Ashoka Buildcon Limited — Call Transcript 2024

Nov 21, 2024

Ashoka Buildcon Limited

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To, The Manager, The Department of Corporate Services BSE Limited Floor 25, P. J. Towers, Dalal Street, Mumbai – 400 001

To, The Manager, The Listing Department National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051

Scrip Code : 533271

Scrip Symbol : ASHOKA EQ.

November 21, 2024

Sub: Call Transcript

Please find enclosed herewith the copy of transcript of the Earnings Call held on November 13, 2024 in respect of Unaudited Standalone and Consolidated Financial Results for the quarter and half year ended September 30, 2024.

Kindly take the matter on your record.

Thanking you,

For Ashoka Buildcon Limited

Digitally signed by Manoj Achyut Manoj Achyut Kulkarni Kulkarni Date: 2024.11.21 17:33:49 +05'30'

Manoj A. Kulkarni (Company Secretary) ICSI Membership No. : FCS – 7377

Regd. Office : S.No. 861, Ashoka House, Ashoka Marg, Vadala, Nasik – 422 011, Maharashtra, India Tel. + 91 253 6633705 Fax +91 253 2236704  www.ashokabuildcon.com CIN : L45200MH1993PLC071970

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“Ashoka Buildcon Limited

Q2 FY '25 Earnings Conference Call”

November 13, 2024

E&OE - This transcript is edited for factual errors. In case of discrepancy, the audio recording uploaded on the stock exchanges on 13th November 2024 will prevail.

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MANAGEMENT: MR. SATISH PARAKH – MANAGING DIRECTOR – ASHOKA BUILDCON LIMITED MR. PARESH MEHTA – CHIEF FINANCIAL OFFICER – ASHOKA BUILDCON LIMITED SGA – INVESTOR RELATIONS ADVISOR MODERATOR: MS. JYOTI GUPTA – NIRMAL BANG INSTITUTIONAL EQUITIES Moderator: Ladies and gentlemen, good day, and welcome to the Q2 FY '25 Earnings Conference Call of Ashoka Buildcon Limited hosted by Nirmal Bang Equities Private Limited. 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. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on a touch-tone phone. Please note that this conference is being recorded.

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I now hand the conference over to Ms. Jyoti Gupta from Nirmal Bang Equities. Thank you, and over to you, ma'am.

Jyoti Gupta:

Thank you, Muskan. Hello, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to the Ashoka Buildcon Limited Quarter 2 FY '25 Earnings Conference Call. We have with us Mr. Satish Parakh, Managing Director; and Mr. Paresh Mehta, Chief Financial Officer.

Without further ado, I request Mr. Satish Parakh, sir, to start with his opening comments. After which, we can open the floor to question and answer. Thank you, and over to you, sir.

Satish Parakh:

Thank you, Jyoti. Good afternoon, everyone. Hope everyone had a great Diwali festival, and all are doing well. On behalf of Ashoka Buildcon Limited, I extend a warm welcome to everyone joining us today to discuss our business and financial results for quarter and half year ended 30th September 2024.

On this call, we are joined by our CFO, Mr. Paresh Mehta, and SGA, our Investor Relations Advisor. Let me begin by giving an industry overview. India is experiencing a massive boost in road infrastructure investment, bringing a major shift in connectivity and economic growth. To support rapid growth in the transport network, the National Highway Authority of India, NHAI, has launched ambitious road development projects. And these actions aim to cut travel times, improve freight movement, and build a strong road system for the future of India.

Through national monetization plan, NHAI has attracted substantial investment from both local and global sources using creative financing approaches. These include focusing on toll operate and transfer projects and infrastructure investment Trusts, which have helped scale up road development efforts like never before.

Road investment in India has speed up significantly in recent years. NHAI has awarded 16 TOT bundles raising about INR49,000 crores and has also raised around INR25,900 crores through its InvIT under the NMP. A key factor driving this growth is the strong increase in toll revenue, bolstered by development like FASTag, regular toll rate adjustments for inflation, and overall economic

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growth. Over the past 5 years, total toll collection has grown by 2.6x, reaching around INR65,000 crores in FY '24. These measures have supported higher passenger and freight traffic, significantly increasing the revenue for the country.

Coming to the company. Ashoka Concessions Limited, a subsidiary of the company, has entered into share purchase agreement with Indian Highways Concessions Trust inter alia for divestment of its 5 subsidiaries. The aggregate enterprise value of the transaction is either INR5,718 crores, subject to adjustment of cash and debt, translating into an equity value of INR2,539 crores.

The company has entered into SPA to acquire 34% of equity of ACL, along with 7,741,250 Class A CCDs and 2,00,00,000 class B CCDs from Macquarie SBI Infrastructure Investment Private Limited and SBI Macquarie Infrastructure Trust for INR1,526 crores.

The company, along with its subsidiary, Viva Highways Limited and ACL, has entered into an agreement with investors for the following transaction which shall be subject to completion of sale of certain project assets of ACL and the company and thereby providing an exit to the investors from ACL.

Post acquisition of ACL securities held by investors, ACL would become a wholly owned subsidiary of the company with effect from the date of acquisition of ACL securities. Viva Highways Limited, a subsidiary of the company, to acquire investments of investors totalling 7,46,20,000 equity shares, comprising of 26% equity shares held in Jaora Nayagaon Toll Road Company private Limited at an aggregate consideration of INR150 crores.

Monetization of land. - Land owned by Viva Highways Limited, a wholly owned subsidiary, under its real estate portfolio situated at Hinjewadi, Pune, has been monetized for a total consideration of INR453 crores.

Now on the projects front, let me give you an update. The company has a received a completion certificate for its HAM project: Four-laning of NH-161 from Kandi to Ramsanpalle in the State of Telangana from August 2024. The project is executed by Ashoka Kandi Ramsanpalle Road Private Limited, a

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wholly owned subsidiary of the company. The SPV has received a certificate for completion of entire project stretch of 39.98 kilo meters. Consequent to this, the SPV will receive annuity for the entire stretch 39.98 kilo meters.

The company has received 3 LOAs from Mumbai Metropolitan Region Development Authority, MMRDA, in October 2024 aggregating to INR1,737.86 crore. Company has also received LOA from CIDCO for EPC project, which is for the integrated infrastructure development under NAINA project for a value of INR1,673.24 crores. This is in JV where the company is the lead member with 51% stake.

The company received a letters of acceptance for Maharashtra State Road Development Corporation, that is MSRDCL, in October 2024 for an aggregate value of INR2,309.99 crores. Company has also received LOA for the BMC project of construction of flyover at T Junction on Sion Panvel Highway with project value of INR1,126.58 crores inclusive of GST.

Company received the provisional completion certificate from NHAI project, where the company has informed September 15, 2024, as the commercial operation date for a stretch of 39.07 kilo meters as per letter issued by independent engineer for its HAM project of NHAI, on Hybrid Annuity Mode under Bharatmala Pariyojana. The project is executed by Ashoka Baswantpur Signodi Road Private Limited, a wholly owned subsidiary of the company.

The SPV has received a provisional completion certificate of 39.07 kilo meters of the total stretch 40.6 kilo meters. Upon the declaration of COD, the SPV is eligible for receipt of annuity from NHAI for the operational period of 15 years at the interval of every 6 months from September 15, 2024.

In addition to this, Ashoka Buildcon Limited is also declared as the lowest bidder, L1, for MSETCL project on November 1, 2024. It's a domestic project for establishment of 400/220 kV substation EPC work at Nandgaon Amravati. The project bid price is INR312.3 crores including GST.

Coming to the order book status. As on September 30, 2024, our balance order book stands at INR11,104 crores. This excludes additional orders received from projects post September '24 worth INR4,320 crores and also

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excludes L1 of INR265 crores. The total of current order book stands at INR15,424 crores.

The breakup as on September '30 is Road and railway project compromise around INR6,582 crores, which is 59.3% of the total order book. Among the road project order book, HAM projects are to the tune of INR844 crores and EPC road projects are worth INR5,185 crores, and railway is around INR844 crores. Power T&D accounts for INR3,939 crores, which is approximately 35.5% of the total order book. The total EPC building segment is INR583 crores, which is 5% of the total order book.

To conclude, let me say this again, that at our primary focus remains on maintaining a sustainable EPC business in segments encompassing highways, railways, power transmission, distribution, and buildings.

This is all from my side. I would now request Mr. Paresh Mehta to present the financial performance. Thank you.

Paresh Mehta:

Thank you, sir. Good afternoon, everyone. Starting with the standalone numbers for Q2 and H1 FY '25. The total income of Q2 FY '25 stood at INR1,459 crores as compared to INR1,590 crores in Q2 FY '24 with a drop of approximately 8%. EBITDA for the quarter stood at INR160 crores with an EBITDA margin of 11%.

Finance costs during the quarter has increased by INR18 crores on a Y-o-Y basis due to an increase in long-term borrowings. This is largely on account of increase in working capital cycle of power orders and constitutes interest paid to 100% subsidiaries where the funds are being borrowed from the 100% subsidiaries.

PAT stood a INR36 crores for the quarter. For H1 '25, the total income stood at INR3,295 crores as compared to INR3,093 crores, a growth of 7%. EBITDA for the period stood at INR305 crores, a growth of 14% with EBITDA margins improving by 60 basis points to 9.1%. Reported PBT grew by 4% to INR121 crores and PAT is INR77 crores.

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Our revenue contribution for each segment for Q2 FY '25 is as follows. Road EPC and road HAM contributed 49%. Power EPC contributed 28%. Railways stood at 12%. And other segments, like building EPC and others, contributed to 11%.

Coming to the consolidated results. The total income for Q2 FY '25 stood at INR2,489 crores as compared to INR2,154 crores in Q2 FY '24, which has seen a growth 16%. EBITDA for the quarter stood at INR945 crores, a growth of 61% Y-o-Y. PAT grew by 334% Y-o-Y to INR463 crores.

For H1 FY '25, total income stood at INR4,954 crores as compared to INR4,090 crores as on Q2 FY '24, registering a growth of 21%. EBITDA for the quarter stood at INR1,573 crores, a growth of 43% year-on-year. PAT stood at INR620 crores, growth of 269%.

Total consolidated debt as on 30th September 2024, stood at INR6,881 crores. The stand-alone debt is at INR1,317 crores, which comprises of INR109 crores of equipment and term loans and INR1,209 crores for working capital loans. In Q2 FY '25, in our toll collection division, the company recorded a gross toll collection of INR316 crores as against INR297 crores in Q2 FY '24, recording a growth of 6%.

With this, we now open the floor for question and answers. Thank you.

Moderator:

Parikshit Kandpal:

Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

My first question is that in the first half, we have grown by 7%. But if I see your debt, it has gone up to INR2,200 crores, including from subsidiaries. So it's a jump of almost INR950 crores. So and even the working capital seems to be very weak in the first half. So what is happening on this front ? Working capital has substantially increased, debt has gone up significantly. So how do we look, so what are the key reasons for this? And how do we look for these numbers in coming quarters?

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Paresh Mehta:

Parikshit Kandpal:

So it's typically as one of the points that we've given, is that working capital on the power sector which we had won a lot of contracts in '23, have been executed largely in these 2 years, 1.5 years, wherein the working capital cycle in the power sector is longer, elongated. That is the reason these working capital cycle has increased, which has been typically funded both by loan from subsidiaries as well as loan from the working capital lenders. So what we expect is by -- these projects will come to an end by March to June next year, and where we'll see this number is going down by INR300 crores to INR400 crores at least.

No, sir, I'm just talking about this quarter. So even if I look from March to September, the debt is up by INR800 crores. So in 6 months, what has gone up? Because are there one thing is that your margins are not coming. So you are supporting the projects. And since the cash flows is a shortfall, so you are supplementing it with increased debt. And that means that the debt will eventually become very sticky, and it will not reduce. So this INR2,200 crores stays on your balance sheet, and you will look forward to only reduce it from the cash flows from the monetization proceeds.

So because this is only 6 months, I'm not talking about -- even YoY, 6 months is INR800 crores, Y-o-Y, 12 months, it's almost INR950 crores. So there's not much of a difference on this. But what we know that has happened over the last 6 months.

Paresh Mehta:

Yes. So basically, I just said, there is a large requirement of working capital in the power sector and certain receivables in the road sector where the projects are coming to an end and there are certain receivables which will be received, as well as the project is handed over totally because these are projects coming to an end. So we will see the change. No doubt that there is ramp-up in this quarter. But if you also see, as of June 30, there was a large cash balance which was used for working capital.

So if that cash balance would not have been there and what would have been used for reducing the debt, then this difference should not be that much. If you see as of June 30, they were almost cash balance of INR357 crores which are receivables received at the end of the quarter June 30. The effective

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increase in working capital debt between June 30 and September 30 is to be adjusted for almost INR300 crores of cash lying in the books as of June 30.

Parikshit Kandpal:

Okay. I'll take it off-line, sir. I'm still not able to understand. I'm going to take it off-line. Our numbers are not matching.

Second question is on the margin. in Q3 or Q4 FY '24, you have said that -- FY '23, you had said that the margin will continue for 2 more quarters or 2, 3 quarters. And then every quarter, that deadline has been shifting back to 3 quarters. The only thing which has remained constant is that shifting of quarters by 2, 3, and we have already behind schedule by almost, I think 3, 4 quarters. And we're still not able to reach double-digit margins.

So my question is that why don't we do cost of completion accounting and take the write-off on all these projects, and we move to normalized margin? Because this plain the guidance is not being met, and every time, I'm missing it. So when do we get to that double-digit number is a big question now because, again, last quarter, you said 2, 3 quarters. So now do you think that in Q3 or Q4, we'll be back to double-digit margins.

Paresh Mehta:

No, I don't think so we'll be back on double-digit margin. It's not due to that we can change the margin. Margin's at what have been settled for the past 2, 3 years for these projects. And these projects are coming to an end. The new projects, whenever the deals take off -- probably February or March, the new projects have been -- which have already coming, which are better margins. So the double-digit numbers would be seen only in Q1, Q2 FY '26.

Parikshit Kandpal: The original deadline almost moved ahead by almost a year. So we expect it now Q2 FY '26, that we start hitting double-digit margins?

Paresh Mehta:

Yes.

Parikshit Kandpal: Just the last question. What was the total order inflow for the financial year to date in '25?

Satish Parakh:

Around INR6,000 crores.

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Parikshit Kandpal: The guidance for the full year? So if you can give some color on full year guidance, and how is the bid pipeline looking? So that's my last question. Satish Parakh: So bid pipeline is there. Around INR1 lakh crore bidding is there from NHAI. Out of which, INR65,000, we'll be participating. There are bids to be opened of around INR9,000 crores which we already bid. And bid opening is yet to balance. And we hope we should pick up around INR4,000 crores to INR5,000 crores in balance part of the year.

Moderator: The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Mohit Kumar: My first question is, sir, are we still maintaining your guidance of 10% growth in revenues for the entire fiscal F '25 and EBITDA of 9.5%? Or do you think that EBITDA will beat the EBITDA guidance?

Paresh Mehta: So on the execution side, keeping in view the orders which have come in and their expected date of start of activities, we believe that the revenue top line may be flattish for this year, so what we have said or thought in the last quarter. As far as EBITDA concerned, we expect at least it should improve by 0.5% for the next 2 quarters.

Mohit Kumar: 0.5%. but you have in terms of 9% for the next 2 quarters? Paresh Mehta: 8.5%. Mohit Kumar: 8.5%, the number we achieved in the Q2, it's your number. Paresh Mehta: Then Q4 -- then we start our new orders. That time, the revenues will then start looking into that 10-plus numbers.

Mohit Kumar: Given the fact that we have been doing below 10% for a very long time, what makes you confident of getting into double-digit for the project which you won earlier? Were there the fixed price contract? What is different about the new orders?

Paresh Mehta: Yes. As we -- because explained in the last few, couple of quarters. The margins have been lower on the projects which we have won in the last 2.5, 3 years post-COVID. So that's the intrinsic part of it. These orders now being -

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• coming to an end, will change. And we now continue to bid at double-digit margins, 11% to 12%. So these are for orders which were taken in the past, and the impact of -- as they were fixed price contract, the impact of inflation or increase in prices have had an impact on the margins.

Mohit Kumar: My last question is Jaora-Nayagaon and Chennai ORR. Are you looking to sell these assets to NIIF? Where we are right now?

Paresh Mehta: So as far as NIIF SPA was concerned, it had a long stop date which has expired quite some time back. So presently, it is not on, the SPA is not live. But we continue to engage. We -- as far as Chennai ORR is concerned, we could consolidate our stakes. And we are in the process of structuring the debt on that and then take it to the market for sale.

As far as JTCL is concerned, we are still awaiting permissions from the state government, MPRDC, for a transfer of 26% of shares. And in that -- meanwhile, we'll also try to consolidate the balance 26%, which is being held by Macquarie.

Moderator: The next question is from the line of Hari Kumar, an Individual Investor. Please go ahead.

Hari Kumar: Yes. My question is regarding 35% stake by INR1,500 crores, and the total sale consideration we are getting is INR2,500 crores. Am I right, sir?

Paresh Mehta: Yes, for the BOT projects, correct.

Hari Kumar: Yes. So for 60%, we are getting only INR1,000 crores. Or I am wrong on my assumption, sir?

Paresh Mehta: So these sale of assets are presently only of the 5 BOT projects, for which SPAs have been signed. We also have other assets in ACL which will represent the balance, 66%, also. So having acquired 34% from SBI Macquarie, post that, all the other assets will be part of 100% ownership of ABL. So we have HAM projects, 7 HAM projects under ACL, plus certain shares of Jaora-Nayagaon, which also is of value to be available to ABL for monetizing.

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Hari Kumar:

Okay, sir. And my second question, sir, this land sale by our subsidiary has been recorded in this September quarter account, sir? Or it's not yet included in the books?

Paresh Mehta: It has been recorded, and it has it is reflected in the consol numbers because this land sale was held by the 100% subsidiary of Ashoka Buildcon Limited, Viva Highways Limited. And that's the reason we see the consol numbers quite robust.

Hari Kumar: Okay. It's not shown as other income. It has been shown as regular income, sir?

Paresh Mehta: Yes. It's because the land purchase/sale is part of VHL's business, so it showed a regular revenue.

Hari Kumar: Okay. Sir, my last question, sir, regarding the end of the year. Can you give an estimate of the consolidated debt profile because of the sale? How much are we going to end up as an estimate, sir?

Paresh Mehta: So by the end of this quarter -- by end of this year, we probably -- the INR6,800 will be used by debt, which is already on the 5 BOT projects of INR2,400. If that deal happens, that will go down. Certain debt on the HAM projects also will go down, which we intend to sell. So today, it's difficult to estimate what exactly, but we expect that at least of INR3,000 crores, INR3,500-odd crores of debt definitely will go down before March. And then balance will happen in post March.

Moderator: The next question is from the line of Vishal Periwal from Antique Stock Broking. Please go ahead.

Vishal Periwal: So on the margins front, just a clarification. So you mentioned the second half margin may be 50 basis points higher than what we have done in the first half. Is that fair...

Paresh Mehta:

You could expect do that, yes, definitely.

Vishal Periwal: Okay. So I mean, like in the first half is almost like 7.5% to I mean, it's touching like 8% in the second half. That's what we could see. Okay.

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And then second, on this transaction that we have done. So HAM asset is not part of it. So any color that you can provide, like anything that is happening on that front?

Paresh Mehta: So we are -- as we have stated in the past, and we are constantly engaging. And we expect that in the next couple of weeks, we should be able to sign on the SPA for the HAM projects also.

Vishal Periwal: Okay. So which means basically, I mean, probably in this quarter itself, I mean, that's...

Paresh Mehta: Yes, yes. Vishal Periwal: Okay. And then this couple of the sort of BOT assets that we have done, so there were impairments that was taken. So I mean, like can you highlight, like will this lead to a write-back or anything on that front in the coming quarters? Or anything that you can share with us?

Paresh Mehta: So there will be impairment at ACL level which will be reversed once these assets are sold off, which is almost -- at ACL balance sheet of almost INR800 crores. And at ABL balance sheet, there could be a reversal of approximately INR250 crores to INR300 crores post sale.

Moderator: The next question is from the line of Jyoti Gupta from Nirmal Bang Equities. Please go ahead. Jyoti Gupta: As I heard correctly, you said that the current order book will be executed in the next, let's say, 3 quarters. And then you would be bidding in for projects which will give you double-digit margin. What projects would that be, sir?

Paresh Mehta: No, no. What we have clarified is that the new projects which we have won, there they the execution of that will largely start somewhere in the last month of FY '25. And then it will be full swing in FY '25, '26, wherein then, we will be in a position to book a double-digit margin.

Jyoti Gupta: Okay. All right. So what is the current, how do we see this quarter? I mean, we see that the second quarter was impacted because of several reasons. How do we, how should we see third quarter now? Has the execution picked

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up pace? And fourth quarter, you are more positive. So are there green shoots here? Paresh Mehta: So we as we said, primarily, we will end up this year, '25, in a flattish sense. So we'll have a marginal growth in the revenue based on the existing order book, which is getting over a period of time. So overall, we will do the similar turnover, which we did in last year -- last half year, H2. Jyoti Gupta: Okay. And what would be the outlook for FY '26, sir? Paresh Mehta: FY '26, based on this order book, and maybe next order book, we should definitely look at after getting new orders, to grow by 10% to 15%. Moderator: The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Parikshit Kandpal: Sir, this land sale is reflected in which line item in the consolidated? Paresh Mehta: In the revenue only, I will just see Revenue from operations. Parikshit Kandpal: Sir, how much is INR400 crores, how much INR430 crores, how much is there in there?? Paresh Mehta: INR453 crores. Parikshit Kandpal: And you have received the payments, the payments also against this? Paresh Mehta: Yes. Parikshit Kandpal: Okay. And so what is this arrangement with the subsidiary, the land debt which has gone up from a subsidiary? If I do the math from presentation, that the balance sheet, there's a difference. So what is that arrangement with the subsidiary? Paresh Mehta: Regarding what? Parikshit Kandpal: So this INR950 crores difference between the presentation debt of INR1,317 and the balance sheet debt INR2,250 crores. There is a difference of INR950 crores. So which has increased over the year, this number has been increasing, the difference between the two. So what is that...

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Paresh Mehta: INR950 crores is loan received from the subsidiaries. Parikshit Kandpal: Is this for working capital? Paresh Mehta: Which has been used for working capital. Parikshit Kandpal: So instead of banks, you're borrowing from subsidiaries, the INR950 crores. Paresh Mehta: It's 100% subsidiary. Like whatever land was monetized, this INR450 crores, most of it was upstreamed to ABL for ABL's operations. Parikshit Kandpal: Now do you think this is the peak debt? I mean, with now the growth improving, this working capital debt of INR2,250 crores, including the INR950 crore subsidiary debt. So this will keep ballooning from here also as the growth picks up? Or this is a peak debt now? Paresh Mehta: From a turnover perspective, it's a peak debt. But from perspective of realization of monetization money and a mix of new HAM projects and BOT prices coming up, we cannot immediately say what how they could peak out. But I think we should be close to a peak. Parikshit Kandpal: But what could be the non-recurring part in this? I mean, because we were under assumption that once you do the BOT, there'll be some release of cash, which is not there Paresh Mehta: Agreed. There will not be, but this will happen maybe next year, '25-'26. Parikshit Kandpal: Is this a way of telling that the INR2,200 crores will keep sitting now for some quarters before it starts reducing? Paresh Mehta: Yes, by Q4 or Q5, sorry, Q1 '26, it will start reducing. Parikshit Kandpal: So without the repayment, I mean, without repayment from the monetization proceeds. So on an absolute basis, as the margins come back and we generate operating cash flow, will this number start reducing? Paresh Mehta: Yes, definitely. Parikshit Kandpal: But increasing from here on, you don't see significant headroom for this to grow from here now?

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Paresh Mehta:

I don't expect because they are almost substantial working capital has been provided for the projects. And the projects will now be throwing back the realization of debtors and the other WIP, which will then rationalize the working capital.

Parikshit Kandpal: So what's the impact of delayed connections from the clients which have impacted or elevated this working capital? Because all the companies have seen that, during this quarter, there has been delay from release from the government agencies. Maharashtra has been in 2 elections. So will you attribute a part of this increase also to that? Or this is the normal business course increase in the debt?

Paresh Mehta: Largely based on the working capital cycle. Of course, partly also on these slight delays in payment being released due to various non-administrative reasons. But capital cycle plays that way. So power projects which have been which require initial capital for procurement and other things, they take up a lot of working capital requirement because on the purchase side, there's a lot of competition buying so you need to pay the vendors.

Parikshit Kandpal: But sir, when I look at the cash flows on the stand-alone side, actually the increase is coming because the trade payable is going down. So not because of...

Paresh Mehta: we have used that money for you say the trade payables more, but correspondingly, the election has been slower at the -- from the client side. Parikshit Kandpal: But trade payables for what? What kind of trade payables have Paresh Mehta: It was for the buyers and vendors for my power and road projects. Parikshit Kandpal: Okay. And so you've given them advances for procuring the... Paresh Mehta: If you see that, trade payables have gone into WIP and debtors from purchase of materials for my power projects.

Moderator: The next question is from the line of Vasudev from Nuvama Wealth. Please go ahead.

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Vasudev: So sir, after we've acquired the 34% from SBI Macquarie for INR1,526 crores. Will there still be anything remaining to be paid after that? And when do you expect this acquisition to get completed?

Paresh Mehta: So as far as ACL is concerned, after payment of INR1,526 crores, Ashoka Buildcon will become 100% owner of ACL. We expect this transaction the long stop date for this transaction is June '25, and we expect to get that done somewhere in the month of March -- April, May '25. Vasudev: Okay, okay, sir. And for the Jaora-Nayagaon, the Chennai ORR, any tentative timelines when we might again start to look for monetization of these projects? Paresh Mehta: See, this will happen somewhere in '25-'26. We recently focus on the BOT and HAM projects which we have already signing on. Vasudev: Perfect. Okay, sir. And sir if you can help me with the total equity requirements for the HAM project. How much have you already infused? And how much do we plan for FY '25-'26? Paresh Mehta: The balance equity for our current HAM projects is approximately INR100 crores. Vasudev: Okay. And how much of this would be infused in H2 then? Paresh Mehta: It should be totally infused before March. Vasudev: Okay. And lastly, sir, what is the capex that we did in H1? And how much are you planning for the second half? Paresh Mehta: So in H1, we did capex of approximately INR33 crores. And in H2, we may prepare another INR35 crores to INR40 crores. That's H2, sorry. Not FY, H2. Moderator: The next question is from the line of Anant Mundra from My temple Capital. Please go ahead. Anant Mundra: Sir, what was the book value of the land that we sold in this quarter? Paresh Mehta: So approximately INR65-odd crores. INR65-odd crores.

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Ashoka Buildcon Limited November 13, 2024

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Anant Mundra: Sorry, I missed the numbers. How much was it? Paresh Mehta: Approximately INR65 crores. Anant Mundra: INR65 crores. Paresh Mehta: Yes. Anant Mundra: So - and INR65 crores, we've recorded a revenue of INR435 crores, correct? Paresh Mehta: Yes, plus other expenses, net, we are recording a profit of INR370 crores. Anant Mundra: INR370 crores. And sir, after this monetization, what is the land bank that we have remaining? The book value of the land bank that we have? Paresh Mehta: So we would have approximately INR210 crores of land bank with our subsidiaries which will be available for sale, and which could have maybe a value 3x to 4x at least. These are land banks on an average hold of 6 to 7 years. Anant Mundra: Okay. All right. So sir, in spite of these INR435 crores flowing in this quarter, the consol debt has not been reduced. And the reason for that? Is that understanding correct on the power projects are over That should again normalize and start... Paresh Mehta: Largely, this amount has been utilized for payment of -- the payables of power and EPC projects. Anant Mundra: Got it. And sir... Moderator: I'm sorry to interrupt, sir. Your voice is breaking, sir. Anant Mundra: Is this better? Hello? Moderator: Yes. Now it's better. Anant Mundra: So what is the total equity plus loss funding that we've done for the 5 BOT projects that we're going to monetize? Paresh Mehta: Approximately INR2,300 crores.

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Anant Mundra: INR2,300 crores. Against that, we are getting about INR2,500 crores, right? INR2,500 crores to INR2,600 crores. Paresh Mehta: Right. Anant Mundra: And some INR1,500-odd crores is what they're going to pay to SBI Macquarie, which is already provided for in the book. Paresh Mehta: Right.

Anant Mundra: All right. And sir, what was the -- I mean, if you have that number handy, these 5 BOT projects would have contributed to how much PAT for FY '23 and '24? Paresh Mehta: I would not have it off hand. Anant Mundra: But was it profit-making? Paresh Mehta: What? Anant Mundra: Were they making profit? Paresh Mehta: The EBITDA definitely will be positive. And most of the projects would be plus also. Maybe you can take it off-line, and I could give you that data. Anant Mundra: Got it, sir. And sir, this land parcel that we sold, is this has this been sold with some related party? Paresh Mehta: No, no. It has been sold. We have declared it was sold to Microsoft India. Moderator: Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Paresh Mehta: I hope we have been able to answer most of your queries. We look forward to your participation in the next quarter call. For any further questions, you may get in touch with SGA, our investor relations Advisors, or ourselves. Thank you.

Satish Parakh: Thank you. Thank you, everyone.

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Moderator:

Thank you very much. On behalf of Nirmal Bang Equities, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.

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