Sanghvi Movers Limited (NSE: SANGHVIMOV) Q2 2025 Earnings Call dated Nov. 18, 2024
Corporate Participants:
Sham D Kajale — Chief Financial Officer
Rishi C Sanghvi — Managing Director
Analysts:
Saurabh Jain — Analyst
Sunil Jain — Analyst
Gaurav Agarwal — Analyst
Manan Vandur — Analyst
Krushi Parekh — Analyst
Harsh Saraswat — Analyst
Riya Mehta — Analyst
Samyak Jain — Analyst
Anuj Sharma — Analyst
Arjun Agarwal — Analyst
Devang Kabra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Sanghvi Movers Limited Q2 FY 2024-’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Sham D, CFO of Sanghvi Movers Limited. Thank you, and over to you, sir.
Sham D Kajale — Chief Financial Officer
Thank you very much Seema, for the introduction. Good afternoon, ladies and gentlemen, and thank you very much for attending H1 FY ’21 [Phonetic] Analyst and Investor Call of Sanghvi Movers Limited. My name is Sham Kajale, Chief Financial Officer; and along with me is Mr. Rishi Sanghvi, the Managing Director of our company. So I will just quickly run through the highlights of the financial performance of the company, and then I’ll open the session for — floor for the question and answer, if any.
So in terms of financial performance, for the quarter ended September 2024, our income from operation was INR156 crores, which is at par with INR151 crores that we achieved in Q1 FY ’25. For H1 FY ’25, our income from operation was INR307 crores, higher than INR286 crores in H1 FY ’24. This includes income from operation of INR256 crores and INR51 crores from renewable and Project EPC business.
For Q2 FY ’25, our average capacity utilization was 68% vis-a-vis 77% in Q1 FY ’25. The average blended yield for Q2 FY ’25 was 2.15% vis-a-vis 2.04% in Q1 FY ’25. The increase in yield is primarily on account of pricing advantage with respect to certain short-term contracts that we executed in Q2. Similarly, for H1 FY ’25, the average capacity utilization was 73% vis-a-vis 83% in H1 FY ’24. The average blended yield for H1 ’25 was 2.09% vis-a-vis 2.15% in H1 FY ’24. Although the management has informed the investor that our Q2 FY ’25 performance would be subdued, we have achieved on par performance with our Q1 FY ’25 financial results. The drop in capacity utilization and the yield is primarily on account of prolonged and early monsoons and slowdown in private and government capex due to general elections.
Our overall EBITDA percentage for H1 FY ’25 was 52% on a consolidated basis compared to 62% in H1 FY ’24. Our EBITDA margin for the Crane business remained as expected at 55%, while the overall EBITDA margin for renewable and Project EPC business is around 15%. The consolidated EBITDA, as mentioned, is 52% first due to increase in the renewable and Project EPC business from INR25 crores in FY ’24 vis-a-vis INR50 crores for revenue achieved in H1 FY ’25, nearly 2 times there is an increase in the business volume in the first six months. This business volume is driven with lower EBITDA. The second factor for the consolidated EBITDA is on account of lower revenue from Crane rental business. For the six months period ended 30th September 2024, our net profit after tax was INR70 crores vis-a-vis INR79 crores in H1 FY ’24.
Our company has done a capex of INR89 crores in H1 FY ’25. And in H2 FY, our — we propose to do additional capex of INR70 crores to INR80 crores depending on the market dynamics, order visibility and ongoing demand scenario. Thus on the annualized basis, the company may do total capex between INR160 crores to INR170 crores in the current financial year. This is curtailment of our initial capex plan for FY ’25 and is in line with our comments given in Q1 investor conference call.
We have sold 18 cranes, which includes some cranes which we have shown under the asset held for sale in H1 FY ’25 and generated profit of INR8 crores from sale of these cranes. The company has sold surplus freehold land and three residential flat in Chennai and generated profit of INR11.60 crores. As on 30th September 2024, the company has a fleet of 351 cranes aggregating to INR2,550 crores. This is excluding some 40-plus cranes, which are shown under the asset held for sale.
As on 31st October 2024, our order book was INR898 crores, of which INR640 crores will be executed in current financial year, that is FY ’24-’25. The balance order book worth INR254 crores will be executed in the next financial year that is FY ’25-’26. The spillover of EPC order book is primarily due to a delay in project offtake and on-ground delays. Thus, the order book for the current financial year is INR644 crores, out of which we already clocked a revenue of INR307 crores in the first six months ended 30th September 2024. The breakup of crane order book and EPC order book is already shared in the investor presentation, which we uploaded on the website of BSE and NSE. Based on the current order book position, inquiry pipeline and the possible extension of current contracts with the customer, we expect 10% to 15% top line reduction in the crane rental business in the current financial year. However, on a consolidated basis, that is crane rental plus renewable plus Project EPC business, we expect to register top line growth of 15% to 20% plus on account of volume driven in the renewable and the Project EPC business.
With this, I would like to hand over the floor to Rishi for his further comments. Over to you, Rishi.
Rishi C Sanghvi — Managing Director
Thanks, Sham. Now in order to leverage some of our core capabilities. And with an intention to provide value-added services to our customers, we have started the renewable and project EPC businesses two years back. As mentioned by Sham and also earlier, this is a high volume, low EBITDA business. In the current financial year, the company expects to achieve more than INR250 crores of top line from the combined renewable and project EPC business. This is a 10 times growth as compared to the last financial year 2024. And further, we will have an order backlog of more than INR250 crores, which will be executed in the next financial year. This order backlog will continue to grow throughout the year based on a very healthy inquiry pipeline. Currently, due to the competition intensity and fragmentation, there is limited headroom for growth in the crane rental business. Therefore, we, as a management team, have strategically taken a call to carve out Sangreen Future Renewables, which is primarily focused on the renewable business and further to develop the Project EPC business that will make use of and leverage our relationships with our existing customers.
These two verticals are less capital intensive, but have high working capital requirements. Through a business transfer agreement that is a slum sale, we have created two wholly owned subsidiaries of Sanghvi Movers that have been in operation since 1st October 2025. Also, we have transferred more than 50 employees and other assets into the new entity, which is primarily Sangreen Future Renewables Private Limited, and we have also appointed the CXOs to drive the P&L. The said spin-off of the Renewable and Logistics business aims to unlock the full potential of each business by providing dedicated attention and management, which will eventually lead to value creation for all our shareholders.
Our company and the management has already taken a number of strategic initiatives for the growth of the overall group, primarily reactivation of Phase 2, which is our engagement with the consultant Bain & Company to explore engine to growth opportunities, for which our company has already earmarked and built the necessary growth capital. Furthermore, we have taken effective steps to incorporate 100% wholly owned subsidiary of Sanghvi Movers in the GCC for our geographic expansion of the Crane rental business into the KSA.
I hope that all the investors have had the opportunity to take a look at our investor presentation as well as the financial performance, which has, as Sham has indicated, already been uploaded on the BSE and NSE.
With that, I would now like to hand it over back to Seema, who can open up the floor for Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much sir. We will now begin with the question-and-answer session. [Operator Instructions] We’ll take our first comes from the line of Saurabh Jain from Sunidhi. Please go ahead.
Saurabh Jain
Hello? Yeah, good evening. Am I audible?
Sham D Kajale
Yes.
Saurabh Jain
Yeah, thanks for the opportunity. Earlier you had guided for a stronger [Indecipherable] H2 with close to [Indecipherable] with 50% EBITDA margin. Now with these EPC orders spilling over to next year, do you see exiting the current year with INR700 crores plus top line and higher EBITDA margin because those EPC contracts are not there in this fiscal now, so 55% or higher margin?
Rishi C Sanghvi
I will take this question. In the opening remarks, we have mentioned that we already achieved a top line of INR50 crores from the EPC business, and we have an order book of more than INR200 crores to be executed from this business in the current financial year. So our top line from this business itself in the current financial year will be in excess of INR250 crores. So what was your question?
Saurabh Jain
So this INR250 crores worth of orders, which are spilling to next fiscal. So can we see higher margins now because these EPC revenue were supposed to be recorded in this current fiscal, so that should leave us with higher margins, right, higher than we had initially expected.
Rishi C Sanghvi
I will tell you. See, we have an order book of more than INR500 crores, out of which partly will be executed in the current financial year, and there will be a spillover of INR250 crores of worth of order in the next financial year. These orders, we are already back actually. So the numbers are already frozen. So the EBITDA margin in this business, as you know, the EPC business doesn’t have a normally two digit EBITDA margin. So based on our expertise and currently, we are subcontracting many of this activity to build our capabilities. So overall EBITDA margin in the EPC business will remain between 15% to 16% in the current financial year as well as in the next financial year.
Saurabh Jain
Okay. And sir, earlier we had guided for yield to fall below 2% in the September quarter in the crane rental business. However, it has gone up a bit as you have mentioned in the opening remarks that was because of short-term contracts. So how do you see yields to behave going forward in the second half and probably next year, if you can [Speech Overlap]
Rishi C Sanghvi
Thank you. I’ll take this question. So we expect yield to remain in and around 2%, plus or minus. And this is the guidance we can give for this financial year.
Saurabh Jain
Okay. And sir, one more question on windmill segment. So which are the top two, three players who contributed to our windmill revenue, which makes the highest contribution to our top line?
Rishi C Sanghvi
No, we don’t disclose this information. It’s a trade secret.
Saurabh Jain
Okay. Okay. And sir, just one last question from my side. If you can elaborate a bit on this proposed formation of a company in GCC for geographic expansion of crane business. So what kind of opportunity do we see and what kind of investment we are planning here?
Rishi C Sanghvi
Yes. So I think I can answer this question. Thank you for asking it. So the GCC is a very promising market. We have — it is an alternate market to our domestic market. So it allows us to leverage our core expertise into an international market that has a massive opportunity size. We plan to invest around between INR400 crores to INR500 crores over the next 3.5 years. And there are several opportunities in the GCC with respect — in the GCC specific in the Kingdom of Saudi Arabia with respect to large construction projects that are called giga projects and other civil infra projects around the World Cup and the World Expo. So there is a good potential market there for the next 15 years. And we believe that we are well poised to build and leverage our core expertise into this new market. Thank you.
Saurabh Jain
Okay sir. I will just fall back in the queue. Thank you.
Operator
Thank you sir. The next question is from the line of Sunil Jain from Nirmal Bang Securities. Please go ahead.
Sunil Jain
Yeah, good evening sir. And thanks for this opportunity. Sir, this Project EPC has turned in negative margin if you see your results in the BSE exchange. So what is the reason for that? And how it is likely to behave –.
Rishi C Sanghvi
Yeah, to be frank with you, this business at a nascent stage. So last year, we earned a healthy EBITDA margin from the Project EPC business. There’s no negative margin as such. Basically, we are now consolidating in this business. And overall, the Project EPC business will also fetch the EBITDA margin between 15% to 16% going forward. Earlier, we got some contracts where the — we got some good pricing, and that’s why the EBITDA margin was healthy in the initial one or two contracts. But now this business will become more mature and saturated. So going forward, our EBITDA margin will remain between 15% to 16%.
Sunil Jain
Also, what is prudent to note is that the size of those orders last year were very small. And as we expand, again, the volume will come, but at lower EBITDA.
Rishi C Sanghvi
Yes.
Sunil Jain
So this wind EPC and Project EPC, is there anything overlap or both work separately?
Rishi C Sanghvi
There are two distinct offerings that we — for the renewables, we do our activities under Sangreen Future Renewables, which is an end-to-end construction of wind farms, and we have a very solid inquiry pipeline in that business. For project EPC, we are primarily focused on hydrocarbons. So we are working across multiple refineries. And there, we do a number of activities like structures, fabrication, piping, insulation, ducting, electronic instrumentation. So these are composite jobs with — where you — and of course, equipment erection. So these are composite jobs primarily tailored for the hydrocarbon sector.
Sunil Jain
And sir, second question related to working capital. So if we see how we should build in the EPC working capital cycle, how much is the debtors day inventory and creditors? So this quarter, it shows a bit higher compared to the previous quarter.
Rishi C Sanghvi
Yeah, I will take this question. So overall debtors days have slightly increased in the Q2 of FY ’25. This is primarily because there was some delay in execution of project, not only from the crane business, but in the EPC business, primarily on account of monsoon season. But we are keeping our eye open and making every efforts to recover the days from the — recover the dues from the debtors, not only from the crane business, but also from the wind EPC business also. So going forward, you will see some kind of improvement in receivable days in the crane business as well as the EPC business.
Sunil Jain
So earlier you were indicating that EPC business will be having a working capital cycle of around 45 [Phonetic] So will that extend or there could be some variance to that?
Rishi C Sanghvi
See, most of the order that we back in the wind EPC segment, they are IPPs who are backed by good PE funds and pension funds. So on a technical side, we don’t foresee any lapses in getting the payments from this IPP. But overall, one can assume — safely assume that receivable days in the wind EPC business will remain between 45 to 60 days.
Sunil Jain
Okay, great. Thank you.
Operator
Thank you. We’ll take the next question from the line of Gaurav Agrawal from Nine One Capital. Please go ahead.
Gaurav Agarwal
Hi sir. Thank you for the opportunity. Sir, your crane rental business, I think in the first half, we did INR256 crores. And in FY ’24, we did INR593 crores. Is my number correct?
Rishi C Sanghvi
In FY ’24?
Gaurav Agarwal
INR594 crores odd.
Rishi C Sanghvi
Correct. Total years, absolutely right.
Gaurav Agarwal
Yes. And sir, for this year, you said we are expecting 10%, 15% kind of a decline from FY ’24 levels?
Rishi C Sanghvi
Right.
Gaurav Agarwal
Understood. So sir, can you help us understand what exactly leading to this decline in crane rental business? Is it because of competition? Or is it because of slowdown in the projects and capex as you alluded in the beginning remarks? And if it is so, if it is more a slowdown, where exactly are you seeing the slowdown more on the government side or on the private side? And what is giving you this thinking that this slowdown should extend in 2H also?
Sham D Kajale
Sir, I can answer that question. So first, to begin with, there is an increase in competition intensity and fragmentation. There is no denying this. But overall, also, the economy is going through a structural slowdown. And I had indicated the same in the Q1 investor call. If you look at any of the metrics, for example, the performance of the Nifty 50 companies, it’s today at a five year low in terms of their results. The surplus unutilized capacity with most private players. Government spend has substantially reduced, which is well documented. There is an issue with fund flow to site, on-ground execution is muted. Project offtake is delayed or canceled, and there is a massive shortage of skilled and semi-skilled manpower at site. There’s high inflation, which is preventing the RBI from holding back its decisions on interest rates. And due to all of this, we are — of course, there is a prolonged monsoon, which we already discussed. So effectively, we have lost potential billable revenue for the first half, which we cannot recover. We are in a rental service business. So it’s not possible for us to recover that. So all these reasons put together, we are saying that overall, we do see a 10% to 15% drop in the crane rental business. And that is where we believe that we have closed the financial year.
Gaurav Agarwal
Sir, is it possible for you to tell us what was your revenue in the second half last year for crane rental so that we can do kind of –.
Sham D Kajale
It’s available on our investor presentation. So I request you to please take a look at it.
Rishi C Sanghvi
One second, I can give that number is roughly around INR300 crores.
Gaurav Agarwal
That’s it sir. Thank you.
Sham D Kajale
Thank you.
Operator
Thank you. The next question is from the line of Manan Vandur from Wallfort PMS. Please go ahead.
Manan Vandur
Yes, sir. Thank you so much for the opportunity. I had one question, sir. Even at [Indecipherable], you said that we’ll be looking for the H2 will be better. And even as you answered the previous person. So I just wanted to clarify that even as Suzlon and Inox Wind, they have to execute their orders, and Suzlon is saying that they want to set up around five to six gigawatt every year, then how come you’re saying that crane rental will not do well going forward?
Rishi C Sanghvi
So I can answer that question. It doesn’t matter what order book these OEMs have. What needs to be looked at is what is the actual capacity addition on site. So in the first six months, the country has only added 1.5 gigawatts. In the first quarter, it was lesser than what we had done in the last year. So although the large OEMs have an impressive order book, the offtake on-ground execution has been delayed, again, because of a prolonged monsoon. And that’s why you can see this discrepancy.
Manan Vandur
Right. So in H1, it has not happened, I agree, monsoon. But H2, it should pick up, right? So if that happens, then –.
Rishi C Sanghvi
It should pick up. But there are a lot of challenges in the project execution. So as a management, we believe that the country would add anywhere between 3.5 to 4 gigawatts this year. Is that right, Sham?
Sham D Kajale
Yeah, see, even if you take a very rough estimate, in the first half, India as a whole, they have put 1.5 gigawatt of wind installation and effective deployment or the effective execution for this project was roughly for three months because three months, there was a heavy monsoon. So even if you double the capacity in next six months, India will end up between four to 4.5 gigawatts. As you mentioned that OEMs have a solid order book, why it is not being reflected in the SML revenue. They have a solid order book, which will be executed over a period of two to three years. That one needs to understand. So on an annualized basis, if they are ending up — if the India is ending up with four or 4.5 gigawatt wind installation, it doesn’t mean there is — that will be captured in the SML revenue. So there is an on-ground delay in project execution and the order book that OEMs are having that will be executed over a period of next two to three years.
Manan Vandur
Got it. Got it. Okay. So this year, you are saying that mostly on overall consolidated basis, our revenues will grow by 10%, 15% on due to our Project EPC business?
Sham D Kajale
Renewables and Project EPC, yes, correct.
Manan Vandur
Okay. Got it. And how do you see like going forward because we had US elections also and Indian elections also, we have a state elections, which is why there might be a slowdown. But let’s say, going forward, like FY ’26, how do we see our crane rentals and more on the on-ground work? How do we see that?
Rishi C Sanghvi
We are hopeful that there will be an uptick. But as I’ve already commented on the economy, you can consider that position with respect to your question.
Manan Vandur
Okay, understood. Thank you, thank you so much.
Operator
Thank you. We take the next question from the line of Krushi Parekh from Pentacle Family Office. Please go ahead.
Krushi Parekh
Hi sir. I just want to understand one thing. So Indian crane rental business, so we have enjoyed a network of depots across India that helps us bring us the cost efficiency. We’ve also had this long track record for the debt management. I’m presuming because of that, we have had lower borrowing costs versus our peer. So how do we see things changing when we are looking to invest about INR300 crores, right, you mentioned in the GCC region?
Rishi C Sanghvi
Yeah, over a period of next three to four years is more than INR400 crores.
Krushi Parekh
Right. So how — what kind of — how are we positioned when it comes to competition over there? Because in India, we do already enjoy some of these benefits being one of the largest Indian rental outfit. So how does that put us in the GCC region?
Sham D Kajale
Rishi?
Rishi C Sanghvi
So obviously, the depot network is something that we will not be able to translate in the KSA. But there are a lot of competitive advantages that Sanghvi Movers will bring in terms of safety, operational optimization and maintenance and uptime of the equipment. So what we are bringing to the KSA is our operating capabilities, our safety as well as our investment in terms of assets. We will be partnering or rather we are in the midst of identifying a partner who can support us a strategic or operative local partner who can support us in the KSA, and we will be formalizing the relationship shortly. So going forward, we believe that we can essentially build another engine of growth similar to Sanghvi Movers in the KSA and the broader GCC area.
Sham D Kajale
Based on our understanding and the market research that we did, this business in KSA or GCC is having a healthy EBITDA margin between 40% to 50%. So that is also an added advantage. That’s why we took this bet to expand the crane business beyond Indian territory.
Krushi Parekh
Okay. And will this also involve sending some of our current operators from India to KSA?
Rishi C Sanghvi
Yes, not just the operators, we’ll be taking a lot of our core capabilities to the region.
Krushi Parekh
Okay. And after all these things, where do we see our position in the KSA market? I mean, like in India, we are definitely the Number One player in terms of volumes. Say, after five years down the line, where will we be in the overall market?
Rishi C Sanghvi
It’s too early to comment.
Krushi Parekh
Okay. Got it. Thank you sir.
Operator
Thank you. The next question is from the line of Harsh Saraswat from Elegant Family Office. Please go ahead.
Harsh Saraswat
Hi, so I am referring to the Page Number 18 of your investor presentation, where you have given breakup of orders on hand to be executed in H2 FY ’25, where it says crane order book for H2 FY is INR138 crores. Can you explain it to me? There is some confusion, I guess.
Rishi C Sanghvi
See, we have a total order book to be executed in the current financial year is INR644 crores, out of which INR307 crores worth of revenue is already clocked in the first six months of the current financial year. Hence the balance order book to be executed from 1st of October 2024 to 31st March 2025 will be INR337 crores. And further, I’ve given the breakup of that INR337 crores of order book between the crane business and the EPC business. So EPC business, we have order book of INR199 crores and the crane business, as on that date, we have order book of INR138 crores. This is excluding the possible extension of the order that we currently have with our existing customers. This is excluding the new orders that we will be bagging in the next six months. This is excluding the possible overtime which is 1% and 2% that over time we get is excluding that position.
Harsh Saraswat
Okay. Because if we go by the crane rentals of INR138 crores over the next six months, that will lead to almost 33% of decrease in the top line compared to last year.
Rishi C Sanghvi
Yes. But we are not factoring the extension, the possible extension with our existing customers. We are also not factoring the new orders that will be backed in the next six months.
Harsh Saraswat
Okay. I hope that we get a lot of orders—.
Rishi C Sanghvi
Yeah, there are a lot of orders that we already have where the extensions are possible. And this is a typical situation in the crane rental business or any equipment rental business.
Harsh Saraswat
Okay. And if that doesn’t happen, the degrowth can be much higher. Is that right?
Sham D Kajale
It will not be. That position will not arise.
Rishi C Sanghvi
Things are better as compared to the H1 because there’s no monsoon. So we’ll definitely try to deploy the cranes if it gets released from our existing customer.
Harsh Saraswat
Got it. Thank you for the clarification.
Operator
Thank you sir. The next question is from the line of Riya Mehta from Aequitas Investments. Please go ahead.
Riya Mehta
Thank you for giving me the opportunity. My first question is with regard to the capex. We have reduced our capex for the full year to around INR160 crores, INR170 crores. So could you help me with that is it because we have shifted to secondhand cranes? Or what is the probable reason?
Rishi C Sanghvi
See, basically, Riya, to be frank with you, depending upon the ongoing demand scenario, market dynamics, order visibility and the competition threat that we have, the management has cautiously reduced the capex that initially planned for the current financial year. So we don’t want to end up buying our cranes and keeping it idle unless we have a clear visibility unless we have assurance of deployment of those cranes.
Riya Mehta
Got it. What would be your current gross block for cranes?
Rishi C Sanghvi
INR2,550 crores.
Riya Mehta
INR2,550 crores. And in terms of our investments, they are major in debt mutual funds, right?
Rishi C Sanghvi
Yeah, debt mutual funds, then commercial papers, corporate bonds. We have not invested any money in equity or equity-oriented scheme.
Riya Mehta
Got it. That’s it from my side. I will get back in queue for further questions.
Operator
Thank you. We take the next question from the line of Samyak Jain from Marcellus Investment Managers. Please go ahead.
Samyak Jain
Thank you for the opportunity. Just one question from my end. On the GCC piece, when do you expect the revenue to start flowing for us for the GCC business?
Rishi C Sanghvi
We hope to make our first dollar in revenue this financial year. We hope that is the operative plan as of right now.
Samyak Jain
Okay. Thanks.
Operator
Thank you. The next question is from the line of Anuj Sharma from M3 Investments. Please go ahead.
Anuj Sharma
Yeah, thank you for this opportunity. Rishi, you made a reference that this slowdown is structural. So what are the pointers which make you think this is more structural than maybe a temporary one?
Rishi C Sanghvi
The private and government capex has slowed down. There is a surplus capacity in the market. And directionally, all — most industries are currently unable to deliver. If you look at the renewable side, for example, there is a lot of news on the order booking of most companies, of most OEMs. However, the on-ground execution is very muted. There is a fund flow issue. Money is not flowing in the ecosystem. And so therefore, decisions are not being taken.
Anuj Sharma
Okay. So we have been through multiple cycles similar to this. How long can you think this cycle — this sort of down cycle can continue?
Rishi C Sanghvi
No, I would have to be appointed as the Governor of RBI, if I could answer that question.
Anuj Sharma
All right. All right. No, this was just based on historic cycles. But nonetheless, the next question is, see, historically, whenever you entered a down cycle, this business used to throw a huge amount of cash. But now the added business model of an EPC, and EPC will keep bloating as the environment is subdued. So our advantage, which was cash flow historically in a down cycle will actually be sucked up by EPC business. So how do you propose to manage this transition or rather this cash management?
Rishi C Sanghvi
Again, EPC is not capex heavy. It is working capital heavy. Plus our balance sheet, if you look at it, Sham, what is the cash on hand and investment?
Sham D Kajale
INR153 crores.
Rishi C Sanghvi
So we have a low debt-to-equity ratio. We have managed our capex prudently. We are well poised to take advantage of the demand. We have been very selective or judicious about the kind of customers we are working with. So cash management from a capex standpoint is — the balance sheet is sound due to our surplus cash reserves, which are invested. And on the EPC side, due to being prudent about the customer selection and the kind of customers we’re working with. The difference between traditional EPC and putting up a wind farm or a hybrid wind farm by an IPP is that the complete project financing is locked in as these sort of projects are backed by private equities, sovereign funds and pension funds. So we are comfortable working with these companies from a payments perspective.
Anuj Sharma
Sure. That’s helpful. And one last question. See, again, if I look at our old cranes, they were mainly German cranes, German or, let’s suppose, Western cranes. If we see the recent additions in the last three, five years, it’s been predominantly dominated by SANY. Does — how do you — how does the life of crane change because of this changing manufacturer mix? That’s my last question. Thanks.
Rishi C Sanghvi
As a promoter and as a businessman, I’m of the firm opinion of you get what you pay for. So German cranes are — have the best engineering and technology. I would say the engineering and the manufacturing quality of a German crane is unsurpassed and unparalleled. However, there are a lot of reasons why we have made the shift. One is that the Chinese technology or the Chinese cranes, they are very quickly evolving, and they have jumped in leaps and bounds. The second is we have — the hub heights in the country have continuously been increasing and off late has reached now 140 meters. So there’s a need for us to invest in bigger and bigger cranes in order to meet the hub heights. And in order to stay ahead of the demand curve, we have invested in these bigger cranes and therefore, taking the call from a capex point of view to buy Chinese cranes. And finally, if you see the other cranes, I think in the — Sham, we have sold 18 cranes in this quarter or in the first half of the year.
Sham D Kajale
Yes, 18 in the first half.
Rishi C Sanghvi
So these cranes most — I mean, a majority of these cranes, I would say, more than half are Chinese cranes that we got in 2008, 2009, 2010. So it’s almost been a 1.5 decades. And we are selling them above their much, much higher than their WDV value and in some cases, almost between 50% to 70% of their acquisition — historical acquisition cost. So all put together, that’s a validation of the replacement value or the market value of these Chinese equipment. So all put together, I think it is a conscious call that we are taking. And so far, we are succeeding in that.
Sham D Kajale
Just one more thing, the lead time to get the German crane is higher than the Chinese crane. So suppose you want to place an order for 650 tonne or 750 tonne a German crane, the lead time is between 9 months to 12 months. However, in case of Chinese crane, you can get the crane within three to four months, plus they are offering attractive credit terms also.
Anuj Sharma
Yeah, got it. Thanks for the answers. Appreciate it.
Operator
Thank you sir. We take the next question from the line of Gaurav Agrawal from Nine One Capital. Please go ahead.
Gaurav Agarwal
Thanks for the follow up sir. Sir, if I look at your second half ’25 growth over your second half last year, so it shows around 17% kind of degrowth. Is the number correct what I’m getting, assuming 15% kind of degrowth in the overall trend rental business for FY ’25?
Rishi C Sanghvi
See, H1 FY ’24, our total income from operation was INR286 crores. And in H1 FY ’25, our income from operations was INR307 crores. So there is a slight —.
Gaurav Agarwal
Sir, I’m talking about rental business specifically.
Rishi C Sanghvi
Yeah, so there is a slight degrowth in the train rental revenue. Yes, your point is valid.
Gaurav Agarwal
The point is first half, we degrew by 13%. If I assume your first half FY ’24 numbers were INR294 crores versus this first half INR256 crores. What you told me for second half last year was INR300 crores. And if I assume 15% degrowth on total FY ’24 crane rental revenue, I get INR505 crores revenue. That is first half, I get INR249 crores revenue for the second half. That’s the implied second half revenue. If I see Y-o-Y, it comes to 17% decline, which is even higher than what you did in the first half, assuming there was a prolonged monsoon election, everything, which will not be the case in the second half. So just trying to understand why are we expecting even higher degrowth in the second half when all these one-off factors which were there in the first half will not be there in the second half?
Rishi C Sanghvi
Okay. On a year-on-year basis, I will give the answer. Last year, our income from crane operation was INR593 crores. This year, we expect that it will reach INR500 crores. So there will be decrease in the top line with respect to crane rental business by INR93 crores. So INR93 crores, you are by INR593 crores. The effective reduction in the top line will be 16%, which we already guided in the opening remark.
Gaurav Agarwal
So that point is understood. I’m just asking, sir, first half, we had a lot of one-off challenges like election, prolonged monsoon, etc., which will not be there in the second half, right? And despite those factors being not there in the second half, we are still guiding for a lower — we are still guiding for a lower revenue in the crane rental business. So is it something like we are overly conservative in guiding? Or is it like something we are [Speech Overlap]
Rishi C Sanghvi
Let me answer your question. So we are in a service business. So if you have lost the revenue in the first half of the year, we are not in a production business. We can’t like build up inventory and sell 2 times our production capacity.
Gaurav Agarwal
So that is fine. I’m not talking about first half revenue to be recovered in the second half. I’m just saying second half last year, you did INR300. Can’t we do at least 300 [Phonetic] in this second half is what I’m trying to understand.
Rishi C Sanghvi
So the guidance that we had given is based on the order book that we have, the possible extension of the current existing contract with our customers and also the new order that we can back plus the small capex that we are doing in the second half. Based on these factors, we have given a guidance, which might be on a conservative side, but I think that is doable. I don’t want to give any very optimistic answer to the investors.
Sham D Kajale
No, if we give over guidance and we don’t achieve it, then there is an issue. And if we give under guidance [Speech Overlap]
Gaurav Agarwal
That’s always good. I’m just trying to understand because you are guiding for a lower — like a higher degrowth in the second half versus first half, while the one-off factors will not be there. So just trying to understand more on the capex side, whether you are seeing things to become worse as compared to how they were in the first half of last year — of this year. So that is where I was trying to understand. All right sir. Thank you so much.
Operator
Thank you. The next question is from the line of Arjun Agarwal, an Individual Investor. Please go ahead.
Arjun Agarwal
Hello. Good evening. I just wanted to know that what kind of means you have guided regarding GCC. So just to extension of that, I just wanted to know that what kind of revenue can we envisage down the line to two to three years maybe?
Rishi C Sanghvi
Yes. So thanks for asking this question. As I already mentioned, it’s a little early to — too early to comment. So allow us some time and we should disclose.
Arjun Agarwal
Okay. And the second one is, prior to this quarter, we gave order book, which is executable in the current financial year only. Am I right on that means till last year?
Rishi C Sanghvi
Yes. Yes. Your question was [Speech Overlap]
Arjun Agarwal
So this year, I think you have given order book that is executable in another means in FY ’26 also. So what kind of means disclosure can we expect moving forward?
Rishi C Sanghvi
Moving forward, we’ll use the format that we used in the last reporting cycle because there has been some on-ground delays in execution of projects, more particularly the wind EPC project. So we thought it prudent instead of giving the order book as a whole, we should give the spillover of the order book, which will happen or which will be executed in the next financial year. So from the next quarter onwards, you will get the information in the format which we recently shared in the investor presentation.
Arjun Agarwal
Okay. That is the total order book –.
Rishi C Sanghvi
Total order book that will be executed in the current financial year and the order book that will be spill over in the next financial year. So all this information will be captured and shared, yes.
Arjun Agarwal
Okay. These were my questions. Thank you. Thank you for answering them.
Operator
Thank you very much. We take the next question from the line of Devang Kabra from Wallfort PMS. Please go ahead.
Devang Kabra
Yeah, hi. Am I audible?
Operator
Yes.
Devang Kabra
Yeah, so my first question is about your company registered in the GCC. You said that you will make an investment of around INR400 crores to INR500 crores in the coming years. So when can we expect for revenues to kick in? And how much revenues can we see in the next three to four years or three to five years?
Rishi C Sanghvi
So the operator plan is to get the first dollar in, in terms of revenue in this financial year. It’s too early to comment on the kind of revenue outlook for the next two to three years.
Devang Kabra
Okay. And then as you said that you all have a low debt-to-equity ratio and then you also want to make investments of about INR500 crores and other investments. So do you all plan on raising any debt?
Rishi C Sanghvi
Yes, of course. It’s a plan for next three years. So a certain amount of debt will be raised in the balance sheet to fund that capex.
Devang Kabra
If you could give an amount, like.
Rishi C Sanghvi
See, everything is at the evolving stage at the nascent stage. Unless we freeze the capex, how much amount of money that we have planned to invest in GCC or KSA, I’m not able to really give a true picture on that right now.
Devang Kabra
Okay. No problem. And being in these many businesses, do you all plan about having a demerger anytime soon? Any comments?
Rishi C Sanghvi
No comments right now.
Devang Kabra
Okay. And my last question would be regarding the credit cycle and what are your credit terms with your creditors?
Rishi C Sanghvi
Creditors or debtors?
Devang Kabra
About the credit cycle.
Rishi C Sanghvi
You’re talking about the credit period that we allow our debtors, customer or –.
Sham D Kajale
Yeah, with the customer.
Rishi C Sanghvi
Normally, it’s 30 to 45 days, depending upon the profile of the customer.
Devang Kabra
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, we take that as the last question for the day. I would now like to hand the conference over to the management for closing comments.
Sham D Kajale
Rishi?
Rishi C Sanghvi
Good afternoon, ladies and gentlemen, and we thank you for taking the time to listen to us patiently. We remain invested in returning value to our shareholders. I look forward to our next conference call. Thank you.
Operator
[Operator Closing Remarks]