Spml Infra Limited (NSE: SPMLINFRA) Q2 2025 Earnings Call dated Nov. 12, 2024
Corporate Participants:
Manoj Digga — Executive Director Commercial & Chief Financial Officer
Analysts:
Pranay Premkumar — Investor Relations Consultant
Prathamesh Dhiwar — Analyst
Shridhar Jadhav — Analyst
Tej Patel — Analyst
Subhash Gate — Analyst
Dheeraj Ram — Analyst
Mandira A — Analyst
Vijay Rawat — Analyst
Hina Parikh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to SPML Infra Limited’s Q2 and H1 FY 2025 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Pranay Premkumar from Adfactors PR, Investor Relations team. Thank you, and over to you, sir.
Pranay Premkumar — Investor Relations Consultant
Good evening, everyone. From the senior management, we have with us, Mr. Manoj Digga; the Director Commercial and Chief Financial Officer; and Mr. Malay Kanti Chakraborti, Executive Vice President.
Before we begin the conference call, I would like to mention that some of the statements made during the course of today’s call may be forward-looking in nature, including those related to the future financial and operating performance, benefits and synergies of the Company’s strategies, future opportunities and growth of the market of the Company’s services. Further, I would like to mention that some of the statements made in today’s conference may involve risks and uncertainties.
Thank you, and over to you, Mr. Manoj Digga.
Manoj Digga — Executive Director Commercial & Chief Financial Officer
Thank you very much. Good evening, and thank you all for joining the Q2 and H1 financial year ’25 earning conference call of SPML Infra Limited. I’ll give you a brief overview of the industry trend, business update, and will also walk you through the Company’s financial performance.
As regarding the water sector, India is among the most water-stressed region in the world, with almost 40% of population suffering from extreme water shortage. With the challenge, there are opportunities as well for water infrastructure development companies. With Government of India’s focused initiative in the water sector, coupled with visible opportunities, we expect that the central government and various state government agencies will come out with sustainable tenders in this financial year and in future.
The flagship scheme of Jal Jeevan Mission is likely to be extend until 2023 — sorry, 2030, coinciding with the United National Sustainable Development Goals to achieve clean drinking water facility to every household in the country. With a sustainable upside budget, this scheme may attract further allocation as near to the target of — in 2030. Recently, the Honorable Prime Minister announced Mission Amrit, the next step in the Swachh Bharat Abhiyan, which involves setting up a water and sewerage treatment plant in all cities in an effort to make cities clean across the country. It will further generate additional business opportunity and will boost wastewater treatment facility to improve the quality of water, addressing issue of flowing sewerage and effluent into the water bodies, thus reducing water contamination.
As per available data on various government sites, irrigation and river interlinking project will provide approximately INR19 lakh crore worth of opportunities. The National Water Development Agency has identified around 30 projects, of which four projects namely, Ken-Betwa, Kosi-Mechi, Parbati-Kalisindh-Chambal, and Godavari-Cauvery, likely have been selected for early implementation.
Now, regarding the SPML business and operation. Moving to the business and operation of our Company, we have successfully completed 43 years of operation as on August 2024 and are among a very few companies having such a huge experience in this space. Being the leading integrated water management companies in India, we take pride of having one of the best pre-qualification criteria, which will enable us to not only participate in the high-value project, but also collaborate with various other companies in joint venture to undertake large ticket projects. As I have told to you in my earlier interaction, we seek to focus more on the bulk water business, which involves the distribution of water from river to reservoir, wherein a substantial portion of this business involves laying pipeline for transportation of water. We have good association with leading pipe manufacturers and also have a paneled expert sub-contractor who could execute it faster. We have plans to execute such orders under the escrow mechanism to reduce the strain of our working capital, which will give the Company substantial advantage as compared to other companies.
One major update during this quarter I would like to inform you is that we have reached a settlement agreement of an Arbitration Award with Power Grid Corporation of India under the Vivad se Vishwas II scheme for an amount of INR25.06 crore. With the successful settlement, I am pleased to announce that we have received a total of INR268 crores through arbitration from Vivad se Vishwas scheme and the balance amount of INR26 crore is also expected within the current financial year.
We have successfully raised an amount of INR346 crore through the preferential allotment of shares and warrants, out of which INR290 crore will be received in cash and balance through conversion of loan to NARCL as per their terms, other from the promoter, which will be utilized towards taking the advantage of growing opportunity in water sector. Out of the aforesaid preferential allotment, we have already issued INR170 crores from equity and warrant, and balance of INR1 crore is expected within next 18 months. On the aforesaid amount raised, promoter has contributed INR190 crore in addition to the INR160 crore already contributed since past three years to improve the liquidity, which reinforced the strong focus and confidence that we have towards the Company and its business.
With the continuous efforts of the promoter, the net worth of the Company stood at INR602 crore as of September 30, 2024. With the aforesaid infusion of equity and warrant, along with money realized from Vivad se Vishwas scheme and infusion from promoted earlier, total FD stood — as on date is INR280 crore and the further issue of equity and expected Vivad se amount, the total FD is expected to be around INR460 crore in future, which will utilize only for the business.
We would like now move towards the quarterly financial performance. On a standalone basis, we achieved a revenue of INR200 crore in Q2 financial year ’25 as compared to INR254 crore in Q2 financial year ’24. The earning has been impacted in the quarter and the H1 operation due to monsoon season and slowing down the operation due to general election and state election in different states. The Company emphasized, along with new order, that the operation after Q2 onwards will improve gradually. Our EBITDA has recorded INR26 crore compared to INR3 crore in the last quarter. We recorded a PAT of INR14 crore in Q2 financial year ’25 as compared to INR0.5 crore in the same quarter last year. For Q2 financial year ’25, our EBITDA margin and PAT margin stood at 13% and 7%, respectively, which is at par with our targeted EBITDA margins. The aforesaid growth is mainly on account of JV earnings.
With regards to our half-yearly performance, we recorded a revenue degrowth of 31% to INR422 crore versus — in H1 FY ’25 as compared to INR608 crore in H1 FY ’24. Our EBITDA has recorded at INR53 crore compared to INR6.5 crore in H1 financial year ’24. We recorded PAT of INR27 crore in H1 financial year ’24 as compared to INR1.2 crore in H1 financial year ’24.
We also reported a healthy balance sheet, with a net worth of INR622 crore, with NARCL debt of INR376 crore. Also, we have dissolved an inactive subsidiary to alleviate consolidated financial pressure, which will be our continuous effort going forward to focus on the core business.
Currently, the sector is facing a — its own headwinds. Tendering in the water sector has been delayed this year due to state election and government changes in several states, which have temporarily slowed down decision-making. Although, new tenders were expected after the election, they have not been released as planned. As the need of water projects remains high, especially under the Jal Jeevan mission, tender is expected to be floated from Q3 onwards. Currently, the Company has participated in a bid of INR5,000 crore order against the total available tender of INR11,000 crore based on the Company’s criteria of bidding for the selected tender and we are expecting some orders to be received against this tender as it is finalizing.
With this, we conclude our opening remarks. Thank you for listening to us. We now open the floor for a question-and-answer session. Thank you.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. [Operator Instructions]
The first question is from the line of Prathamesh Dhiwar from Tiger Assets. Please go ahead.
Prathamesh Dhiwar
Yeah. Am I audible?
Manoj Digga
You are audible.
Prathamesh Dhiwar
Yeah. So, sir, I think you recently mentioned that the tenders will be flowing from Q3 onwards. And we have been bidded [Phonetic] for around INR5,000 crore worth of orders. So, how much time it will take us, let’s say, in the — tenders to come into the — in the market in Q3?
Manoj Digga
Normally, the tenders out of these INR5,000 crore tenders, there are few tenders have been floated before the state election, etc. So, there are — the bid also has been received. But normally, after the election, it takes slightly longer time. Normal tender time from the tender opening till the allocation of the work is roughly around three months. And the tender work has started in, you say, the August and September. So, by December, we — the tender results should start coming. It has started coming into few states. And now, it will start to various other states also.
Prathamesh Dhiwar
Okay. So, by December or by early January, we can expect order inflow?
Manoj Digga
Definitely.
Prathamesh Dhiwar
And sir, what is our average order ticket size?
Manoj Digga
Average order ticket size, now, our focus is on the bulk. So, normally, we are bidding from INR300 crore to INR400 crore to INR1,000 crore plus order. So, the various tenders, we have floated in accordingly that size, that is there.
Prathamesh Dhiwar
Okay. And so, out of this INR500 crore — INR5,000 crore worth of orders, how much is the winning rate or how much can we convert it into our order books?
Manoj Digga
That we can’t tell you, because it is not possible. Once the tender will…
Prathamesh Dhiwar
Sir, any winning rate or any conversion rate you would like to give?
Manoj Digga
At the moment, I can say you, around INR1,400 crore, we are L1 and there is a possibility to get something on — from this INR1,400 crore. But it depends. When that — it’s all our competitive bidding and how the bidding will be opened, it all depends on that.
Prathamesh Dhiwar
Got it.
Manoj Digga
So, definitely, we should have — two quarters — with two, three quarters, we will have few tenders to be received in our time.
Prathamesh Dhiwar
Okay. Got it, sir. And my last question is on the margin. So, for the H2, how are we seeing the margins?
Manoj Digga
Margins, pardon?
Prathamesh Dhiwar
The EBITDA margin, sir?
Manoj Digga
In this tender?
Prathamesh Dhiwar
No, no. In coming H2 FY ’25?
Manoj Digga
Means EBITDA margin, the thing is that, one, it depends upon the tender. Q3 will be more or less same, because Q3, I’m not expecting anything from the new tender. Q4, we will get some from the new tenders. So, some income will be further generated. So, it will — Q3 will be more or less the same figure in — at similar line. Q4, there may be some increment.
Prathamesh Dhiwar
And sir, any guidance on top-line for FY ’25, you would like to give?
Manoj Digga
Like, for — till we get the new order, we are on the similar line, what we are having. Q3 will be — Q4 will be slightly high. But the similar line, the top-line will be there. And the next year, it will be — with the new order, the next year, the top-line will increase along with the bottom-line.
Prathamesh Dhiwar
So, INR1,000 crore to INR12,000 crore for this year, you can expect?
Manoj Digga
It’s on the Q2 level, because that’s the same level which we will be in, unless we get the new order.
Prathamesh Dhiwar
Okay. Got it, sir. Thank you.
Operator
Thank you. The next question is from the line of Shridhar Jadhav from JM Financial. Please go ahead.
Shridhar Jadhav
Hello, sir. Sir, I just wanted to understand…
Operator
Sorry to interrupt, Mr. Jadhav. Sir, your audio is sounding a little bit muffled. Can you speak a bit louder?
Manoj Digga
Can you come closer?
Shridhar Jadhav
Yeah. So, just wanted to understand the current order position.
Manoj Digga
We were having the order book of roughly around INR1,800 crore at the current position, and that’s the current, with including me and JV.
Shridhar Jadhav
And sir, what would be the typical execution timeframe for these orders?
Manoj Digga
This will be executed into this year, next year, may be part of the third year first half. So, we can — you can take two years.
Shridhar Jadhav
Okay. And so, sir, just — I know that in this was asked earlier as well. But just wanted to understand what would be our typical order conversion among the INR5,000 crores. Sir, I just wanted to get a tentative guidance as to order book position as of end of FY ’25.
Manoj Digga
Exactly — it’s very difficult to tell you that the order conversion, because it’s a competitive bidding and who has competed what, that we are not able to do. But normally, every quarter, we should get few tenders. That’s our target we can review, because there is a huge business opportunity available, huge standard opportunities are available. But the percentage, it’s hardly — it’s very difficult to say, because it’s a competitive bidding.
Shridhar Jadhav
Okay. Thank you, sir. I’ll come back in queue.
Operator
Thank you. The next question is from the line of Tej from Niveshaay. Please go ahead.
Tej Patel
Thank you. Am I audible?
Manoj Digga
You are audible.
Tej Patel
Yeah. Thank you, sir, for the opportunity. Sir, I mean, correct me if I’m wrong. In the last con-call, and probably, in your few public appearances, you told probably we are L1 in about INR2,000 crores to INR3,000 crores-odd, right, and you told probably we would get — in India, if you are L1, we’ll — probably you are winning that order, right? And you told probably you would send a notification very soon. But now, you are saying that probably we would be L1 in about INR1,200 crores to about INR1,300 crores-odd.
So, sir, I just wanted to understand, are we really L1 in few of the orders, or the results are yet to come? Because in the last con-call, you’ve said that we are already L1 and the orders would soon come out. But still, it’s been, I mean, November and then still, we haven’t received any notification from you. So, just wanted clarity on your side. Have we bidded for any projects? Are we L1, or we are waiting for the results?
Manoj Digga
Well, as I told you last time also, out of this around INR1,400 crores, INR1,500 crores, two orders, we are in the L1, in the Rajasthan. We are still L1 on this tender. Rajasthan, there was some election issue. So, the tender was not open. Now, there is a sub-election on, so there are few — again, there is Achar Sanhita, so, again, they are not opening the tender. Hopefully, we should get the tender open into this quarter.
And then, you see, the tender from last — as you — as I told you, last two months, the tender opening and tender finalization get delayed. Although, we have the L1 position, but the L1 has not been converted into LOI. So, we are expecting this quarter some tenders to be converted into LOI.
Tej Patel
So — okay. Got it. Then — but because earlier, you said we are L1 in probably about INR4,000 crores. And now, you are saying INR1,500 crores…
Manoj Digga
INR4,500 crores — around INR5,000 crores, we have participated. We — from the beginning, I am saying that the Rajasthan two tenders, which has — their financial bid has opened. So, we got the L1 position. There are other tenders where we participated, but their financial bid has not opened. So, if it is not open, we are not able to understand whether we are L1 or L2. But in Rajasthan, two tenders, we are. But because of these issues, Rajasthan election, sub-election issues, they are not issuing the LOI. So, that should happen into this quarter.
Tej Patel
So, is it correct to say, like, let’s say, by the end of this financial year, probably, we would get those INR1,300 crores-odd of orders in which we are L1, right?
Manoj Digga
It should be. For all practical purposes, it should be, unless there is further change, because there is some uncertainty will remain from L1 to LOI. But normally, if I’m L1, that I should get the LOI.
Tej Patel
Got it. And sir, I mean, we raised our funds at the start of September, right? But when I see the cash inflow, like, we reached around INR300 crores-odd. But our cash inflow is probably around — probably just INR30 crores, INR40 crores-odd. So, have funds come in October, or am I missing something here?
Manoj Digga
Fund comes into October, because we have allotted on 24th of October. So, the fund has come later. We got the in-principle approval on 11th of October. And after that, we have started getting the fund from all the prospective investors. As on today, we have the FD of around INR280 crore.
Tej Patel
Got it. So, how much would we be utilizing it for, let’s say, repaying our debt, or will we be utilizing it for hold for the tender bidding, because we require FD for that bank guarantees, right?
Manoj Digga
The money which is there around INR280 crore, and further money of roughly around INR180 crore which we will raise by way of warrant, and further this Vivad se Vishwas, all of INR460 crore will be utilized for the business. Nothing will be for the repayment. Repayment, it is very clearly attached with the arbitration award. Whenever the arbitration award money will come, it will be utilized for the repayment to the debt. Out of which, 75% we pay to the lenders. 25% will further improve the liquidity.
All the money which we are raising at this moment by way of preferential offer and the Vivad se Vishwas money what is coming, all, we utilize for the business purpose.
Tej Patel
Okay. Got it. And sir, is it correct to assume that the whole INR800 crores-odd of order book which we have right now would be completed by FY ’26?
Manoj Digga
You can take two years from here.
Tej Patel
Two years from here, okay. And can — yeah, got it. And can margins inch up to let’s say 8% in, let’s say, FY ’26? Probably, you are saying that in current FY, probably, it will not — let’s say, it would be around 5%, 6%, right. But in FY ’26, is it possible that it can go up to 8%, because new orders would come in and those execution would also contribute to revenue, right?
Manoj Digga
It should be, because the margin in the new order, we are bidding for the higher margin and it should come in that way.
Tej Patel
How much higher, sir? Can you give a — I mean, a number, if possible?
Manoj Digga
We are targeting the new order at a 10% to 12% margin. But that depends upon what finally the rate will come. But we are targeting a 10% to 12%.
Tej Patel
Got it. And sir, are we…
Operator
Sorry to interrupt, Mr. Tej. Sir, may we request that you return to the question queue for the participants waiting for their turn?
Tej Patel
Okay. No problem. Thank you.
Operator
Thank you. [Operator Instructions]
The next question is from the line of Subhash from Value Investments [Phonetic]. Please go ahead.
Subhash Gate
Hello, am I audible?
Manoj Digga
You are audible, sir.
Subhash Gate
Okay. Thank you. Sir, out of the INR1,800 crore order book that you mentioned, including the JV, could you mention what is your — I mean what is only SPML’s order book, excluding the JV?
Manoj Digga
This — whatever we have bidded, we have told about the SPML order. This — INR1,800 crore, [Foreign Speech] it is 50-50. [Speech Overlap] 50% is JV and 50% is ours.
Subhash Gate
That is with the JV, right? So, without the JV, how much is the order book?
Manoj Digga
Around INR900 crores.
Subhash Gate
INR900 crores. Okay. And so, I think last quarter, you had guided us, saying that you would achieve 50% to 60% of the total order book, that is INR1.1 crore what you had during Q1. If we convert that into revenue, we would get around INR600 crores. And if any new order then comes, then that will be added to the revenue. So, it is around same as last year, right, same as last year, plus if you win any orders in Q3 and Q4, that will be added to the revenue. Am I right?
Manoj Digga
We were having roughly around INR2,000 crore to INR2,100 crore by 31st March. And then, we have executed two quarters, and that will — and the balance will execute into further two years.
Subhash Gate
Right. I mean, I mentioned INR1.1 crore only SPML’s, not JV, because you mentioned that, the JV’s revenue will not come to the top-line, right?
Manoj Digga
JV revenue will come to the top-line a little bit [Phonetic]. Our share will come to the top-line.
Subhash Gate
Yeah, your share, got that. Also, out of the total finance cost of INR8.98 crores, I mean, last quarter, you had explained to us, saying that you recognized other income and also some finance costs as provisional entry, right? So, what is the actual finance cost for the second quarter?
Manoj Digga
Actual finance cost, there are hardly anything, because there are some small amount which we have to pay to the BG Commission, etc. Rest is only the IndAS adjustment, roughly around INR8.5 crore is the IndAS adjustment, which we have to make. Rest is mainly the provisions on BG charges. So, nothing — finance cost is nothing.
Subhash Gate
It’s almost like INR40 lakhs or something, okay.
Manoj Digga
That INR30 lakhs, INR40 lakhs, which is the BG Commission, etc., which is we are paying every quarter.
Subhash Gate
Okay. And sir, what is your order pipeline as of today, the orders that you have bid for, is it INR5,000 crore that you mentioned?
Manoj Digga
It is roughly approximately INR5,000 crore. And the pipeline — the bid, we will start opening into next one or two months, or next three months.
Subhash Gate
Okay. And you expect to bring INR1.5 crore [Phonetic] to INR2,000 crore of order every year, right, going forward?
Manoj Digga
Every week, there are few tenders and we will keep on bidding into that, because there is — in water, there are enormous opportunity and lot of tenders keep on coming. So, that — our selected tenders, we will keep on bidding.
Subhash Gate
Right. Okay. So — and you expect to win around INR1,500 crore to INR2,000 crore order every year going forward, right? That’s your — I think that was your guided…
Manoj Digga
It should happen, because that much business to — so much business opportunity and looking into our position, that much at least we should get.
Subhash Gate
Okay. Thank you. So, I attended even the other water infrastructure company con-calls. Even, they mentioned the same thing about the election slowdown. But they were able to manage at least one or two or three orders. I mean, can we assume that because of the past, where the — where your funds were stuck from the government project. Is it because you have certain conditions and that is why you’re not taking all the projects?
Manoj Digga
No, it is not. It may be that the various tenders where they have bidded, the tender has opened, and LOI has been converted into order. It is like we are L1 in Rajasthan, where the election, etc., is there. So, that may be the reason our tender has not been finalized. They may be in UP, where there is nothing to happen. They may have opened the tender and the LOI has been converted. So, nothing like that.
We have certain problem. They have certain strengths, that is not. The bid where we have made the tender, and then, if that open, then within one month, 1.5 month, that gets allotted to the LOI.
Subhash Gate
Okay. Got it. Thank you so much, sir. That’s all I have. And all the best for your future order wins. I think everybody is waiting for the next order win, which could come in late December or January, as you said. So, we’ll be waiting for it. All the best.
Manoj Digga
Thank you.
Operator
Thank you. The next question is from the line of Dheeraj Ram from Ashika Institutional Equities. Please go ahead.
Dheeraj Ram
Hi, sir. Can you hear me?
Manoj Digga
I can hear you, sir.
Dheeraj Ram
Sir, congratulations for a good set of numbers. Sir, my first question is a follow-up from the previous participant. So, we know that the 50-50 is our order book with joint venture versus SPML share. So, in joint ventures, what is the SPML share in it which will be recognized in top-line?
Manoj Digga
That’s correct.
Dheeraj Ram
So, what is our share in joint venture, is it 60%, is it 50%?
Manoj Digga
On average, you can take 30%.
Dheeraj Ram
30%, okay. And my second question is what is — yeah.
Manoj Digga
On average, you can take 30%.
Dheeraj Ram
How much, sir, sorry?
Manoj Digga
It depends on joint venture to joint venture. But average, you can take 30%.
Dheeraj Ram
Okay. Got it. So, my second question is, what is the expected amount of money that we are expected to receive in H2 from Vivad se Vishwas scheme?
Manoj Digga
There is a INR26 crore, it is still left for which we are pursuing. And that is the target — targeted amount that either both the INR26 crore or at least one of the award we will receive before 31st March.
Dheeraj Ram
Okay. So, at least INR13 crore to INR15 crore that we can expect, sir?
Manoj Digga
If not INR26 crore.
Dheeraj Ram
Okay. Got it. Okay, sir. So, my third question is, with our current cash holding, whatever the liquid asset we have, till how — how much projects can we bid for? Because we have to submit various bank guarantees, etc. So, what is the amount of projects that we can bid for?
Manoj Digga
It depends upon the state-to-state. Because if you see the Rajasthan, there is no performance bank guarantee. If you are going to the MP, there is a 2% guarantee. If you are going to Karnataka, there is a 10% guarantee. If you go to Orissa, there is a 3% guarantee. So, which tender we participate and that accordingly will determine that how much amount we can take. But normally, it is roughly, you can take 5% to 7% is the requirement of BG and working capital, you can take it average wise.
And then, there is a — that much business we can take, roughly around 280 divided by 0.7 [Phonetic], you can say, but — 0.07. But going forward, we have the money which we have the warrant. Anytime, we feel that the money is required, we can allot the warrant. Because majority of the warranty is with the promoter hand. Number three, we are also approaching to the bank. If we get the bank limit, then there is a BG limit further, which will be available for taking the project. So, tender — taking the tender will not have any issues.
Dheeraj Ram
Okay. So, bidding for the tenders is not a big issue. Once the tender starts, that’s when we can expect large amount of orders coming in. Is that correct, sir?
Manoj Digga
Only one thing is that, we are very selective in taking the bidding. We don’t bid in every tender, because we have made certain criteria of fully-funded project, DPR, where the DPR is completed, where there is a bulk water, there is a control and comfort with our escrow partner, pipe suppliers. So, only those projects we are bidding.
So, there is ample number of bidding opportunity in the water sector. But we are selective in taking the water. And we will not have any issue in whatever targeted tenders we want to achieve for this year or going forward.
Dheeraj Ram
Okay. Okay, sir. Just last two questions, so if you can allow. The first one is, what is the percentage of old orders in our order book and what is the percentage of new orders in our order book?
Manoj Digga
At the moment, after the resolution, what — new order and old order, we consider that before the resolution, whatever order has been taken, that we consider as an old order. So, all the orders are old orders. Very recently, we have not bid any — we have not received any order. So, once — whenever the order, we will receive the new order, this will be called as a new order. So, you can consider all the orders which we have are the old orders.
Dheeraj Ram
Okay. So, my last question, sir. So, based on this old orders only, we were able to clock this amount of EBITDA margin. So, if we get new orders in H2, so what is your guidance in FY ’26? Can we go up to or cross 8.5% EBITDA?
Manoj Digga
In the new order, we are targeting 10% to 12% margin. So, 10% margin is our targeted order. Although what — in the competitive bidding, what finally we achieve, that is a different issue. But our target bidding is 10%. And then, we will get that 10%. So, that is our targeting. Now, whenever the order will keep on coming, we will keep on briefing you how much percentage we have — we got in this order.
Dheeraj Ram
Okay. Sir, just last question. So, if you want to achieve INR60 crores-plus as PAT in H2 — I mean, for the FY ’25, we have to clock at least INR40 crores-plus of PAT in H2. So, how do you see ourselves clocking INR40 crore PAT in H2?
Manoj Digga
What amount is going to come into the full-year, that is difficult to say at this moment. Because forward-looking, I can’t say. But I can only say that Q3, I’m not expecting much. Because if — even if I get the order, it will not execute. It will be more or less same line. But Q4, we should get some order, some JV order, JV commission, etc. So, Q4 should be better. But whatever — whenever the order will come, whenever we do that, then only every quarter, we will keep on communicating you.
Dheeraj Ram
Okay, sir. Yeah, that’s it. Thank you, sir. Thank you very much.
Operator
Thank you. [Operator Instructions]
The next question is in the line of Mandira A from Investore [Phonetic]. Please go ahead.
Mandira A
Thank you for the opportunity. So, I have a couple of questions. What factors give you confidence in achieving double-digit margin, considering that the water tender, which is being floated in the market is not as per your expectation?
Manoj Digga
So, it is an expectation. Water tender, as I told you, there are water tender, which has — there are so many water tenders. If you see the — currently, there are roughly around INR11,000 crore water tenders are floated into various states, more than INR11,000 crores. And we are selective in taking the participation, because of our criteria. As I told you, in the first con-call itself, we will be very selective. We are not in the mood to built-up a huge order book. We will — would like to remain as a boutique. We will select the selected number of orders which has a higher profitability, which is fully funded, which is in a good state, which are easy to execute, which are bulk, on which we have the support from our own pipe manufacturer, which is in panel pipe manufacturer who are ready to do the work in the escrow mechanism.
So, these are the criteria which we look into that. Whatever the tenders are coming to that criteria, we keep on participating into that. So, at the moment, we have participated into around INR5,000 crore of order book, which are fulfilling these criteria. But we’ll keep on bidding. Every week, we will keep on bidding, whenever the tenders keep on coming.
Mandira A
Okay. Got it, sir. And what is the expected quantum of arbitration award for H2?
Manoj Digga
No, arbitration, we have that one award of roughly around INR180 crore, which is at the Supreme Court of Arunachal Pradesh, which we are expecting to be get the order from the [Technical Issues] the current financial year. That is INR180 crore that we are targeting. Rest will keep on coming. Because there is a INR620 crore of arbitration award against which we have to pay roughly around INR430 crore to the banks. Rest will remain into — will be with us. So, that is our targeted to be received in next five years in tranches.
Mandira A
Okay. That was it from my side. Thank you so much.
Operator
Thank you. The next question is from the line of Vijay Rawat from Vedant Capital. Please go ahead.
Vijay Rawat
Good evening, sir.
Manoj Digga
Good evening.
Vijay Rawat
Yeah. Sir, I just want to know what stage the discussions are there with banks for the BG limit.
Manoj Digga
BG limit, we are in the process of improving our rating. So, that is there. Although we have the BG limit, whatever bank FD we have, we are taking the BG against those FD. So, that is not at all a problem. We are in the process of discussing with the ICRA for doing the rating. Once the rating will come, then we will approach to the bank for the BG limit.
Vijay Rawat
So, approximately, how much time it can take?
Manoj Digga
Maybe I will pass this for the next con-call, because, first, the rating has to come, and then we are in the process. We have already appointed ICRA. So, that is under process. So, once that happens, then only we will approach to the bank and I will give you — able to give you more — much more clarity in the next con-call.
Vijay Rawat
Thanks, sir. And my last question is, you said you have bid for INR5,000 crore order. So, this INR5,000 crore was done in this Q2 only or how is it?
Manoj Digga
This is the accumulated till date. As I told you, the tender in the last one month, 1.5 months, very low tender has come because of the various issues of the government. There is some Jal Jeevan Mission renewal, etc., was going on. It is — so there is a few people are engaged in the election, etc. So, now, the tender floating has started coming. Till date, we have bid into around INR5,000 crore of tenders in which around INR1,400 crores, INR1,500 crores, we are L1.
Vijay Rawat
Okay. Fine, sir. Thank you, sir.
Operator
Thank you. [Operator Instructions]
The next question is in the line of Hina Parikh, an individual investor. Please go ahead.
Hina Parikh
Hi. Thank you for the opportunity. My first question…
Manoj Digga
Thank you. [Foreign Speech] Can you be closer?
Hina Parikh
Yeah. Is it better?
Manoj Digga
It is better now.
Hina Parikh
Fine. So, what makes us different from the other EPC players who look to enter this segment based on the huge business opportunities available?
Manoj Digga
In the EPC, it’s a very peculiar business. Basically, if you see, the EPC order, EPC tenders and EPC work order gets only basis of PQ. PQ means your qualification, which is you are getting with the work actually done in past. So, all those players who have recently started the EPC business don’t have any track record of PQ. Without PQ, nobody gives any business. In the government, it is very clear that whether you had done similar type of work in past, which is PQ, pre-qualification, then only you will get the order.
Now, the pre-qualification when they give to the water sector, it’s a water pre-qualification they see; when it is a road sector, the road pre-qualification they see; when the power sector, power pre-qualification they see. So, our — since we are in the — from the beginning into the water sector, we — our pre-qualification into the water sectors are enormous. Any tender which comes, around 80% to 90% of the tenders, we are pre-qualifying. Maybe the company which is in the road sector and wants to start the water sector will not get any PQ into the water sector. So, they will not get the business. So, that’s the added advantage all the companies who are there in the sector will have. And that is where we have the much, much better advantage compared to other EPC company which has recently started.
Number two, we don’t have any debt issue, because all the debt we have resolved. Number three, we don’t have any payout issue. I don’t have to pay any installment, any interest. All are linked with my arbitration receipt. Number four, we are the experience player. We have 43-year experience. Our system and process are set up. Our employees are well trained. Our internal contractor and suppliers are very, very strong, which are not compared to the new EPC company which will start into the water sector. So, that’s the major advantage. And we have the liquidity of roughly around INR300 crores.
Hina Parikh
Thank you so much, sir. Really helpful. Wishing you all the very best.
Operator
Thank you. The next question is from the line of Dheeraj Ram from Ashika Institutional Equities. Please go ahead.
Dheeraj Ram
Hi, sir. Sir, we have received INR25 crore of arbitration award during the quarter. Is that right?
Manoj Digga
We received around INR25 crores award.
Dheeraj Ram
So, how does it flow into EBITDA? What percentage of the arbitration award will have an effect on EBITDA?
Manoj Digga
Arbitration is not affecting anything on the EBITDA, because arbitration is the received from the data. So, we — in the EBITDA, there is nothing on the arbitration income.
Dheeraj Ram
Okay. So, how do we account this arbitration award? I mean, which line item does it fall under? Does it come on the top-line, or where does it come after EBITDA?
Manoj Digga
We will set up from the debtors. If there is any excess amount, we will — it will go to the profit and loss account.
Dheeraj Ram
Okay. Got it. Sir, any guidance on FY ’25 closing order book?
Manoj Digga
As I told you, it should — at least, we should have INR1,500 crore to INR2,000 crore order book in next six months. But that depends, how it pan out, the competitive bidding. But this much should be added — minimum, this much should be added into the next six months.
Dheeraj Ram
Okay. So, basically around INR2,500 crore to INR3,000 crore, we can expect as a closing order book. Is that right, or…
Manoj Digga
Old and new together.
Dheeraj Ram
Okay. Sir, and I was just attending the company con-call which has again major presence in Rajasthan which is Vishnu Prakash R Punglia con-call. And do you see any — I mean, they are also very aggressive in bidding as per their con-call. So, do you see any competition from these kind of players?
Manoj Digga
In the EPC sector, whichever set — whichever field the government is spending, all the EPC sector will start putting into efforts there. So, water is a best bidding place where the government is spending a huge amount. So, all the EPC companies whether they were in the water earlier or not, they will focus into the water sector. And it’s really a profitable sector. It’s really 10 years, the water sector will remain into the business. So, all the EPC will be there.
And as I told you, the PQ will be the major player, important role. And the Company’s maturities and Company’s team and Company’s contractor and suppliers, that will result the deliverable of that orders which we will take. So, even if any PQ, if any strong company comes to the water sector, if they don’t have the PQ, they have to go along with the JV route with any of the company which have the PQ, because they will not get the business. If they get the business, every size of project, they have the different pre-qualification. So, if it is a INR1,000 crore plus company, there are only four, five players. INR1,000 crore plus order, there are only four, five players who can participate. If it is a INR500 crore, there are 10%, 15% will kind of participate. If it is a INR100 crore, INR200 crore, there can be 20, 30 participants, and the margins are accordingly.
So, that depends which company — but it is there, that all the EPC companies now focusing into the water sector, because there is a huge government spending in this sector. So, I’m not finding any competition, because our PQ is much, much higher compared to any company. There are four, five major players, which are equivalent, our PQs are equivalent to them.
Dheeraj Ram
Okay. Got it, sir. Yeah. Thank you.
Operator
Thank you. The next question is from the line of Shridhar Jadhav from JM Financial. Please go ahead.
Shridhar Jadhav
Sir, you said that you mentioned that one of our strong edges are pre-qualification to bid for orders. But what I can see is that in the INR5,000 crore order that you have bid, mostly you have taken the JV route. So, what is the disconnect over here?
Manoj Digga
No, there are — as I told you, if it is — I’m giving a theoretical number, that if it is a INR1 lakh crore order book in a year, our qualification will be INR90,000 crores. And our targeted order book, because we are — as I told you we are the boutique order. We will not in the rush to build the top-line and order book. So, suppose, we take a target to take INR5,000 crore to INR6,000 crore orders, maybe the INR85,000 crore order book which are available, which in any case others are bidding.
If any strong party wants to have a JV with us, we agree to do that, where we will get 1.75% to 2.5% upfront. That’s the equity money, that is giving additional revenue to the Company. So, we will continuously to bid on our own and with the JV.
Shridhar Jadhav
Okay. And sir, in the bigger orders, who are the major players that you are seeing as competitors?
Manoj Digga
L&T, Megha, NCC, PMC, these are the major players.
Shridhar Jadhav
Okay. Sir, I’ll come back in queue.
Operator
Thank you. [Operator Instructions]
As there are no further questions, I now hand the conference over to Mr. Manoj Digga for his closing comments.
Manoj Digga
Thank you very much all to participate into this conference. Before closing in, I would like to mention that with the active engagement of the companies related to the project under Jal Jeevan Mission in rural and urban, the Company identifies substantial opportunity in the water sector. And there is a further potential to grow under river linking and irrigation project. The Company foresees significant long-term growth in the water sector as demand for sustainable water infra solutions increase substantially.
The Company is ready to take targeted share of the future project in water EPC against the various already announced schemes of INR12 lakh crore of Government of India. Thank you very much.
Operator
[Operator Closing Remarks]