Power Mech Projects Limited (POWERMECH) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Power Mech Projects Limited Q1 FY '26 Earnings Conference Call hosted by Nirmal Bang Equities Private Limited. [Operator Instructions] Please note that this call is being recorded. With this, I now hand the conference over to Ms. Arshia Khosla for opening comments. Thank you, and over to you, ma'am.

Thank you. I am Arshia Khosla. On behalf of Nirmal Bang Institutional Equities, welcome all of you to the First Quarter FY '26 Earnings Call of Power Mech Projects Limited. From the management team, we have Mr. S. Kodandaramaiah, Director, Non-board, Business Development; and Mr. N. Nani Aravind, Chief Financial Officer. I would now request the management to give their opening remarks, post which we shall open the floor for Q&A. Thank you, and over to you, sir.

Thank you, Ms. Arshia Khosla. Good morning, everyone. I'm Aravind, CFO of the company. I have with me Shri Kodandaramaiah, Director of Business Development. I extend a warm welcome to all of you for our quarter 1 financial year '26 earnings call. The performance for the first quarter of financial -- first quarter of financial year '26 was in line with our set targets. We reported a total income of INR 1,304 crores, marking a 28% increase over INR 1,016 crores in Q1 FY '25. EBITDA stood at INR 182 crores, up 48% from INR 123 crores last year, while profit after tax came in at INR 81 crores, registering a 31% growth compared to INR 62 crores in Q1 FY '25. The EBITDA margin improved from 12.1% to 13.95%, supported by exceptional revenues from Uttarakhand Riverbed Mineral project, while PAT margin rose marginally from 6.1% to 6.2%, moderated by higher finance and tax costs in the LLP, which we floated for Riverbed Minerals projects. For the revenue mix for quarter 1 in terms of revenue mix for quarter 1 FY '26, the mechanical segment contributed INR 222 crores, a 117% increase over INR 102 crores in Q1 FY '25. The Civil segment, including railways, water projects contributed INR 581 crores, reflecting a 7% increase. O&M revenues rose to INR 398 crores, up 17% from INR 341 crores. The Electrical segment recorded INR 67 crores compared to INR 8 crores, a 737% jump. And the mining business contributed INR 26 crores versus INR 14 crores last year, showing 80% increase. Other income stood at INR 11 crores compared to INR 9 crores in the previous year. The revenue split for the quarter was 95% domestic, 5% international, while the contribution from the power sector remained at 53% with non-power sector accounting for 47%. On the financial front, return on equity declined from 3.09% during the Q1 -- from 3.09% to 2.41% due to higher finance and tax cost, which anticipated -- we anticipated that normalization in collection and execution. ROE is likely to improve significantly in the coming quarters. While return on capital employed improved from 4.7% to 5.69%, driven by better capital deployment and improved operating margins. Operating cash flow remained neutral due to pending receivables in the Water division. However, we are actively engaging with clients to expedite the certifications and clearances, and we are confident of realizing the outstanding dues in the coming months. Net current asset days, excluding cash and cash equivalents have decreased from 128 days in Q4 FY '25 to 123 days in Q1 FY '26, driven by the realization of receivables, which resulted in a reduction in the current assets. We are actively engaging with the Uttar Pradesh government for the realization of pending Jal Jeevan Mission receivables, which is expected to further reduce current asset days. Additionally, with the stabilization of MDO business from 2027 onwards, we anticipate a significant improvement in the net working capital days. As on 30th June 2025, the gross debt and net debt remained controlled and despite delays in certification of water bills and delays in realization of receivables, as on 30th June '25, gross debt is around INR 753 crores and net debt stands at INR 239 crores. The debt equity ratio as on 30th June '25 stands at 0.34x. During Q1 FY '26, the company secured fresh orders worth of INR 1,270 crores. The total order backlog stood at INR 53,972 crores. Excluding the 2 MDO projects, the executable order book is INR 14,391 crores. We are targeting INR 10,000 crores new orders by March '26. And as on date, we have already secured INR 1,882 crores. Our strategic focus remains on the high potential areas, including industrial O&M, railway and water infrastructure as well as MDO projects. For FY '26, we have set a revenue target of INR 6,500 crores. with an expected 25% year-on-year growth and a stable EBITDA margins in line with the FY '25 levels. Margins could see an upside depending on the contribution mix from O&M and mining segments. The order book outlook for the year remains healthy, supporting our growth trajectory with the company well positioned to execute and convert around 40% of its opening order book annually. The MDO business is ramping up steadily and along with O&M is expected to drive significantly growth in the coming years. So from the MDO business point of view, our MDO business is progressing steadily. At the Kotre Basantpur project, mobilization of HAM equipment has been completed and first year of mining operations commenced on 15th April 2025. Till date, overburden removal of 5 lakh cubic meter has been completed and the work is continuing. Coal production is expected to commence from September '25, subject to the monsoon conditions. At the Kalyaneswari Tasra project, OB removal and coal dispatch operations have been ongoing since January '24. As of June '25, coal production has reached 7.61 lakh tonnes with a corresponding OB removal of 14.71 lakh cubic meter. Mining fee against the coal produced and dispatched to sale have been accruing since January '24. To date, invoices have been submitted for 7.52 lakh tonnes of coal dispatch to the existing washery as per sale direction with a total value of INR 158 crores so far, we have recognized revenue. In terms of washery and railway sliding development is concerned, design consultants have been appointed for both the washery and railway sliding. For the railway sliding, engineering scale plan, L-section plan and consent to establish approval have been received, while approvals for overhead electrification and signaling interlocking system are expected by end of this month. For the washery, major equipment designs have been completed and LOIs have been issued to the vendors for some of the equipment with the remaining order under progress in parallel with the design activities. Mobilization and establishment of the washery site are also in progress. While sales current coal offtake remains below the plan due to the limited actional washery capacity available outside, we are actively working to resolve these constraints and ramp up the production in the coming quarters. With this now, I request Mr. Kodandaramaiah garu, to update on the key business development initiatives and future outlook.

Yes. Thanks, Aravind, for your introduction and also the overall business intro of the company. Thanks for our participants also. I think as Aravind has said, we are looking up into the business opening up substantially. We have seen it is there for the last 2 years. and it continues to happen in the coming years also. Now coming to the basic order booking and the backlog, what we are having here. I think in the first quarter, we had a total order booking of INR 1,270 crores with key orders from Telangana, where Telangana Yadadri project, we are also building into the quarters the establishment quarters, about INR 1,350 [indiscernible] value of INR 972 crores. We have taken a first major step into the green energy business in taking the -- under the KUSUM scheme of solar project in Bihar for INR 159 crores, total value for about 25 years. And O&M jobs also we have taken for 9 jobs of INR 108 crores. These are the key orders there. But beyond the quarter 1 also currently also recently, we have booked a major O&M order in SJVN that is 2x6 [indiscernible] Buxar INR 498 crores for 5 years winding operation and NTPC Jhabua also about [ INR 53 crores ]. So this is the latest 2 major developments apart from what we have seen in the first quarter. Now looking at the overall order backlog, taking into consideration the revenue, what has happened in the first quarter and the last year backlog, what we had in 1st of April, INR 14,387 crores, more or less, the order backlog remains same, about INR 14,391 crores with a major increase in the Civil segment of the business from INR 8,472 crores to [ INR 902 crores ], 6.5%. And in other segments because in the first quarter, we have not substantially added because of the opportunities were postponed later. And these things are expected to come -- happen and there is some marginal reduction in the overall order backlog from mechanical and installation business from INR 2,303 crores to INR 2,081 crores; O&M from INR 2,749 crores backlog to INR 490 crores. And electrical, we are consciously looking at the business and stabilizing it. Therefore, we are not looking at any significant in adding new businesses at this stage. Barring its stabilization, it is now INR 786 crores the backlog compared to INR 863 crores. The domestic business continued to drive the business with about 98% of the order backlog and the international business mainly focused on the O&M with a backlog of INR 250 crores is about 2%. And the power sector continues to be a lead opportunity provider for the company with about 61% of the business at the beginning of the year. It is now 57.5% in the first -- last year, now it is 57.5% and non-power is about 42.5%. This is on the segment-wise opportunity. And in the case of the key initiatives has been the market has been opening in the power sector and in the infrastructure and non-power sector also, there are a lot of opportunities. I have seen the last 8, 10 years, the trend is continuing for the -- our participation in railways, roads and infrastructure, metro work and then significantly the O&M profile what [ we have increased ]. One of the key aspects of the O&M business has been that -- in fact, our total capacity of operation of the O&M business has gone up by 4,107 megawatts with the 3 major projects in the preceding years. And recently, what we have taken is also 1,320 megawatts. That will jack up the overall O&M business to nearly 75,000 megawatts and with more focus on the power sector addition of the capacity, there is going to be a lot of opportunities. Now coming to the key opportunities and the business, where it is going. I think we all know there is going to be a renewal of the power sector business owing to a variety of requirements in another 5 to 10 years as the increase in capacity, which I have been telling in the many of my previous interactions with you, that with 500 gigawatts of the renewable power adding up by end of the decade, and then there is going to be a balance with the power requirement, 80 gigawatts of thermal power has to necessarily be added. And there is a significant addition into the -- actions taken by the various companies, particularly Adani, which has got a present installed base of about 17,550 megawatts, they intend to double it about double the capacity to 34,000 megawatts, 35,000 megawatts in another 5 to 6 years. And they have taken the lead in adding around recent orders, what they have placed in the last couple of months, maybe including the previous 2, 3 quarters and about 15,720 megawatts they have ordered. And recently also, they have taken action on another 4,800 megawatts. Therefore, they are significantly adding up to the ordering backlog of the engineering EPC companies like BHEL and L&T. And NTPC is another major organization, which has taken the lead about 11,580 megawatts of ordering, which has been done in the last couple of quarters. That also is adding up. And other utility companies like DVC, Neyveli Lignite Corporation, MAHAGENCO, then Singareni, SCCL, then Gujarat State Electricity Corporation Limited, then Chhattisgarh, they also have taken the initiative and added new capacities. Therefore, if you take about 18 months to 2-year ordering status in the last 1.5 years and that trend is continuing, about 38,000 megawatts ordering has been done in different areas and different stages. About 10 EPC projects have been awarded to BHEL. And then L&T has taken a major step -- again step forward, again, coming back to the power sector execution about 4,000 megawatts, 2 projects they have taken at Nabinagar and Gadarwara. And these 2 players will now L&T also is going to put their feet in. And the latest information is that Adani perhaps has taken an initiative to order some boiler packages to them, and this news has to be confirmed for the L&T also. Therefore, perhaps they want to slightly diversify the power -- the BTG orders, boiler and turbine, the [ mainland ] ordering package to apart from BHEL also looking at the overall order backlog, BHEL has taken it. Therefore, if you look at the overall scenario, there has been a substantial ordering of more than INR 2 lakh crores at about 38,000 megawatts in the last 1.5, 2 years. That throws up significant opportunities for a company like Power Mech. We are into various segments of the main power plant installation, both in the main plant and the balance of plant area and that offers an opportunity of about INR 30,000 crores. Now in these areas recently, our interest and where we have taken a lot of initiatives is in getting into the market with Adani, about 3, 4 major jobs we have taken at Mahan, then Raipur, Korba that is [indiscernible] of mechanical installation jobs and then INR 800 crores of the civil works at Mahan Phase 2 and Mirzapur Phase 1, which they are putting up for the first time, 2x 800 megawatts. That comes to about INR 2,453 crores. And all the schedules about 30 months firm price contracts with fair advance payment terms. And these projects are already under execution and going on a fast-track basis. And the other important development is the BHEl Koderma DVC, we have taken INR 579 crores in BTG civil works and the cooling tower work about INR 743 crores. Therefore, if you look at the power sector itself, perhaps the company has added nearly about 7,500 megawatts of capacity addition of presence in the recent times. And this will continue to happen in the coming years also. And then on the O&M sector, what I can say is that have got a reasonable backlog to continue the conversion factors. And the opportunities are going to be -- continue to be there with a new capacity addition of about 6,000 megawatts to 8,000 megawatts every year, both with the -- particularly Adani is going to add a lot of capacities and other players are also going to add up capacities and public sector also is going to add up the capacities. With that, more opportunities will come. As I said, the 4,000-plus megawatts have been added to the base strength of the O&M coming to 75,000 megawatts. Perhaps with more and more capacity addition, this base capacity of Power Mech has to increase in the coming years, and we continue to bank on the domestic O&M business. And the international O&M business, the main focus is around the shutdown jobs, repair jobs, maintenance jobs and manpower supply actively, we are doing in the Middle East and Nigeria. Nigeria, we are executing a 400-megawatt long-term contract that is being under execution. And then many maintenance jobs we have taken. And that we expect about INR 300 crores of order booking in this year. Now the other important sectors are the railways, where we are significantly working in about 8 major projects of INR 2,500 crores and having completed some of the significant railway jobs also. And the road sector also, we are working in many projects. And apart from that, one of the key areas of infrastructure business is undertaking the metro works. Metro works, there is a major ongoing investment. 22 cities are being -- have got its penetration. Metro spread is there about 950 kilometers. This is going to double up in the next 5 years to almost 2,000 kilometers with another 23 cities added. And our interest is in all these metro shops is first works on the maintenance depots because each of the major metro cities, they need 2 maintenance depots. We have got experience in doing many of railway workshops with the railway jobs what we have undertaken so far.. Major railway metro maintenance job we are executing in Bangalore for the Bangalore Metro Rail Corporation INR 427 crores. That gives us the references to it for many of the metro opportunities, which is expected in the future. Therefore, in the overall scenario, what I can say is that last year, our total order booking was about INR 6,437 crores that is compared to previous year INR 8,758 crores in '23-'24, 24-'25, INR 6,437 crores. Of course, last year, there were many aspects mainly because of the elections and monsoon and so many other interferences. Perhaps this year, we are keeping a target of about INR 10,000 crores. And an area, which is of significant importance in the power sector business in opening up the balance of plant packages, a couple of projects we are pursuing it with the opportunities of about INR 10,000 crores to INR 12,000 crores and some significant development should take place shortly. And that should see how we can take up that work and that synergies with our overall business plan and our expertise also on a comprehensive basis, we have got a master in construction and an end-to-end solution in civil structural, mechanical and afterwards post commissioning O&M also. Therefore, that enables us to be a strong player in this. And we are discussing with a couple of players on this. And then let us see how it takes place. And that is an area, which is a lot of interest to us in this year. That's what I would like to say. Thank you all of you.

[Operator Instructions] The first question comes from the line of Mohit Kumar from ICICI Securities.

My first question is on the margin in this particular quarter. Was there any one-off in this quarter?

Yes. So we -- this is exceptional revenue, sir, because in the Uttarakhand Riverbed Mineral, there are certain quantity, which we seized from the clients where they have to pay the royalty and we got some quantity, where without unpaid royalty. So because of that, we paid -- we collected double the penalty that resulted the higher profit and royalty. So that resulted in a higher profit. So it's a 9 months business. Basically, the Riverbed Minerals [indiscernible] in Q2 probably will not have that much profit. So 9 months only operation. In Q1, we got the exceptionally seized high quantity, resulted more profit in the current quarter.

So what is the impact of that in the current quarter?

Sir that is roughly around 19% sir.

Sir, INR 19 crores is the impact this quarter?

INR 55 crores is the PAT. It comes into 19% EBITDA margin from that particular LLP.

Understood, sir. My second question on the thermal BOP. Of course, it's a very large opportunity. But having said that, sir, why there are delays in finalization of the tender? And is this opportunity of POP, is it away from BHEL, Adani, NTPC? Or are the packages being broken up into small, small part? Is it single factor, is it small, small part, the size could be much smaller. Is that the right understanding?

Yes. I think both the ways it is possible because what has happened, people like Adani companies like Adani, they would like to do themselves many things. The main plant, they would like to order rest of the balance of plant packages, including the civil and other packages, they would like to handle themselves. That is where we have also taken some of the jobs and what I said recently, we have taken. Now the other aspect is the -- apart from the main plant, that is called the balance of plant is nothing but the inputs, which goes into the main plant for its operation like water, power and then civil works and then so many axillaries are like coal handling, ash handling, water systems and then miscellaneous things are there. This is all nowadays combined as a part of a single package. And that is a concept because main plant is specialized with a company like BHEL or L&T, balance of plant, it is again specialized -- multidiscipline specialization, not only engineering, but also in construction in different areas, civil, structural, mechanical, electrical, C&I. So that is more of integration and needs a proper unified input source like water is required to start the power plant, then power is required to start the power plant and other utilities also. So they follow both the models. One is to combine the entire package into something like a single package that is a balance of plant package. Another is to further segment into balance of plant to civil segment, coal handling, ash handling and individual segments. And that depends on the customer choice and how you would like to get a competitive offer and the pricing to see that overall investment cost is moderated. Therefore, our interest is in both the cases because our strength now -- because the end-to-end construction we are having. We have also strengthened our engineering base. And then with these things, perhaps BHEL also is planning to do this type of BOP in a way that it can be roped in with other agencies. And particularly contracts like us, we are better qualified to do that. That is how it is.

Are there too many single BOP packages available in the market?

Yes. I think if I look at the ordering, NTPC has ordered 10 EPC jobs total NTPC ordering, which has been done is about 14,500 megawatts, about [ 1,13,000 ]. Now this NTPC ordering mostly on BHEL and to some extent on L&T. Now the major orders, which are not ordered on the EPC, NTPC has balance of plant about 6 plants, they have to order it. That will come for packaging. And Adani, as I said, around 15,720 megawatt, that entire balance of plant will come as a packaging. Apart from that, BHEL they themselves have taken a lot of orders in terms of BHEL EPC ordering, as I said, about [ INR 1,13,880 crores ] for 14,500 megawatts. Therefore, this will be some areas, maybe some of the projects can be thought of as a balance of plant package with BHEL also.

The next question comes from the line of Jainam Jain from ICICI Securities.

Sir, in the first quarter, we had a low order inflow Y-o-Y of INR...

Sorry to interrupt, there is a little bit of disturbance from your end.

Hello. Am I audible right now?

Yes, sir. It is better.

Sir, in the first quarter, we had a low order inflow Y-o-Y of INR 1,200 crores. So with the strong pipeline in thermal space and nuclear space, why are the orders not flowing in? Like is there any challenges or delays, which we are seeing.

I think that is a typical of first quarter and second quarter. If you look at last year, first quarter also, it was INR 1,040 crores. This year, we have taken INR 1,270 crores. Now the opportunities what we are tracking in various things, various business segments is more than INR 30,000 crores. And then the power sector, there is an opportunity in size of INR 30,000 crores. And then there is the infrastructure side, continuous investments are coming. We have seen the annual investments in what is happening in the railways, roads and then metro jobs are also. Generally, the trending of any customer is to start the ordering in beyond the second quarter. That is how the order gets added into the last 2, 3 quarters generally. Therefore, with the -- looking at the opportunities what we are having because at any time, we are tracking about INR 30,000 crores to INR 35,000 crores of opportunities. And then INR 10,000 crores is a reasonable thing, which we have projected to the investor community. That should be reasonably possible because in various areas, power sector side, non-power sector side, infrastructure side, O&M side, also O&M as on today around INR 1,700 crores of opportunities we are tracking. And then the new plants as and when they are commissioned, for example, latest SJVN, I said about INR 500 crores of job which we have taken that should happen. And let us see these targets, what we have about INR 10,000 crores should be possible from that perspective.

Okay, sir. Sir, within the Tasra mines, what is the total production during quarter 1. Hello?

Yes. 1 minute. 1 minute. Around 1.5 million tonnes.

Around 1.5 million tonnes.

[ 1,50,000 ].

Sir, we have guided for -- sir, we have guided for INR 300 crores to INR 400 crores of top line in this fiscal from MDO business, whereas we have booked only INR 26 crores in this quarter. Can you throw some light on that?

This combines both together, we plan for INR 204 crores from the Tasra mine and INR 40 crores -- INR 60 crores from the KBP mine. KBP mine, we just started the production, and we are expecting to start the revenue from the Q3 onwards. From September, middle of September, we will start. But ideally, it will be from Q3 onwards, we'll start generating this. Probably we'll touch maybe around 0.2 million -- INR 30 crores, INR 40 crores of revenue will touch this year. And in the Tasra mine because of the washery capacity availability outside is very limited, we are -- offtake arrangements as per the sales plan order only based on the availability of external washery, we are giving around INR 50,000 to INR 60,000 per month depends on the sales direction we are executing. We hope that this we will -- we are trying to push the sales team to take the material up to [indiscernible] per month capacity we are asking them to looking at. And we are looking at the other alternative arrangement to outside any available external washery availability is there, we are also pursuing that to speed up our offtake arrangements.

The next question comes from the line of Vinod from PhillipCapital.

Sir, how much of this 80 gigawatt can be realistically completed by FY '32 according to you?

How many?

Of this 80 gigawatts can be realistically completed by FY '32?

Yes. I think the ongoing jobs we are doing nearly 7,500 megawatts to 8,000 megawatts. Adani, Vedanta [Technical Difficulty] and then the new jobs, what we have taken from recently from Adani for the last couple of months. Therefore, this is on the execution side, both in the civil and structural side. And perhaps another perhaps another 1,500 -- another nearly 2,000 megawatts to 3,000 megawatts should be added in this year also.

Okay. Because utility companies are talking of shortage of BOP bandwidth. So what is happening in terms of BOP bandwidth? Are new vendors being developed? Or are they relaxing vendor norms now for the BOP?

Our bandwidth is a very strong organization set up for execution. Our headquarter is there, our expertise there in construction, end-to-end construction solution, civil structural, mechanical and the complete segments. And we have got also experience in doing some of the complex jobs like cooling towers and also buildings. For what we have to interface more is the engineering aspect of it. That is an important aspect, which we have strengthened the people with very senior people we have taken from experienced groups, and they are assisting us. And now we are in the process of evaluating the projects and bidding it. And the other aspect is the procurement. The procurement is a second important aspect of the EPC work. And that also we have strengthened with really experienced hands. And in fact, what I can say is that the EPC concept, what we are doing [indiscernible] significantly has got a better presence in railways and roads. Therefore, already that type of experience is being gained by the organization. It is a question of integrating the procurement additional capacities required and engineering interface, which we have to take with the engineering consultant part of the in-house strength and the existing construction strength. Of course, the technological part of the equipment supplies in many of the key packages like coal handling, ash handling, control instrumentation and other things as the engineering supply has to come to them as to go to the various vendors, we are qualified as per the CA guidelines as per the main EPC contracts guidelines. And those aspects we'll follow it up. We are already in touch with many of the key vendors in many key areas for the critical areas like coal handling, ash handling, water systems, and we have established a rapport with them and to see that once it comes, we can work with them also.

Sure. And sir, what is the status of FGD projects? Are FGD projects now happening? Or are they going to be abandoned? What about the existing projects for FGD?

Sir, so far, out of the total orders received there is -- because of the government guidelines, shifting of regulatory landscape and extended compliance time lines, this FGD project, there is a delayed prolonged inactivity. So after discussing with the clients, wherever there is a nonmoving to the extent of INR 4,264 crores worth of FGD packages, we are -- we moved some nonmoving category and we removed it from the order book. And only INR 936 crores worth of BOP project, only one project only running, which we have considered in the order book value. And we are pursuing this -- we are pursuing with the client. And as and when the activity approvals received from FGD, probably we'll take up these works. Till that time, we are keeping this under the nonmoving category, sir.

The next question comes from the line of Darshil Jhaveri from Crown Capital.

So just regarding our mining development operations. I could not get what you're saying about the second mine, like the KBP mine, we are assuming around INR 30,000 crores [indiscernible] but the second Tasra mine, what do we expect this year, sir?

This year, probably we will touch around INR 100 crores to INR 120 crores turnover, Quarterly around INR 25 crores to INR 30 crores revenue, maybe around INR 120 crores to INR 150 crores between we'll try to achieve the target. Mainly because this washery requirement, this case is including the washery they have allotted to us, and we are constructing the washery. Our washery will be ready by December '26. So till the time they have to do this washery outside the washery. So outside capacities are not available to do the washing. So only limited 50,000 tonnes to 60,000 tonnes per month capacity is only available outside washery. So we are -- their offtake arrangement, they are taking only to that extent of mine quantity. So the projected -- we are pushing the department sale to take the more mining quantity. But because of the outside constraints, they are unable to lift the major -- more materials.

Okay. So is it fair to assume till our washery is not complete, we'll maintain a sort of quarterly run rate of INR 20 crores, INR 30 crores. Is that like a fair assumption, sir?

Yes, yes. That means that we are pushing now further to increase to another 20,000 tonnes, 30,000 tonnes extra quantity. We are pushing them to take.

Okay. Okay. Fair enough, sir. And sir, with regards to our guidance, we've given a very clear guidance of INR 6,500 crores, but based on our order book, do we see any potential upside that can also happen to this order book to the revenue recognition?

See, our -- generally, our company execute to convert around 40% of its opening order book annually. We have around [ 15,000, 14,000 ] orders in hand, which translates to 40% into -- we can easily achieve the projected turnover of INR 6,500 plus the current Q1 and Q2, the new orders, whatever we are getting also we can able to convert into the turnover. So we are confident of achieving the growth because last year also, we touched around 25% growth, and we are also projecting this year also 25% growth in the -- compared to the last year. More or less, we'll try to reach that number.

Okay. Okay. Fair enough, sir. And sir, just last question from my end. In the other mine, the KBP mine, is there any constraint of washery or how that ramp-up happen, sir.

No, the scope is only mining, sir. There is no linkage of washery to that. And it is the responsibility of the client to lift the material without linking to the washery. So we are -- we just touched the coal now, but because of the rains and all, we are not producing the coal now. We are shifting this to the next month. Maybe it depends on the monsoon, we'll start the coal production by next month.

So sir, for the full year FY '27, what kind of revenue could we estimate approximately is also fine, sir?

Because this washery constraint is there for Tasra, so we can take average of INR 150 crores yearly basis for next year also, INR 150 crores to INR 200 crores between. And for the KBP, we can touch around INR 120 crores to INR 140 crores revenue. Around -- all together around INR 300 crores, INR 350 crores we'll touch next year.

Okay. And sir, mining, what margins do we [Technical Difficulty] usually, sir?

Sir, during peak rated capacity, both the plants, both the mines with peak rate capacity, weighted average of around 22% we are expecting. So because these are in the development phase now over -- once we reach the peak rate capacity by '28 onwards, we can touch around 22% weighted average. But till that time, maybe average of 15% to 16% level because washery is also not started in Tasra, maybe around 10% to 15%, we can touch minimum and depends on the readiness of the washery, it will go up to 22% on a...

The next question comes from the line of Dinesh Kulkarni from Finsight.

Really great set of numbers and the guidance you have provided. Sir, my question is, we have seen MDO, the kind of businesses we have got is not many in the last, say, 2 years, 1.5, 2 years. So what's your specific outlook on these kind of businesses? How many are open for bidding now? And how large this could be in terms of order book, say, in the next 2, 3 years?

Sir, so in terms of the MDO is concerned, we are planning to continue with these 2 only right now, and we are not thinking of bidding for any new further MDOs till the time we touch this peak rate capacity. And coking coal MDO [ 2 ] are there, and we are looking at iron ore, if any MDO is available, iron and ore side, we will look at that opportunity.

Okay. So is it because of our capacity constraint? Or you think the business economics and the financial metrics are not equally lucrative? What's the reason?

No, no. This is because we are new to the MDO business, and we want to first stabilize our business, existing business, and then we want to take up further business in the MDO.

No, I would add to what Aravind had said, Ramaiah here. See, as an opportunity, huge opportunities is there. I think this we have touched upon a couple of times. For example, Coal India, that is called -- what is called the last mile -- first mile connectivity is there. First mile connectivity is nothing from the mine side to the loading area, which includes the railway siding, the balancing facilities. and then the exploration facilities and then -- sorry, this one, ore exploration facilities. And then more important is the mechanization of the material handling. Coal India has got an investment of INR 53,000 crores. Now that is how we know. For example, our initial experience, what we have taken as an EPC contract with Thyssenkrupp at [indiscernible], we are trying to gain certain experiences in doing an execution also. Of course, MDO is a developer in these 2 projects. But as an opportunity, it will be there. As far as we are concerned, our capacity as of today 9 million tonnes. Perhaps down the line, we can look at one more MDO based on how these 2 things shape up and then based on the augmentation of our revenue and network then we can certainly look at it. And it is definitely a lucrative business. And our work -- our organization synergy is better because we can -- have got a strong execution strength also. And then post completion, we can do the operation maintenance ourselves. So that way, it jell well with our objectives. But business-wise, the opportunity can be substantial, both in the iron ore handling and the coal handling.

Okay, sir. That really sounds great. And one more thing, sir. You mentioned that only 5% of revenue is from outside India right now. So around 90%, 95% is within India. So I just wanted to understand the business profiles in the foreign countries and Indian entities, where do you think there is in terms of like more opportunity with better margins? Because I believe there is some working capital constraint as well, right, in terms of number of days or receivables and stuff like that. So if you could just put some light on this, please?

International, sir, we are -- right now, used to do the ETC jobs outside, and we completed all the ETC jobs. And some of the countries, where repatriation back that money back to India is again the difficult challenges we faced in Bangladesh and some of the countries. So we stopped doing all ETC outside, and we are only focusing on the O&M business outside India. All Gulf countries and Nigeria, we completed the ETC, and we have just started the O&M service and manpower supply and overhauling activity, where we are getting good margins in O&M than the ETC. So we are more focusing on the ETC business at this moment. There are a lot of opportunities are available internationally, but we are pursuing with -- based on the profile and clients. So we are now bidding for one case of Fujairah, where material handling work, we are now bidding along with the Thyssenkrupp. So we are looking at the better opportunities. But at this moment, we are only focusing only on the O&M and overhauling of the power plants.

Okay. But where are the better payment terms within India or outside like because I don't know how large our operations are there in terms of manpower handling and all that, like the payment terms I was asking, sir.