HG INFRA ENGINEERING LTD (HGINFRA) Q2 FY23 Earnings Concall Transcript

HG INFRA ENGINEERING LTD (NSE: HGINFRA) Q2 FY23 Earnings Concall dated Nov. 11, 2022

Corporate Participants:

Rajeev Mishra — Chief Financial Officer

Harendra Singh — Chairman and Managing Director

Analysts:

Sana Kapoor — Go India Advisors — Analyst

Shravan Shah — Dolat Capital — Analyst

Mohit Kumar — DAM Capital — Analyst

Parikshit Kandpal — HDFC Securities — Analyst

Ashish Shah — Centrum Broking — Analyst

Jiten Rushi — Axis Capital — Analyst

Romil Jain — Electrum PMS — Analyst

Nikhil Abhyankar — DAM Capital — Analyst

Sarvesh Gupta — Maximal Capital — Analyst

Jiten Parmar — Aurum Capital — Analyst

Prem Khurana — Anand Rathi Share — Analyst

Uttam Kumar Srimal — Axis Securities — Analyst

Franklin Moraes — Equentis Wealth Advisory — Analyst

Mudit Jain — Hem Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the H.G. Infra Engineering Q2 FY ’23 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. Sana Kapoor from Go India Advisors. Thank you, and over to you.

Sana Kapoor — Go India Advisors — Analyst

Thank you, Inba. Good morning, everybody, and welcome to H.G. Infra Engineering Limited earnings call to discuss the Q2 and H1 FY ’23 results. We have on the call Mr. Harendra Singh, Chairman and Managing Director; Mr. Arvind Khandelwal, President, Strategy; and Mr. Rajeev Mishra, Chief Financial Officer.

We must remind you that the discussion on today’s call may include certain forward-looking statements and must therefore be viewed in conjunction with the risks that the company faces. May I now request Mr. Harendra Singh to take us through the company’s business outlook and performance, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.

Harendra Singh — Chairman and Managing Director

Yeah. Thank you, Sana. Good morning, ladies and gentlemen. Thank you for joining us on Q2 and H1 FY ’23 earnings call today. Hope you all are in high spirits and keeping fine. I trust that you would have looked at the earnings presentation uploaded on the exchanges and company’s website. As you would have seen from our presentation, there has been another good quarter for the company, and that is despite being weak quarter across the sectors due to the prolonged monsoon.

As a listed company, over the last five years, we have ensured that all our efforts are in a direction which create superior shareholder value, and we will continue to focus on building sustainable long-term value for them. Our strong focus is always on growing bottom line, maintaining strong balance sheet and selection of high-quality projects to augment our order book.

Let me give you some update on the infrastructure, first of all. Taking on the whole [Phonetic], as you can see that coming to the NHAI tendering status, NHAI has set full year target of 5,500 kilometers of road projects to be awarded this year, which is a bit slow in the first half of this financial year, which is likely to pick up in the second half of this year, which gives us the opportunity for bringing new projects and further spending of our order book as a priority sector.

Railways, as there are a lot of development in railways, which are announced in the recent past. A total of 1,253 railway stations have been identified for development on the Adarsh Railway Station scheme, that is modern railway station, modernization of railway station. As many as 199 stations are likely to be awarded this year. So we have bidded for few and we are likely to build many in this sector.

Apart from this, other track doubling and high-speed network corridors are all there, which are to be developed and they are at the [Phonetic] DPR stage. Water is again our priority focus, which we, again, are looking at to bid under JJM in Rajasthan, UP and MP states. All these developments will give a lot of opportunity to us to enter into this segment and diversity our business beyond groups.

Let me first start with quarterly financial performance. So during the quarter, we reported a revenue of INR752.1 crore. At a stand-alone level, this revenue for the corresponding period last year stood at INR753.2 crores. The EBITDA stood at INR120.8 crores in Q2 FY ’23 and EBITDA margin stood at 16.1% in Q2 FY ’23.

The EBITDA margin stood moreover at the same level vis-a-vis last year despite increase in the cost of materials, but are driving with better operational efficiencies, strong execution capabilities, has been leading with the cost and margins. Profit before tax for Q2 FY ’23 stood at INR86.24 crores and profit after tax for the same period at INR64.6 crores.

Now coming to the half yearly financial performance at a standalone level. Our total revenue for H1 FY ’23 stood at INR1,817.74 crores, an increase of 9.05% year-on-year as compared to INR1,666.81 crores in H1 FY ’22. EBITDA stood at INR283.20 crore as compared to INR275.8 crore same period last year. EBITDA margin at H1 FY ’23 stood at 15.6% and PAT stood at INR162.3 crore for H1 FY ’23 as compared to INR158.80 crores during the same period last year, and PAT margin for H1 FY ’23 stood at 8.9%.

Our total gross debt as on September 30, 2022 stood at INR392.2 crores at a stand-alone level. This includes working capital debt of INR42.4 crores and term loans plus current maturities of INR349.8 crores. That also includes payable under MSME trade receivables at INR66.6 crores and NCD of INR97 crores. Our total gross debt at consol level stood at INR1,425.3 crores, which includes project debt of INR1,033.1 crores.

I will now briefly cover our key updates on our operational highlights of prominent projects. Our total unexecuted order book stood at INR10,851 crores as on September 30, which — with our presence in nine states of the country and it is well diversified with 64% of the EPC projects and 36% HAM projects. We are pleased to inform you that we have recently received the appointed date as November 3, 2022 for our most prestigious Ganga Expressway project, where almost 94%-plus land is available and we have started the execution in this project.

Coming to the progress of other major EPC projects. In Delhi-Vadodara Package 8, we are inching towards the completion of the project as we have made good progress and have completed around 92%. We expect the project to be completed in this quarter, say, quarter three. In Delhi Vadodara Package 9, where we have completed around 81%, we expect the project to be completed by February ’23.

In the Mancherial project of Adani, we have completed around 72% and applied for PCoD, which is likely to be received in November ’22, and the project is expected — and that project is expected to be completed in Q4. In UER Package 1, Karala-Kanjhawala of Delhi, we have completed 27.4% of the work, which is running as per the scheduled time lines. In Neelmangala-Tumkur project, we have mobilized our resources at project sites and execution work has been done, post the appointed date, which is August 25, ’22.

Coming to our HAM projects under execution, which are also progressing well as per the scheduled time line. In Rewari Bypass HAM project, we have completed around 86%, and we are moving ahead for project completion as per the scheduled time line. In Raipur-Visakhapatnam AP 1 corridor, we have completed 13% of the project. Further in two HAM projects of Raipur-Visakhapatnam corridor, Ladakh-Orissa Packages 5 and 6, we have completed about 8.4% and 12% respectively.

In Khammam-Devarapalle Package 1 and 2, we have received our appointed date on September 30, 2022 for KD Package 2, and post our financial closure declared on September 15, 2022 for KD Package, the appointed date is likely to be declared very soon. We have started the project verification in these projects post all these developments. Almost 80%-plus land is available in these two projects. For all HAM projects, we have a total equity requirement of INR1,137 crores that is projected till FY ’25. Out of this total amount, we have already invested INR609.54 crore as on September 30, 2022. And we project to invest some INR200 crores in this beginning part of this financial year.

It is important to update the other significant developments of projects and at our national level. We have received the completion certificate for Gurgaon-Sohna HAM project in September. That’s where we received the PCoD date as Febriary 25, 2022. For this Narnaul Bypass, we received the COD letter from the RD [Phonetic] where the completion was — PCoD was March 11, 2022.

At this point, I feel immensely proud and blessed to share that we have been awarded as the fastest-growing construction company in medium sector in October 2022 at the Construction World Global Awards 2022 basis our financial indicators of last five years, which shows our strong presence and recognition in this sector.

Our guidance on the bidding outlook and the business opportunities [Phonetic], we are very positive on the sector outlook and opportunities in the second half of this financial year as covered in my opening remarks that tendering is expected to show a strong pick up, which gives us the opportunity for winning new projects and further expanding of our order book. We are all aware that government is taking numerous initiatives in various infrastructure development program, including the National Infrastructure Pipeline, the [Indecipherable] program that will give thrust to this sector and ample opportunities on the players like us. We at H.G. are readying ourselves for the next level of growth through various steps.

Like in last quarter, we have initiated various in-house initiatives to strengthen our regional capabilities and enrich our system and processes, the new synergies in our thought process with external environmental like vendor meet, annual operational meet with the project and top management interaction and with the stakeholders. This will help us to build a robust business model, having a complete integration and operations, along with a large fleet of in-house equipment and excellent human resource.

Our strong focus is on operational efficiency, cost optimization and strong project execution skills that give us the confidence to close this financial year close to our earlier stated guidance with 25% growth year-on-year and EBITDA margin close to 60%-plus as compared to last year. Our key focus ahead will be on winning selective projects that complement our order book and ensure efficiencies. Our goal is to achieve additional guiding numbers of INR4,000 crores to INR5,000 crores new order inflow in this financial year.

Now, I would like the moderator to open the floor for question and answers. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah — Dolat Capital — Analyst

Thank you, sir. Sir, first, coming on the guidance front. So, you mentioned in your opening remark, 25% growth. So, does that mean we are looking at INR4,500 crores revenue versus earlier guidance of INR5,000 crores, and now are we confident to achieve this INR4,500 crores or is there also a possibility to slightly even further lower number by the year-end?

Harendra Singh — Chairman and Managing Director

See, as it is all evident that this year the monsoon has early arrival to prolong monsoon and the entire country has seen good rains. So this is the first factor which has affected the progress during the quarter two. And again, if you see to the appointed date which likely was supposed to be the year of Ganga Expressway in September — sometime in September, which has been delayed by 1.5 months as per our expectations, affecting the progress. So, this has impacted almost INR150-odd crores of progress altogether in quarter two. But again, as we are very clear on it, the concentrate of almost all the projects are in hand, and execution has been fixed in all the projects.

So with that, we don’t see much of a challenge this quarter, definitely in quarter three, quarter four, whatever is possible, we would be likely to coop with that. And for 25%-plus means they’re down INR4,600 crores — around INR4,600 crores, we will be reaching this year. And with the major execution, which we have looked into would be coming in quarter three and quarter four will be from Raipur-Visakhapatnam, all three packages of HAM, and Ganga Expressway, of course, would will be the major contributor in this quarter three.

Then UER Package, again, we did INR183 crores in last quarter and delivered the Package 8 and 9, we again paid INR181 crores in last quarter. Around INR300 crores is left in Delhi-Vadodara packages and, again, INR900-odd crores is left in UER package. There again, most execution is at very good trend. We have INR200 crores of execution expected in quarter three and INR200 crores plus in quarter four. So this is how gives us a fair outlook that we would be reaching the INR4,600 crore level.

Shravan Shah — Dolat Capital — Analyst

So, broadly, we did INR1,800-odd crores. So, to reach INR4,600 crores, we need INR2,800-odd crore, so around INR1,300 crores, INR1,400 crores run rate would be required in third and fourth quarter. So that can be doable. And also, for the FY ’24, previously we were looking at INR6,000-odd crores revenue. So what’s the new number? And in terms of the margin, when we say 16% plus, so that is for entire full year of FY ’23? Or in the second half, we are looking at 16% loss margin.

Harendra Singh — Chairman and Managing Director

The trend of margin has now been restored at again, we can say last, say, almost four, five quarters, we were reeling under this pressure of the commodity price. Now it is all back on track with 16%-plus margins, which will all be visible low. At quarter three and quarter four, altogether INR2,800 crores, definitely in quarter three, we always see that the quarter four comes at about 35% — to 50%. So there, we are very clear about it that quarter four would be really a big number. But in quarter three, ultimately in quarter three and four, it would be coming at INR2,800 crore roughly.

Shravan Shah — Dolat Capital — Analyst

And for the next year, FY ’24?

Harendra Singh — Chairman and Managing Director

Next year, definitely we will be on same track as we have already seen at about 22%, 25% year-on-year. That is with which you can see the INR4,600 crores if we add some 22% to that, it’s coming at around INR5,800 crores to INR6,000 crores.

Shravan Shah — Dolat Capital — Analyst

Okay, okay. And on the order inflow, last time when we said we will be looking at close to INR3,000 crores to INR3,500 crores from HAM and INR1,000 to INR1,500 crores from the other JJM and NHAI EPC, so that remains the same or are we now looking at more railway orders than the NHAI EPC orders?

Harendra Singh — Chairman and Managing Director

Of course, as already addressed in the opening remarks that in railway remodeling, the new contracts coming in on the EPC mode from railway, and where we have already bidded few of the stations, though we could not win those projects earlier on. But now we again believe that EPC or NHAI or EPC of railways or any EPC of water together would come at about, say, INR1,500, and balance INR3,500-odd crores will be coming from HAM.

Shravan Shah — Dolat Capital — Analyst

And then, any of the projects in terms of the value size apart from railway where we have bidded, what’s the value and where we have bidded and when likely the results are to come?

Harendra Singh — Chairman and Managing Director

We have already some INR15,000-odd crores of projects bidded, INR11,000 crores is in NHAI and some INR4,000 crores in our railway and railway stations and water, where I think there are about eight bids which are yet to be opened.

Shravan Shah — Dolat Capital — Analyst

Okay. On the equity front, just you mentioned INR200 crores this second half also in FY ’24 and ’25, how much will be needing? And in terms of the monetization, we were previously looking at four HAM projects. So, any progress? When can we see the announcement from the front?

Harendra Singh — Chairman and Managing Director

The total equity requirement for, say, FY ’24 and ’25 after this INR200 crores, as already INR1,137 crores. Out of this, INR610 crores we already invested and some INR200 crores would be invested in the later half of this year. So, the balance would be in ’24 and ’25, hardly it’s coming at about INR190 crores in ’24 and balance in ’25.

Operator

Mr. Shah, may we request you to return to the queue? There are several participants waiting for their turn.

Shravan Shah — Dolat Capital — Analyst

Okay, okay. Thank you.

Operator

[Operator Instructions] The next question is from the line of Mohit Kumar from DAM Capital. Please go ahead.

Mohit Kumar — DAM Capital — Analyst

Good afternoon, and congratulations on a very, very good order book, sir. Sir, my two questions. First is, how is the road bidding pipeline looking like from NHAI side, till date, I think the bidding has been pretty lukewarm. And is there any — and are we seeing higher portion of HAM in the pipeline?

Harendra Singh — Chairman and Managing Director

See, almost that one is expected in first half of this year, not much of the bidding activity, which we always has been experienced in the last few years. But as we already guided, I think 6,000-plus kilometers to be awarded by NHAI this year. So they were looking at a few decisions [Phonetic] into the cash support from NHAI from 40% to 20%, wich is in at the advanced stage of discussion. But by that time, I think now we have seen that almost there are around 60-odd bids which are to be debated or to be awarded within this quarter three. So, this was a clarity that now in NHAI again with all majorly into HAM, EPC are not many, but definitely a few of the DoT.

Mohit Kumar — DAM Capital — Analyst

Okay. Understood, sir. So, expect the H2, bidding to pick up substantially. Is that right, sir?

Harendra Singh — Chairman and Managing Director

Yes, yes. Quite right.

Mohit Kumar — DAM Capital — Analyst

And second question, sir, on the railway side. I think you gave a detailed outlook on the opportunities. Are you looking at railway station redevelopment work? And does it mean that we need to build some capabilities and investment in the resources?

Harendra Singh — Chairman and Managing Director

Well, I think as you can see, in any of the redevelopment work like station building, terminal building, it doesn’t require much of a capex, it’s majorly out of procurement and labor-oriented [Indecipherable] work. But these are good work which we believe they are the steel frame structure work, which gives us possibility and opportunity that we may go for any of the one or two stations.

Operator

Mr. Mohit Kumar, may we request you to return to the queue, please? Thank you.

[Operator Instructions] We’ll take our next question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal — HDFC Securities — Analyst

Harendraji, congratulations on a decent quarter, sir, especially tight control on the balance sheet and working capital. My first question is, what is the total order inflows for financial year to take? And for the next year, how are you looking to replace this large order of Ganga Expressway because that’s one bulky order, which is coming, so it will be a tough task to exceed this year’s order inflows.

Harendra Singh — Chairman and Managing Director

For sure, I think, which initially, as we expect that INR9,000 plus crores to be added during the year with INR4,500 crore orders already there. We are now were at ease — but now again, as usually happens in years that around INR3,000 crores to INR4,000 crores were orders of NHAI, with HAM or EPC, [Indecipherable] in the last two years’ trend. So this is our prime focus. We have good — any of the orders having bearing good profit. That is the first focus. And then, again, beyond highways, in railways, we have already bidded five of the bids that has a railway new track or doubling of those things and high-speed networks, which are we at an advanced stage, which likely to come in later half of this year or next year. Again, it would be the likely opportunities in railway other than the railway remodeling of the stations. And again, in water, we have already bid some three of the projects. So we look forward that in quarter three and quarter four. So altogether, we would be looking into the mixed balance of all the three, four sectors.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. The second question is on the monetization, sir. Now we have already invested INR600 crores. We have projects where we have achieved upon the COD. So, what’s the time line for monetization? And how many projects are valued — the book value of the equity you’re looking to monetize?

Harendra Singh — Chairman and Managing Director

Again, I think, it is, say, for almost two, three quarters, it was at a standstill, but really, say, it has been initiated at again, very aggressive pace in quarter two of this year. So, we are now having, say, three particular proposals going on side by side. And we are working on it. And most likely, by end of this year, the deal would be concluded. And we are getting a good response from the investors, because they are all waiting and we also are working for the completion of which we have completed in two of the projects where the COD is received. And just one project where a small portion is left out, the earlier PCoD already in November ’21 we received, Rewari-Delhi. But the entire completion of the project is done. And maybe, soon we will be completing the Rewari project. This — all of our projects is almost INR350-odd crores of equity, which we are looking that at least we should have a decent step up about 40%, that is about 12%-plus discounting number.

Parikshit Kandpal — HDFC Securities — Analyst

What did you say? 40% in premium [Phonetic], INR350 crores in equity investment is what you are looking at, 12% discount rate. Okay. Thank you. Those were my questions.

Operator

Thank you. We will take our next question from the line of Ashish Shah from Centrum Broking. Please go ahead.

Ashish Shah — Centrum Broking — Analyst

Yeah. Good morning, sir. Sir, I know you’ve given an overall guidance for the execution for the year. But just wanted to understand that a couple of projects like OD-5, OD-6, we haven’t seen a great lot of progress in the first half, I mean, after the appointed dates have been received sometime in end of May. So what is the reason why the pickup has been a little on the slower side?

Harendra Singh — Chairman and Managing Director

See, this monsoon gained in North and South, it behaves differently, okay? So, you can see in this Eastern part where the corridor — the entire corridor is lying, the AP and OD-5, OD-6, there were not much of the progress is visible. It’s hardly — in all these three projects, it’s hardly about, say, INR150-odd crores is the progress during the quarter, which in North would have been much better. But now we are there, we have mobilized. We are having the entire resources, waiting for the monsoon withdrawal and that has now been restored that and we would be coming back to the track. We will be progressing very good — progress to these projects from quarter three and quarter four.

Ashish Shah — Centrum Broking — Analyst

Okay. So any number you’d like to put, let’s say, by the end of the year in OD-5, OD-6 and AP 1.

Harendra Singh — Chairman and Managing Director

All three corridors, Raipur-Visakhapatnam, we would be doing INR325-odd crores in quarter three, and around INR450-odd crores in quarter four, where around INR2,700 crores [Indecipherable] as on September 30.

Ashish Shah — Centrum Broking — Analyst

Okay. Sure. Also, on Ganga Expressway, how is the ramp-up likely? How much do you expect to execute by this financial year end and how much you’re looking at next financial year?

Harendra Singh — Chairman and Managing Director

Earlier, it was expected about INR1,000 crores of execution during the financial year. But now it has, say, we would be looking at INR700 crores because of almost delayed by 1.5 months or two months delay. So that is one reason. And again, if you see that in North, the fog and other winter rains, they do affect these kind of our projects, which earlier [Indecipherable] started, then I think — and the related activities is hampered a lot. In any case, this was INR300 crore odd crores which is likely to be, where INR5,000 crores gone down to — it’s likely to be going down to INR4,600 crores, that is the big reason.

Ashish Shah — Centrum Broking — Analyst

So INR700 crores this year and next year, what would be the number, sir?

Harendra Singh — Chairman and Managing Director

Next year, definitely we will be looking at about INR2,000 crores of activities coming on from the [Indecipherable].

Operator

Thank you. We’ll take the next question from the line of Jiten Rushi from Axis Capital. Please go ahead.

Jiten Rushi — Axis Capital — Analyst

Yes. Good morning, sir. Sir, my first question, when I was reconciling the revenue based on our order backlog — opening and closing order backlog, the revenue change to be INR656 crores. So I think our reported number, it is short by INR96 crores. So any other revenue other than the execution you’ve booked in the quarter, sir?

Harendra Singh — Chairman and Managing Director

What you are saying that the amount which you have seen executed, INR750 odd crores…?

Jiten Rushi — Axis Capital — Analyst

Yes. The reconciliation is…

Rajeev Mishra — Chief Financial Officer

This number is coming from price variation as well.

Jiten Rushi — Axis Capital — Analyst

Okay. It’s price variation and sir, and any utility shifting or something like that?

Harendra Singh — Chairman and Managing Director

It’s a minor number, not a big number. INR15 crore, INR20 crores is coming from the utility shifting and INR10 crore to INR12 crore is coming as O&M revenue. The similar number is about 8% to 10% is coming from price variation, price escalation.

Jiten Rushi — Axis Capital — Analyst

Okay. And balance is for price escalation?

Harendra Singh — Chairman and Managing Director

Yes.

Jiten Rushi — Axis Capital — Analyst

And sir, on the book keeping side, can you just highlight the outstanding mobilization advance and yield revenue retention money? And if you can give us the breakup of debtors if it is possible, sir, as on September?

Harendra Singh — Chairman and Managing Director

Yes, sure. I think it has been reduced by INR337 crores, which you see altogether it was debtor including retention. Okay, so INR373 crores at June 30, now it’s got down to INR536 crore. Though it has become a increase in the contract effects, this is unbilled because major portion is in Ganga Expressway and DV8 and 9, which is approaching completion, this is, again, a significant number is there, which is certain previous approvals are likely to be there in Q3 only on this. And a bit of a HAM projects and other projects, Maharashtra as well as Rajasthan. So all together, this is a increase in INR100 crore on contract as such, which is likely to come down again to the same range we have always done INR300 crore to 350 odd crores. But debtors would not be doing anything major capacity would be coming in as we are now having INR350 crore reserve debt.

Operator

Mr. Rushi —

Jiten Rushi — Axis Capital — Analyst

Ma’am, the question has been incomplete. So let me get the answer please.

Harendra Singh — Chairman and Managing Director

And so this is regarding the debtor —

Jiten Rushi — Axis Capital — Analyst

I just didn’t get the number. What is the outstanding unbilled number and what is outstanding mobilization advances and retention outstanding, sir?

Harendra Singh — Chairman and Managing Director

So unbilled number is INR458 crores, where the major I have already given that the project does major, where again it’s going to drop down to INR350 crore, not beyond that. Whether it’s on the project nearing completion and HAM projects again where we have completed, we are certain [indecipherable] we are committed. So that is one part. I think government ones, again it has been increased by INR3 odd crore. And again, we again are coming to that, that there is INR60 crore increase in the order book, which is [indecipherable] INR347 crores.

Jiten Rushi — Axis Capital — Analyst

And retention, sir?

Harendra Singh — Chairman and Managing Director

Retention is normal.

Jiten Rushi — Axis Capital — Analyst

That is what? INR2…

Harendra Singh — Chairman and Managing Director

INR175 crores.

Jiten Rushi — Axis Capital — Analyst

Okay, sir. That’s it from my side. I’ll come back in the queue.

Harendra Singh — Chairman and Managing Director

Thank you.

Operator

[Operator Instructions] The next question is from the line of Romil Jain from Electrum PMS. Please go ahead.

Romil Jain — Electrum PMS — Analyst

Hello. Yes. Thanks a lot, sir. I hope you can hear me.

Harendra Singh — Chairman and Managing Director

Sure.

Romil Jain — Electrum PMS — Analyst

Yes. Sir, actually, I just missed — I could not hear properly. What is the equity requirement for current year and ’24 and ’25?

Harendra Singh — Chairman and Managing Director

Current year balance it is INR200 crores for the balance half of this year. And next year, it is coming at around INR190 crores. Out of that INR857 crore [Phonetic], we have already invested INR610 crore.

Romil Jain — Electrum PMS — Analyst

Okay. And ’25 number?

Rajeev Mishra — Chief Financial Officer

Balance is coming in ’25. Hardly it is coming at around INR100 crores.

Romil Jain — Electrum PMS — Analyst

Okay. Okay. Got it. And sir, one question on the competition. So as you mentioned, most of the projects are HAM from NHAI. So how is the competitive intensity in the last couple of months? And do we see some kind of pressure in the competitive intensity?

Harendra Singh — Chairman and Managing Director

No. EPC is not yet improved, but definitely HAM, the major shift has been there. I think now the number of players are getting lesser and lesser. And with that, again the percentage where the discounts were passed on, now we have seen a premium over it.

Romil Jain — Electrum PMS — Analyst

For the upcoming projects?

Harendra Singh — Chairman and Managing Director

Upcoming projects from the recent past year [indecipherable] aggression is a bit better compared to [indecipherable]. It was earlier. Now it has been improved.

Romil Jain — Electrum PMS — Analyst

Okay. But any specific reason why it has been improved, I mean, there are players who are not able to bid or capital issues are there?

Harendra Singh — Chairman and Managing Director

Actually, not a big reason. But definitely, you can consider that a major initial say, about 20, 25 bidders were there, which was a small midsize company. They are having enough of appetite, orders in hand. They are not participating much now.

Romil Jain — Electrum PMS — Analyst

Okay. Thanks.

Operator

We’ll take our next question from the line of Nikhil Abhyankar from DAM Capital. Please go ahead.

Nikhil Abhyankar — DAM Capital — Analyst

Thank you, sir. Thanks for the opportunity. Sir, I’m really sorry I had joined the call late. So have you mentioned your guidance for FY ’23, the revenue, EBITDA margin and the order inflow?

Harendra Singh — Chairman and Managing Director

I can repeat it to [indecipherable] INR4,600 crores and EBITDA to 16% plus, somewhere in that range.

Nikhil Abhyankar — DAM Capital — Analyst

Okay. And OI sir, INR9,000 crore to INR10,000 crores?

Harendra Singh — Chairman and Managing Director

Order we already received is INR4,500 crores. And another INR4,500 crores likely to be added during the year in roads and other sectors.

Nikhil Abhyankar — DAM Capital — Analyst

Understood. Sir, and you also mentioned that we are looking at the railway station orders. So I would like to know that whether the margin profile on these projects will be the same as our current margin?

Harendra Singh — Chairman and Managing Director

Yes. We are keeping our intent clear that we would be not going for further sales to lower margins or any of the other factors.

Nikhil Abhyankar — DAM Capital — Analyst

Okay. That’s all, sir. Thank you.

Harendra Singh — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.

Sarvesh Gupta — Maximal Capital — Analyst

Good afternoon, sir, and thanks a lot for taking my question. One question is on these large projects like Ganga Expressway which you have in your order book. So do you expect the margins to be in similar range? Or do you see any efficiencies or do you see because these are very large orders that you have got, you see some sort of a lowering of margins?

Harendra Singh — Chairman and Managing Director

Probably I can understand your question. Say in any case this 150 kilometer is a huge magnitude, say INR4,500 crores, like in Raipur and Vishakhapatnam adjoining package, again, about INR3,000 crores. So this gives cluster-based approach, where the margins definitely options are much better. The margin would be good. No doubt that it was — there was a bit of a shrinkage in the earlier quarters. Now we are coming back to the track, 15% less margin would be there.

Sarvesh Gupta — Maximal Capital — Analyst

Understood. And secondly, in railways, while we’ve been trying to enter these 2 segments, railways, water, but we haven’t yet got any significant sort of order which will move…

Harendra Singh — Chairman and Managing Director

No, I think it doesn’t gave us that we need to be very — first has to be there. But no doubt, we are having a clarity on that, we should not be compromising looking at the margin — compromise with our there. So we are on track. We would be getting the orders in any case as we are for 10% to 15% this year for the other sector.

Sarvesh Gupta — Maximal Capital — Analyst

And in railways, specifically, sir, some of the other EPC players have burned their hands badly in terms of track laying and many other activities.

Harendra Singh — Chairman and Managing Director

There is a big change in the execution pattern. As you can see in last few years in NHAI also the earlier the land was not there. Project time over run was there, four to five years completion. Now it is coming at two years, two-and-half, three years. So again, the big change is coming there in the railways as well, which is Gati Shakti monitoring program. It happens like that, the things have been monitored very closely.

Sarvesh Gupta — Maximal Capital — Analyst

In HAM, we are expecting around INR350 crores release this year. Is that right? And what is the expectation for the —

Harendra Singh — Chairman and Managing Director

The deal is going to be completed this year. The fund may or may not come this year, but definitely as the deal concludes in this financial year, within six months we will be getting the funds.

Operator

Mr. Gupta —

Sarvesh Gupta — Maximal Capital — Analyst

Just one second, this is the continuation of the same question. So the next 18 months, what are we expecting of the overall equity release from the HAM projects?

Rajeev Mishra — Chief Financial Officer

Release?

Sarvesh Gupta — Maximal Capital — Analyst

Release, sir, I mean the HAM monetization, what are we expecting the equity amount to be monetized for this 18 months, let’s say, this 6 months and next 12 months of the next financial year?

Harendra Singh — Chairman and Managing Director

This is INR350 crores of total equity, all for the four projects which are in proposal for monetization. So exactly we are looking at 40% over the equity deployed. But again, we can expect in next year, 18 months again from now.

Sarvesh Gupta — Maximal Capital — Analyst

Understood, sir. Thank you and all the best.

Operator

Our next question is from the line of Jiten Parmar from Aurum Capital. Please go ahead.

Jiten Parmar — Aurum Capital — Analyst

Yes. Good morning. My question is basically on the consolidated margins, we did 19% last year. Are we on track to maintain that or better that for this year? And what is the outlook for next year?

Harendra Singh — Chairman and Managing Director

Currently for the first half of this year is at 18.9%. You are talking of the consolidated margin?

Jiten Parmar — Aurum Capital — Analyst

Right.

Rajeev Mishra — Chief Financial Officer

It would be in the range of about 19% to 20%. That would be the range.

Jiten Parmar — Aurum Capital — Analyst

And for next year also, you are guiding the same?

Harendra Singh — Chairman and Managing Director

Probably it may increase with the entire monetization if you think about at CV level where the loan and few expenses are incurred, but the revenue is not yet realized.

Jiten Parmar — Aurum Capital — Analyst

Okay. My second question is on the order inflow. So I think you answered that, but I couldn’t get it clearly. For H2, you are saying that you should get order inflow of around INR4,500 crores. Just want to make sure of that, is that right?

Harendra Singh — Chairman and Managing Director

Yes. Definitely, we are looking at it about INR3,200 crores, INR3,500 crores coming from HAM projects of NHAI and other than that EPC NHAI or other sectors.

Jiten Parmar — Aurum Capital — Analyst

Thank you. That will be all from my side. Thank you so much for answering my questions.

Operator

Thank you. Our next question is from Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah — Dolat Capital — Analyst

Yes. Thank you. Sir, Khammam-Devarapalle P1 appointed date will be expected by…?

Harendra Singh — Chairman and Managing Director

By 10th of November — sorry, the 10th of November, the JMF has been already signed. Within next few days, we will be getting the appointed dates.

Shravan Shah — Dolat Capital — Analyst

Okay. in next — before this month end, we will be having the appointed date?

Rajeev Mishra — Chief Financial Officer

Yes, for sure.

Shravan Shah — Dolat Capital — Analyst

Yes. Second is in terms of the capex for this 1H, we have done INR149 odd crore. Previously, we were looking at even a sale of the equipment at INR135-odd crore for this year.

Harendra Singh — Chairman and Managing Director

I can give a clarity on the breakup of the capex, which has been done and that is likely to be done. So this is INR134 crore of capex. Out of the INR18 crores — earlier this capital work in progress which is there, it is for camp development, which earlier was expense, categorized as expense. Now it is capital work in progress to be depreciated within say, two, three years of the duration of the contract. So that is how the number looks today.

That is how INR91 crores of capex was [indecipherable]. INR25 crores of land and building are there and INR30 crores of camp is there, so total INR150-odd crores of capex done. Another INR45 odd crores would be done in later half of this year and INR45 crores is likely to be received for the disposal of the old assets.

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. Got it. And in terms of the debt level, which is INR392-odd crore. So by March end we will be seeing some reduction from here on?

Rajeev Mishra — Chief Financial Officer

Yes, INR350 crores to INR400 crores, that is the magic number, which should be there.

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. And lastly, on the — we were expected to get the INR26 crore bonus in the second quarter.

Harendra Singh — Chairman and Managing Director

This again is at a competitive authority approval level and in Q3, you would be getting.

Shravan Shah — Dolat Capital — Analyst

So we will be getting INR26 crores in the third quarter? And is there any other projects that we’ll be getting a bonus in fourth quarter?

Rajeev Mishra — Chief Financial Officer

No, as of now, there’s no possibility.

Shravan Shah — Dolat Capital — Analyst

Okay. That’s it from my side. Thank you.

Operator

Thank you. Our next question is from Jiten Rushi from Axis Capital. Please go ahead.

Jiten Rushi — Axis Capital — Analyst

Yes. Thank you for taking my question again, sir. In the railway bids, you said you will be bidding for the railway lining projects and also on the station redevelopment projects. So sir, these projects are we qualified or we shall be bidding in joint ventures?

Harendra Singh — Chairman and Managing Director

Yes. Mostly, we are qualified in metro and this side of our projects. And if in case of an atypical requirement, qualification requirement, we are already — already we have tied up, we would be doing for those intercity projects. As of now most of the projects are bidded as a single entity.

Jiten Rushi — Axis Capital — Analyst

So what is the size till which we can bid as an independent entity?

Harendra Singh — Chairman and Managing Director

It’s almost at a level of INR1,000 crores or even INR1,500 crores, we are eligible for those projects.

Jiten Rushi — Axis Capital — Analyst

Is it 1,500?

Harendra Singh — Chairman and Managing Director

Yes. I think we are not getting many projects which size is over INR800 crores or INR1,000 crores, but we are eligible.

Jiten Rushi — Axis Capital — Analyst

And so water project, obviously, will go in joint venture as you said in the past?

Harendra Singh — Chairman and Managing Director

That is with a partner, yes.

Jiten Rushi — Axis Capital — Analyst

And sir, on the escalation part. So these projects are mostly commodity-driven projects. So these projects will include escalation, right, sir?

Harendra Singh — Chairman and Managing Director

Every project is having the site escalation clause.

Jiten Rushi — Axis Capital — Analyst

So that should not be the challenge for us?

Harendra Singh — Chairman and Managing Director

Correct.

Jiten Rushi — Axis Capital — Analyst

And sir, on the margin front, obviously, you’ve given that H2 should be better in terms of EBITDA margin. But sir, going forward, you said that there are large — for large ticket projects like you are executing like the Raipur project, the Adani project. So in that, we are seeing like a 15% margin. So do we see that going forward margin overall should come down to 15%, 15.5% as against 16%, 16.5% which you said?

Harendra Singh — Chairman and Managing Director

I don’t see now onwards with the commodity size, always has cooled down and now it was at a stagnation stage. So whatever build we have done say one-and-half year back, now we are getting the equivalent price escalation. So that is a similar number. So we don’t expect that 15% plus margin would be, say, big question in coming months or coming years.

Jiten Rushi — Axis Capital — Analyst

Sir, in the revenue terms, you said INR2,000 crores we expect from the Ganga Expressway in FY ’24. So what kind of revenue you’re expecting from the Raipur package and the DV 1 and 2 in FY ’24, sir?

Harendra Singh — Chairman and Managing Director

If you can just leave looking to the breakup of that, whichever project where we are like targeted to complete by June ’24, sorry, May ’24 rather, so then in any case significant portion would be completed in FY ’24.

Jiten Rushi — Axis Capital — Analyst

My question, you said that you’re expecting a revenue of INR5,800 crores to INR6,000 crore?

Harendra Singh — Chairman and Managing Director

At least that would be coming at about say INR1,300 to INR1,400 of revenue all three packages, Raipur, Vishakhapatnam in FY ’24.

Jiten Rushi — Axis Capital — Analyst

And on the Khammam-Devarapalle package 1 and 2, how much do we expect in the DV or how much do we expect in FY ’24?

Harendra Singh — Chairman and Managing Director

So probably with the entire order book, which is about INR10,800-odd crore, which is supposed to be completed by the time of this year and FY ’24 in November ’24. So with that you can very well understand. The majority of the project where we would be targeting within the similar time line where the land is not challenge, and where other challenges are not there. We are according to contract and accordingly we are also prepared to execute at all times.

Jiten Rushi — Axis Capital — Analyst

Got it, sir. That is from side. Thank you.

Operator

Thank you. We’ll take our next question from the line of Prem Khurana from Anand Rathi Share. Please go ahead.

Prem Khurana — Anand Rathi Share — Analyst

Yes. Thank you for taking my questions, sir. My question was with respect to hybrid annuity, and we already have two which are operational now and we’ve started receiving annuities as well. So one was to understand if we’re receiving our annuities in time. And second is essentially given the fact that both these are such an operational, so have you been able to manage refinancing of these assets? I mean has the interest rate come down? And what’s the spread now that you’re able to make with this? And just to continue on this, I mean you spoke about some 40-odd percent premium that you expect once you want to sell these assets, right? So is that a hurdle rate? I mean if let’s say, I mean there’s a buyer who doesn’t agree to 40%, would you be willing to settle for a little lower number or not?

Harendra Singh — Chairman and Managing Director

In the first part there, you are saying that the entire — this project which we have completed COD, we are getting the right annuity on right on time, number one. The operation costs and maintenance costs which we are incurring is sales, below what we are getting from NHAI. That is all in control. The number which has been integrated as the premium which we are likely to get on the equity investment, which is coming from because of that only. Because of the interest rate, which most of these assets, which we are having this is around — it’s almost 7.4% rather, 7.4%.

So with that, I think it is an advantage to us that we are in the cash flow of — at the CV level, a decent one. And this number which you are saying that 40% which we are looking at, definitely 30% to 40% has been indicated by them and there is possible negotiation which is going on.

Prem Khurana — Anand Rathi Share — Analyst

Sure. And the payments have come in two tranches, right? I mean, you’ll get to a first 49% and then another 51%. The first two asset, I mean, I understand you already spent six months, so which is where you’ll be able to have it, but then the third and the fourth you would have to wait for some time, right?

Harendra Singh — Chairman and Managing Director

Obviously. I think this is gradually — it’s a process been taken — it is a one-year process almost.

Prem Khurana — Anand Rathi Share — Analyst

Sure. And would you be able to help me with the receivables from IRB and Adani?

Harendra Singh — Chairman and Managing Director

Yes. Adani, there is not a big balance receivable. It’s as a better — hardly INR60 something crores, which we received pretty regularly, which we are receiving regularly. And IRB I can update upon it. Basically at the start of this financial year — this quarter, we were having — let me give you the update. We were having INR306 crores. This was debtors and retention and unbilled all three together the start of this quarter. Now it’s coming down, and we have received INR133 crores in quarter. We have received some INR40 crores post to quarter. And now that is coming at roughly — major portion is INR94 crores which is not yet due and indicates the two-year DLB period. INR58 crores, out of INR58 crores debtor, we have INR40 crores and INR30 crores of unbilled, which is likely to be billed within this pre-final bill under production. So it’s mostly all on track.

Prem Khurana — Anand Rathi Share — Analyst

Sure, sir. Okay. And for Ganga, the capex is already taken care of, right? Or there is some more which is…?

Harendra Singh — Chairman and Managing Director

I think the capex which we have done, the capex which is likely to be done, which again is going to be set out with the disposal plan, which we are going to dispose.

Prem Khurana — Anand Rathi Share — Analyst

Sure, sir. That is my end. All the very best.

Harendra Singh — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Uttam Kumar Srimal from Axis Securities. Please go ahead.

Uttam Kumar Srimal — Axis Securities — Analyst

Yes. Thank you, sir. Thanks for the opportunity. Sir, this quarter, our employee costs and other expenses have increased. So can you please throw some light on that?

Harendra Singh — Chairman and Managing Director

See, the mobilization in all the big size and all the projects where the opportunity has been bit delayed and which we have received very recently. So with that, I think the manpower cost in those on the projects is being reflected as an extend in this Q2. Number two, as a percentage it’s all high, which you see the execution ticked up, and it would be again back to the same percentage as we have been in most of the last few years.

Uttam Kumar Srimal — Axis Securities — Analyst

Okay. As Said that competitive intensity has reduced. Earlier there were 20, 25 players. So now at this juncture, how many player bidders are bidding for the particular HAN project?

Rajeev Mishra — Chief Financial Officer

No. See, what I’m saying in HAM there has been reduced. In EPC, it’s not that. EPC is almost sending a similar number of players, which are —

Uttam Kumar Srimal — Axis Securities — Analyst

No, I’m asking about HAM only, sir.

Rajeev Mishra — Chief Financial Officer

Earlier it was going at about say 13, 15 numbers. Now it’s coming down again to, say, eight to 10. So that is a significant reduction.

Uttam Kumar Srimal — Axis Securities — Analyst

Okay, sir. That’s all from my side, and all the best to you.

Rajeev Mishra — Chief Financial Officer

Thank you.

Operator

Thank you. Our next question is from the line of Franklin Moraes from Equentis Wealth Advisory. Please go ahead.

Franklin Moraes — Equentis Wealth Advisory — Analyst

Yes, sir. Thanks for taking my question. So you had alluded to the fact that you had some monsoon impact for the quarter. So has this impact spilled over for this quarter as well and in Q3?

Harendra Singh — Chairman and Managing Director

Has — earlier been asked that in any case if we are looking at about INR2,800 crores of execution, the balance part of this year. Q4 would be the highest one. And Q2 because you can see in the whole Orrisa, Andhra, Bangalore nearby those areas, Telangana, the monsoon withdrawal has been some time, say, 15 or 20th of October. So a bit of a portion being affected. But now again, we are — the execution is on well track. We are doing almost INR15 crores to INR16 crores of execution a day now. So we would be completing — significantly, it would be coming at a good number, decent number in this Q3 whereas year-on-year growth is concerned.

Franklin Moraes — Equentis Wealth Advisory — Analyst

Okay, okay. And last four to five years, we have seen EBITDA margin improvement also from 15% to 16% plus. This is a steady improvement. So one is, is it a function of your internal efficiencies? Or is it a function of the product mix? And going forward, maybe for the next three, four years, can we expect margins to improve going forward as well? Or are they likely to be stable?

Harendra Singh — Chairman and Managing Director

Now I think it’s even stable at the 16% to 17% range, 16.5% range even. So that we have already — this is the mix reason why it can be this size project magnitude, operational efficiencies being improved, certain modification to the operational model is there, execution strategy is there. So this is how I think look like — and coming years also we would be making that number.

Franklin Moraes — Equentis Wealth Advisory — Analyst

Okay. And in the last five years, what was the reason for the improvement, internal efficiency?

Harendra Singh — Chairman and Managing Director

I think the commodity price which was earlier damaged, say few quarters, going down as low as 15%, coming back to 16%. So that is the major reason now.

Franklin Moraes — Equentis Wealth Advisory — Analyst

Okay. Thanks a lot.

Operator

Thank you. Our next question is from the line of Mudit Jain from Hem Securities. Mr. Modit Jain, could you please unmute your line and go ahead with your question.

Mudit Jain — Hem Securities — Analyst

Good morning, sir.

Harendra Singh — Chairman and Managing Director

Good morning.

Mudit Jain — Hem Securities — Analyst

My question was regarding that on the margin front. Our stand-alone margin last year was around 16% and the consolidated margin is around 19%. The concerting revenue difference is not very much between standalone consolidated revenue. What’s contributing to this additional margin? Can you throw some light on that?

Harendra Singh — Chairman and Managing Director

The consolidation of our books is only majorly because of HCVs, and HCVs, there is not much of expense, only the revenue and the profit, the top line and bottom line is coming almost at a similar range.

Mudit Jain — Hem Securities — Analyst

Okay. Thank you, sir. That’s all from my side.

Harendra Singh — Chairman and Managing Director

Thank you.

Operator

Thank you. That was the last question. I now hand over the floor back to the management for closing comments.

Harendra Singh — Chairman and Managing Director

Yes. Thank you all for your time today for attending the investor call. I hope all your queries were answered satisfactorily. In case you have any follow-up queries, please feel free to reach to our IR advisors, that is Go India Advisors. Wishing you all a very good weekend. Thank you.

Operator

[Operator Closing Remarks]