Rajesh Power Services Ltd (BSE: 544291) Q4 2026 Earnings Call dated Apr. 23, 2026
Corporate Participants:
Arpit Mundra — Investor Relations
Utsav Panchal — Chief Executive Officer
Nikita Shah — Chief Financial Officer
Adish Patel — Senior Manager, Finance
Analysts:
Aniket Madhwani — Analyst
Agastya Dave — Analyst
Deepak Poddar — Analyst
Shravan Shah — Analyst
Kaushal Sharma — Analyst
Divya Ghoshal — Analyst
Andrey Purushottam — Analyst
Mohit Arora — Analyst
Pushkar Jain — Analyst
Vishvendra Singh — Analyst
Umang — Analyst
Vaibhav Lohia — Analyst
Vinay Lakra — Analyst
Jainam Vora — Analyst
Presentation:
Operator
Good evening, ladies and gentlemen. I’m Karthikeyan, moderator for the earnings conference Call. Welcome to Rajesh Power Services Limited H2, FY26 and FY26 earnings conference call we have with us today from the management Mr. Utsav Panchal, Director and CEO. Ms. Nikita Shah, Finance Head; and Mr. Adish Patel, Senior Manager, Finance. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Mr. Arpit Mundra, EY team for the cautionary statement. Thank you, and over to you sir.
Arpit Mundra — Investor Relations
Thank you Kartikeyan. Good evening everyone. On the behalf of the management, I am pleased to welcome you all to Rajesh Power Services Limited earnings conference call to discuss the H2 FY’26 and FY’26 financial results. Today from the management side we have with us Mr. Utsav Panchal, Director and CEO Ms. Nikita Shah, Finance and Mr. Adish Patel, Senior Finance Manager. Please note a copy of all the disclosure is available in the investor section of the website as well as on the stock exchange. Anything said on this call which reflect the outlook for the future of which could be constructed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. Now I shall hand over the call to Utsav for his opening remarks. Over to you Utsav. Thank you.
Utsav Panchal — Chief Executive Officer
Thank you Arpit. Good evening, everyone and a very warm welcome to all of you to the earnings conference call of Rajesh Power Services limited. The audited financial results along with the Investor presentation for H2 and FY26 have already been uploaded on the stock exchange. We trust you have had the opportunity to review them and have your questions ready which Miss. Nikita and Mr. Adish look forward to addressing later during the Q and A session. Before I begin with our customary briefing I would like to share a broader perspective.
At Rajesh Power, our journey is becoming increasingly exciting and meaningful. We are actively identifying and executing opportunities across new states, new customer segments and new channels of growth. As the power sector in India evolves rapidly. We believe the coming years hold tremendous promise not just for Rajesh Power as an organization but for all our stakeholders. So let me begin this with the operational highlights for the second half and the full financial year. As of 31 March 2026, the company’s unexecuted order book stood at INR3,326 crore.
Of this, the power distribution segment accounted for 71%, that is INR2,365 crore and the power transmission segment constituted the remaining 29%, that is INR961 crore. This healthy order book gives us strong revenue visibility for the coming quarters. During FY’26 the company recorded order inflows of INR227.43 crore supported by consistent wins across government, utility and private sector projects. During the year, Rajesh Power successfully executed and commissioned several projects underlying our strong project management and execution capabilities.
Key among them include 132kV gas insulated substation at Jodhpur in Rajasthan, 66kV substation project for JK Paper in Gujarat, RDSS schemes Gandhinagar and Ahmedabad projects for UGBCL Gujarat, Lalgad traction substation project in Bikaner for Rajasthan, 132 KV GIS substation project in Jaipur and 220 KV GIS project at ATUL for Gujarat. These projects strengthen our credentials for gas insulated substation, air insulated substation, underground cabling and turnkey grid infrastructure. As we look ahead, I am pleased to share that the company has currently the company currently has a targeted robust bid book of approximately INR6,000 crore, 75% of which originates from Gujarat and 25% from other states, reflecting our expanding national footprint across Rajasthan, Uttarakhand, Maharashtra, Bihar and beyond.
This diversification aligns with our strategy to reduce geographic concentration risk and pursue sustainable long-term growth. India’s power sector is entering a transformational phase under Viksit Bharat 2047 vision. The draft National Electricity Policy 2026 places significant emphasis on the policy targets per capita Electricity consumption from 2,000 kilowatt hour by 2030 to over 4,000 kilowatt hour by 2047 Expansion and modernization of transmission networks, achieving single digit AT and C losses in distribution, underground networks in urban areas and adoption of advanced grid technologies and redundancy planning.
Rajesh Power is well aligned with these national priorities. Our work in RDSS projects, underground cabling, GIS substations and high-capacity transmission infrastructure positions us as a key partner in India’s grid modernization journey. I would now like to highlight the tangible outcomes we are witnessing from the deployment of MVCC and underground distribution networks. Based on the DISCOM feedback and on ground performance data, MVCC and underground cable installations have resulted in a 70% to 80% reduction in the interruption durations which are driven by structurally stronger networks and quicker fault management.
These results underscore that underground Bing is not only a reliability enhancing intervention but also an economically compelling solution. Discoms increasingly indicate that underground distribution delivers a rapid payback with incremental revenue and efficiency gains significantly exceeding the overall cost underground cabling over its life cycle. The key operational benefits of these include 70 to 80% reduction in interruptions, interruption duration, significant reduction in HD faults, faster fault isolation and restoration which is enabled through RMU based sectionalization, improved voltage stability, enhanced public safety by eliminating exposed overhead conductors and removal of HD pole, improves customer premises safety and enables smoother execution in municipal infrastructure projects. In FY26 alone we have successfully strengthened the distribution network by installing over 350 feeders which ultimately affect more than 15 lakh consumers.
We have installed over 4000 wingman units and we have installed over 1200 distribution transformers along with laying more than 1300 km of cable in a single year. FY26 also marks a strategic milestone for Rajesh Power with our entry into battery energy storage system where we sign a 65 by 130 megawatt hour standalone battery energy storage system project in Gujarat which was ordered by GUVNL. The project is designed to enhance grid flexibility, optimize peak demand management and enabling smoother integration of renewable energy into the grid.
As highlighted, the BESS is becoming central to India’s energy transition especially as renewable capacity continues to grow rapidly. With over 102 gigawatt hour of storage capacity already tendered in India, BESS is transitioning from pilot project to mainstream Greek infrastructure. We believe this marks the beginning of a new growth engine for Rajesh Power over the coming decade.
Rajesh Power operates on a clearly differentiated transmission and distribution platform that sets us apart from conventional TND players. Our strong leadership in underground cabling significantly reduces right of way risk as these projects are primarily right of usage in nature which enables smoother execution with minimal regulatory challenge. This structurally advantageous allows us to deliver projects faster typically within 18 to 24 months compared to the longer timelines seen in traditional transmission EPC models.
We work with high quality customers including top rated discoms and multilateral backed entities which ensure predictable cash flows and strong working capital discipline coupled with our deep technical expertise across the voltage levels from right from 1.1 KV up to 400 KV spanning transmission, distribution, GIS, underground cabling and operations and maintenance. We believe Rajesh Power is uniquely positioned as a scalable, execution focused and resilient TND platform.
Turning into the financial performance, I am pleased to inform you that during the FY26 the company has recorded a total revenue of INR1628 crore. The EBITDA stood at INR197 crore. The EBITDA margin was 12.1% and the PAT margin was 8.8%. The year witnessed robust and consistent performance supported by disciplined execution and operational effectiveness. Historically, on annualized basis, our revenue has grown at a CAGR of over 99% over the last three years ranging from FY23 to FY26, reflecting the scalability of our business model.
At Rajesh Power, employee safety remains a top priority. During the year we conducted multiple safety awareness initiatives including structured programs such as Suraksha Covered Safety Workshop aimed at strengthening on ground safety practices and reinforcing a culture of responsibility across project sites. Beyond safety, we continue to invest in training, capability building and team engagement ensuring our people are prepared to execute increasingly complex next generation power infrastructure projects.
Before concluding, I would like to express my sincere gratitude to all our stakeholders, our clients, partners, investors and lenders for their continued trust and support. Above all, I would like to thank our employees whose dedication and excellence have been instrumental in delivering another strong year. While FY26 has been a year of solid progress, we view this as just a stepping stone towards larger and more impactful milestones ahead. We remain firmly committed to profitable growth, operational excellence and sustainable business practices aligned with India’s evolving power ecosystem. Once again, thank you for your confidence in Rajesh Power Services Ltd. With this, I would now like to hand over the call to Ms. Nikita Shah who is a finance head who will take you through the detailed financial performance of the company.
Nikita Shah — Chief Financial Officer
Thank you sir. Good evening, everyone, and a warm welcome to Rajesh Power Services Limited second half and full financial full financial year 2026 earnings conference call. Thank you for joining us today. It is my pleasure to walk you through our financial performance for the second half and full year ended 31st March 2026. Let me begin with the key financial highlights for financial year 2026 in comparison with financial year 2025. In financial year 2026 revenue grew 52% to INR1,628 crores on the back of efficient project execution and a diversified order book while EBITDA and PAT rose by 59% and 48% respectively too, INR197 crores and INR143 crores respectively, resulting in margin of 12.1% and 8.8%.
On a balance sheet front, the company’s net worth increased by 53% year on year to INR406 crores in financial year 2026. Underscoring our strong capital position, ROCE and ROE stood at 43.65% and 35% and 26% respectively in second half of financial year 2026, demonstrating efficient capital deployment and robust return generation. Our capital structure continues to remain comfortable with the debt equity ratio of 0.31 only for the period ended 31st of March 2026, reflecting prudent leverage and financial discipline.
Now let me share the key financial highlights for the second half of financial year 2026 in comparison with 2nd half of financial year 2025. During the second half of Financial Year 2026 the company delivered a strong performance across all key metrics. Revenue grew by 30% year on year to INR990 crores, driven by disciplined project execution and the strength of our well diversified order book. EBITDA for the second half of financial year 2026 increased by 31% year on year to INR113 crores with a healthy EBITDA margin of 11.4% reflecting improved operating efficiency and effective cost management.
Profit after tax also grew by 26% year on year to INR84 crores, resulting in a PAT margin of 8.5% supported by higher operating leverage and stable financial cost. Overall, these results highlight Rajesh Power limited Strong operational execution, balance sheet strength and continued focus on sustainable and well diversified growth. With that note, I conclude the financial highlights. I now request the moderator to open the floor for the question-and-answer session. Thank you so much.
Questions and Answers:
Operator
Thank you madam. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Aniket Madhwani from Step Trade Capital. Please go ahead.
Aniket Madhwani
Yeah hello, I’m audible
Operator
Yes,
Aniket Madhwani
So my question was with regards to the best project that you sign with Guvn, so what is the timeline that this project will be no complete? Will it be completed by 5/27 and can we expect the from this project in this year?
Utsav Panchal
So this project is to be completed by September 27th the entire execution and then the revenue will start post that but we’ll try to execute maybe a bit higher or by Q1 or 27th.
Aniket Madhwani
And apart from this single project are you in talks with any other projects in best segment?
Utsav Panchal
So currently our strategy for BESS is mainly to understand the entire value chain of the BESS project from sourcing till epc, EPC part everything. Currently we’re not looking to bid for any more BSS projects. We are interested in bidding for more BSS EPC projects where we see a lot of value addition. And this is exactly what we do at Rajesh Power, the BSEPC part of it.
Aniket Madhwani
Okay, so you are more interested in best EPC. So what would be the capex for 1 megawatt? I mean for, for best infrastructure?
Utsav Panchal
So it’s broadly INR1.5 crores to INR2.5 crores.
Aniket Madhwani
INR1.5 crores to INR2.5 crores for 1 megawatt.
Utsav Panchal
Yeah.
Aniket Madhwani
Okay. Yeah, thank you.
Operator
Thank you. The next question comes from the line of Agastya Dave from CAO Capital. Please go ahead.
Agastya Dave
Yes, hello. Yeah, thank you very much. Good evening sir. My question pertains to your balance sheet. The trade receivables have jumped quite substantially compared to even last year and also compared to the first half along with the inventory. So can you break this down? Is there any element of the best project which is getting reflected here or is there anything which you would like to point out which could be worrisome going forward? Are there any delays from the clients in terms of payments or. This is something which you were expecting and it’s just a transient thing.
Utsav Panchal
I think this is just a, I think a higher receiver is just a short time phenomenon. I think because of very high billing in the month of March. There are no BS receivables in this project. The only reason of this, higher receivers you see is because of very good billing in the month of March. There is no delay in any payment receivable from the client or customer. The payment terms stay as it is, 45 to 60 days for all our customers.
Agastya Dave
But the billing was not that high. Right. If I look at last year’s H2 numbers, the revenues, consolidated revenues was INR760 crores. Now it is INR919 crores. But the receivables have gone from INR181 crores to INR350 crores. So that’s a substantial jump. I mean it’s not proportionate. The number of days has definitely increased. So that’s why I’m asking the question.
Utsav Panchal
The only reason is because of the higher billing in the month of March. So that’s why the receivers are showing a higher number at a year end basis.
Agastya Dave
So you expect everything to be cleared by let’s say June.
Utsav Panchal
Yeah, 45 to 60 days. The standard payment terms which we have for all our customers.
Agastya Dave
Perfect, Perfect. So for next year the order inflows have been excellent this year. And your Commentary on the bid Book is also looking fairly good. How do you see the next year panning out? Sir, the previous time we interacted you had talked about a 4, 5 year opportunity of over INR15,000 crores from just the three states of Uttarakhand [Phonetic], Gujarat and Rajasthan. So how do you see that panning out and are there any changes there, Any improvements or any cuts?
Utsav Panchal
Yeah, so yes, last time what we talked about, I think we are consistent with that in the sense that we are looking at opportunity size, the entire market just Gujarat. We are seeing an opportunity in the JETCO of around, you know, INR10,000 crore annual opportunity out of which addressable market would say is more towards 45%. So around, you know, INR4,000 crores to INR4,500 crore is addressable market just from the Gujarat Transmission utility. Additionally, you know, distribution is having additional roughly INR5000 crore. This is just for Gujarat. And apart from Gujarat, we have Rajasthan, Maharashtra, Uttarakhand, Orissa, Jharkhand and also we are bidding, we are in plans to bid for railway electrification tenders where we have to build traction substations, sectioning post and subsection posts. So adding all those opportunities, we are, yes, we are seeing around, you know, 15,000. Rough figure of INR15,000 crore opportunity size.
Agastya Dave
Okay, so last time you had mentioned time of INR10,000 crores per year. So you are seeing acceleration In that, like increasing the size of the pipeline. Yes,
Utsav Panchal
Addressable. Addressable market in the coming future, we are seeing roughly around 14% to 15%.
Agastya Dave
How does next year look like to you in terms of execution timelines, the projects that you have in hand, where mobilization has happened? How do you see execution panning out for next year?
Utsav Panchal
So we are confident on the execution like we did this year. We are confident on achieving execution, executing the projects within the timeline of 18 to 24 months, which is the ideal timeline of our majority of our projects. So we are confident that fewer projects will be, will be mobilized, you know, in the next two months. Few have already been mobilized in the last three, four months. The revenues of which will be realized in, in the coming, you know, 12 to 18 months.
Agastya Dave
Great, sir. Yeah, that’s about it from my side. Yeah. Okay. And so any revision in the revenue growth guidance of you were saying 35% to 40%. So any revision there, sir, because the time has increased. Would you like to revise that?
Utsav Panchal
No, we, we are, we are sticking with our previously commented guidance. No revision.
Agastya Dave
Perfect. So thank you very much and all the best, sir.
Utsav Panchal
Thank you.
Agastya Dave
So one request. If you can start doing quarterly, quarterly results, that would be of great help. That’s a request. Thank you. Yeah. All the best, sir.
Utsav Panchal
Thank you.
Operator
Thank you. The next question comes from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Deepak Poddar
Yeah, I’m audible sir.
Utsav Panchal
Yes.
Deepak Poddar
Okay. Okay. So thank you very much for this opportunity. So just first up wanted to understand you mentioned about Bess as a new growth engine. Also you’re looking at. So, so can you throw some light on the opportunity we are looking there, what sort of contribution from BSS we can see over next two, three years And What’s the margin profile in BSS?
Utsav Panchal
Sure, sure. So you know as of now we as a country have witnessed more of BASS projects on a developer basis. But what we are seeing, you know, the PSUs like NTPC or you know GIPCL or some PSUs have been aggressively involved in having announcing bids which are Bess EBC, you know, roughly in the range starting from INR400 crores, INR500 crore and ranging to, you know, totaling to around INR10,000 crore. So we are seeing a very good opportunity in the Bess EPC space. And that was the strategy to enter the Bess segment that EPC our is our forte. And if you see majority 30% amount of a BESS project accounts to the AC side. AC side means the substation that is to be constructed along the Bess site. So substation is basically a Rajesh Powers expertise. So that is a strategic entry that we are looking at and we’ll slowly be exploring good amount of opportunities in this space.
Deepak Poddar
Okay, so I mean in terms of orders or in terms of revenue contribution in three years, where do you see? I mean can BSS contribute 15, 20% revenue mix?
Utsav Panchal
So I think giving an accurate percentage would be difficult to give right now. But I do feel that we’ll move towards that PI of BSS.
Deepak Poddar
Okay. Okay. And what’s the margin profile here?
Utsav Panchal
Yeah, same margin profile as we we have in transmission segment because mainly it’s substation. Along with Substation it is just plug and play of batteries, nothing else.
Deepak Poddar
Okay, Understood. And, and you mentioned to the previous participant we are looking for, I mean no revision and we’re looking for previous growth guidance. I mean so, so is, is that 40 CAGR is what we are looking at over next three, four years?
Utsav Panchal
Yes. So for the next FY27 we are looking at a 40% growth.
Deepak Poddar
Okay. Okay. So. So earlier we have mentioned I think over next three to four years. Right. That this is the growth that we are looking at. Right? Yeah,
Utsav Panchal
Roughly. Okay.
Deepak Poddar
So we maintain that.
Utsav Panchal
Yes.
Deepak Poddar
Okay, understood. And in terms of margins, I mean this, this second half of a gross margins and even EBITDA margins were lower. So what led to that and how should one look at EBITDA margins going forward?
Utsav Panchal
Can you repeat the question please?
Deepak Poddar
So I was just trying to understand our gross margin as well as EBITDA margin were lower in second half. So what led to this decline and how should one look at both this parameter going forward?
Utsav Panchal
Okay, so I think that just could be a what you can say a billing mix issue. Broadly, I think at a project level we look at a ebitda of around 11 to 12% and PAT margins are usually 8% to 9%. So that’s how we broadly do it. Small few, few percentage points spike here and there is mainly because of what sort of billings we do to the client.
Deepak Poddar
Okay, so. So, so the second half reduction is only because of the billing mix changes. Otherwise in general we are looking at 11 12% EBITDA margin, 8% to 9%.
Utsav Panchal
Yes. Yes.
Deepak Poddar
As a PAT margin.
Utsav Panchal
Yes.
Deepak Poddar
And why our employee cost and other expenses are lower the second half?
Utsav Panchal
I think employee expense because I think more project manage, project managers managing more projects. I think it is just that now the scale of revenue has increased substantially but our employee costs would not change in the same proportion. So that’s the advantage which will see it for going forward also.
Deepak Poddar
Okay, okay, okay. Understand just one last small thing. You mentioned your bid waiting result is about INR2200 crores and pipeline is around INR3500 crores. So total is about INR5700 crores. So, so what sort of conversion we are looking at on that pipeline of total INR5700 crores that you.
Utsav Panchal
So historically our conversion like our winning rates are usually 40. So that’s the same kind of number we are looking for this projects.
Deepak Poddar
And what’s the timeline of this announcement to happen over for this entire INR6000 odd crores.
Utsav Panchal
So for the bids which we have already bid above INR2200 crores I think we are looking by end of May we’ll have all the conclusions ready. And for other projects we’ll go as and when the tender opens and concludes.
Deepak Poddar
Okay. For 2200 by May end we’ll get the conclusion.
Utsav Panchal
Yeah, May and maybe first week of June. But that is the number expected timeline because there is nothing which we have a control of. But that’s what is the expected timeline for that.
Deepak Poddar
Fair enough. That’s very helpful sir. I mean wish you all the very best. And that’s it from my side. Thank you so much.
Utsav Panchal
Thank You.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Shravan Shah from Dolat Capital Markets Private Limited. Please go ahead.
Shravan Shah
Hi sir. Thank you for the opportunity. Sir, just couple of questions. So you have mentioned in terms of the 40% revenue CAGR for next two three years that we are looking at just two, three things further to understand. One is on the margin front current 12% kind of a number that we are having. So that will be the similar even for next 23 years. The EBITDA margin.
Utsav Panchal
Yes, we are confident on maintaining similar level of EBITDA and PAT margins. Roughly you know EBITDA between 11 to 12% and packed between 8% to 9%.
Shravan Shah
Okay. Okay, great. And in terms of order inflow, so this year obviously for 26, 2700, 2800 crore that we have received. So in for this year how much we are we are looking at to win.
Utsav Panchal
So we are looking at further order inflows of roughly around you know around INR4,000 to INR5,000 crores is what we are targeting that we should have this at the end of the year.
Shravan Shah
Okay, so and currently just to understand further. So currently the entire order move INR3326 crore. So out of that how much is in Gujarat and now what we are looking at INR4,5000 odd crore. So will the Gujarat will continue to be up 70%, 75% of the in terms of the Order inflow the same kind of a share or it will keep on reducing.
Utsav Panchal
So I think from an order book perspective currently Gujarat is around 85 to 90 and the rest is outside Gujarat. We are looking at, we are very aggressively spreading doing projects outside, bidding for projects outside Gujarat. So we think eventually this number will start moving towards 80, 20 in the near term.
Shravan Shah
Okay. Okay. Not much. 5%, 10% kind of. But even. Yeah. So given if, if we, if we win INR45000 crore order inflow for this year and then obviously the similar number we will try to get for even FY28 then in terms of growth then this 40% seems to be around. On the a very, very conservative side we should be then growing. If given the 18, 24 months kind of Execution this number should be on the higher side. The execution growth, revenue growth.
Utsav Panchal
I think this number is what we plan to execute in the way we have the project deadlines mapped currently. So I wouldn’t say it’s conservative. I think it’s in well with what we are planning to execute in the Next two, three years.
Shravan Shah
Okay. Okay. And out of currently the entire order book, how much is the underground? INR3,326 crore book. How much would be the underground in that?
Utsav Panchal
So basically we do not have any specific. We usually look at as distribution and transmission. We don’t look as underground versus overhead. But roughly this number might be somewhere around underground might be somewhere around 70, 75%. And rest would be substations and overhead.
Shravan Shah
Okay. Okay. Okay. The current bess, are we putting any. Any equity and if yes, how much equity are we putting in?
Utsav Panchal
So I think we are working currently with our lenders. I think in the same in the range of will do 70 to 80% financing by the banks and rest will be equity by the company.
Shravan Shah
So that will translate into absolute number would be how much equity?
Utsav Panchal
I think we are determining the project size currently. As soon as we have a project size we have a much better number to share.
Shravan Shah
Okay. Okay. Got it sir. Got it. Thank you. And all the best. Thank you.
Operator
Thank you. The next question comes from the line of Kaushal Sharma from Equinox Cap Capital Venture Private limited. Please go ahead.
Kaushal Sharma
Hi sir. Very good evening. Am I audible?
Operator
You’re very, I think not audible. That Voice is not clear.
Kaushal Sharma
Hello, am I audible Now? Is it clear?
Operator
Yeah, it’s clear.
Kaushal Sharma
Yeah. So my question is on working capital side like I can see that your table has significantly increased from last financial year. That, that. That subject to your inventory and receivable that also increased significantly. So what is the rest of
Utsav Panchal
Your voice is not coming clearly. I’m able to not understand the question.
Kaushal Sharma
Hello, am I audible now?
Utsav Panchal
Yeah, yeah, this is clear.
Kaushal Sharma
Yeah. So my question on your working capital side, like I can see on your table side it is increased significantly and it funded your inventory and receivable which also increased significantly. So what is the rational on increasing the paper? Because earlier is it is in 26 days. Now it has become. It has become around 50 days. So is it a sustainable level or what is the key reason on that?
Utsav Panchal
So I think this year has been very what you can say a good win for us at Rajesh Power where we have been able to negotiate with our vendors for credit terms. And I think that’s what is getting factored in in the increasing creditors.
Kaushal Sharma
So is this level sustainable?
Utsav Panchal
I think these levels are sustainable. So usually working capital cycle of 30 to 40 days is something which is sustainable. It could be two, three days here and there. But that’s a number which we think we would. That’s how we manage our working capital cycle.
Kaushal Sharma
And so what is the reason of spike in financial assets as well like INR155 crores in financial 25 and now it is INR385 crores. Almost 96% growth. And what. What component in this?
Utsav Panchal
I Think. I think in financial is the. What we show is the retention money is a part of that number.
Kaushal Sharma
So what is the percentage of retention money that we need to give?
Utsav Panchal
Retention would be. Retention would be around. So at an absolute number it is around so 10. So okay there are three layers to it. So say for few projects we have 10%. For few projects we would have around. Or you can say 30% and around for a few projects we’ll have 20%.
Kaushal Sharma
And when will get this back? Like what is the timeline? Okay so
Utsav Panchal
On supply. So there is a retention of 30 which we. Out of which we get 20 when we install the thing and the last 10 when we commission the project we get that back against issuing of region.
Kaushal Sharma
Okay so is it interest bearing like you have to deposit in also you get interest on that just…
Utsav Panchal
BG commission cost is what we have to pay for.
Kaushal Sharma
Okay and my last question on your order book site, like you said 85 to 90 is Gujarat link and management also consciously avoided distribution work outside Gujarat due to weaker discount payment cycle. So as you explained into lifestyle what is the exact filter for choosing product projects, Client rating, payment cycle, retention terms, VG requirement, voltage level and margin threshold. So that the company doesn’t dilute ROC while choosing non Gujarat growth.
Utsav Panchal
So basically yes correctly said that distribution we are focused towards Gujarat. But in transmission we are moving pan India in the sense that all the transmission state transmission utilities are healthy. They have good payment cycles. And we yes we do check the profile. The you know every financial profile of every transmission utility that we associate with. So till now where we have associated is Rajasthan and Uttarakhand where we have we are seeing very healthy payment cycle. And further also whatever pick and choose we are deciding to bid. We are confident that there will not be any any compromise on the margin profiles. As well as compromise on the cash profile
Kaushal Sharma
You are also looking INR96,000 crore of opportunity in GET over the next 10 years. And there is one scheme, robust infrastructure scheme in Gujarat has outlay of around 26,000 out of his 16,000 is still left. So what kind of opportunity or tender are you expecting that that would be floating in this year? And overall dam that per annum basis that you are targeting in our segments.
Utsav Panchal
So first I’ll talk about Jetco. JetCo has around INR96,000 crore which is divided into your. So right now Jetco has approximate capex each year of around INR10,000 crore. So INR9,000 crores to INR10,000 crore out of which we see our addressable market is which is specifically underground cable and substations to be around 40 to 50%. So for INR4,000 crore what we are seeing from Jetco and an addressable market of roughly INR5,000 crore from the distribution side of Gujarat. That is what we are seeing.
Kaushal Sharma
And what about robust infrastructure scheme?
Utsav Panchal
This distribution what I said INR5000 crore is a part of robust infrastructure scheme.
Kaushal Sharma
And my last question on your best I said like you have recently took an order of 65 megawatts. So what is the economics of this base project and is it on build operation or operation boom on board or is it a etc like how will we recognize revenue over there?
Utsav Panchal
I think in week BSS. I think we’re gonna develop and we’re gonna own the infra and we’ll be getting the what you can say tariff rentals from the government.
Kaushal Sharma
Okay. Sure sir. Thank you.
Operator
Thank you. The next question comes from the line of Divya Ghoshal from Shubkam Ventures. Please go ahead.
Divya Ghoshal
Hi sir. Thank you for the opportunity and congratulations on good set of numbers. Sir, I just wanted to ask the previous participation participants question sir. How will we recognize revenue from BESS and will we own the infrastructure and whether will be continuing these projects?
Utsav Panchal
Okay, so I think first the revenue part. I think revenue we have we are going to build to the utility every monthly. This will start after September 2027 or maybe Q1 of 2027 where we have commissioned the entire project monthly invoice, monthly rental which we have already stated and disclosed. That’s what we’re going to build to the client every month. So that is very simple. As far as the projects about the strategy as we discussed the idea of this BSS project was to understand the entire ecosystem of the VESS so that we can bid higher and more strongly in the VESS Etc projects.
Divya Ghoshal
And what would be the cost of the project and the IRR if possible?
Utsav Panchal
I think we are targeting an IRR of same 10 to 12% in this project. The cost of the project is dependent on the entire all the cost components. I think our team will be visiting China and we have a better quotes and idea on the cost once we finalize the vendor of batteries.
Divya Ghoshal
Okay Sir, thank you so much.
Utsav Panchal
Thank you.
Operator
Thank you. The next question comes from the line of Andrey Purushottam from Cogito Advisors. Please Go ahead.
Andrey Purushottam
Yeah. Hi sir. Congratulations for a great set of members. I had three questions. The first question was an elaboration of what was previously asked on your employee expenses. I can understand that you’re having some scale economies and all that, but the absolute amount of your employee expenses actually went down in a year where your volumes went up. So in a half year many volumes went up. So I didn’t understand that. Just explain that.
Utsav Panchal
I’ll just ask. Thank you Andrey. I’ll just ask.
Adish Patel
Yeah. So Andrey. So for the, if you, if you look at it, the entire cost of execution the projects, which is the bigger part of the lower level of the part that’s a part of our cost of goods, goods and services. So that’s what it is. The employee expenses are our corporate offices, supervisors, project managers and that team. So that is of course will have will rationalize over more projects.
Andrey Purushottam
This still doesn’t answer my question. How do you Have a Lower absolute amount of employee expenses with a higher volume.
Adish Patel
Sorry,
Andrey Purushottam
How do you have an absolutely absolute reduction in employee expense expenses with increased volume of sales? It doesn’t answer that question,
Nikita Shah
Sir. Employee cost has increased from INR43 crores to INR59 crores.
Andrey Purushottam
Now if you look at from what I remember from your console results, your employee expenses for the.
Nikita Shah
In FY25 the employee cost is 43.90 which has increased to INR59 crores in FY26
Andrey Purushottam
For the full year. I’m talking about the half year comparison. Anyway, let me get to my second question. My second question is that in terms of you talked about the revenue mix from non Gujarat, Rajasthan perhaps coming down to going up to 20% from the outside Gujarat. So can you just give us an update on what is happening on states outside Gujarat and Rajasthan?
Utsav Panchal
Sure. So basically we are trying to expand our transmission footprint which is mainly underground cable up to 220kV and GIS substations up to 400kV footprint taking our experience from Gujarat and Rajasthan to other states. So as of now we are actively pursuing opportunities. Of course in Rajasthan we are also pursuing active opportunities in Maharashtra where we are having huge underground cable and substation GIS substation projects in the next six months we are actively pursuing the state of Odisha where we are having huge 132 and 220kV cable projects as well as GIS and EIS substation projects up to 400kV. We are also pursuing Jharkhand where there are very good the state transmission utilities investing very heavily the capex on substation substation portion. So we are targeting Opportunities across these states. So and what time frame do you expect Expect to. I think in the next. In the next. In the next eight months. Roughly eight, eight, eight to 10 months. We should see some action on the order book of outside Gujarat.
Andrey Purushottam
And my last question is that in a small fraction of your order I think particularly in Rajasthan there were some terms of business which was favorable to your working capital deployment and basically reduced your working capital deployment. Now is that an increasing trend or is business still requiring the same amount of work capital?
Utsav Panchal
No, it is an increasing trend. It is actually an increasing trend in the sense that Orissa and other states have also seen this and have also started implementing the insurance surety bond clause, the tender.
Andrey Purushottam
But so currently in your order book, what proportion of your order book comes under this insurance surety bond?
Utsav Panchal
Very minor portions of whatever. We are working outside Gujarat. So Around, you know 8%, 8% to 10%.
Andrey Purushottam
Okay, but is he [Indecipherable] a meaningful way.
Utsav Panchal
It will increase day by day. People have been pushing the usage of insurance surety bonds because practically blocking cash of contractors is unfavorable business. Makes it unfavorable business environment as well. And insurance surety bond guarantee equal amount through a very minuscule investment.
Andrey Purushottam
Okay, thanks. That’s all from my side. Thank you.
Utsav Panchal
Thank you.
Operator
Thank you. The next question comes comes from the line of Mohit Arora from HEM Securities. Please go ahead.
Mohit Arora
Thanks for the question. Sir. You can see that your MSME payables have increased from INR5 crore to INR87 crore. So are you within 45 days general mandate and the receivables doubling and payable getting 2.5 times. So
Utsav Panchal
There is a lot of disturbances in the background.
Mohit Arora
Hello. Is it audible?
Utsav Panchal
It’s audible but there’s some disturbances in the background.
Mohit Arora
Yeah. Is it better?
Utsav Panchal
Yeah, it’s better.
Mohit Arora
We can see that MSME payable has rose from INR5 crore to INR87 crore. So I am asking are these under 45 days payment mandate. And the other question is that our receivables is getting double payable is getting up 2.5 times. And the short term borrowing has also increased from INR29 crores to INR82 crores. So which clearly indicates that there is a working capital stress. So how will you normalize all these things?
Utsav Panchal
I think if you ask us from a cash test for the working capital we don’t see that stress on our books. I think what we were able to manage this time from creditors is that from an advanced payment for creditors to we have started getting credit terms from them for up to 30 days. So that has been one positive win for us while managing our what against it business. I think the only spike which you see which is say the debtors getting moved to around 78 days as we discussed. That’s mainly because of a very high bullet kind of invoicing in the month of March. The more rational, the more what you can say the billing becomes evened out. These numbers will again fall back to the genuine around 60 days for debtors. Maybe a good some good improvement in creditors where we are able to stretch them and inventories. Keep in mind keeps moving in. So I think there is no stress on the working capital. We are well positioned to manage the entire business in this.
Mohit Arora
And on this MSME side that we are having INR87 crores of outstanding. So are these are within 45 days payment mandate.
Nikita Shah
We have a specific agreement with these parties and we are okay with the payment terms of more than 45 days.
Mohit Arora
How many percentage of this INR87 crores are like agreed for more than 45 days of payment?
Nikita Shah
All. Within 45 days only, sir.
Mohit Arora
Okay. And in the previous call you mentioned that you are targeting to get to close the order book of INR4500 crores by the end of FY26. But now we can see that there is a shortfall in that. So what led to that?
Adish Patel
I think there is no shortfall. I think it’s just the tender results are not out. So the. So whatever we are targeted we had bid in Q4. It’s just that the results are taking time to get out. If you consider the order. Yeah, it’s a time issue. It’s not a target issue or any slowing down issue or something.
Mohit Arora
And. Okay, thanks. And could you please explain the margin profile in the transmission segment and the distribution segment. As the overhead cost absorbs better in transmission. So are there a better margin in transmission?
Utsav Panchal
So looking at every perspective of you know the bid and the project. Of course there we need more manpower to manage the distribution projects compared to transmission projects. But from what we operate currently we are seeing a same margin profile both for transmission and distribution project projects. So we are not seeing any more any big change in the margin profiles of both the businesses.
Mohit Arora
And. And you said that you have…
Operator
To interrupt you. Could you please join back the queue?
Mohit Arora
Okay, sure.
Operator
Thank you. Next question comes online of Pushkar Jain from Mili Capital. Please go ahead.
Pushkar Jain
Yeah. Am I audible?
Operator
Yes.
Pushkar Jain
Yeah. So I just wanted to know out of the INR3600 crores order book or INR3300 crores order book how much is fixed and how much Is, you know, has the price escalation clause and what will be the duration lag for the price escalation to kick in.
Utsav Panchal
So I think all our projects are covered by the price escalation clause for most of the items. That’s the reason that we saw a lot of aluminum copper prices going up in Q3, Q4 but still our margins remain intact. So I think it’s completely moves back to background as soon as the supply happens at a bigger price the same time we also invoice to our customers with the new reverse price. So I think there’s no time left and that’s how we are protected from market for any price ratios.
Pushkar Jain
Okay, so basically everything is virtually back to back. There is no lag.
Utsav Panchal
Correct.
Pushkar Jain
Right. And sir, you can tell me what is the attrition rate among our PHP cable jointers? Not the overall headcount, just the those specific or GIS commissioning engineers.
Utsav Panchal
So attrition rate. We can proudly say that we have the one of the lowest attrition rates in the industry. The cable jointers that have been with us since 2002 and three are still with us and are in fact training the next generation that we hire new to become the jointers. So hardly probably you know, 2% attrition or 3% attrition would be there but not more than that. Not major.
Pushkar Jain
Oh wow. Great to hear. Thank you so much.
Utsav Panchal
Thank you.
Operator
Thank you. The next question comes from the line of Vishwendar Singh from Prudent Equity. Please go ahead.
Vishvendra Singh
Hi sir. Am I audible?
Utsav Panchal
Yes
Vishvendra Singh
Sir. I wanted to ask what is the current L1 position in the executed order book?
Adish Patel
So I think the L1 position in the current order. Yeah, the L1 order book in the current order book which you already stated would be around INR210 crores. L1 fit.
Vishvendra Singh
Okay. And this was somewhere around 900 crore including taxes. Like an H1 con call, right? H1
Adish Patel
8 08. Yeah, I think 808 is what I remember the order which we had stated like Somewhere around 8900 crore including taxes. We are now now not using taxes to avoid confusion among anyone. So we just talk about pre tax number only.
Vishvendra Singh
Okay. And also the I saw that there was a slight decline in the share of profit of loss of like associates and joint ventures. So any major reason behind that?
Utsav Panchal
So basically the billing that was scheduled to happen was shifted because there was, there was issues regarding site readiness by the customer. So the project that we were aiming to commission by February, March we, we had to shift it to you know, a couple of months further. So that is the reason there is a slight decline. But we are confident of it getting back over the next year.
Vishvendra Singh
Okay, just a quick confirmation. Who holds the rest of the 75% of that enterprise? The HKRP solution innovation.
Utsav Panchal
I’ll just ask Ms. Nikita to answer that question.
Nikita Shah
Another group is Hari Group Automation Private Limited family. And the remaining 25% is with the Rajesh Power promoters only. And remaining 50% is owned by group of families and their promoters.
Vishvendra Singh
Okay, got it. And I wanted to ask what is the bit like you have mentioned Bids awaiting results. So can you shed some light what is this category like? Are we announced L1 in this or what is. How do we see this?
Utsav Panchal
No, basically those are tender that we have applied for. And we are awaiting results that we bid in Q1. Q4. Sorry.
Vishvendra Singh
Okay. So is it fair to assume that the total bid. You
Operator
Please join back the queue sir.
Vishvendra Singh
Sure.
Operator
Thank you. Next question comes online of Umang from in Nvest Analytics Advisory Llp. Please go ahead.
Umang
Hello. Am I audible?
Operator
Yes.
Umang
Thanks for the opportunity and congress for good set of numbers. Just one question on the order inflow. Last time when we interacted I think you have highlighted that this year we will be closing around INR4500 crores order book. Now we are sitting at 3300. So can you explain the reason for it? Why there is a gap?
Adish Patel
Sir, as previously explained, the 2200 order book which we already made in Q4 of 26. We are just awaiting results of it. If the results would have been received, I think that number would have been fairly achieved.
Umang
Okay. Understood. Understood. Okay, thank you. That’s it from my side.
Operator
Thank you. The next question comes from the line of Vaibhav Lohia from cfm. Please go ahead.
Vaibhav Lohia
Thanks for the opportunity. I wanted to understand what is the targeted closing order book for FY27.
Adish Patel
I think we are targeting somewhere about above INR5,000 crores of order book for FY27 closing.
Vaibhav Lohia
About INR5,000 crores. Okay, I’m just. And lastly you said that the subsidiary PL would be contributing back again like previously. So like previous year for FY26 it was INR9.75 crores. So what can we expect in FY27 for this?
Adish Patel
So sky is an associate. I think the way the building will happen, I think we’ll have much better idea in we had the H1 numbers where we’ll be able to tell how the projects have progressed for the associate. And accordingly we’ll know what will come to our company.
Vaibhav Lohia
Okay. Okay. And one more thing from my end or what is the amount collected out of the INR3,348 crores of receivables till now?
Adish Patel
Almost INR1,150crores has been received.
Vaibhav Lohia
Okay. Okay, that’s it. Thank you.
Operator
Thank you. [Operator Instructions] The next question comes from the line of Vinay Lakra from Ratnatraya Capital. Please go ahead.
Vinay Lakra
Hello. Hello. Am I audible? Yes.
Utsav Panchal
Yes you are. Yeah.
Vinay Lakra
Yeah. Actually just wanted To know the split in the order inflow as well. Like L1 part in the order inflation. Sorry. So I wanted to know the L1 part in the order inflow. So ordering flow was around 2743 crore, right?
Utsav Panchal
Correct. So
Vinay Lakra
Does it include L1 L1 as well?
Utsav Panchal
No. No. So. So what was. What was L1 the order book of September 30th were already converted into confirmed orders. Right. Which for which we have already made the disclosure. So I think at if you’re looking at 2700 number only INR200 crores is. What is L1 right. Now as I mentioned rest. Everything has been confirmed orders. So..
Vinay Lakra
Okay, so if we add up or if we add up all the numbers in the press release this should. This should get into ’27 reducing.
Utsav Panchal
Sorry.
Vinay Lakra
So in press release you give orders. Right. So that is including GST. The order order numbers, the in value in crores
Utsav Panchal
I think the order. What are the numbers we are talking now are all excluding GST.
Vinay Lakra
Yeah, but I’m saying like when the pray in the press release the order number which we give is including GST. Right. The value.
Utsav Panchal
So so basically the. So whatever results we, whatever announcements we make, we specifically mention whether it’s including GST or excluding GST. So I think because we have a back to back tender with GST we usually mention that number. We specifically disclose it that it is a GST.
Vinay Lakra
Okay, so this 2743 is the actual order intro happened. Yeah.
Utsav Panchal
Exact number which will convert to revenue.
Vinay Lakra
Okay, fine. And on the Bess billing, how do we expect to build the fence? Is it going to be like. I mean we are my understanding would be around INR100 crores, INR220 crores. So what is the annual billing that we expect starting from Q2 September FY27?
Utsav Panchal
Sir, your voice was cracking in between. What? Can you just frame your question again?
Vinay Lakra
Yeah. So on the BSS project, I think my calculation says we are investing around INR100 crores to INR120 crores in that project. How much would be the annual billing starting from September 27th that we expect.
Utsav Panchal
So I think as it said it’s 1.89 lakh per megawatt. So now if you, if you’ll multiply with 130, that’s the number you will get for monthly invoicing. And if you multiply by 12, that’s the number you. So around INR14 crores to INR15 crores a year is what we’re gonna build under the BS project.
Vinay Lakra
And what is the cost of these revenues? Would there be any cost to these revenues in terms of opex or nothing?
Utsav Panchal
I think opex would be very minor.
Vinay Lakra
So this would be almost like a rental income, right? Which will flow through the. Correct.
Utsav Panchal
Yeah, it’s close to kind of a rental income kind of.
Vinay Lakra
Okay, definitely. And one last question on the distribution side you said From Jetco in TA, it is 5 or INR5000 crores opportunity. But are we, do we totally that INR5000 crores entirely is in our opportunity set or only a certain portion would be there in our opportunity?
Utsav Panchal
Now I think the entire 5,000 which we have mentioned is the address size for us.
Vinay Lakra
Okay, thank you.
Operator
Thank you. The next question comes from the line of Jainam Vora from Saltoro Investment Advisors. Please go ahead. Thank
Jainam Vora
You. So yeah, thank you so much for this opportunity and congratulations on a different set of numbers. My first question is regarding the manpower. As you kind of go on to scale the business with 40% revenue growth guidance that you looking at in the medium term, how are you going to deal with the manpower case of it, will it proportionally increase? And in the near term because of the West Asia War and the LPG impact, are you kind of seeing issues with manpower and issue in execution? So if you could talk about that.
Utsav Panchal
So basically majority of our projects are the site based projects in the sense that we have labor camps that are stationed near the site. So as of now or in the near future also we are not facing any labor shortage issue in the sense of lpg. The situation that we are seeing has normalized and we are not facing any issues because we have labor tires, very good labor tie ups with various agencies.
Jainam Vora
And as you scale, more importantly, like you said, this is a temporary thing which you manage. But as you continue to scale INR5,000 crores of order inflow that you’re looking at FY27 and similar levels in FY28 if not more, how are you planning to scale beyond a point? Because it might become a challenge. So what’s your sort of thinking behind that?
Utsav Panchal
So for cable laying perspective, we are also exploring some automation techniques like automated cable winch machine and things like that. So we are exploring some, some, some part of that. But obviously rest will have to be manual. So we, we don’t think that there will be any challenge of labor around that, around the range that we have committed, we’ll be working.
Jainam Vora
Okay. My second question is regarding sourcing of the materials. Whether it is the RMU units or whether it is transformers, given the kind of tailwind that is there right now, the supply is very constrained. And we’ve been hearing from multiple stakeholders that it’s a seller’s market. So given that issue, as you continue to scale the business, how are you going about managing, you know, the supply chain piece of it so that you can timely execute the order book that you have?
Utsav Panchal
Yes. So I think procurement is one of the strong arms of the company. The main reason being that we are procuring all the materials in bulk. So we have a line of vendors that are gathered with us to supply the material before time. So as of now or in the near future also we, we are working on a very good, I mean the capacity that we are consuming in the capacity, manufacturing capacity that the industry has, that is a very, very comfortable gap. So we don’t think there will be any challenge related to this.
Jainam Vora
Okay. And in terms of competitive intensity, whether it’s the orders that you see in Gujarat, whether it is transmission or relating to the distribution or it’s the new stage that you’re targeting in transmission, if you could provide a flavor of what is the number of competitors that you have in a bid and how intensive is it getting? Probably let’s say versus FY25 versus now, given that, you know, things are really picking up.
Utsav Panchal
So competitive intensity, yes, the, it does increase, but we, we should understand that we are carrying out a specialized nature of work that is underground cabling or GIS substation. So there are very few qualified players in this segment. And yes, roughly one or two players each year. We are seeing an increase of one or two players each year in both the segments. But even after that there is, there are plenty of opportunities. So there is, there is competition. But at the same time the entire addressable market has increased significantly. So we are, we are, we are seeing around, you know, in distribution segment there are four to five to six competitors and in transmission segment there are three to four competitors in. And then in an average bit.
Jainam Vora
Okay. Okay. And my last question is, do you have any aspirations to go beyond the 220kV class? I mean for, so you’ve got specialization in MVCC. But going forward how 765kV is going to continue to increase? Are you planning to find out more pockets like Best for example? More pockets where it’s a niche and it could be high profile margin in nature. So just a few thoughts around that. How are you kind of looking at it?
Utsav Panchal
Yeah, sure. So basically we have expanded in fact beyond 220kV where we venture over 400kV GIS segment with a private company in Gujarat where we’ll be commissioning the project in approximately September to October range. After commissioning the project we can proudly say that we’ll be one of the few, very few paper players in the country having commissioned a 400kV GIS which will again give us a benchmark to participate or to look for opportunities in the 765kV segment as well as if you see MVCC segment, medium voltage covered conductor is one of the largest success stories of Gujarat. So that model where we have executed more than we are under execution of more than 51,000 kilometer of MVCC, one of the largest in the entire country. Other states are also seeing this example and trying to implement them. So of course we are seeing a very huge opportunity in MVCC segment. So and yes that’s also it’s a niche, relatively niche segment. That is why we as we said earlier we are targeting best EPC projects in the near mid to near future.
Jainam Vora
So shouldn’t this improve margins? If you’re looking at niche projects and if you’re looking at something that’s very iterative in nature and especially states, see new states, see that you already have such a track record, I fail to understand why the margins would be just around 11% to 12%.
Utsav Panchal
So what we are committing is not a decrease in margin but a stabilized margin. That is what we are able to comment right now.
Jainam Vora
All right, got it. Best wishes. Thank you so much.
Utsav Panchal
Thank you.
Operator
Thank you. Due to time constraints that was the last question for the day. I would now like to hand over the floor to Mr. Utsav Panchal for closing comments.
Utsav Panchal
So thank you everyone on behalf of the management of Rajesh Power Services Ltd. We thank you all for joining us on our post earnings call today. We hope we have been able to address majority of your queries. You may reach out to me or our investor relation partner Ernst & Young for any further queries that you may have and they would connect with you offline moderator. We can now close the call. Thank you all.
Operator
Thank you sir. [Operator Closing Remarks]