Financial assistance — concessional loan?
Many parts to it; not appropriate to comment further. Will keep posted.
Hydrocarbon competitive intensity and strike rate?
Off-late high competitive intensity — won't compromise margin to win. Some slip-ups but bullish on balance 9 months pipeline.
Nabha Power sale timeline?
Won't comment on timelines. Both Nabha + Uttaranchal up for sale; talks with prospective investors. Hopefully developments soon.
Can we get back to Q2FY20 sales levels without third wave?
Maintaining low to mid-teens revenue guidance assuming Q2 normalcy. Should see stronger numbers in Q2 onwards. Better positioning to manage third wave even if it occurs.
So, from infra or hydrocarbon, it is not going to be possible to give those split ups?
At this juncture for some reason, see we keep it at the overall segment level, Subhadip.
Are we sticking with the 12-15% order inflow / revenue growth guidance and stable core EBITDA margin guidance?
Yes — guidance maintained at low to mid-teens for both order inflow and revenue assuming Q2 normalcy onwards. Margins for ex-services and ex-concessions business at ~10.3% (FY21 level). Confidence from Rs.3tn+ order book and economic recovery.
Middle East / Africa Hydrocarbon, Power T&D — improvement that supports 20-30% intl share of order inflow?
Hydrocarbon prospects Rs.1.8tn — 70% intl largely Middle East. Power T&D prospects Rs.1.07-1.08tn — 60% outside India (Middle East + Africa).
Hyderabad Metro relief from government — refinance first or new investor first?
All measures parallel, not sequential. Telangana discussions positive — financial assistance (govt very easy to extend concession period 60yr but doesn't help). Investor talks ongoing for equity. Also exploring refinancing existing debt with extended tenure to reduce near-term cash support. TOD monetization (18mn sqft) also pursued. Won't put timelines but better position by Mar22 expected.
Will Rs.2,000 crore cash support be enough?
That is the plan. Rs.500 crore given in Q1; Rs.1,500 crore balance. Visibility of closure on resolution measures by end FY22 expected.
AP receivables update — Rs.1,800 crore + Rs.100 crore ECL — any improvement?
Net exposure now Rs.1,200 crore. Discussions with state agencies ongoing. Some AP projects multilateral-funded — possible revival. Partially recovery, partially attributed to higher provisions.
Order prospects added since March — where from?
Hydrocarbon prospects up Rs.1.44tn → Rs.1.81tn. Largely 71% intl driven by oil price recovery. Infra reduced from Rs.6.97tn → Rs.6.40tn (orders awarded out).
What gives confidence COVID impact will be insignificant ahead — workforce status, intl execution?
April-May avg 170K (drop of 30-40K vs typical 210K); end-June 235-240K vs Q2 peak need 250K. Execution assumes no economy-impacting lockdowns. Despite severe second wave, manufacturing/site execution didn't get hit as much as Q1FY21. Intl execution at near-pre-COVID; no labour issues. Some intermittent supply-side constraints.
Is mobility from India to Middle East impacting execution?
Middle East returned to normalcy from August-September 2020 — no labour exodus issue like India. Site labour stayed put.
HSR project — on-ground mobilization status; revenue contribution timing?
Work commenced February 2021. Four-year deadline starts Jan 2021. Land parcel acquisition done (15-16 parcels for batching plants). Major revenue accretion in Q4 FY22 and largely FY23 onward, not current year.
Development projects debt — Rs.20,600 crore down to Rs.18,700 crore — where?
Nabha debt down Rs.1,250 crore from favorable settlement (recovered stuck client money). Hyderabad Metro third-party debt down ~Rs.600 crore (replaced by L&T cash support).
Coastal road execution and margin recognition status?
Coastal road 32% complete; margin recognition usually upwards of 25% — already recognized.
Quantum of one-time claim in Hydrocarbon margin?
One-time claim ~Rs.90 crore. Claims/settlements are recurring — happen across segments every quarter.
Core ROCE back at 21%+ levels post FY21 — how should debt taper?
Stopped using 'core' word — now ex-services-and-concessions. Target 10.3% margin for FY22. Working capital at group 22.3% guidance; core could slip slightly higher (~25%). Endeavor to improve ROCE.
Gross debt reduction by year-end?
Yes objective is to reduce parent debt sequentially. Q1FY21 pre-emptive Rs.12,000 crore borrowing being unwound. Liquidity balanced against working capital needs; rest to retire maturing debt.
Infra margins healthy — any provision write-back?
Infra Q1 7.1% vs 6.3% Q1FY21. Improved execution despite second wave; steel price increase factored. Variable-price contracts mitigate cost increases. Margin recognition crossings across multiple projects + volume recovery improves overhead absorption.
Coastal road — driver of margin improvement?
Not just one project — Infra has ~600-700 projects under execution. Combination of volume + claims/counterclaims + project mix drives margin.
P75I submarine — technology partner readiness?
P75I cleared by Defence Advisory Council. RFP issued July 20; 4-month response deadline. Need technology partner — should not be problem for L&T.
NWC absolute numbers, ROE ex-E&A, Hyderabad Metro debt/equity?
Core (ex-services-concessions) NWC Rs.21,000 crore → Rs.22,000 crore (+Rs.1,000 crore). Group consol NWC Rs.27,000 crore → Rs.29,500 crore (+Rs.3,000 crore vendor payouts). Group NWC/sales 22.9% slightly better than internal estimate. ROE ex-E&A gain ~11-11.2%. HM debt Rs.13,500-13,600 crore; equity Rs.2,541 crore; cash support Rs.5,000 crore.
Core NWC/sales level?
Around 25% at core (ex-services-and-concessions) level.
Hyderabad Metro support — Rs.2,000 crore plus prior Rs.1,000 crore?
Last year Q2-March infused ~Rs.1,000 crore. This year Rs.2,000 crore set aside; Rs.500 crore in Q1 already deployed.
Realty PAT contribution in Q1?
In Other segment, Realty Q1 revenue ~Rs.330 crore; PAT ~Rs.100 crore (basis number). Refer segment results for IT&TS.
Headwinds beyond labour — right-of-way / environmental clearances?
Internal estimates based on active order book. With no third wave, low-to-mid-teen revenue growth. By end Q2 better position to put a precise number.
Defence margins — contingency release quantum?
Not material. Defence margins ~20%; combination of jobs in closure with last contingency releases.
Where is Nabha Power margin recorded post non-recognition?
In Q2FY21 group capped Nabha carrying value at realizable value. Now we take Nabha revenues and costs but don't factor margins — margins impaired in schedules; carrying cost held same unless higher/lower realization.
Margin improvement driver — overhead absorption material enough to offset RM cost increase?
Direct project staff costs and other operating expenses largely fixed — site productivity output enables billable cost recovery. Higher recovery as share of revenue reduces these line items. Plus claims/counterclaims/ECL provisions/reversals contribute.
Quantify variable-price share of Infra/Hydrocarbon order book?
Group level Rs.3.23tn order book — 40% fixed-price, 60% variable-price.
Repeat 80% domestic order book breakup?
Central 9%, State 31%, PSU 43%, Private 16%.