Capacit'e Infraprojects Limited (CAPACITE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Capacet InfoProjects Limited Q1-FI27 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 Capricet Infra Projects 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 Capricet Infra Projects 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Rohit Katyal, Executive Chairman, Capacite Infra. Thank you and over to you, Mr. Katyal.

Good afternoon. On behalf of Capacity Infra Projects Limited, I extend a warm welcome to all participants on our Q1 FY27 earnings conference call. Joining me today are Mr. Rajeshla, CFO, along with Mr. Alok Mehrotra, Nishit Pujari, and our investor relations team from Marathon Capital. I trust you have had a chance to review our results. The presentation and press release have been uploaded on the stock exchanges and are also available on the company's website. The momentum built up by the company in FY26 is poised to deliver improved revenue growth in the remainder of the current financial year. The performance was impacted by workman shortages and factors beyond the control of the company. However, the workman situation has since normalized, and we are confident of achieving our guided performance for the current fiscal over the remaining three quarters of FY27. Let me turn to some of the key updates. Commodity price volatility, especially in respect to non-ferrous metals, is yet to get reflected in the inflation indexes being published by the government. As a prudent measure, the company has therefore taken an additional provision of Rs. 10 crores in the current quarter. Order book stood at 13,535 crores as on 30th June 2026. Public sector accounts for 55% while private sector accounts for 45% of the total order book. FY27 order inflow target is between 4,500 to 5,000 crores. Order booked so far in FY27 stands at 1,071 crores. Supported by the strong pipeline of identified quality projects for bidding, 22,000 crores in public sector and 5,000 crores in private sector, over Q2 and Q3, the company remains confident of achieving its FY27 order inflow target. The promoter share pledge has been reduced from 85.5 lakh shares on absolute basis as on 31st March 2026 to 50 lakh shares currently. The company targets for full release of the pledge by the end of the current financial year. I now turn to the consolidated performance highlights for Q1 FY27. Revenue for Q1 F527 stood at 629 crores, up by 7% as compared to 589 crores in Q1 F526. Ebitda for Q1 F527 stood at 99 crores, thereby moderating by 3% as compared to 102 crores in Q1 F526. EBITDA margin for Q1 FY27 stood at 15.7% as compared to 17.2% in Q1 FY26. EBITDA margin for Q1 FY27 stood at 80 crores, down by 8% as compared to 87 crores in Q1 FY26. EBITDA margin for Q1 FY27 stood at 12.5%. The price for Q1FI27 stood at 40 crores as compared to 47 crores in Q1FI26. Patent margin for Q1FI27 came in at 6.2%. The key financial metrics as mentioned above were impacted by the Rs.10 crore additional provision as mentioned in my earlier remarks. I now leave the floor open for questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vinay Chaudhary from Invexa Capital, LLP. Please go ahead.

Hello. Hi. Good afternoon. So, my question is regarding the revenue, the execution. So, we have seen, you know, the order inflow being strong this quarter as well. Of course, it's YTD. So, and our order book to revenue ratio is quite strong. But we have not seen, you know, the conversion in our execution. So, where, like, in a project level, where are we, you know, not able to execute at that level, if you can throw some light on that?

Yeah, good question. So, the order book includes IIT Bombay. That's a 550 crore contract, which was to start in quarter four of the last fiscal, but will start only in quarter two of the current fiscal because there were no tree cutting permissions available with the client. So, therefore, while we have the extensions in place, this impacted because the project is a fast track project of 24 months. So, the first quarter one and quarter two of the current fiscal should have had revenues of in excess of 65 to 70 crores from that project alone. This is one impact. Secondly, the revenue built up of NBCC has happened from the current quarter, and you will see a three-fold increase in that project as well. So like there are right-of-ways issues with clients in other sectors, we could also face problems with certain clients for tree cutting or certain encroachment issues with government clients. But the first, I'm happy to say that the first building of IIT has been handed over, the design has been approved, and the execution has started. So I do believe that the execution will double up in these projects or more over the next quarter or two. And therefore, I am very confident, as I explained, to achieve the full year guidance. Now, coming to the overall order book to revenue, you should look at our... CSGR over 2022 till 26, which is close to 20% or thereabouts. You should look at our path, which is at about, CSGR will be more than 30%. So, the company has been able to convert. Yes, you are right, we can do far better, and we are online to do that. Hope to have answered your question.

So, just to reiterate, H2, I assume, will be quite stronger, assuming the monsoon impact is a seasonality in the current quarter. So, it will be fair to assume that quarterly run rate can touch above 8.50 or about so to achieve our full year guidance.

It will be 101%. Our guidance is 20% year on year. All right. And we are well on track to do that. There has been a moderate increase. We had mentioned in the last conference call also that the labor had dipped to 50 percent in May and then to 7,000, that is shortfall of nearly 30 percent in June. As I speak to you today, the labor requirement is fully in place. And therefore, you will see. Quite a satisfactory uptick in Q2 as well. And obviously, we are looking to do that 850 crore plus in Q3 and Q4.

Secondly, on the provision, so, of course, we have guided about 15.5% to 16% on EBITDA level margin, while we have provided about incremental 10-10, 20 crores in the last quarter and the current quarter. So, you know, just wanted to understand if, like, you know, the raw material normalizes, the price normalizes, is it fair to assume that these, this 20 crores can potentially get reversed, which can, you know, improve our P&L for the...

That the prices of aluminum, which went up by 35-40%, the price variation has not caught up with that. Okay, similarly, other non-perrous metals like copper, you see CPWD has just published a new DSR, and it will yet take a quarter or two more till the entire escalation is covered by these indices. So we have to wait and watch. But I am pretty confident a large portion of this will get reversed. It is only prudent to provide because as on 30th June, it was not covering. Similarly, as on 31st of March, it was not covering. So answering your question, we are extremely hopeful of reversing this provision in quarter three and quarter four. However, there's a disclaimer. It again depends on the inflation index and not on the food or retail or wholesale price. This is regarding the copper, aluminum, and so on and so forth. But given the seven years or eight years history, generally we have been able to cover up. So let us wait and hope for the best, but a substantial portion will yes get reversed and add to the bottom line.

Thanks for answering the questions.

Thank you. The next question is from the line of Rohit Gupta from RKG Online Services. Please go ahead.

Hello. Good afternoon, sir.

Good afternoon. Please go ahead.

Sir, my question is regarding Mahada BDD Burli project. What is the current outstanding order value which is still left to be executed? And when do you expect the demanding value to be included in the deficit order book?

See, the total order value on the TCC level, that is the parent company, which is owned jointly by Tata Projects and Capacite, is close to around 17,000 crores, including escalation. Out of this, MADA has handed over 50% of the project, which is about 34 rehab buildings. These 34 rehab buildings translate into an order book at TCC level, again the parent company level, of about 7,500 to 8,000 crores. Out of these 8,000 crores, 35% belongs to Capacite Infra Projects Limited. So approximately 7,500 to 8,000 into 35%, that is our order book as far as MADA project is concerned at the parent level. At the subcontractor, that is, 35% of the subcontract is being done by Capacite Infra Projects on standalone basis, and 65% by Tata Projects Limited. It translates into the same value, which I have just mentioned to you. However, some profit will be booked at consolidated basis, like you are seeing, profit from share of associated. And the balance profit will be booked in the standalone books of the company.

Okay, sir. And for my follow-up is, Capacite is currently L1 for the SIDCO Maha-Avaz DRS housing project. Any light on this?

So we are, we as a policy don't declare L1 positions, but yes, we are L1 in a couple of projects. One of these is you have just mentioned, and we hope that within this month that should get converted into an order.

And second one is the Chennai Metro Commercial Complex, another L1.

Yes, we are expecting that also to get converted in the current month. Apart from the L1 positions, but as a company policy, since we don't declare on the stock exchanges, I will not be able to commit any further. This because the government is in the public domain, I can.

Okay, thank you, sir. Just use the answer.

Thank you.

Thank you. The next question is from the line of Vasudev from Novama. Please go ahead.

Yeah, thank you for the opportunity, sir. Professor, how are the work progressing in the SEDCO and the Signature Global Project?

The SILCO project, we are handing over, virtually we had explained last time also, we have handed over two locations, so work is going on at the balance four locations. We believe that the client has identified, if you remember, there were seven locations all put together. So we are in the process of receiving the handover of the balance quantum of land. Starting quarter two and ending quarter three. So, therefore, from quarter three, you can expect enhanced revenues from Citico project. Our completion for the remainder of the four locations, we have received the extension from the client for March 28, which means that we have to... Further, get a certified revenue of close to 1,000 crores, plus escalation thereon, and that is to be done over the next 18 months, and therefore, the revenue guidance earlier given for Cisco is based on this 1,400 crores plus escalation, and we are well on track to achieve that. And on Signature Global, we are targeting to achieve approximately 22 crore monthly revenue. We are on track to do that. There was a serious dip in quarter one because of serious shortfall in labor across the country, across the industry. But now we have about more than 1,000 booths on the ground at the project site, and we are confident to achieve the targeted revenues. It has improved significantly in July, and you will see significant improvement between July and August.

Okay. And for MADA and Sudkos, if you can give a similar number, like what is our current monthly or quarterly run date, and how are we expecting to improve it?

So, our target is to do about 20 crores per month in Mana in quarter 2. We expect another four buildings to open up in quarter 3. And let me tell you, at the subcontractor level, one building is approximately 140 crores. So, with opening up of each building, we add approximately 6 crores to the top line. Because each slab casting gives a revenue of about 3.1 crores. So it's a very long answer, but to answer your questions, in this current quarter, we should be at 60 crores approximately. And then for quarter three and quarter four, we expect 75 crores plus from this project alone, given the current status of the land handed over by the client to the parent company TCC and by TCC to Capacify.

Sure, sir. And for SIDCO, also, if you can help with similar numbers.

So, SIDCO, we are targeting, I had given a figure last time, of approximately 600 crores for the bull year. So, we do believe that we should be more or less within that hitting range. With some betterment, but the positive surprise will come from NBCC in the current quarter, next quarter, and Q4 as well. The billing momentum has built up over there, and we do, as I explained in my earlier answers, we do expect the revenue to jump from 20 to 60 crores approximately per month over there from current month onwards.

Okay, and in NBCC, you have started booking profits for this project?

Yeah, yeah, yeah. Now, it has started booking profits. We are at 300 crore certified bill, and we are looking to bill about 60 crores further per month for the remainder of the year. Okay, so, obviously, we have crossed that 20% threshold, and therefore, we are booking the profits as guided for NBCC project.

So, sir, and just one last, from my side, what is the CAPEX we did in Q1 and our target for the full year?

For the full year, the target is 193 crores. The CAPEX done in Q1 is 79, sorry, 52.26 crores.

Yes, sir. That's it from my side. I will join back in with you. Thank you.

Thank you, ladies and gentlemen. If you wish to ask a question, you may press star and 1. A reminder to all the participants to press star and 1 to ask a question. The next question is in the line of Vaibhav Shah from JM Financial. Please go ahead.

Yeah. So, firstly, what will be the order backlog for the sixth building? And what will be the same for seventh building?

So, it's not seventh building. The total square feet to be constructed under the contract is 1,62,000,000 square feet. All right. We have received 50% of that. So, 50% is the remainder to be handed over. And the client has identified a couple of locations, which we believe that should be handed over to us by next month. So we should get the entire scope of 162 lakh square feet over the next two quarters, including the current quarter.

So, in terms of order value, what would be the order book for 6th buildings and the 7th buildings?

So, the total order value for the remainder would be approximately 2,000 crores per escalation. And the current escalation...

Including all the buildings.

Sorry?

Including all the buildings.

Whatever balance has to be received. Whatever has been received, out of that, another 1,000 crores to be built.

Okay, okay. Sir, can we, what is our bronzette right now?

3,500 approximately.

The outstanding portion or the entire USM?

The outstanding portion, including price variation, because price variation is approximately 28% as I speak to you. That will be between 3,200 crores or 3,300 crores. It can vary depending on the price variation which the company gets. Currently, it is at 28%.

Okay, and of this 3,200 to 3,300, what will be for the seventh building value?

2,500 approximately, including escalation.

Okay, got it. Secondly, what will be our gross debt right now, and how do you see it going forward by March 27?

Sir, the total gross debt is 522. I have given a commentary during the last conference call that on the yearly basis it will reduce. This has only increased because approximately 150 crores of payments got shifted by 10 days, which obviously have been collected in the current month. So this should not be viewed on a quarterly basis. On a yearly basis, we will reduce our gross debt and so will we reduce our net debt. Our eight quarters net debt free target is well on track.

So, lastly, one confusion was there. So, between the console numbers and channel numbers, what is the difference in terms of revenue? So, which projects are booked in, revenue is booked in the console books?

So, the National Speed Highway project is on console basis, two hours share of revenue, and the Capacity Infra and Mutagroup Maldives project.

So, MADA revenues won't come in the standard book?

No, if that would have been the case, we would have been having 1000 crore revenue in the quarter. Only the profit will come in the console, not the turnover.

Thank you, sir.

Thank you. The next question is from the line of Vedan Cabra from AVN Capital. Please go ahead.

Hello, thank you for giving me the opportunity. I just had a couple of questions. Sir, your quarter one commentary flagged the Mumbai water cut as an execution drag. So now looking ahead for this year, you know, in quarter three, the Delhi NCR Grab Construction Bands are a recurring annual event that spans on November to January for the entire NCR. So, how do you plan on tackling this and still achieve the 20% top-line growth that we have targeted for this fiscal, you know, given that we have achieved 7% for Q1?

So, the point is that, sorry, we have achieved. Yeah. So, the point is that quarter two... And therefore, we derive confidence on the August and September numbers. Quarter 3, as I told you, at the moment, we have just started IIT project. We have just started yielding from NBCC. Revenue is bound to rise in SIDCO and MADA projects. And similarly, we had announced the downtown project in quarter four of last fiscal. The current quarter will give you substantial revenue of close to nearly 55 crores from that project alone, which is bound to rise in quarter three, quarter four. Therefore, the number of projects which will add meaningful revenue from quarter two onwards and peaking in quarter three and quarter four, that gives us Substantial confidence of achieving the full-year target on a consolidated basis.

Okay, so this Delhi NCR, that construction ban period will not be impacting in any revenue flow.

We have factored an average of 20 days burst. Now, if it goes to 40 days, everyone will suffer. But I do believe that the industry is taking adequate steps for that. But if the HUI remains at 400, 500, then it is anyone's guess. But at the moment, we have factored 20 days in the current fiscal for the Northern India revenue impact due to NGT.

Okay, sir, got it. And sir, my second question is on the revenue growth because the revenue growth has slowed steadily, right? We were at 22% in FY25 and then we were at 12% in FY26 and we are currently at 7%. So even though our order book has at a record 13,500 odd crores, which is about five times our annual sales. So the slowdown has started before the water cut issue and labor issue. So, sir, my question, I just wanted to understand from an investor's standpoint, do we have a bottleneck on execution outside of the labor issue and water issue? Is it slow revenue recognition because of the shift to 40 plus towers, which is now 62% of the book? I just wanted to understand.

No, no, no, no, no. It's not like that, sir. We have been very open with all our investors and new financial institutions that the order execution on nearly 2,000, see, for example, FITCO 2,500 crore, I just mentioned to the earlier query, 2,500 crore, yet execution has to start. We expect that from next quarter. Okay. We are increasing the revenue of NBCC, which was not even 15 crores per month last year. We are taking it up to 60 crores from the current quarter already. Okay. Current quarter, in the sense, per month. So, about 150 crores would come in the current quarter. Similarly, IIT Bombay, we couldn't start the work because of tree cutting permissions. Now, these things are uncoursing. And therefore, My 13,500 order book, I could have only executed, or execution was only happening on 8,000 to 9,000 crores. That does not mean that the active order book is not active. But as soon as, that's an opportunity. Suddenly now we have 34 buildings in Mara to execute. So obviously that will get reflected in the top line. We have already started our works at IIT. From next quarter, you will see revenue happening in that also. And obviously the increase in revenue coming from NBCC. Lastly, great value still has to receive approvals. So while the order was booked in quarter four of the last fiscal, we have not recognized a penny of revenue from that project, maybe a crore or two. So again, we do believe that quarter three onwards, you will see sizable revenue coming from that. So therefore, when we say our total order book, That includes sites on which the work is yet to begin, all right? And therefore, since now we have a roadmap available with us, that yes, from quarter to end and quarter three, a lot of additional projects will start giving revenue and sizable at that. Similarly, Vadala of raiments, okay, that will start from quarter to end. So, you will see the sizable revenue coming in quarter 3 and quarter 4. And therefore, the confidence of revenue increase comes from that. Similarly, I would request you to look at our CAGR over 22 to 26. And that would be at approximately 18% on console basis. And if I have given a projection of 20%, obviously the CAGR will improve by that percentage. But our goal over the next two years is to maintain that growth rate. The order book supports it. The current labor strength supports it. And obviously, our focus on use of the new age technologies will further support it from quarter three, quarter four, end of the current financial year.

Okay. Okay, sir. Got it. That brings immense clarity. Thank you so much.

Thank you. The next question is from the line of Tatek Bhandari from Art Ventures. Please go ahead.

Hi, sir. Thanks for the opportunity. Just wanted to get a sense of the current quarter of the last 40 days that have gone by. Have you seen some sort of stabilization in the commodity prices?

The commodity prices are stable over the last three months. The steel prices went down by 20%, have increased by 3%. But the concern is over the non-perrous, aluminium, copper. The price increase, which at the moment is reflecting from the CPWD is approximately 14%. Well, on the ground level, the raw material itself, let's say, raw material is 30% of the entire MEP. So, if that has increased by 40%, it is 12% to 14% only on the material part not to speak about the labor. So, it is stabilized, but the inflation is yet to catch up with the price rise. And Office of Economic Advisors for Relative Commodity. Got it.

And secondly, on the CAPEX, you last time guided for CAPEX for FY25, for FY27 to be around 155 crore, that was for Aluminium Exclusion. And now you have mentioned it to be 193 crore. So can you give a sense as to where is the difference flowing?

So we have taken, we are expecting certain orders in this quarter, and therefore we have accounted for that. You can just take the bifurcation. We are looking at 66 crores of plant and machinery. We are looking at the aluminium institutions and the related homework of 121 crores for the full year. And information technology would be 5.43 crores. So, we are currently on the process of implementing SAP, and we should go live in the quarter three of the current fiscal. It is important for the organization. So, this is a bifurcation. So, 150 crore for only homework stands at 121 crore. Plant and machinery will increase because we are currently executing more than 15 buildings in super IRI segment. And while we have our own equipment substantial at that, still the requirement of high-speed lifts for passenger and materials will be there. Similarly, we are building for composite buildings which involve steel structures like the IIT Bombay, which will require heavier cranes. So these things cannot be emphasized only in March. So, we have booked, we are very confident of exceeding our half yearly target in the current quarter and with the L1 position alone. Okay. So, we do believe that this equipment increase is directly proportional to that. However, given the equipment increase, our repayment of term loans for the current year will stand at 102 crores. So, therefore, the debt position due to the equipment purchase may increase by 45 to 50 crores, nothing more than that, on net basis. Similarly, on the working capital front, like we reduced 40 days last year, we expect a similar reduction in the whole year this current financial year. Do not please ask me March, September, December, but we will definitely talk to you. For March 27, and the March 27 working capital days will be further improved to March 26, and the overall debt position will be lower. Yes, the term loan obviously because of substantial equipment purchase will be higher by net, whatever new loans we take and whatever repayments we do, by approximately 45 to 50 crores.

And just one last question. Of the audience that we have received during the quarter, can you give a split? Is it from public or private?

The first quarter was totally private. The second quarter we see equivalent coming from public and we are under negotiations with certain... Seriously high level quality private sector and we are very hopeful of converting some of them in the current quarter. So yes, therefore I told you, there is no reason why we should not cross the upper band. So our band of order inflow is 4,500 to 5,000 crores. We see crossing 50% of the higher end of the band in quarter two itself. All right. Thanks a lot.

Thank you.

Thank you. The next question is from the line of Dhananjai Mishra from Centrum Brokane. Please go ahead.

Yes. Good afternoon, sir. Sir, there is 6.5 per hour monetization value. So where it is getting captured? In the other income?

In the other income. Sorry, can you repeat the question 6.5?

5 crore realized from non-code effect.

Yeah, it is getting reflected in the... Profit is it? The profit is getting reflected in the other income.

Okay, that is part of 10 crore. Absolutely.

So, therefore, if you see overall on the full term basis last year, there was substantial other income which was booked. And the target for the full year remains unchanged.

And for Citco, you said outstanding order of the 6th site is 1000 crore and 2500 crore is for the 7th site.

Not seventh side, remainder area to be handed over is 2,000 crores plus escalation, so 2,500. So, in our order book, we have considered 2,000, but as soon as that locations are handed over, approximately four locations encompassing the seventh location which people know. However, we will give you absolute clarity on that in quarter two, earning conference call. But we do expect a couple of locations to be handed over within the current quarter.

Can you also talk about the bid pipeline for this financial layer, and do you see any opportunity in this Mumbai 3.0 we are talking about for our support?

I will not be able to take names, obviously, you can understand due to restrictions, but we have an identified bid pipeline of 22,000 crores in the public side. And approximately 5000 crores of targeted bid pipeline in the private sector for Q2 and Q3. Q3 will be uploaded by the end of Q2. That is the process how we follow because just leads does not become bid pipeline. What tenders are only planned and which have received administrative approval from various government departments, those are the projections which we can take in our bid pipeline. So that is the opportunity as far as capacity is concerned. It may get added or deleted depending on finally when the NIT is published by the government. But we do see a very strong pipeline both in government and private sector.

Okay, sir. Thank you. Thank you. Thank you.

Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question is on the line of Kunit Singh from Cyclical PMS. Please go ahead.

Hi, sir. Thank you for this opportunity. So, my question is regarding the contract assets. So, if we look at our PAs like Aluvalia or PHP, contract assets as a percentage of revenues are about 14 to 15 percent, whereas ours are about 50 to 55 percent. So, can you help me understand why are the contract assets much higher than them, and what percentage of these are normal unbuilt revenue versus how much of them are under stress?

So, the stress has already been provided for sir. Now, I would like to just clarify, I do not have the, from where this 15% and 14% has come, but contract assets plus debtors. For our company stands at approximately 78% to the top line as on 31st March. The same percentage for my competition is between 56 days to 65 days. If you remember, during COVID, after COVID, our 325 crores had got held up, and this figure had shooted 220% to the top line. So there is up to 45% betterment over the last 3-4 years. As far as contract assets are concerned. And we, during our commentary during the quarter four, you know, earnings call, had said that we will be in the leadership position better than most of our competition without taking names over the next eight quarters. So you will see improvement in the contract assets and debtor realization both, like you saw last year of 40 days in networking capital. And the reduction of 43 days to be precise. And similarly, the percentage to top line of contract assets and debtors also coming down, you'll continue to see on quarter to quarter basis. But there will be a very positive surprise in March FY27. And we should be in a leadership position by March 28. What we had in March 19 prior to COVID.

Got it, sir. So, I mean, unbilled revenues plus receivables for them are between 35% to 45% of revenues. But, so, I mean, what efforts or what steps are we taking to reduce these contract assets? Is it that we will be changing our accounting standards? Or is it that it's, I mean, stuck by, I mean, money is stuck by a few clients which will be expected to clear them? And if you can help us understand how much of these contract assets are over one year, two years, three years, so we can get an idea of, I mean, this is regular unbilled revenue, or it's, I mean, something which has not been cleared since a long time.

So let me just give you a gist. It's a very long answer. While the data is available, you can connect with our investor relations team immediately after the call. But now, for example, Cisco, we have a 300 crore unbilled revenue, obviously, because of the work done and the milestone payment. Similarly, we have on a 6,500 crore, nearly 200 crore of unbilled revenue on BADA. These figures may be off by 5-10% because I'm not having the details in front of me. So, we have seen substantial reduction in payments. We have seen some increase in NBCC. We have seen the reduction on an absolute basis in MADA. So, the entire data is available, and since these are all ongoing projects where bills are getting certified every month on month, and payments are getting received, so you will see, these are cyclical, it is not, nothing is above one year, two years, three years, okay, so everything is over the milestone payments, the milestone payments are getting billed, the current month certification of CEDCO will be in excess of 60 crores. The revenue is 35 or 40 crores. So this additional 20 crores is nothing but the milestones getting built. All right. So two final bills of two locations are also going to go to the client in the current quarter. So obviously you will see further certification happening. So these are nothing but milestones getting converted. However, I would urge you to see the overall No contract assets.

That's great, sir. So, I mean, what is the aspirational exit contract asset for FY27? And, I mean, should we consider this 1,000 crore as a normal BAU contract assets or we aspire to come down to what level?

Obviously, we aspire to come down, but at the same time, you should remember that on 1,800 crore revenue, this was the contract assets. On 2,700 crore, this was the contract assets. So, obviously, on 3,200 crore revenue or 3,150 crore revenue, also the contract assets would be this or tagged lower. So, we are well on track to reduce it as a percentage to the top line, absolute number. We can always discuss offline because I don't have it ready in front of me.

Got it, sir. Thank you very much, and I wish you all the best.

Thank you very much.

Nice question.

Thank you. The next question is from the line of Rohin Gupta from RKG Online Services. Please go ahead.

Sir, I just wanted to clarify you regarding BDD, Mahada. Our unexecutive order book still remains 3,000.

Sir, I'll explain to you. It's a very long answer. I told you that the order, our portion is 35% on the parent company level. Because we are 35%, we cannot consolidate the revenue. We can only take our portion of profit. What we book as revenue is as a subcontractor to our own parent company. That is taken in the standalone revenues, all right? Over the next quarter, years, you will see the profit or share from TCC growing, that is the consolidation profit growing, and the revenue also as a subcontractor growing. Our share is 35%, and we will be executing over the next six, seven years, this backlog of... So, to be clear with you, the current certification of TCC... With MARA is in excess of 2,000 crores. And if the revised order book, including price variation, is 16,000, 17,000 crores, you can establish what is the backlog, and 35% of that is attributable to capacity.

Okay. Got it.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. A reminder to all the participants to press star and 1 to ask a question. The next question is on the line of Deepak Podar from Sapphire Capital. Please go ahead.

I am audible, sir. Thank you very much for this opportunity, sir. So, we just wanted to understand on the provisioning, I mean, do you expect to, again, reacad, because last two quarters we have been doing 10 crores per quarter, right, in terms of the provisioning.

So, sir, the impact has happened subsequent to February. Okay, I don't see any provisioning coming in in quarter two. All right. We will have to wait for quarter three how the escalation indices pan up. So, yes, in quarter four of last fiscal was necessary because suddenly after the geopolitical tensions, we did see a very serious upsurge in non-ferrous metals, and that impact would have happened in quarter one, quarter two, quarter three of the current fiscal. All right? And similarly, we have not seen softening of the non-finished commodities. Neither have we seen the price escalation matching up with that increase. That warranted this additional 10 crores of provisioning in the current quarter. And therefore, I do not see any further provisioning in quarter two onwards. However, we shall discuss and give a confirmation about quarter three in the next earnings call.

So, this provisioning is largely because of the non-ferrous price escalation, right?

Absolutely. Absolutely. Because we have nearly 55-60% of our business coming from public sector. You have electromechanical works in that, and you have, obviously, sizable aluminum homework, which has to be purchased. When it purchases, then you have notional... Good morning, everyone. Debit of rent or, in your terminology, depreciation, which happens. So, all these impacts, if the purchase price has gone, it has to get impacted somewhere or the other.

Correct. And how are we saying that the majority of it can get reversed in third quarter and fourth quarter? What is the thought? Yeah.

So, till March, the price variation did not move. So, if you compare last June to this June, the price variation has been close to 8, 8.5%. Okay. Which was not even 2% till March. All right. So suddenly in April, May, the inflation for non-food items, I'm talking referring to non-food items, has moved up. Similarly, at the same time, the June did not see a big tick and therefore this need for provisioning. However, we do believe that true price will get reflected.

And just one last clarification, when we say EBITDA margin of 16-17%, we are excluding the other income here?

Excluding. Otherwise, both of us will be happy.

Okay, excluding. Okay, okay, that would be true of my side. I wish you all the best. Thank you. Thank you very much.

Thank you. A reminder to all the participants to press star and want to ask a question. The last question is from the line of Rahul Kumar from Vicaria Fund. Please go ahead.

Yeah, hi. Thanks. So, just carrying forward Deepak's question, Akhil, is just for understanding, but this extra provision which you have created, is this for any specific project, or is it for the revenues which you have booked in March and June quarters?

No, no, no. This extra provisioning is for materials which have to be purchased over the next four quarters, where we believe at the current state situation, the escalation would not cover up the cost. For example, currently in NBCC, we are at an escalation of 6%. We don't believe that 6% will cover the entire cost. Point number one. It is basically referring to the government contract because in private sector, we do only shell and core. So there is no electromechanical business over there. Similarly, if you look at the aluminum windows, which we are fixing, in all the government projects, the price has gone up. A substantial portion of that is currently under coverage of price variation. But going forward, if it does not move the way we... Perceive it should move, then perception cannot make us prudent, oh sorry, laid back that we should not provide now and then provide suddenly in quarter three and quarter four. So if you see that the escalation has caught up with the price at which it is being purchased, you will see reversals in quarter three and quarter four. That is what I meant.

Okay, okay. So just to summarize, this 20 crores is the potential, you know, exposure to this inflation for the projects which are impacted by this commodity inflation.

Which are actually impacted, where the escalation at the moment is not covering the total increase.

Yeah, yeah. But for the, you know, for the completion of these projects, let's say, over the next three, four quarters.

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

Understood. Understood. Just last question on this working capital. I think you mentioned that, you know, you want to be net debt free next eight quarters. Net debt free.

Net debt free.

Yeah, net debt free. Right. But let's say, if we think of, you know, March 27, this year, this fiscal, and so, last year, we had reduced the working capital by, I think, 40 odd days, right? Where do we want to, you know, see as a medium term target for the, you know, this year end? Where do we want to end up?

See, I'll just tell you, sir, from 2013 till 2020, our net working capital was between 56 to 72 days. All right? Net working capital. Net working capital is the overall impact of reduction of contract assets, more receivables getting converted, net cash flow position from operations. So, you saw last year the cash flow improvement from 50 crores to 250 crores, approximately, give and take, 10 crores. All right. We expect that momentum to continue, and therefore, these projections. And ideally, I would like to see ourselves at the pre-COVID situation, at which time our 325 crores was stuck. Today, we have bought that figure down to 150 crores. And we have a target for the current year of 50 crores also. We have achieved our target of better last year, and we are hopefully on track for achieving that in the current year as well. So all these realisables which come, always directly impact the net working capital, contract assets in a positive way. So since we reduced last year by 40 days, we expect Thank you. If not that much, at least 25-30 days to happen in the current financial year also.

Okay, okay. And rest by FY28, we will end up at...

So, absolutely, sir. The industry has to set up, I believe, your analysts like you all have to set up whether you all would like to compare the contact assets and plus debtors excluding retention to turnover or whether you would like to monitor the networking capital. So, whatever you all say, we will put it in our company's investor presentation every quarter. We will be very happy to be as transparent as possible.

Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Rohit Katyal for closing comments.

I would like to thank all of you again for joining on this call today. We hope we have been able to address your queries and provide some insights into our performance and future outlook. If you have any further questions or require additional information, please feel free to reach out to our Investor Relations team. Thank you. And thank you for your time and continued support.

On behalf of Capacet Infra Project Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.