PSP Projects Limited (PSPPROJECT.BO) Earnings Call Transcript
February 7, 2020
Earnings Call Speaker Segments
Ladies and gentleman, good day and welcome to the PSP Projects Q3 FY '20 earnings conference call hosted by Asian Markets Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amber Singhania from Asian Markets Securities. Thank you, and over to you, sir.
Good afternoon, everyone. On behalf of Asian Markets, I welcome you all for 3Q FY '20 earnings conference call for PSP Projects Limited. We have with us today, Mr. P.S. Patel, MD; and Ms. Hetal Patel, CFO, along with their team, from the company's side. We would like to start with a brief update about the company and the results from the company side, and then we will proceed for the question-and-answer session. I now request Mr. Patel to take us through the quarterly results and thoughts about the company, and then we can start with the question-and-answer session. Over to you, sir.
Thank you, Amber. Good evening, ladies and gentlemen. This is P.S. Patel, Chairman, Managing Director and CEO of PSP Projects Limited. I welcome you all to this call, which focuses on our company's performance in quarter 3 and 9 months of FY 2020. So as usual, before we move to the financial statistics and performance of quarter 3, I would like to throw a light on few of the key developments of this quarter. Company bagged orders worth INR 271 crore in this quarter from government, industrial, institutional and residential sector. The major awarded projects includes design build project of Sabha Hall and residential complex for a trust in Ahmedabad, that is INR 104 crores, industrial projects by an MNC FMCG worth INR 99 crores, construction of a private school civil plus MEP at Ahmedabad, about INR 27 crores and construction of civil plus MEP for a redevelopment of a corporate office of a limited company, which is in the fertilizer section of INR 18 crores. I'm happy to share that out of the total 4 projects awarded contracts, there are 3 projects, either design built contract or composite package, including MEP. So steadily, we are seeing growth of our shift of projects in our hands, in our order book from just civil contracts to contracts with all services and allied activities. I'm also glad to declare that post quarter 3, we have been awarded a prestigious project of Shri Kashi Vishwanath Dham beautification amounting to INR 339 crores, which was [Foreign Language] ground breaking was done on 15th of January. We have already started mobilization, and at the same time, we have already started piling work which is going on since last 8 to 10 days. So the amount of total projects awarded in this year is INR 1,552 crores till date. This does not include a project worth INR 307 crores including GST. There we have stood lowest and which is not included in the above INR 1,552 crores. We have successfully completed 12 more projects this quarter, which is higher in a single quarter so far. This took our number of completed projects to 142. Major completed projects in this quarter includes our first design build industrial project for pharmaceutical company, corporate house for a leading pharma company, institutional project for an institute based at Ahmedabad. So company's outstanding order book as of 31st December, 2019 is INR 3,078 crores, including 43 projects under execution without Surat Diamond Bourse work on hand is INR 2,290 crores. In the above INR 3,078 crores, the orders which we have declared post quarter 3 is INR 339 crore Kashi, INR 42 crore on interior project of Leela Palace and Leela Hotel at Gandhinagar and one more project which we already declared at lowest, it will also include all of these projects. Total outstanding order book comes to INR 3,766 crores till date. We also have a big pipeline worth INR 1,000 crores from various -- from industry and institutional sectors. Company has booked INR 423.07 crores revenue from operations of this quarter, where we have about 61% year-on-year growth. As an update, I would like to brief you about Surat Diamond Bourse work project, which we have been seeing since last -- which we have been doing since last 2 years, and we are expecting this project to complete by December 2020. Presently, all the activities, which was related to finishing has already been started. Almost the activity was still getting completed by next month. We have already started flooring on the initial 5 blocks. We've already started the development work for all the podiums. We have already installed about 48 elevators and the rest of the elevator work is in progress. So this is all update about Surat Diamond Bourse. So these are the key highlights from my side. For detailed financial disclosure, I will request our CFO, Hetal Patel, to take it forward. Thank you, everyone, to be a part of this call.
Thank you, sir. Good evening, everyone, and welcome on the call. Let me first give you highlights on stand-alone financial results for the quarter ended on December 31, 2019. Company has recorded revenue from operations of INR 423 crores for quarter 3, which has increased on Y-o-Y basis by 62% compared to previous year's third quarter revenue of INR 261 crores. The revenue generated from Surat Project was INR 191 crores during this quarter. Total revenue booked for Surat project till 31st December, 2019 is INR 787 crores. So company has executed 50% of the total contract value of the Surat project. EBIDTA for quarter 3 is INR 54 crores, which has gone up Y-O-Y basis by 47% compared to previous year's third quarter EBIDTA of INR 37 crores. Profit after tax, including other comprehensive income for the quarter is INR 36.74 crores which has increased on Y-o-Y basis by 71%, which was INR 21.48 crores in third quarter of the previous year. PAT margin stood at 8.57% for quarter 3 FY '20 and 8.95% for the 9 months ended on 31st December, 2019. As of 31st December, 2019, the company had free deposits of INR 38 crores, FDs worth INR 117 crores are under lien with bank for credit facilities and FDs given to client as security deposits amount to INR 14 crores. We'll also brief about working capital base on stand-alone basis. Debtor days are 54 days, payable days are 51, and inventory days are 25 days for the 9-month period. Work-on-hand as of 31st December, 2019 is INR 3,078 crores, which comprises INR 788 crores from Surat Diamond Bourse project and INR 2,290 crores for other projects. With this, I end up giving key highlights for the company's financials, and now we are open for the question-and-answer session. So request the moderator to take it forward.
[Operator Instructions] The first question is from the line of Utsav Mehta from Edelweiss AMC.
Two questions. First one, just a simple bookkeeping one. What is our loan and outstanding debt and cash balances at the end of December?
See we haven't finalized the balance sheet, but yes, I can give you the idea about loan outstanding, our current borrowing. Short-term borrowing is INR 70 crores, which is in line with September financials. And we -- yes, we have borrowed some equipments on long term loans, so that will be long-term loans will be around INR 5 crores.
Okay. Okay. And any sense on cash in the bank? So we had around INR 220 crores.
We -- around -- I have already briefed you about the FDs. The total FD outstanding in the books of company is INR 229 crores approximately.
Okay. Okay. So ma'am, this broadly seems in line with what we had at the end of September, and lower than what we had on a net debt basis or a net cash basis at the end of 31 March. I was wondering, is that the incremental revenue is not getting translated into cash. Is our working capital getting stretched?
See we have -- our plant and machinery has also increased. We have invested around INR 14 crores of plant and equipment during this quarter. So there also some of the money has been passed.
Okay. And totally, 9-month CapEx would be?
Total CapEx would be around INR 24 crores.
Okay, understood. And sir, my next question is on our Maharashtra projects. I just wanted to sort of get an update on anything that has changed as far as execution time lines go post the Maharashtra elections?
No time line has not changed, but we were waiting for some approvals. Initially, the project was delayed by 2 to 3 months. And then later on, we have to go for the approval of [ APDC] and [ CC ]. Now presently everything is in line and we've already started mobilization. So probably by next month, we'll be in the position to start something else.
Okay. So you would say that work on this project would start in FY '21? So let's say, by second quarter -- third quarter it should start full fledged?
Yes.
And sir, the working capital on this project, would this be in line with the rest of the company? Or would this have a 10% retention element to it?
It is not 10% retention. I think it is 5% retention only. But in terms of working capital, there is no mobilization amortized in this project. Because none of the government project is carrying any mobilization order. So at least the first initial investment was the CapEx and 2 months' receivables will be an investment, which will not be more than INR 10 crores to INR 12 crores, I would say.
The next question is from the line of Chintan Sheth from Sameeksha Capital. As there is no response from the line of Chintan Sheth, we'll move to the next question from the line of Nihil Parekh from Dhanki Securities.
Sir, this is Kaushal here. Congratulations on the good set of numbers. Sir, if I look at the quarterly run rate that we are doing and if I exclude the SDB project, that number has basically remained fairly constant at around INR 220-odd crores. So what I was wondering was that once this SDB in the next 2 quarters, substantial execution will be done. So are we in a position to ramp up the current orders so that our quarterly revenue run rate does not reduce? That is question #1. The second is on the fundraising plan that we had. If you can just share any details, if at all?
If you see the projection for the new order book which we gave for this year was in the range of INR 1,500 crores, out of which we have already reached INR 1,550. And if we consider the INR 307 crores L1 order, it will be in the range of INR 1,700 crores, INR 1,800 crores. So there won't be any issue related to ramp-up of the sales. I don't think any issue related to that. And regarding fund raising still we are in the process, we have not concluded anything now.
Okay. And on the SDB project, sir, roughly INR 800 crores is pending and we have 4 quarters to execute. So that given our Q3 run rate, I'm sure we should not have a problem in doing an additional INR 200 crores run rate per quarter, right?
Yes. Probably, we can consider that because most of the things will be now fit out. So the revenue will be more compared to other quarters, wherein the civil type or civil work was more, now the fit outs and MEP work is more, so there will be revenue in the range of INR 150 crores to INR 200 crores, yes.
Okay. Finally, sir, you mentioned that the new order wins that we had, that are including MEP. And so for the next year, can we expect a slightly better margin profile for us?
There is no point on better margin as far as the bidding line what we are having in the competition, which we are having. So even if we can maintain the same ratio, I would be happy, because still we have been in the market as a selected contractor by selective clients. So I think we can maintain the same margins will be good for a company like us.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Sir, congratulations on good set of numbers. Sir, can you give me the breakup of the revenue this quarter. So INR 190 crores you said was from SDB. So what are the other projects which have contributed to the revenue?
See there are other projects like Dahod project. We have one major significant project at Dahod hospital also. That is also contributing certain amount in the revenue.
That is one project. There are...
There are so many other projects are there.
But roughly like what are the 3, 4 big projects which would have contributed like besides the SDB?
Major projects if you consider in the company, we are presently doing about this high project for Zydus Group which is an order book of more than INR 550 crores. So most of the revenues after the SDB comes from Zydys Group from their R&D centers and hospitals. Secondly, the revenue comes from DDIT, and revenue comes from this [ IM ] also, which we have started since last 3 months. So these are the major projects on which these revenues come.
Do you have the numbers handy right now? I mean, [ IM ] or...
No, I haven't got any numbers right now in detail about which are the projects and what is booked for each of the projects because in total, it is 42 projects.
Okay. Okay. The second thing is basically on the Sterlite and other projects. Any update on the bid sir, SR and Sterlite? What has happened there? I mean, what stage of...
Which Sterlite? Which project?
Sir, this SR. You had one project in SR.
No, no. SR project had been scrapped off. We are not -- we haven't heard from SR since last 6 months. So we do not consider that as a part of the bidding book also.
Okay. And what will be the -- now after this, we have significantly completed almost 50% of the SDB project. So what would be our qualifications, like if you have to bid for the government projects now? So how much be the certified qualification as of now?
I think at the end of the project, we should be in the range of quoting for minimum INR 3,000 crore project figure. And even in between, there is a tender and if you have completed more than 60% of work, I think, it would be in the range of bidding of more than INR 2,000 crores.
INR 2000 crores. In this INR 190 crores of SDB revenue which you have recorded, how much would be the bought out items, like you said, that lift and all you have basically this quarter you deployed there. So what ...
I think that detail is not with me.
Because your margin seems to have come off. So I'm wondering that maybe because...
It is about INR 40 crores INR 50 crores. [Foreign Language]
And on the guidance side, sir. How much, now what will be the run rate we are looking at FY '20 now full year and for FY '21, if you can just tell me that.
[Foreign Language] What are your -- I did not get your question.
Sir, how much is your revenue guidance now for FY '20 and '21, because this quarter has been very robust? So for FY '20 and '21, what is the revenue guidance?
It will be in the same range of whatever we have been performing till today.
So this quarter, you have done INR 400 crore. So looking at INR 400 crore for fourth quarter?
It can be in the range of INR 400 crore to maybe less, maybe more.
Okay. And next year, sir, 10%, 15%, 20% growth, what are you looking at for FY '20?
Yes, 10% to 15% or more than 15% growth we can expect.
The next question is from the line of Ravi Naredi from the Naredi Investment.
Again, Patel, it is a very good quarter indeed in this top line and bottom line, everything you are doing in the right way. Sir, any L1 project that we're likely to get in near future which can be converted into confirmed project?
Which we have already declared INR 307 crores where we were L1 and we are expecting that order to come.
Except that INR 300 crore, no other L1?
No.
Okay. And sir, secondly, Surat Diamond, when we are likely to complete this project, time lines?
Time line for the project has been extended from 30 months to 40 months, but we are still targeting to complete the project in 36 months. So probably I'm expecting this should get completed by December 2020.
Okay, 2020 December we will be likely to complete it, right?
Yes.
The next question is from the line of Dushyant Mishra from Sageone Investment.
My question is more on the side of where you see your cash situation. Once you complete a certain amount of this SDB project you said you will qualify for INR 2,000 crores project. Is there going to be a need for more cash infusion or you going to go forward to QIP situation? Or are you going to take on more debt? I just want to understand if there's going to be a change in your cash situation going forward to qualify for these large projects.
Sir, can you repeat your question. I'm not getting clearly what your question is about.
Sure. My question about your cash situation. You said that about 60% completion of the Surat Diamond Bourse project, you'll qualify for projects of INR 2,000 crores to-date. Is there going to be a need for more cash for your projects because right now, as you said, there's about INR 229 crores. So is there going to be a change in that? Will you need to take on more debt to qualify for bidding in these projects or no?
Actually, there won't be much cash required as far as working capital is required, but there will be a requirement in terms of cash if we are bidding for large size project. Non-fund based bank guarantees, which we require, which we have to enhance if we are going for large size project, and therein we may require margin, which is in the range of 25% to enhance our bank guarantee -- requirement of cash as a working capital.
[Operator Instructions] The next question is from the line of Aayush Sharma from Edelweiss.
Congratulations for a very good set of numbers. Sir, 2 points I missed. Sir, firstly, what was the order inflow in Q3? And how much have you kept it out in terms of the L1 orders?
I have already stated in my opening statement. I have said that it is INR 271 crore was the inflow order in quarter 3 and INR 339 crore [ facility ] order and INR 42 crores interior order and INR 307 crores for L1.
Sir, has the payable days increased slightly this time? Or has it remained similar to H1 levels?
4, 5 days is the difference I think.
Yes.
I think there is a difference of 4 to 5 days compared to last quarter.
Sir, any major reason? Or would it stabilize going forward?
No, nothing major reason. No reason.
That next question is from the line of Shravan Shah from Dolat Capital.
Congratulations for a good set of numbers. Sir, I understand you've already said that QIP is still in process. So 2 things. Why it is -- what is still that are stuck? And second, are we still open for both date and equity or slight -- maybe our focus would be, maybe we can go for a date?
We have the things. We have 1 year permission for this. So we will think about it at the right time, and we'll do it right time at the right -- in the right way.
Okay. And sir, would you like to give any update on the Central Vista? Has the tenders came or when it will likely to come? Because last time you told that maybe by this January and February?
See whatever we have heard from the market and what we hear from the newspapers, it is probably going to come somewhere in the month of March. Actually, it was supposed to come in February first week. And I think something must have delayed in terms of preparation of the standard document, so still we are waiting that let us hope it comes in March.
Okay, okay. And sir, this INR 307 crore of L1 order, that is from the GIDC Gift City, that is the one...
Yes, GIDC Gift City tower which is the -- GIDC Gift City tower [ head count ].
So that most likely would be there by this March. So apart from that, in terms of what kind of other orders that we are looking maybe in this February and March, how much more -- what is the pipeline -- bid pipeline for this 2 months? And can we expect INR 300 crores, INR 400 crores inflow apart from this L1?
We are going a bit conservative also and at the same time we may bid to cover INR 800 crores to INR 1,000 crores. And most of the projects are in process. So probably we can add up to maximum INR 100 crores, INR 200 crores, that's the what maximum I can see.
Okay, okay. And next year, we would be comfortable in the same run rate INR 2,000 kind of order inflow can be -- that kind of opportunity are there?
Yes, we can consider along that line.
[Operator Instructions] The next question is from the line of Dhiral Shah from PhillipCapital.
Sir, there is a press release stating that we have appointed Sagar Prahladbhai Patel as an Additional Director.
Yes.
This is the from 1st of November. So what would be the role of Sagar Bhai?
See actually he has joined the company since 1.5 years. He was at site on Surat Diamond Bourse. The project was 18 months and now he has already shifted to office. And presently, he's looking after tendering and contract portion for us to understand how the things are moving in the company.
Okay. Okay. And sir, what has led to this dip in margins?
What is the reason of dip in margin?
Yes. So we used to deliver margins of around 14% and this time, we have seen a margin below 13%, that's why.
Usually that margin is ranging between 12% to 14%. So it depends on what type of project is going on and what type -- during that quarter, what type of activities are going. So I don't think there is a dip in the margins.
It will again bounce back to 14%?
I cannot assure you as of now, but it can be in the range of 12% to 14%. Because it depends on the -- what type of activities are going in that quarter.
Okay, okay. And sir, what is our bid pipeline right now?
The bid pipeline is about INR 850 crores to INR 1,000 crores.
INR 850 crores to INR 1,000 crores?
Yes.
Okay. And we are expecting INR 2,000 crore of order in for next year, right?
Yes.
The next question is from the line of Nihil Parekh from Dhanki Securities.
Yes, Kaushal again, sir. Newspaper reports are indicating some major losses for the diamond industry due to the China coronavirus. Are we facing, it is too early, but are we facing any delays in our payment cycle from the SDB?
Till today, there is no delay. We have also read that news, but I think that industry may have impacted by size of the office which we have been telling you that each office owner is not investing too much per office. So I think that will not impact too much on the payment side from SDB to us.
[Operator Instructions] The next question is from the line of Prem Khurana from Anand Rathi.
And congratulations on very good set of numbers. Sir, just want to understand on your U.S. exposure. I mean, have you seen any movement in terms of inventory liquidation? I think, we want to sell some units and then use that money to fund the second project...
We are waiting for the same. So it is in the process.
Okay. Okay. So fair to assume it will take some more time?
Probably we were expecting first open house we did it somewhere in the month of November, December. Now we are expecting that to open in February. Let us hope it should be concluded in a month or so.
Sure. And the entire proceeds, I mean, whatever you get in terms of proceeds from this liquidation would go towards meeting the requirement for the second project, right?
Yes. Yes, we can consider this.
Okay. And sir, I mean, assuming -- I mean, assuming, I mean, the project goes a little slow, I mean, liquidation goes a little slow, so how much -- I mean, could there be a situation wherein you would be required to fund the second project? And how much could the amount be in terms of the money that you would have to invest?
We also -- we told you that if we require some more money for that project, it would be in the range of INR 6 crores to INR 10 crores -- INR 6 crores to INR 8 crores, not more than INR 10 crores.
And sir, on the Surat Diamond Bourse, I think we were supposed to receive some incremental work there. Any progress there? I think we were in discussion with the client for the fit out thing so...
We are now doing the interiors of the project, but since we have to handle about 4,200 clients individually, so they have not moved too much on that line. But still client is open, if we can start something on interiors later after March. But here also we are improving everything on 5 to 6 tower then we can even think of that thing but till today, we haven't started anything on that line.
Okay. Also, if you could help us understand the status of Dahej project with Torrent Pharma. I think it was moving little slow and...
Yes, Dahej project is almost now at the verge of completion, but yes, Torrent tower was almost moving slow for 6 to 8 months. Now we have got an [ accretion ] of 4% to 5%, and we've already started full fledged. So now it is on.
Sure, sure. And just one last, if I may. On inflows, I think we've always done what we were targeting for the year-end, including L1 we have already done better than what we were targeting. So how does that change your bidding strategy? I mean, is it fair to assume that now you would look for higher margins, I mean if you're going for any new orders, at least in this year till the time you're firmed up your budget for the next year? Or you're fine with the number that you're bidding with, I mean, you don't intend to take your expectations higher in terms of margin, whenever you bid for a new project now?
It depends on the type of the contract and the client, who is the client. So it is not absolutely always we take a call based on the margins only. Of course the margins -- bottom line, we always consider that this is the lowest margin on which we should do the work. But when we select the contract, we also think about the client whether he is a older client or the existing client. So we take all parameters into consideration while analyzing on the contract.
The next question is from the line of Chintan Sheth from Sameeksha capital.
Congrats for a good set of numbers. Hetal, can you provide absolute amount of debtors payables and receivables for the 9 month end?
Yes. I have -- in my initials, which I have already mentioned, debtor days for this 9 months on a stand-alone basis is 54 days.
64 days?
54 days. Yes, and payable days around 51 and inventory days 25.
25 days. This is calculated on a trailing 12 months revenue, right?
9 months.
Annualized?
No, not annualized, based on 9 months' revenue.
9 months' revenue, okay.
Yes, you can say annualized based on the previous year's numbers.
Okay. And sir, you mentioned INR 6 crores to INR 10 crores additional fund will be required if the -- in the U.S. project, if liquidation doesn't happen in Q4. That's the correct -- I just wanted to check on that statement?
It may be required because if the sale is not happened, and we have to start on that type of project, then only it will be required because it seems that the [ SO ] project we are in the approval stage only. If it comes by November, December then it may not be required. But it depends on when this is sold and when that project starts off.
So you were expecting at $1.5 million for the Livermore 2 units, which were up on sale, right?
$2.5 million.
$2.5 million, okay.
Out of that $1 million we have to pay back to the banks, is on a loan.
$1 million, sorry, I couldn't get it.
$2.5 million is, maybe can be $2.4 million is the total revenue that can come from that project and I think about $1 million, we have already taken loan from the bank for this project.
Okay. $1 million will be repaid to the bank again.
Yes. So we'll have a cash flow of about $1.5 million or $1.4 million.
Net will be $1.4 million. Okay. And sir, in the Bhiwandi, we haven't yet to commission anything, right? I can see some movement in Pandharpur and even you mentioned about Torrent also, we saw some movement this quarter after...
Yes, Pandharpur project is now on full fledged. And since 10, 15 days' time the Torrent project is also on full fledge. So both the projects have started.
Right. And Phoenix also I'm seeing very strong execution this quarter as well as the Zydus, Dahod project.
[indiscernible]
Yes, we got some additional work order apart from the previous order, right?
Yes, we got about INR 40 crores additional order because of the change in FSI, so that is because of the...
How much we have executed so far?
I think we have executed about INR 12 crores.
Yes, it will be more than INR 12 crores...
INR 17 crores?
Yes.
INR 17 crores to INR 18 crores.
Right. I'm also getting that figure only, INR 17 crores in the past 2 quarters after we received the order.
The next question is from the line of [ Ashwin Kritik ] an individual investor.
Congratulations for good set of numbers. And also congratulations on the recent orders that have been won. Sir, my question was like more from a time frame of 4 to 5 years when I believe that currently, we have enough bandwidth to like take a major number of orders from Gujarat itself like a 70-30 split as mentioned in the annual report. I was just hoping to understand that, say, 3 to 5 years down the line when you're looking at INR 3,000 crores to INR 4,000 crores of top line, what would be the kind of split in Gujarat versus outside Gujarat revenues that you would see? And how do we stand in terms of the management bandwidth -- in terms of the top management to like execute at parallel locations? And how do we see ourselves managing the working capital situation arising out of orders having multiple projects like outside of Gujarat?
See now we have an experience. We have been working at Bangalore for 2 projects since last 2 years. And literally, we have already started 1 project in Pandharpur near Pune and third project in Bhiwandi in Mumbai. So we are -- and we have done some projects in Rajasthan also. So we are not 100% focusing on out of Gujarat. But of course, whenever there is a good opportunity, of course, we'll go out of Gujarat when we require revenue top line of about INR 3,000 crores or INR 3,000 crores plus. We have also received an order for Varanasi project. So that's also INR 340 crores project. If you say the total order book, I think it will be 70-30.
Okay. And also, sir, regarding the management bandwidth, the top management to like sort of execute multiple projects in parallel, like, say some, say like when you're like INR 3,000, INR 4,000 crores kind of top line say, 3, 4 years down the line, do we see ourselves like sort of building up the talent pool for that sort of thing? Because you had mentioned some of your interviews that the dependence is more on the top management and the capabilities and like building up the cost base for that rather than the machinery and things like that. So I just wanted some color on that.
I have been always telling that I believe in my middle management more and middle management works from the ground. So we are trying to create more and more processes within the company so that people does not have any problem in terms of execution. So increasing the bandwidth by training the people to processes, we have already appointed Deloitte since last 3 years -- 3 months, who is improving our SOP. And that's how I'm trying to put more and more people into process. So anything in the range of 10% to 15% or 15% to 20% when you are growing, bandwidth cannot be increased to 50%. So same person who is working for a company or joining a company after 3 or 4-years, he is capable to handle a project of 50% -- INR 50 crores, if he is having that understanding of the company's processes. So I am still focusing on more on processes and then on people. And, of course, my son and daughter has already joined the company. They are also focusing more on the management side. So we think that we'll be able to cope up with the management strength.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
You highlighted that you've got a couple of projects in Maharashtra and now outside Gujarat and Varanasi also you have got a project now. So when you into new geography, so there could be business development opportunities in these geographies. So how are you strategizing or planning out of taking more orders in these places? What kind of setup you are doing there in terms of what kind of BD efforts...
Sorry to interrupt, sir, if you can be a bit loud, your voice is not very clear.
Hello. Yes, P.S. sir, could you hear what I say?
Yes, I can hear, I can hear, a bit louder.
Yes, so I was just asking on the BD efforts now you are in the new locations, which you have got projects. So what kind of efforts are going on there to get more projects outside Gujarat and de-risk the Gujarat exposure. So either be it Northern India, like in Varanasi or in Maharashtra 2 projects, or in Bengaluru, we are already doing 2 projects for the last 2 years, but we have not seen any substantial growth in that order book. So just wanted a color on that.
See we are still trying to focus as we were saying that we were keen to work in Bengaluru, Karnataka then we have shifted to Bombay. We have worked on the -- some fronts of Rajasthan. Now we have just moved to Varanasi. So in Northern India, we can focus till UP or Varanasi in UP, Delhi, Rajasthan, Gujarat and Karnataka and Maharashtra. We are not going to -- we are not presently inclined to go towards the East, I would say, like that.
Okay. So what kind of like BD efforts you're already putting in. What kind of people you would have recruited in these locations or everything will be like, again, taken up from Ahmedabad only, so...
No. Actually, what is happening since last 12, 13 years of our journey, we have plenty of people coming in the company out of Gujarat also for the senior level or at the junior level. So upfront when we started on Varanasi, we were having sufficient people from UP itself to move straight to Varanasi. So that type of staff we have been already increasing since very long. So whenever we get such types of opportunities, so most of the staff when we select also, we try to focus on that whenever we have to go out of Gujarat, we don't have a problem in moving the staff.
Okay. So these -- but the location itself will become bigger like as you started small in Gujarat. So these locations over a period of time will themselves become bigger locations, right, for you? So you have a long-term plan for this location. It's not that you're taking just one of the projects just to get orders, but do you have a long term...
No, no. See, what is happening, see when we talk about out of Gujarat, it is always 1 or 2 person going from Gujarat. When we were operating in Bengaluru also, only the project manager and some senior engineers going from Gujarat and the accounts in the store. Rest of the engineering team and the supervisor team will be usually, get the interview there in that local location and basically start from that area only.
No I am saying more the order book perspective, sir. Like in Varanasi, you have INR 300 crores project. So do you see this order book of say Northern India going to INR 1,000 crores or to INR 1,500 crores. Do you have a plan already in mind because...
That visualization in a building construction, I think is not possible. Whenever it comes in the market, then only we focus on whether you have to go in this location or not.
Okay. Because obviously your clients will want you to be there for a longer term. They will like to understand what your long-term plans in that location or region.
You are absolutely right. Every client wants us to be in their location. But again, when we are moving out of Gujarat, we are always going to be a bit cautious also and who is the client and how much potential is this for that project only we focus. We do not focus on the region and how much revenue will come from that region. Because it is always decided as and when that project comes in the picture.
Okay. And on this Bhiwandi project, has the EC -- you've already got the EC, sir, environmental clearance for this project?
Yes. Yes, we have already got.
Okay. And earlier, I was asking about the Vedanta project and [ Essar ], you told me, but what about the status of this Vedanta project, sir. Any update on that?
I think that project is -- we have mentally closed because we have not heard anything from their side since last 2.5 months.
Okay. And just last bit on the southern market in Bengaluru, you have 2 projects. So how is the bid pipeline there? Are you engaging with more clients? And are you bidding there for more projects?
No, we are not -- see previously we were having an opportunity from Brigade Group and then -- and we bidded. Lastly, we had one inauguration of Mercure hotel from Brigade in Gandhinagar. At that time, I was also talking to the Chairman of Brigade. He was telling me whenever there’s opportunities coming, we will bid for them and Prestige Group also will bid for it.
So you will continue to bid for Brigade only?
Brigade, Prestige both.
Okay. And in the Institutional segment, like these commercial offices and others like...
Commercial offices and others like?
Sir, commercial offices, malls or retail malls so are you..
Yes, whatever. First and foremost thing when we are entering into developing business, when you are consulting for a developer, we need to understand who is the developer. We have a very good experience with both of these people. So I think we can have that safe mind to bid for those people.
The next question is from the line of Shravan Shah from Dolat Capital.
Sir, what is our current fund base and nonfund-base limit? And how much is utilized?
Yes, current total limit what we are having right now is INR 610 crores. And out of that, around INR 175 crores is outstanding.
Pardon, INR 175 crores?
Yes, outstanding.
Is unutilized?
Yes.
Yes, unutilized.
Okay. So this is combined now, you are saying fund and nonfund, okay.
Yes. Our fund base limit is convertible to non-fund base. So as and when we require bank guarantee we can utilize that.
Secondly, sir, just wanted to understand, excluding SDB order book, so remaining is INR 2,300 crore. What is the execution period? Is it less than 2 years? I'm trying to understand now in how many 1.5, 2 years can we complete it?
No, it is 2 years. Because if we consider that Bhiwandi project and other like projects, we’ll at least having more than a minimum 2 years. So we can consider the total outstanding order book except Diamond Bourse can be for 2 years.
Okay. So Bhiwandi is 36 months, so rest would be you are saying is 2 years.
I'm saying average. So some of the projects will be having about 1, 1.5 years.
Okay, okay. And sir, this 9 months, we already done INR 24 crores CapEx. So this year additional can be -- how much additionally are we planning to do? And next year, how much CapEx and so definitely it depends on what kind of orders we get, but just a broad range?
Yes, it will be in the same range, what we have been seeing. It will be in the range of 3% to 4% of our revenue. But this year, we may go below 3% also.
The next question is from the line of Sumit Modi from JM Value Investment.
Sir, this quarter, in Q3, the revenue recognized on SDB is close to INR 190 crores. So is it because of the higher proportion of equipment that got -- the higher proportion of equipment component because of which the margins are low because the margins have been at a 10-quarter low?
Margins are at a 10-quarter low?
Yes.
See that is overall margin you are talking about.
Yes.
Yes. So SDB projects net revenue, maybe due to the equipment -- elevators installation and all but overall margin may depend on other projects also. I mean new projects are...
What type of activities are going at that time in the quarter is considered.
Sorry?
What type of activities are going in that portion in that quarter which we are considering. So depending on the activities as you are seeing MEP, of course MEP maybe sharing some less profit, so that can also be a criteria, but sometimes what happens other finishing activities can have -- carry more profit also. So on an average out, we always say 10% to 13% and it changes between that.
Okay. Sir, also, given that we have some close to INR 780-odd crores of pending revenue to be booked, which you are saying will be booked in the calendar year of 2020. So that amounts to around INR 200 crore again for every quarter on a run rate basis. So would that also have some sort of large amount of equipment proportion because of which margins can be moderate?
So now there is no -- equipment side, we do not require anything more. Because most of the things we have -- building contracting firm will require -- contractor initial stage of the project, which is machinery and the shuttering material. Now the major structure is over, we have already shifted our 1 plant to Varanasi. So the things on the CapEx side will be start moving from that side. And the major activities which is going is MEP and which is a bought out item and fit out item, so we won't require too much CapEx to completely take this around -- when it is around.
The next question is from the line of Jitendra Rushi of BOB Caps.
I just wanted to know the revenue breakup project-wise and region-wise for this quarter.
We are not ready with that figure. So can you call Hetal later and she will be ready with that figure.
We are having around 43 projects, 45 projects execution, so it will be varying. We are showing major SDB project revenue on the call.
I will take it offline.
The next question is from the line of Pratik Kothari from Unique Asset Management.
Good afternoon, just one question on bid pipeline, which was about INR 3,500 crores at the end of FY '19 has come down to -- I think you mentioned on the call INR 850 crores to INR 1,000 crores. So what has happened here? I mean, why is our pipeline shrink so much?
When we're talking on that side, we have been always mentioning that Essar project and the Barmer project. Since both of these 2 projects are totaling to about more than INR 1,000 crores. And that we have now considered and that is not going to come back again. So we have outstanding order type declines as of now, still on the work.
Okay. So then, at that time in March, we had these large projects, which are not going ahead?
Yes, we were considering and that Delhi was also fluctuating. When they came up with the tender, it was about more than INR 1,500 crores project. Then they came up to INR 1,000 crores, then they came up to INR 500 crores. So we were also not sure what the exact size of the project we will be getting.
Fair enough, sir. But do you have enough visibility to continue the current run rate or order flow that is there?
Yes. Yes, yes. We don't have the problem in terms of visibility. Amber, are you online?
Yes, sir. I am there.
So because I have to leave at 5 o'clock, can you continue with Hetal?
Okay. So we'll take last 1 question, sir?
Okay. No problem.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Just 1 question on what is the 9-month FY '20 revenue of SDB, total revenue for 9 months?
9 months is INR 372 crores.
INR 372 crores for 9 months and out of that INR 190 crores is in this quarter, right?
Yes. Amber, thank you very much to all of you. I have to move now. So...
Yes, sir. You may proceed with the closing comments.
Thank you, everyone. On behalf of Asian Markets, I thank everyone for joining this call. And special thanks to the management of PSP Projects Limited for providing the insight about the company and business future outlook. Thank you. We conclude this call.
Yes, thank you, everyone.
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