Kalpataru Power Transmission Ltd. (KALPATPOWR) Q2 FY23 Earnings Concall Transcript

Kalpataru Power Transmission Ltd. (NSE:KALPATPOWR) Q2 FY23 Earnings Concall dated Nov. 10, 2022

Corporate Participants:

Manish Mohnot — Managing Director and Chief Executive Officer

Vishesh Pachnanda — Vice President and Head of Investor Relations

S.K. Tripathi — Managing Director and Chief Executive Officer

Analysts:

Bhoomika Nair — DAM Capital Advisors — Analyst

Parikshit Kandpal — HDFC Securities — Analyst

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Abhineet Anand — Emkay Global — Analyst

Swarnim Maheshwari — Edelweiss Securities — Analyst

Kunal Sheth — B&K Securities — Analyst

Prem Khurana — Anand Rathi — Analyst

Arafat Saiyed — Reliance Securities — Analyst

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Jainam Shah — Equirus Securities Private Limited — Analyst

Thomas George — — Analyst

Presentation:

Operator

Good morning, ladies and gentlemen. I am Belgia, moderator of Kalpataru Power Transmission and JMC Projects India Q2 FY23 Earnings Conference Call, hosted by DAM Capital Advisors Limited. As a reminder, all participants will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note this conference is recorded.

I would now like to hand over the floor to Ms. Bhoomika Nair from DAM Capital. Thank you and over to you, ma’am.

Bhoomika Nair — DAM Capital Advisors Limited — Analyst

Yeah, thank you, and good morning to everyone on the call and also the management. [Technical Issues] FY23 earnings call of Kalpataru Power Transmission Limited and JMC Projects.

We have Mr. Vishesh Pachnanda, VP and, Head, Investor Relations of the entire Kalpataru Group. I’ll hand over the call to him to introduce the entire management and post which we will open-up the floor — post opening remarks for Q&A.

Over to you, Vishesh.

Vishesh Pachnanda — Vice President and Head of Investor Relations

Thanks Bhoomika. Thank you for hosting the call today for us. Very good morning to all the participants. This is Vishesh Pachnanda. I am pleased to welcome you to Kalpataru Power Transmission Limited and JMC Projects Limited earning call for the second quarter of the fiscal year ’22-’23.

We have with us today the management team represented by Mr. Manish Mohnot, the Managing Director and CEO; Mr. S.K. Tripathi, Managing Director and CEO of JMC Projects; Mr. Amit Uplenchwar, Director of Group Strategy and Subsidiary Operations and Mr. Ram Patodia, President, Finance 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 Manish. Thank you.

Manish Mohnot — Managing Director and Chief Executive Officer

Thank you. Good morning and a warm welcome to all of you for the earnings call of Kalpataru Power Transmission and JMC Projects for the quarter ended September 2022. First. I will put forward, a quick update on our performance, post which I will appraise you on the individual business and key strategic matters.

We have reported consol revenue growth of 7% in Q2 and 11% in H1, driven by strong execution and healthy order book in B&F, Water and International business. Our consol EBITDA margin improved by 70 basis points from 9.2% in Q2 and has remained flat at 9% in H1. Our improvement in EBITDA margin is largely led by higher execution and a better business mix in the Civil business at JMC. Our EBITDA margin at KPTL standalone continues to remain under pressure, given higher commodity and logistic costs, volatility in currency and commodities, lower revenues and delays in project closures. The softening commodity price and the decline in logistic costs are now very much visible and with the new orders that are quoted at better price levels, we expect the margin profile to improve.

Our consol PBT before exceptional items improved by 17% in Q2 to INR150 crores and 13% in H1 to INR289 crores. Our exceptional item in Q2 and H1 pertains to Shree Shubham Logistics on account of sale of cold storages, which had minimal volume. Our reported PAT improved by 18% to INR98 crores in Q2 and 16% to INR186 crores in half one 2023. Our consol net debt stands at INR2,905 crores. Our net debt in core EPC business excluding the Road BOOT assets and Shree Shubham Logistics stands at around INR2,046 crores. Our net working capital days in core EPC stands at around 140 days as on September 2022 compared to around 121 days in March 2022. The increase in debt levels can be attributed to higher working capital requirement in JMC to commensurate with the business growth, lower collections in domestic T&D in oil and gas business and postponement in the closure of old projects. We have witnessed improvement in collections in the month of October, which has led to a decline in net debt by around INR150 crores in October.

We continue to witness a strong momentum in order booking and business outlook has meaningfully improved over the past few months. In fact, it is significantly better than our expectations at the beginning of the year which has led us to rethink on our capex plans for the year. As such, we have now accelerated our growth plans and capacity building in the B&F and International, Civil business. This should benefit us in gaining strategic advantage in key markets and businesses going forward. We expect working capital to normalize by the end of the financial year. Moreover, our focused efforts to bring further efficiency in working capital’s speedy project closures and proceeds from the sale of Indore asset will help us further in our deleveraging journey. We are targeting net working capital days in a range of 110 to 120 days for our EPC business by the end of the year. We are witnessing a strong momentum in order booking as we have already secured orders of INR14,388 crores at the consol level. Additionally, we have an L1 position of approximately INR6,000 crores. Our consol order book is at an all-time high of 38,550 crores as on 30th September with visibility of more than 47,000 crores as of today including L1.

Now coming to individual businesses. In the T&D business, business remains impacted largely due to lower opening order book. We continue to strategically scale-up our T&D business with notable order wins in key markets. We have secured orders including L1 position of over INR8,300 crores as of date. This provides us with good visibility for growth going forward as execution of new orders will start in Q4 of this financial year. Our Sweden subsidiary, Linjemontage has reported revenue of INR256 crores in Q2 and INR522 crores for half one with an order book of INR950 crores at the end of September 2022 and margins are in the range of 7% to 8%. Our Brazil subsidiary, Fasttel has revenue of INR98 crores in Q2 and INR221 crores in H1 with an order book of around INR1,036 crores at the end of September 2022. The Brazil subsidiary still added marginal loss at EBITDA level. Our order visibility in the T&D business remains robust in domestic and international markets, given the push for renewables and the requirements for new transmission lines. We believe we are at a sweet-spot and one of the key beneficiaries of the global energy transition, which is underway.

In the B&F business, we have achieved revenue growth of 24% in Q2 on the back of robust execution and a healthy order book. We continue to diversify our client base and have added new clients in the commercial and residential building segments and [Indecipherable] into civil works for datacenters. Our YTD order intake is INR1,968 crores and the order book stands at INR8,687 crores. There is an add-on pickup in the real estate business, including commercial, residential, which augurs very well for our B&F order book and outlook.

Our Water business recorded strong growth of 53%, led by robust execution. We have secured orders of INR460 crores till-date in financial year ’23 and additionally we have a sizable L1 position in the Water business. Our order book in the Water business is at a record level of INR8,300 crores. Over the past couple of years, we’ve made focused efforts on capability building and have emerged amongst the leading player in the Water business in India. Given the government’s trust on tap water supply and JJM scheme and huge capital allocation, the Water business continues to hold enormous growth potential for us.

Our Railways business declined marginally given impact of monsoon at select projects. [Indecipherable] metro rail electrification space, thereby expanding our portfolio and clientele. Our order visibility has significantly broaden the railways across both conventional and emerging areas like metro, RITS [Phonetic] and high-speed rail.

In the Oil and Gas business, we have secured orders up around INR1,200 crores and have a decent L1 position. The business reported growth of over 40% in Q2 2023. We continue to focus on India and International market to drive sustainable growth in the Oil and Gas business.

In the Urban Infra business, we continue to focus on metro rail, elevated structures for big spaces, airports, etc. We have secured elevated viaduct metro rail and indicated airport project during the year. We are confident to significantly scale-up and improve our market position in the Urban Infra business in India and International market going forward.

In case of our Road BOOT projects, we have witnessed good improvement in traffic across all three road assets. Our per day revenues increased from INR44.1 lakhs per day in Q2 last year to INR49.7 lakhs per day in Q2 this year. We have included an additional amount of INR42 crores in half one 2023, largely to fund the repayment. For WEPL, we have received consent from lenders and expect the restructuring to complete by March 2023.

With respect to VEPL, we are taking all appropriate steps to improve viability and ensure reduction in further capital infusion. Our sale in Indore real estate remains on a good growth trajectory. We expect to complete sales of the balance 35%, 40% of the inventory over the next 10 to 12 months. We have received cash flows in the range of around INR50 crores till-date in the current financial year and we expect further INR100 crores in the next six months.

As far as update on the KPTL and JMC merger is concerned, we have received no observations letter from SEBI and stock exchanges. We’ve also received shareholder approval. We expect order from NCLT anytime soon. We plan to complete the merger latest in Q4 2023.

On a concluding note, I would like to highlight that business visibility remains strong across all our businesses with a tender pipeline in excess of INR1,000 billion [Phonetic] over the next few quarters. Our current order book and the diverse business mix gives us confidence to deliver consol revenue growth in excess of 15% with a stable margin profile for the full year 2023. We continue to judiciously monitor our capital employed and are working very hard to reduce our net debt by improving working capital cycle and achieving planned targets with respect to non-core business and assets.

With this, I would request the moderator to open the lines for Q&A. Thank you.

Questions and Answers:

Operator

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal — HDFC Securities — Analyst

Yeah. Hi, good morning, Manish. Congratulations on a decent quarter, sir. So my first question is, you have given a very robust outline to your presentation, but still we remain conservative on our growth guidance of 15% plus. So if you can just give some more granularity on how much growth is expected in KPTL and how much in JMC. And potentially what could be the upside risk to this growth?

Manish Mohnot — Managing Director and Chief Executive Officer

Good morning, Parikshit. At JMC, we clearly see growth in the range of 20% to 25% if not more for the entire year. At KPTL, at the beginning of the year, we looked like we were confident of growth of 10% to 15%, but it now looks like more to be in the range of 7.5% to 10%. We have a very good visible order book, but a lot of our orders get converted to revenue only in Q4 and after that because of design-related issues, environment clearances and all of that. So on a consol basis, while we are confident of 15% growth, we are not revising our target as of now. We would be revisiting this number at the end of Q3.

Parikshit Kandpal — HDFC Securities — Analyst

So is it right to look at that for the next year, KPTL growth is much higher given strong order backlog and the wins which has happened for us. So what kind of growth can you pencil-in for FY24 about JMC and KPTL?

Manish Mohnot — Managing Director and Chief Executive Officer

So Parikshit, clearly from a perspective of next year and the year after that, I am sure, you are visible, you are aware of our target of INR25,000 crores by 2025. So next two years, we definitely look at growing at closer to 20%, if not more. Given the order book visibility of closer to INR47,000 crores today, I don’t see that to be a challenge at all.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. So KPTL will move more towards 20% and JMC could be like 30%?

Manish Mohnot — Managing Director and Chief Executive Officer

I would stick to a consol number now. More than getting into specific of the business, consol number even next year while we stand today looks like easily being in the range of 15% to 20%, more towards 20% plus.

Parikshit Kandpal — HDFC Securities — Analyst

Thank you. And sir, both on the margin side, how do you see this year FY23 for both the companies and for FY24, how do you see the EBITDA margin?

Manish Mohnot — Managing Director and Chief Executive Officer

So as far as margins for 2023 is concerned, we definitely see improvement in margins happening across the board. A lot of historical issues, whether it was on commodity or logistic cost or volatility in FX, all of them look like being behind us. So while we stand today, we definitely look like by Q4 we should be targeting consol EBITDA margins to be more much higher levels of 9%. So on an annualized basis, we have targeted EBITDA margins to be in the range of 9% to 9.5% on a consol basis and we believe we will be there. As far as next year is concerned, we definitely expect margins to improve, but I would not like to quantify that today. You will have to wait for some more time before we give you exact margin profiles getting into next year.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. One more question. Coming back to [Indecipherable]. So this has been another tricky question and the other parts of the businesses have recovered quite well, but this one over-time still continue even though you have not seen any major movement. So we have been talking about in the last quarter we mentioned that there could be some reduction going post Q2. So recently we have heard from the medium is that there has been large sale of real estate land by the group, parent and besides that, the sector is also doing quite well. So based on the cash flow which the group may have at the parent level, so how do you see the de-pledging of shares from here on till the year-end from the current, approximately 50% of pledge shares?

Manish Mohnot — Managing Director and Chief Executive Officer

So Parikshit, we had the discussion with the senior management of GAIL on this aspect. We have been informed that cash flows have significantly improved at Kalpataru Limited on the real estate business. We’ve also seen some movement and divestment of land assets which we all read in the newspapers a few weeks ago. We’ve been informed by them that pledge reduction has started already and you will see some movements happening as early as this week and over a period of time, gradually it will reduce. We do not have any specific targets of Q3, Q4, but we’ve been informed that gradually pledge reduction will reduce because the cash flows have improved significantly across all projects.

Parikshit Kandpal — HDFC Securities — Analyst

But any timeline on a longer-term where the pathway towards zero pledge seen in next financial year FY24 and so any sense over there, directionally it will now keep reducing. So if you can give some more color on that.

Manish Mohnot — Managing Director and Chief Executive Officer

So Parikshit, we do not have a defined timeline for this except the fact that gradually things will only reduce and given huge cash flows, which have improved significantly, it’s going to be one-way of production only.

Parikshit Kandpal — HDFC Securities — Analyst

So you’re not going to see any volatility there in terms of ups and down, it’s only going to be directionally going down, right?

Manish Mohnot — Managing Director and Chief Executive Officer

Exactly.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. And just the last question for SKT. Sir, in this quarter this half year again, done a large funding about INR42 crores, which you have highlighted, which is the number which looks to be on a higher side. Also once this restructuring of WEPL happened by this year-end and you said the measures have been taking at VEPL. So how do you see this large funding for the next year. So if you can break it up both for the shortfall of loan and for the major maintenance for FY24 and FY23, both.

S.K. Tripathi — Managing Director and Chief Executive Officer

Right. So good morning, Parikshit. So two things. One is the, there is an uptick in the revenue in the projects that — we have just said that, there is almost growth of 20% in the revenue, that is one thing. And with the restructuring, but at the same time, the maintenance of these assets are almost 7.5 years old and they will require some money in terms of the — part of the long-term maintenance, which are due in the projects now. Now those long-term maintenance we have decided strategically to spread over couple of years rather than doing it in one shot. So seeing all this, in the next half, we may have to infuse another INR25 crores, INR30 crores including the maintenance and shortfall of the loan and the next year this number — so for this year the total number will be in the range of about INR70 crore to INR80 crore, next year we can see with the same revenue uptick, including the maintenance we will be in the range of about INR50 crores, to INR60 crores without restructuring. If the restructuring happens, this number will further come down by INR25 crores to INR30 crores.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. Got it sir. And lastly, I’m sorry, on the Indore real estate, how much is the total residual inventory to be sold and what is the residual collection including on this sold value and balance value?

Manish Mohnot — Managing Director and Chief Executive Officer

So we have approximately 40% of inventory yet to be sold. And if you look at, we have sold around 60% of the inventory including residential and commercial, both. As of today, if you look at the current value of investment post impairment is in the range of INR275 crores to INR280 crores and we expect to collect all of that in the next 12 to 18 months, so around 40% of the inventory is yet to be sold.

Parikshit Kandpal — HDFC Securities — Analyst

So it is the 40% value or is it total 100% [Speech Overlap].

Manish Mohnot — Managing Director and Chief Executive Officer

It is the 40% value. Post impairment last year.

Parikshit Kandpal — HDFC Securities — Analyst

So INR280 crores have to be collected over 12 to 18 months and is there any cost component to it or is just pure cashless.

Manish Mohnot — Managing Director and Chief Executive Officer

No, there is a cost component to it because there is half building which needs to be done lot of finishing work needs to be done, so there is approximately 15% of this, 15% to 20%, which would be the cost component.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. Got it sir. Thank you.

Operator

Thank you. Next question comes from Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Hi Manish, good morning and congratulations to the whole team of Kalpataru and JMC on a very good performance on a challenging time. Manish, one question first is on the PBT margin side because we generally give the guidance on the PBT. So in first half, we have achieved around 3.8% and full year we are guiding for 4.5% to 5%, so which implies that in second half we expect to report around 5% to 5.75% kind of PBT margin. So which are the lever if you can explain first part on that.

And second question I’ll come back later on.

Manish Mohnot — Managing Director and Chief Executive Officer

Good morning, Bharat. Bharat, yes we have guided for a PBT margin in the range of 4.5% plus and we believe we should be achieving that. We should be very closer to that number by the end of the year. A significant uptick in margin comes from the following aspects; one, typically the revenue for the last six months if you look at any EPC contracting business including our this is much higher than what we do in the first six months. It’s typically been a ratio of 40:60. So that is the first leverage, because on overheads, on allocation of cost, all of that that makes a difference. Second, typically collections in the last six months is always higher. And if you see historically, you’ll always see the debt goes up in the first two quarters and it reduces in quarter three, quarter four. And that will also help us leverage on in terms of interest cost and a few other parameters. And third and the most important, a lot of new orders which we have secured in the last 12 to 18 months do not have any of those legacy of course whether it was commodity or COVID or logistics or any of that. And that would also help us improve our margin. Is it going to be a easy task? No, but as a team we are committed to be in the range of 4.5% plus PBT margin for the entire year.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay. So is that fair understanding that then again in 2024 there is a further scope of improving this PBT margin by around 50 to 100 basis point.

Manish Mohnot — Managing Director and Chief Executive Officer

Bharat, we definitely believe margins would improve going forward in the next two years, but I’m not going to give a number as of today because we still have not done a detailed business plan for the next year, but we definitely believe that there will be a margin improvement getting into next year.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay. And last question, with your permission. You said view from two, three years is, our which business is likely we have seen more traction and how the order inflow domestic as well as international, both separately if you can give some color, which will grow much faster and where we are seeing further scope.

Manish Mohnot — Managing Director and Chief Executive Officer

So Bharat, we believe that out of our focus six businesses or I could even see seven businesses, there are three, which would grow at 20% plus, the three are the international business, which includes both transmission and civil; the water business given the trust by the government and capital allocation and the buildings and factories business. So this three business we believe can easily grow in the range of 15% to 20% if not more and will continue to be profitable in the range of 9% to 10% EBITDA if not higher. On the other businesses, our oil and gas business we are focusing a lot more international and depending upon what winds we get there that business could be either in that single-digit range or a very-high double-digit range because we are now qualified in 67 countries and we bid for a lot of projects, but the competitive pressure is very-high. So we’re not going to get into that business only for revenue but we will do that is us as we believe it has margin which is sustainable.

On the T&D domestic business a, lot of projects are coming up, but a lot of them have got deferred also. Whether you look at last six months ago, we are speaking about Leh, Ladakh, six months ago we are speaking about a lot of projects in Northeast, a lot of them have got deferred. So while the opportunity exists and they continue to improve, given the trust by the government on one connectivity and second the new thermal tenders also coming up, we believe that business will do well in the long run, but the next two years it would be a single-digit growth.

On the railways business, we will continue to be selective because of the competitive pressure across all segments of the business. On an average, we are seeing 15 to 18 bidders on that business. So we would not like to be in that herd mentality of taking business only for top-line.

Our focus on the infrastructure business is very, very high. We won two projects in the last six months, the Kanpur Metro and well Airport project at Maldives. And that’s one business which we will build, but again selectively. We would not do that business only for getting a topline kind of revenue, but making sure that we are present in all the segments of urban infrastructure from a long-term perspective. So with that mix, we believe growing at a 20% plus for the next two years will not be a challenge.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay, fair. I’ll come back in the queue. Thank you very much and all the best.

Operator

Thank you. [Operator Instructions] Next question comes from Abhineet Anand from Emkay Global. Please go ahead.

Abhineet Anand — Emkay Global — Analyst

Yeah, thanks for the opportunity. Just wanted to delve a bit deeper on the working capital side. If you see your debt from 1Q till now, it is up by more than INR300 crores. If you can just give a granular picture, which segments are you facing issues. We have heard some of the companies saying about railways and why are these issues and how do you get see it getting solved, because you said that net working capital would normalize by March-end. That’s my first question.

Manish Mohnot — Managing Director and Chief Executive Officer

Yeah. See, on working capital are we at alarming level? Let me be very, very frank on this morning, we are not. Typically in our business, we always see the first six months working capital going up because a lot of clients, their budget numbers, their ability to pay a lot of advances, all start coming from Q3, Q4. So yes, debt levels have gone up but if I divide this into three segments; one, at GMC the growth has been so high, so debt levels have gone up by 150 crores which is very commensurate with the growth. At Kalpataru, we hired a few collections which got delayed and which came-in in October and that’s why we declared that in October our debt levels have come down by further INR150 crores. So to us today there isn’t anything which is sticky in the sense of saying that this project or that project, yes a few projects we have some issues, which are getting sorted out and we believe in, Q3, Q4, they’ll get sought-out. We also have got some huge claims coming in from ECGC on one of our international projects at Afghanistan where the work was stalled because of course major reasons. So on a totality, if you ask me is there a concern in terms of working capital debt, no it is not. It is a typical cycle where first two quarters it goes up and it stabilizes again by Q3, Q4 and we’re pretty confident of that.

Abhineet Anand — Emkay Global — Analyst

So what is the money that is stuck in Afghanistan for us.

Manish Mohnot — Managing Director and Chief Executive Officer

So our total exposure to Afghanistan was closer to INR150 crores and we’ve got closer to INR120 crores from ECGC already on that claim. We had a ECGC claim on that. So our net exposure would be less than INR30 crores against which we have some advances also. As of today, our net exposure would be very minimal in Afghanistan.

Abhineet Anand — Emkay Global — Analyst

Okay. Secondly, last year I remember we got a large order, HVDC order from Chile, right. If you can just highlight. I think it was a larger order, so engineering etc has started there or is it, I mean the first few steps have started if you can give a detail on that.

Manish Mohnot — Managing Director and Chief Executive Officer

Sure. The project is on-track and the entire aspect of engineering as well as environment clearances with the client needs to do and a few other clearances are all on-track. So we believe that the project in terms of revenue delivery would start only by Q3 of next year. Till that time, we have to finish the engineering and approvals, which are all on-track. We now have a big team in Chile which is working on the project and post that project we have also won two more projects in Chile, which are smaller in nature, with the same client and with another client and we’re pretty confident that this project is going to be a big advantage for us in entering into that entire market.

Abhineet Anand — Emkay Global — Analyst

Okay. So from KPTL perspective, what is the margin that we’re expecting for 2023.

Manish Mohnot — Managing Director and Chief Executive Officer

I responded to this question earlier also. As far as the next year is concerned, we will come back on margins. As for the current year is concerned, we are we are working hard to make sure that our EBITDA margins goes up from the current levels of 8.1% to 8.5% and 9%. We still will have some challenges in Q3 given that there’s still historical order book which used to be integrated and new order book revenue does not come. But getting into Q4, we believe we should be in that EBITDA range of 9%.

Abhineet Anand — Emkay Global — Analyst

Thanks, sir. Those were my questions.

Operator

Thank you. [Operator Instructions] Next question comes from Swarnim Maheshwari from Edelweiss Securities. Please go ahead.

Swarnim Maheshwari — Edelweiss Securities — Analyst

Yes, thanks for the opportunity and congratulation on good set of numbers. Sir my first question is on the balance sheet. Now I am looking at this H1 balance sheet, the consol balance sheet and I can see the gross borrowings at about INR4,200 odd crores whereas the presentation highlights it around INR3,700 odd crores. So what is this INR500 crores this difference pertaining to?

Manish Mohnot — Managing Director and Chief Executive Officer

I just had to look at one of my colleague, I’ll be very frank on this and I immediately got response. So on the two transmission assets which we have sold, we have already got the entire cash low. We had declared that earlier; the one, which was sold to Adani and CLP we’ve already got the entire cash flow but the transfer of equity is still happening because of the TSA. So while we will see that number coming in loan, which has already got our cash flow, which has already received, so we net that off, there is no money pending to be received, it’s only a accounting entry to be passed as and when the equity gets transferred. So that is a difference of around INR600 crores on the loan book.

Swarnim Maheshwari — Edelweiss Securities — Analyst

Fair enough. But then I think shouldn’t be net debt be at INR3,500 odd crores, instead of INR2,900 odd crores that is reflected in the presentation because we have already received the money.

Manish Mohnot — Managing Director and Chief Executive Officer

Yeah. So that’s what. Net debt is at INR2,900. So net debt also reduces cash, right. So they are two aspects, two questions you asked. One, why is the gross different, I’ve explained to you. For net debt, also reduced cash. So we have cash which is visible on the balance sheet of around INR500 to INR600 crores, which has been reduced. And that’s exactly what we’ve been reporting for the last whatever five, six, seven as many number of years. You can see the cash and cash equivalents, it is clearly visible. INR810 crores cash and cash equivalent on a consol level is visible. We have also presented that.

Swarnim Maheshwari — Edelweiss Securities — Analyst

Okay. Maybe sir, I’ll understand that later. Sir, my second thing is if you just look at from YoY basis, from Q2. I mean our net debt levels taking INR29 odd crores, it has really not gone anywhere. This is after the asset sale and I believe in the last 12 months we would have actually sold some of the inventories at Indore also. So what is, is it the working capital pressure that is visible on this heightened numbers because in Q1 we did actually report INR2,300 of net debt. So this is just the working capital pressure or something else also.

Manish Mohnot — Managing Director and Chief Executive Officer

No. I think it’s only and only the working capital numbers which is compensated with the growth in [Indecipherable] business, one. Second, it is also delay in a lot of advances which we plan to take after the increase in interest rates. So you remember we discussed this last year saying that when interest rates were so low we are not taking too many client advances, now we’ve decided to do that and that will help us further leverage our debt. So it’s only and only working capital and it’s a typical cycle. So if you go back to the years before last five years you will see first two quarters it goes up and improves in Q3, Q4. This is only and only working capital. There’s nothing else beyond working capital. There is no investments or there is a small investment, yes we acquired 15% stake and the balance stake of our erstwhile promoter in Sweden. Yes, that’s what we have done. We have infused some equity or some advances to Brazil, but otherwise significant portion if not the entire portion is only working capital.

Swarnim Maheshwari — Edelweiss Securities — Analyst

Sure. So what is the targeted net debt level by the end of this year?

Manish Mohnot — Managing Director and Chief Executive Officer

So on a consol EPC business, we still continue to be having a target of further reduction of INR300 to INR400 crores from where we were at the beginning of the year. So at the beginning of the year we were at the net-debt of capital and GMC of around INR1,500 odd crores. So we are targeting to be below that definitely. We will revisit this based on our revised capex plan. I had mentioned earlier that we are, give increasing our capex plans for the year from INR350 crores on a consol to INR500 crores. So with the increase in capex plans, there could be some small change in this, but on a net debt level, capital plus GMC we are targeting to be below INR1,500 crores definitely by the year end.

Swarnim Maheshwari — Edelweiss Securities — Analyst

So this is INR1,500 crores by the year end?

Manish Mohnot — Managing Director and Chief Executive Officer

Yes, by the year-end.

Swarnim Maheshwari — Edelweiss Securities — Analyst

So almost half from the current lens?

Manish Mohnot — Managing Director and Chief Executive Officer

No, no, no, it’s not half. INR2,300 crores to INR1,500 crores is only INR800 crores, half makes it INR1,200 crores, every rupee counts on this number.

Swarnim Maheshwari — Edelweiss Securities — Analyst

Sure. I was actually looking at INR2,900 crores of net debt, that is where I was coming from.

Manish Mohnot — Managing Director and Chief Executive Officer

Okay, okay.

Swarnim Maheshwari — Edelweiss Securities — Analyst

All right.

Manish Mohnot — Managing Director and Chief Executive Officer

We’ve seen already improvement in October. October itself has come down by around INR150 crores. So I am again correcting this, so that we’re clear. What number I gave you was KPTL and JMC together as far as Shubham and road BOOT assets are continued, they will continue to be at those levels unless the restructuring happens.

Swarnim Maheshwari — Edelweiss Securities — Analyst

Right, right, right. Got it, sir. Got it. Thank you so much and all the best.

Manish Mohnot — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you [Operator Instructions] Next question comes from Kunal Sheth from B&K Securities. Please go ahead.

Kunal Sheth — B&K Securities — Analyst

Yes. Hi. Good morning, sir. Thank you for the opportunity. I just wanted to get, sir…

Manish Mohnot — Managing Director and Chief Executive Officer

Good morning.

Kunal Sheth — B&K Securities — Analyst

Your comments on the railway side specifically. How has been the traction there? Because as you know there is a lot of excitement around railways that we’ve been hearing, so just wanted to hear your views. Is there a real traction happening in railways in terms of — and which sub-segments? And a related question here is that have we augmented our capabilities in terms of number of segments that we cater in railways meaningfully over — in the last 12 months?

Manish Mohnot — Managing Director and Chief Executive Officer

So let me first answer your second question. Over the last 12 months, we’ve continuously focused on improving our PQ and competency in this segment whether it is on signaling, whether it is on metro electrification, whether it is on large civil projects. So as of today, I think we’re qualified for everything in the railways space except maybe the high-speed corridor, which also along with JMC as a merged entity, we will qualify.

As far as the opportunity is concerned, yes, the opportunity is very high on all four areas. One is the high-speed rail and related areas. Second is expansion of two tracks to four tracks. Third is electrification and fourth is signaling. And fifth, if I had to add the entire metro whether it’s a metro civil, metro electrification or a combination of these projects. So from a traction perspective, yes, there is a lot of opportunities and it looks very attractive.

The only challenge is the competitive pressure in some of the segments is extremely high. So smaller size projects of INR100 crores to INR200 crores at times we have seen 15 competitors bidding. On bigger-sized projects, yes, we still see six, seven people bidding. So while the opportunity is high, I’m not personally sure that whether this would be very attractive from a margin perspective at least for the next two years.

Second, a lot of railway projects, the entire working capital cycle is very back-ended, so everything is milestone-based payments and you get a lot of payments after you’ve done 90% of your work. So with that also, it’s very important for us as Kalpataru to be very conscious of saying that what is the order book we need to build because we just don’t want to build an order book, which has a stretch under working capital. So while the opportunity looks good, we are not as bullish as on the international businesses, B&F business and water business, but we believe that from a long-term perspective, this space would be very meaningful both in India and international.

Kunal Sheth — B&K Securities — Analyst

Great, sir. Sir, just will it be possible to put a number to this opportunity size and probably what would have been the same number, say six months back or 12 months back to get a sense of quantum of opportunity?

Manish Mohnot — Managing Director and Chief Executive Officer

I think you’ll have to just speak to my team to get the number. I don’t know about last year but I know while we speak today, we have more than INR10,000 crores of railway tenders to be bid in the next four to five months. A lot of them on metro, a few on electrification and a lot of them on further expansion of two tracks to four tracks or one to two. As for the previous year numbers are concerned, it might help if you can just connect with my team and get a feel of the entire numbers.

Kunal Sheth — B&K Securities — Analyst

Sure, sir. Thank you. Thank you so much for such a detailed answer. Best of luck.

Operator

Thank you. [Operator Instructions] Next question comes from Prem Khurana from Anand Rathi. Please go ahead.

Prem Khurana — Anand Rathi — Analyst

Yes. Thank you for taking my questions, sir. Sir, my questions are related to JMC projects. So I think when we started the year, I mean we were targeting almost around INR10,000 crores to INR11,000 odd crores, these are orders and when I look at the way we have been able to perform till this time, I think we have INR7,500 crore of [Indecipherable] L1 of another around INR1,700 crores. So we are almost there. So given the fact that we are very close to our target now, so how does that change the way you approach any new projects? I mean what does it make you raise your margin expectations now or we are happy with the 9%, 10%-odd generally target even otherwise?

S.K. Tripathi — Managing Director and Chief Executive Officer

So yes, good morning, Prem. As far as the order book is concerned, you are right we are touching almost to the yearly target but as we said in the beginning of the year also that we are not running after the order book, it is only when we get the selective opportunities, we go and pick it up. So the same trend will continue in the next half also.

As far as the margin is concerned, we have said earlier also that our entire quest is there when we are booking at the order is to improve the margins. So given the look and feel what we have in the order book today, we should move towards the improvement of the margins at least for next one or two years.

Prem Khurana — Anand Rathi — Analyst

Sure, sure. And sir, second question was on the order backlog conversion ratio. So when I look at each of these three segments that we gave out in our presentation, water, B&F and infra, so when we — specifically when I look at infra, the conversion ratio seems to be very slow, I think we’re doing around INR100 crores, INR200 odd crores these kind of number in a quarterly basis on — and order backlog of almost around INR3,000-odd crore, which seems to be on a slower side and then when I compare like either B&F or water, so do we have any slow-moving orders or when some of these orders have fairly kind of gained traction in terms of the execution, which would explain this low conversion ratio in infra space specifically?

S.K. Tripathi — Managing Director and Chief Executive Officer

So that order book of INR3,000 odd crore, it also connotes about INR2,500 crore orders of international highways and they are long distribution projects, both the projects in Ghana and Ethiopia, they are four years gestation period projects. In fact, we have done just one year in those projects, which out of that six months remains the mobilization period and that is why you are seeing the low traction there. And domestic anywhere, it is INR500 crore, INR600 crore order book, out of that a substantial portion is under the last phase where we are closing the projects and that is why on that two — on the infra side, you see the low traction compared to water and B&F.

Prem Khurana — Anand Rathi — Analyst

If possible to share I mean what would be the average execution cycle for each of these three segments, I mean based on the kind of orders that you have in these segments? As you explained, and this is eventually, infra would be long gestation with some of these projects running in four years itself and how would the number be for let’s say, I mean water and buildings, I mean in terms of average execution cycle?

S.K. Tripathi — Managing Director and Chief Executive Officer

So we can send you across the details but in general, the water will be around three years, B&F will be 2.5 years because of our larger order book is with the private, right? If you do the analysis of our order book on the B&F, being prices there the conversion cycle is faster. Water, it could be in the range of 2.5 to three years and the infra as I said since the — currently that order book is predominantly weighed upon by the international projects, where the project duration itself is four years that is why it is looking three plus.

Prem Khurana — Anand Rathi — Analyst

Sure. And any update on our asset sale efforts that go underway, I mean sell our BOT roll asset, so any progress, I mean any new updates that you would…

Manish Mohnot — Managing Director and Chief Executive Officer

We’re not able to hear you clearly. We are not able to hear your question clearly. Can you repeat the last one?

Prem Khurana — Anand Rathi — Analyst

Yes, yes. So I mean I want to understand if you’ve made any progress on our asset sale efforts, right? I mean we wanted to sell our BOT toll asset. So, any update that you would like to share with us?

S.K. Tripathi — Managing Director and Chief Executive Officer

So currently, we are not looking at the sale because rather than we are focusing on the restructuring, there is an uptick in the revenue itself, so, we’ll wait if we have to open the sale options going forward. So currently we are not looking at the…

Prem Khurana — Anand Rathi — Analyst

Sure. And just one last if I may with your permission. I think so while — I mean in your opening remarks, I mean you spoke about 20% to 25% kind of revenue growth, third JMC in this year, but I mean if I were to continue with the run rate that we have in Q2, almost around INR1,800 crore and care to have similar kind of number in the next two quarters, I’ll — I mean this ideally itself should get me to almost around 30% kind of growth. So are we being little conservative or I mean you see some challenges, which is why I mean you’re guiding on a lower side, I mean, generally, I mean H2 tends to be better than H1, right? I mean if you can do INR1,800 crores in a monsoon hit quarter, I mean I would be under the impression that Q3 and Q4 ideally should be better than INR1,800-odd crore. So how should I kind of connect these or understand this thing, the growth target that you are giving?

S.K. Tripathi — Managing Director and Chief Executive Officer

So while I agree with you, H2 numbers will be higher. And at the same time, yes, there is some amount of conservatism is applied which is required for this kind of business where we are because we are working like water projects, they are with the state governments, right? And given the situation that the — half the country is in the election mode, right, and that is why we are cautious with the number. You know how the things goes on and that is why we are a bit cautious with the number.

Manish Mohnot — Managing Director and Chief Executive Officer

And I’ll just add to what SK ji said. While the order book visibility is good and we don’t have anything which is sticky projects, well, we are very, very conscious of the working capital requirements, right, and historically, we have seen around phases of — around — sometimes around some phases of the political environment, you have projects which gets delayed for a few months. And that’s the time where we have to be very, very quick and reactive so that we don’t get blocked on working capital. So yes, we could do better, but we will be happy to be cautious at this stage and then take a final call maybe at the end of Q3 or by the year end.

Prem Khurana — Anand Rathi — Analyst

Sure, sir. Thank you. That’s it from my end. All the very best for future.

Manish Mohnot — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. Next question comes from Arafat Saiyed from Reliance Securities. Please go ahead.

Arafat Saiyed — Reliance Securities — Analyst

Yes. Hi, sir. Thank you for taking my question. Sir, my first question, can you please discuss on the order pipeline on a core KPTL and how T&D and non-T&D [Indecipherable] going ahead? Have you seen some opportunity in [Indecipherable] in metro segment?

Manish Mohnot — Managing Director and Chief Executive Officer

So, Arafat, good morning. I did explain this earlier, but I’ll just repeat that. The pipeline looks very good on majority of the segments, whether it is water, whether it is transmission, whether it is B&F, whether it is oil and gas. But within those, the markets are very, very different. So international markets look much better than domestic markets on transmission. Oil and gas, again, both domestic and international look good. On water, domestic looks much better than international. So on an average, we believe that at least, our core businesses growing at high double-digit will not be a challenge for the next two years.

And I’ll just add to it, today, visibility in order book is closer to 2.5 years at a consol level. So today, we have a visibility of around INR47,000 crores and expected the revenue at the year-end is closer to INR17,000 crores. So with that number, it’s like 2.7 times, 2.8 times, so growth challenge looks minimal. The real challenge is to make sure that we focus on projects where we can, one, make a reasonable return on capital employed; second, closure challenges are minimal; and third, they are in geography to segments where long-term opportunity is high.

So we will be focusing a lot more also on international business for the civil business. Today, if you see the international portfolio, it is 90% transmission, 10% roads, and there’s one project in B&F and a few projects in water. So our aim is over the next three to five years time, make sure that internationally across all segments where we exist, whether it is water, whether it is railways, whether it is roads, whether it is oil and gas, whether it is B&F, we continue to grow. So opportunity looks good, growth will not be a challenge, we just need to focus on improving our margins and return on capital employed.

Arafat Saiyed — Reliance Securities — Analyst

Yeah. And next one, how the mix of T&D and non-T&D will be [Technical Issues]?

Manish Mohnot — Managing Director and Chief Executive Officer

On a consol basis, and I’m sure you would have looked at the analyst presentation, which we have sent. And if you look at our consol basis order book which we had, you will see that T&D as a whole is hardly at around 20%. So — or 25% on a totality if I include Linjemontage and Fasttel. So on a consol basis, I think T&D is going to be not more than — so if you look at the KPTL consol order book as of now, you can see T&D is only 30%, water is 28%, urban infra and railways is 20%, oil and gas, 8% and B&F 14%. So I believe on a consol basis, T&D will be in the range of 30% to 35% only.

Arafat Saiyed — Reliance Securities — Analyst

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

Operator

Thank you. We have a follow-up question from Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Manish ji, thanks for the opportunity again. So when we are talking of these green energy opportunity where it is, I mean Europe is very aggressive, here, we have a fair amount of presence in Nordic region and also if you can give color tower transmission shipment to U.S. market where we are seeing a big kind of opportunity coming up as well as South America?

Manish Mohnot — Managing Director and Chief Executive Officer

Bharat bhai, yes. Just to answer your first question, yes, green opportunity — green hydrogen and related opportunity looks like a big opportunity. We have a team working on it, but while we say so at least, our internal belief is by the time it gets converted to reality and there’s some meaningful traction, it might still be 12, 18 months if not more than that.

I’m not saying that we’re not working on it. We have a team, which is looking at it both on manufacturing as well as EPC opportunities. But there is — there are so many options and solutions and feasibility and liquidity and so many challenges, I’m just saying. So to us, it’s a good opportunity but maybe beyond ’24, ’25.

On the second aspect, as far as the U.S. market is concerned, yes, that’s a focused market from a long term. But while we say so, we have had very minimal traction there, we’ll just supply towers to a few clients, we’ve not been able to get into the EPG space there. The markets are very different and very competitive and we’re still studying that market as far as U.S. is concerned.

On the Latin America player, the entire South America whether it is Brazil, whether it is Chile, whether it is Peru, whether it is Argentina or the neighboring countries, we see a lot of traction coming up. We are selective on projects, which we need to take. Brazil has not been a very good starter in the last 12 months, but we’re pretty confident of turning it around by next year itself. Chile, we have done exceptionally well and today, we are among the top three contractors in the country on transmission. A few more countries we are looking at those opportunities, but yes, that’s a big opportunity for us. So we believe over the next three to five years, at least on the transmission side, we might be among the top three players in the Southern American market in totality.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay. And we believe to remain strong in Middle East, South Africa and Southeast Asia?

Manish Mohnot — Managing Director and Chief Executive Officer

Yes. So we’ll continue to be present there as long as it is competitive and it gets us reasonable returns. The challenge in some of these markets is there’s so much competitive pressure. But at times, whatever numbers you bid for become challenging by the end of the project, right, because they’re very different markets. Yes, we’ll continue to be present, but our focus will be a lot more on newer markets and not the same markets where we are today.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay. And last question on the working capital side, particularly on KPTL. Sir, because of these advanced — I mean, duty — GST duty structure or GST set of amount, I mean outstanding is INR312 crores, so how do we see because this amount is — keep on increasing, so that is also causing some kind of a working capital pressure?

Manish Mohnot — Managing Director and Chief Executive Officer

Yes, for sure, Bharat bhai. That was a challenge, but it’s improved significantly after the revision in the rates on railway projects, which happened just three, four months ago. Earlier railway projects were at lower GST, so we had a challenge there. So we believe that this number should get down by the year-end as — because now the difference in majority of the projects is very minimal. Now railways again at 18% and water has also gone up and JMC, so we would not have much challenges, it’s only the historical credit which we need to utilize, so you’ll see a reduction happening, but not significant in the current year.

Bharat Sheth — Quest Investment Advisors Private Limited — Analyst

Okay. Thank you and all the best.

Manish Mohnot — Managing Director and Chief Executive Officer

Thank you, Bharat bhai.

Operator

Thank you. We have a follow-up question from Vineet Anand from Emkay Global. Please go ahead.

Abhineet Anand — Emkay Global — Analyst

Yes. Sir, one of the things that the KPTL and JMC merger, we had been talking about the synergy, right? So first I wanted to understand that where these — what is the differential in interest rate for KPTL and JMC today?

Manish Mohnot — Managing Director and Chief Executive Officer

Yes, Vineet, the differential interest rate is in the range of 200 basis points to 300 basis points depending on the kind of borrowing. It’s much lower on NCDs, it’s much higher on WCDR [Phonetic] and CC limits, but it’s in the range of 200 basis points to 300 basis points.

Abhineet Anand — Emkay Global — Analyst

And apart from this interest cost, I’m assuming that the product — when the merger happens, everything will become KPTL’s rating, right? What are the other aspects that one should — one can monitor to have more benefits that can grow in the next few years?

Manish Mohnot — Managing Director and Chief Executive Officer

So, we had articulated this earlier also. There are three segments where we are focused on, right. One is the savings in costs coming out of all our entire HOR1 [Phonetic] back office operations on several areas. But more than that is the opportunity of bidding for large projects using the civil, mechanical and electrical skill sets and one balance sheet, which will allow to us to bid for larger projects, which could be a much bigger opportunity.

So if you look at the last nine months, you will see majority of our order wins are very high value projects and if you compare it with any number for the last three years, you’ll see a huge difference. So that’s one ability, which we are building — which is creating a team cutting across streams and using our balance sheet to bid for it in terms of guarantees, in terms of ability to take risk, all of that.

Third and again a big opportunity is getting a lot of our businesses on the international foray. So what we have done successfully internationally in transmission, we replicated that very well in the last three years on roads in a few geographies. We believe that with a focused approach, we can do that across all our segments.

So with this three is where we believe that one, growth on revenue as well as margin should be possible, it’s a journey, which will take its time, but clearly, it’s a journey, which will be very, very fruitful in the long run.

Abhineet Anand — Emkay Global — Analyst

Thanks, sir. Those were very informative. Thank you.

Operator

Thank you. [Operator Instructions] Next question comes from Amit Anwani from Prabhudas Lilladher Private Limited. Please go ahead.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Hi, sir. Sir, my question is, sir, on the 20% growth which you were talking about and achieving a $3 billion revenue by FY ’25. So are we factoring in any inorganic growth here and how the domestic versus international will look like, anything which you are factoring about this?

Manish Mohnot — Managing Director and Chief Executive Officer

Amit, the — are we factoring in today any inorganic growth? The answer might not be very — we are looking at inorganic opportunities, but not very significant in nature. Our approach in inorganic growth always if you look at whatever we have done in the last 15 years has been that buy companies which are small with a good team and then growing. So even if we look at inorganic growth, it’s not going to be significant in terms of numbers for the next two years. It will be significant from a long-term perspective but not in terms of numbers for the next two years.

And the second question was on — sorry, I missed the second one.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

International…

Manish Mohnot — Managing Director and Chief Executive Officer

Yes. Domestic and international. Apologies. Yes. I think the focus clearly is international from a long-term perspective. Today, our revenue if you look at it is one-third international, two-third domestic, but getting into the next few years, it might be at the range of 50-50 or at least 45-55 till 2025. Beyond that, looking at opportunities, these numbers can be plus-minus but our focus on international business is a lot, lot more, given the visible opportunities and given our presence in more than 70 countries.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Sure, sir. Sir, next question is on the working capital situation, which you might be seeing for the high-growth segment, which you mentioned, including building factories, water and urban infra compared to the traditional segment, which we had.

Manish Mohnot — Managing Director and Chief Executive Officer

So this is always a challenge for people like us in terms of growth versus working capital. And if you look at Kalpataru historically, if you pick up the numbers over the last decade, you’ll see that we’ve always been conscious on working capital and it’s never been revenue just for the sake of revenue. So while we have challenges in a few segments, which are back-end in terms of payments, but we will be focused on balancing this with segments where payments are not as stretched.

On totality, we still believe that staying in the range of 120 days of net working capital at a consol KPTL, JMC is what is achievable and that’s a good target to stay with the growth trajection for the next two years.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Sure. Sir, with respect to margins for next 1.5, two years, so as we already highlighted that commodity softening and all other factors would definitely improve the margins from here, and we are talking about synergy post JMC merger. So how soon we are looking for double-digit margin, anything which you would like to highlight?

Manish Mohnot — Managing Director and Chief Executive Officer

See, I just want to be cautious at this stage on saying that it’s not that margins will not improve, margins will definitely improve, but I’m not ready to commit a number as of now for the next year and the year after [Phonetic]. Yes, we have targeted to be at PBT levels of 4.5% to 5% going forward and even the current year, but EBITDA margins will continue to be in the range of 9% to 10% even in the — for the next two quarters and even for the next year. But we will revisit these numbers when we get into Q4 because that will give us a lot more clarity on the order book for the next year.

Amit Anwani — Prabhudas Lilladher Private Limited — Analyst

Sure. Thank you.

Operator

Thank you. Next question comes from Jainam Shah from Equirus Securities Private Limited. Please go ahead.

Jainam Shah — Equirus Securities Private Limited — Analyst

Yes. Thanks for the opportunity. My question relates to the PMC projects [Indecipherable]. So earlier we were anticipating some restriction in the Vindhyachal. However, in the last [Indecipherable], we were anticipating refinancing of that project. However, in this current presentation, I guess you were not seeing any [Technical Issues], so are you going for any refinancing of [Technical Issues], we are just going ahead with the…

Operator

Jainam, sir, I’m sorry to interrupt you. Your voice is not clear, sir.

Jainam Shah — Equirus Securities Private Limited — Analyst

Yes. Just a minute. Yes, sir, so, I’m talking about the Vindhyachal project, so here, we were start doing the stakes for the project, however, in the earlier presentation, it has been mentioned that we are going for the refinancing of that project. However, currently, in this recent presentation, there is no comment for the same project. So are we going for refinancing of that project or we are just looking for a wind-down in the refinancing as of now?

S.K. Tripathi — Managing Director and Chief Executive Officer

So to answer you, the revenues have substantially improved and we will be — so when it comes to the refinancing, options are open, but if you are asking we wanted tomorrow basis, the answer is no. We will look at the right opportunity and go for the refinancing, but at the same time, there is no desperation.

Jainam Shah — Equirus Securities Private Limited — Analyst

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

Operator

Thank you. Next question comes from Thomas George, an Individual Investor. Please go ahead.

Thomas George — — Analyst

Good morning, Mr. Mohnot and Mr. Tripathi. It’s nice to connect with you again.

S.K. Tripathi — Managing Director and Chief Executive Officer

Good morning, Thomas.

Thomas George — — Analyst

I have two questions. Pardon me for my ignorance if I missed the news. What was the status of the Turkish project for which we had taken I think the market report? And then I’ll get to my second question after this one.

Manish Mohnot — Managing Director and Chief Executive Officer

Turkish project?

Thomas George — — Analyst

Yes. [Speech Overlap], sir.

Manish Mohnot — Managing Director and Chief Executive Officer

No, I’m not sure we’ve taken any project in Turkey on building in factories or any of the other segments. So…

Thomas George — — Analyst

There was a joint venture partner from Turkey for I think one of our tunneling projects and there was a news article that there were some issues regarding [Indecipherable].

Manish Mohnot — Managing Director and Chief Executive Officer

Yes, yes. That was a — okay. So sorry, I got it wrong. I thought a project in Turkey. Yes, that was a project which we were bidding for NHAI, where we had a Turkish partner. I do not think we are getting that project that we were L1 in that project, but for some reasons related to security and a few other aspects, we were not qualified for it. So we’ve removed that out of our L1 and order book — out of our L1 long time ago. We’ll not be getting that project is what indication we have as of today from the relevant Ministry and the officials.

Thomas George — — Analyst

Right, sir. And the second question is again a little bit more generic. What is the way forward for embedding new technologies in EPC field? I mean what are we going to be doing in terms of getting more advanced in terms of capabilities of the company, if you can maybe share some words on that.

Manish Mohnot — Managing Director and Chief Executive Officer

Sure. I think this is a very good question and a very important question for our sector. Traditionally, our sector has been more brick-and-mortar, right? And it’s been known as a sector, which is brick-and-motor. But if you look at the way technology has come into different segments of our sectors over the last five years has just been amazing.

So let me just spend a few more minutes on this. So transmission, we start from basics of transmission, right? Today, on transmission, we have technologies, which can take care of a lot of things. We can do drone stringing, we can use helicopters for erection, we can do foundations using clearing methodology by which the timing is very low, we can do erections using technology by which the entire cycle comes down significantly. So there are technologies, which are being built-up in all segments. So transmission, a lot happening on stringing as well as on foundation.

If I go to water, a lot happening in terms of the entire staging shuttering, the entire technology to build water pipelines as well as the, vis-a-vis, right? Historically, we used to do staging shuttering, which was plywood. Today, we have all shifted to aluminum and modular, and we’re going beyond that. The entire O&M of water is now done using technology solutions, which are unbelievable.

And on machinery, when you look at it, we recently had a big team which went to bauma, which was there in Munich just a few weeks ago and it was an eye-opener on the kind of opportunities on the machinery segment not only in productivity, but productivity, fuel consumption, electricity-driven productivity and monitoring of all parameters.

So even on machinery, whether it is the dozers, excavators, which are very basic [Indecipherable] which are required at all projects you’re seeing huge improvement in technology. We no longer have problems, which we have — used to have in the past on fuel, on productivity and how many hours of operation and that’s very helpful. But while we say so, we often get to remember as I said earlier, we’re still in brick-and-motor. We’ll still need labor to do a lot of things. Computers or robots will not replace them and we will still be a labor-intensive business.

Even on buildings and factories, the kind of technology we using are on slabs. Today, we have reached a cycle where majority of our buildings, the slabs are happening in seven to 10 days and sometimes less than that, which at — traditionally if you go five years ago used to be 20 or 25 days. Our biggest advantage on technology also is our SAP platform, which we’ve been using for more than 10 years where everything in the organization, right, from a site DPR through a purchase order, to monitoring of any cash flow to a plant output to MIS, everything comes from one platform which is SAP across all projects across all countries.

So we continuously are investing in technology. On an average, we’ve been spending more than INR20 crores, INR25 crores every year for the last 10 years and that number will further go up based on what we’ve seen in the last bauma, on at least equipments and machinery. Even at a plant level, over the last three years, we have — while the plant output has been very dismayed because we’ve not had a lot of order book on transmission but a lot of technology improvements has come whether it is on the zinc coating and the relevant things or whether it is the OE at a plant as well as at every machine level.

So the big focus area for us and we have a dedicated team, which works on this real time. Our focus continues to be being real time connected to our workers to our plant and machinery and to our site. And today, we have achieved that on a scale of 10, my view seven to eight, but that scale keeps on changing real time.

Thomas George — — Analyst

Right, sir. That’s splendid. Wishing you all the best and much more success to you all. Thank you, sir.

Manish Mohnot — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. That will be the last question for the day. Now, I hand over the floor to Ms. Bhoomika Nair from DAM Capital for closing comments.

Bhoomika Nair — DAM Capital Advisors Limited — Analyst

Yes. I would just like to thank everyone for being on the call and the management for giving us an opportunity to host you, as also answering all the questions. Thank you very much, sir, for the outlook, and wish you all the very best.

Manish Mohnot — Managing Director and Chief Executive Officer

Thank you, Bhoomika. Thank you very, very much.

Operator

[Operator Closing Remarks]