PSP Projects Limited (NSE: PSPPROJECT) Q2 2025 Earnings Call dated Oct. 25, 2024
Corporate Participants:
Kenan Patel — Company Secretary and Compliance Officer
Prahaladbhai Shivrambhai Patel — Chairman, Managing Director and Chief Executive Officer
Hetal Patel — Chief Financial Officer
Analysts:
Lokesh Kashikar — Analyst
Shravan Shah — Analyst
Vaibhav Shah — Analyst
Chintan Mehta — Individual Investor
Prem Khurana — Analyst
Vishal Periwal — Analyst
Aditya Pal — Analyst
Aayush Saboo — Analyst
Sajal Vats — Analyst
Uttam Kumar Srimal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to PSP Projects Limited Conference Call hosted by SMIFS Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Lokesh Kashikar from SMIFS Limited. Thank you. And over to you, sir.
Lokesh Kashikar — Analyst
Yeah, thank you. Good evening, ladies and gentlemen. On behalf of SMIFS Limited, I am pleased to welcome you all on the PSP Projects Q2 FY25 and H1 FY25 earnings conference call. From the management side, we have Mr. P.S. Patel, Chairman, Managing Director and CEO; and Ms. Hetal Patel, CFO of the Company.
I will now hand over the floor to Mr. Kenan Patel, Company Secretary for a disclaimer and then the management will have the opening remarks. This will be followed by interactive Q&A. Thank you and over to you, sir.
Kenan Patel — Company Secretary and Compliance Officer
[Technical Issues] Anything said on this call which reflects the outlook for the future, for which it could be considered as a forward-looking statement must be reviewed in conjunction with the risk that the Company faces.
Now I shall hand over the call to our Chairman sir for his evening remarks. Over to you, sir.
Prahaladbhai Shivrambhai Patel — Chairman, Managing Director and Chief Executive Officer
Thank you, Kenan. Good evening, everyone. A warm welcome to the earnings [Phonetic] conference call of PSP Projects Limited to discuss the unaudited financial results for the second quarter and half year ended on 30 September 2024. We concluded the Board meeting in the morning. During quarter two FY25, the revenue marginally declined year-on-year and quarter-on-quarter by 5% and 6% respectively on account of ongoing work at various sites got hampered due to ongoing unusual and extended monsoon of 66 days in Gujarat.
In addition, majority projects were awarded during quarter four FY24 and in some cases, the site has not been handed over due to clearances and approvals or the final designs were pending from the client. These projects are Fintech at GIFT City, Human and Biological Science Gallery, GBRC, which led to a lag in execution. From our ongoing projects, the revenue booking from the Dharoi Dam project has not happened basis our anticipation because of land acquisition and encroachment, and electrical and water line shifting at the [Indecipherable]. The year-on-year dip in revenue is seen in during quarter two FY24 UP projects were at completion stage and higher revenue was generated from those projects whereas during this quarter two FY25 revenue from UP projects was to the tune of INR12 crore only and as mentioned a couple of large projects did not take off as anticipated.
We expect post-Diwali, there will be positive improvement in the execution of the Fintech Building at GIFT City and GBRC have already begun and Human and Biological Science Gallery clearance is also in place which will be started post-Diwali. We expect revenue to reflect from quarter three FY25 onwards. Also, in the same line, we would like inform that the revenue of two of our [Indecipherable] awarded residential projects, INR269.55 [Phonetic] crore SIBAN @ GIFT and INR165.04crore Trogon Central at Ahmedabad will start recognizing from Jan 2025 only as those projects possession will be given to us by December End. During quarter two FY25, we see a substantial impact on profitability, this is because of higher expenses incurred on UP projects during the quarter. During the execution of the project, we installed certain equipments at our cost. Of which, there was not clarity in the scope. But just as the end of our [Indecipherable] we initiated and mandated expense at our end. This is to inform you that during the quarter, most of the UP projects have been completed and handed over, only two projects are being handled by maximum [Indecipherable]. Outstanding receivables from these projects are to the tune of INR54 crore.
With regards to the litigation, a Writ Petition has been filed by us for the project of Construction of Residential Building of PAC Mahila Batallion at Badaun, Uttar Pradesh. We had received a termination order arbitrarily without due consideration of the reply and without providing an opportunity for a personal hearing. Receipt of the termination letter was taken as a surprise and considered as a technical error. The company team was trying to represent our case to the senior government authorities and find a solution to revive the project. Each time we were getting verbal confirmation from them of the necessary rectification steps underway. I would like to inform our investors and shareholders that we do not foresee any material financial impact as the net receivables in this project are negative.
During quarter two FY25 and H1 FY25, the Company was awarded six projects and 12 projects respectively. During the quarter, key project awarded are: Civil and Structural Work for the project Himalaya at Sanand; Gujarat for International Refreshments India Private Limited, Coca-Cola company; Construction of Gold Stone Hotel and Commercial Towers at Bangalore, Karnataka; Construction of highrise [Indecipherable] in Ahmedabad; Construction of Project Ninety at Mumatpura, Ahmedabad which is one of the first and tallest commercial building in [Indecipherable] Gujarat.
During H1 FY25, the order inflow was to an extent of INR1,445 crore. During the quarter, the Company completed seven projects which includes medical colleges and hospital at seven Locations in Uttar Pradesh on EPC basis. As on H1 FY25, the outstanding order book was to the extent of INR6,546 crore, a year-on-year growth of about 34%. Out of the outstanding order book, the private projects comprises of 44% while government projects comprises of 56%. As on 30th September 2024, there are 55 ongoing projects, 87% of which are in based in Gujarat, 7% in UP and 6% in Karnataka. Till date, the Company has completed 231 projects in total since inception with 82% private projects and balance were government projects.
Outlook. Our current bid book is around INR7,000 crore. We are confident and optimistic to achieve our order inflow guidance for FY25. In our business, the project execution is the key and our teams are relentlessly working on executing projects as per planning and to the best satisfaction of our clients.
With this, I conclude my remarks and would like to handover the call to our CFO, Ms. Hetal Patel to take us through the financial highlights in detail.
Hetal Patel — Chief Financial Officer
Thank you, sir. Good afternoon, everyone. The financial performance during the quarter ended September 30, 2024 is as below: Quarter two FY25 versus quarter two of FY24. Revenue from operations for the quarter is at INR578 crore versus INR607 crore, which is decreased by 4.8% on Y-o-Y basis. EBITDA for the quarter is at INR39 crore versus INR74 crore, decreased by 47% on Y-o-Y basis. EBIDTA margin is at 6.72% versus 12.15%. Net profit for the quarter is at INR11 crore versus INR39 crore, reduced by 71.8% on Y-o-Y basis. PAT margin is at 1.9% versus 6.4%. The major reasons for decline in revenue and profitability has already been explained by PS sir in his speech.
The revenue generated from seven UP Projects was INR12 crores during quarter two FY25. Cumulative revenue booked for seven UP project is INR1,481 crore. During quarter two FY 25, company has incurred capex of INR11 crores. Gross block as on September 30, 2024 is INR588 crore and net block is INR309 crore.
Would like to mention few of the important balance sheet numbers as on 30th September ’24. Long term borrowing is INR61 crores including short term maturity of INR33 crore. Short term borrowing INR212 crore, excluding short term maturities of INR33 crore. Net unbilled revenue INR539 crore, retention non-current INR130 crore, retention current INR23 crore, mobilization advanceINR262 crore, inventories INR336 crore, which comprises of INR130 crore of construction materials, INR178 crore of work in progress and INR28 crore of finished goods.
Working capital days are as follows: Debtor days are 72, creditor days are 74, inventory days are 51. Total net working capital days are 49. Out of total sanctioned credit facilities of INR1,497 crores, company utilized INR973 crores including fund based utilization of INR158 crores and INR524 crores is available for utilization. As on September 30, 2024, the Company has total fixed deposit of INR210 crores, out of which lien free deposits are of INR39 crores, FD worth INR163 crores are under lien with banks for credit facility and FD worth INR8 crores are given as security deposit to clients. Work on hand as on September 30 is INR6,546 crore. Detailed bifurcation is available in the uploaded presentation.
This concludes the update on financials, and we are now open the floor for the question and answer session. Thank you.
Questions and Answers:
Operator
Okay. Thank you. 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
Yeah. Thank you. P.S. sir, in your entire opening remarks, there was a lot of disturbance. So, 50%, 70% I could not hear. And even Hetal ma’am, there was some disturbance. So, just wanted our number again. Retention money, mobilization advance and unbilled revenue.
Hetal Patel
Yeah. Retention money, non-current is INR130 crore, and current portion is INR23 crore. Mobilization is INR262 crores and net unbilled revenue is INR539 crore.
Shravan Shah
INR539 crore. Okay. P.S. sir, now, if we look at in terms of so two aspects, first so in 1H, we have done 6.6% revenue growth. And we were looking at INR2,800 crore kind of revenue for full year. So, the ask rate is significant. 26%, 27% growth is required in the second half. So, just wanted to know what’s the revised number for FY25 and also for FY26. Previously, we said 10%, 15% kind of growth. So, what’s the new number?
Prahaladbhai Shivrambhai Patel
See actually, it was the unprecedented monsoon of this month and most of the projects going on in Gujarat, it was impacted a lot. As I said, the new project which was awarded in March 2024 that could not take up on time. And that was again affected in the second quarter because of monsoon when the — all clearances were on Board. So, probably that this can impact the revenue to the extent of INR100 crore, INR150 [Phonetic] crore [Indecipherable] INR2,800 crores and that is what is here [Indecipherable]. But still six months to go and there are few orders which are just starting up. So, if those projects get approved in — on time and nothing further and it comes out of this, I think we should keep a margin of about INR100 crore, INR150 crore reduction or we can still plan to reach INR2,800 crore.
Shravan Shah
Okay. So, you are saying at max we can have a INR150 crore to INR200 crore lower. So, INR2,600 crore to INR2,650 crore. That is in the worst case or in the best case scenario, we can achieve a INR2,800 crore revenue. Okay. That’s great. And on the margin front because now the margin in this quarter, so first wanted to understand this quarter how much extra expenses for UP we have booked and that’s why the margin is lower at 6.7%-odd.
Prahaladbhai Shivrambhai Patel
Shravan in the last quarter also we declared that there are few issues related to UP projects handover process. There were few expenses which incurred in the first quarter and the second quarter also, and we — first quarter and we said that there will be an impact of INR8 crores to INR10 crores of expense on the second quarter also. But as I said in my opening remarks, there were few things which is related to equipment which was to the tune of about INR12 crores to INR13 crores, which was actually not in my scope. But as the handover was getting restricted and the college timings were getting nearer, we took a conscious call to supply those materials. So putting that INR12 crores to INR13 crores and INR10 crores to INR12 crores more expense, that has incurred about INR25 crores. And if you put this INR25 crores in extra expense in this quarter, still our margins are in the range of 11%.
Shravan Shah
Okay. So this quarter also we have done a INR25 crores extra expenses on UP projects. The similar number was there in the Q1. So now onwards, is there any further that has to be done? So from the third quarter, can we start looking at 10%, 11% kind of EBITDA margin?
Prahaladbhai Shivrambhai Patel
Yeah, of course.
Shravan Shah
Okay, okay. Got it. And sir, in terms of the order inflow, so is there — INR1,445 crore is there. So is there any L1 and portfolio? Or how much more are we looking to get?
Prahaladbhai Shivrambhai Patel
See, still the bid pipeline is good. We are having a bid pipeline of about INR7,000 crore. So probably to reach to the guideline which was given to you in absolute number INR3,500 crore plus, I think we will be in a position to reach to that easily.
Shravan Shah
Okay. Are there any projects where we are L1 as on September or post-September?
Prahaladbhai Shivrambhai Patel
No, I think the L1 which is already declared [Indecipherable] declared. So therefore there is no proper L1 as of now. But the bid pipeline, I can share you because someone [Indecipherable] bid pipeline. So there is a government residential project at Noida, which is about INR2,000 crore, Airport City side development in Mumbai INR1,000 crore, the Airport Airside and Various Development project at Ahmedabad INR900 crore, Airport City Side Development project at Ahmedabad, which is INR900 crore, Government Museum Project at Lothal, which is INR900 crore, Precast Industrial Project at Ahmedabad & Mundra for INR500 crore, Residential Colony at Mumbai about INR350 crore, our Industrial Project at Nadiad INR250 crore, totaling near to about INR7,000 crore.
Shravan Shah
Okay, okay, got it. And then now in terms of the working capital which has increased particularly in the later days, 70 odd days, so will it — by end of year, will it come back to the normal 50-odd days?
Prahaladbhai Shivrambhai Patel
Yeah, because see, there are two or three cases I would say. The UP [Indecipherable] hand over has been delayed to the extent. And secondly, the project of Naranpura Sports Complex is also going on fast. And Vadnagar Museum, that is also one of the projects. Both the projects are of Center. And there were few delay in terms of getting the payments from the Center. So, that has increased debtor days. Probably, you are right that we should be in the range of 50 to 60 days in future.
Operator
Sorry to interrupt. Mr. Shah, you can join the queue. Okay. Thank you so much. [Operator Instructions] The next question is from the line of Vaibhav Shah from JM Financial Limited. Please go ahead.
Vaibhav Shah
Yeah, thanks, sir, for the opportunity. So, firstly, on the UP PAC Mahila project, so what was the exact issue for which the client has terminated the project for early termination?
Prahaladbhai Shivrambhai Patel
See, in general, if we talk since last three or four years, there is no precedence of termination of a contract. So, initial start of the project was too much delayed because of the roads availability were not there. And later on the project, when the roads were developed till in the site level, the project was fully flooded with water. So, the project itself and our mobilization advance and other clarity were also given after one year. So, the project was going delayed. But by the time we reached to a full pace of about 1,000 people working on site and we built almost about INR60 crores of work, this project was terminated without giving any clarity.
And based on the same, we met the senior officials also. And they were also little bit surprised that there is no precedence of termination of a contract on a slow progress. Usually, a liquidated damage is only thing which is applied on the bill rather than terminating a contract. And especially in our case, when the labours were up to a tune of 1,000 in last week, how it can be terminated? That was the reason that we were waiting that this mistake [Indecipherable] revised. And that’s how we were waiting for that. But last Thursday, when they put up a fresh letter, saying that [Indecipherable] part then we have to move to the court.
Vaibhav Shah
So, we got the LOA for the project in November ’21 and it was an 18-month project. So, when did we start the execution and when was it supposed to end?
Prahaladbhai Shivrambhai Patel
Actually, the extended timeline for the project was October — 15th October 2024. So, once all the delays they have considered and the project was going smoothly on a faster track. And was to be completed by October, which could have been completed by December. Because of that if you see our progress of work, most of the buildings were almost through with 80% to 90% of the RCC were completed and finishing just started. So getting eight to nine months in finishing, we could have been able to complete this project. But due to our bad luck, we are not aware of what was the clear reason why this termination was done.
Vaibhav Shah
What is the outstanding order book for the project?
Prahaladbhai Shivrambhai Patel
Outstanding?
Vaibhav Shah
Order book of the project.
Prahaladbhai Shivrambhai Patel
We can say about out of INR238 crores is the order value without GST. We have done work up to INR75 crores, so about INR160 crores.
Vaibhav Shah
So INR160 crores we are expected to complete this by March ’25?
Prahaladbhai Shivrambhai Patel
Now, whatever the decision the government takes in terms of starting the project and again giving us the timeline of further 11, 12 months, that will be the case that whatever work has been left to be carried out.
Vaibhav Shah
Okay, okay. And sir, what would be the bank guarantee? Is there any chance that bank guarantee can be encashed by the client?
Prahaladbhai Shivrambhai Patel
Bank guarantee is only the performance guarantee of INR8 crores which they can encash if they are seriously wishing to terminate the project. The rest of the bank guarantee is against the advance. And mostly all the bank guarantees are expired. But the bank guarantees [Indecipherable] 2021, the claim period given by the banks was for one year. So, we can say that yes, the bank guarantees are still at risk because it is in the claim period. But the probability is that since we are having an advance of over INR18 crores against the material advance and nothing against the mobilization advance, then we can retain it. And the only risk which can come if they seriously want to terminate and that is the performance guarantee of INR8 crores.
Vaibhav Shah
So, bank guarantee is secured against the advance that they have received?
Prahaladbhai Shivrambhai Patel
Yeah, yeah.
Vaibhav Shah
Okay. And sir, secondly, our debt had reduced to around INR200-odd crores as of July that we mentioned in the last call. So, it has again increased to INR274 crores as of September. So, what was the reason for the increase? And what would be the promoter loan out of the INR274 crores?
Prahaladbhai Shivrambhai Patel
There is no promoter loan I think [Indecipherable].
Hetal Patel
Yeah, that has been repaid. Promoter [Indecipherable] and most of with [Indecipherable] our borrowing also has been repaid. But we have utilized further once it was repaid. Now, if you see, as I have already mentioned, the short-term borrowing is INR212 crores, which includes around INR60 crores of bill discounting and FDOD facilities also. So, if we look at the fund-based utilization, that is INR158 crores only.
Vaibhav Shah
Okay. And sir, lastly…
Prahaladbhai Shivrambhai Patel
And then, the utilization is big [Indecipherable] because of the three projects that are getting delayed. UP, three projects, UP, Vadnagar and Naranpura, all these three [Indecipherable] are getting delayed. [Indecipherable] payment, we may have utilized for the [Indecipherable].
Vaibhav Shah
Okay. And sir, lastly, what will be timeframe of HDBI [Technical Issues]?
Prahaladbhai Shivrambhai Patel
Pardon me. What will be the timeline for?
Hetal Patel
Are you talking about Surat [Indecipherable]?
Prahaladbhai Shivrambhai Patel
Hello. Hello.
Operator
Sir, hello, sir [Indecipherable].
Prahaladbhai Shivrambhai Patel
Hello.
Operator
[Operator Instructions] The next question is from the line of Chintan Mehta from — an Individual Investor. Please go ahead.
Chintan Mehta
Hi, sir. Sir, what is your guidance for FY26 to achieve your revenue and project order inflow?
Prahaladbhai Shivrambhai Patel
The project order inflow we have already announced INR3,500 crores and the revenue which we said that being in the range of INR2,800 crores but due to this quarter fall down and because of the heavy monsoon, we are not able to do good in this quarter. That can [Indecipherable] INR150 crore to INR200 crore which I answered to one of the previous questions.
Chintan Mehta
And sir, for the Surat Diamond Bourse [Indecipherable] recovery, will it be the only on net cash after one half year also?
Prahaladbhai Shivrambhai Patel
Pardon me.
Chintan Mehta
After two years down the line, will we again be debt-free company?
Prahaladbhai Shivrambhai Patel
That depends how the things goes on for next two years.
Chintan Mehta
Okay, thank you.
Operator
The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Yeah, sir, SMC, Surat Municipal Corporation, [Indecipherable] if I am looking at it, is just for INR68-odd crores revenue that we have done and we were looking at INR300 crores to INR400 crores revenue this year and the next year INR600-odd crores. So, is it doable or?
Prahaladbhai Shivrambhai Patel
Yeah, now most of the structure part which is the I would say the complicated part of any highrise building that is the basement and the podium level. So, we have reached to the fourth-floor level of the total building and now the towers are getting started from next month. So, I personally see in the MEP and the facade [Indecipherable] is being done, so, finishing is going on. So, probably this six month, we should be in position to gear up to what I am expecting. Basically, there was INR8 crores to INR10 crores of shortfall in revenue from structure site [Indecipherable].
Shravan Shah
Okay. And sir, for even at a broader level from next year onwards, FY26 onwards, 10% to 15% that is the way one can look at in terms of the revenue growth. Is there a likely scenario that we can be doing a 20% plus kind of a growth for ’26 and ’27 for next two years?
Prahaladbhai Shivrambhai Patel
I think 20%, 25% growth, again, now I am little bit reluctant to say 100% because the things which we have seen and the uncertainties which we have faced in last one and a half to two years, the situation and the order book is little bit high, because presently we are working at almost the order book of 2x, 2.2x. If that order book is more than 2.5x or 3x, then the revenue can have a rise in terms of growth. Otherwise, I think 10% to 15% is normal if we keep and our order book is 2x.
Shravan Shah
Okay. And Hetal ma’am, the capex for 1H is INR23 crore, INR24 odd crore. For full year, last time we said INR60-odd crore. So, that remains the same.
Hetal Patel
Yeah, I think it will be on the same level. [Indecipherable] cumulatively around INR30-odd crores. It should be around INR50-odd [Phonetic] crores.
Shravan Shah
Okay. And P.S. sir, whatever the recent projects that we have got in last six odd months, so there the — mostly the revenue will be kicking in from the third quarter or from the fourth quarter we should be seeing. Because if I broadly look at, we have decently got the projects in last six months. So just to…
Prahaladbhai Shivrambhai Patel
So, again, Shravan, the usual problem is if I talk about Coca-Cola, that project was awarded in monsoons. But I could still make a revenue of INR30 crores because it was on time. And the foundation was heavy. But the buildings which are under basement and where the diaphragm walls are also to be done. As I said in private projects, the diaphragm walls are done for the client. And some of the projects that [Indecipherable] to be got in the last quarter, we could not make a revenue due to first quarter we spent because just for the approvals. And second quarter, we were affected because of monsoon. But all the order books which we have received today, I already said two projects which are residential and commercial projects in GIFT City and Vaishno Devi, that will generate revenue in the third, last quarter. Otherwise, all other projects which we have received, it has started giving revenue from this quarter.
Shravan Shah
Okay, okay. And then this debt level by end of March, will it remain at this level or it can be even lower than INR200 crores possibility from INR270-odd crores?
Prahaladbhai Shivrambhai Patel
I mean, I would say that depends on what are the projects going on and how the payments are coming from the debtor side. Otherwise, if we consider all these three debtors and once we get this INR100 crores, which we are supposed to get from Surat, that is also being paid. I think we should be in position to reduce to [Indecipherable].
Operator
May I request you to come back to the questions queue for the follow-up questions?
Shravan Shah
Yeah.
Operator
The next question is from the line of Prem Khurana from Anand Rathi Shares and Stock Broker. Please go ahead.
Prem Khurana
Yeah. Thank you for taking my question, sir. Sir, two questions. So, one is, I mean, if you could talk about competitive intensity because the prospect pipeline that you gave us, right, INR7,000-odd crore seems, I mean like does that include, I mean, last quarter the INR6,400 crores pipeline that you shared with us included DLF. There was one large project that you were targeting in Noida as well, INR1,800-odd crores worth. I think that project seems to have gone to someone else and DLF is not there in the list now. So, how is the competition? I mean, how much of those INR6,400 crores would have been kind of already given out? What was our success ratio with those INR6400 crores?
Prahaladbhai Shivrambhai Patel
See, again, I would say, depending on the large-scale project, the success ratio cannot be considered as 16%, 20%, it can be 8%, 10% also. But depending on the competition what we see and the type of projects where will it be. And still, I will not say that it’s a huge competition so we are not being awarded. But sometimes it is the client’s call or sometimes the contractor wish to go a little bit low on the bid side, but we still try to maintain that let us not enter into any contract which should give us a less revenue or give a tight rate. So, we are still going a little bit conservative. But still, I am confident that we will be in a position to reach to our bid pipeline deadline given as INR3,500 crore plus.
Prem Khurana
Sure. And on an average, how many participants do we see, let’s say, if it is a project more than INR500-odd crores and sub-INR500 crores? [Indecipherable] I understand the number could change.
Prahaladbhai Shivrambhai Patel
Again I would say from area to area and type of project, if we see the private project it is three or four companies. If we see government at different, different locations, definitely three, four or maximum five contractors. So, it depends on the qualifying criteria and the interest of the contractor in different states.
Prem Khurana
Sure. And in the prospect pipeline of INR7,000 crores, how would this be split between Gujarat and non-Gujarat?
Prahaladbhai Shivrambhai Patel
I think Gujarat is 39% and another state is 61%, but 61% is majorly because of that government [Indecipherable] project at Noida. So, if we exclude that and if we consider INR5,000 crores total out of these INR2,000 crores being deducted, it must be about 60-40.
Prem Khurana
Awesome. And just one last, I mean, on this settlement with the SDB, I mean, of almost around INR225 odd crores, how much is already come to us and how much more is expected this year?
Prahaladbhai Shivrambhai Patel
See, we were supposed to get the first tranche of payment on 15th of August, but since they are in the process of clearing their loans against the sales of those shops which is pending. So, probably, I have been following with them since last 15, 20 days rigorously. They are saying that they will be in position to give us the payment as early as possible still. Otherwise, we haven’t received any payment we can say which was supposed to get in 15th of August. Now, [Indecipherable] by the end of before closing Diwali, they should be able to give us [Indecipherable] of INR25 crores.
Prem Khurana
Sure. Sir INR105 crore has already come to us by July itself INR105 crore or INR125 crore, how much was received?
Hetal Patel
INR104 crore has been received.
Prem Khurana
INR104 crore. Sure.
Hetal Patel
Yeah.
Prem Khurana
Okay, sure. Thank you and all the very best for future.
Prahaladbhai Shivrambhai Patel
Thank you.
Operator
Yeah. Thank you, sir. The next question is from the line of Vishal Periwal from Antique Stock Broking. Please go ahead.
Vishal Periwal
Yes, sir. Thanks for the opportunity. Just continuing on that SDB deal. So, remaining INR120 crores, which is expected, so, as of now, is there a timeline or it is contingent upon the money received by the association? How exactly the deal is structured? I mean…
Prahaladbhai Shivrambhai Patel
What was the question?
Hetal Patel
[Indecipherable]
Prahaladbhai Shivrambhai Patel
Yeah. It is divided into four installments.
Hetal Patel
Four quarterly instalments it has been divided. So by next October ’25, we should be receiving in full.
Vishal Periwal
Okay. No, but is it fair to say it is contingent — I mean, it’s dependent upon on the sale of the, I mean…
Prahaladbhai Shivrambhai Patel
No. It is not at all be any condition. It is absolutely an agreed amount to be paid on the dates which was confirmed. Only the first date which was August ’25 — ’24 which they have missed. And they have missed just because they are on the sale of the offices which they wanted to do. They were not able to do that office sale. So, they are going on a loan for again those offices to be sold yet in the SDB. So, they are in the process of getting this loan for payment and giving payment to us. And that is in process.
Vishal Periwal
Okay, okay. Sure. And I think I just missed on one more thing. From the previous participant question was like one of the project is terminated where INR70 crore, INR77 crore is the pending receivables. Can you just name the project? And then second related to that is like that INR77 crores…
Prahaladbhai Shivrambhai Patel
No, there is no receivable. The work done was INR75 crores and it is fully paid. So, nothing is receivable and it is terminated.
Vishal Periwal
Okay, okay, got it.
Prahaladbhai Shivrambhai Patel
And it is in UP, Mahila Batallion Educational Institute & Hostel. So, we are doing the hostel part. So, INR165 crores work is to be done and the work has been terminated.
Vishal Periwal
Okay, okay. So, whatever the work that we have done, we have already received. That is…
Prahaladbhai Shivrambhai Patel
Yeah.
Vishal Periwal
Sure, sir, sure. Okay. Yeah.
Prahaladbhai Shivrambhai Patel
Thank you.
Vishal Periwal
Thank you.
Operator
Thank you. The next question is from the line of Aditya Pal from MSA Capital Partners. Please go ahead.
Aditya Pal
Hello. Am I audible?
Prahaladbhai Shivrambhai Patel
Yeah, a little louder, please.
Aditya Pal
Thank you so much for the opportunity. Sir, wanted to understand [Indecipherable] recently, the government has passed [Indecipherable] from October.
Prahaladbhai Shivrambhai Patel
Your voice is so much breaking. It is not clear.
Aditya Pal
Is it better now?
Prahaladbhai Shivrambhai Patel
Yeah.
Aditya Pal
So my question was that, so the government has passed that to increase minimum wages across the Board from October 1st. Sir, how do you see it impacting PSP going forward?
Prahaladbhai Shivrambhai Patel
Government is impacting [Indecipherable]?
Aditya Pal
Sir, they have increased the minimum wages.
Prahaladbhai Shivrambhai Patel
Minimum wages you are seeing.
Aditya Pal
Yeah, yeah.
Prahaladbhai Shivrambhai Patel
I personally don’t see too much impact to us as far as Gujarat is concerned. And the impact which we have received, till now, it has been covered up. So, whatever new tenders which we are putting up, we are putting on the existing rates. So, we don’t see any much impact as of now. And we have not heard about the clarity of how the wages are going to be.
Aditya Pal
Understood, sir. Sir, so, quarter two has been somewhat a very subdued quarter for us because of the monsoons in Gujarat. Do you see that from quarter three and quarter four onwards revenue picking up substantially? Because a lot of a key project like SNCIR [Phonetic] is building.
Prahaladbhai Shivrambhai Patel
If you see the track record of any contracting firm, first and second quarters are always good and third and the fourth quarter is the only quarter when [Indecipherable] companies are able to work consistently. So, probably that benefit we should also get and that trend is not of this year or last year, it is usually the substandard [Indecipherable] that is throughout, I have been experienced in the last 10 years, when in the first two quarters we were not able to generate the revenue what we expect. And third and fourth because there is no disturbance as far as the availability of labor or any seasonal impact or such type of impact. So, that is the best period [Indecipherable].
Aditya Pal
So, the question is — I completely understand that H2 is much better than H1 for construction companies but would Q3 and Q4 be far better because work was stopped in Q2 and you would have to complete more work in Q3 and Q4, one. Two, profitability would be better because now you wouldn’t have any more UP projects. So, can I comfortably say that H2 will be a more normal quarter period for PSP going forward?
Prahaladbhai Shivrambhai Patel
Yeah, we can say that it will be a better quarter for us and that has been always in the past also. And probably there is no further hindrance [Indecipherable] unexpected hindrance, it should be better.
Aditya Pal
Understood. Sir, a more broader question I had was that we had invested in a precast plant in FY22 and I completely understand that it has helped us in speedy completion of projects like in Nestle, AMC Sports Complex. But I don’t see it impacting our margins beneficially. Our EBITDA margins over the last three years has actually come down. Our ROEs, ROCEs which were 25%, 28% has come down and it has also impacted on fixed asset turnover because of the asset base increasing. Going forward, when I say going forward, I mean in three to five years how do you see it benefiting PSP? Because we put this, we are also doing projects.
Prahaladbhai Shivrambhai Patel
I have been answering this question since last two quarters, because of the technology which was not universally accepted all over India. And this is the first plant in Gujarat, where we are manufacturing products for not only captive consumption. It is the technology which we are trying to push into the corporate, we are trying to push into the developing business, we are trying to push into the industrial business. So industrial and warehousing, we have done fantastic work in last two years. And now we are entering into residential. Presently we have lots of inquiries on to being the buildings up to 70 meter. And once we make one or two such types of buildings I think then only we will be having a larger orders to come to pass on.
Aditya Pal
So, sir, I then…
Operator
[Indecipherable] Mr. Pal, may I request you to come back to the question queue for the follow-up questions?
Aditya Pal
All right. Thank you.
Operator
Yeah. [Operator Instructions] The next question is from the line of Vaibhav Shah, JM Financial Limited. Please go ahead.
Vaibhav Shah
Thanks for the opportunity. So there were some data points which I missed in the previous question. So for the Mahila PSP project, what would be the outstanding advances and outstanding receivables that we have?
Prahaladbhai Shivrambhai Patel
[Indecipherable]
Hetal Patel
I think the project.
Prahaladbhai Shivrambhai Patel
[Indecipherable] Mahila [Indecipherable] outstanding.
Hetal Patel
Outstanding receivable is not there basically. We have only INR1.9 crores retention outstanding to be received. We have been paid all the bills for the work already done. The advances which we received from the client is INR17 crores amount. So that is outstanding as a liability as mentioned.
Vaibhav Shah
And what is the time guarantee and performance guarantee value?
Hetal Patel
Performance guarantee is INR8 crores. And mobilization advance guarantee is also there to the extent of around INR27 crores. So that was the total mobilization given [Indecipherable].
Vaibhav Shah
The bank guarantee that you have submitted?
Hetal Patel
Sorry, bank guarantee?
Vaibhav Shah
The bank guarantee that you have submitted for the project?
Hetal Patel
Yeah, that’s what we [Indecipherable].
Prahaladbhai Shivrambhai Patel
Bank guarantee, performance guarantee and guarantee against the mobilization [Indecipherable].
Hetal Patel
There are two types of bank guarantee outstanding with the client. One is performance guarantee that I have already mentioned, INR8 crores. And mobilization, INR27 crores. So obviously, we received the mobilization advance. So, once we pay off that, the bank guarantee will be returned.
Vaibhav Shah
Okay okay, thank you.
Operator
Thank you. The next question is from the line of Aayush Saboo from Choice Equity Broking Private Limited. Please go ahead.
Aayush Saboo
Yeah. So could you give some guidance on the debt level in financial year ’25 and ’26? Like earlier you stated that we are targeting to be net cash positive. So give some guidance regarding that and the capex that will be incurred in the next few years.
Hetal Patel
Basically, debt level for a construction company, it will always be required for the working capital. So normally we used to have this limit to the extent of around 10% of our overall facility of INR1,500 crores. So that is the normal debt level which we used to have earlier also of INR150 crores. So right now, also we are utilizing INR158 crores. And [Indecipherable] is there and the projects are [Indecipherable] done in [Indecipherable] March, we can reduce to some extent. But yeah, this current level is the normalized level of debt which we are literally using for working capital.
Aayush Saboo
Okay, okay. So I mean like do we intend to be like a net cash-positive company? Like in the next two years or next two to three years or we will be having net debt on the balance sheet?
Hetal Patel
Yeah, hopefully. See, if all our projects and collections go by on time, then we can get it. Because all our accruals will be used for paying of the working capital utilization.
Aayush Saboo
Okay, okay, got it.
Operator
Thank you. The next question is from the line of Sajal Vats from Green portfolio Private Limited. Please go ahead.
Sajal Vats
Yeah, thanks for the opportunity. Am I audible?
Prahaladbhai Shivrambhai Patel
Yeah.
Sajal Vats
Yes. Sir, I noted a sharp increase in the trade receivables in the last six months. It has gone from INR342 crores to now INR472 crores. Can you please explain that? I am curious about that change.
Prahaladbhai Shivrambhai Patel
See, that is because of, as we have already said, that because of these UP projects getting closed and there is a payment of INR55 crores. There is a payment of more than INR50 crores from Naranpura Sports Complex. And there is also payment of INR95 crores from the SDB. So, putting all — the SDB was not there in the last quarter. So, putting that into now into receivables, that is, we are getting that larger figure compared to the previous quarter.
Sajal Vats
Okay, okay. And my next question, sir, is what percentage of revenues do we expect from outside Gujarat in the next two, three years, sir, as we expand geographically? Because currently we are [Indecipherable] sir.
Prahaladbhai Shivrambhai Patel
I mean, you are right. But the percentage of separate distribution between Gujarat and other states [Indecipherable] is very difficult for a company like us or any other construction company, because that depends on the opportunities how we are getting in different states. So, previously we were working in the Uttar Pradesh on a larger extent. Now we have got an opportunity to work in Karnataka also. So, that depends on time-to-time and the type of projects which are coming up and the type of projects which we receive. So, it is very difficult to define a percentage how we will be operating out of different, different states.
Sajal Vats
Thank you. Thank you, sir. That’s all from my side. Thank you.
Operator
Thank you.
Prahaladbhai Shivrambhai Patel
Sir, can we conclude on the call now? Because I have to leave. And if you have no more questions, then I can leave. If there is any financial question, you can continue.
Operator
Okay. So, we just have a last question that comes from…
Prahaladbhai Shivrambhai Patel
Yeah.
Operator
Uttam Kumar Srimal from Axis Securities.
Prahaladbhai Shivrambhai Patel
Okay, no problem.
Operator
Okay. The next question is from Uttam Kumar Srimal from Axis Securities. Please go ahead.
Uttam Kumar Srimal
Yeah, good afternoon, sir.
Thanks for the opportunity. Sir, my question is with regard to interest and depreciation. Hetal madam, this run rate that go in the second and third and fourth quarter also for interest and depreciation?
Hetal Patel
Yeah. So, as I have already mentioned, this quarter, I think we can say that we have nominalized like our working capital level. So, it will range between INR160 crores to INR200 crores. So, maybe interest here will be around INR10 crores or little bit lesser. And depreciation, yes, because we have already been using the capex last year also around INR150 [Phonetic] crores or more. So, that has increased our depreciation compared to earlier years. But yeah, that will not be much because as it is set around further INR30 crores addition in capex [Indecipherable]. So, to some extent, it may — depreciation may increase to some extent.
Uttam Kumar Srimal
Okay, okay. Perfect. And with regard to UP project, ma’am, how much additional expenditure are remaining to be incurred from whatever we have incurred already?
Prahaladbhai Shivrambhai Patel
Are you asking about the further expenditure still required for UP?
Uttam Kumar Srimal
Yeah, yeah, yeah.
Prahaladbhai Shivrambhai Patel
No, I don’t think there will be any further expenditure because almost six projects — out of seven, six have been handed over. So, we are at the closure.
Uttam Kumar Srimal
Okay, okay, okay. That’s all from my side. Thank you.
Operator
Yeah. Thanks, sir. As there are no further questions, I would now like to hand over the conference to the management for closing comments. Yeah.
Prahaladbhai Shivrambhai Patel
Thank you all for joining us on our earnings conference call today. Thank you for your support and trust in us. We hope that we have been able to address most of your queries. In case of further queries, you may reach out to our investor relation advisor Ernst & Young and they will connect with you offline. Thank you, Lokesh, SMIFS for hosting our call this quarter. And at last, Happy Diwali and Happy New Year to everyone. Thank you.
Hetal Patel
Thank you, everyone.
Operator
[Operator Closing Remarks]