Capacit'e Infraprojects Limited (CAPACITE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Capacity Interprojects Limited Q4 and FI26 Earnings 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 Capacity Interprojects Limited has uploaded on the Stock Exchange and their website, including the discussion during this call, Contains or may contain certain forward-looking statements concerning Capacity Inter-Projects Limited, Business Prospects, and Profitability which are subject to several risks and uncertainties, and the actual result could materially differ from those in such forward-looking statements. Should you need assistance during this conference call, please signal an operator by pressing star with a zero on your touchstone phone. Please note that this conference is recorded. Good morning, everyone. I now hand the conference over to Mr. Rohit Katiyaal, Executive Chairman, Capacity Infer Projects Limited. Thank you and over to you, Mr. Katiyaal.

Good morning. On behalf of Capacity, I extend a warm welcome to all participants on our Q4 and FY26 earnings conference call. Joining me today are Rajesh Das CFO, Mr. Alok Mehrotra, Mr. 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 our company website. FY26 marked a defining year for the company, setting new benchmarks across execution, operational efficiency, and business development. The year underscored our splendid execution capabilities across project sites and reinforced our track record of delivering consistent performance and scale. Despite temporary disruptions arising due to local elections in the MMR region, and the labor migration linked to assembly election, project execution remained resilient across geographies. With execution momentum normalized and further strengthened, we are well positioned to accelerate project progress meaningfully in F527. Some of the key updates, order inflow during FY26 stood at 4,446 crores, exceeding a full year guidance inflow of 3,500 crores. Supported by a strong pipeline of quality bits, we remain highly optimistic about order inflows during FY27. The company has realized aggregate 44 crores during FY26 against disposal of non-core assets. The company is expected to realize 50 crores in F527 from sale of non-core assets. The year saw a significant reduction in working capital days by 43 days on back of improved debtor collection. Net cash from operating activities stood at 224 crores in F526 as compared to 52 crores in F525. The company's bank rating has been upgraded to BBB+. Signifying overall improving credit profile. The assessed working capital limits, fund-based and non-fund-based, stand fully tied up, providing clear headroom to boost execution in the coming year. This transcends our capacity to deliver on growth plans and drive stronger performance ahead. It is pertinent to know that the ongoing geopolitical challenges have resulted in steep increase in prices of commodities using aluminum, copper, and likewise inputs. The company has witnessed nearly 18% rise in the prices of electrical items, aluminum product items, over the last three months, starting February 26 to April 26, while electrical commodities are lower as a total input cost. And while they are covered under escalation, the upward movement in escalation was only 2% in February and March 26, while significant increase. For April 26, in the wholesale price index, the company as a prudent measure has factored rupees 10 crores in procurement cost. If the escalation receivable from the client matches this increase overall over the next two quarters, the provisions so made will be reversed. Considering the current situation, the EBITDA guidance for the full financial year, 2627, will be in the range of 15.5 to 16.5%. However, if the global uncertainty cease over the next few weeks, a couple of months, the guidance will be restored to 16.5 to 17.5%. I now turn to the consolidated performance highlights for Q4 at 526. Revenue for Q4 FY26 stood at 712 crores, up by 6% compared to 671 crores in Q4 FY25. EBITDA for Q4 FY26 stood at 109 crores, up by 27%, as compared to 86 crores in Q4 FY25. A bit of a margin. For Q4FY26 stood at 15.3% compared to 12.8% in Q4FY25. Hibit for Q4FY26 stood at 84 crores down by 11% as compared to 93 crores in Q4FY25. The reduction was primarily on account of reduction in other income to 1.5 crores in Q4FY26 from 33.5 crores in Q4FY25. EBIT margin for Q4 F526 stood at 11.7%. PAT for the Q4 F526 stood at 45 crores as compared to 53 crores in Q4 F525. The reduction was primarily on account of reduction in other income. PAT margin for Q4 F526 stood at 6.2%. For the full year, consolidated performance. Revenue from operations for FY26 stood at 2.623 crores, up by 12% as compared to 2.350 crores in FY25. EBITDA for the year FY26 stood at 4.27 crores, up 13% compared to 3.79 crores in FY25. EBITDA margin for the full year FY26 stood at 16.3% around our guided range. EBIT for FY26 stood at 349 crores, up by 2% as compared to 342 crores in FY25. EBIT margin for FY26 came in at 13.2% as compared to 14.2%. The reduction was primarily on account of reduction in other income to 21 crores in FY26 as compared to 58 crores in FY25. Pat for F526 stood at 193 crores. For margin, F526 stood at 7.3%. The gross debt stood at 0.25 and the net debt to equity stood at 0.1. Net turnover ratio of core assets stood at 5.2x for F526 in line with 5.2x for F525. The company continues to focus on increasing execution across projects. Which will further improve the utilization. Order book on standard-owned basis stood at 13,498 crores, as on 31st March 26, public sector accounts for 57%, while private sector accounts for 43% of the total order book. I now leave the floor open for questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star then 1 on their touch screen telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for the moment while the question queue assembles. A reminder to all, you may press star and one to ask a question.

Bye-bye.

We have the first question from the line of Jainam Jain from Dam Capital. Please go ahead.

So, my first question is, how are you seeing the impact of war and increase in commodity pricing on our execution and profitability of our projects? Like, are there projects on a fixed cost basis? Or, like, how is it exactly?

So, while our projects in the private sector have 100% passed through for commodities, And the government sector, we are covered by escalation in all our projects. However, the increase in the escalation indices is not matching with the actual price increase, as I mentioned in my opening remarks, especially pertaining to products in electrical and aluminium foam work, which have inputs of copper and aluminium, which have increased drastically. Now, the escalation at the moment is not covering up. But we have seen an upward trend of 8% in April, and the escalation increase in May also will be there because of a few price increases. So, therefore, we have taken a provision of 10 crores at the moment in the last quarter towards covering these price increases. Now, if the price escalation matches the increase over the next two quarters, then this provision will be reversed. Or if the war gets over very quickly. It has lasted more than what everyone anticipated, but yes, there will be an impact. As I have already explained, the current escalation for electrical goods on the WPI, published by the Office of Economic Advisor, is 8%, while the price increases have been around 18 to 20%, though it is more seen in the electrical and aluminium products. But how much it will spread to other...

Okay, so in our contracts, what is the variation over which this escalation clause gets affiliated?

Please repeat your question.

So in our contracts, what is the minimum escalation in the WPI after which the escalation clause in the prices get reflected?

There is no minimum clause as such. Whatever the base index is the Month prior to which the tender was quoted or submitted, I'm talking about government contracts, and every quarter the average of the three months is taken and escalation is paid. So if the escalation is 5%, it is paid as 5%. If it is 10%, so in our contracts we have escalation which are ranging between 30% to as low as 6%. Because last one and a half year for whatever reasons, There's hardly been any movement in the price escalation. The movement has only come in in March and April. So, now we will see escalation go up. As I explained, whether it will cover for the increase which has happened from February to April in entirety is yet to be seen. And therefore, the provision of 10 crores.

Okay, sir. Thank you for the opportunity and all this.

Thank you. We will take the next question from the line of Baibab Shah from JM Financial. Please go ahead.

Yeah. Sir, you mentioned that we are targeting close to 50 crore of non-core assets in FY27. So what could be the entire value as of March 26 in the books?

So as I told last time, we started the entire effort with the 200 crore of non-core assets which were acquired through both cases. Starting post-COVID. Out of that, we have already sold 60 crores or more in overall. Till date, another 50 crores is targeted for the current year. And the remainder, that is about 90 crores, will be taken care over the next 24 months or so. So this is our target. But we are well within the target guidelines and timelines internally and as committed to our shareholders. Okay.

So, secondly, on revenue side, what kind of revenue are we targeting at standalone level in FI27?

Over the next two years, we are seeing that we are giving a guidance of 20% revenue growth year on year, and the order book, which the currently company has, completely backs up this guidance with some headroom for betterment.

Okay, sir. Lastly, one update on CEDCO and what revenue are we targeting from CEDCO and MADA in FI27?

So, all projects are operational. MADA has opened up big time. So, we will see a substantial uptick in MADA project. We will also see an uptick in the six locations. Two locations are under handover in the current month. Four locations will also see a substantial uptick. We should be close to 500 to 600 crores in Sudoku, and we should be close to 350 to 400 crores in Mada. However, apart from this, the huge revenues are anticipated from Downtown 25, from NBCC, Signature Global. We also anticipate substantial revenues upward of 25-30 crores from our key client Raymond's. So, there are sufficient projects on the books of the company under execution, which will add substantially to the revenue. So, if you look into the company's order book, the top 10 projects give 92% of the top line. So, the company is focusing on meaningful size of the projects now and going forward as well, and therefore the guidance.

Okay, so lastly, we are seeing in the news articles that Grap again has been implemented in Delhi, NCR. So, could it impact the execution at least in OneQ?

See, at the moment, I don't have any news for Gudgaon and Haryana and Noida. The projects are working. The impact was due to the elections in West Bengal and Pihar. And that saw a huge exodus of labor, but now it is stabilized. But on the, you know, on the graph, there was no such stoppage from April till today.

So what were the orders from NCR and Gurgaon?

NCR and Gurgaon? So Haryana, the total NCR, Haryana, Gurgaon, Noida, UP put together. In private sector, we have close to 1,500 crores, order backlog, and in public sector, we have close to 800 crores, NBCC.

Thank you so much, my question.

Thank you. We will take the next question from the line of Vasutev from Novama Wealth. Please go ahead.

Yeah, thank you for the opportunity, sir. You mentioned about Mahada and Tharco. Similarly, can you also guide us on Signature, Global, and MBCC? What kind of revenues are we projecting in FI27 in these two projects?

So, I do not have the exact details project-wise, because SIDCO and MADA are the largest, we have the details on bank of our farms. However, you can just drop a mail to our investor relations, and they will immediately give you the top five hours.

Sure, sir. And if you can just let us know about the KPEX we did in Q4, and how much are we targeting for the next year?

Just the same, please. So, last year, the addition was 67.81 crores in quarter four. All right. And the additions for the full year was 147.33 crores. For the current financial year, our target towards capex, mainly coming from aluminum, foam work, jump form, will be close to about 165 crores.

Okay, sure, sir. And lastly, on the order intake front, now that we've surpassed our guidance, we have a quite healthy order book. So, how are we looking at it for the next year?

I'll give you a range of 4,500 to 5,000 crores, and we are well on track to achieve that.

Thank God, sir. Thank you. That's it for myself.

Thank you. We will take the next question from the line of Darshil Javeri from Crown Capital. Please go ahead.

Hello. Good morning, sir. Thank you so much for letting me ask a question, sir. Firstly, congratulations on a great set of results, sir. Sir, yeah, sir, just wanted to understand like we've clearly laid out our vision 2028, but with the order book and the order intake that, you know, we are targeting for, is it possible that, you know, the even if you've given a bit conservative guidance in terms of revenue, like our 20%, we could easily so far to 30%. Right? Like, or at least come 25-30 percent rate. Would that be a fair, you know, aspiration for us at least, sir?

Thank you, first of all. You are right, but the current geopolitical conditions, what are surrounding all of us, do not allow me to give you an upward number. If you were at 1200 crores, giving 30% was logical. At 2700 crores, giving 30% in such situations, which have been declared as emergency. By the central government of India, I don't think it would be appropriate. But if we do better, it will be a Swedish which will be sweet for all of us, management and the investors.

Okay, okay. But just an example, if we were in February where the war wasn't there and with the order inflow, we would be confident about it. I'm not asking for a guidance or something, but in general, we would be confident for a higher risk. Of course, of course.

Yeah, yeah, that helps a lot, sir. And I just wanted to understand, you know, we've reduced

our working capital and, you know, our interest cost significantly. So, going forward, what kind of, you know, finance cost run rate can we see, sir?

See, we have given a guidance that over the next two years, we would like to come to pre-COVID levels. So, the reduction in working capital days, excluding retention. 129. It has come down by more than 50 days. And net working capital has come down by including retentions by across 42, 43 days. Now, there's a substantial jump in a 12-month period. Over the next eight quarters, you will see we are achieving that what we were talking about net working capital of 56 to 60 days. Now, what will this do? Obviously, this will reduce the debt as well. Considering that we maintain our creditor levels and reduce our debtor levels. Okay. And second part to it is that the finance cost on the uptick in the rating has ensured that the interest cost over the last 15 months has come down from 12.65% to 9.65%. Going forward, if the RBI maintains their margin rates. We further see a reduction in that. The commissions on bank guarantees have nearly halved. So, the current year, we will see an absolute drop on an absolute level, a drop in the overall finance cost, including the advances on which interest is payable. All right? So, yes, you can take it from us that on an absolute basis, the company will exhibit reduction in finance cost. By maybe 6 to 8 crore rupees for the full year.

Okay, okay. That's really great, sir. That's it from my side. Thank you so much.

We will take the next question from the line of Diwakar Rana from Prudent Equity. Please go ahead.

Can you hear me? Yes, I can.

Hello.

Yeah.

Hi, sir. So, sir, in last corporate phone call, you mentioned that you will report the highest report quarterly revenue, March 2026. And in this quarter, you have reported, I mean, 6% growth, which is the lowest in last 10-15 quarters. What are the reasons, basically, apart from these geopolitical issues that you talked about?

Yeah, hi. So, we have shown a growth over the last 10 consecutive quarters. All right.

Yes, but sir, this is the lowest growth that we have reported in the mass quarter. In March 2020, you reported 28%. Following that, 34%. That's right. And this year, when you said in the last quarter that we will record revenue in mass quarter, you have reported the lowest growth.

When we say record quarter, we are talking on absolute numbers, sir. So, the point is that the company for the full year, on an overall basis, has shown the complete growth. We have already informed in my last answer that the impact came due to the elections in March due to Bihar and West Bengal, which saw serious migration of labor, which was much more than anticipated. So, yes, the company has lost revenue of close to 45-70 crores, but then we would not like to put that as excuse because, let's face the fact, in India, going forward, we will have to factor in loss of 30 days due to elections, another 30 days due to NGT or environmental issues. So, we wouldn't like to make that as excuse anymore. Yes, we are lower than what we had anticipated due to shortfall of labor at various sites, both in North Zone and West Zone. However, going forward, that has been factored in, and of course, with our order book and our guidance of 20%, FI27 and FI28, robust increase in top line and corresponding bottom line will be visible.

Sir, in last quarter, you lost, I think, around 100 CR of the value due to migration and environmental issues. And this quarter, you are saying you have again lost 45 crores, am I right?

It is not me. It is entire industry. It is not pertaining to us alone. There is shortfall of...

No, I am talking about capacity in process. How much revenue the capacity lost in two or four of this financial year?

In the whole of financial year, it will be about 125 crores. In this quarter, in March, I just mentioned about 40 to 45 crore.

Due to migration. But in last control, you mentioned that now the situation has normalized. We were in February 12th, the last controls on health, and you said on the record that everything has been normalized, and you are still saying that we have lost the revenue between these two.

Sir, sir, sir, sir, sir, one minute, one minute. Please understand my answer first. We discussed on 12th February. All right. The elections came thereafter. I just said the migration was much more than all the companies, including us, expected. All right? And they were further attributing was the BMC elections in Mumbai. However, we do concur that the migration was much more than what we anticipated, and hence the impact. I started my answer by saying we do not want to give it as an excuse, but you want to be specific, and therefore I am giving a specific answer.

So, but let's say, why don't we factor in all these things when we get the guidance? We started with 20% growth, and if by Q2, I asked this question in the last call that how much growth you will report, and you said we will report 18% growth or so financially, if we report revenue from JV, like, you gave a reason that if we report revenue from JV, we will report 18% growth, and so how much revenue that we have reported from JV, because this year growth is 11%, which is lower, sadly, and On stand-alone vessels, you have grown by only 2%.

See sir, our consolidated financials are the projects which we are executing by taking joint venture from only consultants. So therefore, Bandhu project of capacity e-governance, we own 96% of the controlling stake. Alright? So, 96% of the revenue gets added over there. Similarly, in the Maldives project, or for that matter, only project where we hold 49%. is the project of the national high-speed rail railway stations. So the point is that while we are guided for 18%, you cannot rule out the geopolitical conditions where we are in. The company has ticked all the boxes. We are market leaders in EBITDA. We are one of the top end in our industry for PAT. We are the top end in the R industry for cash fat. We have reduced our net working capitals, excluding retention by 50 days. Our cash flows have improved from 52 crores to 240 crores. So the parameter is that if a revenue loss has happened and if we have exceeded everywhere else on our guidance, if appreciated, it should not be depreciated.

It is appreciated, sir, because there are a lot of PPC companies that have reported single-digit revenue growth for the financial aid, and you have reported 11%. That is appreciated.

So, sir, I am trying to tell you it is not the revenue growth. The balance sheet. Look at our reduction in working capital days. Look at our cash flows, which have increased from 52 to 230 plus crores. After adjustments of working capital, look at our debtor level, which has decreased. On a top-line increase of 11%. So, the parameters for, as an organization and as a management, revenue growth cannot come at the cost of depleting other ratios. We have increased 11%. I do admit it is lower than our own expectations, but that is not a cause of concern because the order book, our execution strength, stands stabilized. And therefore, given the order book, which we intook of 4,400 crores, and we have started the current year with a strong note as well, we do believe that the revenues from Rayman's, revenues from Signature Global, that since now Phase 2 has started, revenues from NBCC will see a kickstart. You have to remember that only one project could not start last year of IIT because of tree-cutting permissions, which are in the scope of the client. Now, whatever revenue was projected from there could not happen. That a government client would take six months to get tree-cutting permission, which is still pending, is not in our hands. So, there are ifs and buts. However, we do not want to give any excuses. We did not achieve the revenue for the full year to our own expectations. But yes, on all other parameters, we have exceeded our guidance.

Sir, for FY27, you are giving 20% of any evidence, right?

That's true.

So, this 20% guide... Sorry to interrupt in between debacle, I will request you to please rejoin the queue again, as there are participants waiting for the term. Thank you. We will take the next question from the line of Rahul Kumar from Vicario Pant. Please go ahead.

Yeah, hi. Thank you. Congratulations for the strong quarter even in this difficult time. I think that's commendable. I just have a question on your guidance of EBITDA margin, which you mentioned that, you know, 15.5% if the war continues. So, can you help us understand? I mean, even in this quarter also, we had 15.3% operating margin. So, are we assuming any escalation in this guidance of 15.5%?

Yeah. So, you see that if the escalations in the government contracts do not match the actual price increase, which has happened over the last three months, There will be an impact for everyone. So that will be an industry phenomenon. However, as I speak to you in May, we have seen the escalation increase by 8, I'm talking about not, I'm talking about wholesale price index, by nearly 8% over one month, that is in April, with the fuel prices ticking in the current month. It will rise further by a similar percentage or plus and minus 5% in April, which will be public or in May, which will be published in June. Now that number what comes in will actually be, I will be able to tell you whether the guidance will be 15.5 to 16 or whether it will be 16.5 to 17.5. But as a prudence there, we have incorporated 10 crore impact in March numbers for what would happen. In the coming quarter or two. Will it be reversed? Yes. If the war gets over, fuel prices come down, aluminium and copper prices come down, and therefore the electrical goods prices come down. If that does not happen, then it is anyone's guess. I will only be able to give you a clear picture at the end of quarter one, earliest or quarter two latest.

So, are you saying that the worst case, you know, for you is 15.5% operating margin?

Yes, 15.5% as we can see today. But now if the dollar goes to 150, I do not know. Or the fuel prices go to 200, is anyone's guess. Please try to understand that the government needs 15 rupees increase in diesel prices and much more than that in petrol prices to cover up their losses. Now, they have so far restrained that, and therefore the food inflation is limited, but the escalation or the inflation in industrial goods is much, much higher. It is not impacting the common public at the moment, but definitely it is impacting businesses. If you look at Middle East, the prices in construction are already up by 22%. In India, obviously, if it is not 22%, you will see an impact of 8% to 9%. Now, if that overall 8-9% is covered by the price variation, then there will be no impact. However, if it is covered a couple of percentage points lesser in some commodities, you will see an impact on EBITDA, PAT, cash profit, or all the parameters. That's what I'm trying to derive the point.

Okay. And this operating margin which you mentioned, is it including the other income or is it excluding the other income?

Excluding.

Okay. Got it. Got it. And, sir, I think the disruption in the execution would have come in, I guess, in the March, especially in March. So, if you can help us understand, you know, what was the monthly billing rate, let's say, in March, and how it has moved since then?

So, I don't have it in front of me, but please drop a small mail. We will give you the monthly run rate for April, May, April, Jan, and, sorry, Jan, Feb, and March.

Okay. Okay. Okay. But do you expect this execution to improve from, you know, now, going forward? Do you see this resolution of...

From May, yes, because workmen have started coming back after the Bengal elections, there were some extended celebrations there, what we understand, but we have seen 25-30% increase across project sites in labour strength, but it will only streamline in totality, that means the peak strength what is required, we are still short of about 3,000 workmen across our 30 project sites. But we do believe that that will be covered up this month. However, we never give you guidance with 100% availability of manpower. We only fail if the depletion of manpower is beyond what was anticipated.

Okay. And how much workmen will we actually enjoy? I mean, you mentioned 3,000 shortage.

More than 10,000.

Okay.

Thank you. We will take the next question from the line of Vanj Sodanky, from RSP Inventures. Please go ahead.

Hi. Good morning, everyone.

So, are you talking between Vanj, your voice is not audible? No. No, it is not. It is breaking. I would request you to please rejoin the queue again. Thank you. We will take the next question from the line of Deepak Putar from Sapphire Capitif. Please go ahead.

Yeah, I'm an article, sir. Okay. So, just first up, this 10 crores provision, I mean, where was it accounted? I mean, which line item in P&L?

Construction expenses, that is the material and N plus L. Okay, in the construction.

And generally all contracts are pass-through, right? Pass-through contract, right? I mean, but still you are saying that there can be some impact, right? Because of...

I'll tell you, sir. I explained, but I'll say that again, I try to explain. The private sector, it is shell and gore, all right? And whatever private sector finishing items are there, they are also on base rate. So the price doubles up also does not make a difference. On the other hand, the government contracts are based on escalation. As per the indices published by the Office of Economic Advisers and republished by RBI. Now that increase in escalation at the moment doesn't commensurate with the price increase and hence the provision. In certain items, like electrical, aluminium, as I explained, and therefore the provision, if the increase in escalation over the quarter one and quarter two matches with the overall price increase, this provision will be reversed.

So, it's only a prudent measure, right? I mean, but you are kind of positive that this reversal can happen?

If you can predict when the oil prices and war will get over, I can predict when this can be reversed. I can be only optimistic that I am hoping, like everyone is hoping, that this war gets over very quickly. Because the impact yet in India has to come out to the general public, but the companies are already witnessing it. Our most senior company in our sector is L&T. They have already mentioned this during their call. And if they have faced it, then I don't know why other companies will not face it. So we are all optimistic on Indian growth story. The order books are at record high. But there is pessimism due to the geopolitical uncertainty.

And on the labor side, I mean, what's the per-day labor that we kind of have right now, and what's our requirement?

So, the per-day is never a count. It is always at the requirement at project site. So, the average requirement should be 14,000 plus, maybe we are at 11,000 odd. This has depleted to nearly 9,000 in March. And some part of April. We have seen reinforcements coming back after the elections, and we hope to be at the optimum by the end of this month.

So by May end, we are expecting to be back to 14,000?

It could be 13,500 or it could be 14,500. I am giving you a ballpark figure, 5% plus minus.

Okay, okay. I got it. And what sort of order book inflow target we have for FI27?

4,500 to 5,000 crore, and we are well on track to do that.

4,500 to 5,000 crore. Okay, and just one last small thing. In terms of execution in April, I mean, are we on track with whatever outlook we have given in terms of 20% growth for the entire year? So, this April also, we saw that growth or it was impacted?

So, April was impacted by labor shortfall. However, it is stabilizing in May, and June will also be there. I don't see the monsoons coming in a hurry this year. As predicted by the meteorological department, it's not my prediction, but therefore we do believe on the overall for the first quarter should be decent. We will maintain our momentum in quarter two and improve it significantly over quarter three and quarter four.

Okay, understood. That's very clear, sir. I mean, I wish you all the very best. Thank you very much. Thank you.

Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. We have the next question from the line of Rajesh Jain from RK Capital. Please go ahead.

Yeah, thanks for the opportunity. Sir, I'm not very familiar with the industry, so I just wanted a confirmation from you that for the government sector, the escalation clause that is related to aluminium and copper, is it best-marked to the wholesale price index for everyone in the digital industry?

No, every contract is unique. There are escalation clauses. Wherever the escalation clauses are there, a certain portion is towards the labour, that is 30%. A certain portion is there towards reinforcement steel, a certain portion is for cement, a certain portion is for POL, that is oil component, and the remainder for the other thing is WPI, oil commodities. Alright? So, aluminium would generally, aluminium being a homework, not direct input in the project, but an indirect impact, will come under wholesale price commodity. Impact only. Electrical will come either under electrical items, if there is a provision in the contract, or under whole WPI oil commodities.

Okay. And so, like, for your 20% revenue growth guidance, what could be the negative downside risk, for example, apart from crude oil or currency fluctuations or the war escalating, do you foresee that, I mean, there could be escalation in the labor rate also?

See, we don't see an escalation in the labor rate. If the war continues, then, of course, the Middle East labor will look at India to work. The problem is that availability of enough trained manpower. It's not the question of availability of manpower. Trained manpower is the criteria. So that is what is a challenge. Was a challenge, it will continue to be a challenge, war or no war. But if the commodity prices go beyond a limit, if the input prices or the cost of construction in economies like Bangalore, Hyderabad, tier two cities, increase by 20 percent, you could see projects slowing down. That challenge will always be there. Fortunately, our order book is coming from metros like Mumbai, 80-90%, where the prices of real estate is very high. So a 10% dip will not make any difference to the construction for the developer. But in tier 2, tier 3 cities, yes, there is a fear that if the price increases go unchecked, year on, there could be a slowdown in projects.

Okay, sir, for your order book guidance of 4,500 to 5,000 crores, how much you have bid so far, and when do you expect the first major order announcement for FY27?

I think one order announcement was given, or no? No. So, we do expect in the quarter one, orders closed in excess of about 1,000 crores. Quarter two will be a similar number. Quarter three and quarter four. It will be about 3,000 crores, so between 2,500 to 3,000 crores, thereby, which we will be achieving the full year guidance of about 4,500 to 5,000 crores.

Yeah, and how much you have bid so far, the first part of my question?

We have bid more than 5,000 crores, but the point is that we are in the industry, so we will continue to bid, but at the moment, we are negotiating with our existing clients. To close some orders in upward of 1,000 crores, once the negotiation is done and we receive the LOI, we will inform the stock exchanges and all the investors.

And the last question, you have some kind of procurement arrangement with a company called Arise Impra. So what kind of arrangement is that and what benefit do you get out of it?

There is no arrangement. It is an agreement for project supplies, purchase of certain commodities like cement, steel in bulk. So the benefit only is that when the purchase done is about 20 crores from one vendor, it's a joint negotiation which happens with the manufacturer by virtue of which we are able to lower. For example, if we root the entire... Plywood of, let's say, 3 crores through one vendor, then we are in a better position to negotiate and take a bulk discount from the main manufacturer, which is then shared between Ares and us, by which it is a win-win situation for the company and the supplier.

Sir, just one clarification on the order book, which I already asked you. The guidance, 4,500 to 5,000 crore. Can you give the split between PSU and private sector? Because you will get impacted in the escalation clause only in the PSU sector, right? So, if you can give the breakup.

I will try to re-clarify. I will not. If the full industry gets, I will also get. So, the inclination will be to maintain the current balance. However, if the private sector is something like what we are executing, if the quality is same or better, we don't mind taking the projects. But looking into the labor requirement, we would like to go for LSTK, EPC projects, more than item rate projects, to increase the revenue per labor or per member of the capacity family. We cannot afford to reduce the revenue per person. So, therefore... The focus really is on EPC projects, but we will not refuse private sector projects, which are of meaningful in nature and in sizes of more than 300-400 crores.

So PSU will remain around 50-60% of the order book item?

Yes.

Okay. Okay, sir. Thank you. Thank you so much.

Thank you. We will take the next question from the line of Van Tholangki from RSP and Ventures. Please go ahead.

Okay, open.

Mr. Vansh, please proceed with the question. Sir, you are not audible. Sir, your voice is breaking. I would request you to please rejoin the queue again. Thank you. We will take the next question from the line of Diwakar Rana from Prudent Equity. Please go ahead.

Hello. Thanks for the opportunity. Sir, I really appreciate you giving the margin guidance of around 15.5 to 16.5 considering the geopolitical issues. But do the revenue guidance on 20% consider all these geopolitical issues or has been excluded?

The current geopolitical issues, now something worse may happen. I cannot predict for that. You know that generally I am not a very big fan of quarter to quarter in construction company. I have been repeating this over so many quarters now. So given the current situation we are seeing, this guidance is realistic. It takes into account that no further elections are there in the remainder of the current financial year, hopefully. That's what our understanding is. We have factored in for 15-20 days of environmental stoppages like what happens in NCR and Mumbai, what we have seen. However, any further deterioration cannot be predicted by you and me. So we are cautiously optimistic. That is all I can say. And we will discuss the situation on the war or the other geopolitical uncertainties. During our Q1 earnings. But at the moment, I can only provide for what we are optimistically cautious about. If things go bad, we will revisit that in the quarter one financial earnings and we will explain that to you. As I told you that if the prices suddenly go up by 20-25%, the input price for the developer, let's say the steel price is, in December, were 46,500 primary producer. Today is 60,000 rupees. So, it's not an impact on us, but it's an impact on my client. Now, if this client If the client is working at 10,000 rupees sale price, he may think twice. But if the client is working at a lakh of rupees sale per square feet, it doesn't make an impact to him. So it's a case-to-case basis. We cannot generalize it. So the impact is not on capacity or concession companies like us who are in private sector, the impact would more so be on the client and the sale price at which they are working. Okay.

Okay.

That's all coming. Thank you.

Thank you. We will take the next question from the line of Rajesh Jain from RK Capital. Please go ahead.

Yeah. Thanks for the follow-up. Sir, you had explained about the reduction in other income, but I could not follow it completely. This reduction in other income, was it primarily due to a reduction in debt recovery or what other income it represented?

So, it was some write-backs which we received as one-off, which was recorded in the last financial year. Generally, the other income includes interest income. All right. So, last year, the interest income and this year's interest income, this year, on the contrary, the interest income has increased a little bit. However, the other income has not been there because it was a one-time, as we explained last year also. If sometimes it comes as a write-back, coming into the books as other income, it will be informed separately during every investor conference call. Otherwise, other income will only contain interest.

So, going forward, then we can expect only about 3 to 4 CR per quarter as other income. What would be the trajectory for F527 per quarter?

Same, plus or minus 10%.

Okay, thank you. And sir, are you also bidding for any data center orders? Yes, we are.

Yes, we are.

Okay, and are they slightly higher margin compared to the building construction orders for the residential and commercial building?

Sir, you are taking away my competitive advantage by asking this. You can ask me this offline, I can explain.

Thank you.

We will take the next question from the line of Rahul Kumar from Vekar, your fund. Please, go ahead.

Sir, just one question. What will be the split of the revenues between private and public contracts?

What's the whole party? 60 is public sector. 60 is 65%. Private will be 32 to 35%.

Second,

what would be the, you know, I think last time we had guided for an absolute reduction in the receivables and contract effect for FY26. What would be the similar guidance for this reduction for FY27?

Hey, we have given you guidance for net reduction in working capital days. As I explained, excluding retention, we have fallen by 50 days. And our guidance earlier also was 25 days or thereabouts. But 50 days comes in as a very present surprise. The efforts are paying off. So the focus will continue on debtor collection. The focus will continue on liquidation of non-core assets. And the focus will continue to work with clients who have strong balance sheets. In government, focus will continue to work with clients who have their own sources of income and not dependent on grants. So this focus is a strategy which the company has been working on from 24 onwards. And two years down the line, you are now seeing the results of that. So there is no need now to change the strategy. The only impact is the ongoing global uncertainty. Hopefully, we will all sail through it like we have done in the past. But our focus over the next two years, more than revenue, is on improving the working capital matrix, improving the cash profit, and lowering the debt. So, the net debt is approximately, as I speak to you, less than 170 crores. I believe that the net debt reduction will continue over the next two financial years, and with the uptick in the collections, what we have seen in April and what we continue to see in May, we are quite optimistic of the strength the company's balance sheet will exhibit over the next two financial years.

Thank you.

We will take the next question from the line of Parth Dhabkar from JM Financial. Please go ahead.

Thank you for the opportunity. What would be our revenue from the CITCO and the MADA project for X526?

One minute, please. MADA is 223.68 crores and SIDCO is close to 400 crores.

Thank you. Those are my questions.

Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, we now conclude the question and answer session. I now hand the conference over to Mr. Rohit Kajiha for the closing comment. Thank you, and over to you, sir.

I would like to thank all of you for joining us on this call today. We hope we have been able to address your queries and provide some useful 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 once again for your time and continued support. See you next time.

Thank you, sir. On behalf of Capacite and Projects Limited, we conclude this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.