Kalpataru Projects International Limited (NSE: KPIL) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Manish Mohnot — Managing Director and Chief Executive Officer
Amit Uplenchwar — Director, Group Strategy
Analysts:
Bhoomika Nair — Analyst
Sumit Kishore — Analyst
Mihir Manohar — Analyst
Parikshit Kandpal — Analyst
Bharat Sheth — Analyst
Chinmay Kabra — Analyst
Vaibhav Shah — Analyst
Samarth Khandelwal — Analyst
Gaurav Uttrani — Analyst
Uttam Kumar Srimal — Analyst
Presentation:
Operator
Sa Ladies and gentlemen, good day and welcome to Kalpataru Projects International Q3FY25 Earnings Conference Call hosted by Dan Capital Advisors. 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 call, please signal an operator by pressing Star then zero on your touch tone phone.
I now hand the conference over to Ms. Bhumika Nair from Dam Capital.
Bhoomika Nair — Analyst
Thank you. And over to you, ma’am. Yeah. Good morning everyone and a warm welcome to the Q3FY25 earnings call of Kalpatru Projects International Limited. We have the management today being represented by Mr. Manish Manon, Managing Director and CEO, Mr. Skit Tripathi, Deputy Managing Director, Mr. Mr. Sanjay Dalmia, Executive Director, Mr. Amit Uplinchwar, Director Group Strategy and Mr. Ram Patodia, President Finance and CFO.
I’ll now hand over the floor to Mr. Manaut 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 and Chief Executive Officer
Thank you, Bhumika. Good morning everyone and thank you for joining our earnings conference call for the quarter ended December 24th. I’ll start with a quick update on the operating context followed by the key highlights of the quarter.
The operating environment continues to radiate with challenges related to labor shortage, geopolitical issues and stretch working capital in the water business. In this backdrop, we continue to focus on scaling up our execution and improve our competitive position. I’m happy to share that we have delivered a strong performance for Q3.25 with robust revenue growth, healthy margin levels, record audit flows and noteworthy improvement in working capital.
In Q3.25, we have delivered consoled turnover of Rs.5,732 crores with a YoY growth of 17%. Similarly, at the standalone level, revenue growth was 16% for Q3.25. The growth in revenue was led by strong execution and healthy order backlog in the TND, BNF and oil and gas business.
In Q3.25, B&D business delivered strong growth of 42%. BNDF business was up by 26% and Olmdas recorded YUI growth of 123%. Let’s look at. In the water business has led to impact on the overall growth. Collections from JJM projects continue to remain slow. However with the recent announcement in the union budget for 100% tap water coverage and allocation of rupees sixty seven thousand crores for FY25 26. We expect speedy recovery in collections and improved execution in coming quarters.
Our EBITDA grew by 13% at console level and 17% at standalone level in Q3.25. Our EBITDA margin for Q3.25 remains healthy at 8.4% at consol level and 8.3% on standalone basis. A console PBT grew by 5% YoY to 202 crores at standard level PVT was up by 12% YoY to 218 crores with margin of 4.5% for Q3.25. In Q3.25 we faced some constraints in margin improvement due to lower revenue in the water business, the deposition of the Brazilian rehab impacting USD denominated loans in parcel and higher maintenance spending on road SPVs.
We continue to remain on track to improve our margin going forward. Our net debt at consolant standalone level has come down significantly both as a resultant of QIP and efficient working capital management. Consumer net Debt declined by 27% QoQ to Rs 2,694 crores and standalone net debt is down by 35% QA Q to Rs 8,1820 crores as on 31st December 24th
Our net working capital days decreased by 6 days Q OQ to 112 days at the standalone level while at the console level net working with the capital days were down by four days to 94 days. We managed to keep up finance cost as a percentage of sales at around 2.2% at the standalone level. Despite significant capital employed in the water business. This very well indicates a focused approach in ensuring robust working capital management and maintaining a strong balance sheet.
We continue to focus on improving our competitive position with an equal weightage and ensuring that fundamentals of our business remain strong. The strength in our business model is underpinned by a diversified business profile, disciplined capital management and proven execution capabilities for large KSI DPG projects. The same is reflected from the solid response which we received to our QIP issue in December 24th. Our QIP so far saw participation from multi domestic and international investors.
On the auto insure front we have secured order for Rs 20,185 crores including the 824 crores announced yesterday Additionally, we have a healthy advanced position with over Rs. 2,500 crores, mainly in the domestic TND business. Majority of these order wins and L1N. Nearly 80 to 90% are from our flagship TND and PNF business which gives us reasonable confidence of the execution and improved margin levels going forward.
Notably in Q3.25 we have strengthened our competitive position by securing prestigious orders in the HVDC space. Major orders win in Sweden, large size BNF orders from reputed developers and further expanded our reach in the Metro rail segment with securing orders from Nagpur Metro. On the capability front, we achieved first breakthrough from our TBM in the Kanpur Metro Line 2 project. Additionally, numerous mechanical and technology initiatives on the civil construction side are helping us to improve our productivity and heat time for snapcasting.
We continue to invest in capex in line with our robust product backlog, improved business visibility and our philosophy of owning our own construction equipment in order to be competitive and have better control on execution.
Coming to the order backlog, our order backlog hit a record high of rupees 61,429 crore as on 31st December 24th. We have a fairly diversified order book providing us a good visibility on the execution and growth going forward.
We remain positive on the opportunity pipeline in power transmission, residential commercial buildings, airports, metro rail and international oil and gas projects. Moreover, the traction in the domestic and global TND market remains robust on back of a multi decade opportunity led by widening gap between demand and supply of power, rereplumination and modernization, push for renewables and improving electrification in developing markets. This represents a good opportunity for KPI going forward.
On the impact of subsidies front LNG Sweden revenue has doubled y o y for Q3 as well as 9 months. 25 LMG’s order book is at an all time high of 3143 crores. In Fastel, Brazil we have achieved revenue growth of 18% for Q3 and 35% for 9 months. 25 A Fastral auto book stands at around Rupees 1000 crores as of December 24th in a road booth project per day Revenue reached 64.3 lakhs in Q3. 25 Compared to 56 lakhs in similar quarter last year. We are looking towards closure of the bepl transaction in FY26.
Before I conclude, I would like to highlight a specific performance in the water business. Over the last five years our water business has grown from 642 crores to 3500 crores reflecting a healthy CAGR of 52% with healthy margins and working capital consistently below 100 days. At the start of this year our water business had an order book exceeding 10,000 crores with a projected revenue of over 3,700 crores for the year and a nine month revenue target of more than 2007. With reasonable margins and efficient working capital tail.
However, in Q1 we faced challenges as payments from clients were delayed due to budget constraints impacting our targets. Despite these challenges, we made a conscious decision to continue executing projects as slowing down of shopping work would have had wider implications on cost and profitability over the nine months. Over the past nine months we have infused approximately thousand crores on this business. With the budget allocation now in place, we expect cash flows to start improving in Q4 25 and Q1 26
In the water of business. From Jan onwards we have realized over 240 crores and we anticipate connecting the remaining 500 to 700 crores which is already built in Q4 or Q1 26. While we remain cautious in the short term on this water business, we are confident about our long term growth prospects.
Finally, looking at the outlook, execution across most businesses including tnd, bnf, oil and gas and urban electronics expected to remain strong going forward, we are targeting growth of 15 to 20% in Q4 with margins expected to be around 5% at the PBT level. At the standalone level, similarly conserved performance is also expected to show significant improvement.
Before I conclude, we believe that had the water business issues not been there, we would have reached our targeted numbers of 15 to 20% growth in the current year. And we also believe that this should be behind us soon for us to catch up on our projected growth going forward. With that, I conclude my opening remarks and open the floor for Q. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press Star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you May press A Star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from Sumit Kishore from Axis Capital. Please go ahead.
Sumit Kishore
Good morning sir. My compliments on a strong overall execution performance in the quarter and strong inflow performance as well. My first question is on the water segment of the 100 billion rupee order backlog. How much is under the Jaljeevan mission? How much is under other irrigation or other water segments? You mentioned some improvement in the directional velocity on collections, but how should we be looking at this segment? For Q4 and the next financial year in terms of execution. And you also made comments on the JGM allocations in the budget for FY26. So how soon is the improvement going to be visible? That’s my first question.
Manish Mohnot
Good morning Amit. Our JDM allocation order for order book is closer to 75 to 80% and the balance would be from other utilities. As I mentioned in my opening remarks, we have seen traction already, some traction in January, but we still have closer to 700 crores of certified uncertified line with various water utilities. We believe that that should start coming in from March onwards or it could even go to April, May depending upon when the budget allocation is actually done by the center
Post the budget. Our discussion with all the water utilities have been very positive because you know, now it’s a clear roadmap given in the budget by our Hon. Finance Minister on the entire segment in terms of both capital allocation and the goal of achieving 100% tax to the entire country. So as I said earlier, while we remain cautious in the short term given the huge capital deployment which has happened, but from a long term, medium and long term perspective, we remain very, very confident about this business.
Sumit Kishore
Okay, the second question is when we evaluated your Q3 result, we possibly saw a higher net interest cost during the quarter than what we expected. The other income was down sharply quarter on quarter at the console level while the interest cost was up 9% quarter on quarter. The QIP happened around the 18th of December. So the benefit might have been for a few days. But shouldn’t the net interest cost now improve? Your net debt is also down about 10 billion rupees quarter on quarter. Was there any one off in interest?
Manish Mohnot
No, I do not think we had any one off in interest. And as you rightly pointed out getting into Q4, obviously interest cost would come down given that we have got the QLD proceeds and given that there’s some recovery happening on the water business also. So our Q3 interest cost had no one offs. It was primarily driven by the capital deployed in the water business as I said earlier and the growth in revenue which happened in Q3. And definitely as a target we should be below 2% of interest cost in Q4 and that would be a target going forward also.
Sumit Kishore
Got it. Those are my questions. Thank you and wish you all the best.
Operator
Thank you. Next question is from Mihir Manohar from Carnelian Asset Management. Please go ahead.
Mihir Manohar
Yeah. Hi, thanks for giving the opportunity. I wanted to understand on the water side what is the total pending which is there on the water and how much is built and how much is unbilled. Some color around that. Also you mentioned I think two particular roads has been received in chant. Right. And the expectation is that by either April or May some collections should materialize. So you know, I mean just wanted to understand how does it work? Is there a central authority who pays it? Is it more granular or is it just one single authority or three single authorities who are paying it? Just wanted to get a color on it.
Manish Mohnot
Good morning Meera. Total build which is certified lying in the finance is closer to in the finance department of the various utilities is closer to 450 to 500 crores. There’s another 250 to 300 crores which are in the process of reaching the final stage. You know the water. Typically in all the utilities there are six to seven levels of approval. So believe it. By the end of February or maybe by beginning March we should have that number in the range of 700 plus crore. As far as bills lying at the various utilities for payments only for budget allocation.
Your second question. Yes, we have received 240 crores but that’s not only in January, that’s January and February ytd. So it’s the data as of day before yesterday these 240crores have come across various utilities. So we’ve got good collections coming in from Odisha. We’ve got good collections coming in from mp. We’ve not seen much traction right now happening in up but Odisha and np. We have seen some traction in January and February. As I said earlier, our discussion with all the utilities post the budget has been very, very positive and they believe that it could happen. The collection could be paid in March or later September depending upon when the budget allocation happens.
Mihir Manohar
Understood. Sort of 700 crore. How much would be up on a broadcast basis
Manish Mohnot
In order book? My up order book is closer to 40% of the order book. So I’m just using a benchmark that 40 to 50% would easily be up. I don’t have the exact details but just being, you know using the benchmark of order, 40 to 50% would definitely be used.
Mihir Manohar
Understood. My second question was on the profitability for the subsidiary. When we see profitability for the subsidiary for this quarter now this number is like consolidated minus pairing. When I do the balance number which is subsidiary as well as JVs the EBITDA margins for 3Q FY25 for like 8.5% versus 10.7% on a Y basis. Even for 9 month cases like 9.1% versus 10.3% on a YY basis. This is like console minus parent. So I mean, just broadly wanted to understand how should we see the profitability of our subsidiaries improving from here on and why should that happen? Some color around that?
Manish Mohnot
Sure. Meer, the standalone to console has four or five critical components and I’ll first give you the macro picture and then get into specifics. What. One is Lindjay Montaj which is Sweden. I think they have done very well both on revenue as well as profitability. Second is our road assets where we have had a dent on profitability in Q3 primarily because of focus on O and M in a big way. Even that it’s more strategic in nature and given that we also have plans to divest a few of them.
Third is Fasal Brazil where we had losses coming in primarily due to the devaluation of the currency on the USD loans given by Exim India. This does not have a overall impact in the long run because on an overall basis at an organizational level we are net export surplus. So it’s more a timing issue. Shuban has been more at a breakeven level. So we have not had impact there.
So what has had a dent in the Q3 has only been two the Brazil A primary dent that’s been the Brazil devaluation in currency and the losses on the road assets primarily on onm. Going forward we believe that the losses on road assets should come down. You know, given that collections have also improved and we are divesting the largest road assets in the next few quarters itself.
Going forward we also expect that larger losses to be to be coming down because the currencies come back from 6.2 levels on the 31st of December. It’s already back to 5.7 levels while we speak now. So we believe that it’s more a timing issue. So our own belief is that going forward into next year, you know, the consults will only be better than standalone and not be worse in any form. Hello.
Mihir Manohar
Yes, that’s it for my side. Thank you.
Operator
Thank you. Next question is from Parikshit Kanpal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Yes, sir. Hi. Congratulations on a decent quarter. So my first question is on the India TNB fees. So if you can help us understand how much has been the total wins which has been announced by the utilities and how much is pending award for the EPC or the equipment players as per your understanding.
Manish Mohnot
So Parikshit, you know if you look at our and order inflow in the current year it’s around rupees 6000 crores. Our actual inflow is around 5300 crores. And we L1 is 1750 crores. Plus I think we are bid for projects worth around 4000 to 5000 crores which should all get decided in the next two to three months. So from my perspective, you know, including L1 today we are at around 7000 crores. In far as domestic TND is concerned and 2000 to 3000 crores. I’m including Alberta and 2000 to 3000 crores is what we have already bet, which should get decided in the next maybe month or maybe latest by April.
Typically we mean around 20 to 25% of this market share. So while I don’t have the exact details of everyone else, but I’m. Assuming that for the space where we are, the order inflow could have been in the range of 35 to 40,000 crores in the last six months, out of which we are at around seven to seven and a half thousand crores.
Parikshit Kandpal
How is the big pipeline looking at for the year next year and maybe over next two, three years? I mean we have large numbers being spoken on by the government. So in your own understanding and estimate, how is the pipeline looking for FY26 and in the near term
Manish Mohnot
I think the pipeline is looking extremely good. Right. And you know, if you go back to history, last four years we’ve been very bearish on this pipeline, but now it’s looking extremely good because if you even look at the projects floated by RDC and PFC in their website, if you look at the kind of details which Powertrain has given for their capex, if you look at the project already identified, if you get into trending in the next six months itself, I think the pipeline looks like growing by at least by even double in the next year. The next two years look very good from a pipeline perspective and then after that from execution perspective.
So you know, and we have presented that in our presentation also. So 2.5 to $3.5 trillion is what we’re expecting by 2029. And this is driven by everything, renewable energy connection system upgrades and capacity addition. So to us we look at this business growing at minimum 20 to 25% from a next three year perspective. And we expect next 12 to 18 months to be very, very good in terms of order inflow. Again on this business our biggest challenge continues to be labor availability. And that’s why we would like to be also cautious at times in terms of taking projects which have very stringent delivery timelines. So we remain very optimistic if not bullish on this business as of now.
Parikshit Kandpal
So what is the HVDC pipeline sir, in the near term, say next one year? Which all projects do you think can come in the market and get awarded
Manish Mohnot
At the beginning of the year? You know we were looking at HVDC of around 50 to 60,000 crores. Right? Is what we had looked at. Out of which I think around 25,000 crores worth of projects have already been rewarded. So I would see another 20, 30,000 crores happening in the next three to six months minimum.
Parikshit Kandpal
Okay, this last question on the margin, sir, we were so when do we now the share of new orders have been increasing TNT as a share has been going up. So when do we expect to revert to double digit margins. Any guidance on how will the FY25 revenue and EBITDA would be and what margins would be in for the next year? What kind of growth and margins you’re making?
Manish Mohnot
So as I mentioned in my call earlier, we are targeting to reach closer to 5% margins at the PVT level in Q4 itself, and I don’t see us going down from there, at least for the next couple of years given the healthy visible order book today. So at a standalone level you should see margins reaching closer to Q. In Q4 itself and I mentioned that in my opening speech itself with a 15 to 20% growth minimum earned on top line also. So I believe that we should be at this at the minimum level going into the next year. But obviously for the next year numbers we will have more clarity once our budgets are fully frozen and we come back in may post our Q4 numbers.
Parikshit Kandpal
But EBITDA on double digit. Any guidance on EBITDA reaching double digit margins?
Manish Mohnot
So I think we stopped riding on EBITDA for the last couple of years. Our focus is a lot more on PBD so definitely should improve it in relation to the way where it is today. But given that our debilit is so low in every term, we focus more on the PBD guidance going forward.
Parikshit Kandpal
Okay sir, sure. Thank you and wish you the best.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press Star and one to join the question queue. The next question is from Bharat Seth from Quest Investment. Please go ahead.
Bharat Sheth
Hi, good morning Manish ji.
Manish Mohnot
Good
Bharat Sheth
Sir, I missed the water business part which you said that in Q4 how do we really look and full year and next year.
Manish Mohnot
So guru bai, in Q4 we will continue to focus on projects which are under closure in the water business and also start refocusing from the next year perspective as we expect cash flows to come in sooner than later. We have closer to 400 to 500 crores of bills lying at the final stick for payments. Another few hundred crores which are at stages where it will reach the final stages.
So as I said earlier, we will stay cautious in the short term in this business in terms of taking new orders and focusing a lot more on execution. It might be only this quarter where we might be cautious. But getting into next quarter, given that the budget allocation is done and the vision by The Finance Minister, Hon. Finance Minister was very clear.
We believe that we should be going back to that double digit growth in that business from next year onwards. So Q4 still looks slightly not very good because out of our, you know we’ve just got 230 crores out of whatever 700 crores of bills lying there. I’m hoping that this would improve by March, but this could even get to April, May once the budget is finalized and allocated by the center.
Bharat Sheth
So earlier, I mean if you can give working capital intensity which earlier in water business a kind of you are operating at negative or very nominal level. So what extent it has now gone up, I mean in work that working capital cycle.
Manish Mohnot
So water business you know, has been one business which has been very, very efficient and working capital. If you forget this year, right, they’ve been working at days which have been more in the 60 to 90, at times less than. The current year they’ve gone up to during excess of 130 days while we speak. Right. And for reasons known to all of us, we believe that this business, you know, for the last five years was more in the 60 to 90 days. We believe that getting them back to that would be very easy once we get our collections back. But currently there’s that big impact on our both working capital days as well as our debt position primarily driven by non collection on that business.
Bharat Sheth
Okay, and how do we sell, I mean LNG and fossil EBITDA margin going and how much is actual for the nine month and where do we see it stabilizing?
Manish Mohnot
So if you look at that as India on that business, you know there’s been a very stable business in terms of EBITDA margin always in the range of 4 to 6% and EBITDA is typically equal to PPT because they hardly have even any interest. If you look at our Numbers From a nine month perspective on DJ Mozart, our revenue is around 1,300 crores which is double in terms of from 64 crores to 1,337 crores. EBITDA has gone up from 22 to 64 crores in the same period. So EBITDA is around 4.8%. As far as Lindjay Montage is concerned.
If you look at Fastel, our revenue has gone up from 560 crores to from 560 crores to 755 crores in 9 months. And EBITDA has gone up from 6 to 56 crores in the same 9 months. PVT is negative. PVT also improved. We had a negative 43.5 crores last year. It’s only 16 negative this year. But just as I said, the 16 negative is primarily due to the currency devaluation which we believe is a timing impact.
Bharat Sheth
Okay. I mean on one bookkeeping question in this quarter particularly over other expenses have shoot up QOQ substantially. So any one off there or
Manish Mohnot
No, I don’t think there’s been a one off there. It could have slightly gone up for maybe specific reasons driven by growth only. But if I have not seen any one off there to the best of my knowledge but I can ask my team to come back to you. I think it’s only in relation to the growth and nothing more than that.
Bharat Sheth
I mean sorry, on guidance side LNG will remain around 5% kind of EBIT margin, 4.5 to 5% and Castle, where do we see EBIT margin?
Manish Mohnot
So I believe on guidance front going into the next year Ninja montage margin should definitely reach towards more towards 5.5% plus from 4.8% at EBITDA level in the current year. And as far as partner is coming, our aim is to. You know we have improved the EBITDA margin from as low as 1% to 7% in the current year and we believe it will stay at the levels of 7 to 8% going forward. Also
Bharat Sheth
PBT margin would be approximately
Manish Mohnot
PBT margin as far as range of montage is concerned would be more in the range of 3 and a half to 4% and fossil will try and break even. So more in the range of 1 to 2% because the interest cost is much higher
Bharat Sheth
And water will also start making money. Is that fair understanding?
Manish Mohnot
Yes, definitely. To be very frank, Bharat bhai, water was completely beyond our control. You know we really worked hard to reallocate resources to other businesses to achieve our targeted growth. Because for the last five years we have never had these issues of payment. And you could see the budget numbers also last 5 years, 60,000 crores. This year only 22,000 crores allocated to the water business at the central level. So this was completely beyond our control. But now with the budget allocation back, we’re reasonably confident that this business should start delivering both growth and margin getting into the next year.
Bharat Sheth
Can you give some color on the international TLD as well as oil, gas and railway?
Manish Mohnot
So we are bullish on all international tnd, oil and gas, urban inspira, all three businesses. As said earlier, I think we’ll see both growth and margin improvements in all three businesses. As far as railways is concerned, we haven’t, we’ve been obvious. We have been very cautious on this business for the last two years and we will like to be like that. I don’t see any growth happening in the railway business at least for the next year. But definitely we don’t see any margin deterioration happening in that business going forward.
Bharat Sheth
Okay, thank you and all the best, sir.
Operator
Thank you. Participants who wish to ask questions, please press star. And one next question is from Chinmay Kabra from MK Global Financial Services. Please go ahead.
Chinmay Kabra
Yeah, hi sir. So just really wanted to understand what would be the difficulty timeline for the repayment of borrowings against the 7.5 billion that we have kept separately, separately from the QIP
Manish Mohnot
And if we’ve already started that process, a significant portion of that. So the repayment of borrowings also include repayment of working capital limits and you know, short term loans and NCDs. I think we have already started that process. A significant portion of that would have already been done by 31 December because it’s working capital. That’s why you can see our debt numbers have come down. So it’s nearly fully done. It’s not nearly, I would say fully done because it just depend on working capital and some of our CP and some of our short term loans which we had and even some NCDs. I remember some NCDS also we have repaid high cost entities. Also we have repaid in December or early January.
Chinmay Kabra
Understood sir. So factoring in the payments that we have done in, in the recent quarter, what is the networking capital guidance that we are building in for Q4 and going ahead as well. Do we still maintain it to reach approximately the hundred days?
Manish Mohnot
Yes, we still need to reach 100 days and we hopefully. We will be there. Even without water collection being significant in Q4 we’re still targeting to be in that 100 days level at a standalone level and console, maybe 90 if not below 90 days.
Chinmay Kabra
Understood sir. Coming to the railways segment. So just really wanted to understand how is the execution going ahead in railways. I mean we do see the sustained degrowth even in this quarter and going ahead also we are building in decline for FY26 as well. So just really wanted to understand that from when can we see a growth in the railway segment and how is the current tendering opportunities coming up?
Manish Mohnot
So from our perspective, I don’t think we see any bullishness in that business on the three, four segments where we are, whether it is electrification, whether it is civil, in terms of expansion, whether it is micro electrification, we are not seeing very bullishness in that business primarily for three reasons. One, there’s a lot of competition coming into that business. We see 20 plus players competing in majority of the standards. Second, the businesses have gone back decentralized to the various zonal railways. We had created coal which is dismantled and now it’s gone back to zonal railway. So the functional style in terms of the size of orders, all of that has become very different.
And third, with competition the margin profile is not exactly where we want to be. So personally from a two year perspective I don’t see that business growing in any form. The good part is our order book is limited to around 4000 crores on that business. So it’s not very high from an order book and delivery perspective parallel, we’re exploring international opportunities in that business in five or six countries. At a global level, we’ve not reached anywhere closer to saying that we should be signing or doing something soon.
But I believe getting into the next year, maybe Q2, Q3 of next year we should be targeting a win at the international level. So from a two to three year perspective we continue to be very cautiously optimistic in this business with minimal growth or I would say with negative or zero growth. But yet margins do not look like deteriorating further from here as far as that business is concerned.
Chinmay Kabra
Understood sir. So just if I can take one last question. So coming to the EBITDA or the PBT level, or if I can look at it on a segmental level, tnd, BNF and Oil are the only contributors in terms of the expansion. Meanwhile railways and water will continue to be a laggard. If I can summarize it.
Manish Mohnot
No, I think I would similar this differently. TL business would continue with the largest growth continued by BNF and oil and Gas. Oil and gas is at a lower BAS going forward. I also expect ARPAN infra to do very well in terms of the revenue growth because they started with a low base and they have a very good order book and good visibility going forward.
So the only business where I believe we might not do. Well as railways in terms of revenue growth even on Hotra, we believe that next year would see very good revenue growth because we have a healthy order book and now tax flows are visible given that the budget has given so much elevation. So getting into next year except railways, I think all businesses should be at a double digit minimum growth if not very high double digits.
Chinmay Kabra
Understood sir, those were my questions. Thank you very much.
Operator
Thank you. Participants who wish to ask questions, please press star and one next question is from Vaibhav Shah from JM Financial. Please go ahead.
Vaibhav Shah
Yeah sir, how much have we infused in the road assets in Q3 and nine months?
Manish Mohnot
So I think just before I give you the exact number, our maturity investment in road assets has been primarily to repay debt because you know majority of the road assets debt happens is to be done in the next two three years. Full payment has to be in the next two, three years. Our total investment in the last nine months is around 69 crores on all three assets or all three assets put together in Q3 we have invested closer to 30 crores.
Vaibhav Shah
Didn’t get a number 59 or 69.
Manish Mohnot
69. 69.
Vaibhav Shah
Okay and so how much do we expect for the entire year this year and next year?
Manish Mohnot
So my belief is that Q4 also we should see investment closer to same 29, 30 crores because they’ll be investing in O and M as well as some repayment of debt on wepn. It should be in a similar range going forward it should only come down. So if for example if you do 100 crores this year going forward I don’t think we should be doing more than 50 crores if the GPL by Q2. So going into the next year we’ll come back with exact numbers. But my own belief is it should be less than 50% of the current year.
Vaibhav Shah
Okay, I missed one number. For LMG you said that EBITDA margin have been around 5 and a half percent and for fast sell around 7% in nine months.
Manish Mohnot
LMG I said EBITDA margin in the range of 4 to 6 it was 4.8%. The exact EBITDA margin I gave was 4.8%. In LMG fossil 7.4%. Road assets was negative and there are some international subsidiaries like Saudi where we had some losses. So LMG is 4.8% 9 months and faster is 7.4% EBITDA 9 months.
Vaibhav Shah
And for LMG what is the guidance for 26 in terms of margins or our target?
Manish Mohnot
So we still have finalized the targets for next year, but I personally believe that this number should go up by at least 100 basis points getting into next year because their current order book is much healthier than what we had in the past.
Vaibhav Shah
Okay? And so secondly, we have seen some degrowth, and though it is a very small number in the overall scheme of things, in the but. Infra side. So the growth can be much, much higher in 26 and 27.
Manish Mohnot
Yeah, we definitely expect the growth to be much higher because we brought two large projects in the last six months, you know, which would get converted to revenue going forward. So definitely in the next, you know, year I see this business going up by 20, 25% if not more than that because they have a lower base, they might even go closer to 40%
Vaibhav Shah
In terms of order inflows. Are we confident of looking for some growth in FY26 as well? Maybe a 10 15% growth on the current base because YTD number is quite strong right now and we are on track to achieve the 25 guidance.
Manish Mohnot
So we will be coming back to the guidance for 26, you know, later part of this year. But as we stand today, if I look at majority of our business right, Transmission domestic looks like very bullish. Transmission International looks bullish given that opportunities in Africa, Middle East, LATAM are back. BNF given by residential, commercial, data centers, airports, a lot of tenders so that also we stay bullish. Urban infra focus has been on select space where we’re seeing a lot of traction. Water should be coming back given the budget allocation. So I don’t see challenges but in terms of exact numbers, you’ll have to give me a few more months to come back and give a target for the next year.
Vaibhav Shah
Okay, thank you sir. Those are my questions.
Operator
Thank you. Ladies and gentlemen. To ask a question please press star and one on your touchstone telephone. Next question is from Samarth Khandelwal from ICICI Securities. Please go ahead.
Samarth Khandelwal
Hello, Am I audible?
Manish Mohnot
Yes,
Samarth Khandelwal
Yes. Congratulations on a very good execution this quarter. My question is on the non core assets specifically what has been the update for indoor assets in Q3?
Manish Mohnot
Some of indoor assets, you know what is unsold is primary last building inventory which is with us. We believe that OC of that building could come in anytime now. It could be a few days, it could be a few weeks, not beyond that. Our sales team has indicated that the moment the OT comes we would be able to sell out the entire inventory within a period of 60 days. Not even beyond that because the other four towers are sold off and people have come occupied all of that.
So my own view is in the next three to four months we should be getting back our entire investment on Indore, maximum 90 days after we get the OT. We’re just waiting for OT and before March actually we believe we will be able to set up the entire thing. So it’s just a matter of time, which is days, weeks, and not even months. So by March, or if not, maybe should be done fully in terms of selling off the entire inventory on indoor. And cash flows coming in later before June 25th.
Samarth Khandelwal
Right. So my last question is on. I read a news article saying Kalpatru Limited has received IPO nod from sebi. So how will that impact our company?
Manish Mohnot
You know, I also read that news article. The way you read it, I do not see any impact on our business in any form. You know, because as far as CA concerned there are two different organizations and you know Kalpatru Limited with a separate organization in every form. So I do not see any impact in any form. If at all. It will be a positive impact but no negative impact on any form from the IPO plans of KL Limited.
Samarth Khandelwal
Thank you sir. Thank you for answering my questions. All the best.
Operator
Thank you. Before we take the next question, a reminder to participants to please press star and one to join the question queue. Next question is from Gaurav Utrani from Access Capital. Please go ahead.
Gaurav Uttrani
Thank you for the opportunity. Sir. We have seen that order inflow has been largely driven by TND segment and other segments like dnf. And all are largely flat on a year on basis. If you look on a nine months basis also. So is it like we are selective in taking order for the bnf and we have also seen like there’s an order inflow in railway segment of almost like a 364crores. So what sort of orders we are taking in railways? As you mentioned that we’ll be very cautious in the segment going forward.
Mihir Manohar
Let me answer the last question, sir. First, railways order we have taken a primary and metro electrification, you know. So this is the overhead metro lines for which electrification projects we have taken. These are reasonably good margins to be delivered in the next few years. So they are much better in terms of margins compared to what we have now.
As far as being cautious on our book. Yes, I think that’s been our strategy always. Because our biggest challenge is resource allocation. Whether it is resource in terms of labor availability, resource in terms of capex, in terms of working capital, all of that. Today the way the environment is, we see much better opportunity in tnd on everything. On profitability, on ability to deliver, on plant utilization, resources as well as labor.
So our focus is trying to focus on large projects in building and factories and primarily also looking at large projects in T and T. But while we say so, it’s not that we have not been focused on the B and M business. That business has also done reasonably well in terms of revenue growth. But that’s because it’s very labor intensive and capex intensive. So we are focused on much larger size orders instead of looking at orders of 200, 300 crores. And we believe that there is a huge opportunity for large size orders going forward. So it’s just a strategic call for the typing. But in terms of bullishness, I think both the businesses we are equally bullish getting into the next year.
Gaurav Uttrani
Got it, sir. And sir, if you talk about the railway segment specifically so our order book which was outstanding like at 3, 700 crores, that remains largely flat. So are we seeing still challenges in execution for that legacy projects or backlog which already we have which is being on our working capital and margins. And when do we expect that to be get over? Like say for in terms of next quarter or say for the next six months.
Manish Mohnot
So if you divide the railway business, you know the railway business has one large order in Bangladesh and then domestic orders. We have not seen many challenges on execution on the domestic orders. But the Bangladesh order book, the Bangladesh project which we had obviously got stalled for four or five months for reasons known to all of us. It has picked up back in terms of revenue but still not to those levels which happened before the Bangladesh debacle. Which happened.
So to answer your question, I don’t see challenges in the Indian audit group. You know, we are on track in terms of delivery. Bangladesh was a setback in the current year. Not significant from a larger perspective but a setback from a railway perspective. And we expect that to start improving from next year onwards.
Gaurav Uttrani
Okay. And so which international territory we will be targeting in railways? As you mentioned earlier,
Manish Mohnot
Primarily the African zone. Primarily a lot of countries in Africa.
Gaurav Uttrani
So that’s all from my side. Thank you.
Operator
Thank you. Participants who wish to ask questions, please press star and 1. The next question is from Bhumika Nair from Dam Capital. Please go ahead.
Bhoomika Nair
Yes sir. So just wanted to understand how the oil and gas order of Middle east from Saudi is progressing. I know it is. Yet we got it at the end of last year. The execution timeline is elongated. But nevertheless just wanted to understand how has your experience been, what margins are we seeing on that project? How is the working capital? If you can throw some light on that project?
Manish Mohnot
Sure. Vamika. On the Saudi projects which we got last year, we have still not reached our threshold of 10% to recognize margins. We will be reaching that threshold in the current quarter. We are on track to achieve our targeted numbers for the current year next year. Out of the 800 odd million on that project, we believe that closer to 40% would get delivered in the next year and the balance should go into the year two and three.
In terms of margins, I think these are high single digit margin business as we said earlier also. And we believe we should be able to achieve that in terms of working capital since we just started the business. It’s still in that range of 50 to 60 days. But typically international autom book working capital always is less than 50 days. But we just can less than our pens. We just reached a 10% level in February. Pretty well we speak about it.
So I do not see any challenges. The biggest challenge in any Saudi Arambo project is to make sure that the initial things in terms of setups, in terms of third gas facilities, in terms of clients requirements are all done. It’s all done. The pipes have been a key bias. We have started the welding already and it’s on track as far as our internal gadgets of achievement are concerned. So I do not see much challenges. You see good numbers coming from that business who is getting into this quarter itself and the next seven to eight quarters. Amit, you want to add something?
Amit Uplenchwar
No, I think yeah, that’s next year should be now that the stage is set as Manish mentioned, the third facilities for camp etc ready, the mainline welding has started. So now is when the pace picks up and hopefully the next four, five months will be good visibility in terms of work that gets actually executed at that.
Bhoomika Nair
Got it. So when you say high single digit margins, that means on the EBITDA side, right?
Manish Mohnot
Yes.
Bhoomika Nair
Okay. Okay, got it. So the other thing is on Fastel, you know the order intake has been fairly muted in the nine month period. Are we, you know, being cautious a little bit on our end to kind of not take too many orders? What is the outlook in terms of growth there? Because. Because as you mentioned that the working capital and debt by interest is higher which is where the profitability is getting impacted. So how are we seeing that both revenues margins expanding and thereby a turnaround where you spoke about Fastel, that from next year we should see a break even to 1 to 2% PBT margin, what will drive that and how do we see that progressing thereafter?
Manish Mohnot
I think you’ve got that right. While we’re very bullish on LinkedIn montage in terms of both revenue growth and margin, we continue to be cautious as far as partner is concerned. Both from a political perspective, the country’s own plant perspective and our ability to take that order book to a different level. So we will be cautiously optimistic on waiting for projects there. We do not expect huge revenue growth coming in faster in the next year because we have seen good growth in the current year. But our intent would be slowly to improve margins and get back to the standard levels of the organized level. So yes, you’re right, we will be cautiously optimistic and the focus would be not revenue but margin improvement getting into the next year.
Bhoomika Nair
Okay, okay. And lastly on the BNF side, you know the order backlog remains healthy. We’ve seen decent inflows as well. Now are you seeing any improvement? Because you know, there was a bit of a slowdown in terms of private capex. Any sense you can throw on the ordering activity out there.
Manish Mohnot
We have not seen any slowdown in the BNF ordering in the last two or years. So maybe private capex at a country level could be different. But when I look at bnf, whether it is residential, commercial, data centers, airports, even industrial plants of large PSUs, we are seeing good traction.
So to me the business looks very attractive from at least two to three year perspective. Not even beyond that. So you’re seeing all large developers doing large scale projects thanks to rera, cash flow looks very healthy because money comes in much faster than required. Our ability in terms of having a huge capex fix helps us in terms of delivering on or before time. So we’ve not seen any traction coming down in this business in any form.
Bhoomika Nair
Okay sir, got it, got it. I’ll come back in the question queue sir. Thank you.
Operator
Thank you. Next question is from Parikshit Kanpal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Given that we had weakness in the water segment. So for FY25, what kind of guidance? I mean is there any revision in the guidance or we’ll be able to deliver that 15% growth for FY25.
Manish Mohnot
So if I look at, you know, our growth for nine months, it’s closer to 10% at a standalone level, right? Q4 we believe that we should be in that 15 to 20 inching towards the 20% revenue growth levels. So if I look at Consol, obviously we would be limiting a group to 12% to 13%. And the shortfall if at all is only in the water business where instead of doing a number of 3700 crores which we had planned, we might restrict ourselves to 16, 1700 crores only.
So the entire shortfall of closer to 2000 crores would be in the water business. Had that shortfall monthly there we would have been very closer to achieving 18 to 20% guided mark revenue growth for the year. So right now we believe we should be more in the range of 13 to 15% for Android basis, on a console basis and standalone maybe 12 to 13%. And next year, both standalone and console
Parikshit Kandpal
For next year,
Manish Mohnot
For the current year. Next year is something which will come back but given the LD order book we should be doing very well. But we’ll come back on the next few numbers by the end of Q4
Parikshit Kandpal
Just on the standalone debt if we are able to materialize the pending receivers from the JGM. So where do you see FY25 ending in terms of standalone net debt?
Manish Mohnot
So you know, current year, as I said standalone we still have a huge outstanding on JGM and I mentioned that earlier also. So current year, except what the business, every business has done well on whatever we had projected in the next two months. I don’t see significant improvement in revenue coming on the water business next year. With the budget allocation, there should be no reason why that business should not be even going at 20% to 85% if not better than that, or the lower base of the idea.
Parikshit Kandpal
So. But more on. I think earlier, before the merger of GMC we had plans of making Kalpa 2 netcat. So now the combined business, what kind of peak that you think for delivering 15% kind of a growth should be there in a fight in 26, 27. So any plan, any sense on whether we can become net cash over the next two, three years.
Manish Mohnot
So there are two philosophies which we are driving. One was reducing our debt which we have constantly reduced through working Capital Management and QIP. But priorly we have been also pushing our CapEx significantly. You look at our CapEx for the last four years including now the number has been in excess of 2,500 crores. The focus was that given the huge opportunity, should we be looking at keeping our net cap zero or should we be looking at building a balance sheet for the future?
We have tried and managed both of them. So while the debt levels are under control, our net debt will be equivalent to EBITDA very soon. If not, we have already reached there and our capex has been significant. So we balance that looking at the long term and not even focused on only one of the two parameters.
Parikshit Kandpal
So you’ll try to maintain debt one time. That is what the guidance is.
Manish Mohnot
Yes. So we are, as I stated earlier, our focus will be more on net working capital debt below 100 and that would drive a lot of our debt numbers as well as working capital numbers.
Parikshit Kandpal
So over the next one year. So what kind of monetization conversion can happen? I mean we have already entered into definitive agreements for the road assets. So both from Indore and from the road assets. What? And from the balance receive claims, the arbitration claims in your favor. So if you can help us break up these three things in terms of how much potentially receipts could be from these three avenues.
Manish Mohnot
So you know I’d be happy to guide on Indore as well as EPL which we have already signed off the claims is something which I would not be able to guide because claims is a long process. So Indore and BPL we definitely expect closer to 500 crores to come from both of them net including debt in calendar year 25. And also water receivables which have been overdue should be a huge surplus. That could be another 500 plus crores which could be a positive
As far as claims are concerned. As I said earlier, I don’t want to give a target because these are all driven by can’t be driven by a specific target but definitely on BPL indoor and water backlog we should see a thousand crore plus improvement in cash flow getting into the next year.
Parikshit Kandpal
And debt reduction because of indoor and water.
Manish Mohnot
That’s what I said. Indoor water and bpl. I said give you all three. Right?
Parikshit Kandpal
Okay, so you’re talking about that. Including that and inflows, it should be thousand crore. And how much of this would be debt out of thousand crores?
Manish Mohnot
No, no, this is the equity corporate I’ve given you. There’s a further debt corporate deduction on B. TPL which will be closer to 350 crores. 250 crores. Sorry.
Parikshit Kandpal
Okay, so 250 crores will get knocked off from your consultant.
Manish Mohnot
Yes.
Parikshit Kandpal
Okay. And what is the total value of the claims which are in our favors? I’m not asking about what you will realize, but what is the total claims available? Arbitration claims in our favor?
Manish Mohnot
I might not be able to give you that number today because a lot of that is confidential in nature and a lot of tables includes interest component. Other companies, it’s a significant number. But we, as a rule of corporate governance, we typically do not disclose this number unless the claims are finally realized.
Parikshit Kandpal
Okay. Is the last thing on the pledging. So any stands on any guidance from the promoter now that the IPO is almost near. So directionally from here on, how do you think the pledging shares will play out?
Manish Mohnot
I think we’ve had the same balance which we had at the end of Q2. That pledge will only come down. And we’ve seen pledge come down in Q3 also. So if you look at the freight level, we are at around 24% levels while we are now from as high as 50% a few years ago. So the guidance to us is exactly what it was in the past of saying that the price levels will only come down going forward and not go up.
Parikshit Kandpal
Okay. Sure, sir. Thank you.
Operator
Thank you. Next question is from Uttam Kumar Srimal from Access Securities. Please go ahead.
Uttam Kumar Srimal
Yes, sir. Very good morning and thanks for the opportunity. So my question pertains to capex guidance. So how much capex we have incurred this year and what would be our capex guidance for FY25 on a whole and for FY26?
Manish Mohnot
So I think we have already incurred a capex in excess of 450 crores for the current year. We expect capex to be more in the range of 600 to 650 crores on the balance sheet in the current year. Going forward next year we expect capex to be below the current year because this year had a significant capex coming from TBM and significant capex on dnf. It should definitely be lower than this year. But the exact number silent will be able to give you once we have finalized the business plan.
Uttam Kumar Srimal
Okay. And so now coming to the urban infra business since this constitute only 5% of our total order move. So what kind of growth you are building in urban infra business, particularly on the side of metros because already we have got two projects. So where do you see this urban infra business? Panning out in next two to three years.
Manish Mohnot
You know, we’ve been a late entrant in this business. Although we did Some more components 7, 8 years ago in terms of Delhi Metro and Bangalore Metro. But last four, five years we’ve not done much. Only in the last two years we have got traction again. And in the last two years the team has already been an order book closer to 3000 crores. What? Speak as of now,
We believe that traction in everything on metros, there’s underground metros where we see good traction. Over at midline metro where we see good traction. We see traction coming in urban cities as well as second tire cities. And we believe that getting into the next few years, this looks like a very good opportunity.
So in terms of growth, I expect that business, as I said earlier, to grow at 20, 30% definitely in the next few years. In terms of order book, you know, being optimistic, being cautious. In terms of our capex targets, we still should be growing this order book at 30, 40% if not higher in the next couple of years.
Uttam Kumar Srimal
Okay sir, that’s all from my side and I wish you all the best.
Manish Mohnot
Thank you.
Operator
Thank you very much. We’ll take that as the last question. I would now like to hand the conference back to the management team for closing comments.
Manish Mohnot
Thank you everyone for being on the call. Thank you.
Operator
Thank you very much on behalf of Dam Capital Advisors. That concludes the conference. Thank you for joining us ladies and gentlemen. You may now disconnect your lines.