that business, as I said earlier, to grow at 20%-30% definitely in the next few years. In terms of order book, being optimistic, being cautious in terms of our CapEx targets, we still should be growing this order book at 30%-40%, if not higher, in the next couple of years. Okay. That's all from my side. I'm very sure of this. Thank you. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments. Thank you to everyone for being on the call. Thank you. Thank you very much. On behalf of DAM Capital Advisors, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.