Kalpataru Projects International Limited (NSE: KPIL) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Manish Mohnot — Managing Director & Chief Executive Officer
Analysts:
Unidentified Participant
Bhoomika Nair — Analyst
Mohit Kumar — Analyst
Gaurav Uttrani — Analyst
Vaibhav Shah — Analyst
Mihir Manohar — Analyst
Amit Anwani — Analyst
Abhijeet Singh — Analyst
Bharat Sheth — Analyst
Teena Virmani — Analyst
Parikshit Kandpal — Analyst
Ashwani Sharma — Analyst
Balasubramanian — Analyst
Mahir Moondra — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Kalpatru Projects International’s Q1 FY26 earnings conference call hosted by DAM Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhumika Nair from TAM Capital Advisors. Thank you. And over to you, ma’am .
Bhoomika Nair — Analyst
Thanks. Good morning everyone and a warm welcome to the Q1FY26 earnings call of Kalpatur Projects International Limited. We have the management today being represented by Mr. Manish Manot, Managing Director and CEO, Mr. S.K. tripathi, Deputy Managing Director, Mr. Sanjay Dalmia, Executive Director, Mr. Amit Upleinchwar, Director Group Strategy and Mr. Ram Patodia, President Finance and CFO. At this point I’ll hand over the floor to Mr. Manod for his initial remarks post which we’ll open up the floor for Q and A. Thank you. And over to you, sir.
Manish Mohnot — Managing Director & Chief Executive Officer
Thank you, Bhumika. Good morning everyone and thank you for joining us on today’s earning call. I am happy to share that we have had a strong start to FY26. The performance for quarter one of 26 marks our highest ever Q1 revenue and profitability in the company’s history. This performance reflects the underlying strength and resilience of our diversified business model, robust balance sheet and working capital management and relentless focus on project execution on back of strong capabilities to execute EPC projects across diverse geographies. Let us now move to the business performance at the Consol and stand alone level.
Both revenue for Q1 grew by a strong 35% YoY led by strong project execution and healthy order backlog. In Q1 FY 26 improvement in profitability has significantly outpaced revenue growth as our Consol ebitda grew by 39% yoy, PBT grew by 112% yoy and PAT was up by 154% yoy. Similarly at stand alone level, EBITDA was up by 37% yy, PBT grew by 67% yoy and PAT was up By 72% in Q1 26. This was on back of 20 basis point improvement in consolida margin which stood at 8.5% and 170 basis point improvement in consoled PBT margin.
Our standalone EBITDA margin was up by 10 basis points to reach 8.5% and PBT margin improved by strong 100 basis points to 5.4% for Q1.26 as guided earlier margin expansion remains a major focus area for us on back of strategic bidding, diversified business mix prudent working capital and operational efficiencies. Our finance cost as a percentage of sales has come down to 1.7% at standalone level and 2% at consol level backed by efficient working capital management. We continue to maintain a strong balance sheet as we close the quarter with 33% YoY reduction in standalone net debt to rupees 1940 crores and 26% YoY reduction in consolidated debt to rupees 2765 crores.
Our net working capital has improved significantly compared to similar quarter last year with net working capital days at 106 days at standard loan level and 91 days at consol level which is an improvement of 19 days at standard level and 12 days at consol level compared to the similar quarter of last year. Our order inflows remain healthy at 9899 crores till date in FY26 with significant wins in the B and F and T and D business. Our order book stands at Rupees 65,475 crores as of 06-30-2025 up 14% YoY with fairly diversified and provides strong visibility for future growth now coming to the performance of individual businesses.
Our transmission and distribution business delivered a strong revenue growth of 56% wifi supported by robust order backlog and project execution in India and overseas market. We received new orders of Rs 3,188 crores in the TND business supported by India and international markets. Our TND order book stands at Rs 26,725 crores, a growth of 30% YoY reflecting good growth visibility in coming quarters. We continue to strengthen our capabilities and market reach in the TND business as we have secured new HBDC project and strengthened presence in the Middle east and Nordic region. LNG Sweden has reported revenue growth of 72% YoY to Rs 774 crores.
LMG received orders worth approx 850 crores till date in FY26 and have an order backlog of around 3500 crores as of 30 June 25. We have initiated a strategic overview in LNG where various options are being evaluated including options related to IPO subject to market conditions. In this regard, merchant bankers and other advisors and intermediaries have been appointed to assist with such evaluation and LMG has initiated certain preparatory steps. Overall, the outlook for a TND business remains very optimistic in domestic and overseas market with tender pipeline in excess of rupees 1 20,000 crores in the next 12 to 18 months driven by investments in energy transaction, grid modernization and the growing demand for power, we are confident that our TND business is well positioned to continue its growth trajectory with improved profitability going forward.
In Q1 26 our buildings and factories business maintained its growth momentum recording a 13% yoy increase in revenue. We have secured record orders worth rupees 6711 crores taking our order book to all time high level of over rupees 16,600 600 crores. In the B and F business, this performance is driven on back of our strong capabilities to win and execute large size design and build contracts from both long standing and new clients. Notably, we have secured our largest B and F order on design build basis till date in our history for development of over 12 million square feet of residential buildings in one single project.
Additionally, we expanded our presence in the data center business with additional works on an existing project. In the buildings and factories business, we continue to focus on establishing strong footprint in key markets, expanding our portfolio with large scale design build projects while sharpening our competitive edge to robust execution and timely delivery. Our oil and gas business delivered strong growth with revenue more than doubling to Rs.588 crores. Progress with good progress on the Saudi project looking ahead, we are actively working to improve our presence in international markets to drive the next phase of growth in this business.
Our water business saw a decline in revenue by 5% YoY to Rs. 670 crores. Collections in the water business have started to improve in a few states while progress in certain states still remains very slow. On the collection front, we expect collection intensity to improve going forward. With an. Order booklet backlog of Rs. 8,900 crores. We remain comfortable in the execution front in the coming quarters and also in the next few years. Our urban infra business delivered strong performance this quarter with a 42% YoY growth driven by progress on Metro rail projects both elevated and underground. We are continuously building our capabilities in execution and delivering to capitalize on the growing pipeline of opportunities in Metro systems, elevated corridors and tunneling infrastructure. In our railway business we recorded revenue of 254 crores during this quarter. This aligns with our current strategy of prioritizing project closures while being selective with new orders given the competitive intensity in this business.
Lastly, daily revenue from our road boot assets rose to Rs. 72.6 lakhs in Q1.26 from Rs. 63.6 lakhs in Q1.25. Importantly, we have not infused any funds in the three road SPVs during the first quarter. Our subsidiary, the Wainganga Expressway WEPL has issued termination notice to NHI on the 15th of July due to various contractual defaults on the part of the concessioner. The company does not have any material impact on the termination on our financials. We are progressing well on approval for sale of Vindhyachal Express and expect to complete the transaction in Q3 of 2526.
Moving now to our outlook, we remain confident to deliver on a targeted growth and profitability for FY26. We are on track to achieve revenue growth in the range of 20 to 25% at both standalone and console levels with healthy improvement in PVT margin. Our order visibility remains very positive in most of our businesses as we continue to target order inflows of 26 to 28,000 crores for full year 26. We also remain committed to efficient working capital, prudent debt management to support execution and competitiveness. With strong momentum across most of our businesses, we are confident in delivering sustainable and profitable growth in the quarters ahead.
Thank you for your continued support. We now look forward to your questions. Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wish to ask a question, you may press Star and one on your touch tone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all participants. If you wish to ask any questions you may press Star and one. We have a first question from the lineup. Mohit Kumar from ICICI securities. Please go ahead.
Mohit Kumar
Yes, good morning sir and congratulations on a very strong quarter. But my first question on the despite being very, very strong order inflow, it seems like the India TND was slow in the Q1. Can you please comment on that? And how do you see that unfolding forward?
Manish Mohnot
Good morning, Mohit. Mohit, if you look at our TND order inflow in the India side, you would have seen Q3 Q4. We won orders more than 7000 crores. Typically you see a lot of orders coming in Q3, Q4, driven by all the tenders of power grid and REC PFC bidding. We have not seen much bidding in Q1, which is a typical strategy. But while we go ahead, there’s a huge backlog. We’re seeing tenders of more than 50 to 60,000 crores to be bid over the next six months, primarily for grid expansion where tenders are all being floated by REC pfc.
So we remain very confident that you’ll see that growth coming in very, very soon. From the last nine months perspective, we have got orders in domestic TND of more than 7,000 to 8,000 crores. So it’s just a timing issue. And getting into Q2 Q3, you see growth coming back in terms of order book, also in domestic tnd.
Mohit Kumar
But is it fair to say that India saw roughly 1.3 trillion of order of bid finalization in FY25? Is it fair to assume that a lot of these projects are yet to close the EPC contract and.
Manish Mohnot
Sumit, it’s a mix. It’s a mix of a lot of orders have been closed. A lot of orders are under in the stage of a pipeline in terms of bidding. But the plans going forward to achieve the 2032 target, which is the NEA target, I think we’ll have to grow at at least 20 to 25%, if not one more in the next three years in the T and D space.
Mohit Kumar
Understood. The second question is on the building and factory wins. This quarter was surprisingly very good. Can you comment on the spread, geographical spread and is it driven by few clients or is it driven by a large number of clients?
Manish Mohnot
So on the B and F side, you know, on the geographical spread, our biggest strength continues to be southern India. You know, where all the markets, whether it is Bangalore, Hyderabad, Chennai, Vizag, all of them, that would be closer to 60% of our order book. 60, 65%. The balance 35% would be driven between west and north primarily. As far as the client concentration is concerned, we work with selective clients. The biggest clients of the country. Whether it is prestige, whether it is dlf, whether it is Godrej, whether it’s punishment or whether it is Brigade. We work with selective clients.
But these are the biggest clients of the country. We do not see any client concentration risk in any form. Because majority of the projects which we are executing have already been launched. And significant sales are visible in those projects. And given the current RERA environment, we see minimal stress on any of those projects from a client concentration risk perspective.
Mohit Kumar
Understood, sir. Thank you. And all the best. Thank you.
operator
Thank you. We have our next question from the line of Gaurav Utrani from Access Capital. Please go ahead.
Gaurav Uttrani
Thank you. Sir. Congratulations on the good set of numbers. So I just wanted to comment on the water segment. Like how we are seeing recovery in the segment and are we seeing new inflows to sort of come in the segment similarly for the railways. If you can highlight like what would be the progress going forward and what would be our strategy to grow this segment as a whole.
Manish Mohnot
Sure. Thank you. Gaurav. Gaurav. On the water segment, as I mentioned earlier we are seeing some improvements coming in some states in terms of cash flow. So when I look at states like MP Orissa, we’re seeing, you know, good improvements coming on cash flows. We’re getting paid whatever we are billing today. But in some states, primarily UP and Jharkhand, we are still not seeing too much traction on release of our old outstanding. We believe that it’s only a matter of time because these are all projects funded by the center and all budget allocation has been done.
We are cautious in terms of delivering. We are primarily focusing delivering on states which are paying us on time. So to that extent we are slightly cautious but I wouldn’t say we have reduced it significantly. So going forward we believe next couple of quarters the balance sheet should also start paying and that would help us again to actively look at projects from a long term perspective. Our current order book on water is good enough for the next two, two and a half years. So we are not worried in terms of an order book building immediately given the current constraint on cash flows as far as railways is concerned.
We’ve been slightly bearish on this business for the last couple of years because we’ve seen huge competition. Plus 95% plus of the country is already electrified. We do see some projects coming up on electrification, on metro electrification as well as civil projects. But we are very, very cautious for both water and railways. We continue to explore international opportunities. And I personally believe that during the current year we should at least see one large win in both the segments on the international front.
Gaurav Uttrani
Got it, sir. And sir, our margins have been really good this quarter like at 8.5%. So if taking into consideration that water segment would have performed well. So what would be the impact, negative impact that on the margins due to underperformance of this water segment, if you can highlight that.
Manish Mohnot
So we had already, you know, built in this when we gave our projections at the beginning of the year where water segment was not supposed to grow so much during the current year because we knew that these challenges might continue for some more time. So whenever we had given this, our profitability target of 5, 5 and a half percent PVT level, we had already included that impact. So water is right now at more, if you look at a quarterly basis, more at a breakeven level. They’ve not done highly positive, they’ve not done highly negative. But that is what was already budgeted in our numbers when we gave projections to the entire market.
Gaurav Uttrani
Okay, got it. So that’s all from my side. Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press Star and one. Anyone willing to ask a question, you may press Star and one. Now we have our next question from the line of Fairbhav Shah from JM Financials. Please go ahead.
Vaibhav Shah
Yeah, hi sir. Firstly on the BNF business, so we have seen a strong uptick in order inflows and order book also has strengthened in the past few quarters. So how would you see the revenue growth in this segment? So it should be in line with the company’s overall growth guidance or it can even surpass the growth given the strong order position.
Manish Mohnot
Good morning Weber. Weber. We believe that the revenue growth would be in line with whatever we expected for the company as a whole. The 20 to 25%. A lot of these new orders which have come are more design built orders. So converting them to revenue would take some more time. It would not happen in Q2, Q3, it would even only start in Q4. So on an annualized basis we believe that B and F business should be very similar to the growth target which is given for the entire company.
Vaibhav Shah
Okay. Secondly on the JJM side, will we see a decline in water resolution for the entire year like it was in the first quarter? And what are the outstanding receivables as of June?
Manish Mohnot
So on an annualized basis we believe that the water business will do slightly better than what they did in the previous year. It might not be a huge growth, but it would still be a single digit growth in terms of revenue. As far as our JGM outstanding are concerned, they are in excess of 1000 crores as of 30th June, which includes build, unbilled, all of them. And we are monitoring that closely. And I said earlier, some of the states like UP and Jharkhand, the outstanding is much higher but the other states the outstanding have improved significantly.
Vaibhav Shah
Okay. So lastly on the, on the margin bit, so you mentioned that at in water we are at break even levels and railway also should be at similar levels or a negative level. So how do you see the margins especially in the TND and the BNF segment which are the major contributors for us?
Manish Mohnot
I think as we guided earlier, TND, B&F, oil and gas, all of them in terms of margins are much stronger, more in the range of 9 to 10% EBITDA for all of those businesses and some of the other businesses are much lower on EBITDA. And that’s why this mixed bag of 8.5%. We believe that this would continue for the balanced part of the year also wherein some of our Transmission, Domestic, International as B&F and oil and gas will deliver much higher margins and the other businesses would be subdued, slightly subdued on margins.
Vaibhav Shah
And lastly on LMG and Fasttel, how has been the margin performance in the first quarter and what is the guidance for FY26?
Manish Mohnot
I think the margin performance for LMG in the first quarter, I think at a EBITDA level they’ve done 8% plus. As far as parcel is concerned, they continue to be negative on EBITDA even in the current quarter. We’re not able to provide guidance for the current year given that the process of looking at options of fundraiser started for lmg. But we are on track on whatever we had given at the beginning of the year on the business plan of LMG.
Vaibhav Shah
Also. Execution was very much very strong in the first quarter for lmg. So this momentum should continue.
Manish Mohnot
Yes, because the order book looks very good. So we believe that we should be on track for a reasonably good execution going forward.
Vaibhav Shah
Okay, thank you sir. Those are my questions.
operator
Thank you. We have our next question from the line of Mihir Manohar from Carnelian Capital. Please go ahead.
Mihir Manohar
Yeah, hi. Thanks for giving the opportunity.
Manish Mohnot
Good morning Maze. Yeah, go on.
Mihir Manohar
Yeah, yeah, good morning. Congratulations on great set of great set of numbers, sir. Wanted to understand the GDM side you mentioned excess of thousand crores build plus unbuilt put together. What is the bifurcation between build and unbuilt? And what was this number individually on March quarter?
Manish Mohnot
Meer, I might not have the exact details of that with me right now. I think compared to March quarter, I know that the incremental cash which we have given in the current quarter is only around 150 to 200 crores. As far as details specifically in terms of what is how much is build and unbilled. If you can connect with any of our team members, post the call, they’ll be able to give you those details.
Mihir Manohar
Sure. Done sir. I mean on the UP side we were expecting the numbers, I mean this recovery to happen roughly April or May or around. But however there are still August. The number has not come in August. Broadly. I mean, what is the reason for UP and Jharkhand that the money is not flowing in?
Manish Mohnot
We wouldn’t know the exact reasons except that they have not got the funding from the center. As of now, we are in continuous touch with them. We still continue to work on majority of the projects in UP while Jharkhand we have slightly slowed down our work execution. We have had discussions both at a state and the central level. Across all levels we have been given to understand that we should see some cash flow coming in as early as August. September. September. Remember this next few months itself, we’ll just keep our fingers crossed, continue working and continue pushing to see that the cash flow comes sooner than later.
Mihir Manohar
Understood? Sure. Second question was on the LMD side. I mean we are exploring options for either raising capital over there or a separate listing. I just wanted to understand the thought process because I mean it is also TND business similarly sitting in kpin. So what is the strategy and thought process of getting it a separate subsidiary listing? Subsidiary?
Manish Mohnot
I think the strategy is very simple. I think it is accretive to the shareholders of KPIL to create value for some of our subsidiaries where we have invested a lot of time in the last 10 years. So that’s one approach. And second is also to build a kitty to make sure that if there are further opportunities of growth in the European segment, then LNG itself could look at those opportunities using the cash flow which we could raise over a period of time. So it’s a mix of both of them. And as I said earlier, we’re looking at various options and we’re exploring that and we’ve appointed bankers and advisors for that.
Mihir Manohar
Understood. And my last question was on the international side, on the international just do we execute HVDC projects also?
Manish Mohnot
Yes, we do. But not across the globe. In some part of the world, Latin America, Chile, we are doing an hvdc. So some parts of the globe, yes, we’re doing HPDC projects, but not across the globe. Brazil and Chile, Yes. We didn’t. Not so much. But it’s a mix. Yeah. So depends on whatever opportunities exist in any of those countries. But if your question is are we qualified to do HBDC projects at a global level? The answer is yes, we qualified to do HVDC projects at a global level.
Mihir Manohar
Okay, understood. Just on the HVDC globally, I mean, are the Margins and ROE ROC is better than the non HBDC or lower KIWI projects just from a fundamental perspective.
Manish Mohnot
So I don’t think there’s any difference in terms of HVDC or non HVDC projects when it comes to margins or rows or roe, you know, because we built all that in the tender costing and effectively we build at similar margins. So it’s not that if it is HVDC versus non hvdc, the margins would be different in any forms.
Mihir Manohar
Understood? Sure. And my last question was just on the guidance. I mean given a good trajectory which is there in 1Q and also robust CapEx across the power T and D space, do we expect our guidance to be revised upwards?
Manish Mohnot
So if you, if you, I’m sure you would have heard my opening remark at the beginning of the year. I’d said a 20% plus compared to that. Right now we have said 20 to 25% and I personally believe we should be more closer to that 25% levels in terms of revenue growth guidance with margin guidance being similar of 5 and 5.5% at a standalone level.
Mihir Manohar
Understood. Surely that’s it for my. Sir, thank you very much.
operator
Thank you. We have our next question from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Good morning sir and congrats for the good set of numbers. First question, sir, on, on the debt levels, what kind of target debt levels we are looking at this year? Also the VPL transaction, if it happens, what is the value we are expecting, how much we invested and will that help making our balance sheet better? Some color on the debt position and how VPL is also going to benefit us in terms of the balance sheet.
Manish Mohnot
Sure. Good morning, Amit. Amit, we continue to stay cautious on our debt levels and that’s been our model all throughout the last 10, 15, 15 years. We believe that our net working capital days will be below 100 days at the year end, which is one of our targets. And driven by growth, you’ll have appropriate debt. Q1 Typically you see debt going up. That’s been a trend of the industry as a whole and you’ve seen that now also. So my own view is Q1, Q2 debt should go up and it should start stabilizing in Q3, Q4 on absolute numbers, it will be driven by how much growth we achieve with working capital days below 100, net working capital days below 100 at a standalone level. That’s how we’re driving it as far as debt and net working capital is concerned.
Amit Anwani
Right sir, so we are expecting the indoor real estate. So any update? Has that been closed and is the money received? And second, same for, for the Sri Shubham Logistics what exactly will be looking for in the subsequent quarters as a strategy?
Manish Mohnot
So Sri Shubham Logistics, we continue to explore opportunities of selling some of our warehouses and land parcels which were there and reducing external debt. We should be selling at least two, three large warehouses in the current year. One of them may be in as early as Q2. Our target is to reduce external debt significantly by the end of the year and then we could look at strategic options getting into the next year for Sri Shubham as far as the real estate is concerned, I think you know we have already given on the indoor side, majority of our projects are major if not major day.
I would say 99% of residential and shops are sold. We have to collect approximately 100 crores which we believe collection should all happen in Q2 or early Q3, not beyond that. That’s on the indoor project.
Amit Anwani
So the amount which we are expecting exclosure, 200 crores. Okay sir, thank you. Thank you so much for answering my questions.
operator
Thank you. A reminder to all participants if you wish to ask any questions you may press star and 1. Anyone willing to ask questions, you may press star and one. Now we have our next question from the line of Abhijit Singh from Systematics Group. Please go ahead.
Abhijeet Singh
Yeah. Thank you for the opportunity, sir. Great to see an amazing set of results for this quarter. My first question is given the current mix of the order book, what is the sensitivity to an increase in commodity prices like you know, steel, copper, etc. Whatever the commodities that are the input costs. So what is the, I mean proportion of let’s say fixed price contracts to the contracts for the PVC clause and other variables which would go into the sensitivity.
Manish Mohnot
So Abhijit, just so that we’re very clear, you know we are exposed to three or four kinds of commodity risk. Steel being the largest, aluminium second, copper and zinc. As far as aluminium and copper and zinc are concerned, we are significantly hedged, if not fully hedged. So there will be no impact of any price movements going forward on an overall book. If you look at our order book, there’s around 65% of our order book which is fixed in nature. So that 65%. We do not believe that there will be any impact of any improving any increase in any of the commodity prices.
There’s 35% which is variable and out of that 35% significant is already hedged. So personally if you ask me, there could be a very, very minimal impact in case prices go up, you know, significantly. Unless prices double from here, which we saw, you know, post Covid when, you know, suddenly steel had doubled itself. Unless that happens, we do not believe there’ll be any impact on margins given by volatility at least in the current year.
Abhijeet Singh
So only a sudden and sharp increase in steel could impact substantially.
Manish Mohnot
Yeah, when I say sharp is if it doubles itself from here, which we have seen only once in the last 15 years. That was post Covid. You know, if it doubles, it still doubles itself from here. You still have a three to four month inventory. So you would not see that impact coming significantly in the current year. It would only come in the next year for that order book which is more fixed in nature.
Abhijeet Singh
Right. You mentioned in your comments about the BNF and what are the business that you are expecting one order in the international geography. So could you comment on, I mean the geography and the kind of addressable market that we are looking at there and the margin profiles. So I mean a general idea of how we are looking at those markets.
Manish Mohnot
So I, on my commentary I spoke more about water and railway on the international front. It wasn’t B and F. The segments for water continue to be more focused on the Middle east side where we are looking at options with a few large developers in the Middle East. This would be high value projects and margins similar to what we quote in India in terms of EBITDA and pbt. As far as railways are concerned, we are looking at options more in the Africa side and we are looking for tenders more in the African region. It might still take some more time before we really, you know, get into which exact geography of Africa.
But as I said earlier, it would be high value with margins similar to the Indian margins which we quote.
Abhijeet Singh
Right. Lastly, is there any impact of the increased tariffs by the US and Indian imports on our business?
Manish Mohnot
I think on our business we have looked at. We have had. We have a nil impact because we have zero exposure to us in every firm and all the businesses. We do not do any imports, we do not do any exports. Nothing from us directly as well as indirectly.
Abhijeet Singh
Right. Sir, thank you for answering my questions. That’s it from my side.
operator
Thank you. We have our next question from the line of Bharat Seth from Quest Investment Advisors. Please go ahead.
Bharat Sheth
Hi. Congratulations Maniji and team for.
operator
Sorry to interrupt you, Mr. Bharat. Can you please be a little louder?
Bharat Sheth
Hello. Am I audible?
Manish Mohnot
Yes, please.
Bharat Sheth
Good morning. Congratulations Manishi and team for excellent performance. Sir, my question is one is how do we see opportunity in European region? What was year back and now and how do we see it’s changing?
Manish Mohnot
Good morning Bharat Bhai. Bharat Bhai, we as KPIL have always been very bullish on the European segments on on a few specific sectors. One of the sectors where we are very bullish is TND and I think we continue to stay bullish whether it is in the Nordic market or whether it is Germany or whether it’s the neighboring markets. As of today, if you look at it at Sweden, we are among the top three through Lindjay Moon charge and we continue to be staying in that position. So from a two to three year perspective we continue to stay very bullish.
And personally if you ask me even from a five year perspective because majority of the European states now have, you know, becoming clean in terms of energy by 2035 which requires them to build a very strong grid. Given that, I think we continue to stay bullish in this markets at least from a three year, three to five year perspective.
Bharat Sheth
And how much capability investment that we are planning and what stage four, I mean gearing up for future opportunity.
Manish Mohnot
So Bharatbha, I might not be able to speak a lot on the future opportunities given that you know, we’ve started a process. I can only say that whatever business plan we had given at the beginning of the current year, we’re confident of achieving that and we’ve geared up in terms of competencies to make sure that we achieve that and further growth also if required.
Bharat Sheth
And how about Sir Fasal? How do we see, I mean and when do we expect to PBT break even?
Manish Mohnot
So we’ve had, we still continue to see have some challenges on Fasal Q1 was good on revenue growth but on profitability it was not necessarily a good quarter. I personally believe getting into Q3 onwards we should be at a breakeven level. Q2 is also slightly difficult quarter but from Q3 onwards at Fasal we should be at a breakeven level. We’ve also been very selective in terms of taking orders there and we would be revisiting a strategy in terms of future growth of Fasal, maybe Q3, Q4 and then we’ll revert back to all of you.
Bharat Sheth
Okay, as a last question, see after winning a large project in oil and gas in international market. So how we are seeing now and how, what is Your view from 23 years perspective?
Manish Mohnot
So Bharatbhai, on the international front when it comes to oil and gas today we are qualified with majority of the international Middle east players, whether it is adnoc, whether it is Saudi Aramco or whether it is the neighboring countries there with the oil and gas utility we are seeing a lot of opportunities coming up there. You know our first aim was to make sure that we had taken a large project that we create a team and focus on delivery. And that’s why we did not take any projects in the previous year. Over the last 12 months we are now seeing that our team has delivered better than what we had expected.
With this we now continue to refocus on building an order book and this on the international front. And we believe that before the end of the year we should have some large wins coming on the international front on the oil and gas business.
Bharat Sheth
Okay. And sir, last question with your permission, when we are talking of three years opportunity say on India side, I mean growing on tnd side 20, 25%. So again I mean what are the major challenges that we are facing and how really we are building a company to gear up to encase those opportunities.
Manish Mohnot
So Bharatbhat, today on challenges our biggest challenge continues to be labor availability and also the movement of labor. To me if you ask me the biggest challenge one, challenge two and challenge three continues to be only that. As far as our plant capacity is concerned we are in the range of 2.25 lakh plus tons and we can easily expand that in a few months to whatever we need. As far as our management team as well as our design engineering team, our equipment base, our capex base, I think we can even do double of what we are doing today.
So today we do not have a challenge on any front except labor availability and that’s also improving in terms of where we were the same time previous year to where we are right now. I can see see some improvements but it needs to improve significantly for us to continuously growing this at 25 30% for the next three to five years.
Bharat Sheth
Okay? Okay. And same thing on B and F side.
Manish Mohnot
Yes, I think it’s exactly the same on B and F. The opportunity looks good. We work with the large guys, we are doing large size projects, design built thanks to rera we do not have any challenges in terms of liquidity, cash flow, any of that. We’ve also invested hugely in capex over the last three years in the B and F side. So that also helps us having a good capex base. So our only challenge continues to be labor on the B and F side also.
Bharat Sheth
Thank you very much. All the best.
operator
Thank you. We have our next question from the line of Tina Virmani from Motila Losal Financial Services. Please go ahead.
Teena Virmani
Hi sir, thank you and congratulations for extremely good set of numbers. Sir, my question is related to the previous question on growth across segments. Given the way this pipeline is strong and order inflows for KPIL also have been strong in last three years. Beyond this labor issue or which, which probably can be a temporary issue, what can be your constraint to grow even at a 30 35% growth rate would in the sense like I just want to assess whether you can grow on a full year basis by more than 25% or 25%. Is it possible or not? Because barring Q2, which has a seasonal impact, Q3 and Q4, generally the execution ramps up and all those labor related issues also get sorted out.
So can you be at even 30, 35% growth rate if things fall in line?
Manish Mohnot
So Tina, you know a good part of our business is that it is driven by external factors as well as as much as driven by our own capabilities and competencies. Right on an order book front, yes, we have good visibility across all the business. You see in Q1 we have grown at 35% and that’s why annualize we are confident of 25% plus. We do not believe that at least for the current year we have any challenges on achieving a targeted growth. But our businesses have always have internal and external factors both. We would rather be cautious and continue growing at 25% and not target 35 for a year and then come back to 10 or 15 in the next year.
So our own belief is that we would like to continue this 20, 25% growth for the next two, three years, focus on improving margins and focus on selecting projects which we want to deliver in the shortest time frame. So to answer your question, you know, we believe 25 is a good number. We can do better than that. But we’ll be happy with doing this sustainable instead of doing it in a year and then coming down next year.
Teena Virmani
Got it. Because to some extent FY25 base also was lower. And particularly for Q1, the base was lower. That’s why I was trying to understand that on a low base also can the growth be little better than what you’re guiding for? But I take your point that you want to maintain it as of now at 2025%.
Manish Mohnot
Sure.
Teena Virmani
And my second question is related to any kind of CTC provisioning. Have you done anything for this year in the current quarter? Is it part of the numbers or is it is It Is there any provisioning done in the balance sheet?
Manish Mohnot
So we continuously do CTC provisioning on a monthly basis. It’s not on annualized basis. Right. So projects, wherever CTC provisioning is required happen on a monthly, monthly basis. Quarterly basis. Now if your question is have we created additional provisions in the current year on warranty guarantee. Even in the current quarter we have provided for additional 28 crores. So that number compared to March has gone up by 28 crores. On ECL we had similar numbers as of March. On CTC there would be some small moments but not significant. There could be plus minus 5, 10 crores but not significant.
Teena Virmani
Got it, sir. Thank you. That’s it. From my side.
operator
Thank you. We have our next question from the line of Parikshit Kanpal from hdfc. Please go ahead.
Parikshit Kandpal
Hi sir. Congratulations on a great quarter. So my first question is on the loss funding. So you said that this quarter there’s no loss funding. So is it right to assume now. After the Veneganga termination that there won’t be any loss funding from here on?
Manish Mohnot
Good morning. Parikshit. I just want to recorrect your understanding. I don’t. We have stopped loss funding maybe a few years ago. We’ve been primarily funding to repay debt. There’s a big difference. But anyway, I’m sure we understand both of us. So our belief is that you know we might have to do some funding on WEPL to repay the small debt which is with bankers. Now our debt with bankers is around 40 crores. So while WEPL has been terminated we do not want to get into this discussion with bankers of an NP or any of that.
This would eventually come back in the form of a claim. But our finance team is right now discussing with the bankers to see that how do we fund that. So that could be the only funding which might be required. So to answer your question, a max of 50 crores. Out of which 40 crores would be more to repay debt of wepl closer to 40 crores. I do not remember the exact numbers. And there could be 5 to 10 crores further. But we would target that to be kept at a minimal level.
Parikshit Kandpal
Okay. The second thing on the margin trajectory now. So the mix is now changing. We are seeing high growth and higher margin. I’m in double digit segments like tnd, BNF and all. So as a trend from here on a quarterly basis as railways and other segments slow down in terms of growth contributions. Do you think that directionally what kind of margin expansion are you Looking at PBT level in FY27.
Manish Mohnot
FY27 Parikshit, it would be too early for me to give you a target on 27. In terms of margins, I can only say that the current order book in terms of margin visibility is much better than what we had in the last two years. So definitely you would see margin improvements coming in next year also. I’m pretty confident about it. But exactly would it be 25 basis point? Would it be 50? Would it be 75? You will have to give us some more time to come back to you current year. We stay confident that we would be at a PBT standalone in the range of five to five and a half more towards the higher side and going into the next year you’ll definitely see an improvement. But give us some time to come back with exact numbers.
Parikshit Kandpal
Any views on the PBCB revival on the state side sir? So how’s that opportunity you’re seeing and how big can that opportunity be over the next few years?
Manish Mohnot
Today our state exposure on an overall basis is less than 2 or 3% of the total order book. We continue to stay cautious on state funded projects across all segments and we would like to stay cautious going forward also given the kind of opportunities we have with central funded, with PSU funded and private sector funded. So as KPL we will be cautious on building our order book on state funded projects across all segments.
Parikshit Kandpal
Okay. Just on the pledging now that Kalpatru real estate is listed. So any thoughts on how the pledge will move now? I mean is it the peak? I know you’ve been talking about it last quarter but nothing the listing happens. How do we, how do one see the pledging mid to long term?
Manish Mohnot
No sir, I think we have seen a huge reduction in pledge over the last two years with pledge being below 25%. We’ve been given to understand by by the real estate team that you should see pledge only coming down. We do not have a definite time frame with them but we have a commitment that pledge should only start coming down going forward.
Parikshit Kandpal
Just on the renewable opportunity in the Middle East. Any thoughts there? How do you think that you can capture a market share in the Middle East? On the oil and gas side we’re doing something looking at other opportunities but on the middle side what are we looking at? What could be the addressable opportunity?
Manish Mohnot
So we have built a very strong team on the renewable side to look at the international business. While we speak. We are bid for two or three large projects and we remain very confident that we should have at least one large win on the solar project in Middle east before the end of this year. I might not be able to share details more than that at this stage. But once we have order win, I’ll be happy to share more details on that.
Parikshit Kandpal
And when we say large. So generally what is the quantum of this large wing?
Manish Mohnot
Typically a thousand crore plus is large for us.
Parikshit Kandpal
Okay. And this last question sir on the. Interest bearing mobilization advance. So what will be the quantum and if any. Yeah, so yeah, if you can give me that number.
Manish Mohnot
So average interest on mobile on customer advance on a totality basis more in the range of 9.9/2% in totality. Our total advances, customer advances are of this date. I wouldn’t have exact number but if anyone has a number in terms of what advances we have today. But you can take that from. But I know the interest cost on advances is more in the range of nine and a half percent in. In totality. Okay, sorry. Ram is just giving us the number average advance utilization. So average advances in the range of it should be. Interest bearing advances should be in the range of 6 to 700 crores. Yeah. And any interest bearing acceptances that would be very minimal. Closer to zero. Because we do not have interest bearing acceptances at KPI.
Parikshit Kandpal
Okay. Thank you both for my questions and wish you the best.
operator
Thank you. We have our next question from the line of Ashwani Sharma from MK Global Financial Services. Please go ahead.
Ashwani Sharma
Yeah. Good morning sir and congratulations for a stellar set of performance. My first question is on the guidance. When you say 25% revenue guidance in the current year. Can you just give us some indicative indication on the mix in the. In terms of segments and the domestic international contribution.
Manish Mohnot
Good morning, Ashwini. Ashwini. All our businesses except water and railway, we expect them to grow at 20, 25% plus which includes TND transmission, domestic transmission International B and F Urban Infra as well as oil and gas. They will all grow in excess of 20 to 25%. Our water and railway business would not see any growth. Some of the businesses will grow more than 25%. And that’s how it will get compensated on an overall business basis. As far as geography growth is concerned, I think our order book is primarily 60% domestic and 40% international today. And I see in terms of growth international growing at a similar level that what the domestic business is growing.
Ashwani Sharma
Internationally. So you paid a lot to the labor challenges. How are you managing challenges as far as labor is concerned? Mainly in the interest in geographies. Especially in The Middle east or you know, South Africa, if you can. Just what is your strategy and what has been your strategy to, you know, overcome this challenge?
Manish Mohnot
Our international labor challenge is not as much high as domestic labor challenge. Primarily for only one reason that on the international front we can take labor from various countries including our neighboring countries, including some European countries, including some African countries. And that’s why on the labor front internationally we have not seen such high challenges as what we have seen on the Indian projects.
Ashwani Sharma
My third question is on the capex. If you could just spell out your CAPEX plans in the current day, next year.
Manish Mohnot
I think for the current year our CAPEX plan is more in the range of 600 to 700 crores. What we had guided at the beginning of the year also as far as next year is concerned, we have still not decided our CAPEX plans. But we would be slowly moving to a CAPEX target which is more equivalent to depreciation kind of thing. So we should be looking at a minimum of 500 crores even getting into the next year. Current year is more in the range of 600 to 700 crores.
Ashwani Sharma
And yeah, those were my all those are my questions. Thanks for asking. Thank you.
operator
Thank you. We have our next question from the line of Bala Subramanian from Arian Capital Markets. Please go ahead.
Balasubramanian
Good morning sir. Thank you so much for the opportunity. Congratulations for a good set of numbers. Sir. On the data center side, what kind of ticket size we are getting right now and how does this margin ROC profile compare to traditional BNF projects And what is the pipeline visibility?
Manish Mohnot
Good morning, Bala Supreme. On the data center side we are right now bidding for two or three large projects. Hello. We are right now bidding for two or three large projects both in South India as well as West India. The new project which we have got is not very big in size because it’s an additional building on the earlier project which we did for an international client in Mumbai itself. But we build the competencies to do the end to end data center which includes civil, electrical as well as mep. We believe that there should be some very good opportunities coming on that. And we are bidding for two or three projects while we speak.
Balasubramanian
Okay, sir. So on that Vinjan Chal Expressway monetizations, what is the expected timeline for closure and how will proceeds will be utilized and any other non core assets under review for monetization.
Manish Mohnot
So as guided earlier, we believe that Vindhya Chel Expressway we should get approvals in Q3. The total expected cash flow on that project as we guided earlier should be in the range of 7 to 800 closed with half of it going for debt and half of it should come back to us as equity. Primarily the cash flow would be utilized either for working capital or to reduce debt. But we’ll take a call on that closer to you know the date when the money is expected to be received.
Balasubramanian
Okay sir. So on that island gas side almost one third of the project is delivered for Saudi Aramco. I just want to understand how we are managing our subcontracting like heavy cost structures. And if you could throw some light on like how is domestic oil and gas and how we are prioritizing Middle east market compared to domestic markets and what kind of order inflows we can expect both Middle east and domestic side.
Manish Mohnot
We’re seeing a good traction on the Middle east front as I mentioned earlier and we’re bidding for large scale projects because the only limited players from India who qualify with the large oil and gas utilities in Middle East. So we are bidding for some large projects. I wouldn’t be able to give you a target as of now. But the international front opportunities look much bigger on oil and gas as compared to the Indian front. On the Indian front also we’re seeing some good opportunities coming up on both the pipeline as well as the plant side. But in terms of quantum our focus is a lot more international as of now as compared to India.
Balasubramanian
Okay sir. So on the subcontracting side how you are managing how this cost structures.
Manish Mohnot
I think we’re managing subcontracting the way we do it across all projects in the country. There’s nothing different for oil and gas. It’s exactly the same for transmission oil and gas. So it, you know it’s a team which manages this for. It’s exactly the same way before all our businesses. I do not understand what is the exact question on this?
Balasubramanian
Actually I hear this island gas cost structure is little heavy compared to other projects.
Manish Mohnot
No, I don’t think that’s a factually correct statement.
Balasubramanian
Okay, got it. Thank you.
operator
Thank you. We have our next question from line off. Mahir Mundra from Nuama Institutional Equities. Please go ahead.
Mahir Moondra
Yeah, Am I audible?
operator
So you need to be a little louder.
Mahir Moondra
Yeah, sorry. Am I audible? Yeah, yeah. So my question is on the tax rate sir. So we’ve seen in the past two quarters the tax rates have normalized to. Around 25, 26 levels and it was much higher before that. So how do we expect it to be throughout this year? How does it work out?
Manish Mohnot
So our Taxes is primarily driven by, you know, the profits on specific projects in a quarter. So there are some international geographies which have a higher tax rate. And also there were some geographies where we are making losses which you know you not get a tax benefit. So I think we believe for the current year we should be more in the range of this 26, 28, 30%. Not beyond that but on a quarterly basis it depends on the profits which projects we earn that profits. On all those basis we should be more in the range of 28 to 30%.
Mahir Moondra
Okay, got it. Got it sir. Thank you. That’s it. From my side.
operator
Thank you. We have a follow up question from the line of Bharat Seth from Quest Investment Advisors. Please go ahead.
Bharat Sheth
Hello. Am I audible? Yeah, yeah. So sir, to understand that this on labor front there is a more challenge on domestic side rather than the international. And since we are winning lot of large project now, even real estate also. So how, what is the opportunity for automation which can, I mean upset this and what are the stage we are in how we are investing in automation.
Manish Mohnot
So bhai, bhai, we’ve been very focused on automation and mechanization of a lot of our processes, a lot of our projects. Whether it is B and F, whether it is transmission, whether it’s oil and gas. We have moved to a higher level of automation on every aspect. Right from the basics of let’s say civil in terms of concreting to the basics of staging. Shuttering will be moved up to aluminium formwork and even going beyond that to using cranes for tower erection for TLD to using automatic welding machines for oil and gas, to using steel prefabricated structures for buildings.
So a lot of it is happening today. And today our big focus of KPIL is on mechanization, automation and related capex to it. Even at a plant level we have automated to a great extent. Whether it is on raw material, handling, finished goods, storage, all of that. So it’s a continuous process. I can assure you that we are completely on top of it. But it’s also something which changes so fast that you know, something which happens yesterday is obsolete tomorrow. So we continuously want to be making sure and we have a lot of consultants helping us on this process.
Also a lot of our capex in the last three years, last three years we have done capex or more than 1700 crores is also gone in that. So whether it’s entire staging shattering, whether it’s a plant automation, whether it is automatic welding machines, all of that. So it’s a continuous focus. But we need to also remember that this industry still is primitive in nature, right? We are still in that brick and mortar, right? We can’t move to automation like let’s say OEM or iPhone manufacturing or any of that. But within what we are able to do, we are doing one of the best things is what we believe.
Bharat Sheth
Oh, thank you. Thank you very much, sir.
operator
Thank you. As there are no further questions, I now hand the conference over to Ms. Bhumika Nair from DAM Capital for closing remarks. Over to you, ma’, am, for being.
Bhoomika Nair
On the call, and particularly the management for giving us an opportunity to host the call. Thank you very much, sir, and wish you all the very best. Any closing remarks from your end.
Manish Mohnot
Thank you, Bhumisha. Thank you everyone for being on the call and we assure you that we’ll continue to deliver similar results going forward. Thank you everyone.
operator
Thank you on behalf of DAM Capital. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.