Patel Engineering Limited (NSE: PATELENG) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Kavita Shirvaikar — Whole-Time Director and Chief Financial Officer
Rahul Agarwal — Head Strategy and Finance
Analysts:
Unidentified Participant
Harsh Patel — Analyst
Sukrit Patel — Analyst
Dhananjay Mishra — Analyst
Chirag Shah — Analyst
Viraj Mahadevia — Analyst
Prashant Keshri — Analyst
Neeraj — Analyst
Rachel — Analyst
Amisha Vora — Analyst
Rohit Deshmukh — Analyst
Freya Vora — Analyst
Devanshi Shah — Analyst
Preeti Agarwal — Analyst
Nidhi Malhotra — Analyst
Jainish Shah — Analyst
Presentation:
operator
Good day and welcome to Patel Engineering Limited Q1FY26 earnings conference call hosted by Share India Securities Limited. As a reminder, all Participant 9s 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Patel from Share India Securities. Thank you. And over to you, Mr. Patel.
Harsh Patel — Analyst
Thank you. Good evening everyone. I would like to congratulate management on a very good set of numbers on behalf of sharing their securities. I would like to welcome all the participants for Q1FR26 earnings conference call of Patel Engineering Ltd. We are pleased to have with us the management team represented by Mr. By Managing Director Ms. Kavita Sirvaikar and Chief Financial Officer Mr. Rahul Agarwal. We will have the opening remarks from the management followed by Q and A session. Thank you. And over to you, ma’. Am.
Kavita Shirvaikar — Whole-Time Director and Chief Financial Officer
Thank you. Harsh. Good evening everyone. Thank you for joining our Q1 FY26 earnings call. It’s a pleasure to speak with you all here today. We have uploaded the presentation summarizing the company’s performance for Q1 FY26 along with the results on the stock exchange. I hope you have had the opportunity to review the same. Overall, this financial year has commenced on a very good note. And we are happy and proud to present a good set of financials for Q1FY26. We have been able to achieve a consolidated revenue of Rupees12.33 crore which is growth of around 12% for the quarter as compared to corresponding previous quarter.
And our net profit has grown by around 56% from 48 crore Q1FY25 to 75 crore in Q1FY26. In this quarter we have received letters of awards for three projects. This include the 240 megawatt Hio Hydropower Project by Nicco which is located in Arunachal Pradesh and valued at rupees 711 crore. Next is the Kundana Dam project by Citco located at karjat valued at rupees 13, 19 crore. And Neera Devda Rice bank main canal irrigation project from Maharashtra. Krishna Valley Development Corporation located in Maharashtra and valued at around thousand crores which is to be executed in JV.
And our share is around 200 crore. Thus altogether orders of around 2 to 5.0crore have been received in the first quarter. Besides this project, recently post Q1 we have also received LOI for the Teesta 5 hydropower project from NHPC located in Sikkim valued at rupees 240 crore this quarter. Strong revenue are due to our team’s commitment and accelerated execution at all project sites despite impact of early monsoon at some of our sites. Now let me take you through some of our operational achievements for the quarter. At Arun 3 hydropower project which is located in Nepal, we completed the powerhouse unit one and also the project’s 155 meter shell shaft having a massive 24 meter diameter.
At par hydropower project located in Jammu and Kashmir we achieved breakthrough of the main access tunnel at the powerhouse service bay level. The project also achieved pouring of our 1 lakh 20,000 cubic meters of concrete and casted the undergru slab At PJRW project which is an underground water tunnel located in Mumbai we completed 1972 meters of tunneling using a 2.8 meter diameter TBM and achieved a breakthrough at the Ghatkopar high level reservoir shaft at Subansari hydropower project which is located in Arunachal Pradesh we completed all the civil works of the 12.5 kilometer water conductor system at T7 tunnel project which is located in Sikkim of also achieved significant progress where we completed over 3 kilometer of lining work.
This quarter has been steady progress and we expect to continue the momentum going forward. Moving on to our order book, as of June 30, 2025 our order book stands at Rupees 16,285 crore which exclude the Tista Phi hydropower project of around 240 crore for which LoA was received recently in Q2 out of the 61% of the order book comprises hydropower projects, around 20% is irrigation, 7% tunneling and the remaining 12% from urban infra and other segments. Receiving the new orders of around 2,500 crores so far has set a positive note for the remainder of FY26.
The Indian Infrastructure sector continues to be a key driver for economic growth although the ordering activity have not gained enough momentum till now as was expected. However, with the suspension of the Indus Water Treaty, we are now witnessing a significant acceleration in execution and tendering of several long stall projects. After many years, big projects like the Sawalkot Dam are finally back on track making a fresh start for India’s water and power plants. Other hydropower projects like the 240 megawatt Ori, 260 megawatt Dulcie and 700 megawatt Tattoo 2 are also in advanced stage of tendering. We currently have tenders submitted of around 11,000 crore which are yet under evaluation and further identified projects of around 40 to 50,000 crore for which bids are expected to be submitted this year.
Paraster State has been taking keen interest in developing PHP projects and have recently signed multiple MOUs in recent months for development of these projects and have set a long term target of achieving 1 megawatt PSP capacity for the state. In June, the Ministry of Road Transport and highways approved 19 road and tunnel projects for JNK with an investment of around 10,000 crores. These are strategically important projects which will help improve logistical support and troops movement. In conclusion, the focus of the government on hydropower and tunneling aligns perfectly with our core expertise. This opens up a huge pipeline of opportunities for us moving forward and we are already seeing some major tenders being floated.
We remain committed to focus on execution and maintain steady growth. Thank you and now I will hand over it over to Rahul, our CFO to take you through the company’s financial numbers.
Rahul Agarwal — Head Strategy and Finance
Thank you Kavitha. Good evening everyone. I will now take you through the company’s financial performance for the quarter On a consolidated basis the revenue for the quarter is 1,233 crore which is up by 12% year on year driven by strong project execution. Operating EBITDA for The quarter is 165 crore, a margin of 13.4%. Profit after tax has increased by around 56% and stands at 75 crore with a margin of 6.09%. On a standalone basis the revenue is 1,224 crore an increase of 13%. Operating EBITDA is 159 crore and EBITDA margin is around 13%. Profit after tax is 69 crore with a margin of 5.67%.
Sector wise revenue breakup Hydro is 55%, tunnelling is 19%, irrigation is also 19% and roads and others are 7%. Our book to bill ratio currently stands around 3.3 providing strong revenue visibility. Our total debt as on 30th June 25th is 1527 crore out of which working capital debt is 981 crore and term debt is 546 crore. The debt as in March was 1603 crore, thus implying a reduction of 76 crores during the quarter. Total debt plus contractee advances as of 30th June is 2145 crore as compared to 2267 crore as of March. Hence a reduction overall of 122 crores in the quarter.
The finance cost has accordingly reduced from 84 crores to 73 crores in this quarter compared to Q1 last year. Overall debt to equity has improved from 0.42 in March to 0.40 in 30 June. The net working capital days is almost similar at around 168 days. And after adjusting of land arbitration claims and in cash and bank balances the net working Capital is around 110 days. We remain positive on the outlook of the sector, the enhanced government spending and their focus on renewable energy. And we expect to continue the momentum going forward and focus on execution across all project sites.
That was the brief for Q1. We are now happy to take questions which you have. Thank you very much.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sukrit D. Patel from Eyesight Fin Trade Private Limited. Please go ahead.
Sukrit Patel
Good evening to the Patel Engineering. Yeah. Yeah. So good evening to Patel Engineering team. My name is Sukrut Patil and I. Have a specific question for Mrs. Shah. Is. Is. Ma’. Am.
Kavita Shirvaikar
Yes sir. Yes sir, I’m there.
Sukrit Patel
Yes. So my question is as Patel looks to grow over the next few years especially with its presence in hydro, what will be your plan of action about expanding into your infrastructure segments or areas that could diversify the order book and improve margin visibility. And a follow up is that if in case there are project delays or funding bottlenecks to slow down execution process, what kind of backup or alternative growth plan are you building in to keep the momentum intact and protect the profitability? And just on the ending note, have I mentioned your name correctly? Is it Shri Vaikar?
Kavita Shirvaikar
Yeah, it is Shiruvaikal. So thank you. Thank you sir. See, let me start with our current order book. See, our current order book is around 16,500 crore. Out of the 60% is hydro, 20% is irrigation and rest from other sectors. So as you aware traditionally we are focused on hydro, civil work and tunneling and irrigation. So going forward, also looking at the current opportunity available in the sector itself where we have an expertise and government plan going forward, like as I mentioned in my Speech also that due to Indus Water Treaty, the hydropower and dam and everything is government is also completely focusing and long start project also getting clearance faster.
So considering the opportunity available in the sector we will continue to focus. Our main focus will in the similar areas only. Like our order book is first this year we have. You have seen the good momentum. We have 2000 crore plus order. We have received LoA. Our target is to increase the order book to around by 25,000 crore by this year end. So we expect another 8 to 10,000 crore addition in the order book. Now the plan as you have seen like funding of the project and such thing. As you have seen we are consistently reducing the debt.
So our financial position and balance sheet is stronger day by day. Our rating also has improved from BBB to a triple B plus to A minus now. So we are focusing on monetization also current year our target is to reduce around 150 to 200 crore debt. Out of that 75 crore we have already achieved in the first quarter itself. Going forward we have enough bank guarantee lines available with us to bid for these kind of projects. So we see this is a. We are fairly confident that considering overall situation we’ll be able to achieve our target.
I hope I have answered your question. If anything else please you can tell me.
Sukrit Patel
Yes. So to just sum up whatever we have discussed. So hydro project is somewhere where you are very bullish on. I would like to understand just one final thing is. Is there one area which you are watching execution risk more closely and what kind of risks are you factoring factoring in those areas.
Kavita Shirvaikar
So see let us evaluate hydro. What kind of in past I think you might have seen lot of projects getting delayed. Delayed beyond. You know beyond expectation. So now what is the reason? One is the hydro is the environmental risk and one is the approval risk and all such risk. So now even government also taken various steps, you know to improve this. Unless and until land acquisition is done 90 to 100% they are not issuing the LOI. So we have overcome this risk. So going forward we see key. There will not be unnecessary delay in execution of the project.
Because government is also a proactive resolving our all issues. Timely resolving all our issues. If you see our performance Subhan Sari we have complete almost completed the project Nepal Arun 3 we have almost 90% our work is done. We have completed tunneling P15 tunnel last year Selah Pass tunnel Last year we have completed to uc. Now the execution cycle is. You know it’s a fast and government with the government Support, focus, timely decisions, everything. Execution is also moving fast. So we don’t see any major risk as of now.
Sukrit Patel
Okay, great. Thank you very much for the guidance and best of luck for all your future ventures ahead.
Kavita Shirvaikar
Thank you so much.
operator
Thank you, sir. Ladies and gentlemen, to ask a question please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Dhananjay Mishra from Sunidi Securities. Please go ahead.
Dhananjay Mishra
Yeah. Hi. Thanks for the opportunity. Am I audible?
operator
Sir, your voice is very low.
Dhananjay Mishra
Am I audible now?
operator
Can you please use your handset, ma’? Am.
Dhananjay Mishra
Sir, I’m using handset only.
operator
Okay, sir, please go ahead.
Dhananjay Mishra
So just wanted to check in this quarter we have grown about 12%. Right. So. And last time we. For the full year we have given guidance of 5%. So any change in guidance and also this quarter margin has come down. So any one off in this quarter as well.
Kavita Shirvaikar
See, I’ll tell you. This year our target is to cross the 5000 plus. That was initially we said out of this first quarter we have already achieved 1240 crore. So we are hopeful and we are confident that we’ll be able to meet our target. Now coming to the EBITDA margin. In beginning only we said our EBITDA margin will be 13 to 14%. And quarterly it will vary based on the project execution which work we do. So that we will continue to. You know, we are confident that we’ll be able to maintain that kind of market.
Dhananjay Mishra
Okay. And with respect to order inflow, we are expecting 8,000. So any specific project we are, I mean bidding for which will be announced or pending will happen in next 2, 3 quarters.
Kavita Shirvaikar
Next 2 to 3 quarters we are expected to build around 14 to 40,000 to 50,000 crore of work which mainly majorly hydro, civil and tunneling and irrigation only. And considering our success ratio in the past which is 20 to 25%. So we are fairly estimating that around 8,000 crore work we should be able to get.
Dhananjay Mishra
Okay. And this quarter we have also seen working capital has improved slightly. So can we expect this trend to continue in upcoming quarter.
Kavita Shirvaikar
As we are. We are achieving the turnover. As I mentioned that government also has taken various steps and to release the payment part and everything. So. Yes. Yeah. We are. We are hopeful that this thing will continue.
Dhananjay Mishra
Okay. Okay, ma’. Am. Thank you.
Kavita Shirvaikar
Thank you so much. Thank you.
operator
Thank you. Sir. The next question is from the line of Chirag Shah from White Pine Investment Management Private Limited. Please go ahead.
Chirag Shah
Yeah, thanks. For the opportunity. So the first question is if I go back peak order book was around 20,000 crores and now we have seen a gradual decrease. And I understand it is more to do with awarding happening from government side rather than anything from our side. But any thoughts on that? How do you look at this? This ramp up of order book and related is of this 40 50,000 crore that you indicated. So by when do you expect the submission would happen for at least 60, 70% of the project.
Kavita Shirvaikar
By this financial year we expect to submit this needs.
Chirag Shah
Okay. And any thought process on how to look at order book and why I’m asking this question is as I see as an outsider it appears the focus of government seems the the power hydropower seems to be slightly lower priority as compared to let’s say a difference which is a different segment altogether. But from government allocation or gel driven machine or solar which are small physic items may be retail oriented but much that government is looking to spin. So in and given the hydro being a very large ticket size projects in general. So any anything that you can share which gives you confidence there will be a pace of change happening from the government.
Kavita Shirvaikar
After the Indus Water Treaty government focuses on large dam and high clearance of large dam and hydropower projects. So they because as you rightly said there is a. You know because of the large ticket size it takes time for the approval and all the process. But once approved but they are expediting and we see now going forward next 2/4 lot of projects are coming for the bidding actually.
Chirag Shah
And if you can also indicate it’s not very large project but projects which are in the range of 2000-5000 crore project. So how many of this type of projects are coming up? Because I don’t think a much larger size project government will still take a lot of time. But up to 2000 crore or up to 5000 crore project can happen at a faster pace. So if you can help us understand what size of projects that we are looking to bid. This 40 50,000 crore project that we are looking to bid are they there are one or two big size projects or most of them are like thousand 2000 pro type of project.
Kavita Shirvaikar
So most of them are From,000 to 200025003000 in the range of that kind of value and one or two large projects I can say that one or.
Chirag Shah
Two large projects would take away 60% of the budget. The 60% of the 40:50,000 crore 30%.
Kavita Shirvaikar
You can say.
Chirag Shah
Sorry I missed you, sorry for that.
Kavita Shirvaikar
If you can repeat not 50 to 60%. I say maybe 25 to 30%.
Chirag Shah
Okay. Okay. And anything on pump storage that you.
operator
Would like to interrupt. There is some background noise coming from your side. Chirag.
Chirag Shah
Sir, Just a sec. Is it better now? Is it better now?
operator
Yes.
Chirag Shah
Yeah. So one last question. I’ll come back into you again. On the pump storage side any. Because that was supposed to be a very big agenda on government side. But again it seems to have gone on some kind of back burner. So any update you could share on urgency on the government side?
Kavita Shirvaikar
I’ll tell you, Palm Storage, there are government projects also and there are some of the private labels, private players also who have taken up further development. So we are targeting both these projects and which 40,50,000 crore which we said that includes PSP also.
Chirag Shah
Okay. And at least 20% of that would be PSP nature or it would be a lower number.
Rahul Agarwal
We’ll have to check. Maybe 10%. Maybe 10.
Chirag Shah
Maybe 10%. No. Fair point. A ballpark. Ballpark is good. Yeah, yeah. Thanks a lot. Thanks a lot. All the.
operator
Thank you sir. The next question is from the line of Viraj Mahadevia from Moneygrove. Please go ahead.
Viraj Mahadevia
Hi sir. Ma’. Am. Encouraging results. A couple of quick questions. One is you paid down debt of about 80 crores in the quarter. Can we reasonably assume over by FY27 your term loan will be completely repaid. And were there any one offs or asset monetizations in Q1?
Rahul Agarwal
Viraj, we are looking at, you know 150200 crore deduction this year. So term debt by next year. Obviously majority of the term debt will go. But then monetization. We are looking to do monetization also this year. Some land banks and money expected from claims also.
Viraj Mahadevia
And none of that has happened in Q1, right?
Rahul Agarwal
Q1?
Viraj Mahadevia
No.
Rahul Agarwal
We have got some money, you know from the government on claims and all but not substantial.
Viraj Mahadevia
Understood. Secondly, given the improvement in your ratings. What is your current interest expense as a percentage and is it likely to go lower?
Rahul Agarwal
Interest expense currently is between 11, 11 and half. So. And it may go lower also. Right now we are looking at talking to our lenders to get their interest rate going down.
Viraj Mahadevia
Great. And my last question is given that. You know, I’m referring to your deck. Showing the project completion. Do you expect a meaningful uptick in execution and consequently billing in the latter part of this year?
Rahul Agarwal
That is already happening. We have accelerated execution at all project size. That is where we could achieve a 12 13% growth in revenue this quarter.
Viraj Mahadevia
Okay, great. And lastly, do you intend to do. Some kind of roadshows for investors given the limited institutional investor in the shareholding. Book and the fact that your company is relatively undervalued to the other infra plays.
Rahul Agarwal
Yeah, we’ll be happy to do it.
Viraj Mahadevia
Okay, thank you. All the best.
operator
Thank you, sir. Ladies and gentlemen, to ask a question, please press star and run now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Rahel from Sapphire Capital. Please go ahead.
Rachel
Hi ma’, am, good evening. Can you hear me? Good evening.
operator
Yes sir.
Rachel
Yes, yes. Hi ma’. Am. Just, you know, going back to that growth, revenue growth question, I was just not able to understand clearly. So you’re saying the momentum is to continue. Right. In the coming quarters because execution is looking good and you have a very healthy order book. Given that you’ve done a strong double digit 12% growth in quarter one, it’s fair to assume that this can be the same growth rate for the whole year of FY26.
Kavita Shirvaikar
So FY26, as I mentioned earlier, our target initial target was to achieve cross 5000 crores this year, also revenue. But now since we have accelerated, we said we are confident to, you know, achieve the 5 to 10% growth.
Rachel
Okay, so why not like more than 10% given that you see the shift in momentum is on the higher side and it’s to continue. So are you, are you just being conservative at this moment?
Kavita Shirvaikar
So yes, we are. One is, we are conservative. Second, we are saying our current order book is 16,500 crores which is three, three and a half book to build ratio. And plus we are expecting some of the new projects during the next two to three quarters. Our cycle is such once we get the project, 6 month time it takes for mobilization and then it starts giving, it starts adding to the revenue. So considering overall and on the conservative side, we are saying, see, we are confidently, you know, confident, hopefully we should be able to cross 5,000 crore this year also.
And overall that 5 to 10% guidance.
Rachel
And both revenue and margins, they both depend on the kind of projects you execute. Right. Like given in, in terms of value of the order.
Kavita Shirvaikar
Right.
Rachel
So if you do large order values, then both revenue and margins can go. Up.
Kavita Shirvaikar
Margins, more or less. EBITDA margins, you said it will be around 13, 13 and a half percent that we should be able to maintain. And based on the growth of the turnover and we are, you know, fairly hopeful that our net profit margin will increase.
Rachel
Okay. Net profit will increase. Okay. And any Sort of. As of today, the way you see the current scenario, you’ve also bidding for large projects. Your pipeline is pretty huge as well. So any. Any sort of like general outlook for the next year as well. FY27 which you’ve internally like projected for the company.
Kavita Shirvaikar
So as we expected 8000 crore auto book and at the year end we expect around 20 to 25,000 crore order book. Considering that from FY27 onwards we are hopeful to achieve around 10 to 15% growth going forward.
Rachel
And any scope of improvement in the margins there, given the new orders margin.
Kavita Shirvaikar
EBITDA will remain in the similar range and net profit will go up based on the growth in the revenue.
Rachel
Okay. Okay. Got it. Thank you ma’. Am. All the best to you.
Kavita Shirvaikar
Thank you.
operator
Thank you sir. The next question is from the line of Prashant Keshri Sagar from Universe Corporate Research Private limited. Please go ahead.
Prashant Keshri
Yeah. Good evening ma’. Am. Am I audible?
Kavita Shirvaikar
Yes, you are audible.
Prashant Keshri
Yeah. In the opening remarks you mentioned about the civil works of a connecting tunnel. Being completed for Subansari hydroelectric power. And later on in the question, correct me if I’m wrong but just your. Hello.
Kavita Shirvaikar
Yes. Yes.
Prashant Keshri
So am I correct on this part? Because I may have.
Rahul Agarwal
No, no. It was a water conductor.
Kavita Shirvaikar
Water conductor system. I said. So once every hydropower project we completed all the civil works of the 12.5 kilometer water conductor system.
Prashant Keshri
So the conductor was from the dam to the powerhouse or how. Which part it was like.
Rahul Agarwal
Yeah, it is. It is part of the power also.
Prashant Keshri
Yeah. Connecting to the dam or to the reservoir?
Rahul Agarwal
Yeah, it is part of the powerhouse only. So it is all connecting various powerhouses.
Prashant Keshri
Okay. And the reason I’m asking you, were you involved with the dam civil work of the dam with Subhan Sari?
Kavita Shirvaikar
No, we are not involved civil work of the dam in Subansari project powerhouse and HRT and other package.
Prashant Keshri
Okay. And second question is on the Debang. Hydroelectric project where you are bidded. So can you share at what stage. Your bidding has come to.
Kavita Shirvaikar
Let me tell you that it is coming up for rebidding which will be come up in next one or two months.
Prashant Keshri
Oh, it is coming for rebidding. Okay. And the third question is in this order book which you said 40,000 crores. Or 50,000 crores which are planning to bid. What part would be the hydroelectric in that?
Rahul Agarwal
Around 60%.
Prashant Keshri
60% on that. Okay. So that would include that Debang which. You are building actually. So. Hello.
Kavita Shirvaikar
Yeah, that will include debunk also.
Prashant Keshri
Okay. Okay, ma’. Am. And Last question is regarding your projects in Arunachal. So.
Kavita Shirvaikar
Yes. Yes. Hello.
Prashant Keshri
Yes ma’. Am.
Kavita Shirvaikar
I can’t hear him further. Hello.
operator
Ma’, am, the line for the current participant is dropped.
Kavita Shirvaikar
Okay.
operator
So can we move to next question?
Kavita Shirvaikar
Okay.
operator
Okay. The next question is from the line of Chirag Shah. Please go ahead.
Chirag Shah
Hello. Am I audible?
operator
Yes.
Chirag Shah
Yeah. Just one question. You indicate you did you mentioned that you are targeting a 20 to 25,000 crore order book by end of the financial year at 26.
Kavita Shirvaikar
Yeah. We are targeting careless. It should be between 20 to 25,000 crore our order book.
Chirag Shah
Okay. And this is net of the execution, right? That you will do, right? Correct. So. Okay. And of that we have till now got order of what? 1200 crores, right?
Rahul Agarwal
2,500. 2,500.
Chirag Shah
2,500 dot yeah. Sorry. 2500. So basically we are targeting an order book incremental order book of around 10 to 12,000 crores.
Kavita Shirvaikar
We said right now it is 16,000. So incremental is around 8,000 crore we said.
Chirag Shah
But there will be some drawdown also, right? Of the 16,000 crore.
Kavita Shirvaikar
Yeah. So net increase around 8,000 crores.
Chirag Shah
Yeah. Yeah. So the option actual additional new order book that you are targeting is actually and followed question is. In the past has it ever happened that suddenly big order have come in one year itself like 20. 25,000 crore order addition happens in one year. Has it ever happened in the past or. Government is generally reasonably consistent in ordering. In terms of ordering announcements.
Rahul Agarwal
See past. So we have not received 20,000 odd crores one year. In one year.
Kavita Shirvaikar
So we saw 8 to 10,000 I think last to last year it’s 8,000. I think 8,500 crore we had received in one single year.
Chirag Shah
In one single year. Okay. And debunk and change it to whoever wins it. It can change that. That. And just one thing. Do you expect debunk to happen this year And I understand it’s not in in your hand but do you. Because it’s a technical rebidding kind of a thing. Do you expect that com that the government would fasten upon that or because it’s a big project they will take their own quick time.
Kavita Shirvaikar
No, it is already announced for the bidding. So next two months we should. It should come up for bidding actually.
Chirag Shah
Okay, great. Thank you.
Kavita Shirvaikar
Thank you.
Chirag Shah
Thank you.
operator
Thank you, sir. Ladies and gentlemen, to ask a question Please press star and 1. Now participants who wish to ask questions may please press star and one at this time. The next question is from the line of Neeraj from K Cap Research. Please go ahead.
Neeraj
Good evening. Am I audible?
operator
Yes, sir, go ahead.
Neeraj
Yeah. Thank you for the opportunity and congratulations on a good set of numbers. I want to understand our contingent tax liabilities and our claims. I want to understand, is there anything.
Rahul Agarwal
You can share which can help me understand how much of our liabilities might actualize and how much of our claims under arbitration might actualize and in particular the tax liabilities, whether we have gotten.
Neeraj
Some favorable orders or some favorable unfavorable initial order.
Rahul Agarwal
Thank you. So see, the contingent liabilities are mainly on account of bank guarantees and. And some taxation liabilities which are there. So these taxation liabilities are where multiple orders have received in our favor actually. And it has been challenged by the authorities at higher levels. And that is why it is there forming part of liabilities. Thank you, that’s very helpful.
Neeraj
And on the contingent claims or arbitral.
Rahul Agarwal
Claims, we have arbitral claims and awards of combined around 3000 crores. So this is all. You know, when we get awards we get with interest. And also we expect even if you consider 50, 60% of this value coming in with interest, the number will be much higher. Thank you, that’s very helpful.
Neeraj
That’s all from my side.
operator
Thank you, sir. Before we take the next question, we would like to remind participants that. You may please press star and one to ask question. The next question is from the line of Amnesh from PL Capital. Please go ahead.
Amisha Vora
Yeah. Hi sir, I have a couple of questions. My first question is regarding the psp. Yes, there’s a huge opportunity. But what I want to know is that what is the proportion of ESP to our order book and what are our plans to bid for more and where do you think we will stand in terms of the order book from PSP by the end of the current year? The second question is regarding the promoter pledge which remains quite High at 85%. So any timeline or any guidance you can give as to how that number will pan out in the coming year or so.
Rahul Agarwal
See right now order book has only one project of PSP which is Kunda Hydroelectric. PSP project is in Tamil Nadu. There are a lot of PSP projects coming up for bidding right now. Out of the bidding pipeline of 40,50,000 crores, around 10,15% is from PSP projects. So we are hopeful that we’ll get some projects in there as well. And the next question, Sorry, what you had apart from PSP Promoter pledge. The Promoter pledge. The Promoter pledge is expected to come down eventually. Right now rating is A minus and numbers and all are Good. So now we’ll start talking to the lenders to reduce the place.
Amisha Vora
Okay. So what it exactly means is that the amount of money which has been taken against those shares. So that is significantly less than the total number of shares encumbered.
Rahul Agarwal
Right? Right. Right.
Amisha Vora
Okay. So by just pure adjustment, how much that 85% number can come down to.
Rahul Agarwal
If we have to talk to the lenders and then you know, can give that number. But we’ll start talking to them to reduce. Last year after our promoter had expired, we had not had such discussions with the lenders. As of now we will have, you know, and then we can come back.
Amisha Vora
Okay. But any targets which the company has to reduce that number for the next 12 years.
Rahul Agarwal
So we want to reduce that significantly down.
Amisha Vora
Okay, Thanks a lot.
operator
Thank you. Sir, the next question is from the line of Rohit Deshmukh from Vishwai Enterprises. Please go ahead.
Rohit Deshmukh
Hello, I’m audible.
operator
Yes, please go ahead.
Rohit Deshmukh
Okay. What is the current share of hydropower projects in our total order book and how much of it is under active execution right now. Around 60%. You know, hydro is there of a total order book and all projects are under execution. Yes. Okay. And which region states contribute the most to the agro portfolio?
Rahul Agarwal
So it is jnk, Himachal and Northeast.
Rohit Deshmukh
Okay. Is there any losses due to heavy flood for rail?
Rahul Agarwal
See, during the monsoon, you know, rain happens and also we are prepared for that.
Rohit Deshmukh
Okay. Any projects over 500 crores in hydro currently being integrated?
Rahul Agarwal
Yeah, yeah, we have large projects. Kiru Kwar, Bansuri, Chongtong. All large projects are there.
Rohit Deshmukh
Thank you. That. That’s all from my side.
operator
Thank you, sir. Before we take the next question, we would like to remind participants that. You may please press star and one to ask a question. The next question is on the line of Viridi Vora from SAS Capital. Please go ahead.
Freya Vora
Yeah, thank you for the opportunity. So I have a question that are there any key projects currently facing execution challenges such as delays or cost escalations?
Rahul Agarwal
So there are no major delays anywhere. And cost escalation, whatever is there, it is a pass through for us in terms of contract.
Freya Vora
So any mitigations and like you have taken regarding that cost escalations?
Rahul Agarwal
No, it is. It is clearly defined numbers in contract. Yes. You know, there are formulas, basis which the escalation can be passed through.
Freya Vora
Again, evaluating the new bids. Now we have how does the company balance the margin optimization against their volume growth. And has there any been a strategic shift in your bidding philosophy recently?
Rahul Agarwal
The strategic shift in the Bidding philosophy is like we are doing bids selectively. We’re not going in for bidding for all sort of projects where we are able to get our reasonable average margins, only then we are able to bid.
Freya Vora
Okay. And how you’re balancing the margin optimization against volume growth.
Rahul Agarwal
So see, what we are doing is that we are, since we are into segments like Hydro and all, where the competition is low, we are able to get margins and able to maintain our margins. Although there is a growth in terms of people and you know, the organization is growing, we are trying to balance it out with taking high margin.
Freya Vora
Okay. And any initiatives that you have underway to enhance the execution’s efficiency and call discipline across projects or any digital tool or technology platform, to strengthen the project. Oversight and delivery timelines, we have implemented.
Rahul Agarwal
SAP across all the way. We are also using IoT and other, you know, available digital platforms to improve the efficiency.
Freya Vora
Okay. And further, like, can you elaborate on the criteria that guides a decision to outsource versus executing work in house? Is that driven primarily by cost or capability or strategic alignment? What is the primary purpose?
Rahul Agarwal
It depends upon project to project. It could be local area, you know, vendors to be working with you in some. It could be some strategic partnership in some other position. So it depends upon project to project. There is no specific defined.
Freya Vora
Okay, thank you so much.
operator
Thank you, ma’. Am. The next question is from the line of Devanshi Shah from SDA Finance. Please go ahead. Am I audible right now? Yes, ma’. Am.
Devanshi Shah
Hi, thank you for taking my question. So my first question is considering the recent deceleration in order inflows, how does the management view the trajectory of the infrastructure and construction sector over the medium term, say the next two to three years?
Rahul Agarwal
We see that the next two to three years, the order inflow will remain high.
Devanshi Shah
Okay. And in the context of evolving geopolitical dynamics, are there any regulatory or policy. Developments, either tailwinds or headlines, that you anticipate could materially, say, affect your order pipeline or margin profile?
Rahul Agarwal
What we are seeing is because of the current scenario, there has been increase in the number of projects coming in. The projects are expected to be expedited.
Devanshi Shah
Okay. And with the rollout of the national. Infrastructure pipeline and other supportive government measures, could you elaborate on how the company is aligning its strategy to leverage these opportunities?
Rahul Agarwal
Most of our projects, whatever projects are being undertaken, are part of the national infrastructure pipeline. And the upcoming projects are also part of that. So we are totally aligned with the.
Devanshi Shah
Got it, sir. Thank you. Thank you, ma’. Am.
operator
The next question is from the Line of Preeti Agarwal from FK Associates. Please go ahead.
Preeti Agarwal
Yeah, thank you so much for the opportunity. My first question is, can you provide an update on your current debt position and how you’re thinking about deleveraging going forward?
Rahul Agarwal
So our current debt is around 1530 crores out of which term debt is around 550 and then the working capital is around 950. So what we are seeing is the term debt would eventually come down although we may take some more working capital debts as and when new projects come up. So with the increase in order book and revenue, we don’t see an increase happening in debt.
Preeti Agarwal
Okay. And with the board’s recent approval about additional borrowing, how does that align with your broader capital allocation framework?
Rahul Agarwal
So whatever we are taking it is for working capital requirements only. So we have, what we are seeing is this year some debt, term debt will go down. So even with the additional debt, overall debt may not go up.
Preeti Agarwal
Okay. And I wanted to know what’s the recent trajectory of your EBITDA margins and highlight the and the highlights of the key operational or strategic levels you’re focusing on to enhance profitability in coming quarters.
Rahul Agarwal
Yeah, EBITDA margins are generally in the range of 13 to 14. So we are seeing that EBITDA margins will remain around this region. And the net profit because the revenue is going up, the debt has gone down. So the interest costs are coming down. So the net profit is expected to increase.
Preeti Agarwal
Okay. And previously there has been a potential cash inflow of around 200 crores from arbitration awards and land bank monetization. So given that these haven’t reflected in the current quarter, do you expect that going forward?
Rahul Agarwal
Yeah, we are expected to have around 150 to 200, you know, in this financial year.
Preeti Agarwal
Okay. And lastly, I would like to know that looking at your current order book mix, particularly the contribution from hydroelectric projects, do you see this composition sustainable or should we anticipate a shift in product type or sector exposure going forward?
Rahul Agarwal
So this we would be reasonably Hydro is more than 50% throughout for us. So that would continue.
Preeti Agarwal
Okay. All right. Thank you so much for that. Just for myself.
operator
Thank you, ma’. Am. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your question to two per participant. The next question is from the line of Nidhi Malhotra, an individual investor. Please go ahead.
Nidhi Malhotra
Thank you. Can you hear me?
operator
Yes. Please go ahead.
Nidhi Malhotra
So first of all, congratulations on a good number and little bit growth after long time based on your current order book we would like to know what will be the quarter on water growth both for top and bottom line.
Rahul Agarwal
As we as Kavita had explained, you know earlier in the questions that this year our target is again to cross 5000 crores in revenue quarter on quarter. It is very difficult to explain depending upon because various factors like monsoon and all which is going on. So we can’t comment on quarter on quarter numbers. But overall full year should be able to cross more than 5,000. In terms of net profit we see an increase happening because of reduction in interest cost.
Nidhi Malhotra
Okay. So we take it as a positive as we go forward from here. Right. Thank you. Thanks.
operator
Thank you. The next question is from the line of Jainish Shah, an individual investor. Please go ahead.
Jainish Shah
Yeah, thank you for the opportunity. Sir, I think a couple of things you mentioned about or gave a detail about your amount which has got got right now under arbitration which is somewhere around 3,000 crore. And I mean it’s a significant amount which is getting locked and because of which also the capital, you can say allocation or in the, in the company has been really been disturbed because of which the returns, I mean in spite of you being in a like a healthy business, the return on equity generation has been very, very muted. Just wanted to understand your take on this entire 3,000 crore.
I mean you mentioned that I mean there could be a 50 to 60% recovery. So are we going to see the balance Like I’ve been saying, first of all like how long this scale is going to continue for you to recover this amount. And second is in case like when it’s been a long year since these claims have been there. When do you think there’s an appropriate time where you need to clean up your balance sheets and select a capital picture for you to move on with this legacy. In that that is one. And second is again on the competition you mentioned there is a very less competition right now in the business and you still believe the margins will continue to be in the 30.
I agree that there is a healthy pipeline of orders which are building up. I mean the potential opportunities are large but there could be a limited competition or limited players to grab it. In such environment how does your ability to get extract a better margin out of this is there if you can just give some understanding with the sense. Thirdly, the third question is given the kind of an opportunity, what kind of internal target company has set for Excel for achieving maybe a revenue growth or I’m saying the revenue profits and maybe the return ratios which probably internally you might Be talking about or evaluating.
That will be helpful if you can throw some of the slides on three questions. Thank you very much.
Rahul Agarwal
So I’ll start first with the claims. So there are 3000 crores of arbitration claims and you know, other claims awards and all. So what I was saying is that expected is 50, 60% for the claims plus interest. So that overall number is pretty high. And we expect to recover these over the next five to seven years because slowly, slowly it will start coming in every year because it goes to various stages of quotes and everything in terms of margins and all. So as you rightly said, we have less margin in hydro segment. Other segments still have competition, but Hydro has more margins and less competition.
So we see that that will continue. There are many less players in hydro, four or five only, maximum. And there are a number of projects coming in. So each person would get their own share of projects. So we don’t see a challenge there. And overall strategy will remain this only that we continue more in hydro, more than 50%. We continue in hydro and other segments. We work tunneling, irrigation. That will continue as well.
Jainish Shah
Well. So you don’t see the margin trajectory improving more closer to like a 17, 18% range. These are complex projects.
Rahul Agarwal
No, no. See practically what will happen is when we grow, you know, the employee base, admin cost, everything grows. So considering all we see that the margins will be maintained.
Jainish Shah
Okay. And maybe if you can throw some light on your target internal target set for this company for next three to four years.
Rahul Agarwal
Yeah, internal target is like next four, four, five years. You want to double from here.
Jainish Shah
Okay. The double the revenue and profitably profitability and ratio wise, I mean capital efficiency wise. Where you see the company heading for a change.
Rahul Agarwal
What we are seeing is that there is no increase happening in terms of the new claims addition and all. Whatever claims are there, these are of the past. Because of the new focus of the government and various steps taken by the government, there are various things which are all set being settled during the course of the execution only. So new claim buildup is not happening. So eventually all these claims will keep coming down and as a percentage the ROE and all will keep improving.
Jainish Shah
Thank you very much for giving all the clarification.
operator
Thank you sir. As there are no further questions from the participants, I now hand the conference over to management for closing comments.
Rahul Agarwal
Thank you all for joining this call. Any further questions you can write directly to us. Thank you.
operator
Thank you on behalf of Share India Securities. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.