Good afternoon, everyone. On behalf of Ambit Capital, I thank the management of Ahluwalia Contracts India Limited for the opportunity to host their Q4 FY '26 earnings conference call.

To discuss the results, I'm pleased to welcome Mr. Shobhit Uppal, Deputy Managing Director; Mr.

Vikas Ahluwalia, Director; and Mr. Satbeer Singh, Chief Financial Officer.

Now, I invite the management to take us through the key highlights of the quarter, post which we'll open up for Q&A. Thank you, and over to you, sir.

Thank you so much. Good afternoon, everybody.

Thank you for joining in on this investor call. Ahluwalia Contracts India Limited has announced its financial results for Q4 FY '26.

During Q4 FY '26, the company has achieved a turnover of ₹1,322.30 crores and a PAT of ₹80.14 crores in comparison to a turnover of ₹1,215.84 crores and a PAT of ₹83.16 crores during Q4 FY '25. The company has registered a growth of 8.76% in turnover and a de-growth of 3.63% in PAT during Q4 FY '26 in comparison to Q4 FY '25.

EPS of the company for Q4 FY '26 is ₹11.96 as compared to EPS of ₹12.41 in Q4 FY '25. During Q4 FY '26, the company's EBITDA margin is 9.35% as compared to 10.17% in Q4 FY '25, and PAT margin is 5.95% as compared to PAT margin of 6.74% in Q4 FY '25.

During FY '26, the company has achieved a turnover of ₹4,565.20 crores and a PAT of ₹264.32 crores in comparison to a turnover of ₹4,098.62 crores and a PAT of ₹201.51 crores during FY '25. During FY '26, the company has registered a growth of 11.38% in its turnover and 31.17% in PAT in comparison to FY '25.

During FY '26, EPS of the company is ₹39.46 as compared to an EPS of ₹30.08 in FY '25. During FY '26, the company's EBITDA margin is 9.52% as compared to 8.34%, and a PAT margin of 5.70% as compared to 4.85% in FY '25.

Net worth of the company has crossed ₹2,000 crores as on 31/3/2026. The net order book of the company as on 31st March 2026 is ₹21,096.31 crores to be executed over the next 24 to 30 months.

Total order inflow during FY '26 was ₹10,257.39 crores. At present, we are L1 in two projects amounting to ₹1,620.95 crores.

Thank you. We are ready to take questions.

Hi. Thank you, sir.

A couple of things, sir. Sir, now we are L1 in two projects, if you can specify would be great.

Sir, now how we can look at the full year in terms of the order inflow? Given that we are already at ₹21,000 crore-plus and plus ₹1,600, kind of what, ₹22,700-odd crores.

Now will the execution ramp up significantly in FY '27, '28? What kind of a number one can look at in '27 and '28?

Shravan, yes, the order execution will ramp up now. We have stocked up as far as our order book is concerned.

We are giving a guidance of 15% to 20% in this year. As far as the order inflow is concerned, our target is about ₹8,000 crores.

Including this L1?

Yes.

Okay. Sir, for this even FY 15%, 20% also seems to be lower.

Rather, it should be at least 20% kind of a number. FY '28, can we see a much higher in terms of the execution?

Sorry, come again? I've given you a guidance of FY '27, right?

You're saying that further on you're asking me about FY '28, is it?

So 20 even FY '27, this 15%, 20% or rather it should be a minimum 20% that's what I was looking at. FY '28, how

Aap dekh sakte ho ki main pichhle do ya teen saal se jo guidance de raha hoon woh 10% se 15% de raha hoon. Jo humari order book hai aur because we are well stocked up, aur doosra, jin states mein hum kaam kar rahe hain ab stable government aa gayi hai.

To us hisaab se isliye maine nearly five percentage point humari guidance badha di hai. To aur doosra, kuch kaafi saare abhi bhi jaise headwinds hain primarily due to war, woh ek badi uncertainty hai.

To isliye is waqt I don't think humein isse zyada guidance dena prudent hoga.

Okay. So '28 maybe similar kind of and then the margin, sir, woh thoda sa we were looking at 10% at least, but actually woh 9.5% tha full year FY '26.

Given obviously the commodity run-up because of the war, how we look at the margin in 1H also and We're looking at

the margin profile as I've said in my last call, maine double-digit indication diya tha and we are nearly there. We are at 9.5%.

This is in spite of numerous headwinds that we faced in the last quarter. Elections which were in early April.

March was a right off on account of the fact that due to SIR and elections in Bengal and Assam, a lot of labor left the other parts of the country where our projects are, especially NCR, jahan nearly 40% to 50% humare projects hain. Woh yahan se chali gayi.

Aur doosra, war began in end February. March mein uska bhi impact hua, plus kyunki Bengal mein aur Assam mein elections the, Assam mein to majorly slow down hua execution mein because the state started facing cash crunch.

To in spite of these headwinds, we have managed to increase this thing by 9.5%, which is more or less in line with the guidance that I've given last time. We will be into double-digit margins in this year.

Okay.

Okay. Lastly, sir, a couple of balance sheet data points.

Mobilization advance, retention money, and unbilled revenue.

Satbeer is going to answer this, Shravan.

Mobilization advance is ₹802 crores. The retention is including non-current is ₹450 crores.

Unbilled revenue is ₹688 crores. 688.

Sir, just a two, three other projects, particularly the CSTM railway station. Correct me if I'm wrong.

Third quarter order book and now it seems that a ₹470-odd crore execution has been done. Is there any adjustment in that because it seems the execution is much better.

If it is, how one can look at the FY '27, '28? Similarly, the Indian Jewellery Park one and the recently won the Central Vista, ₹2,600 crore ka jo project

hai? Jaise ye aapne bola CSMT, wahan execution last year se is year dekhein aap to kaafi zyada ramp-up ho chuki hai.

The designs are now approved and the project has picked up speed. We will see an increase in the revenue from this project.

As far as Central Vista is concerned, this is a design-build project. The project was awarded to us in January, on 14th January.

Our design is getting frozen. We have begun execution on the ground.

One of the two buildings, Nirman Bhawan, has been fully demolished and we've started excavation and concrete. This year, we'll see substantial revenue being accrued from this project also.

IJPM, at the moment, the designing is happening. There the work on the ground will begin in the last month of this quarter.

Okay. Okay.

Thank you and all the best, sir.

Thank you.

Thank you. Hope I'm audible.

You are. Thank you.

I have a question.

Hi. See,

in recent quarters or maybe in recent years, we have seen a noticeable step-up in our CapEx intensity. However, this increased investment hasn't yet translated into a corresponding expansion in EBITDA in a significant manner, which would exert downward pressure on our structural RoE.

If you can help me understand if this lower asset turnover is a new normal of the business, or because whenever we have been exceptional in terms of return ratios and lower depreciation with disciplined CapEx. Now, the higher CapEx is not commensurately increasing the margins, and also depreciation is increasing as you can see.

Now, is it a new normal for the business that what we used to enjoy maybe a decade back or maybe three, four years back also is distant in terms of return ratios? Because the CapEx is increasing and it is not, at least the way in which I see it in the last one year, it is not increasing the margins in general.

Just want to understand structurally is the company going through a different shift or the industry is going through a shift where CapEx is needed to stay in the same place and not excel in the operating margins?

See, a very interesting question, Mr. Lakshminarayanan.

Yes, the last point that you made, both the industry as well as our company is at an inflection point. What we see now, if you've tracked our company also, since we are only in buildings and factories, the size of the orders, individual orders, has gone up considerably.

The timelines are getting squeezed. What that means is that at the scale at which we are operating, the buildings are becoming more complex.

To handle such buildings, CapEx will go up because we require mechanization. The need for machinery or mechanization is further enhanced because of shortage in labor.

What we've been seeing over the last two, three years that there are various factors which now virtually round the year lead to a shortage of labor. Earlier on, it used to be for a couple of months, maybe around jab katai hota tha April, May mein, ya festive season hota tha towards the end of the year.

Now virtually through the year, every month or so, the labor supplies is disrupted. Hence, the top management of the company decided a couple of years ago that we would invest in mechanization.

The full effects of which, while this is the new norm, right, but the full effects as far as our company is concerned, since we have been at this inflection point and we've been preparing for it as we have said in our past couple of investor calls, the impact towards the positive side will be seen in the coming couple of years. Our margins will go up.

You will see that. They've already gone up in the last year and you will see them further going up in this year and the following year.

More so, the higher CapEx also is on account of the fact that over the last two years if memory serves me right, we've taken an order inflow about ₹18,000 crores. We're well stocked up and that we are well geared to execute this in the next three to three and a half years.

One. Secondly, because of our presence in areas like say Bihar, Bengal, Assam, NCR of course being our backyard, now all these areas have very stable governments.

The governments are the same in these states and in the center. The cash strife or the payments issues that we had faced earlier in these states, we feel they are a thing of the past.

Going forward, I think that's why we're giving you an increased guidance on the margins as well as topline. Got it.

Got it. The depreciation would continue to meaningfully increase or what would be the increased in depreciation or the CapEx with respect to the revenue growth?

Because we have an exceptionally strong order book. Just want to understand how do we kind of map it in terms of whether the CapEx would grow higher than the revenue growth and therefore higher depreciation.

Is that how to think about for the next three or five years?

As I said, the CapEx in this year FY '27 will be on the similar lines. In fact, a couple of quarters ago, I had given a guidance of CapEx of about ₹500 crores.

As we moved along, we've factored in some headwinds and we've factored in how by increasing the efficiency of our machinery, we've been able to reduce the CapEx in this year to about ₹274 crores. I think moving forward, around ₹300 crores would be the CapEx in FY '27 also.

Depreciation would increase, but on similar lines.

Got it. This is helpful.

Just one question. See, if you look at that inflation has actually increased across the board driven by fuel prices.

Now, since our projects are L1 and you'll have limited room if I think, how do you ensure that the margins are protected, or this is something which you have to keep in mind that it's difficult to negotiate for the price increases as you execute the projects?

The answer to this is twofold. One, almost all of our contracts now have a built-in escalation clause.

To cite an example, this ₹3,000 crore contract of Central Vista, there is an escalation clause, 10CC, which is based on Wholesale Price Index. Where labor is also covered and the material increase is also covered.

Having said that, what we've seen in the short term, in the last one, one and a half, two months, the WPI has not moved as much or if the movement is not commensurate with the actual increase in prices, especially the metal prices. We have, not only us, but the other construction companies have also represented to the government directly and through industry bodies, that they should take a look at this.

The ministry is taking an actual look at how, when they principally have agreed to compensate in price increase to the contractors, how they can be more fair. What I can say at this stage is they are also biding their time.

They're seeing how long the impact of this war is going to last. If it is a prolonged impact, I think wherever there is a gap between the WPI uptick and the actual inflation, that they will find a way to compensate us.

As regards our private clients, like say DLF or other large builders or developers like Brigade or Mahira and so on, and Signature Global, all heavy material like cement, steel, raw material, the basic price of procurement is a pass-through. The inflation is a pass-through.

We are adequately covered. Having said that, if the war prolongs for a longer period The

Please stay on Hello? I'm listening.

Hello? That is that.

Thirdly, as I said, the industry bodies, the various clients, contractors, they are talking to the government. Pollution mitigation measures have been taken on-site like, again, at the Central Vista project, we've got mist sprayers all over the site, along the boundary, along the fencing, on the building, on and so forth.

All these efforts, I think, will lead to a reduced impact and hence the number of days of shut down, I think, should be lesser this year.

Thank you so much.

Thank you.

if you see our order book has doubled over the past two years, but our revenues have grown at less than 9% CAGR over the past two years. What I'm trying to understand that what has changed in the current year that we will do approximately double the revenue growth that we have been doing since the past two years?

Because orders were anyway not a issue.

As I said, most of our slow-moving projects, like say somebody asked a question about CSMT. CSMT, which was till recently one of our largest order wins, that for the first year and a half was a slow-moving project on account of the designs getting changed and approvals getting delayed.

Now, that has picked up speed. Secondly, projects in states such as Assam or Bengal and Bihar, which were slow-moving because of political upheavals, now all these states have a stable government.

These projects are again, I think, will move much faster. Thirdly, with a lot of our orders such as large orders, such as the two airports that we are doing, again, design is a thing of the past.

Now, we are looking to complete the Varanasi Airport actually ahead of schedule because there are elections next year there. Darbhanga also will be closed out in this year.

Kota, which is a new order win for us, there designing is happening and two months down the line we'll be breaking ground. As I said earlier, Central Vista, which is our largest order win till date, there we've already broken ground and due to the nature of that project it's a fast-moving project where we'd be logging a turnover of close to ₹100 to ₹150 crores a month.

All this will contribute to the growth projections that I have given at the beginning of my call.

Now, sir, if I remember correctly, two years back you had said that to the question that why our margins had come down from low double-digits to low teens to basically single-digit margins, you had said that once the private sector order book becomes the lion's share of the business, margins will again go up. Sir, now that has happened.

Now I think over 60% of the order book is of private clients. Sir, now at the time of bidding, you must be keeping some margin in mind before bidding.

On this order book when we execute it, will we be able to reach that kind of margin?

As I said during my last call also that the margin will go up and we will be near about double-digit or we will hit a double-digit this thing. We are nearly there.

In the last one year also, as our private sector this thing has gone up, exposure, we have increased from 8.3% to 9.5% as far as EBITDA is concerned. As I am saying, going forward, this will further increase.

We'll be well into the double-digits now. I had also said last time, the glory days of 13% to 14% are or the teens, to say, are I don't think there are too many factors which are beyond our control.

I don't think in the short term we will be getting there.

Sir. Now that 12%, 13% margins are no longer.

Sir, basically what has changed fundamentally in the industry that the margins have come down? Because one would have expected the operating leverage to kick in.

When we were doing 1/3, 1/4 the current revenue base, that time we were doing 12%, 13% EBITDA and now with triple the revenue, we are doing 9.5%, 10%?

If you were to see, this is an industry-wide phenomenon. All of you would have done a peer comparison.

We have done it. Not only now, last few quarters we're doing.

We're consistently in the higher bracket of the kind of results or margins that we are declaring, right? If this is an industry-wide phenomenon, part of the reason is that while the industry is growing, the CapEx is growing, the skill levels are actually deteriorating, labor shortage is increasing.

That's why I'm mentioning that this industry is at an inflection point. While we are aspiring or aspirational to make buildings at par with those being made or having been made earlier in the developed part of the globe, but the skill levels don't exist.

I think be it the government or the developers or the contractors, they are realizing this now. Hence, more and more mechanization is happening.

It will take time. Even with mechanization, we need trained crane operators, trained excavators operators, pump operators, on and so forth.

There is a skill shortage across the board. This cannot be upgraded at the press of a button.

This takes time.

Hence,

the margins have come down across the board.

Understood, sir. Now, sir, what is the net cash that we have?

Hold for a moment. Cash and bank balance is ₹817 crores.

Understood, sir. Sir, way back in 2008, 18 years back, our stock price was ₹350, and now it is ₹760.

Sir, basically the wealth has grown by 4%, 4.5% CAGR, which is less than the rate of inflation, and there have been no significant dividends also. Sir, and now that we are in a very comfortable net cash position, sir, don't you think we should do a big share buyback so that the number of shares can reduce and whatever future growth gets divided on a smaller equity base?

The government has reduced taxes on share buyback also. Because ultimately we are debt-free, then why just subsidize banks by giving them low-cost deposits?

Look, our industry has always been at the forefront of cycles. The cycles at times it's difficult to predict.

3 months ago, we were thinking that we were riding a wave, and all of a sudden the war hit, and the future is now quite uncertain. During such times, it's always better to have a war chest with you.

This is what our past experience has taught us. During the last downturn, when a lot of our peers fell by the wayside, we could survive the downturn, and we could continue to grow.

At the moment, a share buyback is not in the offing. That's not even crossed our mind.

Sir, now my last question is, sir, that are we thinking of putting up a precast facility, especially in the NCR region where we have a good business for the same reason of labor substitution and so on?

We are internally debating on how to use technologies which are being used in more developed nations. Precast pre-engineered building, precast building, these are things.

Also how to do pre-engineered services as far as MEP is concerned. All this is being looked at, researched.

For this to succeed, you need greater standardization. We are in active talks with a lot of our large clients where we are sort of convincing all constituents of the ecosystem to look at standardization so that more and more things can be done off-site and brought to site in knockdown condition.

This is something which is not something which is a short-term solution. As I said earlier, upskilling would also form a key part of all this.

Going forward over the next 2 to 3 years, yes, some of these will be brought to use in a lot of our projects, but it's not something which will be seen in the next year, year and a half.

Understood, sir. Thank you very much.

Thank you.

Hi. Thanks for taking my question.

Just wanted to understand on your guidance of 15% to 20% growth and double-digit margins, to what extent are the current macro headwinds sort of factored in your guidance? What are the potential factors which could sort of lead to underdelivery either on execution or on margins?

At a macro level, I think we've factored in quite a few, like political instability, as I said, in states. That is something now seems to be a thing of the past.

The only thing which can derail this is if the impact of the war, if this war is prolonged, and India's fiscal performance or financial performance or India's gap, it widens. The trade gap, right?

That is something which is beyond our control. Otherwise, and that will impact the rupee-dollar this thing also.

Otherwise, I don't really see any other reason which can stop us from meeting the guidance that I have given.

Fair enough. Just wanted to understand, can you just explain a bit in terms of how the impact of the war impacts our business either directly or indirectly?

When the war began, the first impact which was the immediate impact was the LPG prices or the lack of availability of LPG cylinders, which directly impacted the labor. The labor ran away to their native places because they use LPG to cook their food.

That was an immediate impact. Labor is a key resource today.

In fact, as I mentioned in an answer to the earlier question, that today we're facing a huge crunch as far as skilled labor is concerned. That was a direct impact.

Now, going forward, the price of fuel, this also now has an indirect and direct impact towards inflation. Thirdly, supply chain is badly disrupted.

A lot of materials or at least the components, say, to give you an example, electrical panels. Now, switchgear is not available.

The delivery of, say, a panel from the time that the order was placed, if it used to be 2 months, now it is not less than 4 months. There are delays everywhere on this account.

That has an impact on our overheads, on our IDCs.

Understood. That's helpful.

Thank you.

Thank you.

Hi, good afternoon, sir, and thanks for taking my question.

Hi, Parvez.

Hi. Couple of questions.

First, you said we are looking at adding about ₹8,000 crore of orders in FY '27. In terms of your target, would these be more towards private sector or government sector?

Also in terms of segments, will we continue to kind of stay away from this private residential orders and focus more on commercial and institutional orders? Just wanted to get some color on it.

The first question, answer to that is it would be in line with our broader vision, overall vision of having an equitable split as far as our client list is concerned. It'll be half and half tentatively.

As regards residential orders, in NCR residential is not a focus for us, but in the southern part of the country or the western part of the country, we are not averse to picking up residential orders with clients who are stable. Which was the last question that you asked, sorry?

Have I answered your questions, Parvez?

You answered my question. The second question is and I'm sorry if you've given this data earlier, what is the quantum of fixed-price orders in our order book currently?

This is 11%.

Sure. Lastly, in view of the significant amount of volatility, both external as well as even the domestic operating conditions, which you talked about labor shortages and NGT ban and so on and so forth, how is the competitive intensity in this segment now?

Has it increased or do you think some people have gone away from the segment witnessing the huge challenges which are there? Just wanted your thoughts on that.

While last quarter when we spoke or when I sort of took the last call, the competitive intensity was high. Over the past couple of months, there is a bit of a status quo.

Everybody or each constituent of the ecosystem is trying to evaluate where we are headed. The private developers have also slowed down fresh launches.

Government sector also, as I said, there was a spate of elections in various states. The machinery as such over the past couple of months was moving very, very slowly.

It would not be prudent for me to sort of predict or project where the competitive intensity is headed. I think over the next couple of months, people will bide their time.

Got it, sir. Thanks and all the best.

Thanks.

Yeah. Sir, just to harp on margins, you mentioned that we are expecting a double-digit margin for sure in FY '27.

Given the headwinds in terms of the rising raw material cost and the labor availability is a big challenge, what gives the confidence of that 10%-plus margins? Is it the mix of the order book right now?

It's the mix of the order book both in terms of private and public sector. It's also how the order book is spread geographically.

Thirdly, also because 89% of our order book, the escalation clauses are inbuilt. These are the things.

Most of our large orders, be it the Central Vista project, be it the DLF project, the escalation clauses are or the majority of the volatile materials are covered.

Okay. Sir, if I look at the top three projects, what kind of execution are we targeting in FY '27 from CSMT, Gems & Jewellery, and the Central Vista project?

CSMT would be around ₹600 crores. The Central Vista would be about ₹1,000 crores.

The third one, which one did you mention, Dalias?

IJPM?

IJPM.

IJPM, as I said, the designing is it would not be prudent for me to comment on that. We've kept our targets modest as about ₹100 crores.

Dalias.

Did you ask about Dalias?

No. Dalias, what are we targeting?

Dalias, yeah, Dalias would be to the tune of about ₹200 crores.

Sir, if I look at the IJPM guidance, earlier we were targeting a much higher revenue from the project. Any particular issue with that or are you seeing a delayed start in execution given the designing is going on?

As I said, we will start towards the end of this quarter, but there are certain changes in design which are happening there. That's why we've kept our target modest or conservative in terms of our projection for the topline from this project.

Okay. Secondly, in terms of depreciation, it was around ₹29-odd crores in Q4.

Do you see this run rate going forward?

Yes, that should be on similar lines in proportion to that. Already this is 66 to 97 this year depreciation.

According to 250 to 300, we are planning for the CapEx in the next year. Depreciation would be according to that proportionately.

Okay.

Okay. Lastly, on the working capital side, we have seen some increase this year, especially in the second half.

I was looking at the other current assets. It has jumped up significantly from 1,100 to almost 1,700-odd crores.

No, other current assets is including unbilled revenue and retention money, that definitely unbilled revenue has been increased to ₹688 crores.

Our working capital days has been 104, 105.

Hold for a moment. In the last quarter this was 103 days and now is 104 4 days.

Last year you are talking about this was around

I calculated working capital ex-cash. It

was coming around It has increased there, but definitely, but this is in line with the our system trade.

Yeah. We see some reduction in '27 or it should be at similar levels?

That is,

I think, that is standard. This is 104 days, that is standard.

It should be at similar levels going forward?

Yeah. Okay.

Okay. Sir, lastly, in terms of since larger part of the elections at the state level have been done in this year, will be completed, labor do you see should be a better compared to what it was last year?

Look, last 3 months have been particularly bad for labor. I think going forward, things will improve.

Labor shortage is here to stay. As I mentioned earlier, there is a deficit of skills also.

Then the labor is only coming from a handful of states, three or four states only. Construction pipeline is increasing exponentially.

This is a problem that we will have to continue to grapple with. We are looking at more mechanization, we are looking at upskilling, and we're looking at standardization helping more mechanization.

All the constituents of the ecosystem are coming together to see how we can combat this. Over the next 3 to 4 years, this is a problem that will be there.

It's here to stay.

Are there any payment challenges in particular states?

At the moment, no. There were challenges in Assam over the last 4 to 5 months.

The state machinery was preparing for elections. As we've seen generally, 3 to 4 months before the elections are slated to happen, everything slows down.

We've seen an uptick post the elections there also, as far as release of our funds is concerned.

Okay. Okay.

Thank you, sir. Those were my questions.

Thank you.

Hi, sir. Sir, my first question is on the uncertainties that you highlighted on account of war.

Is it also impacting our pipeline? Are the new projects, new bids being delayed?

Pipeline is impacted, but we are not that affected because we are well stocked up. We have an healthy order book.

Going forward, we are sort of biding our time. We are waiting and watching, and we are only picking up, going forward, contracts with either our existing clients or well-established clients with deep pockets.

We are not that affected. Yes, the pipeline overall, as I said in answer to an earlier question, everybody is sort of waiting and watching and trying to see kis taraf oont karwat leta hai as far as the war is concerned.

Sir. Sir, we have I think reported this time our order inflow and order book excluding GST values, right?

We have also given the past year numbers. Can we get the order inflow for this quarter if we want to compare it with last quarter or last year quarters?

This quarter, we have not received any kind of order. During current year, you are talking about?

Q4,

Q4. I'm talking about Q4.

That comparison we have to see. We'll get back to you.

You are asking for the order inflow in Q4, is that what you're saying?

Quarter 4 comparison to quarter 4 '25.

Sir, correct.

Our order inflow our Q4 FY '26 was ₹4,300 crores. Regarding FY '25 quarter 4, we will get back to you.

Sir.

Maybe you can reach out directly to our CFO, Mr. Satbeer Singh, and he'll provide you with this information.

Sure, sir. Sure.

Thank you.

Thank you. Sir, just to clarify, you said the Q4 order inflow was ₹403 crores?

₹4,300 crores.

₹4,300 crores. Okay.

All right. Got it.

Thank you. Sir, secondly, my question was on execution in the residential real estate segment.

I think you also mentioned that new launches have been slow. Looking at the execution in a couple of projects like Signature Global and Whiteland, we haven't seen too much progress the last three, four quarters.

Is there some broader issue here or these are kind of project-specific slowdown in execution?

No, as far as both these projects, the work on the ground has picked up in real earnest. Whiteland, they had due to frequent nodal changes, as some of you would know, first there was a revised disaster NDMA code, right, which was later discarded and the government ordered to go back to the original code.

A lot of developers went into redesign to optimize cost. That is behind us.

In Whiteland, we have begun work on the foundations. Concrete casting has started.

Signature Global also, work is started on all the towers. I think we are doing eight towers there, a total of 5 million square feet of built-up area, and work has picked up there.

Broadly you're not kind of seeing the sector as a whole at some sort of a risk of slowing execution because new

No, as I said, the sector definitely the prices at which these developers were selling, they've plateaued off. The war, as I said, has impacted each and every constituent of this ecosystem.

It's not only contractors, but also developers who are biding their time and they're waiting and watching to see what happens going forward. Everybody is looking to conserve cost and the sentiment is also muted.

That kind of effect is there. Specifically talking about the projects that we are doing, you mentioned two, Signature Global as well as Whiteland, we see no reason to believe that the client is looking to slow down the projects that we are executing.

Understood, sir. Great.

Thank you so much.

Thank you.

Sir, do we enjoy any advantage in terms of the procurement side over the competition? What,

Keshav, what kind of advantage?

Sir, costing. Since we have a large size versus most others, do we have better credit terms versus our suppliers versus the competitors with our suppliers and vendors?

We would like to think so, but to answer your question more directly, yes, I think we feel we are handling the supply chain issues to the best of our ability. As I mentioned earlier, if you're looking to cut down the timelines on, say, a project like say the Varanasi Airport where our stipulated date of completion is June '27, but we're looking to complete it before the elections are announced, that is by January '27.

In such challenging times if we are aspiring to do that, I'm sure we would be handling the supply chain constraints in a fairly decent manner. Given the challenging times, I think we're doing an okay job.

Sir, amongst all the competitors, who would you consider your top competitors, some two or three names?

L&T, as I said, L&T B&F is a competitor. Nagarjuna is a competitor.

Shapoorji is a competitor. Kalpataru is a competitor.

Tata Projects is also now, they've gotten back into buildings, it seems. These are four or five people who bid alongside us on a lot of projects.

Sir, now since most of these players have a very good overflowing order books, sir, do you expect the bidding intensity to cool down? At least for us, now that we have a very comfortable order book, going forward, whatever bids we will put, will we be selective in those that only the high-margin orders we would bid for or what's the outlook on the bidding intensity?

I said that, Keshav, earlier also that we are very choosy. We are also biding our time, and we're not only doing our due diligence, but yes, we're looking to increase our margin profile going forward.

Now,

sir, lastly, if let's say a customer is delaying project on his side by not releasing the funds after every milestone is completed by us, sir, then what is our strategy? Do we stop the project, or do we put our own capital and complete the project and wait for the client to release funds in future, or how exactly do we go about it?

While there are some standard guidelines, there are SOPs within the company on how we have to operate. This starts from the time that we choose on which project to bid.

We check the customer profile. We do our due diligence.

Certain set of factors are there which lead our people to decide on the go, no-go. Once we bid for a job, once we're successful, then our endeavor is that we try because our IDCs are pretty high.

Our endeavor is to work at a steady pace as per a targeted schedule. We are in constant dialogue with the client when there is a slowdown or is an expected slowdown.

If we feel that there is increased turmoil as far as the financial position of a client is concerned, then at times we slow down also.

Sir, what is the maximum hit that we have taken in the past on any single project due to the customer either going bankrupt or getting into financial difficulties or due to any other reason?

That's a very general question. You would need to reach out to our CFO with a slightly more focused queries.

If I was to say, the details on our write-offs are there for the past 2, 3 years on a few of our clients who have gone under, the likes of Jaypee or the likes of Astertech or the likes of HDIL. If you've been a part of our concalls or investor calls over the last 3, 4 years and if you followed this industry closely, then you would have the data.

We can provide that data to you. All that I can say is that the way we do our due diligence, I think we've survived the slowdown much better than a lot of our peers.

Whenever we have seen in the past that a client is facing increased turmoil, we've sort of engaged in a barter. We've taken real estate inventory off them so that our risks are mitigated.

Understood, sir. Thank you very much.

Thank you.

Thanks for the opportunity, sir. I just wanted to ask gross margin during the quarter was relatively low.

How much this is due to inflationary pressure?

Again, number of factors for the gross margin being low. Because of the enhanced order book, we built up our costs, be it on account of increased staff, primarily on account of increased staff as well as the salary enhancements, the increments.

There was a slowdown. As I said, the war started in February and then elections were also there in April.

The impact started in February for that also. Then January this year or the last quarter, Q4, January was also impacted on account of NGT.

All that led to our topline would have been much higher if these impacts would not have been there. Our IDC led to a decreased margin.

Then, yes, inflation also played a part, but not so much as I said. A lot of it is covered by the escalation clauses in most of our contracts.

Okay. What is the time lag for recovering that higher inflationary cost which you built in the escalation clause?

Generally, it lags by a quarter. There are two kinds of clauses which are there.

On the government sector side, it's the WPI for which once the index is published, quarter-to-quarter the billing which is there is sort of the enhancement is worked out. On the private sector side, it is the volatile materials like cement, steel, grit, sand, it is more or less immediately, month-on-month.

Okay. Got it.

As on earlier concalls, you mentioned that we take the employee cost increase in the month of Jan or Q4. Does we take this year, too?

Yes, we did actually.

Okay. Got it.

Last one is that CSMT total order value has been decreased. What's the reason for that?

The GST has been factored in that. That's because of earlier with total amount was 2,450, but excluding GST it's 2,076.

All the figures that we've given with these results are without GST.

Got it. Thank you, sir, and all the best.

Thank you.

Sir, thank you for the opportunity. Sir, I just wanted to understand what kind of IRR or payback do we expect with these mechanization projects because on one side you mentioned that meaningful benefits to our margins would be three to four years down the line.

Whatever CapEx that we have done in the past two, three years and the ₹300 crore that we'll be doing this year, how should we look at it from a payback or an IRR perspective?

Look, the IRR should go up. It'll be very difficult to give you an absolute number, but the enhancement should be between 7% to 10% because our hiring costs will go down.

Generally, it would be about four to five years compared to

Generally, the life of an equipment is taken to be about four years. The payback would be in about four to five years.

More than that, you can say, sir, in shuttering we are taking that life cycle is around four to five years, but for the other assets we are taking cycle around seven to eight years also depending upon the life of the assets.

Got it,

sir. It depends on equipment to equipment.

Got it. Sir, when we say IRR enhancement, is it that so for a current project, if we get a 20% IRR, whatever mechanization project that we are doing, that should increase by additional incremental delta of 7% to 10% or how should I look at it?

I am not very clear on the enhancement part of IRR.

I don't understand your question. What I'm saying is that the CapEx that I'm doing, the rate of return on account of that CapEx will go up by about 7%

to 10% in form of savings. Basically,

we work on the EBITDA and other kind of factors. You can speak about the EBITDA also, please.

For EBITDA margin improvement can we expect over a three-year period of two years?

No. Not at all.

Frankly speaking, I'm a little confused about this question. I don't know if you could articulate it in a slightly better form, maybe I'll be able to shed more light on it.

Yes. We've done close to, I think, in the past three, four years we've done close to 400 ₹500 crores of more than ₹500 crores CapEx, and we'll be doing additional ₹300 crores this year.

There has been no meaningful improvement in our EBITDA margin or employee expenses. How should this whatever investment, how should this flow to our revenue and how should this flow to our margin?

I'm trying to understand that. Look,

I did mention earlier, right, that the industry is at an inflection point due to a huge shortage of labor and due to the complexity of the building getting increased exponentially. The industry as such is going towards more and more mechanization.

10 years ago, you would only see a handful of cranes or not every project had a crane. Now, every project has four or five cranes.

If you see the Aerocity, the project that we're doing, we have 15 tower cranes there, right? The downtown project that we're doing for DLF, we have seven cranes there.

What I'm trying to say, it's the nature of the buildings. If every building in NCR or in Gurgaon is 40, 50, 60 stories, Earlier on, the buildings used to be four stories, six stories, eight stories, 10 stories.

They could be done without tower cranes. Now, not only tower cranes, you have passenger hoists.

You have state-of-the-art passenger hoists which take up not only building material, but also people. Each passenger hoist costs about 50, 60, ₹70 lakhs, depending on whether it's twin-cage or single-cage.

It's very difficult to say if you're putting a tower crane or if you're mechanizing and putting passenger hoist, that there will be a corresponding increase or projected increase in EBITDA by a percentage point or half a percentage point. The industry is changing very rapidly, plus we are forced to change on account of labor shortage.

The true benefit of these things will take time to accrue, maybe 4, 5 years. The industry will mature up, right?

There'll be greater standardization. We would use more industrialized techniques.

We would do more work off-site and get things in a knock-down condition to site, use machinery to erect it like we do in a Lego set. I don't think there is any metric which we can use or yardstick which we can use to say, okay, we've invested ₹20 crores in tower cranes and batching plants and concrete pumps and this will straight away improve our EBITDA by 1 percentage point.

Got it. Sir, to sum it up, from what I understood was because of the CapEx intensity for these projects increasing, over a medium term there should be industry consolidation and some amount of margin improvement from that.

Is that a fair understanding?

Over the long term.

We are,

any step that we take, say, tomorrow, for instance, everybody is talking about AI. If I start using AI to start analyzing my output, be it of machinery or labor, I can't say I'm doing it and the impact will be visible in my EBITDA immediately.

All these steps that I'm taking, be it for mechanization, be it for digital transformation, or any other company which takes these steps, they are with the long-term goal of increasing efficiency, right?

Got it, sir. That's perfect.

Sir, just a final suggestion as a shareholder. Sir, please consider a share buyback.

Thank you so much, and all the best.

Thank you.

Thank you. We are in a very good advantageous position in terms of our order book.

We are almost 2x from where we actually started. The visibility has actually meaningfully increased.

Now, how this is changing our bidding filters? Specifically, are we actively walking away from lower-margin contracts?

What specific margin threshold you're actually applying when you actually walk into a new order? Also, how are you sensitizing your entire sales machinery, which has actually done fantastically last two years?

How are you asking them to kind of pick and choose and not just push for bidding or even bringing the proposals to the management? How are you using this advantageous position to your advantage that incrementally the ratios and the margins only would get better?

It's a very good question, a set of questions, Mr. Lakshminarayanan.

As I mentioned earlier, we have a series of metrics which are our regional tendering departments and tendering department in central head office, there's a common set of metrics which potential clients when they call us to bid, we put them through those metrics. Then a decision to go or no-go first is taken by our regional heads.

Recommendation is given by them, and then they're passed on to the top management, namely Mr. Vikas Ahluwalia or myself.

Then we decide to whether to go ahead or not. As far as margins are concerned, we are actually A, walking away from a lot of projects even with existing clients where we've told clients that we don't want to overexpose ourselves if we feel that they are impacted or potentially going to be impacted by the slowdown.

As far as the margins are concerned, we've actively, as I answered earlier, our bidding, when we are bidding, most of the items are standard, right? When we're bidding now, we have increased our costing profiles, be it for labor or be it on account of staffing or our other IDC costs.

We are factoring in the enhanced costs that we are facing on a day-to-day basis, and also our profit margins by a couple of percentage points, if not more, depending on the project profile and the competition intensity that we foresee.

Got it. A couple of years back, you are smaller than what in terms of complexity as well as revenues and order book, right?

Now, the last couple of years, the complexity has increased with multiple type of projects, large project, and you admitted that the projects are even more complex. The way in which you are providing guidance also has to taking to account all these complexities.

For the last two years, there are a lot of things which are outside your control, which actually resulted in the deviation between what the guidance you gave and the actual numbers which reported. Of course, they are all external to you.

Now, in this context, right, how are you tempering the expectations and how are you improving your guidance sharpness so that there is less amount of perceived dissonance between what you say and what you deliver, and therefore how the market and the investors should react? Again,

a good question, but I'd like to sort of start by giving my own opinion on what you've said. By and large, we've always been very conservative in our guidance and we've more or less been able to achieve what we've guided in spite of headwinds.

Secondly, if you were to do, you already must have done a peer comparison of our results of the last financial year or even before that, we've constantly outperformed a lot of our peers. Having said that, to answer your question in a more direct manner, as far as a lot of factors other than the impact of war, while some impact is already factored in in the guidance that I've given, but most of the other factors that have impacted our performance or the headwinds that we've faced in the last couple of years, they seem to have been covered.

A lot of headwinds were created by elections now and different governments being there in the states that we are working in and the one at the center. That seems to have been taken care of now.

Secondly, our order profile or order mix mixture is more equitable now. Thirdly, we have a lot of fast-moving projects in our order book now, Central Vista being one.

Fourthly, our slow-moving projects are either over or they've started moving, CSMT being a case in point. All this has led to the guidance that we have given during the course of this call.

I'm just wondering whether providing guidance itself is a good thing because of the sheer complexity and a lot of things have moved away from your control, right? Given that, is it even do we even rethink the giving guidance itself is fine?

An

excellent observation. I wish more of your brethren thought like you.

I've always sort of struggled to people put words in our mouths and say, why are you being conservative? I think the nature of our industry is such that we are always at the forefront of a cycle.

As I mentioned earlier, 3 months ago, we were extremely gung-ho. We would have if we could have gone back in time and this call was held 3 months ago, I would have without batting an eyelid, I would have given a 20% growth guidance.

All of a sudden, the scenario has changed. What people don't factor in, our buildings are or even B&F has become very complex.

A lot of our projects are EPC projects. Supply chain is badly, badly disrupted.

It's not only about getting concrete or cement or steel, it's about panels, it's about other MEP products, chillers, transformers, on and so forth. A lot of components of these finished goods come in from overseas.

Yes, you're very right that we are more prone to disruptions or headwinds now.

Got it. Thanks for detailed explanation.

Thank you.

Thank you.

Sir, these two L1 projects, if you can specify which are these two projects and when the LOA is likely?

Shravan, ek to RML Hospital hai Delhi mein, aur ek university project hai Odisha government ka, Bhubaneswar mein. To iska abhi date dena mumkin nahi hai kyunki yeh puraane tender hue hue orders hain.

It will not be possible for me to comment on when they'd be likely to be awarded.

Is there also a possibility that it can be rebidded or cancelled?

That possibility is always there because it totally depends on the market conditions being what they are, escalation being what it is. Though there are escalation clauses inbuilt, but if they reach an award stage, we would also like to have a say on whether we would accept these orders or not depending on how escalation is worked out.

That possibility is there from both sides.

Okay. Broadly right now in terms of for us, the bid pipeline would be ₹7,000, ₹8,000 crore or even much higher?

No, it's about ₹8,000 crores.

Sorry, ₹8,000 crore, you say?

Yes.

Okay. Just so I was trying to understand why so much questions on the margin.

Just to give you one more perspective that because ultimately all the investors whatever their expectation, they want to build in whatever the numbers, the volatility or the sensitivity is decently high for us in terms of the margin. Let's say the 1% margin if it is higher or lower, 12% to 18% kind of a variation is there at the PAT level and that's why the more questions.

Everybody is trying to understand whether this 10% EBITDA margin that we are looking at, whether it can go to 11%, 10.5%, or on a lower side, can it be a 9%? That's the main thing.

In that sense, everybody is trying to understand. Whatever you have explained, given we are much better comfortable in terms of order book, the couple of projects are now fast-moving.

Broadly, let's say even FY '28 also we would definitely be doing kind of a 15%, 20% kind of a revenue growth. In that sense, the possibility of 50 bps kind of a improvement would be a higher versus going lower.

That's the way one can look at?

I think you've articulated it very well. To ye jo main kisi doosri company ke baare mein to 18% ya 15% ya 14% to bolna nahi chahunga, but main apni company ke baare mein jaanta hoon.

Main yeh bata sakta hoon aapko ki jitne risks ya headwinds humne pichhle do saal mein face kiye hain, war ko agar ek taraf rakh dein woh to kisi ke control mein nahi hai, a lot of those headwinds seem to be a thing of the past. I'm quite confident ki jo humari projection hai woh hum achieve karenge and that stems from the fact ki order book humari strong hai, humare clients ke profile achhe hain, and a lot of these orders are fast-moving orders.

Aur doosra, jahan-jahan hum geographically present hain wahan stability hai sarkar ki ya sarkaron ki.

Okay. Got it, sir.

Thank you and all the best.

Thanks, Shravan.

Hi. Good evening.

Thanks for this opportunity. I want to ask a couple of questions.

The first question is that there have been news in regarding to the poor monsoon this year. Will that impact our business in any way?

I don't think so. Look, the reports are that there'll be a poor monsoon and it may lead to an impact on the economy per se.

By the time that it trickles round to the projects that we have on hand, and I don't think there'll be much of an impact.

Okay. Great.

Sir, second question is regarding Central Vista project. Is there anything in terms of you have already discussed that I think the first level of execution has started.

The scale would be much higher, but is that comparatively a smoother project from an execution standpoint looking at the once we are sort of started the work on it because we have projected a higher number for the entire year and it has that NGT clearance also. Do you see any unexpected sort of variables coming into this project execution like we had of the past projects, but they were of a different nature and this is of a different nature?

No, I think this project, as you yourself said, that A, it is not impacted by NGT. B, Central Vista, all projects, the government is extremely aggressive on the timelines because they need these buildings.

This particular building that we are doing, or two buildings that we are doing, this will house the Ministry of Finance as well as the Ministry of Defence. The government wants these buildings as of yesterday.

Money, obviously, is not a problem for the Central Vista project. I don't see any challenges other than the fact that, yes, these are extremely complex buildings.

The advantage that we have is that end-to-end it's an EPC contract. A lot of activities or most of the items that go into executing this are going to be done by us in-house other than highly specialized items.

We have a greater control on the output on a month-to-month basis.

Right, sir. Thanks.

Sir, last one question I have. In the last concalls when we were discussing about a residential project, you discussed about a CapEx which we are doing specially for purpose of the tall buildings.

Now you just mentioned that outside NCR we are still open to have a residential buildings, and in the context of the margin and other discussions which we had in the call till now. I just wanted to check if we have those CapEx or those machineries with us and with the capabilities which we already have, does that give us the advantage in terms of the competitive advantage either at the margin level or at the clients preferring us while they want to execute this tall residential premium buildings?

It definitely does because, as it is the entry threshold or barriers, the bar has been raised as far as building construction goes. The very fact that it requires heavy mechanization for which CapEx is required, you require a stronger balance sheet.

One. Secondly, the pedigree in terms of meeting the criteria for qualification is also high.

Not everybody has the criteria or everybody meets the criteria. Yes, that definitely gives us an advantage.

The private sector, there are only four or five companies because the private sector large developers, they have their own criteria. Government has a set of defined criteria, but in the private sector it's more to do with the persons' whims and fancies.

I won't say whims and fancies, but it's choice of the developer or the top management and they purely go by the delivery of the potential bidders. Successful delivery, let me put it that way.

Sure. Thank you.

This was my question. Thanks a lot.

A couple of data points. You mentioned that mobilization advance is around ₹802 crores.

What will be the interest-bearing portion of that?

This is 37%.

You see this number remaining constant or it can increase further in next couple of years?

I think that is government project this is interest-bearing and more or less because 38% is the government order book. That's a similar line, mobilization advance is also there.

We think so It will not go up. It will stay at the same level.

Okay. Sir, lastly, what would be the margin money as of March '26?

Margin money you are talking about?

Yes.

This would be around Hold on. It's around ₹200 crores.

Okay. Thank you, sir.

Those were my questions.

Thank you.

Thanks for the opportunity again. I just wanted to ask one question in relation to India Jewellery Park.

Sir, what I have realized over a last one year with various observations, this project has been going in terms of the timelines due to various reasons. I just wanted to know, is it related to a design of the project, or is it related to the decision-making part of the client?

Because there were India-US trade deal challenges where gems and jewellery is one of definitely a factor which got impacted. In last concall also we discussed that maybe by April we'll start with the execution.

What I have understood or what I've heard in the call, correct me if I'm wrong, is that we'll be able to start this by this quarter, last month of the quarter. Do you see any other uncertainties at the client side, or is it more related to just a matter of time in execution of this project?

This is Vikas here. The project has been delayed for some administrative reasons, no other reason.

Actually, there was a bit of a change in the FSI and all that for the agency, which now has been built in properly. The excavation work has started at site.

We've already applied for all the licenses and all. We are expecting to start work full swing after the Mumbai monsoons.

After the Mumbai monsoons,

we are gearing up now. We are still awaiting a formal go-ahead from the client though.

Verbally the client has said that things are in place now. They have their own process because it's a quasi-government agency under the Ministry of Commerce.

Whatever permissions they are awaiting because the land is allotted by the government of Maharashtra. Some administrative aligning is happening, which is going to happen soon.

Sure. Thank you.

Just one point, we have guided for 15%, 20% revenue growth this year. Last year after our quarter two where we had definitely much stronger view and then maybe because of NGT and then other disruptions which we have faced in last three months.

This 15%, 20% is what we are seeing for the coming year. At the quarter-on-quarter also, do we see this level of growth over a last year, or we see the H2 will be much higher in FY '27 looking at the disruptions which we had in H2 in FY '26?

Or do we see this more uniformly across quarters barring a little here and there margins?

No, you're right. H2 H2 is always substantially higher than H1.

More so in in the case of H1, as it is Q1 is always slow-moving, but this time it will be exceptionally slow-moving because we had, due to a confluence of various factors. A, I talked about elections, labor went away, and then there was, there was the festival of Eid.

Nearly 70% of our skilled workforce is Muslim, especially carpenters and bar benders. They went away and once they went away for elections, they didn't come back over for a prolonged period, they were at home.

Q1 is also impacted, but starting Q2 the numbers will ramp up significantly, and H2 will be significantly higher than H1.

Yeah. Thank you.

Thanks a lot.

Thanks.

Thank you everybody for joining in, and look forward to seeing you on the next investor call. Thank you once again.