Hi. Thanks, Henrik.

Good morning everyone, and thanks for joining in, and a warm welcome to the Q3 FY26 earnings call of Kalpataru Projects International Limited. Today we have the management, which is represented by Mr.

Manish Mohnot, who is the Managing Director and CEO, Mr. R.

K. Tripathi, who is Deputy Managing Director, Mr.

Sanjay Dalmia, Executive Director, Mr. Amit Uplenchwar, Director, Group Strategy, and Mr.

Ram Patodia, President Finance and the CFO. Now, at this point, I'll hand over the floor to Mr.

Mohnot for his initial remarks, post which we'll open the floor up for question and answer. With that, thank you and over to you, sir.

Thank you, Kishan. Good morning everyone.

Thank you for joining us today and for your continued interest in Kalpataru Projects International Limited. We trust you have had a chance to review our financial results and the presentation available on the stock exchanges and our website.

To start, this has been an exceptionally strong year, operationally, financially, and strategically. Before we dive into the specific performance metrics, I would like to provide a broader perspective on our progress achieved in the last three quarters.

First, our revenue has consistently improved over the last three quarters, driven by robust execution and a healthy order backlog. At a consolidated level, we achieved 27% year-on-year growth for nine months FY26, while standalone growth reached 28%.

Both at standalone and consolidated level, we are already ahead of our full-year guidance of 25% of revenue growth. Second, we maintain the steady trend of securing new projects with better margins.

The same is reflected from improvement in consol and standalone PBT margins of 110 bps and 80 bps respectively for nine months FY26. This performance exceeds our guidance of consol PBT margin improvement of 100 bps and standalone PBT margin increase of 50 bps for FY26.

Third, our achievement of the net working capital front reflects our relentless focus on timely project delivery and disciplined bidding approach, with an aim to improve returns on the invested capital. With net working capital at 79 days at consol level and 97 days at standalone level, we are performing significantly better than our year-end target of 100 days.

Fourth, we have significantly elevated our corporate positioning this year by securing several large-scale strategic orders in our T&D and B&F business. With 19,456 crores in YTD order inflows and an additional 7,000-plus crores in favorable position, we are well positioned to meet our annual inflow target of 26,000-plus crores.

Fifth and the most important, our balance sheet is at its strongest point in recent history. We have reported a notable decline in net debt due to improved operational performance.

Furthermore, we have completed the divestment of the Vindhyachal Road asset in January 2026, and we are on track to fully monetize the Indore real estate project by March 2026. This step is aligned with our commitment to redeploy capital into our core EPC businesses to enhance our return ratios.

Let me now get in more details on the financial performance. At consolidated level, we delivered Q3 FY26 revenue of 6,665 crores, a 16% year-on-year increase.

For nine months FY26, revenue rose 27% year-on-year to rupees 19,365 crores. Similarly, standalone revenue grew by 20% in Q3 26 and 28% for the nine-month period.

The growth in revenue is broad-based, with most of the business verticals delivering a healthy double-digit growth, led by strong execution and a healthy order backlog. Our consolidated EBITDA rose 23% year-on-year for the first nine months of FY26.

At a standalone level, EBITDA grew by 20% year-on-year in Q3 and 28% year-on-year for nine months period. For nine months FY26, our consolidated and standalone EBITDA margins remain healthy at 8.3% and 8.4% respectively.

We continue to deliver a solid earnings performance, characterized by healthy improvement in PBT margins. Our consolidated PBT before exceptional items grew by a robust 37% in Q3 and 69% for nine months FY26.

Similarly, for the standalone business, PBT before exceptional items rose by 44% in Q3 and 52% for the nine-month period. For nine months FY26, our consolidated PBT margins expanded by 110 bps to 4.6%, while the standalone PBT margins increased by 80 bps to 5.3%.

More importantly, we have continued to strengthen our balance sheet through notable improvements in working capital management and leverage. Our net debt at both consolidated and standalone levels declined significantly, dropping by 29% and 16% respectively compared to the previous quarter.

As of 31st December, our consolidated net debt stands at 2,240 crores, while standalone net debt is at 1,849 crores. This debt number would further improve in Q4, given the inflows of Vindhyachal and normally healthy inflows in Q4.

Our net working capital days have shown further improvement both on a year-on-year and quarter-on-quarter basis. For the period ending December, NWC days for both consolidated and standalone basis improved by 15 days.

As a recent and significant update, we successfully completed the divestment of our 100% equity stake in the Vindhyachal Road asset in January 2026. This transaction was based on an enterprise value of approximately 799 crores post-closing adjustments and has resulted in net cash inflows exceeding rupees 600 crores for KPIL.

Looking ahead, we are on track to complete the full monetization of inventory in our Indore real estate project before the end of March 2026. This strategic divestment will help us to further reduce leverage and strengthen our financial position as we approach the end of the fiscal year.

Turning now to our order book position, our consolidated order book remains exceptionally strong, standing at rupees 63,287 crores as of 31st December 25. This provides us with significant revenue visibility for the quarters ahead.

We have maintained robust business momentum in FY26, securing 19,456 crores in new orders year-to-date. Furthermore, we are favorably placed to secure additional orders exceeding 7,000 crores, predominantly in our T&D business.

We continue to garner substantial T&D orders, both domestically and internationally, alongside several significant wins in our B&F business. This order win further solidifies our leadership in the global EPC landscape.

Now coming to the performance of individual businesses, first starting with T&D business. Business visibility in the T&D business continues to improve and remains strong on the back of global push for renewables and development of grid infrastructure, both domestic and internationally.

We have solidified our position as a global leader in the T&D business with key wins in the strategic markets and reputed clients. We have received orders of rupees 7,826 crores in the T&D business till date in 26, and further are L1 or favorably placed in projects over rupees 5,800 crores.

Our T&D business order backlog stands at over rupees 25,752 crores as of 31st December 25, reflecting a growth of 12% year-on-year. T&D revenues saw strong year-on-year growth of 37% for nine months FY26, to reach rupees 8,992 crores, on the back of improved execution and healthy order backlog in India, Sweden, and other international markets.

Talking specifically on the Indian T&D market, we expect the growth momentum to remain strong, led by major impetus on renewable energy integration and rising electricity demand. This is amply supported by PGCIL capex numbers and annual pipeline projection of 90,000 crores per annum for the next four years.

With a strong order book and robust tender pipeline in our focus markets over the next three to four years, we remain confident to deliver strong growth in the T&D business going forward. Our B&F business has reported one of the best performances, with order inflow crossing the 10,000 crores mark in nine months.

We have secured orders worth 10,911 crores till date in FY26 and further have L1 of rupees 1,100 crores. Our B&F order book has grown by 40% year-on-year to rupees 18,596 crores.

During the year, we have added prestigious projects in terms of data centres, large-size residential projects, hospitals, and industrial works. Our strong execution capabilities and ability to deliver large-scale projects has helped us to improve our competitive position across marquee developers in India.

Our B&F business maintains its growth momentum, recording revenue growth of 17% YOY for nine months FY26. Our oil and gas business delivered strong YOY growth of 58% for nine months FY26, led by robust execution in Saudi projects.

Our water business saw a decline in revenue in Q3 and nine months FY26. Collections in the water business have started to improve, especially from UPJGM project starting January 2026.

Till date in the current year, we have received collections of over rupees 1,250 crores, and in the month of January, we have received collections in the range of 250 crores. We remain confident on improving collections from water projects in Q4 itself.

In our railway business, revenue improved by 31% in Q3 and 15% for nine months FY26. Our order book in the railway business is rupees 2,713 crores and further we have in the metro rail electrification project.

The outlook for railway business remains positive with considerable opportunities in areas like high-speed rail, RRTS, safety and signaling works. Our urban infra business delivered strong performance this quarter with a 79% YOY growth driven by progress on metro rail projects.

We have strengthened our presence in the metro rail segment with major order wins on the Thane metro rail project. Before I conclude, I would like to reiterate my opening comments that we continue to deliver consistently strong results underpinned by three key pillars: first, strong growth in revenue and earnings.

Our operational performance has consistently outpaced our guidance, reflecting robust execution across most of the business verticals. Second, a robust order book.

With significant new wins, mainly in T&D and B&F businesses, we have built a high-quality order backlog that ensures long-term revenue visibility with improved margins going forward. Third, a strengthened balance sheet.

We are successfully reducing debt and maintaining an efficient net working capital, ensuring we remain financially agile without compromising on capex. We have incurred more than 500 crores of capex in the first nine months of the current year.

More importantly, we are well positioned to deliver on the strategic priorities and guidance set for FY26. We expect revenue growth for the full year to be approximately 25%, accompanied by improvement in earnings of minimum 50 basis points at standalone and 100 basis points in consol.

Furthermore, we remain confident in reaching our target consol EPS exceeding rupees 50 per share for the current year. We are well placed to achieve targeted net working capital and order inflows guided for the year.

Lastly, we expect growth momentum to remain buoyant, supported by clear visibility in T&D, B&F and civil businesses. We are strategically aligned with evolving market needs and occupy a strong position in the global EPC landscape, backed by an integrated expertise, robust execution capabilities, global reach and a resilient financial profile.

On the back of this, we expect growth momentum to continue along with margin improvement in financial year 2027. With that, I conclude my opening remarks, and moderator might now open the floor for Q&A.

Thank you.

Hi, sir. Thank you and congratulations for a good set of numbers.

Good morning, Amit.

Yeah. First question, sir.

There is a kind of decent decline in the consol versus standalone, and you did explain that two legacy projects are getting executed in Fasttel. Just want more explanation what led to kind of 10-12% decline on consol and where are we today with respect to the legacy executions in this, yeah.

No. Amit, as we have explained in the presentation also, on the consol level, at a PBT level, obviously we have done reasonably well.

When you look at EBITDA level, there were three specific areas: one, water EBITDA is much lower than what it was in the previous year, driven by reasons all of us know that, and I'm hoping this will improve in Q4 because in January itself we have collected 220 crores, as I said earlier, and looks like majority of the states now have the budgets to start paying us. We're keeping fingers crossed.

Second, in the previous year we had our road assets with us, all of three of them; now it's only two. There's some decline in consol EBITDA coming from there also in Q3.

Third, we continue to suffer on Brazilian operations as we are just closing some of our old projects, while we have claims and all of that with clients, but normally we don't take that in books till the claims materialize. I think Brazil has been a dampener in some form.

The good part is the Brazil order book is nearly completed, the historical order book. We have less than 100 crores of orders left to be delivered, and we are reviewing what we need to do in terms of Brazilian operations going forward.

It was a combination of three things at EBITDA level, while EBITDA has grown, not exactly in the same form of revenue on a quarterly basis. If I look at it on a nine-month basis, while our revenue has grown at 27%, EBITDA has also grown by 23% and EBITDA at 69%.

This was a few challenges in EBITDA, and I think it's maybe one more quarter, or if not, maybe this was the last quarter where because road assets could continue in terms of comparison from previous year, water should improve in Q4, and Brazil losses should start coming down at least consol level, given that we have a lower order book there.

Yeah. Sir, in terms of pipeline, since I think the budget is also over, and so just wanted to understand this year definitely would be strong.

With 12 to 15% perspective, what is the pipeline for domestic T&D, international T&D? Any changes you have seen post-budget where you feel that the pipeline can improve or can be reasonably okay?

Especially metro I would like to highlight in terms of pipeline additionally.

No, sir. Post budget, I think on infrastructure overall, given the kind of thrust by the government and given the thrust of all the PSUs, I think pipeline has only improved significantly.

We're still looking at finer details, but whatever numbers have come out, whether it was PGCIL yesterday increasing their capex guidance significantly, whether it was a metro project, we're seeing a lot of tenders now coming in, whether it is even on B&F where you're seeing industrial projects coming in, whether you're seeing data centers coming in, whether you're seeing airports coming in, and residential and commercial continue to come in. We're also seeing some good traction on the international front on oil and gas.

If you ask me from a pipeline perspective, all businesses — T&D, B&F, oil and gas, urban infra, as well as Sweden — they only look more promising than what it was prior to budget. We are looking at the finer details now, and hopefully in the next few months we'll get a lot more clarity.

The good part is today we have a visibility of orders in excess of two and a half years. Even if we grow at a reasonably good number, we have good visibility for the next two to three years.

With improved pipeline and strong visibility, I think performance should improve only going forward.

All right, sir. Fair to assume that even next year the growth can be 20-plus percent?

I would come back with exact numbers in the April call, but yes, it would be definitely a very good growth with improved margins. This two commitment you can take, but exact numbers give me some more time to come back.

Thank you so much, sir. Thank you all the best.

Thank you. Congratulations on a great quarter.

My first question, if I see your underbook, now T&D is about 41% and 29% is B&F, and I understand these will have excess of double-digit margins. If I have to look at profitability from here on in the coming quarters, every quarter from here on, what are the pain points currently you are facing in terms of legacy underbook?

How do you think the margin trajectory will move quarterly from here on into the next year? Will there be improvement on a sustainable basis given 70% of these order backlog is from double-digit-plus kind of margins?

Parikshit, first to answer the pain points: the pain points clearly where we exist today, one still continues to be water, where our outstanding is in four-digit crores, a very high number crores, while collections have improved and we're keeping our fingers crossed, that still as of today is a pain point, and we are hoping that that would improve significantly in February, March. Second, from a pain point perspective, today it's just the volatility in whatever has happening in exchange or whatever else.

While we're 90% plus hedged, but that's second pain point because in tendering in all our businesses, that continues to be its cost which needs to be taken. While we say so, I completely agree with you that at least three of our business units, transmission, B&F, and oil and gas, are at a double-digit EBITDA level, and going forward also they'll continue at that levels.

Assuming that the water business cash flow improves, definitely margins should improve going forward, including in Q4 itself. We would just like to wait for guidance post March, once we have this clarity on water.

On the legacy orders, I don't think I have anything left now, maybe on 63,000, maybe 1,000-odd crores. Otherwise legacy orders with lower margins are all gone.

Yet on some of our business segments, like urban infra, we have not taken orders at similar double-digit margins, because these are businesses we have grown in the last three years, but even with that overall you'll see margins improving reasonably well going forward.

On these water orders, 8,000 crores of backlog, what kind of margins will be there? Is it more of an overhead issue, because you are only progressing to the extent you are receiving cash flows?

Is it that these now have much lower margins given the projects have been significantly delayed? How does one evaluate or look at this profitability in this segment, supposing the payments are coming on time?

Parikshit, out of the 8,000 crores of orders, you'll have to divide this into two: around 5,500 crores of orders which have to be delivered, and there's around 2,500 crores which is O&M for the next 5, 6, 7 years across the various projects. On the balance 5,500 crores orders to be delivered, if I look at it at a gross margin level, I don't think there's a big dent.

The dent is only coming because of interest costs. Interest costs typically, with all these delays, get hit at a project level.

At a gross margin level, the dent is minimal. If I was at whatever X levels, it is maybe 100 basis points dent, not more than that.

The bigger dent comes out of interest cost. That's where we're waiting and watching.

Second, I think it's the speed of execution, right? While we are delivering on water projects, we're not delivering at the speed ideally which we would like to, given the constraints on cash flow.

The moment cash flows come, you can work on everything. You can increase the speed and deliver this quickly.

You can also build a healthy order book also because tenders would also start coming, and you could rationalize this cash flow to do better things on other business units also. It's a combination of all of this, all dependent on water, but dent in terms of EBITDA could be 100-200 basis points, not more than that, as far as water business is concerned.

On the monetization we receive, I think 600 crores from EPL. Now, additionally, how one should look at that?

What are the other low-hanging fruits? I think you have some monetization in progress and gone for termination.

Over the next three years, how do you think further cash flows can come in? Also from Indore real estate monetization point of view, what is now pending from there?

To first answer your question, whatever cash flows we're receiving are just going into working capital and debt improvement and some capex. That's clearly our indication going forward.

As far as Indore is concerned, as of 31st December, we had an outstanding of approximately 75 crores. In January we have already collected 35-odd crores, and we believe the entire amount, maybe a few crores here and there, should come in before March.

We're pretty confident that all collections would be done by March. We would be done as far as Indore is concerned, and that would also go in debt reduction only.

As far as monetization of the other assets are concerned, I think now all transmission assets are monetized. We just have one road asset left.

We have Shubham, which we have declared as non-core, where also we are selling specific warehouses to reduce debt, and you can see that debt reduction coming at a consolidated level also. I believe there also debt reduction should happen by selling specific assets at a Shubham level.

Besides this, as we had indicated earlier also, that we have appointed bankers to advise us on fundraising at Sweden, which is also progressing well. We do not know which options and what timing it exactly is, but we have appointed bankers to look at exploring fund raising at Sweden also, which I'm expecting in 26-27 should give us further cash flows.

And

From arbitration, you have gone for termination, what kind of realization we can get over the next two, three years?

Parikshit, a very difficult question to answer. I can say that on arbitration we have a lot of awards, and the total amount of those awards might be in four-digit crores.

Whether it would happen, whether we would get that money in year one, year two, year three, difficult to assess that. We have not taken any of these awards in books, so as and when this comes through, we would take that to the quarterly numbers, but difficult to assess from a three- to five-year perspective.

Thank you. I will follow-up question while joining from.

Thank you.

Thank you.

Good morning. Thank you.

Sir, my question is on the commodity cost inflation. With aluminium, copper, etc.

going high, can you just explain or walk us through how we are protecting ourselves from any potential pressure, and where does the risk, if at all, exist still on this particular issue?

Sure. Ashish, on the commodity front, we have exposure primarily on aluminium, zinc, copper, and steel.

As of today, as per our risk management policy, on aluminium, zinc, and copper, we are 80-90% hedged, if not 95% plus hedged in some of them. I can confidently tell you that whatever levels we are hedged are lower than our tender cost on 99% of our tenders, and so to that extent, our profit margins, whatever we have bid at tender level, is reasonably protected.

At a steel level, we obviously cannot hedge steel because there isn't a market available for that. We carry an inventory which is in excess of 50,000 tons when I look at raw materials, finished goods, and WIP, and we have continuously loaded the steel increase expected cost into our tenders.

To the extent on steel, our total order book is approximately 3 lakh tons as of now. We have a visibility of already 50,000, and some would be in terms of we would have ordered for Q4 also.

There could be some exposure to steel, but at a tender level we have adequately provided contingency for that. My view is, even on steel increase from here of 5 to 7,000 rupees further, it shouldn't dent our margins to any extent on a totality basis.

Sure. Sir, particularly coming to transmission projects in India from BGCIL, etc.

Now are these sort of fixed price EPC contracts for you, or there is a provision for commodity cost pass-through in some of these projects?

I think majority of our transmission projects are fixed price projects, and we have to load the expected increase in cost at tender level itself.

Right. Then you do go and hedge for the commodity again?

Yes. Except steel, as I said, we are 92 to 95% hedged in all our commodities, including some of our L1 positions we are hedged, which we are reasonably sure we should be getting them sooner than later.

Right. Sir, also the other issue is on the water side, where you did mention that you are expecting things to improve.

This is your expectation primarily from the central budget starting to flow, or you expect state to really come and chip in more, and hence your cash flow will improve in water?

Actually it's a combination of both. Before the budget came in, the state level we had already collected closer to 220 crores in the month of January.

The budget just came in a few days ago. Even in the budget, I think the allocation to water at 67,000 crores is a huge number, and they also indicated that out of the current year 67,000, hardly 25-30% has been spent.

With that message of saying that they would be spending more at a central level and with states coming in with their own cash flow, and we are seeing that improvement at the ground also, except Jharkhand, UP, MP, Orissa, Punjab we are seeing improvements across. Today if you ask me, except Jharkhand everywhere I am reasonably sure that Q4 you should see good inflow coming in.

I would still like to keep my fingers crossed because we get this hope several times in the last six, seven quarters. I'll just keep myself positive right now and hope that it goes the way we have planned.

Right. Sir, last one, LMG could be on what sort of a margin range right now?

LMG, if you look at the margin range, is more in the level of 5.5 to 6, both EBITDA and PBT, because their EBITDA is nearly equal to PBT. They hardly have an interest cost.

I think it was 5.9% if I'm not mistaken, but more in the 6.9% for 7.8% EBITDA for nine months and PBT at 6.9%. I expect this should be at an annualized basis more in the range of 6 to 7 only

at the PBT level. Sir.

Thank you very much.

Yeah. Sir, firstly, what capex are we targeting for the entire year this year and for FY27?

For the current year I think we had already taken approval of capex outflow of closer to 700-plus crores. We have already incurred capex outflow of 500-plus crores.

If you ask me for the current year capex outflow should be in the range of 700 to 750 crores in terms of outflow. I believe that we should be at a similar range going forward also because we are seeing good traction across all our businesses, and given the healthy cash flows which we have and some more cash flows which are coming in January, I think we believe that that's the best place to invest from a long-term perspective.

I think on a cash outflow basis next year should be also similar numbers. We'll come back to you in April with the exact trend on that or exact numbers which we are projecting for the next year.

Okay. Secondly, when you mentioned the revenue growth guidance of 25% for FY26, it is for standalone as well?

Yes, at the standalone level also we believe that we should be in the range of 25% for the current year.

Okay. Secondly, what is our plan at Fasttel now going ahead in the next couple of years, given the almost negligible order backlog right now?

Are we looking to slow it down or close the business, or will we doing at a nominal level?

Vaibhav, we are reviewing the business in detail in Q4, including some detailed presentations at the senior-most level and meeting clients and all of that. We clearly are not very optimistic about the business where we stand today, and in the last few years we have seen several challenges coming on that business.

As far as optimism is concerned, looks slow. As far as way forward, I think we'll have a lot more clarity in the next two months, and clearly the business is on a downturn and not on an upturn in any form.

Currently what would be the EBITDA loss right now at the Fasttel level in nine months?

In nine months, I think at a Fasttel level we have already provided at a consolidated level a number closer to 230-odd crores, 238-odd crores. If you look at it, in the last two years we have provided closer to 325-plus crores at a consolidated level.

At a consolidated level we provided for majority of the losses, which is equivalent to the amount we have already invested in Fasttel. So

EBITDA was negative 230 crores in first nine months?

In the current year.

Okay. Lastly, we have received...

So

Sorry, I just correct myself. At EBITDA level in Fasttel it's 186 crores.

At PBT level it's 237 crores. I correct myself for nine months.

EBITDA is 186?

Yes, Yes.

Okay. Lastly, in terms of the money we have received, we have received 600 crores already in the Q4, right?

Yes, the money is in the bank. Plus there is a debt reduction at a consolidated level because there was around 190 crores of debt, which has been taken over by the acquiring entity.

At a consolidated level the impact of cash inflow plus debt is closer to 800 crores.

How do you see the debt number which we have right now? Gross debt of around 1,100 crores as of December.

How do you see it moving ahead around March?

At a net debt level I believe March should be lower than December on account of everything. Normally Q4, your cash inflows are normally very healthy in our business, also the VPL and also what is coming from Indore.

At a net debt level we would be much lower, and also on the net working capital we would like to be lower than where we are. Difficult to give you exact projections, but I can tell you it will be much lower than Q4.

Than Q3. Whatever we have reported net debt in Q3, it will be much lower than that, both at standalone and consolidated.

And

our total investment in SRO will be somewhere around 420-odd crores?

Total investment in?

In VPL, loans and equity put together.

I think it was around 340-odd

crores.

Sorry, yes. Sorry, my team just said it.

It's around 417 crores. You are right, Vaibhav.

Okay. The gain should be booked in Q4?

Yes, for sure.

Yeah. Okay.

Thank you, sir. Those were my questions.

Thanks for the opportunity and very strong performance on factors that are within your control. The first question is your working capital stays again, well below your guidance.

Exo water, what would be your working capital days at the consolidated level?

Sumit, exo water, the working capital days could come down by 6 to 7 days at a standalone and consol level, assuming that the cash inflows were normal. It could be in the range of 6 to 7 days because we have not done so much revenue also for the current year.

If it was a normal situation, and if the revenue would have been on target, numbers could have been lower by 8 to 10 days also. As of now, 6 to 7 days is what the impact is.

Understood. Following up from an earlier question from Ashish, what is the hedging cost that you have incurred for commodity and/or exchange in Q3, FY26 and nine months, FY26, in case you have the number handy?

I do not have the hedging cost number, but I'll be happy to explain you that. As far as FX is concerned, we are net exporters, there is never a hedging cost.

We always get a premium.

And

as far as commodities are concerned, whatever is the cost, it's loaded at a project level. At a project level when we bid, we take the, let's say, the three-month forward plus assuming that it is required nine months, we add that forward cost also at a project level itself.

Typically our forward cost, which is let's say a 12-month, 18-month, 24-month forward cost, is what is bid at a project and what is charged also at a project level. As I said earlier, today where we stand, on 99% of our projects, whatever is hedged at actual cost forward, including the forward premium, it's lower than what we have bid at a project level.

It significantly lowers, and that's where you'll see margins improving going forward.

Okay. This cost of hedging would be sitting as part of your other expenses?

So

not necessarily. The cost of hedging is sitting as a part of the project cost.

As and when delivery happens, it comes into P&L. It sits in the project cost as a CTC cost of saying that this is the cost to be incurred going forward.

As and when delivery happens, the revenue and cost both comes into P&L, not in other cost. It would come in the direct cost itself.

Right. It would be as part of the landed raw material cost for you in your RM expenses for your commodity hedging.

Perfect.

Yeah. Understood.

That is very clear. Just for bookkeeping, what was your Fasttel EBITDA loss in Q3, if you can tell us?

It will help us adjust numbers.

In Q3, Fasttel EBITDA loss is around 63 crores, in Q3 itself, yeah, and total for nine months around 186 crores. This is one area where we believe, against whatever we had projected for the year, this is one area where we have not been able to achieve on whatever projections we did.

That's something which is a setback for us.

But

in totality, whatever we have guided at a PBT level, we have exceeded our guidance on all account.

Phenomenal. With the hundred-odd crore of Fasttel backlog remaining, even if you have to quantify remaining pain, it should be less than 100 crores?

Much lesser than that, at a consol level.

At a consol. Thank you and wish you all the best.

Thank you.

Good morning, sir. Thank you for the opportunity.

My question is on the T&D opportunity in India, specifically, right? I think last quarter was pretty weak.

Can you just talk about the T&D opportunity pipeline or tender opportunity which you see for the next 6 to 12 months?

Mohit, as I said earlier on the call, we're seeing a lot of tenders coming on T&D, while we presented that earlier also. As of now, out of a 7,000 crores, around 5,800 crores we are L1 in T&D itself, both domestic and international.

Also, if you look at the guidance of Power Grid in terms of what CAPEX they planned, they have increased that guidance significantly, and it's visible now. Whether it was tenders coming up on HVDC, whether it is in Rajasthan and Gujarat to support renewable, whether it is southern India, whether it is northeast, or whether it is Jammu Kashmir.

Overall, we believe that next two to three years, these opportunities will only increase multifold level, both domestic and international. We're well positioned in terms of that because we are among the top two, three globally in all markets except China in the T&D space.

It’s always a good position to be in, and that would be one of our biggest drivers of growth from a three-year perspective. And

what was the international T&D inflow in the last nine months compared to FY25?

If you look at the T&D international in the last nine months, we have received orders of around 3,600 crores, and we are L1 in orders of around 4,500 crores. Some order we declared yesterday.

I believe by the end of the year TLI should get orders closer to 8,000 crores, and this excludes the Sweden orders. If I include Sweden also, TLI should be reaching a number around 9.5 to 10,000 crores of order inflow in the current year.

And

how was this number in the base year?

If you look at the previous year, TLI and plus means international, all put together was around 5,500 crores, which includes TLI, LNG, and Fasttel for nine months in the previous year.

Understood. Thank you, and all the best.

Thank you.

Thanks for the follow-up. Now in this year, how much loss funding we've provided and from Q4, somehow we're looking at the loss funding for the road projects?

I don't think we have provided significant amount of cash funding to any of the road projects. As far as loss funding is concerned, the first six months we had approximately 40-odd crores, but that was more a P&L.

I don't think funding we did significantly. Nine months, if you look at it, we did 40 crores for loan repayment.

It was not for loss funding. I think going forward we just have one asset, there is no more loss funding required, and that asset is positive in every form, both at a P&L level as well as in a cash flow level.

Going forward, I expect zero loss funding to be done on road assets.

Okay. On the pipeline, if you can quantify segment-wise total prospects pipeline, both domestic and international, and also want to be on pipeline opportunity, because after the last big order, I have not seen anything major coming up.

If you can give us some sense in terms of quantifying the pipeline, both international and domestic, segment-wise that would be helpful.

As I said earlier, Parikshit, on the oil and gas front, our major focus continues to be on the international market. We had taken a large order at Saudi Aramco last year and were focused more on execution of that project.

I'm happy to say that as of now we are closer to 50% of the project, what needs to be delivered, closer to that where we stand today, and I expect the balance project to be done in the next 15 to 18 months. We are on track as far as execution of Saudi project is concerned.

As far as pipeline is concerned, we're seeing a lot of tenders coming from Saudi, Abu Dhabi, as well as Qatar. We are now qualified for maximum projects, and there’s no size restrictions.

Now that we have already delivered significant portion of the project, we would continue to bid for a lot of these projects. We ourselves were cautious in bidding in the last 12-odd months because the size was itself very big, and our typical approach is being cautious when it comes to taking large-size projects.

Given that, I don't have the exact quantification, but I know while we speak we have bid for at least four or five large projects in Saudi and India, which in the next three to six months we should hear from them. Clearly, as I said earlier, going forward, from a 26-27 perspective, one of the largest drivers of order book will be oil and gas in the international front.

About if you can quantify the domestic and international T&D opportunity in the next 12 months?

From a bidding, if you look at it in the current year, when I look at T&D, out of our 26,000 crores expected order book, T&D itself would be around 15-odd thousand crores. Going forward, next couple of years I expect this inflows to increase by at least 15-20% on an annualized basis, if not more than that.

If I have to give you a numbers perspective, it could be trillions of dollars differently at different places, but clearly the focus today for us is India, number one focus, CIS countries, number two focus, Sweden number three focus and neighboring countries, and LATAM, which is a big area for us, not necessarily Brazil, but LATAM, Chile, Guyana, all of that, is our number four focus. We're seeing opportunities everywhere.

I don't have the exact quantification of what kind of orders, but I can say it's trillions of dollars of tenders expected over the next 24-odd months. Clearly, that business growing at 20-25% on order book would be a bare minimum for us, and with improved margins, which is very, very important for us.

Given the robust pipeline and ordering expected, how are you looking at capex and T&D expansion and looking both from tower expansion? How are you looking at it?

On the T&D front, typically the capex is much lower than when I compare it at BNF level, right? Typically on the BNF front, capex is more in the range of 5-6% of our revenue if you need to do the entire capex.

On the T&D front, our capex would primarily, and which is continuing, would come in plant expansion of capacity. Our plant has already reached closer to 2 lakh 75,000, both plants put together in terms of capacity on transmission itself.

Besides that, we do staging, sheetring, girders, all of that separately, and railway projects. Some capex would go in plant expansion, some capex would go in terms of TSC equipment and cranes and all of that for the transmission side.

It's not going to be as significant as we're looking at BNF side. If you ask me, a number of 100 to 150 crores, or max 150 crores should be enough as far as capex on transmission is concerned for the next year.

And

what kind of bookings? If your capacity is 2.75 lakh tons, is it completely booked?

Just to get an undercurrent on the ordering to the orders which you have currently, is capacity fully booked for the year, or how once you look at it?

As we stand today, we are at 90% plus capacity booked for the next year, and if I include the L1 orders, we are nearly fully booked. The good part is capacity expansion in this business is very simple.

We have huge galvanizing capacity. It's only about adding CNC machines, which takes three-odd months, and you can easily increase your capacity to a higher level.

As of now, looks like 2 lakh 75,000 to 3 lakh tons should be enough for us from a next two-year perspective.

Okay. Sure.

Thank you, sir.

Good point on the team. I have two forward-looking questions.

As Kalpataru operates across multiple infrastructure segments and geographies, where project selection and execution discipline matter as much as order inflows. From a strategic point of view, what factors now play the biggest role in deciding which projects to aggressively pursue versus where to remain selective, especially where competition and execution risk are involved?

That's my first question. I'll ask the second question after this.

Thank you.

This is Sudip. I think a very valid question.

I think we are very clear that all our six businesses are cyclical in nature. If you look at the last five, six years itself, you saw first two years T&D domestic, there were hardly any orders.

There were orders in water and railways. Last two years you've seen T&D and T&L and B&F running at a different speed.

Starting point is assessment of what the market is and what competitive strength we have and what is our strength in terms of delivery is a starting point. The second point is which markets to focus.

It's domestic, international, which clients to focus, private, public, out of which which clients. Third important aspect is availability of labor because there are some projects where labor requirement is very high versus some projects, for example urban infra, for the same volume labor requirement is much lower than B&F.

Then the fourth aspect comes is capex. What is the capex requirement.

It's a mix of five or six things based on which we decide resource allocation strategy, based on which we decide our bidding strategy, based on which we decide our margin strategy which we need to bid at, and based on which we decide what is that our balance sheet can afford. If you ask me personally, that's been our biggest strength for the last few decades, not even for the last few years.

That's why you see that even with growth which we have happened over the last 10 years of around 15% per annum, our net debt number nearly stays the same, right? Even after we have done capex every year.

Last three years we have done capex of closer to 2,000 crores. It's a mix of six, seven factors which go in and it's a larger team which gets involved.

It's not about one person, but it's a team, five, six-man team, including guidance from the risk management committee and what we need to do. It's not an Excel spreadsheet based or it's not something which is a yes or no, but a combination of various factors based on which this gets decided.

As far as execution methodology is concerned, which is the point you asked, I think our strategy has been very simple. We first build teams and then we take work.

That's been our strategy always. Whether I look at Urban Infra, whether I look at Saudi Aramco, whether I look at the solar business which we are looking at the international front where we already have one large L1, our strategy first is to build a team, a reasonably good team before we bid for an order and then continue building that business.

That's been very effective for us all across.

It's Mr. Ram.

Again, along the similar lines, from a financial point of view, as the order book mix changes across different segments and regions, what internal metrics help you assess whether the execution quality is improving or not? Particularly in terms of cash flow, working capital discipline, and returns on deployed capital.

I want to understand how you look at this beyond just the reported margin numbers.

I think maybe it might help for you to have a specific discussion on this, Ram, separately, but Ram is on the call. I can just say that, as I said earlier, for us one of the biggest drivers is balance sheet strengthening, and last five years our ROCE has improved by more than 500 basis points through various aspects, improvement of profitability through reduction in non-core investments, all of that.

At a project level we have all three components, PBT level tenders, ROCE, and capex. When we tender all of them are available, and if you need to further deep dive, you could meet Ram separately in office.

I can ask my office to schedule that meeting with you.

That would be wonderful. Thank you and best of luck.

Thank you.

Thank you everyone for joining us on this call. We expect results to improve going forward.

Thank you.