Rail Vikas Nigam Ltd (RVNL) Q3 FY23 Earnings Concall Transcript

Rail Vikas Nigam Ltd (NSE:RVNL) Q3 FY23 Earnings Concall dated Feb. 17, 2023.

Corporate Participants:

Rajesh Prasad — Director, Operations

A K Choudhary — Principal Advisor, Finance

Analysts:

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Ash Shah — Elara Capital — Analyst

Pranay Khandelwal — Alpha Invesco Research — Analyst

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Deep Mehta — Bank of India Mutual Fund — Analyst

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

Presentation:

Operator

Ladies and gentlemen connected to the Rail Vikas Nigam Limited Q3 FY ’23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Periwal. Thank you and over to you sir.

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Yeah, good afternoon, everyone. First of all, I’d like to thank the management of RVNL for giving us this opportunity to host the earnings call. From the management of Rail Vikas Nigam Limited we have with us Mr. Pradeep Gaur, Chairman and Managing Director, RVNL; Mr. Rajesh Prasad, Director, Operations, RVNL; Mr. Sanjeeb Kumar, Director of Finance and CFO, RVNL. So as usual, we’ll have a commentary from the management on the results and then we’ll have a line open for Q&A.

Thank you and over to you sir.

Rajesh Prasad — Director, Operations

So, very good evening, this is Rajesh Prasad. I’m Director, Operations, and with me Principal Advisor Financer, Shri A K Choudhary sir; and Director Finance, Mr. Sanjeeb Kumar is joining in two minutes. Mr. Pradeep Gaur is having another meeting which he is continuing for the last two hours, and he will be joining later on. So as you are aware that this company is 20 years-old. We celebrated our 20th anniversary on January 24, 2003. We started operations from December 2005 and we were executing from [Indecipherable] of the Ministry of the Railways, now the Ministry of Railways and Government of India also desire that we should have the broader perspective.

We have been contributing more than 30% to 35% of the railway infrastructure and we have commissioned more than 15,000 route kilometers of the railway infrastructure doubling New Line gates and railway electrification. Besides that, we are also in the metro construction and the turnkey projects, we have completed and commissioned 16 turnkey projects which are really on very, very fast track. This was — basically this is a MiniRatna Company given in September 2013 and it is getting upgraded to Ratna. Our Administrative Ministry has recorded approval for this, and followed by, there was a meeting with the Department of Public Enterprises and there also, it has been cleared and then after that, we had been [Indecipherable] Committee meeting they have again cleared it.

So it is almost like — basically it is only for some time that maybe during this time period we’ll get Nav Ratna status. We have got the Pan-India projects and we are executing all kinds of railway infrastructure. We are involved in the company project lifecycle which — it start from the concept to commissioning, the Final Location Surveys, DPR, the designs and plans, then estimates and tendering, the basically land acquisition, execution, commissioning and then defect liability position and handing over for the operation.

We have got a very new setup and earlier it was 100% dedicated to IR. We were executing the railway infrastructure so now we have changed our model from local rail infra to global [Indecipherable]. And if you see the performance of this company last 11 years, it has been rated excellent and in last five years you can see the performance of the public sector, which has being issued by the Department of Public Enterprises. This must be number one PSU in the country for the year 2020-’21. It was third amongst all the PSUs. Three times it was number one. So if you take the average, then it will have the basically it will be the number one PSU.

Regarding the Q3 performance, very small thing, very briefly I would like to highlight that we have as per the target of MOU we are — we have been given a target of top line of INR20,000 crores as per the MOU. We have been given a target for commissioning of 1,000 kilometers. We have commissioned more than 810 kilometers. So that is also as per the timeline. We have had the turnover of more than INR14,560 crores after Q3. So increase of around 12.5% with respect to FY ’21-’22, so again this is a very good sign. And if you see the fair price variation on this particular company in last year this, nine plus one, 10 months’ time the share price has been more than 125%.

And if you compare with respect to BSE 500 Index, this is more or less stagnant in 24,000 mark and the BSE Infra Index, which is more close to the infrastructure it is again stagnant 288 as 01/04/2022 and as on 01/02/2023 it is 287. So with respect to that it has shown a tremendous improvement. And in the SPVs there is a total trend around in the special-purpose vehicles in terms of the increase in the volume of the traffic, in terms of the earnings and in FY 2021, the total earnings in the whole of the financial earnings was loss of around INR40 lakhs. This has got increased to one INR103 crores in FY ’21-’22 but in FY ’22-’23 even after Q3 in nine months it had already surpassed INR141 crores.

So, all the SPVs have shown tremendous improvement. We have got the rating done. It is AAA and stable and we have started bidding in the market. We have participated in the — in bids worth INR70,000 crores. We started this bidding only around 16, 17 months back, and it has shown a lot of improvement and the strike [Phonetic] rate is around 24% to 25%, and we are also happy to inform that the Angul Sukinda Railway ASRl in Odisha is getting operational from February 2023, so all the five SPV will get commissioned, and accordingly [Indecipherable] in time to come will go up. So these are about the SPVs. I talked about the overall performance of RVNL and we are focusing in not only railway sector, but all sectors.

And the major — main agencies where we are concentrating is the Metro, then the tunneling work, then the port connectivity, marine work, S&P [Phonetic] work. And the areas you can say that railway [Indecipherable]. And we have already become global as I said earlier. We are executing one project at Maldives which is costing more than INR1,500 crores. And the project has already taken off. And in time to come this much I can ensure to the investors that whatever the target and the projections which we have made for FY ’22-’23 we are going to achieve that.

So now we are ready for the questions and then whatever questions are there we’ll answer. And if you need further clarification then I can also elaborate upon that.

Questions and Answers:

Operator

Thank you. [Operator Instructions] The first question is from the line of Ash Shah from Elara Capital. Please go ahead.

Ash Shah — Elara Capital — Analyst

Good evening, sir, congratulations for the great set of numbers. Sir, can you just provide what is the order book outstanding as of Q3 FY ’23? And can you give us the details of segment-wise?

Rajesh Prasad — Director, Operations

So you are asking about the order book. See, I can tell you that as on 31/03/2023 based on the projections we will have an order book of around INR55,000 crores to INR60,000 crores. It has [Indecipherable] and if you want to know the breakup for the segment-wise, then the through the market bidding it will be around 20%, so out of INR55,000 crores,20% will be through the bidding and then rest will be the typical railway projects which have been given on nomination basis.

Ash Shah — Elara Capital — Analyst

Okay, so nomination basis 80% as of FY ’23, but if you can just provide what will be for nine months FY ’23 if possible the order book outstanding?

Rajesh Prasad — Director, Operations

You are not audible, you please tell again.

Ash Shah — Elara Capital — Analyst

Can you give us the 3Q number, outstanding? I mean, this one is for FY ’23, but what will be that for 3Q?

Rajesh Prasad — Director, Operations

Outstanding numbers regarding what?

Ash Shah — Elara Capital — Analyst

Order book.

Rajesh Prasad — Director, Operations

Order book, means, see it is a dynamic situation. Yeah, yeah, so minus [Indecipherable], and we will have some attrition in this year. So around INR52,000 crores.

Ash Shah — Elara Capital — Analyst

So, as of December it’s INR52,000 crores. No, no as of Q3, Q3 FY ’23.

Rajesh Prasad — Director, Operations

See as of Q3 we gave you INR55,000 crores then you wanted something more. So that is INR52,000 crores.

Ash Shah — Elara Capital — Analyst

Okay, okay. Also second question would be, what was the order inflow for nine months FY ’23, and are we L1 in any of the other projects?

Rajesh Prasad — Director, Operations

L1 is sensitive information we can’t give you. Yeah, but I can tell you the price [Indecipherable] is around 24%-25%. And if you want to know that how many bids we have submitted, so I have already explained that we started bidding only 16 months back, 16, 17 months back and we have participated in bid of about INR70,000 crores.

Ash Shah — Elara Capital — Analyst

Okay, thank you. And just last question, can you just provide the update on the Kazakhstan project. I mean, what is the progress for the same? Are we like because last we were approved the DPR and then probably take on the next part. So is there any update on the same.

Rajesh Prasad — Director, Operations

So basically, we have identified four such projects and the total length is around 1,000 kilometers costing around $2 billion to $3 billion, so we have signed an MOU and we have already formed a JV [Indecipherable] and basically in first phase, we will be executing three projects and the moment we get additional information, it will be placed before the SEBI and it will be available in the public domain.

Ash Shah — Elara Capital — Analyst

Okay, thank you. That’s all from my side.

Operator

Thank you. The next question is from the line of Pranay Khandelwal from Alpha Invesco. Please go ahead.

Pranay Khandelwal — Alpha Invesco Research — Analyst

Hello sir. Congratulations on a good set of numbers. I wanted to ask recent interview you alluded that you have participating in a bid of INR50,000 crores plus for [Indecipherable]. Can you give more clarification that? And also is it a tie-up that are doing with a company?

Rajesh Prasad — Director, Operations

We have participated in a bid, that is correct. This is under regularization. And if we get any update it will be made available to the public also. So basically these are — it is work where the train sets are required to be manufactured. There are five bidders in this. And we are one of the bidders who we have participated in this tender. And the approximate cost is around INR55,000 crores plus.

Pranay Khandelwal — Alpha Invesco Research — Analyst

Okay, and we have bid separately like there is no tie-up.

Rajesh Prasad — Director, Operations

We are not counting this in the total bid which — the numbers, which I shared, that INR70,000 crores. If we add this, then the total number of bids, the total basically amount of bid will be over INR1.25 lakh crores.

Pranay Khandelwal — Alpha Invesco Research — Analyst

Alright. And can you also say anything more about the Maldives project? I heard in your opening remarks that you said that it has been commenced. So what’s the timeline?

Rajesh Prasad — Director, Operations

Maldives project, yes, we have already shared information that we have been awarded the project of Maldives. This is costing around more than INR1,500 crores. It was QCBS tenders. It is sensitive information, because it is a Government of India’s project being developed for some MNDF. And we have already started executing the project. This is the first project for the first time we are executing an overseas project, and I’m also happy to inform that it is not a typical railway project, it is a marine work. So we are getting diversified, number one. We are executing in the first project in overseas condition and in time to come we are very keen to have more-and-more projects overseas also. And you can see in times to come.

Pranay Khandelwal — Alpha Invesco Research — Analyst

All right. Thank you, sir.

Operator

Thank you. [Operator Instructions] The next question is from the line of Sandeep from Shivam Dealmark Private Limited. Please go ahead.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Good afternoon, sir and thank you for giving us the opportunity to have a one-to-one and kind of learn more about the company. I basically have two concerns. So one is that we have seen a very flat topline growth in Q3. And the ticket size of most of the orders that the company seems to be getting is very small in the region of INR30 crores, INR40 crores, INR50 crores. So is there any constraint in ramping-up our order book?

Rajesh Prasad — Director, Operations

I have understood your question. The first question is the flat performance in Q3 but let me first answer that, if you see the performance of Q3, okay, fine, it is flat, because it is more or less INR5,000-plus-crores in terms of the topline. But if you see the cumulative performance, there is a jump of 12.5%. It’s INR12,945 crores to INR14,560 crores. So the topline has also increased if you see the overall performance up to Q3. See, we are more concerned about the PAT in the bottom line. And if you see the PAT, it has increased by 30.45% with respect to INR715,000 crores, this time it was INR923,000 crores.

Regarding the order, see, we wanted to first enter into the market. Our aim was that yes, let us get some work from the markets and the first two packages from Indore Metro gave a very positive sign. The margin was very good and we are very, very happy to inform that we are going to commission this particular metro corridor. We’ll have — we’re going to have the trial in our project in Indore, which we [Indecipherable] from the market in the month of September and October.

Regarding the small value or the bigger value and in fact, only thing to tell that if it is a highly technical, like signal and telecommunication. Yes, smaller value tenders are there but higher value tenders are also there. For example, this one package of Chennai Metro, it is costing around INR11,034 crores. Maldives project is INR1,500-plus-crores, INR15,046-odd-crores. So we have got the mix of all kinds of infrastructure, with smaller values, but at the same time, bigger values are also there.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Sir, are we maintaining our gross margin, which, if I remember correctly from the past investors meet, normally in the region of 5.5% to 6.5%, so when we say that we are going in for a higher technical projects do the margins improve over there or do we continue to make that 5.5%, 6% or 7%.

Rajesh Prasad — Director, Operations

See, you have to understand that we have got various models. And the models are like the projects which have been assigned on a nomination basis, the projects which have been — the SPV projects which we are executing, it is almost at completion phase. Then we are executing the project from the market and also the dividends from the SPVs and the interest-rate interest which we get from the banks for our deposits. So if you wanted to know — if you want to know about the margins, see the margin has been around 5.6% to 5.8% something like that.

And in time to come, we will be focusing more on the margin part, but yes there is an element of risk involved in this for the projects which we are getting from the bid. For that we are allocating the risk factor for the projects for which we are bidding. I’ll set one example, see, we are bidding the projects and there are some price variation clauses available, whether it is [Indecipherable]. And sometimes the escalation is not as per the price variation, which we normally get from the contracts. So we are okay to risk depending upon the kind of tenders and the contracts [Indecipherable]. So we are taking care of this. It is a kind of risk which we are addressing.

What I wanted to tell you is that in time to come there could be a time when the margins will go down, but I can assure you this much that in time to come in the longer version the margin is going to be up. Yes, we are taking actions for increasing the margin. You see, we have decided that we are going to have the [Indecipherable] sales so that we’ll supplying the materials. We are going to have the engineering design on sales. We are augmenting the existing designs. The idea behind this is that we will do some kind of value engineering for the projects. So we are working in the right direction. Normally, every private infrastructure company because company do these kind of practices and we are equally concerned for this.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Thank you, sir. The next part of my question relates to one company, this joint-venture companies which is, Krishnapatnam Railway Company. I think we are having a constant problem with them even in Q3 so it has — have mentioned some — they have [Indecipherable] to say that we are not getting funds from them. And in the last Investors Meet also Mr. Gaur had informed us that some progress is being made and they are continuing to pay very small amounts. So, can you update us, sir, on any further improvement with that performance and their commitment to our company?

Rajesh Prasad — Director, Operations

Okay, so. Let me first explain about this company. This is a — before the project sanction by Ministry of Railways through PPP model and the first phase commissioned in 2008-’09, and the final commissioning took place in June 2019. And the [Indecipherable] is 49.76%. 82% of the equity are held by the Central Government, the State Government and PSUs and the company is on — there are also, financials are also audited by CAG. We have executed projection work completion on INR22,400 crores and we have received INR1,600 crores plus and this is a kind of a trade receivable, this is number one. Number two, the reasons behind this trade receivable is that are there are two source of earning.

One is called the terminal cost, the other is freight apportionment and for [Indecipherable]. So, the Ministry of Railway agreed from 2017 rather than from the date of commissioning. So this has led to all kinds of problems. And the arbitration is going on. The next hearing — most of the — maybe the final rounds of hearing will take place in last week of February. And we are very hopeful that we are on very strong footing. And you can [Indecipherable] this year in fact, if anything, any of — out of any commercial agreements if it is to be bid, it has to be bid from the operational date, the commencement [Indecipherable] not from any date after that.

So this is number one. Number two, if you see the performance of this particular company this has shown a phenomenal progress in terms of the loading in terms on the apportion earnings. For FY 2021, the loading increased — FY ’21-’22 the loading was 11.53 million tonnes with respect to FY ’20-’21 of 8.61 million tonnes. And the apportion earning also increased from INR183 crores to INR231 crores. This was the comparison of FY ’20-’21 and FY ’21-’22.

Now, if you see the first nine months performance the traffic has gone by 80% apportion earning has gone up by 97% with respect to the previous finance figures, first nine months performance. We have commissioned two crossing stations [Indecipherable]. This will again further increase the [Indecipherable] and I am 100% that in time to come the company will improve — further performance of the loading and transportation. Whatever deals which are pending from the Ministry of Railways this will be decided by the — after the Arbitration Tribunal gives the judgment which is at the final phase and we are very hopeful that in time to come we’ll get that.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Thank you sir. One more perspective either a suggestion or a question sir, is that we now have almost we do have eight such SPVs and joint venture companies. And each of those companies have now gone into giving revenues, generating profits. Can as a shareholder as an investor in the company can we hope to have some sort of a consolidation or a listing of any of these companies or a consolidation of these companies as one for RVNL and to create more value for the shareholders?

A K Choudhary — Principal Advisor, Finance

See, I’m A K Choudhary, Principal Advisor, Finance speaking. The nature of these SPVs, they’re temporary. Their lives is 30 years. That concession period total 30 years after that the company will be taken over by Ministry of Railways. So no long-term plan can be done for consolidation and all. After 30 years, they will merge with Indian Railways. Rather they are project-specific. Up to the project life, they are there, after that again these companies will dismantle and all. So no point — there’s absolutely there is no point in consolidating or investing in these companies because these companies are not permanent in nature [Indecipherable].

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Okay, thank you, sir. That’s all from my side. Thank you very much.

Operator

Thank you. The next question is from the line of Devang Shah [Phonetic] from Asit C Mehta Investments. Please go ahead.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Hi, good afternoon, sir. Am I audible, sir?

Rajesh Prasad — Director, Operations

Yeah, yeah, very much. Very good afternoon.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Sir, I have one question. The way we have seen in a budget, the Government has given us such kind of capex program and to boost the overall infrastructure and the allocation has been given in general of INR10 lakh crore of capex and particularly in a railway front INR2.43 lakh crore and many other infrastructure — Gati Shakti projects and many are there, they have shortlisted.

So as far as your future order outlook is concerned, because you have guided very well that you are going to have a strong order book, then only you can achieve your target, so you have to have a strong order book. So by considering these facts, as far as overall infrastructure development, how you are going to capture this particular thing and how it will be beneficiary to company as far as order inflow is concerned as far as participation and what you are thinking, what’s your plans, sir?

Rajesh Prasad — Director, Operations

Okay, so you are right that yes, the Ministry of Railways and the Government of India have got huge plans for the capex and the creation of infrastructure — all kinds of infrastructure not limited to only railway infrastructure. And you are also right that the capex this time is INR2.4 lakh crores in comparison to INR1.37 lakh crore of budget expense of FY ’22-’23 which [Indecipherable] to INR1.59 lakh crores of the revised budget. And the total capex has increased from INR7.4 lakh crores, to INR10 lakh crores.

See, the Ministry of Railway has got huge plans for the capacity building, [Indecipherable] electrification, transportation of 3,000 tonnes by 2030, then [Indecipherable] development connecting unconnected areas. So yes, it is there. And RVNL has got a proven track-record. See this infrastructure, especially the railway infrastructures are complicated and complex. And it is not something like that, you have got the money and then you go to the market and you just implement those infrastructure projects. It requires a lot of technical decisions, technical coordination, interfacing. And as I said, it is very complicated and complex and at the same time RVNL has got a proven track-record.

Why I’m saying all this that at the end-of-the day, it is the RVNL which play a significant role in all those. And in FY ’22-’23 if you also see that we have commissioned around 810 kilometers during FY ’22-’23, and it is around 30% of the entire commissioning by Indian Railways including RVNL. So I don’t know how it will come to us but certainly, it is one of the areas where we will be focusing and we are very keen to enter into all these kind of infrastructure projects.

So we are not only concentrating only these INR2.4 lakh crores of the chunk, we are concentrating on the entire INR10 lakh crores, whether it is in the Metro segment, whether it is in the other segments, road segment. So we have identified that where we should focus and certainly we have got the expertise in the railway infrastructure sector. So we will concentrate on the railway infrastructure sector. Metro segment is again very good.

We have got plenty of experience this year, in this financial year we have commissioned two metro corridors sections in Calcutta. And Indore Metro has taken up very. Chennai Metro, yes, we have got the LOA. We have already started setting up the [Indecipherable] yard and agency. So everything is in line, everything is in line and we are 100% sure that in times to come we are going to have a lot of railway infrastructure getting implemented by RVNL. And also the other sectors like the road sector, the metro sector, even the high speed corridors. So we are also concentrating on that. And we’ll see how we will get that.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

So you mean to say sir that order inflow that is going to be a definitely on a positive side going-forward by looking at this development, right? And you are going to be in a tendering process. So it will not be restricted to only railway, you will also participate in other tenders and try to get orders from the development, right?

Rajesh Prasad — Director, Operations

We have been getting that, we have been getting that. We have backed metro corridors for Chennai, for Surat Metro, we are executing one depot. We are executing systems. We are executing tracks. So we are entering into all kinds of segments. So, see, earlier we were having only one option depending upon the Ministry of Railways. Now we have got the wider options available.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

One more question regard to you, your Q3 earnings. We are seeing that there is decline in our share of profit from the JV. So any particular on a sequential basis, I’m talking about, so any particular reason for that?

Rajesh Prasad — Director, Operations

No, no, no you have seen the wrong figures. I will cite the examples that up to Q3, we have had an earnings of INR141 crore with respect to the INR88 crores of FY ’21-’22. Am I correct?

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

You are correct on that front. I’m just saying Q-o-Q basis. You are right on your calculation that I have seen, but on a quarter-over quarter if you see last quarter it was INR78 crores somewhere odd and this quarter you have realized INR43 crores. That is the only question.

Rajesh Prasad — Director, Operations

This is how do you see it? We see it in a cumulative basis in the finance.

A K Choudhary — Principal Advisor, Finance

And the seasonal flow and seasonal flow and the traffic pattern also changes depending upon the — one of the traffic is coal import — imported coal transportation. So that depends upon the kind of demand and supply and the government requirement [Indecipherable], the requirement of the places, so it’s keeps on changing, but we monitor up to the month, up to the quarter and up to the quarter, there is an increase, maybe in the same quarter. If you compare it may be flat or maybe slightly less, but if you see the overall performance in FY ’22-’23 with respect to FY ’21-’22, there is a sharp increase.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Got it, sir. And last question. Sir, as far as next year — next financial ’23, ’24 is concerned, sir, you are going to maintain the same revenue guidance that has been so far we are seeing?

Rajesh Prasad — Director, Operations

These MOU target like INR20,000 crores of topline, this is fixed by the Department of Public Enterprises, Ministry of Railways and Government of India and depends upon the so many factors, so the way we have been working, we want to see that there is a growth and there will be a growth in the topline. And we are focusing more on the bottom-line and maybe in ’23-’24 we will have the bottom-line, maybe more than INR1,200 crores, INR1,250 crores or INR1,300 crores. And from the investors perspective, this is more important to have a better bottom-line.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Okay, thank you sir. Wishing you all the best.

Operator

Thank you. [Operator Instructions] The next question is from the line of Ash Shah from Elara Capital. Please go ahead.

Ash Shah — Elara Capital — Analyst

Thank you again for the opportunity, sir. Can you — just one clarification, you mentioned that receivables were INR1,600 crores from the Krishnapatnam JV. So can you just provide what is the interest from?

Rajesh Prasad — Director, Operations

I said the total project cost was around INR2,400 crores, out of which we have received already INR1,600 crores, remaining INR800 crores, INR800-odd-crores are in trade receivables. This is what I had said. And there is arbitration going on. It is almost at the last phase of finalization. So we hope that we should be able to get these through the arbitration and the demand and the issues are very simple. If you wish I can explain it to you again that there are two issues, terminal cost and the freight apportionment [Indecipherable].

Ash Shah — Elara Capital — Analyst

That I understood. So in INR800 crores trade receivables is there any interest component on that or it’s just purely trade receivables?

A K Choudhary — Principal Advisor, Finance

Interest is shown separately, not as trade receivables.

Ash Shah — Elara Capital — Analyst

And what will that amount be, interest?

A K Choudhary — Principal Advisor, Finance

Roughly around, INR450 crores — INR530 crores.

Ash Shah — Elara Capital — Analyst

INR520 crores. Okay. Next question would be, so recently we saw an unfortunate event in Joshimath. So is there any — because of that event are we seeing any impact on the Char Dham project that the MOR was going to sanction or they were planning to build?

Rajesh Prasad — Director, Operations

We are not aware. We are not aware. See we were given the assignment of doing the survey and the feasibility report and we have already submitted that. We are executing [Indecipherable]. And the moment the project is sanction and Ministry of Railway will take a call that how they want to get it executed.

Ash Shah — Elara Capital — Analyst

Okay. So there is no. And also last question. By how much will be the — so you said around 80% of the order book, current order book is nomination based. So by when will that order book be out-of-the books like in by FY ’25-’26?

Rajesh Prasad — Director, Operations

A typical railway projects takes around five years’ time for completion and commissioning. So if the project has started around two years back. So it may take another two years. If it has started around three-and-a-half years back, it will take one-and-half years back. So what I can say is that being down the line maybe three years, 3.5 years, it should be completed, the work [Indecipherable] on nomination basis.

Ash Shah — Elara Capital — Analyst

Okay, and last question, also you had mentioned that you have bidded in projects worth INR70,000 crores. So can you just provide what is the international component of the same? I mean, are we looking for any?

Rajesh Prasad — Director, Operations

I do not have the figures right now available, but I can tell you that we have started executing overseas. The first overseas contract was around INR1,546 crores in Maldives and that project has already — the execution has already commenced over there.

Ash Shah — Elara Capital — Analyst

Okay, yeah, that’s all from my side. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Vishal Periwal. Please go ahead.

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Yes, sir. Thanks a lot for the opportunity. Sir, you mentioned like the profit from associate has been pretty good and this year INR141-odd-crores. Do you have the breakup of this in subsidiary-wise available, sir?

Rajesh Prasad — Director, Operations

Hello. Sorry, just can you repeat the question?

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Yeah, sorry, so I think you mentioned that profit from associate in year till-date is around INR141-odd-crore. So do you have number available how exactly this stack up subsidiary-wise.

A K Choudhary — Principal Advisor, Finance

Yeah, we have got the numbers, but — yeah, the highest contributor is Kutch Railway which has a PAT of INR237.42 crores and we have 50% share, so our PAT shares comes to a INR118.71 crores. Out of INR141 crores, this is the single largest chunk. Then Bharuch Dahej has a PAT of INR40.6 crores. Our share is 35.4% for this. Share in PAT is INR14.4 crores. Krishnapatnam has a PAT of INR11.42 crores. And our share stands at INR5.68 crores. Haridaspur Paradip has a PAT of INR7.6 crores and our share is INR2.27 crores. And lastly PAT of Angul Sukinda, our share is INR12 lakhs which adds up to INR141 crores roughly.

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Okay and in terms of new subsidiaries. Any other sorry and JVs that we’ll be commissioning in this year or maybe like FY ’24, do you foresee, sir?

Rajesh Prasad — Director, Operations

See the earlier SPVs which was built for the railway infrastructure like [Indecipherable] Bharuch Dahej, Krishnapatnam Haridaspur they were commissioned earlier. Angul Sukinda is getting commissioned in this month. So it is going to change the dynamics of the transportation and these were the typical railway infrastructure SPVs, and the new SPVs which are getting formed for the business development will take some time to get basically completed and commissioned.

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Okay, okay. Sure sir. And I think since we are moving into more of a competitive bidding I think we are setting up allied infra. So can you give some breakup on maybe like some guidance on what has been the capex this year, what are we doing for next year?

Rajesh Prasad — Director, Operations

So basically topline, you are asking. So the topline I said these FY ’22-’23 years we have been given a target of INR20,000 crores, which we are going to achieve maybe INR20,500 crores plus. [Indecipherable] This is initial phase, we may not be able to predict now.

Vishal Periwal — IDBI Capital Markets & Securities Ltd. — Analyst

Okay, okay. Sure sir. Sir, I’ll come back in the queue sir for more. Thank you so much.

Operator

Thank you. The next question is from the line of Deep Mehta from Bank of India Mutual Fund. Please go ahead.

Deep Mehta — Bank of India Mutual Fund — Analyst

Hello, sir, thank you for the opportunity. I just need some clarification regarding your guidance of INR1,200 crores of PAT in FY ’23. Sir, for nine months, we have done around INR1,060 crores of PAT. And if I have to do some calculation then you are saying that in Q4, you will do around INR140 crores, INR150 crores of PAT, and that will be 50% de-growth compared to next last year same quarter. And also margins, margins will be very lower. So can you give some clarification on this? Thank you.

A K Choudhary — Principal Advisor, Finance

Your question is not very clear. Can you be little louder.

Deep Mehta — Bank of India Mutual Fund — Analyst

Hello, am I audible? Sir, you have done around INR1,060 crores of PAT in this nine-Month and you are guiding that you will do INR1,200 crores in this full-year. So does this mean that you will do only INR150 crores, INR140 crores of PAT in Q4 and that will signify very lower margin in for Q4.

Rajesh Prasad — Director, Operations

You are not telling correctly. See the PAT after the Q3 was INR923 crores. This was around 30% higher than with respect to INR715 crores of FY ’21-’20. And see, these are the figures of the first three quarters, so next three quarters if you take the average, it will be become INR1,200 crores.

Deep Mehta — Bank of India Mutual Fund — Analyst

So you are taking standalone profitability for your guidance, adding JV profit?

A K Choudhary — Principal Advisor, Finance

No, we are not taking JV profit for this.

Deep Mehta — Bank of India Mutual Fund — Analyst

Okay, that is very helpful. And can you give some color on how — what is the growth we were looking for next financial year that is FY ’24?

Rajesh Prasad — Director, Operations

So the growth part, I said — somebody had asked this question and then I think that the topline is basically decided by the Department of Public Enterprises, Ministry of Railways, Government of India. This year it was only INR20,000 crores, which we are going to achieve around INR20,500 crores. This depends upon so many other factors. So this year, FY ’23-’24, we target around INR21,000 crores plus. And the bottom-line we’d like to have, again, more than INR1,200 crores.

Deep Mehta — Bank of India Mutual Fund — Analyst

Okay sir, that’s all from me. That was very helpful. Thank you.

Rajesh Prasad — Director, Operations

But I’ll tell you one thing, you see all the investors are there in the in line only. So I’ll tell one thing that only 16, 17 months back, we decided to bid in the market and we not only survived, we have performed exceedingly well and our numbers speak very high about that. And as I’ve said in the beginning that if you compare the market depreciation, the share price appreciated by more than 128% in first 10 months, whereas the BSE 500, it is stagnant, BSE Infra Index it is stagnant, what else you expect from us? It is after all a government company, where Government of India is having a share of 78.2%, so that is why I keep on quoting that it is a very, very flexible company where we have got the flexibility of the efficiency of the private organizations, private companies and the authority and trustworthiness of the government company.

Deep Mehta — Bank of India Mutual Fund — Analyst

Yes sir, I completely agree. In fact, for past five years, our growth will be highest among all both private as well as for public companies, so yeah your growth has been quite exemplary in the past. Thank you.

Operator

Thank you. The next question is from the line of Devang Shah from Asit C Mehta Investments. Please go ahead.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Sir, as you are now participating in a tendering process so do you have a cost escalation clause also in a tender? Because on a nomination basis so, we understood that you are getting certain fees from the Ministry of Railways, but in a different model, how it works. As far as cost escalation is concerned?

Rajesh Prasad — Director, Operations

See, it depends upon the plan, the provisions made in the tender documents each and every tender is different, each and every tender is having different kinds of provisions. each and every tender, it could be EPC, it could be a BOQ based and sometimes it’ll be the mix of that. And the price variation clauses also where sometimes even the price variation is not available. So what we do is while bidding we have got a complete business development. We allocate a risk depending upon the kind of provisions made in that particular tender. And if we allocate that risk so that the risk factor, the risk is slightly mitigated. So yes, you are right, this is slightly, it is not very clear at the time of bidding. But yes, we are allocating risk. And we have developed enough skill on this particular aspect. And the price variation some banks may get some extra benefit some banks may not, escalation may not be as per the market perception, market variations. But yes, we are allocating a risk [Indecipherable].

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Okay sir, thank you.

Operator

[Operator Instructions] The next question is from the line of Sandeep from Shivam Dealmark Private Limited. Please go ahead.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Sir, thank you once again. You might call this phishing, sir, but what kind of fund allocation can we expect towards dividend from the current year’s profits?

Rajesh Prasad — Director, Operations

You are asking about the dividends, the guidelines?

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Yes, sir, the dividend guidelines for the current financial year.

Rajesh Prasad — Director, Operations

The guidelines are available as per the Ministry of Finance directive and we will abide by that.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

And what is that, sir?

Rajesh Prasad — Director, Operations

Last year it was 35%, they haven’t issued for this year.

Sandeep Sutodiya — Shivam Dealmark Private Limited — Analyst

Okay, thank, sir.

Operator

Thank you. The next question is from the line of Rajesh from Moneyore. Please go ahead.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

Hello sir. Sir, are the margins more in the bidding order.

Rajesh Prasad — Director, Operations

In long-term, in longer-term, I think the margins will go up. But in the initial it stays there could be, I can tell you about Indore metro, the first two packages. Yeah, the margins are quite good and maybe slightly better than the margins which we used to get from the Ministry of Railways.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

And sir, this order [Indecipherable] order is included in the INR52,000 crore order book.

Rajesh Prasad — Director, Operations

No, it is not included, it is not included.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

So when we able to get that order and included here.

Rajesh Prasad — Director, Operations

This will be notified in the public domain.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

Okay, and sir, how will the PAT growth for next two-three years, if we’re not growing the topline. If the topline will not grow, it with grow for 5% to 10%, how the PAT will grow by 20% next two-three years?

Rajesh Prasad — Director, Operations

Because we are in the market, we are in the market. While we are in the market and we have got the flexibility, probably you have not heard what I was mentioning is that we are opening basically design cell, assembling the design cell for the value engineering, we are in the process of making a procurement cell, where the material supply, etc, drug will be done by us. These things will help us in that there will be a cost reduction in the execution of the projects and then we can increase the margin. This is what the major mega infrastructure companies have been doing.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

How much time it will take, sir, one or two years. How much time it will take to improve the margins?

Rajesh Prasad — Director, Operations

How much time it will take to increase the margins? See, this is something which we cannot — which cannot be predicted, but yes we are thoroughly professional and we allocate all types of risks. And we are aware about the margin requirement and see this is a government company, just now I was mentioned that, only 16, 17 months back we started bidding in the market, because we [Indecipherable] the nomination became [Indecipherable]. As you can see that we have participated in bids around INR70,000 crores. So this is something unique for this particular company and we are working for not only the bid part, getting the work. We are also equally concerned in the implementation part. We are also concerned about the margin part.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

Sir, the last question, how is the JV going to perform in the future going forward all JVs? All JVs [Indecipherable]?

Rajesh Prasad — Director, Operations

I can tell you, I can tell you, these JVs, there will be a turnaround in the JVs because a lot of developments have taken place. All the SPVs, the infrastructure SPVs have been commissioned and the traffic has gone up. And with the internal resources in the [Indecipherable] company they are undertaking the doubling in the railway electrification. The cost of O&M will go down because of the diesel traction with getting into the electric traction and then O&M cost will go down so there are so many things happening in these SPVs. And really the traffic has gone up like anything, as I said in Krishnapatnam alone and the traffic has gone up by 80% and the apportion earnings has also increased accordingly, 97%.

Rajesh Agarwal — Moneyore Capital Advisors LLP — Analyst

Thank you, sir. Thank you, sir.

Operator

Thank you. Ladies and gentlemen, we’ll be taking the last question that is from the line of Devang Shah from Asit C Mehta Investments. Please go ahead.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Thank you so much sir, once again. Sir, I have just — I want to have one clarification that you are saying that in the current order book, 80% of the order book is on still on a nomination basis, so I just — have changed your business model from nomination to tendering basis. So now onwards there will be no nomination contract, right, it would be completely tendering basis only you are going to get order flow right sir, correct me if I’m understood?

Rajesh Prasad — Director, Operations

You are partially correct. See, the MOU which we have signed with the Government of Kirghizstan, the projects are on a nomination basis kind of thing only. So we don’t know from there we’ll get the nomination works, but this may continue. We are not aware the now we have been informed, but there is a possibility that the nomination not from Ministry of Railways, but somewhere else, we can get, this is number one. Number two, we have started bidding only 16, 17 months back.

And then, we have already bidded participated in bids worth more than INR70,000 crores. If you add retention then it will become INR1.25 lakh crores. So this is small span of around 17, 18 months, 17 months, the company has seen a modestly feel happy that that we are ready to face the crisis and take the major — to mitigate those kind of crisis. We have in fact converted the crisis into the opportunities. Earlier, our client was one that was a Ministry of Railways, now today we are having different clients. We have opened all kinds of segments verticals. There is a diversification in the execution. So things are happening in a positive direction for our units.

Devang Shah — Asit C Mehta Investment Interrmediates Ltd — Analyst

Yeah, yes sir. Thank you. Understood, and wishing you once again all the best.

Operator

[Operator Closing Remarks]