Thanks, Atharva. Hi.

Good evening, everyone, and a warm welcome to the Q1 FY27 earnings call of Kalpataru Projects International Limited. To discuss these results, we have the management today, which is being represented by Mr.

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

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

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

Ram Patodia, President - Finance and the CFO. With that, I'll hand over the floor to Mr.

Mohnot for his initial remarks, post which we will open the floor up for the Q&A session. With that, over to you, sir.

Thank you, Kishan. Good evening, everyone, and thank you for joining us today for the KPIL Q1 FY27 earnings call.

I hope you have all had the opportunity to review our financial results and investor presentation, which are available on the stock exchange and our website. I am pleased to share that we have delivered another strong set of results for the quarter ended 30th June 2026.

We registered robust performance across nearly all parameters, including order book, revenue within the constraints, profitability, margins, and working capital, reflecting an excellent start to the financial year. Before I delve into details of our Q1 performance, I want to reinforce a few key messages from the previous earnings calls.

First, the underlying strength of our business remains solid. This is backed by a robust delivery track record, strong customer trust, and steady demand across all diversified of India and diversified markets.

Second, the investments we made in capability development over the last few years are translating into tangible results. This is evident in our improved competitive positioning, as we continue to secure large, complex bids, aligned with our focus on improving profitability and margin profiles.

Third, and the most important, we remain deeply committed to disciplined growth and strict capital management. Our balance sheet highlights excellent financial health, anchored by disciplined working capital, a best-in-class leverage ratio, and improved return ratios.

This is further validated by a recent credit rating upgrade to AA+ Stable, positioning us among an elite group of large-scale EPC players and giving us strong confidence in our strategy to invest in growth and scale. Moving on to the details of our financial results: KPIL maintained its growth momentum, delivering record first-quarter revenue, EBITDA, and profitability.

Our standalone revenue increased by 9% YoY to ₹5,482 crores, while consol revenue reached ₹6,408 crores. On a comparable basis, adjusted for the base effect of our Brazilian business and road SPVs, KPIL consol revenue increased by 9% YoY in Q1 2027.

Our profitability growth continues to outpace our targeted levels. Our consol EBITDA grew 7% YoY to ₹562 crores.

PBT rose 45% to ₹420 crores, and PAT increased 46% to ₹312 crores. At a standalone level, EBITDA rose 14% YoY, while both PBT and PAT grew by 32%.

Importantly, our consol EBITDA margin expanded by 30 basis points to reach 8.8%, and the PBT margin rose 190 basis points YoY to 6.6%. On a standalone basis, the EBITDA margin reached almost 9%, and the PBT margin was up by 120 basis points to reach 6.6%.

This expansion reflects strong operating leverage and improved business mix, and disciplined working capital management. It is important to note that we achieved this robust revenue growth and margin improvement despite early-quarter labor shortages due to state elections, slower receivables in the water business, and global supply chain constraints stemming from ongoing disruptions in the Middle East.

This performance clearly highlights the resilience of our business and strengthens the foundation for sustainable growth in the coming quarters. Turning to our balance sheet: Our consol net debt-to-equity ratio stands at 0.1x, and ROCE remains within our targeted range of 21% to 22%.

Standalone and consol net debt remains stable QoQ at ₹752 crores and ₹917 crores respectively. We maintained this stability despite higher execution, capital expenditure exceeding ₹250 crores in the first three months, and increased capital employed in the water business.

Regarding working capital, our net working capital days declined by 12 days YoY to 94 days for the standalone, and decreased by 11 days YoY to 80 days on a consol basis in Q1 2027. Moving to our order book: Our ongoing momentum continues to anchor our confidence, providing strong revenue visibility and reinforcing customer trust in our capabilities.

We closed the quarter with our highest-ever order book of ₹66,607 crores. This was supported by robust year-to-date order inflow of ₹7,668 crores in FY27, with an additional L1 position in projects worth ₹7,500 crores.

Equally encouraging is the growth across our key business segments. Starting from T&D business, excluding the Fastel business, revenue like-for-like grew nearly 10% YoY.

Year-to-date in FY27, we have secured orders exceeding ₹4,100 crores and hold an L1 and favorable position in contracts valued at over ₹5,000 crores. We are expanding our market presence by onboarding new clients and strengthening our footprint in high-growth HVDC and GIS substation segment.

Globally, the T&D market continues to offer a massive, structurally attractive growth runway across all our target markets. In India specifically, we expect a notable ramp-up in transmission line and substation capacity to meet rising electricity demand and support the evacuation of renewable energy.

The annual addressable market is expected to remain within the range of ₹1 to ₹1.25 trillion for at least next five years, including incremental opportunities of one to two HVDC projects every year. On the international front, the lack of grid capacity is emerging as a critical bottleneck for rising electricity demand across our key markets in Europe, Middle East, and parts of South America.

With our differentiated global EPC capabilities and strong international reach, we are uniquely positioned to capitalize on this opportunities. Meanwhile, Linjemontage Sweden delivered 8% YoY revenue growth, reaching ₹833 crores.

Linjemontage secured orders worth approximately ₹1,500 crores year-to-date in FY27, bringing its total order backlog to around ₹4,200 crores as of June 30th, 2026. Our Building and Factories business maintained its upward trajectory, recording a 15% YoY revenue increase in Q1 2027.

We secured record orders worth over ₹2,800 crores till date in FY27. Additionally, we hold an L1 position for around ₹2,200 crores in this business.

Our order book for the Building and Factories business at the end of 30th June 2026 stands over ₹19,600 crores. We continue to see steady traction in large-scale residential projects from reputed developers, backed by our design-build capabilities and strong delivery track record.

Additionally, the pipeline remains strong forward by way of public PSU and private industrial capex. This is further supported by improved demand for commercial office space, data centers, airport, and large-scale urban development projects.

In our oil and gas business, execution on our Saudi gas pipeline project is progressing steadily with site activities moving at a strong pace. Despite the ongoing conflict in Middle East, major utilities and asset developers remain optimistic and eager to advance their investment plans.

We see strong business momentum building up in Middle East on the oil and gas business, offering multifold growth opportunities across onshore engineering and construction projects over the next few years. Our water business achieved revenue of ₹626 crores, which is in line with our planned execution.

Notably, the business achieved a major breakthrough by securing its first order in the high-potential Middle East market for a water treatment project valued at ₹344 crores. Our collections in the water business remain on an improved trajectory with around ₹650 crores collected year-to-date, including July in FY27.

We expect further improvements in collection intensity in the coming months. Growth in our urban infra business is driven by robust execution across metro rail projects, with all our TBMs remaining fully utilized.

I am pleased to share that we have nearly completed the tunneling work for our first underground metro project in Kanpur, demonstrating our steadfast commitment to execution and timely project completion. Moving forward, we continue to selectively target strategic opportunities into metro rail, tunneling, pumped storage, nuclear power, and the international roads and highway segment.

In our railway business, our approach remains strictly focused on delivery and project closures, while we remain selective with bidding for new orders. To wrap up, I will quickly update you on our guidance for the FY27.

In our first four months of the year, our project delivery remained resilient despite the Middle East conflict and initial labor availability constraints. The prospects for our diversified end markets remain strong, further reinforced by the increasing need for energy security, infrastructure development, and industrial growth.

This has led to a meaningful acceleration in order intake, keeping us well on track to reach our targeted goal of ₹30,000 crores of order inflow for the current year. Specifically regarding revenue, we confirm our guidance of at least 15% growth on an annualized basis, and our original guidance for PBT margin improvement of over 75 basis points remains unchanged.

Our operating cash flows remain healthy due to structural improvements in our order book and business mix. This gives us the confidence to maintain our current positive trend in working capital, debt metrics, and return ratios as we move forward in this financial year.

Thank you for your attention. We are now happy to take your questions.

Yeah. Sir, firstly on the oil and gas business, earlier you had mentioned that we are looking for larger value orders in Saudi similar to Aramco, maybe in size could be smaller, but any update on that and what inflows are we targeting in oil and gas business?

Vaibhav, as we said earlier, we are now qualified in oil and gas in the large utilities in Middle East, whether it is Saudi, ADNOC, Kuwait, or Qatar. We have bid for a lot of tenders in these places and some very big ones.

The entire tenders in terms of orders have been delayed as of now. We're very confident of making sure that we win a few large projects in the current year, might not happen maybe immediately in the next few months.

As we stand, we believe that there's a huge opportunity of having orders either from Aramco or ADNOC or Qatar or Kuwait, all in the next three to six months. We have included that in our targeted ₹30,000 crores of order book for the current year, and we believe that it should be in place in Q3, if not late part of Q2.

Sir, can you tell the quantum of the bids which you've submitted?

Vaibhav, the bids are wide, ranging from $100 million to $500 million, right? It's at different levels, difficult for me to quantify exactly which one is something which the client would award to us.

They are ranging from $100 to $500 million.

Sure. Sir, secondly, on Indore side, the receivables have been completely received now in Q1?

I think Indore, we've completely zero now.

Okay. Any money would be infusing now incrementally,

either

further in SSL or somewhere else?

No, not at all. I think SSL was cash positive, they've literally become debt-free as of 30th July, and the project is closed, I don't see any reason of any infusion happening in Indore or Shubham not in the near future, in the long term

also. Sir, lastly, on the interest cost side, we have seen a sizeable improvement in terms of interest cost in the first quarter, incrementally, that should be a sustainable run rate?

Sorry, incrementally, what was the question? I missed the incrementally...

The interest cost run rate around ₹67, ₹68 crores in Q1, incrementally, that could be a sustainable run rate, or we may see a rise in interest cost?

No, we should be in this range, depending upon growth, if working capital slightly goes up, and to that extent, you'll see some increased cost, but as a percentage of sales, we should be in a similar range where we are today.

Roughly we will be targeting a sub-100-day kind of working capital for FY27?

Yes, definitely.

Okay. Thank you, sir.

Those were my questions.

Hi, sir. Thanks for the opportunity, and congrats for the good set of numbers.

First question on the margin: you said you'll be maintaining the guidance of 75 bps improvement on PBT level. I just wanted to understand, particularly to Q1, the operating margin of 8.9%, which segments contributed better margin?

I understand by seeing the numbers that there was a favorable mix also this quarter. That is one.

Second, in your 75 bps PBT improvement, are you factoring in, and by what segments, you're factoring in the improvement in, specially, the EBITDA margin for remainder of the year? Yeah.

Amit, so as I've said earlier also, our transmission business, our B&F business, and our oil and gas business, all three of them continue to be delivering EBITDA closer to double-digit levels, and PBT which are also good. If you look at water and railways, while water at EBITDA level has delivered reasonably good margins, but because of interest costs, they're getting hit at a PBT level.

Railways is not doing such good in margin, and urban infra. Three businesses are more at a double-digit level, and three other businesses at a high-single-digit level when it comes to EBITDA.

As far as the 75 basis point improvement is there, I think it's a mix of the entire order book, but significant improvement in margins would come from the same three businesses: T&D, B&F, and oil and gas.

Understood. The second on you highlighted about the orders coming in from Aramco, ADNOC, and from the geographies of Qatar, Kuwait.

When you are building in the inflows, can we expect the proportionate increase or disproportionate increase from these geographies in your inflows in the coming years, I would say? Second, is it only T&D or some other segments in this geographies?

Amit, as far as the Middle East opportunities are concerned, I think we continue to remain bullish on both oil and gas and T&D. We're present in both these segments as far as Middle East is concerned.

We do believe, or we are seeing a lot of traction on tenders coming up on both these segments in this geographies. We do believe that we are very well positioned to win some projects in the next three to six months.

Would this be disproportionate depends on what values of orders we win, but in totality, I think they would, given our size and scale, they would still be of a reasonable size to make sure that there's good visibility going forward.

Understood. Sir, lastly on the update on the IPO of LMG, any progress there?

Thank you.

Amit, we have appointed advisors to look at various options to fundraise at LMG. As of today, we are not in a position to give you any further update on that, but we have appointed advisors, as earlier informed to all of you last year, to explore various options of fundraising at LMG.

At an appropriate stage, we would be able to give an update to all of you.

Thank you, sir. Thank you.

Thanks for all.

Hi. Congratulations, Manish and team, and thanks for the opportunity.

Sir, my question is related first is on T&D. Apart from Middle East and India, which are other geography that you think that next two, three years could be a growth driver for our company?

Bharat, I think from our perspective, even when you look at our numbers today on the international front, you see that our larger exposure is in Latin America, which is entire Chile, Guyana, that market, excluding Brazil. If you ask me today, I think we stay bullish on all three markets.

One is LatAm, excluding Brazil; second is Europe, driven by Linjemontage and the neighboring countries; third is Middle East. Today, for us, our LatAm exposure, excluding Brazil, is much higher than Middle East and Europe.

Per se today, we stay bullish in all this markets, and in the last three months, we've become slightly more bullish on the Middle East opportunities, because we see a lot of developments happening there. It's all across the globe, if you ask me.

Okay. For other business, if say, oil and gas, apart from Middle East, this time, I think we have also seen some order in domestic market.

Is that correct understanding?

No, I don't think we have secured any order in the domestic market in oil and gas. We have got a small project, not something big, which is a small project what we were doing earlier, not very big one, around 100-and-odd crores.

As far as oil and gas is concerned, I think our focus significantly continues to be on the Middle East market, and at least from our one- to two-year perspective, I think that's our biggest opportunity which we want to focus on, given that last three years, we have delivered on one of the largest Saudi Aramco projects. We started from zero, and we have reached a stage and scale where we have delivered on some of the large projects.

Our focus continues to be Middle East, at least on oil and gas for the next couple of years, if not beyond that also.

Sorry, I missed one. Earlier, we were very strong in Africa also, any color on that market?

Or you think that this is still few years away?

No, I think we have a lot of tenders coming from Africa, it's not that we are not bullish in that. If you ask me in terms of our priority markets, number 1, 2, 3, 4, Africa is number four, right?

It continues to be LatAm, followed by Middle East, followed by Europe, and then Africa. Also for reasons that Africa now is seeing a lot of competition, whether Indian competition or even Chinese competition, at times it's difficult to really compete and have projects with our margin standard which we have.

Are we bullish? Yes, in my ranking, it will be number four.

Okay. Apart from T&D, now second is a Building and Factory.

How do we see and how the whole landscape is changing? Are we seeing any kind of a change in landscape factory side or building side?

Or still, we are bullish?

Bharat, as I said earlier, on the Building and Factory side, we're seeing a lot of developments coming on industrial capex, primarily from PSUs and select private players. PSUs, we've seen a lot of tenders come, whether it is tenders from NMDC, NALCO, and all of them, and for which we are qualified.

When we stand today, while residential and commercial continues to be very, very attractive, at least with the large developers where we're doing a lot of work, but besides that, given our expertise in doing data centers, given that we've done two airports now, given that we've done some very large industrial plants, we continue to be very positive on those opportunities also, and we're seeing good traction as compared to what we saw in the previous year.

Sir, any color on Building and Factory side EBITDA margin differential between residential and industrial side?

No, I think, Bharat, there's not a significant differential in terms of residential versus industrial at a EBITDA level at least. They are typically double-digit margins, more in the range of 10% to 12%.

Project to project, sometimes it might change, depending upon the size of the project, the client, and all of that. On average, I think the entire order book continues to be in the range of 10% to 12% EBITDA only.

Okay. Great.

Any capability-wise also, do you have to build a further in industrial side or we have all kind of a capability we have developed?

Bharat, this is a continuous exercise, right? There's nothing which says that we've built everything.

It's a continuous exercise. We started from zero.

Now we're qualified for large-scale projects, maybe not very big scale projects like some of our large competitors, but we are moving in that direction. Every project we take, we move towards this direction of qualifying for a higher value, and that's been the journey.

Any update would you like to give on urban infra? The last question would be on backward integration that we were evaluating.

No, urban infra, Bharat, as I said earlier, we have a reasonably good order book today. We restarted this journey four years ago.

Now we have six TBMs. We have now nearly completed one underground project already.

All the TBMs are deployed on two new projects which we got in the last year. We're not seeing many tenders in urban infra in the last few months, but we believe it should come up sooner than later.

As far as our own business is concerned, we see a good double-digit growth in urban infra in the current year. Going forward, we will keep on exploring opportunities in the underground metro as well as overhead metro in India, and also explore opportunities overseas, maybe not immediately, but going forward, that's also something which would be on our radar.

Sir, capex side and backward integration that you are looking for?

No, on capex side, I think we have targeted a capex of closer to ₹800 crores in the current year, and I think we should be on track to do that, if not slightly more than that. As far as backward integration is concerned, we have just declared today that we would be setting up a rolling mill in Raipur along with a plant.

We are continuously exploring backward integration on various other products within the value chain where we exist today. One of them we have declared, but we are continuously exploring some, and as soon as we have clarity, we'll declare further.

Okay. Thank you, and all the best, sir.

Thank you, Bharat.

Yeah. Sir, many congratulations on a great quarter in a highly restrictive geopolitical uncertainties.

My first question is, now we have given order inflow guidance of 30,000, which we have maintained, and this year, maybe we will touch 27, 28,000 crores on revenues. Which is a very big base to grow from here on.

How are you looking over the next two, three years to grow at least 15% from here? What capabilities, what segments, what markets are we looking to add to continue to keep growing at 15%, given that our balance sheet is found at very strong level, having nearly no debt, technically maybe in near term it will be debt-free?

How does one model growth from here on?

Parikshit, three or four aspects going beyond the current year to look at growth, and we've started working on all of them. The first aspect is taking a few of our businesses international which have delivered extremely well in the country over the last one decade, right?

Whether it is water, whether it is urban infra, whether it is larger projects in oil and gas, and whether it is T&D, it's still getting to newer geographies. That's the one thing which we're exploring continuously for the businesses, which could give us much higher growth compared to what we're doing here.

The second aspect, as I mentioned earlier, is to look at backward integration wherever we can, which will help us not only achieve higher growth, but also give us profit improvement if we do backward integration on our projects. Third, within some specific areas, whether you look at B&F or you look at urban infra, right, from where we started to where we are today: we started from only being a residential, commercial; today we are qualified in data centers, airports, industrial, all of them.

Now all of them together, the opportunity is huge, and we've never looked at it except for a few projects in the past. Within the value chain where we exist, we are qualifying ourselves through our design expertise, through our execution expertise, through capex, to make sure that we can target bigger size projects.

Our average size projects today is more than 500 crores, and we're wanting to see how we can further increase that. Enhancing value chain within our offerings, looking at international markets, and backward integration, it's a combination of all three by which we believe that growing at at least a 15% minimum should not be a challenge even for the next few years.

Besides this, our international subsidiaries, Sweden Linjemontage has been on a good growth journey. Last three years, they've done very well, although current year, we do not see them doing extremely good, but they should also be in good shape to look at further growth opportunities going forward.

Combination of all of this, and with great opportunity in the market today, right, all the segments where we are today, whether it's T&D, look at the numbers, including today's newspaper, you would have seen some further capex additions being planned; B&F across the segments; oil and gas, Middle East; with all of this, we believe that we're getting well-positioned to look at larger projects, complex projects, margin-accretive projects, and growth should not be a challenge at least for the next couple of years. Even where we sit today, if you look at it, we have closer to 2.5 years visibility in order book, right, including L1.

Where we are today plus visibility, I see that it's going to be a mix of all of this to make sure that we achieve what we've targeted.

My other question is, sir, including L1, we are ₹15,000 crore in financial year to date. Does it make the case for the rest of the year to increase your order inflow guidance?

Secondly, on the Middle Eastern clients like ADNOC, Aramco, beyond the pipeline projects, in terms of capability upgrade, what are we looking at? What further mining can we do with them in terms of the order wins and new capabilities being developed to win new contracts?

Parikshit, yes, we might have a revision, upward revision, but we'll have to come back to you at the end of Q2, because there are a lot of delays happening in some parts of the world in placing orders. We also believe as an organization that given that we have 15,000 crores already in our hand, we might be able to do better than this, but we'll have to give us some more time, maybe end of Q2, by which we might be able to revisit our guidance.

As far as capabilities in oil and gas is concerned, we continue to keep on further building on process plants, on stations which we are doing, on high-end projects, on pipeline projects, all of that, and we expanding through capex investment also. Right now, we're not exploring offshore in any form, but onshore, everything from plants to process lines to pipelines is what we're looking at.

We've already built a strong team on it, and we already have the credibility, it's only a matter of bidding for the right projects, winning it, and then focused on delivery.

Anything on the hydrocarbon side, carbon or new energy? Anything there we can do?

We've created a small team which is looking at those opportunities. We had also recently bid for some projects for Power Grid for something on BESS.

We were not successful in that, but yes, the exploration part has started. Do we have that clarity by which we can say that we will do this much in the current year is going to be difficult, yes, but we've created a team which has started exploring BESS as well as hydro, carbon projects, but it's just the beginning, give us some more time before we come back to you with a with a clear picture on this.

Just one last question on KPIL: so NHAI has got some reprieve from the court. If you can help us understand what was the context and what was the expectation on the awards we could have realized and now how the scenario changes?

What could be the worst hit could be there on the cash flows if at all, have everything been provided in the P&L?

Yeah. Parikshit, as far as KPIL is concerned, on our books, the carrying value of equity is zero.

The entire amount is already provided. We provided it three years ago when we surrendered the asset.

This was an arbitration award which we had won. The award has not been fully set aside.

It's been set aside on some technical parameters to revisit the base-line assumptions on whatever claims was done. There were some technical issues on seeing that whether the cost should be considered A, B, C, right?

That's something which the High Court has said to be revisited. Whatever the award comes, it is only positive for us.

There's no negativity in any form. We're just going to go back to the drawing board, make sure that the process starts again and decide that what is the right mechanism to calculate what award should come to us.

We would be going under Section 37 against that award, and sooner than later, we would work on that. From a cash flow as well as P&L perspective, there's no negative.

It will only be positive as and when it comes. We have not considered this award in any form in our balance sheet or P&L in any form today, because our accounting policy is clear: only once the award finally comes and it's not contested is when we take it.

I would not like to quantify the number because the number are relatively huge. I can only say that whatever comes to us is only going to be positive and not negative.

Will it take care of the debt, your share, because there was a partner. What is the outstanding debt here, and once we realize whatever in the worst-case also continues, will it be able to cover up your debt, and whether still post that, you'll have some cash flows left?

Parikshit, technically, we have zero debt on this project today. This project has been taken over by NHAI.

We have handed it over to them four years ago, and as per the concession agreement, the entire debt has now to be managed by NHAI. Technically, we have zero debt on this project.

Yes, there is a contest going on between NHAI and us in terms of the calculation of the debt, but even in the worst-case scenario, we would not have any impacts of debt coming on our books.

Sure, sir. Thank you, and wish you the best.

Thank

you for answering my questions.

Yeah. Hi.

Thanks for the opportunity, sir. Just want to get a sense on how exactly we are dealing on the margin side.

In the previous call also you had mentioned that 50% of our order book are variable in nature, and within that, there are certain commodities which have been hedged. Steel and diesel is something the escalation of which can have an impact.

Just want to get a sense on those costs, how exactly they are scaling up and what impact could that have over the near-term margin, say, by Q2 and Q3 kind of a level?

Anuj, as I said earlier also, right, on our variable projects or on our fixed projects, because the impact comes more on the fixed-price projects, the impact is only on let's say diesel and steel, and I continue to be saying that. If you look at the steel prices last three months, there's hardly been any movement.

Actually, the movement has been more positive than negative for us. That's something which I've been saying historically also, if it moves within a band of plus/minus 5, 10%, we can manage through contingencies and reserves which we always have at a project level.

Today where we are, there's some impact happening on diesel prices, there's some impact happening on aggregate prices in some parts of the country, but is it big enough to have an impact on the larger balance sheet? The answer is no.

We still continue to be guided on the 75 basis point increase which we have promised for the current year. Quarter 1 has been much better than that, and so I believe on annualized basis, we should be in that range with even a 5, 10% movement in prices from where we are today.

Got it, sir. Can you throw some light on the domestic opportunity on the transmission space?

We hear that, as you mentioned today also, that there's around ₹30,000 kind of an opportunity which has been discussed, but any near-term big opportunities which is coming specially on the HVDC side?

Anuj, we've said this in the past also, the opportunity in terms of tendering looks very, very attractive when it comes to domestic T&D, whether it is HVDC, whether it is renewable integration, whether it is GIS substations, all of that. We believe that this opportunity in terms of an annualized basis is more in the range of ₹1 lakh to ₹1.5 lakh crores on an annualized basis for the next five years.

We continue to stay very bullish. There are limited players in the market on the EPC side who can deliver such high-value projects, and we are one among them.

We continue to stay bullish. Current year also, we have good traction on it, my view is a ₹1 lakh crore-plus order release on an annualized basis for the next five years should not be a challenge on domestic T&D in any form.

Got it, sir. Sir, for this quarter specifically, we see the Brazil revenue have fallen steeply.

Any reason for that, sir?

I think it's zero now, right? We have nearly written off the entire Brazil business.

All our projects are zero, it's closer to zero now.

Oh, got it. Got it, sir.

This was quite helpful, sir. Thanks.

Hi, sir. Thank you for the opportunity.

Sir, I would just like to know, sir, what is the margin differential between the overseas order and the domestic order? I believe the overseas order must be fetching good margin, any color on that?

Bhavin, there isn't a specific rule on a margin differentiator. Typically, overseas orders have a higher margin because they carry a higher risk, but it's all again linked to a particular client, a particular kind of order, and a delivery time frame.

There isn't a kind of a rule. Even my international TL business does EBITDA more in the range of 10% to 12% also, which is what B&F also does.

It is very different when the competition is high versus when competition is low, when it is Latin America versus Middle East versus Africa. As I said earlier, it's typically higher than domestic, but risks are also higher, and to that extent, you need that expertise to make sure that you deliver within that budgeted cost.

Understood, sir. Sir, second thing, are we open to the government orders in terms of the B&F, for example, Central Vista projects?

Are we open to that?

Definitely. If there are good projects where we qualify, we would be more than happy to look at that.

We are okay with having a government client, especially in the B&F side? No,

no, I think we've never said that we will not have a government client. We'll be more than happy.

Third, sir, with respect to the urban infra, so, apart from the elevated, underground metro, are we also open for the projects like Coastal Road projects, or the elevated road projects?

Urban infra, our road project portfolio is very, very minimal at a domestic level, and it's not one of our focus areas. If it's a project with tunnels or with high-end expertise on engineering is where we might be focused, but if it is a plain, vanilla road project or something like that, we might not be very excited with that.

Got it. Got it, sir.

That's it from my side, sir. Thanks.

Yeah. Hi, sir, and thanks for taking my question.

Sir, congrats on great, set numbers in the tough environment. Sir, my question is, if you look at other EPC players posted lower margins in the quarter, impacted by commodity infection, labor shortage, and [force majeure?]

, and all the other logistics issues, but despite that, you guys maintained, in fact, delivered 40 basis points higher margin. What differs, let's say, the difference we have for a higher margin, you say?

Arafat, I would not like to deep dive into the numbers of some other companies. I can only say that what have we built is all about a diversified order book, is of a large-scale order book, is about resilience in a lot of projects so that if something does not deliver, something else will deliver, is about having a robust plant operations which helps us on transmission projects, and is about deep dive planning which helps us to make sure that even with external factors, we can still deliver closer to what we have budgeted.

Additionally with that, our working capital-focused approach, where working capital is very, very critical, helps us to make sure that delivery is the big driver. To us, it's a mix of all of that, along with a capex-driven approach on growth.

If you see last four years, we have done closer to 2.5, 3,000 crores of capex, right, which is a very big number which helps us to deliver on the projects. It's a mix of all of that which helps us achieve what we have done.

Clearly, we also had a lot of challenges in the Q1, including labor. It was a challenge for the entire industry.

When domestic did not deliver, international delivered. When one market did not, something else delivered, and that helped us achieve a balanced growth for the organization as a whole.

Got it, sir. Secondly, sir, any non-core are you looking to sell off in the near term?

I don't think we have much non-core left. We have one road asset which had a life of closer to two years, it would automatically be handed over.

We have Shubham Logistics, where we are reducing debt continuously by selling off their own assets. My view is, maybe in the near future, nothing except that debt reduction in Shubham Logistics will continue over the next two years also.

Got it. Sir, specifically for Shubham Logistics, I just want to understand overall ecosystem, when you bought that, what amount you invested, and how much is, let's say, are looking to sell, are you making a profit on that, or what is the investment in that system?

Arafat, I don't have those details with me. I'll be happy if you can connect with Kunal.

I can only tell you that today Shubham Logistics is closer to zero in external debt. They have repaid all banks as of 31st July.

As far as Kalpataru is concerned, our investment, including equity and loan together, would be in the range of 300-plus crores, ₹325 crores, they have just corrected me. The business is doing reasonably well.

They are in profitable zone today, and I believe that we're not investing any further capital in it, and slowly this investment value should only come down because we have a lot of assets in that business which we are slowly disposing of.

Got it. Lastly, sir, what kind of a opportunity are we looking in for data centers, and what's the project pipeline in that, how's the competition and in the overall data center opportunity for you?

Arafat, in the data center side, we are today qualified for civil as well as MEP. We've already done two data centers and we're doing the third one right now while we speak.

We're seeing a lot of tenders which have come up, both by domestic developers as well as some international developers in India. We are bidding for it.

My view is that there's a reasonably good opportunity available there, and in the next six to nine months, we should be able to take at least a few projects in that space.

Fine, sir. That's all from my side.

Thank you.

Thank you for the opportunity. Sir, given that we have received the first order in water segment in Middle East, what sort of opportunities does it opens for us in the Middle Eastern market?

Jainam, on the Middle East side, in the water segment, now we are qualified with some of the large developers in those geographies where we exist. This is the first project which we have won with a large Middle East developer.

There are some more projects coming on everything: on let's say plants, on pipelines, on a mix of all of that, including water treatment plants. We are bidding for that, and our view is that this is a great opportunity from a two- to three-year perspective, and we'll be slowly and steadily building that order book so that we can focus on the building delivery capabilities along with the order book.

Sir. Sir, are we looking for desalination projects in Middle East?

Yes, we're looking at desal projects also in Middle East, and we're qualified for a lot of them already.

Okay. How are the margins panning out over there in terms of when it comes to water segment over there?

I think we just started this journey, and obviously when you start this journey, the margins are not the best for any business. It's just started the journey.

They're still with positive margins, not necessarily the same levels at which T&D and B&F and oil and gas are, but I believe that given that there are limited players only in that segment, in that size and scale, we should be able to get good margins in the long term.

Okay. Generally, we subcontract the projects whichever we do in the international markets, is that our understanding?

No, I don't think we ever subcontract an entire project. There's smaller components of the project where sometimes on civil, sometimes on let's say fabrication, sometimes on erection, all of that we subcontract, but project as a whole, we never subcontract.

Okay. Sir, in the water side on the domestic front, how are we seeing the opportunities coming up?

On

the domestic front on the water side, as I said in my call, you've seen good traction of collections, not necessarily what we wanted to. Even today, if you look at our billed and unbilled, it's more in the range of 1,500-plus crores on the water side for work which is done, which is pending, but it's much better than what it was in the previous year.

We expect a lot of collections to improve. It's visible in the finance budget, it's visible in all the action of the government.

As far as tenders on the domestic side are concerned, we as of now not bidding for any major tenders. We're not seeing major tenders also, but as and when once our dues are clear and if tender opportunities come up, we'll definitely look at that also.

I'm not so confident that you'll have a lot of tenders in the current year, but I believe going forward in next year, you should start seeing tenders on the domestic water front also.

Sir, other than the Jal Jeevan Mission on the water front, are we seeing any desalination projects in India as well on which we are looking to bid for?

As I said earlier, in the Indian market today, we're not bidding for any projects, at least from the six- to nine-month perspective, till our collections come back.

Sir. Sir, what is the pending order book in Jal Jeevan Mission?

Closer to ₹4,000 crores, sir. Closer to ₹4,000 crores, out of which a significant portion should get delivered in the current year itself.

Okay. The outstanding receivables?

Billed plus unbilled more in the range of ₹1,500 crores.

₹1,500 crores. Sir.

Do you have the state-wise bifurcation for this? No,

I don't have that with me right now. You can collect that details from Kunal later on.

Okay. That answers my questions.

Thank you so much and all the best.

Thank you, everyone. Thank you for attending the call.