Hi. Thanks, Alaric.

Good morning, everyone, and a warm welcome to the Q4 FY26 earnings call of Afcons Infrastructure. Today we have the management with us, which is represented by Mr.

Paramasivan Srinivasan, who is the Managing Director; Mr. Ramesh Kumar Jha, the CFO; and Mr.

Hitesh Singh, the Head of Corporate Strategy. Now at this point, I will hand over the floor to the management for their initial remarks, post which we will open the floor for the Q&A.

With that, over to you, sir.

Thank you, Kishan. Good morning, ladies and gentlemen.

I welcome all investors, analysts, and participants to the Q4 and Financial Year 26 earnings conference call of Afcons Infrastructure Limited. We appreciate your continued support and participation today.

Our financial results and investor presentation for the quarter and year ended March 26 have been uploaded on the stock exchanges, and I trust you had an opportunity to review them. Joining me today are Mr.

Ramesh Jha, our CFO, and Mr. Hitesh Singh, our Head of Corporate Strategy.

Financial Year 26 was a challenging year for the infrastructure sector, and overall performance during the year remained far below our expectations. I apologize to all the investors that we made a loss in a quarter for the first time since we started publishing quarterly numbers from 2010.

We view this as an exception. In fact, it will not be out of place here to mention that I am personally deeply upset with the results, and I am sure that this could be an aberration or a one-time exception and will change.

For the year, revenue stood at ₹12,322 crores, reflecting a decline of 5.4% year-on-year. EBITDA was ₹1,439 crores, and despite the moderation in performance, we maintained a healthy EBITDA of 11.7%.

This continues to be among the better margins in the industry. Profit after tax stood at ₹257 crore ₹251 crores after providing ₹76 crore for one-time impact arising from the implementation of the new labor code.

If we exclude that, PAT will be ₹327 crores. For the fourth quarter, revenues were ₹2,777 crores, while EBITDA stood at ₹170 crores.

The quarter closed with a net loss of ₹89 crores impacted by certain project-specific developments, provisions, and one-time factors during the period. The year was characterized by lower-than-anticipated ordering activity across several segments, delays in project conversion, prolonged tender evaluation timelines, and execution-related disruptions in certain projects.

Our top line during the year was also impacted by continued liquidity constraints at the client level, which affected execution momentum in some projects longer than anticipated. In addition, certain overseas projects witnessed temporary disruptions during the fourth quarter due to geopolitical developments in the region.

A few projects that were expected to ramp up during Q4 also experienced delays arising from the design and alignment-related changes. Taken together, these factors had a meaningful impact on the revenue growth and profitability during the year.

However, we continue to view this as largely timing-related and external factors rather than structural issues in the business or our execution capabilities. Despite these challenges, we continue to make progress across several strategic and operational priorities.

During the year, the HRRL Crude Oil Terminal Project at Mundra, part of one of India's largest integrated refinery and petrochemical complexes, was commissioned, reflecting our growing capabilities in industrial and energy infrastructure. We also witnessed operationalization and inauguration of several infrastructure projects completed by Afcons during 26, including sections of the Bangalore Double Decker Metro and Flyover Corridor as a part of ongoing elevated metro project.

This section was executed within one of the world's and Bangalore's busiest live traffic environments with minimal disruption to city traffic. In addition, successful trial runs were conducted on our Agra and Kanpur Metro project, while Delhi-Meerut RRTS Corridor, where Afcons executed two packages, became fully operational.

Our execution capabilities and institutional strength also continued to receive recognition during the year. Engineering News-Record USA ranked Afcons 8th in Marine category globally and 12th in International Bridge Contractors, reinforcing our position in technically complex infrastructure segments.

We were also honored with the prestigious MIKE Award for the eighth consecutive year, and overall the tenth year if you take MIKE and MAKE together, reflecting the institutionalization of knowledge management and innovation practices across the organization. Turning to our own internal business, I am pleased to share that we have received the proposal for the rehabilitation and construction of the railway line project in Croatia, for which we were declared L1 last year.

We expect the related formalities to conclude shortly. As disclosed recently to the stock exchanges, the two Croatia road tenders, where we were declared L1, have been canceled by the client due to budgetary constraints.

While this is disappointing, we continue to remain positive on the long-term opportunity in the region. On the Mumbai-Ahmedabad High-Speed Rail C2 project, the second consignment of the tunnel boring machine, which had remained held up for several months, has now been received at site.

Assembly activities are progressing well, and the main drive has already been lowered into the shaft. We expect tunneling operations to commence before end of next quarter.

Coming to order inflows during financial year, we secured new orders worth ₹4,125 crores, excluding approximately ₹3,800 crores of variation and change orders received on existing projects. Our order intake was below our earlier expectations, largely on account of deferment of several large project awards and delays in conversion of L1 positions into firm orders, particularly in the fourth quarter.

You would have noticed that we have booked around ₹8,000 crores of orders and declared L1 in another around ₹7,000 crores of new orders so far in this financial year. We expect this L1 orders to get converted in this quarter.

With this, last year order booking guidance backlog will be completed in the first quarter of this financial year itself. That said, we have seen encouraging progress on some of these opportunities, both in domestic and international markets in recent weeks.

Our addressable pipeline remains robust across key segments: transportation, marine, underground, hydro, water, and industrial infrastructure. Having the certainty of about ₹15,000 crore order including L1 in the current financial year, we expect to book another ₹15,000 crore of more orders, making a total order booking guidance of ₹30,000 crores for the current financial year.

At this stage, considering the continued uncertainty in the geopolitical environment, elongated award cycles, and ongoing project-related developments, we believe it would be prudent to wait for greater visibility before providing specific revenue growth or EBITDA margin guidance for Financial Year 27. To conclude, while Financial Year 26 was undoubtedly a difficult year operationally, we remain confident in the long-term fundamentals of the business.

Our diversified presence across sectors and geographies, strong execution capabilities, healthy opportunity pipeline, and disciplined approach to growth position us well to navigate the current environment and capitalize on opportunities as sector conditions improve. With that, I now invite our Chief Financial Officer, Mr.

Ramesh Jha, to take you through the financial performance in greater detail. Thank you all.

Thank you, sir. Good morning, everyone.

Before talking on the numbers, let me reiterate that our quarterly number varies. Company is into the business of construction.

The margin in a quarter varies based on the nature, type, and quantum of work executed. Quarterly results may vary in different quarter and may not be indicative of the annual results or trend.

Now moving into the specific numbers. In Q4 FY26, we had a total income of ₹2,777 crores.

This is 18% down as compared to Q4 FY25, wherein we had done ₹3,387 crores. For the full financial year, we have done ₹12,322 crores, which again is 5.4% down from the previous year 25, wherein we had done ₹13,023 crores.

Now specifically in Q4, we have seen that the payments were not coming from the customers. Payments were not very smooth from majority of the customers.

Working capital funding to the project continued in Q4 as well, and under the circumstances, we decided to balance between funding projects and maintaining liquidity. We funded projects up to a limit, but we had not gone beyond a point to avoid overexposure to any customer.

This limited our turnover in some projects. Also in Q4, after the war, there was POL and gas-related issues in projects consumables and logistic-related challenges.

Basically, this was in the overseas market, which kind of marred the planned progress. Usually, we have seen that in Q4, we do at least 15% to 20% turnover more than Q2, Q3, and that is backed by smooth payment from the customers.

That gives us the benefit of economies of scale and improves profitability significantly in Q4 and then impacting overall year performance. However, this year was a contrary effect.

It was one of the factors which has impacted the bottom line also during the year. For the full year, we achieved a turnover of ₹12,372 crores, which is a drop from previous year top line.

This year we could not achieve the planned turnover from various projects across domestic as well as overseas. On a overall basis, if I have to put it in a nutshell, there were payment issues, L1 orders were not converted, some of the fast-track projects not picked up, and sudden geopolitical issue were the main reason impacting the revenue growth.

Now moving on to the EBITDA. During Q4, we had done absolute number ₹170 crores of EBITDA, which was quite significantly lower than the previous year's ₹415 crores.

In terms of percentage, in Q1 it was 6.1%. For the overall year, the absolute number of EBITDA was ₹1,439 crore, which is 11.7% as compared to last year's ₹1,662 crores, 12.8%.

On a year-on-year basis, it was down by around 13.4%. Now in our EBITDA calculation, we consider the BG commission as part of our operating expenditure.

EBITDA what we are talking about is after removal of BG commission as the operating expenditure. This year, because of overall reduction in our interest rate, the finance cost even though has gone up, which I'll talk about when I talk about the finance cost.

Also, our EBITDA calculation includes other income as part of revenue. Here we have explained earlier also that our other income is very much part of business.

Arbitration interest, foreign currency exchange gain, miscellaneous incomes are recurring. Those are very integral to our business, hence this needs to be considered as other operating income.

For the year ended, a sizable amount of ₹374 crores, which is part of other income, needs to be considered as other operating income. Now moving on to profit before tax.

For the full year, we have done ₹387 crores of profit before tax, which works out to be 3.1% of the top line. This has come down as compared to FY25, wherein we had done ₹710 crores, which was 5.5% in the previous year.

In profit after tax, for the Q4 there is a loss of ₹89 crores. However, for the full year, the profit after tax is ₹251 crores, which works out to be 2% of the top line, wherein in FY25 we had done ₹487 crore, which was 3.7% of the top line.

Profits for the quarter got severely impacted because of sizable provisioning in one of the project. In another project, we incurred substantial extra cost on marine operations.

Both these are kind of one-off event. In addition to this, in some projects where we were expecting to cross the margin recognition threshold, usually in all the projects, once we receive a threshold of turnover, which is around 10%, then only we start recognizing profit.

In few recent projects, we could not cross the margin recognition threshold which we were expecting in Q4. We fell short marginally to reach that threshold, margin could not be recognized.

In addition to this, under-recovery of fixed costs because of lower turnover, higher finance cost because of working capital lockup, were the components contributing to loss in the quarter. For the full year, in addition to the above factors impacting Q4 profitability, labor code-related one-off exceptional item was another big impact.

Now specific to finance cost increase, during the year we have continued to see payment-related challenges. We have improved our average borrowing cost in FY26 as compared to FY25 because of the interest rate going down and of course because of improvement in our credit rating as well, but during the year the average borrowing has gone up as compared to previous year.

Because of that, the overall interest cost has gone up, and this has a manifestation of working capital blockages. Despite improving the average cost, interest on bank borrowing has gone up.

Also, the interest-bearing advances for the full year FY26, which is around 40% of the overall advances from the customer, which even though in March 25 was also around, say, 38%, 39%, but then the interest on customer advances were not for the full year that 40% because it gradually moved from, say, around 20%, which in September 24, it moved to around 38%, 39% by March 25. For the interest-bearing advance, in last year there was not full-year impact, whereas this year almost 40% of the overall advances were interest-bearing.

That has got a bearing and the interest from the customer advances has increased in this financial year. Because of this, interest on customer advances has increased, making the overall interest cost go up.

We expect the situation to improve on realization of number of locked-up assets, which we are in a very advanced stage at this point in time in many projects, and also on receipt of interest-free advances, mainly in international orders. On the depreciation front, we continue to account for accelerated depreciation on our TBMs.

Of the total ₹454 crores, the normal depreciation was around ₹289 crores, which is 2.33%. Rest of it is on account of accelerated depreciation.

On tax, the tax rate on Afcons profit is around 35%. This is higher than usually one would expect.

This is on account of some of the JVs where we paid tax in the range of 35% to 36%. Also, in some overseas locations like Bangladesh, Gabon, tax is charged on turnover.

In such situation, if you don't make profit above the threshold, the extra tax needs to be charged off, which was the case in places like Gabon and Bangladesh. Beyond this, we had to make provision in one of the JV entity, which has brought the consolidated profit down, making that effective tax rate higher.

Now specifically on ROC, we have talked about that higher provision in one project due to arbitration development, extra cost on a marine operation in one of the project, and non-recognition of margin in few projects due to non-achievement of turnover threshold, and also under-recovery of fixed costs due to lower top line. This all has severely impacted the profitability, in turn impacting the ROCE and ROE.

In FY26, we have done around 20 12% ROCE, and ROE is around 5%, which is quite low. In terms of debt, gross debt has remained in the similar range that of September and December, and that stands at ₹3,538 crores, and net debt is ₹2,653 crores on the net basis.

On net net basis, the debt to equity is around 0.49 times of the net worth. This is on the numbers.

On behalf of Afcons, I thank everyone for attending this call. Now I request the moderator to open the floor for Q&A.

Hi, sir. Thank you.

Sir, you have tried to explain various reasons why our performance was one of the worst quarter in the overall history. Still trying to get some more clarity there.

When we had a call in the third quarter post the result in February 11th, we were kind of a confident we will be able to do at least 5% revenue growth for the entire full year. That means we would be doing a kind of a 19%, 20% kind of a growth on the fourth quarter versus now we have seen a 19% degrowth in the fourth quarter, and for full year also 5% kind of a degrowth.

Just trying to understand that even at the middle of the quarter, we were so confident, and then what has gone so wrong and that's why we missed significantly on the execution front?

That is correct. See, what we have said, see, this was based on, let's say, last 15, 20 years' experience.

What happens that in Q4, we have seen that the customers, they release all the payments up to date. This is what our experience has been for quite some time.

This year was an exception wherein we have seen that there was a slow down in terms of payment, and payments were not forthcoming. That has impacted.

We had to decide a choice between growth or to preserve the liquidity. Then we had not taken that aggressive call to pursue the top line growth.

Then in the midst of that, the war started, and then that severely impacted the supply chain management. You are aware that even this year we have done close to 30% from our overseas projects even though the order book is lower in terms of order book composition domestic versus overseas, but in terms of turnover, we continue to do around 30% from the overseas market.

Some of the countries where we are operating are not that bigger economies where they have got higher amount of oil reserves. The operations got severely impacted in the month of March.

POL-related stuff and logistics-related stuff, we couldn't send material to project site. This severely impacted.

Even in domestic market also, you are aware that many of our projects are at remote location. Availability of gas was a real problem.

Okay. Got it, sir.

Now again we are at the middle of this quarter. First, obviously, I think correct me if I am wrong, for full-year FY27, we are not providing any revenue guidance.

If that is the case, then this quarter, Q1, till now and looking at whatever the constraint, payment-related issues, everything, can we see a growth in the Q1 FY27, this quarter? You

see, this is what we have conveyed is that at this point in time, because of the geopolitical situation, because the condition continues to be the same. Even in domestic market, we are getting very contradicting signals.

We are hearing that the energy prices are going to significantly go up, and we have not seen the payment situation improving significantly. Even though some of the stuck payments, as I said earlier, we are in a very advanced stage to get those payments, but at the same time, those supply chain-related issues continue.

It would not be prudent on our part to give you any guidance as such for the full year or even for the Q1.

Okay. Got it.

Same even for margin also, though the normal long-term guidance that we have, 11%, we right now will not be kind of a giving any kind of a guidance on that front? See, we are not saying

we are not giving any guidance on the margin front also because we need to see how it actually pans out because many overseas places, we have seen that the petrol, diesel prices have significantly gone up during the war period in the month of March, April. The prices have gone up.

Some of the places like Bangladesh, they were having elections, till the elections were there, the prices remained stable, but after the results, the prices had gone up. We are looking at that kind of a situation.

You are aware that in many overseas locations, our prices are fixed-price contracts. We need to see how we are able to recover from the customer this escalated cost.

We have in past also explained that generally in overseas market, we try to keep risk and contingency, but then at the same time, we are not very sure to what extent those risk and contingencies will be able to take care of the escalated cost.

Lastly, sir, on the inflow front, just to get a number correct. After the 31st March, how much value of inflow that we have received the LOA?

Obviously, we also know if you can also specify in terms of the L1. One what I know is Croatia, which would be a 7,800 odd crore, and the Vadhavan one, which is 5,300 odd crore.

Kind of a 13,000 odd crore kind of a if you can specify the number would be better. We are saying by June we would be getting a 15,000 crore LOA.

That is one. Second, additionally, we will be getting a 15,000 crore more inflow, total would be a 30,000 crore for the entire FY27.

Yeah.

You are right. We have already informed to the exchanges that we have been selected as the contractor for the project.

Besides that, you are aware there are news in the social media that couple of projects we have been declared L1. Since we are not disclosing that to exchanges, we will not be able to give you the exact details, but you are aware there are projects where we have emerged as L1.

There is also an underground metro of DMRC of ₹373 crores which we have bagged already.

In the ₹8,000 number what we are talking about, almost 50% is having a clear visibility in place

in the first place. Got it.

The capex for full year now given the FY26, I think the TBM cost now would be shifting in the FY27. How one can look at the FY27 capex?

FY27, we are looking at a capex of around ₹725 crores.

Okay. That's it from my side.

Thank you. Thank you.

Thank you.

Hi. Sir, I'm referring to your last con call that you mentioned that nearly 1/3 of your Q4 target is already achieved in the first 40 days.

Most approval related to project delays have been resolved. Execution takes to normalize from 4Q, and 11% margins looks sustainable.

Amid all this commentary that you gave, what is it that you did not see coming through, which impacted the balance 50 days of project execution and margins? What are the key projects that actually impacted this, and you did not see it coming through?

See, one, let's appreciate that Q4 always remains to be a sizable portion in any year. Now in the month of March, we had seen a sizable drop because of, as explained earlier, supply chain disruption and energy-related challenges.

Many places, the vendors were asking for advance payment and then only they were committing. Despite giving advance payment, many places it was not available.

That became a major constraint. As I explained that we have got almost 1/3 which comes from overseas market and the countries are not having those kind of energy reserves.

That severely impacted. Some of the projects even in domestic market got big impacted in the month of March.

This is something which we were not expecting. Also some of the projects where the fast-track projects, we were expecting because the kind of discussion we had because these were all private customers also.

We were expecting things to ramp up, but then it didn't pick up.

Can we read it this way that a large part of this impact has been on account of your international projects, which is the Large part

Large part is because of international project, and as I explained earlier also that see, payment has to be something which makes thing flow. This got stuck.

This has severely constrained us to put beyond a point money by ourselves.

Okay. How much percentage of impact is on account of domestic projects, and export, I'm assuming everything got impacted?

Maybe in domestic market, if you have to put a number around, say, 25% or so, the projects got impacted.

Okay. Given that the situation still remains the same, do you think this issue will continue going forward as well at least this quarter or next 6 months' clarity you might be having given the kind of experience you had over the years?

What is your read through in the near term on this?

See, this challenge continues to be so, and we have not seen a very sizable improvement in overseas market in terms of energy availability. What we hear, you might have also seen media, very prominent leaders, world leaders, they have talked about that we are looking at big disruption coming up.

We are also not very sure how to talk anything futuristic at this point in time, but the situation has not drastically changed.

Okay.

That is the reason we are holding on to the guidance. Because once we see some clarity, we will be giving the guidance.

Okay. Sir, can you give me more clarity on your international projects, where all do you have the projects and what is the nature of the work that you're doing there?

See,

in Bangladesh, we are doing a couple of road projects, and we have got a railway project. In Maldives, we are doing one bridge connecting project.

Beside

that, we are doing a couple of water-related projects in Tanzania. We are doing a water-related project in Benin, in Ivory Coast, and then there are various country in Africa.

Okay. What has been the issue here in these places?

Can you give more clarity? Is it supply chain-related or local level disruption that you saw?

I'm unable to understand there that clearly.

Usually what happens that in most of these projects, the material goes from domestic market, India. From Middle East.

Dubai works as a hub for us. Movement of material became a problem for these places.

Usually for our project execution, we require a lot of diesel, we require a lot of gas. Availability of this was not there.

Many places, we had to give advance and then only they were committing delivery.

Okay. This led to increase in the cost.

Has the work stopped on the site or you've continued the work, but you've not got the payment from the clients? See, one,

of course, the cost impact was not that severe, but then because of this, the operations could not move in a manner we were expecting.

Sir. I'll get back in the queue.

I have more questions. Thanks.

Thank you for the opportunity. Sir, we have highlighted the delay in the payment from the customer end.

Are there any concerns on any specific customer side or are we facing issue from the government or the private clients?

See, as such, we are not saying that there is concern, but what we have seen is in some of the state there was election. Because of that, there was no decision.

The payments were certified by the customer, it was sent to the treasury, and the payments were not coming. Some of the customers, we heard that they were not deciding.

Payments were certified, it was sent to their centralized finance team, and then we just heard that the payments will be released. It was not released, it was released actually subsequently in the month of April.

As such, we are not saying that we are seeing any concern, and I think in past we have talked about Jal Jeevan Mission, which continues to be in UP. They have taken a stand that wherever people are completing 100%, then only they'll release the payment.

This is contrary to the contractual condition, but this is how it has been taken up.

Okay. Basically, there was some spillover of receivables from March to this quarter, and we have seen a relief of the payments in this quarter, right?

It's not only limited to quarter. Actually, what we are trying to say is that the payments are getting elongated.

As such, it's not that the payments are stuck, the running bills payments are stuck, but then in manner it used to come or we were expecting, it is not coming in that manner.

Okay. Sir, my second question is is there any plan to bid internationally on the ME side given that Abu Dhabi has unveiled its $55 billion worth of dollars of project pipeline?

No, no. We are definitely at it, and sooner than later, we'll start bagging projects in the Middle East.

Okay. Sir, currently, would you give any bid pipeline numbers for now for this year?

Sure. Our bid pipeline remains healthy for the next 2 years which we track.

It's close to ₹4 lakh crores which we are tracking across segments. Out of that, 70% is domestic and 30% is from the overseas market.

As MD sir just mentioned, Middle East also looks like a big opportunity once the war gets settled. That area also we are looking.

There are many large-value projects in our pipeline which we are expecting to convert soon. Basis that, it gives us a confidence that this year we are giving a guidance of ₹30,000 crores for the order booking.

Do we have any bifurcation for this bid pipeline of ₹4 trillion?

I have the bifurcation as well. Out of that ₹4 lakh crores, around ₹96,000 crores is from the hydro and underground business, which includes our water business as well.

Around ₹90,000 crores is from the marine and industrial. It will be like 50-50 distribution.

Our rail and road business will be around ₹85,000 crores, and remainder around ₹1.3 lakh crores is from the urban infrastructure business, which includes metro, underground, elevated, and elevated corridor projects as well. That's how the distribution looks like.

Sir. That answers my question.

Thank you so much, and all the best.

Hi, good afternoon. Thanks for taking my question.

You mentioned that in Q4, we had a sizable provision in one project. Would it be possible to get a quantum of the total provision that we made in Q4 across all projects?

See,

in Q4, across all projects, we have done a provision close to ₹160 odd crores.

What would have been this number for FY26? FY26,

the number is close to ₹325 crores. See, I'll I'll, Parvez, I'll just explain you.

What we have done is, this year we have in Q4, what we have done is we have made a ECL provisioning matrix. Earlier, what we used to do is, as per accounting standard, we used to look at, some previous periods, what is the write-off, and basis those averages, we used to make provision.

Then in some specific projects where we used to think that, there could be some challenge, we used to make those specific provision. This time around, rather than, sticking with that individual assessment or, individual basis that, we we used to make provision, this time we have made a matrix wherein we have moved from earlier basis, the management judgment provision, we have moved to a matrix wherein basis aging and basis category, we have made a provision matrix.

It will be automatically provision will be made, all the all the receivables. There was some extra provisioning required because of, we had to we had to shift to this new matrix system.

There was some extra provisioning required, which we have done.

Also we have done in one of the projects where we had an arbitration award where we could be taking a call as to contest or not. We thought it is prudent to provide for it, we had provided for that.

That is also a significant amount. Plus another of the projects where there is a cost increase in terms of our marine spreads and other things, while it could get compensated in due course of time, we thought it's upfront we'll book the cost and later on as compensation comes, it could be up receipt that time.

That is how we had as per our usual conservative accounting policies, that's something we have done upfront. Sure.

To summarize, if one adds all these, which is extra provision due to a new policy or a cost incurred in a marine project or some provision for a potential claim where we have to decide a strategy, what will be the quantum of these one-time costs in Q4 across all these categories put together? See,

I think all this put together, the quantum could be around, say, ₹260, ₹65 crores.

Sure. Second question is what is the capex that we incurred in Q4 and FY26?

In FY26, we have incurred a capex of ₹1,069. In December, this number was around ₹370 odd crores.

In Q4, we have done close to ₹700 crores.

Got it. I think that's it from my side.

Thanks, and all the best. Thank you.

Thank you.

Yeah. Hello, sir.

Sir, my first question is regarding the current order book. Can you help me with the split of say the fixed-price order book in it and the variable cost order book in it?

Also in the fixed cost, how much of it is going to be impacted, say, to the margins, which may not be at our normal margins now?

In terms of our existing order book, nearly about 10% to 11% only is currently in the overseas segment.

All

13% is the overseas segment. All others are domestic segment.

As domestic segment, we have a pass-through mechanism, and international segments, we don't have a pass-through segment. Therefore, our impact, and most of these projects which we are talking about is on the closing stages, other than the fresh order which is received in the current quarter, all others are in the final stages of closure, and therefore we do expect a limited impact in terms of the existing cost escalation or other things.

In the new project in the Croatia, beyond a particular level, it has a pass-through mechanism in that contract. Up to 10% additional cost, we need to absorb.

Beyond that, it is a pass-through. That's something which is there in the new contract.

Sir, all the projects you mentioned in Bangladesh, Maldives, Tanzania, and Benin executed this quarter, what will be the quantum of this, because you're saying a large impact came from these projects? What is the quantum of these projects?

Can you come again?

You told the Bangladesh road rail projects, the Maldives project, the Tanzania water project, the Benin project, all of these were slow moving during the quarter. Can you help us with the quantum of these projects?

In the overall order book, the quantum at this point in time, the overseas component is around, say, 13%. What I have explained earlier also that even though it is around 13% in the overall order book, but during the year turnover, almost 30% is coming from the overseas market.

Okay. Sir, we are saying we have ₹32,500 crores of order book.

We are saying we ₹15,000 crores of assured inflows, and ₹15,000 crores of inflows we are going to bag more. That will take me to around ₹60,000 crores of order book.

Even after having a ₹60,000 crores of order book, we are not able to give a revenue guidance for the year. Isn't that a little misleading or some like

No,

it

is not misleading at all because the infrastructure industry needs some bit of an understanding where the initial few months, it goes towards installation, design, and other phases. The revenue starts accumulating in the heavy civil infrastructure project by and large from the second year onwards only.

Some of the projects what we have currently in our ₹30,000 crore, ₹31,000 crore of order book has slightly long gestation projects. Like if you talk about there are four dams, which are about 5-year duration.

There's a high-speed railway project, which is about 62 months, which is now because of the tunnel boring machine getting extended to another 12 to 15 months. Therefore, these are long gestation projects.

Therefore, it's based on the current order giving a guidance especially till uncertainty remains in the geopolitical situation will be inappropriate. While on the one side there have been talks about our own increase in petrol, diesel is minuscule to start with, in stages it could get increased.

All these will have to be factored in properly, and even now we find that some places there are non-availability of fuel in some of the overseas market, some of the domestic markets in remote places, all this. Based on all these, giving a guidance may not be very appropriate.

That's the reason we felt it's not appropriate to give a guidance.

See, we are not saying that we are not giving guidance. What we are saying at this point in time, we are just holding on.

We just want to see the visibility how things are panning out because see, what I am saying is, see, cost may go up. If there is a confirmed order, you may incur some extra cost.

The continuity continues because of the payment flow. That is where we are seeing that there are certain uncertainties.

That's where we want to see some visibility that how things are moving.

Also, Bhavik, even though we are giving a guidance of ₹30,000 crores, we have to see at what point of time the project comes. Because we are also seeing that the award cycle is getting elongated, if the project comes in Q2, Q3, accordingly, it will impact the revenue.

That is also one of the reasons.

Right, sir. Understood.

Sir, in case of say customers are elongating our payments, not giving us on time, do we have any rights to maybe get those payments earlier or how are we negotiating with them currently? Because it will impact our margins for sure.

That is correct. See, usually what happens that in construction contracts, at least with the government customer, we are not negotiating per se individually the contract condition.

Because once the tenders are out, the contract conditions are set in that project. Basis that, everybody bids, and then once whoever gets, he has to follow the same contract condition.

Now many a times, what happens that if your payment is getting delayed, then you will have provision of charging interest to the customer. All that is there in the contract.

In practice, what happens that the customers, if they are not seeing the visibility of releasing payment when they don't have funds, they will not certify the bills. Being government entity, you don't want to get into a confrontation kind of a mood with the customer because that is also not advisable.

Till now, the way we have operated is we have tried to deliver project, in advance, we have tried to solve customer's problem, and basis that goodwill, because of those performance aspects, we were getting our things done. At this point in time, we are foreseeing that there are some challenges related to liquidity, and that is kind of creating this kind of a situation.

Otherwise, we are not having any bad experience with these customers because we are quite focused on our customer selection.

Understood, sir. Understood.

I wish you the very best for the year. Thank you so much.

Thanks for the opportunity. Sir, you highlighted that you are delaying execution of few projects because of uncertainty on collections.

If you can highlight what is the order book which is facing this issue of collections so as to gauge how much impact we are facing? Related to that, also projects with less than 10% completion, what is the receivable on these projects?

See, I think specifically if we have to talk about project, I think other than UP Jal Jeevan Mission project and maybe project in Gabon, we don't have any specific names to be given. What we are saying is in any project, what we try to do, we have our own internal threshold that this many months of turnover, if it is not realized, then beyond this, we are not going to fund.

We try to manage the project from the project cash flow. If the payments are elongated, because many a times it happens that they will try to bunch up.

2, 3 months bill will be hold up. After that, we try to go slow.

We don't fund from our own pocket. Payment comes, then we try to manage the project, and this is how things are going.

This has got a overall impact what we are trying to say. Specific project if we have to talk about, we have already talked about UP Jal Jeevan Mission project, and we have tried to explain that there contrary to the contract condition, the customer has taken a stand that whoever is completing the final connection, it means that one needs to complete 100% those connections, and then only they'll be getting paid.

Wherever we have completed, say, 60%, 70%, 80%, the contract condition says that progressively the payment needs to be made. Now they have taken this stand that final connection 100% completion, then only they'll release the payment.

In normal course, maybe we could have done maybe, say, anywhere around ₹60, ₹70 crores monthly turnover, but then now given the kind of situation, we'll be completing those, wherever we have reached, say, 90%, those kind of. We'll try to complete that 100%, and we'll get that money, and from that money, we'll try to complete the remaining, maybe look at wherever we have done 80%.

Likewise, we'll go.

What I understand is then the collection problem is widespread. It's not limited to certain projects, right?

Absolutely.

Okay. Also less than 10% completion projects, what are the receivables there, outstanding amount?

Receivable is not that significant there. There are receivables, maybe say it will be around 2 months receivable will be there in such projects.

Okay. Sir, this last question on this interest-bearing advances that we are getting, that proportion is increasing.

On the order book level, what percentage of order book will have interest-bearing advances? Want to have a sense of forward looking that where this number is going to be finally.

On one side, we are paying interest on advances to customer; other side, customers are delaying our payment. We are in a kind of a deadlock situation.

How will you manage this? It's a big problem.

No, I think see, we don't look at project selection in that manner that we'll keep maybe, say, 50% only interest-bearing advances, because this is not how we look at. What we look at is in any project, what is the threshold of margin we are looking at.

Generally, these projects we are talking about, we are paying interest is for sure, but then in these projects, we have better margin. Unfortunately, we are at a time wherein we have not crossed the threshold wherein we recognize the margin in the project, and on the contrary, we are paying the interest.

It is getting reflected. Then I think once the top line kind of elevates, we will not have this kind of a situation.

Where this number will go?

This is the follow-up question on the same question. I'm not asking any new question.

Go ahead.

I understand that you don't look at this while bidding for orders, but your ROCEs and ROEs will get impacted, right, if you have higher interest-bearing advances as a percentage of your order book? How confident are you on achieving the guided ROC and ROEs if the projects gets delayed?

That will certainly impact the ROE, but you are getting the money. From the customer, your capital employed is not there.

ROCE, I think that the interest expenditure comes below that, so that will not impact the ROCE.

Okay. Anyway, I'll ask for a question.

Fine. No,

I think, just to add further to that, we have said that generally our order book from overseas market has always been, say, around 30% or 1/3 of the order book, which is down at the moment, but I think hopefully we'll reach that stage, and then because overseas is interest-free, and that can significantly improve the situation.

Okay. I would still appreciate if you can give in terms of segment or order book, what is this number, that will give a forward-looking information.

Thanks.

Hi, sir. Thanks for the opportunity.

Just had a question on your order flow visibility. The three ₹30,000 crores that you are guiding for this year, what gives you that confidence on that balance ₹15,000 crores that you mentioned?

You said visibility is in place for about 50% of this. The balance 50%, what gives you visibility on this?

Is it going to be more on the international side or domestic side? Which areas are these projects coming up in?

Is the bidding already opened or is this more sort of if you could give some more color on that balance 50%?

Balance 50% consists of both domestic and international. In terms of certain international projects, we are already in the stages of negotiation and closure.

Therefore, we do expect things to happen quicker. In domestic projects also, we have number of bids already submitted, and there are a few more bids in the pipeline.

Therefore, we would say there is a definitive visibility in terms of balance ₹15,000 crore order book as well. We will not be surprised some more of this will come in the current quarter itself, which we are keeping our fingers crossed.

Shirom, it is across segments. We have good visibility in marine, in urban infrastructure, in hydro, and certain projects in surface transport as well.

Visibility is also across the various segments we operate in.

Understood, sir. Just secondly on your working capital, right?

Of course, we've had a lot of discussion on the payments getting delayed, and we've seen consequently a rise in your receivable days this year. How are you seeing this panning out in FY27 in terms of your receivable days?

It's gone up more than 300. Maybe in the next 1, 2 months you cannot give any guidance.

Overall, a sense of target number that you're looking for for FY27 in terms of your receivable and overall working capital days? Now

see, in terms of receivable days, I have just now, during the call, I have said that on quite a few big chunk money which is stuck, and on this we are working with various customers. We are at a very advanced stage.

Before June, we are looking at a sizable amount getting unlocked. That will give us some improvement in terms of the number we are looking at because at the moment, this net working capital number of around 143 days.

In last call, we had talked about that we are looking at somewhere around, say, 120 odd days. With this, and to be very honest with you, these monies we were looking at getting monetized before March.

That's what we were discussing, but it didn't happen. Hopefully, before June, this is going to happen because now we are on the verge of closing many of this.

We know that some of the payments has already gone and they're releasing the payments. Still, I am just taking another, say, 40 days or so, it will definitely going to happen.

With that happening, we'll go back to around 120 days. Then from there on, there are number of stuck payment, and we are not going, as I have told that in projects, we are not overexposing ourselves.

I think bare minimum we can look at 120 days. From there on, we need to see improvement, but I don't want to commit at this point in time because we are hearing very contrary news about payments and all.

We need to see how it actually works out.

Got it, sir. If you could just comment on the Maharashtra L1 tenders.

Is there any update on that? They were going for rebidding.

Any comment on those Maharashtra tenders which you were L1 in earlier? Any update on that?

Yes. Earlier L1 both the Pune Ring Road and Nagpur-Gondia, both are going for rebid, which we had communicated in the earlier quarter itself it is likely to go for rebid.

Now they have informally advised us and also asked us to collect the EMD guarantees and all back. Both of these are going for rebid.

Therefore, we have removed it from our L1 status also, those jobs.

Sir. No visibility on the timelines of the rebidding process, right?

When it might come up, and how's the competitive intensity in those projects going ahead?

We expect Pune Ring Road could come for bidding in the current quarter itself towards the June or so. Because Pune Ring Road, the land acquisition is almost completed.

With respect to Nagpur-Gondia, I think visibility will come once they do the land acquisition fully. Pune Ring Road could come up for bidding shortly.

Got it, sir. Thank you so much.

All the best.

Thank you. Thank you.

Hi, sir. Just wanted to get a more sense upon when we say we have 79% of our order book from government, and majorly of our current issues are coming from this side.

I know you don't provide any specific bifurcation, but any range where you can give how much it is from central government or any specific states like you mentioned one of them as UP, or any PSUs where it is in many

states? Yes, of our pending order book, close to 50% is from state government.

Around 80% is from government side, and out of that, 50% is state government and 50% is from the central government. That is how the breakup is.

Out of state government, we have projects in Maharashtra, Uttarakhand, Madhya Pradesh, Rajasthan, UP, Bihar. Across multiple states, we have exposure in our pending order book.

With regards to stuck payments, the main as our CFO already explained, it's from the Jal Jeevan. Rest everywhere, there are certain liquidity concerns, but not anything specific to be highlighted or pointed out.

Okay. Understood, sir.

Thank you so much.

Good afternoon, sir. Thank you so much for the opportunity.

In the Chennai Metro or TKY JV, that ₹659 crore in variation due to unforeseen geological conditions. Could you please explain what it is exactly and whether the geological conditions were indeed unforeseen based on the initial soil investigation?

Or I'm just trying to understand how do we look at whether it will come as a provision or is there any possibility to shorten this?

See, it would be project-specific, we would not like to discuss here. Since you have raised this point, I'm not talking about specific about that project, but generally what happens that in any contract, if there is a contract clause which allows variation accounting, and we have incurred any variation as per the instruction of the customer, then we account for those variation.

In normal course, what happens that the customers many a times, they will settle the amount for those variations across. In some cases, it so happens that we are not reaching any agreement with the customer on the settlement amount.

In such cases, what we do, irrespective of whatever we may claim, in our books, we account for revenue only to the extent of cost we are incurring. That is a mere reimbursement we are looking at, and that is the amount which is getting reflected, the specific project you have talked about.

Sir. Thank you.

Thank you for the opportunity. My first question is, so as I understand that we are now doing the work in proportion to the payments that we are receiving.

Can we see debt levels to go down from here on? We are already at the pre-IPO level debt of ₹35 billion.

How should we look at the debt movement going forward?

See, what happens that generally we have seen that in Q1, Q2, the debts go up. Even though we have said this, that from the project only we will be funding, but not all the time all the expenditure will be funded through the project collection.

Main operations, yes. Then many a times, we need to pay salaries, we need to pay rent, and those kind of stuffs, we know we are not hell-bent.

There could be some marginal debt number going up and down, that is for sure. One thing for sure we can tell you that for this financial year FY27, we'll see a sizable drop in the debt number.

That's what we have stated earlier also that debt, we have always tried to maintain it at a level which is a comfortable to us and comfortable to our stakeholders. This time, it is not that this is alarming number.

On a gross debt basis also, our debt to equity is around 0.65, and on net debt basis is below 0.5, which is, according to me, it's quite comfortable situation. Having said that, we'll bring it down to a level what we were there, say, in FY25 or so.

Okay. The second question, sir, again relating to this, obviously our net debt to equity is at comfortable 0.5x, but last 2 years, sir, our cash flow from operations were negative and we were actually paying the interest cost by taking the more debt, which is a vicious cycle.

What gives us the confidence that the net debt or the debt levels will go down? Now

see, it's a call. It's a calibrated call.

Maybe those kind of concern can arise when your debts are at alarming level. In past, we have operated at a debt equity of more than, say, around 1.3, 1.4.

At the moment, even on a gross debt basis, we are at around 0.65. It's not that it's that alarming level, and we are at a very comfortable situation.

We have got a sizable cash and bank balances. We have got sizable undrawn bank limits available with us, and we have got very sizable advances which we can draw at any point in time.

I don't think we are at that kind of a situation. In terms of finance cost and all, what we had planned for the year, marginally we are higher, but it's not that it is out of blue we are incurring some more cost and on account of borrowing.

Okay. Got it, sir.

Thank you.

No, we can take more questions.

we are seeing that Three more are there.

We'll continue

and close it.

Hi. Can you explain this cost inflation pass-through in the domestic projects, and the delayed payment when you're experiencing, do you think there could be a risk to the passing inflation through in these domestic projects?

All our domestic projects has an escalation formula. The formula could vary from customer to customer, but it has got an escalation formula consisting of steel, cement, labor, fuel, other factors, and all that.

Based on that, whatever is the increases in some cases, it is fully covered; some cases, it is 90% covered; some cases, it's more than 100% covered. That's a formula.

Therefore, generally, any kind of increase in the domestic contracts, there have been no issues in terms of cost increases, except in sometimes when there's an abnormal increase, like happened in 2004, '05, there was suddenly an abnormal increase in the price of steel. From that of 17,000, it went up to 65,000 over a period of 1 year.

Unless such kind of situation, normally it is manageable within the escalation formula. Internationally, most of the contracts are fixed-price contracts, barring some exceptions here and there.

For international price, we have a well-developed escalation formula. Normal price increases gets absorbed through that formula, which we put internally in the pricing itself, we do that.

In Croatia, which is our biggest contract to date, is something where up to 10% of cost increase, we need to absorb. Beyond that, it has a pass-through.

Therefore, everywhere we are properly provided for. We will see comparatively limited impact.

The second question I had was on this labor minimum wage increases we are seeing in some protests we are seeing in northern states. Are you experiencing the cost increase as well as some degree of shortage or protests in any of your sites in India?

See,

we are not seeing that kind of situation. We have whatever minimum wages and labor code-related increases, we have already factored all that.

We are going as per the revised code.

Avnish, labor issues are across the board, so that availability we are trying to manage how it can be managed. There is an availability issue of the labor part, but not protests, nothing like that.

Great. Thank you.

Hi, sir. Thank you for the opportunity.

Sir, you said that we have bidded for couple of projects where bid is yet to open. If you can specify what's the number and also how much is in India and outside India?

It will not be very appropriate for me to mention the bidding values, amounts, and other things. More or less, we would say that we are reasonably confident of achieving this ₹30,000 crore order book guidance.

In terms of domestic, international spread, it could be roughly about 40-60 or so. Domestic will be around 60; international will be around 40.

Depending on which order we get, it could get shifted also in terms of percentage.

Got it, sir. Sir, now just to clarify the capex number that we have said, ₹1,069 crore, but in the cash flow, that number is much lower.

Obviously, the cash outflow would be happening or would have happened in the Q1 FY27. When the depreciation, whatever the capital work-in-progress, I hope mostly it would be related to the TBM.

How one can look at this ₹100 crore quarterly depreciation that we have seen in Q4, a broader sense how one can look at how it can inch up for FY27? FY27,

it will be the similar number. Maybe marginally it will be up because you yourself has said that these capex whatever TBM we have added 1,000 odd crore, so that is going to get added in the gross block and so accordingly, there will be some incremental depreciation.

It will be in line with FY26 and plus some increase towards all these additions.

Okay. Sir, is it possible to break it down the other income for FY26, ₹374 odd crore, the way we give in the annual report?

Two heads that I'm trying to look at. One is obviously the interest income, one is obviously the arbitration one and the other one is the other interest, and what would be the balance?

Balance, I can minus it. These two numbers if you have for FY26, what would be the interest on arbitration awards and what's the other interest in other income?

That is interest on arbitration is ₹19 crore, and other interest is ₹61 crores.

Okay. Put together, only ₹80 crore is the interest part is there out of ₹374 odd crore?

Yes.

Okay. Okay.

Okay. Just one more thing in terms of when we mentioned in previous answer that ₹260, ₹265 crore is kind of a one-off provision that was there in the 4Q.

Till now in Q1, any broad sense that how much Because the way we consider arbitration as a normal part of our business, this provision one should be considering as a normal part of business and not kind of a one-off. Depends how one can look at.

Just trying to see till now, have we kind of a done any kind of a provision in Q1 till now or are likely to be there?

No, no, no.

Okay. Okay.

Okay. Got it, sir.

Thank you.

Thank you.

Thanks for the follow-up. Sir, I wanted to know on the Croatia order that road projects got cancelled due to budget constraints.

For the railway projects, do you feel there might be collection issues going forward or how do you see that?

ECB has already approved the entire amount,

and

the funds are already there with them. Therefore, we don't find any issues.

Even with respect to road projects also, there is an ECB approval for the funding up to a value. Because there were a series of tenders, not this two tenders alone, there were other tenders as well.

As all were higher between 20% to 40%, 45%, they decided they will cancel the tenders and revise the estimate, get the approval from ECB, and then go for fresh bid. That is the reason it got cancelled.

This one has already been approved with ECB and all the others.

Got it. Got it.

Sir, in terms of L1 orders, do you feel any other orders are also at risk of cancellation?

No.

Okay. Okay.

Thanks.

Sir, just a follow-up on inflow side given the pipeline of projects that you have and the L1 positions pending as of date. What is the visibility on inflows for 27?

You mean order inflows?

New order inflows, yes.

New order inflow, we've indicated ₹30,000 crores, out of which we have already received ₹8,000 crores, and another about ₹7,000 crores, we are L1, and further ₹15,000 crores. Total ₹30,000 crore is the guidance for the year.

Okay. Okay.

Largely, these will be orders in India or are you looking at other geographies also for the same?

It will be a mix of both.

Equal split?

Roughly about 60% domestic, 40% international for the balance of the orders.

Got it. International will be similar geographies where you're present currently or you're exploring new areas?

No, mostly it will be similar geographies.

Okay. Okay.

In this Middle East, rebuilding or reconstruction activity that could be there, in your assessment, how big could be that opportunity?

Already Abu Dhabi has expressed $55 billion, and similarly, other opportunities could come up. Bahrain is quite deeply impacted.

At this point, it is too premature because even in terms of timeline of reconstruction also, we need to see. From the second half only, it could start.

Therefore, today, we are not factored in the reconstruction part of it in our assessment.

Okay. Sir.

Sure, that's it from my side. Thank you, and all the best.

Thank you.

Hi, sir. Thanks for the follow-up opportunity.

Just to clarify, the ₹8,000 crore orders that you mentioned, these are already confirmed orders that would be a part of your order book? If you could give some color on which orders these are because if you could

explain. Sure.

Out of ₹8,000 crores confirmed, ₹373 crores is already part of our order book. Croatia, we have not taken in our order book yet.

₹373 crores of DMRC and ₹7,544 of Croatia are the orders in that ₹8,000.

In our pending order book, we have not taken the pending order book of 31st

March. 31st March, this are first quarter.

Yeah.

Right, sir. Then this would be your ₹8,000.

You'd mentioned there is clear visibility in place for 50% of the three ₹30,000 crore order book.

Another two orders, we are already L1, where Vadhavan is a public knowledge, and it's around ₹5,300 and odd crores. There's one more job where we are L1, which is the rest of the amount.

That'll be about ₹1,700 crores to make up the total ₹15,000 that you're talking about? Yeah.

Yes.

Okay. Understood.

Thank you.

Hi, sir. Thanks for the opportunity.

Just one question. You mentioned about the Pune Ring Road coming up in Q1.

What could be the opportunity size over there?

Most likely, they're awaiting the cabinet approval. It could be around the similar size whatever they have made earlier.

What they are trying to do this time is, instead of going a basic number and then go for above the estimate and all, they've updated the estimates and calling for the bid.

Understood. Thank you, sir.

Thank you.

Thanks, sir, for the opportunity. Two questions.

One is there is this invocation of Lombard guarantee, which was mentioned as one of the note items. Just wanted to understand if there is any impact on the earnings for the quarter on account of that.

That is one. Second is on the buildup of contract assets.

You had earlier guided that there would be a liquidation which we can see on buildup of these contract assets as the billing would be certified and so on. Basis the commentary, we understand that that is taking some time.

Can you still give us some guidance as to when we can see the liquidation of the short-term contract assets in the future? Yeah.

On your first question, Gabon, we have already paid that bank guarantee invocation, and in that contract, anyways, we were not recognizing any margin, and whatever was to be provided, we have already provided for the expenses. As we have communicated earlier, we have close to 92% or so we had completed the project.

Since the contract at the moment, we are not recognizing anything as such thereafter. Now coming to your second question of liquidation of some of the contract assets, as I explained that some of the receivables, in March itself, we were looking at a liquidation, and it could not go through.

We are looking at those liquidation maybe, say, by June, we should see a sizable liquidation in the range of, say, ₹1,000 odd crores. With that, we'll see that getting realized, and also we can look at reduction in number of working capital days, which we are looking at an elevated number of 143, 100%.

Thank you, sir.

Thank you.

Hi. Just quick follow-up.

These delayed payments you experienced in government projects, did you also experience the same in private side in India?

Private side, we have not seen that. In

the government side, it's mostly state versus central or across the board?

I think it is across the board.

Okay. Thank you very much.

Thank you.

Thank you very much all the analysts, investors, and our friends from the industry, and we look forward to an exciting period ahead. Stay invested.

Thank you.

Thank you.