NCC Limited (NCC) Q4 FY23 Earnings Concall Transcript

NCC Limited (NSE:NCC) Q4 FY23 Earnings Concall dated May. 29, 2023

Corporate participants:

P. V. Vijay Kumar — Vice President, Finance

Sanjay Pusarla — Executive Vice President, Finance & Accounts

R. S. Raju — Director, Projects

Neerad Sharma — Head Strategy & Investor Relations

Analysts:

Vaibhav Shah — JM Financial — Analyst

Shravan Shah — Dolat Capital — Analyst

Prem Khurana — Anand Rathi — Analyst

Mohit Kumar — ICICI Securities — Analyst

Parikshit Kandpal — HDFC Securities — Analyst

Rohit Natarajan — Antique Stock Broking — Analyst

Parvez Qazi — Nuvama Group — Analyst

Vishal Periwal — IDBI Capital — Analyst

Deepika Bhandari — Phillip Capital — Analyst

Jiten Rushi — Axis Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the NCC Limited Q4 and FY ’23 Earnings Conference Call hosted by JM Financial. [Operator Instructions]

I now hand the conference over to Mr. Vaibhav Shah from JM Financial. Thank you, and over to you, sir.

Vaibhav Shah — JM Financial — Analyst

Yeah. Thanks, Faizan. On behalf of JM Financial Institutional Securities, I welcome everyone to Q4 and FY ’23 earnings conference call of NCC Limited. Today, we have from the management Shri. R.S. Raju, Director, Projects; Shri. A. Vishnu Varma, Director, Projects; Shri. Sanjay Pusarla, Executive Vice President, Finance and Accounts; Shri K. Krishna Rao, Executive Vice President, Finance and Accounts; Shri. P.V. Vijay Kumar, Vice President, Finance; Shri. Neerad Sharma, Head Strategy and Investor Relations; Shri. M. Srinivasa Rao, Chief General Manager, Finance and Accounts; Shri. SMVSR Raju, Deputy General Manager, Finance and Accounts; and Shri. P. Surender Rao, Assistant General Manager, Finance.

We will begin with opening remarks from the management, after which we will have the Q&A session. Over to you, sir.

P. V. Vijay Kumar — Vice President, Finance

Thank you, Vaibhav. Good afternoon, everyone, and welcome to NCC Q4 FY ’23 earnings investors call. I thank you all for taking time to attend this. Before we start, I’ll read out a small disclaimer. Then, we shall go into the subject. My voice is audible? My voice is audible?

Operator

Yes, sir. You are audible. Please go ahead.

P. V. Vijay Kumar — Vice President, Finance

So I may continue now. So the statements made here or in the presentations uploaded by the company are to our best of knowledge true and any forward-looking statements are subject to certain factors beyond control of the company officials and management. And hence, the audience are advised to use their discretion in their own analysis accordingly. Right.

Now we shall go into the performance of the company for this Q4 into account. I’ll briefly start with certain opening remarks followed by Q&A. Prior to announcing my colleagues who are present here, I am happy to introduce that Mr. Sanjay Pusarla, who has taken over as new CFO, and he is also present here.

Sanjay Pusarla — Executive Vice President, Finance & Accounts

Hi, everyone. This is Sanjay Pusarla.

P. V. Vijay Kumar — Vice President, Finance

Now, let us start. Mainly, the pandemic preceded, the war in Ukraine broke out in February 2022, price of food, fuel and fertilizer rose sharply. As inflation rates accelerated, central banks of advanced countries scrambled to respond the monetary policy tightening. Many developing countries, particularly in the South Asian region, faced the severe economic stress as a combination of weaker currencies, higher import prices and the raising cost of living and a strong dollar, making debt servicing more expensive proved too much to handle.

In the second half of 2022, there was a spike for governments and households. Commodity prices peaked and then declined. In the near term, the acute pressure was relieved, although the prices of some commodities remained well above their pre-pandemic levels. The capital expenditure program of the central government, which increased 63.4% in the first eight months of FY ’23, was another growth driver of the Indian economy in the current year, crowding in the private capex since the January-March 2000 — January-March quarter of 2022.

Further, FY ’23, we have seen RBI tightening its monetary policy, increasing report rate a couple of times from 4% to 6.5%. I may share here that we have seen to the extent of average 8.5% to 9.3% increase in the interest rates of the borrowings of the company. Anyway, these forecasts including the advanced estimates released by NSO now broadly lie in the range of 6.5% to 7%. Despite the downward region, the growth estimates for the FY ’23 is higher than almost all major economies, even slightly above the average growth of the Indian economy in the decade leading up to the pandemic.

IMF estimates India to be one of the top two fast growing significant economies in 2022. Despite strong global headwinds and tight domestic monetary policy, India is still expected to grow between 6.5% to 7%, and that too without a base effect. It is a reflection of India’s underlying economic resilience and its ability to recoup, renew and re-energize the growth drivers in the economy.

While that is so, NCC is well placed in terms of diversified execution capabilities. It has presently the orders on hand worth INR50,000 crores — INR50,244 crores, having accretion of INR25,895 crores of orders in FY 2023. I’m happy to share with you that this is highest ever order book achieved by the company. Also, I am sure you will appreciate that we touched INR13,503 crores of revenue on standalone basis and INR15,701 crores on consol basis. This is growth of nearly 35%. Our consol EPS stands at INR9.77 as against INR7.91 previous year. The numbers and details of the same are already furnished in the presentations uploaded in the website.

Coming to last part of my briefing, while my other colleagues will go into detailing of the numbers, I may share with you that we are set to incur opportunities in all the spaces we are present and have plans to enter into new segments like defense, railway, under the ground tendering, etc. Our management felt that we should be able to grow by 20% in FY 2024 with more or less same EBITDA margin and PAT margins going up by 50 basis.

So with this, conclusion with the opening remarks, I will now pass on to my colleague, Mr. R.S. Raju, Director, to bring out salient features of financial performance to you. As I said, please consider the chance to others too and choose and limit your questions without repetitions.

R. S. Raju — Director, Projects

Hi. Good afternoon to all of you. Thank you to my colleague, Mr. Vijay Kumar. He has already briefed about the macro environment around surrounding the construction industry. And see, all of you aware that the environment is not that much favorable to the companies, and we expect a positive environment going forward.

Now, we have uploaded the quarterly and yearly results to our company’s website and, thereby, we avoid the reading of the detailed numbers here to save the time or otherwise to give the more time to you for asking more questions and, thereby, answers. If you come to the already appointed out by this small analyst that good results were given by the company. So I believe that the performance of the company this quarter and for the year is almost too high in all aspects.

So I want to touch the key highlights of the performance for the fourth quarter as well as for the year as a whole. The highest ever annual order inflow of INR25,895 crores for the year as a whole. Similarly, the order book crosses INR50,000 crores mark first time ever, now stands at INR50,244 crores. And reported highest ever annual consolidated revenue, INR15,553 crores. Similarly, reported highest ever consolidated PAT of INR609 crores. The brought down debt, the debt level below INR1,000 crores mark, the lowest in the last 1.5 decades, INR974 crores. It’s almost the first time the value addition by the group companies to the bottom line by about INR40 crores. Highest ever dividend, 110% for the FY ’23. The lowest total receivables collection days in last five years is 87 days. And the lowest working capital days in the last five years, 107 days. And efficient conversion of order book and execution registering lower book to build ratio of 2.98 times. This is about the brief highlights of the performance of the company.

Going to the order book. In the year as a whole, the order book grown by 113%. Order book grown from INR39,361 crores to INR50,244 crores with the growth of the order book about 28%. The order secured by the company excluding the fourth quarter of the year about INR13,283 crores is also ever higher in a particular quarter. Average order book size, if you see, is also highest ever INR578 crores. So it gives that a strong book on hand with a diversified portfolio and increased order value — average order value. So we believe that it gives a good momentum going forward and to report good volume of revenues in the years to come.

The order book composition division wise, the order book revenues division wise are given in the website, so thereby the reading of the numbers division wise I’m not giving. But if anyone has requirement after seeing the website, just we will read out based on the questions raised from the investors. The operating performance, if you take about the consol level, the revenue reported for the fourth quarter is about INR4,981 crores growth against INR3,492 crores, a 43% growth. Similarly, EBITDA reported 72% growth in the fourth quarter, INR465 crores against INR270 crores.

The PAT, excluding exceptional item, if you take that one, it is reported INR217 crores against INR61 crores with a growth of INR156 crores. All of you know that last year fourth quarter, company reported an exceptional gain on the sale of the NCC Vizag Urban property. As a result, that exceptional item is more in the fourth quarter of the last year. If you consider that exceptional item in the fourth quarter, the net profit is INR242 crores against it’s current quarter is INR191 crores. If you compare that one, again, a negative growth is there. But once you exclude that one, there is a positive growth of about 200% or so.

If you come to the 12-month period of the consol that is reported, including other income about INR15,701 crores against INR11,000-odd crores, a growth of 40% for year as a whole. If you observe that, there is a continuous growth in the last two years, as well as in third year, the three consecutive years, the growth has shown last year 30%, last year 40%, now again 40%. On an average in three years, I believe that one company has reached almost 100% growth levels.

Now come to the EBITDA, reported 43% growth for the year as a whole. Similarly, PAT, excluding exceptional item, reported 127%. Is it correct?

P. V. Vijay Kumar — Vice President, Finance

120%, considering the..

R. S. Raju — Director, Projects

After excluding the exceptional item for the earlier year. So that is the performance of the consol both for fourth quarter and 12 months.

Come to the standalone the fourth quarter, reported revenue of INR4,047 crores against INR3,179 crores, a growth of 27%. The revenue primarily driven by the Buildings division and Water division in this particular quarter, EBITDA increased by 59% and EBITDA margin increased from 8.52% to 10.55% in this quarter, primarily the increase on account of lower input prices in Q4 comparing to the Q4 of the previous year and a receipt of INR41 crores claim from one of the BOT SPV. It is Western UP Tollway Limited. That company has received certain claims from NHA in turn and NCC also earlier made a claim with SPV for its EPC contract. INR41 crores in this quarter the company received that amount. The PAT also reported INR178 crores against INR109 crores represents 64% growth over the corresponding year. See, this growth again due to increased turnover decides the reasons what we indicated for the vector.

This is fourth quarter performance. Now come to the 12-months performance. On a standalone basis, reported revenue of INR13,504 crores, a growth of 35%. Similarly, EBITDA also reported a growth of 35%. And PAT is 16% growth before excluding this exceptional item. And after excluding the exceptional item, the growth in the PAT is 65%, a PAT of INR569 crores against INR344 crores. The revenue increased by 35% primarily driven by the Buildings division, particularly Jal Jeevan projects of UP, ITC Nauroji Nagar of New Delhi, and Lucknow Airport. These are some of the projects, which have contributed more into the top line.

When you come to the other income in this year, the other income is increased from INR108 crores to INR152 crores, an increase of INR44 crores, which mainly represents by the profit or the gain on sale of investment property. There are two elements in this investment property. One is the land, what we sold in the Q3 — what we sold in the Q3. And other one is about certain…

P. V. Vijay Kumar — Vice President, Finance

[Indecipherable] flats.

R. S. Raju — Director, Projects

Yeah. TellapurFlats are there. The sale of those investment property. Both together contributed INR44 crores gain for this year as a whole. That is only the — the reason for increase in the other income for the year FY ’23.

When you come to this balance sheet, just I will read out the highlights of the balance sheet rather than reading the numbers. In the year, financial year ’23, the company has built up capex by about INR232 crores for executing its larger size metro projects and high rise buildings, reported fixed assets turnover as high as 9.6 times for financial year ’23, and exhibited an efficient working cap management by reporting working capital days as low as 107 days. Basing on overall improvement of the balance sheet, already based on H1 financials, the credit rating, we got enhanced credit rating from IND to IND-plus. But now again, basing on the annual results, we expect a further improvement in credit rating from existing IND-plus. Reported ROCE on its core business that is after excluding the investment group companies as high as 15.3% for FY ’23. Similarly, debt equity ratio further improved to 0.15 times.

When come to the cash flows of standalone, a continuous positive cash flows from the general operating activities now report INR873 crores against INR1,296 crores of the previous year. And net cash flows used in investing activities is INR132 crores against INR131 crores. And as a result, the free cash flows INR741 crores as against INR1,165 crores of the previous year. The net cash flows used in financing activities is INR749 crores against INR1,099 crores. The balance sheet both the sides, both assets and the liabilities side, reported a good number, good improvement. And the balance sheet ultimately results into the lower debt of INR900 crores odd. And when you come to the net debt, after adjusting the cash flows — after adjusting the cash balances, it has come down to INR182 crores.

Now when come to the other significant matter, AP projects, there is no any big change and the outstanding from AP Capital City projects has come down from INR264 crores to INR157 crores. So the exposure towards the AP Capital City projects at this moment stands at INR157 crores and bank guarantee stands at INR267 crores. There is a further decline from INR346 crores of the opening balance to INR267 crores in this year.

As far as [Indecipherable] is concerned, we inform you that the arbitration proceedings are over and the arbitration believe that order is under preparation. And we expect between June to September ’23 the arbitration award. Similarly, the TAACA [Phonetic] understands current year, we made a provision INR14 crores for TAACA liability towards interesting space, settlement fees to take in place, and management is trying for amicable settlement and hope that in a couple of months the settlement may arise.

And in terms of group companies’ loans and advances, in the current year, FY ’23, the investment we received back from NCC International remained about INR41 crores. Similarly, the loan what we given to NCC Urban, also entire loan balance of INR22.31 crores we received back. As a result, some inflows happened from the group companies in the FY ’23. And also, the mobilization advance, when you see that, there is a good amount of mobilization advance received in this year, about INR750 crores. All these aspects primarily driven to make up bringing down my debt level to below INR1,000 crores and net additional debt level to INR182 crores.

If you take the trade receivables, there is also an improvement in the trade receivables, which on a macro level showing that there is a reduction in the trade receivable days from 97 days to 87 days. And in terms of states, there is an improvement in trade receivables from — in the Telangana state, AP state and UP state, also, improvement is there. But because of more work done in the UP, the trade receivable stands higher than other states as of that was 31st March, ’23. And there is a significant improvement happened in the realization of the world trade receivables more than three years. So there is an improvement from that figure.

So overall, I can say there is an improvement. And also, in the current year, from the claims also we received, there is a whole long one. And if we come to the unbilled revenue, unbilled revenue in fact is a little increase. There is only 1% increase over the financial year ’22 happened in the current year, because of the more of EPC nature projects, but there is no any significant increase when you compare to the percentage of UBR turnover in the last four years. It is ranging from 21% to 24%. In the year FY ’20, it is 21%. In FY ’21, it is 24%. In FY ’22, it is 23%. And in FY ’23, again 24%. More or less in the same range the UBR, in terms of UBR in proportion to the turnover. This is in general about the company’s performance. If any leftover areas, basing on the questions if you ask by, we will clarify those things.

Now, I’ll pass on.

P. V. Vijay Kumar — Vice President, Finance

Thank you my colleague, R.S. Raju, for detailing the numbers. If anybody has questions, they can go ahead now. As I said, please consider the chance to others too and choose and limit your questions without repetitions. Yeah. Please go ahead. We’ll take the questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah — Dolat Capital — Analyst

Thank you very much. First of all, congratulations on robust performance and…

Operator

This is the operator, Mr. Shah, we are not able to hear you.

Shravan Shah — Dolat Capital — Analyst

… clearly.

Operator

Mr. Shah, please repeat your question, Now, it is audible.

Shravan Shah — Dolat Capital — Analyst

Yeah. So first of all, congratulations on robust performance and historic performance across all the parameters. First is just wanted to clarify in opening remarks, we said in terms of the guidance, 20% revenue growth for FY ’24, same EBITDA margin. Does that mean EBITDA margin for FY ’23, which was around 10.6% or 10.1% or fourth quarter 10.6% and NPM improvement by 50 bps is from FY ’23? And also, the order inflow, how much are we looking at for this year, FY ’24?

P. V. Vijay Kumar — Vice President, Finance

Yes. Now, the guidance we given, the top line increase about 20%. Similarly, the order inflow also, we expect in the similar level. And come to the margins level, we expect at the bottom line of net profit level, about 50 basis points, roughly 40% to — nearly 40% growth from the previous year.

Shravan Shah — Dolat Capital — Analyst

Sorry, sir, you said 40% growth in profit that you are looking at in FY ’24.

P. V. Vijay Kumar — Vice President, Finance

The top-line growth is 20%.

Shravan Shah — Dolat Capital — Analyst

Yeah. That I got. Last line you said 40% growth. So at net profit margin, we are looking at 50 bps increase in the net profit margin or we are saying that 40% growth in PAT?

P. V. Vijay Kumar — Vice President, Finance

The 50 basis points or 40% [Indecipherable] to that at the net profit level.

Shravan Shah — Dolat Capital — Analyst

Okay. Got it. And second, in terms of the debt that we have reduced now significantly, so how are we looking at the debt levels and also, in terms of the finance cost, which is around INR500-odd crore for this year, so INR510 crore. So how one can look at in terms of the finance cost for this year?

P. V. Vijay Kumar — Vice President, Finance

In terms of debt, we further expect to reduce by another INR100 crores or INR200 crores since the company has the 20% growth plans. And again, here two important subjects to talk on the debt, one is the SimCorp and other one is NCC Vizag Urban. So if these two positive aspects or outcomes are utilized in the year FY ’24, the debt will come down drastically another by INR600 crores or INR700 crores. It depends upon the outcome of these two major elements. And NCC Vizag Urban, in the current year as for the terms, we didn’t receive the amounts. And basing on the latest status review with the buyer, in FY ’24, the equity portion of INR150 crores expect to realize. And the loan part is there that they are asking for another two years that is ’24-’25 and ’25-’26. This is, at this moment, the schedule of realization of this NCC Vizag Urban.

Shravan Shah — Dolat Capital — Analyst

Okay. And then in terms of the finance cost?

P. V. Vijay Kumar — Vice President, Finance

Finance cost in terms of percentage, it comes down to 3.9% of 4% from top of the 4.6%. And in terms of absolute terms, it would be there around INR500 crores to INR520 crores.

Shravan Shah — Dolat Capital — Analyst

Okay. Lastly, so the data points on the balance sheet front, retention money, mobilization advance, unbilled revenue and group exposure. So also, if you can split into the loans and investment to group companies,

P. V. Vijay Kumar — Vice President, Finance

That — we will read out to those numbers after the call.

Shravan Shah — Dolat Capital — Analyst

Sorry, sir. You said you will read out at the end of the call.

P. V. Vijay Kumar — Vice President, Finance

Yes, end of the call.

Shravan Shah — Dolat Capital — Analyst

Okay. Thank you and all the best.

Operator

Thank you. The next question is from the line of Prem Khurana from Anand Rathi. Please go ahead.

Prem Khurana — Anand Rathi — Analyst

Hello. Yeah. Thank you for taking my question and congratulations on a good set of numbers this quarter. Sir, to begin, I mean — so what I want to understand was, so it’s been an extraordinary year in terms of order inflows, but just if you could help us reconcile the number because when I look at the announcements that you made on the stock exchanges, the number that I get is lower than what you reported in your presentation or in the press release for the results. So what will explain this difference? Because as far as I know, I think the announcement that you made on the stock exchange for Q4, the number works out to be almost on INR6,000-odd crores. And if I were to look at our press release of the results and adjust for the first nine month number, it was probably more than INR13,000 odd crores. So if you could help us understand the gap, please.

P. V. Vijay Kumar — Vice President, Finance

And now, the issue is there primarily two odds represent that difference.

R. S. Raju — Director, Projects

JJ nd MDO.

P. V. Vijay Kumar — Vice President, Finance

The two projects. One is MDO project. In MDO project, MDO project, we got 30 years project, that is INR30,000 crores at a time. So including INR30,000 crores at a time into the order book does not reflect the proper way. That’s why internal management taken a call equal to three years order value we are including in the order book. Every year — we are adding — every year, we are adding at the year-end basing on the progress of the project. So that contributed about INR3,000 crores in the order book now. That is one aspect.

The second aspect is the Jal Jeevan projects, The Phase 2 we got and Phase 3 projects also they give in. So Phase 3 projects — in initial also, Phase 2 projects when they give in, the order value on a tentative basis they mentioned, they canceled that value and subsequently they crystallized it basing on the number of the villages and the number of borewells to erect basing on that they are giving. And as a result, after DPS prepared for the villages identified, so basing on that, the DPR, the values they are arriving and entering the contract on a piecemeal basis for various districts, for various villages is running into hundreds. So in the fourth quarter from the February ’23 to March ’23, in these two months, various agreements they concluded, that value is roughly about INR4,200 crores or so. And further, through that one, some increase, decrease in scope in various products are there. All these put together, around INR6,000-plus whatever difference you are asking that represents.

Prem Khurana — Anand Rathi — Analyst

And sir, when I look at the order backlog, how much would be from our own subsidiary company, the Pachwara, how much would that number be?

P. V. Vijay Kumar — Vice President, Finance

That is about INR4,000…

R. S. Raju — Director, Projects

[Indecipherable]

P. V. Vijay Kumar — Vice President, Finance

Pachwara coal mining is about INR4,393 crores, the order book backlog, what we consider the order book of INR50,000 crores.

Prem Khurana — Anand Rathi — Analyst

Okay. Sure. Second was — I mean, we’ve seen significant drop in our debt number, but I am assuming a part of this is also because Q4 generally tends to be very strong in terms of receipts because most of these government agencies, authorities released payments to exhaust their budgets. Fair to assume, at least in H1, we will get to see debt go up again because generally H1 tends to be a little slow in terms of payments, right? [Indecipherable] I understand, I mean, you could — we can have similar situation wherein you’ll be able to receive significant amount and debt would come back? And H1, is it fair to assume that the number could go up?

P. V. Vijay Kumar — Vice President, Finance

That is the working capital cycle of the construction industry. If you see the last two, three years, what you observed is correct coming down in the fourth quarter in the March month, particularly going up again in the Q1 and Q2. The trend would be continued. But how much? Is it in the same level or not? That is the different thing. But the trend continues. Particularly, for the coming down the debt in this year is the more orders the company secured in the terminal part of the last year, as a result, more mobilization advances were received, which — and also more collections were happening in the fourth quarter, particularly in UP projects where there Jal Jeevan projects were executing. All this again helped to bring down the debt. Again, in the Q1, Q2, the debt will go up and again will come down. That scenario would be continued.

Prem Khurana — Anand Rathi — Analyst

And sir…

P. V. Vijay Kumar — Vice President, Finance

[Indecipherable] principle, you need to compare the same number at the end of Q4 of last year and Q4 of this year. If you do that, INR1,184 crores was the bank balance outstanding at the end of Q4 FY 2022. Compared to the same quarter this year, the debt has been come down by — come down to INR980 crores. Even that way, you can see the significant decrease in the debt.

Prem Khurana — Anand Rathi — Analyst

And sir, just last one, this Vizag Urban, I mean, they are taking a some — trying to get our payments in the place and we’ve received only one tranche. Is there any risk of this deal not going through or it’ll only be extension that you would ever extend and the payments will come for [Indecipherable] Also, if you could help us understand whether the land has been put to use by the buyer or it is still lying idle with the buyer.

P. V. Vijay Kumar — Vice President, Finance

There are two three aspects are there. One is particularly the real estate market and what is in Andhra Pradesh, since it is a big pocket of land. The market is not that much favor to them to sell as they plan as they committed to pay out of the proceeds. And the loan what they committed is to pay by using the proceeds from the further sale by them. So — and in initial also, some time — more time taken for documentation or digitalization or survey or identification or any small, small issues. But premapesa, [Phonetic] there is no any big issue as far as the land or legality and other concern, only it is market perception.

Prem Khurana — Anand Rathi — Analyst

Thank you.

R. S. Raju — Director, Projects

You see, in the equity portion, we expect that it should flow within this year itself. However, the debt portion of INR300 crores plus interest, it will flow in another next two years.

Operator

Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Mohit Kumar — ICICI Securities — Analyst

Yeah. Good afternoon, sir, and congratulations on a very good set of numbers and especially strong work on balance sheet. My first question is on the, is it possible to provide us the order book breakup…

P. V. Vijay Kumar — Vice President, Finance

Can you just be louder please?

Mohit Kumar — ICICI Securities — Analyst

Is it possible to provide us the order book breakup between central government, state government and private agencies? And how much is exposure to Karnataka state government, if any? That’s the first question.

P. V. Vijay Kumar — Vice President, Finance

We will tell you in a couple of minutes those numbers. Now, the macro — the classification of the order book is the central government to order funding wise — if we break down into the funding wise, the central government funded projects are INR15,600 crores, state government funded projects are INR22,600 crores, PSUs INR4,000 crores…

R. S. Raju — Director, Projects

INR7000 crores.

P. V. Vijay Kumar — Vice President, Finance

INR7000 crores PSUs. They are totaling to about INR50,000 crores.

Mohit Kumar — ICICI Securities — Analyst

Understood, sir. So are you classifying JJM into central government funded? Is the right understanding?

P. V. Vijay Kumar — Vice President, Finance

As you know, ADB and the AAB banks funding also there and the central government funding, these UP projects 51% by the central government, that alone is there now about INR12,000 crores or so on hand orders.

Mohit Kumar — ICICI Securities — Analyst

Any exposure to Karnataka state government?

P. V. Vijay Kumar — Vice President, Finance

Now if we take the central government, Karwar projects, seabed projects, where INR2,000 crores plus orders are there, that is from the central government. Like that, all we added wherever the central government to is the major driver for the payments.

Mohit Kumar — ICICI Securities — Analyst

Understood, sir. Any exposure to Karnataka state government?

P. V. Vijay Kumar — Vice President, Finance

Hello?

Mohit Kumar — ICICI Securities — Analyst

Sir, any exposure to Karnataka state government funding?

P. V. Vijay Kumar — Vice President, Finance

Exposure is about INR4,000 crores. It represents 8% of the total order book.

Mohit Kumar — ICICI Securities — Analyst

And have you seen any slowdown in this after the government taking over? Is there any slowdown in the execution?

P. V. Vijay Kumar — Vice President, Finance

Only month — less than a month is over, isn’t it? But the orders what we have INR4,000 crores, they were received primarily three years back, two years back, one year back. The others what we received in the year ’22-’23 hardly about INR1,097 crores, which represents 2% of the total order book. And my team when we reviewed with the team, they are not anticipating any stoppage for this one, for this — even recent to four projects. And our exposure is not there in the last projects of four numbers of INR1,097 crores. In fact, we received mobilization advance from two projects and the money of the government department is with us about INR26 crores if you analyze in that math.

So as far as exposure of the — all the projects put together, INR4,000 crores is not that much in the books of accounts in terms of trade receivables, in terms of [Indecipherable] or retention money, etc. So we are not foreseeing any impacts or any effects going forward on this one. And we have to wait and see about the latest four projects. In that four projects, also, two projects received about four or five months back and two projects we received two months back like that are there.

Mohit Kumar — ICICI Securities — Analyst

Understood, sir. My second question is on the — is it possible to lay out the order outlook segment wise for FY ’24? And are you targeting a flat order inflow or are you targeting 20% higher order inflow than FY ’23?

P. V. Vijay Kumar — Vice President, Finance

Flat. Flat. Flat increase inflow, yes.

Operator

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

Parikshit Kandpal — HDFC Securities — Analyst

Yeah, sir. Hi. Congratulations on a good quarter and the year. My first question is on international business. So can you help us like — any update on the international business, because we are planning to shut it down and focus on domestic? Can you help us with that?

P. V. Vijay Kumar — Vice President, Finance

Yes, already, international business, for the last two, three years, people are working on the closing and almost they reached 95%, 96% level to close the transactions. All the projects are over. Only one project is in execution. There are lots of people expecting another three, four months, they reach the final stage of that project. As far as the collections are concerned, also happened in the year FY ’23, and they paid back about INR41 crores. Now, the loan — the investments outstanding to get back from the international domain is about INR38 crores.

Parikshit Kandpal — HDFC Securities — Analyst

So net exposure in international market is only about INR38 crores now?

P. V. Vijay Kumar — Vice President, Finance

The state crash government [Phonetic] and another exposure INR220 crores is there. NCC Infrastructure Holding Mauritius Limited, where one asset is there, that Harmony Dubai project asset that basing on that asset realization, the balance net exposure comes down to INR124 crores there as of 31st March, ’23 in the books of accounts.

Parikshit Kandpal — HDFC Securities — Analyst

My second question is on the debt reduction. So you said that there has been a big jump, almost INR750 crores of…

P. V. Vijay Kumar — Vice President, Finance

Your voice is very low. You need to be louder.

R. S. Raju — Director, Projects

Please repeat louder.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. So you said that the debt has reduced significantly, but it is on the back of also a large part of mobilization advance, increasing mobilization advance. So I think you received INR750 crores of mobilization advance in this year. Just wanted to get a sense how much was the mobilization advance standing as of third quarter and as of fourth quarter? And are these interest bearing?

P. V. Vijay Kumar — Vice President, Finance

Okay. Now, the fourth quarter, the 31st March, ’23 standing INR2,755 crores [Phonetic] and by third quarter ending, it stands at INR2,100 crores.

Parikshit Kandpal — HDFC Securities — Analyst

Not much change. So INR2,075 crores, you are saying as of fourth quarter end?

P. V. Vijay Kumar — Vice President, Finance

INR750 crores, change is there.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. INR750 crores change. Okay. There’s a big jump, that has gone towards reduction in your, basically, bank borrowing. And these interest — these mobilization advances are interest bearing, all this incremental INR750 crore.

P. V. Vijay Kumar — Vice President, Finance

Majority of these things are for interest-free advances. But if you take the company as a whole, almost 50%-50% level are there interest bearing and non-interest bearing.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. 50% is interest bearing, okay, sir. Okay, sir. Thank you and wish you all the best.

Operator

Thank you.

P. V. Vijay Kumar — Vice President, Finance

What I request at this stage is please restrict your questions and give chance to others. We’ll conclude the call.

Operator

Thank you. We’ll take the next question from the line of Rohit Natarajan from Antique Stock Broking. Please go ahead.

Rohit Natarajan — Antique Stock Broking — Analyst

Thank you for this opportunity. Sir, if I understand it correctly, you are looking at flat order inflow this year FY ’24. Can you help us understand which are the big ticket projects that you are looking in, as in you are looking at the high speed rail package C3 in your assumptions or are you looking at the UP-based water projects? Can you give us some color on those pictures?

P. V. Vijay Kumar — Vice President, Finance

In the article, my colleague, Mr. Neerad Sharma, will explain about this cost.

Neerad Sharma — Head Strategy & Investor Relations

Mr. Natarajan, good afternoon. Am I audible?

Rohit Natarajan — Antique Stock Broking — Analyst

Good afternoon, sir. You’re audible.

Neerad Sharma — Head Strategy & Investor Relations

Right. See, essentially, our business is a play on the opportunities available in the market. So high speed railway. When new packages come up for bidding, we definitely do participate. We have participated in the past as well. Other than this, there are a couple of other big opportunities. JJM, we have already touched upon in the morning. We have substantial order book from this space. And a lot of projects are coming up for bidding. Then, we have a big division devoted to electrical projects. So I hope you are aware about this RDSS scheme of the government. So a lot of projects are coming up there as well. So it’s really a play. Whenever the projects are ready for bidding as and when they are announced, we definitely intend to bid for those projects.

Rohit Natarajan — Antique Stock Broking — Analyst

I appreciate that part, sir. My second question will be more on the non-fund based limits, which we were planning to enhance it to INR15,000 crore, plus some fund based limits we have almost like INR2,200-odd crore. What is that position looking like at this point in time?

P. V. Vijay Kumar — Vice President, Finance

The total limits available with the company is INR15,200 crores, including fund-based limits of INR2,200 crores and INR13,000 crores of fund-based limits — non-fund based limits of INR13,000 crores and INR2,200 crores of fund-based limits. This is spread over 14 bank consortium, led by SBI. And as of now, we are comfortably pleased with the meeting our BG requirement and LC requirement and all that. So now, based on this financial performance of this year and outlook for this year, we are going to seek additional limits from the bankers’ consortium very soon.

Rohit Natarajan — Antique Stock Broking — Analyst

Thank you, sir. That’s it from us and all the best.

Operator

Thank you. The next question is from the line of Parvez Qazi from Nuvama Group. Please go ahead.

Parvez Qazi — Nuvama Group — Analyst

Yeah. Good afternoon, sir. Thanks for taking my question. Congratulations for the great performance and also thanks for uploading the presentation before the call. Sir, two questions from my side. First, what would be our pending order book in Andhra Pradesh? And also, what would be our overall receivables for these projects? And the second is, what is the kind of capex that we expect to incur in FY ’24?

P. V. Vijay Kumar — Vice President, Finance

Okay. As far as AP order book is concerned, there are two parts. One part is about the old projects which we secured prior to the change of the bond mix. That old projects now had to execute stand at INR700 [Phonetic] crores. And subsequently, we secured some other new projects. Those projects stand at INR2,790 crores, totaling to INR3,400 crores, the order of Andhra Pradesh state, which represents partly about 1.5% to 1.6% of the order book.

And as far as exposure is concerned, we have an exposure now about INR157 crores relating to AP Capital City projects. Earlier, it was INR264 crores. Similarly, the bank guarantees, earlier or at the end of the previous year, we have INR346 crores. Now it has come down to INR267 crores. These are the numbers about the AP projects or AP state.

Parvez Qazi — Nuvama Group — Analyst

On the capex guidance, sir?

P. V. Vijay Kumar — Vice President, Finance

[Indecipherable] capex for the year ’23-’24 you are asking?

Parvez Qazi — Nuvama Group — Analyst

Yeah.

P. V. Vijay Kumar — Vice President, Finance

So about INR275 crores or so we are planning. It depends upon how we receive the new projects. We cannot give exact figure. Only it is our estimate of what we consider in our business plan. If you get any new verticals, the projects like tunneling, bullet speed train projects, again, the capex get increased.

Parvez Qazi — Nuvama Group — Analyst

Sir, lastly, what was the execution in the international subsidies this year?

P. V. Vijay Kumar — Vice President, Finance

That — whole tender part, very small part is there that was over, wherein some INR5 crores to INR6 crores or INR7 crores is there. So last year, execution is — so including what we got the claims, about INR245 crores. In the top line, INR45 crores is participated from the international LCMA. [Phonetic]

Operator

Thank you. The next question is from the line of Vishal Periwal from IDBI Capital. Please go ahead.

Vishal Periwal — IDBI Capital — Analyst

Yeah, sir. Thanks a lot for the opportunity. One clarification that guidance on revenue growth and margin that has been given, that’s for standalone or consol, sir?

P. V. Vijay Kumar — Vice President, Finance

That is standalone.

Vishal Periwal — IDBI Capital — Analyst

Okay. Fine, sir. And another question is on the credit rating. I think you did mention briefly that couple of factors that probably the improvement that we have seen in financials. So can you guide what exactly goes into the improvement of credit rating? And when this review is expected, sir.

P. V. Vijay Kumar — Vice President, Finance

See, the general surveillance is due sometime down. Last time, if you see, the rating was taken in mid-time review and was increased — enhanced from A minus to — A to A-plus. This time, also, we are requesting them, because of the substantial performance posted by the company. And there is a tremendous change in the numbers in terms of ratios. So we are asking them for the midterm review. Hopefully, let us see how the things will move.

Vishal Periwal — IDBI Capital — Analyst

Okay. Thanks. And maybe one last question. Karnataka government, you mentioned the order is around — order book is around INR4,000-odd. This includes the metro work?

P. V. Vijay Kumar — Vice President, Finance

You see, this question is already explained. What I request is people should restrict their questions and then give a chance to others looking to the limited time we have, all right? Okay. Anyway, what’s your question?

Vishal Periwal — IDBI Capital — Analyst

No, my question was like Karnataka state government order is INR4,000-odd crores. So this includes the Bangalore metro work?

P. V. Vijay Kumar — Vice President, Finance

Yes. Includes that Bangalore metro rail works. That itself represents INR2,000 crores now.

R. S. Raju — Director, Projects

Which is jointly funded by central government.

Operator

Thank you. We’ll take the next question from the line of the Deepika Bhandari from Phillip Capital. Please go ahead.

Deepika Bhandari — Phillip Capital — Analyst

Hi, sir. Congratulations on great set of numbers. I just need a — two questions from my side. Any comment on sense of arbitration and TAACA?

P. V. Vijay Kumar — Vice President, Finance

That already we explain that one. And the arbitration process is over and arbitration order is under preparation and we expect that order between June 2. We are talking about Taka. Taka, there is no any significant improvement over the TAACA, but we are trying for amicable settlement with the TAACA. That may take some time.

Deepika Bhandari — Phillip Capital — Analyst

Okay. Sir, another last question from my side, the order book in order inflow does not include the April orders that we have received. Is my understanding correct?

P. V. Vijay Kumar — Vice President, Finance

You’re right.

Deepika Bhandari — Phillip Capital — Analyst

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

Operator

Thank you.

P. V. Vijay Kumar — Vice President, Finance

We may take one or two questions now, and we are at the close of the session, please.

Operator

Sure. We’ll take the next question from the line of Jiten Rushi from Axis Capital. Please go ahead.

Jiten Rushi — Axis Capital — Analyst

Yeah. Good afternoon, sir. Congratulations on good set of numbers. My question is on the [Indecipherable] you have given…

Operator

Sorry to interrupt you. Please use the handset mode. The audio is…

Jiten Rushi — Axis Capital — Analyst

Can you hear me now?

Operator

Yes, sir.

Jiten Rushi — Axis Capital — Analyst

Hello. Yeah. Thank you, sir. So in terms of the revenue guidance, we are giving 20% top-line growth. So my question would be what would be the contribution this year from the newer project? So the projects like almost INR13,000-plus we have won in Q4, so we are expecting the INR16,000 of revenue only from the old order backlog? Or we can expect something from the new FY ’24 as a contribution revenue?

P. V. Vijay Kumar — Vice President, Finance

So 90 — 85% to 90% from the existing orders and 10% to 15% to participate from the new projects.

Jiten Rushi — Axis Capital — Analyst

These new projects which are won in Q4, right, sir?

P. V. Vijay Kumar — Vice President, Finance

Yes. Yes.

Jiten Rushi — Axis Capital — Analyst

And, sir…

P. V. Vijay Kumar — Vice President, Finance

No, new projects means new products which are going to get in the year ’23-’24.

Jiten Rushi — Axis Capital — Analyst

Sir, any L1 projects as of now, can you highlight the L1 projects in terms of value and segment?

P. V. Vijay Kumar — Vice President, Finance

We will not disclose L1 projects, but you know that in the April, we received about INR3,000 crores. And in a couple of days, the company also put the — in website the orders received in the May month.

Jiten Rushi — Axis Capital — Analyst

Sir, just last thing, you are expecting INR26,000 crores of inflow this year. But sir, considering being an election year and from December you’re expecting code of conduct, do you feel that this INR26,000 crore inflows we can achieve this year? It’s only now seven, eight months remaining. How confident are you and from which — particularly which segment can broadly drive this? You explained electrical division, but not in terms of value. But in terms of value, which sector — how confident you are from which government agency you can get more orders in terms of value and this year being election year? Can you please highlight on that, sir?

P. V. Vijay Kumar — Vice President, Finance

All verticals are working on that one, and more of vertical division being the biggest opportunity in the market out there. So companies continuously working on those things. Similarly, the company also working on the new verticals like tunneling or bulletproof trains. So the major project opportunities are there in the market. People are working accordingly. And our business plan is there. That whether we receive or not that is a different thing again, what is the plan of the company, just to explain.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Vaibhav Shah for closing comments. Thank you, and over to you, sir.

Vaibhav Shah — JM Financial — Analyst

Thank you, sir, for giving us the opportunity to host the call. Any closing remarks from your end?

P. V. Vijay Kumar — Vice President, Finance

Yeah. I think this is all right. Now we’ll close the call. Thank you, everyone, for taking the time. I thank Vaibhav from JM Financials for arranging this call successfully. Thank you, each and everyone.

Vaibhav Shah — JM Financial — Analyst

Thank you, sir.

Operator

[Operator Closing Remarks]