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00:00We are joined by the management of Patel Engineering, Kavitha Srivakar, MD of Patel Engineering
00:07joins in.
00:08Kavitha, good morning.
00:09Thank you very much for joining us.
00:11The company has been in use for the recent big order that you won in the hydro project
00:15space.
00:16But before I talk to you about that, our condolences, I believe Mr. Rupin Patel passed away, but
00:22two months ago, it must have been a big, big shift and move.
00:26I hope things are okay.
00:27Yeah, yeah.
00:28All things are okay.
00:30Thank you, ma'am.
00:32See, we are a 75 year old company.
00:35We have till now completed more than 250 projects.
00:38So it demonstrates our execution capability and we have a strong team of engineers, technic,
00:45all technocrats.
00:47So I think the show must go on and we are executing the projects at full speed.
00:55I think we completed T-14 and T-15 project.
00:58It's a part of a railway.
01:02So things are fine, ma'am.
01:03Thank you so much.
01:04Good.
01:05Good to hear, Kavitha.
01:06We are hoping for and good luck, of course, going ahead as you take on the realm of affairs.
01:12But good news has come in a few days ago.
01:14You managed to bag a big bang hydro project order and the government's focus on this is
01:20something that's kept Patel Engineering also in the news.
01:23So lots of tie-ups, lots of activity.
01:24You want to walk us through what's going on and how is business at this stage?
01:28See, recently, you might be aware, we have a tie-up, we have signed MOU with RVNM.
01:36It's a PSU.
01:38So it's a first collaboration between public and private partnership to execute future
01:43hydropower projects, large value projects and other infrastructure projects.
01:51What is the size of this collaboration, the size of the business that you will do with
01:55RVNL, ma'am?
01:56See, it depends on the whichever projects.
01:59See, it is a collaboration, it is a joint venture.
02:02Okay, for future projects, we will bid jointly for the large hydro projects and other infrastructure
02:08projects.
02:09That's why it depends on the projects.
02:10What will be the revenue share between you and RVNL?
02:13What are the sort of financials that have been worked out?
02:16That will vary based on the project to project, ma'am.
02:19Ma'am, but there must be some broad outline that you all have agreed upon?
02:24It is depending on the project which we get.
02:28We will bid jointly for the project.
02:30Okay, let me just ask you a bit about, Kavita ji, your order book.
02:34And I was looking at your order book for Q1 FY25.
02:37There's already an order book at Rs. 17,901 crore.
02:43What is your outlook for the full financial year?
02:46Because your FY24 order book in totality is about Rs. 18,600 crores.
02:51See, our order book is around Rs. 18,000 crore.
02:5560% coming from hydro, around 21% from irrigation and rest from other sectors.
03:02See, going forward, we see huge opportunity available in the sector where we operate in.
03:08Hydro itself, there is a potential of 133 gigawatt in India.
03:13So far, project development is around 46 gigawatt.
03:17Balance, around 90 gigawatt, there is a potential.
03:21Out of that, 30,000 megawatt project is already announced for the bidding in near future.
03:29So, we are targeting to bid for large hydro projects, plus irrigation, plus tunneling.
03:36And we have already shortlisted, identified around 50,000 worth projects,
03:42which we are going to bid in near future.
03:45So, in this financial year, what is the number you've earmarked, Kavita ji,
03:50in terms of your order book?
03:52You're already at Rs. 18,000 crore at the end of this FY25.
03:57Where do you expect to be at?
03:59So, we expect in next year to add around 10,000 to 15,000 crore order book in next FY25.
04:08Got it.
04:09Mr. Shirvaikar, good morning.
04:12You know, amongst the other ideas to talk to you was also this large order win that NHPC had
04:18wherein they have signed up for a 7,300 megawatt set of projects with Maharashtra.
04:23I'm sure if it's happening in Maharashtra, it's happening elsewhere.
04:26Now, when we had spoken to Mr. Rupen Patel at the time of your QIP,
04:29you had spoken about how you have a good market share in this field
04:35and you probably enhance it based on the strength of your balance sheet.
04:39So, one is the order book accumulation that you will get,
04:42two is the execution that you do.
04:44What's the guidance, informal, internal assessment that you may have
04:52about what you would do in FY25
04:55and what you're likely to do over the course of the next two or three years?
04:58So, considering our current order book, FY25, our target is to revenue increase by 10%.
05:07We'll be able to maintain the margin 14 to 15%.
05:11Going forward, as we are planning to add around 10,000 to 15,000 crore new orders in one year.
05:18So, we see going forward from FY26 onwards,
05:22there will be revenue growth we expect 15 to 20%.
05:26Okay. So, if the order book is so strong, why is it just a 10% growth number?
05:32Are there execution issues or are projects at the beginning stage
05:37because of which it's taking time, Ms. Sherbaikar?
05:39No, it is as per schedule only.
05:42See, as last year, because of election, order book was subdued.
05:46We see now going forward, it is going to pick up.
05:50So, considering that time cycle like hydro, we have 60% where the time cycle is 4 to 5 years.
05:57Considering overall, we expect this year FY25, 10% growth.
06:02What about the PSP vertical?
06:05There's also a big push coming in from the government on PSP
06:09and that also contributes to your top line.
06:12I know that you're optimistic on the growth numbers there.
06:14How well do you see that playing on any big conversations,
06:17bids that are currently underway for Patel Engineering in the PSP vertical?
06:21See, as you all are aware, last budget, government completely focused on
06:26renewable energy and development of power storage power projects.
06:30Ministry of Power has already, you know, there is a potential of 60 gigawatt
06:36which is under survey and investigation.
06:40NHPC signed MOU for 7 gigawatt.
06:43THDC recently signed MOU for 6 gigawatt.
06:46Other private players also have shown the interest in signing MOU with the government.
06:51It is to meet the picking power requirement.
06:54So, we see huge opportunity being a hydro player there itself also.
07:00And we have already shortlisted certain projects which we are bidding in near future.
07:05Kavita, you also have significant project exposures in the Middle East
07:09and historically, we've noticed that because of stress in that part of the world,
07:14some of your projects have got delayed.
07:16Any concerns there?
07:17What is your international project order book look like?
07:21You want to just walk us through it and any concerns on that front?
07:25See, right now, our focus is in India.
07:28And over in Nepal, India, we are executing one project for SDNL in Nepal.
07:33So, right now, our focus is in India only.
07:37So, one area that you would love to talk about is to tell us about the debt.
07:42You know, there were some concerns a few months ago on the fact that
07:45Patel Engineering, you know, had a fairly high debt.
07:49But we've seen that operationally improve, you've, you know,
07:52consciously reduced and lowered your debt as we see it.
07:55Give us a sense of the debt equity and how much more debt repayment
08:00are you looking at over the course of this financial year?
08:04As you all are aware, we are consistently reducing our debt.
08:09From peak 5,500 to we have reduced to 2,000 crore
08:14and now our current debt is around 1,500 crore.
08:19So, it is a debt equity ratio is around 0.42.
08:24Kavita ji, just a couple of things I want to understand.
08:27So, obviously, a lot of focus on hydropower with various states
08:31and you've just signed a huge set of projects.
08:34You're doing six PSPs with Maharashtra government.
08:37Just want to understand in terms of revenue, the state breakup.
08:41Is the focus and concentration more on some states rather than the other?
08:45Can you give us a bit of a picture there?
08:48Hydro, our focus is, you know, central PSUs largely.
08:53And some other states like we are working from Himachal and other states.
08:59You have a Maharashtra government pact which you've signed for 33,600 crores, right?
09:05It's signed by DHDC.
09:09DHDC has signed six gigawatts with Maharashtra government.
09:14Now, give me a sense of all of these orders that are coming in, Kavita ji.
09:19What is the kind of capex that you would be lining up for this going ahead?
09:23Would you need more capex coming in?
09:26Would you need to raise funds?
09:29Let me tell you.
09:31For hydro itself, there is 1,50,000 crore work is coming in near future for bidding.
09:36In irrigation, we see huge opportunity around 90,000 crore work is coming up.
09:42Over and above, we see dialing also.
09:45There is huge work in pipeline.
09:47So, our current focus will be in these areas.
09:50In addition to that, we will be looking for pipeline work in some of the selected states.
09:56So, overall, overall, there is a huge opportunity.
10:00And right now, our focus is to, you know, we are working on bidding of around 50,000 crore projects.
10:07Now, coming to the fund requirement, as you are aware, we have already raised 400 crores via QIP
10:14in current financial year only.
10:17So, this will meet our working capital requirement for the project.
10:24Ms. Shirvaikar, at least one question from my end is
10:28on how the targets for hydro have been bumped up by the government.
10:33So, would you reckon that this growth rate of between 10 to 20%
10:38is possible for the better part of the remainder of the decade
10:43or you do not have visibility for that far out?
10:47No, we are confident.
10:49Looking at the opportunity available in the sector,
10:51we are confident to maintain the growth of 50 to 20%.
10:55Ms. Shirvaikar, as things stand?
10:58Yeah, as things stand.
10:59No, but do you think you can do it for the next five years
11:02or is it only visibility for the next three years?
11:04No, we can do it for next five years.
11:07You can do it for next five years. Okay.
11:09Great. Ms. Shirvaikar, we'll leave it at that.
11:11Thank you so much for taking the time out and being with us
11:13and all the best for the quarters and the years ahead.
11:17Thank you so much.