NBCC (India) Limited (534309) Earnings Call Transcript

Good morning, ladies and gentlemen. I'm Karthikeyan, moderator for the conference call. Welcome to NBCC India Limited Q2 FY '27 Earnings Conference Call. We have with us today Shri K.P. Mahadevaswamy, Chairman cum Managing Director; Dr. Suman Kumar, Director, Commercial; Shri Anjeev Kumar Jain, Director, Finance; [indiscernible] Shri Ashutosh Gautam, Director, Projects; and Mr. Sri M.D. Singhal, Executive Director, Finance. [Operator Instructions] Please note this conference is being recorded. I would now like to hand over the floor to Shri K.P. Mahadevaswamy. Thank you, and over to you, sir.

Thank you, Mr. Karthikeyan. Good morning, everyone. A hearty welcome to all of you. First of all, happy Dhanteras and wish you a happy Deepawali in advance. Before starting the call, we welcome our new Director, Project, Shri Ashutosh Gautam. He has been serving for 34 years in multidisciplinary wings of infrastructure which will help NDCC in multiple fronts. For quarter 2 operation and execution, we have achieved a revenue from operation of INR 2,890 crores standalone and INR 3,396 crores on consolidated, reflecting a 38% year-on-year increase on a standalone basis. On a stand-alone basis, EBITDA increased significantly by 154%, INR 219 crores from INR 89 crores -- INR 86 crores. And our standalone PAT increased by 31%, stands at INR 225 crores, marking a significant growth. For H1 operation and execution, we have achieved a revenue of operation INR 4,713 crores standalone and INR 5,655 crores on consolidated, reflecting 26% year-on-year increase on a standalone basis. On a standalone basis, EBITDA increased significant by 105% INR 379 crores from INR 183 crores and our standalone PAT stands at INR 376 crores, marking a significant 31% year-on-year growth. In terms of order book position, NBCC standalone order book is standing at INR 1,12,000 crores and consolidated order book INR 1,26,000 crores. New business secured in quarter 2 stands INR 3,600 crores on a consolidated basis. And following are the major projects secured in last quarter. RBI residential complex at Amravati, AP, New Andhra Pradesh, valuing INR 800 crores; housing project at Seychelles around INR 600 crores. Business awarded to contractors. In quarter 2, we have awarded INR 1,500 crores of new tenders on consolidated level, which makes a total of INR 3,200 crores first half in 2026-'27. In next 2 quarters, we are expecting INR 15,000 crores to INR 16,000 crores of new work will be awarded. Tenders of all the package of Supertech have been uploaded worth of INR 9,600 crores and we will award it this quarter 3 itself and turnover will start from quarter 4. And many more projects, including recently secured Government of Bihar, West Bengal, J&K will be awarded in the upcoming quarters. Redevelopment projects. In continuation to sale of resource mobilization under VII GPRA project, NBCC successfully sold residential apartment of 8.8 lakh square feet area at Avenue Towers opposite to Leela Hotel, Sarojini Nagar, New Delhi through an open e-action at a total sale value of INR 5,191 crores. All major packages in the redevelopment projects are on running stage. Now currently, it has INR 9,200 crores of balance workload. Amrapali project. Phase 2 of Amrapali project has started in different packages and currently, it has INR 8,000 crores of balance workload. We are happy to share that NBCC has completed stalled 24 Amrapali project of Phase 1 and now ending over is in progress. Amrapali Phase 2 works are progressing on fast track. And at one of the package, the building site has reached up to INR 26 crores. And in the last to update about HSCC merger, it is on fast track so that we would have better synergy. Thank you. Now the forum is open for the question and answer.

[Operator Instructions] First question comes from the line of Pankaj Kumar from Kotak Neo.

Congrats on good set of numbers. Sir, in terms of guidance that we had given for FY '27 earlier around INR 13,000 crores to INR 14,000 crores of standalone revenue. And with H1, we have reached around INR 4,700 crores. So where are we in terms of achieving this guidance? And how is the way forward for FY '28 and '29?

I'm assuring we are going to achieve INR 13000 crores to INR 14,000 on standalone basis. Usually, our first and second quarter will be in a slow pace. Third and fourth quarter only we are going to achieve this figure, it holds good. We'll go to achieve around INR 13,000 crores to INR 14,000 crores on a standalone basis.

And how about '28 and '29?

'29, already we have committed around INR 21,000 crores in consolidated level basis and 20%, 25% growth will be there, standalone basis.

This is for FY '28.

Next year, you're saying '28.

And earlier, we stated about INR 50,000 crores to INR 60,000 crores of order inflows, and that includes one large project, V GPRA. So what is the status of that? And how is the overall outlook in terms of order inflows for current financial year?

We're going to get INR 50,000 crores to INR 60,000 crores order in the coming -- during this year, still it is holds good only. So recently, we got Bihar government, some INR 2,500 crores work we got, another INR 8,000 crores work order it will come in this quarter itself. GPRA, it will come either this quarter or next quarter definitely. It is in process. We're going to get at the earliest Around INR 30,000 crores, INR 35,000 crores, we are going to get from V GPRA.

And with this due to all environmental-related issues, we see the construction restrictions. So how is the construction site progressing?

It will be there. We are following all the norms we are following. But still whenever AQ is increased, they will going to stop the construction that will affect only our Delhi projects, not other projects. Across India, definitely, we are doing well. During this quarter, we're going to award Supertech also. And next quarter onwards, Supertech turnover will come from Supertech as well as J&K. J&K III tender already we have received the technical bid. It will go to open at the earliest. The price bid will go into at the earliest, and we'll go to award during this month itself, J&K.

Okay. So this INR 15,000 crores to INR 16,000 crores new award includes roughly INR 9,600 crores from Supertech, that's what you said.

So INR 50,000 crores to INR 60,000 crores we are going to get around INR 15,000 crores to INR 16,000 crores go to award during this year. Already we have committed -- that includes Supratech and J&K. And some -- we may expect some work we're going to award through Bihar government and West Bengal also. Recently, we have signed MOU with Bihar and West Bengal government.

And how about next financial year? What kind of award we are looking at? And what would be the total number of -- what would be the total value of the projects that would be running by the end of the financial year and then by the next financial year?

Next year, pardon me? What is the business we're going to give?

No running projects.

Runnings projects?

Yes.

Currently around INR 33,000 crores is running. So next year, another INR 16,00 crores, INR 17,000 crores will be added means. So it will be increased another 10% to 20%.

Okay. And sir, lastly, on MAHAPREIT project, what is the status?

MAHAPREIT project, it is under -- somehow it got delayed. But I think during this year, we're going to start MAHAPREIT also.

So what are the...

Recently, my Director Project visited and they talked with them. Some initial -- because it is a self-sustainable project, we have to arrange funds, we have to get the clearances, approvals and all. Because of that, it is getting delayed. But during this year, we're going to start MAHAPREIT also. And Naveen Nagpur also we're going to start the tendering in the last quarter.

So this HUDCO -- this tie-up [indiscernible] is done or so that's still pending?

HUDCO funding?

Yes, for MAHAPREIT, you discussed about HUDCO funding.

No. It is going on. It is going on.

The next question comes from the line of Mahesh Tolani from [indiscernible]. There seems to be no response. The next question comes from the line of Vasudev Ganatra from Nuvama.

Congratulations on a great set of numbers. So sir, our revenue growth and EBITDA margins, both they were quite good this quarter. So have we done something very differently? Or were there any one-offs? Can you just throw some light on this?

My Director of Finance will reply.

This time, EBITDA has increased to 8% basically. We used to say EBITDA is in the range of 5% to 6%. But this time, we have featured -- including in Q1 also, we recorded 9%. So it is primarily because of the marketing fee we earn on sale of self-sustainable project on behalf of Ministry of Housing and Urban Affairs. So we recorded in half year approximately INR 100 crores of marketing fee because of that, that increase is there. Apart from that, we used to say our cost structure is always fixed whenever there is an increase in revenue, that is going to have an impact on EBITDA. So because of increase in revenue in this quarter as well as half year, that impact is being visible.

So sir, what led to that increase in revenues in this quarter?

There has been increase in approximately -- Q1, you say INR 1,823 crores. Q2, we recorded INR 1,890 crores. And on a consol basis, you see there is -- as against INR 2,260 crores, we recorded INR 3,400 crores. So that revenue itself contributed a good increase in EBITDA.

Okay. So this revenue increase was purely from all the executions that we did. There was no one-off for any such kind of that, right?

No one-off. No one-off. It is perennial income. It will come up. Because our stand is like that, we work on a fixed cost structure. Whenever there is an increase in revenue, it's going to have a positive impact on EBITDA. So that is being reflected on the result.

Sure, sir. That is great. And sir, for H2 now and in FY '28, what are our monetization plans? Any bulk sale or anything that we are planning?

Last time, I think in Q1 con call, we said we are planning and we have [indiscernible] our sale of some land parcel. In Q3 itself, we conducted sale of 2 land parcels and that I think this quarter itself, we are going to book approximately INR 433 crores of the revenue from sale of land parcel. Apart from that, 2 more land parcel RFP is in the pipeline, and that may also come up in this quarter. So we are planning whatever land bank is there, we want to monetize that, and we want to generate money so that, that money can be used for future projects.

Okay. Sure, sir. And sir, what is our target revenue and margin guidance for consol basis for FY '27 and '28?

About INR 15,000 crores to INR 16,000 crores on top line, around INR 1,100 crores to INR 1,200 crores on PAT.

We are maintaining our guidance. Whatever guidance we have provided in Q1. We maintained.

Already provided at that time. And we're going to definitely achieve this.

Yes, that's great to hear, sir. And lastly, sir, when are we planning to launch the Ghitorni project and the Sector 37D projects?

37D already work awarded, contractor already mobilized. Piling work already started. So the sale will be started, I think, hopefully, we're going to launch in the month of January. After 15th, we're going to start a sale. Ghitorni, of course, the sale agreement has to be executed. Once it is over means the consultant tender already we have received. So we have to appoint a consultant and we have to do the agreement with the Delhi government. Once it is over, I think next year onwards, Ghitorni also is going to start. It will going to take shape.

Okay. Right, sir. And lastly, sir, on our Dubai operations, what is the status there?

On Dubai operation, we have taken all the approvals. Our design and [indiscernible] groundbreaking have been approved. We are going to Get a RERA registration as well because in Dubai also, there is a RERA registration requirement is there. And hopefully, this month or maybe first week of December, we are going to do the groundbreaking ceremony. [indiscernible][indiscernible]

Okay. And when can we expect the sales to start here?

Yes, we are planning to start a sale in a phased manner. And I think first phase will be by end of December or maybe by in January 2027. And that will be only sale. Cash will be received, but revenue will be recognized only after completion of that project. Position.

Okay. Got it, sir. And just one more if I can squeeze in. Out of this consol order book, what would be a rough split between PMC and redevelopment?

Around 60% 60-40. Redevelopment 60-40. And in consol level, it is 53...

The next question comes from the line of Komal Choudary from Ratnavali.

You had guided for a closing order book of INR 2 lakh crores by end of financial year. Right now, we are at around INR 125 crores, INR 130 crores. And I'm assuming there were 2 big orders that were expected. So what is the status of those orders?

Still yet to come. It will come. It will come 2 big orders. But in between parallelly, we got recently Bihar government also, some INR 2,000 crores, INR 3,000 crores, we got it and another INR 8,000 crores, we are going to get in Phase 2 in this quarter itself. And West Bengal also, we got -- we are trying with -- discussion is going on with another 2, 3 state governments.

What is the size of West Bengal also, sir?

West Bengal will be around INR 10,000 crores, maybe. We have signed almost 9 MOUs. So we have to assess the value. So roughly around INR 10,000 crores quarter will be there from West Bengal.

That's very great, sir. And sir, why is the execution -- I mean, our quarter 1 and quarter 2, the awarded contracts are almost the same size. So what is the bottleneck? Why are we not being able to award more contracts? Because right now, we're sitting at almost 6 years of order book. If we continue this space, so where is the bottleneck? Why are we not -- I saw I've been fracking a tendering site, you have ordered Supertech of INR 10,000 crores, et cetera. But beyond that, why are things not happening?

Mahar could not take up and Jemmukashmir also got delayed. Now Jemmukashmir tender also there in the website, already tender which we received around INR 2,000 crores over quarter we're going to issue this month itself. And as far as Supertech also, I think this month end or next month, definitely, we're going to award around INR 10,000 crores. So total around INR 15,000 crores to INR 16,000 crores we will go into award during this year. This is minimum, I'm telling. If West Bengal and Bihar will be added means it will be more than that. I think Mahar also going to get converted into business to execution. So Navin Nagpur also is going to start. So redevelopment projects and with state government. Actually, state government, where it is on self-sustainable mode. And it has to be a lot of approvals. So due to approvals and financial arrangement, it is getting delayed. That's all. Otherwise, it will be definitely converted.

Sure. And sir, one final question. Because we have done so much of good work in the Delhi monetization, is the government expected to give us some more orders because we have really given this land -- this recent sale in Delhi, et cetera. So are they warming up to more orders? Because every day, we hear news about a few buildings falling in Delhi, et cetera. So government has to do a lot of redevelopment over there.

Yes, definitely. We are talking with the state government also. So that's why I'm not naming the state government. We're going to get 2, 3 state government with big orders. Of course, Delhi required a lot of redevelopment, all old buildings and in depleted conditions, there is no proper road facility infrastructure, even energy efficient also is not there. By doing redevelopment, it is almost net zero building we are doing. So even solid waste, STP, energy-efficient building we are doing in World Trade Center, even Sarajinagar, Neetajinagar. So this is a big opportunity we have. So -- and a lot of state government empty lands are there. Discussion is going on. I think we're going to crack 1 or 2 orders in this year itself.

And the 2 big orders, should be expected in the calendar year?

Yes, yes, definitely, definitely. The GPRA5GPRA already it is in the process of approval of cabinet, and we are expecting on butter fencing also.

The next question comes from the line of S. withdrawn his request. We have the next question coming from the line of Sumeet Rohra from Smartsun Capital Private Limited.

Firstly, I wish you and your entire team a very, very happy Diwali. And sir, congratulations on a fantastic set of results. Now sir, I have a few detailed questions. So sir, firstly, you signed 9 MOUs just a few days ago with West Bengal. So sir, could you kindly highlight what is the opportunity size you see there? And how soon do you think that, that can translate into business flow? That is my first question, sir. My second question, sir, sir, if I understand correctly, is that you said that your revenue guidance INR 14,000 crores is on a stand-alone. So on a consolidated basis, should about INR 6,500 crores to INR 1,000 crores, is my understanding correct, with PAT being about INR 1,100 crores to INR 1,200 crores as you highlighted. Sir, thirdly, my question is you mentioned just now that you're expecting order inflows of nearly INR 5000 crores to INR 60,000 crores in terms of GPRA and the other orders. So that means you are still expecting that by March 31, we should close with a total order book after awarding could be to the tune of about INR 185,00 crores to INR 2 lakh crores sir. I mean, is that understanding correct, sir?

Yes, yes, definite, definitely. So INR 10,000 -- maybe INR 20,000 crores we will go to award, INR 1,80,000 crores, the balance for cloud will be in the next year -- next financial year.

And sir, I mean... and regarding...

West Bengal, I'll tell you, we have signed 9 MOU with the various departments. So one is sum department, other one is urban development, Kolkata Municipal Corporation. So we did so many iconic projects in Kolkata. One is Dandania, the other one is Sania. So they have -- they know the quality and potential of NBCC. So they wanted to -- because due to change in government, so they wanted to engage NBCC earlier, there was a bar to PSUs. Only state government can execute more than INR 50 crores per order. So now that barrier has been already broken. So we got successfully executed 9 MOU. I think in West Bengal career, first time 9 MOU in a single day, they executed it with the PSU -- so Minister also very much interested and she is so fast to start the work immediately. So one of that kind of work is pink. They wanted to build pink across West Bengal. That we're going to start in the first quarter, next quarter, that is fourth quarter, we are going to start. Apart from that Riverfriend and some to construct apart from that library, Baar. -- many Kolkata is a old city and city, they wanted to do a lot many development works in there. And we have USP and redevelopment model. Presently, we got this work order through PMC -- and of course, they wanted to build a new cabinet also. So that also, I think it will come to our team. So so many other works are in pipeline. So I don't want to mention details in detail, but we're going to get a good order from West Bengal.

Sure. And sir, I mean, if I heard correctly, also, I mean, our Director of Finance also said that we have conducted 2 land parcel sales in this quarter. So effectively, that means in Q3, we will get about INR 400 crores of revenue from the land parcel with some addition in bottom line of about INR 200 crores. I mean, is that also -- is that correctly I heard...

Q4, we will going to get because it has to be realized once already we sell it, we're going to get the cash in Q3. But Q4, the turnover as well as profit will be booked in the Q4.

Understood. Understood. And sir, also, I can tell you confidently that, sir, all of you have built a wonderful company because today, sir, in the public sector space, you are one of the only companies who has a book-to-bill ratio of 1:10. So you have a very high amount of visibility. So sir, my only request to you is that I've also seen that on October 18, you also appointed a director in the infrastructure the development project. So because sir, with the kind of visibility you have of nearly INR 1.5 lakh crores going to INR 2 lakh crore now, you can easily be a 40%, 50% growth company, I mean, on a year-on-year basis, right, because you have that kind of order book. So if we can focus a little bit more on -- also on execution, it will actually do a world good to us, sir. So I mean, if you can just share some thoughts on that as well would be very helpful.

Definitely, Sumit, one thing I wanted to tell you what NBCC did during the last 1 or 2 years, 3 years. Amrapali projects was stalled and Supreme Court by the grace of God and intervention of Supremeourt, Honorable Supreme Court. We have completed all the 24 projects. It is on self-sustainable mode. Whenever a PSU fail, usually what will happen private takeovers. In this case, it is a reverse story. A private builder left the project and the PSU is completing. Similarly, almost a lot of waiting list for the officers. The officers used to travel 1 or 2 hours from Noida or Faridabad, Gurgaon, -- now they are getting their home. Almost 5,000 homes already we have ended our flats. Now another 9,000 work is in progress. By this year-end, we are going to get some on this. But definitely, next year onwards, 7G PRA will going to complete all. By the end of next year, December or March, we're going to complete both Amrapali Phase 2 as well as 7G PRA. This will be a big order and big projects, and we are expecting 5G PRA also. and state government also is following. Gova already, we have awarded execution started. J&K' going to start project, small project already started. So other 3 tenders are in pipeline. So a lot of opportunities are a lot of work already we have to convert. Of course, conversion, it took some time, but definitely now the turnover will come. And as well as we're going to get the PAT also, PAT EBITDA, everything.

So basically...

One more thing I wanted to add in this, we have changed the technology also. by doing this, now in Sa7jarmrapali, we are doing almost 33 floors. We are doing just 2 years. This is a big achievement. We are using my shuttering and speed is very fast and quality is also there. So the technology we have changed Sa7jiar, we have used precast technology also. So we have changed the technology for better quality and timely execution. And of course, energy savings and all ESG we are following.

Sure, sure. Sir, I mean, if I may ask, so on a consolidated basis, you should basically end the current year with about INR 17,000 crores, sir? I mean is that broadly correct?

Whatever 10 whatever we are committed to...

Okay, sure. And basically, going ahead next year, I mean, the matter of fact is that you're awarding nearly INR 20,000 crores. So next year, we should basically be looking at an upward of about 25% growth. So can we about INR 2,000 crores, INR 2,000 crores...