Thank you. Good afternoon, and very warm welcome to everyone.

On behalf of Ashika Institutional Equities, I welcome you all to Power Mech Projects Limited Q1 FY27 earnings conference call. Today, we have with us management represented by Mr.

Rohit Sajja, Executive Director, Mr. N.

Nani Arvith, Chief Financial Officer, and Mr. S.

K. Ramaiah, Director, Business Development.

We thank the Power Mech Projects for giving us the opportunity to host the call, and we will now like to hand over the floor to the management for their opening remarks, post which we will open the floor for Q&A. Thanks, and over to you, sir.

Good evening, everyone. I am Nani Arvith, CFO of the company.

I would like to extend a warm welcome to all of you joining us today for our quarter one FY27 earnings call. Thank you for taking the time to participate in this discussion.

As we begin financial year 2027, the first quarter reflected the continued strength of our growth trajectory with improved performance across most of our core business verticals except ETC business. Our results reflect the strength of our integrated business model, disciplined execution capabilities, and continued focus on operational excellence.

For quarter one FY27, the company recorded total revenue of ₹1,632 crore, reflecting 26% growth over the same quarter last year. The growth was driven by sustained execution across our core verticals along with the ramp-up of operations in civil infrastructure, industrial EPC, O&M, and international projects.

EBITDA for the quarter was ₹176 crore at a 10.8% margin, representing a 3% decline year-on-year. The margin was lower compared to the same quarter last year primarily due to higher material and execution costs arising from the ongoing Middle East conflict, increase in royalty cost in the KRBM project following the government orders on royalty sharing for seized quantities, lower margins in the KBP mining business primarily due to higher overburden removal costs from the opening new seams during quarter one—production from this seams is expected to ramp up in the coming quarters, improving margins—lower other income during the current quarter.

However, our standalone business noted a 11.3% EBITDA margin compared to 10.2% in the same quarter last year. Profit after tax stood at ₹89 crore, reflecting 11% increase over quarter one FY26.

Profit after tax after minority interest stood at ₹80 crore compared with ₹53 crore in Q1 FY26, reflecting a 53% increase over Q1 FY26. This has helped to take the EPS to ₹25.23 compared to 16.61 in the corresponding quarter of financial year '26.

The management is confident of maintaining its full-year target in terms of execution, order book, and margin profile. Coming to the revenue mix, the quarter continued to reflect a well-diversified contribution across our business segments.

The O&M business continued its steady growth, contributing ₹431 crore, an 8% increase year-on-year supported by new order inflows during the year. The civil segment including roads, railways, and water distribution projects contributed ₹796 crore, registering a 28% year-on-year growth.

The industrial construction business contributed ₹270 crore, down by 13% year-on-year, which was offset by the industrial EPC business, which contributed ₹96 crore. The mining business showed strong positive trend with a revenue of ₹84 crore, representing 223% year-on-year growth supported by the commencement and ramp-up of revenue from the KBP mine from November 2025 onwards.

Now coming to the revenue mix for quarter one FY27, the geographical revenue mix comprised 96% domestic and 4% international revenues. Sector-wise, the power segment contributed 54% of the revenue, while non-power segment contributed the remaining 46%.

From the order inflow, the company secured orders worth approximately ₹1,864 crore during quarter one FY27 against our annual target of ₹12,000 crore, representing approximately 15.5% of the annual target. Order inflows during the quarter remained well-diversified across industrial construction, civil infrastructure, and O&M.

Among the key award wins during the quarter include O&M of Mumbai Monorail. This project also marks our entry into the highly technical urban mobility space.

Our total order backlog including MDO projects stands approximately ₹55,398 crore. Excluding MDO orders, the executable order book stands at around ₹16,228 crore.

This provides us with strong multi-year revenue visibility across industrial construction, civil engineering, EPC, and O&M business. We continue to see the strong order pipeline across thermal power both construction, maintenance, BOP systems, and civil infrastructure.

In summary, we are pleased with the progress achieved during Q1 and FY27 Q1 FY27. Our diversified order book, strong execution capabilities, and strategic focus on high-value projects continue to position the company for sustained long-term growth.

Our key priorities remain to improve execution in line with our planned trajectory, sustain and improve our margin profile through a higher contribution from O&M, mining, and other relatively higher-margin business, and further improve cash conversion and working capital efficiency with continued focus on collections, milestone certifications, and mobilization advances. With a strong order pipeline and execution momentum across our business, we remain confident of delivering on our growth objective and creating long-term value for all our stakeholders.

With this, I now request Mr. Ramaiah garu to share the key business developments and the outlook for the upcoming period.

Thank you, Arvith. S.

K. Ramaiah here.

I think in continuation to what Arvith has said is that, yeah, there is a improvement in the total order backlog at the end of the last year, ₹15,898 crore, and now it is ₹16,228 crore, a plus 2%. Of course, major order improvement has come up in the civil segment with about 4.4% add-on backlog.

Then O&M substantially more growth is there with the first quarter order ₹781 crore, and that has boosted the order backlog by 11.8% to ₹3,322 crore. That is a very positive sign.

Of course, EPC segment, electrical, these segments based on the revenue it has to come down. Then ETC business also, because a lot of opportunities, I will explain it later.

Now that is on the segment-wise, and the domestic market continues to play a major role of 98.7% of the order backlog and order opportunities of booking, and international is 1.3%. Then the power sector continues to play a business in view of the huge capacities and huge investments coming into play, and being my expertise we are having it, a lot of focus is out there from the organization also.

Non-power is about 26.4%. This is the overall our position.

Now coming to the opportunities, what we have done in the beginning when we started, we mapped a opportunity size of ₹70 to ₹75,000 crore on a broad basis in various segments of different SBOs in power, non-power, installation, O&M, civil, then in the infrastructure, etc. Now coming to the quarter-wise, more focus is there, and that has to be seen based on the real opportunities what we are going to get it.

As on today, about ₹20,500 crore of opportunities we are mapping on the power sector alone, that is mainly for the installation business, for the civil works, structural work, and balance of plant packages, and then on the infrastructure side about ₹8,500 crore. Therefore, over the quarter-wise when we progress and all, the more opportunities will come up.

This is based on the tendering opportunities and the tender notice has issued, that is where we have to focus it. Therefore, from the overall perspective, when I say in the power sector, the overall scenario is like this: we have been tracking about 58,000 MW of ordering which has been done in the main players like BHEL and L&T for the last 3 years, that is based on our interest where we have to focus it.

Of course, the capacities can be different based on overall market, specific projects we are tracking it. Based on this, BHEL has got the bulk of the orders, about 2.41 lakh crore, and then L&T is capturing a lot of orders, ₹42,523 crore.

Recently, JSW has entered the fray with a two major plants coming up, one at Salboni, another Assam, four units each, MW, and they are going to invest substantially between around ₹30,000 crore there in both the cases. Now if you look at the overall scenario of the various players apart from in the state sector, central sector, and then the private sector, private sector is taking the lead.

Adani is planning to jack up their capacities from 18,330 MW to 42,000 MW in another 5, 6 years. Then this one NTPC is planning to improve their capacity in the coal-based plant from 67 GW to 91 GW, 91,000 MW.

JSW, which has come recently, present capacity is 5,658, they have got ambitious plan to achieve a capacity of 30,000 MW in the next 5 to 7 years. Therefore, there are other players also, the state sector like Singareni, SCCL, GSECL, then Chhattisgarh Generation Company, then one private player, Essar Power, and then NLC, central government, all of them there is a add-on capacity, and then DVC also, HPGCL already have taken action.

Therefore, what we have done in this is that we have mapped an opportunity which is available in the next say 1 or 2 years about ₹60,000 crore. As on today, taking into account what has been gone forward in terms of ordering and etc., the balance ordering which has to be done for what type of work in the site construction work is tendering, balance is BHEL about 9,000 MW, and then the Adani about 11,200 MW, that will come to 22,000 MW, and then JSW is planning with 6,400 MW, that should together come out 26,000 something like that.

Now with that, we are expecting a immediate opportunity of ₹25 to ₹30,000 crore, and then the coming year also it can add up. That is where the overall focus of the company is there because of the strength we have developed it and going to the opportunities where it is there.

Private sector business opportunities is also better for us because both Adani and JSW, their focus is on deliverables, and then they have got a preference for companies like Power Mech because of our delivery management. Recently we have taken a major job from JSW also for their Salboni job, ₹850 crore for the civil and structural.

Then Adani, we're continuing to pursue with all the ongoing projects of their whatever is a new ordering I said about 11,000 MW they say have to complete it. Therefore, from that perspective, this will be continue to be the focus.

Then the other aspect is the O&M side. O&M is we have seen ₹781 crore we have taken in the first quarter, and then the order backlog also has gone up by 11%.

Compared to last year, ₹2,972 crore is now ₹3,322 crore. Therefore, one of the positive things can be how much is the capacity is added in the new plants, particularly the private sector because they'll be more interested like Adani, Vedanta Group, JSW, JSPL, and all.

We are working in all of them. Then that opportunity about it is expected if the government's plan is to add up capacity from present 228 GW to 291 GW by 2030 to adding 61 GW, and then it will go up to 321 GW.

Therefore, yearly addition of capacity is 8 to 10,000 MW per year, therefore that should throw an opportunity of ₹800 to ₹1,000 crore in O&M. Therefore, and O&M being a renewable base type of segment, and the existing contracts will be renewed, and the new contracts will add which will lead to the further growth and all.

The other areas which we can positively look at is in terms of the non-power sector, and then the new investments which are coming in the mining side. For example, NMDC is planning investment of ₹70,000 crore, and certain tenders have come.

We have participated in one tender earlier, we were L1, but they had a issue on the pricing, it has been re-tendered, we are again participating in that. Presently they are calling about three tenders.

One tender we are trying to attend, another two tenders will follow up. Then there is also a lot of investments will come up in the steel sector also that we have to see in all the players.

Particularly the JSW is planning a huge capacity expansion in Paradip and then their existing plants and also putting a greenfield plant in the Maharashtra. Then ArcelorMittal is coming with a huge plant near Vizag, that is around 10 lakh huge capacity, about 1.5 lakh crore, about 10 million ton capacity plant.

Then others are also. Therefore, that is an opportunity which we have to see to expand our business.

Then mining side, I said about the NMDC, the new plants which are coming up for mining side on a build, operate, transfer basis, that is an opportunity. Based on the experience what we are gaining in our MDO contracts, we can apply our expertise and all to see that how we can go into that.

Then the other infrastructure jobs in roads, railways, as we know that government's continued investment is there and need-based opportunities we are capturing it in both roads and railways. Particularly in railways, the maintenance depot shops we are now getting specialized, we are working in couple of projects there, and new projects when it come, we will definitely participate in that apart from the new railway lines.

Then the EPC jobs in both in railways and then the road sector. On the international sector, the present focus is, of course, the disturbed conditions in the Middle East.

Last year we have seen it's mostly on the O&M side, which is quite profitable. We have taken long-term contracts in Nigeria, the Dangote job, and some more jobs we have taken and maintenance jobs of nearly ₹300 crore.

That is in UAE and then GCC countries and all. That focus will continue to be there in the present year also, hoping the situation will improve based on the ongoing conflict will end.

With this, what I can say is that mapping of the opportunities, we continue to see how to achieve this ₹10 to ₹12,000 crore of order booking for the current year based on the opportunities what we are having and the new opportunities which are expected to come. Thank you.

Yes.

Am I audible?

Yes, Deepak. Yes, please

Thank you very much, sir, for this opportunity. Just first up, wanted to understand on the margin front.

You cited few reasons,

right?

The overheads removal cost and the royalty as well as the raw material cost. How is the scenario right now?

How should one look at overall annual EBITDA margins given the current scenario?

See, the increase in royalty last year when you are comparing with the last year quarterly presentation, there is an exceptional revenue we recognized in Q1 FY26, seized quantity where we generated more revenue, and subsequent to the government issued an order and they reduced the royalty rates. This time, KBP mining just started the production from November onwards, and initially we did around 1.6 million tons of execution during till March, and the current year we are targeting around 3 million tons.

We started the new seams where initially OB removal is a higher side where we just started the seams, and the corresponding coal production will start from the subsequent quarter. Overall, the stripping ratio is within the agreed quantity ratio only, but one quarter you'll have a higher OB cost and lower coal production, subsequent quarters will cover that.

Overall, for the year, we will maintain the same EBITDA committed margins of 15% to 16% in KBP mine. Moreover, lower other income, see, we have a QIP funds in the standalone level, and we are using that QIP funds for the washery construction, and we have almost completed the QIP proceeds.

The FDs which you are lying in with our bank, the interest income which generated has because of that also the other income has higher side with ₹3 to ₹4 crore higher side in the earlier periods. Now we completed that and we are now not generating any revenue, we're generating revenue only on the FDs of margin money FDs only.

That is also one of the reason. Overall, we projected guidance 12.5% margin which we committed during the current year.

We are sure about getting this margin profile and because a lot of new orders we received during the last year on the O&M and civil infra projects where we got the good margins in those projects, we will sure that we'll generate this EBITDA margin in the current year.

Okay. That was very helpful, sir.

Then secondly on MDO, what sort of execution we're targeting this year and next year from MDO?

Hi, Deepak, Rohit here. With regards to the MDO, we plan to do 3 million tons in our first mine, which is KBP, and perhaps in the second mine the washery is about to get commissioned, we expect to do the hot commissioning by November, December, that's when we are going to achieve the full fee of the resource that we are going to produce here.

Both the mines together, we expect to do ₹500 crore by the end of this year. So 3 million tons in the first mine, second mine we'll do close to 1.2 to 1.3 million tons because it's going to start ramping up once we have the full fee available after the washery gets commissioned.

What about FY28? FY28,

₹1,100 crore to ₹1,200 crore. There's going to be a significant ramp-up because once the washery is commissioned, we anticipate to achieve peak rated capacity in the second mine, which is 3.5 to 4 because there is 500 half million tons of jhama coal that we also have to produce.

Depending on how much jhama that comes in seams, 3.5 to 4 is ideally what we should look at there after the washery is constructed. KBP, the first mine with CCL, this year we'll do 3, next year we will ramp it up to 4 to 4.2 million tons, Deepak.

Okay. I got it.

In terms of margin, given your higher share of revenue coming from MDO, what does it mean for the overall margins? How much benefit overall at the company level this increased MDO revenue can bring?

I think FY28 we should be able to see a net margin of 20 to 21% to 23% both the MDOs together. This margin profile is going to continue over the life of the mine with few ups and downs whenever we have to do some capex reinvesting at the end of seventh year, at the end of 13th year is a conveyor that we have to construct.

Otherwise, this is the averaged out margin profile that we'll see.

Next year at 1,100, 1,200, a 21%, 23% EBITDA margin in MDO is a achievable task, right?

No, this is when we reach the peak rated capacity only, this is the expected 20%, 21% blended weighted average, sir.

Okay.

Next year '28, one of the mines we still won't reach peak rated capacity, probably from '29 you can see this margin. Next year we'll be around again 15% to 17% range, and then it'll ramp up to 21% to 23%.

Next year it would be 15% to 17%, and FY29 maybe 21%, 23% from MDO one can. Yes.

Yes,

yes.

Okay. Understood.

Just one last thing on the opportunity size that you mentioned, around ₹25, 30,000 crores, is this the amount that we look to bid in the going forward?

I think you are correct. See, initially we make an estimate based on the opportunity, that is based on our internal assessment.

Once the tenders comes, we try to make a more accurate estimates of that based on how the customer ask for the scope and qualification and other things. Therefore, that is the sizing of the opportunity based on the real opportunities has come up.

That will develop from quarter to quarter. As on today, I said you about 20,500 in the power sector and then ₹8,000-some crore in the non-power sector, infrastructure, and other areas.

Every quarter, we will update that, and based on the tenders won and tenders lost, and then we have re-updated the new opportunity as it comes and also see where all we can penetrate the new sectors of the business.

Correct. This ₹12,000 crore of order inflow for this year, we're looking from this pool of ₹25 to ₹30,000 crore, right?

In this, there are some specific opportunities, one in the power sector, and then we are also mapping another balance of plant package, two, three opportunities are coming up, we are working closely on that. Then O&M, we expect the growth will be there because of the additional capacities are getting added and the new power plants getting commissioned.

Then particularly we have got a very solid relationship with Adani based on our performance and our record of working, and there are a lot of new plants which are getting added into their capacity addition plan like Pirpainti is there, Assam is there, and then new other many projects. Then JSW also has got 6,400 MW project identified.

We are hopeful this power sector business also should go up in terms of our installation business as well as the civil and structural business. Then with BHEL, we'll be targeting the balance of plant packages, and then O&M with all the private sectors.

Okay. Understood.

Also, Deepak, just to add to what Ramaiah sir had just said, to answer your ₹25,000, ₹30,000 crore question, in the power sector our success rate is around 60% to 65%. Most of the bids we participate in, we anticipate or we expect to win based on historical data and the way we are progressing here.

That's why we capped this at ₹30 to ₹35,000 crore in terms of the number of projects we pick for and arrive at this number of 12,000. Just wanted to give you this.

Yeah. Got it, sir.

That's quite helpful. That would be it from my side.

Wish you all the best. Thank you.

Thank you.

Thank you.

Just a quick clarification on the expected revenue from mining across KBP and Tasra. Are we revising downward from the ₹600 crore, I think last quarter we had said we'd do 350 from KBP and 150 from Tasra, are we now revising that downward to 500 across both the mines?

No, both together is 500, ma'am, so that's why we told 350 plus 150 from Tasra together ₹500 crore. There's no down.

Sorry, my apologies. I've just gotten my math wrong.

My apologies. That's fine.

Thank you.

Thank you for the opportunity. Could you please give us more details on the KRBM project, specifically the expected revenue from the project and EBITDA margin from this particular project after factoring in the revised royalty structure?

Sir, the nature of work of KRBM is that we have to ensure that the entire corporations which we have allotted the mining activity, we have to ensure that there is no leakage of royalty, and we have to establish our check post, and all the transport vehicles of people who are verifying the royalty. Any unpaid royalty transportation vehicle, then we used to collect the seized content, we collect the double the penalty.

The royalty indirectly there is we get it two times the royalty value. Subsequently, government during middle of the year last year, 50% of that royalty penalty collected, the government is taking that 50% value and 50% only is passing to the client company.

Last year it was a huge seized quantity which we recognized in our revenue. Subsequently, because of this heavy penalties, avoidance of the penalty is not there now.

Very reduced the seized quantity value during the current year is because of this double payment penalties and all. That is one issue.

Another is that they increased the royalty rate to ₹10 for metric ton as a additional royalty payment. Some MITF charges which they are collecting 5% of the royalty value.

These are all increased costs which we have incurred in the last current year.

What is the project size if you could quantify that, number one?

Last year we did around ₹700 crore. This year also we'll touch the ₹700, ₹750 crore from the KRBM, sir.

Okay. What is the specific EBITDA margin for this project?

Last year we did around 14% EBITDA. This year first quarter it has came down to 10% level.

10% from the earlier 14%, right?

From 14% it has come down to 10% because of this additional royalty clause. 14% was annual,

10% for

Q1, and we expect us we expect to maintain 10% to 11% until the end of the year for the remaining quarters as well.

Thank you for the answer.

Thank you.

Hi, sir. Just a clarification in the base quarter Q1 FY26, we had booked this additional royalty payment, right?

I think penalty was there of around 2.8 billion.

In Q1 there is no sharing of royalty, sir. ₹51 crore we recognized seized quantity revenue during the Q1 of last year.

Q1 of last year, right? There was this 0.5 billion of EBITDA level impact because of that, is that correct?

Yes, sir. Okay.

Is there the same project that we're talking about now where the government has come up with the decision?

No, one is that seized quantity, the violations have reduced, now the quantity is also reduced. Earlier, we just started 1 year before that there is last year because of this heavy penalty, the people are paying the royalty without any much of.

That seized quantity is coming down now, not much of the seized quantity. Subsequently, they have allotted some of the private pattas and the river dredging activities to the new players.

There, this penalty clause is majorly applicable, which is only minor amount which we are getting this seized quantity during the current year.

Okay. In this current quarter, is there some amount that is comparable to last year?

Is there any penalty amount booked in this quarter?

Around ₹30 crore seized quantity only we have recognized, but that is in terms of value as compared to the previous is very less, sir.

Okay. No one-off as such in this quarter, right?

Yes.

Okay. Sir, in terms of margins, I think you have also mentioned some impact from the cost escalation due to the Iran conflict, right?

If you can just quantify it and just wanted to understand don't we have a escalation clause for this

in our contracts? See, the mining side standalone level our EBITDA margin has improved compared to the last year because of the new orders which we received and we managed the costs in the standalone level.

At consol level, our major concern is the diesel where rates are increased and that has impact on the profitability.

Okay. Got it.

Sir, among the mining, I think we have done ₹84 cr of revenue from mining in this quarter. Can we get a breakup of that?

KBP we did around ₹57.54 crore. Tasra ₹26.34 crore.

Thank you. Thank you so much.

Sir, sorry, one last question. Hello?

Yeah.

Yeah. Sir, see, despite the margin in Q1, we are still confident about achieving our 12.5% of guidance.

What gives us that confidence? Is it just the mining production ramp-up, or is it something else that we are so confident of achieving that guidance?

See, the KBP we are now targeting even though as per the agreement is 1.5 million, but the clients are ready to take up to 3 million tons during the current year. Conservatively we projected ₹350 crore of revenue based on the current production average basis, but we can do more than that also.

Conservatively we are projecting at 350, and we are confident of getting ₹500 crore revenue.

Okay. That is the key margin driver that will lead to our guided level, right?

Q4 our washery also will be ready, and we are expecting that at least one or two months production will be there in the Tasra also. Overall both together we will target around ₹500 crore

turnover. Sir.

Got it.

Thank you.

Hi, sir. Thank you for the question.

Sir, previously we had stated that, and in this call also, that there will be many projects from NTPC and Adani coming up like Lara, Yamunanagar, Raigarh, Mahan, or Mirzapur. I think we got Singrauli and Mirzapur.

Can you tell what about various projects, in the last let's say one year how many projects were awarded and how many we got in terms of whether there have been delayed from the awarding or any other player getting any other scope of work? What's the history been, and coming ahead let's say within the next one year, which major projects are we targeting?

See,

what I told you earlier, I will reiterate in terms of what tendering has been. Out of whatever tracking I said about 58,000 MW, tendering which has been completed by BHEL and Adani comes to around nearly 28 to 30,000 MW out of 58,000.

The ongoing tenders or opportunities which we are tracking as on today is about 24, 24,000 MW. That is where the opportunity comes to what I said earlier, the immediate opportunity is about ₹20,500 crore, that is as on today.

There are about a dozen projects which are in the pipeline for tendering from BHEL, then Adani, JSW, and then expected tenders to come from L&T also. To some extent, BHEL's tendering has been delayed for variety of reasons, and there is a packaging issues also.

Unlike a vertical composite package, integrated package which Adani gives it in terms of end-to-end construction solution which fits into our execution philosophy, we prefer to work there where the size of package will be more, and then there is additional advantage of doing that work along with undertaking the civil and structural work. Therefore, most of the projects what we have did in Mahan, then Mirzapur, and now Raipur, and now what is expected in JSPL or JSW also we're planning to do both civil, structural, and mechanical works.

Therefore, from that way we are tracking closely with both Adani, JSW, and to see how it develops into BHEL. That's why that opportunity has been mapped.

Then we continue to be more bullish on the Adani and JSW jobs.

Got it, sir. Thank you so much.

I was looking for if any projects that we were targeting but no issues. And No,

there are projects which we have already, for example, in the case of Adani, Pirpainti is there, then Assam project is there. In the case of JSW, there is Salboni is there, another Assam project is there.

Then some more projects have to develop for them and that is expected to come for tendering. BHEL, yes, because of the packaging philosophy and all, we have to take a call on that.

Then on the balance of plant packages, there are some specific projects which are targeting, Durgapur is there, as on today. Therefore, these are all very specific projects on which work is going on for tendering.

Got it, sir. Thank you so much.

When we say we have been impacted because of raw material price increase, what specific raw material are we looking at? Is it basically the commodity or anything else?

No.

One is the cost of a few base metals has increased. That has directly impacted the prices of raw materials like steel and alloy steel.

When the war had started in the initial stages in the month of February, March, there was a spike in energy prices as well. This is also trickled down to increasing cost of gases that we use in construction.

Of course, as you can see, the crude price has been up and down, and there is also an increase in the diesel price over the last two months, which we use predominantly in our mining projects. Majorly it's these three.

Got it, sir. Last from

We have PVC clauses that compensate for most of these increases, but these PVC clauses sometimes kick in a quarter later when the indices get updated. Sometimes if it's a private client, we usually try to approach immediately, and part of the increase has been factored in.

Got it, sir. For FY27, at consol level, what revenue are we looking at?

Second part to this, for O&M in this 1Q, it was a little lower, only ₹413 crore. If I look at quarterly run rates for last few quarters, it was a little higher.

Any specific reason or it's just a quarterly impact, quarterly phenomenon?

Can you repeat the question, the second part?

For second part, in this first quarter FY27, O&M revenue was only ₹413 crore, and if I look at last few quarters, it was a little higher than this levels. Any specific reason or just a quarterly impact, quarterly phenomenon?

Actually, last year we have done some one-time special jobs of overhauling of the power plant, there revenue is higher side during the last quarter and previous year. One-time jobs even this year also we'll get as and when we get, we'll achieve that number.

As of now the projected number is based on my existing order basis.

A few R&M projects, renovation and modernization projects of few IPPs have purchased, we were also getting revenues from those plants around in last year. Those we have already commissioned, and for some of those we have already got an O&M contract, on account of that there is a slight decrease also in revenue.

Overall guidance for FY27 is ₹7,300 crore, and we are on track to achieving that.

Right, sir. All the very best.

If you look at the overall year-on-year basis, we are targeting around 28% growth in O&M. Last year it was around 1,760, and this year we are targeting around 2,089.

Quarter-on-quarter there is a variation, but at the end of the year we'll get that growth of more than 20% to 20% plus only we will get that revenue growth.

Thank you, sir. Looking for that figure.

Hey, hi. My first question was regarding the raw material, we have seen increase in costs of gases, diesel, and base metals.

Are our contracts pass-through or variable in nature or fixed price contracts?

Abhinav, can you repeat? Your voice was muffled.

Can you repeat the question? Raw

materials. I'll repeat my question again.

My question was whether our contracts are variable or fixed price contracts, as we can see there has been increase in the cost such as gases, diesel, and base metals, and it has impacted our margin.

Yes, most of the contracts have PVC clauses factored in, they are variable contracts. Sometimes it doesn't compensate to the extent of the market price increase because they take some time to update the index.

In such cases, especially with private clients, we take up with the client and see whatever is not factored or protected as per the formula, any erroneous increases, sometimes client payback. In most cases, the clients are paying back.

No,

actually, to add on to what he said, basically most of the contracts covered with the price variation clause during the contract period and extended period. There is an element of what is called fixed cost compensation, overrun cost.

That also there is a fixed amount. What happens is when the major portion of the work is done after the contract period, the problem arises.

Such a case, we have to resort to claims management. Of course, in a very unforeseen circumstances, we can also invoke the arbitration and dispute resolution mechanisms.

That is an exceptional case. Generally, we try to settle it.

As Rohit said, private customers, they try to settle it and pay across whatever is reasonable, or they will try to do in a business way that future jobs will take it and then it gets somewhat sort of understanding on that. In a public sector, there are rules for them and therefore they have to go by that, and then as a last resort, we have to resort to dispute resolution putting a proper claim when we find the additional cost have exceeded whatever our cost we are incurring.

Okay.

Hi, this is Riya this side. I just wanted to understand, for our receivables in nature, how much these bigger contracts, what is the kind of receivables for this, with respect to contracts like Adani and BHEL?

What is the amount of orders which are pending for receiving certificates?

You will have to repeat the question. We couldn't quite get what you said.

Slowly.

Hello, am I audible?

You're audible. Now it's better.

Yeah.

Just wanted to understand what is our order backlog from Adani, NTPC, and BHEL, these being the larger customers? My second question is in terms of receivables, what is the nature of receivables we are seeing?

Since our order size is increasing, is there any change in payment cycle or what is the newer payment cycle for the current customers?

What I can say on this, on the BHEL side, we have got a broad classification. On the erection side, we've got a backlog of ₹1,586 crore.

On the civil and power sector, ₹4,282 crore. The O&M side, which is mostly in the private sector, that is about ₹3,500 crore.

The balance of plant what we're doing with the BHEL, that is about ₹2,675 crore. Specific backlogs are there: railways, ₹782 crore; electrical balance work, ₹684 crore; and then the other sectors like roads and then drinking water, about ₹900 crore, ₹1,000 crore.

Then like that, we have got a breakup of the backlogs available pending works to be completed.

Ma'am, see, in Adani we're having outstanding of around ₹2,400 crore total orders worth of pending, 14 orders were executing right now. In BHEL side, around ₹5,300, five major projects which we are executing.

These two are the major. NTPC, we are not having much of exposure.

Vedanta, we have another private player, we're executing six projects with Vedanta, which is around ₹1,551 crore of backlog is there.

Got it. The Adani ₹2,400 is over how many years, and also for BHEL?

The order timelines you are asking about, the order execution timelines. Generally, typically ranges from two to three years between them, ma'am.

O&M generally that gives typically three to five years, and the construction, civil and all, two to three years between.

You can take

all our closing order book, you can take two and a half years as the execution period, you can take average period.

Got it. In terms of receivables, where are we, what is our current cycle of payment, and are we seeing any delay from the larger players or do we have any different norm?

No, generally Adani and other private players, after submission of bill, they take another 15 to 30 days. Initially they will give 70% payment on submission of the bill, and after that before month end, they'll pay the balance 30%.

In the case of BHEL, their period is 30 days from after the submission of the bill to them.

Most of the contracts is within 30 days after the certified bills are passed, and then the payment is due.

Got it. Is there any amount kept for retention?

Sorry?

Any retention money?

Retention generally

5%

general retention money is there. As per the agreement clauses, we are submitting bank guarantee and we're collecting the money along with the running bill, ma'am.

There is no deduction. They're deducting, but they're releasing the money against the bank guarantee.

Got it. For the last question, currently you're guiding for around 12.5% margins, and considering around FY28, 1,200 crore EBITDA, what will be the blended EBITDA margins like?

Are you seeing a dip in that? On MDO margin.

See, MDO margin will be 15%, but that component is only 5% to 6% at this point of time with the overall turnover. The remaining 95%, if you take the standalone average, you can take 11% range of including blended with O&M business around 12% to 13% will be there in the standalone level business, ma'am.

Got it. I think that would be helpful, and I'll join back the queue for further questions.

Thanks. Thank you.

Hi, thank you. Can you share your view on the O&M business, how is likely to scale up in the next two to three years, and what kind of margins we enjoy in this business at operating level?

I think O&M continues to drive the business in top line as well as the bottom line, and we have seen it is component is about 30%, 35%, 30% of our overall business. The major push for the O&M continues to be the capacity additions, as I said earlier, which is going to happen in the next five to six years at the rate of 8 to 10,000 MW.

There the importance of the O&M is from the private sector for outsourcing and whatever plants are getting commissioned. Suppose there is a plan for Adani to complete more than 20,000 MW, then JSW has got plans, and then Vedanta is having plans.

Therefore, these plans will definitely come up for O&M business, that is a long-term outsourcing. The opportunity size will be about ₹800 crore per annum, and then that depends how much is the outsourcing is done.

We expect most of the projects in the private sector commissioned will come for outsourcing. The public sector, it is a question of how they take as a policy matter, but recently what we have seen is that about five projects, five plants we're working on O&M, long-term O&M, that is a indication that public sector also will be interested to add on to the O&M profile to see that their plants are better managed with better margins and outsourcing than in-house management.

We expect more opportunities in the public sector also. Therefore, the growth will be there.

What we have seen, the growth will continue to be there in the O&M side in the coming five to six years.

What about margins? What kind of margins we enjoy in this business?

Around what we are having, 18% to 20%.

That's good. Great.

One more question is about our execution capacity, both human capital as well as balance sheet. How much of orders we can execute on yearly basis based on our current strength, both of manpower and balance sheet?

One is the financial capacity and working capital management, I will bring out the physical capacities. The organization is having a huge HR-based, trained-based with about 4,000 engineers and then about 45 to 50,000 workforce.

That is a basic strength. Another important aspect is the two aspects of project, this one, management and construction management.

We've got very specialized groups in each of these segments, and they also take up the adequate plans and requisite inputs planning required for doing the new projects. That way, in fact, the organization's capacity to enhance the resources is quite substantial.

Last time, last about one year back, we had about 40,000 head count, today it has gone up to 50,000 based on the requirement of the manpower in the increased O&M business and also some of the new erection jobs which has come up in the private sector for the power also. Another matching important capacity requirement is in terms of handling equipment, construction equipment in civil, mechanical, cranes, and then all the civil area of the equipment.

That continuously we're updating, we're providing capital budget for that for new add-on capacities. That way, and then where only exception cases where the capacities are very high, cranes like 500-ton capacity or 700-ton capacity, we resort to hiring.

Otherwise, 80% to 90% is managed with in-house capacities.

In addition to that, sir, what he said, the working capital requirement basically 30% of our revenue is coming from the O&M business where there is no material involvement and equipment requirement. The one-month salary is only the money required for this maintaining these employees.

The 70% of the business, our EPC business, we recently entered and earlier we used to do majority of them are on the construction contracts. Through LCs and all, we manage the materials and.

With the present level of working capital limits with the present setup, we can do up to ₹10,000 crore of revenue. Only thing we need to add every year ₹100, ₹120 crore of capex for the requirement, new orders requirement.

Great. One last question is about the trajectory of operating margin.

What we are talking about is we are getting into BOPs, balance of plants, more, then you're talking about MDOs, we are, and third is the O&M. All these businesses will have a higher margin.

Overall at the company level, do we expect the margin profile to improve as we go in, say, 28 and 29?

Because it depends on the mix of O&M and mining business, your year-on-year your EBITDA margin will go up. We are targeting around 0.5% jump in every year till 2030, and after 2030, it will touch at most 14% of EBITDA margin from the present 12.5%,

12.25%. Thank you, sir.

Thanks for the response. Thank you.

Thanks for the opportunity. Sir, in this quarter, the ETC business has, in terms of revenue, it has come down from ₹250 crore to ₹217 crore, and also we didn't have any order inflow in this segment.

How do you see overall revenue in this segment? Because last year, we had a very strong growth.

On annual basis, we did about ₹1,300 crore from ETC segment. How do you see this segment to do this in current quarter, looking at order pipeline?

The major, sir, we are in under this segment, we used to do the Athena Vedanta project and FGD projects. Because of the accident happened at Athena project last year, last 3, 4 months back, first quarter we have impact of revenue in the Q1.

That's now they recently they started the work in our work, and that will be covered in the Q2 onwards. FGD also, we almost completed the major works, and we are nearer to the completion, maybe in this quarter we'll try to close that entire FGD balance works also.

Because of this comparatively this is lower revenue in the ETC business. Again EPC, internally our erection and civil people are internally they are working on the in-house EPC business.

That will come under the EPC turnover of ₹96 crore, once they're engaged with the EPC works also.

Whatever shortfall we'll have here in Q1 power plant construction is also partly because some of this skill has been diverted to doing industrial construction EPC, the BOP EPC project that we have taken up with BHEL. It's similar nature of work, we are using the same skill to execute some amount of work there, you'll see some growth there.

Overall power construction and EPC together, you'll see a good growth. You'll see a growth of 20% to 22% if you club both of them.

If it's only power plant construction, erection, testing, commissioning, we believe we have maximized our execution potential. We are able to execute 14 to 15 boilers, 800 MW boilers around at the same time, and we plan for this to only increase by one or two boilers year-on-year, which will only contribute to a minor increase of 5% to 7% growth here.

On the other hand, EPC is going to grow at 20% to 22%, an average growth of 14% to 15% is what can be expected from the power sector. Now

looking at the backlog, if you see the trend previously, in the year 2024-25, we had a backlog of ₹14,387 crore and we achieved a revenue of ₹6,000-plus crore. Therefore, today the backlog is ₹16,228.

From that angle, even 40% plus the new orders will come up should give reasonable growth for the current year also.

Thanks for your participation and all. I think at the beginning of the quarter, we have seen what are the direction in which the company has to go.

With the diversification into balance of plant that's a huge group perspective, and then new opportunities are going to come up there. Then the continued investment in the power sector with add-on capacity of 60 GW in the coming 7 to 8, 6 years, we will continue to focus on that.

The recent O&M opportunities will come up with the new plants will be there. Then the focus on the infrastructure, roads and railways, and then other sectors, that'll be stabilized.

Then the international business, we're doing pretty well in terms of O&M and maintenance jobs with a better margins. We expect that the new opportunities coming up in West Africa and then the Middle East and GCC countries should enable us to grow in the international sector also.

Definitely new two, three opportunities are being closely worked out with the EPC contractors there, and that will substantially add up to the installation jobs and the service jobs like what we have done earlier about 2023-24. That will come back on the pipeline once this piece comes into the function there.