Arisinfra Solutions Ltd (NSE: ARISINFRA) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Mamta Samat — Investor Relations
Srinivasan Gopalan — Chief Executive Officer
Analysts:
Shaurya Yadav — Analyst
Vishvender Singh — Analyst
Kaushal Sharma — Analyst
Deepak Poddar — Analyst
Kapil Ahuja — Analyst
Nirav Shah — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to aris Infra Solutions Limited Q1FY26 conference call. As a reminder, all participant lines will be in 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Mamta Samath. Thank you. And over to you Ma’am.
Mamta Samat — Investor Relations
Thank you. Bhavya. Good afternoon everyone and welcome to the Q1FY26 earnings call of Ares Infra Solutions Limited today we have with us Mr. Ronak Mobiya, Chairman and Managing Director, Mr. Srinivasan Gopalan, Chief Executive Officer and Mr. Bhavik Khara, whole time Director and Chief Financial Officer and the AddFactors IR team. We will begin the call with the opening remarks from the management after which we will have the forum open for the interactive Q and A session. I must remind you that this conference call may include forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. The statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Srinivasan Gopalan, Chief Executive Officer of Ares Infra Solutions Limited for opening remarks. Thank you. And over to you sir.
Srinivasan Gopalan — Chief Executive Officer
Good afternoon ladies and gentlemen. Welcome to our Q1 2026 results. We are very very happy to announce the results today. And even before I start my speech I want all of you to note four things which I am personally very very proud of and very happy about that there are four things that we have achieved for the first time in this quarter. One is our EBITDA has gone past 9% for the first time. We have clogged around 9.2%. We have become completely debt free by way of net debt is zero as of today. Our working capital number of days has gone below 100. We are at 97 days today and the Q1 results? We have shown a net profit of 5.1 crores which is almost 85% of the entire year last year that we clocked.
Having said that, let me now start the results Speech. We are pleased to report a solid start for financial year 2026. QN reflects the strength of the model we have built, one that is scaling with clarity, control and discipline. It’s important to highlight that this performance was delivered without any benefit from our IPO proceeds except the debt repayment which I mentioned to you earlier, which we were available only at the very end of the quarter. The impact of that capital in terms of growth, profitability and working capital optimization will begin to reflect from Q2 onwards. Very important to note this our supply services tech model is gaining strong industry response in a sector that’s traditionally fragmented and execution heavy.
What defines us is our ability to bring together reliable supply, project aligned services and smart backend technology into a single integrated operating model that helps construction happen faster and with very few dependencies. This is not just showing up in numbers, it is showing up in relationships as well. From earlier MOUs and order wins with Wadhwa Transcon and Village Wave to our most recent addition of AVS which we did yesterday, the momentum is clear. Developers are looking for long term dependable partners who can simplify execution at scale. We believe Ares Infra is uniquely positioned not just to grow but to do so with capital efficiency, margin visibility and return discipline.
There are three strategic pillars driving scalable and profitable growth, each of which plays a central role in making this business structurally stronger and financially more rewarding. The first one is a strong demand supply engine that generates returns at scale. At the heart of our model is the ability to efficiently match demand with secured supply not just once, but consistently across geographies and volumes. You must have also heard our announcement about a 300 crore facility that we have been able to bag with the House of W. We have built an organized network with long term visibility on both sides, securing capacities through strategic deposits and serving institutional customers with predictable repeat demand. This network effect ensures that as volumes grow, we just don’t grow revenue. We improve margins, reduce volatility and strengthen our position in the ecosystem. This is exceedingly important for us. The second important point is the shift towards smarter working capital management. Working capital management is the core of our business in our earlier years. In the last four years prior to the ipo, we funded working capital through internal accruals and equity, allowing us to scale quickly without external pressure. But now we are moving into a more strategic approach.
We have initiated the process of securing supply chain financing facilities, enabling us to extend vendor payments without disrupting supply or using equity. At the same time, we are scaling invoice discounting with institutional customers, unlocking receivable earlier and accelerating the cash cycle. Close to 40 to 45% of our sales are mainly to these large clients where bill discounting is a given. Together these steps reduce working capital pressure, unlock more capital for growth and improve overall return on capital employed. The third pillar, as I mentioned, is the asset light model that preserves flexibility and reduces risk. We have made a conscious decision to stay asset light in the near term, scaling through strategic partnerships and contract manufacturing instead of investing ourselves in capex heavy assets. This approach gives us all the benefits of a manufacturer, including reserved capacity, cost control and supply security without the operational risks of owning and running assets.
The biggest of these risks isn’t just capital outlay, it’s operational bandwidth. Owning and operating plants and managing full scale production can divert focus from execution. By staying asset light, we preserve that focus and double down on what truly sets us apart. Our integrated supply service model. This model allows us to move beyond material delivery into project based services that generate stronger returns, enable deeper customer integration and drive structural margin improvement. In many ways, it’s our asset light approach that makes this high return integration possible.
Coming on to the financials, we have a sustained momentum across materials and services. The total income for the quarter stood at 216 crores up 11% year on year. While Q1 typically sees seasonal moderation versus Q4, our volumes remain steady supported by consistent demand from institutional customers and a robust supply backbone strengthened by long term vendor partnerships. Coming on to the profitability services driven margin accretion, EBITDA stood at 19.5 crores, up 13% year on year and 77%. If I compare it with the last point quarter driven by better contribution margins, disciplined cost structures and scale efficiencies. A key driver of this important improvement is our services vertical which continues to grow in both relevance and profitability. It helps us move beyond transactional supply into higher margin longer cycle project involvement which deepens customer engagement and improves commercial outcomes.
EBITDA margins as I mentioned to you went beyond 9% to 9.2% reflecting operational leverage and the structural advantage of our integration model. Coming on to the bottom line, PAT for the quarter stood at 5.11 crores after absorbing an exceptional IPO related expense of 2.5, so ideally it should have been close to 8 crores. Adjusted for this, PAT stood at 8 crore cross compact to 6.5 crores in Q1 last year and a 52 lakhs of loss in Q4 2025. This reflects a clear return to consistent sustainable profitability driven by margin expansion, growing services contribution and improved capital efficiency.
At an annualized rate, this translates to 3032 crore of PAT even before factoring in the benefit of interest savings and IPO fueled growth expected in the coming quarters. With proceeds from the IPO and disciplined capital allocation, we are now nearly debt free. As I mentioned at the beginning of this speech, this enhances our financial flexibility and strengthens our ability to scale efficiently across core markets. Coming on to a very very coming on to a very important subject which is the working capital. So something which everyone thought is the pressure point, we have converted that into a strategic advantage. Working capital has historically been our biggest operational risk and it continues to be our key focus.
We are addressing this head on with a structural shift in how we fund growth on payables. We have initiated the process of securing supply chain financing limits allowing us to extend vendor payment terms without impacting material flow or straining vendor relationships or margins. This allows us to free capital with preserving trust and continuity on the supply side. On the receivable side we are scaling up invoicing, invoice, discounting, especially with institutional customers. This helps accelerate cash flow without relying solely on payment cycles. Looking ahead, we expect continued improvement in receivables through a multiple pronged strategy, increasing wallet share with better rated customers, moving to a more project based engagement model that ensures better payment discipline and actively diversifying the long tail of buyers to reduce concentration risk and improve collection cycle across the board.
Over the last 12 months we have brought our net working capital cycle down from an approximately one to days to a 97 days as of Q1. If you remember, in our past investor call we had mentioned that we would be at an 85 to 90 in 12 to 18 months. We are very happy to mention that we are at the 90s already in the Q1 from 120 days in December to 110 in March and now to 97, a level that once seemed distinct. This progress reflects deliberate structural actions. While this is an ongoing journey, we remain focused and confident of bringing it further down to 85 to 90 days range over the coming quarters and sustaining it as we scale.
This isn’t just operational optimization, it’s a fundamental shift that improves return on capital and supports sustainable capital light growth Reinvestment of Cash Flow for Scalable Growth As a working capital led business, we actively reinvest cash into operations primarily through trade deposits, receivables and project linked supply arrangements to drive growth, secure supply and deepen customer relationships. While this can occasionally result in negative operating cash flow, it does not mean that we are burning cash. Rather, it reflects our disciplined approach to deploying capital in areas that generate high returns and and generate structural advantages such as securing vendor capacity, expanding services or increasing wallet share from institutional buyers.
With strong controls, smarter capital structures and improving working capital efficiency, we expect cash conversion into structurally improved without compromising on growth. In Q1, our receivable collections remained strong with vendor payments made in line with operating volumes indicating a steady and disciplined cash cycle. This flow validates our belief that tighter working capital control can drive sustained growth without putting strain on liquidity. We are built for construction design and designed for returns. Ares infra is built for the real needs for construction where timelines are critical, quality cannot be compromised and execution makes all the difference.
What sets us apart is not just what we supply material or provide services that we do both in a structured, dependable and technology enabled way. As we look ahead, our focus remains clear. Grow with control, deepen our customer and vendor network and operate with sharp capital discipline. So this becomes not just a high growth business but a high return business. Thank you for your continued trust and support. We are now happy to answer any questions that you have. As mentioned earlier, I have my Managing Director Raunak and Bhavik who is our CFO and whole time Director. We are happy to answer your questions. Thank you very much. We will now begin the question and answer session.
Questions and Answers:
Operator
Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shaurya Yadav from Pinpoint X Capital. Please go ahead.
Shaurya Yadav
Hello. Am I audible?
Srinivasan Gopalan
Yes.
Shaurya Yadav
Yeah. Thanks for the opportunity. Sir, I have couple of questions. The first one is that our last year Q1 pad was 6 crores which is exactly equal to FY25 pad. So sir, which means net net for remaining 9 months we have incurred losses. And similarly sir, this year we have posted that of 5 corros in Cuban. So I just want to understand what exactly had happened in Q1FY25 that we have reported. Pattern for the remaining years we have incurred net losses. What was the reason for higher growth in Q1 FY25 and going ahead in FY26? Can we see any quarterly losses like we have seen in FY25 for remaining nine months?
Srinivasan Gopalan
Yeah. So thanks for that. Karya. Let me put the number more into perspective with respect to the quarter on quarter comparison year. On year 5.1 was recorded for this quarter. But it was after an IPO expense which is one of the last expenses that we will record with relation to IPO which was about 2.8 crore. If you factor in that we are at about 7.4 to maybe about 8 crore of PAT in this quarter which is in fact our highest ever PAT margin and is in fact about 15% growth year on year. When you compare the 6 crore of profit in that quarter, the debt levels were different in quarter one. FY25, the debt was smaller. We had more debt in quarter one also where the interest cost was approximately 2.2.5 crore higher. And that’s predominantly why even with a higher EBITDA margin we have grown slightly lesser in terms of Pratt with just about 15% growth.
With respect to the financial year FY25, we recorded a PAT in the first quarter. But we had the IPO related expenses again in the same financial year which kind of impacted the entire year’s profitability. If I adjust all of those costs we would be somewhere around 12 to 13 crore of profit before tax in FY25. This is something that we had obviously mentioned in our last earnings call as well. We had to absorb those costs in our P and L and that is why the numbers were reported. You know at about 6 crore a pack. The entire and sir going at in FY26. So there will be not no quarterly loss that we have reported in FY25. No FY26. I mean if I were to consider an FY26 right now we are at about a seven and a half crore of pat adjusted to that IPO expense.
So we are already at an annualized pat of about 30, 30 plus crores. And we haven’t really, we haven’t used even a rupee from the IPO proceeds for the operations. We have just repaid the debt as on the 30th of June. And obviously by repaying the debt there will be significant interest cost savings as well. So an annualized pat of about 30 crores already there. With interest costs reducing and more of the EBITDA flowing into the pack and three quarter to perform with the IPO proceeds, we expect the pat for this year to be significantly higher.
Shaurya Yadav
Okay sir. So is it fair to assume that the current operating margin will remain going by 26 because of increasing contribution from RMC and service led business, which I think is a higher margin business?
Srinivasan Gopalan
Absolutely, yes. In fact it’s not just about the numbers, it’s where the margins come from. You’re absolutely right about the growing services business. And this is really backed by the recent announcements that we made close to about 400, 450 crores of contracts and order wins that we have announced. And the contract manufacturing which has been the focus ever since we started that business about two years back, we’ve been growing in that segment and we feel that it does not just give us additional margins, it gives us supply security, it gives us quality control, it gives us cost discipline as well. Where if we were to look at fulfilling the higher demand of large scale intra projects or real estate developers, it is very important to secure your supply so as to fulfill that kind of demand. So contract manufacturing, growing services, all is going to be our focus and we feel that’s the reason why we’ll be able to sustain this EBITDA margin.
Shaurya Yadav
Going further, just a follow up on that, as you said that there will be no quarterly loss and going at margin will remain in the range of 9 or 9.5 which is the current rate. And also interest cost is coming down due to debt repayment. So is it fair to assume that our debt margin will be in the range of 5.5 or 6%?
Srinivasan Gopalan
Well you could, I mean I’ve given a reference of the analyzed pat for this year. We are yet to deploy IPO proceeds which will start from this quarter, the September quarter. We have three quarters to perform at the current rate. If you, you look at our pat, it’s about two, two and a half which will kind of increase because of the interest cost savings. So yeah, fair to assume that we will be somewhere around maybe about 4 to 6% of PAT. But that’s just the future guidance that we can give. I think it’s more important to understand that the industry that we operate in right now, it’s one of the largest sectors in India which is least disrupted. And it gives us the potential to actually grow with such high margins. And that’s what we would like to focus on.
Shaurya Yadav
Thank you, sir. Understood.
Operator
Thank you. The next question is from the line of Vishwinder Singh, from Prudence. Please go ahead.
Vishvender Singh
Hello sir. I had a few questions. So first of all, can you share the. What is the current monthly rolling order run rate and how are you planning to increase this?
Srinivasan Gopalan
Yes, as mentioned in the previous earnings call, also our rolling demand is close to about 60 to 70 crores a month. We have initiated deploying the IPA proceeds from this month itself. And the guidance that I’ve given before was to reach about a rolling demand of about 90 to 100 crores on a monthly basis in the coming few months. So that is where we are headed and we are very confident because we are going to do this through two things. One is increasing the wallet share with existing customers and onboarding a few new customers as well. And the project based order book that we have recently onboarded will only add to this rolling demand as we grow.
Vishvender Singh
Okay, noted. And secondly, I wanted to ask how do you see the revenue profile for this year and next year for our subsidiary Build Mac that we are investing after our IPO in buildmex?
Srinivasan Gopalan
We have partnered for mainly aggregate stone aggregates. I think the current, the capacity that we were working on previously till about March or maybe about June was in the range of about 1.5 lakh metric tons a month. We have already initiated capacity expansion there and I think we’ll be clocking 2 and a half to maybe 3 lakh tonnes as we move forward in the coming months. So the investments are in the right direction. The category is very exciting. It’s high margin. We have complete control over all these capacities and we are looking to deliver to all the large infrastructure projects down south. So yes, I mean we’ll be looking at increasing the capacity. We’ve already initiated the process and we will see good progress in the subsidies as well.
Vishvender Singh
So do you have an internal ballpark number for the revenue target for our subsidiary for this year and next year?
Srinivasan Gopalan
I would say the rolling, I mean, you know, based on the capacity that I’m talking about, it should be somewhere around July would be close to about 8 to 10 crore a monthly business. So an annualized business, about 120 crores. We will see good growth also in terms of the next three quarters. So you know, that’s, that’s the kind of number and growth that we’re talking about.
Vishvender Singh
Okay, noted. And I wanted to ask, we have reported strong increase in our margins. So what has been a major trigger behind it with respect to margins in our business?
Srinivasan Gopalan
It’s mainly because of our model which is a combination of supply, services and technology. All these three things come together and that is why the consolidated profit has seen a significant increase in the last few months. What I mean by that is when it comes to supply, it’s not just about buying and selling materials. It’s about building a very solid supply backbone and forming long term partnerships and securing capacities so as to secure supply as well as add margins, get volume discounts. With respect to services, we go beyond supply as well. When it comes to real estate developers today, developers need two things, three things in fact, to ensure that execution and ultimate handover is in place. One is materials. Second is execution or management. And third is inventory marketing. We offer everything. We are present at every part of the supply chain where most other people or companies are either offering a couple of materials or maybe just present across one aspect of this value chain, which is material supply. And to manage all of this at the back end, we have built in house technology which actually absorbs the entire operational bandwidth. This is the reason why we have seen tremendous improvement in margins and we feel that we have built a very sustainable foundation to not just grow, but to sustain these margins as we scale.
Vishvender Singh
Okay, noted. Lastly, I wanted to ask, like after Q4, in Q1, we have gone from 2700 to 28, somewhere around 2800 customers. And we have also increased our PIN codes that we serve. So what would be the strategy going forward to increase both our customer count and total PIN codes served?
Srinivasan Gopalan
To be honest, these are outcomes of our reach across the country and the fact that we can, you know, we can onboard new and new customers on a quarterly basis. But our focus, to be honest, is on the institutional demand that we can grow, increase wallet share with the existing customers as well. So it’s not a very conscious decision. It does not really operate like a B2C business where more and more PIN codes or more and more customers are the only focus. It’s just about working on diversity as we grow, where we will look to do both, not just onboard new customers.
Vishvender Singh
Okay, noted. Thank you, sir. Thank you.
Operator
Thank you. The next question is from the line of Kaushal Sharma from Equinox Capital Ventures Private Limited. Please go ahead.
Kaushal Sharma
Hi sir. Very good. Yeah. So my question is on your guidance, like in the last call you said that we will grow around 30 to 40% over the next two years. Now we have. So are we in line with our target? And my working capital site, your audio quality is not clear. Hello, how is it?
Srinivasan Gopalan
Hello. Cutting out a little bit? Still breaking. Sorry sir. Still breaking. Hello. Now is it fine?
Kaushal Sharma
No. My question is on your revenue guidance that in the last call you said that we will grow with 30 to 40% and currently we are growing around 11%. So are we in line with our target? And my second question on your working capital. What is our receivable in value as of today and the payables?
Srinivasan Gopalan
Yes. So the 11% growth that you’re talking about is really, you know, basically compared to the quarter. Year on year quarter, it’s. The growth is about 11%. What we meant was because of the IPO proceeds coming in, debt repayment and, you know, unlocking more capital for growth, we’ll be able to achieve, you know, the guidance that we’ve given, which is about 30 to 40% year on year growth. You know, that’s how we’ll achieve it. With respect to trade receivables, we are at about. Yeah, we are at about 130 days in terms of days and about 350 to 360 crores of receivables in terms of payables. We had about 34 days and about 130 crores of payables. So our networking capital comes to about 96 to 97 days. So receivables in value around 350 crores, right, sir? Yes. And payables 130 crores. Yeah. So that’s how we’ve improved from 120 to 97.
Kaushal Sharma
Okay, sir. Okay. Thank you, sir.
Operator
Thank you. The next question is from the line of Deepak Podar from Shafar Capital. Please go ahead.
Deepak Poddar
Hello. Hello. Yeah, yeah, thank you very much for the opportunity. So just wanted to understand, I mean, for next two, three years we had been saying about 40, 50% growth or 30, 40% growth.
Srinivasan Gopalan
We will be somewhere around 40%. To be honest. That is something that we are consciously targeting. It also comes from the fact that we operate in an industry which offers that kind of growth potential. It’s not really about growing the revenue. It’s really about sustaining the EBITDA margins and the back margins and also keeping the working capital cycle under check. So it’s not really about a high revenue number. We will be looking at a growth of around 40% up and down. But more importantly, the focus is on the EBITDA margins, the back margins and obviously the working capital cycle. And since we have grown only by 11% now, the IPO proceed, money will also kind of kick in. So we’ll start seeing growth from this second quarter itself. Because in the first quarter the growth was not there. Absolutely. I mean, the first quarter we didn’t utilize even a rupee from the agri proceeds. We’ve already started deploying the agri proceeds. You know, we had a very good visible order book. That’s what we’ve been doing since ever since July started. So yes, September quarter is going to be the first quarter with, you know, visible growth, not just in terms of, but in terms of margin and pat expansion as well. And growth as well as margin expansion in absolute terms. Not to say that obviously the 9% is something that we will sustain maybe. But in terms of absolute numbers operating, let’s say we clocked about 19.5 crore in the first quarter. We will see a visible improvement in absolute. I mean percentage may vary but in absolute you are saying it might.
Deepak Poddar
Yeah. Okay. And. And yeah, I got it. And I mean we had around 2 crores of minority, minority interest. So what is that on account of?
Srinivasan Gopalan
So that’s basically the subsidiary other comprehensive income. There’s a subsidiary portion. That’s what it is for. So this is what that re. Subsidiary. I mean you need. We have about six subsidiaries. So it is allocated in terms of the comprehensive income. The allocation to the subsidiary is about two and a half. Okay. So that will continue, I mean for the entire year. I mean you expect such quarterly. It’s going to be in check with the growth of the parent company along with the subsidy. It will be in tandem with that. It will remain tandem with that.
Deepak Poddar
Okay. Okay, fair enough. And in terms of interest also I think we have become debt free that you mentioned. So in terms of interest cost, how should we see that reduction?
Srinivasan Gopalan
I mean this quarter it was 11 crores around close to 12 crores a quarter. So going forward, what sort of interest cost on quarterly basis we can expect on a quarterly basis. The primarily interest will be by way of building accounting. And that should be between one and a half to two crores a quarter. That should be the range where we should have the interest cost. So in rupees crores is it possible to, I mean mentioned rupees crores, how much would that be expect? Yeah, so just to kind of put that, you know, just to understand how it will kind of go down, we repaid a close debt close to about 200 crores and another 30, 40 crores. So the interest that was connected, I mean that was allocated this kind of debt was close to about 30 to 35 crores. And that is something that we will see reducing in the coming quarters with maybe a little bit of an increase in build discounting or invoice discounting or supply chain financing interest. Our net outflow in quarter one was about nine and a half crores. We expect this to come down by more than maybe 70, 75% in the coming quarters. So that’s probably the guidance that I can give you today. So reduced by 70 to 75%. I mean if I have to see let’s say 40 crores on an annual basis, 40, 45 crores. So if it has to reduce by 70 cents, so 15 crores debt interest cost, 41 is. Yeah, 41 is not the net interest outflow. If you look at the net, it reduce the operating income from interest. You know the net outflow was about 30. And that’s what we intend to reduce by about, let’s say, 70% as we go forward. Net interest outlook will reduce by about, I mean, after factoring in your other income.
Deepak Poddar
Right. Okay. Okay. And just one last thing. When we say a 4 to 6% kind of a pat margin, so we have factored in minority interest or with, I mean, excluding minority interest or including.
Srinivasan Gopalan
Excluding the minority interest.
Deepak Poddar
So excluding, I mean you have subtracted after that, I mean we are getting that 4 to 6% of PAT margin.
Srinivasan Gopalan
So 4 to 6% will be for the entire thing. And after that we will be reducing the minority interest. It’s before minority.
Deepak Poddar
Okay, it’s before minority. That’s very, that’s very clear. And in terms of leverage, I mean if you have to see, because we have been growing, we are looking to grow about 40% CAGR next two, three years. So how should one look at margins front overall?
Srinivasan Gopalan
I mean what sort of leverage advantage we can, I mean this year you’re targeting 4 to 6% but if you have to see over next three years any kind of aspiration we have on the margin front, how should one look at. Not in terms of numbers, I can give you more over there, but what I can, you know, it’s basically dependent on that we have is supported by a very complex back end technology. And as we scale what we expect in our business, because it’s execution heavy, it generally requires a very large workforce to handle and manage and execute.
Deepak Poddar
Can you just repeat sir, I didn’t get what you’re saying.
Srinivasan Gopalan
So in terms of our model, it’s important to understand what we are building with respect to the supply services and the backend technology as we scale in heavy business generally we would require a very large to handle the backend operations and because we have built in house technology, kind of absorb all of the operational bandwidth, we will see the operating leverage kick in as we scale and we’re ready for that. So it’s how we work, how we operate. You know, as a company we will be able to sustain and maybe have some bit of improvement in our operating margins as well as with scale.
Deepak Poddar
Yeah, that’s what I was trying to understand. I mean because your operating leverage will kick in. So the EBITDA margin which is currently let’s say 9.2% including other income. Right. So how should one look at, I mean what sort of accretion we can see there?
Srinivasan Gopalan
I mean can it be 100, 200 basis point over next two years or higher than that? I mean some understanding of that would be very helpful. I mean I would answer the other way where let’s say today our entire capex maybe of revenue is somewhere around maybe four and a half to maybe 6%. We will definitely see an improvement of maybe about one and a half to 2% as we grow in the next maybe 18 to 24 months. One and a half to 2% margin improvement over next 18 to 24 months. Yes. What we are seeing is as we scale, we are generating more and more revenue with the same kind of workforce or keeping the costs under. And this is something that we are very conscious about. We want to maintain the cost discipline that we have maintained in the last few months and we expect this to be maintained in the coming quarter.
Deepak Poddar
That’s very clear, sir, and very helpful also. I mean, that would be it from my side. And all the very best to you. Thank you so much.
Operator
Thank you so much. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow up question, we would request you to rejoin the queue. The next question is from the line of Kapil Ahuja from Equinox Capital Ventures Private Limited. Please go ahead.
Kapil Ahuja
Yeah. Hi sir. Congratulations for good numbers. My question is regarding the receivables. You just said that the receivables as on June 30 was 360 crore. 363. 360. And in March 25 the receivables were 3 to 7 crore. Am I right?
Srinivasan Gopalan
Yes. So for top line growth of 11%, you have increased the receiver growth is also of 11% only.
Kapil Ahuja
And for this 360 crore, what is the aging of this?
Srinivasan Gopalan
More than six months and less than six months. So as of now more than six months would be approximately 65 to 70 crores. 65 to 70 crores.
Kapil Ahuja
Okay, so. So what’s the reason for so many so big high receivable days and can we reduce them? Or. Or we can increase the payable days to 70 to 90 days.
Srinivasan Gopalan
We are just acting as a NBFC alternate to NBFC only for the construction material. And any builder would be happy to take the order to give the orders to you because you are asking for the payment in four or five, six months after months. So first it’s important to understand how this industry works. Fundamentally credit is a given in this. It’s a layer that we have to offer. It’s not a credit business. They are on top of the business that we do. It is not like they enjoy a longer credit period. We don’t offer a longer credit period to get business in this business about let’s say our 100 to 120 day receiver cycle is actually considered normal.
How you manage the entire cash flow is what we are working on. And when you look at the improvement that we have gotten from 120 days of net working capital to going down below 100 in this quarter, about 97 days. And we are 100% committed and focused to getting this down to maybe about 85 to 90 days in the coming quarters is when you will start seeing the real results. So it’s not about being an nbfc. I mean the returns that we generate with gross margins at about 15% with EBITDA is about 9%. It’s very uncharacteristic of any NBFC to be honest, it’s really about how we operate. This is something that we invest consciously to maintain the relationship, to get involved with the customers, to actually build a very robust supply backbone and to offer end to end execution services. It’s a different infrastructure that we build to actually help the construction industry.
And we are not just operating as a company which offers credit to do business. Because I was asking because when you have to grow by 30, 40% then managing the working capital at those top line levels would be difficult for the company. In fact, it all depends on how you manage. And that’s why during the speech we wanted to address this head on. Because we feel that this has been a key area of focus for all investors. In the early years we used our own equity, we took traditional debt on books and that’s how we were funding the working capital, essentially how we were paying our vendors. Now that we have a larger equity base, we are making structural shifts in how we actually manage working capital. We are already in process of getting access to supply chain financing facilities.
That is not traditional debt on our books. It helps us to increase our payable days without actually straining relationships with vendors when they get money on day one, which effectively reduces the gap between payable. And that’s how we will get to a targeted number of maybe 85 to 90 days in the coming quarters. And when you actually look at this, an asset churn of about four in a year and less pressure on liquidity and working capital is when you’re able to grow at the number that we’ve just mentioned. So you will be trying to increase the payable days also? Yes, that’s something that we will do through supply chain financing facilities, not by not paying them early but by actually getting access to these facilities so they are paid on day one.
Kapil Ahuja
Okay, thank you. That’s all, that’s all from my side. Thank you.
Operator
Thank you. The next question is from the line of shadow from pinpoint tax capital. Please go ahead.
Shaurya Yadav
Yeah, sir, just a follow up question. What is your operating cash flow in Q1FY22.
Srinivasan Gopalan
Sorry, can you repeat that please?
Shaurya Yadav
The operating cash flow in Q1, in Q1, I mean we did not deploy much of the cash that we had so we raised about 500. We had a cash balance of about 300 crores as on June quarter. So wouldn’t be right to. That’s the cash balance that we had technically net debt free. So that’s how we were positioned. I’m asking for the operating cash flow.
Srinivasan Gopalan
So we will have to really come back to you on this and if you can leave your email, we will come back to you with this as a second question. How much of our cash is stuck in previous steel business in terms of amount, if you can tell. So first of all, I don’t think there is anything stuck in the business. If you see we have an ECL provision which we have made which is close to 20 crores. So all our slow moving debtors are around that range and included in the ECL portion. So cumulatively we would have done close to 3500 to 4000 crores of business.
Shaurya Yadav
Out of the 20 crores is what is a slow moving and not that it has been written off. These are provisions and we are working to get these as well Enter by how much time we can recover it.
Operator
Sorry to interrupt. May I request you to rejoin the queue?
Shaurya Yadav
Okay, thank you.
Srinivasan Gopalan
So Shaurya, just to answer your question, as I said out of a 4000 crore business 20 crores is what is the slow moving? I genuinely don’t have an answer when we will recover but we will definitely try to recover some out of it. But these are already provided in the financials.
Operator
Thank you. The next question is from the line of Nirav Shah from GC Holdings. Please go ahead.
Nirav Shah
Hi sir, good afternoon. A few questions. Firstly just continuing with the provisioning number, I mean if I look at the cumulative last five quarters of that provision that we have done it’s a negative two and a half crore. So incrementally we have not provided anything in the last five quarters and maybe some margin support has come from there also because that number is usually around half a percent. So any, any particular reason why this loss allowance on receivable is for the last five, six quarters it’s accumulated negative, negative number.
Srinivasan Gopalan
So there was when we had initially provided there were certain provisions that we had made, we actually collected those and that was the reason why there was a negative one which was I think primarily last Q1, Q1 2024, around 2 crores or something. Now if you look at the last 12 months run up of our debtors as well we are actually running a gross debtors of around 90 days. So we also learned from our past and that was the reason why there was no need for any provisioning. We have a particular model on which the provisioning is made along with us and there was no need to provide anything and that’s good for us. So we are baking in some provisioning this year, financial year which should be in the region. Half a percent or not needed? No, I don’t think so. So in our projections we have kept a provision for 0.5%. However on actual need based only we will do that. So all our guidance that we give, we are giving it after assuming that there would be a 0.5% of provisioning. But that doesn’t mean that we will mandatorily provide that 0.5% that would be based on the actual business that we have.
Nirav Shah
Got it. And so this exceptional number of 2.9 crores in this quarter. So now that entire IP expenses related expenditure is now provided for. Now Q2 will not see any exceptional.
Srinivasan Gopalan
No, we will not see any though any of those exceptional coming out of IPO at least.
Nirav Shah
Okay. And lastly, I mean what’s the gross data, net net debt number, net cash number, gross debt and gross cash.
Srinivasan Gopalan
You can provide that gross debt as of now will be is around 113 crores. And we have cash in bank of around 300 crores. Sorry, 377 crores. Yeah. Yes, that’s the cash.
Nirav Shah
Got it. Thanks. Thanks sir.
Operator
Thank you. The next question is from the line of Vishwender Singh from Prudent Equity. Please go ahead.
Vishvender Singh
I wanted to ask a Q1 tax rate was around 19%. So what will be our effective tax rate for the full year?
Srinivasan Gopalan
What is the question? I couldn’t understand the question. Can you Repeat, sir.
Vishvender Singh
In Q1, sir, our tax rate was somewhere around 18 to 19%. So do you see the same going forward or do we go back to 25% tax rate?
Srinivasan Gopalan
I think projecting the tax number is not in my hands. I. We would assume if for the guidance reasons and for projections reasons you should take us if 25% as the number.
Vishvender Singh
Okay. Okay. Thank. Thank you.
Operator
Thank you. The next question is from the line of part Chauhan from Patel Investment. Please go ahead.
Unidentified Participant
Hello. Yes. Yes you are. Yeah. Thank you for the opportunity. I just had a couple of questions. First one is that we are majorly focused in three or four geographies. So moving forward, what kind of strategies or steps are we taking to increase it to more tier 2 and tier 3s as well in terms of geography as explained earlier in our previous call. Also it’s not a very conscious strategy where we want to spread across India in terms of tier 2, tier 3 cities. It’s really about the kind of infrastructure or construction activity happening across India. And mainly in metro cities where we are present, where we have a very strong and robust supply network at even an annualized number of let’s say 1000 to 1200 crore of revenue.
Srinivasan Gopalan
We’ve still barely scratched the surface. So it’s really not about spreading across India. It’s really about capitalizing in the areas that we are currently present and mainly concentrating on metro cities which actually offer much more potential in terms of growth and margins as well.
Unidentified Participant
Makes sense. The logistics will be better in tier one cities as well compared to the other ones. I mean, you know, our backbone is our supply network. It’s not like, you know, materials in retail quantities. It’s about the supply network that we have. And the stronger the supply network, the more we are able to fulfill and generate more returns. So that’s, we will, that’s something that we will look to concentrate on. Got it. And the second question is on the financial side. So we turned profitable recently. I just wanted to know moving forward after stabilizing, what would be the EBITDA margin and the PAT margin that we would like to, you know, consider sustainable on a long period of time.
Srinivasan Gopalan
So, you know, as explained earlier, you know, quarter one numbers give a fair idea of where we are headed in terms of the PAT. The recorded PAT was 5.1 crore. After absorbing a 2.5 crore IPO expense at an annualized rate that’s about 30 plus crore. Without any IPO proceeds being used and obviously with the debt repaid, there will be more EBITDA flowing into the PAT. So the guidance of maybe 4 to about 6% PAT is I think fair enough. As of now, we don’t want to project very aggressive numbers. And in terms of ebitda, I think we’ve recorded our highest ever EBITDA this quarter, which is just over about 9%. We will look to sustain that number as we grow and if we are able to do that, I think we’ll be generating substantial returns in terms of, for our shareholders. So 9% and 4% would be good numbers to, you know, calculate for the projections. Pretty much there, you know, hard to give you exact hard code numbers. Sure, that will work. For now. I get in touch with the team if I need any more help for the protection. Sure, sure. That is from, that is all from my side.
Unidentified Participant
Thank you so much and all the best. Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen. This was the last question for the day. I now hand the conference over to Mr. Srinivasan Gopalan for the closing comments. Thank you. And over to you sir.
Srinivasan Gopalan
Thank you all of you. Thank you once again for joining us today. We are extremely pleased with the progress that we have made this quarter. Reflecting in our highest ever EBITDA margin improved profitability and strong order book momentum. This performance underscores the strength of our integrated model and disciplined execution. Looking ahead, we remain committed to capital efficient growth, deepening our developer partnerships and driving long term value for all stakeholders. We appreciate your continued trust and support. We are a young company. We need your support over a long period of time. Thank you from all of us.
Operator
Thank you. On behalf of Aris Infra Solutions Limited, we conclude this conference. Thank you for joining us. And you may now disconnect your lines.