Kalpataru Power Transmission Limited (KALPATPOWR) Q3 FY23 Earnings Concall Transcript

Kalpataru Power Transmission Limited (NSE:KALPATPOWR) Q3 FY23 Earnings Concall dated Feb. 09, 2023.

Corporate Participants:

Abhineet Anand — Investor Relations

Vishesh Pachnanda — Vice President and Group Head Of Investor Relations

Manish Mohnot — Managing Director and CEO

SK Tripathi — Chief Executive Officer

Analysts:

Parikshit Kandpal — HDFC Securities — Analyst

Akshay Kothari — Envision Capital — Analyst

Kaushik Poddar — KB Capital Markets — Analyst

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Teena Virmani — Kotak Securities — Analyst

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Rajkumar Vaidyanathan — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Kalpataru Power Transmission Limited Q3 FY23 Conference Call, hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhineet Anand from Emkay Global Financial Services. Thank you. Over to you sir.

Abhineet Anand — Investor Relations

Thanks, Alwyn[Phonetic]. Good afternoon, everyone. I’d first like to thank the management for giving us this opportunity to host the call. I will hand over the call to Mr. Vishesh Pachnanda, Vice-President and Head, Investor Relations. Over to you Vishesh.

Vishesh Pachnanda — Vice President and Group Head Of Investor Relations

Thanks Abhineet and thank you for hosting the call today for us. A very good evening to all the participants. This is Vishesh Pachnanda, I’m pleased to welcome you to the Kalpataru Power Transmission Limited earning call for the third-quarter fiscal year 22-23. We have with us today the management team represented by Mr. Manish Mohnot, Managing Director and CEO; Mr. SK Tripathi, Deputy Managing Director; Mr. Amit Uplenchwar Director; and Mr. Ram Patodia, President and CFO.

We will start with a few minutes of opening remarks by Mr. Manish and then we can open the floor for Q&A. With that and without any further delay, over to you Mr. Manish sir. Thank you.

Manish Mohnot — Managing Director and CEO

Thank you, Vishesh. A very good evening and a very warm welcome to you all for joining the earnings call of Kalpataru Power Transmission for the quarter and nine months ended December 22. Before diving into our performance for Q3, I would like to inform you that the merger of JMC Projects with Kalpataru Power Transmission in the month of January 23. The scheme of amalgamation has been effective from January 4, 2023. The record date for allotment of — allotment of shares was Jan 11, 2023, and newly-issued shares were listed on February 1, 2023. The merger was completed before the stipulated time against our earlier expectation of March 2023.

With the completion of the merger, Kalpataru has become one of India’s largest listed diversified engineering and construction company with a global presence and order book including L1 of nearly INR46,600 crores. Milestone for us and more importantly, the merger strengthens our core EPC business and places us favorably to take advantage of the large spending happening globally and in India towards energy transition and civil infrastructure development. We now possess the necessary capabilities and flexibility to rebalance our growth strategy given the dynamic business environment.

Our diversified business along with proven competence in domains of design, engineering, construction, project management, and manufacturing will help improve and strengthen our market position going-forward. We are now working on the integration of banking IT, HR, and procurement initiatives in order to fully leverage and benefit from the synergies arising out of combination of these two entities. These benefits are expected to start kicking gradually from Q1 of 2024 onwards. Coming now to the financial and operational performance for Q3 and nine months for the financial year ’23, let me put forward that with the completion of the merger and the appointed date being April 1, 2022, our standalone results represent the combined standalone financials of earstwhile GMC and KPTL.

We have delivered standalone topline growth of 10% in Q3 and 12% for nine months financial year at 2023. The growth has been led by robust execution and a healthy order book in the domestic and international business. Our consol revenue has grown — has grown by 3% in Q3 and 8% for nine months 2023 to reach INR11,459 crores. It’s worthwhile to note that we were not able to book some part of the revenue in the last few days of December 2022 and the initial days of the month of January 2023 owing to the procedural delays and modalities arising out-of-the merger due to the refreshment of contractual documents.

All such contractual documents have been replaced across all projects. However, we still expect standalone revenue growth to be closer to 15% and consol revenue growth in the range of 12% to 14% for the full-year 2023. Our standalone EBITDA margin continues to remain in the range of 9% for Q3 and nine months for 2023 despite enormous volatility in commodity prices and cost pressures. The underlying strength and focus of our business model on profitable growth are clearly demonstrated in our performance. Our EBITDA margin at a consol level were 9.1% for Q3 and 9% for nine months 2023.

Our standalone PBT before exceptional items stood at INR166 crores with a margin at 4.7% in Q3 ’23. For nine months ’23 PBT before exception stood at INR520 crores, with margins at 5.2%. Our standalone reported PAT stands at INR111 crores in ’23, and INR379 crores for nine months FY ’23. Our standalone net-debt stands at INR2053 crores. The increase in net-debt is primarily on account of incremental working capital requirements in select projects and higher capex for new orders, largely in the international markets. Our standalone net working capital days stand at around 134 days as on December ’22 compared to 126 days in March ’22.

Our net-debt level is expected to remain in a similar range for Q4 ’23. Getting into next year we believe debt levels to reduce as we expect better collections, maybe project closure and proceeds from divestment of non-core assets, particularly in the real estate. We have witnessed strong order momentum with YTD order inflows of INR19,487 crores. Additionally, we have L1 position of INR5,200 crores. Our current order inflow including L1 stands at INR24,687 crores against a targeted order inflow of INR21,000 to INR22,000 crores for full year. Our order book including Linjemontage and Fasttel stands at an all-time high of INR41,442 crores as on 31st December 22.

Coming now to the individual businesses. In the T&D business our revenue remained subdued, largely on account of lower backlog at the start of the financial year. However, with the improved tendering activity and business development efforts, we have secured projects of over INR7,500 crores, till-date in 23. With the new orders getting at the execution, we expect growth to start — to kick-start in Q4 of 23 onwards. Our credit facility Linjemontage has delivered revenues of INR279 crores in Q3 as INR801 crores for nine months 23. Our EBITDA margin for Linjemontage remain at comfortable levels in the range of 8% to 9%.

Our value subsidiary Fasttel reported revenue of INR95 crores in Q3 and INR316 crores in nine-month 23 with an order book of INR810 crores at the end of December 22. We continue to focus on project closures and strengthening our business in order to improve our performance in Brazil. Our B&F business has delivered revenue growth of 30% on back of robust execution and strong order book. Our YTD order intake stands at INR3,395 crores and order book stands at INR8,088 crores. We continue to send in a market position with repeated events from large existing clients and additional new institutional clients.

We are confident to continue the growth momentum in our B&F business on back of a robust capabilities and improved business visibility. Our water business achieved strong growth of 41%, aided by a record order book and healthy execution. Our order book stands at INR9,874 crores for the water division. Currently, we are executing over 30 projects in India and overseas market. The continued thrust by the government and increased budgetary allocation for JJM augurs well for this division. Our railways business was subdued marginally due to a lower order backlog. We are now focused on project closures and improving our market standing in segments like metrorail, semi-speed, and high-speed rail. We have positive recent allocation in budget by government for improving and strengthening the railways infrastructure.

Additionally, we are focusing on international markets and expect some breakthrough in the next year. In the oil and gas business, we have reported revenue growth of 7% in Q3 2023, and we have secured orders of around INR1,420 crores. Our bidding activity remains very positive in India, MENA and African markets. We now qualify to bid in six to seven countries and expect our international reach in the oil and gas business to improve in coming quarters. In the urban infra business, we reported strong growth in Q3 23, which was driven by improved execution of new projects. We have also successfully commenced execution of the Maldives integrated airport development project.

We expect our Urban infra business to contribute meaningfully to our growth in the coming year. Our significant investments are geared towards improving our capabilities. In case of a road boot projects revenue continued to be in the growth trajectory as it has reached to INR52.6 lakhs per day-in Q3 23 compared to INR46.3 lakh per day-in similar quarter last year. We have invested INR60 crores in nine-month 23 largely to fund repayments and service our debt. We had final stage of completing restructuring of WEPL.

We have appointed advisers to evaluate the sale of road boot assets, again given improved performance on traffic and tolling front. We are entering the last quarter of the financial year with a strong order book and a healthy tender pipeline across all our businesses in key markets. Additionally, the benefits arising from the merger integration with JMC will help us to improve our growth and profitability in the coming quarters. Currently, we are in the midst of a detailed planning and budgeting exercise for the next financial year and given a strong order book, together with healthy tender pipeline, it appears that we should be able to deliver revenue growth in excess of 20% and improved EBITDA margin in financial year ’24.

We will come back to you on the exact financial year 24 guidance during our full-year results later in the year. With this, I would request the moderator to open the lines for Q&A. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin with the question-and-answer session. [Operator Instruction] The first question is from the line of Parikshit Kandpal from HDFC Securities, please go-ahead.

Parikshit Kandpal — HDFC Securities — Analyst

From the integration of JMC now, have you started to be.

Operator

Sir, there was some loss of audio. I request you to please repeat your question.

Parikshit Kandpal — HDFC Securities — Analyst

Yeah, so, I just wanted to understand that integration with JMC. So have you started realizing improved profitability or savings, did we recognize anything in this quarter?

Manish Mohnot — Managing Director and CEO

So, Parikshit, given the benefits are coming on different accounts, but on the financial side, the savings would start maybe from Q1 of next year, primarily on the banking and interest cost because there’s a big difference in the cost for both organizations. We have started the process of discussing with banks and it’s a very advanced stage. We believe by March that should be done. So on the banking and interest cost, it would start from Q1 of next year. On the process of integrating the capabilities in bidding for large projects we have already started working that out and that’s helping us win some large projects. And also on international projects taking lot of our civil business, international, that’s also started. But to answer your question directly on the financial side I think the benefit is starting from Q1 of 24.

Parikshit Kandpal — HDFC Securities — Analyst

Both on the financial side and the operational side and plus release of our other guarantees fund and non-fund because of the integration. So what kind of total savings we are expecting next financial year, out of this merger. Because interest rates have also gone up. I know how much you can really save, if you can quantify the current interest rate that would be helpful and what kind of limits will get freed up for us, post those integration on fund and non-fund based.

Manish Mohnot — Managing Director and CEO

Sure, so on the limit front I think now as a merged entity we have enough limits to look at growth of 20% plus for the next two years. So we’re not worried, both on funded and non-funded. Doing our merger exercise we had calculated a benefit of closer to INR200 crores coming out-of-the merger exercise. Both on interest cost and a few other areas of cost rationalization. We believe that easily INR50 to INR70 crores reduction we should see an interest, getting into the next year itself on the merged entity.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. Second question is on the growth outlook now so now we have JMC with us we have fortified our balance sheet, we have expanded network capability qualifications. So what kind of opportunity it opens up in the international market. So how do you see your prospect pipeline multiplying now on account of this integration or merger?

Manish Mohnot — Managing Director and CEO

So Parikshit, today, our order book visibility of around INR46,000 crores. You is good enough to provide us a healthy growth, getting into the next two years. Right. Please remember that our order book has actually doubled in the last two years on a merged entity business. Right. So with this order book we are confident that we’ll be doing a minimum of 20% growth, getting into the next year. Is it going to be very significantly different than that in terms of the upside I would say, no, it should be in — this will be in the range of 20% to 21%, 22%. We are doing the final stretch now and will come back to you but 20% plus growth is visible for the next two years.

Parikshit Kandpal — HDFC Securities — Analyst

It’s coming more from JMC side, that JMC is now going international, so the brand-name of Kalpataru to unified Kalpataru talk. So what kind of possibilities it opens up on the ordering front and this INR21,000 to INR22,000 crores of inflows so how do you see this growing for the next year.

Manish Mohnot — Managing Director and CEO

So Parikshit, you know it is important to understand that now as a merged entity all divisions are looking at a growth of closer to 20%. Except for the railway division, every other division, whether it is water, whether it is B&F, whether it is T&D or whether it is oil and gas, all are looking at growth of 20% plus in the next years, given the visibility of order book.

Parikshit Kandpal — HDFC Securities — Analyst

The order inflow was expected to grow by 20% next year [multiple speakers]

Manish Mohnot — Managing Director and CEO

We will come back to you on that, because if current year against our order inflow target of INR21,000 crores we believe we will be landing up at INR24,000 to INR25,000 crores. So, our revised order inflow target for next year, will come back to you along with the year end results.

Parikshit Kandpal — HDFC Securities — Analyst

Okay, okay, sir. That is my question. Thank you and all the best.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Akshay Kothari from Envision Capital. Please go-ahead.

Akshay Kothari — Envision Capital — Analyst

Thanks for the opportunity and congratulations on good set of numbers. Sir, I could not understand the reason for the lower execution, which you mentioned. Can you please elaborate it?

Manish Mohnot — Managing Director and CEO

See, the primary reason for lower execution in the last week of December and the first week of January was because a lot of projects of JMC primarily with government agencies and a few railway projects we had to replace the old guarantees JMC with the guarantees of the new erstwhile company. Also, a lot of this PSU entities have their own processes of giving the approvals, right. While the NCLT approval had come there would be certain documentation, they would ask for certain additional information and all of that. It’s a process, which is very normal. But we’re doing it for the first time. So we did invest a few weeks in getting that done. While we speak all projects, we have done that. And during that process in the last week of December and the first week to few weeks of January, few projects suffered in terms of execution, as well as collection.

Akshay Kothari — Envision Capital — Analyst

So now they have normalized, right.

Manish Mohnot — Managing Director and CEO

Yes. As of today, all projects are normalized.

Akshay Kothari — Envision Capital — Analyst

Okay and sir in the recent credit rating update, it was mentioned that around INR100 crores of maximum loss from the road projects could be around INR100 crores. So we have booked an ECL of around INR2 crores in this quarter, so do we expect any significant ECL in the coming quarters or in Q4 as well?

Manish Mohnot — Managing Director and CEO

So we don’t — I don’t think the ECL has come out-of-the road projects, just that we are very clear. ECL as the process comes out-of-the overall data, which are overdue in nature. As far as our road projects are concerned, we don’t expect any further loss to come. We have just taken a INR2 crore hit on KTL, right, which is on account of expenses, which have been incurred there just a amount of INR2 crores, which is on account of statutory liabilities and some creditor payments which were overdue in nature, which we have paid now.

Akshay Kothari — Envision Capital — Analyst

Okay. So you did give guidance of FY24 but in Q4 do we expect very good revenue execution and what could be the margins, we could see?

Manish Mohnot — Managing Director and CEO

So in Q4 also we are expecting revenue growth in the range of 15% odd and that’s what we have guided. We do not see margins falling drastically. We do not see it going up also. It should be in the range of say 8.5% to 9% at a standalone and the consol in the range of 9%.

Akshay Kothari — Envision Capital — Analyst

And sir my last question would be on the effective tax-rate. So it’s around 30%, 31% currently in this quarter as well, so as far as I’m where it was around 25.2 or guided as 25.2 so can you just clarify on what would be our effective tax-rate, because a lot of jurisdictions come into play and so.

Manish Mohnot — Managing Director and CEO

The effective tax-rate is close to about 20% plus, because there are certain countries, where the tax rate, is much rather than the Indian tax so we’ll have to pay taxes in those countries. For the tax liability of those countries also will get clubbed over Indian tax liability. Plus there are certain losses on which we have not created deferred tax asset because we don’t have a certainty at this point in time, how we generate that kind of gains to offset those losses. So that’s why our effective tax rate is close to 30% to 31%.

Akshay Kothari — Envision Capital — Analyst

Okay, that’s it from my side. Thanks a lot and all the best.

Operator

Thank you. [Operator Instructions] The next question is from the line of Kaushik Poddar from KB Capital Markets. Please go-ahead.

Kaushik Poddar — KB Capital Markets — Analyst

Yeah, next year, what is the kind of margin you are looking at. I mean, right now it is on 9% or 9.5% on the consol basis. So what is the margin you’re looking at with a 20% top-line growth?

Manish Mohnot — Managing Director and CEO

So Kaushik, while we are doing detailed business plan, we do not see significant reduction in margin. We expect margins to be at a similar level. We would be coming back with a refined number when we give the year end numbers.

Kaushik Poddar — KB Capital Markets — Analyst

On the margin front, as well, is it?

Manish Mohnot — Managing Director and CEO

Yes, yes, yes. But you shouldn’t expect a significant downfall or incremental. First level is a fact, it would be in the range of 8.5% to 9% only.

Kaushik Poddar — KB Capital Markets — Analyst

And with the expected INR50 to INR70 crores of interest-rate reduction do you see the PBT level margin going up?

Manish Mohnot — Managing Director and CEO

Yes, we are targeting PBT levels to be in the range of closer to 5%, that’s what our target getting into the next year. And we will do a final print on that and come back to you all.

Kaushik Poddar — KB Capital Markets — Analyst

As of now, it is less than 5% as of now. I haven’t calculated it.

Manish Mohnot — Managing Director and CEO

It’s around 4.7, on a nine-month business.

Kaushik Poddar — KB Capital Markets — Analyst

Okay, so you see a 0.%3 to 0.5% bump-up. Right.

Manish Mohnot — Managing Director and CEO

Approximately, 0.%, 30 basis-points.

Kaushik Poddar — KB Capital Markets — Analyst

0.3%, okay, okay and this suddenly. I mean, this 20% you are thinking of this year, next year and year-after next, that is the kind of prediction, you are giving. So do you need some amount of additional manpower for that or I mean, would it be a how much percent increase in manpower cost you think if those 20% revenue growth for the next few years?

Manish Mohnot — Managing Director and CEO

So we have been continuously building manpower over the last few years. Right. and today the integrated manpower strength of more than 7,800 people. We believe we might not need so many people to come in at HO, RO, or project site level. As far as subcontractors are concerned, definitely we need most of contractors to work with us. We will definitely need more manpower on the international projects where we have had a huge exponential growth coming up in the last 12 months in case of order book and that’s something. So water division and international project is something where we might have to build additional teams, water because we have entered a few more states in the last three to six months and order book is very international because we’ve covered more geographies and the order book has grown. So with that. I think this two deficiency is building. It’s a continuous exercise, not we are constrained to achieve our revenue growth.

Kaushik Poddar — KB Capital Markets — Analyst

Okay, and my last question, you have given a projection of $3 billion by ’25, that means, you’re talking about FY ’26, right.

Manish Mohnot — Managing Director and CEO

No we are talking about FY ’25. If you grow at 20%, we are there.

Kaushik Poddar — KB Capital Markets — Analyst

I mean 24-25 or 25-26.

Manish Mohnot — Managing Director and CEO

24-25.

Kaushik Poddar — KB Capital Markets — Analyst

Okay, okay, okay, okay. Thank you. Thank you. Thanks a lot.

Operator

Thank you. [Operator Instrutions] We have the next question from the line of Amit Anwani from Prabhudas Lilladher Private Limited. Please go-ahead.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Hi, sir. Thank you for the opportunity. So my question is about domestic, international mix, if you could highlight, segment-wise and post-merger what kind of domestic, international mix if any assessment, you would have done looking for the next two years based on the order book.

Manish Mohnot — Managing Director and CEO

So you know I just divide this into two components, one is the order inflow for the current year. And second is the order book, if you look at the order book today. Our order book of around INR41,400 crores, domestic is 56% and international is 44%. If you look at the current year order inflow, domestic is 60%, international is 40%. We believe that the opportunity in international at least on three or four segments, which are primarily transmission, urban infra, oil and gas look very attractive. As far as the domestic market is concerned, whether it is transmission or water or B&F or railways, all of them look healthy. Going-forward, we believe we should be in the range of 55% to 60% on domestic and around 40% to 45% on international.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Right. But in the current book. Just wanted to understand how much at least in like water and T&D, how much is domestic, international.

Manish Mohnot — Managing Director and CEO

So on the T&D side, if you look at our total order book, which is around INR14,376 crores. I think around 70% plus is international. To give you exact number out of the INR14,376[phonetic] crores around only INR2000 crores, which is domestic, everything else is international.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Right. My second question is.

Manish Mohnot — Managing Director and CEO

90% plus is international, there’s only Mongolia and Maldives, which is international. Everything else is domestic, sorry, in the water 90% plus is domestic.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Yeah. My question is on next question on railways and T&D you highlighted T&D has seen a decline because of lower opening order book and railways also has been muted. So any order pipeline visibility, would like to highlight in domestic market, considering there were few announcements in budget also for FY 24 for T&D entering this.

Manish Mohnot — Managing Director and CEO

Yes, so if you look at the T&D what happened in the first-six months was a lot of projects got delayed, whether it was solar-related integration, whether it was Leh Ladakh, whether it was a lot of Rajasthan, Gujarat projects, a lot of them got delayed. In the last three months, we’ve seen a lot of projects open up and while we speak we are alone on three or four large projects. So on the T&D front we believe that, that business should be coming back to 10% or more growth, getting into the next year. Because a lot of these orders, where we are L1. One of them is a state and a couple of them are Power Grid. We should get the orders and the execution would start into next year.

As far as railway is concerned, we have not grown, our order book, consciously because took us a lot more on closure of projects and completing those projects because the order book, there was very healthy at the beginning of the year. Now with the new budget hopefully, we’ll see a lot more — many more tenders coming up. And that’s why we strategize, our growth plans for the division.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Right. Last question on the synergy benefits. So what we are targeting, how much percentage savings you are targeting through synergy benefits for the next two years?

Manish Mohnot — Managing Director and CEO

So I think I have already answered this question. I’m just repeating it, at least on the interest front, we expect the savings to come up INR50 to INR70 crores. This is what we had budgeted when we had done the merger exercise now with interest rates going up, we’re going to revisit that. But definitely it should be in the range of INR50 plus crores on the interest front itself.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

All right. Just wanted to understand operationally of more interest, yeah.

Manish Mohnot — Managing Director and CEO

So, operationally, we wouldn’t see a significant portion of saving except for the ability to bid for large projects. Doing projects where Civil Engineering Mechanical all of them come together and international projects, exposure to a lot of civil businesses. Because given the growth trajectory I don’t think we’ll see any savings coming out of reduction of manpower because we are right now continuously recruiting. But definitely we are aiming to 9% for the current order book also.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Right sir. And so, how is the — how has been the margin variability across segments. The low-margin segments and higher-margin segments right now currently in the book.

Manish Mohnot — Managing Director and CEO

So I think except for urban infra and railway balanced business margins have been all-in the range of 8% to 10% only.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Thank you sir. All the best.

Operator

Thank you. [Operator Instructions] The next question is from the line of Teena Virmani from Kotak Securities, please go-ahead.

Teena Virmani — Kotak Securities — Analyst

Hi, sir, thanks for taking my question. My question is regarding working capital, how do you see the demand situation from railways now, has it started improving. In the current quarter or how do you see it going-forward, because of some change in the methodology that we have adopted and how do you see it going forward. And my second question is related to pledging as to what would be your plans for prediction going-forward.

Manish Mohnot — Managing Director and CEO

So on the railway projects tes, there were a few APC projects where the payments were milestone-based which were back-ended. On those projects now we have done more than 50% to 60% of work and so payments are regular in nature. We do not see any difficulties in getting payments there. We had a few quarters where that had gone up, but getting into Q4 that would start reducing in proportion to the work done. So we do not see any challenges on collecting our receivables as far as railway divisons are concerned based on whatever payment terms exist today.

As far as the pledge is concerned I think that the visibility from the promoters is the pledge is continuously reducing and they reduced something in the last few months also. And the belief is that it will continuously reduce over the period over the next six to nine months. And in a manner that the pledge is similar to what it used to be three to four years ago. We do not have exact numbers of reduction. But the message from promoter is that the pledge would continuously reduce.

Teena Virmani — Kotak Securities — Analyst

Okay, got it. My last question is regarding the breakup of order book in terms of fixed and variable.

Manish Mohnot — Managing Director and CEO

Today in terms of fixed and variable order book it would be very different across various divisions. But in totality, if we look at it as an organization on a whole on INR40,000 crores, we might have closer to 55% is variable in nature and 45% is [technical issue] nature.

Teena Virmani — Kotak Securities — Analyst

Got it, sir. Thank you.

Operator

Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please go-ahead.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Hi, congratulations Manish ji and Tripathi ji.

Manish Mohnot — Managing Director and CEO

Thank you Bharat.

SK Tripathi — Chief Executive Officer

Thank you Bharat.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Completion of this merger. Sir, going ahead, can you give some visibility in all of the segment that we are present and how do we look at I mean from two to three years perspective? Sure, Bharat bhai, I’ll take the help of SKT also and I’ll request SKT to first start with water, civil and some of them, and then I’ll add-on to other things. SKT?

SK Tripathi — Chief Executive Officer

Yeah, so Bharat bhai on the waterfront there is a huge visibility across the country in most of the states, in fact, if I can quantify for the benefit of this discussion only 30% to 40% of the opportunity has been opened up balance opportunities are yet to open in the other states who complete the water distribution across the country. So this is one spectrum. So next two to three years, we see good visibility. Coming to the B&F there is a robust inquiry across all the whether it is the IT space, it is residential. Of course, the areawise the challenges and problems, they remain. I mean, the NCR issues, Mumbai issue and the stable South market based that dynamics remain, but there is no dearth of the opportunities. This is true and the third is — so just to add-on the T&D side if I divide this into domestic and international. As I mentioned earlier, worldwide domestic last three-four months we’ve seen a lot of traction. And in the last two weeks there have been at least five or six reverse auctions conducted by PFC, RFC where we are on few projects with Power Grid. So that visibility in a few states and Gujarat, Rajasthan, connectivity, looks good. And with that, growing at 10% plus, is not a challenge for T&D domestic.

As far as international is concerned, you can see from our order book also that over the last months, we have won several orders and across the globe. We have won orders in Africa, we won orders in Middle-East, we have won orders in Latin-America, we won orders in CIS countries. So there is good visibility and that business should be growing at 25% plus for the next year.

Manish Mohnot — Managing Director and CEO

As far as oil and gas is concerned. Our focus is lot more on international business, the domestic business does not look like growing very aggressively, but on the international business, we have now qualified for six, seven countries in Middle-East and Africa, and that’s something which is a very exciting opportunity. Railways, as I mentioned earlier, while there is opportunity but our focus is right now, a lot more on closure of projects because we already have very healthy order book there. And just to add, that is last one the infra, those are like we have said earlier, there is a big spectrum of the opportunity, but we are cautiously choosing where to pick-up the project and that is definitely one point of growth, which remains and whensoever we get the opportunity, it is going to see a very good growth, because that is the market which we are yet to address.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

So Tripathi ji, this infra can you I mean differently I mean say road, airport as well as port side or something.

SK Tripathi — Chief Executive Officer

So, Bharat bhai, yes, it is a big sector in India, but practically we are not there. And we do not want to be here, because it is overly competitive. Metro, we are there. We are executing a project. We are looking more into the value-added project like going for the underground or something like that. So that opportunity I think there is a good spectrum available and we will get-in there. Third is the heavy civil kind of infrastructure projects like coastal road, tunnels, or dams. They are also now with this merger, we have the array of capability to address such projects of the large sign that the large complexity hence rather than attempting a INR500 or INR700 crore project in those heavy civil areas we will be attempting the larger projects. This will be this will be the strategy. Now coming to the infra, if you look at in the Maldives we are doing airports that also is an infra project per Indian project. So as I said in infra, it will be more based on the opportunity based, where we get the right opportunity, we will chip-in.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

And what is the can you give some more color on this renewable what are the things are happening and where there is a lot of [indecipherable] but still on-the ground, how do we see.

Manish Mohnot — Managing Director and CEO

So, as far as on the renewable side, we do not have a lot of presence in the solar business, we’ve taken one project in the international market, but we are not so much focused on that in the domestic market. As for the domestic market is concerned the opportunity is more existent. The connectivity required for transmitting renewable to the grades. So that’s why we’re seeing a lot of projects coming up in Gujarat and Rajasthan and that is what you know is our focus area. On the domestic side, we are not so much focused on renewable EPC, whether it is solar or wind or hydro any of them.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

So my question was, when is the if say earlier in thermal power when the thermal power order used to get release T&D because both takes around four or five years now, whereas in case of solar, it is much smaller. EPCs for setting up the solar power plant, is much lower timeframe. So how do we see I mean government working that evacuation should not suffer so transmission line has to be ready, which should be at least taking still 18 month time.

Manish Mohnot — Managing Director and CEO

Sure, Bharath Bhai, so what we have seen in the last six months is a lot of tenders being floated by RFC PFC to take care of the requirements in Rajasthan and Gujarat. We’ve seen tenders of more than INR20,000 crores being floated by them across various projects, whether it is Hawada projects or the Buj projects or connectivity from Rajasthan to Gujarat and I think those have now moved into a very active manner. Last one-week, there have been five or six auctions which were done and won by different parties. So I think that clearly is a good opportunity for the next couple of years and beyond that I think this opportunity will continue to the other states of the country. Right now, a lot more focus on western states primarily Rajasthan and Gujarat.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay, and simultaneously these earlier we were working with, say techno Electric for the solar power plant for stabilizers and power fluctuation. So in that space are we doing anything?

Manish Mohnot — Managing Director and CEO

I don’t think we working with techno in any solar plant. We’re working with them on a few substation projects.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Yes, substation, sorry.

Manish Mohnot — Managing Director and CEO

We now have got pre-qualification for majority of the substation projects in the country and overseas and we continuously are focused on building that order book along with the transmission line orders.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay and last question, there was one news item these oil and gas pipeline that we shared gone I mean, earlier to several people L1 quoting bid at lowest and now they are not able to complete. So government is thinking of rebidding, in view of completing the grid connectivity. So are we able to get some kind from that?

Manish Mohnot — Managing Director and CEO

Bharat you will see tenders coming out of that opportunity as of now. Whenever we see tenders coming out definitely we will be focused on that, given that oil and gas, we are among the largest players in the country today.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

So are we seeing say, the way I mean earlier in T&D the way of doing business, say technical qualification, then financial qualifications are happening any other infra project?

Manish Mohnot — Managing Director and CEO

So we see that similar thing across various business units. Even oil and gas today for technical happens then financial happens. Even in water, some states we have seen that for technical and then financial. So I think it’s very different depending upon the state and the client as to what their requirements are.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay. Great. And last question, with operating leverage in Q4, do we see some kind of improvement in EBITDA vis-a-vis Q3?

Manish Mohnot — Managing Director and CEO

So, Bharat bhai, we do not believe we’ll see significant improvement in EBITDA because current year we’ve seen volatility on everything with interest rates going up, which does not directly impact EBITDA, but on commodity prices, steel has again gone up, volatility in FX, volatility in aluminum and copper, we do not see it going up. But we’re pretty confident of sustaining it in that level of 8.5% to 9%.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

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

Manish Mohnot — Managing Director and CEO

Thank you.

Operator

Thank you. The next question is from the line of Rajkumar Vaidyanathan an Individual Investor. Please go ahead. Sir, the line for you has been unmuted. You may go ahead with your question.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Hello. Can you hear me?

Operator

Yes. Go ahead, sir.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Yeah, thanks for the opportunity. Sir, just couple of questions. If I look at your last quarter presentation, you’ve mentioned that the topline will — you’ve given a guidance of 15% for the top line and PBT guidance of 4.5 to 5 for FY ’23. So I just want to know, do you still maintain the guidance because I see that slide is not there in the current presentation?

Manish Mohnot — Managing Director and CEO

On a standalone basis, we still maintain the guidance for the current year. On a consol basis, we have revised the guidance slightly lower to 12% to 14% instead of 15% for the current year.

Rajkumar Vaidyanathan — Individual Investor — Analyst

And how about the PBT?

Manish Mohnot — Managing Director and CEO

As far as PBT margins are concerned, we would be in the range of 4.5%.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Yeah, because we have done only 3.9% for the nine months. So which means your PBT should grow by at least 2% in the last quarter to maintain 4.5%.

Manish Mohnot — Managing Director and CEO

No. So on a standalone basis, I think we should be — we are targeting to be in the range of 4% and 4.5%. If we look at it on a standalone basis, if I look at nine months, we are at 3 — we’e at 5.2% already on a standalone. On consol, yes, it’s low. So standalone, we believe we should be in the range of 4.5% to 5%. Consol, we want to be in the range of 4% to 4.3%.

Rajkumar Vaidyanathan — Individual Investor — Analyst

So it’s lower than what you guided in the last quarter?

Manish Mohnot — Managing Director and CEO

No. Standalone, we are at the similar levels.

Rajkumar Vaidyanathan — Individual Investor — Analyst

No, no, but I think the last quarter guidance was on consol basis?

Manish Mohnot — Managing Director and CEO

Okay. So consol basis, yes, margins could be slightly lower than what we — it would be more in the range of 4.2%. From the quarter we have had quite a few coming out of Brazil and Shubham in terms of losses. Brazil, we have booked losses of closer to INR12 crores in Q3 and Shubham also has shown losses of around INR6 crores to INR7 crores. So this is something which was slightly surprising. We knew there would be some losses. We believe Q4 would also be a challenging period for both Brazil and Shubham, and that’s why a slight reduction in the margin as far as consol margins are concerned.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Okay. Okay. And any one-off expenses booked in current quarter on account of merger?

Manish Mohnot — Managing Director and CEO

No, I do not think we have booked, it might be some legal expenses. But nothing significant in terms of impact on profitability.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Okay. And sir, any reason why you are not upping the PBT guidance even for the FY’ 24 because we are still saying PBT will be in the range of 4.5% to 5%. So despite having a 20% revenue growth, there are no scale, and you said that synergy benefits of INR100 crores is going to come. So, even with that, you are still maintaining the same — the lower end of the guidance, what you’ve guided in the last quarter?

Manish Mohnot — Managing Director and CEO

So, what I said on the call was that we are still working out a detailed business plan. Our current estimates look like we should be in the range of 5% and we will come back with a definite number or range of numbers by when we do our year-end numbers. As of today, our biggest challenge continues to be volatility, right, whether it is on FX, whether it is on aluminum copper, steel, all of that, right? We do not want to get into a situation where we target something which is not achievable. So we believe that we are pretty confident of 4.5% to 5% and we’ll come back with revised numbers when we give the year-end number.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Okay. Great, sir. And last question, sir. So, are you not seeing any softening of the raw material prices yet in the P&L or you expect to see some benefit in the quarters to come by?

Manish Mohnot — Managing Director and CEO

No. We’re not seeing major softening in the raw material prices, whatever happened is happened last year or the first quarter of the current year. Now we’ve seen steel also going up last three to four months and we’ve seen aluminum has gone up again. So we’re not seeing major softening in any raw material prices except cement which was soft for maybe a quarter or so. But otherwise, there’s not a big impact of softening of commodity prices.

Rajkumar Vaidyanathan — Individual Investor — Analyst

Okay, sir. Thanks a lot, sir. All the very best.

Operator

Thank you. The next question is from the line of Akshay Kothari from Envision Capital. Please go ahead.

Akshay Kothari — Envision Capital — Analyst

Yeah. Thanks for the opportunity, again. Sir, for this quarter, there was an improvement in our gross margin as well as our subcontracting expense increased. So what was the reason for that?

Manish Mohnot — Managing Director and CEO

So the subcontracting cost, to answer that is primarily driven by a mix of project revenue. It’s not driven by — you cannot look at that in isolation. On a quarter-on-quarter basis, it has some projects which are more subcontractors, some have their own gangs, some has more supply and all of that. So subcontracting cost is driven by a mix of projects which happened. As far as gross margin is concerned, I think were at a similar level of what we had guided, right, there is no big surprise coming out there.

Akshay Kothari — Envision Capital — Analyst

There was a sort of improvement, so.

Manish Mohnot — Managing Director and CEO

Yeah. So I think it’s — as I said it’s — improvement as compared to what, you’re Looking at improvement compared to our guidance as compared to what you saw Q2 or previous year Q3. We are targeting as well as more on the guidance, and there we are seeing that we are in a similar range.

Akshay Kothari — Envision Capital — Analyst

Okay. Sir in terms of commodities, what would be the major commodities pricing in our material cost?

Manish Mohnot — Managing Director and CEO

I think it would be — if I had to — without quantifying it, the largest would be steel followed by aluminum. Steel in the form of both structural steel, rebar steel, plate as well as all of them, followed by aluminum. The third biggest would be copper and zinc in a similar form, and cement would be important. Cement would again be a big component.

Akshay Kothari — Envision Capital — Analyst

Sir, what was your nine month capex number?

Manish Mohnot — Managing Director and CEO

So we have done capex of closer to INR500 crores in nine months. So that’s an important area where we have revised the targets from the beginning of the year. While we had budgeted for capex of only INR250 crores to INR300 crores at the beginning of the year, we revised it upwards during the year, given the order book visibility and the growth happening. And we have done closer to INR500 crores, and we believe that this should be at levels of INR550 crores by the year end.

Akshay Kothari — Envision Capital — Analyst

Okay, sir. But I think a lot of it [indecipherable] depreciation has not increased. So, is it going to be capitalized by the year end?

Manish Mohnot — Managing Director and CEO

Yeah, you would see a lot of capitalization happening now. And again a lot of assets are more in the range of heavy equipments, where depreciation rates would be anywhere from 8% to 12% or 15%, it is not in the nature of searching [phonetic] materials where depreciation impacts immediately. But yes, a lot of capex is happening while we speak.

Akshay Kothari — Envision Capital — Analyst

Okay, sir. And sir, if I refer to the previous con calls, we were more bullish on the international T&D and water projects. Now, we see that we are also looking towards good domestic T&D ordering. So what’s — apart from the budget guidance, what’s actually changing on the ground, just wanted to know that?

Manish Mohnot — Managing Director and CEO

So I did explain that in the call here earlier also. So just to reclarify this, we continue to stay bullish on international T&D, water, as well as B&F as a core business of growth for the next two years. Domestic T&D last three months, we’ve seen a lot of traction coming from orders in Gujarat and Rajasthan primarily for the entire renewable connectivity capacity. We’re also seeing some orders coming in Southern India. These are all orders which are scheduled to be coming in Q1, Q2 of last year, but due to some regulations issues at Rajasthan, all these orders got deferred. I don’t know if I remember, there was this bird issue in Rajasthan which went up to NGO, which went up to the Supreme Court level. So, a lot of things got deferred by six months. These orders have come up now in the last three months and that’s something which we believe will help us push our growth in T&D domestic for the next few years.

Akshay Kothari — Envision Capital — Analyst

Okay. And any — so, Ladakh also INR20,700 crores has been allocated in budget. But I think there are some protests going on in Ladakh. So any on-ground movement happening over there?

Manish Mohnot — Managing Director and CEO

To the best of our knowledge, we have not seen much happening at the tendering stage, if there’s something happening at a developer or regulatory or strategic space, I wouldn’t be [indecipherable]

Akshay Kothari — Envision Capital — Analyst

Okay. And what sort of market share can we expect from that Ladakh order?

Manish Mohnot — Managing Director and CEO

I think we would be happy to answer that question once the tenders come. As I said, there is no visibility as of now. So as and when we see the tenders, we’ll be happy to. Being in the T&D space, we’ve been having a market share of 15% to 20% over the last 10 years. So hypothetically, it’s good to imagine that we’ll be in a similar space getting into the future.

Akshay Kothari — Envision Capital — Analyst

Understood. And lastly, do we have any exposure in Turkey and the affected area?

Manish Mohnot — Managing Director and CEO

No. Not to the best of my knowledge. Let me check with the team. No, we are preparing something. No, nothing. Absolutely nothing. We don’t even have any of our employees on holiday there. So we’re okay with that.

Akshay Kothari — Envision Capital — Analyst

And has there been an increase in our working capital cycle?

Manish Mohnot — Managing Director and CEO

So if you look at typically working cycle — working capital cycle, you’ll see that going up always in Q2, Q3 and you’ll see that history happening every time over the last five years to seven years. Yes, they have gone up by seven days to eight days over these nine months. We expect that to reduce slightly in the next three months. But yes, we’ve seen that going up mainly driven by growth and a lot more focus on execution of both domestic and international projects.

Akshay Kothari — Envision Capital — Analyst

Okay. So how much do you expect it to come down in the next few months?

Manish Mohnot — Managing Director and CEO

We were — working capital in terms of number of days, I think we were at around 126 days at the beginning of the year. Now it has come to 134 days. We would like it to be back in the range of 125 days to 130 days.

Akshay Kothari — Envision Capital — Analyst

That’s it. Thanks a lot. And all the best.

Manish Mohnot — Managing Director and CEO

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Abhineet Anand from Emkay Global. Please go ahead.

Abhineet Anand — Investor Relations

Yeah. First, on the road BOPs, what is the — nine month support I think is INR60 crores. So what is the support expected in full year FY ’23 and ’24?

SK Tripathi — Chief Executive Officer

’23, ’24, we may be with the — we have a repair — O&M repair cycle, which is going to come. So we should be in the same range of INR50 crores to INR60 crores like this year. Marginally maybe 10%, 15% difference depending on the traffic. But I think whatsoever the upside was to come, it has come in the traffic. Every year, we will not see this growth. But we have an O&M cycle coming up in the projects because most of the projects they have — they are on the eighth year or ninth year of post-operation and we have to put some money too. So that way same kind of infusion we have to see.

Abhineet Anand — Investor Relations

Okay. Secondly, with this standalone both the entities being merged. Can you give some balance sheet data points like [technical issue] capital and all?

Manish Mohnot — Managing Director and CEO

Sorry, it might be helpful for all the details, if you can get in touch with our team members Kunal and all of them. We’ve given the working capital days. The debt numbers is already known. The net debt, which we’ve already shown in the presentation. But if you need the details on gross fixed assets, net fixed assets, and all of that, it might be helpful if you can get in touch with our team. Kunal’s number or Vishesh’s number is there, you can just get in touch with them. They will be happy to provide you.

Abhineet Anand — Investor Relations

Sure. Secondly from Indore, what can be the inflows in let’s say I mean FY ’24 that happens, what could be the inflows from Indore?

Manish Mohnot — Managing Director and CEO

So on Indore, for the current year, we budgeted an inflow of closer to INR100 crores, out of which in the nine months, we have got closer to INR55 crores. So we expect around INR40 crores, INR50 crores to come in this months. After this, getting into the next year, we expect the balance of around INR150 crores to come in ’23, ’24.

Abhineet Anand — Investor Relations

Okay. And lastly, you did mention that in the capex side, higher compared to what you have budgeted. So I’m assuming that for next year ’24, those numbers would normalize to INR200 odd crores or are there any other plans?

Manish Mohnot — Managing Director and CEO

I think we should be targeting capex back to the normal levels of INR200 crores to INR300 crores and we will come back with the exact number once we finalize our business plan for next year. But you’re right, it wouldn’t be as high as what we have done in the current year.

Abhineet Anand — Investor Relations

And given this synergy in terms of both companies, any sector or subsector that you guys are evaluating as to where at a combined entity we could have been? But because we are working as separate entities, we have not been doing. So any subsector that you are targeting to bid in the future?

Manish Mohnot — Managing Director and CEO

I think we continue to be focused on the six, seven sectors where we exist today. Our only strategy change would be, we’ll be bidding for projects of much higher value which involves complexity of design, engineering, prebuilt, all of that. So we would be focused on larger projects with design and engineering requirements also.

Abhineet Anand — Investor Relations

Thanks, sir. Those are all my questions.

Operator

Thank you. We have the next question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal — HDFC Securities — Analyst

Yes, sir. My question is on Shree Shubham. What has been the support given till nine months for Shree Shubham Logistics?

Manish Mohnot — Managing Director and CEO

Parikshit, on the financial side, we have given them zero support. There has been no financial support given to Shree Shubham Logistics in the last two to three years in last two years definitely zero support to Shree Shubham in the nine months, in terms of.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. But how are they funding their launches then, because you said this quarter also there was a loss.

Manish Mohnot — Managing Director and CEO

So, if you see the numbers of Shree Shubham, they’ve exited a few — they’ve sold a few assets on cold storage which were not giving very good returns. And those assets have helped them to make sure that the debt reduces. And that’s also helped them on the cash flow. So with the current visibility, we do not see any support getting into the Q4 also. If this MSP, the minimum support price versus the market price continues to be as high as what we see today, then there could be some requirement in the next year. But we would be in a position to budget that earlier at the beginning of the year. Our biggest challenge in Shubham today is that the market price is so high compared to the minimum support price, that all agriculture across the country are at less than 50% capacity.

Primarily on wheat, we have seen that prices go up significantly because of the Russia-Ukraine war, and because of that you see that even FCI stocks, which is public data you’ll see at a 20 year low. They are sitting on a buffer stock which is less than one year. So with this clearly, there are challenges in terms of warehouse utilizing at Shubham and which could further result in challenges of some small cash flow requirements into the next year. We will review that and come back to you at the beginning of next year.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. And just one last question, just stepping on the road portfolios. So you did mention about the restructuring of the asset. So the losses of about INR50 crores to INR60 crores funding support for two next years. So how do you see it in the light of this restructuring happening?

Manish Mohnot — Managing Director and CEO

So I think from a restructuring perspective, even if the restructuring happen, would there be a significant difference, maybe INR10 cores, INR15 crores reduction could happen in year one. It might improve from year two onwards. So even if restructuring happens, we still believe that INR50 crores to INR60 crores of inflow might be required for next year. But as SKT highlighted earlier, maybe 30% to 40% of that cashflow would be for major maintenance. Last three, four years, majority of our support has been only for debt and interest repayments. But next year given the revenue growth, a lot of debt and interest repayments will be taken care by the respective projects. But we might have to support them on major maintenance, which happens once in seven to eight years.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. Just last thing sir, you said that you appointed some consultants back on the monetization. So do you think it will require significant headstart even post-restructuring projects into those, so there could be some more non-cash losses, which may come in?

Manish Mohnot — Managing Director and CEO

Sorry, I missed this question completely. Okay, sorry. No, we’ve just appointed — we had earlier also appointed consultants to look at these duty assets. We have again reinitiated this exercise just a month ago. All the successes do take time, and, hopefully, next two to three months, we might have some clarity. We believe that the market is bullish in terms of looking at the projects which are — which have a lead of next 10 years to 15 years and that might help us fill these assets. We’ve already declared these assets as non-core. So from our perspective, if there are good buyers, we would be happy to exit this asset at the earliest.

Parikshit Kandpal — HDFC Securities — Analyst

And this Kurukshetra[Phonetic] is now out of our books, nothing — we have nothing to do with. Because we mentioned about INR2 crore provisioning on that. So do you still have any, let’s say, dual interest or any litigation or any liabities pertaining to that project or it’s already maintained and handled by NHAI?

Manish Mohnot — Managing Director and CEO

So on Kurukshetra, we had a small loss out of some payment to creditors and statutory payments. We do not expect significant inflow to happen. We’re completely out of that project. NHAI is now tolling that project for closer to last eight months to nine months. We have initiated arbitration with NHAI on Kurukshetra, the arbitration proceedings are on and we expect that by Q2 or Q3 of next year, we should have the arbitration award on Kurukshetra.

Parikshit Kandpal — HDFC Securities — Analyst

Thank you, sir. And all the best. Those are my questions.

Manish Mohnot — Managing Director and CEO

Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Manish Mohnot — Managing Director and CEO

Thank you, everyone.

SK Tripathi — Chief Executive Officer

Thank you.