Capacit'e Infraprojects (NSE:CAPACITE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Capacit'e Infraprojects Limited Q1 FY 'twenty seven Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Before we begin, a brief disclaimer. The presentation, which Capacit'e Infraprojects Limited has uploaded on the stock exchange and their website, including the discussions during this call contains or may contain certain forward looking statements concerning Capacit'e Infraprojects Limited business prospects and profitability, which are subject to several risks and uncertainties and the actual results could materially differ from those in such forward looking statements.

0:48 Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touch tone phone. I now hand the conference over to Mr. Rohit Katyal, Executive Chairman, Capacit'e Infra. Thank you and over to you Mr. Katyal. Good afternoon. On behalf of Capacit'e Infra Projects Limited, I extend a warm welcome to all participants on our Q1 FY 'twenty seven earnings conference call. Joining me today are Mr. Rajeshla, CFO along with Mr. Alok Mehrotra, Nishit Pujari and our Investor Relations team from Marathon Capital. I trust you have had a chance to review our results. The presentation and press release have been uploaded on the stock exchanges and are also available on the company's website.

1:37 The momentum built up by the company in FY 'twenty six is poised to deliver improved revenue growth in the remainder of the current financial year. The performance was impacted by workmen shortages and factors beyond the control of the company. However, the workmen situation has since normalized, and we are confident of achieving our guided performance for the current fiscal over the remaining three quarters of FY 'twenty seven. Let me turn to some of the key updates. Commodity price volatility, especially in respect to nonferrous metals, is yet to get reflected in the inflation indexes being published by the government. As a prudent measure, the company has, therefore, taken an additional provision of INR 10 crores in the current quarter.

2:27 Order book stood at INR 13,535 crores as on 06/30/2026. Public sector accounts for 55%, while private sector accounts for 45% of the total order book. FY 'twenty seven order inflow target is between INR 4,500 crores to INR 5,000 crores. Orders booked so far in FY 'twenty seven stands at INR $10.71 crores, supported by the strong pipeline of identified quality projects for bidding, crores in private in public sector and INR5000 crores in private sector over Q2 and Q3, the company remains confident of achieving its FY 'twenty seven order inflow target.

3:15 The promoter share pledge has been reduced from 85.5 lakh shares on absolute basis as on 03/31/2026 to 50 lakh shares currently. The company targets for full release of the pledge by the end of the current financial year. I now turn to the consolidated performance highlights for Q1 FY 'twenty seven. Revenue for Q1 FY 'twenty seven stood at INR $6.29 crores, up by 7% as compared to INR $5.89 crores in Q1 FY 'twenty six. EBITDA for Q1 FY 'twenty seven stood at INR99 crores, thereby moderating by 3% as compared to INR102 crores in Q1 FY 'twenty six.

4:01 EBITDA margin for Q1 FY 'twenty seven stood at 15.7% as compared to 17.2% in Q1 FY 'twenty six. EBIT for Q1 FY 'twenty seven stood at INR 80 crores, down by 8% as compared to INR 87 crores in Q1 FY 'twenty six. EBIT margin for Q1 FY 'twenty seven stood at 12.5%. PAT for Q1 FY 'twenty seven stood at INR 40 crores as compared to INR 47 crores in Q1 FY 'twenty six. The PAT margin for Q1 FY 'twenty seven came in at 6.2%. The key financial metrics, as mentioned above, were impacted by the INR 10 crore additional provision, as mentioned in my earlier remarks.

4:55 I now leave the floor open for questions. Thank you. Thank you very much. We will now begin the question and answer session. The first question is from the line of Vinay Chowdhury from Indexer Capital LLP. Please go ahead. Hello. Yes, hi. Good afternoon. So my question is regarding the revenue, the execution.

5:44 So we have seen the order inflow being strong this quarter as well. Of course, it's YTD. So and our order book to revenue ratio is quite strong. But we have not seen the conversion in our execution. So where like in a project level, where are we not able to execute at that level, if you can throw some light on that? Yes, good question. So the order book includes IIT Bombay, that's $5.50 crore contract, which was to start in quarter four of the last fiscal, but will start only in quarter two of the current fiscal because they were not recutting permissions available with the client.

6:35 So therefore, while we have the extensions in place, this impacted because the project is a fast track project of twenty four months. So the first quarter one and quarter two of the current fiscal should have had revenues of in excess of INR 65 crores to INR 70 crores from that project alone. This is one impact. Secondly, the revenue buildup of NPCC has happened from the current quarter, and you will see a threefold increase in that project as well. So like there are right of ways issues with clients in other sectors, we could also face problems with certain clients for tree cutting or certain encroachment issues with government clients. But the first is I'm happy to say that the first building of IIT has been handed over. The design has been approved and the execution has started. So I do believe that the execution will double up in these projects or more over the next quarter or two.

7:36 And therefore, I am very confident, as I explained, to achieve the full year guidance. Now coming to the overall order book to revenue, you should look at our CAGR over 2022 till 'twenty six, which is close to 20% or thereabouts. You should look at our FAT, which is at about CSJR will be more than 30%. So the company has been able to convert. Yes, you are right, we can do far better, and we are on line to do that. Hope to have answered your question. Sir, just to reiterate, like so H2, I assume will be quite stronger, assuming the monsoon impact is a seasonality in the current quarter.

8:25 So it will be fair to assume that quarterly run rate can touch above eight fifty or about so to achieve our full year guidance. It was 101%. Our guidance is 20% year on year, all right, and we are well on track to do that. There has been a moderate increase. We had mentioned in the last conference call also that the labor had dipped to 50% in May and then to 7,000 that is shortfall of nearly 30% in June. As I speak to you today, the labor requirement is fully in place. And therefore, you will see quite a satisfactory uptick in quarter two as well. And obviously, we are looking to do that INR $8.50 crore plus in quarter three and quarter four.

9:16 Secondly, on the provision. So of course we have guided about 15.5% to 16% on EBITDA level margin, while we have provided about incremental INR10 crores, INR20 crores in the last quarter and the current quarter. So just wanted to understand if like the raw material normalizes the price normalizes, is it fair to assume that these INR 20 crores can potentially get reversed, which can improve our P and L for the coming quarters? Or is it absorbed already, these INR 20 crores? Is it something which cannot be passed?

10:07 Or is it something which can be reversed? So I had explained in my last quarter conference call that while the steel prices have moderated, however, we see that the prices of aluminum, which went up by 35%, 40%, the price variation has not caught up with that, okay? Similarly, other nonferrous metals like copper, you see CPWD has just published a new DSR. And it is yet to it will yet take a quarter or two more till the entire escalation is covered by these indices. So we have to wait and watch, but I am pretty confident a large portion of this will get reversed. It is only prudent to provide because as on June 30, it was not covering.

10:56 Similarly, on March 31, it was not covering. So answering your question, we are extremely hopeful of reversing this provision in quarter three and quarter four. However, there's a disclaimer. It again depends on the inflation index and not on the food or retail or wholesale price. This is regarding the copper, aluminum and so on and so forth. But given the seven years or eight years history, generally, we have been able to cover up. So let us wait and hope for the best, but a substantial portion will just get reversed and add to the bottom line. Thanks for answering the questions. Thank you. Thank you. The next question is from the line of Rohit Gupta from RKG Online Services.

11:46 Please go ahead. Hello. Good afternoon, sir. Yeah. Good afternoon. Please go ahead. Sir, my question is regarding Mahada Biriti Bodhi project. What is the current outstanding order value, which is still left to be executed? And when do you expect the remaining value to be included in Capacit'e order book? See, the total order value on the TCC level, that is the parent company, which is owned jointly by Tata Projects and Capacit'e, is close to INR 17,000 crores, including escalation. Out of this, Mahara has handed over 50% of the rehab 50% of the project, which is about 34 rehab buildings.

12:31 These 34 rehab buildings translate into an order book at TCC level, again, the parent company level of about INR 7,005 to INR 8,000 crores. Out of this INR 8,000 crores, 35% belongs to Capacit'e Infra Projects Limited. So approximately 7,500 to 8,000 into 35%. That is our order book as far as MADA project is concerned at the parent level. At the subcontractor, that is 35% of the subcontract is being done by Capacit'e Infraprojects on a stand alone basis and 65% by Tata Projects Limited. It translates into the same value, which I've just mentioned to you.

13:16 However, some profit will me complete. However, some profit will be be booked at consolidated basis, like you are seeing profit from share of associated and the balance profit will be booked in the stand alone books of the company. Okay, sir. And sir, my follow-up is Capacit'e currently L1 for the Sidco Maha Avas VRS housing project. Any light on this? So we are we as a policy don't declare L1 positions. But yes, we are L1 in a couple of projects. One of this is you have just mentioned. And we hope that within this month, that should get converted into an order. And second one is the Chennai Metro Commercial Complex, another L1?

14:04 Yes. We are expecting that also to get converted in the current month apart from L1 But as a company policy, since we don't declare on the stock exchanges, I will not be able to comment any further. Just because it's government in the public domain, I can. Okay. Thank you, sir. Okay. Just hold the other. Thank you. Thank you. The next question is from the line of Vasudev from Nuvama. Please go ahead. Yeah. Thank you for the opportunity, sir. Sir, what is our... You know, how are we progressing in the Silco and the Global Project? The Silco project, we are handing over virtually, which I explained last time also, we have handed over two locations.

14:57 So look, work is going on at the balance four locations. We believe that the client has identified, if you remember, there were seven locations all put together. So we are in the process of receiving the handover of the balanced quantum of land starting quarter two and ending quarter three. So therefore, from quarter three, you can expect enhanced revenues from Sytrico project. Our completion for the remainder of the four locations, we have received the extension from the client for March 28, which means that we have to further get a certified revenue of close to 1,000 crores, plus escalation thereon.

15:44 And that is to be done over the next eighteen months. And therefore, the revenue guidance earlier given for Sudipto is based on this INR 1,400 to 300 crores plus escalation. And we are well on track to achieve that. Sure, sir. And on Signature Global? Signature Global, we are targeting to achieve approximately INR 22 crore monthly revenue. We are on track to do that. There was a serious dip in quarter one because of serious shortfall in labor across the country, across the industry. But now we have about more than 1,000 boots on the ground at the project site, and we are confident to achieve the targeted revenues.

16:35 It has improved significantly in June sorry, July, and you will see significant improvement between July and August. Okay. And so for Adai and Subcost, if you can give a similar number, like what is our current monthly or quarterly run rate and how are we expecting to improve it? So our target is to do about INR 20 crores per month on pseudo sorry, on Mahara in quarter two. We expect another four buildings to open up in quarter three. And let me tell you, at the subcontractor level, one building is approximately 140 crores. So with opening up of each building, we add approximately INR 6 crores to the top line because each slab casting gives a revenue of about INR 3.1 crores.

17:26 So it's a very long answer. But to answer your questions, in this current quarter, we should be at INR 60 crores approximately. And then for quarter three and quarter four, we expect INR 75 crore plus from this project alone, given the current status of the land handed over by the client to the parent company, TCC, and by TCC to CAPACITE. Sure, sir. And for Sirico also, if you can help with similar numbers? So Sirico, we are targeting, I had given a figure last time of approximately INR 600 crores for the full year. So we do believe that we should be more or less within that hitting range with some betterment.

18:13 But the positive surprise will come from NBCC in the current quarter, next quarter and Q4 as well. The billing momentum has built up over there. And we do, as I explained in my earlier answers, we do expect the revenue to jump from INR 20 crores to INR 60 crores approximately per month over there from current fund onwards. Okay. And so then, we started booking profits for this project? Yes. Yes. Yes. Now it has started booking profits. We are at INR 300 crores certified well, and we are looking to bill about INR 60 crores further per month for the remainder of the year. Okay. So obviously, we have crossed that 20% threshold.

19:00 And therefore, we are booking the profits as guided for MVCC project. Okay. And just one last from my side. What is the CapEx we did in Q1 and our target for the full year? For the full year, the target is INR 193 crores. The CapEx done in Q1 is INR 79 sorry, INR 52.26 The next question is from the line of from GM Financial.

19:47 Please go ahead. Yeah. So first thing on Silco, so what will be the order backlog for the 66 Building? And what will be the same for 7 Building? So it's not 7 Building. The total square feet to be constructed under the contract is INR 1 and 62 lakh square feet, all right? We have received 50% of that. So 50% is the remainder to be handed over. And the client has identified a couple of locations, which we believe that should be handed over to us by next month. So we should get the entire scope of 162 lakh square feet over the next two quarters, including the current quarter.

20:34 Sir, in terms of order value, what would be the order book for six buildings and the seventh building? So the total backlog so the total order value for the remainder would be approximately INR 2,000 per escalation. And the current escalation... Including all the buildings. Sorry? Including all the buildings. Whatever balance has to be received. Whatever has been received out of that, another 1,000 crores to be built. Okay. Sir, secondly, what is our gross debt right now? INR 3,500 crores approximately. The outstanding portion or the entire you are saying? Outstanding. The outstanding portion, including price variation because price variation is approximately 28% as I speak to you.

21:25 That will be between INR 3,200 crores or INR 3,300 crores. It can vary depending on the price variation which the company gets. Currently, it is at 28%. Okay. And of this INR 30 to 3,300 crores, what will be for the seventh building value? INR 2,500 approximately including escalation. Okay. Okay. Got it. Sir, secondly, what would be our gross debt right now? And how do you see it going forward by March 27? Sir, the total gross debt is INR $5.22 crores. I have given a commentary during the last conference call that on a yearly basis, it will reduce. This has only increased because approximately 150 crores of payments got shifted by ten days, which obviously have been collected in the current month.

22:16 So this should not be viewed on a quarterly basis. On a yearly basis, we will reduce our gross debt and so will we reduce our net debt. Our eight quarters net debt free target is well on track. Sir, lastly, one confusion was there. Between the console numbers and channel numbers, what is the difference in terms of revenues? So which projects are booked in revenues booked in the console books? So the National Speed Highway project is on a console basis to our share of revenue. And the Capacit'e Infra and Buta Group Maltese project is booked also on the console basis.

23:05 Further, the profit of only share of our profit from TCC, that is the Mahara parent company, is booked in the consolidated. Everything else is in stand alone. So Mahara revenues won't come in the standard book? So if that would have been the case, we would have been having 1,000 crores revenue in the quarter. Profit only the profit will come in the console, not the turnover. The next question is from the line of from ABN Capital. Please go ahead. Hello. Thank you for giving me the opportunity. I just had a couple of questions. Sir, your quarter one commentary flagged the Mumbai water cart as an execution drag. So now looking ahead for this year, you know, in quarter three, the Delhi NCR graph construction bans are a recurring annual event that spans from November to January for the entire NCR. So how do you plan on tackling this and still achieve the 20% top line growth that you've targeted for this fiscal, given that we have achieved 7% for quarter one?

24:17 So the point is that sorry, can you... 7%, we have achieved. Yes. So the point is that quarter two, July has been strong for the company. And therefore, we derive confidence on the August and September numbers. Quarter three, as I told you, at the moment, we have just started IIT project. We have just started yielding from NBCC, all right? Revenue is bound to rise in Sudco and Mada projects. And similarly, we had announced the downtown project in quarter four of last fiscal. The current quarter will give you substantial revenue of close to nearly INR 55 crores from that project alone, which is bound to rise in quarter three, quarter four.

25:10 Therefore, the number of projects which will add meaningful revenue from quarter two onwards and peaking in quarter three and quarter four, that gives us substantial confidence of achieving the full year target on consolidated basis. Okay. So this the MCR that construction bank period will not be impacting in any revenue slowdown? We have factored an average of twenty days, Bose. Now if it goes to forty days, everyone will suffer. But I do believe that the industry is taking adequate steps for that. But if the HUI remains at INR 400 crores, 500 crores, then it is anyone's guess. But at the moment, we have factored twenty days in the current fiscal for the Northern India revenue impact due to NGT.

26:03 Okay, sir. Got it. And sir, my second question is on the revenue growth because the revenue growth has slowed steadily, right? We were at 22% FY twenty five, and then we were at 12% in FY twenty six, and we are currently at 7%. So even though our order book as at a record, 13,500 odd crores, which is about five times our annual sales. So the slowdown had started before the water cut issue and issue. So, sir, my question, I just wanted to understand from an investor standpoint. Do we have a bottleneck on execution outside of the labor issue and water issue? Is it slower revenue recognition because of the shift to 40 plus towers, which is now 60% of 62% of the book. I just wanted to understand.

26:49 No, no, no, no, no. It's not like that. So we have been very open with all our investors and new financial institutions that the order execution are nearly see, for example, if you recall INR 2,500 crore, I just mentioned to the earlier query, 2,500 crore yet execution has to start. We expect that from next quarter, okay? We are increasing the revenue of NVCC, which was not even INR 15 crores per month last year. We are taking it up to INR 60 crores from the current quarter already, okay? Current quarter in sales per month, so about INR 150 crores would come in the current quarter. Similarly, IIT Bombay, we couldn't start the work because of pre cutting provisions. Now these things are uncorsing.

27:40 And therefore, my INR 13,500 order book, I could have only executed or execution was only happening on INR 8,000 to 9,000 crore. That does not mean that the active order book is not active. But as soon as that's an opportunity, we suddenly now we have 34 buildings in Mahara to execute. So obviously, that will get reflected in the top line. We have already started our works at IIT. From next quarter, you will see revenue happening in that also. And obviously, the increase in revenue coming from NBCC. Lastly, great value still has to receive approvals. So while the order was booked in quarter four of the last fiscal, we have not recognized a penny of revenue from that project, maybe a crore or 2.

28:29 So again, we do believe that quarter two, three onwards, you will see sizable revenue coming from that. So therefore, when we say our total order book, that includes sites on which the work is yet to begin, all right? And therefore, since now we have a road map available with us that, yes, from quarter two and quarter three, a lot of additional projects will start giving revenue and sizable at that. Similarly, Valhalla of Raymond's, okay, that will start from quarter two end. So you will see the sizable revenue coming in quarter three and quarter four. And therefore, the confidence of revenue increase comes from that. Similarly, I would request you to look at our CAGR over 22% to 26%.

29:15 And that would be at approximately 18% on a consolidated basis. And if I have given a projection of 20%, obviously, CAGR will improve by that percentage. But our goal over the next two years is to maintain that growth rate. The order book supports it. The current labor strength supports it. And obviously, our focus on use of the new age technologies will further support it from quarter three, quarter four end of the current financial year. Sir. Got it. That brings immense clarity. Thank you so much. Thank you. The next question is from the line of Tatik Bandari from Art Ventures. Please go ahead.

30:10 Hi, sir. Thanks for the opportunity. Just wanted to get a sense the current quarter of the last forty days that have gone by. Have you seen some sort of stabilization in the commodity prices? See, the commodity prices are stable over the last three months or four months. The steel prices went down by 20%, have increased by 3%. But the concern is over the nonferrous aluminum, copper. The price increase, which at the moment is reflecting from the CPWD is approximately 14%. Where on the ground level, the raw material itself, let's say, raw material is 30% of the entire MEP. So if that has increased by 40%, it is 12% to 14% only on the material part, not to speak about the labor.

30:58 So I so it has stabilized, but the inflation is yet to catch up with the price rise. Information from Office of Economic Advisers for relative commodity. Got it. And secondly, on the CapEx, you last time guided for CapEx for FY 'twenty five to be for 'twenty seven to be around INR 155 crores. That was for aluminum exclusion. And now you have mentioned it to be INR 193 crores. So can you give a sense as to where is the difference flowing? So we have taken we are expecting certain orders in this quarter.

31:43 And therefore, we have accounted for that, that you can just take the bifurcation. We are looking at INR 56 crores of plant and machinery. We're looking at the aluminum extrusions and the related homework of INR 121 crores for the full year. And our information technology would be INR 5.43 crores. So we are currently on the process of implementing SAP, and we should go live in the quarter three of the current fiscal. It is important for the organization. So this is a bifurcation. So INR 150 crore for only homework stands at INR 121 crore. Plant and machinery will increase because we are currently executing more than 15 buildings in super high rise segment.

32:28 And while we have our own equipment substantial at that, still the requirement of high speed lifts for passenger and hoist passenger and materials will be there. Similarly, we will we are bidding for composite buildings, which involve steel structures like the IIT Bombay, which will require heavier cranes. So these things cannot be emphasized only in March. So we have booked we are very confident of exceeding our half yearly target in the current quarter and with the L1 position alone, okay? So we do believe that this equipment increase is directly proportional to that. However, given the equipment increase, our repayment of term loans for the current year will stand at INR 102 crores.

33:22 So therefore, the debt position due to the equipment purchase may increase by INR 45 crores to 50 crores, nothing more than that on net basis. Similarly, on the working capital front, like we reduced forty days last year, we expect a similar reduction in the whole year this current financial year. Do not please ask me March, September, December or but we will definitely talk to you for March 'twenty seven. And the March 'twenty seven working capital days will be further improved to March 'twenty six. And the overall debt position will be lower. Yes, the term loan obviously because of substantial equipment purchase will be higher by net whatever new loans we take and whatever repayments we do by approximately INR45 crores to INR50 crores.

34:14 Got it. And just one last question. Of the orders that we have received during the quarter, can you give us split as to is it from public or private? The first quarter was totally private. The second quarter, we see equivalent coming from public, and we are under negotiations with certain seriously high level quality private sector. And we are very hopeful of converting some of them in the current quarter. So yes, as I therefore, I told you, there is no reason why we should not cross the upper band. So our band of order inflow is INR 4,500 crores to INR 5,000 crores. We see crossing 50% of the higher end of the band in quarter two itself.

35:09 Thank you. The next question is from the line of Dhananjay Meshra from Centrum Broken. Please go ahead. Yes. Good afternoon, sir. So the INR 6.5 crore monetization value, so where it is getting captured in the other income? In the other income. Sorry. Can you repeat the question? Six point? 5 crore. 5 crore realized from non core effect. Yeah. The... It is getting reflected in the Profit is it? The profit is getting reflected in the Other income. Other income. Okay. That is part of 10 crore. Absolutely. So therefore, if you see overall on the full term basis last year, there was substantial other income, which was booked.

35:58 And the target for the full year remains unchanged. And for Cisco, you said outstanding order of the six site is INR 1,000 crores and INR 2,500 crores is for the seven site? Our seven site remainder area to be handed over is 2,000 crores plus escalation, so INR 2,500. So in our order book, we have considered INR 2,000 crores. But as soon as that locations are handed over approximately four locations encompassing the seventh location, which people know. However, we will give you absolute clarity on that in quarter two earning conference call. But we do expect a couple of locations to be handed over within the current quarter.

36:44 And can you also talk about the bid pipeline for this financial year? And do you see any opportunity in the Pumbai 3.0 we are talking about our... I will not be able to take names. Obviously, you can understand due to restrictions. But we have an identified bid pipeline of 22,000 crores in the public side and approximately INR 5,000 crores of targeted pipeline in the private sector for Q2 and Q3. Q3 will be uploaded by the end of Q2. That is the process how we follow because just leads does not become bid pipeline. What tenders are only planned and which have received administrative approvals from various government departments, those are the projections which we can take in our bid pipeline.

37:38 So that is the opportunity. As far as capacity is concerned. It may get added or deleted depending on finally when the NIT is published by the government. But we do see a very strong pipeline, both in government and private sector. The next question is from the line of from CyclicalBMS. Please go ahead. Hi, sir. Thank you for this opportunity. So my question is regarding the contract assets.

38:24 So if we look at our peers like Aluwali or TSP, contract assets as a percentage of revenues are about 14% to 15%. Ours are about 50% to 55%. So can you help me understand why are the contract assets much higher than them? And what percentage of these are normal unbilled revenue versus how much of them are under stress? So the stress has already been provided for us. Now I would like to just clarify, I do not have the from where this 1514% has come, but contract assets plus debtors for our company stands at approximately 78% to the top line as on March 31.

39:15 The same percentage for my competition is between fifty six days to sixty five days. If you remember, during COVID, after COVID, our $3.25 crores had what held up. And this figure had to shoot it to 120% to the top line. So there is a 45% betterment over the last three, four years as far as contract assets are concerned. And we during our commentary during the quarter four earnings call, had said that we will be in the leadership position better than most of our competition without taking names over the next eight quarters. So you will see improvement in the contract assets and debtor realization both like you saw last year of forty days in net working capital and the reduction of forty three days to be precise.

40:09 And similarly, the percentage to top line of contract SSN debtors also coming down, you'll continue to see on quarter to quarter basis, but there will be a very positive surprise in March FY 'twenty seven, and we should be in a leadership position by March 'twenty eight, what we had in March 2019 prior to COVID. Got it, sir. So I mean unbilled revenues plus receivables for them are between 35% to 45% of revenues. But so, I mean, what efforts or what steps are we taking to reduce these contract assets? Is it that we will be changing our accounting standards, or is it that it's, I mean, stuck by... I mean, money stuck by a few clients, which we will be expected to clear them.

40:59 And if you can help us understand how much of these contract assets are over one year, two years, three years, so we can get an idea if, I mean, this is a regular unbilled revenues or it's, I mean, something which has not been cleared since a long So let me just give you a gist. It's a very long answer. While the data is available, you can connect with our Investor Relations team immediately after the call. But now for example, Syntcor, we have a 300 crore unbilled revenue, obviously, because of the work done and the milestone payment. Similarly, we have on INR 6,500 crore, nearly INR 200 crore of unbilled revenue on MADA. These figures may be up five ten percent because I'm not having the details in front of me.

41:44 So we have seen substantial reduction in payments. We have seen some increase in MBCC. We have seen the reduction on an absolute basis in Mahara. So the entire data is available. And since these are all ongoing projects where bills are getting certified every month on month and payments are getting received. So you will see these are cyclical. It is not nothing is above one year or two years, three years, okay? So everything is over the milestone payments. The milestone payments are getting built. The current month certification of Sudoku will be in excess of INR 60 crores. The revenue is INR 35 crores or 40 crores. So this additional INR 20 crores is nothing but the milestones getting built, all right? So two final bills of two locations are also going to go to the client in the current quarter.

42:37 So obviously, you will see further certification happening. So these are nothing but milestones getting converted. However, I would urge you to see the overall contract assets of seven, eight players in our sector as a percentage to the top line, and you will see the drastic improvement which Capacit'e has made over the last three years. That's great, sir. So I mean, what is the aspirational exit contract asset for FY 'twenty seven? And I mean, should we consider this 1,000 crore as a normal BAU contract assets or we aspire to come down what to what level? Obviously, we aspire to come down. But at the same time, if you remember that on INR 1,800 crore revenue, this was a contract assets.

43:23 On INR 2,700 crore, this was the contract assets. So obviously, on INR 3,200 crore revenue or INR 3,001 and 50 crore revenue, also the contract assets would be this or tag lower. So we are well on track to reduce it as a percentage of the top line. Absolute number, we can always discuss offline because I don't have it ready in front of me. Got it, sir. Thank you very much, and I wish you all the best. Thank you very much. Nice question. Thank you. The next question is from the line of Rohin Gupta from RKG online services. Please go ahead. Sir, I just wanted to clarify you regarding BDD Mahada. Our executive order book still remain 3,000.

44:13 That I'll will be explain to you. It's a very long answer. Told you that the order our portion is 35% on the parent company level. Because we are 35%, we cannot consolidate the revenue. We can only take our portion of profit. What we book as revenue is as a subcontractor to our own parent company, that is taken in the stand alone revenues, all right? The next quarters, years, you will see the profit or share from TCC growing, that is the consolidation profit growing. And the revenue also as a subcontractor growing. Our share is 35% and we will be executing over the next six, seven years this backlog of so to be clear with you, the current certification of TCC with MARA is in excess of INR 2,000 crore.

45:13 And if the revised order book, including price variation is INR 16,000 INR 17,000 crores, you can establish what is the backlog and 35% of that is attributable to Capacit'e. The next question is from the line of Deepak Pudar from Saphyr Capital. Please go ahead. Am I audible, sir? Yes. Please go ahead. Yes. Thank you very much for this opportunity, sir. So just wanted to understand on the provisioning.

45:59 I mean, do you expect to again, because last two quarters, we have been doing INR 10 crores per quarter, right, in terms of the provisioning? So how should one... So impact has happened subsequent to February, okay? I don't see any provisioning coming in, in quarter two, all right? We will have to wait for quarter three, how the escalation indices pan out. So yes, in quarter four of last fiscal was necessary because suddenly, after the geopolitical tensions, we did see a very serious upsurge in nonferrous metals. And that impact would have happened in quarter one, quarter two, quarter three of the current fiscal, all right? And similarly, we have not seen softening of the nonferrous commodities, neither have we seen the price escalation matching up a debt increase. That warranted this additional INR 10 crores of provisioning in the current quarter.

46:53 And therefore, I do not see any further provisioning in quarter two onwards. However, we shall discuss and give a confirmation about quarter three in the earnings call. Okay. So this provisioning is largely because of the nonferrous price escalations, right? Absolutely. Absolutely. Then... Have copper. We have nearly 55%, 60% of our business coming from public sector. You have electromechanical works in that. And you have, obviously, sizable aluminum homework, which has to be purchased. When it purchases, then you have notional debit of rent or in your terminology depreciation, which happens. So all these impacts, if the purchase price is gone, it has to get impacted somewhere or the other.

47:43 Correct. And how are we saying that the majority of it can get reversed in third quarter and fourth quarter? What is the thought price? Yes. So until March, their price variation did not move. So if you compare last June to this June, the price variation has been close to 88.5%, which was not even two percent till March, all right? So suddenly, in April, May, the inflation for nonfood items, I'm talking referring to nonfood items, has moved up. Similarly, at the same time, the June did not see a big tick, and therefore, this need for provisioning. However, we do believe that true price will get reflected over the next quarter or two. And therefore, a sizable portion of this provisioning, obviously, I'm giving you a clear cut disclaimer.

48:41 We do believe a substantial portion of this will get reversed with whatever data that are available over the last seven, eight years period concerning the WPI and commodity inflation numbers. Okay, understood. And just one last clarification. When we say EBITDA margin of 16%, 17%, we are excluding the other income here or? Excluding. Otherwise, both of us will be happy. Okay, okay. Excluding. Okay, okay. That would be through my side. Wish you all the best. Thank you. Thank you very much. Thank you. The last question is from the line of Rahul Kumar from Vicaria Fund. Please go ahead.

49:33 Yeah. Hi. Thanks. So just carry forward Deepak's question, actually. Just just for understanding. But this extra provision which you have created, is this for the any specific projects? Or is it for the revenues which you have booked in March and June quarter? No, no, no. This extra provisioning is for materials which have to be purchased over the next four quarters, where we believe at the current situation, the escalation would not cover up the cost. For example, currently in NBCC, we are at an escalation of 6%. We don't believe that 6% will cover the entire cost. Point number one, it is basically referring to the government contract because in private sector, we do only Shell and Core. So there is no electromechanical business over there. Similarly, if you look at the aluminum windows, which we are fixing in all the government projects, the price has gone up.

50:38 A substantial portion of that is currently under coverage of price variation. But going forward, if it does not move the way we perceive it should move, then perception cannot make us prudent offering, a laid back that we should not provide now and then provide suddenly in quarter three and quarter four. So if you see that the escalation has caught up with the price at which it is being purchased, you will see reversals in quarter three and quarter four. That is what I meant. Okay. Okay. So just to summarize this INR 20 crores is the potential exposure to this inflation for the project which are impacted by this commodity inflation. Which are impacted, where the escalation at the moment is not covering the total increase.

51:29 Yes. Yes. But for the completion of these projects, let's say, over the next three, four quarters? Yes. So we cannot foresee beyond three quarters, at best, four quarters to the best of our information, taking into consideration the price increases. These provisions have been made. And if the facts are in favor of the organization, you will see reversal in quarter three. And if the facts continue, there is easing of the geopolitical tensions and the prices actually fall, then it will be a complete reversal. But I wouldn't like to comment anything strongly on that, but we do expect some reversals to happen, as I explained earlier.

52:15 Understood. Understood. Just last question on this working capital. I think you mentioned that you want to be net debt free in next eight quarters from now? Net debt fee. Yeah. Net debt fee. Right. But let's say, if we think of, you know, March 27, this year, this this fiscal. And so last year, we had reduced the working capital by, I think, forty odd days. Right? Where do we want to, you know, see as a medium term target for the, you know, this this year end? Where do we want to end up? See, I'll just tell you, sir. From 2013 till 2020, our net working capital was between INR 56 to 72 crores.

53:05 All right? Net working capital. Net working capital is the overall impact of reduction of contract assets, more receivables getting converted, a net cash flow position from operations. So you saw last year, the cash flow improvement from INR 50 crores to INR $2.50 crores, approximately give or take INR 10 crores, all right? We expect that momentum to continue and therefore, projections. And ideally, I would like to see ourselves at a pre COVID situation, where at which time, our $3.25 crores was stuck. Today, we have bought that figure down INR $2.50 crores or INR And we have a target for the current year of INR 50 crores also. We have achieved our target of better last year, and we are hopefully on track for achieving that in the current year as well. So all these realizables, which come always directly impact the net working capital contract assets in a positive way. So since we reduced last year by forty days, we expect, if not that much, at least twenty five, thirty days to happen in the current financial year also.

54:21 Okay. Okay. And rest by FY 'twenty eight, will So end up absolutely, sir, the industry has to set up, I believe, your analysts like you all have to set up, whether you all would like to compare the contact assessment plus debtors, excluding retention to turnover or whether you would like to monitor the net working capital. So whatever you all say, we will put it in our company's investor presentation every quarter. We'll be very happy to be as transparent as possible. As there are no further questions from the participants, I now hand the conference over to Mr. Rohit Katyal for closing comments.

55:09 I would like to thank all of you again for joining on this call today. We hope we have been able to address your queries and provide some insights into our performance and future outlook. If you have any further questions or require additional information, please feel free to reach out to our Investor Relations team. Thank you, and thank you for your time and continued support. Bye bye. On behalf of Capacit'e Infraprojects Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.