Vikran Engineering (NSE:VIKRAN) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the q two NH one FY twenty seven earning conference call of Vikran Engineering Limited. We are pleased to have with us the senior management team of Vikran Engineering Limited. As a reminder, all participant line will be in the listen only mode, and there will be an opportunity for you to ask question after the presentation conclude. Please note that this conference call may contain forward looking statement about the company, which are based on the beliefs, opinion, and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve involve risk and uncertainties that are difficult to predict. I would now like to hand the conference over to Mr. Rakesh Marketkar, Chairman and Managing Director of Vikran Engineering Limited for his opening remarks. Thank you, and over to you, sir. Thank you very much. Good morning, everyone. On behalf of Vikran Engineering Limited, I extend a warm welcome to all participants joining our Q2 and H1 FY twenty twenty seven earnings conference call.

1:09 We appreciate the continuous trust and support of our investors, analysts and other stakeholders. Today, we have Mr. Nakul Markhedkar, our full time Director Mr. Vipul Markhedkar and Mr. Ashish Vahedi, our CFO, along with our Investor Relations Advisor from AdFactors PR. I hope you have had the opportunity to review our financial results and investors presentation uploaded on the stock exchanges and our company websites. On the financial front, we have seen healthy growth in our stand alone business during the first half of the financial year. Our stand alone revenue from operation grew by around 27% Y o Y to INR 4 and 24.12 crore compared with INR 3 and 35.45 crore in H1 FY twenty twenty six. Our profit after tax also increased by approximately 71% to 25.37 crores.

2:11 These numbers reflect the progress we have made in scaling our business. While we recognize that operating margin remain an area of focus, we remain committed to improving execution efficiency and delivering sustainable growth as we move forward. During the period, we received two significant orders from Power Grid Corporation of India Limited. One order valued at approximately 120.69 crore for 400 kb GIA substation package from Power Grid covering the and Rajasvir Substation. Also received another valued approximately 153.76 crore from power grid for the 400 kb AIS substation packet SS136T for the TBCV at the Tunkhoe 2 Puri Substation.

3:05 The scope includes substation work with the civil works associated with STATCOM installation. This is the first STATCOM project we got it. This is very, very important project for the nation. We also achieved an important execution milestone with the commissioning of 132 kilobytes Miao Namsai Transmission Line in Arunachal Pradesh for the Power Red Corporation of India Limited. This is very prestigious project of Government of India. And this after completion of this project, we could able to give the power to the very remote area of India in Arunachal Pradesh. The project involves approximately 40.6 kilometer of transmission line and 138 tower foundations.

3:52 Apart from this, we are very pleased to explain that we have commissioned another very important GIS 400 kbGIS substation for power grid at Malay Khodla. This is, again, ahead of the schedule by approximately two months, and this is the first of its kind in India. We have commissioned this substation with their process bus system. So Vikran become the first... The company to execute this project in India for the power gate and the process bus system. In In solar EPC, our NOPL project covers 152 locations across Maharashtra with a planned capacity of nine sixty nine megawatt AC equivalent to eleven sixty three megawatt peak.

4:41 Vikran's EPC contract for this project is valued at approximately INR 3,517 crore. Recently, NOPR entered into a long term facility agreement within ERIDA Agency for financing of up to INR 2,941.19 crore against the estimated project cost of approximately INR 4,201 crore. These developments represent important milestone across our business. Our focus remains on expanding our project portfolio while maintaining execution discipline and financial prudence. I will now hand over to Mr. Nakul Mahirkar, our whole time director to share further perspective on project execution and our business priorities.

5:34 Thank you very much. Thank you so much, sir. A very good morning to everyone joining the call and Shubadan Teras to everyone. Shared a few points about on our execution status and operational priorities, particularly with respect to our transmission and solar EPC business. In our power transmission and distribution business, the recent orders from the Progress Corporation of India strengthens our presence in high voltage substation infrastructure. Our focus is on effective project planning, procurement and coordination of site activities to ensure timely execution in line with the contractual requirement, which time and time again, we've proved that we excel in. We also achieved a very important milestone as mentioned by about the commissioning of various transmission lines in Arunachal.

6:27 The project involved very tough where around 40 kilometers of transmission line and covering 138 tower foundations in the hilly terrains and forest dense forest areas of Arunachal. This... Yes, sorry. Its successful commission reflects on our ability to execute transition projects in the most challenging geographical conditions. Coming to our solar EPC business, the NOPL project is a significant undertaking covering 152 locations across Maharashtra with a planned capacity of nine sixty nine megawatt AC equivalent to around 1.16 gigawatt peak.

7:13 Given the scale and distribution nature, execution is planned across eight clusters, allowing work progress across different location in a phased and coordinated manner. This also helps us to focus our our resources in in a phased out manner. At present, the company is able to commission nearly 10% of the required capacity even before the start of first disbursement from the lender. So now we have commissioned around 18 sites with a capacity of nearly 90 megawatt within... And we are in advanced stages for further 100 megawatt, which is expect to complete in the next month... In the next couple of months. The revenue generation from solar projects has already started and is expected to cross around INR 50 crores in revenue in the second half of the current fiscal year.

8:08 At peak capacity, the power sales would reach over INR500 crores from this facility. On the financing front, NOPL has entered into a long term agreement with Ireda for financing INR2941 crores against an estimated project cost of INR 4,200 crores. The loan carries an interest of 9.5%. The disbursement of the sanction loan will be aligned with the progress of the project execution. Since the project is divided into eight clusters, work is being undertaken across different clusters and phases, and the loan funds will be available to support execution requirements as the project progresses to subsequent stages. This phase approach, the availability of financing with the project's execution schedule and funding requirements.

9:00 Our focus to... Is on ensuring close coordination between financing procurement and on ground execution. So the project progress is planned efficient planned in an efficient manner. Across our business verticals, we continue to prioritize on time execution, maintaining quality standards and efficient resource utilization and close monitoring of the project milestones. We remain conscious about the working capital requirement of large EPC projects and importance of maintaining financial discipline while scaling our operations. As we move through the second half of FY 'twenty seven, our emphasis will remain on executing projects in hand and strengthening our operational capabilities and ensuring growth is supported by disciplined project management.

9:47 With those remarks, I would like to hand over to our Chief Financial Officer, Mr. Ashish Vaidy, who will take you through the financial performance for Q2 and H1 FY 'twenty seven. Thank you. Thank you, Nepalji, and good morning, everyone. Today, we are getting here for the auspicious occasion of Dantiras. It's the first day of our Diwali festival. So happy Dantiras to all our investors and stakeholders. I hope you have had a opportunity to review our financial results for the second quarter and the first half of the fiscal. I'll begin with our standalone financial performance followed by the consolidated numbers and a brief update on the cash flows.

10:35 The standalone financial performance for the quarter for Q2 FY 'twenty seven, revenue from operations stood at INR $2.20 crores to INR 76 crores in corresponding quarter last year, which has resulted in a growth of approximately 25%. EBITDA for the quarter stood at INR 20.12 crore as compared to INR 25.43 crore in Q2 FY 'twenty six. EBITDA margin was at 9.1% compared to 14.4% corresponding to last year. The profit after tax for the quarter is at INR 7.87 crores compared to INR 9.12 crores in Q2 FY 'twenty six. PAT margin stands at 3.6% compared to 5.2 in the corresponding quarter last year.

11:23 Moving to the first half of the fiscal year, revenue from operations increased to INR $4.24 crore as compared to INR 335.45 crore in H1 FY 'twenty six, representing a good growth of 26. EBITDA of H1 FY 'twenty seven stood at INR 48.13 crores compared to INR 48.09 crores corresponding to previous year. EBITDA margin stood at 11.3% compared to 14.3%. Profit after tax for the first half increased at 25.38 crore as compared to INR 14.78 crore in H1 FY 'twenty six, representing a growth of approximately 72%. PAT margin has also improved to 6% as compared to 4.4% in corresponding last year.

12:13 Overall, our stand alone performance reflects a healthy revenue growth during both the quarters and the first half, while EBITDA remains broadly stable in H1 and EBITDA margin was lower compared to last year. However, the PAT and PAT margin recorded improvement during the first half. In terms of consolidated financial performance, our revenue for Q2 FY 'twenty seven stood at INR 211.84 crore as compared to INR 176 crores, again giving a growth of about 20%, which is reflecting non NOPL projects. And consolidated EBITDA for quarter was about INR 22.26 crore compared to INR 25.43 crore in corresponding quarter last year.

13:00 EBITDA margin stood at 10.5% compared to INR 14.4 crores in Q2 FY 'twenty six. Consolidated profit after tax for the quarter stood at INR 2.75 crore as compared to INR 9.12 crore in corresponding period last year. PAT margin was low at 1.3% compared to 5.2% in last quarter. The main reason behind the reduction of PAT margin and EBITDA margin was the higher direct cost, which is attributable to the escalation of these direct costs. Though these costs can be passed through to client because there is a price variation clause where we can pass on the escalation to the client. However, as per the conservative accounting policy, the company recognized the cost immediately.

13:50 However, the price variation revenue is... Can be recognized only after there's a certification from the client. So we are expecting the certification will happen in H2 and that's where this revenue will be reflecting. So quarter on quarter, it may be slightly plus or minus. But overall for the financial year, we are confident to maintain our margins. For H1 FY 'twenty seven, consolidated revenue from operation stood at INR $3.53 crore as compared to INR $3.35 crore in H1 'twenty six, registered a growth of about 5%. Consolidated EBITDA for the first half is INR 33.53 as compared to INR 48 crore in H1 'twenty six. EBITDA margin stood at 9.5% as compared to 14.3% for corresponding period last year.

14:39 The consolidated profit after tax for the first half stood at 6.74 crore as compared to INR 14.78 crore in first half of FY 'twenty six. That margin is 1.9% compared to 4.4%. In terms of cash flow and financial discipline, our stand alone statements reflect a net cash generation from operating activity of INR $2.58 crore during the H1 FY 'twenty seven compared to net cash used in operation activity at INR 166 crore in the last half first half. This represents a significant improvement in operating cash flow generation during the first half. We continue to closely monitor our receivables, contract assets, project expenditure and collections as a part of our working capital management.

15:30 As an EPC company, maintaining an appropriate balance between project execution, working capital requirement and cash flow remains very important for us. Our focus continues to be on timely billing and certification, also efficient collection and disciplined management of the project related expenditures. To conclude, the stand alone results demonstrate a healthy revenue growth and improved path for the first half of FY 'twenty seven. While EBITDA margin remains an area of focus, we continue to work towards strengthening operating efficiencies, improving the cash flow management and ensuring that our growth is supported by the disciplined execution and financial management. Thank you for your, valuable time and participation. We will now be happy to take any questions you may have.

16:19 Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may please press star and 2. Participants are request to use handsets while asking a question. First question comes from the line of Pratamesh Sawant with Abacus Asset Managers Limited. Please go ahead. Thank you for the opportunity. Very happy to the Vikran team, sir. Sir, my first question is on kind of your clarification on the EBITDA margin. You said that certain price variation clauses will allow you. So this is with respect to our NOPL project or this is with respect to the non NOPL book EPC part. This is... Thank you so much for the question, Patanjee. This is for the non NOPL project, mostly in NP and Maharashtra project that we have.

17:28 So around INR 13 crores to INR 16 crores of price variation revenue is not yet recognized. Okay. Okay. So that will straight away add to EBITDA in the coming quarters? Correct. Correct. Correct. Okay. Glad to hear. And, sir, secondly, so of the 6,200 crore order book that we have, roughly 30% is from the TNT. So this is largely substation EPC. Right? So Yes. Substation typically has a double digit 15... 14 to 15%. Like, when we see other substation EPC players, they kind of post 15 to 16% EBITDA margins. So should we assume same similar margins for us in these projects?

18:14 Yes. Yes. So our current guidance is that we'll maintain a similar EBITDA margins of around 15 odd percent plus minus 1% here and there. Recently, what we've also observed is because of this West Asia crisis, we've also had a few items, which do not are generally not covered by price variation has seen significant increase because of the increase in crude oil pricing. So I'm hoping that the pricing by the time we procure those items, the oil levels should come down to a bit of manageable price. But yes, So rest all impact is more or less covered. Okay. Okay. And finally, on the commissioning of the NOPL part, we are saying that, you know, the 10% of the project has been executed and commissioned. So should we see in the coming quarters roughly 50 crores divided by four? So roughly 12.5 crores kind of a monthly annual or quarterly revenue from power generation sales. Will that be From these projects? Yes.

19:27 Because in the current quarter, we've got 6% from... Every quarter, yes. Correct, correct. So going ahead, we can see 12 crore or increasing run rate from that from the generation in the coming quarters. Correct. Correct. So overall for the H2, we are expecting about INR 40 to 50 crore of revenue from the sale of power. Okay. INR 40 to 50 crores will be on the number 10%. Even we have already commissioned 10%. So because I think we should be in in line of commissioning 35 to 40% of this NOPL projects by the year end. So the Okay. So appropriate revenue recognition should be much higher than 50 crore. Right? So, Ratmir, here here, 500 crores, 10% is around 50 crores. So that is the annual expected from the 10% that we've already commissioned.

20:23 So in the first half, from whatever we've commissioned, we expect to 100 megawatt. In the second half, we should deliver around INR 25 crores plus. There will be a few other projects that we are commissioning around 150 megawatts in this quarter, which should add revenue in the Q4. So that is where the guidance of INR 50 crores is coming from the second half. Okay. Fair enough. Thank you, sir. Thank you. Best of luck. Thank you so much, Putumesheet. Thank you. Our next question comes from the line of Rajesh from Gen Investment. Please go ahead. First of all, wish you a very happy to the client team. My query is regarding thank you. My query is regarding this annual sales project.

21:12 This annual sales project is expected to complete 100% by when, and when will the revenue generation will start fully across the entire year? We are expecting completion to happen by the end of q one or a little bit of spillover can happen in the q two of f I twenty eight. But... Yeah. So peak peak generation will start from q two. Okay. And with the final four plus revenue after q two for one year, an 85% EBITDA, how much bad can we generate in this in terms of percentage? Okay. So you're... Okay. So if at all I remove the depreciation and other those those are accounting, So how much how much would it be approximately?

22:01 100 crores of that. No. That is free cash flow. So 100 crores of free cash flow can be effective from this project every year. The exact exact exact PBT pack margins, I'll communicate to you by the end of this call. Okay. Okay. Thanks. So so can you say that... Yeah. Please. So the EBITDA EBITDA will be around 80... Sorry. 85 percent... 88%. So interest cost is the only thing that should get minus removed from this. So it should be significant. Yeah. So, anyways, I'll send you the exact figures, please. Understood. So can you say that from q two FY twenty eight to q one FY twenty nine, which is a full year, it will have a 100% generation, and no expenses would come to the stand alone financial?

22:53 Yes. No. The Okay. Consolidate. It will come in the consolidated, not in the stand alone. Correct. It come in the consolidated, and because what is happening, at a stand alone, we are doing well. But because of the 10 OKR, our consolidator is falling down. Correct. Correct. Fine. Understood. Understood. Thank you. Yeah. And, honestly, thank you so much for your question. And Thank you. Thank you for calling this. Thank you. Our next question comes from the line of Saurav Sigvi with Mahaprakir. Please go ahead. The tax with I'll just I'm sorry, just to communicate, that with including depreciation will be around INR 70 odd crores, INR crores, INR 75 crores, around 12%. So this is just to answer the previous question.

23:40 Thank you, sir. Now,, you can please proceed ahead with the question. Good morning. First of all, happy to all the team of Vikran Engineering. Question is with revenue. Hello. Am I audible? Yeah. Yeah. Very clearly audible. With revenue increasing but bad declining, sir, what specific operational improvements will drive margin that recovery over the next two quarters? So, yeah, there are there are couple of reasons behind it. As mentioned earlier by, there's a little bit of price variation revenue recognition that has not happened in this quarter, which is expected in the subsequent quarters. That is one. And secondly, one of the most important factors was the deferment of execution in NOPL.

24:27 So because we've not received any disbursement, we decided not to increase our exposure in this project. So we only focus on completing projects which already had significant work done, thereby not spreading ourselves too thin. Now that we are expecting the disbursement to happen before next week, where all our formalities have already happened. So now we'll start pushing and thereby our revenue is going to increase significantly and we'll take care of all the overheads that has caused a little bit of decline in the EBITDA margin this quarter. Sir, my next question is that how will the Vikran Engineering will pay the interest on its EBITDA loan when its cash position is already tight, sir?

25:14 Sorry? What is that? Can you please repeat? Hello? Yeah. Yeah. Am I audible? Can you Yeah. Can you please repeat the question? Because people So my question is, how will Vikran will pay the interest when it's a loan when its cash position is already tight? So the the way... Okay. I'll I'll move this. Right. So with reference to IRRRL loan, there is a period for that. Second is the cash flow from the solar generation will be sufficient to meet the interest as well as afterwards of the loan also. There will be further positive cash flow left after all these things when we are reaching at a peak power generation, which is expected post one year.

26:11 So to add on to what Vaidil has mentioned, the way the solar work is the entire cash flow revenue cost is modeled properly, and there are multiple scenarios which are calculated. Even the worst case scenario is enough to take care of all the loan repayments, including interest and principal. So this is how even the lenders assess the project, and that is how the loan is sanctioned. So servicing interest of the loan is is not not at all a challenge for for the project. This is more... Mostly self sufficient project rather it it gives 130 crores of free cash flow to the to the investor that is Vikran Engineering.

26:57 Okay. And so the company sustained positive operating cash flow in the coming quarters without trailing on these large collections from old facilities? So going forward also, since now NOPL project is started giving us the positive cash flows. Going forward as well, we are expecting a good operational cash flow from these projects. As you know, for solar projects, the cycle is short as compared to the power and water business. So that way, we are expecting the receivable cycle to reduce further from here, and that will help us in improving our working capital cycle days. Thank you, sir, for the best that Vikran will perform much better in upcoming quarters.

27:49 Thank you. Thank you for your wishes. Thank you. Next question comes from the line of Chetan Ria with Capital Advisor. Please go ahead. Hi, sir. Good morning, and thank you for the opportunity. So my first question is what are the major activities planned for the NOPL project over the next six months? And are there any details or challenges related to the equipment procurement? Thank you so much, ma'am. So the... We don't see any delay in procurement of the equipments because we've already placed the orders in. We are... We've already blocked all the capacities required for this project, and we've planned well in advance.

28:34 The only challenge that we see is the last ten, fifteen percent of the land, the 10% of the land that we have, which which is not yet identified. But we are confident that we'll be able to work it out till the point we get to that land. Okay. Now the the the the challenge that we were facing was the disbursement. And now that it is cleared, we are we are positive that we we should be able to push push the project. Six months plan. Six months plan is very... Is evident. Actually, we are planning to do around, what 500 per 14... Yeah. So around 500 megawatt is what we are planning to push this this financial year. Okay, sir. And, sir, my next question is with the part of NOPL operation has started.

29:25 Has it started generating cash flow, and when will this meaningfully contribute to our financial performance? So already this year, we saw sorry, this first half or last quarter itself, we saw around INR 4.66 crores of revenue and free cash coming in from the project. And peak, of course, will peak meaningfully in in... From q two onwards next year. Okay, sir. And apart from NOPL, does the company plan to develop and operate additional renewable energy project? Yes. So for this, ma'am, we've we've... The the... I'm not sure if you have followed company, but we we are planning to set up international base also in UAE.

30:15 The the whole point of doing this is so that we can we can build long term relations with large investors who who will co invest alongside Vikran to develop large projects, where at the end of the day, Vikran wants to hold a minority stake in the project and ensure EPC comes to us. We've already identified a few projects internationally, which would bring sizable revenue as well as margins for the company. And, yeah, hopefully, we should be able to give you a good news by next earning call. Definitely, sir. Looking forward for the good news, and thank you for the opportunity. Once again, all the very best for the future. Thank you so much. Thank you so much. Thank you.

31:01 Next question comes from the line of Mahesh Kaushik, an individual investor. Please go ahead. Yeah. So my question is that you all have delivered around 424 crores worth of revenue in the first half. To meet the overall annual guidance of around $22,300 crores, you would require to deliver 1,875 crores in h two alone. So are you on target for that? Maishi, if if you can even check our previous conversation, even in that also, we had indicated that by the end of Q2, we were actually targeting around INR 500 crores of revenue, of which we've slipped only because of NOPL.

31:50 If you so in Q2, our target was to do INR 200 crores from non NOPL projects and INR 100 crores from the NOPL project. And we only saw a shortfall in the NOPL side. We are pretty confident that we should be able to push and get revenues from NOPL as well. Just to reiterate, we are planning to do around INR900 odd crores in we are hoping to do around INR85900 crores in Q3 and the remaining in Q4. Now with the IRRRL disbursement right around the corner, we will push our operations to ensure revenues are met. It is a... It is no doubt a challenging task, but we should be we should be able to do it.

32:39 Okay. And being cash positive, that was also milestone which was declared. So would this company be cash positive by financial year end? We are already cash positive, and we we shall remain cash positive throughout the year. Yeah. And regarding the margins regarding the margin, will you be able to maintain the 14% plus margin for the whole year? Yes. Despite all the cost inflation possibility that may be there? So there's only a very small portion of our business, which is not covered by price variation. So the impact of that small portion isn't... Can be plus or minus. But most of our purchase or most of our sale is passed through.

33:30 So yes, covered by price variation, and it does not really impact our bottom lines. Okay. Regarding the debtor days, last quarter, we had discussed around two ninety six debtor days would be the peak, and it would come down. So I hope we are still on track for that. Yes. So you can see currently, the overall data space has already came down as compared to last year. This is almost around INR 200 crores plus has been reduced in data. And further, with the disbursement of annual payroll, overall working capital cycle can expect it to improve further from here. Any guidance by year end, how much it will come down by better days?

34:18 So in current year, yes, with the annual project and the solar project, the cycle is small. So we can expect at least about forty to fifty days reduced from our data days as compared to the last year. And it will further strengthen based on the new projects what we are taking. We are targeting more on such type of project where the cash flow is in our control and we can have a better terms as far as data base are concerned. That's great. Did we receive any funds from the project in Q2? Yes. We received we received significant funds around 40 odd crores was received. 45 crores was received in q two. And this is going to continue in the subsequent years. 45 s one. Oh, 45 is in the entire s one. Yeah. So, yeah, this is going to continue, and we've seen...

35:18 So we we are in touch with all the government authorities related to judge even mission, and they are confident that the fund fund flow shall continue and roughly rather improve. So now they've also started us... Started to chase us to do more in water. Oh, that's fine. Okay. Yeah. So thank you. You all are doing a great job. Please keep it up. Thank you so much. Thank you so much. Thank you. Thank you so much for the conference. Thank you. Next question comes from the line of Chirag Gandhi with Astellate Investments. Please go ahead. Yes. Hi. Good morning. Thank you for the opportunity. Can you hear me properly? Yes. We can hear you. Yeah. I I just had two, three clarification questions on stand alone numbers.

36:05 Out of INR $2.20 crores of revenue in stand alone, how much is contributed by MOPL here? Just this quarter, not for this quarter, about 7 crore was recognized from NOPL, balance was mainly from the other non NOPL projects. Understood. And in the cost side, how much of it is due to NOPLs? Like you said, you had a higher cost, but absorption was not there. That was mainly due to non NOPL projects, which are having the escalation clause. And there, the price variation has to be has to wait till the client is approving those particular claims what we made for price escalations.

36:58 Okay. Go ahead. Go ahead. No. No. I understood that part. I'm just trying to understand how much of the cost is going because of the NOPL in the standard. Honestly honestly, I do not have that figure, you know, avail... Ready, available. But if at all, you can share your email ID with with the team. I I should be able to pass on all that into. So mostly, it is the overhead that that has, you know, not contributed, towards the same NIM. So it might be in the range of INR few crores, INR 10 crores, 15 crores or maybe less. I don't know. So I don't want to quote figures without confirmation. So we'll do that. Overall, for the S-one, you can see our investor presentation where we have clearly mentioned about the reconciliation of standalone and consolidated, what is the impact of NOPL for the whole S1?

37:47 Yes, yes, I saw that. So anyways, in that figures can be shared later. Please. Sure. So the next question is this price variation certificate, which we are expected from the clients. Can we get... Expect them to be received in q three or that will flow to Q4? See, so some of it will come, but most of it will come in H2. So this is the cost that we have to carry. The interest cost will keep accruing on this. But yes, this is based on progress of of work itself. So, yeah, some of it will come in q three. Most of it will come in q four. Understood. Understood. And the increase in finance cost is because of the higher cost of raw material that we procure during the quarter. It is because of that to fund that?

38:44 No. For finance cost, mainly, is some entities we have taken that is the impact because we have to push the overall project of and that's where we are including some funds. So as you can see, there are there's a good fund inflow from the investing activity, which we are doing for NOPL project. And that's where we are able to reach almost nearly about 100 megawatt of site, which is near completion of completion. Commission. So you can see INR 400 crores, $4.50 crores of asset is already there in this company and further around 100 megawatt is at advanced stage. So going forward, we should expect a similar interest cost or there should be some moderation in this company? There will be some interest cost will continue at the current level because whatever funds we have infused in NOPL that will remain, I mean, that will cost some interest at the current level. But yes, we are expecting a good cash flow from our subsidiary and that's where we will be able to repay these loans as soon as possible and reduce the interest cost.

40:00 Understood. And the last question is just a clarification. When you say the disbursement was not happening from the MOP, likely, so because of the time taken to get the funding from the data Financial process. Yes. In the mean... Yeah. But in the meanwhile, the work was going on. It's just that the revenue recognition and the cost were not booked in the stand alone. That is how we should interpret it? So so the work was going on. As far as DPC work is concerned, Vikran is working and commissioning on projects, And those revenue is being recognized here. So in the H1, as you can see, around INR 70 crore until now about around 7 crore plus, which we have been recognized 600. For the EPC work of NOPM.

40:56 Okay. So that... What do you mean when you said there was some delay in disbursement, hence, the revenue recognition was not happening? Like, what's So the... We were not able to push. So... Yeah. So this is basically what we are indicating is that we wanted to do a lot more. But because because of the delay in airtight disbursement, we we did not push for panels. Let's say, very simple. 60% of the cost is of solar panels. Right? So we did not send the panel at site for the project to get commissioned. But at the same time, we ensured that that is the groundwork that is required for commissioning towards completion is happening, right? So the remaining 30% we've invested, we are pushing and things should happen. But the 60%, 65% panels we did not send. Hence, the revenue recognition did not happen.

41:47 I hope I was able to clarify. Understood. Understood. Understood. Thank you. Thank you. Those are my questions. Yes. Thank you so much. Thank you. Our next question comes from the line of Karan Kubidya, an individual investor. Please go ahead. Hi, Karan. You may please proceed with your question. My question is that what we need interest cost in the coming quarters. I mean, you give some guidance about that? How much... How how many per quarter?

42:38 Okay. The the approximate interest cost, borrowing cost, I can give you an ROI figure. You're looking at around 11, 11 and a half percent. So I'll... Honestly... Okay. What's the quarterly interest cost? Quarterly interest cost can be calculated accordingly. It's already disclosed in financials. Yes, approximate number interest cost. Can you give that to me? Yes, so around INR 18 to 23, we can expect as a quarterly interest cost. So our overall interest cost for the whole year, as last year, was about INR 65 crores. We remain around INR 70 crores, 75 crores for the whole year, current FY 'twenty seven. And if you are asking about NOPL, whatever loan will be disbursed based on that at 9.15%, the interest cost will be recognized and again capitalized because that is work in progress.

43:34 Okay. But sir, I want to know the whole interest cost per quarter combined. Yes. So for Vikran, the interest cost will be, as we discussed, about INR 18 to 20 crore per quarter. Thank you. I have been handed this to your team. Thank you so much. Thanks, Karun. Sir, I wish you the same. Thank you. Next question comes from the line of Anboli, an individual investor. Please go ahead. Hello. Hello? Hello. Yes. Sorry. What is the name again? Good morning, sir. Good morning.. Okay. Now, sir Can you... And can you repeat your guidance as a consolidate... Consolidated basis? Oh, consolidated figures. Honestly, I'm not sure. I I can give you... Okay. I can give you consolidated also.

44:24 Consolidated revenue should be around $7.50... Sorry, $9.50 to INR 1,000 crores for the entire year. But overall, we should cross INR 2,300 crores on the stand alone basis. And on PowerCell revenue will get top of this. So... Yeah. Okay. If VAR persists, do you expect same kind of margin even VAR persists? Yes. I don't I don't see... Like I said, like I mentioned earlier, a very small, you know, percentage of our our purchases are not part of the platform mechanism that we have with the clients.

45:10 So, yeah, I don't see that big of an issue. But let's say if at all there's a significant issue with with, let's say, steel, let's steel goes maybe 30, 40% up, then there's a possibility that, you know, disproportionate cost can be incurred, but I don't see that happening anytime soon. Okay. In this order book, how much personally this based on price variation clauses? Would... So, all these projects which are related to power and mostly in water, we have this price escalation clause. However, except for the solar, there we have fixed price contract. Most of the other projects are with price escalation. Thank you so much. Thank you.

46:03 Our next question comes from the line of Mohit Jain from Doctor. Chokshi, Finsur Private Limited. Please go ahead. Hi, sir. Thank you for taking my question. Sir, I have just one question on the capital working progress. I see we have around INR $7.40 odd crores in capital working progress. When do you think this will capitalize? H two? We end... We should get capitalized within h two, sir. So this is... So... And and what will happen is, see see, what keeps getting certified, and then little bit of work keeps getting added into the uncertified WIP. So this is... Does not does not remain as is. Right? It will keep converting new. A sale will keep happening, and work in progress things will keep adding. But Got it.

46:52 But this one will be capitalized within next HG. Yes. Yes. Yes. So, yes, HG is mainly related to the NOPL projects where we are working for them. So this is in NCW IP. Once these projects will keep commissioning, we'll keep transferring it to the. All right, sir. All right. Thank you very much. That's it from me. Thank you. Next question comes from the line of Rajesh with Gen Investment as a follow-up question. Please go ahead. Sir, can you just give us some update on the data center plan ahead? So honestly, data centers, we've explored a couple of opportunities.

47:41 But in hand, it's now already here. So we've we've... Very honestly, we've we've tried to slow down. Only if Correct. There's an opportunity that comes to our door, is, you know, super high profit, which is very, very urgently required, those target... Those are the opportunities that we are pushing for... Targeting right now. So anything which... And and, you know, where a developer is okay with, you know, your time delay, but wants to save cost, we are currently ignoring those opportunities or we are Understood. Respectfully saying no to those opportunities. Okay. And so what is your FY twenty eight guidance for consolidated? Amazon is asking about INR 2,400 crores, 2,500 consolidated? Consolidated?

48:27 Sure. Why not? In FY 'twenty eight? Yes, FY 'twenty eight, we can surely expect that. Okay. Thank you. Thank you so much. As there are no further questions from the participant, now hand the conference over to the management for the closing remarks. Thank you. And over to your team. Okay. Thank you, everyone, for your question and for taking the time to join us today. We appreciate your continued interest in Vikran Engineering Limited. We will continue to focus on disciplined execution, strengthening our project capability and maintaining financial discipline as we move forward.

49:13 We remain committed to building the business sustainable and creating long term value for all of our stakeholders. With this, I would like to thank you everyone once again for joining on call. Wishing you all very happy Deepavali and prosperous new year to you. Thank you very much. Thank you so much, sir. Ladies and gentlemen, on behalf of Vikran Engineering Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.