RAILTEL CORP OF INDIA LTD (RAILTEL) Q4 FY23 Earnings Concall Transcript

RAILTEL CORP OF INDIA LTD (NSE:RAILTEL) Q4 FY23 Earnings Concall dated May. 19, 2023.

Corporate Participants:

Sanjai Kumar — Chairman & Managing Director

H C Batra — ED, Finance & Chief Investor Relation Officer

Analysts:

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

Divya Daga — Vijit Global Securities — Analyst

Vignesh Iyer — Sequent Investments — Analyst

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

Shubham Shukla — Voyager Capital — Analyst

Amit Kumar — Determined Investments — Analyst

Dhvani Shah — Investec — Analyst

Nitin Gandhi — KIFS Trade Capital — Analyst

Richa Shah — Individual Investor — Analyst

Pranay Khandelwal — Alpha Invesco — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q4 FY23 Earnings Conference Call of RailTel Corporation of India Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Vishal Periwal from IDBI Capital. Thank you, and over to you, sir.

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

Yeah, thanks, Seema. Good afternoon everyone.

First I’d like to thank the management of RailTel Corporation for giving us this opportunity to host the earnings call. I’ll introduce the management from the RailTel side. Today we have with us the CMD, Shri Sanjai Kumar-ji; Director of Finance, Shri V Rama Manohara Rao-ji; then we have Director of Projects, Operation & Maintenance, Shri Manoj Tandon-ji; and then H C Batra-ji, ED, Finance. As usual, we’ll have a brief overview from the company on the gone-by quarter. And then we have the lines open for Q&A.

Yes sir, over to you.

Sanjai Kumar — Chairman & Managing Director

A very good morning to dear investors and all other stakeholders.

It gives me great pleasure to interact with you on the company’s performance in the backdrop of Q4 audited results of the company as well as results of financial year 2022, ’23, which were declared by the company on 17th May 2023. The company achieved milestone of over INR2,000 crores, total consolidated income during financial year 2022, ’23 all time high in the history of the company. The company achieved consolidated operating revenue of INR704 crores for Q4 as against INR454 crores in Q3 of FY22, ’23 registering a growth of 55% quarter-on-quarter basis. Year-on year growth in operating revenue for the fourth quarter of FY23 has been 51% as compared to corresponding period of last year.

For the financial year ’22, ’23, the company registered the growth of 37% in operating revenues with turnover of INR1,954 crores as compared to INR1,548 crores in the previous financing year. The telecom segment contributed INR1,169 crores and project segment contributed to INR794 crores in the company’s operating turnover. The profit before tax in fourth quarter of FY22, ’23 before exceptional items is INR67 crores as against previous quarter corresponding profit of INR43 crores, registering an increase of 56% quarter-on-quarter basis. For the financial year ’22, ’23, the company has posted total profit before exceptional items and tax of INR257 crores as against INR231 crores in previous financial year. Total profit after tax and exceptional items of financial year ’22 ’23 stand at INR189 crores as against previous year tax of INR209 crores. Earning per share for this year stands at INR5.89.

EBITDA for the quarter 4 of FY23 is INR144 crores and the EBITDA margin is 15%. The company’s EBITDA margin for the financial year ’22,’23 has been 20% as against previous year’s margin of 27%. The fall in EBITDA margin is partly due to competitive base in project business having lower margin also. Your company has bagged many awards and recognitions in FY23, including prestigious SAFA that is South Asian Federation of Accountants certificate of merit for integrated reporting and corporate governance disclosure 2021.

Apart from railways, RailTel is executing a number of projects in other sectors also like coal, defense, banking, education, health, marketing, etc. We continue to grow as a key player in the digital transformation journey of the country. We are now driving the biggest public WiFi monetization program also attempted in India in partnership with a reputed IT company by introducing many passenger friendly infotainment services along with offerings a canvas space to advertisers in access smart. We now have expertise in the Aadhaar-based authentication services for impersonation control of candidates for competitive examinations, including other similar opportunities and scaling up to expand this product line.

We are glad to be associated with State Bank of India projects, which is one of the largest projects of providing last mile connectivity to banks on 4G LTE technology in India. Our retail broadband service called RailWire now has gone through pipelines to less subscribers across the country. We introduced many new value added services like bundled OTT plans, live OTT facilitating RailWire, FTTH subscription on RailTel’s WIFI network at railway stations, IPTV services and so on. Though this is very highly competitive and low barrier market, we will continue to add more value added services and get deeper NPLs to TSC areas.

We offer WiFi services to many universities and recently bagged a prestigious contract from ITPO Pragati Maidan Delhi to offer WiFi services as service and broadband services for all events there. We are already implementing Delhi smart city, Pondicherry smart city projects and video surveillance system project at railway stations as brought to your notice during previous interactions. RailTel also bagged prestigious order recently from C-DAC for developing IT infrastructure for greenfield data centers at New Delhi and Bengaluru. It will facilitate C-DAC in building up its capacity for secured big data enterprise applications. The company has also other IT ICT project orders including one from Bangalore Metro Rail Corporation Limited for revamping their existing IT impact structure, Government of Bihar for establishing their electronic knowledge network, among others.

We are also implementing communication projects namely 5 channel radio communication projects for Indian Railways and converse communication system over 230 stations in south western railway zones. Cyber security is a new area, which offers a lot of opportunities. We have strategically decided to enhance our capabilities to serve this market. Our expertise in implementing NIC eOffice projects has earned us many best assignments from many central government and state government departments. The company as planned a capex investment of the order of INR200 crore for network upgradation, augmentation of data center capacity, automation activities among others for the current financial year to further strengthen our vital infrastructure and capability.

We increased network capacity by 10 times recently. Easing off international supply chain will facilitate our implementation of projects also. We are very conscious of maintaining good standards of corporate governance, deep rooted values, best practices, transparency and integrity throughout the company. We are focused on our future growth. We are then constantly keeping pace with the pending IT and telecom scenario and reorienting our strategies to meet the challenges. The management always works for creating value for its investors and customers. We are always strengthen with the trust reinforced by the investor in the company. I would like to assure all that stakeholders that the company will continue to work for the satisfaction of our valued customers and for achieving new milestones in times to come.

Thank you.

Operator

Sir, shall we start with the Q&A session?

Sanjai Kumar — Chairman & Managing Director

Yes, please.

Questions and Answers:

Operator

[Operator Instructions] We’ll take our first question from the line of Mr. Divya Daga from Vijit Global Securities, please go ahead.

Divya Daga — Vijit Global Securities — Analyst

Congratulations on such a great number. And my first mission is what is the expected revenue from the 3i Infotech deal this year and in the next few years? Are you in talks for the deals and what is the revenue recognition model for that?

Sanjai Kumar — Chairman & Managing Director

Okay, so this deal with the 3i Infotech is regarding WIFI monetizing as I have told already that we have provided them a canvas of — canvas space for advertisers. So that the advertisers get their advertisements to them so there is a minimum guarantee of INR14 crore per annum and over and above. If they have revenue, they have to share 40% of their revenue with us with the minimum guarantee of INR14 crores. So whichever is higher, they will share. So this year, maybe another three months, they will be launching their services, this monetizing part, but their the payment period has already started. The minimum guarantee they have to start paying now. I believe your answer is — you are satisfied with the answer?

Divya Daga — Vijit Global Securities — Analyst

Basically I was asking that what is the expected revenue we are expecting in this financial year from 3i?

Sanjai Kumar — Chairman & Managing Director

I told you, this is — any WiFi system globally has not been a profitable business. This is the first time it is happening because we have a very large ecosystem of WiFi, where 17,000 ATs are installed all over the country. And the space will be open to so many footfalls. So this is the first time we will be doing it, and we are expecting good results. But still it depends upon the execution. So we are working onto it. And another treatment, we will see the results. It has been finalized to tender, open tender. I would not like to comment any number now, but yeah, minimum guarantee is there. So this year, at least we may not be expecting anything big. Depending upon the success of this experiment, maybe next year onwards, we can say something about it.

Divya Daga — Vijit Global Securities — Analyst

Or when the revenue will start coming, how will we recognize that? It will come in other income or in the top line?

Sanjai Kumar — Chairman & Managing Director

It is other income. It is operating income, no sorry. It is operating income, but not telecom or projects.

Divya Daga — Vijit Global Securities — Analyst

Okay. My second question is, in Q2 FY23 con call, you said that you are expecting around INR50 crores from data centers, am I right?

Sanjai Kumar — Chairman & Managing Director

Yeah.

Divya Daga — Vijit Global Securities — Analyst

Are we on it or is there any change?

Sanjai Kumar — Chairman & Managing Director

From data center is income you all are asking — so we will be certainly increasing the services and numbers will be more. This year, we have done INR52 crores and at present here, we are expecting somewhere around INR100 crores.

Divya Daga — Vijit Global Securities — Analyst

Okay. Can you just give me what services you’re providing and how is the model and everything about data center basically?

Sanjai Kumar — Chairman & Managing Director

So data center, basically they are different types of services like a pure colocation services which now we are not very much keen to expand upon. Then we are providing core computing facilities to the — so that basically we host the applications and our machines, that is the virtual machines, you can call it. And then, there are security-as-a-service, then application-as-a-service also like we are providing e-office, hospital management information system, the application-as-a-service is also there.

Divya Daga — Vijit Global Securities — Analyst

So as you said that it is on asset light model. So what is that exactly?

Sanjai Kumar — Chairman & Managing Director

Asset-light model means — that is I would say, basically we have not put in money into — basically the money which we have put in this data center activity is not very high because these are applications. The customer does can command and start using our services. Whenever demand comes, yeah, we can immediately start getting the services like Aadhaar authentication service. It is the service being provided at our data center. So we are already having our system platform available with us and customers start using that immediately, there’s no time taken in providing this service.

Divya Daga — Vijit Global Securities — Analyst

Is it like an annual subscription?

Sanjai Kumar — Chairman & Managing Director

No, it is not annual subscription. It’s based on usage. Aadhaar-based authentication services are usage base. Suppose this year, we have conducted complete JEE exam, it was conducted through our Aadhaar authentication biometric services. And so whenever the exam is conducted, they are using it and paying it for physically per user.

Divya Daga — Vijit Global Securities — Analyst

Okay. So what is the revenue recognition model for data centers?

Sanjai Kumar — Chairman & Managing Director

So there are different models. Actually, like this one is for instant based Aadhaar authentication per instances, but there are continuously application posters. So that’ll be annual of income coming to us. Then there’ll be applications which are provided by us, that is also depending upon the license based or how many concurrent users are there, those kind of assumptions are there, so there are really various models. And these models are continuously evolving. There is no single model of revenues earning.

Divya Daga — Vijit Global Securities — Analyst

So is this year…

Operator

Sorry to interrupt you Ms. Divya, may we request you to return to the question queue ma’am. We have follow up question from several other participants. We take the next question from the line of Mr. Vignesh Iyer from Sequent Investments, please go ahead, sir.

Vignesh Iyer — Sequent Investments — Analyst

Congratulations on the strong set of numbers. Just two questions from my side. So if I’m not wrong, I remember from the quarter 2 call, where you had…

Sanjai Kumar — Chairman & Managing Director

A lot of noise coming from your end.

Vignesh Iyer — Sequent Investments — Analyst

Am I audible now?

Operator

Audible. Are you using your earphone while talking?

Sanjai Kumar — Chairman & Managing Director

You are audible, but a lot of background noise is there.

Vignesh Iyer — Sequent Investments — Analyst

No, I’m using my handset mode now.

Operator

Yes. Please go ahead.

Vignesh Iyer — Sequent Investments — Analyst

Yeah. So I remember in the quarter 2 call, you’ve guided that for the project how you operate quarter 1 and quarter 2, could we slower. So just to understand, keeping that in mind, I mean would we see some progress YoY, when it comes to project business in quarter 1 quarter 2 or it would be more or less flattish?

Sanjai Kumar — Chairman & Managing Director

Yeah. I have been saying this again and again because we are a small company. And quarter for a company of our size is a small period. So there may be quarter-on-quarter, they may not be two indications I would say. But still, we are having good order book with us. So we expect that good numbers will come in quarter 1, quarter 2 also.

Vignesh Iyer — Sequent Investments — Analyst

Okay. And could you tell me what is the size of the order book as on 31st March 2023? And what would be the expected time of execution for the same?

Sanjai Kumar — Chairman & Managing Director

31st March, I really don’t remember. But right now, we have INR4,500 plus crores order book as on date.

Vignesh Iyer — Sequent Investments — Analyst

Okay. Just one last question if I could squeeze in. Can you give me what is the RP for RailWire as of now and propose?

Sanjai Kumar — Chairman & Managing Director

It’s around INR550.

Vignesh Iyer — Sequent Investments — Analyst

Okay, fine. I’ll get back in the queue. Thank you.

Operator

[Operator Instructions] We take the next question from the line of Pratap Maliwal from Mount Intra Finance Private Limited, please go ahead.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

We’ve had a good increase in our project revenue this quarter. So I just wanted to ask how much of this was from the VSS order that we were supposed to collect in Q4?

Sanjai Kumar — Chairman & Managing Director

VSS, it’s around INR85 crores.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

Okay. So our total collections of was supposed to be I think in the range of INR400 crores. So are they going to be flowing into the next year as well, the VSS?

Sanjai Kumar — Chairman & Managing Director

Yes. This year, we will be distributing major chunk of VSS.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

Okay. So out of the INR400 crore order, how much are we done till now?

Sanjai Kumar — Chairman & Managing Director

Till now, maybe around INR150 crores including the previous one also.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

INR150 crores done. And I just wanted some idea on the VSS order, so we are doing the project for the railway stations. Is it a separate order for VSS in coaches for next year that we may get, is that a separate order?

Sanjai Kumar — Chairman & Managing Director

No, that is a separate order, but that order we are not counting now because there is rethink going on in with the Ministry of Railways as how to execute this surveillance system in coaches, because there are some — see, coach is a body wherein there are many devices already fitted. So we are working on netiquettes of that. So that you might have seen in the news also maybe on the portal also that we have right now capped this tender on hold. Right now, we are not counting that order in our order kit.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

Understood, thank you. And just wanted to understand that going forward, can we get some kind of idea as to what maybe margin level that an EBIT level, we intend to keep either on an overall basis of our project basis, any color on that?

Sanjai Kumar — Chairman & Managing Director

So if you talk of project, we would try to keep the range of 6% to 7%.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

Okay. And how will we maybe — because I think currently we are at slightly lower level for Q4. So what would drive that increase?

Sanjai Kumar — Chairman & Managing Director

See there are multiple factors. Number one is the selection of projects where we are going. So these LLE select projects where there is an element of telecom, there is an element of data center and then there is an element of IT applications and all that. So generally, we prefer projects where these 2 elements are also present. And then that these 2 elements help us with keeping our margins higher.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

And telecom revenues — I’m sorry, telecom margins would be in the range of the usual 19% to 20%, is that it?

Sanjai Kumar — Chairman & Managing Director

Yes. See our telecom margins, EBIT margins already 33% for the last financial year.

Operator

Thank you. We take the next question from the line of Shubham Shukla from Voyager Capital, please go ahead.

Shubham Shukla — Voyager Capital — Analyst

So my first question is around the margin. So on telecom sector, like if you could give breakup of margin from project work and telecom work?

Sanjai Kumar — Chairman & Managing Director

For quarter or for the year, you are asking for?

Shubham Shukla — Voyager Capital — Analyst

Both actually.

Sanjai Kumar — Chairman & Managing Director

So if you talk of EBITDA margin for telecom services for the quarter gone by, it was 29%. And for project work, it was 4%.

Shubham Shukla — Voyager Capital — Analyst

And yearly?

Sanjai Kumar — Chairman & Managing Director

And yearly, it was 33% for telecom and 5% for the projects.

Shubham Shukla — Voyager Capital — Analyst

Okay. And the second would be on the order book. We currently have INR4,500 crores on the order book and we as far as I can remember, we had the similar range of order book in quarter 2. So like we didn’t see any growth there?

Sanjai Kumar — Chairman & Managing Director

So see, there was like last 4 to 5 months, we have received new orders of around INR1,000 crores. There has been implementation that’s why you have seen that Q4 result there was and some growth in project income also. And there orders have been coming and implementing and then new orders are getting added. So that is our continuous process.

Shubham Shukla — Voyager Capital — Analyst

So this current order book, does it provide any visibility for revenues like if you could say, like a year or two revenue visibility?

Sanjai Kumar — Chairman & Managing Director

This year, I see project income of around INR1,500 crore.

Shubham Shukla — Voyager Capital — Analyst

Okay. And like any future guidance, if you could provide for next years?

Sanjai Kumar — Chairman & Managing Director

Next year, from this order book you are asking or we’ll be having new orders for…

Shubham Shukla — Voyager Capital — Analyst

No, for FY24 like any type of…

Sanjai Kumar — Chairman & Managing Director

For FY24, so somewhere around INR2,500 crores. We will be — to get…

Shubham Shukla — Voyager Capital — Analyst

INR2,500 crores of…

Sanjai Kumar — Chairman & Managing Director

INR2,000 to INR2,500.

Shubham Shukla — Voyager Capital — Analyst

Revenue we will be adding.

Sanjai Kumar — Chairman & Managing Director

Should be. We’d be working towards that. ’24, ’25. I’m talking of ’24, ’25.

Shubham Shukla — Voyager Capital — Analyst

INR2,400 crores to INR2,500 crores, right?

Sanjai Kumar — Chairman & Managing Director

No. I’m talking of financial year ’24, ’25. ’23, ’24 is INR1,500 crores.

Shubham Shukla — Voyager Capital — Analyst

Okay. For financial year ’24 like ’23, ’24, it’s INR1,500 crores. For ’24 to ’25, it should be somewhere around, what?

Sanjai Kumar — Chairman & Managing Director

INR2,000 crores to INR2,500 crores for project income.

Shubham Shukla — Voyager Capital — Analyst

For project income, okay. Thank you so much and good luck.

Sanjai Kumar — Chairman & Managing Director

Thank you.

Operator

Thank you. We take the next question from the line of Mr. Amit Kumar from Determined Investments, please go ahead.

Amit Kumar — Determined Investments — Analyst

Just quick question on this WiFi monetization. You mentioned INR14 crores minimum guarantee amount. I was just wondering the WIFI that you maintain across stations of Indian Railways, what would be the — for the operating expense on an annual basis of sort of managing the infrastructure broadly?

Sanjai Kumar — Chairman & Managing Director

It would be — if you talk of maintaining, it will be around INR10 crores to INR12 crores.

Amit Kumar — Determined Investments — Analyst

Marginal profitability?

Sanjai Kumar — Chairman & Managing Director

Yeah. So no, actually we are pooling resources. There are people who are working as our network along the railway track which is 61,000 kilometers. So they are resources and the same resources are pool projects. So we actually do not dedicatedly provide any man power for that. That is a small internet bandwidth expenditure which is continuously coming down as an as a cost to us because of international and national scenario in this market.

Amit Kumar — Determined Investments — Analyst

Okay, got it. And just one question on your RDN and content on delivery COD, planned previously. Any sort of update on these contracts also? When can we expect any sort of action on these fronts?

Sanjai Kumar — Chairman & Managing Director

I think during last interaction also I mentioned that RDN is also RDN and COD, both are being given a fresh thought in the Ministry of Railways. And that is why we have not included these two projects in our order book also. Now we are awaiting further instructions from Ministry. So they are not there on our radars right now.

Amit Kumar — Determined Investments — Analyst

All right, that’s it from my side. Thank you.

Operator

Thank you. The next question is from the line of Dhvani Shah from Investec, please go ahead.

Dhvani Shah — Investec — Analyst

Am I audible?

Sanjai Kumar — Chairman & Managing Director

Yeah, could you be slightly louder?

Dhvani Shah — Investec — Analyst

Yeah. So first of all just nearer the break up on NND, ISP and IP within the telecom, if you can give it on an annual basis?

Sanjai Kumar — Chairman & Managing Director

Just a minute. So for the financial year gone by, we have total IP1 income of INR215 crores, ISP income of INR380 crores out of which RailWire is INR318 crores and NND INR559 crores.

Dhvani Shah — Investec — Analyst

Okay. Also I just want to understand, so the project is for good ramp up and of that, the VSS with almost INR85 crores. So VSS was supposed to come in at higher margins of almost 8%. So have not started executing your change in strategy you’ve mentioned last quarter saying that the coming forward projects will be at a lower margin given that your focus will be more on volume and is that also why you’ve called out want to be in INR100 crores over the next year and that we’d say that essentially the run rate actually we saw in Q4 will continue going forward?

Sanjai Kumar — Chairman & Managing Director

Could you summarize your question?

Dhvani Shah — Investec — Analyst

Yes. I’m asking that the margins that you saw in project business were at 2.3% this time and VSS project was mentioned would be almost 8%. That was almost INR85-odd crores of incremental revenues that stand at the project business. So are the other projects at a lower margin?

Sanjai Kumar — Chairman & Managing Director

No, actually I would say that it’s 4%, 4-point-something percent. No, last quarter. So there was some project capacity we’ve got with lower margin and that of course affected us in that. But now we will be slightly cautious because there are many projects, there is no dearth of projects business, and we will be slightly selective in bidding for projects where margins are certainly better so that we continue to remain in 6% to 7% bracket.

Dhvani Shah — Investec — Analyst

Okay. And I just one other clarification on the other expenses part. Overall basis you’ve come down from INR30 crores to INR10 crore, can you explain the difference please? Was there a one-off to expenses?

Sanjai Kumar — Chairman & Managing Director

Hello, your voice is slightly breaking.

Dhvani Shah — Investec — Analyst

Just wanted to understand the other expenses for the quarter, they have come down to INR100 million, INR103 million from INR300 million last quarter. Can you just explain that difference? Were there any one offs?

Sanjai Kumar — Chairman & Managing Director

Our ED Finance, Mr. Batra will answer this. In the meantime, if you have any other questions, then you can ask that, otherwise then…

Dhvani Shah — Investec — Analyst

No, that’s it. Thank you.

Sanjai Kumar — Chairman & Managing Director

Yeah, over to Mr. Batra.

H C Batra — ED, Finance & Chief Investor Relation Officer

It’s primarily because of the PTL. In the last quarter PTL probably [Indecipherable], which is not there in the March quarter.

Dhvani Shah — Investec — Analyst

Okay, thanks.

Operator

Thank you. [Operator Instructions] We take the next question from the line of Nitin Gandhi from KIFS Trade Capital, please go ahead.

Nitin Gandhi — KIFS Trade Capital — Analyst

So increasing network by almost 10 times and you have certain projects. So can you share how is the project average execution time out of your order book of INR4,500 crores? And how you are spending of because 3 or 4 times of network capacity utilization in next 1 or 2 years?

Sanjai Kumar — Chairman & Managing Director

See I believe are both separate question. So projects yeah. Is it’s not directly related to any network capacity prices somewhere it may be utilized. All right. But if you talk of project business so out of this 4500 crores, we are expecting that around 1500 crore income, we will be booking this current financial year.

Nitin Gandhi — KIFS Trade Capital — Analyst

That I got it. You said that for two years, [Indecipherable] we have expected,

Sanjai Kumar — Chairman & Managing Director

Yes.

Nitin Gandhi — KIFS Trade Capital — Analyst

But I’m speaking average duration.

Sanjai Kumar — Chairman & Managing Director

So there are projects which are going up to eight years also, one year the implementation or 1.5 years for implementation. And then and then one year or two years for warranty and then another five years for maintenance A&P also. There are projects with 3 years and then after three years, they are getting renewed also and IVRs also there are projects. But implementation is generally 1, 1.5 years.

Nitin Gandhi — KIFS Trade Capital — Analyst

Okay. Out of 4,500, how much is O&M?

Sanjai Kumar — Chairman & Managing Director

O&M may be out of this INR4,500 crore, O&M would be INR500 crore also.

Nitin Gandhi — KIFS Trade Capital — Analyst

Fine. And now network related.

Sanjai Kumar — Chairman & Managing Director

We are not really worked out on this, but I guess. Because those are smaller amounts, generally 3% to 4% kind of a number per annum kind of.

Nitin Gandhi — KIFS Trade Capital — Analyst

Right. And now regarding network, wish you can share something.

Sanjai Kumar — Chairman & Managing Director

Majority are basically one to two years. Majority of the numbers are getting converted into revenue in initial years and remaining 15% maybe depending upon the number of years they are going. 10% to 15% or so.

Operator

Thank you. We take the next question from the line of Mr. Vishal Periwal from IDBI Capital, please go ahead.

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

Yes, thanks for the opportunity. A couple of a data point if I can ask, what is the real via subscriber base currently with us?

Sanjai Kumar — Chairman & Managing Director

It is 5.21 lakh.

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

Okay and I mean if you have this number ready for FY22 for comparison sake?

Sanjai Kumar — Chairman & Managing Director

4.63.

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

Okay. And then for maybe a full year basis project side, if you can give a breakup of revenue between railway and non railway.

Sanjai Kumar — Chairman & Managing Director

Railway for this year gone by was INR155 crores and other project was INR619 crores.

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

Non railway in INR619 crores?

Sanjai Kumar — Chairman & Managing Director

619.

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

Okay. But just one clarification then, if a non railway piece is increasing for us, so any reason that the margins are subdued for us?

Sanjai Kumar — Chairman & Managing Director

No, there is. Yeah, railway of course gives us because there were projects which are given to us on nomination basis and there were healthy margin of 88.5% with us and outside projects even now in railways also we are getting orders by bid, nothing on nomination. So, then of course when we are in competition, margins are decided by the competition and not nomination. So there is an effect of competition, but then you are seeing that in other projects. This year we have only 13% to 14% income from railway including telecom income.

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

Okay and then a like-to-like basis sir, between railway and non railway sort of particular projects, will it be fair to say that now given a competition in normal side so railway gives us better margins because it’s non railway or it’s underpinned?

Sanjai Kumar — Chairman & Managing Director

I told you, even railway is not now a competition for us. We have to get any work through competition only. So I don’t see any difference but those projects like video surveillance, it is already going on. So, of course there will be better margin. We are already in the cubic.

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

Okay, and then the 1,500 crores top line unless you’re expecting for FY 24, the margin expectation is in the range of 5-odd percent, that’s what you said right, sir? Just a clarification.

Sanjai Kumar — Chairman & Managing Director

Yeah, we can say, we will try to get 6% to 7%. 5% of course is assured, I can say.

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

Okay, and on a telecom I think can guide in a similar way, how exactly you’re seeing things are in the next year on the margin and the topping front because I mean maybe parallel question to that, like you mentioned, like you know, we have expanded the capacity by 10.

Sanjai Kumar — Chairman & Managing Director

There has been telecom margins were slightly dipping. You might have seen. Because of some of our fiber was getting older. And we are not yet decided, we have not decided to replace them, but we are continuing with that fiber and repairing it. So there is some maintenance expenditure going on without going in for capex. There are already over but we are continuing with the pay method. So there is some increase in the opex on optical fiber maintenance. And that is how the CRB, we see that there is slight dip in the telecom margin.

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

Okay. How do we see things in next year in terms of margins?

Sanjai Kumar — Chairman & Managing Director

Maybe more or less at the same level.

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

That is on a quarterly basis.

Sanjai Kumar — Chairman & Managing Director

We had EBITDA margin of 33% in comparison to last year of 35%.

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

Okay, well, maybe I’ll try to understand this in detail with you offline. And then one last question from my side and then I’ll come in the queue. The same thing network expansion that has happened that is the along the railway track the optic fiber which is there which side of the business you are saying?

Sanjai Kumar — Chairman & Managing Director

Earlier our network was based on 10G system now it has 100G system. So straightaway we have multiplied by 10, so we have good amount of capacity available to them.

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

Okay. Sure, thanks a lot. I’ll come back in the queue.

Operator

Thank you. [Operator Instructions] We take the next question from the line of Richa Shah, Individual Investor, please go ahead.

Richa Shah — Individual Investor — Analyst

I just wanted to move our trade receivables.

Sanjai Kumar — Chairman & Managing Director

Excuse me, could you be slightly louder please?

Richa Shah — Individual Investor — Analyst

Okay, am I audible now?

Sanjai Kumar — Chairman & Managing Director

Yes, thank you.

Richa Shah — Individual Investor — Analyst

Okay, sir I wanted to understand about, you do have a top line of almost INR2,000 crores. And in that we have a receivables, trade receivables for INR1,050 crores. So I wanted to know what are the number of days of receivables? And from this INR1,050 crores, how many are older than six months?

Sanjai Kumar — Chairman & Managing Director

Older than six months?

Richa Shah — Individual Investor — Analyst

Yeah, from the INR1,050 crores of trade receivables?

Sanjai Kumar — Chairman & Managing Director

Just give us some more time, so that you can ask new question. In the meantime, we’ll get these numbers.

Richa Shah — Individual Investor — Analyst

Okay. My second question, just wanted to know how many subscribers that we added in RailWire in Q4 and in FY23?

Sanjai Kumar — Chairman & Managing Director

[Indecipherable]

Richa Shah — Individual Investor — Analyst

How many, I cannot hear you.

Sanjai Kumar — Chairman & Managing Director

See, if you see the number added, so there were new numbers and there were some standing out also. Net subscribers and it were around 52,000. That has been net recently.

Richa Shah — Individual Investor — Analyst

52,000 in for the full year?

Sanjai Kumar — Chairman & Managing Director

For the full year.

Richa Shah — Individual Investor — Analyst

And for the quarter, for Q4?

Sanjai Kumar — Chairman & Managing Director

Roughly 7,000.

Richa Shah — Individual Investor — Analyst

7,000. Okay. So just the trade receivables, if you can just get back to me on that.

Sanjai Kumar — Chairman & Managing Director

Yeah, so less than a year, number is already there with new business INR700 crores and remaining is more than a year. Roughly around INR400 crores.

Richa Shah — Individual Investor — Analyst

No, so I want to know more than six months is how much?

Sanjai Kumar — Chairman & Managing Director

More than 6 months, this number I think right now is not available.

Richa Shah — Individual Investor — Analyst

Okay.

Sanjai Kumar — Chairman & Managing Director

Yeah. Will get back to you, maybe.

Richa Shah — Individual Investor — Analyst

Okay. And what are the key receivable days that we are currently at?

Sanjai Kumar — Chairman & Managing Director

1,020 now.

Richa Shah — Individual Investor — Analyst

That would be the receivable numbers. I want to know the receivable days. The debtor days.

Sanjai Kumar — Chairman & Managing Director

Days. So this is, that is 191 for the year gone by and now it’s been 192 for the year gone by. Yeah, but see, actually this 192 number which you are seeing, since the our project income has gone up, so what is happening in project income, where many projects we take with our partners and there is the receivables as well as payables also. So it actually does not affect our cash flows because we pay only when our payments are made by the customers. So these numbers are failing, because of this reason, because project income has increased substantially you have seen in our account statement also. So that is the major reason. And there are project milestones also, some project is going on for maybe one and a half years. So there are various milestones. When these payments are due, so then but they are they have to be shown as per in their calendars so that is the reason.

Operator

Ms. Richa, does that answer your question ma’am? Ms. Richa, can you hear us? As there’s no response from the line of the participant, we move on to the next question from the line of Shubham Shukla from Voyager Capital, please go ahead.

Shubham Shukla — Voyager Capital — Analyst

Yeah, hi once again. So I just if I can recall the last statement on your margin from telecom sector, so you said that we are having we are incurring some minor fiber maintenance. These are my minor maintenance then, why are EBITDA margins falling from 35% to 13%, because some minor maintenance as you see it, but the drop in margin is quite significant, does that justify?

Sanjai Kumar — Chairman & Managing Director

Only 2%, 33% banking is up 13%.

Shubham Shukla — Voyager Capital — Analyst

From, I didn’t get it. From?

Sanjai Kumar — Chairman & Managing Director

35% to 33%, not 13%.

Shubham Shukla — Voyager Capital — Analyst

Okay. And our revenue — if you could provide revenue visibility for telecom for the next two years.

Sanjai Kumar — Chairman & Managing Director

So revenue visibility part this year from telecom business, we are eyeing a number of 1,300 to 1,400.

Shubham Shukla — Voyager Capital — Analyst

For FY24?

Sanjai Kumar — Chairman & Managing Director

Yeah.

Shubham Shukla — Voyager Capital — Analyst

And for ’25.

Sanjai Kumar — Chairman & Managing Director

’25 also because the revenue in telecom business by capacity wise, it is growing, but since price are continuously under pressure in market, telecom market, so the numbers are not commensurate with the services we are providing. So again, I can get the number of 1,700 — 1,600 to 1,700 for the next year.

Shubham Shukla — Voyager Capital — Analyst

Okay and margins on these project work would be similar to like 6%, 7% for next two years?

Sanjai Kumar — Chairman & Managing Director

6.50% to 7% is what we are striving to get with a minimum from there it goes to 5%.

Shubham Shukla — Voyager Capital — Analyst

Okay. Thank you so much. That’s it from my side.

Operator

Thank you. We take the next follow up question from the line of Dhvani Shah from Investec, please go ahead.

Dhvani Shah — Investec — Analyst

I just wanted to get some color on telecom businesses and the sectors within like if you can give some color on our performance.

Sanjai Kumar — Chairman & Managing Director

You want numbers from these individual services from telecom?

Dhvani Shah — Investec — Analyst

Yes, just some color on how there are going forward in the group like the where do see maximum most coming from within those two sectors?

Sanjai Kumar — Chairman & Managing Director

Your voice is getting distorted when you are speaking.

Dhvani Shah — Investec — Analyst

Yeah. I just want some color on…

Operator

Sorry to interrupt you ma’am. Ma’am, when you’re talking there is a lot of background noise from you end.

Sanjai Kumar — Chairman & Managing Director

Yeah, there is lot of background noise.

Operator

We’re unable to hear your questions. [Operator Instructions] We take the next follow-up question from the line of Pratap Maliwal from Mount Intra Finance, please go ahead.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

I just wanted to confirm one data point that you provided that, out of our total income this year, in FY24, we are expecting a total railways income to be 30% to 40%, did you say, did I get that correct?

Sanjai Kumar — Chairman & Managing Director

I do not mention about this number. 13% was for the ’22, ’23. But I didn’t say anything about ’23, ’24.

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

I think I said that in the coming year that the percentage of revenues we expect from railways including our telecom income. What is the data point if I can just get that?

Sanjai Kumar — Chairman & Managing Director

You are asking anticipated income for the ’23, ’24?

Pratap Maliwal — Mount Intra Finance Private Limited — Analyst

Yeah, from railway, what is the percentage of income that we expect from railway?

Sanjai Kumar — Chairman & Managing Director

To say this year also will be 15% to 20%, 15% to 20% of our total income.

Operator

Thank you. We take the next question from the line of Mr. Pranay Khandelwal from Alpha Invesco, please go ahead with your question.

Pranay Khandelwal — Alpha Invesco — Analyst

Congratulations on good set of numbers. I wanted to understand just one thing that if you look at the segmental performance that you have reported, over there if we see the telecom EBIT margins, it was around 19% to 20%. While you have been iterating, that is 33%. Can you explain me? Why that’s different? How we calculate the telecom margin from your side and what is the difference in segmental result?

Sanjai Kumar — Chairman & Managing Director

Yeah. Mr. Batra, our ED Finance will answer your question. Over to you.

H C Batra — ED, Finance & Chief Investor Relation Officer

You are talking about EBIT margin. EBITA margin.

Pranay Khandelwal — Alpha Invesco — Analyst

Okay, there comes in 13% difference because of…

H C Batra — ED, Finance & Chief Investor Relation Officer

EBITA margin is 33%.

Pranay Khandelwal — Alpha Invesco — Analyst

Yeah. So there comes a 13% difference from the depreciation expense?

H C Batra — ED, Finance & Chief Investor Relation Officer

Yeah, of course, a depreciation element.

Operator

Thank you. The next question is from the line of Divya Daga from Vijit Global Securities, please go ahead.

Divya Daga — Vijit Global Securities — Analyst

My question is, what is the real order book and how much are you going to exclude in this financial year?

Sanjai Kumar — Chairman & Managing Director

So our order book is roughly around INR4,500 crores and this year we are targeting to get INR1,500 crore number. Does this answer to your question?

Divya Daga — Vijit Global Securities — Analyst

Yes and thank you so much.

Operator

Thank you. The next question is from the line of Mr. Amit Kumar from Determined Investments, please go ahead.

Amit Kumar — Determined Investments — Analyst

Just one follow-up. I think you mentioned on number of INR200 crores for capex for this fiscal ’23, ’24. I just want to understand, what is — can you just break it down between maintenance and growth capex and across both of those any sort of major element that you want to sort of highlight and what’s the principal areas in which that capex is divided?

Sanjai Kumar — Chairman & Managing Director

So I’ve also mentioned in my interest also. Partly, it will go towards network upgradation further basically inhibiting the capacity, capacity when I say enhancing the capacity, it is basically adding to the existing system. We can increase the capacity up to 800 G — 8,000 G, that is the maximum capacity we can go so partly it will go through that. Partly, it will go through the data center augmentation also and then we are — we have already planned for a largest scale automation in about the POS system to increase our institutions and productivity. So these are the major key segments we will be spending this money.

Amit Kumar — Determined Investments — Analyst

Will there be constant decrease to put some numbers to in each one of these? And what would be the maintenance capex also I just wanted to get some thoughts on that?

Sanjai Kumar — Chairman & Managing Director

Maintenance, it does not come in — Maintenance is never part of capex. That is part of revenue expenditure.

Amit Kumar — Determined Investments — Analyst

Okay. In terms of the different pieces, how does this INR200 crores of productive?

Sanjai Kumar — Chairman & Managing Director

So you can say that roughly around INR50 crores towards data center, INR75 crores each towards network tradition and automation.

Operator

Thank you. We take the next question from the line of Richa Shah, please go ahead.

Richa Shah — Individual Investor — Analyst

I just wanted to understand you were telling the Q you have payables also because you worked for third-parties. So just wanted to know what are the payable days?

Sanjai Kumar — Chairman & Managing Director

Payables days would be — as I told you, suppose I have got milestones from my customer, which is due three months from now, it depends on the payments from the customer and milestone as per the contract. So we cannot say that this is the payables. So as soon as the money comes to us, we have terms and conditions with our partner that we have immediately pay them back. Let it be weeks and days, that is all.

Operator

Thank you. Ladies and gentlemen, due to the time constraint that was the last question.

[Operator Closing Remarks]