HG INFRA ENGINEERING LTD (HGINFRA) Q3 FY23 Earnings Concall Transcript

HG INFRA ENGINEERING LTD (NSE:HGINFRA) Q3 FY23 Earnings Concall dated Feb. 09, 2023.

Corporate Participants:

Harendra Singh — Chairman and Managing Director

Unidentified Speaker —

Analysts:

Priya Sen — Go India Advisors — Analyst

Mohit Kumar — DAM Capital — Analyst

Shravan Shah — Dolat Capital — Analyst

Ashish Shah — Centrum Broking Limited — Analyst

Nikhil Abhyankar — DAM Capital — Analyst

Sarvesh Gupta — Maximal Capital — Analyst

Prem Khurana — Anand Rathi Shares — Analyst

Uttam Kumar Srimal — Axis Securities — Analyst

Deepika Bhandari — Phillip Capital — Analyst

Ash Shah — Elara Capital — Analyst

CA Akash — Individual Investor — Analyst

Bharat Gianani — Moneycontrol Pro — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the H.G. Infra Engineering Q3 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. Priya Sen from Go India Advisors. Thank you, and over to you, Ms. Priya Sen.

Priya Sen — Go India Advisors — Analyst

Thank you, Bibiran [Phonetic]. Good afternoon, everybody, and welcome to H.G. Infra Engineering Limited Earnings Call to discuss the Q3 and nine months 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 under today’s call may include certain forward-looking statements and must be, therefore, viewed in conjunction with business 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, Priya. Good afternoon, ladies and gentlemen. Thank you all for joining us on the Q3 and nine months FY ’23 earnings call today. I hope you are all doing well. Since our inception, we have placed a strong emphasis on our bottom line by selecting high-quality projects. We are a symbol of trust for all our marquee clients. To build a sizable order book, we are relentlessly working to think beyond the road segment and diversify our business by showcasing our strengths. With the addition of the new DMRC project to our order book, we are boosting our presence in other segments in order to maximize value creation for all our stakeholders.

As you can see from our earnings presentation, which have already been uploaded on the website and the stock exchange, our company has yet another strong quarter demonstrating exceptional results. Before I talk about the quarter results, let me give you some updates on the infrastructure first. This year’s union budget prioritized infrastructure, boosting overall capex outlay by 33% to INR10 lakh crores from INR7.5 lakh crores. Talking about the roads, more for the allocated some — INR2.7 lakh crores in the union budget, which is up 35% from INR1.99 lakh crores. The budget envisaged an expansion of 25,000 kilometers in the highway network in the current fiscal year. A significant opportunity is offered by the NHAI robust pipeline of 4,500 kilometers of projects totaling INR1,144 million [Phonetic] as a tender.

Given our strong pipeline execution is scaled and our healthy balance sheet, we are confident that the center pipeline will result in significant order inflows for the Company in the coming months, followed by railways, which has received the highest ever capital outlay till date of INR2.4 lakh crores. The capital expenditure is expected to be spent on a variety of critical projects including multimodal stations and high-speed networks.

Also Water segment is a focus area of this budget under the Jal Jeevan Mission. In various states, this flagship project of center has been allocated INR6,684 crores, and that is again an increase of 27% over the last year. [Technical Issues] the union budget includes 50 more airports, heliports, water aerodrome, etc., and advanced landing field that could be reactivated in order to increase the regional aviation connectivity. With such a great impetus on infrastructure, we foresee tremendous growth opportunities, enabling us in diversifying our order book and entering into new segments.

Now let me start with the quarterly financial performance of the Company. Quarter three started on a positive note with a strong economic activity. During the quarter, we touched highest ever quarter top line of INR1,131 crores, that is the standalone level as compared to the revenue of the corresponding period of last year last quarter at about INR922 crores. The EBITDA during the quarter was INR189 crores and EBITDA margin stood at 16.7% in Q3 FY ’23. There is an upward trend seen in the EBITDA margin due to the reduction of the cost of material consumed by 25.2% and the receipt of a bonus of INR15.95 crores. The profit before tax for Q3 FY ’23 was INR151 crores versus that of Q3 FY ’22 at INR120 crores. PAT grew to INR111 crores in Q3 FY ’23 versus INR89 crores in Q3 FY ’22, showing a growth of 25.3% on a year-on-year basis.

Coming to nine months financial performance. That is on a standalone basis. Our overall revenue of nine months FY ’23 was INR2,949 crores, an increase of 13.9% year-on-year from INR2,589 crores in nine months of FY ’22. EBITDA was INR473 crores in comparison to INR428 crores during the same period last year showing a growth of 10.4% on a year-on-year basis. In nine months FY ’23, the EBITDA margin was 15%. PAT margin for nine months FY ’23 was 9.3%, while the profit after tax for the nine months was INR274 crores as opposed to INR247 crores for the same period last year. On a standalone basis, our gross debt as on 31st December 2022 was INR470 [Technical Issues] crores. This includes capital debt with trade limit of INR81.9 crores, term loans and current maturities of INR39.48 crores and including the NCD of INR97 crores. At the consolidated level, our gross debt was INR1,589.75 crores, which comprises project debt of INR1,118.29 crores.

Some of the significant operational highlights on our prominent projects are as follows. I’m pleased to share that we have been declared L1 bidder and received of LOA by NHAI HAM project worth INR997 crores. It is a six-lane greenfield Karnal Ring Road project in the state of Haryana. The Company has also diversified its order book in the railway and metro segment. Having projects awarded by Delhi Metro, we have received one of our first metro projects worth INR412 crores including the GST, which is in line with the Company’s objective to diversify its order book portfolio. As of December 31st, our entire pipeline of unexecuted orders totaled INR11,064 crores. We are present in nine different states, and our order book is well diversified including 51% of our EPC projects and 39% HAM projects.

Coming to the progress of the major EPC projects, our progress is as follows. With regard to the DV packages, that is Package Number 8, we have made a significant progress in this and completed around 93.6% financially. The project is anticipated to be finished this February, and we have already applied for the COD. For Delhi Vadodara Package 9, our completion status stands at 86% financially, which is in line with our completion target in this quarter. In the Mancherial project of Adani, the completion status is 81.7% that is financial. We have received PCOD for this project in December 2022, and the entire project is expected to be completed in Q4 except for certain QS works. In the Urban Extension Road of Delhi project, Karala-Kanjhawala [Phonetic], we have finished 39.9% of the job, which is progressing according to our scheduled timelines. In Ganga Expressway project of Adani, we have executed 4.9% of the work and the execution is [Indecipherable] in this project. In the Neelmangala-Tumkur project, the completion status is at 4.8%.

Moving on to the HAM projects, which are under execution, which are also progressing well as per the scheduled timeline. In the Rewari Bypass HAM project, about 89.7% of the project is completed. We expect to get the provision completion by this financial year. In Raipur-Visakhapatnam Corridor project of AP 1, the completion status stands at 24.3%, which is right on schedule time. Further to the two HAM projects of Raipur-Visakhapatnam, that is Odisha OD Package 5 and 6, we have accomplished about 19.1% and 23.7% of the projects respectively, and they are again moving on right on track. In Khammam-Devarapalle Package 1 and 2, which we have started recently, project execution stands at 6% and 9% respectively. For all 10 HAM projects, the total liquidity requirement anticipated till FY ’25 stood at INR1,273 crores. That includes the equity requirement of recently awarded Karnal Ring Road project. Out of this, an investment of INR720.3 crores as of December 22 has already been made and a projection to invest INR38.4 crores is estimated in this remaining financial year, that is FY ’23.

We would like to update the forum that on monetization of four HAM projects, it is at an advanced stage. With the technical due diligence of this, we are hopeful that we should be able to sign the document formally to conclude this deal shortly, subject to our expected valuation and the satisfactory conduct of due diligence.

Other significant developments at the organization level are as follows. We received a bonus of INR15.95 crores in December ’22 from NHAI, that is for Rewari Ateli Mandi and Narnaul projects and another INR4 crore bonus is in the approval stage. We are also anticipating to receive a bonus of about INR4.5 crores for the Rewari Ateli Mandi project during quarter four.

Now guidance on the bidding outlook at the business opportunities. We are highly optimistic about the sector’s outlook and the opportunities for the forthcoming year. The government’s focus on infrastructure is evidenced from the current budget. Given that we will be entering the election year soon, we expect the focus on ordering [Technical Issues]. At H.G., we have laid the groundwork for our phase of expansion. The three main areas of our focus are operational efficiency and effectiveness, cost optimization and timely completion of the project.

We are anticipating INR3,000 crores to INR4,000 crores order before March to maintain the order book, which will result in 2.5 times revenue. Furthermore, we have submitted bids for projects totaling INR80,000. We will be submitting — sorry, we will be submitting the bids for projects totaling INR80,000 crores, of which INR4,000 crores pertaining to railway, INR2,000 crores from water projects, INR1,500 crores of metro and some INR73,000 crores in the highway projects. The opening of some of the tenders is still pending, which are in the tune of about INR15,000 crores.

Together, the diversification of company’s portfolio is well underway. As we have reached the top line of INR2,950 crores till December 2022, we are hopeful that we will be achieving the growth of 22% to 25% in comparison to the last year revenue to endorse our guided numbers.

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

Questions and Answers:

Operator

Thank you. [Operator Instructions]. The first question is from the line of Mohit Kumar from DAM Capital. Kindly proceed.

Mohit Kumar — DAM Capital — Analyst

Yeah. Good afternoon, sir, and congratulations on another good quarter. Sir, my first question is on the revenue guidance. You said 25% for FY ’23, given that the last year base was INR10 billion, this implies around 50% growth. Is that achievable in the Q4?

Harendra Singh — Chairman and Managing Director

So what we are looking at — since we are looking at about, say, 25%, which comes at around 4,500 [Phonetic]. So, this quarter four has to be where we need to run at about, say, 1.5 times of the earlier quarter last year. Yeah, sure. With all the projects under execution and whatever you can see about the monsoon times and any of the winter times, they are not gone — now gone. And we are running at about, say, almost INR20 crores a day in many of the projects yielding that particular number. So, we believe that 100%, we would be achieving the target.

Mohit Kumar — DAM Capital — Analyst

Sir, on the bid pipeline, especially for NHAI, I think that is a very muted last nine months. Do you think the Q4 [Technical Issues] should pick up based on whatever you have?

Harendra Singh — Chairman and Managing Director

Yeah, for sure. I think for the first half of this year, nothing much has happened as for the bidding and many of the contractual, say, agreement correction modifications were going on. Now you see in December and now in the current three months, around INR78,000 crores, which we have allocated and looked into, to bid up. But they are more than INR1 lakh crores of projects at the tender stage.

Mohit Kumar — DAM Capital — Analyst

And how this Ganga Expressway, the execution, especially in FY ’24, there is [Technical Issues] will happen in FY ’24 to sense 50% of this order book to get executed in the fiscal year?

Harendra Singh — Chairman and Managing Director

Sorry, I couldn’t get your question clarity.

Mohit Kumar — DAM Capital — Analyst

My question was on the Ganga Expressway. Will that 50% of the execution happen in FY ’24? Is that a fair assumption?

Harendra Singh — Chairman and Managing Director

Yeah, for sure, because that’s a 27-month-duration project, and we started in November. So with that, we need to complete by March — sometime by February 2025. So 50% of the execution would be in FY ’24 on Ganga Expressway.

Mohit Kumar — DAM Capital — Analyst

Understood, sir. Thank you and best of luck. Thank you.

Harendra Singh — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Shravan Shah from Dolat Capital. Kindly proceed.

Shravan Shah — Dolat Capital — Analyst

Yeah. Thank you. Congratulations for the good set of numbers and the highest ever revenue EBITDA and PAT in a single quarter. Sir, just wanted to understand slightly more in detail in the sense that now we are seeing [Technical Issues] reduce our revenue guidance for this year to INR4,500 crores from last of INR4,600. So is it possible that by your end, we may see INR4,400 crores [Technical Issues]. So ideally from the original INR5,000 crores to now coming to INR4,600 crores and then now we are saying INR4,500 crores, and also in terms of the FY ’24 last time, we said INR5,800 crores to INR6,000 crores. So how is now the new guidance?

Harendra Singh — Chairman and Managing Director

Look, I think for this year, the correction has been because of the few delays in the appointed date and [Technical Issues] of Ganga Expressway, which earlier was anticipated to be started by July, and where the shortfall is clearly visible because of that for INR5,000 crores to INR4,600 crores. We still are in that confidence that we would be reaching that number of earlier being guided with INR4,600 crores, but we are keeping it, say, well within the achievable target, 100% is what INR4,500 crores. So the reason behind that was for [Technical Issues] was the big reason for those three projects. We already discussed last quarter. Now coming to the FY ’24, if you see the total orders, which we need to deliver or execute into FY ’24, whatever is –was not possible during this year, would be added to the next year. So we are keeping our guidance of about 22% to 25%, which earlier was not that number on year-on-year, so which is always INR5,600 crores, INR5,500 crores always is achievable.

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. And in terms of the margin, more than 16% even if there is no bonus, so that is achievable?

Harendra Singh — Chairman and Managing Director

Yeah. Say, we are having all our projects, which are having — bearing this margins on everywhere [Technical Issues]. So, we’re not seeing much of the challenge as far as getting the 15% margin.

Shravan Shah — Dolat Capital — Analyst

Okay. So — and in terms of a couple of things, just to clarify, the total equity with the new Karnal Ring Road, you said at INR1,237 crores, what’s the requirement?

Harendra Singh — Chairman and Managing Director

See, the total equity requirement is now INR1,237 crores, earlier it was INR1,100 crores and is now at [Technical Issues] crores that we will add.

Shravan Shah — Dolat Capital — Analyst

Okay. And fourth quarter, you mentioned INR38.4 crores. So in ’24 and ’25, how much to be added?

Harendra Singh — Chairman and Managing Director

It’s cutting round to INR325 crores and INR INR170 crores in FY ’24 and FY ’25 respectively.

Shravan Shah — Dolat Capital — Analyst

INR325 crores and?

Harendra Singh — Chairman and Managing Director

INR170 crores.

Shravan Shah — Dolat Capital — Analyst

INR170 crores?

Harendra Singh — Chairman and Managing Director

Yeah. [Technical Issues] crores already invested until December ’22. So the balance number is of INR170 crores, [Technical Issues] here then followed by INR327 crores or other INR327 crores in ’24 and ’25, INR171 crores.

Shravan Shah — Dolat Capital — Analyst

Okay.

Unidentified Speaker —

To answer your question, INR1,270 crores was total investment. Out of that, INR725 crores has already been invested. So balance INR550 crores is only to be invested in the next 27 months.

Shravan Shah — Dolat Capital — Analyst

Yeah, yeah I got the point. Sir, need a couple of balance sheet data points. So before that, just in terms of the date, though it has increased by INR79 crores, by year-end, will it come back to again INR430 crores, INR440 crores?

Harendra Singh — Chairman and Managing Director

Yeah, for sure. [Technical Issues] increase because you see we initially have given the capex addition, which was a key trigger for this particular financial year, early five years back, we all invested around INR250 crores in ’17, ’18. So this year, the major capex has been added. So because of that, INR108 crores of debt is being added during this quarter, this quarter only [Technical Issues] the selling plan for the key segments, which are about to be sold. So they are all [Technical Issues] cards, and we would be, say, at least INR21 crores of equipment would be sold — we will be selling in this particular quarter and then again, if you see to the number, which would be coming down to about [Technical Issues] by the end of this year.

Shravan Shah — Dolat Capital — Analyst

Okay. Sir, the data part I need is inventory, trade receivables, trade payables, retention money, unbilled revenue, mobilization advance.

Harendra Singh — Chairman and Managing Director

So, the borrowing base you have [Technical Issues] INR471 crores out of which, major is a term debt that is INR292 crores [Technical Issues].

Shravan Shah — Dolat Capital — Analyst

Si, I need an inventory number, trade receivable number, trade payable number, unbilled revenue, mobilization advance and retention money.

Harendra Singh — Chairman and Managing Director

Unbilled revenue, no, sorry, [Technical Issues] the debtor balance?

Shravan Shah — Dolat Capital — Analyst

Yes. debtor, inventory, trade payable.

Harendra Singh — Chairman and Managing Director

Okay. So, debtor balance is INR638 crores.

Shravan Shah — Dolat Capital — Analyst

Okay.

Harendra Singh — Chairman and Managing Director

And then the mobilization advance INR412 crores.

Shravan Shah — Dolat Capital — Analyst

INR412 crores, okay.

Harendra Singh — Chairman and Managing Director

Trade payables is INR630 crores.

Shravan Shah — Dolat Capital — Analyst

INR638 crores [Phonetic], okay.

Harendra Singh — Chairman and Managing Director

Inventory is INR226 crores.

Shravan Shah — Dolat Capital — Analyst

INR226 crores.

Harendra Singh — Chairman and Managing Director

[Technical Issues] rather than the FDRs and GST deposits and etc., FDR is INR170 crores. So likewise, it is coming at about INR653 crores, other assets.

Shravan Shah — Dolat Capital — Analyst

Yes. Retention money and unbilled revenue.

Harendra Singh — Chairman and Managing Director

That is all included and receivable is included and unbilled revenue is about say INR582 crores, I would like to add here this unbilled revenue has gone high in this particular quarter because there has been what we have executed in Ganga Expressway and one of the projects of the Khammam-Devarapalle, so there, whatever has been executed, it could not be built because of the — some GST issues were there, but the invoicing was done in January month. So we have not taken that particular revenue in the quarter, revenue means recognized revenue, it’s remained unbilled because of that reason.

Shravan Shah — Dolat Capital — Analyst

Sir, you said the unbilled revenue is INR512 crores?

Harendra Singh — Chairman and Managing Director

INR592 crores.

Shravan Shah — Dolat Capital — Analyst

Sorry, INR562 crores?

Harendra Singh — Chairman and Managing Director

82, 82.

Shravan Shah — Dolat Capital — Analyst

INR582 crores and retention money for last quarter, it was [Technical Issues]. What is the number?

Harendra Singh — Chairman and Managing Director

It’s around say INR190 crores, retention.

Shravan Shah — Dolat Capital — Analyst

INR190 crores, okay. Lastly, in terms of the — you mentioned that how much orders that we have bidded in terms of to be bidded, INR80,000 crores that you mentioned, how much we have already bidded and yet to…

Harendra Singh — Chairman and Managing Director

There is INR15,000 crores of the orders already bidded, but we are — yes, they are not open, expected to be open within next 15, 20 days.

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. Okay. Thank you, sir, and all the best.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Ashish Shah from Centrum Broking Limited. Kindly proceed.

Ashish Shah — Centrum Broking Limited — Analyst

Yeah. Thank you for the opportunity. Sir, my question is on the — some of the newer segments that we are planning to get into like railways, water and metro, we have recently got into. So what are the margin expectations from these segments? Because typically, when we see the other construction companies engaged in some of these segments, their margins tend to be in probably maybe 11% to 13% range, and they do not kind of manage 15% margin or 16% margin. So how do we would like to guide on our future margins?

Harendra Singh — Chairman and Managing Director

The projects which we are looking into [Technical Issues] railway. So there we are keeping. So that’s why you can see because we are putting our entire trust over the last one and a half years or so, but we cannot succeed getting one, say, many projects out of the water or metro or railways. But then again, we are keeping very, say, clear eye on that, the margin should be there at least, [Technical Issues] 14% to 15%, not less than 14% margins in other sectors where we can add the entry level — at the entry level. And a project — already we have given you that last three years, we have seen the margins at about, say, 18% to 20% that are coming from HAM and the mix of EPC, which we are seeing in — even in the EPC of NHAI, we are making margins of about, say, 13% to 15% in that range. So there’s averaging out, it is coming at around [Technical Issues].

Ashish Shah — Centrum Broking Limited — Analyst

Okay. So even on a blended basis, if these segments become like maybe 20%, 25%, we will still be broadly like 15-plus margins, 15% to 15.5% or closer to 16%.

Harendra Singh — Chairman and Managing Director

Yeah. Correct. Correct.

Ashish Shah — Centrum Broking Limited — Analyst

Right. Sir, also more in terms of the asset monetization that you touched upon earlier, if you can just elaborate a little exactly, I mean, at what stage we are, you mentioned something about technical due diligence. So what is the kind of time frame that we are expecting? And any expectation of how much we expect to get from monetization.

Harendra Singh — Chairman and Managing Director

No. See, as of now, the number is not very clear on it. So you — already in the last call also, we have discussed on it, but our expected valuation is about 1.4 times to 1.5 times [Phonetic] of the equity, which we have invested into these four projects. That is one part. It is [Technical Issues] more of the clarity has come, thereupon the technical due diligence has been started because unless that is being principally agreed, so nothing of that nature can be taken up. So we are already into that phase where most of the things are all aligned. Now post that, anything like SPA and binding agreement to be signed. So within the shortest period we expect, so while everything is over, say within next — within a month or so, we can conclude upon our deal closure. And thereupon, I think the productions and everything of [Technical Issues] getting the NOC from the lenders and NHAI, it will take another three to five months. So probably by September end, we believe that we would be able to monetize those assets and then actually cash can come in the accounts.

Ashish Shah — Centrum Broking Limited — Analyst

Sure, sir. Sir, lastly, can you just tell us in terms of this new HAM asset we’ve got? So what is the rate at which the financial closure can happen? I mean what is the kind of ask rate of the banks at this point of time?

Harendra Singh — Chairman and Managing Director

See. It’s very early to say about it. We are initially getting the offer about 8.3%, 8.5%, but it’s very early to say.

Ashish Shah — Centrum Broking Limited — Analyst

Sure. And the equity debt portion, etc., will remain the same. There’s no change from the historical…

Harendra Singh — Chairman and Managing Director

Almost will be the same.

Ashish Shah — Centrum Broking Limited — Analyst

Right. Okay. Thank you. Thank you for the answers.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Nikhil Abhyankar from DAM Capital. Kindly proceed.

Nikhil Abhyankar — DAM Capital — Analyst

Thank you sir. Thanks for the opportunity. Sir, just to clarify, one, the bonus income has been around INR16 crores in this quarter, right?

Harendra Singh — Chairman and Managing Director

Yes, it is INR15.95 crores to be very precise, and that is at the SPV level. See, at the company level, it has been 90% of that, it is INR13.7 crores.

Nikhil Abhyankar — DAM Capital — Analyst

Sir, if you [Technical Issues] against the revenue, so the margin is coming out to be around 15.6%, 15.7%.

Harendra Singh — Chairman and Managing Director

It is 15.73% to be very correct.

Nikhil Abhyankar — DAM Capital — Analyst

Right. So sir, are we still seeing some margin pressures?

Harendra Singh — Chairman and Managing Director

I will explain a few reasons that margins definitely at 16% are much visible. The employee cost, which has gone high in this particular stage because the projects which we have recently mobilized and even the capex cost of the CAM construction, etc., has been done in those projects, which is giving a higher number of that particular expense and [Technical Issues]. So it is coming at because 1% to 1.5% is going into those numbers. So that will be, again, being — gradually being spread in the coming quarter revenue.

Nikhil Abhyankar — DAM Capital — Analyst

Understood, sir. Sir, about the DMRC project, this is our first non-road project. So, what are the kind of margins that you are targeting?

Harendra Singh — Chairman and Managing Director

Already, I have, we have given the guidance that is always bidded at about same margin, 14%.

Nikhil Abhyankar — DAM Capital — Analyst

Okay. Sir, and any guidance as to like you have mentioned a huge bid pipeline of INR73,000 crores for routes, so what — can you just give a flavor as to what will be the competitive intensity right now?

Harendra Singh — Chairman and Managing Director

That we cannot just guarantee, but definitely, it has been cooled down. We have seen the number of projects we have like in Karnal Ring Road, there only two bidders were there. In one of the projects of Haryana, they were only six bidders. So in many of the projects, they are coming at as high as 9 to 10 or 12 bidders, but many projects are now getting, say, the less number of bidders, so which I believe that this — what amount of opportunities, what amount of bids are there. So when that gives us a fair chance that we would be, say, able to at least 3,000 to 4,000 [Phonetic] three projects from HAM or another, say, another one from railways or so, we would be able to get in this year.

Nikhil Abhyankar — DAM Capital — Analyst

Understood, sir. And sir, earlier, there was talks of the grant being reduced to 20%. So any news around that?

Harendra Singh — Chairman and Managing Director

No, no, nothing of very concrete outcome is there. It’s only a proposal, which was discussed — as of now, [Technical Issues] outcome is there.

Nikhil Abhyankar — DAM Capital — Analyst

Okay. [Technical Issues] what is the total equity invested in all the assets that we have identified from monetization?

Harendra Singh — Chairman and Managing Director

Already have given that the INR722 crores [Technical Issues] we have funded, say, INR120 crores [Technical Issues] till December ’22. [Technical Issues] We are talking of the projects which are going to be monetized [Technical Issues] for INR343 crores.

Nikhil Abhyankar — DAM Capital — Analyst

Understood, sir. Thanks a lot, sir.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Sarvesh Gupta from Maximal Capital. Kindly proceed.

Sarvesh Gupta — Maximal Capital — Analyst

Good evening, sir and congratulations on a good set of numbers. Sir, first question, order inflow, so I think till date, we are at INR6,000 crores. But I guess, net of price variation, it might be somewhat closer to INR5,000-odd crores. [Technical Issues].

Harendra Singh — Chairman and Managing Director

Sorry, sorry, sorry. I will just correct. Net of price variation means these are net of GST numbers, which we have added this year. And the price variation is all there, whatever price escalation, it is going to be paid over and above these numbers.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. So, INR6,000 crores net inflow till December from March, then if you add the price variation, then what is that number, sir?

Harendra Singh — Chairman and Managing Director

See. Exactly, we cannot presume any price variation on a percentage basis. But as a normal trend we have seen, like in this particular quarter, we have received some INR87 crores of price variation. So, it is going as high as 8% as of now. But usually, the trend is — 6% to 8% is the trend, which we have seen in the past — historical past.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. So on top of this INR6,000 crores, we are guiding for INR3,000 crores to INR4,000 crores in this current quarter. So, it will make it INR9,000 crores to INR10,000 crores order inflow for this quarter. Is that right, sir?

Harendra Singh — Chairman and Managing Director

Yeah.

Sarvesh Gupta — Maximal Capital — Analyst

And then for the coming year, what is the expectation?

Harendra Singh — Chairman and Managing Director

See, we are keeping our guidance on that basis that whatever we will be doing in a particular year, on basis that, we would be — like to add to maintain a ratio of 2.5 to 3 times the bill, say, order to the bill.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. So, let’s say, next year, you are planning to do [Speech Overlap].

Harendra Singh — Chairman and Managing Director

It would be coming roughly in the range of about INR8,000 crores to INR9,000 crores again.

Sarvesh Gupta — Maximal Capital — Analyst

Understood. Understood. And sir, on this particular corporate group from which there has been a lot of media stories so that occupies a major part of your order book. So any sense on these corporate developments? How can they potentially sort of have a negative impact on us, if at all? If you can throw some more color on — are there any risk sort of mitigation measures here should anything happen on these fronts because this is quite significant part of your order book?

Harendra Singh — Chairman and Managing Director

I understand your question. So, basically, with the recent development which we have also seen and we have experienced and with touching upon authority — where the project is coming from UP government and touching upon their higher authorities even with the group. We have understood that operationally, there is no challenge as far as they are having the — all commitment. And there is an escrow account being dedicated escrow account for the all entire SPV is maintained, where I think there are the three, one is the lenders and the client and the group company. So they are all having that clarity that whatever fund is going to be paid from that particular escrow is going to, say, EPC contractors or any small liability of that nature. So with that understanding, it is not a big challenge for us as of now because they’ve given the comfort and the authority has also given the comfort of that [Indecipherable].

Sarvesh Gupta — Maximal Capital — Analyst

Any sense on how much will be the lenders contributing to this, which is already tied up versus how much will be the funds, which will come from your client?

Harendra Singh — Chairman and Managing Director

So ideally, if you see any project of that where about 36% or 36% plus is coming from this UP government, which is coming in the form of grant depending upon the various stages of the completion of the project. And the equity commitment is coming about, say, 40% of the remaining portion of that and balance 60% is coming from the lenders.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. So, around 15%, 20% total is the equity commitment from your client?

Harendra Singh — Chairman and Managing Director

Yeah, roughly, it is coming to that.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. And these are all tied up already and…

Harendra Singh — Chairman and Managing Director

Yeah, these are all tied up projects. Financially, all complete closure is there. Everything is done. And again, you can just — I can mention upon it. [Technical Issues] time frame for the completion of these projects. So accordingly, it’s not that the their own capex is going to be affected. It is a company — the country’s capex or the state capex is there, which is going to be affected.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. So you don’t see any impact on this particular chunk as such? I mean your execution will continue as it is.

Harendra Singh — Chairman and Managing Director

Yes. As of now, they are already very clear. They have taken the weekly plan — monthly plans. And whatever we are running at about, say, that number, they are very clear on it, so we should add our resources or rather we should [Indecipherable] at a more aggressive pace. Because of the winter and the fog time in January, we could not do much in that. So that is how again, the clarity is there.

Sarvesh Gupta — Maximal Capital — Analyst

Understood. And sir, on the HAM projects of INR340-odd crores, I think the expectation, which was there in previous quarters was that in quarter four, we should be able to materialize these sales, so now it seems like because of our valuation expectation, we don’t know the time lines for these.

Harendra Singh — Chairman and Managing Director

No. No. I have given the time lines. The discussion is at a very advanced stage. The due diligence means, it is a proper technical due diligence at a very advanced stage. The discussion is almost [Technical Issues] by this financial year-end, as it was already discussed that we would be concluding our deal. And thereupon, it will take another six months for exit.

Sarvesh Gupta — Maximal Capital — Analyst

But valuation is not a concern that has already been sorted. Is that the right understanding, sir?

Harendra Singh — Chairman and Managing Director

Normally, it is being principally agreed upon the fair absolute number, I cannot just give right now, but it is supposed a binding agreement and this SPA only which can be disclosed.

Sarvesh Gupta — Maximal Capital — Analyst

Understood. And finally, on the NHAI pipeline, sir, so it has been like quite strong for a long time now for many quarters, but we are not seeing much on action, which is slightly counterintuitive also because, as you rightly said, election is there, so it could have been preponed rather than this — all this pipeline getting stuck and sort of not being given out and/or given out very close to the elections itself.

Harendra Singh — Chairman and Managing Director

No, I think it is very clear because NHAI has given the clear indication to all the [Indecipherable] and contractors to run — to increase the execution rate as of now, which is quite low. They have also indicated there are not many projects which are coming right now to be bidded and in the bidding pipeline as well, so it’s hardly matter is the election year or whatever. So what is not visible is they are — continuously they are awarding the project, but it’s a lot many companies who are not in the listed entities or not in the public domain. So they’re getting the projects. So it’s not that the bidding is not going on, bidding is going on.

Sarvesh Gupta — Maximal Capital — Analyst

Okay. So we are confident of getting this as per our pipeline expectation in the coming quarters?

Harendra Singh — Chairman and Managing Director

Correct. Correct.

Sarvesh Gupta — Maximal Capital — Analyst

Understood, sir. Thank you, sir. All the best.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Prem Khurana from Anand Rathi Shares. Kindly proceed.

Prem Khurana — Anand Rathi Shares — Analyst

Thank you for taking my questions. Sir, I think most of my questions are already answered, just a couple of questions from my side. So one was I want to understand the ROW status for the recent hybrid annuity that we have been able to manage, and if you could also help us with the land status for the two Odisha packages as well, I think we were more like 80-odd percent there. So have you seen any progress there in also in this Karnal project, if you could let us know [Technical Issues] status?

Harendra Singh — Chairman and Managing Director

No, say, as for the land availability in Orissa and EP projects, more than 90% of the land is available now, and we are running at a decent pace in those projects. And you can see in our total execution what we have done during this particular quarter where significant contribution has come from INR370-odd crores is from all Raipur Vishakhapatnam, AP and OD projects. So that is in this particular Karnal Ring Road project, also 40% of the land is right now available. So by the time we complete our financial closure, I’d say, by May or June, we will be able to get the entire 80% plus land.

Prem Khurana — Anand Rathi Shares — Analyst

Sure. And the second question is around the Ganga Expressway [Technical Issues] working sort of [Technical Issues] come to us, fair to assume some of these mobilization advances that were supposed to come to us should have come [Speech Overlap].

Harendra Singh — Chairman and Managing Director

Yes. We have taken just 1% of the mobilization advance [Technical Issues] INR49 crores in that particular project. We have again applied for another 1%. That would be in February and March. We’ve been looking forward to that.

Prem Khurana — Anand Rathi Shares — Analyst

Okay. Is it — I mean you are supposed to get 10%, right? So if you want to do it in 1% [Speech Overlap].

Harendra Singh — Chairman and Managing Director

See, we are okay with — we don’t want because all are interest-bearing, had it be only limits or had to be [Technical Issues] limit and the mobilization advance [Technical Issues]. So rather, we would be looking more into this matter where the mobilization advance is interest-free.

Prem Khurana — Anand Rathi Shares — Analyst

Sure. And the metro projects that were taken, would you be required going to spend any money in terms of any specific equipment that would be required as I understand [Speech Overlap].

Harendra Singh — Chairman and Managing Director

We are already having most of the equipment. It’s a very nearby projects of Urban Extension Road Delhi project. It’s very nearby. So entire establishment, most of the things are all in place. So what is going to be added is a slight capex addition of [Technical Issues] which is not a very big amount.

Prem Khurana — Anand Rathi Shares — Analyst

Sure. And sir, I’m not sure if you gave this number in your opening marks, how much will be the capex for the full year? And how much is [Technical Issues]?

Harendra Singh — Chairman and Managing Director

So capex for the full year, which is right now being what we have done is the also all-time high capex because of the phasing out. It’s almost INR243 crores of capex is done during this financial year. But this INR243 crores is not only the plant and equipment. [Technical Issues] that is the land is a gain there is INR28 crores of land being invested. There are some offices going to be developed. And CAM construction, earlier it was going to the extent, now it is INR25 crores of CAM construction, which gradually is going to be expensed out. So this is how the capex is looking a bit high. But otherwise, we are keeping — maintaining that guidance that INR80-odd crores of capex would be added in subsequent and not this year, the ’24 and ’25.

Prem Khurana — Anand Rathi Shares — Analyst

Okay.

Harendra Singh — Chairman and Managing Director

And this year, almost it is done about INR10 [Phonetic] crores likely to be added, not more than that.

Prem Khurana — Anand Rathi Shares — Analyst

Sure. And you’re planning to sell equipment further [Technical Issues].

Harendra Singh — Chairman and Managing Director

Yeah. Further, we are going to sell out some not less than say INR25 crores to INR30 crores of equipment during this quarter only.

Prem Khurana — Anand Rathi Shares — Analyst

Sure, sir. Thank you, and all the very best for future.

Operator

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

Uttam Kumar Srimal — Axis Securities — Analyst

Yeah. Thanks for the opportunity. Sir, my question pertains to the competitive intensity just you talk about. So sir, can you let me know whether competitive intensity has come down both in HAM as well as EPC, or is only in HAM projects?

Harendra Singh — Chairman and Managing Director

[Technical Issues] only in HAM. In EPC, it is almost the same.

Uttam Kumar Srimal — Axis Securities — Analyst

So, still 13, 14 bidders are there in EPC?

Harendra Singh — Chairman and Managing Director

Yeah. We are getting not more than [Technical Issues] not less than 20 bidders per bid. And going as less as 25% to 35%.

Uttam Kumar Srimal — Axis Securities — Analyst

Okay. Okay. Okay. And sir, this quarter, our employee cost has increased. So this will continue in the fourth quarter also?

Harendra Singh — Chairman and Managing Director

Sorry?

Uttam Kumar Srimal — Axis Securities — Analyst

Employee cost has increased in this quarter.

Harendra Singh — Chairman and Managing Director

No, no, this quarter, we would be — see it all spreads upon your total turnover. So wherever the mobilization was going on, say, we can see in quarter two and three, three most of the mobilization was done because, say, [Technical Issues] we are not seeing that if this is not 1,100, [Phonetic] it is really coming at about, say, 1,500 plus [Phonetic]. So this way, I think the spread would be — this employee cost remains the same, but the turnover is more.

Uttam Kumar Srimal — Axis Securities — Analyst

Okay. And now coming to the [Technical Issues] railway capex. So you would be bidding for most of the railway projects or some particular projects like station development [Technical Issues]?

Harendra Singh — Chairman and Managing Director

We already started bidding, a few of the projects we already bidded. A few of them are already [Technical Issues] the bid is yet to be open. So we are keen on that we will be bidding those projects as well.

Uttam Kumar Srimal — Axis Securities — Analyst

Okay. Okay. Thanks, sir. And all the best to you.

Harendra Singh — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Deepika Bhandari from Phillip Capital. Kindly proceed.

Deepika Bhandari — Phillip Capital — Analyst

Hi, sir. Congratulations on a great set of numbers. Most of my questions have been answered. Just to confirm, I think I missed out on that. What capex, net capex are you planning for FY ’24 and ’25?

Harendra Singh — Chairman and Managing Director

Capex — sorry, equipment capex, almost INR80-odd crores is likely to be added in FY ’24 and INR80 crores to INR100 crores in ’25. So the most of the capex, which we added this year would be sufficient enough to take up next two, three years of that.

Deepika Bhandari — Phillip Capital — Analyst

Okay. This is net of the [Technical Issues] planning to sell next year?

Harendra Singh — Chairman and Managing Director

Yeah. It’s net of net addition.

Deepika Bhandari — Phillip Capital — Analyst

Okay. And just the last question. When are we expecting AD [Phonetic] for Karnal Munak Road [Technical Issues]?

Harendra Singh — Chairman and Managing Director

See, as of now, the trend looks like by June or if not in June, by September, we will be taking the project [Technical Issues].

Deepika Bhandari — Phillip Capital — Analyst

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

Operator

Thank you. [Operator Instructions]. The next question is from the line of Ash Shah from Elara Capital. Kindly proceed.

Ash Shah — Elara Capital — Analyst

Good morning. And sorry for — if I’m repeating the question. But I just wanted to clarify that you mentioned that INR1,500 crores of revenue, we will do it in Q4.

Harendra Singh — Chairman and Managing Director

Yes.

Ash Shah — Elara Capital — Analyst

So, from where will that — which all projects will contribute most of it, if you could just provide a brief breakup?

Harendra Singh — Chairman and Managing Director

Yeah, sure. This major portion would be coming from if you just take a major project. One is the Urban Extension Road of Delhi, where the yield would be coming in the range of about INR225 crores. So the INR225 crores and, say, INR550-odd crores would be coming from Raipur-Visakhapatnam AP1, OD5 and OD6, three projects, HAM projects. And INR125-odd crores would be executed in Khammam-Devarapalle Package 1 and 2. There’s about 10% of the total project cost there. So likewise, I think the Ganga Expressway, it is coming about — say INR350-odd crores will be coming from the Ganga Expressway.

Ash Shah — Elara Capital — Analyst

Okay. And second question was regarding that you have made some investment in a partnership firm called SafetyFirst. So if you could just provide some details on the same, what is it regarding and how is it beneficial for us?

Harendra Singh — Chairman and Managing Director

Yeah, for sure. This is a manufacturing company, which usually manufactures [Technical Issues]. So these are the [Technical Issues] being supplied to us in many of the process that there is the company, which we know for the last three years. So we found that [Technical Issues] integration in the form of not going into the manufacturing by ourselves. But going into that, it is dedicated or committed [Technical Issues] where we would be getting better advantage. And there is a huge growth opportunity in the coming future.

Ash Shah — Elara Capital — Analyst

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

Operator

Thank you. [Operator Instructions]. The next question is from the line of CA Akash [Phonetic], an individual investor. Kindly proceed.

CA Akash — Individual Investor — Analyst

Yeah. Good evening, sir. And congratulation on a good set of numbers. Sir, I just wanted to confirm just one thing because most of the questions are already answered. This is with respect to the margin priority, you said it would be around 15%, 16% [Phonetic]. Just wanted to confirm, is this the PAT margin you’re talking about or the EBITDA margin?

Harendra Singh — Chairman and Managing Director

EBITDA margin. PAT margin is roughly [Technical Issues] applicable taxes there [Technical Issues] and you will see the depreciation EBITDA, depreciation and the interest cost, which is roughly coming at about, say, 3.5% to 3.4% in that range. So PBT is coming at about 13% this year. So it would — the PAT has come in about the 9.3% to 10%.

CA Akash — Individual Investor — Analyst

[Technical Issues] for the next year, that is FY ’24.

Harendra Singh — Chairman and Managing Director

So, this is the same trend which we are keeping for this year as well as next year.

CA Akash — Individual Investor — Analyst

[Technical Issues] Confirm it will be somewhere in the range of 9.3% to 10%, right?

Harendra Singh — Chairman and Managing Director

Correct.

CA Akash — Individual Investor — Analyst

And the top line will be somewhere around hovering around INR5,500 crores to INR5,600 crores, correct?

Harendra Singh — Chairman and Managing Director

Right, right.

CA Akash — Individual Investor — Analyst

Okay. Okay. Thank you, sir. Thank you for your help.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Bharat Gianani from Moneycontrol Pro. Kindly proceed.

Bharat Gianani — Moneycontrol Pro — Analyst

Yeah, sir. Thanks for the opportunity and congrats on a good set of numbers. I just missed the number, like you mentioned that you have INR80,000 crores of project pipeline. So, out of that, INR73,000 crores is for roads. And so what is the balance? I missed that number of balance of INR7,000 crores that you gave, that is for mix segment [Phonetic] basically.

Harendra Singh — Chairman and Managing Director

INR4,000 crores from the railway, which we are looking at to bid for the railway project. INR2,000 crores is from water project while INR1,500 crores are the metro projects.

Bharat Gianani — Moneycontrol Pro — Analyst

Okay. And so basically, based on the project bid and your plan, now you got a breakthrough in the metro project. So next year on, say, one or two years down the line, what’s your view that — what’s your target because we have been eluding this point since last many years [Technical Issues] how much would be the contribution of the nonroad revenues in the — sorry, what is the nonroad contribution in the overall order book that you expect in the next two to three years’ time line? And in the nonroad segment, what will be major areas that you think you should be getting the projects. Thank you.

Harendra Singh — Chairman and Managing Director

See, already we have discussed, I think we are gradually going to increase other than the roads 25% in the next three years, gradually it would be added. So looking to that, total revenue sharing from these kind of projects would be in the trend or right now, if it is lowly metro and their subsequent in the year FY ’24 and ’25, you will be able to get many more projects in other sectors. The sectors are like metro, railways, water and it can be airport even. So going beyond that, if you see that gradually, the number from — say the number in revenue would be coming from these sectors.

Bharat Gianani — Moneycontrol Pro — Analyst

Okay. Okay. Okay, sir. Thanks and all the best. That’s all from me.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Shravan Shah from Dolat Capital. Kindly proceed.

Shravan Shah — Dolat Capital — Analyst

Yeah. Thank you. Sir, appointed date for this metro project will be one to two months from now?

Harendra Singh — Chairman and Managing Director

This is already declared. It’s 23rd of January. We have already started the work.

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. Got it. And the INR15,000 crore projects that we have bidded roughly, how much would be the HAM projects from them?

Harendra Singh — Chairman and Managing Director

They mostly are HAM projects, a few are EPC just, INR2,000 crores to INR3,000 crores of EPC and about INR10,000 crores are on HAM budget, remaining, say, [Technical Issues] INR1,500 crores are from railway, I think one or two other projects.

Shravan Shah — Dolat Capital — Analyst

Okay. In that — any specific — any new states that we have already bidded any of the new state?

Harendra Singh — Chairman and Managing Director

Yeah, we have bidded one or two projects in Jharkhand as well.

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. Got it. And sir, any thought or any idea in terms of the Bharatmala Phase 2 when it is likely to be approved or what could be the size of that? So structurally, I’m trying to look at — in next two, two and a half years, this Phase 1 will be over, so what will be the next in terms of the opportunity size. So, this Phase 1 was started with INR5 lakh crores to INR6 lakh crores and now close to INR11 lakh crores, INR12 lakh crores, so just trying to understand any broad idea? Will it be the same kind of a size INR10 lakh odd crore kind of Bharatmala Phase 2 and then…

Harendra Singh — Chairman and Managing Director

I am not having any big idea on those things, but definitely, that [Technical Issues] and the plans are very much on that track only. So I think by FY ’23 or say, by the year end, we would be able to get the clear guidance, but for sure, I think about the 1,500-odd kilometers to 50,000 kilometers to be developed in that [Indecipherable].

Shravan Shah — Dolat Capital — Analyst

Okay. Okay. Thank you, sir. And all the best.

Operator

Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Mr. Harendra Singh for closing comments.

Harendra Singh — Chairman and Managing Director

So, thank you all. I appreciate you all for taking your time out for attending today’s investor call. I hope all of your questions were answered adequately. In case there are any follow-up queries, please feel free to reach out to us or our IR advisor, Go India Advisors. Thank you.

Operator

[Operator Closing Remarks].