Afcons Infrastructure Limited (NSE: AFCONS) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Subramanian Krishnamurthy — Executive Vice Chairman
Paramasivan Srinivasan — Managing Director
Hitesh Singh — Head, Corporate Strategy
Hitesh Singh — Head, Corporate Strategy
Ramesh Kumar Jha — Chief Financial Officer
Analysts:
Unidentified Participant
Anupam Gupta — Analyst
Aditya Bhartia — Analyst
Jainam Jain — Analyst
Amol Rao — Analyst
Amis Thang — Analyst
Garvit Goyal — Analyst
Kunal Bhatia — Analyst
Parvez Qazi — Analyst
Karan Bhatelia — Analyst
Parikshit Gupta — Analyst
Balasubramanian — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the AFCON Infrastructure Limited Q4 and FY25 earnings conference call hosted by IIFL Capital. 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 touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Anupam Gupta from IFL Capital. Thank you. And over to you sir.
Anupam Gupta — Analyst
Thanks Manav. And welcome everyone to the discussion with the management of Afcon Infrastructure Limited. From the management we have Mr. Subramaniam Krishnamurthy, Executive Vice Chairman for Afcon, Mr. Parma Sivan Srinivasan, Managing Director, Mr. Ramesh Kumar Jha, Chief Financial Officer and Mr. Hitesh Singh, Head Corporate Strategy. To start off, I’ll hand it over to the management for the opening comments post which we’ll have a Q and A. O over to you, sir.
Subramanian Krishnamurthy — Executive Vice Chairman
Good afternoon ladies and gentlemen. I am pleased to welcome all of you to the Q4 and FY earnings conference call on Afcons and Offset Limited. Our financial results and investor presentation have been uploaded on the exchanges and I hope you had a chance to review them as told. Joining me today are Mr. Paramashwan Srinivasan, Managing Director, Amitra, Chief Financial Officer, Anitesh Strategy ahead Let me begin with a brief overview of our performance. Afcon reported a Q4FY25 total income of 3,387 crores, compared to 3,809 crores in Q4FY24. For the full year, the total income was 13,023 crores, slightly below the 13,647 crores recorded in the FY24.
This was only the second time in a decade that we have missed our budgeted turnover, with the COVID year being the prior exception. Our top line faced headwinds from challenges such as cash flow concerns in Jaliyah and mission projects, political instability in Bangladesh and delays in project awards and L1 to LOA conversions. While we took proactive steps to address these challenges, that scale impacted our performance. Our CFO will elaborate on these factors. Despite these obstacles, our disciplined financial management and robust cost controls enabled us to deliver strong profitability metrics. Turning to our profitability metrics. Now EBITDA for Q4 stood at 415 crores compared to 482 crores in Q4FY24.
For the full year, EBITDA margin improved by 120 basis points reaching 12.8% compared to 11.6% last year. FY EBITDA stood at 1662 crores registering a 5% year on year increase. Profit after tax for Q4FY was 111 crores compared to 145 crores in the same quarter last year. For the full year pat stood at 487 crores reflecting an 8% growth over FY24. On the debt side, total debt at the entire FY25 stood at 2,235 crores down from 2,000 crores in FY24. Our debt to equity ratio correspondingly moderated from 0.68 to 0.42. There were several notable developments during the year.
Facilitated Companies Bank Loan and Assigned AA with a stable outlook for long term and A one with a stable outlook for the short term. Upgrade from the earlier rating of a 1 in the long term and a 1 in the short term. This reflects our strong execution capabilities, healthy business profile and consistent performance to complete in complex infrastructure projects across geographies. We are also included in the MSCI India Domestic Small Cap Index as well as nifty 500 and nifty small cap 250 indexes further validating our growing 11 in the capital markets.
Our Project Execution Fund we completed many projects for which you received the completion certificates. 97 Kilometer Ghana Railway Project the longest in Ghana the East Kolkata Metro India’s first Andhran River Metro Tunnel the Tirupati Smart City project A water supply project in Zanzibar which two of Nagpur Metro Rail projects featuring India’s first four level wiretech. In addition to project execution, we continue to build institutional strength and industry leadership. AFCON was recognized among India’s Top 500 Most Valuable Companies in the 2024 Burgundy Private Rural India 500 list. We also received several prestigious awards reaffirming our position as a company committed to knowledge innovation and engineering excellence. Our seventh contributing Mike Award for Knowledge Management, the IEA Industry Excellence Award in the platinum category received fourth year in consecutive fourth consecutive year and recognition as India’s 75 most innovative companies by CII.
Safety is a non negotiable priority at affants and we continue to elevate our safety standards in global benchmarks. One of our projects in Liberia received the prestigious five Star Golden Award and the Safety Shield from the National Safety Council of India. Additionally, the British Safety Council conferred International Safety Awards for two of our projects in Bihar and for Package six in Delhi Meerat RRTS projects. Eleven other projects were recognized for safety Excellence by the World Safety Organization and the Indian Chamber of Commerce. In line with our focus on improving efficiencies, we are making investments in adoption of emerging technologies and digital transformation. We expect to reap the benefits of these investments in the near future. We reaffirm our commitment of creating value for our stakeholders, customers and shareholders and we wish to thank you for all your support and trust.
I now hand over the call to our Managing Director Mr. Paramashivan Srinivasan who will share deeper insights into our strategic development and future roadmaps. Thank you.
Paramasivan Srinivasan — Managing Director
Thank you, Mr. Subramanian. Good morning everybody. It’s my pleasure to welcome you all at the Q4 and FY25 earnings conference call of AFCOM. We truly appreciate your continued interest and support in our journey. Financial year 25 has been a mixed year for the company. While we have seen a post election slowdown that continues to linger, the government commitment to infrastructure development remains strong. As is evident from the Union budget, geopolitical uncertainties have posed challenges impacting supply chains and in certain cases project timelines. Also, the ongoing tariff tensions are altering global business landscape though the long term implications are still unfolding.
That said, we are seeing some positive momentum on the ground and remain optimistic about the medium term outlook. Despite these headwinds, we are confident about our growth trajectory for financial year 26. We are targeting a top line growth of 20 to 25% with new order booking in the range of 20 to 25,000 crores excluding more than 10,500 crores of L1 orders. Regarding the conversion of these L1 projects, we expect letters of acceptance from two Pune Ring Road projects aggregating to 4,788 crores Rajasthan Water Supply Project of four hundred and twenty seven crores, two Nagpur Gundiya projects and all these in the first quarter of the current year.
In addition to the robust top line growth, we also aim to maintain healthy EBITDA margin and while we had gated that 11 + last year and delivered about 12.8, we continue to gauge 11+ for the current year as well. Despite the temporary slowdown, we remain optimistic about robust infrastructure demand in India and globally. Domestically. Alongside the government’s ongoing infrastructure priorities, we anticipate increased investments in border infrastructure connectivity projects such as roads and tunnels as well as accelerated focus on the hydrostate path. Afcon, with its diversified expertise and proven execution track record, is well positioned to drive these initiatives and support India’s infrastructure and strategic growth.
Internationally. We see emerging opportunities in our focus regions including Africa and some of our neighboring countries as well. Apart from that, there are definitely some positivities in Middle east and Saudi. They explained on multiple occasions how and why we have reduced the exporter in the Middle East. We are now working on select opportunities in Saudi and Dubai, partnering with strong local players to capitalize on evolving market Dynamics. As of 3-31-25 our pending order book stands at 36,869 crores, highest in Afghan’s history and it’s roughly about 2.9x of our turnover. We recorded strong order flows. We have always maintained that this thing we will maintain between 2.5 to 3 point x 5x while outer limit could be 4x.
We recorded strong order inflows of 15,960 crores and we are confident we have already explained the L1 status. We also made strategic entries into new segments and geographies. Of course entered into water supply tunnel segments through two projects awarded by Cisco and mcgm. We have also backed our first marine project with prestigious client DP World, further diversifying our client base. Notably, we completed the incorporation of our joint venture company in Saudi Arabia with a local partner and plan to commence project bidding activities soon. In conclusion, I would like to reiterate that AFCON is strongly positioned to capitalize on emerging opportunities in the infrastructure sector with a healthy order book, robust business development process and a solid execution track record. The we are confident of delivering sustained growth and long term value for all our stakeholders.
With this I conclude my remarks and now hand over the call to Mr. Ramesh Jha, our Chief Financial Officer who will take you through the financial performance in detail. Thank you all.
Ramesh Kumar Jha — Chief Financial Officer
Thank you sir. Good morning everyone. Before getting specific into the numbers, I would just like to clarify that company is into business of construction. The margin in a quarter varies based on the nature, type and quantum of work executed. So quarterly results may vary in different quarters and may not be indicative of annual results or trend. Now to the specific numbers. In Q4FY25 we have done a total income of 3,387 crores as against in Q4 2024 3,809. So the Q4 number from on year on year basis has come down 11.1% and as compared to Q3 25 the number is 1.7%.
It has gone up and in terms of full year number the total income is 13,023 crores. As against FY24 13,647 crores. So on a full year basis the number has come down 4.6%. Now if we talk specifically on the revenue Q4 we have seen generally there was delayed payment. Payments were not very smooth from many customers. We witnessed funding requirement from many projects at the same period of time. In Q4 this was not possible because of at a time requirement to fund. Under the circumstances we decided to balance between funding growth and maintaining liquidity. So we funded projects up to a limit.
But we have not gone beyond the point to avoid overexposure in any project. Usually we have seen that in Q4 we do at least 15 to 20% turnover more than what we do in Q2 Q Q3 backed by smooth payment from customers. This gives us benefit of economies of scale and improves the profitability in Q4 and then the impetus is on the full year as well. However, for the full year we achieved a turnover of 13,000 crores which came down from the previous year top line. This year we could not achieve the planned turnover on an overall year basis because we could not do the planned turnover in our project in Bangladesh because of the reasons you all are aware just we have seen bill specification and payment related issues.
So this has impacted the Q4 turnover and this has also impacted on the overall profitability. Usually in a year when I said that in Q4 we do 15 20% more that not only in this quarter on overall year it gives the benefit. So these were the main reason for top line. Now as far as Revenue guidance MD has already talked about in FY 2025 we have booked around rupees 16,000 crores of order and we are L1 in project worth 10,600 crores. We are targeting to better the order booking in FY26 as compared to 2025. Therefore in FY26 backed by the strong order book we have and the kind of order booking we are looking at.
We are looking at a top line growth in the range of 20 to 25%. On a medium to long term horizon we would like to sustain our long term CAGR achieved of around 15%. Now moving to EBITDA. During the quarter we have done 415 crores of EBITDA which is 12.2%. And this if we correspond with the previous year Q4 where we had done 482 crores. 12.7%. So there is a the number has come down from the previous year and if we look at the same number from the Q3 of this financial year where we had done 448 crores from that also the number for the Q4 has come down.
On an overall yearly basis if we see we have done 1662 crores of EBITDA as against 1583 crores in the previous financial year. So the overall year EBITDA has gone up by 5%. And in terms of percentage FY25 we have done 12.8% as against FY24 11.6%. Now EBITDA in our EBITDA calculation we consider BG Commission as part of our operating expenditure. So EBITDA that we are talking about is after removal of BG Commission as expenditure. Whereas we understand that the market considers BG Commission as part of interest or finance cost. Hence if you consider that way then the EBITDA will increase to the extent of 168 crores which works out to be 1.3% of the total income.
So what we are talking about 12.8% it will go to 14.1%. Whereas at the same time the market removes the other. So that’s another nuance which one needs to factor. As far as other income is concerned, our EBITDA calculation, what we have talked about 12.8% includes 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 arbitration. Interest, foreign currency exchange gain and miscellaneous incomes are recurring and very integral to our business. Hence these needs to be considered as other operating income.
So for the full year the total operating income is 474 crores. Now when we have talked about EBITDA I would also like to clarify that construction is full of contingencies. Our endeavor will be to save on those contingencies or optimize those costs. But many a times we may not be able to save those countries contingencies. Hence our guidance will remain around 11%. Now moving on from EBITDA, if you look at the profit before tax for the Q4 25 we have done 184 crores as against we had done 207 crores in the previous Q4 24 and in the previous quarter Q3 of 25 we had done 200 crores.
For the full year we have done 710 crores as against 673 crores done for. So on a full year basis the profit before tax has gone up by 5.6% and in terms of percentage for the full year it is 5.5% whereas last year we had done 4.9%. Now from EBITDA to profit before tax, we would like to clarify that finance cost during the year we have seen that the payments were not forthcoming as smoothly as one would have expected. Expected payments in JAL B1 Nissan projects were not coming. We hardly received anything in up project full year and in MP projects it was coming with lot of rattling.
We witnessed overall stretch across the spectrum in payment. This resulted in higher average borrowing during the year. Because of this interest cost has gone up this year. Our international order booking is low where the advances are higher and all the advances are interesting. Coupled with this new interest bearing advances we received has elevated the interest cost on client advances. Taking the overall interest cost high. Usually 20 to 25% of our interest bearing. 20 to 25% of our total advances are interest bearing. But of the new jobs we have received during the year, 75% of the projects were having advances with interest bearing cost.
So because of this our interest cost on an overall basis has gone up. And that is why the PBT number is at 710 crores now the PBT is also after considering the accelerated depreciation because we continue to account for accelerated depreciation on our TBMs. Of the total 491 crores of depreciation, around 1/3 is an account of accelerated depreciation. So that also needs to be factored when we look at the PBT number or any return we calculate. Now moving on profit after tax for the full year we have done 487 crores and as against 450 crores done in the last year which IT has grown 8.2%.
And if we look at the specific for the quarter 111 crores we have done in Q4 25 as against 145 crore we have have done in the last year Q4 24 and 149 crore done in Q3 25. Now another important aspect one may look at that if you look at the tax rate as a percentage it is working out around 30% or so. So the tax rate on Afcon profit. If we look at Afcon plus its. Joint ventures, the tax rate on Afcon profit is around 27.5% only. This is on account of our JVs. And of course this 27.5 is also higher than the normal one would expect 25.17% normal tax rate. So this 27.5% is higher because our JVs pay tax in the range of 35 to 36%. Second, in some overseas locations like Bangladesh, some African countries, the turnover is charged at the turnover. In such a situation, if you don’t make profit above the threshold, your tax deduction needs to be charged up in the as an expenditure. So that also takes the tax rate higher.
Now when I talk about expense plus JV the rate is 27.5% whereas on a consolidated basis it is 30%. So in some overseas subsidiary we had to make some provisioning on a conservative basis and that’s how the profitability has come down. And if you look at on a consolidated basis the tax rate is appearing higher. Otherwise AFCOM plus JV the tax rate is only 27.5%. Now moving on, if you look at some of the return ratios, so return on capital employed we have done 17% as against, we had done around 20% last year. And return on equity as against done 13% last year we have done 11%.
So capital infusion has increased the capital base but operations are yet to elevate. Hence returns in FY25 is 17.28% on RoC basis as compared to previous year 20.18 and we are clocked in around 11% RoE. So and at the same time I would like to clarify that this these return on equities after the accelerated depreciation. So once the business elevates these returns will go back to the normal levels what we were doing earlier. Now on the debt basis at the year end FY25 our debt has come down to the levels of double to C0 crores on a gross basis and 1486 crores on net basis.
On net basis debt equity is working out around 0.28 times of the net worth on gross basis. The debt to Equity is around 0.42. So this is I think you know very excellent debt metrics if one would have looked at in terms of net working capital days. So net working capital is at an elevated level of 113 days. We are witnessing delays in certification of the work done and release of payment. In some projects this has led to the increase in uncertified work done leading to jump in working capital requirement. Most of the projects got all the build amount cleared by the year end.
But JALG1 mission remains to be an exception wherein overall around 500 course worth remain outstanding. This itself is close to 14 days of working capital. Another important point to note is the recent advances. We have received all of it is classified as non current advances. So roughly 25 days equivalent funds which is otherwise available to us is not getting factored in the networking calculation cycle. Just that the recovery of those advances will start only after 20 to 30% of the project completion. All these advances are getting classified as non current. Effectively we need to see the net working capital adjusting for those 25 days as non current advances not the full amount but the incremental from last year.
So this is on the networking capital front. Now on behalf of afcon, I thank everyone for attending this call. Now I request the moderator to open the floor for Q and A.
operator
Sir, should we begin the question and answer session?
Ramesh Kumar Jha — Chief Financial Officer
Yes.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from line off. Aditya Bhartia from Investec. Please go ahead.
Aditya Bhartia
Hi. Good morning, sir. So my first question is on the provisioning that we have done in this year. We can see from the cash flow statement that there appears to be elevated provisioning this year. Which project does it pertain to? And the related question is on the unbuilt WIP part that given that it has increased a lot this particular year. You mentioned about Jaljeevan mission. Are there other projects also that are not getting certified and within Jalgivan mission, what is your expectation? How exactly does this issue get resolved? I’ll come back to the second question.
Ramesh Kumar Jha
Yes. As far as provisioning is concerned, there is accounting standard on the Eclipse and recently there was a guidance also on the ecl. So this is that we have formed a committee and the committee looks at the overall whatever contract assets we have and the receivables we have. This is that we have taken feedback from the committee and accordingly we have gone ahead with. It is not specific to one project. It is across projects. Wherever we have deemed fit. We have provided for that ECL provision. So that is in line with the accounting standard. This is one on the contract assets or unbilled revenue.
So as I said that we have not gone overboard in funding the project. We have funded to an extent and beyond that we have not gone ahead in Madhya Pradesh projects. We have received maybe around 50% of the payment before March in up. We have not seen the payment. Our People had with the senior officials at the UP project they are saying that we are going to release a sizable amount of payment.
Aditya Bhartia
Sure sir. So my second question is on the Middle east markets wherein off late you have started speaking a fair bit and it seems that we are looking at opportunities. Just want to understand how the qualification status over there which are the areas where India qualified, which are the areas wherein we are focusing on it. How exactly are we tying up with the local contractors and what kind of opportunities are we really looking at? How large can that market be for us?
Paramasivan Srinivasan
Practically we are looking at signing up with big players locally where we will have the maximum share of work, he will have comparatively lesser share of work and but in terms of local environment management and other areas practically for every area we are qualified and some big projects were already pre qualified and the proposal has to be made. We are also looking at a model where some government agency from Dubai or. Middle Eastern country. So that some of the contract conditions we have talked about in the past we can work with the confession to make it advantageous to us that also we are doing in terms of Saudi we are very much focused on select work to start with and principally the work which are being administered by either the Aramco, SABIH or PAF or some of the Navy related work. These are the kind of works we are focused on in Saudi.
Aditya Bhartia
Understood sir. And and within Aramco will be a subcontractor to the main contractor. And what about UE
Paramasivan Srinivasan
in Saudi we. Could be a main contractor also in see Aramco is not only doing oil and gas now they are given a lot of infrastructure projects also to be administered. So you could be the main contractor with the Arams. So that’s something going on. And in terms of Dubai also we will be the main contractor if there is a concession or will be the contractors of part of the two years in succession. In UAE we were rated as the best contractor and in Kuwait we were rated as the best contractor for a year. Therefore in fact they have been in continuous discussion with us. Why don’t you participate? So we have put certain benchmarks to participate so that our risk is reasonably mitigated.
Aditya Bhartia
Understood sir. That’s helpful. Thank you so much.
operator
Thank you. We have our next question from the line of Jainam Jain from ICICI Securities. Please go ahead.
Jainam Jain
Thank you for the opportunity. So my first question is how are we seeing the bid pipeline in India and Middle east in this year?
Hitesh Singh
Yeah, very healthy. We maintain our big pipeline for the for two years. We have visibility of Focus projects. I mean if you see the universe is very large but the kind of projects we focus on is close to 3.2 lakh out of that it’s. I mean, I mean in the same 2/3 is domestic, 1/3 is overseas opportunity. If we look at into specifics as. In what is the nature of the. Opportunities we are targeting around 1.3 lakh crores of the opportunity which we are pursuing are from the urban space which includes underground metro, elevated metro bridges and elevated corridors. Close to 80,000 crores of opportunities are from the hydro sector which includes road tunnels, a dam, hydro bar project and water related projects. Around 60,000 crores of the opportunities we see in the next two years are from the surface transport is large into road business and also some couple of rail bridges Also we are pursuing and some rail projects outside India we are pursuing and around 47,000 crores of the opportunities are from the marine and Indian industrial sector. And as you have earlier mentioned also within especially in marine we work with very Mary clients like Reliance Aristotle. So there are opportunities with clients as. Well both in India and outside. So that being the pipeline.
Jainam Jain
Okay sir, answer. What sort of arbitration income are the L26 and SR27?
Ramesh Kumar Jha
Can you, can you come again? I’m not.
Jainam Jain
Hello. Hello. I’m audible right now. Yeah. So what sort of arbitration income are we looking to get in SR26 and S27?
Ramesh Kumar Jha
Arbitration income? It’s difficult to you know, put in but usually what happens that every year we are. We keep track of all the arbitration cases which are ongoing and with some reasonable certainty. We are aware that which all awards are going to get certified during the year. So those awards are factored accordingly in the. In the projection.
Jainam Jain
Okay sir. And what sort of debt levels are we looking by the end of F100? Currently we are at the net debt of 800.
Ramesh Kumar Jha
See it’s difficult to put any number at the moment for FY26 but what we have talked about always is on a gross debt to equity basis as you know we have moved below so we’ll be comfortable maintaining those levels. And on the debt to EBITDA level we have you not like to you know make this cross maybe say around 1.5 or so. Those aspects we are looking at we are in a very comfortable situation as far as debt is concerned and wherever there’ll be requirement to you know put in some capex and all that we are fully prepared. So to accelerate growth is some equipment required in a very comfortable position to.
Jainam Jain
Okay, and so my last question is Are there any slow moving orders in a current order group?
Ramesh Kumar Jha
Slow moving orders? It’s not that. Not their Bangladesh. We have got a couple of projects and we know the projects are going slow. And besides that we have got one project in Jammu and Kashmir that also is going a bit slow. But if you look at from the overall order book perspective, those are not that sizeable.
Jainam Jain
Thank you so much.
operator
Thank you. A reminder to all participants. If you wish to ask any questions you may press star and 1. Anyone who wishes to ask a question, you may press star and 1. We have our next question from the line of Amul Rao from one of financial consultants. Please go ahead.
Amol Rao
Good morning, Mr. Krishnamurti. Mr. Ja. Thanks for the detailed presentation. So, a couple of questions. So this Bangladesh project, if I remember correctly at the IPO time you had said that this usually gets classified as a government project because it’s funded by the Indian government. Is that understanding correct? Sir? I mean.
Paramasivan Srinivasan
Yes, understanding is correct. It is.
Amol Rao
You also explained that usually, I mean to the extent of the work that is done which crosses the milestone, you get paid. So ultimately I mean if the work stalls or is going slow, I mean the exposure is less. So I know you are said that it’s an insignificant amount. But could. Could you put some number to it? Is it possible, sir, to put.
Paramasivan Srinivasan
Yes, I will explain Bangladesh situation.
Amol Rao
Yes, sir.
Paramasivan Srinivasan
We were doing at a point of time four projects, three road projects and one railway project in joint venture with KBDN. And recently about a month, on 6th of May also not, not even a month. Government of India has approved adjustment within the BOQ for railway project and one road project and the other road project. Government of India has approved variations to the tune of $16.5 million. With that, government of India stands committed towards completion of these projects. However, the ground level situation being what it is one out of three road projects, one project we have where as the government of Bangladesh is not in a position to have a rate revision done which we had requested.
We had earlier also conveyed that that is why we have done only survey. Without rate revision. We refuse to do the other work. There. There is an agreement. Agreement to foreclose the contract which is in terms of value is not very significant. It’s about find the crores or so. So that will get foreclosed in. It’s already approved by the government of Bangladesh. Indian government has to approve it. Package 1 and 2 of ROAR. Package 1 variations have been approved. Package 2 within the BOQ. Changes in terms of scope, deletion, scope addition or division in rates all these are permitted.
But even with all these. So we were initially Indian government conveyed to go slow till such time things are settled at the government to government level. After that now Indian government has given the cohort. That’s the reason when our CFO explained, he did explain about a shortfall in turnover with respect to Bangladesh. And now we have started but we will be going selectively because of internal stresses going on within Bangladesh which could impact and at some stage we could get stuck with something. Therefore we are very cautious and we have kept the limited equipment and other equipment. We have already moved back to India. Therefore we are our risk exposure is comparative less. If in case of the reason internal political issue. That is the thing which we want to explain.
Ramesh Kumar Jha
Amul, just to add here. See these projects are funded by government of India through line of credit. Now if you are looking at specific exposure from the Bangladesh project, close to 50 crores we have to receive all that is retention money. Generally you know, those are released after the completion of the project. So we don’t foresee any difficulty in getting payment. Because. Because regular bills, whatever we are slow progress work we are doing. We are getting it paid. And just to add in line of credit project in Bangladesh, Nepal and Sri Lanka. There has never been any instance where an exporter has done some work and payment has not been given. So be rest assured that whatever payment is outstanding, we are going to get paid and those payments are going to be released from Exim bank of India here in India. So there are no risk assets from the receivable perspective.
Amol Rao
So thank you sir. That was a very elaborate clarification. So Mr. Murthy just mentioned that there was approximately a 500 crore closure that will move out of the order book at some point in time whenever the project is closed. Right.
Ramesh Kumar Jha
Which 500 crores?
Amol Rao
Sir, you said that there was a road project for 500 crore of project foreclosure which has been approved by the Bangladesh government. Which is to be approved by the Indian government. So once that happens, that moves out of the order book. Am I.
Ramesh Kumar Jha
That is already removed. Already removed from the order book.
Amol Rao
Okay.
Amol Rao
It’s already removed. All right, sir. So thank you so much. I wish you all the best.
Ramesh Kumar Jha
Thanks.
operator
Thank you. We have our next question from the lineup. Amex tank from Fuller Fund Management. Please go ahead.
Amis Thang
Hey guys, can you hear me?
Ramesh Kumar Jha
Yes.
Amis Thang
Hi, my name is Amos from Fullerton Fund Management Singapore. I wanted to ask two questions just to follow on from the question on Bangladesh. What is your total risk exposure is this 500 crores which you talked about and has been removed from your order.
Ramesh Kumar Jha
So see that 500 crore work project we have already talked about that we have removed from our order group and at the moment we have got couple of projects, one road project and another rail project. These two projects we have to do the execution. So to execute these projects and to limit our risk, what we have done we have limited to the extent possible. We have moved our resources and we’ll do, you know, we’ll not try to overexpose ourselves as far as exposure is concerned. In terms of receivable. Just now I talked about that we have got total rupees 50 crores rupees which is close to say $6 million we have to receive.
All this is retention money which is not due, which gets. Which gets released only on the completion of the project. But at the same time what I’m saying is in. In case of Bangladesh project there are no instance where you know there has been any default in the payment because these payments are to be released by Exim bank of India here in India. So those works have already been certified by Bangladesh authority and they have already sent this to the Indian authorities. So all documented and payment is that it will fall due on the completion. So we’ll get that payment. So there is no exposure, there is no risk of any receivables not getting paid in Bangladesh. And that’s where going forward we are taking a very cautious approach.
Amis Thang
Okay, second question is could you outline your. I took your point on the 20% top line growth. KPI 20, 26, FY26. Can you outline EBITDA margin or just margin E what your expectations over there and the various cost items like raw material, labor cost. If you could comment on the extent of cost inflation that we are seeing at the moment. Thank you.
Ramesh Kumar Jha
See next year of course when we are looking at 20% top line growth that will reflect in all the numbers your EBITDA margin and your return ratios all will be at a from the elevated level what we have clocked from this year. But in terms of guidance we will not be able to talk about all those numbers. What we can about talk about is the EBITDA margin will maintain 11 + percent.
Amis Thang
I see. And could you comment on the scale of concentration that you’re seeing at the moment? Be it from employee, you know, employees or raw material. How should we think about the scope of cost inflation that you’re seeing at the moment?
Ramesh Kumar Jha
The cost inflation majority of our projects has got pass through mechanism because we have that escalation through escalation formula, we get compensated from the customer. And at the moment, majority of the projects are with the government customer where there is escalation provision. So it is not going to impact our profitability.
Amis Thang
Understand? So it seems pretty difficult, I mean, to get. You guys have a 12.8% EBITDA margin. You’re guiding for 11 plus. I’m just wondering how the margins fall for the year. Perhaps you’re being conservative. If you could help us understand this. The scale of EBITDA margins being 100 basis points lower than year on year.
Ramesh Kumar Jha
This is where we have talked about in part that our project selection plays a very crucial role. And then some of the risk framework we have put in place the knowledge management in the organization. So all that helps, right? Since beginning when we back the project and when the project goes through this risk management framework and the knowledge in the organization. So all that helps to clog the margin we are doing. And that’s where if you see, not only this year, you know, every year, say 22, we had done close to nine and a half percent, 23%, we had done 10.7%.m 24, we had done 11.6%. This year we had done 12.8%. So on a consistent basis, the margins, one year clopping and year on year, year basis, we are trying to improvise.
Amis Thang
Okay, so for this year, at least 11 point. At least 11%. Yeah.
Ramesh Kumar Jha
Yes. But at the same time, you know, let me just reiterate what I said, that construction is full of contingencies. Our endeavor will be save on, you know, some of the aspects, but not all the times the we will be successful. If we are successful, you know, the kind of results we have shown last three, four years, if we are not, then, you know, we are, what we are saying is at least, you know, we will be able to do 11%.
Amis Thang
Thank you. Thank you. Thank you, sir.
operator
Thank you. We have our next question from the line of Anupam Gupta from IFA Capital. Please go ahead.
Anupam Gupta
Yeah, so the first question is on the, on the reason you highlighted for the slower revenue growth in this quarter as well as the lower margins which emanated from that. Does Bangladesh and JGM project fully explained that or are you seeing a slightly broader slowdown in terms of payment and execution? And related to that, have you seen any improvement so far in April, May in that sense, or this continues to remain slow even in the first quarter?
Ramesh Kumar Jha
See, usually in April you will have hardly any payments. But you know, we need to understand this from the broader economic perspective. See everybody was talking about in Q4 that there was a liquidity, liquidity squeeze in the Indian economy, even the Asian economy people were talking about. But then RBI did lot of open market operations and they were through different means they were trying to infuse liquidity. And we have seen that in the month of May, you know, payments, whatever we had to receive, those payments have come. So again, you know, in the economy as a whole we are, we are hearing that the liquidity is there because even in Q4 banks were telling that, you know, they were, they were facing the liquidity pressure which now they are saying that they are, they are flux with the liquidity. So I’m hoping, hopeful that you know, things should significantly improve.
Anupam Gupta
Okay, so basically execution should normalize from first quarter is what they are trying to highlight.
Ramesh Kumar Jha
Yes, yes, hopefully.
Anupam Gupta
Okay, okay, understand. And so the second question is on the planned CapEx and, and the depreciation. So let’s say what would be the CAPEX number you’re targeting for this year and in terms of depletion because there is one third of accelerated depreciation. What, what sort of increase broadly one can expect in FY26 in depreciation?
Ramesh Kumar Jha
See this year we are looking at since in FY25 we had planned close to 1300 crores of capex whereas as against that we have done say close to 370 crores largely because the TVM’s for C2 project had not come. And also some of the project awards got deferred and accordingly in line with the project award we have also deferred our CAPEX plan. So in FY26 we are looking at a capex of around 1100 crores and depreciation. What we had done during this year maybe we can look at say around 10, 12% growth in terms of depreciation.
Anupam Gupta
Understand sir, and just one last question. So let’s say of the total 37,000 crore order book plus 10,000 crore of L1, what proportion is right now under construction and how do you see that changing in the next couple of quarters?
Ramesh Kumar Jha
This 37,000 crores of order is fully under execution. This 10,600 crores of. Once we get the LOI, we’ll, you know, we are fully prepared and we are will quickly mobilize. So that will also come under the fold of execution.
Anupam Gupta
Okay, fine. That’s all from Isaac. Thank you.
Ramesh Kumar Jha
Thank you.
operator
Thank you. We have a next question from the line of Garvit Goel from NVEST Analytics Advisory. Please go ahead.
Garvit Goyal
Hello. An audible.
Ramesh Kumar Jha
Yes, go ahead.
Garvit Goyal
Good morning, sir. Congrats. So in your opening remarks you were talking about some temporarily slowdown. So can you elaborate upon that? Because in last phone call we were talking about closing order book of around 45,000 to 50,000 cr by March. Citing those ongoing tenderings and the Algonquin. But we did not end up with that figure. So I want to understand the key reasons for the gap versus the guided rate. Were there any delays in the order conversions and how now that situation is getting improved? Because we are still maintaining our guidance for about 26 as we have given in the last quarter. That is my first question.
Paramasivan Srinivasan
I’ll just explain that in terms of our pending order book of between 45 to 50,000 crores. We are there with L1 but we are not there without L1. That is the reality. And the L1 jobs. Some jobs we became L1 as early as in September. And some jobs in the last quarter. So in the normal circumstances from L1 to award it doesn’t take more than two months typically. But in this case what we have later found out is that a proper survey had not been done. With respect to Nagpur Gondia in terms of land acquisition which they submitted only on 31 March to the government which is under approval.
Once that approval is done, that job will get awarded. With respect to Punehring road, the cost has gone beyond the estimate and which has been negotiated and closed with us. And they need to get a cabinet approval. And it has gone to the cabinet approval land acquisition process. With respect, out of group Mone ring road project. One project has already been completed and the other project they have crossed 80% full money is in the bank already for the land acquisition related expenditure. So those two projects once cabinet clears it will get awarded. And straight away it will start.
Nagpur Gundya. That land acquisition has to be approved by the cabinet and then it will get awarded. Therefore Rajasthan Water project has been awarded now it has. Last week. It’s not awarded. Sorry. Last week finance committee has cleared that. So anytime this week it could come up. And Pune Ring road will come very quickly. And Nagpur Gondia. Once the process is approved they will give an LYI or LOA before they commence. That is what it looks. Because of that there have been delays which is not a normal phenomena. Normal phenomena is about two months from the time the L1 is declared. That is the reason we. In fact it’s a surprise to us also. So that’s one of the reasons why we had factored in some Amount of cost being spent there, which will count as turnover, which has not been done also.
Garvit Goyal
Understood, sir. Secondly, sir, you mentioned like 20 to 25% growth for FY26 and medium term we are targeting about 15% growth. So is it like we are expecting a slowdown over the upcoming years from the government spending which is essentially leading to egr which is lower than the growth that we are expecting from next year.
Paramasivan Srinivasan
At 15%? Okay. That is what we have always needed. And here we have been consistently maintaining because of jump in order book in the last year, which ultimately some of these are shifting to current year. And because of that there will be a jump from 20 to 25% from that of the earlier years. The same thing we are maintaining, even though there has been delay, this thing which also will have an impact. But the base being low for the last year, we still believe that 20% plus could happen.
Garvit Goyal
Understood. That is it from my paper. Thank you all.
operator
Thank you. We have our next question from the line of Kunal Bhatia from Dalal and Brooka. Please go ahead.
Kunal Bhatia
Yes, sir. Thank you so much for the opportunity and both of my questions are answered. Thank you for a detailed explanation. So just one thing in terms of the guidance which you have given for the next year, 20, 25%. Sorry for this ripple, but what is the risk which you carry of achieving the lower end or slightly below the lower end, 20% a if you could also include the geopolitical risk into the same.
Paramasivan Srinivasan
So we have considered the jobs coming in very quickly in the next about four weeks or so. Some of these jobs whatever we are L1 now if some of these jobs get further delayed, which is unlikely, then there could be an impact. Because we have originally planned in our original plan from the beginning of the year itself. Now if the order comes, there is a monsoon period for three months. Effectively the work will start in October only that is how you will get the some of these jobs turnover getting reflected in the second half of the year.
And also typically in the construction industry, any big job first six months, the turnover always used to be goes in establishment installations and other things. And here we are making efforts to see that we get the turnover done. Therefore, if there is some delay in award of some of these jobs for again, which is unlikely, then we could it could impact the turnover below 20% also.
Kunal Bhatia
Okay, but you are at least confident that this time that the words should go through. Because.
Paramasivan Srinivasan
Whatever inputs what we have from the client side, we do believe that it could happen very quickly.
Kunal Bhatia
Internationally in terms of the Project order book, any risk you see there, like what happened in case of say a Bangladesh project. Any other risk do you carry for any other geography wherein you see that there could be further more delays in terms of either a project execution period or a payment period?
Paramasivan Srinivasan
Currently, wherever there are geopolitical issues, there have been attempts to get into a peace situation by internationally. Therefore we do expect. Except I do not know how far it will take the Indian situation between India, Pakistan. Other than that, I believe global level, wherever there are issues, this could get settled in due course of time. And also we have started looking at newer geographies and well, in the current year we could be bagging few jobs in a newer geography in some of the Southeast Asian nations and European nations and all. Therefore geopolitical issues are there.
But I think it is getting addressed. Therefore, we believe that the situation will be under control. In fact, last year our international order booking was low. And while our turnover has crossed 30% of international turnover. But in terms of order booking, if you look at it, the pending order book, it’s about 13, 14% only international. Therefore we should look at increasing it to have a sustainable 30% from the international turnover. Therefore, we are expecting more international presence in the current year.
Kunal Bhatia
Okay. Okay. And so my final question is, sir, the Rajasthan projects put together would be how much in terms of size?
Paramasivan Srinivasan
10,500, 10,600.
Kunal Bhatia
All three put together. Okay.
Paramasivan Srinivasan
Yeah.
Kunal Bhatia
Okay, fine, sir. Thank you. Thank you so much.
operator
Thank you. We have our next question from the line of Parvez Kazi from Nuama Group. Please go ahead.
Parvez Qazi
Hi, good afternoon and thanks for taking my question. So my first question is, I’m sorry. If I missed it, but what proportion. Of our revenues would have come from. The international geography in FY25?
Ramesh Kumar Jha
Good afternoon. From international market, we have done 31% of the total turnover.
Parvez Qazi
Sure. And secondly, a bookkeeping question. What would be our mobilization advance at. The end of FY25?
Ramesh Kumar Jha
So all advances put together, it is close to 4500 crores, both current and non current.
Parvez Qazi
Sure. Thanks. And all the best. Thank you.
operator
Thank you. We have our next question from Lionel Karan Battalia from MAIQ Capital. Please go ahead.
Karan Bhatelia
Yeah. Hi sir, good afternoon. So my first question is like, are there any projects proposed in the Jammu and Kashmir region which we are looking at regarding the recent water treaty going on?
Paramasivan Srinivasan
I think as the matter is of confidential nature, we will not be able to disclose this. I’m sorry.
Karan Bhatelia
Would be capable enough to take the projects if you can just guide on.
Paramasivan Srinivasan
That of the contractors in the country, maximum work done by JNK is by Afghans. And just to just to extend the nature of work generally which is being talked about in public is related to damage hydro tunnel and road works. And we have done these kind of numerous projects of these kind. And currently also we have close to five dam projects with us. So capability wise there is no challenge.
Karan Bhatelia
The second question is how do you plan to finance the upcoming project considering we are reducing the debt to equity ratio. And also there’s been payment delays.
Ramesh Kumar Jha
So see to fund the projects or to run the projects we have got a consortium of or banks facility and we have got a very sizable limit with us. With enough headroom. There are sizable, you know, available limit with us. So we should be taking care of the growth we are talking about from the existing limit.
Karan Bhatelia
Okay, got it. Thank you.
Ramesh Kumar Jha
Thank you.
operator
Thank you. We have our next question from Lionel Parikshit Gupta from Fair Value Capital. Please go ahead.
Parikshit Gupta
Thank you very much for taking my question and for such a detailed presentation and answers. I would like to again talk about the payment realization challenges. I understand that we have had several points from your end in terms of JJM UP mp. But it will be really helpful if you could please talk about from a short and a medium term perspective about the different authorities. How have they been performing in terms of payments. We do have context of liquidity improving but from a one to three year perspective it also helps us define the focus. So if you could please spend a minute or two on this.
Ramesh Kumar Jha
So Parikshit, we have always talked about that what projects we take central government agencies or some of the state. When we talk about the project we look at whether the project has achieved financial closure in international market. We try to see project those are having funding from some multilateral agencies and from the private parties with whom we work. We see that how they are capable of. And you know, we just don’t jump for any project if some private parties offering. So we have got established relationships. So as far as you know, the company’s risk framework from the payment realization perspective is concerned.
You know, we are, we are we very in a detailed manner we evaluate all that. Despite that, you know this Jalgivan mission we have talked about. These were the projects where it was a central largely central government funded project and with some small amount coming from the state government and central government was giving budgetary support every year. From there the funds were allocated. So if you look it from the risk evaluation perspective, it was fully covered. But we are also a bit surprised that even allocation in the budget and decide that there was no allocation.
So this was some exception. And in some of the overseas projects the geopolitical situation also it was out of the box. Suddenly this erupted and that has impacted the collection cycle. And then in overall economy there was liquidity related issue. And the payments were not as smooth as one would have expected. But I think these are a combination which has happened in a year. A year which was having impact because of election as well. So I don’t think you know this is going to continue. Because even in my recent, you know, if I remember recent history I have never come across all the things coming in a single year kind of a situation.
So I don’t think that this is going to continue. And things are. Things are improving as far as the overall economy liquidity is concerned. We are seeing that the payments are coming even in the Bangladesh project. Whatever work we are doing, we are getting paid on a regular basis. Just even Nishan, we have got sizable amount released in the month of April from Madhya Pradesh project up we need to see. So we are quite hopeful that situation should improve.
Parikshit Gupta
This is helpful just to follow up. In terms of nhai we have for many quarters or many years even seen pressures especially with the rising debt levels and them also deleveraging. Probably over making payment realizations to the contractors on an industry wide level. How do you see the situation with nhai? Please.
Paramasivan Srinivasan
Nhia. Anyway the award of jobs have come down in also further on the many jobs have been moved to PPP basis on a bot basis. And the last several months it has slowed down a bit. And therefore and yesterday there was a statement conveying that they have significantly deleveraged. I think they have repaid some debts and other things. So as still the debt is at an elevated level. We expect slowdown in terms of award of jobs in NHA on the EPC basis and payment related delay may not be there. They have been very regular. In any case we don’t participate in NHA related road jobs as of now. Till such time the qualification becomes stringent.
Parikshit Gupta
Understood sir. Thank you very much for answering the questions. And good luck for the current year.
Paramasivan Srinivasan
Thank you.
operator
Thank you. We have our next question from the line of Bala Subramanian from Aryan Capital. Please go ahead.
Balasubramanian
Hello sir. Good afternoon. Fund based and non fund based limit as of now.
Ramesh Kumar Jha
So we have got total limit of 20,400 crores and 1800 crores in that is fund based limit.
Balasubramanian
Got it sir. So I think right now labor issues were there and the cost also rising up especially in India. For is there any impact on existing projects on the margin side and how we are mitigating in upcoming projects.
Paramasivan Srinivasan
Skill shortage is there for everyone. We also face skill shortages. We have tied up with a startup for skill development at various levels including development level and the skill development level on a continuous basis. We have been churning out people and sending to project sites. In spite of that, wherever labor intensive works are there, we have issues on this thing. We mitigate as needed by sourcing local manpower and also trained manpower. But this problem remains for the industry as of all.
Balasubramanian
Got it sir. Sir, on that water related project side, how much receivables are there? Because I shared in the industry itself lot of payment issues were there.
Ramesh Kumar Jha
Water related projects. We have already talked about that. We have got 500 crores of total receivable as on the 31st of March. But a sizable, you know close to 100 crores or so we have received in Madhya Pradesh project. So that leaves us with the outstanding with UP project only at the moment.
Balasubramanian
How do you. How do things are shaping up in the coming quarter sir? For water projects.
Ramesh Kumar Jha
So water projects in Madhya Pradesh we don’t have any, you know, sizable outstanding. So Madhya Pradesh is going to go, you know, as usual in up Whatever discussion we have had we are expecting you know a large part, part of the payment getting released in the month of June and then thereafter we will see. Once the payments are smooth then we don’t foresee any difficulty. Anyways, in the current budget the government has allocated close to 70,000 cores for the water related project.
Balasubramanian
Got it. Thank you.
operator
As there are no further questions I would now like to hand the conference over to the management for closing comments.
Paramasivan Srinivasan
Thank you very much for all and we request your continued support. And AFCON is completed 65 years into its 66th year. And we are hopeful of a long term caveat of 15% on a consistent basis. Thank you all.
Ramesh Kumar Jha
Thank you. Thank you everybody.
operator
Thank you on behalf of IIFL Capital. That concludes this conference. Thank you for joining us and you may now disconnect your lines.