Morning, everyone. Thank you.

Let me start with giving the safe harbor statement. The presentation and the press release which we uploaded on our website and exchanges yesterday, and discussions during the call today, may have some forward-looking statements.

These statements consider the environment we see as of today, and obviously carry a risk in terms of uncertainty, because of which the actual results could be different, and we do not undertake to update those statements periodically. Let me give you a brief overview of the quarter one performance the way we see it.

We are quite upbeat and confident in the way quarter one has panned out in terms of the roadmap which we had set ourselves at the beginning of the FY, and that, as you recall, was primarily that the all-time high order book of last year starts generating revenue, and we have a substantial growth YoY in the overall FY. Having said that, while the quarter one has been an YoY good growth of 9-10%, and bottom line also about 8%, we need to really step on the gas and keep on improving the execution sequentially over the coming quarters so that the entire FY is as per the guidance which I had laid down at the beginning of the FY of having a substantial growth vis-à-vis the last entire FY.

That in a nutshell is how we see the performance of Q1 and the quarters going forward, and I'll go into details as I answer specific questions.

Hello. Am I audible?

Yeah.

Morning, Vipul. Go ahead.

Yeah.

Thank you for the opportunity first. My first question was regarding the export side.

As management has said ki revenue recognition will start from first rake in July 2026 for the Bangladesh order. What was that?

Why the revenue recognition was not coming in the first quarter?

Yes. Vipul, in an export business, as you would be aware, the revenue recognition happens in the entire stock, that is whether it's a bunch of locomotives or, in case of coaches, jaise Bangladesh order, the entire rake of 20 coaches is sent as a group.

While the coaches are getting ready in bits and portions, the entire rake will be shipped out in the next 10 days. That's why the entire revenue recognition will take place in a group in the quarter two for the first rake.

Subsequently, these will be in the successive rakes. In terms of why it did not happen in Q1, because you see, this is the first rake and has about four types of coaches.

If you recall my last call, in that I had mentioned that the prototypes have got approved, and the mass production has started. Basically, being the first rake in terms of the approval of the final rake has taken a few days, and now the rake is in the final stages of being dispatched.

We foresee that the subsequent rakes should take little lesser time per rake because of the designs now getting approved and accepted.

Okay. Thank you.

One more question was regarding the Vande Bharat

Okay. Sure.

Thank you.

Sir. Thanks for the opportunity.

Sir, with respect to our export order, can you give the breakup of order which is pending from Bangladesh, Mozambique, and others?

Yes. Total RITES Videsh order book, let me include both the export and consultancy, is ₹2100 crores.

Out of that, about ₹1775 is the export of rolling stock. Out of that, about ₹900 odd crores is the order from Bangladesh, which is about 200 coaches.

The rest of the orders are for locomotives, both from Mozambique as well as the in-service locomotives, etcetera, from the various countries in the African geography. Broadly if I put it, it's about 50% of the export order book is for this coaches to Bangladesh, and the balance is for the locomotives.

Okay. In terms of variation could be there, revenue booking on a quarterly basis.

In terms of our timeline, Bangladesh, can we conclude all our order delivery this year, and second, Mozambique, will it start anything this year or it will move to FY28? That's my last question, sir.

In terms of Bangladesh, these are 200 coaches, roughly about 10 rakes each. The first rake starting now in this month.

We will not be able to complete all the 10 rakes in this year. Contractually also, we have time till next year, and we foresee that, yes, it will definitely get completed in the next FY.

The coming quarters will tell us how many maximum we can push in this because the first rake once it goes and stabilizes, it will hasten up the speed of the subsequent rakes. Definitely, yes, it'll get completed in next FY, maybe somewhere the early second or maybe third quarter of the next FY.

As far as the locomotives are concerned, the Mozambique ones, yes, we are trying that maybe by the end of this FY, we could aim for beginning of the deliveries, but again, a little more clarity would happen maybe by end of Q2 in terms of the exact visibility, while we are trying to start some deliveries by end of this FY.

Sure, sir. Thank you.

I'll come back in the queue, sir.

Thank you. Thanks.

Yeah. Hi, sir.

Thanks for the opportunity. Sir, just wanted to know how much revenue you are expecting from export side this year and the next financial year?

Our assessment is that this year export, we should try and achieve at least ₹300 crores plus. As I said, the coming quarters will maybe by end of Q2, we'll get a little more visibility in terms of progress in being able to aim for some starting of delivery on the Mozambique locomotive order as well as the the gap between the successive delivery of rakes of the Bangladesh order.

The first rake as it goes in the next few days and it stabilizes there in the coming weeks will give us a clarity on the gap between the successive rakes. Maybe by end of Q2, we'll be able to further fine-tune the figure, but definitely not less than about ₹300 crores for this FY.

Sir, as you said, this order has to be executed in next two years. Can that mean that in next year, export will be bigger part of our revenue?

Yes, for sure. Both the export of rolling stock and the project consultancy, our RITES Videsh order book, which is at ₹2100 crores as of 30th June, we are aiming that this year it should account for roughly about 15% odd of my total revenue.

As the quarters progress and more clarity emerges on the exact quantum which we can achieve this year, for sure, as you correctly predicted, that the current order book which we have should by and large get covered in the next FY. That is the reason why we are aiming that we continue to get fresh orders also, which also one order, one export order, which we are trying this year, this quarter also we got, and quarter two also we've got one order, which we've not currently included in the order book we've declared to the exchanges.

While as you correctly said, the current order book we'll aim to definitely finish by next year. There will be a fresh addition in the coming quarters.

Sir. Thanks a lot.

Hello. Am I audible, sir?

Yes.

Yeah. As we see Vande Bharat is going global, what is the opportunity looking by the company in that area perspective?

I'm sorry, please repeat your question. I didn't get it.

As we see Vande Bharat is going global, what is the opportunity looking by the company in that area?

Yes. We have already initiated the possibility of exploring exporting Vande Bharat on the standard-gauge platform to certain geographies.

We have reached out to certain possible countries which have evinced some interest in it. The process of trying to develop a prototype on the standard-gauge platform, the initial discussions with Indian Railways have already started, and I think in the coming months, this will gather pace in terms of developing the first prototype on the standard-gauge platform.

Okay. Thank you.

It's very helpful, sir.

Sir, am I audible?

Yes. Go ahead.

Sir, could you throw some light on turnkey projects? I see the margins are very low.

Is it usually that way or is there something else going there?

Yes. The turnkey is about 50% of our order book and it contributed roughly about 30 33% of the revenue of this quarter.

Basically, they always remain in the range of about 1.5% to 2%. We are very clear.

We, as we have said earlier, we are not a construction company, we are a consultancy company. The turnkey orders also that we take, the scope of work for us for these turnkey orders is the same as the PMC work which we take.

It's just that the method of accounting, let's say, for explaining, if a project is ₹100 crores and let's say the fee is ₹5 crores, in a consultancy, our order value would be ₹5 crores. In a turnkey model, it would be ₹105 crores, where the revenue flows through our P&L.

That's the only difference, and that's why, the denominator being bigger, the margins become smaller. Certain clients prefer to give it on that model because of dealing with a single entity, and strategically also, that's why we take it in that mode.

Yes, you're correct. The margins are much, much lesser compared to the consultancy mode.

Okay. Our base in order book also, we'll be taking the whole base or only the part which is going to come to us?

Yes. Order book also, the full order of, let's say, ₹105 crores would be the order in the turnkey mode, and if it would be in a PMC consultancy mode, it would be ₹5 crores.

That's the way it's accounted in the order book also. Sir.

Okay.

Sir. Thanks for the follow-up.

Sir, in terms of new opportunity, one is into consultancy and another into export, can you give some color how is the environment looking like, any bid pipeline or that can further take our order book to almost maybe more than ₹10,000 odd crores of what we have been seeing. Can you give some color around this particular point?

Yeah. The total order book or export in particular?

Yeah. Consultancy and how the opportunities are in export, sir.

Yes. You see, this quarter also, we have got 128 orders totaling to ₹670 crores, and we maintained the strike rate of 1 plus, which is nearly 1.4 orders a day.

Again, despite the execution, the order book has grown, we are now at ₹9,450 crores. Our target of achieving ₹10,000 crore And the interesting thing is that about 70% of this fresh orders are on competitive basis.

While we continue to get orders, we are getting them even on a bulk of them on a competitive basis. Whether it is consultancy or export, we are getting orders at the rate that we have envisioned, and we are on track of reaching the ₹10,000 crore order book despite heavy execution aimed for this FY.

Okay. In terms of a new opportunity, and anything that you have seen, size-wise, export side, how things are, briefly you did mention on the Vande Bharat, anything that quantification can be provided, sir, how are the bid pipelines looking like?

In export specifically, again, we have been maintaining now nearly for about 7-8 quarters, the aim of one order a quarter of export. This quarter also, in July, we have got an order for about $35 million for nine locomotives to South Africa.

We haven't yet accounted for it. While we declared it to the stock exchange, we haven't yet accounted for it in our order book because we're waiting for the formal agreement to be signed, and then we will account for it in the order book.

In terms of getting orders on the export front, whether there are a number of bids that we have bid now, and as you are aware, now most of the export orders are on competitive global tender bidding. We have bid for a number of orders, both in the locomotive front, the coaches, DMUs, etcetera, and I'm sure that we are targeting to maintain at least the export orders of one order a quarter.

Besides, in the international project consultancy, also there are a number of bids in the pipeline, and combined the order book of ₹2100 crores of RITES Videsh as on 30th June is definitely aimed to even with execution, not get depleted over a period of the coming quarters.

Okay. Sure, sir.

I'll come back in the queue, sir.

Thank you. Thanks.

Yeah. Hi.

Good morning, sir, and congrats again for a good recovery and the revenue. Just wanted to get your head on the margin front, sir.

We are seeing margins probably coming down both sequentially as well as on a YoY basis. Now, do you think have we hit the bottom or is there a possibility that we can further see margins to be on a lower

Yeah. Morning, Harshit.

See, broadly, if I lay down while the execution is happening and the young order book will continue to generate revenue sequentially as I've brought out in the beginning, we will step on the execution. There are broadly three elements which are definitely contributing to the overall stress in the margin.

The first is definitely, as you see, that since about 70% plus are on competitive mode, as they generate revenue in the coming quarters, these have been taken definitely at a much tougher margin. The overall mix in terms of margin, whether it is from consultancy or turnkey, that they will obviously add a stress to the margin.

The second element is the travel. Being a consultancy organization, both domestic and international travel is a major element, and there is definitely a pressure on the travel costs, while we've got very strong guardrails put on it to keep a check on it.

Yes, that is definitely a contributor which has to be kept on watch. The third element is that the impending pay revision has to be definitely accounted for somewhere down the line.

Broadly, with all these three, in a nutshell, the EBITDA margins will always be under pressure. As you see, we have been giving a guidance that on a consol basis, our red lines are not coming below the 20% EBITDA margin.

Even this quarter, we've been able to hold on to 22%. Sequentially also, we've held on to 22%, Q4, Q1.

PAT margins, we've held on to about 17% sequentially also. Our red lines of 20% EBITDA margins and 15% PAT margins on a consol basis, we will definitely, strategically pushing on the execution of some higher margin orders out of the 700 plus orders that we are executing, we will ensure that we don't go below these red lines.

Specifically to answer your question, yes, these 22% and 17% which are there currently on a consol basis, while they may fluctuate a bit here and there on a particular quarter, but as I said, on an annual basis, we will definitely not allow them to go below the red lines.

Fair enough, sir. I have a few more questions.

I'll join in the question queue. Thank you.

Yeah. Good morning.

Thanks for the opportunity. Can you hear me?

Yeah.

Morning, Parimal. Go ahead.

Sir, just a observation since last two years. If we see the order book build-up, mainly I think so consultancy, since we got into competitive bidding, the consultancy side of the order wins have been not on a great level compared to the turnkey side.

How do we look at it? If you can answer that question, it'd be much better for us, sir.

Yeah.

You see, the mix is changing, if you see that. If you compare on two years back, the quantum of the turnkey order was much lesser.

Now, it's about 50% of the order book. That is why you see a bigger increment.

In terms of the total order, today also, out of ₹9,450, about ₹4,700 is turnkey, and the balance about ₹4,700 is both the project consultancy and the export of rolling stock consultancy. Roughly it is now 50/50.

In the pure consultancy, the export of rolling stock consultancy has grown quite substantially. Yes, as I again said that the turnkey element now is grown as a much larger percentage, you see that as a bigger growth.

Sir, since we came into competitive bidding, the margins on the domestic side will be the same going ahead from Q1?

Yes. The margins, as I said, on an overall, while case-to-case, since a large number of 70% odd, as I said, fresh inflows are on competitive basis, case-to-case there may be tougher margins.

An overall EBITDA margins of 20% plus is what we are aiming to be maintained. We normally at beginning of every quarter or every half year, we are able to prioritize some of the high-margin orders along with the low-margins, etcetera, so that on a blended basis, on a quarter, we don't fall below 20%.

That is what we are going to definitely try and maintain.

Thank you.

Yeah.

Thanks for the follow-up, sir. On the employee cost, what is the increase that one can expect in FY28, sir?

That's first. Second, I'll come with second question, sir.

Harshit, if you see a quarter-to-quarter, oh sorry, YoY basis in Q1, there has been an increase of about ₹10 odd crores in the employee cost. We we would roughly this is the trend on a per-quarter basis is what we would aim at.

There are two elements to it, which is to be seen in perspective. If you compare YoY Q1 to Q1, the there has been a net increase in our employee strength of about 450 numbers, which is a huge jump, from about 2,675, it has gone up to about 3,125.

Roughly about 450 numbers is a jump. That's a conscious jump, because as we were early last year stepping on getting new orders and we were confident seeing the bids in pipeline that we will get an order at the fresh orders at the strike rate of one order a day, we had to build up our bench strength for keeping, executing these orders.

That is the reason why we could not have a gap in hiring the bench strength and then executing the order. There is a substantial increase in the numbers.

That is number one, which is contributing to the increased cost. Even now with the fresh orders coming, there is a pipeline of about 200 plus for further inflows, and this will keep on increasing as we strategically, on the sectors that we get more orders.

The second element, as I've brought out, is that at somewhere down the line, we have to account for the impending pay revision, which is expected. Both these elements will definitely have an impact on the overall employee cost on an annual basis this FY.

The answer is that we have to generate as much of top line so that even with the margins we have set the red line, you see an incremental growth in the actual bottom line.

Understood, sir. Would it be right to say at least there'll be a 20% increase next year in FY28 mainly because of the pay revision, just because of the employee count, both will

Not really 20%. I would put it more in the range of about 8%

to 10%. Fair enough, sir.

This is really helpful. Sir, second question is mainly on the order book.

We have seen the order book composition in a 50/50 with turnkey being 50% share. Now since we are increasing the order book, the trend towards ₹10,000, maybe ₹11,000, ₹12,000, do you see turnkey as a proportion staying there, or do you think it's going to increase or decrease?

Any color if you can give from a two-year perspective, that would be of great value for us.

You see, today as we stand, turnkey is about 50% of our order book. It is a low-margin contributor.

It's in the range of about 1.5% to 2%. It does pull down the margin and besides the fact that the consultancy and export are, in any case, a large chunk is on competitive basis, they in any case have tough margin.

We are not really very keen on taking much on turnkey basis. More and more, many clients are preferring to give us on a turnkey mode in terms of dealing with a single point of contact for compliances, GST provisions, etcetera.

Strategically, we have to take certain orders on turnkey to keep the clients' pipeline open. That's the very reason why, but we definitely will because the parallel growth in the consultancy and export is also there in the pipeline.

I don't think over a period of time I see the turnkey being more than 50 odd percent on an average basis of the total order book.

Fair enough, sir. Thanks for answering.

I'll join for the question queue again. Thank you.

Thanks for the opportunity, sir. I do not know whether you have answered this question, but would you be able to share within the consultancy how much is the QA revenue in this quarter, sir?

QA has been, again, a good, steady growth, and if you recall, last FY, we touched the levels which we had touched about before the competitive arena of about two years back, we touched an all-time high again, and we are on track again. It's about in the same range of about

₹70 odd crores. The run rate is very

We will definitely surpass the previous year's overall at least by a double-digit growth.

Oh, very nice, sir. Congrats on that.

I think I'm done with my questions. Thank you, sir.

Thanks.

Sir, just needed an update on the REMCL business, and second, sir, are we going to payout issue going ahead

I lost your second part of the question. Your voice cracked.

Parimal, are you there?

Can you hear me?

Voice was cracking. Now I can hear you.

Go ahead.

Sir. First question is on the REMCL business, which is that,

and

the second part is in terms of dividend payout over next two to three years, sir. Will we maintain the same momentum going ahead?

Let me tackle the second part of your question. I don't see any reason why you should have any doubt on that.

The last two, three years trend have assured you that we do not come in for any surprises and changes in our business model, and having said that, we are always 90% plus. We'll not give you any surprise in the change in our basic business model.

Once there is no major change, we can with the low capex and hardly any working capital requirement, debt-free, we don't see any major shift in the dividend payout policy. In terms of REMCL, REMCL has been steadily giving a good PAT and dividend to us.

It's about 50% plus PAT margins. This quarter also, it gave a profit of about 20 ₹22 crores, and that's why good dividend payout ratio of about 90% plus, 91%.

We've got a good dividend of about ₹10 crores from REMCL. We see this on a steady growth basis.

It's also last quarter, I had mentioned that this year is a focus for REMCL further diversifying into both international renewable consultancy as well as renewable consultancy in the domestic area. In both these fronts, some headway has been made in quarter one.

It's early days, but I'm definitely sure by the end of the FY, that'll also start contributing in a substantial way in both the top and bottom line of REMCL.

Sir. Thank you, and all the best.

Thank you.

Thank you. Thank you all, and just to reiterate that the focus on increased execution sequentially to be able to achieve the targets that we had set ourselves for this FY, that's the key focus in the coming quarters, while definitely not compromising on the red lines of margins that we have set, and definitely aiming that we have a double-digit growth on the revenue and have some incremental definitely growth in profit.

That's the aim in the quarters on a sequential way. Thank you.

Thank you very much.