HG INFRA ENGINEERING LTD (NSE: HGINFRA) Q2 2025 Earnings Call dated Nov. 13, 2024
Corporate Participants:
Harendra Singh — Chairman and Managing Director
Rajeev Mishra — Chief Financial Officer
Analysts:
Saloni Ajmera — Analyst
Shravan Shah — Analyst
Vaibhav Shah — Analyst
Unidentified Participant
Vishal Periwal — Analyst
Ajay Surya — Analyst
Yoshowardhan Panka — Analyst
Uttam Kumar Srimal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the H.G. Infra Engineering Q2 FY25 Earnings Conference Call hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Saloni Ajmera from Go India Advisors. Thank you and over to you, ma’am.
Saloni Ajmera — Analyst
Good afternoon everybody and welcome to H.G. Infra Engineering Limited earnings call to discuss the quarter two and H1 FY25 operational and financial performance hosted by Go India Advisors. We have on call with us Mr. Harendra Singh who is Chairman and Managing Director and Mr. Rajeev Mishra the CFO from H.G. Infra.
We must remind you that the discussion on today’s call may include certain forward-looking statements and must be therefore moved in conjunction with the risk that the Company faces.
We now request Mr. Harendra Singh to take us through the Company’s business outlook and subsequent performance which will open the floor for Q&A. Thank you and over to you, sir.
Harendra Singh — Chairman and Managing Director
Thank you, Saloni. Good afternoon everyone and welcome to the H.G. Infra Engineering Limited earnings call for our quarter two and half-yearly FY25 numbers. As we reflect on the joyous celebrations of Diwali and welcome the new year, I would like to extend my warmest greetings to each of you.
I hope you have had a chance to review the investors’ presentation and the financial results which are now available on the exchange. I am pleased to share that our Company has built a strong legacy with decades of experience in India’s infrastructure space. We have formally established our leadership in the highway sector and successfully expanding our expertise into railway and solar projects.
Our focus on operational efficiency and execution has led to impressive performance across key matrices. Let me now provide some updates on the Infrastructure sector. Talking regarding Roads & Highways sector which has been a key focus for the Indian government and we expect this momentum to continue. Recently, the government approved highway project worth INR50,655 crores covering a length of 936 kilometers [Phonetic]. These projects are part of eight national high-speed corridor initiatives. By December, the cabinet is expected to clear projects worth INR2 lakh crores.
Although project award slowed in — has been — it’s quite slow in FY ’24 due to election delays, NHAI’s financial challenges and cost overruns, a strong recovery is anticipated in the second-half of FY ’25. More Plans to award around INR3 trillion in contracts during ’24, ’25 and has recently approved 215 kilometer of higher projects across multiple states valued at INR5,000 crores. Despite the slowdown in the bidding pipeline, we remain confident about the road and highway sector as a strong financial backing and supportive policies are set to drive rapid growth and modernization.
In Railway, the cabinet has given the green light to eight major railway projects with a total investment of INR24,657 crores, set to extend India’s railways network by 900 additional kilometers across seven states. This ambitious initiative supported the PM Gati Shakti National Master Plan, which focuses on enhancing multi-model connectivity across the country.
Significant opportunities are emerging in the Railway sector as well, especially in modernization infrastructure, key areas, including electrification, the development of high-speed corridors, multi-tracking and comprehensive station upgradation under Amrit Bharat scheme. Additionally, the introduction of metro line and metro neo systems in smaller cities aim to address light of traffic [Phonetic] needs efficiency. With INR2.55 trillion allocated to railway infractors, the government is planned for — also include the rollout of 50 high-speed Vande Bharat and Amrit Bharat trains in FY ’25. This gives us the ample opportunity to expand our presence in this sector.
In Renewable Energy, where the Rajasthan renewable policy targets 65 gigawatt of solar and significant wind energy capacity by FY 2030, emphasizing wind solar hybrid system for efficient resource use and grid [Phonetic] stability. Meanwhile, the Central Electricity Authority, that is CEA, projects of 34 gigawatt of battery storage that is 136 gigawatt hour by 2030, supported by the government fund scheme of INR3,760 crores of 4,000 gigawatt hour, this funding will boost renewable energy integration into a nation — into the national grid.
India’s renewable energy momentum has been significantly strengthened with the Ministry of New and Renewable Energy initiating annual bid for 50 gigawatt with solar energy comprising around 80%. This major push towards a solar-driven energy-efficient future presents EPC player with an annual opportunity of INR150 million crores — billion crores.
Looking ahead, solar energy will be critical in achieving India’s ambitious target of 500 gigawatts of renewable energy by 2030 with plans to hit 200 gigawatt by FY ’28.
Let me begin by sharing the journey in this quarter and providing you with a big glimpse of our operational highlights. As of first-half of FY ’25, our order book totaled around INR16,624 crores with a breakdown of INR12,326 crores of Roads & Highways, INR2,387 crores from Railway & Metro INR1,911 crores from Solar projects.
Our portfolio consists of 67% EPC and 37 — 33% HAM project, reflecting a well-balanced approach. We are currently active across 13 states, demonstrating a strong and diversified geographical presence.
Regarding the update of EPC projects, the Ganga Expressway project is 71.5% complete and progressing on-schedule and we expect to complete by end of this financial year. The Delhi UER [Phonetic] project has reached 97 — 96.4% where the completion has already been applied, which we expect during this quarter only. The Kalimandir Jamshedpur project is currently at its early-stage with a progress of around 3.7%. The appointed date for this project was recently received on 14 of September ’24.
Meanwhile, the new Neelmangala-Tumkur project, which stands at 26.5% due to land availability challenges, we are actively collaborating with NHAI to expedite regulatory clearance and are also discussing this potential settlement agreement for some pre-closure of this project with some de-linking and de-scoping and we expect the same to be closed before this — in this quarter only. The MSRDC project where the [Indecipherable] has been delayed mainly due to non-availability of adequate land possession.
Regarding the HAM project, the Karnal Ring Road project has achieved 46.1% progress. The Raipur-Visakhapatnam projects of OD5 and OD6 are progressing well at 79.1% and 86.6% completion respectively. The Raipur-Visakhapatnam project that is AP P1, which is 81.3%. The Khammam-Devarapalle project has achieved 59.6% in package 1 and 62.7% in package 2.
We would complete all these three projects of Orissa and AP and both projects of Khammam-Devarapalle that is KD1 [Phonetic] and 2 before March ’25 and will target — sorry, and by June ’25, the project of balance of the scope of completion of 45 will be done. The Chennai-Tirupati Package-II package is currently at the initial stage of fulfilling condition precedence. With financial measure achieved in September ’24, we anticipate the appointed date to be in December ’24. The Varanasi-Ranchi-Kolkata Package 10 and 13 of Jharkhand are currently in the advanced phase of land acquisition and forest clearance. Appointed date of these projects is anticipated in third and fourth quarter respectively.
Regarding the equity requirement of HAM projects which all 10 HAM projects requires INR1,468 crores. As of September 24, INR790 crores have been — have already been infused with a projected infusion of INR370 crores [Phonetic] in remaining six months of FY ’25 and balance will be infused FY ’26 and ’27, respectively.
Turning on to the projects of Railway, the DMRC project is at around — progressing well at around 63.9% and as this is running as per the scheduled timeline. The Bilaspur Himachal Pradesh railway project of RVNL, 42.8% is being completed and now we are on-track on targeting as the completion within the timeline. The Kanpur Central Railway project is 10.3% complete and there has been some clearance issues of land and utility in — which is now settling down.
The appointed date of Dhule-Nardana Railway project, which was received on 4 September ’24 is currently at 4% completed. The Karanjaon and Gaya-Son Nagar railway station project where the appointed date was declared on 22 June, they are around 3.3% and 2.4% completed respectively.
Regarding the Solar project, during the financial year, we strategically capitalized on the promising opportunity in the rapidly-growing Solar sector by actively pursuing and securing Solar power projects under the [Indecipherable], a government initiative aimed at promoting the development of renewable energy across India. As a result — result of these efforts, the Company successfully acquired a total of [Indecipherable] solar power plant, collectively contributing a substantial capacity of 740 [Phonetic] megawatt of PV. Of this total NG scope of one covered 167 plant representing a total capacity of 638 megawatt with an estimated EPC value of INR2,243 crores, which is — excluding the GST.
The land agreement for these projects are progressing well with more than 50% of the required land already leased. The Company is actively working on identifying and securing the remaining land parcel with the expectation that all land leases will be finalized in the coming quarters. As of now, the execution of this project stand at 14.8% with the work progressing smoothly and in-line with the project timelines. The debt funding of Solar projects will start rolling out from this month only and will be concluded in next two months, fulfilling our debt requirements for the set projects and all the PPA will be signed with authority by December ’24.
In terms of funding, the total equity requirement for these solar projects is estimated at INR732 crores. And as of September 30, 2024, just INR3.5 crores has been infused in this project. It is estimated that additional INR350 crores will be infused during this financial year that is ’24 ’25 and will the remaining balance to be contributed in FY ’25, ’26. This structured capital infusion plan ensures that the Company can maintain the financial flexibility needed to meet its project milestones while supporting the long-term growth of its solar energy portfolio.
Let me now share other significant updates of quarter two-and-half yearly FY ’25. In Q2 FY ’25, we successfully secured two HAM projects. Those are newly declared 84 Kosi Parikrama Marg in UP with a BPC cost of INR763.11 crores and upgradation of six lanes from Narol Junction to Sarkhej Junction Gujarat were up at INR781.11 crores.
Additionally, we recently has been selected as a successful bidder by NTPC Vidyut Vyapar Nigam Ltd for 185 megawatt, that is equal to 371 megawatt-hour within a share of 400 megawatt project, this will be a tariff rate of at 38,000 per megawatt per month expected to yield annual revenue of approximately INR52.83 crores. Over the tenure of 12 years, this project is projected — this project is to generate a total revenue of around INR633.96 crore for HG.
The COD for Kundal to Jhadol Package 1 in Rajasthan was received on October 2024. The COD of Nandurbar – Prakasha – Khetia in Maharashtra was received on 10 July 2024.
Now I will provide you an overview of financial highlights of Q2 and half yearly FY ’23. The standalone financials in-quarter two FY ’25, our revenue from operations grew by 22.4%, reaching INR1,064 crores, up from INR869 crores in Q2 FY ’24. EBITDA for the quarter stood at INR174 crores with a margin of 16.4% compared to INR138 crores and a margin of 15.9% in the same-period last year. Profit-after-tax for Q2 FY ’25 was INR89 crores, reflecting a margin of 8.3%, an increase from INR62 crores and a margin of 7.1% in Q2 FY ’24. The revenue for half yearly FY ’25 stood at INR2,570 crores, marking a 20.1% year-on-ye increase compared to INR2,141 crores in first-half of FY ’24.
EBITDA for the half yearly stood at INR418 crores with an EBITDA margin of 16.3%, showing a 21.7% growth from INR343 crores in first-half of FY ’24. PAT for the half yearly stood at INR228 crores with a PAT margin of 8.9% compared to INR180 crores and a margin of 8.4% in half yearly FY ’24. On a standalone basis, our gross debt stands at INR884 crores. This comprises INR279 crores in working capital debt, INR58 crores from term-loan and current maturities and along with INR16 crores of NCLE.
There has been significant increase in the working capital and term loans to accelerate the solar power project progress and the bridge funding requirement for the procurement of solar modules and inverters and other groundworks. The same was also needed to give momentum to the progress of Highway, which was slowed down due to erratic and good rainfall during the monsoon.
Moving on to the consolidated number, in Q2 FY ’25, our consolidated revenue from operations stood at INR902 crores compared to INR955 crores in Q2 FY ’24 and EBITDA remained steady at INR220 crores with the margin improved to 24.3% from 23.1% in the same quarter last year. PAT at Q2 FY ’25 was INR81 crores with a margin of 8.9%, down from INR96 crores and a margin of 10.51% in Q2 FY ’24 and for half yearly FY ’25, we reached a revenue of INR2,430 crore, reflecting a 5.4% year-on increase from INR2,306 crores of half yearly ’24, EBITDA stood at INR532 crores with a margin of 21.9%, up slightly from INR501 crores and a 21.7% margin of the same-period last year. PAT for first-half FY ’25 was INR243 crores with a profit margin of 10% compared to INR247 crores with a margin of 10.7% in half yearly first-half FY ’24.
On a consolidated basis, our gross debt stands at approximately INR2,404 crores. Just the reason for dip in revenue and PAT in consol as for the inter group transactions between SG and SPVs related to solar project. We eliminated our consol financials. As a result, revenue and expenses from these projects do not appear in the consolidated P&L statement, but are recorded as a capital work-in progress under [Indecipherable].
At the standalone level, HG Infra recognizes revenue from EPC work and saves tax on this income. However, in the consolidated accounts, both revenue and cost from these intercompany transactions are amended. Reducing the overall figures and margins compared to the standalone financials, the tax expense in these earnings remains impacting consolidated margins negatively until the SPV generates its revenue from unit production. Once revenues start flowing, this effect will reverse, improving the consolidated financial performance. This is an update regarding the monetization of four [Indecipherable]. As informed earlier, we have successfully monetized our three projects on Gural Sona [Indecipherable], against this consolidation of INR315 crore received in FY ’23-’24 only and INR54 crores received in October ’24 post-approval of NHAI related GST change in the opening.
Regarding the fourth HAM project that is Rewadi bypass, NOC was received from NHAI and lenders in March ’24. The compliance with SPV condition is in-progress and expect to — and expected to complete by ’24. That is around INR145 crore, including the residual amount of INR6 crore of first tranche expected to be received from Rewadi bypass proceeds where we have invested equity of INR275.7 crores.
We are targeting an order inflow of between INR11,000 crores to INR12,000 crores for FY ’25 until date we have successfully secured approximately INR5,500 crores in projects from highway sector and around INR780 crores from solar sector. We are confident to maintain an EBITDA margin of about 15% to 16% and achieve revenue growth of 17% to 18% in the upcoming quarters. Furthermore, we are actively pursuing opportunities in new segments where concentrating an operational efficiency, prudent capital allocation and a strategic project selection to sustain margins and enhance shareholder value.
With that, I conclude the update in Q2 and half yearly FY ’24 and open the floor for question-answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, sir. Sir, just to clarify, you said that 17% to 18% revenue growth in coming quarters. So does that mean in the second-half, we are looking at 17% to 18% growth?
Harendra Singh
So overall, as we are targeted about INR6,000 crores, which — of INR5,100 crores is around 18% to 19%. So we have already has around touched around 20% growth in first-half and we are targeting to see that number coming in around INR6,000 crores as an entire year top-line.
Shravan Shah
Okay, okay. And then for — even going-forward, the similar 15% plus kind of a growth is can be, can be looked at.
Harendra Singh
Yeah, for the across the years.
Shravan Shah
Okay, got it. Got it. And in terms of the order inflow, so we have already, I think if I total it close to INR6,280 odd crore, I think we have received. So now remaining INR11,000 crore INR12,000 crores, so how much are more we looking from the Road, how much we have already bided? Previously, we have mentioned that we have bided in the Road, Railway, all this. So if you can help us in terms of how much we have already bided in each sector, Road, Railway or maybe any other sector and how much more are we planning to bid and how much in terms of broadly we are looking from the inflow in the Road, Railway and Solar or Water.
Harendra Singh
So as far as roads are concerned, we are already say awaiting the results, which bided around INR21,000 crores per project. So the results are yet awaited. And railways around INR7,400 crores being — we have already been bided. So for — as of now, solar also we have bided around, say, INR1200 crores. So again, these are the projects which results are yet awaited. Apart from the bidding pipeline, if we see that the — in Highway, of course, it has been delayed, but we are looking at about, say, INR74,000 — INR75,000 crores of project pipeline, which for us we have taken into consideration for NHAI as well as more projects.
In Railway also, we have identified INR25,000 crores which are yet to be bided, where the project pipeline is there for the new projects. And for Solar, we are looking to the opportunity where battery storage — energy storage bests as well as hybrid projects are yet to be and even few of the projects where segregating the same speeder is being invited by government on the HAM model.
Shravan Shah
Okay. So in terms of value would be broadly how much for Solar?
Harendra Singh
Solar is about, we are looking at about INR10,000 crores to be bided in the bid pipeline, which is already visible.
Shravan Shah
Okay. Okay. Got it. Got it. Just a couple of things. So in terms of the — whatever the pending appointed date is there, if you can help us project-wise when whatever the projects are pending for appointed date, when the appointed date likely to be received?
Harendra Singh
Yes, as of now the project like Jharkhand and Tirupati. So these are the projects which in any case by December, we are expecting to get the — receive the appointed date for project 10 — 13 of Varanasi Ranchi Kolkata, package 13 as the Tirupati and followed by package number 10 of Jharkhand in March quarter.
Apart from this, we have two new projects which are current situation and condition need to be set. For these two projects, the point is likely to happen in-quarter one of FY ’25-’26 only. [Speech Overlap]
Shravan Shah
Okay, got it. And in terms of the [Technical Issues]
Harendra Singh
Yes. And the project of Maharashtra where the LOA we have not released, which in any case, it’s 70% of the land, which is the condition set for issuance of LOA, which will be [Speech Overlap] by January, it will be completed post that only the LOA will be issued and followed by the appointed date.
Shravan Shah
Okay. So most likely MSRD — MSRDC revenue should be very, very, very less revenue in this year. So execution will be in FY ’26 onwards.
Harendra Singh
This year hardly there can be any single percentage of execution possible in those projects.
Shravan Shah
Okay. And lastly, just a data point, the equity requirement in HAM or in FY ’26 and ’27 and retention money, mobilization advance and unbilled revenue.
Harendra Singh
[Speech Overlap] equity is concerned, around INR790 crores already done, balance of INR670 crores. In FY ’25 is INR370 crores and followed by INR177 crores and INR131 crores in ’26 and ’27. In Solar, it is INR728 crores. This is — in ’25, it is around INR300 crores followed by INR428 in FY ’26. This is what about — and what about the mobilizer [Speech Overlap] is built to INR239 crore.
Shravan Shah
Unbilled revenue and retention money?
Harendra Singh
The retention money is INR110 crores in all the projects and debtors is INR1,035 crores. That includes our retention. [Speech Overlap] Solar, SPV unbilled as well as SPV ram and say one of the fierce approval which is yet awaited in Ganga Expressway has gone up to INR1,353 crores.
Shravan Shah
INR1,315 crore is of unbilled revenue?
Harendra Singh
Yes.
Shravan Shah
Okay. And lastly, sir, the date has increased. [Speech Overlap] Okay. No, no issue. No issues. All the best.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the Management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow-up questions, you can rejoin the queue.
The next question comes from Vaibhav Shah from JM Financial Limited. Please go-ahead.
Vaibhav Shah
Sir you mentioned that the solar order inflow for the year is around INR700 plus crores — INR780 crores. So last quarter, the order book was around INR1,700 crores and this quarter if you look at the order book, it’s around INR1,900 crore. So I have seen the order inflow of — for 83 megawatt solar projects in Jodhpur, which was INR409 crores. So apart from that, which is the other project beyond the ultra vibrant solar energy project?
Harendra Singh
So this is one project which we have received during the year only is the NTPC best also this has contributed to it.
Vaibhav Shah
So that is now a INR300 crores.
Harendra Singh
Sorry?
Vaibhav Shah
What is the value of that project?
Harendra Singh
This is around INR450 crores.
Vaibhav Shah
Okay. NTPC Vidyut Vyapar Nigam, that project?
Harendra Singh
Correct, correct.
Vaibhav Shah
Okay. Okay. And sir, we have seen that EBITDA margins have been quite good in second-quarter as well and we have done significant execution on solar side as well in the first-half of around, 14%, 15%-odd percent. So how have been the margins in the Solar segment so far?
Harendra Singh
And Solar has showed us the significant good margins around 18%. So that’s why we have seen a significant jump during this quarter where Solar execution is around INR262 crores, which is being executed that has been executed during the quarter only.
Vaibhav Shah
So are these margins sustainable ahead in the Solar segment?
Harendra Singh
Yes, Solar margins because of there are two, three reasons. One is the stabilizing at price of PV modules that is very low now and we have all booked the orders and that is why we have taken that the order has been booked at without say price escalation also. So this gives us a sensible reasons and the margins would be in this range only for the entire balanced completion of these projects.
Vaibhav Shah
And lastly on the Railway side, how are the margins?
Harendra Singh
Railway do have the margins about 10% to 12% in every of the project except for Metro DMRC where the margins are 3%, rest all — because it is very small portion which is INR100 crores value, but rest all projects do have the margin of about 12%.
Vaibhav Shah
I didn’t get that, DMRC project is 3% margins.
Harendra Singh
Yes.
Vaibhav Shah
Why the margins are so low at 3%?
Harendra Singh
There has been some issue with respect to the design and with respect to the sewer line underlying. So because of that, there have been time overrun and the cost of overhead increased, which we anticipated in the similar way when we are doing Railway or Highway projects so cost of overheads which remains around 6% then this project is way up at about 12% to 13% because of very less production every month.
Vaibhav Shah
Okay. So initially when you bid for the project, the margins were in the 10% to 12% range but it [Speech Overlap]
Harendra Singh
8% to 10%. Yes. Yes.
Vaibhav Shah
Okay. Okay. Thank you, sir. I will come back-in queue.
Operator
Thank you. Requesting all the participants, please restrict your questions to two. The next question comes from Maximal Capital. Please go-ahead.
Unidentified Participant
Yes, good afternoon, sir. Sir, firstly, now when you see your consolidated numbers, these are quite low compared to the standalone number. So you’re knocking off the related-party sort of transactions, right, which your one entity, standalone entity doing the EPC work for your Solar entities. That is the reason, right?
Harendra Singh
That is the reason in all Solar projects was these project being commissioned. So till the time whatever execution is happening as per the top-line, which is coming into standalone of HG Infra where the margins are also there. But in consolidation, the margins are totally eliminated, but there the tax liability also is there. So this is the top-line and bottom-line net effect, which in this quarter which is around INR62 crores of bottom-line is being affected, because this will happen for subsequent quarters as well. So this is — this will come back as a call correction once we commission and start billing the project — billing the tariff.
Unidentified Participant
So the overall impact, sir, how much — you mentioned INR62 crores was the overall impact on profit before-tax or profit-after-tax?
Harendra Singh
[Speech Overlap] Profit after tax, INR62 crores is a profit PAT impact, which we have seen during the quarter.
Unidentified Participant
INR52 crores, sir?
Harendra Singh
INR62 crores.
Unidentified Participant
INR62 crores. So it would have been INR140 crores-odd instead of INR80 crores?
Harendra Singh
Yes because — yes, definitely this has impacted, this is absolute number which I think.
Unidentified Participant
Yes. So net of this impact, it could have been INR140 crores instead of INR80 crores, which is reported.
Harendra Singh
But this is the accounting standard which always would be coming in such kind of a Solar project. So Solar projects and BOT projects, they do have a different set of the accounting standards.
Unidentified Participant
Understood. And sir, you mentioned about higher solar margins, right, which you are anyway knocking off. So this is because they are related parties. So in that sense, because these are all related-party contracts, then what is the sanctity of the 18% margin in this contract because you may get higher margins from your other party because that is any as a related-party. So how should we read those margins?
Harendra Singh
So in any case, any project being executed for SPVs or rather for HG holding companies. So they are all the subsidiaries where the contract is awarded to HG Infra and HG Infra who is doing the project where the entire procurement to bought up items to execution and the EPC is there. So put together, there is a margin there. So we are keeping a balance of the margin — the equity IRR, which is more important as well as the EPC margin to HG infra.
Unidentified Participant
And net of all this, sir,
Operator
Sorry to interrupt.
Unidentified Participant
Yeah, just let me finish this line.
Operator
There are several other participants waiting for.
Unidentified Participant
Yes, just finishing just allowing this question. So because he mentioned equity IRR, sir. So what is the target equity IRR, including the EPC margins and the cash flows that will occur in the BOT of solar?
Rajeev Mishra
So if we consider that the equity IRR along with the EPC margin would be roughly around 30%, 32%.
Unidentified Participant
Okay. Thank you, sir. I’ll join back.
Operator
Thank you. The next question comes from Vishal Periwal from Antique Stock Broking. Please go-ahead.
Vishal Periwal
[Technical Issues]
Operator
Vishal, sir, your line is unmuted. Please proceed with your question.
Vishal Periwal
Yes, is this audible now?
Operator
Yes, sir.
Vishal Periwal
Yes, yes. Okay. So this is regarding your one slide in which you mentioned the L1 order that you received. Say for the Ultravibrant client in EPC mode, the solar plant that we are building in. So this is — the EPC project costs include the — even the module and the cell that you need to procure or it’s only the EPC work, the civil — I mean, how exactly the structure?
Harendra Singh
So the project of 83 megawatt, they are acquired from Ultravibrant. So once we have acquired the project for the entire acquisition cost being paid. And post that whatever EPC including solar PV modules and inverter, transformer, everything is included in the cost.
Vishal Periwal
Okay. So basically then the cost works out to be like INR4 crores — INR4,90 lakh per megawatt. So that is — I mean like that’s your last assumption in this particular element order, right?
Harendra Singh
Correct.
Vishal Periwal
Okay. And similarly for this NTPC one, the INR370 crore project cost which is there. So this includes your battery or it includes only the — how exactly this one is.
Harendra Singh
No either this includes battery as well as some bought out other than battery items, which are inverters and others creating that infrastructure of service station.
Vishal Periwal
Okay. So I mean generally like these — I mean NTPC order that you’re saying, even the IRR will be what upward of, 13% 14% equity IRR and then plus EPC margin will be there. Is that fair way to understand?
Harendra Singh
Yes, that is again a similar fashion. The EPC margin are around 14% and the equity IRR is against 14%.
Vishal Periwal
Okay. Okay, okay. And maybe one last thing from my side. I think you — initially you touched upon like the PMO in the road side, they have done an approval of INR50,000 crore worth of order. So anything that you’re hearing like when this will see a light update in terms of tendering because this is — this was approved long back, but not heard anything in terms of award?
Harendra Singh
So one is the cabinet — cabinet approval of the project where any greenfield or any such kind of a project put to for approval. But post the approval, this is the second part which is the SSC approval, which is now say the committees which we are going to approve, the DPRs and everything. So this now keep on a strong and fast pace is being done. So we are expecting right after this November also, in December, January, February, everything which they have then the planned 5,000 kilometers is likely to be a rollout health to be awarded.
Vishal Periwal
Okay. Okay. Sure, sir. I’ll come back-in the queue for more. Thank you.
Operator
Thank you. The next question comes from Ajay Kumar Surya from niveshaay.com. Please go-ahead.
Ajay Surya
Sir, thanks for the opportunity. Sir, I’m new to the Company, so just wanted to understand on the custom order which we have got. So we have got an order of around 700 megawatt over INR1,800 crores to INR2,000 crores. Sir, if you can help me explain — understand the working of this order like it is a part of kusum component fee FLS the fielder level solarization and we’ve commented that we have started ordering the modules and other components. Sir, will the pumps will also get changed in the FLS part? If you can help me understand or give some thoughts on the working of this Kusum components, the order which we have won? And sir, and we have been hearing the pace of execution in this yojna has been pretty slow compared to the kusum component B. So if you can also highlight the problems we are facing maybe in terms of acquiring the land or getting any regulatory approval. So if you can just show what is working in the industry as of now, that will be very helpful.
Harendra Singh
So in this sector as a kusum C where we need to align the land which is being taken on the lease basis, say almost 50% of the land parcels already in-place and we have all started — they all — wherever we are having the land in-place, we have already started the project. Around 60 to 65 days, we usually are looking or seeing that once the project being started, the completion is happening and then 15 to 20 days more for the commissioning. So this we are seeing that if the land availability is insured, then most of the 88% to 89% of any problems and any dynamic problems remains settled. And other regulatory affairs where the PPA is being signed and we are receiving that SPV and PPA. So these are the regulatory things which are happening parallelly. So in France [Phonetic], as well as PV modules and inverter transformer, we have already orders where the — all such built chunk of supplies should be aligned well with the completion.
So this we have done and within last three months, say most of those things being done, design being done. So now the progress is on-track. We believe that, say, in the month — in the quarter of December, January and March and June, so most of this project will be completed.
Ajay Surya
And sir, in the FLS part, are the pumps also getting replaced or it’s unlike — like the pumps are not getting replaced, it’s only the electric pumps which are getting solarized.
Harendra Singh
No, no, these are not pumps. They are nothing related to electric pumps. This is related to the power, the energy which we are producing, the power is to be sell to the nearest grid substation of this comp. So it’s very nearby, just one and a half kilometer of transmission line is to be laid in.
Ajay Surya
Okay, sir. Sir, my next question is on.
Operator
Sorry to interrupt Mr. Surya, may we request you to return to the question queue for follow-up questions.
Ajay Surya
Yes, sure.
Operator
Thank you. The next question comes from Yoshowardhan Panka [Phonetic] from Tiger Assets. Please go-ahead.
Yoshowardhan Panka
Hello, sir. Thanks for the opportunity. Sir, are we looking at any recent with upcoming government orders?
Harendra Singh
Sorry.
Yoshowardhan Panka
Are we expecting any upcoming government orders?
Harendra Singh
Government orders?
Yoshowardhan Panka
Yeah.
Harendra Singh
So what kind of government orders are the orders which we are — the project which we are bidding. already In continuation, we already are bidding the project. But as of now, there is no result yet awaited to what are the results, which I just expect that in highways around INR20,000 plus crores and railways 7,000 or on projects where the results are yet to be declared.
Yoshowardhan Panka
Okay. Thank you.
Operator
Thank you. The next follow-up question comes from Maximal Capital. Please go-ahead.
Unidentified Participant
Hello. Hello.
Harendra Singh
Yes.
Unidentified Participant
Yes. Sir, on the railways part, you mentioned that the margins are 10% to 12%. So that is significantly below the Company average. But on the capital side, is it more capital-efficient in terms of the cash flows or what is the benefit apart from diversification that we are getting by aggressively getting into that project.
Harendra Singh
So in railway project, one thing is very unique. It’s not that the — say there is a big difference between the capital allocation or working capital cycle. It’s almost similar as in highway EPC. But very important is if we are looking at the projects where the weighted margins are very important, it can be HAM highway road projects and then highway EPC projects. And then highway EPC projects, which we are having a similar kind of a margin around 12%, 13%, even in a project like Ganga Expressway, which we are doing, it’s a similar kind of a margin. So in the EPC margin range are based only.
In HAM project, the margin is in a range of around 19% and in solar also our margins are around 18% because put together weighted-average is around 15% to 17% — 16%.
Unidentified Participant
Okay. And the four assets that we have sold, so I think the price-to-book on that was around 1.4. But on our invested equity, what kind of IRRs were we able to get including the EPC margin that we had accrued early?
Harendra Singh
So as far as EPC margins, this is a total different subject that HG Infra usually is executing the project on an EPC lump-sum model only and first for including the price escalation or including anything with a plus side or mine. So this is one-way when we are calculating the margin for coming to EPC to HG infra, coming from EPC to HG infra. And regarding the equity IRR, which we all have seen in the earlier past that wherever at such kind of a HAM project or solar projects, we are usually maintaining about 14% of our rough guidance that we should get equity IRR over 14% to 15%.
Unidentified Participant
Okay. Thank you, sir. All the best.
Operator
Thank you. The next follow-up question comes from Ajay Kumar Surya from Niveshaay. Please go-ahead.
Ajay Surya
Yes, sir. Thanks for the opportunity. Sir, my question is on-again the kusum competency. Sir, if you can also explain us the tender, how are those awarded? So is it the L1 gets the order or is it some technical qualification which are required, which is providing an advantage to HG Infra in winning the orders.
Harendra Singh
As per earlier, the strategic partner was there. So we partnered with a technology partner while we bid for those projects in last year only. Now in Kusum C, there is a different model where the mandatory use of DCR. So now the projects are of a totally different model. So we are not in it at all participating in such kind of orders in this financial year also. So we are looking into the newer opportunities coming in where kind of a segregation of the distribution and networking with the best projects, which is a battery energy storage solution. So such as projects are now in pipeline.
Ajay Surya
Okay, sir. And sir, if you can also throw some light on the opportunity size, because if I look at the — our order book as of date, solar orders are around 9% to 10% of our order book. If you can also explain the opportunity size which lies in either the Kusum competency for SG Infra or the overall Solar scheme of things which are happening across the country?
Harendra Singh
So right now, as far as the total order is concerned, it was 14.5% are the solar orders. And apart that, as I already has explained that we would not be very keen on adding more of the Kusum C, but in — again as we are looking into some hybrid kind of a project where it can be battery to solar. So there is a round the clock power to be generated. But then again, there are tenders which we would like to set-up some power projects, power plants and it — had it be kind of a PPA from or government also is inviting some projects on a HAM model. There are the EPC projects. They are all EPC.
Ajay Surya
Okay, sir. All the best for future.
Operator
Thank you. The next question comes from Uttam Kumar Srimal from Axis Securities Limited. Please go-ahead.
Uttam Kumar Srimal
Yes, sir. Good afternoon and thanks for the opportunity. Sir, currently, we have already diversified from Roads to Railways to Solar and to Power also. So are you also looking to diversify to power transmission segment as such there has been lot of traction from the government in this particular segment.
Harendra Singh
So we have all — technically our team is examining such kind of a project where the — because they are against such kind of a project where the transmission or bought out lines are there, then the ROW constraint is again the limiting factor which such kind of a project because the project being delayed in earlier part because of the ROW also. So the government is also helping and keep giving the new guidelines for ROW procurement also. But we are working on it. As of now, we do not have any project pipeline where we’ve been bidding at least.
Uttam Kumar Srimal
Okay. And sir, how is the competitive intensity currently in both EPC and HAM project?
Harendra Singh
I think not many projects have been awarded — have been bided rather, but for sure, there are the cost-cutting and aggression has been seen in Highway, but there are chances that the disqualification criteria and something is going to be changed very soon in highway as well.
Uttam Kumar Srimal
Okay. And sir what would be our capex guidance in FY ’25 and ’26?
Harendra Singh
Not much of a capex is required because the project which we are operating it had been Railways or Solar, we do not have such a capex, big capex requirement. Highways we do all — already having the big already mid-sized fleet which is available. So hardly there will be INR30 crore to INR35-odd crore, which is likely to be there in case of requirement — any such requirement for the year.
Uttam Kumar Srimal
Okay. Okay, sir. That’s all from my side and all the best.
Operator
Thank you. The next question comes from Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, sir. Sir, just to clarify, did you mention that Solar order book of INR1900 odd crore which is there will be completed by June ’25?
Harendra Singh
Around 90% of this will be completed.
Shravan Shah
Okay. Okay, got it. And sir, our debt has gone up to INR884 odd crore to INR62 crore in Q-o-Q. So previously we were looking at INR500 crore to INR600 crore kind of standalone debt.
Harendra Singh
So I already had explained in my remarks that because which we were very — it was very important for us to block the module at a fixed-price as well as transformer inverter and all cable items. And so these are the all the items which we have booked up. That’s why for the huge advances have been paid as well as what we have executed in Solar. So we have seen that the entire solar is either unbilled or it is or say yet to be received as a debtor rebalance. So this is because of meantime arrangement, but it will be all coming back to the normal level in Q3 and Q4.
Shravan Shah
Okay. So by Q3, Q4, it would be — again, we’ll be back to INR500 crore, INR600 odd crore.
Harendra Singh
Yes, yes.
Shravan Shah
Okay. Okay. Okay. Yes. Got it. Thank you.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to the Management for closing comments.
Harendra Singh
Thank you. I appreciate you all for taking the time-out for attending today’s investor call. And I hope all of your questions were answered adequately. In case there are still any follow-up queries, please feel free-to reach-out to us on our IR advisors, Go India Advisors. Thank you.
Operator
Thank you. [Operator Closing Remarks]