Afcons Infrastructure Limited (NSE: AFCONS) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Subramanian Krishnamurthy — Executive Vice Chairman
Paramasivan Srinivasan — Managing Director
Ramesh Kumar Jha — Chief Financial Officer
Hitesh Singh — Head, Corporate Strategy
Analysts:
Veenit Pasad — Analyst
Jainam Jain — Analyst
Mahesh Bendre — Analyst
Bhavin Chheda — Analyst
Ayush Sabo — Analyst
Nidhi Shah — Analyst
Parvez Akhtar Qazi — Analyst
Prateek Bhandari — Analyst
Bhoomika Nair — Analyst
Garvit Goyal — Analyst
Disha Shah — Analyst
Presentation:
Operator
SA it foreign. Good day and welcome to F Commons Infrastructure Q3 FY25 earnings conference call hosted by Invested Capital Services India Private Limited. As a reminder, all participant lines will win the list in only mode. And there will be an opportunity for you to ask questions question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on attached on phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Vinitra Saad from Invested Capital Services Private Limited. Thank you. And over to you, sir.
Veenit Pasad — Analyst
Thank you. Muskan. Good afternoon everyone. A warm welcome on behalf of Investech India to Q3FY25 earnings call of Afcon Infrastructure Limited today we have with us the senior management team represented by Mr. Subramaniam Krishnamurthy, Executive Vice President, Vice Chairman. Mr. Param Sivan Srinivasan, Managing Director. Mr. Ramesh Kumar Jha, Chief Financial Officer and Mr. Hitesh Singh, Head Corporate Strategy. Now I would like to hand over the call to Mr. Subramaniam sir, executive Vice Chairman for his opening remarks. Thank you. And over to you, sir.
Subramanian Krishnamurthy — Executive Vice Chairman
Good afternoon ladies and gentlemen. I am pleased to welcome all of you to the Q3 of FY25 earnings conference call of Afghan Infrastructure Limited. Our financial results and investment presentations have been uploaded on the exchanges and I hope you had a chance to review them. Joining me today, Mr. Brahmachen Srinivasan, Managing Director Amer JA, Chief Financial Officer and Riteshti Head, Corporate Strategy Let me start by giving you all of you some business updates. Afcon total income was 3332 crores in Q3 of FY25 as compared to 3182 crores in Q3 of FY24. For nine months of FY25 the corresponding figures root at 9635 crores compared to 9837 crores in nine months of FY24. Let me turn to our profitability metrics. In Q3 of FY25 our EBITDA stood at 448 crores, making a 14.1% year on year increase compared to 393 crores in Q3 of FY 24. EBITDA margins expanded by 111 basis points to 13.5% during the quarter. For the nine month period, EBITDA reached 1247 crores, growing 13.3% year on year while maintaining a healthy margin of 12.9%. Moving to PAT, we delivered a 38.7% surge in Q3 of FY25 with profits rising to 149 crores from 110 crores in the same period last year. This translates to a PAT margin of 4.5% up from 3.4% in quarter three of FY24 reflecting improved cost management and higher profitability. Cumulatively, for nine months of FY25, PAD grew 23.3% to 376 crores, reinforcing our ability to sustain momentum even in the competitive environment. I’m happy to share with you that Crystal ratings have aligned AA minus with a stable outlook for long term and A1 plus with a stable outlook for short term ratings to the bank loan facilities and commercial paper program of AFCON Infrastructure Limited. This is an upgrade on the earlier rating of A plus for long term and A1 for short term. The rating reflects the strong business profile of OPCOMs demonstrated by the established track record and ability to execute complex infrastructure engineering projects in India and overseas. Additionally, UPCOMS has been included in the MRCI India Domestic Small Cap Index Fund Qual Cap Index which will be effective on 28th February 2025. Speaking about infrastructure sector updates and growth prospects, we see strong continued growth in the infrastructure construction space. Evidence from government’s clear vision of becoming a developed nation by 2047. As highlighted in the recent economic survey, India must sustain an annual growth rate of 8% over there for at least a decade to attain developed nation status by 2047. Also as aptly mentioned, infrastructure is a key enabler of this goal, with significant scope of oil level for are improving multimodal connectivity, public transport and disaster resilience in urban areas. Infrastructure development, particularly in the segments we operate, are key to achieving this growth. Various policy initiatives by the government will ensure efficiency in the government’s infrastructure investments. Strategically, we continue to leverage our expertise in delivering large, large scale complex infrastructure projects across India and globally. Our unique ability to execute projects across diverse infrastructure segments, be it in marine, industrial, metro, underground or elevated bridges, highways, traveling or hydro, sets us apart in the industry. Over the decades, AFCON has demonstrated the ability to successfully deliver across all major infrastructure verticals. This makes us a formidable and a differentiated player in the Indian infrastructure space. We also continue to build on our core strengths which we adopted over time such as knowledge management, risk management and operational excellence through innovation. Our commitment to these areas have been recognized through multiple prestigious awards. Most recent being Most innovative knowledge enterprise MIC award of 2024 recognized for the seventh consecutive year at both global and India level, reinforcing our leadership and Knowledge Management IEI Excellence Industry Excellence Platinum Award 2024 this is our fourth consecutive year of recognition for innovation and operational excellence in construction. We remain committed to investing in technological advancements, digitization, cutting edge engineering capabilities to improve efficiency, execution, timelines and overall project Delivery. In conclusion, AFAN’s infrastructure remains dedicated to creating value for our stakeholders, customers and all our shareholders. Thank you for your support interest. I will now hand over the call to our Managing Director Mr. Paramashan Srinivasan to offer a deeper understanding on developing on the developments and our future path. Thanks a lot. Thank you.
Paramasivan Srinivasan — Managing Director
Thank you, Mr. Brahmanian. Good afternoon everybody. It’s my pleasure to welcome you all to AFCON sir Q3.25 earnings call. We appreciate your continued interest and support in our journey. I’ll just give a broader business landscape, business procurement and important updates in the recent budget. Despite significant measures to boost consumption and associated pressures on fiscal consolidation which is an excellent step taken on the fiscal consolidation. The government has allocated 11.2 lakh crore for capital expenditure, a 10.1% increase over the revised estimate of the last year. This underscores the commitment the continued commitment of the government to infrastructure development which is once again reiterated by some statement yesterday. It will be a middle class focused and an infrastructure focused approach towards reaching Richit Bharat by 2047. The government’s alignment with this perspective is evident in the healthy allocation for roads, railways and metro projects and special push through state government. This will be very significant in many states. A 1.5 lakh crores 50 year interest free loan that I think many states can use to raise the resources using this fund. Further using the resources that will go a long way in terms of infrastructure development and national monetization Plan. The phase one has been hugely successful. Hardly 20,000 crore is shortfall in the phase one and in the phase two. Now whatever is announced I am pretty sure with a three year pipeline what is made will go national monetization pipeline will go a long way in terms of improving the finances. And there is a revised PPP model being attempted and there is a three year along with a three year project pipeline and all that I think will be a work in progress as you look at it in this thing because PPP in India PPP has moved to HAM and again moving back to ppp. How it is going to work we need to see and the government has announced establishment of export promotion mission which is very positive. This is something which I must say Government has acted based on feedback by many exporters as some of the areas of improvement required and also government’s own push to see that top Indian companies become top global players as well. So from that angle they have created an export promotion mission to address non tariff barriers, facilitate credit taxes and provide other forms of support to enhance exports. This initiative is also expected to focus on project exports including those funded by the government. And as I conveyed earlier, the government is developing a strategy to elevate select Indian project exporters to compete with global peers. And AFCON along with other leading project exporters are engaged with key ministries and also with NITI Aayog to advocate for supportive policies in this regard and the initiatives required in this regard. If implemented, these recommendations could drive a substantial expansion in India’s project export footprint. Overall, the government continued focus on infrastructure development will provide a strong impetus to this sector. This positions large diversified EPC contractors such as Afghans to capitalize on emerging opportunities and contribute meaningfully to the nation’s infrastructure development. And internationally with the export mission and also a continued focus with some strong private clientele like Arcellar Metal gives us better revenue visibility. The LOC projects by government of India has seen a slowdown for example and however there are select geographies as we have been mentioning wherein there is a good visibility in terms of wherein the competition is restricted to some European players, Turkish Indian players like that Eastern as well Eastern Europe and some of these countries and also as indicated as a part of our strategy, bigger project in Middle east with local partner that is also taking shape from the futuristic angle in terms of business development. Afghan continued to strengthen its position and as of 31st December we have a 38,000 crores of vending order and which excludes about 10,662 crores of L1 and 14,603 crores is the amount of order we have booked in the first nine months and in the first month of the current financial year. Now before the first fourth testing 45 days we have already received 1283 crores from DP World and with that our order book is almost at 16,000 crores as of now. With the 10,662 crores further L1 I think we are slated to achieve about 30,000 plus in the current year with some more vendors expected to be opened shortly. With this we would say we would have reached the highest ever order book in terms of for the year and at the end of the year we will be somewhere between 43 to 50,000 crores order book giving us more than 3 years visibility for the future period. And this will clearly give revenue visibility for the next couple of years. And as we conveyed earlier, while the current year we expect ourselves to be the flat or marginally higher growth next year we expect 20 to 25% growth from that of current year more towards 25%. That is what we are looking at. And Afghan continues to set the benchmarks in the infrastructure sector with notable achievements and industry efforts as per latest Engineering News Record 2024 rankings of USA we are ranked 139th in the top 250 international contractor list reaffirming our global presence. In terms of Marine we are rated as the 14th largest. In bridges we are the 12th largest. In transportation 45th largest in Aquadex 12th largest and in water supply 38th largest. In marine we are the highest ranked Indian contractor. In Bridges we are the only Indian contractor within the top 25. In transportation we are the only Indian contractor within the top 50 and these are very very happy tidings in our international principle and our Delhi Merit Rapid Rail project is inaugurated by our honorable pm. Of course it’s not entirely our stretch. Partly our stretch is also included over there and we have won several awards et Infract Leadership Awards for our Calcutta Metro and Maharashtra Samrudi Package 14 Excellence in Transportation Infra Sector National Safety Council has awarded five star rating and the shield for our Liberian project. So unwavering commitment to innovation, execution, excellence and safety is continued to be given accredited by various agencies. This reinforces Askhan’s position as a leader in delivering World Curves infrastructure. In conclusion, Afghan remains strongly positioned to capitalize on emerging opportunities in the infrastructure sector. With a robust startup book we are confident With a robust order book, a strategic approach to business development and a strong track record we are confident on delivering sustained growth and value for our stakeholders. Thanks. Thank you all once again while I conclude my request hand over to our CFO for providing review of the financial results.
Ramesh Kumar Jha — Chief Financial Officer
Good afternoon everyone. Before I get into the numbers first I’ll just talk about the rating upgrade we have got done. We are very happy to inform you that we have got our credit rating upgraded to AA minus for long term and A1 plus which is the highest rating for short term from Crystal moving into AA category will open up the money market instruments like CP NCDs to us and this will give us lot of interest saving arbitrage opportunity. This should also help us bring down the interest rate going forward. Now on the numbers we have talked about last time also I would just like to retreat. The company is into the business of construction. The margin in a quarter varies based on the nature, type and quantum of course we execute. So quarterly results may vary in different quarter and may not be indicative of annual result or trend. Now moving to specific numbers. During Q3 we have done a top line of 6332 crores as compared to Q3 in the previous year 3182 crores and the previous quarter Q2 25 we had done 3090 crores and if you look at the top line number for 9 months we have done 9635 crores as compared to previous year 9 months 9837 crores. Now during this quarter we had a growth of around 5% year on year and around 8% quarter on quarter. Because of the acceleration in the turnover during Q3 this has narrowed the YoY gap to 2% in nine months from the previous nine month period because in Q2 we were 5% down from the previous year number. Since there is an increased pace of execution now we are seeing in recent months. So as things stand we should close the year on a similar top line or a nominal growth for this financial year. As far as revenue guidance is concerned, this year we are looking at a flat growth or maybe a nominal growth. This is because of our muted order booking in last two years which we had talked about earlier. But since this year we have already backed close to 2627,000 crores of order including the projects where we are L1 which we are quite hopeful that we should be getting very shortly. All these projects will mature for construction in next financial year wherein we are looking at a growth of 20 to 25% more towards the upper trajectory on a medium to long term horizon. We would like to sustain our CAGR which we have achieved over a longer period of time, say last 10 years. So we should be around those numbers which is around 15%. Now moving to EBITDA. During this quarter we have done 448 crores of EBITDA as against Q3 24 we had done 393 crores. So in terms of percentage this quarter we have done 13.5% and this is up by 111 basis points from the previous year. In the nine month period we have done 1247 crores of total EBITDA which is 12.9% and this again is up 175 basis points from the previous year wherein we had clocked 11.2%. Now in EBITDA. I would just like to clarify that in our EBITDA calculation we have considered BG Commission as part of our operating expenditure. So EBITDA we are talking about is after removal of VG commission as an expenditure, operating expenditure. Whereas we understand that the street considers busy commission as part of interest or finance cost. Hence if you consider that way then the EBITDA will increase to the extent of 125 crores which we have excluded. Also in our EBITDA calculation we have included other income as part of revenue. Here we have explained earlier also that our other income needs to be understood in the perspective of our business. So arbitration, interest, foreign currency exchange gain and miscellaneous incomes are recurring and very integral to our business. Hence this needs to be considered as other operating income. So for the nine month period the 311crores of other income we have considered operating income while calculating the ebitda. So these EBITDA percentage what we have achieved for the nine months 12.9% for this financial year up till the nine month this year. As things stand we expect the number to be higher than what we have been given a guidance. We have always talked about that we are going to maintain our EBITDA 11% plus reason being we are maintaining this, that construction is full of contingencies. Our endeavor will be to save on those contingencies or optimize it. But many a times we may not be able to save those contingencies. Hence our guidance will remain at around 11%. Now moving to profit after tax. But you know I again reiterate that this financial year we will be having an elevated EBITDA margin since we have already achieved 12.9% moving to profit after tax. We have done for this quarter 149 crores as against 110 crores we had done last Q3 last year. This again is 102 basis points up in terms of percentage point. For the nine month period we have done 376 crores of profit after tax. This is 3.9% of the top line of the total income. This again is 80 basis points up than the last year number in finance cost we have seen and you know the kind of optimization we were expecting. So there is a saving in interest cost because of the IPO proceeds we use towards debt repayment. But this got negated because of change in mix of interest free versus interest bearing advances. Usually in. In the total portfolio of advances we were having 75% used to be interest free and 20 to 25% used to be interest bearing advances. But this time around the projects we have backed we are seeing 70 to 75% project and interest bearing. So that’s where we have saved on the bank interest but interest from client advances have increased so that’s why we are not seeing any benefit on the interest cost front. But the projects have been tendered in such a way that these aspects have been factored in the project. So our margins are going to remain intact. We have also continued to account for accelerated depreciation on our TBMs. Of the total 367 crores of depreciation, around 1/3 is on account of accelerated depreciation in that. So the trend continues. Now moving on the return ratios for the nine month period, we have clocked a ROCE of around 16.6% and ROE of around 12%. So here again I would like to clarify that the capital infusion has increased the capital base but operations are yet to elevate. Hence returns in short term are showing some dip, right? Indicator for the return ratios are annual number. Even though we have clocked in excess of 15% ROC and around 12% ROE, if we factor in the accelerated depreciation, our ROE will be at a very high level Also. These returns need not be looked into isolation. This needs to be looked in the perspective that it is over and above the impact our projects are creating on the society. Moving to the debt, we have closed the nine month period. Debt has come down to the level of 2,692 crores on gross basis and on the net basis it is around 1788 crores. On the net basis the debt equity is working out around 0.35 times of the network order book we have already talked about. So on behalf of Afcon Infrastructure Ltd. I thank everyone for attending this call. Now I request moderator to open the floor for Q and A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press STAR in one on the Touchtub telephone. If you wish to remove yourself from 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. The first question is from the line of Jainam Jean from ICIC Securities. Please go ahead.
Jainam Jain
Thank you for the opportunity. So sir, my first question was what is the order inflow guidance for FY26?
Paramasivan Srinivasan
Fy 26 is 25,000 crores.
Jainam Jain
20. Sorry. Okay. And how are we seeing the order pipeline currently? Like what is the order pipeline?
Hitesh Singh
What is it? So the perspective as you understand our projects are long gestation projects. So our order pipeline we generally monitor on a rolling basis of around two years. So currently we have a visibility of around 3.46 lakh covers of orders. And they are spread across the segment where we are visible as rightly so. The largest visibility we have in Unman infrastructure which is close to a lakh crores. Surface transport which is our road and rail business. There also we expect a good number of orders to come around 90,000 crores is the visibility in that area. Hydro underground which includes dams, pump storage schemes, tunnels that is around 80,000 crore. And Marine is around 60,000 crores. So that is the visibility we have for the next two years.
Jainam Jain
Okay, and so what is the project value for which we have bidded currently? Like for the tenders which are yet to be open and we have bidded for.
Hitesh Singh
On a rolling process around 40 to 45,000 crores of tenders are being bid by the company across verticals. And that it keeps on. I mean some projects get we won, some project we lose. But around 40 to 45,000 crores is on a continuous basis.
Jainam Jain
Okay. In terms of metro or urban infra projects.
Hitesh Singh
Sorry, your voice was not clear. Can you please repeat the question?
Jainam Jain
Are there any major projects which we are expecting the tennis to be floated in the coming months in which we are planning. To which. In which we are planning to build.
Paramasivan Srinivasan
There are quite a number of projects. Two specific projects which we can mention is. One is Dubai municipality where there is a big sewage tunnel for coming up by tunnel boring machines. Where we are already pre qualified. That’s in this thing in consortium with couple of others. It’s about three and a half to $5 billion each. That is coming up in the next three to four months. And in domestic in Maharashtra we have the binder VRAR connectivity which is coming up which is about 75,000 crores of jobs split into six packages. JICA funded job. So that is something which is again a marine project to a marine bridge which will be a specialist project. So there also this is the another big project. The third big project which is coming up is the tunnel under Brahmaputra in northeast where in Assam that is also in the pipeline. These are some of them. There are a number of other projects. Padan port is coming up with two projects Breakwater and desalting tank. Andaman port is coming up with projects and there are number of other bridge projects are in the pipeline. Okay, I’m just giving the flavor a big project where limited the pre qualification possibilities and that way.
Jainam Jain
And anything in metro segment.
Paramasivan Srinivasan
In metro segment. Metro segment. Already we have bid for indoor underground metro. We have bid for partner underground metro and it’s on a continuous basis. Recently government has announced expansion of NCRTC where we have done one elevated on underground. So they’re going to be a big investment coming up. Already sanctioned long back but now it is put into action. So that is coming up. And every everywhere the expansions are taking place in the metro projects In Bombay has announced expansion of metro and Delhi has announced and Chennai has announced expansion in Chennai and also extension to Coimbatore and Madurai. The number of places metro expansions have been announced.
Jainam Jain
Okay, so we expect all the generics.
Paramasivan Srinivasan
In terms of urban infrastructure. We expect continued growth and that is something where the government is also pushing quite a lot. And in marine we find a good opportunity. Currently in the domestic market which are not there for last few years because of Wadhwan Port, Andaman Port and similar and this thing in terms of surface transport I think it will be left more to the specific states as NHA projects. As you mentioned that it’s become very crowded. Therefore it depends on more state specific projects which number of states have come up with proposals and with the government also giving in 50 year interest free loan which they can use as equity towards raising funds. So that will go a long way for state level related development. Therefore in terms of project pipeline we don’t find much issues that’s on the domestic market, international market as I told you, Dubai is there. Saudi we have a focus currently and Africa is slowly coming back reviving back after post Covid that gives an opportunity to us and some of the European markets which you mentioned earlier as well we have been focusing on. We are submitting our bits so that will open up opportunities for us. All these are funded projects by multilateral institutions.
Jainam Jain
Okay. And so I wanted a few numbers on inventory trade receivables occur revenue, trade payables and mobile.
Ramesh Kumar Jha
So if you are looking for number for. For December. So you. You are looking at any specific number.
Jainam Jain
So I said inventory, trade receivables, unbuilt revenue tables and mobilization advance. This number will help us to analyze the working capital.
Ramesh Kumar Jha
Trade receivable, you know. See I’ll tell you. As far as the networking capital is concerned, network is still at an elevated level because we still see delays in certification of the work done and release of tenants. In some projects this has led to the increased uncertified work than receivables leading to jump in working capital requirements. Generally this trend remains during the year wherein bill certification and payments are not up to date. So we see the elevated working capital requirements and borrowings in Q2, Q3 and this gets sorted out by Q4 and that’s what we are expecting this time around. Also now to give you the specific numbers, the Trade receivables are 3140 crores. The inventories are 1576 crores. Unbilled revenue is 6134 crores. And the advances from customers is 2383 crores.
Jainam Jain
And trade payables?
Ramesh Kumar Jha
Trade payables are 4024 crores.
Jainam Jain
4424. Okay, that answers my question. Thank you so much for the opportunity and all the best.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. The next question is from the line of Mahesh Brandry from Lic Mitchell Fund. Please go ahead.
Mahesh Bendre
Hi sir. Thank you so much for the opportunity. Sir, I heard that we. I mean the guidance for next year is around 20, 25% revenue growth. Is it right what I heard?
Ramesh Kumar Jha
Yes, that is right.
Mahesh Bendre
Okay. Okay. And sir, some of the. We. I mean some of our peers were indicating that there is some kind of payment details happening from the state governments and many agencies in terms of construction projects. So have we witnessed anything like the similar situation?
Ramesh Kumar Jha
It again depends from company to company with which counterparty they are working. So as we have in past said that we are very focused when we approach any project and the risk management practices the company has put in place not only helps us in selecting the project but it at times it helps to remove some of the bad projects. So we have not had a similar experience. But to mention we also had Jalgivan mission projects and there the bill, certification and payment issues are there.
Mahesh Bendre
Okay. Okay. Sure, sure. Thank you so much, sir.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. The next question is from line of Bhavin Jera from Enam holding. Please go ahead.
Bhavin Chheda
Good afternoon, sir. Overall good set of numbers and a very strong order intake. And a very strong guidance for next year. So just a few questions. I think you mentioned in first 45 days of this quarter you have received fresh orders of around 1100 crores. That’s the number you mentioned. I missed that number.
Paramasivan Srinivasan
1283. 1283 crores is a marine project from DP World in Gujarat.
Bhavin Chheda
Okay. Okay. And so you mentioned there is a 10,600 crores L1 plus this 1200. And already our order intake for nine months was 14, 600. So for the entire fiscal we would be crossing an order intake of over 25,000 crores. Right, sir?
Paramasivan Srinivasan
Yes. With the L1 already considered we are already at about 27,000 crores. We do expect another one or two orders to flow into the company. With that we will be closer to 30,000 crores.
Bhavin Chheda
Closer to 30,000 crores. And for FY26 order intake you mentioned is 25,000 crores fresh. That is as of now you are estimating.
Paramasivan Srinivasan
Yes.
Bhavin Chheda
Okay. The other question was on the higher interest cost. The reason you mentioned was the client advances. Now almost 75% of the advances you have to pay interest versus earlier where 75% of the advances were interest free. So has this happened on a specific segment or specific orders received now or now this has been the general phenomena across all orders?
Ramesh Kumar Jha
No. So this is not a general phenomena across. It actually depends that in which segment we have booked the order. So if you see the order booking we have done generally in metro, in high speed overseas projects are interest free. So these projects recent past we have not backed. But as MD was explaining and Hitesh also explained that you know the projects we are targeting or in the pipeline are in the segments where interest free advances are available. So the percentage I have talked about is for the projects we have backed this financial year. Now you know, as things stand on an overall portfolio the composition may undergo a bit change which earlier used to be 75% interest fee and 25% interest bearing. Maybe that number might be around say 50, 50 at the moment. But with the fresh influx of orders we are quite hopeful that we’ll get back to a similar situation.
Bhavin Chheda
Okay. So interest cost may slightly subsidize as going forward as the order makes changes. Right. And the last question on the accelerated depreciation. We appreciate your accelerated depreciation policy to write it up as versus the other companies in the sector. The number you mentioned was one third of the depreciation amount is still on the accelerated part of the TBA.
Ramesh Kumar Jha
What I said is in nine month period we have 367 crores of total depreciation. Cost of that around one third is towards the accelerated depreciation we have accounted.
Bhavin Chheda
Okay, thank you sir and best of luck.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. The next question is from the line of Ayush Sabo [Phonetic] from Choice Equity Broking Private Limited. Please go ahead.
Ayush Sabo
Picture. For the next two years we see the others, we see the debt coming down.
Ramesh Kumar Jha
Your voice was not very clear. But what I could hear about was you wanted to understand the debt profile moving forward for the two years. Is that correct?
Ayush Sabo
Yes, yes, exactly.
Ramesh Kumar Jha
So see we have what we have talked about. The company is on a year, on year basis generating a very positive cash flow from the operations. And the orders we have backed are quite good orders, very quality orders. So going forward we are looking at the business generating a sufficient amount of cash flow. We will be generating positive cash flow and that debt on a continuous basis. In terms of debt equity, in terms of debt to EBITDA will keep coming down. In terms of absolute number. Maybe it could be in the range what we have indicated for the year end say around 2000 crores. But I think we should look at improvement from there going forward for future period. Are you sure there?
Ayush Sabo
Yes. Yes. Thank you.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Nidhish from ICIC securities. Please go ahead.
Nidhi Shah
Thank you so much for taking my question. So I wanted to ask about the that we have approved over the year. So last quarter also you mentioned the L1 that were in a similar way. I wanted to know how much of the L1s that you have mentioned this quarter are carry forward from the beginning of the year and how much are new and the ones that have carried forward from the beginning of the year can do at least to convert into Lois.
Paramasivan Srinivasan
At the beginning of the year we had zero carry forward of L1. Whatever is the carry forward during the year only. And we do expect all these orders to rectify before end of the financial year. Out of couple of things could come up earlier. Maybe the Rajasthan water project and the Pune ring road project. Quite likely it could come in the month of February and the Nagpur Gondia could come towards March. That’s what is our expectation as things stand now.
Nidhi Shah
All right, and my second question would be on if you mentioned that you would be able to move into some developed countries to bidding for projects. I wanted to understand what the margin profile would be like in those countries. Typically what we have seen for other EPC companies is that margins are lower abroad, especially in developed countries with the projects that you are bidding for as well. Or
Ramesh Kumar Jha
See our experience in overseas market is quite positive and we in fact we generate very high margin in overseas markets. So overseas continues to be a good margin generating segment for us. And we are quite focused working in overseas market.
Nidhi Shah
Even the developed countries where generally margins tend to be lower. You are positive about those countries as well.
Ramesh Kumar Jha
In overseas market it’s difficult to put developed and all. But we are not working in say a place like America, Northern America or Southern America. Those places we are not working and the places we are working in is neighboring countries. We are working in Africa and we are targeting markets like Eastern European markets, Saudi Arabia and some projects in Dubai.
Nidhi Shah
All right, thank you so much.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. The next question is from the line of Parviz Kazi from Nuama Group. Please go ahead.
Parvez Akhtar Qazi
Hi, good afternoon everyone and thanks for taking my question. The first question is that of our 38000 crore order book, what is the quantum of project where we are yet to Receive the appointed.
Paramasivan Srinivasan
38, 000 crore is the order book which is already there in the books. Apart from that we have another 1300 or 1283 to be precise. With that it’s about 40,000 crores pending order book plus 10,000 and odd crores. We have L1 status.
Parvez Akhtar Qazi
Sir, I was asking about the appointed date. I mean probably 38,000 crore order book. Have we got the notice to proceed from our client or are the projects already.
Paramasivan Srinivasan
All the cases including that 1283 we have received in all the cases notice to proceed.
Parvez Akhtar Qazi
The second question is did I get it right that we expect our debt level to reduce about 2,000 crore by the end of FY25?
Ramesh Kumar Jha
Yes, that’s what the target is.
Parvez Akhtar Qazi
And lastly what was the capex that we have incurred in nine months?
Ramesh Kumar Jha
The capex we have incurred in the nine months is around 250 crores.
Parvez Akhtar Qazi
And of that person what would have come in Q3? Come again?
Ramesh Kumar Jha
I’m not clear on the question.
Parvez Akhtar Qazi
So what was the capex in Q3?
Ramesh Kumar Jha
In Q3 it was around 125 crore sort.
Parvez Akhtar Qazi
Sure. Thanks. And all the way.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. The next question is from the line of Pratik Bhandari from Adventures [Phonetic]. Please go ahead.
Prateek Bhandari
Yeah. Hi sir. Thanks for the opportunity. If you can give a sense of what typically is a bid success ratio and what is the current bid pipeline?
Hitesh Singh
Yeah, so bid success ratio is currently. I mean is typically in the range of 18 to 20%. And the pipeline, as I just mentioned we have a very healthy pipeline for around two year visibility. We have close to 3.4 lakh crores of pipeline spread across segments. So on the availability of projects we don’t see any challenge. And that’s why the guidance is given for FY26 that we are targeting 25,000 crores of fresh order rupees.
Prateek Bhandari
Okay. And of the total quantum of debtors you mentioned which are 3140 odd crores how much of them would be six months?
Ramesh Kumar Jha
You know. You know, six months older. See last time also I had explained that generally in our data the number we are giving you it’s distributed in three parts. Roughly 1/3. 1/3. 1/3 is 1 is normal receivables which will be say 30 to 40 days kind of normal receivable. One third is towards retention money which we receive as per the terms of the contract. And around one third is towards arbitration debtors. Those arbitration arbitration debtors of that around 1200. We have already received around 668 crores by giving bank guarantee under the nuclear guideline. But since accounting standard requires that the gross amount of arbitration receivable needs to be shown in the books as gross receivable and the amount we have received as liability. So that’s how it gets reported in the books. So to answer you this arbitration receivable could be more than six months.
Prateek Bhandari
More than six months.
Ramesh Kumar Jha
Yeah. Older.
Prateek Bhandari
That one third you mentioned about the arbitration data. Right?
Ramesh Kumar Jha
Yeah. Because you know it takes time unless you know those matters are settled in the code. Even though we have received say more than 50% amount we have received. But those needs to be classified as gross amount as receivable. And unless those are settled, it remains in the books. And those are, you know, generally older cases.
Prateek Bhandari
Okay. And what would be the quantum of contingent liabilities on the balance sheet as on December 24th?
Ramesh Kumar Jha
Contingent liability as on December 20th? 24th will be around 1400 course.
Prateek Bhandari
1400.
Ramesh Kumar Jha
Yeah.
Prateek Bhandari
Okay. And of this what would be the quantum of claims?
Ramesh Kumar Jha
So are you asking about the claims or the variations we have to receive from our customers?
Prateek Bhandari
Yes, hello.
Ramesh Kumar Jha
Yeah.
Prateek Bhandari
Yeah, I’m talking about the claims. If you can give a split of this 1400 crore.
Ramesh Kumar Jha
So these 1400 we have talked about is contingent liability which you know is in our books of this around 480 odd crore. So say close to 500 crores is towards one of the royalty claim which has been given put on us. So this has been set aside by Nagpur High court. And then the same matter, you know the party had gone to Bombay High court wherein they have actually put the case against government of Maharashtra. So that is one item. Ideally this should have gone up. But since they have again gone into litigation. So the amount is outstanding closer to find it crores is various disputes or you know the claims put by our subcontractors against us. So those are around finder crores. And close to 400 course will be pertaining to some of the tax related litigations we are fighting.
Prateek Bhandari
Okay. So 500 crores of the royalty claim and 500 crore is for the subcontractor dispute. And the remaining 400 in the form of taxes and other.
Ramesh Kumar Jha
Yes.
Prateek Bhandari
Okay. Okay sir. Thanks for answering my questions.
Ramesh Kumar Jha
Thank you.
Operator
Thank you. The next question is from the line of Prasad from Investec. Please go ahead.
Veenit Pasad
Yeah, thank you. So just I had a couple of questions. The first one being on the oil and gas sector. In the previous conference call we spoke about us having all the industry having presented to government and when you sees changing the project terms, etc. So how is it any progress on that front which is made.
Paramasivan Srinivasan
As of now? No, not much progress in this. Efforts are still on to get the contract methodology, contracting methodology and the implementation of contract administration improved. And so. So we have been persisting from quoting to NGC till site. Then they make it.
Veenit Pasad
Understood. Understood. And if you can share some update on Bangladesh orders. Where are we as the execution commenced again or we’ll be dropping those orders on that.
Paramasivan Srinivasan
On Bangladesh. Both the governments are insisting that we do the work. Both Indian government and Bangladesh government. One particular project, it is in the process where we have not commenced asset. We have conveyed earlier also package three of a road project, WP3 where they awarded the contract 19 months later than we submitted the date and where we said unless rate revision is done, we will not commence the work. That project is probably going towards cancellation. And that is something which will be about 600 crores. About 600 crores value. So that is likely to go out. The other two projects we are just waiting for the variations and others to be approved for doing the work. We have put a skeletal team there. They have not started the work. The government of India started paying the money. Now hitherto they were not paying. Now they have started paying the money. Government of Bangladesh wants us to work and we are just working around to see that in both the cases, both the railway project and one of the road projects, both the cases the variations have been approved and recommended by government of Bangladesh through the government of India which is yet to be approved. We are just waiting for the approval to go full harm on that. And in railway projects there are three parts. Part one has been already handed over. Part two, they are given the land. Now Part three, they are yet to give the. And in package one of the things road project last 600 meters is something which they are yet to hand over to us. And there is a likelihood of discussion and settlement. That 600 meter will be removed from the scope. It is already two years since the project deadline is completed. Even extension though. But this will prolong. They are not able to acquire that part of the land because it’s more crowded place. So. So we are working with the governments, both government of Bangladesh and government of India to see things are settled to the mutual satisfaction.
Veenit Pasad
Understood. So last question from my side. We spoke about maintaining 11% EBITDA margins. Now I understand 11% is after including other income, less of BG expenses. But we have done a lot higher, probably closer to 13% for, for the 3 consecutive quarters now in the 9 months this quarter as well. So do you think this 11% EBITDA guidance is slightly conservative and we can, we can still do much better not saying that we may still continue to deliver 13% or so, but is it, is it slightly on the conservative side?
Paramasivan Srinivasan
Our construction industry as we keep always telling has a lot of contingencies happening continuously. While our guidance will continue to be 11 plus for the current year it could be well crossing 12 and for the subsequent years or otherwise we would say 11 + could happen higher but we would not like it to fall below 11.
Veenit Pasad
Understood? Understood. Thank you so much sir. Thank you.
Operator
Thank you. The next question is from the line of Nair from DAM Capital. Please go ahead.
Bhoomika Nair
Yes sir. On the, you know, you spoke about the margin profile and you know the interest bearing advances which has actually increased, you know, as we move ahead. Given that interest costs will kind of stay elevated because of this interest bearing advances, would the margin profile in what we’ve seen in the nine month actually continue to remain on the higher side with PBT margins being more stable and the correct way to look at things.
Ramesh Kumar Jha
So what we have talked about that even going forward we should see improvement in our PBP margin gradually. Even our PVT margin should improve.
Bhoomika Nair
Okay. Yeah. I mean that any which is the PPT margins has also improved in the nine month period and would that be a more correct way to look at it as what we’ve seen in the nine month to kind of sustain as we go ahead.
Ramesh Kumar Jha
Yeah. So see the EBITDA margin if you see year on year has improved and so is PVT margin Now I mean it’s up to the investors or individuals how they want to look at but generally people look at the operating margin and people also look at say PVT margin or a pat margin.
Bhoomika Nair
So the other thing is in terms of CapEx, you know if you can just tell what is the status of the TBM machines and while We’ve done some 200250 crore of capex what are we looking at for this year and is that number how does it look like for the next year as well.
Paramasivan Srinivasan
With respect to TBM machine at the highest level Railway Minister convened a meeting calling the machine manufacturers as well we had a very good meeting. Alternatives are being attempted to bring in the machine and while there has been a delay of a few months on account of border related skirmishes between India and China and things are I think more or less getting resolved Subsequent to the meeting Foreign Secretary also visited China all that and I had also met Foreign Secretary in this connection with that I think things should find a resolution with respect to TBM regarding CAPEX funding details. Rameshwar.
Ramesh Kumar Jha
So for this financial year we expect to close the full CAPEX somewhere around say 450 to 500 crores and this is much lesser than what we had budgeted for the year. Now last time also we had discussed that some of the project awards got shifted so we have aligned our CAPEX procurement in line with the project award and also the tunnel boring machines also got shifted to subsequent period. So as this has reduced in this financial year, next financial year we are looking at from the number what we had budgeted we’ll have to revise the number. So for next couple of years we will be having a higher number what we had budgeted earlier but since many projects recently we have completed couple of projects and maybe say next six eight months we are also looking at completion of some of the projects so many equipments are going to get free so we’ll recalibrate the requirement and as things stands we are looking at there could be a slight reduction if we see three years period, you know say 25, 26, 27 the total quantum of CAPEX what we had planned there could, there is a possibility that there could be some reduction in the overall capex requirement. So 26 and 27 there’ll be elevated number but it is considered three years the number will come down.
Bhoomika Nair
Understood sir. So just one follow up on the TBM Given the delay in receiving it. Will there be any challenges on execution of any project for which the TVM was planned and there could be some elongated one off project which could get impacted.
Paramasivan Srinivasan
In general, the government had taken things seriously and had talked to the people and all the projects where TBMs are involved, there have been some delays. There is also fresh initiative from Government of India jointly with Government of Germany to have a manufacturing base setup in India. The existing Chennai facility of ERIC Net is being expanded. The first such TBM assembly entirely had happened in India very last week only. So therefore there is more attempt towards indigenization of overall scheme of things. So temporarily, whatever projects which have been awarded in the last about one year plus wherever PBMs are to come in, there have been some amount of delays and the delays could impact the project to an extent. But once the TBM starts arriving and project commences, there will be no issues. Future projects, I think people will plan accordingly. They would not like to get even some parts from China or anything to avoid such kind of delay. They will accordingly price it. That is what our belief is.
Bhoomika Nair
Understood sir, Understood. Thank you very much.
Paramasivan Srinivasan
Thank you.
Operator
Thank you. The next question is from the line of Garvey Goyan from Invest Analytics [Phonetic]. Please go ahead.
Garvit Goyal
Hi, am I audible?
Ramesh Kumar Jha
Yeah, you are audible.
Garvit Goyal
Good afternoon sir. Congrats for decent execution in this quarter. While most of my questions are answered, I just want to get your view on. Like we all know like everywhere there are talk regarding the slow, slowdown happening in the economy level in terms of execution. But your numbers are saying a different story. Right? So how, how are you seeing right now in Q4? Basically the execution, the kind of execution of the kind of government, government demand that you are seeing in the project to the government, government initiative towards uh. Towards the execution of these project towards us.
Paramasivan Srinivasan
As you would have seen, highest ever order book in the history of Afghan is being achieved in the current financial year. So while everyone has talked about slowdown and so our own requirement being on a comparative scale much less, we don’t find any problem in terms of government itself. Government is very focused on infrastructure development. The priorities could shift as we told earlier. Also that while probably for some time roads have been in focus for nearly 25 years and now the focus gets shifted to railways to hydro segment and some of these areas and road kind of act activities being shifted to state level development. Instead of centrally developing the roads, we are probably looking at developing roads through the states by the state level initiatives, by special funding mechanism to the states for the equity portion or whatever. And similarly border related connectivity. There have been a lot of focus and some underdeveloped states that appear that there is going to be a lot of focus. And also it appears there is a significant focus on agriculture, irrigation related infrastructure. So that would be a very, very significant river linking project or the various levels of irrigation projects. Those are taking the proper shape. And the very fact that even with all these the government has found a way with the tight fiscal controls. Also a 10.1% increase over the revised estimate of the previous year should convey government continuous focus on infrastructure. And for us it is not only India, we are looking at overseas market as well. Therefore that gives an opportunity in some of the markets which is opening up and that gives an additional opportunity. Therefore we don’t believe any even perfected slowdown is not going to impact us in the near future. And in terms of slowdown also there is no real slowdown. There has been shift in segments which in the process so which are one segment, two segment focused contractors may get impacted, but not a diversified contractor. I would put it.
Garvit Goyal
That is it from my side, sir. All the best for the future. Thank you.
Paramasivan Srinivasan
Thank you.
Operator
Thank you. The next question is from the line of Disha Shah from RR Investments Advisors [Phonetic]. Please go ahead.
Disha Shah
Hello.
Operator
Yes, ma’am.
Disha Shah
Hello.
Operator
Yes, ma’am. Go with the question.
Disha Shah
Yeah, thank you for this opportunity. Yeah. So I have one, two questions. One is we are saying that bidding pipeline we have of 3.5 lakh crore. So could you please highlight that. Will it be just domestic or it will include domestic international? Both and if so could we have a split of it in terms of percentage?
Hitesh Singh
Yeah. So it includes both domestic and overseas. And close to 30% of this is overseas and 70% is domestic out of the 3.46 left crore I have mentioned.
Disha Shah
Okay, thank you. So my second question would be out of the current order book of around 38,000 cross how much percentage is under completion stage which we can recognize as revenue in the near future, say for our next 2, 3 fiscal year.
Ramesh Kumar Jha
So see as far as revenue recognition is concerned, the revenue recognition happens on a percentage completion basis and as per the accounting standard prescribed under Ingress 116, we recognize the revenue. So of this 38,000, if you know if you’re looking at what percentage should get completed over a period of time. So our average execution period is anywhere around two and a half years. So that should give you an idea what we are talking about.
Disha Shah
Okay. Okay. Yeah. Thank you so much, sir. That’s it from my side.
Ramesh Kumar Jha
Thank you.
Operator
Thank you ladies and gentlemen. As that was the last question for the. I now hand the conference over to Mr. Vinit Prasad for closing comments. Over to you, sir.
Veenit Pasad
Thank you. Thank you. Muskaan. I would like to thank the management team of Afcons for giving us a chance to host the call. Thank you so much. Thank you everyone for joining us. Sir, would you have any closing remarks?
Paramasivan Srinivasan
We would only like to say that Afcon continues to hold its value. We continue to do a strong, technologically complex and innovation led projects. And it would not be out of place to say that in terms of construction technology we could well be the leader. And Afcon will continue to focus the way in which we are focusing on the risk management framework and knowledge management which helps the company to grow significantly. And we believe that we are poised for continued growth for the next few years. As advised earlier, 15 to 16% CAGR over the next few years as we had achieved a similar number over the last 10 years. And in terms of EBITDA, you would have seen we have been consistently improving. While our General guidance is 11 plus percent. We look forward to continued improvement in the areas to come. And we would continue to operate as a transnational operator. And we look forward to investors staying invested with us over a longer period of time to gain full value. Thank you.
Operator
Thank you. On behalf of Envisa Capital Services India Private Limited. That concludes the Wisconsin. Thank you for joining us. And you may now disconnect your lines. Thank you.
Paramasivan Srinivasan
Thank you.