Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
KEC International Ltd (NSE: KEC) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Vimal Kejriwal — Chief Executive Officer, Managing Director
Analysts:
Jainam Jain — Analyst
Amit Anwani — Analyst
Vaibhav Shah — Analyst
Parikshit — Analyst
Ravi Swaminathan — Analyst
Unidentified Participant
Anuj Upadhyay — Analyst
Ashwini Sharma — Analyst
Sandeep Sabharwal — Analyst
Rafat Syed — Analyst
Bhavan Modi — Analyst
Saket Kapoor — Analyst
Mihir Vyas — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to KEC International Limited’s Q4FY26 results conference call. As a reminder, all bias pin 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 touchtone phone. Please note that this conference is being recorded on the call we have with us today. Mr. Vimal Kejriwal, Managing Director and CEO and Mr.
Rajiv Agarwal, CFO. I now hand the conference over to Mr. Vimal Ketriwal for his opening remarks. Thank you. And over to you sir.
Vimal Kejriwal — Chief Executive Officer, Managing Director
Thank you, Michelle. Good morning everyone and welcome to KAC Q4 earnings call. I will begin with an overview of the operating environment followed by our annual performance and update on each of our business segments. We have achieved our highest ever revenues, profitability and order intake during the year despite a challenging operating environment marked by geopolitical tensions in the Middle east during Q4, labor shortages and subdued order inflows in India, we successfully executed key strategic initiatives and developed niche capabilities across our businesses positioning us for sustained growth and value creation.
First let me provide a brief update on the current situation in the Middle East. The region accounts for approximately 27% of our overall order book and L1 position almost equally divided between Saudi Arabia and the UAE and with a small presence in Oman as on date, Dubai factory and the physical execution of all our projects in the region continues unhindered. Tendering activity remains strong across the Middle east with new opportunities being announced across uae, Saudi Arabia, Oman and Kuwait during and after the recent conflict.
We have also been awarded a large order in Saudi Arabia after the conflict started. Cash flows remain stable and the region continues to be a key growth driver supported by investments in grid expansion, regional interconnections, rebuilding initiatives, grid resilience and renewable integration. The safety and well being of our employees remain our highest priority and we continue to closely monitor developments in the region. While the project execution on the ground in Middle east continues. The ongoing disruptions have resulted in supply chain and logistic challenges.
Shipments from Europe, China and India to GCC countries are witnessing delays due to port congestion and continued disturbances while freight costs including war related surcharges have increased materially particularly for ocean transportation. Lead times have also lengthened due to rerouting and port congestion alongside delays in supply of towers. Third party but out items. We are in touch with our clients on these issues. The ripple effects are also being felt in India where labor availability across project sites has been impacted due to fuel related constraints and elections in certain parts of India.
In addition, certain equipment and steel suppliers are facing operational disruptions and shutdowns arising from LPG shortages. These disruptions impacted operations during Q4 and are expected to continue affecting Q1 and potentially Q2 as normalization of the supply chain and logistics ecosystem is likely to take time. Now coming to the annual performance for the year, we achieved a record revenue of 23,506 crores reflecting a growth of 8% driven primarily by the T and D and cables and conductors business.
In line with our strategic focus, the TND segment’s contribution to overall revenues increased to 68% compared to 59% last year. Operating PBT is at 848 crores with PBT margins expanding by 40 basis points to 3.6%. Operating PAT margins have also increased by 30 basis points to 2.6%. We have achieved an operating PAT of 650 crores as stated above while the revenue growth has grown by 8%, operating PBT has grown by 21% and operating PAD has grown by 18%. PBT and PAD growth continues to outpace the EBITDA and revenue growth.
The tax rate for the year, particularly in Q4 was slightly higher due to increased tax costs in some of the international markets. The operating PBT and PAT numbers are excluding exceptional items of There’s a provision of 59 crores made in FY26 towards the new labor code and an income of 24 crores from an arbitration award recognized last year in FY25. In Q4 we delivered revenues of 6390 crores with an EBITDA margin of 7%, EBITDA margin of 4% and PAT of 193 crores. Our performance could have definitely been better but for the following Geopolitical disruption in the Middle east led to deferment of revenues while the labor situation While the labor had shown signs of improvement earlier, it deteriorated again due to the recent LPG related issues and elections in certain parts of India.
LTG issues have also impacted supplies in India. We adopted a calibrated approach in executing water projects due to continued delayed payments. Also delay in legal closure of dispute settlements of claims in our transportation and Metro projects. In terms of order intake we have achieved an all time high inflow of rupees 25,280 crores, notably a substantial 70% of this order intake has been secured by our TND business across India and the international markets. During the year, we sharpened our focus on enhancing the quality of order inflows by consciously shifting towards fewer but larger EPC orders to strengthen operational control and execution efficiency.
As a result, the average order size increased from 350 crores last year to over 500 crores this year while the overall number of orders reduced by 25% despite higher order inflows. This strategic shift towards high quality orders will enable tighter cost control, superior execution and better working capital. Our closing order book remains robust at rupees 36,267 crores. We are happy that the order intake Trend continues in FY27 with new orders of rupees over rupees 1000 crore announced till date across TND Transportation, Renewables and cables and conductors.
In addition, we have an L1 position of over rupees 3000 crores. The TND business has secured a prestigious HVDC order from a reputed private developer. Our renewable business has expanded its presence in the wind energy segment with a repeat order from an existing customer. The transportation business has reinforced its position in the technology enabled automatic block signaling segment with two recent orders. With this, the current order book plus L1 position stands at over 40,000 crores which gives us visibility for the next six to seven quarters.
On the debt front, our net debt including acceptances is at rupees 6,722 crores, marginally lower than December 25. The debt could have been lower but for the spillover of collections of rupees 450 crores from certain large clients to the first week of April 26. The debt levels could have been reduced further but for the higher inventory due to delayed dispatches in Dubai amidst Middle east disruptions, Strategic inventory buildup in cables, raw material and steel owing to volatile crisis. Due to the collection in the water business and increase in revenue driven debtors debt, we expect the debt to improve by Q2 while the absolute interest costs have remained flat.
Despite the 8% growth in revenues, interest expenses as a percentage of revenue have reduced by 20 basis points to 2.8%. The Board of directors have decided to recommend a dividend of up to 75%, that is rupees 5.50 per equity share on the face value of rupees 2 each. Now coming to our specific businesses, our TND business has delivered an outstanding performance achieving a milestone revenue of Rupees 15,883 crores for the year, a remarkable growth of 24%. The growth has been delivered on the back of a robust exhibition across both domestic and international markets.
Our annexed order book to revenue ratio is one of the best in the industry. On the order intake front, the TND business secured significant inflows of rupees 17,700 crores across India, Middle East, Americas, Africa and the CIS. In India, the transmission sector is witnessing a structural shift with large intrastate projects traditionally executed by state utilities increasingly moving to the TBCB route. This transition has also resulted in utilities and several new private parties participating in TBCB tenders as developers, resulting in several new players securing TBCB projects during the year.
Consequently, the share of these players has increased significantly to almost 80% compared to 45% last year. In line with this trend, we continue to scale up our presence with private sector clients and have secured orders of rupees 3600 crores from private players and SCVs during the year. Additionally, we are today well placed to secure further orders from private clients. The orders during the year in India include our largest ever domestic T and D integrated order of over rupees 1000 crores from a reputed private player for a 765kV transmission line and a 765 by 400kV AI substation.
We have also strengthened our position in the HVDC segment, securing three orders from Adani and pgcil. We are currently executing five HVDC projects having commissioned the first HVDC converter station project built by us in Maharashtra for Adani and Hitachi. On the international TND front, we continue to strengthen and diversify our global presence with orders exceeding rupees 11,300 crores representing a robust growth of over 35%. A key highlight was the strong revival of order inflows from Africa and CIS alongside sustained momentum in the Middle East.
Notable wins in the Middle east include our first ever 380kV GIS substation order in Saudi Arabia as well as our largest composite order in Saudi Arabia comprising transmission lines, substations and EHV cabling. With these orders in L1 positions, our overall substation portfolio has expanded significantly both in India as well as in the international market, both in GIS and AIs segments. In SA 8 hours, the business achieved profitable revenues of rupees 1800 crores for the year, a robust growth of 36%.
Year on year the business continues to witness traction in order inflows with inflows of approximately 2000 crores. These orders for the supply of towers, hardware monopoles and engineering services span across the U.S. Mexico and Brazil. During the quarter, the business secured a few large power supply orders in Mexico and US signaling a clear uptick in the North American market. The business now boasts of a healthy order book and L1 position exceeding rupees 2,600 crores. We continue to reduce our debt levels in SAE.
Capacity expansion initiatives are progressing well following successful capacity enhancements at our plants in Dubai, Jaipur and Jabalpur. The expansion of our Beautybury facility in Nagpur is expected to be completed within this quarter. We have also expanded our hardware manufacturing facilities in Brazil. These expansions will further strengthen our ability to cater to rising demand for transmission infrastructure across domestic and international markets. The outlook for the TND sector in India remains highly encouraging.
Supported by a strong and sustained tender pipeline. Peak power demand continues to rise, reaching record highs and expected to grow further. Driven by economic expansion, rapid electrification and evolving weather patterns. Transmission is increasingly emerging as a critical bottleneck amid rising grid congestion, leading to a sharper policy and execution focus on strengthening infrastructure. Reflecting the accelerated pace of energy transition and rising electricity demand, the government has enhanced its non fossil fuel capacity target from 500 gigawatt by 2030 to 900 gigawatt by 2035.
This will drive significant investments in transmission lines, substations, green energy corridors and inter regional connectivity, translating into a robust multi year opportunity for the TND sector. On the international front, the outlook remains strong and well diversified across regions. Despite the ongoing geopolitical tensions in the Middle east, tendering activity continues to remain resilient and robust with substantial opportunities across Saudi Arabia, UAE and Oman. The same time, we are witnessing a recovery in Africa with increased tendering activity post the COVID slowdown along with expanding opportunities in the CIS region.
In the SARC region, improving political stability in Bangladesh and Nepal is expected to support a gradual revival in demand. The Americas also continue to present strong opportunities, particularly in Brazil, Mexico and the US driven by sustained demand for towers, hardware and poles. Again driven especially by the Data center and AI boom in the US market. With a strong order book and L1 position in TND of over rupees 25,000 crores, we remain confident of delivering sustained and profitable growth in the TND business.
In civil the business has strengthened its order book with multiple orders of rupees 5000 crores, a growth of more than two times over the last year. During the year the business has secured orders across high growth segments such as semiconductors, hospitals, thermal power plants, metals and mining, residential and commercial real estates. Some of the key highlights include the entry into the semiconductors EPC space a large first of its kind order from a new client securing our largest ever commercial real estate order from a global developer Winning an order for our tallest residential structure to date a approximately 80 floors from a reputed real estate player, a luxury villa development project from one of India’s largest developers expanding into the thermal power segments with civil and structural work for 150megawatt plant from a prominent private sector player Strengthening our presence in the healthcare segment with multi specialty hospital projects from a renowned healthcare player and securing five orders during the year from reputed metals and mining players.
The civil business achieved revenues of rupees 8,823 crores for the year. The revenues could have been higher but for the labor constraints, delayed release of workfront in some projects and slower release of payments in the water projects. Given the current payment dynamics in water projects, we continue to follow a calibrated and cautious approach to execution. However, with the recent budgetary allocation to the sector, we expect collections to improve going forward. During the year, the business successfully commissioned the Bed and water project in Odisha, supplying clean water to over 58,000 households, one of the largest projects to be commissioned in Odisha.
The business also successfully completed three Metro projects, two in Delhi and one in Chennai. The Delhi Metro projects were inaugurated by the Prime Minister Sri Narendra Modi. With the Tamil Nadu elections now concluded, we expect one of the Chennai Metro projects to be inaugurated shortly. During the year, we launched a transformational program in partnership with the global consultant focused on driving execution excellence in our civil business. This initiative aims to significantly enhance operational productivity and accelerate project execution.
The program has been initiated with select pilot projects within the civil business and scaled up in a phased manner across other projects. While strengthening its presence in core segments such as building and factories, data centers and public spaces. The business has commenced building in new segments of urban infrastructure including underground metros, stations, tunnels and pump storage projects, opening up a large growth opportunity. In parallel, we have further strengthened organizational capabilities in civil business through strategic hiring at senior leadership levels.
With a robust order book and lvan position of over rupees ten thousand crores, improving outlook on collections of water segment expansions into the new segments and the ongoing Execution excellence program, we are confident that the civil business is well positioned to turn around and deliver healthy growth in the coming quarters. Our transportation business achieved a revenue of rupees 1555 crores for the year. In line with our strategies, we continue to remain selective and calibrated in this segment.
During the year, we secured orders of rupees 550 crores including projects in the PCAST under Kavach in partnership with our JV partner as well as a railway sadding project from a private sector client. The business has successfully implemented coverage across 667 route kilometers and is currently executing deployments across an additional 1780 route kilometers of the railway network and over 3000 locos. With the government’s continued focus on railway safety, modernization and indigenization, initiatives such as Kavach are expected to witness wider adoption over the medium term and we remain well positioned to secure further orders in this segment.
We continue to bid for opportunities in technologically enabled areas of metros and tunnel ventilation. Our focus remains on fast tracking project closures, optimizing working capital and selectively pursuing domestic and international opportunities for growth. Our cables and conductor business has achieved record revenues of 2200-2217 crores, a strong growth of 23%. The profitability of this business is also witnessing consistent improvement driven by better product mix and the cost optimization.
Notably, it has also achieved its highest level of profitability during the year. The business continues to witness steady inflows of orders for supply of cables and conductors. We had commissioned an aluminum conductor plant last March, making an important milestone in strengthening our manufacturing capabilities and expanding our product portfolio. During the year, the business successfully supplied aluminum conductors including ACSR and AL59 conductors to various customers across India. On the new product front, elastomeric cables are slated to commence production in Q2 followed by the commissioning of the EBM plant within the same quarter.
Our renewables business has achieved revenues of Rs 516 crores. In a significant development, the business forayed into the wind energy segment with two orders for 100 megawatt wind projects in southern India from a renewed private developer. We successfully commissioned a record 1,000 megawatts of solar capacity across Rajasthan and Karnataka. These projects are among the largest tracker based installations in India. We continue to pursue selective opportunities in both solar and wind segments and are well placed to secure additional orders in the near term.
The oil and gas pipeline business has achieved revenues of Rs. 258 crores for the year. The business secured two orders in Africa and Middle east, marking a key milestone. The business entered the GCC region with a composite station works project, unlocking a large and attractive growth market. Geopolitical developments in West Asia are expected to accelerate investments in energy security, creating additional opportunities in pipeline infrastructure. The business remains focused on expanding its international footprint in ESG and sustainability.
We continue to make Significant strides across the organization. Some of the key initiatives and development during the year include increased solar footprints across our factories to 39% up from 32% last year. All five plants in India are water positive with positive water index of 1.48. Our people centric agenda focusing on fostering happiness aligned with our brand tagline hello Happiness which is a core aspect of RPG Group’s philosophy. This year we saw our happiness quotient reaching 85%. We have now onboarded an external consultant to advance our scope.
3 Inventorization and Net Zero Strategy Our sustained progress in ESG and sustainability has been well appreciated. It is reflected in the improvement of our ESG ratings by key agencies such as MSCI S&P Global, DGSI and Morningstar Sustained Analytics. Additionally, KSC International has been ranked 19th among BW India’s Most Sustainable Companies 2425. In conclusion, while the operating environment, supply chain and logistic ecosystem remains uncertain, however, supported by a strong and diversified order book plus L1 of rupees 40,000 crore and a robust tender pipeline exceeding rupees 1 lakh 80,000 crores particularly across the TND and civil business, we are confident of continuing our growth.
Thank you very much. We are now open for questions.
Operator
Thank you very much sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask questions may please press and one on the touchtone form. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press Star and one to ask questions. The first question is from the line of Jainam Jain from Dam Capital.
Please go ahead.
Questions and Answers:
Jainam Jain
Thank you for the opportunity sir. Out of the total order book, how much order book is on a fixed cost basis and how are we looking the margins to shape going forward in this year?
Vimal Kejriwal
So if you look at our order book roughly I’ll say 50% or so would be on fixed and the balance would be on variable. Okay, but when you look at fixed also what what happens in that is if you look at TND 30, 40% would be on base metals which typically is also hedged. So what you are exposed to on these orders would be escalation in steel and maybe labor.
Jainam Jain
So is there any sort of guidance which you would like to give for this year in terms of margins?
Vimal Kejriwal
No, it’s too early. I think right now. I think we’ll wait for the station all to Settle Maybe when we finish Q1 or earlier, whenever we have a better visibility, we will do it. Today it’s a bit difficult to give.
Jainam Jain
Okay. And sir, are we seeing any improvement on the collection from the JVM side?
Vimal Kejriwal
Last year we got around 800 crores. This year already we got, I don’t know what 50 crores if we got this April. Yeah. So last year we got around 800 crores and this year till now we have got around 50, 58 or 60 crores. So this is in line with what we received last year. We have not yet seen any improvement because if you look at what the cabinet approval talks about is they need some framework to be put in place. They want the JGM Mission 2 to be launched. So there are a few conditionalities attached before the central government actually starts dispersing its full quota.
I understand they have dispersed some amount but what has exactly happened is still a little bit difficult or not yet understood by our teams. But expectation is that there will be some improvement. Because what has also happened, they wanted to do audits, all those audits have been completed, etc. So I think it’s a matter of time that payments are getting released.
Jainam Jain
Receivable days are increased from 88 days to 101 days. And like we have recovered 450 crores as part of our statement. But still adjusting to that working, working capital. Disabled days still stands to continue at a high level. So is there any stress which you’re seeing from any specific customer end or let’s have an experience
Vimal Kejriwal
Very disturbed. I think on the. Whatever I could understand on that you’re talking about the receivables. I think major reason was there was a spillover as I mentioned earlier of almost 450 crores. If you bring that in also then I think the numbers would be a little bit better. Also our Saudi business has got 20% retention and we have got a lot of large Saudi contracts around two years back and they are now heading into completion. So I think in the next two quarters we will receive a lot of release of retentions also.
So we expect the receivables to be normalized going forward.
Jainam Jain
Okay, so my last question is on the HVDC lines. So are they expecting projects or ordering in this year?
Vimal Kejriwal
There is a talk of two new lines being ordered this year. I think one is very close to getting ordered in the sense that I think it’s very advanced that there could be a second line also coming up. Overall we are talking about some seven projects to happen. Eight projects. Sorry. So Overall, I don’t know by what time it will happen but one is in very advanced stage, a Barmyar complex.
Jainam Jain
Thank you so much.
Vimal Kejriwal
Thank you.
Operator
Thank you. We’ll take the next question from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Thank you for the opportunity. Hi. Hi. So sir, just wanted to understand what is the guidance now for this year in terms of revenue, EBITDA and also for the order intake
Vimal Kejriwal
As far as revenue is concerned. As I said, we have an order book plus element of 40,000. So we have been talking about anywhere between let’s say 12 to 15%. But I’ll say honestly Amit, we’ll have to wait for some time. But looking at the order book and the way things are happening, I think we should be able to achieve for the year around 12 to 15 now with the problems which we are still having in Q1, Q2, how it will pan out over the first quarter may be a bit different, difficult. But annually we do expect that as far as the order intake is concerned, we did around 25,000 and odd this year.
So we expect that we should be touching around 30,000 crores of order intake for the year on the margin guidance. I think right now it’s a little bit too lazy for me to give a guidance. Maybe in a month or two once the things clear and once we see the reaction of the clients and what is happening and how the prices stabilize, I think give me a month or two, then we’ll come back to you. On the, on the margin front.
Amit Anwani
Right. The second you highlighted because of the elections in four, five states, we had a labor issue plus obviously a lot of geopolitics which we are seeing. So what is your understanding in terms of pipeline conversion in India? Are you sensing that there could be delays in pipeline in terms of conversions? The things are taking longer than expected in terms of orders converting. Any sense, since a lot of things have changed in past three months and you also highlighted the LPG shortage is also impacting indirectly your business.
So just wanted to understand on that front.
Vimal Kejriwal
So Amit, whatever we could see, I have not seen any major or any significant delays in pipeline conversion at least in India. Definitely. Okay. Middle east. While the pipeline is pretty strong, I think conversion has been, has been taking place a little bit slower than what we would have liked it to be, to be very honest. But there’s a strong pipeline and we have had repeated meetings and we’ve been called by the clients saying they are going to order and you know, you need to strengthen and we are going to have rehabilitation and redundancy jobs, etc.
Coming up. So that part has been a little bit slow in terms of conversion, not in terms of pipeline India. I think what is happening in the India piece is one is if you look at the last year H1 there was a slowdown in TND at least that has now been made up in H2 and with large equity projects which are spanning over 48 months etc. People were not that quick in awarding which has now started happening. Okay. So I’m not seeing anything honestly any, any major change in the pipeline conversion. But what we need to understand is the pipeline.
If you look at civil residential, we have not seen any slowdown where right now we are negotiating pretty large numbers, large number of orders. We are tenders, we are negotiating where we have seen a comeback has been on the automotive side. Okay. We are L1 in a large with a large customer. I would like to say we are discussing other tenders also and metals and mining. That has been the trend. Metals and mining was for the last one year. We have not seen any other major industry coming up. So with private capex being where it is impact, I don’t think we are seeing much impact on the conversion or the pipeline.
Amit Anwani
Right. So finally on the 27% book exposure to Middle east you said largely the sites are going. So just wanted to understand pre war and now what is the productivity drop and what was the revenue loss we had because of this impact in Q4 and also how are we since the war is still on, how are we managing our supplies and the tight executions? Some sense would help. Yeah.
Vimal Kejriwal
So Amit, we can divide into various parts. So first of all site execution has not got impacted. Okay. Sites are all ongoing once in a while. I think our factory stopped for one and a half day at the peak at the start of the war. But then it has been running same thing has been happening on projects off and on. We had some stoppages at the start again last one month. I have not heard of any stoppage or anywhere in any of the pieces. So that’s as part of the physical part is concerned. I think what had got impacted severely had been the supply side of it.
So steel was not available. Shipments from China. I have a transformer stuck in China for last three I think two months already. So you know those things that even supplies from India were initially very badly affected. But now what is happening is that the shipping routes are slowly getting stabilized. Like we have been able to send quite a quite a lot of steel now from India and it has reached the plant whether through Fujairah or in Saudi. It goes through the Red Sea and on the western side. Slowly, slowly it’s stabilizing.
The timelines are increasing, the costs are increasing. But some semblance is coming as far as the numbers are concerned. Difficult to quantify, but I think we lost around 300, I would say 380 or 400 crores of revenue in Q4 because of this slowdown. And also we were not able to dispatch a lot of material which was lying in our Dubai factory. So which led to an increase in our working capital as well as on the borrowing side which has now. Part of it has gone, part of it is now going. So there will be some impact.
I don’t think it should be as severe as Q4, but there would be some continuing impact definitely in Q1 also.
Amit Anwani
Thank you sir. Thank you so much and all the best.
Vimal Kejriwal
Thanks Amit.
Operator
Thank you. The next question is from the line of Vaibhav Shah from GM Financial. Please go ahead.
Vaibhav Shah
How are we targeting for FY27? So
Operator
Excuse me sir, Mr. Shah, may I request you to kindly use your handset please.
Vaibhav Shah
Am I audible?
Operator
Yes, please. Yeah,
Vimal Kejriwal
Better sir, better. Weber. Yeah,
Vaibhav Shah
Yeah. So on networking capital and debt, how are we targeting for FY27?
Vimal Kejriwal
So I think the way we had been looking at it is that we are targeting an overall reduction of almost thousand crores in the debt. But and the way we are looking at this, 500 should happen by end of Q2 and another 500 by the end of the year. That’s the way we are looking at it. Rajiv, any, any views on that?
Jainam Jain
Yeah, I think that that’s.
Vimal Kejriwal
So H1 could probably be by end of H1 should be around 6000 crores is what Rajiv is saying.
Vaibhav Shah
By year end it should be around nine hours,
Vimal Kejriwal
Five and a half. Yes, yes, absolutely.
Vaibhav Shah
Okay, answer on one capital days,
Vimal Kejriwal
110 days.
Vaibhav Shah
So if you mentioned that there were some delayed selections in the quarter. So if so if we look at the current theme of things, so right now it should be somewhere on 130 or this.
Jainam Jain
I think roughly around that. Currently we are at about 155 days. Better. Okay. And by H1 I think we should come down to about 120 days or so. In another 10 days we will reduce in the H2.
Vaibhav Shah
Okay. Okay, got it. So secondly on the civil side we know that water execution has been impacted. But apart from water also we have seen some weaker execution. So what are challenges we are facing. And how do you see the execution improve in FY27?
Vimal Kejriwal
Two things which I talked about earlier. One is labor availability has been a continuous issue.
Vaibhav Shah
Okay.
Vimal Kejriwal
So labor, labor will continue to be a problem. I think as I said out of our
Vaibhav Shah
30,000
Vimal Kejriwal
We had 12,000. Now they’ve gone up to 15, 16,000. We accept. So that that’s one challenge. Secondly, what we have also seen is that especially on the real estate side there have been changes in plans and then there were new codes issued in the NCR which was withdrawn after three months. But that led to suspension of some of the projects, commencement, etc. And also on the industrial side we keep on seeing changes happening. So we had at least I’ll say four or five projects where there were significant delays in revenue ramp up.
But now those have been closed so that should start. So I think we will see a significant turnaround happening in the civil business. I think hopefully from Q2 onwards because the labor is now coming back. So April, May will be a challenge. But by May and we expect the labor to be back. And now most of the I’ll say projects have started where we are on hold for various reasons, different reasons but they were on hold.
Vaibhav Shah
So we could see a 20% kind of growth in civil revenue for this year. 25 number.
Vimal Kejriwal
No, definitely. I think we are looking for more than that. We should have at least 30% or maybe more than that. Growth in the civil revenues
Vaibhav Shah
And order inflows possible.
Vimal Kejriwal
Right now we are looking at around, if I’m not wrong around 8,000 crores or so. Is the order intake target for civil against the 5,000 which we got this year and two and a half last year.
Vaibhav Shah
Okay, okay. And fair nicely. What would be our JGM order backlog right now and outstanding receivables
Vimal Kejriwal
1400 crores. Receivables. Order book is around 1400 receivables around 800 crores.
Vaibhav Shah
Okay. Okay. Thank you. Those are my questions.
Vimal Kejriwal
Thanks. Thank you so much.
Vaibhav Shah
Thank
Operator
You. Will take the next question from the line of Parikshit Kanpal from HDFC Securities. Please go ahead.
Parikshit
Yes. Am I audible
Operator
Clearly not very clear.
Vimal Kejriwal
But I. I can at least hear you. Yeah, go ahead.
Operator
Yes.
Parikshit
Yes. My question was in this such tough environment. So once one is the price increases and one is the execution. So if we execute we lose on margins And I think that is also preempting us not to give us any guidance on margin. So how are the clients telling us? I mean because are they ready like at the site events is available you think that the clients are asking you to stop work or there is indecisiveness from the client side that you should execute. So if you can help us understand on the ground what is exactly happening, which is not giving you confidence to give the margin guidance
Vimal Kejriwal
As far as on the ground execution is concerned. I don’t think we have a single client, I’ll repeat, a single client who has asked us to either either go slow or not execute. That’s number one. Number two is on margins. I think the issue is slightly different on margins because as I said there have been cost increases, etc. And we are talking to various clients. So unless and until you have a clarity on what will happen with all those, let’s say a freight has gone up. Now we are very clearly, we are talking with all our Middle east clients and everyone else saying that, you know, that this needs to be reimbursed and in some cases till we hear that we are not, you know, allowed the shipments to take place.
Which is also a reason why you’re seeing a lower this. But discussions have been going on as I said and some, some contracts we have clear force major clauses which allows us to pass on. So, so you know, it depends upon the criticality of where we are. If the project needs the supplies to be done without delaying the project, those are being done and we’ll take it up with the client later on where we have the luxury of, you know, holding it till the client gives it. You, you are, you’re holding at some places.
But coming back to your basic question, I don’t think we have been asked to hold back any execution in any project. I’m saying either in India or international.
Parikshit
So when you analyze your cost to completion on a, I mean on a quarterly basis or monthly basis, you’d be budgeting and seeing it, measuring the performance. So if this situation persists at the current levels, largely the steel and on the supply chain issues. So what kind of currently, what kind of under absorptions of margins would be happening? Will it be 50 basis point, 100 basis points? So largely if this thing persists, what kind of impact do you think we can have on the margins on the order books?
Vimal Kejriwal
Difficult to quantify. But as I said earlier, see 50% of the orders are on price variable where most of the increases will get passed on of the balance. Some have base metals, some have steel and other different, different items are there. So let’s take civil, civil 80% is steel and cement and that it’s a complete pass through. So it’s only the labor and overheads. So it will depend upon what we are able to pass through, what we are not able to. Now, whether the Quantum will be 25 basis points or 50 basis points, difficult to quantify, which is why we are holding back.
But do you expect it to be beyond 100 basis points? No, but whether it will be 0 or 2550 is something which is holding back, you know, from giving a number.
Parikshit
Okay. And within the segments, which segments like contacted because of this? I mean, we should be more prone towards correction in margins if the things persist. So where are we most exposed in terms of the supply chain issues or labor issues?
Vimal Kejriwal
So labor issues clearly is the India civil peace which is, which is more exposed? We have not seen a labor problem in the Middle east in spite of everything. What is there? Okay, on margin front, difficult to see where you are more. I think very, very. I think it’s almost, I’ll say evenly spread. But basically if you look at Middle east has got more supplies. So if the logistic costs or shipment delays and all happen and is the client decide not to compensate, okay,
Jainam Jain
Then
Vimal Kejriwal
There could be some impact because typically around 30, 35% of our revenues would be from supplies. Okay. And if the freight cost and logistic cost goes up, see, then there could be some, some impact on the, on the Middle east margins. But we have been discussing with most of our, in fact all our Middle east clients and there are ways and means which, which are, which are being discussed as to what can be permanent. So like one client has said okay, I’ll pay you some additional cash straight away, you know,
Jainam Jain
So
Vimal Kejriwal
Those things are getting, getting discussed. Someone has said okay, diesel prices government. So most of our clients are government. So any case, the diesel price hike has gone to the government. So how do we put it back to you? So those discussions are right now going on. How they will finally end up, I honestly do not know. Okay. But as I said impact. I don’t see an impact beyond 100 basis points. In any case, whether it would be 0 or 25, I honestly very difficult to guess today.
Parikshit
Okay, so broadly if I compare though you’re not giving any guidance, but last year with 7.1% EBITDA so max loss is that we could be muted or probably it could be somewhere in the range of 7 on the lower side to 8 on the higher some somewhere in between we could land up for the year as a whole. Is right now the assessment.
Vimal Kejriwal
Those are your numbers, not mine.
Parikshit
No, no, I’m saying. You’re saying up to 100. Yeah,
Vimal Kejriwal
Yeah, yeah, yeah. Thanks. Okay,
Operator
Thank you. We’ll take the next question from the line of Ravi Swaminathan from Evander Spark. Please go ahead.
Ravi Swaminathan
Hi, sir. Thanks for taking my question. If you can give the TND pipeline commentary for both domestic and international markets, that will be great. Every year you end up giving that. Ravi,
Vimal Kejriwal
I could not understand anything. Can you repeat or something? I think the line is very disturbed.
Unidentified Participant
Okay, you can
Ravi Swaminathan
Do that?
Vimal Kejriwal
Yeah. Now better, Much better. Yeah,
Ravi Swaminathan
Yeah, yeah. If you can give the pipeline commentary that is there both for international and domestic markets.
Vimal Kejriwal
So the pipeline we have is for the next three months, which will be around 70,000 crores divided equally between India and international.
Ravi Swaminathan
Okay. And how it would have been compared to last year? Sir,
Vimal Kejriwal
It’s almost similar in that sense. You know, overall for the quarter it has been similar. Overall, it keeps on moving a little bit. Like one HODC project will increase it by 25,000 crores. You know, that’s the way it’s happening. See
Ravi Swaminathan
Saudi,
Vimal Kejriwal
Saudi has got some large HODC also. If they announce them, then the pipeline will move significantly.
Ravi Swaminathan
Got it. And a slightly long term question on the India power transmission capacity. This is more like a Lehman kind of understanding that I, from a point of view that I am asking this question. FY26, around 50 gigawatt of solar capacity would have been added and that would have been one of the highest in the history. And to achieve a target of around 300 gigawatts by 2030, we need a linear addition of 40 to 45 years over 20. So is there a scope for transmission work to increase further over the next two, three years?
Where is that calculation which will show the growth here?
Vimal Kejriwal
No, you’re absolutely right, Ravi, and you’re not a layman. So let me just say one thing, that there is a huge pressure
Ravi Swaminathan
And
Vimal Kejriwal
If you look at the numbers and I think you have a power grid conference also after this. So I think that there’s a huge pressure on, first of all on completing the existing projects. In fact, one of the reasons which I did not want to say, but now that you provoked me into saying is that
Anuj Upadhyay
A
Vimal Kejriwal
Lot of our resources are all diverted towards completing lines to release a gridlock.
Anuj Upadhyay
And
Vimal Kejriwal
Because of that, a lot of new lines where I would in the normal course would have started work are actually slight, I’ll say put on hold because the resources for clearing ROW and other things are limited from our side as well as the client side also. And it’s not limited to power grid. It also applies to all the private sector. We are doing work with virtually every large private sector client on the. In the TND sector. And this issue of ROW continues everywhere. So I think we are clearly seeing that transmission and with our discussions with the authorities is that with all the flag they have drawn on gridlock, etc.
There may be some advanced construction also starting to happen where we start building in redundancies especially in areas of Rajasthan, Gujarat and now towards south also Karnataka. I think we are doing seven or eight projects in that region now. So clearly we are going to see a lot more work happening on TNT and also on the substation side for grid stability and the battery storage also because you are looking at one rupee one and half rupee tarry, you know, power price in the day and ten rupees touching in the night.
So a lot more stability will also have to be built in the system.
Ravi Swaminathan
Got it sir. Yeah. Thanks a lot.
Operator
Thank you. The next question is from the line of Ashwini Sharma from MK Global Financial Services limited. Please go ahead.
Ashwini Sharma
Yeah. Hi sir. Good morning and thank you very much for the opportunity. My first question on the order inflow, pardon me if I missed it, you talked about 30,000 crore kind of order inflow. Can you split it in terms of segments of tnd, Civil and others?
Vimal Kejriwal
So what I said actually was no, I can’t give you exact numbers of what is there. But out of 30,000 VHS roughly around 60% would be TND. So around 17, 18,000 is what we are targeting in TND and around 8,000 in civil. The rest would be split between our cable business and renewable and railways. That that’s the way we. The broad breakup.
Ashwini Sharma
Okay, thanks for the clarification. Secondly, sir, again on the supply chain, you know, especially on the LPG side. So on the side are we looking at other alternatives? Any other options, you know, just to continue the operations?
Vimal Kejriwal
No. So first of all our operations have not been impacted in the sense our factories if you’re looking at that. Because fortunately we had multi fuel and other arrangements. So we are okay in our operations. But what I said was two different two things. One was we are seeing some impact on the vendor side which I think by now is now getting normalized. People have made other arrangements because I remember in March a lot of supplies got deferred because many of our vendor plants were having a problem in terms of hardware, in terms of insulators which were dependent on lpg.
Now people are making alternate arrangements so it’s slowly falling in place. The second major issue which we had was all the labor colonies which anyone has, whether we or anyone else is always dependent on lpg. So there was a major shortages of LPG resulting many workers. Going back I think there obviously you are now shifting to electric, people are now shifting to wood and all that. So but all arrangements are being made. But obviously it is not as efficient or as environment friendly at least the wood and all that.
But slowly, slowly, slowly it’s falling back. It’s still a bit of a challenge to get this and also added to that is a little bit of a challenge on transportation, diesel supply. Although in Mumbai and all that we don’t see that happening. But if you go to distant areas you do have seen queues of trucks and all that. So there has been some impact on logistic which I think hopefully we get settled.
Ashwini Sharma
Okay. And finally, finally sir, if you can give me a capex number for F27
Vimal Kejriwal
27 we should be I think will depend upon what is happening. But we had target around 400 crores. Okay,
Ashwini Sharma
Okay. All right. 400 crore.
Vimal Kejriwal
Yeah.
Ashwini Sharma
Thank you very much. Thanks
Anuj Upadhyay
Ashwini. Thank you.
Operator
Thank you. The next question is from the line of Anuj Upadhyay from Investec. Please go ahead.
Anuj Upadhyay
Yeah, hi sir, thanks for the opportunity. The first question is basically on the solar etc plant. So you know like last year we did around one gigab of an EPC but currently I don’t see any kind of an order coming in from the solar etc side. So how has been our experience over there and are we still active? So recently we have done this.
Vimal Kejriwal
So Anuj, we are definitely still looking at orders in the solar however what has happened is that if you look at the last six months with the IPO boom there were too many solar companies coming into the market and they had significantly like what had happened on the road sector etc. Significant undercutting of pricing had happened especially on the government tenders like NTPC and NLC etc etc. So virtually that market is right now shut for large players. Virtually I’ll say that the large markets because you’ve seen too many small time EPC players getting into that market.
So basically our market is now focus on the private sector and the two wind projects which we announced and we are well placed in some more orders. They are more because on the wind side if you look at it there are not too many large EPC companies. Our focus has in a way shifted more towards wind. But solar we have been bidding for and working with some private clients and I think hopefully this year we will have some more Projects coming in on the. On the solar side also.
Anuj Upadhyay
Five point sir. And similarly how have been the experience in the wind? I know it’s quite recent that we have done the bit but overall if I see the wind market relative to the solar is much smaller and even in wind we have two or three notable players who are actively getting or are present in the etc space. So how big this opportunity could be and what could be the sustainable margin over here.
Vimal Kejriwal
I think we are clearly seeing a lot more focus on wind. Okay. Otherwise you know, for me to get a mid and order in wind would have been difficult because we did not have a prior experience. But people are finding that wind especially with. If you look at what is happening on the gridlock and the power situation where in the night we have a shortfall, a shortage and day we have surplus power where plants are being backed down. There is a clear view that many people who have burned their fingers, you know, on Solar where 60, 60 gigawatt of back down etc.
Is happening and wind is a more perennial resource. So we are clearly seeing lot of people now shifting to wind. The other advantage in wind you have is that you don’t need to have the all your turbines, you know adjacent to each other. In solar your entire land block has to be en masse one together and which is a lot of land acquisition. Other issues are happening wind in a way, you know, you put one turbine, the next turbine can be you know, half a mile away so it doesn’t increase your cost too much.
So solar you cannot do that. So I’m seeing that execution of wind and all that is relatively easier for the developer also. So I think we are seeing a shift happening more towards wind, especially on the private side.
Anuj Upadhyay
The next is on the TND side. You do mention that the row challenges will persist while power grid. In the last meet they mentioned that the government has certain of the state government has better took them to procure land on a market basis versus the 30 trade earlier. So post that change hasn’t there been any kind of an improvement happening related to the RWHUS or the challenge still persists across the states.
Vimal Kejriwal
I think the challenge still persists. Very clearly it persists and I think you have to understand couple of things. So one is let’s say you do a substation where you acquire the land and you pay the money and it gets closed in transmission you are still acquiring the right to use and that is always relative saying how much money you want to pay, what is the right to use because the land does not get transferred to the developer. The land still remains with the farmer and although we’re talking about market but that that’s a moving target.
And what they have done is you need to form a committee where there is a village guy and other people and all that. And unless there is that the committee may or may not agree to a settlement then it goes back to the district commissioner who then settles it, etc. So it’s a long drawn process and it is helping in resolving at the end of the day, not at the start of the day. So after all the problems you have, you then get it resolved. So is it expediting the process? I am not so sure, honestly.
Anuj Upadhyay
Lastly, on water collection, sir, any states where we are seeing mark improvement happening? What are expectations?
Vimal Kejriwal
So we are in limited number. We are only in two states, Orissa and MP and we have got reasonable collection from both the states. So I think that way. I would not like to say whether it is a marked improvement or a marked deterioration. What last two years or whatever we have been getting, you know, 50, 60 crores per month is what we keep on getting. One month from Orissa, one month from MP. So there’s no either improvement or deterioration. Let me put it this way.
Anuj Upadhyay
No fair point. That’s very helpful and thanks for the opportunity.
Vimal Kejriwal
Thanks Anuj. Thank you.
Operator
Thank you. The next question is from the line of sandeep sabharwal from Ask Sandeep sabharwal.com please go ahead.
Sandeep Sabharwal
Hi MLJI, I hope you’re doing well.
Vimal Kejriwal
Good to see you. Yeah.
Sandeep Sabharwal
So as you know I’ve tracked the company for I think decades now.
Vimal Kejriwal
I know
Sandeep Sabharwal
Last three years we’ve been seeing a scenario where every beginning of the year like this year, obviously you’re not giving a margin guidance. I know because of uncertainty we’ve been looking at margin improvement, some historical projects, getting over deleveraging, etc. But I think the debt level that actually tended up and the margins have not improved. So I think beyond this phase, let’s say this Middle east crisis, when it’ll end. Your guest and my guess is as good as anyone else’s. But subsequently in a normalized scenario like when do we see the things actually moving towards a scenario where you move back to near double digit margins and you actually have the deleveraging cycle play out.
Vimal Kejriwal
So Sandeep, I think it’s a valid question. If you look at what is happening at a point of time. We had thought that TND business will plateau and which is why we wanted to have couple of Other legs to stand on. And that’s where we had decided to focus on Railways and Civil. Now Civil, this is our sixth or seventh year, okay? And now we have reached a reasonable size. I think there is a steep learning curve. Also we decided to grow it organically rather than, let’s say spending 5,000 crores in inorganic growth.
And I think today we have sort of reached the end of our investment part where you are investing to get PQs, acquire capability, etc. So if you look at some of our competitors in this industry also, many of them have taken 7, 8 years to reach a respectable level in the civil business. Okay? So I think to me Civil is now turning around. We are beyond now. I think we have passed the learning curve. Also what had happened was that we had picked up a few Metro projects because that was supposed to be the ending at that point of time on the Metro elevated projects.
Fortunately at least three out of the four are completed and fourth one will get completed now, which will help us in working capital. Also to me, I think Civil will now turn around this year onwards. So I think we should be seeing some uptick getting contributed by Civil. But it will also contribute a large number to the revenue which will help us in managing our leverage. Railways was unexpected. We were expecting it to grow significantly, but somewhere down the line someone took a decision saying that all the railway projects will now be done by the divisional railways, not the PSUs like RVNL or anyone else.
Okay? And suddenly the bottom fell out because now Instead of having three clients, we ended up with 18 clients. And then making them understand commercial terms, EPC terms became a nightmare. So virtually that entire. And also electrification got over, which was also our forte that time, at that point of time. So that business is getting run down except for technological part where we’re talking about coverage and signal and also on the tunnel ventilation and some part of Metro. So that I think will probably take a year or so further to stabilize and then we will take a call on what we need to do.
Although we are now working on the international market. So coming back to a basic question, I think this year we’ll have to see what happens on the West Asia and other pieces and all that. Next year onwards I think we’ll clearly see an uptick happening on the. On the margin side. When do we reach double digit is a million dollar question I probably will not be able to answer today. But that’s also our ambition and our aspiration that we reach it as fast. Can we do it next year? Looks difficult to Me.
Okay. Unless there is some major. What also happens is that this business, most of the projects will be at, you know, 7, 8, 6, 7 sort of margin. Then you end up getting at least three or four very large projects with large margins. So it’s also a question that, you know, if you today get two projects which are difficult but which are very high margin, you’re able to execute the entire margin levels gets pulled up. So maybe I think we’ll have to wait for another year or so before we look at double digit.
So maybe fi or 29 or something. Or 20, I don’t know. Very difficult to talk about it today. I hope I have been very frank and open with you.
Sandeep Sabharwal
Yeah, I understand. So I think a lot of things you addressed. So just a point of view from my side, like maybe it’s time to just focus on not on growth per se, but on improving the balance sheet first. And then once that gets addressed, then I think the other things fall into place. But obviously it’s your business. You need to decide on how. No need to proceed. Thank you.
Vimal Kejriwal
I think that has been a question which is getting debated everywhere, including our board on growth versus margin. It’s a very tough decision to take. Okay. And earlier we had been doing that and I think that’s something which we are again, in fact we had a board meeting day before and this discussion also again happened. So we are revisiting this part and saying that should we look at, you know, slowing down the growth and look at more. But if you look at what I said at the start of the conference saying we have changed our order intake the way we are doing order intake.
So like we have stopped taking any order which has got any negative cash flow anymore. And I’m saying it’s the life of the project. Okay. So we have let go. That’s why when you look at my order intake to execution ratio, it’s one of the best in the industry because we are looking at very clearly focus, valid that thing is happening. So you don’t see major growth happening in the order intake or on the order book, but revenue is growing. I think your point is well taken. We will keep that in mind.
And it’s a point of discussion already with us. Okay,
Rafat Syed
Thank you.
Vimal Kejriwal
Thanks Sandeep. Thanks a lot.
Operator
Thank you. The next question is from the line of Rafat Syed from Dalit Capital. Please go ahead.
Rafat Syed
Hi sir. Thanks for taking a question. I’m audible.
Vimal Kejriwal
Yeah. Yes.
Rafat Syed
Yeah. Every time you supposed to give the, let’s say order pipeline across the segment. So is it possible to quantify that?
Vimal Kejriwal
Okay. I thought I gave the order intake pipeline. No,
Rafat Syed
I said 30,000 TND. Yeah. Again used to give let’s say around 1 like 8 rupees across segments. So if you can quantify let’s say apart from TND also on civil and other intra part.
Vimal Kejriwal
So I think I don’t have the exact number. But what Abhishek is saying is that almost 50,000 on the balance 1 lakh 80 is on civil side. If I’m not talking about 20 by 30,000 is on the renewable side railways it’s not. I don’t think we have the large order intake target also. So it’s okay.
Rafat Syed
Okay. And sir, secondly on net working capital days I know it has increased to almost 137 days as of now. FY26. And you also said that you’re getting supposed to get some money from the Saudi for the retention project which is now the completing. So any target in your mind that what would be your networking level days by end of 27.
Vimal Kejriwal
I thought we said 110 days.
Rafat Syed
Okay. Okay. And lastly sir, let’s say how you think, how you see the Middle east crisis now. I think it will get over next quarter or two. So are you seeing let’s say large trending pattern. You start again from the H2 onwards or it will remain let’s say muted for some more time. And let’s say how you. How do you see that please.
Vimal Kejriwal
So it is not muted. Today there’s a large tender pipeline of almost 45,000 crores. Even today on this and as I said earlier we expect it to go up. Because for most of these people I am very clearly seeing that transmission is very essential. What cut down may happen could be on non essential part. Also with oil at 110 and all that they’re all making a lot of money. Let me put it this way. Although the quantity has gone up but the price has shot up. And also without discussions the clients have called us in all the countries, Saudi, uae, Oman and they very categorically told us that the business will go up.
So please ensure that you actually beef up your presence. So see, one is rehabilitation, one is redundancy. You know there will be a lot of rebuild happening, data centers, etc. So I’m very clearly seeing a lot of opportunity and let’s say extremely today all the sanctions on Iran are removed. Then. Then Iran will become a very large market.
Rafat Syed
Correct. Thanks.
Vimal Kejriwal
Thank you.
Operator
Thank you. The next question is from the line of Bhavan Modi from Anandraji, please go ahead.
Bhavan Modi
Hi sir. Thanks for giving the opportunity. So my first question, out of the 6 segments, you know, in FY26, only the 2 segments, you know, showed the growth and the 4 businesses show 30 growth. So where can we see, you know, growth coming from in FY27? Can we you know, safely assume from the civil and the transportation?
Vimal Kejriwal
So it will not be from transportation, will definitely be from civil transportation may grow a little bit, but I think it will not be material. So I don’t think we should assume any major growth in that. But civil, as I said earlier, will definitely grow by 30, 35%. That’s what we are talking. And cables will definitely grow. Cables is 2300. It will grow at least by 15% if not more.
Bhavan Modi
Okay. And for since you know, now the cable is, you know, almost touched, 2,000 crore plus. Right. Plus there’s a growth that is being seen. So are there any chance to look for the strategic investment, you know, for value unlocking or something like that? Is there anything on the end means
Vimal Kejriwal
That is definitely on the animal, but not in the near term. What we had said, I mean if you remember when we desubsidized we had said three at that point of time. So the 1st of January 25, around maybe 28, 29 is the year when we will look at it. I don’t think right now we don’t have any plans but it will definitely happen over maybe, maybe one, one and a half, two years later on.
Bhavan Modi
And so just last question. In the civil business, you know, I, you know, assume, you know, there’s a labor problem which is persistent. Right. So Q4 is the, you know, quarter where there is, you know, heavy execution, you know, takes place. But now in FY27, you know, we, we will see a, you know, huge election coming in the up. So how have we heavy plan, you know, anything in terms of the labor?
Vimal Kejriwal
So I think lot of things are happening on the, on the labor front. Okay. One is how do you keep the labor with you? So the major thing is that how do you give them better facilities? What else should be done? Do you, can, can you get permanent labor, build labor colonies? You know, there are a lot of things which are happening on. Plus many of the clients are now willing to pay extra money for retention, etc. So clearly one part which is happening is on how to get and retain more labor. The second part is how do you mechanize?
Like today we have started using plastering, automatic plastering machines. We are now getting robots for bricklaying, etc. Okay, then how do you do painting? By way of drones. And so, you know, I think that the second piece is largely on how do you reduce the need or optimize the mechanization, optimize the amount of labor which you are hiring. The third piece would be on how do you get more or better homework which requires lesser labor, etc. And I think a lot of work is happening on that. And the fourth piece would be on substantial skilling and training.
I think we are working with some people, we are working with power, we are working with a lot of other people on trying to see how do you skill, labor and you know, upgrade the required, the needs from just being an ordinary labor to a, you know, mason or getting into, from a normal carpenter into the aluminium formwork, etc. I think so on four or five different fronts. Not only we, the industry and everyone is trying to work and see how can we retain labor, how can we mechanize more, what else needs to be done.
I think it’s becoming a burning issue. And if you look at anyone, whether it is LNT or anyone else, everyone is facing this issue and everyone has been trying to tackle it jointly.
Bhavan Modi
Yeah, got it. So my question, you know, when we say, you know, we’ll see the growth in the civil, so I assume, you know, we have almost no factor in, in case there’s a labor disruption due to up election and second means how we should look at, you know, data center business, you know, in the civil side, both internationally and domestically. So are we seeing a good traction coming in the D.C. Side?
Vimal Kejriwal
I think D.C. Side we have seen a lot of announcements happening and that will slowly start getting converted into orders now. Okay. Like Andhra Pradesh, there was a large data center announced. Reliance has been talking, so many people have been talking about it. So I think it’s a matter of time that those start getting converted from drawing board into physical orders. People are talking, I think the orders will start coming in. As far as your question again on AOPA etc, I think I also talked about getting into a little bit of infrastructure where it’s much more mechanized.
You want to do an underground, you’ll get a TBM and doing it, you don’t need that many workers and all that. So I think the focus is also shifting on looking at what sort of business you can do with lesser labor and third party, which we have not discussed earlier has been that in oil and gas, we already are in international market, civil also we have been looking at something on international, especially on the waterfront etc. So that is also a part or some part would come in from there where we don’t see a labor challenge.
Bhavan Modi
Got it, Got it. Thanks.
Vimal Kejriwal
Thanks Robin. Thank you.
Operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor company Please go ahead.
Saket Kapoor
To be very brief as you spoke about the wagelies of labor and then upskilling from. Upskilling from our side new labor code implementation. Why how do we see the cost for us for the labor moving up or what should be. What should be pensioning in. In terms of the incremental increase just because of that on a quarterly basis. How should that plan out?
Vimal Kejriwal
Okay. Which, which would provide for basically more for the managers and everyone. Okay. You are already paying them almost at 100% as salary. So we have not seen any significant increase in the labor cost on account of that basic salary. And so wherever the basic salary was, let’s say 20% of your CDC and now graduate and actressing you should make it 50% so on those places. So it’s more at managerial level where these salaries were structured workers, factories. So I don’t, I don’t see a major impact on.
On the, on the construction side or that side contract price.
Saket Kapoor
Okay. Because of what we have seen is the unrest across many parts of the country especially with the case at Noida that was just pertaining to this labor code issue. I think so. So.
Vimal Kejriwal
Understanding is it was not on the labor code. It was basically an overtime payment and all that. That is the way it continues. So I think there their issue was that they were working what I read in the newspaper and I do not whether it is right or wrong. It was nothing to do with labor code and all that. That’s my understanding. Basically. That was my understanding of the whole issue. Labor code was.
Operator
Ladies and gentlemen, the line for the management has been disconnected. Kindly stay connected while we try to reconnect. Sa. Foreign. Ladies and gentlemen, thank you for patiently holding the line for the management has been reconnected. Over to you sir.
Vimal Kejriwal
Yes Akit Ji
Saket Kapoor
Yes. Just to. Just to conclude two points. Firstly on the EHV cable capacity additions ESV cable key demand supply case officer scenario play out and JJM schemes that March. How are the receivables declining for April and May? Receivables are down by what amount and if you could give just some color whether it has improved or not.
Vimal Kejriwal
I don’t think it has improved. Saket the JGM continues to be where it is the same. Government pays double the money of what they are paying today. I don’t see that happening in the near future.
Operator
Thank you sir for answering those questions. We’ll take the next question from the line of Mihir vyas from. From 9rays EquiResearch. Please go ahead.
Mihir Vyas
Thank you for the opportunity. I just wanted to ask an update on the power grid issue. I mean when can we expect the orders starting to start flowing in from power grid side?
Vimal Kejriwal
So we had a timeline which I think is getting over in August or so. So from September onwards or October onwards to start getting. Although we are still representing with them to reduce it. But as of now I think the earliest we can expect would probably be October or so because you start bidding in August and you get the orders. So maybe a month or so more after that.
Mihir Vyas
Okay. And any potential order book which we can expect from there and
Vimal Kejriwal
Too early to say what tenders are open, that point of time and all that to depend upon that.
Mihir Vyas
Okay sir. And sir, this as you said, just steel and labor are the factors which shall affect the margin. Any as you have discussed a lot on the labor side, any same color for the steel.
Vimal Kejriwal
The steel definitely has gone up. But I think what has also happened in the last one or two weeks, the steel prices started coming down again and we are seeing because ultimately we are all talking about demand. So at the end of the day and once you are approaching near monsoon now even automatically steel prices come down. So the same thing will happen. I don’t see steel prices being, you know, a major spoiler in the market. And also what had happened was that in many of our orders which we are now executing had been taken at a higher steel price.
So what has happened is that although the steel prices have gone up, we are in many cases still within our tender estimates and all that notwithstanding the increase.
Mihir Vyas
Okay, sir. Thank you sir. Thank you for.
Vimal Kejriwal
Thanks. Thanks. Thank you.
Operator
Thank you. As there are no further questions I now hand the conference back to Mr. Vimal Ketriwal for closing comments. Thank you. And over to you sir.
Vimal Kejriwal
Thank you everyone for your continued interest in case. Thanks. Thanks Michelle. Thank you.
Operator
Thank you sir. Thank you. Members of the management, on behalf of KEC International Limited that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.