KEC International Limited (KEC) Earnings Call Transcript

Good day and welcome to the KEC International Limited Q1FY '27 earnings conference call. [Operator Instructions] Please note that this conference is being recorded from the management Today we have Mr. Vimal Kejriwal, MD and CEO and Mr. Rajeev Aggarwal, CFO. I now hand the conference over to Mr. Vimal Kejriwal. Thank you. And over to you sir.

Thank you Alaric. Good morning everyone and welcome to the KEC International's Q1 earnings conference call. Let me begin by sharing an overview of the operating environment followed by our performance during the quarter and business wise updates. In the Middle east, our Dubai manufacturing facility and the execution of all ongoing projects continue to operate near normal on the ground. The region accounts for approximately 25% of our overall order book and L1 position. While tendering activity remains strong across the region, we are witnessing some delays in the finalization and award of new orders. Cash flows remain stable and we continue to be optimistic about the medium to long term outlook supported by sustained investments in grid expansion, regional interconnections, grid resilience, renewable energy integration and reconstruction initiatives. While on ground execution continues across our sites, we continue to face challenges on the supply chain and logistics shipments, especially from Europe, China and India to the GCC countries which had come to a standstill earlier have gradually resumed albeit with some delays. This has resulted in slower execution on certain projects on the supply side. Freight costs including war related surcharges, insurances etc. remain elevated though they are expected to moderate over the coming weeks. This also had a cascading increase in logistics, fuel and power costs also in the manufacturing facilities in India. We are working closely with our supply chain partners to minimize these disruptions and are also engaging with our customers to recover these additional costs. Procurement or project execution may get deferred until customer alignment is achieved on recovery of the additional cost which resulting in revenue margin timing impact. These challenges impacted execution during Q1 and are expected to have a spillover effect on Q2 also. Coming to Q1 performance despite a challenging operating environment, we delivered a resilient performance by maintaining revenues, strengthening our order book, reducing debt and continuing to build a healthy pipeline for future growth. We delivered revenues at rupees INR 5024 crores, marginally higher than Q1 last year. We have delivered a PBT of INR 90 crores with PBT margins of 1.8% and our PAT stands at INR 73 crores. Our performance could have been better but for the continued geopolitical disruption in the Middle East, shortage of labor and calibrated execution of water projects owing to delays in payments. The labor situation has started improving from June 26 onwards. Delay in legal closure of disputes/settlement of claims in transportation and Metro projects also impacted the profitability. On the order intake front, we secured new orders of over INR 6300 crores across T&D, civil, renewables, cable and conductors and transportation business. Additionally, we have a L1 position of almost INR 3000 crores predominantly in the T&D business which are expected to be awarded in the near future. We have a diversified and strong order book of INR 37,697 crores as on date. Including the L1 position, our order book and L1 stands at over INR 40,000 crores. On the debt front, net debt including acceptances have been reduced by over INR 150 crores to INR 6568 crores in June '26 from March '26 supported by a free cash flow generation. This reduction in debt has also translated in a lower absolute interest cost compared to Q4 '26. The debt could have been further reduced but for the delay in realizing significant collections from Afghanistan which we now expect to materialize in Q2 as well as higher inventory levels due to delayed dispatches from Dubai factory as well as some raw materials storage amongst the ongoing Middle east disruptions on specific businesses T&D, the business achieved revenues of INR 3217 crores higher than last year, the revenues could have been better but for the supply chain constraints in Middle East. On the order intake front, the business secured orders of rupees INR 3600 crores across India, Middle East, Africa and the Americas. In India, we secured repeat orders from leading private developers including a significant order in the rapidly growing HVDC segment, we continue to witness a robust opportunity pipeline in this space. We have already participated in multiple packages in the Barmer Rajasthan HVDC scheme and expect additional schemes to be floated during the course of the year. We have also secured our first transmission line order for evacuation of power to a data center in Western India from a private developer. This order marks an important milestone for the T&D business in supporting the power infrastructure needs of the growing data center segment. We are also engaged in discussions with other data center developers for similar opportunities. In addition to PGCIL and other private developers. We have started bidding for 3 new developers during the quarter. In international, we are witnessing a gradual revival in the Africa African market reflected in the recent win of a significant transmission line order that further strengthens our presence in the region. We have also expanded our tower supply business by securing a substantial order in the Middle east, opening up a sizable new market beyond our presence in the Americas, Australia and Europe. In SAE, the business achieved revenues of rupees INR 450 crores, a strong growth of 25% year-on-year. We continue to witness strong momentum in order flows with new orders of over INR 1650 crores for the supply of towers, hardware, poles and engineering services across the U.S. Mexico and Brazil, an increase of nearly 4x compared to last year. These orders include the largest ever power supply order from the U.S., reflecting the growing momentum in the American T&D market. With these orders, the order book and L1 position has been scaled up to a record level of over rupees INR 3800 crores. In line with our strategy of diversifying our product portfolio and expanding into new markets, we continue to make encouraging progress. In Brazil, we successfully executed our first pilot order for mining structures, opening up opportunities beyond the power transmission sector. In Mexico, we expanded our international footprint by securing an order for the supply of structures for a solar project outside Mexico. On the manufacturing front, following the successful capacity enhancements at our facilities in Dubai, Jaipur and Jabalpur, we completed the expansion of our Butibori facility in Nagpur in Q1. With this, our global manufacturing capacity has increased to 4,83,800 metric tons. These capacity additions further strengthen our manufacturing capabilities and position us well to cater to the growing demand for transmission infrastructure across both domestic and international markets. The overall tender pipeline in T&D continues to remain robust across both domestic and the international markets. In India, the sector continues to offer a strong multiyear growth opportunity driven by rising power demand, accelerated renewable energy capacity addition grid modernization and the increasing need to address grid congestion through expansion and strengthening of the transmission network. With a robust tender pipeline, we see significant multiyear opportunities ahead and remain well positioned to capitalize on this growth. The international T&D market continues to present a strong growth outlook supported by robust transmission investments across the Middle East, a recovery in Africa, expanding opportunities in America, CIS and the SARC regions and increasing infrastructure demand driven by renewable energy integration and the AI-led data center book. Our diversified global position presents positions us well to capitalize on these opportunities with a healthy order book and L1 in T&D of over Rs 25,000 crores, we are confident of delivering significant growth in the T&D business. In civil, we delivered revenues of INR 993 crores for the quarter, a growth of 6% year-on-year. While execution has progressed across multiple sites, growth was slightly lower owing to the labor shortages arising from the election period and the delays in customer payments in the water segment. During the quarter, we successfully commissioned the Bheden water supply project in Odisha which was inaugurated by the Honorable Prime Minister Shri Narendra Modi. This landmark project will provide safe and reliable drinking water to 166 villages through 58,000 household tap connections, creating a meaningful social impact. During the quarter, the business secured multiple orders/ L1s of over INR1400 crores, in the buildings and factories vertical from reputed clients. The civil business has widened its presence in the automobile segment with an order from one of India's leading automobile manufacturers. Adding a marquee client to its portfolio, the business continues to strengthen its presence in the high rise residential segment, expanding its customer base with a prestigious order in Northern India. It is also well positioned to secure another order from a repeat customer, reflecting our strong execution capabilities and customer confidence. With these wins, KEC is now constructing approximately 80 high rise buildings for marquee clients across the country. Our geographic footprint extends with a strong presence market such as Mumbai, Gurugram, Pune, Goa, Bangalore, Hyderabad and Kolkata. During the quarter, we further strengthened our civil leadership capabilities through onboarding of senior talent. Looking ahead with the labor situation gradually normalizing, a sharp focus on execution, a robust order book in L1 of over INR10,000 crores. We are confident that the civil business is well positioned to deliver healthy growth over the coming quarters. Our transportation business has issued a revenue of INR 259crores for the quarter. The business continues to focus on execution of the new orders and completion of ongoing projects. During the quarter, the Honorable Chief Minister of Maharashtra inaugurated the Mumbai Metro Line 2B section between Mandale and Diamond Garden where KEC executed the Balalastless track work. The business has also secured new orders over INR 250 crores. In the technologically advanced automatic block signaling segment, the business has successfully implemented coverage across 667 route kilometers and is currently executing deployments across an additional 1780 RKM of the railway network and over 3000 locos. We continue to actively pursue opportunities in Kavach, technologically advanced metro systems and tunnel ventilation projects. Going forward, our focus remains on accelerating project closures, improving working capital efficiency and selectively pursuing high value domestic and international opportunities to drive profitable growth. Our cables and conductors business has achieved a revenue of over INR 600 crores, a stellar growth of 57% year-on-year driven by robust demand across the infrastructure, power transmission and industrial segments. We also continue to witness steady inflow of orders for supply of both cables and conductors. On the new product front, [ elastomatic ] cables are slated to commence production in this quarter followed by the commissioning of the E-Beam plant in the next quarter. These investments are expected to strengthen our specialty product portfolio, improve our product mix and support long term margin expansion. In the renewables business. We secured new orders of INR 800 crores from an existing customer during the quarter. These include prestigious projects in both the wind and solar segments. We are now executing solar and wind energy projects with a cumulative capacity of over 600 megawatts. In addition, the 1 GW solar projects for IRCON in Karnataka and NTPC in Rajasthan commissioned recently are operating successfully at their rated capacity. The outlook for the renewable business remains highly encouraging driven by sustained investments in clean energy grid modernization and the increasing focus on reliable and dispatchable power solutions. We continue to engage with leading wind OEMs for strategic partnerships to strengthen our presence in the wind segment. With our expanding exhibition capability and growing project portfolio both across wind and solar, we are confident that the renewable business will become a significant contributor to KEC's long term growth in the oil and gas pipeline business, we have initiated the merger of a wholly owned subsidiary, KEC Spur Infrastructure with KEC International. Post the merger, the oil and gas pipeline portfolio will be integrated into our civil hydrocarbon segment enabling a more unified approach towards hydrocarbon projects. Going forward, we see significant opportunities to expand our hydrocarbon business across both domestic and international markets. In conclusion, our performance during the quarter reflects the resilience of our diversified geographical portfolio. While we continue to face certain near term challenges, we believe these are largely transitory. With supply chains gradually normalizing labor availability, improving a strong order book and L1 position of over INR 40,000 crores, a robust tender pipeline exceeding INR 2 lakh crores and encouraging opportunities across both domestic and international markets, we remain confident of delivering stronger execution and improved financial performance over the remaining quarters of the year. Thank you. We are now open to take questions.

[Operator Instructions] The first question comes from the line of Vaibhav Shah with JM Financial.

Yes sir, firstly on the standalone performance we saw EBITDA margin decline to almost 4 odd percent for Q1 and PAT was negligible. So what was the reason for that at standalone level?

Vaibhav, as you have seen our numbers. So T&D obviously is at a higher margin and railways and civil has been negative and that is in the standalone. T&D is -- a large part of our T&D is also in the console piece. So which is a major reason why the standalone is showing a much lower number as compared to the console.

Okay, so you expect the T&D to pick up from Q2 onwards or it should be in the second half?

There should be some pickup happening in Q2. I think the problem in Q2 is in T&D in India is there because of very heavy rainfall especially in Gujarat where most of our projects are right now concentrated. But clearly Q2 definitely be better on standalone.

So secondly, you mentioned about the stock receivables in Afghanistan and JJM. So what is the quantum of receivables from Afghanistan and JJM? And can you split the JJM receivables in both MP and Odisha and how do you see the inflows coming in?

I don't have the split numbers but the total receivable should be around INR 800 crores to 900 crores of which around INR 400 crores to INR 500 crores are sort of overdue. Okay. Balance are, you know, pending certification etc. So if things happen, you know we should be. We have been talking with everyone including the state governments and the central governments and the assurances that funds are now being released. So we will keep our fingers crossed. In fact, in the month of July and August till date we have received around INR 110 crores or so between the 2 states. I don't have the exact amount, the dues are equally spread between Odisha and MP. As far as Afghanistan is concerned, we have around roughly INR 300 crores of money which is due for payment for some time and it has to come from ADB. We have been getting repeated assurances that we should get the money. It was supposed to come in Q1. Now they have told us Q2. So I think it's a matter of time. I think if we are lucky, let me put it that we should get it in Q2 itself. Otherwise definitely Q3 and that's a large amount, INR 300 crores without any outflow against it. So that will help us in improving our debt situation which did improve a little bit in this quarter.

Sir lastly you mentioned that in the previous call that we are targeting 120 days by September and 110 days by March in terms of overall working capital. So if we receive the INR 300 crores of Afghanistan and another INR 300 crores, INR 400 crores from JJM then also we to achieve that target we need ISR improvement as well. So what could be that lever to reach towards that…

These 2? These 2 should be decent. Will help us decently. Also I did mention that we had a higher inventory level in Q1. One is partly in our Dubai factories because there was some balancing equipment etc. which did not reach there. Which are now reached. So that is one. Secondly in our cable business also with all the uncertainty on the plastic side etc. We had increased our raw material etc. And finished good also. So now they are getting going. So I think maybe around INR 200 crores, INR 250 crores should get sort of released from the working capital side without the debtors also. So I think we are pretty okay with the numbers what you're talking about.

Okay. Okay. So lastly on interest cost we have seen some reduction on a Q-o-Q basis. So incrementally this should be the run rate on a quarterly basis for the entire year?

No, it should be much less than that. This quarter we had 3.3% largely because a lot of cash came in in the end of the quarter. So while the absolute borrowings went down by the quarter end, I think in April-May it was elevated. So our expectation is that again the 3.3% which we did, we should be around 2.3% or so for the whole year. Our total debt should interest should be around INR 600 crores and odd crores. That's our expectation.

The next question comes from the line of Sumit Kishore with Axis Capital.

My first question is in relation to your 25% order book in Middle East. Could you speak about the composition of this order book? The challenges that you faced in terms of execution. So excluding Middle east, what would have been your revenue growth? Just trying to understand the impact here. :p id="44232536" name="Vimal Kejriwal" type="E" /> So Sumit, 25% order book is broadly, I'll say equally divided between Saudi and UAE. That's the basic. So when you say 25% is almost INR 10,000 crores. So INR 5,000 crores each between the 2 countries. Okay. Very broadly maybe close 1% or 2% here and there. Okay, that's one part of it. On challenges, we are not seeing anything significant on the ground. So project executions are going on. I think in the last 4 months. We have commissioned 3 or 4 projects during these 4 months and a lot more is happening. I think the problem is twofold. One is the logistics. Costs have gone up, fuel costs have gone up, so local operating costs have gone up significantly, which is reflected in the margins we have in touch with the client, et cetera. Let us see what happens. But since the costs are being incurred, they're getting booked immediately. That's one part of it. The second part is on the supplies. So typically, you know, 25, 30% of our revenues come from supplies items. So we are seeing a significant challenge on the shipping side with the ports under, you know, attack or so. So vessels from China, Europe and even from India are difficult to get. And then also the rates have gone up. So whatever is impacting the quality of revenue, we have been deferring it for some time. Hopefully the situation is slowly normalizing, so it should come back maybe by the end of this quarter or so. We'll keep our fingers crossed on this. So the major impact is not on the physical execution, but towards the supplies which go into the projects.

Okay. So essentially revenue growth excluding Middle east would also have been flattish, just like we have seen on a year-on-year basis for KEC at consolidated level?

So I think the revenue growth was slightly, I'll say impacted in India T&D and also civil because of labor in the civil side. India T&D, I think we are still seeing a huge headwind in terms of rows, whether it is Rajasthan, whether it is Gujarat. I think there are 2 major states where we are operating majorly because all the renewable projects are there. So most of our projects are in that side. So that's one issue I think slowly, slowly it is getting resolved. Gujarat has come out with a new scheme where they have increased it twice or thrice of market value. So I hope that we will start seeing a lot more movement on the India T&D side.

Okay, okay. On the FY '26 call, you had indicated an expectation to grow 12% to 15% in revenue terms. Order inflow of INR 300 million. And you had not given any specific margin guidance. Would you like to revisit your guidance for the fiscal?

I think we are okay with the guidance. I think only on the revenue side we were 12% to 15%, so it will depend upon what happens in the war. I think maybe half a 1% here and there, but I don't think that there's anything major for us to worry because we have an order book that sell on the INR 40,000 crores. So Q3, Q4 typically are good for execution. So I think right now we are, we are pretty okay with our guidance.

Okay. And finally in your Civil segment, how much is water as a percentage of your order book now and…

Yes, go ahead.

Yes. And basically with the headwinds or working capital challenges, what is the outlook on execution there and particularly within civil? I think you had expressed the expectation of INR 80 billion rupees of orders inflow in FY '27. How much of that would be particularly from water?

We had not taken anything from water first of all. Secondly, I think on order book we are roughly around INR 1200 crores or INR 1300 crores in water. So that would be let's say 13%, 14% of our order book. I think for the balance numbers I think we are pretty okay. We have got a large pipeline tender pipeline for civil. So we are not too much worried that there is enough and more work happening especially on the residential and the commercial piece of it and continued work. A lot of inquiries from the metals and mining. I don't think we are seeing too much on other sectors but at least on this sector there is a continuous inquiries coming on.

The next question comes from the line of Parikshit Kandpal with HDFC Securities.

Yes sir. So my first question is on the standalone revenues and the profitability. So if I do simple math, almost close to about INR 3,900 crores of revenues and you've reported 4% EBITDA. Historically this business had 10% margin. But assuming if we take even 8% normalized margin, so it's a INR 311 crores or INR 300 crore EBITDA. So we are shortfall for almost INR 150 crores. So this loss is coming from which segment within the book? Order book.

It's difficult to quantify which exactly. But it's primarily coming from our transportation and civil business. That's where the shortfall is coming. T&D is doing reasonably well I would say.

But civil some even approaching high single digit margin. So what's happening in civil now? Why civil has turned negative?

I think. No, no, it has not turned negative. I think the issue what we have been discussing is that we have got a few old metro projects and all that. I can give you an example. I've got 4 metro projects, 2 in DMRC, 2 in Chennai Metro. One of the DMRC project was commissioned sometime back. The second one is ready for commissioning since I think last June. Okay. The client has not taken over Chennai Metro the same thing that the project and one of them is ready for commissioning for I don't know how many months now. And it's not been commissioned for whatever reason because somebody is not available or I don't know what's happening. And because of that what happens is that you, the client will not take over. You are supposed to maintain so virtually you end up spending almost INR 10 crores per month on each project. Project. All these are going in the expense account. You will make a claim and all that. [Foreign Language] So that's where it is continuing. And I think it's a saga which is -- I don't know what to say about it. Hopefully we are now hearing that they will get commission and they are stuck for commissioning because the second part is not getting ready or something else has happened and all that. So that's where this is happening. When you say that we are going towards a higher margin, it's a fact on all the new orders are all profitable and we are pretty okay with them. It's a question of, you know, as soon as we are able to close the tap on these orders we will start seeing a turnaround.

When we talk about the line of sight. So I mean Q1 is INR 150 crores of shortfall. If I analyze it's almost INR 600 crores on standalone. So where does it end? I mean what is the order backlog right now from all this troublesome projects which are underfunded or maybe a loss making. So what is the pending cost to completion? I mean or maybe extra cost that you need to cover up. So if one has to look at which quarter down the line will turn profitable, move towards 8%, 9% standalone margins. So if you can give some color on that will be helpful?

It's difficult to give it today. And on the second part or the first part on the order book, these are not in the order book because they are all completed projects. They don't have any backlog of orders except one CMRL project which will get completed in maybe next 6 months where we may have an order book of INR 100 crores, INR 150 crores or so. Rest of all are not as I said, they are completed, ready to hand over. Everything is done. So they are not in order book. I will not be able to give you exact numbers but I do think that you know this quarter also Q2 also would remain in a similar line. Maybe 50 basis points here or there. But that's the way at least Q2 will be there. Q3, Q4 would depend upon what happens also in West Asia because most of the projects of West Asia, many of them are in my standalone.

The other part is the one thing which is there on the civil side and the transportation side. Now secondly challenges which are coming up on the freight and the commodity side. So steel, aluminum some prices are going up. So is there a case where in the T&D business which was supposed to be high margins, now starts seeing headwinds on the margins because of all this conflict and they'll start reporting lower margins and directionally our aspiration to reach high single digit margin gets pushed out maybe by a year or a couple of years?

T&D, I am not seeing too much of a challenge on a double digit margin. Okay. We have I think enough questions available. A lot of them are hedged already. So I don't think we are too much worried about it. Okay. T&D, I think we are. Okay steel and all that. What has happened is that the costs have come down again especially on the plates etc. and angle. Aluminum, yes, we have some exposure but I think we have enough time to look at it. Are we worried? No, I don't think we are significantly worried about maybe 50 basis points here and there. But our view is that T&D would probably continue to be in double digit or maybe very close to double digit going forward.

And what about the other segments, transportation and others, if you can give...?

They are still negative. Okay. So that, that's where the overall numbers are under pressure.

Any guesstimates are from which quarter do you think the margins turn around will start happening? I mean if you have to give, if someone has to hold you and give a call that give which quarter will see the turnaround happening. So will it happen in FY '27? And now we'll look at maybe towards the FY '28 start of FY '28 where the margin turnaround will start happening?

No, I think the margins will keep on inching up. Where and how they attend reach. I have no numbers to give you today. Okay, but do we think we'll get into double digit and all in FY '27 or not possible.

'28 high single digit starting '28?

High single digit in '28 should be possible. Yes.

Those are my questions. I don't know biggest worry is on the margin side now because that impacts the CFO and CFO...

I thought the biggest worry, I thought the biggest worry was on working capital which you're not asking.

Yes. So eventually CFO leads to working capital and then how working capital gets impacted so it flows down from profitability. But anyways, I mean that's a challenge right now, yes, not able to grapple with.

The next question comes from the line of Jainam Jain with DAM Capital.

I wanted to understand how do we see the opportunity in data center or EPC business in terms of competitions, margins and what is the right to win over in that segment?

Jainam, it's a difficult business in the sense that what we are seeing is that although there are large opportunities being there but traditionally we are seeing developers breaking up the orders into various smaller sections, you know, slicing it into different way. Very, very few I'll say hyperscalers are there who are willing to give orders for your civil as well as MEP and all together, typically most of them break it up on the high low and you know, so we're not seeing large orders coming in from most of the clients. A few exceptions are there right to win for us is that we can do civil as well as we can do MEP together and that's what is being pitched. So I think hopefully we will see some wins happening on data centers maybe next quarter. The market is large but as I said that there is too much of too many players with small, I'll say ticket sizes which is creating a problem overall. But for me the interesting part in the data center is more coming on my T&D side where we are seeing inquiries coming in where you know the data center may get built in 15 months to 18 months but then the lines and the power supply etc. Are becoming challenged in some places which is why we announced that we got a private order. Now we are seeing developers like us also resorting to having their own connectivity, etc. So I think that is also very interesting.

Okay, so we have been pursuing the opportunities in the US for the US data center as well especially in the T&D segment.

I am not pursuing for the U.S. but we got some large orders and we had a lot of inquiries are there which are from also private developers in U.S. who want, who are supplying to data centers.

Okay, and sir, how about the competition? How is it panning out?

In which area?

In the data center business and…

Data center [Foreign Language] it's very fragmented, you know, it's region wise and all that. Each region has got different players so difficult to say who are there. But otherwise if you look at the bigger players it would be people like Tata Projects and L&T etc.

What would be the civil TAM if we have to compare. So right now we have got ordering the T&D space right for data center. How about the [ TV ]? How about this segment for data centers?

So right now we don't have a single order in data center or we have finished. Or we have finished 5 data centers in the last couple of years. We have bid for a few of them. Which is why I said that hopefully by next quarter we should at least have a few orders in the civil side on the data centers.

But sir, if you have to quantify, I mean per mega or if it's, if it's available on the per megawatt basis?

Typically our size would be around INR 10 crores per megawatt or something like that.

Okay.

[Foreign Language] Because what happens is every developer gives in a different format. So it's, it's. It's difficult to put numbers. You know, each, each tender has got a different number.

Okay, sir, the last question is in the Jal Jeevan Mission, right? So what is the pending order book currently and how much will be receivables are stuck over there you know?

We have order book of roughly around INR 1300 crores or so. So pending gross debtors would be around INR 800 crores, INR 900 crores. I think INR 400 crores or something is are due for payment. So we hope that that will come in.

The next question comes from the line of Amit Anwani with PL Capital.

The first question you did highlighted about the delays in conversion. So just wanted to understand is it more so with the domestic market or the export market, particularly Middle East. And second you have highlighted INR 2 lakh crore pipeline, INR 50 crores. I think INR 1 lakh crore for T&D and INR 1 lakh crores for non T&D. So within INR 1 lakh crores of T&D how much you are really factoring in from the Middle east market. And third, what is the expected inflow now amid whatever is happening? Because we are already 4 months, 5 months in the financial year portfolio. What is the expectation of inflow? So yes.

So Amit, when we talked about delay in conversion, it was primarily the West Asia market. Primarily. Okay. We have built quite a few projects in Saudi and UAE and Oman. In fact we are L1 in a few of them. But the conversion is taking its time. It's not that it's unduly delayed but it is taking time. Okay. But the tender pipeline is there. In fact now also we saw some new tenders getting announced even yesterday also in Middle East. So I think we are not worried about it because tenders are getting announced even now. So you know there has been some talk saying will there be scaling down? I don't think there is a scaling down because continuously projects are coming up. So to me, that is the basic thing as far as West Asia is concerned. As far as order I'll say when you look at the order intake when we said INR 30,000 crores or so roughly as a 60%, 65% would be from the T&D market and I think international is around INR 9,000 crores, INR 10,000 crores. Right? Yes. So I think our international expectation was that we'll be between INR 9,000 crores to INR 10,000 crores in terms of order intake. So a significant part of it would obviously come from West Asia.

Right. So second on, on the cable business you have done very strong and probably few quarters performance has been quite strong. So what's the capacity now? And with elastomeric are you seeing the more growth happening? Are you seeing more CapEx lined up in cables? Because we are seeing other fair play cables or conductor players have still been front loading the capacities. That is one. And second any thought on the exports of cables also to the U.S. market and what are the margins which you're currently making in the cables business?

So typically our exports have been roughly around I'll say INR 200 crores last year. Okay. And we obviously want to expand the sale. So with the specialty cables coming up I think by Q4 we should have increase happening in our export market. I don't think we have very large CapEx programs. We normally have been spending around INR 75 crores, INR 80 crores or maybe INR 100 crores in cables every year. Last 3 years we have spent INR 300 crores. A large CapEx will happen if we decide to expand our EHV which we have been looking at it. So once we see the demand stabilizing maybe we will put in a larger CapEx. Not immediately, could be next year or something but I think it's still on the drawing board. Otherwise INR 50 crores, INR 75 crores we keep on spending. So we may add some. We will definitely I think add some capacity on our aluminum conductor side. More specialized products on HTLS etc. That's the way we are looking at cables. The margins have been okay, I think they are around 5% right now. Almost 200 basis points still below the market. With the special, with the specialty cables coming up I think the margin will start inching up. That that's the expectation.

Right. What's the capacity or probably the peak revenue you can do with the fixed asset you have?

I don't have the capacity in terms of kilometers and all that but I think we can do around INR 3000 crores with the current assets without any, without any more CapEx.

Right. So lastly, what was the deferment? I would say or probably you were not able to book it revenue because of the Middle East conflict and the overall expectation now in terms of the full year growth and yes, so I think this will help.

So Amit, full year, we are still saying what we had said last quarter, around 12% to 15% growth should be feasible today. Middle East, I think the number would be around INR 300 crores or so for the quarter.

Right. And is it like that is also probably dragging the growth this year or this is something which is recoverable in the subsequent quarter for this?

It will definitely be recovered. This is not a product sale that it has lost.

Right.

It's an EPC number. So whatever has not happened in this quarter and what did not happen in Q4 also, ultimately all of that should happen which is why despite having a flat quarter this year, this quarter we are still saying that we will maintain our growth.