PSP Projects Limited (PSPPROJECT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to PSP Project's Q1FY27 Earnings Conference Call hosted by Ernst & Young. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal and operate by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Krishna Patil from Ernst & Young. Thank you and over to you.

Thank you, Mesya, and good evening, everyone. Welcome you all to PST Project Limited's Q1 FY27 Earnings Conference Call. To take us through the results and to answer your questions, we have with us the management of PST projects, represented by Mr. Perala Bhai Patel, the chairman and MD, Ms. Pooja Patel, the CEO, and Ms. Aethal Patel, the CFO. Please note that the discussions that we may have today may contain certain forward-looking statements relating to the future events and future performance. Numerous factors could cause actual results to differ materially from those in the forward-looking statement. Please note, the audio of this earnings call is a copyright material of PSP projects. Cannot be copied, rebroadcasted, attributed in press media without specific written consent of the company. With this, I hand over the call to Ms. Pooja Patel, the CEO, for her opening comments. Thank you, and over to you, Pooja.

Thank you, Krishna, for the introduction. Good day, everyone, and thank you for joining us for CSP Projects, Part 1, FY27, Earnings Call. As 30th June, 2026, our outstanding order book stood at 13,245 crores, reflecting our robust 103% year-on-year growth and providing us with a strong multi-year revenue visibility. Of our total order book within group projects accounts for approximately 70%, while external project contributes to remaining 30%. The first quarter is traditionally a challenging period of the construction industry due to seasonal factors, including labor migration during festivities and rest wedding season, as well as the initial onset of monsoon. Despite this industry-wide challenge, CFP delivered a strong 65% year-on-year cost. Revenue growth during Q1 FY27. Our performance demonstrates the strength of our execution capability and the process achieved across key projects. Importantly, most of our major projects have now moved beyond the initial stage involving excavation and underground walls, and entering for construction phase, enabling include Execution Momentum. During the quarter, we deployed the workforce of over 16,000 labor across project sites, reflecting the scale of our operation and execution readiness. As labor availability normalized in the coming quarters, we expect construction activities and project execution to gain further sections. I would also like to highlight our continued investment in strengthening organization capabilities. The increase in employee cost during the quarter reflects our strategic focus on the enhancing, leadership, and project management bandwidth across various levels of the organization. We have expanded our team across. Key functions and geographic to ensure we are well positioned to manage a significantly large project portfolio while maintaining our commitment to timely delivery, quality execution, and operational excellence. During the quarter, the company successfully completed six projects and receiving order inflows of 630 crores with 93% order from Adani Group. Major orders are Adani Healthcare and Research Foundation Project Mumbai, Airport Office Building at T1 Mumbai, Refurbishment of Port User Building Mundra, Construction of Skilled Accommodation at Green PVC Project. Mundra, the order book is diversified with the industrial project comprising of 39%, residential project 37%, government project 23%, and industrial project approximately 1%. Our current order book, please make note of key projects and their outstanding contract values. Three Ambaji Mata Temple, 962 crore. SMC High-rise Building, 693 crore. Construction of Quintech Building at Gibbs City, Gujarat, 259 crore. Human Biology Centre Science Gallery at Science City, 248 crore. Biggest Residencial Project in Gibbs City, 202 crore. Development of Dharu Dam region 198 crores. Sarawamati riverfront development is to 187 crores. The bid pipeline is 6200 plus crores with 61% group projects and 39 external projects. Now let me share certain. Project level updates. SNC, core and shell activity has been completed and now full-fledged MEP, interior work and facade work is going on. RVNL out of three buildings, two buildings will be handing over soon and the hostel building RCC is completed and MEP work, interior work and facade work is going on. And there are the airport and city-side development. We are at a different level of call. RCC work going on in full-fledged, and for Ambaji Mata Temple, we are at excavation level and some of the buildings are in footing level. With this, I now hand over the call to Hettleman to share the financial in further details.

Thank you, ma'am. Good afternoon, everyone. We will brief you about consolidated financial performance for the quarter ended 30th June 26th. Q1 FY27 versus Q1 FY26. Revenue from operations for the quarter is Rs. 853 crores versus 518 crores, which is increased by 65% on YY basis. EBITDA for the quarter is at 55 CR versus 25 CR, increased by 121% on YY basis. EBITDA margin is at 6.42% versus 4.79%. Net profit for the quarter is Rs.18CR versus Rs.37L which is increased by almost 50 times YY basis. Net profit margin is 2.12% versus 0.07%. During the quarter under review, employee costs have increased from 35 CR to 46 CR, which is mainly on account of annual increments performed in April month and increasing number of employees from 2400 almost to 2600. Increase in depreciation from 17CR to 26CR is mainly attributable to additions in asset block during FY26 as well as in quarter 1 FY27. During quarter 1 FY27, company has incurred capital of 28 crores, gross block is at 793 crore as on 30 June 26, and net block is 417 CR. Would like to mention few of the important consolidated balance sheet numbers as on 30th June 26th. Long-term borrowing is 38 crores, which includes short-term maturities of 19 CR. Short-term borrowing is 217 CR, which is excluding short-term maturities of 19 CR. Net only revenue is 473 CR. Trade disables are at 745 CR. Trade payables are 356 CR. Retention long-term and short-term 222 CR. Mobilization advance stands at 836 CR. Inventories of 362 CR comprises of 205 crores of construction material, 137 crores of work in progress, and 19 CR of finished goods. Out of total sanctioned credit facility of Rs.1497 crores, company has utilized non-fund based facilities of Rs.678 crores and fund based utilization is Rs.166 crores. Limit available for utilization is Rs.653 crores. As on June 30th, 26th, the company has total fixed deposit of 324 CR, out of which lien-free deposits are 139 CR, and at least worth Rs. 185 CRs are under lien, which banks for credit facilities and given a security deposit to client. Work on hand on consolidated basis as on June 30th, 26th, is 13,245 CR. And the detailed breakup is provided in the uploaded presentation. That concludes the update on financials, and we are now open for the question and answer session.

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 the touchstone 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 Shravan Shra from Dollar Capital. Please go ahead.

Hi, sir. Great to see a decent, significant improvement in the execution front. A couple of things to understand. First, sir, in terms of... The guidance, just to get a sense, that for 27,000, 4,500 crore revenue that we were looking at, and even going forward, we were looking at 20-25% kind of revenue growth. So that remains intact?

Yeah, we can say it will be on an average more than 25%. So it can be between 4 to 4,500. Still we remain on the same line.

Okay. And now, sir, on the margin front, so this quarter also 6.4%. So, we were looking at 7-8% kind of a margin. So, can we start seeing that 7% plus kind of a number from Q2 onwards or maybe it would be from the second half onwards we can start seeing that kind of a number?

Yes, you are right. From second half onwards, we should be in that range. But if you see this quarter also, our employee benefit expenses is 46 crore. Which is 5.39% of the sales. And because of the first two-month sale of April and May was down, and the third month it was 319 crore, two years to two months it was 270, 270. So that will itself speak about there is almost 1% more expense due to the turnover not being converted, but not converted into reality. And that itself is making 1% difference. So if you add at least a 7-8 crore in the EBITDA, it will be somewhere above 7%. But, okay, fine, but we will be in a better position from quarter three and quarter four.

So, employee costs now from second quarter onwards, can we see the similar?

Yeah, see, on an average, we have been in the range of 4 to 4.5%, or 4.5%, almost 4.5%, 4.6%. This quarter, it is almost 5.4%. So that's the big difference because first two months of April and May, as you were aware that there was a huge requirement of labor and deficit of labor on the side. If it could have been converted into sales, then it is almost at 4.5%.

Okay, okay. And so this quarter, we got 630 odd crore and previously we were looking at 6000 odd crore and close to 5000 crore from Adani group. So that now will remain the same for this year. So maybe in the second half, are we seeing a significant order coming in?

Yeah, probably we'll be in the same range, maybe plus 1, minus 400, 500,000, but we still remain in the same range of plus 5,000, because there are so many other projects which are under discussion, which will be increasing in second quarter and third quarter. So we still remain in the same range of the visibility of the orders.

Okay, and the capex also the similar 3-4% of revenue. So in this quarter, we have done 28-odd crore. So that also remains the same or once the LJC is picking up?

More or less, today it is very difficult to say, but in case there are few projects and the size of the project is large, then the capex can be a little bit high. But on an average, I think it will be somewhere in the range of 3-4% only.

Okay. And these quarters are out of this broadly 853 crore revenue, how much would be the Adani group revenue? So just to get up in terms of the pickup in the execution of the Adani projects.

Yeah, right now we don't have exact numbers, but it will be mostly around 60%, 55 to 60% will be Adani Group.

Because we are executing this RVNL around, that is also High Valley Project, S&P says.

So around 60% we can say it will be from Adani Group.

Okay, okay, okay, got it. And this mobilization advances is entirely kind of interest-free? Yeah. And working capital, can we see a further improvement in the working capital?

Yeah, that we can see because you might have noticed finance cost has reduced compared to previous quarters. So we have utilized less working capital facilities and we have surplus athletes also. Going forward, we expect some more reduction in that.

And then in next two to three quarters, then we will be having a kind of a zero kind of a finance cost and will be becoming a net-date free, date-free.

We can expect so.

Okay. Thank you, sir, and all the rest. Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question comes from the line of Bala Subramaniam from Arihan Capital. Please go ahead.

Good evening, sir. Thank you so much for the opportunities. Sir, what is our current status of execution of Mumbai projects, especially in Mahima and Matabar side?

The MIME, the first two-block foundation, the basic RAAF foundation has been done, and we are now in the first basement for work. And in Matunga, the piling work is on before exploration, the seed piling is going on.

Okay, sir. And, sir, what is the current interest-free advances? I think Manapha has mentioned the overall mobilizations. What is the share of interest-free?

It is, the whole amount is interesting.

Okay, okay.

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

Yeah, good evening. Congress, congrats on very strong set of numbers. So, just wanted to know, I mean, any update about this Commonwealth project, what is the status when it is going to be ended, or?

I think, Steve, we are not having any clear idea, but the movement has started, few days that they have started to make a control room for the Commonwealth development, which is going to happen in Endeavour. So probably still nothing on paper or nothing on news that when this tender will be coming up. Last week also we heard that the Home Minister has visited this Glasgow for the Commonwealth discussion also. So maybe in the next quarter we should hear something for what is going to happen because now it's high time to start some of the projects.

Okay. So, this year, order inflow guidance, we have not considered anything from that side, whatever 6,000 crores or anything?

No, no, no. As far as government projects are concerned, we are not considering order inflow considering that part of survey. In grid pipeline, we can consider, but in order inflow, it is always when the orders get clear.

Okay. Oh, sir, any progress on this UP medical project collection? Any improvement or it is still?

Yeah, now almost three of the projects, EOT is almost at the verge of signing, and last, one day back only I was there in Lucknow to discuss about the last three projects also. So probably by this week or end or maybe end of this month, first week of office, we will be in a better position to get all the EOTs. So, the money will be due, and when the money is in place, we expect that this account should close somewhere by end of August or mid of September.

Okay. So, both receivable as well as unbilled part? Yeah. Both will fertilize?

Yeah. Okay, sir. Unbilled part is this one, right?

Unbilled also will be. Okay.

Yeah.

Okay. Okay.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. A reminder to all the participants, if you wish to ask a question, you may press star and 1. The next question is from the line of Ayush Sabu from Choice Institutional Equities. Please go ahead.

So, going by your EBITDA margin guidance of 7-8%, do we expect to meet this guidance by the first or the second half of the financial year? And is there any upside to this guidance, the 7-8% EBITDA margin?

I think I have already answered in the second half only. First half, as I said, that there is an employee cost is more than...

A reminder to all the participants to press star and 1 if they wish to ask a question. The next question is on the line of YBav Shah from JM Financial. Please go ahead.

Sir, any update on LTV receivables?

No, not clearly, but yes, I have one call to go and have some discussion with the top management director, so probably I will be visiting next week. They have called me for some discussion. I don't know what is the positive direction in there, but yes, they have contacted me to come and wait for the receivables.

Sir, what is the outstanding amount of receivables in the books?

Ninety years.

Ninety years. Okay. So, secondly, on margins, you mentioned seven to eight percent statutes for the entire year or only for the second half?

No, no, it should be for the entire year, but once the execution speed is coming up in the next few quarters, we should be in a better position to go beyond 7%.

Okay, okay. Sir, lastly, so when we see the revenue on the console and the standard on books, so difference is for which projects? It's for Dharavi.

Standalone and console books, you mean to say, what are the projects we execute in a subsidiary company, right?

Yeah, so what is the difference between the standalone revenue and console revenue?

Yeah, so around 80% of revenue we have booked in our subsidiary. So that is some business projects which we have taken up in that company.

These are Adani Group projects?

Yeah, Adani Group projects only.

Okay, so whenever now you give the guidance, that should be the consult, we should take it as a consult guidance?

Or everything will be on a consult guidance.

Okay, okay. Thank you, sir. Those are my questions.

Thank you. The next question is on the line of Rasha from RBSA Investment. Please go ahead.

Hello. Yes, sir, your audible. Yes, sir, anything can you share on the audio experience?

Your voice is breaking.

Sorry to interrupt you, sir. Your voice is breaking.

Can you hear me, sir?

Not clear.

Sir, can you please speak to the handset?

Hello? Yeah, I just don't know if there's any guidance that you can check out of the ordinary book that starts in 2007.

Is there any visibility you have? Sorry, sorry, your voice is seriously not coming up here. Okay, I'll just try again.

Yeah.

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. Participants who wish to ask a question may press star and 1 on the touchtone telephone. The next question is from the line of Vishal Perival from PL Capital. Please go ahead.

Yes, sir. Thanks for the opportunity. Just a few data points. The order book that is there with us, 13,000-odd crore, what is coming from Dharavi side in this order book?

I can't have the exact figure of what is coming from Dharavi side, but I think there are two projects of Dharavi which is considering this order book.

3,000. Okay, okay.

3,000. It is about 3,000 crore, right?

3,000. Okay, okay. And then overall, I think, though, I mean, in this Adani meet, which happened a couple of months back, when we attended, and then there was like a big opportunity that we could see they were projecting. So, for us, what could be probably a number that one can look at, because the size is pretty big, probably what we are eyeing from this opportunity, any ballpark number that can be shared?

We are talking about Dharavi, sir. The Dharavi is a development, the first part is redevelopment, and then second part is the development of Dharavi land once it is recreated. So as far as redevelopment is concerned, it is going to go for at least four to five years, maybe six years. And after the six years, the whole redevelopment is completed, then that land will be recreated, and the fresh development of those land will be coming after six to seven years. Today, out of the first two large projects which is being announced for Dharavi dehydration, that we are doing. But since this tool at Houses has to be made within a period of five years, I think by the time we are through with some of the projects, we can further get an opportunity of the same size later on after two years. So, presently, we are the first person to write a rejection. If we can build up our capabilities in Mumbai, then we will be getting more and more chances. But as they have a fixed timeline of making two live houses, there can be a few other players also who can be participating for the RIDER1 project.

Okay. So, if I just to, I mean, like, you know, probably what you have said just to repeat, the new opportunity for Dharavi will come only once we deliver these two projects? Is that, or before that?

No, no, no. Not only two projects. It is going to be, the whole Dharavi redevelopment is requiring two late houses to be built first. Once those two less houses are built in phases, after three years, if we are able to deliver 40,000, 50,000 houses, those 45,000, 50,000 houses will be shifted from Dharavi to this new location of redevelopment. And later on, those lands will be reflected, and then only this new development of Dharavi will start.

Okay, okay. Got it, got it. And then maybe in terms of like, you know, your presentation mentioned, we have deployed almost like 16,000 plus laborers across the project site. So, just to understand like, you know, the intensity of it. So, I mean, like, you know, historically, I mean, how this number has been and it is becoming 16,000 odd crores, just to get a perspective, can you share the previous numbers, what it used to be like?

It is very difficult to mention this previous number because it depends on the typography of the work going on each project. So presently, my requirement is in the range of 16 to 17,000 and we are almost through with the requirement of all the projects. So, you can say three to four thousand numbers will still be added in the next one or two quarters, because more and more activities start at each project. Some of the projects are in foundation, some of the projects are in finishing, some of the projects are in MEP. So it depends on what type of activity is going on. If it is purely core and shell, then the requirement is a little bit less, but when the project core and shell is over and all finishing, MEP and everything is going on, there will be a requirement from different trades also.

Okay, okay, sure, sir, sure. I think that's all from my side, sir. Thank you very much. Thank you.

Thank you. The next question is from the line of Jainam Jain from Dam Capital. Please go ahead.

Thank you for the opportunity. So, my first question is, I wanted to understand what sort of impact we have seen on the course because of the award escalation. And out of the total order book, what is the percentage of the order book, which is six prize in nature?

Yes, we have been telling you every time that most of the projects, all Adani projects are pass-through costs, so there is not much impact on any of the projects of Adani. And 30,000 order book, which is consisting of our order book, which was in the tune of 5,500 to 6,000, last projects are almost under completion. RV and LB, as Pooja already said, that it is going to get completed by October. SMC Tower we are going to complete by next June 2027. The row is completed. Package 2 is going on. Ambagi is my fresh order, so it has no much impact because now the things are little bit improving. But we can say that the few of the activities at SMC and RVNL were impacted because of the cost of aluminum and popper going little bit higher.

Okay, sir. Okay, sir. Sir, my second question is, are there any new segments which we are planning to enter post the recommendation of the new parent?

Are we? Pardon me. Again, repeat your question.

Sir, are we planning to enter any new segment after like other new sequoires? Are we planning to enter a new segment in terms of data?

No, no, no. As far as our expertise is concerned and as far as our infrastructure we have created being tied to the meaning building only. But building anything like from industry, data center, commercial, water, hospital, anything, but not out of any projects which is not related to buildings.

Okay, sir. Thank you so much, and all the best. Thank you.

Thank you. The next question is from the line of Dresha from RBSA Investment. Please go ahead.

Yeah, am I audible now? Yeah. Yes, just wanted to clarify on the order book, what could be this number at the March end? Is there anything that we can share on this side?

I think as we have already told you that we will be expecting some 5,000 to 6,000 crores of order book, and if we consider that if we are able to execute more than 4,000, you can calculate what will be outstanding in order book, you will be in the same range, plus 1,000. Okay.

Any major projects, are we looking out for, maybe even other projects?

No, presently, we are focusing on our own projects and Adani projects, and we try to make our order book between 75 to 25 years, 25 now Adani and 75, 70 to 75 years Adani. As far as order visibility is concerned, and the order is concerned, we have sufficient visibility for next two years. So we are not going to enter into different regions as of now. We will be focusing on Gujarat and Mumbai.

Okay. In terms of the Dharavi work that you mentioned, what is the total pool of order that Adhani group is trying to execute? What will be the PSP chair of that building in whatever the Dharavi project has to be done? Is there any...

To mention what will be the chair is difficult, as I answered in the before two minutes, that this is a long five-year project, and they have to deliver two left houses. So probably if we are able to perform well in the next one and then after two years, we will get the first sight of this user as far as Dharavi is concerned. But to complete the project before within five years to make school as houses so that the evidence can be reshifted to the new houses and the redevelopment of the Dharavi land can be taken up after five to six years. They can give it to some other contractors also, but PSP will always have a better edge as far as being a part of this American group.

Just on the capability side, so that we have the right of first refusal, what all things have been done in the last six months or nine months to ensure that execution side we don't falter? We will be able to exceed the expectations.

Yeah, that's what we have. I said that this month, employee expenses have gone little bit high, then we are building up the team. We are building up the team to multiply ourselves to 1.5s to 2x from last year. So, we are in the process of sending ourselves so that we can get more and more orders from Arani Group and deliver their projects on time.

Okay, okay. Thank you.

Thank you. The next question is on the line of Jainam Shah from Aquarius Securities. Please go ahead.

Yeah, hi, sir. I hope I am audible.

Yes, sir. I am audible.

So just one question, while you're mentioning the building segment, you mentioned the data center part as well. So just wanted to check, do we have any specific order from the data center, maybe just the APC work of the building? And are we planning to enter into it? What kind of size we would be looking at? Because this is a segment which can drive our order book going forward to the larger extent. So what is your view on that particular segment? Is it going to be big, let's say, 10-20% of our order book? Well, it is just something that we are starting as of now.

Presently, we are focusing in Gujarat and Mumbai, and specifically Mumbai, as we already declared, will be a major part of Garabi only. As far as data centers are concerned in Mumbai and the new data centers which are coming up in Vishakhapatnam, I think we are not that part as of now, but later on we don't know because it's again a part of a building only. So that can come to our order book. But the things we are going to develop in Gujarat, like Dolera, they have two lands. One is for the data center and the second is for defense. So those types of work can come in future. But as of now, we'll be focusing on airports, city-side airports, reality, their own requirement of housing colonies at Mundra. And MediCity. MediCity, both the projects with that can come later. First, we are already started in Dawa. And Mumbai, it will come after three to four months. So probably these two projects we can consider can be a part of PSV. One is already a part of PSV. Second, can be a part of PSV in future.

Go to it, sir. Thank you.

Thank you. The next question is from the line of Urvi Ben Patel from Infinite Welt Advisors. Please go ahead. The show will be Ben, can you hear me?

Hello?

Yes, sir, you're audible. Am I audible? Yes, sir.

I want to know, sir, what is the revenue in this product from Pika side?

Yeah, I think we don't have a separate revenue from Pricast side because the projects which are we doing is a part of the Pricast also. So we do not have a separate identity, but I think we are doing better and better. So throughout the year, what Pricast now's capacity is within the range of 200 crores. So we'll be executing about 150 to 200 throughout the year, whatever may be the project, but getting exact revenue for PITAS today, I don't have the figure, but in general, you can understand that the PITAS can generate a revenue of 200 perot. from the plant side.

Okay, sir, okay. And approximate Prakash margin, sir?

It is really part of the business, so it depends on the same margin as because we are working, today we are not working for any other projects except Adhan. We have previously working from some infrastructure for bulletin for L&D, but now we are only focusing on buildings, and that buildings are also related to Adhani Group Fund.

Thank you.

Thank you. The next question is from the line of Shrevan Shah from Dollar Capital. Please go ahead.

Hi, sir, just to get a clarity on Dharavi 1, so 3,000 crore order book that we have, so which if we translate in terms of the number of houses, so is it the entire 45,000, 50,000 houses that we want to build that is a part of this 3,000 crore order book or this will be an even lesser number?

No, no, no. It will be a little bit lesser number, but you will see 3,000 per hour each house is in the range of 10 to 12 lakhs. If we consider 350 square feet and 3,500 rupees per square feet as the cost of the house, it is about 10 to 12 lakh per house. So 3,000 means 30,000 houses here in presently buildings. The total is 2 lakh houses. So, what we can consider as total diary development, it is two lakh houses, out of which we are making 30,000 to 32,000 houses today by doing these two projects.

Okay, so once these two projects will be over, then only we can take the new, or it can be even made of this ongoing, we can also take other, other Dharavi projects also.

See, we should understand that most of the countries, when they have settled project, and it is going up to beyond basement and from the first to second floor. All the other uploads are typical. The complexity is more at the foundation level. And once any good site is settled, you can always start a new site. But that depends on how we are established in Mumbai and how we are working on these two projects. So once we are stable in these two projects, we can always take up a third or fourth project of an Dharavi.

Okay, got it. And this quarter, the tax rate was 35%. So, for full year, can we have this normal 25% tax rate or it would be on the higher side?

It will be slightly on the higher side because there are certain expenses which are not deductible in taxes. So, it's a permanent difference. So, for the year, it will be slightly on the higher side.

Okay, and if you have to look at in terms of the cash balance versus what we report, so as on March, let's say we were having around close to 413-15 odd crore. Okay, so against that, as on June, the cash level would be the similar, 400 odd crore?

Cash, you mean to say? Cash and bank, what we report and balance it. Yeah, I'm buying. Yes, yes. It will be on the same level. It will be slight higher.

Okay. Okay. Okay. Thank you.

Thank you. The next question is from the line of Sanjay Kohli from Goldstone Capital. Please go ahead.

Good evening, and congratulations on a very good sales growth this quarter, and especially with better working capital. So, that is very encouraging. Now, Pallarda, you mentioned this pass-through. Pass-through costs, the projects, what are the margins you're keeping in them?

It is more about cost plus percentage on overall cost of the project. It is not about what is the margin on pass-through. Most of the materials, whatever we are buying, it is always a parcel. So once we understand the cost part, we put one place as a cost, when we are calculating cost plus percentage, we are putting one X cost, and when we buy, there is a difference, and that difference is already fixed in the running field.

Thank you. Yeah, yeah.

I haven't fully understood, but when we talk about costless percentage, it is on the overall cost of the project. So that whatever cost which we have decided as overhead profit and profit on material and profit on labor, it comes as a consolidated figure which is in the range of 20 to 25 percent, which you usually will be going to be. So when we talk about each of the material, there is not a separate percentage for each of the material. But that's what I am trying to do.

Okay, so the margin is being decided, and as and when the material is... Utilize, it's all inbuilt into the ongoing building, it's all inbuilt.

Yeah, yeah. So it is an item rate contract where the materials which you are utilizing comes at a base rate when you coat it. But when you buy it, if there is a difference on plus or minus side, that difference is again paid in the bills.

Okay. So what is the range, low and high range on these projects? On the cost-class projects?

You meant to say the inflation part of the material?

No, no, no. The pre-decided cost-class on the past year, you had mentioned that most of the Adani projects were the cost-class. So what would be the range, you know, 10 to 20 percent?

We have already said the total EBITDA level when we could talk about Adhani project, it comes in the range of 6 to 7 percent. And we talk about projects with PSV, we have been doing at a range of 8 to 9 percent. So at EBITDA level, you can complete a cost plus formula that's served at 7 percent.

Oh, so this is very, very, it's very, very tightly controlled. There's not much of a, it's not a large range. It's a very small range from project to project.

There is always a gap of 1-2% in terms of exhibition. These are standardized rates for each type of project. If I'm working in Mumbai, there will be a difference of 3%. If I'm working in Munra, there will be a difference of 1.5%. So, it depends on what type of project you are doing, and sometimes whatever the overheads which we have considered is a type of project, then you can have a saving on one and a half person on overhead side also. So, this is one of the examples, once we go through it one or two years, we will get a clear idea, how does this cost us formulise company, but mathematically it is coming at seven.

Thank you.

Thank you, ladies and gentlemen. We take that as the last question of the day. I would now like to hand the conference over to the management for closing comments.

Thank you all for joining us today and for your active participation in the earning conference call. We sincerely appreciate the continued trust, confidence, and support of our shareholders, investors, analysts, and our stakeholders. We hope we have been able to address your key questions and provide a clear perspective on PSP's performance growth plan and outlook for Step 527. Should you have any further queries, please feel free to reach out to our investor relationship advisor, EY, who will be happy to coordinate with us and assist you offline. Thank you.

Thank you, Aruvati.

Thank you.

On behalf of Ernst & Young, that concludes this conference. Thank you for joining us and you may now disconnect your lines.