Capacit'e Infraprojects (NSE:CAPACITE) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Capacit'e Infra Projects Limited Q2 and H1 FY 'twenty seven Conference Call. As a reminder, all participant lines will be in the listen only mode. 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.

0:54 I now hand the conference over to Mr. Rohit Katyal, Executive Chairman, Capacit'e Infra. Thank you, and over to you, Mr. Katyal. Good day, everyone, and thank you for joining us. On behalf of Capacit'e, I extend a warm welcome to all participants on our Q2 H1 FY 'twenty seven earnings conference call. Joining me today are Mr. Rajesh Dhar, CFO Mr. Alok Mehrotra Mr. Nishit Pujari and our Investor Relations team from Marathon Capital. I trust you have had an opportunity to review our financial results. The presentation and press release have been filed with the stock exchanges and are also available on our website. I'm pleased to share that we have delivered another strong quarter, achieving our highest ever quarterly revenue of INR $7.71 crores, representing a 19% Y on Y growth despite the seasonal changes challenges.

1:54 This performance reflects the strength of our execution capabilities, the commitment of our teams and the confidence our clients continue to place on us. Our growth is backed by a strong and diversified order book of INR 13,000 crores as on 09/30/2026, providing excellent revenue visibility for the coming years. During FY 'twenty seven, thus far, we have secured new orders worth 2,487 crores, reinforcing our market position and creating a solid foundation for sustained growth. Supported by our strong client relationships, improving execution intensity and a healthy pipeline of opportunities, we remain well positioned to capitalize on the growing demand across the construction sector.

2:47 We have also remained focused on strengthening our balance sheet and improving operational efficiency. Our healthy leverage profile and improved working capital performance provides us with the flexibility to pursue growth opportunities while maintaining financial discipline and creating long term value for shareholders. As we look ahead, our priorities remain clear: accelerating execution, securing quality orders, enhancing operational efficiencies and delivering sustainable and profitable growth. I now turn to the key updates during the quarter. This quarter saw us achieving our highest ever quarterly revenue, driven by a significant ramp up in the project execution across key sites.

3:33 While elevated commodity prices continued to exert some pressure on the margins, the impact was substantially mitigated through contractual escalation clauses embedded in our projects for key raw material. As execution scales up further and commodity prices stabilize, we remain fairly confident of improving profitability over the medium term. Improved working capital efficiency resulting in a reduction of eleven days in working capital cycle compared to Q1 FY 'twenty seven. The company added Mahindra Lifescape Developers Limited as a new client, further strengthening our customer portfolio. As mentioned earlier, order book stood at INR 13,013 crores as on 09/30/2026, with a balanced mix of 54% coming from public sector and 46% from the private sector projects.

4:29 Combined with orders secured in FY 'twenty seven and a strong identified bidding pipeline, we remain confident of surpassing our FY 'twenty seven order inflow target. With that, let me take you through our operational and financial performance for the quarter. Revenue from operations for Q2 FY 'twenty seven stood at INR $7.71 crores, up by 19% year on year. Revenue from operations for H1 FY 'twenty seven stood at INR 1,400 crores, up by 13% year on year. EBITDA for Q2 FY 'twenty seven stood at INR 119 crores, up 10% year on year. EBITDA margin for Q2 FY 'twenty seven stood at 15.5%. EBITDA for H1 FY 'twenty seven stood at INR $2.18 crores, up by 4%.

5:18 EBITDA margin for H1 FY 'twenty seven came in at 15.6%. PAP for Q2 FY 'twenty seven stood at INR 48 crores as compared to INR 51 crores in Q2 FY 'twenty six. PAP margin for Q2 FY 'twenty seven stood at 6.1%. Similarly, PAC for H1 FY 'twenty seven stood at INR 87 crores as compared to INR 98 crores in H1 FY 'twenty six. PAC margin for H1 FY 'twenty seven stood at 6.2%. With that now I leave the floor open for questions. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Participants are requested to please use only handsets while asking a question.

6:29 The first question is from the line of Rajesh Jain from RK Capital. Please go ahead. Congrats on a good set of numbers. Sir, my question is primarily on the contract asset side. So if I look at your balance sheet, under your noncurrent assets, there are contract assets of 2,010 crore. Under current assets, there are contract assets of $117.92, and trade receivables on top of it are $11.82 crore. Okay? So all put together, it comes to 2,640 crore, which is 95% of your previous twelve months revenue. I want you to understand this contract asset. Are all of these only retention money and unbilled revenue? Or is there something else in this? And how much of it is retention money and how much is unbilled revenue?

7:26 So retention money is INR 170 crores, which has remained steady in spite of growing revenue, number one. Number two, the contract assets have to be reduced by INR 217.62 crores towards a negative contract assets. As such, the total contract assets will stand at... Net will be... It will be divided into the following, please note it down. $11.88 is towards work in process is essentially our milestone payments, which are built. And if you see the increased revenue is only reflecting that this WIPs, in spite of increased top line, are getting converted into sales and debtors as the debtors are getting collected.

8:20 The collection for the corresponding six months also reflect that fact. The debtors in totality after ECL provisioning stood at on a consolidated basis at INR 1,300.27 crores. And most importantly, the working capital days quarter on quarter have fallen by eleven days. As informed during the last conference call, this trend will continue, and you will see the committed reduction in the full financial year. Okay. Sir, I'm not yet clear on one point. So how much should I count as your total receivables? Because there is a build receivable and there's an unbilled receivable, right? So if I have to put both of them together, that figure will be roughly around 2,300 crores, 400 crores? Or what will be that figure? INR 2,400 crores on net basis, please.

9:18 Okay. Which will be roughly around 85%, 90% of your previous twelve months revenue, right? No, but this has to be taken over the revenue built up for the current financial year. It should be approximately 77% to 78% of the full year. Okay. And sir, what are the aging what is the aging of these contract assets? Like how much of contract assets are zero to three months and three to six months and more than six months? You can just drop in a mail. We can share that with you. However, having said that, the debtors are at 1,300 crores, all right? So approximately one hundred twenty days, which includes milestone billings, which are done and received over the next two quarters.

10:05 So that is the total debtor level, and it has to be compared over the revenue projections for the current financial year and not the previous year. Okay. Fine. And sir, like when I compare with your peers, like I think your peers are having contract assets at roughly around 18 to 20% of the revenue. So I just wanted to understand why are... I mean, why is that after we recognize the revenue in our books? But why are we not able to bill to the client? I understand the reason is there are certification delays. Right? They're... Maybe you're not getting the go ahead to to raise the invoice. So I wanted to understand that why does it take so long for our clients to certify the work? And why is it not the case with similar peers like Aloo, Aliyah or other peers?

11:00 So I will tell you, let Aloo, where it just come out, so I will not be able to comment on that. My nearest competitors like PSP are at 78%. I do not know from where 19%, 20% has come. All over the last year was 58%, all right. We were at 87, and we are giving a guidance of about 78% for the current year. In the same sector, other people like material engineering is above the top line, that is 108%. You have many companies, but I have yet to see any company or having 19% to 20% what you mentioned, contract assets, you have to add other assets as well under what classification the assets are lying that has to be totaled up, all right? We have the calculations available with us. So your information, my friend, is incorrect.

11:57 Nowhere in the industry anyone has a contract assets, which includes WIP, retention monies, certified debtors and noncertified debtors of 20%. Market leader in this, the last year was Aluwalia 56. Everyone else having the A rating is above close to 72%, 73% of the top line. And we hope to achieve in the current financial year close to 77%, 78%. Sir, in general, irrespective Mr. Of the Jayant, please return to the question queue. Okay. Thank you. Thank you. Our next question is from the line of Dananjay Mishra from Centrum Broking. Please go ahead.

12:48 Yeah. Good morning, sir. So can you talk about project wise contribution in the current quarter from all these projects like NBTC, Signature Global, Mahara, and also and also the recently awarded players like or Mahindra, when they are going to contribute from each quarter in terms of numbers? So out of the certified sales for the first six months, So Sitco stood at INR 178 crores. I can be up and down by INR 102 crores. Mahara was INR 123 crores.

13:35 Leisure Valley was INR 95 crores. Raymond's was INR 100 crores. Downtown was INR 111 crores. So these were the main projects. Apart from this, M3M was INR 60 crores, Godrej Malakhni was INR 50 crores, IOC at Andheri was INR 40 crores and so on. On the consolidated basis, MCGM Bandur gave INR 63 crores and the Maldives project gave INR 169 crores. And when can we start, I mean, follow-up from the first question only, this Mahindra Life work, when will it start from Q1 of next year? Or it will start from Q2? The revenue, ideally, we should start recognizing from quarter one of the next financial year. If it starts by quarter four, it should be should be avenues for everyone.

14:45 Okay. And my second question, as per new project is coming in, so can we expect the next two quarter run rate will be INR 800 crores plus for this financial year? And eventually, as we are targeting INR 4,000 crore in FY 'twenty eight, so we will be reaching INR 14 crore quarterly run rate by Q1 or Q2 next year? Yes, we are ready to do that. We have already crossed in the previous month, more than INR $2.60 crores. So we are well positioned to cross INR 300 crores run rate by quarter four. And therefore, the projection of 4,000 crores for the next financial year. That's number one. Number two, our target is quite strong for the current financial current quarter as well. However, we need to account for the NGT issues, which may arise and are getting more and more stringent with every passing year.

15:43 So I cannot give I cannot predict what will be the NGT stand in Delhi NCR for this current winters. However, we have definitely factored about INR 50 or 45 crores to 50 crores of revenue loss. All in all, we have given a particular target for the month for the year, and we see no reason at the moment in time why we will not achieve that. But nationwide water issue is there. So our requirement of water for construction project, so can you anticipate in certain reason government may ban this construction activity for temporarily as as water require... In level... Levels are low across many reasons.

16:33 So what is your take on that? We are urban areas construction company. So we did not face the problem or we let us say, we counted the issues, which were during the low rainy results resulting out of the rainfall. At the moment, we do not anticipate any such issues. However, if something drastic were to happen, we will keep our all stakeholders involved. NGT issue will come only in NCR, isn't it? No. NGT is for NCR. Okay. That is all from my side. Thank you and all the best. Thank you. Thank you. The next question is from the line of Tanmay Jain from Dollar Capital. Please go ahead.

17:24 Yeah. Hi, sir. Thank you for the opportunity, and congrats on the results and performance. So my first question is mainly pertaining to the labor availability that you might see, especially in the upcoming UP elections in the last quarter of the financial year. So like, can you please elaborate on this? And if possible, if you can quantify on the execution capabilities that might impact it due to this? If you have heard my comments in the last quarterly conference earnings, I said that in India, we cannot work more than ten months in a year because of continuing elections, because of NGT issues, because of issues which are not attributable to the company or, for that matter, anyone. So these are post measures. I can only call them post measures. At the moment, I do not see any impact.

18:21 The availability currently is quite strong, all right? And we are taking all measures to retain our workmen during elections. Quarter one of the current year saw the revenue dip because of the Bengal elections. And whatever learnings have come, I think all major construction companies are trying to do that to avoid similar situation in quarter four of the current financial year. Okay. Fairly, and this is sir. My second question is mainly on the aluminum prices. If we see the aluminum prices, you know, come back to pre war levels and there's on the commentary from the global aluminum companies, it seems like it will be hovering around these levels or maybe go down. So are, like, at these price levels still high on the... Still high for us for... As a procurer, or we can see any possibility for reversal in the provisions in the coming quarters?

19:21 See, at the moment, the steel prices, which were 47,000 three months ago, today are hovering around 62,000 per metric ton. Aluminum prices have come down, but it is still away from the levels it were in the pre war period. Aluminum homework had gone from 10,500 per square meter to 14,500, representing a 40% increase. Yes, there will be a correction, It should come down to INR 12,012 thousand 500 for future procurement. However, at the moment, I cannot comment whether it will be in the prewar stage. That's number one. Number two, our profitability is not impacted by higher aluminum prices because it's a short term CapEx for us or for that matter for any concerned company.

20:15 It is written down over the five, six year period as per the depreciation policy of the company. It only impacts cash flow. So if we were to spend 1 crore of rupee earlier on procurement of aluminum foam work, now we have to expend INR 1.4 And the appreciation in dollar has also not helped the cost. So I don't see any impact on profitability. Slight impact or negligible impact on the overall cash flow from operations at the end of the financial year. Also, I do not see any impact. So we have to wait and watch. It's too it would be premature on my part to say what impact this 2,000 square meter fall of aluminum would result into.

21:04 Yes, electrical items will become more reasonable, but we have to give them a couple of months. So sir, like how much CapEx we have done towards the aluminum framework procurement like in the H1? We have done a total of $1.27 crores of total homework purchases. And the balance that we are left out... I would like to correct myself. I'm sorry. The total homework purchase is INR 64.23 crores. And the plant and machinery purchase is INR 10.57 crores. Since the order pipeline is very strong, I do believe that the entire budgeted procurement of INR 135 crores to 140 crores will be required and completed in the current financial year. That is the balance H2.

22:04 And, sir, I'm getting it correctly that, like, at current price levels, these levels are still higher than our escalation clauses. So It is... So if it... The gap was 5% or 6% in quarter one, the gap has come down to maybe 2%. As I had told last quarter also, it takes six to nine months. The government wholesale price index do not move the way the international markets move. Understood. Understood, sir. So just let's... Just one last question. Sir, I just want to broadly understand how asset turnover works in our business. Like, for instance, if you are targeting around INR 4,000 crore of revenue in FY twenty eight. So essentially, I want to understand how CapEx requirements are aligned with the revenue growth.

22:54 Can you just briefly give me the answer on that? The CapEx requirements are directly proportional to the order intake and the quantum of projects which we start quarter on quarter, all right? However, we have maintained our 4x fixed asset core fixed assets turnover ratio that for the quarter ending thirty nine, twenty twenty six, stood at 4.7. Okay. So I can assume that for achieving, like, 4,000 per milestone, we will be in need of more CapEx. And, basically, it's some basing on that margin, that's that's what my concern was.

23:45 Sir, I think we have a industry leading back margin. Our cash back margin also continues to be within the target range of 10.5% to 11.5%. Our cash flow last year after adjustments was positive. That is after repaying INR 101 crore of term loans. At the moment, if on consolidated basis, our fixed asset revenue turnover ratio is INR 4.7. I don't see any reason why on INR 4,000 crores, it will not be well above INR 5,000 Again, an industry leading number. And therefore, see, the cash flow from operations is what is most important for us. We have to ensure that after repaying our term loans or adjustment of financial adjustments in the cash flow, the company is left with positive cash flow.

24:39 That is very important. Profitability, as I told, because of geopolitical issues, you saw some more dip in quarter one. It was better in quarter two. And I'm sure if the geopolitical situation improves, we will see a higher VAT number going forward. However, whatever our targets are set for the whole financial year, I don't see any reason, material or otherwise, at the moment to change that. Thank you. The next question is from the line of Vasude from November. Please go ahead. Yeah. Thank you for the opportunity for congratulations on a great set of numbers. So can you just give us what's the current progress on the Mahara, Silco and the signature global projects?

25:35 So Mahara, out of 34 rehab towers, we have been given 25 rehab tower already. At the current level, the total rehab portion at the JV level will be close to INR 6,500 crores. So you can divide that if reduce about nine towers to be received, we have a clear cut work front of close to INR 4,200 crores, INR 300 crores as far as the rehab towers are concerned. This figure includes price variation. On the sale residential, we have started filing on Sector 8 And 9, which are the sale residential towers.

26:25 Sector 10 will be handed over by the department latest by December. So we can see a serious ramp up of revenue in the current next financial year. We have already seen a ramp up in the current financial year, but a very meaningful ramp up can be expected in the next financial year. And just to add a caveat, 35% would be to our share, CIL share. On the second part of Silco, I'm happy to share that further scope of work will be added to the operational order book in the current month or so. And therefore, we expect revenues from new locations starting from quarter one of the next financial year.

27:16 And therefore, we will see a meaningful revenue from the Sitco project happening. Point number three, Signature Global will be impacted in this quarter due to NGT issues. But otherwise, we are getting close to 15 crores per month or thereabouts. And we are well in a situation that the Phase one that is titanium, we should excluding the NGT impact, we should be in a position to bill INR 18 crores, 19 crores per month from quarter four of the current financial year. Yes. That was helpful. In Mahara and Silico, is it possible to give what is our quarterly run rate right now? And how much are we expecting in q four and going forward?

28:10 Yes. For Zilco in the first six months, the company has done INR 177 crores, all right, close to INR 30 crores per month as a run rate. We expect this run rate to increase by 35 percent to 40% in quarter three and quarter four. From quarter five quarter one of the next financial year, obviously, I told you that new scope has been added, and that will substantially increase the revenue. So next year, I do expect the run rate to not be less than 50 crores per month, which would mean that INR 150 crores per quarter and INR 600 crores per year.

29:02 As on Marai is concerned, we have done a revenue of INR124 crores in the first six months. Again, we expect an increase of 25 percent in the remainder of the financial year and this should increase by overall 40% from the current levels in the next financial year. That was quite helpful. And sir, second question is that you mentioned that water supply is not being an issue for us and even the commodity prices are coming down. So the INR 10 crore provisions that we did in Q1 and also in Q4, do we expect it to reverse in the second half? I cannot give a comment because you see that I would like to see the markets behaving, the geopolitical situation easing out because oil is $115 one day, 95 the next day, someday it becomes $72 So it's too volatile at the moment.

30:05 And even the dollar price is not helping. So the point is we should give it a quarter more. If the price variation in government contracts can match the actual market inflation, then you will see some reversal happening in quarter four. Unfortunately, if that does not happen, it will not happen. But we should not predict the markets very, very dangerous to do that. But at the moment, what I can say is the green shoots are that in quarter two, the escalation, which was much lower in Q1 as per the Office of Economic Advisor has increased and the gap has narrowed down substantially. And therefore, you see the improvement in profitability.

30:54 If this gap diminishes in quarter three, I will be better placed to answer this question in the next earnings conference call. Okay. Sure. So that was great. Thank you and happy to value to you and your team. You too, please. Thank you. The next question is from the line of Bharat Takkar from JMP Financial. Please go ahead. Thank you for the opportunity. My first question is regarding the pipeline. Has there been any projects where we have bid and results are yet to be abated? Yeah. Many. So we have active bid negotiations going on for 3,270 crores.

31:41 The bid pipeline is very strong, and we don't... We see no reason why we will not surpass our annual target provided to you all. And also, can you once reiterate the guidance for FY '27? So FY 'twenty seven, the original guidance was INR 4,500 crore. I believe that as I speak to you today, we have done INR thousand 5 crore or thereabouts. You want FY 'twenty eight or 'twenty seven? 'twenty seven only, 'twenty seven. 'twenty seven. So INR 4,500 crores was the guidance for the financial year 'twenty seven. We have already crossed INR 2,500 crores or thereabouts.

32:29 And with the bid pipeline and whatever we have submitted the bids, we are very confident of surpassing the full year guidance comfortably. And the margins would be in the same level of 1H? So margin profile, we have given a guidance for the full year, and we will maintain that guidance at this moment in time. If there is improvement in commodity prices and the escalation, as I mentioned in the previous in the answer to the previous question, if the escalation matches the cost price increase, we will revisit that in quarter four of the current financial year. But the current guidance remains intact.

33:19 Okay. Thank you, sir. Those are my questions. Thank you. Participants with questions may enter star followed by one. The next question is from the line of Deepak Pudar from Sapphire Capital. Please go ahead. Deepak, your line is unmuted. Please ask your question. Yes, am I audible? Yes, sir. Okay. Thank you very much, sir, for this opportunity. So just on the continuing on the margin part, so what's the guidance of the margin for this year, FY 'twenty seven EBITDA margin? So we have given guidance in the quarter one itself of INR 15.5 to 16.5 at EBITDA level. And we have given cash back levels of between INR 10.5 to 11.25 whereabouts, and we continue to maintain that level.

34:09 So this what is 10.5 to 11? Cash back, cash profit. Okay, okay, Got it. So ideally, I mean last year also your EBITDA margin was around 16%, 16 So point three ideally, if you look to grow your top line by 20% with similar EBITDA margins, so ideally, bottom line also, do we expect 20% kind of a growth in your bottom line? Bottom line, yes, we have been growing at a CAGR of 40% or more in our bottom line. You see that as a practice and company policy, we always discuss with you all the consolidated numbers, all right? And consolidated numbers means that where the company has joint ventures, it has got overseas projects like in Maldives, where obviously, the margin profile is lower than the project what we are executing on a stand alone basis.

35:06 Because we are only taking into account our share of profit, okay? And therefore, I see no change happening in that. On the contrary, with the Maldives project getting over in the current financial year, you will see some uptick in the margin profile next financial year. So the reason I was asking because in this first half, on a Y o Y basis, your bottom line is largely similar. We have not seen any growth in your in the first half. So that's the reason I was asking that in the entire year, do we expect, I mean, similar revenue growth as in prior growth? Sir, last year, we were impacted positively by recovery of certain assets through sale of noncore assets.

35:57 And therefore, this was informed in the last year's conference call as well. We have a target assets held under sale of 48 crores in the current financial year as well. We are putting all efforts to realize the value of those assets in the current financial year. If we are successful, then you will again see an uptick in the margin profile. But you have to remember, this is coming from the held up monies, which were held up maybe five years ago, and the company has worked very hard to get this money realized. I'm talking the from the operating current order book perspective, 15.5% to 16.5% is the EBITDA guidance for the current year.

36:43 It remains the same as what we told last year last time around. And the fact will also be at similar levels. If the other income comes in, you will obviously see a step up in the profit margins. Understood. And on the provision part, I mean, I think last two quarters, we have provided some INR 20 crores, right, because of the commodity price volatility. So have we provided anything this quarter? We have not provided anything this quarter. And any kind of reversal that we can expect in coming quarter? Yes, I just answered that. You can expect reversals only if commodity prices stabilize over completely over this quarter, and we see some benefits of green shoots we can see today.

37:32 And therefore, there is no provisioning taken in the current quarter. But we have to give the markets to stabilize sometime. And once we see the stability, we can guide for this reversal for quarter four only when we meet for quarter three results. Okay. Okay. Understood. That will be from my side. All the All the best. Thank you so much. Thank you. The next question is from the line of Rahul Kumar from Bankaria Fund. Please go ahead. Yeah. Hi. Thanks. Just on the guidance for the full year in terms of execution, when you mentioned that 20% growth, you know, we are guiding for FY '27. Are you factoring in any disruption for the MCR region?

38:22 I... The answer is. However, for your clearer information, we... No one can predict what is going to happen this year around with NGT. Last year, we had taken fifteen, twenty days as a set out period. All right. However, the first set of details which are coming out like a complete ban from November 5 to November 20, itself is taking away fifteen days. So last year, it was Graft one, two, three, four. So complete suspension used to happen in graft four. Now we are still in graft two, three and the complete suspension has happened. So we will have to wait and see how it pans out. I am as eager as you to know that, but I will not be able to give a firm number to that. If the disruption is fifteen days or so, no issues at all. If it is twenty days, we will still cope up from the other projects.

39:15 However, if it is forty five days, I cannot give a number to that. Okay. Okay. Understood. And for, let's say, one edge, you know, 1,400 core revenue, how much of that was from, you know, NCI? From? From NCI. I do not have that bifurcation in front of me. But if you put a mail, maybe we can try to answer your question to some level. Okay. Okay. I'll do that. Second question is more on the margins. I think as you already answered a lot on margins, but would it be fair to say that, let's say, you know, the commodity prices remain where they are as of as of now?

40:07 These are the, you know, the bottom margins which we have seen now, and hopefully, they should improve from here on? So as I would like to reiterate again that if the commodity prices stabilize and the escalation clauses in the government tender match those increases, then yes, you will see improvement from quarter four. But if the prices of main commodities are so volatile that one quarter between quarter one and '2, you see a gap of 35%, then it is very difficult to give a prediction. However, currently, they are stable. There are some downward trends in the main commodity prices.

40:53 Most of the 100% of the private sector is full pass through. But when the in government, it depends on the price variation, which is derived from the WPI and commodity based indices. Those have caught up much better in quarter two. If they catch up in quarter three, then yes, in quarter three earnings call, I can give you a firm answer. But if it is not stable, then it will be very difficult to predict something on which I have no control. Okay. Okay. And which are the commodities, which where you're seeing a higher inflation versus the wholesale price index rate cost inflation?

41:39 We have seen higher prices of steel, okay? We have seen higher prices of all electrical items, which have just little bit got corrected because of CPW circular. And the formulas to bring it down to the current prices. So these two are the major things, which are impacting. The war took the time prices through the roof by 20%. Escalation has caught up to some extent, but not for the entire increase. Whereas the increase means, obviously, it increases the cost of production, all right? So therefore, if the quarter three does the catch up and matches this increase in finishing items, electrical items, electrical items and so on and so forth, I will be able to give a more clear answer in the next conference call.

42:40 Okay. Okay. So basically, for the public sector projects, commodity Sir, could you return to the question queue? Is this just a continuation of this question? You could please return, please. Okay. Thank you. Participants, please limit your questions to two questions per participant. We have several participants awaiting their turn. The next question is from the line of Devakar from Prudent Equity. Please go ahead. Sir, I would like to know the long term strategy of increasing our margin because in last eleven quarter, we have not seen any profit growth. We used to do 18% margin. Now we are doing 15%. And this quarter, your depreciation expense has also increased from INR29 million to INR35 million. So what is the long term strategy to increase this margin and give some profit growth on quarterly basis?

43:33 The profit from with respect to last quarter has increased. However, as a strategy, I have just mentioned that the company continues to look at profitable orders, which match our current profit profile or improves upon that. And our order mix clearly substantiates that these orders, which have to be executed over the next three, three point five, four years period when superimposed do suggest that the margin profile, which we have been committing of 15.5 to 16.5% as EBITDA, which again is a market leading EBITDA level or the past level at the current levels because we still wait for the commodity prices to stabilize. Once that stability happens, I can give a guidance on the increase.

44:23 But on an absolute basis, we are well on track to have a very good growth in the current year and the next financial year. So there is no change in the long term strategy of the company. We will focus on our core strengths. We will not digress into new segments of infrastructure. Building and building construction, including factories, will be our domain of growth. And there will be some geography expansion into Tier two and Tier three cities. We will be qualified for international projects once we have completed The Maldives. And this is how the strategy of the company, was taken up in 2024 will continue, and there will be no change in the foreseeable future.

45:13 And so on the debt part, I see there is there is some increase in the debt. So how do you see the debt in this financial year and next financial year? The debt at this level, in spite of the growth, will remain same. We have invested about INR 80 crores in CapEx, majority of which has come through term loans. The repayment per month is approximately INR 10 crores. So I see I believe firmly that by thirty first as on March 31, there may be a slight reduction, but we foresee a sizable buildup on the cash position. So the net debt should fall or be in line with the 03/31/2026 numbers.

45:58 This is what we believe. And sir, I would like to know the depreciation expense trend going forward. This quarter, we did around 35 crores. So given that, you said you will be doing $1.35 CR CapEx. So how do we see how do you see the depreciation? Sir, depreciation is directly proportional to the CapEx which we do. So the point is that aluminum foam work, which is a majority of our procurement, is being written off over a seven year period. And maybe with the project execution periods, which was earlier four point five years now coming down to three years, this depreciation will only accelerate. So at the moment, all I can say is it will be at the current level. What is more important for us is to improve the top line and thereby bring down the fixed cost as a percentage to the top line to improve the profitability, EBITDA or whatever parameters you are looking at.

47:05 Sir, do you have any further questions? No. The next question is from the line of Amit from Robocapital. Sir, I just wanted to reconfirm our FY 'twenty eight revenue guidance of INR 4,000 crores. I hope I... I mean, I've joined the call after a couple of quarters, so I just wanted to reconfirm that. Yeah. At the moment, our guidance remains unchanged For FY '8. For FY 'twenty eight at INR 4,000 crores. Alright, sir. Thanks. And what do you expect the order inflow to be for, you know, this... Like, h two of this year and next year, FY '28? So h two of the current... We believe that we will cross the targets given for the full year very easily.

47:54 So that's one. The target was given at INR 4,500 crore as new order inflows. The current orders already booked and with what we are negotiating in current month and next month, we do believe that we may revise the order inflow chart in the next quarter. The bid pipeline is very, very strong. And so we see no reason why a 25% increase in order book should not happen in the next financial year to commensurate with our top line guidance. The next question is from the line of Parikshit Gupta from Fair Value Capital. I am relatively new in covering the company, so please pardon my naivety of questions.

48:48 First question on the public private share mix. While I do understand that the management's objective is to ensure profitability and cash flows rather than the sponsor, Are there any plans of moving towards more private projects in the coming future? 55%, 45%. So we have maintained that a healthy mix will be maintained at about 55%, 45%, 50%, 50%. It's dynamic. You have another 1,000 crores coming in private sector, it may shift to private sector being called INR 45 and government, INR 45 You may see certain government projects from coming in, and that may shift again. But ideally, we would like to see government at 55%, private sector at 45%. This is simply because the government projects are lock and key.

49:37 The project values are higher because it's not share and core like in private sector. So this mix is what we will try to maintain. What is the second question? That's it? Okay. No, no, no. I'm sorry. Yes. The second question is on the promoter pledge. I believe that the management had earlier guided that it would be completed by the end of FY 'twenty seven. So I just wanted to check, has there been any updates on that or any modifications in the earlier guided figures? No change. We have reduced ZAR 35 lakhs of pledge this year. Now only ZAR 50 lakhs of shares are placed for the company limit with State Bank of India, project specific limit. The limit, which was initially INR $60.08 crores has come down to INR 140 crores.

50:32 And therefore, we have given a guidance of 03/31/2027, and we are working towards it. However, this pledge is not for promoter or anything. It's for the company's working capital limits, which the company is using. And therefore, it's a it can be concluded as a very, very safe pledge, unlike the earlier pledges, which were given to NBFCs, which has all been removed, and the company will not give any pledge in the foreseeable future to any NBFC for working capital limits enjoyed by the company. Understood. So these are very helpful. Thank you very much for the answers. Thank you.

51:19 Thank you. The next question is from the line of Sanmejjan from Dollar Capital. Please go ahead. Yeah. Yeah. Thank you for the opportunity again. Sir, just two quick questions. Firstly, on the monthly on the MVCC project and the IIT Bombay project. So MBCC, we have crossed 60 run rate. However, they will... The NGT impact for November will be there. But not withstanding that, in the clean period where the NGT impact is not there, we will do about INR 70 crores 65 crores to INR 70 crores per month. And for the IIT Bombay?

52:04 IIT Bombay, only one location has been handed over of INR 70 crores against INR $5.50 crores. And that's the only thing we can execute at the moment in time. The client is trying their level best to take certain permissions for tree cutting. Once that is there, then the overall run rate can be given. However, we do believe that the client should be able to provide the entire frontage by thirty first March 'twenty seven. And in which case, we will have to then complete the project in twenty four months, which means that the run rate would be about 60 crores per quarter, excluding escalation. Yes, do you have any further questions? Yes, just one last question, sir. Sir, as NBCC is planning for the Gittoni land for the redevelopment project, by any chance, are we looking for that opportunity?

53:06 Or See, we continuously we continuously keep bidding for CPWD and NBCC in the central government apart from the other BSUs. So NBCC, a lot of projects are coming. I do not have a list of the specific one, which you mentioned. But then there will be bids going month on month to NBCC. And depending on the geography where we are present, we shall submit our bids. So for example, there were bids invited for JNK. We refrain because that is not our geography at the moment in time. But yes, we will look at projects in Delhi and CR area, maybe even 150,200 kilometers away from Delhi and CR.

53:52 And we will be looking at Mumbai MMR area. So NBCC and CPWT, these are the locations we are focused on. Okay, sir. And we will be re waiting for the CPWD for the RV quarters. Absolutely. Will will be. Okay. Thank you. Thank you so much. Thank you. The next question is from the line of Rohit Gupta from RKG online. Please go ahead. Hello, sir. Good morning. Sir, regarding the project, the company, could you please explain why the project award process is taking so long? The Board meeting has happened, and we are given to understand it has been cleared in the Board meeting.

54:40 Hopefully, in the next ten years, we should be able to share some good news with you. And sir, my next question is, could you please explain the rationale behind appointing four CEOs? Yes, absolutely. We believe that including Rahul or other members, no one is a superhuman. The projects are getting more and more complex. And therefore, we have appointed co CEOs in charge of each BU. We have divided these BUs into four, BU1, BU2, BU3, BU4. And each BU head or CEO has been mandated with a minimum revenue and profit after tax or what we call in construction power lines as site contribution quarter on quarter and for the year.

55:32 So we believe that this structure has given us a better quarter two, and we see no reason why this upward trend will not continue. This was the only reason for having a strategic shift from having a conventional one CEO to four BU heads or CEOs. Thank you. The next question is from the line of. Please go ahead. Yeah. Hi. Thanks for the question. I would just like to understand how much recovery has been done for the first half from the aging from that old data that we had? And what is the expectation at the end of the year, how much we will recover?

56:22 So we have been able to get the property registered in our name. We hold INR 48 crores of properties for sale in H2 of the current financial year, and that is the target. In the first half of the first half, the physical money flow was approximately INR 5 to 6 crores. However, this will grow manifold in the coming quarter or two. So answering your question, 48 crores plus whatever has been recovered, maybe INR 52 crores to 54 crores could be the total recovery. Obviously, this is subject to the pricing available for the properties held for sale. And so and what will be the final number that will be that we will be getting, so let's say, by FY 'twenty eight?

57:11 So I have given that our INR 200 crore, which was held up or maybe INR $3.50 crore in 2020, we have already recovered close to INR 200 crore out of INR 150 crore. We are holding assets worth INR 50 crores or thereabouts. That will remain put that will that means only INR 100 crores will be pending subsequent to this collection, against which we already are having some properties, and we are on the verge of finalizing certain settlement agreements. As and when that happens, we will let you know. But I would like to say that we have been successful in protecting the commercial interest of the company for the monies which were stuck and provided for over these so many financial years.

58:05 Great. For the updates. Thank you. Ladies and gentlemen, we take that as the last question. I now hand the conference over to Mr. Rohit Katyal for closing comments. Thank you all for joining us today and for your continued support and confidence in CAPACITE. We hope we have addressed your queries and provided useful insights into our performance and our growth outlook. With strong order book, healthy execution momentum and a robust project pipeline, we remain confident about our future prospects. Should you require any information, please feel to reach out to our Investor Relations team. As we celebrate the festive season, I wish you and your families a very happy Diwali and a prosperous New Year. Thank you once again, and we look forward to connecting with you again next quarter. Have a wonderful day and holiday.

58:57 Thank you very much, sir. On behalf of Capacit'e Infraprojects Limited, that concludes this conference call. Thank you all for joining us and you may now disconnect your lines. Thank you.