Ladies and gentlemen, good day and welcome to the Kalpataru Projects International's Q1 FY 2026 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 conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors. Thank you, and over to you, ma'am. Thanks. Good morning, everyone, and a warm welcome to the Q1 FY 2026 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. 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. Good morning, everyone, and thank you for joining us on today's earnings call. I'm happy to share that we have had a strong start to FY 2026. The performance for Q1 of 2026 marks our highest-ever Q1 revenue and profitability in the company's history. This performance reflects the underlying strength and resilience of our diversified business model, robust balance sheet, and working capital management, and relentless focus on project execution on the back of strong capabilities to execute EPC projects across diverse geographies. Let us now move to the business performance. At the consolidated standalone level, both revenue for Q1 grew by a strong 35% YoY, led by strong project execution and healthy order backlog. In Q1 FY 2026, improvement in profitability has significantly outpaced revenue growth, as our consolidated EBITDA grew by 39% YoY, PBT grew by 112% YoY, and PAT was up by 154% YoY. Similarly, at standalone level, EBITDA was up by 37% YoY, PBT grew by 67% YoY, and PAT was up by 72% in Q1 2026. This was on the back of 20 basis points improvement in consolidated EBITDA margin, which stood at 8.5%, and 170 basis points improvement in consolidated PBT margin. Our standalone EBITDA margin was up by 10 basis points to reach 8.5%, and PBT margin improved by a strong 100 basis points to 5.4% for Q1 2026. As guided earlier, margin expansion remains a major focus area for us on the back of strategic bidding, diversified business mix, prudent working capital, and operational efficiencies. Our finance cost, as a percentage of sales, has come down to 1.7% at standalone level and 2% at consolidated level, backed by efficient working capital management. We continue to maintain a strong balance sheet as we close the quarter with 33% YoY reduction in standalone net debt to INR 1,940 crores and 26% YoY reduction in consolidated net debt to INR 2,765 crores. Our net working capital has improved significantly compared to the similar quarter last year, with net working capital days at 106 days at standalone level and 91 days at consolidated level, which is an improvement of 19 days at standalone level and 12 days at consolidated level compared to the similar quarter last year. Our order inflows remain healthy at INR 9,899 crores till date in FY 2026, with significant wins in the B&F and T&D business. Our order book stands at INR 65,475 crores as of June 30th, 2025, up 14% YoY, with fairly diversified and provides strong visibility for future growth. Now, coming to the performance of individual businesses, our transmission and distribution business delivered a strong revenue growth of 56% YoY, supported by robust order backlog and project execution in India and overseas markets. We received new orders of INR 3,188 crores in the T&D business, supported by India and international markets. Our T&D order book stands at INR 26,725 crores, a growth of 30% YoY, reflecting good growth visibility in coming quarters. We continue to strengthen our capabilities and market reach in the T&D business, as we have secured new HVDC projects and strengthened presence in the Middle East and Nordic region. LMG Sweden has reported revenue growth of 72% YoY to INR 774 crores. LMG received orders worth approximately INR 850 crores till date in FY 2026 and have an order backlog of around INR 3,500 crores as of 30th June 2025. We have initiated a strategic overview on LMG, where various options are being evaluated, including options related to IPOs subject to market conditions. In this regard, merchant bankers and other advisors and intermediaries have been appointed to assist with such evaluation, and LMG has initiated certain preparatory steps. Overall, the outlook for our T&D business remains very optimistic in domestic and overseas markets, with tender pipeline in excess of INR 120,000 crores in the next 12-18 months, driven by investments in energy transition, grid modernization, and the growing demand for power. We are confident that our T&D business is well-positioned to continue its growth trajectory with improved profitability going forward. In Q1 2026, our buildings and factories business maintained its growth momentum, recording a 13% YoY increase in revenue. We have secured record orders worth INR 6,711 crores, taking our order book to an all-time high level of over INR 16,600 crores in the B&F business. This performance is driven on the back of our strong capabilities to win and execute large-sized design and build contracts from both long-standing and new clients. Notably, we have secured our largest B&F order on design-build basis till date in our history for the development of over 12 million sq ft of residential buildings in one single project. Additionally, we expanded our presence in the data center business with additional works on an existing project. In the buildings and factories business, we continue to focus on establishing a strong footprint in key markets, expanding our portfolio with large-scale design-build projects, while sharpening our competitive edge through robust execution and timely delivery. Our oil and gas business delivered strong growth, with revenue more than doubling to INR 588 crores with good progress on the Saudi project. Looking ahead, we are actively working to improve our presence in international markets to drive the next phase of growth in this business. Our water business saw a decline in revenue by 5% YoY to INR 670 crores. Collections in the water business have started to improve in a few states, while progress in certain states still remains very slow on the collection front. We expect collection intensity to improve going forward. With an order book backlog of INR 8,900 crores, we remain comfortable on the execution front in the coming quarters and also in the next few years. Our Urban Infra business delivered strong performance this quarter, with a 42% YoY growth driven by progress on metro rail projects, both elevated and underground. We are continuously building our capabilities in execution and delivering to capitalize on the growing pipeline of opportunities in metro systems, elevated corridors, and tunneling infrastructure. In our railway business, we recorded revenue of INR 254 crores during this quarter. This aligns with our current strategy of prioritizing project closures while being selective with new orders, given the competitive intensity in this business. Lastly, daily revenue from our road BOOT assets rose to INR 72.6 lakhs in Q1 2026, from INR 63.6 lakhs in Q1 2025. Importantly, we have not infused any funds in the three-road SPVs during the first quarter. Our subsidiary, Wainganga Expressway, has issued termination notice to NHAI on 15 July due to various contractual defaults on the part of the concessionaire. The company does not expect any material impact on the termination of our financials. We are progressing well on approval for sale of Vindhyachal Expressway and expect to complete the transaction in Q3 of 2025-2026. Moving now to our outlook, we remain confident to deliver on our targeted growth and profitability for FY 2026. We are on track to achieve revenue growth in the range of 20%-25% at both standalone and consolidated levels, with healthy improvement in PBT margin. Our order visibility remains very positive in most of our businesses, as we continue to target order inflows of INR 26,000-INR 28,000 crores for full year 2026. We also remain committed to efficient working capital and prudent debt management to support execution and competitiveness. With strong momentum across most of our businesses, we are confident in delivering sustainable and profitable growth in the quarters ahead. Thank you for your continued support. We now look forward to your questions. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, you may press star and one on your touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our first question from the line of Mohit Kumar from ICICI Securities. Please go ahead. Yes, sir. Good morning, sir. And congratulations on a very strong quarter. But, sir, my first question on the, despite very, very strong order inflow, it seems like the India T&D was slow in the Q1. Can you please comment on that, and how do you see that unfolding forward? Sure. Good morning, Mohit. Mohit, if you look at our T&D order inflow in the India side, you would have seen Q3, Q4, we won orders more than INR 7,000 crores. Typically, you see a lot of orders coming in Q3, Q4, driven by all the tenders of power grid and REC, PFC bidding. We have not seen much bidding in Q1, which is a typical strategy. But while we go ahead, there's a huge backlog. We're seeing tenders of more than INR 50,000- INR 60,000 crores to be bid over the next six months, primarily for grid expansion, where tenders are all being floated by REC, PFC. So we remain very confident that you'll see that growth coming in very, very soon. From the last nine months' perspective, we have got orders in domestic T&D of more than INR 7,000- INR 8,000 crores. So it's just a timing issue. At getting into Q2, Q3, you'll see growth coming back in terms of order book also in domestic T&D. But is it fair to say that India saw roughly INR 1.3 trillion of bid finalization in FY 2025? Is it fair to assume that a lot of these projects are yet to close the EPC contract? So, Mohit, it's a mix of a lot of orders that have been closed. A lot of orders are in the state of a pipeline in terms of bidding. But the plans going forward to achieve the 2032 target, which is the CEA target, I think we'll have to grow at least 20%-25%, if not one more, in the next three years in the T&D space. Understood. A second question is on the building and factory wins. This quarter was surprisingly very good. Can you comment on the geographical split? And is it driven by a few clients or is it driven by a large number of clients? So on the B&F side, on the geographical split, our biggest strength continues to be southern India, whether it is in all the markets, whether it is Bangalore, Hyderabad, Chennai, Vizag, all of them. That would be closer to 60% of our order book, 60%-65%. The balance 35% would be driven between west and north, primarily. As far as the client concentration is concerned, we work with selective clients, the biggest clients of the country, whether it is Prestige, whether it is DLF, whether it is Godrej, whether it's Puravankara, or whether it is Brigade, right? We work with selective clients, but these are the biggest clients of the country. We do not see any client concentration risk in any form because majority of the projects which we are executing have already been launched, and significant sales are visible in those projects. Given the current RERA environment, we see minimal stress on any of those projects from a client concentration risk perspective. Understood. Thank you. All the best. Thank you. Thank you, Mohit. Thank you. We have our next question from the line of Gaurav Uttrani from Axis Capital. Please go ahead. Thank you, sir. Congratulations on the good set of numbers. Sir, just wanted to comment on the water segment, like how we are seeing recovery in the segment, and are we seeing new inflows to sort of come in the segment? Similarly, for the railways, if you can highlight what would be the progress going forward and what would be our strategy to grow this segment as a whole? Sure. Thank you, Gaurav. Gaurav, on the water segment, as I mentioned earlier, we are seeing some improvements coming in some states in terms of cash flow. So when I look at states like MP, Odisha, we're seeing good improvements coming on cash flows. We're getting paid whatever we are billing today. But in some states, primarily UP and Jharkhand, we are still not seeing too much traction on release of our old outstanding. We believe that it's only a matter of time because it's all projects funded by the center and all budget allocation has been done. We are cautious in terms of delivering. We are primarily focusing on delivering on states which are paying us on time. So to that extent, we are slightly cautious, but I wouldn't say we have reduced it significantly. So going forward, we believe next couple of quarters, the balance sheet should also start paying, and that would help us again to actively look at projects from a long-term perspective. Our current order book on water is good enough for the next two, two and a half years. So we are not worried in terms of an order book building immediately, given the current constraint on cash flows. As far as railways are concerned, we have been slightly bearish on this business for the last couple of years because we've seen huge competition, plus 95% plus of the country is already electrified. We do see some projects coming up on electrification, on metro electrification, as well as civil projects, but we are very, very cautious. For both water and railways, we continue to explore international opportunities, and I personally believe that during the current year, we should at least see one large win in both the segments on the international front. Got it, sir. Sir, our margins have been really good this quarter, like at 8.5%. So if taking into consideration that water segment would have performed well, so what would be the negative impact on the margins due to underperformance of this water segment? If you can highlight that. So we had already built in this when we gave our projections at the beginning of the year, where water segment was not supposed to grow so much during the current year because we knew that the challenges might continue for some more time. So whenever we had given our profitability target of 5%, 5.5% PBT level, we had already included that impact. So water is right now at, if you look at it on a quarterly basis, more at a break-even level. They have not done highly positive. They have not done highly negative. But that is what was already budgeted in our numbers when we gave projections to the entire market. Okay, sir, got it. So that's all from my side. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone willing to ask a question, you may press star and one now. We have our next question from the line of Vaibhav Shah from JM Financial. Please go ahead. Yeah, hi, sir. So firstly, on the B&F business, so we have seen a strong uptick in order inflows and order book also strengthened in the past few quarters. So how would you see the revenue growth in this segment? So it should be in line with the company's overall growth guidance, or it can even surpass the growth given the strong order book position? Good morning, Vaibhav. Vaibhav, we believe that the revenue growth would be in line with whatever we expected for the company as a whole, the 20%-25%. A lot of these new orders which have come are more design-build orders. So converting them to revenue would take some more time. It would not happen in Q2, Q3. It would even only start in Q4. So on an annualized basis, we believe that B&F business should be very similar to the growth target which is given for the entire company. Okay. So secondly, on the JJM side, will we see a decline in water utilization for the entire year like it was in the first quarter? And what are the outstanding receivables as of June? On an annualized basis, we believe that the water business will do slightly better than what they did in the previous year. It might not be a huge growth, but it would still be a single-digit growth in terms of revenue. As far as our JJM outstandings are concerned, they are in excess of INR 1,000 crores as of 30th June, which includes billed, unbilled, all of them. We are monitoring that closely. I said earlier, some of the states like UP and Jharkhand, outstanding is much higher. But other states, the outstandings have improved significantly. Okay. So lastly, on the margin mix, so you mentioned that in water, we are at break-even levels, and railway also should be at similar levels or a negative level. So how do you see the margins, especially in the T&D and the B&F segment? Which are the major contributors for those? I think, as we had guided earlier, T&D, B&F, oil and gas, all of them in terms of margins are much stronger, more in the range of 9%-10% EBITDA for all of these businesses. And some of the other businesses are much lower on EBITDA, and that's why this mixed bag of 8.5%. We believe that this would continue for the balanced part of the year also, wherein some of our transmission, domestic, international, as B&F and oil and gas will deliver much higher margins, and the other businesses would be slightly subdued on margins. Lastly, on LMG and Fasttel, how has been the margin performance in the first quarter? What is the guidance for FY 2026? I think the margin performance for LMG in the first quarter, I mean, I think at our EBITDA level, they've done 8%+. As far as Fasttel is concerned, they continue to be negative on EBITDA even in the current quarter. We're not able to provide guidance for the current year, given that the process of looking at options of fundraisers started for LMG. But we are on track on whatever we had given at the beginning of the year on the business plan of LMG. The execution was very strong in the first quarter for LMG. This momentum should continue? Yes, because the order book looks very good. So we believe that we should be on track for a reasonably good execution going forward. Okay. Thank you, sir. Those are my questions. Thank you. We have our next question from the line of Mihir Manohar from Carnelian Capital. Please go ahead. Yeah, hi. Thanks for giving the opportunity. Am I audible? Good morning, Mihir. Yeah, go on. Yeah, good morning. Congratulations on the great set of numbers. Sir, I wanted to understand on the JJM side, you mentioned excess of INR 1,000 crores billed plus unbilled put together. What is the bifurcation between billed and unbilled? And what was this number individually in the March quarter? Mihir, I might not have the exact details of that with me right now. I think compared to March quarter, I know that the incremental cash which we have given in the current quarter is only around INR 150- INR200 crores. As far as details, specifically in terms of how much is build and unbuild, if you can connect with any of our team members, post the call, they'll be able to give you those details. Sure. Done, sir. I mean, on the UP side, we were expecting the numbers, I mean, this recovery to happen roughly April or May or around. But however, there are still August, but the number has not come in. Broadly, I mean, what is the reason for UP and Jharkhand that the money is not flowing in? No, we wouldn't know the exact reasons except that they have not got the funding from the center as of now. We are in continuous touch with them. We still continue to work on the majority of the projects in UP. While Jharkhand, we have slightly slowed down our work execution. We have had discussions both at the state and the central level, across all levels. We've been given to understand that we should see some cash flow coming in as early as August, September, this next few months itself. We'll just keep our fingers crossed, continue working, and continue pushing to see that the cash flow comes sooner than later. Understood. Sure. Our second question was on the LMG side. I mean, we are exploring options for either raising capital over there or a separate listing. I just wanted to understand the thought process because, I mean, it is also a T&D business, similarly sitting in KPIL. So what is the strategy and thought process of getting it a separate subsidiary, listing it subsidiary? I think the strategy is very simple. I think it is right to the shareholders of KPIL to create value for some of our subsidiaries where we have invested a lot of time in the last 10 years. That's one approach. And second is also to build a kitty to make sure that if there are further opportunities of growth in the European segment, then LMG itself could look at those opportunities using the cash flow which we could raise over a period of time. So it's a mix of both of them. And as I said earlier, we're looking at various options, and we're exploring that, and we've appointed bankers and advisors for that. Understood. Sir, and then the last question was on the international side. On the international, do we execute HVDC projects also? Yes, we do, but not across the globe. In some part of the world, Latin America, Chile, we are doing an HVDC. So some parts of the globe, yes, we're doing HVDC projects, but not across the globe. Brazil and Chile, yes. Sweden, not so much. But it's a mix. So it depends on whatever opportunities exist in any of those countries. But if your question is, are we qualified to do HVDC projects at a global level? The answer is yes, we qualify to do HVDC projects at a global level. Okay. Understood. Just on the HVDC globally, I mean, are the margins and ROE, ROCs better than the non-HVDC or lower T&D projects just from fundamental perspective? So I don't think there's any difference in terms of HVDC or non-HVDC projects when it comes to margins or ROEs or ROE. And because we built all that in the tender costing, and effectively, we built at similar margins. So it's not that if it is HVDC versus non-HVDC, the margins would be different in any forms. Understood. Sure. And my last question was just on the guidance. I mean, given a good trajectory which has been in Q1 and also robust CapEx across the power T&D space, do we expect our guidance to be revised upwards? I'm sure you would have heard my opening remark. At the beginning of the year, I had said 20% +. Compared to that, right now, we have said 20%-25%. And I personally believe we should be more closer to that 25% levels in terms of revenue growth guidance, with margin guidance being similar of 5%-5.5% at a standalone level. Understood. Sure. Yeah, that's it from my side. Thank you very much. Yeah. Thank you. Thank you. We have our next question from the line of Amit Anwani from PL Capital. Please go ahead. Good morning, sir, and congrats for the good set of numbers. First question, sir, on the debt levels, what kind of target debt levels we are looking at this year? Also, the VEPL transaction, if it happens, what is the value we are expecting, how much we invested, and will that help making our balance sheet better, some color on the debt position, and how VEPL is also going to benefit us in terms of the balance sheet? Sure. Good morning, Amit. Amit, we continue to stay cautious on our debt levels, and that's been our model all throughout the last 10, 15 years. We believe that our net working capital days will be below 100 days at the year-end, which is one of our targets, and driven by growth, you'll have appropriate debt. Q1, typically, you see debt going up. That's been a trend of the industry as a whole, and you've seen that now also, so my own view is Q1, Q2, debt should go up, and it should start stabilizing in Q3, Q4. On absolute numbers, it will be driven by how much growth we achieve with working capital days below 100, net working capital days below 100 at a standalone level. That's how we're driving it as far as debt and net working capital is concerned. Right, sir. So we're expecting the Indore real estate's any update. Has that been closed, and is the money received? And second, same for the Shree Shubham Logistics, what exactly will be looking for in the subsequent quarters as a strategy with them? Shree Shubham Logistics, we continue to explore opportunities of selling some of our warehouses and land parcels which were there and reducing external debt. We should be selling at least two, three large warehouses in the current year. One of them may be in as early as Q2. Our target is to reduce external debt significantly by the end of the year, and then we could look at strategic options getting into the next year for Shree Shubham. As far as the real estate is concerned, I think we have already given on the Indore side, majority of our projects are if not majority, I would say 99% of residential and shops are sold. We have to collect approximately INR 100 crores, which we believe collection should all happen in Q2 or early Q3, not beyond that. That's on the Indore project. So the amount which we are expecting? It's closer to INR 100 crores. Okay, sir. Thank you. Thank you so much for answering my questions. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone willing to ask questions, you may press star and one now. We have our next question from the line of Abhijeet Singh from Systematix Group. Please go ahead. Thank you for the opportunity, sir. Great to see an amazing set of results for this quarter. My first question is, given the current mix of the order book, what is the sensitivity to an increase in commodity prices like steel, copper, etc., whatever the commodities that are the input costs? So what is the, I mean, proportion of, let's say, fixed price contracts to contracts with a PVC clause and other variables which would go into the sensitivity? So Abhijeet, just so that we are very clear, we are exposed to three or four kinds of commodity risk, steel being the largest, aluminum second, copper, and zinc. As far as aluminum and copper and zinc are concerned, we are significantly hedged, if not fully hedged, so there will be no impact of any price movements going forward. On an overall book, if you look at our order book, there's around 65% of our order book which is fixed in nature. So that 65%, we do not believe that there will be any impact of any increase in any of the commodity prices. There's 35% which is variable, and out of that 35%, significant is already hedged. So personally, if you ask me, there could be very, very minimal impact in case prices go up significantly, unless prices double from here, which we saw post-COVID when suddenly steel had doubled itself. So unless that happens, we do not believe there will be any impact on margins given by volatility, at least in the current year. So only a sudden and sharp increase in steel could impact substantially? Yeah. When I say sharp is if it doubles itself from here, which we've seen only once in the last 15 years, that was post-COVID. If it doubles, if steel doubles itself from here, you still have a three- to four-month inventory. So you would not see that impact coming significantly in the current year. It would only come in in the next year for that order book which is more fixed in nature. Right. So then, on the, you mentioned in your comments about the B&F and water business that you are expecting one order in the international geography. So could you comment on, I mean, the geography and the kind of addressable market that we are looking at there and the margin profiles? So, I mean, a general idea of how we are looking at those markets. On my commentary, I spoke more about water and railway on the international front. It wasn't B&F. The segments for water continue to be more focused on the Middle East side, where we are looking at options with a few large developers in the Middle East. This would be high-value projects and margins similar to what we quote in India in terms of EBITDA and PBT. As far as railways are concerned, we are looking at options more in the Africa side, and we are looking for tenders more in the African region. It might still take some more time before we really get into which exact geography of Africa, but as I said earlier, it would be high-value with margins similar to the Indian margins which we quote. Right. So lastly, is there any impact of the increased tariffs by the U.S. on Indian imports on our business? I think on our business, we have looked at. We have a nil impact because we have zero exposure to U.S. in every form and all the businesses. We do not do any imports. We do not do any exports, nothing from U.S., directly as well as indirectly. Right, sir. Thank you for answering my questions. That's it from my side. Thank you. We have our next question from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hi. Congratulations, Manish and team for. Sorry to interrupt you, Mr. Bharat. Can you please be a little louder? Hello. Am I audible? Yeah. Yes, please. Good morning. Congratulations, Manish and team for excellent performance. Sir, my question is, one is how do we see an opportunity in the European region? What was year back and now, and how do we see it changing? Good morning, Bharat Bhai. Bharat Bhai, we as KPIL have always been very bullish on the European segments on a few specific sectors. One of the sectors where we're very bullish is T&D, and I think we continue to stay bullish, whether it is in the Nordic market or whether it is Germany or whether it's the neighboring markets. As of today, if you look at it at Sweden, we are among the top three through Linjemontage, and we continue to be staying in that position. So from a two to three-year perspective, we continue to stay very bullish. And personally, if you ask me, even from a five-year perspective, because the majority of the European states now have becoming clean in terms of energy by 2035, which requires them to build a very strong grid. Given that, I think we continue to stay bullish in this market, at least from a three-year, three to five-year perspective. How much capacity investment that we are planning and what stage for, I mean, gearing up for future opportunity? So Bharat Bhai, I might not be able to speak a lot on the future opportunities given that we've started a process. I can only say that whatever business plan we had given at the beginning of the current year, we're confident of achieving that. And we've geared up in terms of competencies to make sure that we achieve that and further growth also if required. And how about, sir, Fasttel? How do we see, I mean, and when do we expect to PBT break even? So we still continue to have some challenges on Fasttel. Q1 was good on revenue growth, but on profitability, it was not necessarily a good quarter. I personally believe getting into Q3 onwards, we should be at a break-even level. Q2 is also a slightly difficult quarter, but from Q3 onwards, at Fasttel, we should be at a break-even level. We've also been very selective in terms of taking orders there, and we would be revisiting our strategy in terms of future growth of Fasttel, maybe Q3, Q4, and then we'll revert back to all of you. Okay. And the last question, see, after winning a large project in oil and gas in the international market, so how we are seeing now, and then what is your view from two, three years' perspective? Bharat Bhai, on the international front, when it comes to oil and gas, today we are qualified with the majority of the international Middle East players, whether it is ADNOC, whether it is Saudi Aramco, or whether it is the neighboring countries there with the oil and gas utility. We're seeing a lot of opportunities coming up there. Our first aim was to make sure that we had taken a large project, that we create a team and focus on delivery, and that's why we did not take any projects in the previous year. Over the last 12 months, we have now seen that our team has delivered better than what we had expected. With this, we now continue to refocus on building an order book and this on the international front. We believe that before the end of the year, we should have some large wins coming on the international front on the oil and gas business. Okay. And sir, last question with your permission. So when you are talking about three-year opportunity, say, on India side, I mean, growing on T&D side 20%-25%, so again, I mean, what are the major challenges that we are facing, and how really we are building a company to gear up to encash those opportunities? So, Bharat Bhai, today on challenges, our biggest challenge continues to be labor availability and also the movement of labor. To me, if you ask me, the biggest challenge, one, challenge two, and challenge three continues to be only that. As far as our plant capacity is concerned, we are in the range of 2.25+ lakh tons, and we can easily expand that in a few months to whatever we need. As far as our management team, as well as our design engineering team, our equipment base, our CapEx base, I think we can even do double of what we are doing today. So today, we do not have a challenge on any front except labor availability, and that's also improving in terms of where we were at the same time previous year to where we are right now. I can see some improvements, but it needs to improve significantly for us to continuously growing this at 25%-30% for the next 3-5 years. Okay. And same thing on B&F side? Yes. I think it's exactly the same on B&F. The opportunity looks good. We work with the large guys. We are doing large-sized projects, design, build. Thanks to RERA, we do not have any challenges in terms of liquidity, cash flow, any of that. We've also invested hugely in CAPEX over the last three years on the B&F side. So that also helps us having a good CAPEX base. So our only challenge continues to be labor on the B&F side also. Okay. Thank you very much, sir, and all the best. Thank you, Bharat Bhai. Thank you. We have our next question from the line of Teena Virmani from Motilal Oswal Financial Services. Please go ahead. Hi, sir. Thank you, and congratulations for extremely good set of numbers. Sir, my question is related to the previous question on growth across segments. Given the way this pipeline is strong and order inflows for KPIL also have been strong in the last three years, beyond this labor issue, which probably can be a temporary issue, what can be your constraint to grow even at a 30%-35% growth rate going forward? In the sense, I just want to assess whether you can grow on a full-year basis by more than 25% or 25%, is it possible or not? Because barring Q2, which has a seasonal impact, Q3 and Q4, generally, the execution ramps up, and all those labor-related issues also get sorted out. So can you be at even 30%-35% growth rate if things fall in line? So Teena, a good part of our business is that it is driven by external factors as much as driven by our own capabilities and competencies, right? On an order book front, yes, we have good visibility across all the business. We have seen Q1, we have grown at 35%, and that's why annualized, we are confident of 25% +. We do not believe that, at least for the current year, we have any challenges on achieving a targeted growth, but our businesses always have internal and external factors both. We would rather be cautious and continue growing at 25% and not target 35% for a year and then come back to 10 or 15 in the next year. So our own belief is that we would like to continue this 20%-25% growth for the next two-three years, focus on improving margins, and focus on selecting projects which we want to deliver in the shortest time frame. So to answer your question, we believe 25% is a good number. We can do better than that, but we'll be happy with doing this sustainably instead of doing it in a year and then coming down next year. Got it. Because to some extent, FY 2025 base also was lower, and particularly for Q1, the base was lower. That's why I was trying to understand that on a low base also, can the growth be a little better than what you're guiding for? But I take your point that you want to maintain it as of now at 20%-25%. Sure. My second question is related to any kind of CTC provisioning. Have you done anything for this year in the current quarter? Is it part of the numbers, or is there any provisioning done in the balance sheet? So we continuously do CTC provisioning on a monthly basis. It's not on an annualized basis, right? So projects wherever CTC provisioning is required happen on a monthly basis, quarterly basis. Now, if your question is, have we created additional provisions in the current year? On warranty guarantee, even in the current quarter, we have provided for additional INR 28 crores. So that number compared to March has gone up by INR 28 crores. On ECL, we are at similar numbers as of March. On CTC, there would be some small movements, but not significant. There could be ± INR 5, 10 crores, but not significant. Got it, sir. Thank you. That's it from my side. Thank you, Teena. Thank you. We have our next question from the line of Parikshit Kandpal from HDFC. Please go ahead. Hi, sir. Congratulations on a great quarter. So my first question is on the loss funding. So is it right to assume now after the wind and the termination that there won't be any loss funding from here on? Good morning, Parikshit. I just want to correct your understanding. We have stopped loss funding maybe a few years ago. We've been primarily funding to repay debt. Yeah, yeah. I think I was talking about. There's a big difference, but anyway, I'm sure we understand both of us. So our belief is that we might have to do some funding on WEPL to repay the small debt, which is with bankers now. Our debt with bankers is around INR 40 crores. So while WEPL is being terminated, we do not want to get into this discussion with bankers of an NP or any of that. This would eventually come back in the form of a claim, but our finance team is right now discussing with the bankers to see that how do we fund that. So that could be the only funding which might be required. So to answer your question, a max of INR 50 crores, out of which INR 40 crores would be more to repay debt of WEPL, closer to INR 40 crores. I do not remember the exact numbers. There could be INR 5- INR 10 crores further, but we would target that to be kept at a minimal level. Okay. The second thing on the margin trajectory now. So the mix is now changing. We are seeing high growth and high margin, I mean, double-digit segments like T&D, B&F, and all. So as a trend, from here on a quarterly basis, as railways and other segments slow down in terms of growth contributions, do you think that additionally, what kind of margin expansion are you looking at PBT level in FY 2027? FY 20 27? Yeah. Parikshit, it would be too early for me to give you a target on 2027 in terms of margins. I can only say that the current order book in terms of margin visibility is much better than what we had in the last two years. So definitely, you would see margin improvements coming in next year also. I'm pretty confident about it. But exactly, would it be 25 basis points? Would it be 50? Would it be 75? You'll have to give us some more time to come back to you. Currently, we stay confident that we would be at a PBT standalone in the range of 5-5.5, more towards the higher side, and going into the next year, you'll definitely see an improvement, but give us some time to come back with exact numbers. Okay. Any views on the TBCB development on the state side, sir? So how is that opportunity you're seeing, and how big can that opportunity be over the next few years? Parikshit, sorry. Today, our state exposure on an overall basis is less than 2% or 3% of the total order book. We continue to stay cautious on state-funded projects across all segments, and we would like to stay cautious going forward also given the kind of opportunities we have with central funded, with PSU funded, and private sector funded. So at KPIL, we will be cautious on building an order book on state-funded projects across all segments. Okay. Just on the pledging, now that Kalpataru real estate is listed, sir, any thoughts on how the pledge will move now? I mean, is it the peak? I know you've been talking about it last quarter, but now since the listing happened, how do we see the pledging over mid to long term? No, sir, I think we have seen a huge reduction in pledge over the last two years, with pledge being below 25%. We've been given to understand by the real estate team that you should see pledge only coming down. We do not have a definite time frame with them, but we have a commitment that pledge should only start coming down going forward. Okay. And just on the renewable opportunity in the Middle East, any thoughts there? How do you think that you can capture a market share in the Middle East? On the oil and gas side, we're doing something, looking at other opportunities, but on the renewable side, what are we looking at? What could be the addressable opportunity for us? So we have built a very strong team on the renewable side to look at the international business. While we speak, we are bidding for two or three large projects, and we remain very confident that we should have at least one large win on the solar project in the Middle East before the end of this year. I might not be able to share details more than that at this stage, but once we have an order win, I'll be happy to share more details on that. When you say large, so generally, what is the quantum of this large win typically? 1,000 crores plus is large for us. Okay. And just last question, sir, on the interest-bearing mobilization advance, so what is the quantum and if any? Yeah. So yeah, if you can give me that number. Our average interest on customer advance on a totality basis is more in the range of 9%-9.5% in totality. Our total advances, customer advances as of this date, I wouldn't have an exact number, but if anyone has a number in terms of what advances we have today, but you can take that from it. I know the interest cost on advances is more in the range of 9.5% in totality. Okay. Average advance, sorry, Ram is just giving us the number. Average advance? Average advance is INR 650 crores. Utilization. So average advances in the range of interest-bearing advances should be in the range of INR 600-INR 700 crores. Yeah. And any interest-bearing acceptances? So that would be very minimal, closer to zero, because we do not have interest-bearing acceptances at KPIL. Okay. Thank you. Those were my questions, and I should have asked. Thank you. We have our next question from the line of Ashwani Sharma from Emkay Global Financial Services. Please go ahead. Yeah. Good morning, sir, and congratulations for a stellar set of performance. The first question is on the guidance. When you say 25% revenue guidance in the current year, can you just give us some indication on the mix in terms of segments and the domestic international contribution? Good morning, Ashwani. Ashwani, all our businesses, except water and railway, we expect them to grow at 20%-25% +, which includes T&D, transmission domestic, transmission international, B&F, urban infra, as well as oil and gas. They will all grow in excess of 20%-25%. Our water and railway business would not see any growth. Some of the businesses will grow more than 25%, and that's how it will get compensated on an overall basis. As far as geographic growth is concerned, I think our order book is primarily 60% domestic and 40% international today, and I see in terms of growth, international growing at a similar level as what the domestic business is growing. So internationally, so you did allude to the labor challenges. How are you managing challenges as far as labor is concerned, mainly in the international geographies, especially in the Middle East or South Africa? If you can just—what is your strategy? And what has been your strategy to overcome this challenge? Our international labor challenge is not as much high as domestic labor challenge, primarily for only one reason: that on the international front, we can take labor from various countries, including our neighboring countries, including some European countries, including some African countries. And that's why on the labor front, internationally, we have not seen such high challenges as what we have seen on the Indian projects. Okay. My third question is on the CapEx. If you could just spell out your CapEx plans in the current and next year. I think for the current year, our CapEx plan is more in the range of INR 600-INR 700 crores, what we had guided at the beginning of the year also. As far as next year is concerned, we have still not decided our CapEx plans, but we would be slowly moving to a CapEx target, which is more equivalent to depreciation kind of thing. So we should be looking at a minimum of INR 500 crores even getting into the next year. Current year, it's more in the range of INR 600-INR 700 crores. Great. And yeah, those were my questions, sir. Thanks for asking. Thank you. Thank you. We have our next question from the line of Balas ubramanian A from Arihant Capital Markets. Please go ahead. Good morning, sir. Thank you so much for the opportunity. Congratulations for a good set of numbers. So on the data center side, what kind of ticket size we are bidding right now, and how does this margin ROC profile compare to traditional B&F projects, and what is the pipeline visibility? Good morning, Balasubramanian. On the data center side, we are right now bidding for two or three large projects. Hello. We are right now bidding for two or three large projects, both in South India as well as West India. The new project which we've got is not very big in size because it's an additional building on the earlier project which we did for an international client in Mumbai itself. But we've built the competencies to do the end-to-end data center, which includes civil, electrical, as well as MEP. We believe that there should be some very good opportunities coming on that, and we are bidding for two or three projects while we speak. Okay, sir. So on that Vindhyachal Expressway monetization, what is the expected timeline for closure, and how will proceeds be utilized, and any other non-core asset center review for monetization? As guided earlier, we believe that Vindhyachal Expressway, we should get approvals in Q3. The total expected cash flow on that project, as we had guided earlier, should be in the range of INR 700-INR 800 crores, with half of it going for debt and half of it should come back to us as equity. Primarily, the cash flow would be utilized either for working capital or to reduce debt. But we'll take a call on that closer to the date when the money is expected to be received. Okay, sir. So on that oil and gas side, almost one-third of the project is delivered for Saudi Aramco. I just want to understand how we are managing our subcontracting heavy cost structures. And if you could throw some light on how is domestic oil and gas and how we are prioritizing Middle East market compared to domestic markets, and what kind of order inflows we can expect both Middle East and domestic side? So we're seeing a good traction on the Middle East front, as I mentioned earlier, and we're bidding for large-scale projects because there are only limited players from India who qualify with the large oil and gas utilities in the Middle East. So we are bidding for some large projects. I wouldn't be able to give you a target as of now. But the international front opportunities look much bigger on oil and gas as compared to the Indian front. On the Indian front also, we're seeing some good opportunities coming up on both the pipeline as well as the plant side. But in terms of quantum, our focus is a lot more international as of now as compared to India. Okay, sir. So on the subcontracting side, how are you managing these cost structures? I think we're managing subcontracting the way we do it across all projects in the country. There's nothing different for oil and gas. It's exactly the same for transmission and oil and gas. So it's a team which manages this, for it's exactly the same for all our businesses. I do not understand what is the exact question on this. Actually, I heard this oil and gas cost structure is a little heavy compared to other projects. No, I don't think that's a factually correct statement. Okay. Okay. Got it. Thank you. Thank you. We have our next question from the line of Mahir Moondra from Nuvama Institutional Equities. Please go ahead. Yes. Now audible? Sir, you need to be a little louder. Yeah. Sorry. Am I audible? Yeah. Now you can hear me. Yeah. So my question is on the tax rates, sir. So we've seen in the past two quarters, the tax rates have normalized to around 25%-26% levels, and it was much higher before that. So how do you expect it to be throughout this year, or how does it work out? Our tax rate is primarily driven by the profits on specific projects in a quarter. There are some international geographies which have a higher tax rate. Also, there are some geographies where we are making losses, which you do not get a tax benefit. I think we believe for the current year, we should be more in the range of 26%, 28%, 30%, not beyond that. On a quarterly basis, it depends on the profits, which projects we earn that profits. On an annualized basis, we should be more in the range of 28%-30%. Okay. Got it. Got it, sir. Thank you. That's it from my side. Thank you. We have a follow-up question from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hello. Am I audible? Yeah. Yeah. I'm supposed to. Sir, to understand that on the labor front, there is a more challenge on the domestic side rather than the international. And since we are winning a lot of large projects now, even real estate also, so what is the opportunity for automation, which can, I mean, offset this? And what are the stage we are in? How we are investing in automation? So Bharat, we've been very focused on automation and mechanization of a lot of our processes. A lot of our projects, whether it is B&F, whether it is transmission, whether it's oil and gas, we have moved to a higher level of automation on every aspect, right from the basics of, let's say, civil in terms of concreting to the basics of staging shuttering, where we have moved up to aluminum formwork and even going beyond that, to using cranes for tower erection for T&D, to using automatic welding machines for oil and gas, to using steel prefabricated structures for buildings. So a lot of it is happening today. And today, our big focus of KPIL is on mechanization, automation, and related CapEx to it, even at a plant level. We have automated to a great extent, whether it is on raw material handling, finished goods storage, all of that. It's a continuous process. I can assure you that we are completely on top of it. But it's also something which changes so fast that it is something which happens yesterday is obsolete tomorrow. So we continuously want to be making sure that we have a lot of consultants helping us on this process also. A lot of our CapEx in the last three years, last three years we have done CapEx of more than INR 1,700 crores, is also gone in that. So whether it's the entire staging shuttering, whether it's a plant automation, whether it is automatic welding machines, all of that. So it's a continuous focus. But we need to also remember that this industry still is primitive in nature, right? We are still in that brick and mortar, right? We can't move to automation like, let's say, OEM or iPhone manufacturing or any of that. But within what we are able to do, we are doing one of the best things, is what we believe. Okay. Thank you. Thank you very much, sir. Thank you. As there are no further questions, I now hand the conference over to Ms. Bhoomika Nair from DAM Capital for closing remarks. Over to you, ma'am. Thank you for being on the call, and particularly the management for giving us an opportunity to host the call. Thank you very much, sir, and wish you all the very best. Any closing remarks from your end? Thank you, Bhoomika. Thank you, everyone, for being on the call. And we assure you that we'll continue to deliver similar results going forward. Thank you, everyone. Thank you. On behalf of DAM Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.