Ahluwalia Contracts Limited (NSE: AHLUCONT) Q2 2025 Earnings Call dated Nov. 18, 2024
Corporate Participants:
Shobhit Uppal — Deputy Managing Director
Satbeer Singh — Chief Financial Officer
Vikas Ahluwalia — Whole-Time Director
Analysts:
Dhruv Jain — Analyst
Shravan Shah — Analyst
Amit Khetan — Analyst
Lakshmi Narayan — Analyst
Parvez Qazi — Analyst
Vaibhav Shah — Analyst
Samyak Jain — Analyst
Sunny Roy — Analyst
Ketan Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Ahluwalia Contracts India Limited Q2 FY ’25 Earnings Conference Call hosted by Ambit 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. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you and over to you, sir.
Dhruv Jain — Analyst
Thank you. Hello, everyone. Welcome to the Q2 FY ’25 Earnings Call of Ahluwalia Contracts India Limited. From the management side today we have with us: Mr. Shobhit Uppal, Deputy Managing Director; Mr. Vikas Ahluwalia, Director; and Mr. Satbeer Singh, Chief Financial Officer.
Thank you and over to you, sir, for your opening remarks.
Shobhit Uppal — Deputy Managing Director
Thank you, Dhruv. Good afternoon, everybody. Ahluwalia Contracts India Limited has announced the financial results for Q2 FY ’25. During this quarter Q2 FY ’25, the company has achieved a turnover of INR1,011.48 crores and a PAT of INR38.36 crores in comparison to a turnover of INR901.55 crores and a PAT of INR55.30 crores in Q2 of FY ’24. The company has registered a growth and degrowth of 12.9% — 12.19% and minus 30.63% in turnover and PAT respectively during Q2 FY ’25 in comparison to Q2 FY ’24. EPS of the company for Q2 FY ’25 is INR5.73 as compared to INR8.26 in Q2 FY ’24. During Q2 FY ’25, the company’s EBITDA margin was 7.25% as compared to 9.96% and a PAT margin of 3.79% as compared to 6.13% in the corresponding period of the last financial year.
During the H1 FY ’25, the company has achieved a turnover of INR1,930.83 crores and a PAT of INR68.96 crores in comparison to a turnover of INR1,665.16 crores and a PAT of INR105.03 crores in H1 FY ’24. EPS of the company for H1 FY ’25 is INR10.29 as compared to INR15.68 in H1 FY ’24. During HY1 FY ’25, the company’s EBITDA margin is 6.93% as compared to 10.36% and a PAT margin of 3.57% as compared to 6.31% in the corresponding period of the last financial year. Net order book of the company as on 30th September 2024 is INR16,193.45 crores to be executed in the next two to 2.5 years. Total order inflow during FY ’25 till 30th September 2024 is INR6,699.70 crores. From 1/10/2024 till date INR1,094.67 crores. So total order inflow in this financial year till-date is INR7,794.37 crores.
Thank you. We are ready to take questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. [Operator Instructions] We have the first question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi sir. Thank you sir. Sir, just to recheck on the guidance front. So now for this FY ’25 in terms of the revenue growth and for FY ’26, how much growth are we looking at? And also possibly on the margin front given the margin was very low in the 1H so in the second half, how much margin are we looking at and in FY’26, will it again go back to 11%?
Shobhit Uppal
So as far as our topline growth is concerned, we are sticking to a guidance of about 15% growth. As far as our margin is concerned, we feel that we’ll have to moderate it a bit. It will come below double digits now. It will be around 9%. As far as the next financial year is concerned since our order book is healthy and a lot of our design build projects we feel will be in full swing in the next financial year, we should cross the double-digit margin barrier in the next financial year that is FY ’26.
Shravan Shah
Okay. And in terms of the revenue, will it be — so in FY ’26, can we see more than a 20% kind of a growth?
Shobhit Uppal
Yeah, it should be between 15% to 20%. We are targeting a 20% growth.
Shravan Shah
Okay. Got it. And in terms of the order inflow, now already we have received a significant INR7,800 odd crore including the recently won. So now how much more are we looking at by March and if — possibly if you can share in terms of the bid pipeline and our long-term vision was to have a 50/50 private/government which we are already there. So, how we want to now go ahead.
Shobhit Uppal
Yeah. That is what I’ve been mentioning in our last two or three con calls that we would like to maintain it at this level at the 50/50 level and going forward we are actually consolidating. So in the rest of the three, four months of this financial year, we are not bidding very aggressively, maybe another INR1,000 crores inflow and going forward in the next financial year, maybe anywhere between INR5,000 crores to INR6,000 crores new orders.
Shravan Shah
Got it. And currently the bid pipeline would be?
Shobhit Uppal
Currently the bid pipeline as it stands is about INR5,000 crores.
Shravan Shah
Got it. And just a couple of data points on the balance sheet front; mobilization advance, retention money, and unbilled revenue?
Satbeer Singh
Yes. Mobilization advance is INR542 crores and unbilled revenue is INR598 crores and retention is INR335 crores.
Shravan Shah
335. And just on the capex front so already INR92 odd crowd done so one step?
Satbeer Singh
Capex till 30th September INR101 crore as incurred.
Shravan Shah
So for full year how much now we are looking at?
Shobhit Uppal
Given a guidance of about INR130 crore — INR175 crores. Rest of the financial year it should be about another INR30 crores to INR35 crores. That also we’re revising it downwards.
Shravan Shah
Okay. Got it, sir. Thank you and all the best, sir.
Operator
Thank you. [Operator Instructions] We have the next question from the line of Amit Khetan from Laburnum Capital. Please go ahead.
Amit Khetan
Hi sir. Thank you for taking my question. So we have a good order book currently, but if I were to look out over the next two to three years, what are the segments or areas you are most bullish on in terms of incremental new orders? Are there going to be new areas that we will participate in or is it going to be the current segment that we are in?
Shobhit Uppal
So Amit, we are — as you would be aware, we are present in the entire spectrum of the building industry. So, there are areas over a period of time which we had not focused on because there was not much activity. We are now refocusing on industrial activity. We’ve recently won an order with Balco also. Airports is something which we continue to be bullish on. The government is continuing to spend on airports. So we already are executing two airports which are in design build stage — designing stage as we speak and there are a couple of orders in the pipeline which we are bidding on. So, that is another area that we are looking at. Commercial and retail activity is something that also excites us, we are focusing on that. So these are the areas. And residential actually there is a lot happening, but we are now being a little wary. We already have a healthy exposure as far as residential projects go. So, we are bidding sort of conservatively going forward as far as residential is concerned.
Amit Khetan
Got it. And these — this industrial sector that you talked about in airports, right? What are the typical order sizes like? Are these in the similar ticket size range of INR500 crores to INR,1000 crores or would they be much larger?
Shobhit Uppal
No. They are in this range only. As far as office infrastructure goes, the government is also coming out with larger orders for government office building using alternative technology. They are INR1,000 plus crores. That is an area which is of interest to us.
Amit Khetan
Understood. And secondly, in the last couple of quarters you’ve been talking about a shortage of labor and things like that. Has that eased or do you see that continuing for the next few quarters?
Shobhit Uppal
That is continuing on account of various factors. As the country continues to be permanently in an election mode, that’s what we’ve been seeing since the general elections — preparation for the general election started. So this labor problem continues as labor comes from a few areas geographically and this continues and NGT issues such as NGT and rain, this continues to affect labor supply. So we feel that this will — throughout this financial year at least and even in the first quarter of next year, this problem will continue to be there.
Amit Khetan
Got it. And would this also be a factor in margin contraction or is that just a function of operating leverage?
Shobhit Uppal
No, no. It’s a huge factor.
Amit Khetan
Okay. Got it. That’s very helpful. Thank you and all the best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead
Lakshmi Narayan
Yeah. Thank you. Few things. See, when you started the year you actually alluded to a particular margin and then you stand at this point in time at a slightly lower margin level. Now what is actually possible? What has negatively surprised you when you actually grew up your budgets at the start of the year and whether things have become little unpredictable now than earlier and how — do you think it’s becoming a little more predictable going forward?
Shobhit Uppal
So look, while one of the things which had surprised us in the past is the volatility in material cost that we had catered for by building in escalations in our contracts. But a, on some of our larger order — larger contracts which we have won in the last year or so, there are various factors which have hit us, which were not sort of within our control. One is of course the prolonged monsoon across the country. Some of our biggest projects are in say places like Mumbai or Orissa or Bihar or Assam, where the monsoons this year have been exceptionally heavy. The turnover has been affected there. Then as I mentioned in my answer to the earlier question about the last five, six months, the country has been in election mode. That has impacted the labor force availability on site. So this was something which was not expected.
Thirdly, on some of our large contracts, the design part approval so to say has been delayed for no fault of ours, which were beyond our control. CSTM being one such project, which is our largest project till date. That has impacted our margins because our fixed overheads have continued to be there and we have not been able to execute on the ground. So, these are factors which have impacted our margin. And totally some of these factors are generic or general to the industry. If you were to compare our margins with our peers, actually we have done better than most of them. So, we managed our cash flows better. But the industry as such has been affected and reset by some of these margins. Going forward, hopefully in the next financial year, I don’t think there will be so much focus on electioneering. A lot of state elections would be behind us. Most of our large projects, the design is nearing completion, approvals are mostly going to be in place. So hopefully, we’ll have a clear run and our margins would be on the upswing again.
Lakshmi Narayan
Got it And in the last call you mentioned that, there has been spurt in the subcontractor expenses as well as the employee expenses or both of them. Now — and you said that only some of your contracts have a pass through — you can actually pass this expenses. So right now what kind of situation we are in? Has it been — has there been any changes in the contract that you have passed on these expenses or how situation is looking now?
Shobhit Uppal
See, most of our contracts now have built in escalation clauses one way or the other. As far as the government, most of our fixed price contracts have been completed or are nearing completion. As far as the ongoing contracts are concerned, the government contracts, they have a built-in escalation clause or standard clause based on wholesale price index. As far as the private contracts go, all the volatile materials the basic pricing is there for cement, for steel, for grit, stone aggregate, so on and so forth, even the finishing material like stone, wood, etc. So as I said earlier, the volatility in these materials is covered. And because we have a healthy order book, to a certain extent in the private sector we are able to dictate terms in having a more balanced contract agreement and plugging in these.
Lakshmi Narayan
Sir, if I just look at your current assets in the balance sheet and the trade receivables are something like INR625 crores. Can you just tell me how do you classify the current assets? How much of them are payable within six months? Can you — any receivables within six months or if you can just throw some light on what is the aging of the receivables and current assets?
Satbeer Singh
So what I could understand that there is basically INR625 crores debt that’s at current receivable and that we are expecting within our normal days — operational days that’s coming around 60 days — 60, 75 days that we are expecting to receive that. [Speech Overlap] And this is non-current so this is hardly INR33 crores I think so, which we are expecting [Indecipherable].
Lakshmi Narayan
So I’m looking at the current assets this quarter is around INR625 crores, I just want to understand how much of a trade receivables are within six months and how much is beyond six months to one year. So less than six months and six months to one year.
Satbeer Singh
This is — out of INR625 crores, we’re expecting around might be 100 crores more at the upper side just more than six months.
Lakshmi Narayan
And next INR525 crores will be within six months.
Satbeer Singh
Yes, within six months.
Lakshmi Narayan
Okay. Sir, one more question regarding your — you talked about fixed cost are slightly estimated. Now if I just look at your expenses, which are the ones that are variable in nature? So if you look at it, the subcontract work is completely variable in nature. And how about the employee benefit expense, how much is variable and how much is fixed?
Shobhit Uppal
Variable — as far as employee cost is concerned, variable is very less. As far as the variable is concerned, it’s only for the top — maybe out of total employee strength of about 3,500, variable component would be only there for about 20 people who are at — who are in the top levels of management in the company.
Lakshmi Narayan
Because your employee benefit expenses have actually kind of gone from around INR70 odd crores for the first quarter and to that almost INR89 crores. So just want to understand how — what actually led to a substantial increase in the employee benefit expenses.
Shobhit Uppal
So, two things. One is our employee cost Includes labor cost also. So this is the labor, which is — which the company is spending directly on. So, there are two components to the labor. One is labor which is under the subcontractor and as a part of the INR89 crore, there is labor which the company is directly spending on. So part of this increase is due to the increase in revenue and part of the increase is also — so that’s what I’m saying. And the other big thing is we have increased — we have paid arrears to the staff increments. Our staff increments, we put those increments in the last quarter and the arrears have been paid. This was due from 1st of Jan, but the process was delayed. So part of that increase is due to that. And thirdly, obviously the number of people, the number of staff has also increased to cater for our increased order book where we are going to be executing the work over the next say two, 2.5 years.
Lakshmi Narayan
Got it. And any idea what is the band one should expect because it is like a one-off arrears which has been taken into consideration. So employees…?
Shobhit Uppal
Just to give you an idea, our staff cost per se, only our staff cost, if that is helpful to you, is in the region of — it varies from about 6.8% to 7.1% and this is where it’s been kept at over the past say two to three years.
Lakshmi Narayan
Got it, sir. And this is part of the employee benefit expense?
Shobhit Uppal
Yes, this is a part of the employee benefit expense.
Lakshmi Narayan
Thank you, sir. I’ll come back in queue.
Shobhit Uppal
One moment. Hello? Are you there? Okay. So you asked about specifically a question about the trade receivables, right? So our trades are about 60 days as Mr. Satbeer said, right, which is one of the lowest in the industry today. I mean it goes on up to about — so we have reduced. Also our networking capital days have reduced from 117 in the last quarter that’s Q1 of ’25 to 93 days in the current quarter. That’s the additional information to you.
Lakshmi Narayan
Thank you, sir.
Operator
Thank you. The next question comes from the line of Parvez Qazi from Nuvama. Please go ahead.
Parvez Qazi
Hi, good afternoon, sir, and thanks for taking my question. So, couple of questions on my side. As you rightly said, historically our staff expenses have been between 6.8 to 7.1 whereas if one looks at H1 numbers, they are at about 8.8 or something. Now clearly part of the reason is because of operating leverage. As you right said, some of our projects because of various reasons haven’t progressed at the pace at which we would like. So maybe part of the reason is also because of the industry-wide labor shortage. Now going ahead, do you think we should pencil in slightly higher than historical average for this or do you think this will normalize and come back to the 7%, 7.5% mark maybe one year down the line, two years down the line. Just wanted to get your thoughts on that?
Shobhit Uppal
We aim to get it down to anywhere between 7% to 7.5%. That is what our internal planning is. But as I mentioned earlier and you also sort of alluded to that, it all depends on our revenue, on our actual execution on the ground other than the factors that I mentioned earlier which has affected our work on the ground or production on the ground. One factor which will continue to impact us in this quarter, the ongoing quarter, is the NGT, right? All of you are aware of what’s happening in NCR. So now Grab 4 is in place and so that is another big thing which is going to impact this quarter. That’s why I’ve kept the margin guidance muted for the rest of the year because we have a lot of large projects in NCR especially Gurgaon.
Parvez Qazi
Sure. My second question is I mean you said that for the CST redevelopment project there are design issues and which hopefully will get resolved going ahead. But if you look at some of our other major projects like the Tata Memorial Hospital in Parel or the DLF Arbour project, there also the quarterly execution run rate seems to be somewhere around INR25 crore, INR30 odd crore. So you — and in the East projects also, are there some design issues or some other issues and when do we expect a pickup in the pace of execution for these larger projects?
Shobhit Uppal
As far as the DLF Arbour project goes, we actually executed about INR11 crores to INR12 crores per month. For last month we achieved that run rate and this month we were on a target to achieve — to double that and then going forward maintain about INR25 crores every month. But this quarter, as I said, now it will be impacted by NGT. But we are out of the ground there now. The design issues — the design was not in our scope, it was in the client’s scope, but there were a few issues there and labor shortage was there. But I think as far as DLF goes, once the NGT issues are behind us, we are ready to take off. As far as Tata is concerned there, yes, there were design issues; but that also I think within a month or so we should be taking off on that project also.
Vikas Ahluwalia
Also was a Tata Cancer hospital is nearly on Target now, I mean whatever time we’ve lost is because of the monsoon. So whatever was the design issues, they were more to do with the foundation part of it which the Tata Memorial people had to redesign or do a little bit of changes because we encountered a certain rock which was not there. That is — that would be, otherwise Tata per se is on track.
Parvez Qazi
Sure. My second question is the overall industry. When we talk to real estate developers, they do highlight that there is a shortage of good quality contractors in India. You as well as some of your other peers in the building contracting space clearly have lifetime high order book. There is no shortage of order intake. So then the question is in the previous cycle 2002, we had seen a similar phase and all of you as well as your peers had seen significant expansion in EBITDA margins. Why do you think the similar situation is not playing out this time?
Shobhit Uppal
It’s too early to sort of say whether those kind of margins will happen or not happen. All we can say is or to give you the reason for why they have not happened up until now as far as this financial year is concerned, I did mention all those reasons. Prolonged monsoon, electioneering, right, and all of a sudden the infrastructure growth is upon us and this kind of growth is unprecedented. This was not even there in the last term. So the kind of labor shortage that we are seeing now, I mentioned in my last two calls that this is virtually an epidemic which is waiting to be upon us. So the government has to wake up and do something about upskilling of labor force, do something or change the NREGA laws. So labor shortage till the government steps in, I don’t think anything much is going to happen. So that is a major contributor to works not proceeding on schedule and that in turn is affecting not only our revenues — projected revenues, but also our margins. See, now the industry is suffering. It’s not only us. That’s why I mentioned if you see the results of all construction companies, all of these factors have contributed.
Parvez Qazi
Yes. Absolutely, sir. Last question to Satbeerji sir. What would be our gross debt level?
Satbeer Singh
This is INR9 crore.
Parvez Qazi
INR9 crore, Sure. Thanks, sir, and all the best for future.
Operator
Thank you. We have the next question from the line of Vaibhav Shah from JM Financial. Please go ahead.
Vaibhav Shah
EBITDA margin guidance for FY ’25, what’s the number?
Shobhit Uppal
About 9%.
Vaibhav Shah
And sir, what will drive that improvement in the second half, the margin improvement?
Shobhit Uppal
As we mentioned some of the factors which have affected us till now, they are behind us. One is I think other than NCR, we should have a clear run execution, no monsoons are there. Once the Maharashtra elections are over, that sort of hold back should also not be there. As far as NGT is concerned, in NCR this month or maybe December, maybe a washout of the last quarter, we should see a good run rate. We have — most of our contracts have taken off now and out of our total order book, almost 30% comes from NCR. And our bigger projects like CSTM and Tata, as Vikas mentioned, the design phase is almost over so we are looking for healthy revenue from these projects also. The two airports that we are doing, Varanasi and Darbhanga, there also design phase is nearing completion. So in the last quarter of this financial year, we should see a good run rate from these projects also.
Vaibhav Shah
Okay. Sir, secondly, out of our total order book what would be the share of fixed price contracts?
Satbeer Singh
This is 15%.
Vaibhav Shah
And this should be completed by March largely?
Shobhit Uppal
You can say — largely they should be completed by March. Almost totally it will be over by H1 FY ’26.
Vaibhav Shah
Okay. And sir, lastly, on few projects. So for CST now, what would be our guidance for FY ’25 in terms of revenue and earlier you were targeting completion of June ’26. So would we be revising the numbers?
Shobhit Uppal
Vikas, you want to answer that?
Vikas Ahluwalia
Come again, please.
Vaibhav Shah
So for CST project, what would be our revenue guidance for next couple of years? And we were targeting a completion of June ’26 earlier. So are we maintaining that target?
Vikas Ahluwalia
So, the project is actually about 3.5 years and I mean the execution time will probably remain the same. I mean whatever time we’ve lost last six months, eight months because of design and approvals from the railways is lost, is lost. But there — but it is going to be compensated for that. That is for sure.
Vaibhav Shah
Okay. So what revenue are we targeting for ’25 and ’26 from this project?
Vikas Ahluwalia
You can take an average run rate of about INR80 crore. Some months is going to go up, some months is going to come down. So my average run rate is about INR70 crores, INR80 crores.
Vaibhav Shah
That should start from fourth quarter onwards, INR70 crores, INR80 crores run rate.
Vikas Ahluwalia
That should from, yes, somewhere in the January. February.
Shobhit Uppal
So to specifically answer your question as far as this financial year is concerned, we are looking at a turnover of about — we are targeting a turnover of about INR300 crores. And as far as the next financial year is concerned, as Vikas has said, INR70 crores to INR80 crores per month would be an average. [Speech Overlap] That’s about INR800 crores give or take a few crores here and there for the next financial year.
Vaibhav Shah
Okay. And sir, when do we expect to start the work on Jewelry Park?
Vikas Ahluwalia
Jewelry park, we have not yet got the notice to proceed, but we are expecting it in the month of December. We are expecting the notice to proceed and then again it will go into the design stage. So, let’s be fair and square not to expect much from this financial year itself.
Vaibhav Shah
So revenue will start flowing from next year second half?
Vikas Ahluwalia
Yeah, next year second half.
Vaibhav Shah
Okay. Sir, any broad guidance for in terms of revenue from the project for FY ’26?
Vikas Ahluwalia
Maybe about INR15 crores a month. See, what will happen in this is that by the time the design and all is going to get completed, rains are going to set into Mumbai, Maharashtra next year. So, that is what is going to happen in this case. I’m being very honest here. Maybe next year again an average run rate of about INR30 crores to INR50 crores the first few months. Then again it is going to go up to that level of
INR70 crores, INR80 crores; INR70 crores, INR80 crores.
Vaibhav Shah
Okay. Sir, and lastly, any issue on the working capital side from any particular states?
Shobhit Uppal
As I mentioned during the last call, Bengal and Bihar were two states. Bihar working capital has actually improved, all our dues have been certified and we should see them being cleared in this financial year — rest of the financial year. Bengal, we are not executing any government jobs as we speak and all the earlier jobs have been finished.
Vaibhav Shah
Okay, sir. Thank you, sir. Those were my questions.
Operator
Thank you. The next question is from the line of Samyak Jain from Marcellus Investment. Please go ahead.
Samyak Jain
Thank you for the opportunity. Sir, I understand that you are maintaining your revenue guidance at 15% for FY ’25, but bringing down the capex guidance for the year. Sir, just wanted to understand how will you maintain the pace of execution for this financial year?
Shobhit Uppal
It’s an internal reworking that we’ve done. Some of our larger projects have gotten over and, as I mentioned earlier, we become — we are conservative as far as new order inflow is concerned. So as a part of cost cutting exercise that we have gotten into once we’ve realized that the margins are down for the reasons as enumerated earlier by us so we are looking to reduce our capex expenditure as far as equipment and shuttering go. We are looking at — as far as shuttering goes, we are looking at maybe going the rental route on some of our projects where we feel which are fast track projects where we can use rented shuttering, a quick in and out as a part of the overall strategy to cut costs.
Samyak Jain
Understood. And if the renting increases, will that further impact the margins or it will remain in the [Speech Overlap]?
Shobhit Uppal
We have an internal, you can say, the way we work out which projects can take renting where the profitability will not be impacted, which are fast track projects where the project which have to be finished in about a year, year-and-a-half at least the structured bid. So, there we go the renting route.
Samyak Jain
Understood. That’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Sunny Roy, an individual investor. Please go ahead.
Sunny Roy
Hello. Am I audible?
Shobhit Uppal
Yes.
Sunny Roy
Yeah. So I just wanted to know that since we are targeting a 50/50 between the private and the public sector for our orders, what is stopping us from bidding for the private sector more than 50% given that the terms and conditions are much better and the receivables and the margins and all and competitive intensity is much better against the public sector? So, why aren’t we increasing the private sector part in the order book?
Shobhit Uppal
Nothing is stopping us, but other than the scars of the last downturn. Earlier when the downturn hit the private sector, a lot of contractors got waylaid, they lost — actually companies were finished. So, we don’t want to put a lot of eggs in one basket. And while the going is good today as an infrastructure company, we are always at the forefront of cycles be it upward cycle or downward cycle. So we’re just being cautious.
Sunny Roy
Right. Last year, like as mentioned by the previous caller regarding this earlier cycle of 2008, if we compare that to this. So, where are we in that cycle? Are we in the starting point? Are we in the midway? Where do you feel — even though it’s not comparable, where do you feel from the industry standpoint the construction industry is compared to the last cycle? Is it in the midway or at the starting point?
Shobhit Uppal
I think we are somewhere between the starting point and midway. But it would not be right to do a strict comparison because when the last cycle was there, the geopolitical situation was something else. Today the world is flatter. What happens in America impacts us immediately. So it would not be fair to do a direct comparison. If you would have asked me this question 1.5 months ago, I would have said we are just at the starting of the cycle. But today, I would like to say we are somewhere between starting in the midpoint. We have to be cautious. That’s what I am saying. Anybody who is not cautious, who throws caution to the wind and indiscriminately plans to grow, that’s what actually we are seeing. There is a plethora of issues which are coming out for construction companies and in the real estate sector. So, we don’t agree with that line of thought. I think one has to be cautious going forward.
Sunny Roy
Sir, thank you for the strong execution and the prudential approach. I’ve always been a long-term investor so I wish you all the best, sir. Thank you.
Shobhit Uppal
Thank you so much. Good to hear that.
Operator
Thank you. [Operator Instructions] We have the next question from the line of Ketan Jain from Avendus Spark. Please go ahead.
Ketan Jain
Thank you. Sir, my question is on the Emaar settlement. How much of the money is received and yet to be received?
Satbeer Singh
I think it’s INR56 crores to be received now. All money — total is INR218 crores, out of this INR56 crore is yet to be received now.
Ketan Jain
INR56 crores is pending.
Shobhit Uppal
The ranks that was to be received in this quarter has been received. That has been received so that the payment is happening as per schedule.
Ketan Jain
And how much in this quarter is it?
Satbeer Singh
This is INR70 crore.
Ketan Jain
So it will get done by FY ’25.
Shobhit Uppal
Yeah. Next tranche is due in January, the last tranche in January.
Ketan Jain
Okay. Sir, So my second question is on — so I was just seeing your P&L In FY ’19, ’20, and ’21. We have had a big bad debt provision — bad debts written off in FY ’20 and FY ’21 worth of INR42 crores and INR53 crores. If you could tell us what does it pertain to? Which client does it pertain to?
Satbeer Singh
That is also related to Emaar also. That time we have taken provision of INR47 crores and various other party was there at that moment like [Indecipherable], various parties are there.
Ketan Jain
Okay. So, it’s largely Emaar and other parties.
Satbeer Singh
Yes.
Ketan Jain
Okay. Thank you, sir.
Operator
Thank you. Ladies and gentlemen, we have no further questions at this time. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Shobhit Uppal
Thank you so much, everybody, for joining in. See you soon in about three months’ time. Thank you. Thank you so much.
Operator
Thank you. [Operator Closing Remarks]