Ahluwalia Contracts Limited (NSE: AHLUCONT) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Margaret Mishra — Corporate Access
Shobhit Uppal — Deputy Managing Director
Satbeer Singh — Chief Financial Officer
Vikas Ahluwalia — Whole-Time Director
Analysts:
Shravan Shah — Analyst
Mohit Kumar — Analyst
Rajat Setiya — Analyst
Amit Khetan — Analyst
Vaibhav Shah — Analyst
Sameer Jain — Individual Investor
Ketan Jain — Analyst
Vasudev Ganatra — Analyst
Presentation:
Operator
Ladies and gentlemen, you’ve been connected to Contracts India Limited Conference Call. Please hold the conference will begin shortly ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of Ahluwalia Contracts India Limited 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. Should you need any assistance during the conference call, please signal in operator by pressing star then Zero on your phone. I now hand the conference over to Ms Margaret Mishra from Ambit Capital. Thank you, and over to you, ma’am.
Margaret Mishra — Corporate Access
Good afternoon. On behalf of Ambit Capital, I thank the management of Contracts India Limited for the opportunity to host your Q3 FY ’25 earnings call. We have the following members of management with us today, Mr Shobhit Uppal, Deputy Managing Director; Mr Vikas Ahluwalia, Director; and Mr Satbeer Singh, Chief Financial Officer. I will now hand over the call to the management, Mr Shobhit Uppal, Deputy Managing Director to walk us through the quarter. Thank you all and over to you, sir.
Shobhit Uppal — Deputy Managing Director
Thank you, Margaret. Good evening, everybody. Our Ahluwalia Contracts India Limited, the NEPC company has announced the financial results for Q3 FY ’25. During Q3 FY ’25, the company has achieved a turnover of INR951.95 crores and a PAT of INR49.39 crores in comparison to a turnover of INR1026.47 crores and a PAT of INR70.66 crores during Q3 FY ’24. The company has registered a negative growth of 7.26% and 30.10% in turnover and PAT, respectively during Q3 FY ’25 in comparison to the corresponding quarter Q3 FY ’24. EPS of the company for Q3 FY ’25 is INR7.37 as compared to IN 10.55 in Q3 FY ’24. During Q3 FY ’25, the company’s EBITDA margin is 8.86% as compared to 10.90% and PAT margin of 5.11% as compared to 6.82% in the corresponding period of the last financial year. During the nine months of FY ’25, the company has achieved a turnover of INR2882.79 crores and a PAT of INR118.35 crores in comparison to a turnover of INR2691.64 crores and a PAT of INR175.69 crores during the corresponding nine months of FY ’24. EPS of the company for nine months FY ’25 is INR17.67 as compared to INR26.23 during the nine months of FY ’24. During nine months FY ’25, the company’s EBITDA margin is 7.5% — 57% as compared to 10.56% and PAT margin of 4.05% as compared to 6.47% in the corresponding period. The net order book of the company as on 3124 is INR16,258.44 crores to be executed in the next three years. Total order inflow during FY ’25 is INR7794.37 crores. Now we are ready to take questions now. Thank you.
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 the on telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use Hansen while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Thank you. Hi, sir. Hi, sir. Yeah. Sir, couple of questions. So obviously, first on the guidance front, so Nine-Month we have done 7.1% revenue growth. So we were looking at a 15% kind of a number for this year. So how one can look at the full-year or maybe the 4th-quarter, if you can help us how one can look at the 4th-quarter growth and also at the same time in for next financial year, how one can look at — because we were looking at 20%, can we now start looking at 25% kind of a number?
Shobhit Uppal
Shravan, while the order book continues to be very healthy. As far as this quarter and this financial year is concerned, we’ve been hit as along with our other peers by the NGT bans in Delhi, 33% of our order book now comes from the NCR region. And you know what I had mentioned in my last call also that you know we had expected that the NGT ban would hit us, but we had not expected that they would hit us so badly. That is the reason for sort of de-growth. I had said that we would — I had given a guidance of about 10% growth. So we should be around that — around — we would be about 8.5%, 9%. 4th-quarter is always the best quarter in terms of performance. As far as the guidance for the next year is concerned, it would be about 15%.
Shravan Shah
Sir, look, I understand that this quarter or this year is a lower number, but next year, I think last-time we have talked about close to 20 odd percent and now we are saying 15%. So are we seeing a slowdown in the execution or the bigger projects still have not picked-up as expected?
Shobhit Uppal
In fact, we see — and this is — I’m reiterating what I said last-time that next year, we would be 15% plus. Order book is healthy and the slow-moving orders also are behind us now or are larger projects like CSMT, the design issues should be behind us by the end of this last quarter. And from April, we should be logging a steady turnover even in some of our larger projects. So I think we are looking quite good to have not only a 15% plus growth and also a double-digit margin or you know what I projected last-time, but that will happen in FY ’26. Yeah,
Shravan Shah
Yeah. So coming to the margins, so in the 4th-quarter also, can we can we look at the double-digit kind of a margin.
Shobhit Uppal
4th-quarter, we are expecting a growth in the margin, you know, but we must keep in mind that January also has been badly hit on account of NGT. It is only now that the work has started in real earnest in February. In fact, the ban got lifted around the third or the fourth of February. So the first month of the last quarter has also been affected, but the margins will definitely be better. And we feel that the top-line at the end-of-the year would have grown by about 8.5%, 9%.
Shravan Shah
So next year also on the side, we are looking at 10%, are we — is there a possibility that we can even clock 10.5% or maybe close to 11% is that? We may.
Shobhit Uppal
If you see — if you compare our results, if you compare the quarter-on-quarter results of Ahluwalia with our peers, we — if you leave L&T aside, we are the only company other than Larsen and Tubro where our EBITDA margin has grown quarter-on-quarter. We’ve grown at 15%, whereas in most of the other construction companies, there has been a degrowth in the EBITDA margin. Our net profit has grown by 28%, right? So we are hopeful that the last quarter will be good and next year, our margins should increase.
Shravan Shah
Got it. And on the — are we L1 in any of projects and in the 4th-quarter, how much more order inflow can we look at and for FY ’26 we —
Shobhit Uppal
We’ve quoted for a — for a few government projects and a few private projects. They are the government projects, the bids have yet not been opened, so we can’t comment whether we are L1 or not L1 or where we stand. And we are actively negotiating with a couple of private sector clients of finalization. So yeah, there will be some order inflows. I can’t peg a number, but there will be some inflows in this quarter.
Shravan Shah
For next year?
Shobhit Uppal
For next year our order inflow this year has been close to — I think it stands at about INR7,800 crores. So next year, we are looking at a similar number.
Shravan Shah
Got it. Lastly, sir, balance sheet numbers, if you can, sir can help inventory, debt receivable, payable, gross debt, cash, retention money mobilization advance and unbilled revenue growth
Satbeer Singh
Cash position INR246 crores. And bank’s balance is INR489 crore. Retention 361 crore, 351 crores. Okay. Mobilization INR621 crores. Okay. One build revenue INR572 crores, 573 crores. Inventory INR324 crores including INR36 crore real-estate inventory. Okay. Debtor INR772 crores. And trade INR882 crores, INR882. Yes.
Shravan Shah
Okay. Okay. Got it sir. All the best, and thank you.
Operator
Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go-ahead.
Mohit Kumar
Yeah. Thanks for the opportunity, sir. Sir, the first question is, what are the levers that are available to us to ensure that the margins will increase next year? Why am I asking this question because the NGT issue and the GRAP issue in Delhi will be a regular future now, right, every year.
Shobhit Uppal
Yes. So specifically talking about levers, I assume you’re asking not for the industry per se, asking for us. Now you know, as I said, some of our larger projects, CSMT being the bigger one or the biggest one, you know the design issues are now slowly getting behind us. And by the end of this quarter, we hope we are seeing now that most of the approvals from the client would be in-place. So we would be taking off as far as execution on that project is concerned. Secondly, you know, most of our slow-moving projects would have finished by the end of this quarter. Thirdly, you know, all the expenses, if you see, if you do a deep-dive on our on our numbers, our staff expenses are high. They’ve gone up to nearly 9% on account of the NGT bans and the slow-moving orders. But now when the projects will pick-up, you know, this number as a percentage will come down. What I’m trying to say is we are well-stocked in terms of order book. We are well-stocked in terms of staff and now the turnover will go up and the margins will increase. As regards NGT, now with the BJP being the ruling party in the entire NCR, we are hoping that there would be measures — concrete measures put in-place, which would reduce the disturbance on account of entity. While we don’t expect it to go away, but this year was exceptionally bad in terms of the Supreme Court stepping in the work happening and stopping in fits and starts, we think that this would not be repeated next year. The industry is also coming together making representations to the various governments. Now the government at the center and the state being the same, we are hopeful that the industry voices will be heard and the work may not be impeded as much during the period from October till January.
Mohit Kumar
Understood, sir. My second question is, sir, is there a cost escalation because of NGT issue and-or is it purely the loss of radio? And are there any recourse available for us in this context?
Shobhit Uppal
Look, NGT, though it’s been going on for the last few years, it’s not something which had been taken very seriously by our clients or by the government authorities. It’s only this year that the various stakeholders have started to sit together and try and find out ways and means to combat it. So some clients of ours have started compensating for the labor, which has been idle during this period, primarily from the point-of-view to prevent the labor from going back home. So these are some measures — there are measures which various stakeholders are thinking of. That’s why I said maybe before the season sets in, the winter season sets in next year, you know, there would be more concrete and granular measures in-place, which would help us combat this problem in a better fashion. But escalations as far as this delay is concerned, other than the general escalation clause, there are no other specific escalation clauses.
Mohit Kumar
Understood, sir. Thank you and all the best, sir.
Shobhit Uppal
Thank you.
Operator
Thank you. The next question is from the line of Rajat from ithoughtpms. Please go-ahead.
Rajat Setiya
Hi, thanks for the opportunity. Sir, how is the labor availability now.
Shobhit Uppal
Labor continues to be in short supply, you know and that is a phenomena which is which is something that again as I said, the stakeholders have started to sit together and see how they can combat this, maybe by more standardization, maybe by more mechanization, but it’s not a problem that is going to go away in the short-term. This is something which the government will have to look at they will have to you know look at upskilling the Labour. They will have to look at you know making this this profession more attractive so that more people coming from their hometowns to work-in the large cities, Tier-1 and Tier-2 cities. So — but it’s a problem which is here to stay.
Rajat Setiya
So and sir, our labor cost is up a lot despite single-digit revenue just labor shortage as well as idle labor both put together. Is that the reason why our labor cost is up more than the revenue growth?
Shobhit Uppal
The primary reason for the labor cost being up, I wouldn’t say it’s labor shortage. The primary reason is on account of NGT. As I mentioned in my opening remarks and in answer to the first question that 33% of our order book is now in the NCR region, which has been very badly affected. So idle labor due to entity. So the idle labor has also contributed to our labor percentage going up.
Rajat Setiya
So then our finance portion is also up. I mean, more than the — basically as a percentage of sales have gone up.
Shobhit Uppal
So finance is — it’s not gone up quite a bit, but it’s on due, it’s on account of the — primarily on account of the mobilization advance, which is interest-bearing and again due to one project, which is the CSMT where the work has been very less and the mobilization recoveries consequently have also been less. So that has contributed to this minor uptick in the interest cost or the finance cost.
Rajat Setiya
So often do you imagine next year again, our margins could take a ahead because of again the same.
Shobhit Uppal
No, I did — if you heard my answer to predece question, the margins we are very, very confident the margins will go up because as I said, the slow-moving projects are behind us. Our larger projects are now taking off. And all the extra expenses that we had done in anticipation of these projects taking off, you know, we don’t see any addition to those expenses. And obviously, the NGT we are hoping that period October to January next year would also be handled in a much better fashion by all the stakeholders, including the government.
Rajat Setiya
What is the cash-flow from operations for the nine months?
Shobhit Uppal
Sorry, come again.
Rajat Setiya
Cash-flow from operations for nine months.
Satbeer Singh
That I think that is not available right now, but that cash position has told already INR246 crores and bank balances are INR488 crores.
Rajat Setiya
Broadly 750,. And in terms of the — we are expecting — I think in the last call we said we are expecting — for FY ’26, we were expecting inflows of INR5,000 crores INR6,000 crores. However, in the call — in today’s call, we are saying maybe same level of inflows as this year, which means we are in a way being more bullish on the next year. So what is driving that bullish more which set us within having or view will contribute to currently.
Shobhit Uppal
So as I said, this year, we have an inflow — we’ve had an inflow of about INR7,800 crores and maybe a few hundred crores in the last quarter. And we think that this run-rate should continue or this inflow run-rate should continue in the next year because we don’t see any slowdown on the private sector side. And government also, I guess with the budget behind us and now the focus on the next round of elections, Bihar, where elections are — will be held in the end of this year towards the end of this year, there’s going to be a focus on infrastructure growth there, which we can see that. And since we are present there, we are present in Assam, we are seeing activity — the growth continuing. So we feel our order inflow would be on similar lines.
Rajat Setiya
So you expect private mix to be substantially higher next year in the inflows compared to this?
Shobhit Uppal
Yeah, we hope to maintain a — or we are — our plan is to strategically maintain an equitable distribution between the public and the private sector. This is what I’ve been mentioning for the last three investor calls and we’ve got there. We are at about — I think we are equally divided between the two sectors now. We would maintain a 50-50 ratio.
Rajat Setiya
Understood. Understood, sir. Thank you so much.
Shobhit Uppal
Thank you.
Operator
Thank you. The next question is from the line of Amit Khetan from Laburnum Capital. Please go-ahead.
Amit Khetan
Hi, thank you for taking my questions. So my first question is, we’ve — our scale of individual projects have gone up over the last few years and most of our projects are now like at least the major ones are over INR1,000 crores. Just wanted to understand, do the larger projects come with better margins and/or working capital terms or would they be similar to the smaller projects?
Shobhit Uppal
That’s an interesting question. You know, conventional logic says that the larger projects should come with better margins. And that’s what you know — but in the short-term, the projects because not only — because they’re becoming larger, they are also becoming more complex. The timelines are getting shrunk and the skill-set or the skill levels in the labor force on which we are — we continue to remain dependent to a large-scale or is dwindling. So it’s a bit of a bit of a tightrope walk. In the long-run, yes, the margins on the larger-scale projects we feel would be higher. But in the short-term, I think of that will not be the case. That has not been the case and that will not be the case going-forward the government, as I said earlier, being a major stakeholder in infrastructure development will have to step-in as far as the skill upgradation measures are concerned and standardization measures are concerned. Once that happens, then of course, the margins will be higher. Have I been able to answer your question?
Amit Khetan
Yes, yes. And working capital would be similar?
Shobhit Uppal
No, working capital requirements are much more now because obviously mechanization is much more. The projects are becoming taller, as I said, more complex, more projects are now EPC projects, even the private sector is trying to embrace the EPC model or trying to at least look at it. So mechanization costs are higher, staffing costs are going higher, as you can see from the numbers of our balance sheet for in these nine months. So, yeah, it’s more working capital-intensive. Which again in the long-run would make the entry barrier higher. So it may lead to — it will lead to not may better margins for established larger players.
Amit Khetan
Understood. Understood. Understood. And secondly, we have a significant order book right now compared to the scale of our current revenues. As we scale-up and execute these orders, what sort of organizational changes do you foresee that you will require?
Shobhit Uppal
This has already — the changes in the organization had already started. In fact, I have been continuously mentioning in all our investor calls that Ahluwalia is nimble footed and they had embarked on a — or we had embarked on a digital transformation drive three to four years ago, which is hemmed by our Director, Mr Vikas Ahluwalia. And we are now as a part of that exercise, we are now well into SAP implementation, we are going-live or in a month or so. And this comes with slew of other measures where you know the company is now more data-driven, there are more analytics. So this had been started three to four years ago. And you know, we would — going-forward, we would be using AI also to look at various areas of operation. And the results are there for us to see now also. As I mentioned earlier, you know, our profit and EBITDA margins have gone up as compared to the last quarter of this financial year. So — and then we are investing in training and upskilling of our existing staff or there is a succession planning being done for every level. So new talent is being groomed. So these are some of the measures that we have undertaken.
Amit Khetan
Got it, got it. And last question would be, what would be our fixed-rate versus variable-rate proportion? And related to that, in case of variable-rate contracts, is labor also — are there process for escalation of labor costs as well or is that only for material costs?
Shobhit Uppal
So there are different cost escalation formula, which are there in different contracts. In the government contracts, most of the contracts have the wholesale price index and the labor index, minimum wage index-based on which the escalation is paid. Almost all our government contracts, the escalation clause is there, other than one project that we are executing for NBCC, which is a fixed-price contract, which is also nearing completion. As far as the private contracts go, all volatile materials like cement, steel, raw materials like aggregate, sand or blocks, most of the private clients now have started putting in base rates or based on which, you know, the cost escalation or de-escalation is a pass-through to the client. On a lot of maybe to put a ballpark figure, 50% of contracts, the labor escalation is also paid, 50%, it is not paid. Private sector I’m talking about.
Amit Khetan
Got it. So it will be 100% for the government and 50% for private.
Shobhit Uppal
Yes, you can say that. But the volatile materials are covered.
Amit Khetan
Got it, got it. And what would be our current mix of variable versus fixed in the order book?
Shobhit Uppal
So 87% variable and 13% fixed-price.
Amit Khetan
Great. Thanks a lot and all the best.
Shobhit Uppal
Thank you.
Operator
Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go-ahead.
Vaibhav Shah
Thanks for the opportunity. Sir, firstly, on the margin side. So we said that next year could be a double-digit margin. So could it be very closer to 10% or we can even expect somewhere around 10.5%, 11% as well.
Shobhit Uppal
I think it should exceed 10%.
Vaibhav Shah
Okay. And sir, secondly, for Q4, we have mentioned that the entire year growth would be somewhere around 9-odd percent. So it impacts around 15-odd percent growth in Q4. So what would lead to this uptick in the 4th-quarter given that June — the Jan also has been impacted by NGT.
Shobhit Uppal
So what we are seeing starting February, you know, know, there has been a considerable upswing in our production across projects in NCR, right? And as I mentioned, you know, some of the clients paid-for us to hold our labor on-site even when the projects were closed. So we could just hit the ground running on third or 4th of February when the — when the NGT ban was lifted. So we are seeing that or we are — we feel that if we extrapolate our work-in now in the first week of February or from third till 10th, we feel that the revenue will go up considerably as compared to the last quarter, which would lead to a better margin.
Vaibhav Shah
So Q4 also should be — would be not double-digit margin, should be between 9% to 10%
Shobhit Uppal
Up should be, yes, it should be about 10%.
Vaibhav Shah
Okay. And sir, secondly on the some few bigger projects. So when do we expect to start the work on jewelry? Earlier targeting somewhere around June.
Shobhit Uppal
Yeah, we are expecting that they will give us a notice to proceed in the next one to two months. As I mentioned that starting the next financial year, work on German jewelry, German jewelry, the actual work on-the-ground will begin because we have to start designing also that will — so maybe towards the end of first-quarter, actual work on-the-ground will begin, but in April, work on CSMT will be — will be going on in real earnest. We would be working on a number of buildings there parallelly. There will be a substantial uptick on the monthly progress out of CSMT. Sorry, you said something?
Vaibhav Shah
Yeah. So any — so we were — earlier targeting closer to INR300 crores of revenue for FY ’25 from CSMT. So that looks a bit difficult.
Shobhit Uppal
No, that will not happen. We are looking at anywhere between INR80 crore to INR100 crores. That is something which has set us back-in terms of our revenue guidance for FY ’25.
Vaibhav Shah
INR80 crored crores in Q4, right?
Shobhit Uppal
Yes. — no, no. In Q4, as far as CSMT is concerned totally in — in the quarter, about INR80 crore to INR100 crores in Q4.
Vaibhav Shah
And for FY ’26,
Shobhit Uppal
FY ’26, we are looking at about 600 crores to INR700 crore INR600 croress — about INR750 crores.
Vaibhav Shah
And a similar figure for jewelry Park for 26 and 27 at least for ’26
Shobhit Uppal
German jewelry Park should be lesser because as I said the first two to three months would go in designing and approvals and then it will take-off. So maybe it will be about INR500 crores.
Vaibhav Shah
So do we expect a similar — maybe could it happen that similar issues may come up in design and that can lead to maybe a delay in execution like we saw in CSMD for jewelry or we are confident that it will proceed on pace.
Shobhit Uppal
Hemmed by a agency, which is comparatively new as compared to more established PMCs like NBCC and CPWD. Thirdly, the German jewelry Park project is not as complex. These are basically large or offices where the German jewelry workers have to work, though it’s bigger in scale, but it’s not as complicated. So we foresee fewer problems there.
Vaibhav Shah
And lastly, on interest cost, it should be a similar number in Q4 as well at around INR14 crore INR15 odd crores.
Shobhit Uppal
Yes.
Vaibhav Shah
Okay. Thank you, sir. I’ll come back-in the queue.
Shobhit Uppal
Thank you.
Operator
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, hi. Thank you, sir for opportunity again. Sir, our gross debt would be the similar INR10 odd crore.
Satbeer Singh
So that is working capital debt is INR5.93 crores and in totality, including term-loan is INR11 crores.
Shravan Shah
Okay. So INR13-odd crores working capital plus INR11 crores working long-term debt.
Satbeer Singh
Yes.
Shravan Shah
Okay, so close to INR24 odd crores. Okay. Got it.
Satbeer Singh
No, total is INR11 crores.
Shravan Shah
Okay, got it. And in nine months, how much capex we have done and in the 4th-quarter? How much are we
Satbeer Singh
Totally, nine months 154 crores.
Shravan Shah
154 crores.
Satbeer Singh
Yes.
Shravan Shah
And in the 4th-quarter how much we are looking at?
Satbeer Singh
INR175 crores.
Shravan Shah
INR175 crores. Okay. So sir, next year also can we see the similar kind of capex?
Shobhit Uppal
No, no, it will be lesser. It will not be as much. As I said, you know projects CSMP, DLF, all the other larger projects, the capex is — which will take-off now, the capex has already been done. So I think it should be about INR125 crores
Shravan Shah
And yeah, sir, you mentioned that you have bid for a couple of government projects and also having a discussion with the private. So any ballpark number in terms of the — how many projects and the broader value combined put together, everything.
Shobhit Uppal
It will be very difficult because as I said, the government projects bids have yet not been opened. So we don’t even know where we stand. On the private sector side, the opening is not in the public domain and you know, the decision is not necessarily L1. So negotiations or discussions are happening. It will be very difficult for me to say right now or give an indication right now.
Shravan Shah
No, no, I was just trying to understand both put together, government private in terms of will it be the value that we have bidded from oversight would be INR1,000 crore INR2,000 odd crore kind of a number.
Shobhit Uppal
In terms of bid value in terms of the projects that we bid, so it should be about — I think it should be easily about INR4,000 crores.
Shravan Shah
Okay. Okay. And then in terms of
Shobhit Uppal
Maybe even INR5,000 crores? Yeah, if I think from the top of my head, the projects that have been bid till now and not decided would be close to INR5,500 crores?
Shravan Shah
Got it. And further in terms of by March, how much more are we looking at considering will it may be also 4, 5,000 odd crores that looking to bid?
Shobhit Uppal
Yeah, at least 3,000 crores.
Shravan Shah
Okay, okay yeah and sir this, this both the airport one there also the execution when started
Shobhit Uppal
Both projects. The execution has started. In fact, I think at Varanuki, we’ve already clocked about INR40 crores. At Durbangla, we’ve clocked about INR20 crores.
Shravan Shah
Okay. And then for even the signature global business park also there also the execution has started.
Shobhit Uppal
Not totally. The client has to hand over the towers to us after excavation. So they barely handed over 10% of the site to us. So that’s why I’m saying that all this starting from the next financial year or the first-quarter of next financial year, all these projects will take-off.
Shravan Shah
Yeah. So that’s what actually I was trying to understand. So if the almost all the projects will start kicking-in, we should be having close to — even more than a 20% kind of a growth next year, but you are restricting yourself to 15% plus.
Shobhit Uppal
You know me, we are always conservative here. Otherwise, you hold us accountable. No, that’s why I’m confident that our margins will also go up and we will be having double-digit margins next year. We can already see the results though there has been quarter-to-quarter corresponding quarter-to-quarter degrowth, but you know if you compare to the last quarter of this financial year, we are extremely bullish. We can see that our margins have increased significantly.
Shravan Shah
Yeah. And sir, this is the last installment of MR of INR56-odd crores that have been received.
Shobhit Uppal
Yes, it’s been received, yes.
Shravan Shah
Okay, okay. Got it, sir. Thank you and all the best.
Shobhit Uppal
Thanks a lot.
Operator
Thank you. The next question is from the line of Sameer Jain, an individual investor. Please go-ahead. MR. Jain, your line is unmuted. Please go-ahead with your question.
Shobhit Uppal
Yeah, we can’t hear you.
Sameer Jain
Hello,
Shobhit Uppal
Yes, hi.
Sameer Jain
Sir, one question we had on CSMT was, there are some newspaper reports that end of December, they mentioned a 15% completion of the project and they are quoting some railway authorities. Now obviously that is very different from the revenues that we have booked, right? So what would be the difference between how the railway thinks of project completion versus how much we book in terms of revenues?
Vikas Ahluwalia
So let me answer that.
Shobhit Uppal
Sure,. Yeah.
Vikas Ahluwalia
You see, what is happening is that because now the designs are getting finalized, so a lot of — this is here. So a lot of fabrication work of structural steel is happening, which is say about 40% is offsite and 60% is onsite. So if you consider that, which is actually the work not done, which is not being billed yet, it takes a while to start billing it. So if you take that figure and 15% work done also, in their definition means that a lot of area has been taken-up, which is now we are doing the ground preparation like removing the age-old services, 100-year old services which are running under of the station. So that work is taking a lot of time and like we’ve been saying from day-one to past, day-one is the same four, five months. The design is taking a lot of time because it is a very complex system, complex, complex. You know you are you are integrating a new building with a 100-year old infrastructure. So that is what is going. If you really speak our current lot of structured steel, nearly, nearly 5,000 to 6,000 metric tons of structured steel is under fabrication or fabricated and it’s aside. So those numbers, if you go by, I can’t say 15%, but yes, there is a considerable amount of work which is going on.
Shobhit Uppal
And to add to what Vikas has said, you know, 15% would amount to about INR270 odd crores, you know. If you take-out the GST value, the project value is about INR1,800 crores, it will tantamount to INR270 odd crores. And we’ve already built, acknowledged and agreed build figure with the client is close to INR150 crore INR160 crores. And rest of say INR100-odd crores, what Vikas has said is work done but unbuilt because a lot of fabrication has already happened. So yeah, so this is — so maybe when they — when they say 15%, this is sort of an intangible number. When they say 15%, they may be taking work-in progress or stock into account, yes.
Sameer Jain
Right, right. I understand that. Thank you. My second question is maybe Sanjiv, you can answer this is, you know, from a revenue recognition point-of-view, let’s say, if we have completed 5% of the value of the work at a size do we recognize revenue to the extent of 5% or is there a minimum threshold we wait for before the revenues are booked?
Satbeer Singh
No, the revenue is booked when the client passes a bill. So tell what work has been that also in food revenue in foods also unbilled revenue also.
Sameer Jain
Okay, okay. But that happens as and when whatever work is completed, right? There is no minimum, let’s say, we start recognizing only at a certain milestone or a certain percentage completion. Even if it is 1% client approval, we book revenues. So that’s how
Shobhit Uppal
He is not asking about escalation. Please repeat your question.
Vikas Ahluwalia
What happens in these EPC contracts, there is a stage-wise payment. So this stage has to come. Then it can be billed also on the pricing,
Sameer Jain
Okay. So if the stage is upset 5%, then you book only at 5%. If the stage is at 1%, then revenues are book, then 1% stage is completed, right? That’s the way to understand that or
Vikas Ahluwalia
No, then there is a mathematical — it’s not a stage only work if there is a mathematical formula to this. So perhaps you come to the office, we can.
Sameer Jain
Okay. All right. And sir, lastly, in the subcontracting cost, if we compare this quarter with the last two quarters and there is some part of a reduction there as a percentage of revenues. And does this have anything to do with availability of labor or any other metrics because it’s that in some cases of labor shortage, subcontracting has come off a little bit.
Shobhit Uppal
Sorry, your question was not very clearly audible at our end. Could you repeat that please?
Sameer Jain
Sir, on subcontracting costs, right? Now if I look at the previous two quarters, we were at about, 31% 32% of revenues. This quarter we are at about 28% — a little over 28%. So what would — what would explain this slight reduction versus the first-quarter, especially in the light of shortage of labor continuing?
Satbeer Singh
This will basically get the subcontracting comp is coming out 31%. It’s not basically, you can say in technical terms of contracting, it’s also improved manpower supply and also labor contact. That’s why that is amount is very-high and high
Shobhit Uppal
He’s saying, why has it reduced?
Vikas Ahluwalia
So you know subcontracting, this keeps subcontracting, petty contracting, labor supply, this keeps on interchanging depending on the nature of the work. So you know in 1/4 if the subcontracting number is 31% as you said, then some subcontracting in contractors parlance is work which includes more material also, right? Say for instance, if we’ve outsourced lift installation or escalator installation or aircon works, right? This is with material. So in the preceding quarter, maybe such works outsourced works with material may have been slightly higher. So this number needs to be actually looked at in conjunction with the labor supply with material. That is why this figure is to be looked at. In our case okay, so that question operator yeah,
Shobhit Uppal
Hello, any further questions? Moderator, hello.
Operator
Thank you. The next question is from the line of Ketan Jain from Avendus Spark. Please go-ahead.
Ketan Jain
Thank you. Sir, my first question is on the MGT band. Since when was the band implemented?
Shobhit Uppal
It started in end-October, November around Diwali time, that is the time that you know the air quality index starts worsening in Delhi in NCR and it has gone on till as late as the first week of February and this time, because Supreme Court also got involved, the ban was introduced, revoked, introduced, it happened in fits and starts. So there have been multiple stoppages from, say, end-October till about February 1st week.
Ketan Jain
Understood. Otherwise, what would have been an end date mix now in ’24?
Shobhit Uppal
It is now dependent totally on the air pollution, the air quality index. As per the guidelines, there are different thresholds when different levels of guidelines kick-in. So it’s more or less automatic. When the AQI say crosses a certain level, one-level of restrictions come in, it crosses, it jumps up further, another level — more stringent restrictions kick-in. So when it crosses 300, the entire construction machinery comes to a standstill. The supply-chain comes to a standstill because you know the trucks cannot enter NCR region. So — and then once these guidelines are sort of revoked, then there is a logjam of trucks or materials at the borders. So it takes time for the pace to pick-up again. So are you understanding? Have I to clarify?
Ketan Jain
Yes, sir, yes, yes. Just to compare last year when was it like over the bank and just to compare.
Shobhit Uppal
Yeah, just to compare what this year because they were — if you see the number of stoppages starts and restart so-far more, so it’s sort of the effect on the supply-chain all-around has been much worse, so to say. While the end-to-end duration may have been the same, but overall, the impact on construction work at ground as well as the supply-chain has been far worse.
Ketan Jain
Understood. Understood. Sir, my next question is on the number of projects bid — the value of projects bid, you mentioned around INR5,000 crores. Sir, any flavor on what type of segment, which segment is this residential, commercial or any such flavor would be helpful.
Shobhit Uppal
So residential, commercial healthcare and hospitals, yeah, healthcare, yeah.
Ketan Jain
So it’s across all of those segments.
Shobhit Uppal
Yes.
Ketan Jain
Understood. Sir, my last question is on are you seeing any slowdown in payments from state.
Shobhit Uppal
Not really. As I mentioned in the investor call at the end-of-the last quarter, I think you know the slow-moving payments, this thing, Bengal, our government projects are over. Bihar, we are seeing an improvement since the BJP and JDU government has come to pass and Assam continues to be okay for us, because same government is there at the centre and the state so that is where we are.
Ketan Jain
So no material change from
Shobhit Uppal
No.
Ketan Jain
Okay, thank you/
Operator
Thank you. The next question is from the line of Vasudev Ganatra from Nuvama Wealth. Please go-ahead.
Vasudev Ganatra
Yeah. Thank you for the opportunity, sir. So can you give us what’s the status of the DLF Harbor project and the Tata Memorial Project.
Shobhit Uppal
DLF project you know is now well underway and prior to — it had taken off prior to the NGT ban coming into play, but you know, post the bank that BLF is one of the clients where they’ve compensated the labor for staying back. So when the ban was revoked and the work started I think on the 3rd of February, we hit the ground running. And in this month, we’ve already done close to 4,000 cubic meters of concrete there. So that project is — we see that seeing ourselves clock a healthy run-rate there in the rest of this quarter as well as next financial year. We’ve done a total good billing there already in excess of INR200 crores. And which was the other project that you asked about
Vasudev Ganatra
Tata Memorial.
Satbeer Singh
That has been executed so-far.
Shobhit Uppal
Tata Memorial INR110 crores has been executed.
Vasudev Ganatra
Okay, sir. And sir, for next year, what is the kind of bid pipeline that we are looking to bid, like which segments and if you can quantify that
Shobhit Uppal
Residential, healthcare, commercial and total pipeline should be in the region of about INR25,000 crores.
Vasudev Ganatra
Okay, sure, sir. That’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Vaibhav Shah from JM Financial. Please go-ahead.
Vaibhav Shah
The mobilization advance of INR620 odd crores, what will be the interest-bearing portion
Satbeer Singh
Just 43%
Vaibhav Shah
And what was the mobilization advance as of September?
Satbeer Singh
25 crore.
Vaibhav Shah
I didn’t get you.
Satbeer Singh
You asked me what number?
Vaibhav Shah
Mobilization advance as of September.
Satbeer Singh
This is INR542 crores.
Vaibhav Shah
Okay. So we see — do we expect this number to reduce next year or it should be in similar range?
Shobhit Uppal
It should be in the similar range going-forward, as I said, we are increasing our private sector order book there the mobilization is interest-free. So the company policy is to, you know take that. As far as wherever there is interest-bearing advance, we would try and work without the advances. Say, for instance, the two airport projects, we have not availed of the advance. We are funding it from internal accruals. So going-forward, we are working to reducing the finance cost which is primarily on account of interest-bearing mobilization advance.
Vaibhav Shah
Okay. And sir, the recently place that you have won on the residential side of INR1,100 crores reach from the DXP and a second or that of composite structured works. So those when do we expected to start
Shobhit Uppal
So those projects, as I said, will take-off in the next financial year. While some little work has started on-the-ground, but as I mentioned in answer to an earlier question, DXP, Signature Global, the fronts — work fronts which the client has to hand over to us has not been done barely 5% to 10%. So they are a little slow off the blocks. We think they will start in the next financial year.
Vaibhav Shah
Okay. Okay. Thank you, sir. Those are my questions. Thank you.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Shobhit Uppal
Thank you so much everybody for your insightful comments and questions and I look-forward to seeing you again at the end of this financial year-on next investor call. Thank you so much. Bye.
Operator
Thank you. On behalf of Ahluwalia Contracts India Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.