Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Ronak Shah from Equirus Securities.

Sir, first of all it was saddened to hear about the unfortunate event. Sir, my question is regarding to the Waste -to-Energy operation. So, into the results highlight wherein you have mentioned currently the operation are under the regulatory review. So, from that context, what is the status? And considering it is a high return churning and high-margin business what can be the near-term impact in terms of the Waste-to-Energy revenue? That was my first question.

On the WtE part, there are 2 operations that are undergoing. The material recovery and composting section has already started operations from 28th of July. We have started processing around 400 tons of waste a day. The WtE plant is expected back by first week of October. During this period, the fixed cost incurred would be in the range of around ₹2.5 crores to ₹3 crore per month for us. So that's like around ₹7 crore will be sitting on our books of accounts. The revenue will start technically from first week or second week of October for us on a full stream basis.

Okay. So, the tipping fee part will be continued, but the power generation and sale part will see some hampering. This is the broader understanding that I got?

That's correct.

Okay. Secondly, from the processing business, if we see the current quarter has seen some moderation in terms of the revenue growth. So, can you highlight the core any specific one -off or specific reason for that? And secondly, when you're calling out inflationary trend which are hampering the current profitability from the Q2 and Q3 perspective, considering current high crude, crude derivative related prices, secondly, the wage hikes which we have seen, how the near -term profitability going to see trajectory in terms of numbers?

So, to answer the first part on the softening processing volumes, that's mainly because of CIDCO bio-mining contract got over in the last quarter. This was a very specific 2 -year project where we were supposed to bio-mine a particular tract of land and that got over. So that is why we are seeing a moderation in the processing content in Q1. Going forward with the Atkoli Project up and running by Q4 of the current financial year, we will be back on the growth trajectory. On the margin profile, we have seen certain cost pressure mainly because of transportation and hiring related items. We expect those margin profile to

slightly improve going forward. It will not be as bad as what we have encountered in Q1. We'll see some respite coming in because of re-negotiation on the terms with the transport entities. On the labo ur front, yes, I mean that is something that has happened recently, we got a new Maharashtra state government revision in DA rates. So, there will be a timing issue of the cost pressure due to the labour front. But since bulk of our projects has got escalations linked in, we see some respite going maybe in the second half of the current financial year.

Okay. So, on a long -term guidance wherein we are likely to post around 22% to 24% sort of EBITDA margin. But from the FY27 perspective, could it be below 20-odd percent considering all these macro factors?

On the processing side, we don't see a lot of pressure coming in. On the Collection and Transport business, yes, because of higher repairs and maintenance costs and a few of our contracts getting old, we see some margin pressure coming in. Having said that, FY27 still has certain upticks mainly because our BMC contract will start from the third quarter onwards. So that has a slightly better margin profile. Our Atkoli capex reimburse will also come in by Q4. That has a higher margin profile. So, the internal threshold should be to go back to our historical margin trend, but yes, it can be a plus or minus a quarter here and there.

Okay. So, in terms of the balance sheet, we have refinanced the loan. So can you highlight the quantum of that? And secondly, there is some ₹15-odd crores sort of receivable, which we have got a favorable judgement from the court. So what is the timeline for that in terms of the receivables?

So, total amount that got refinanced is around ₹140-odd crores at the Lara Renewables end. That is the quantum of that is getting restated at a lower cost. And on the ₹15 crores amount, the amount is still pending. The Corporation is working and they will get back to us shortly.

Okay. And sir, lastly, on the Andhra project, so what is the status on the Andhra project? And secondly, in terms of the C&D, how it is progressing considering current monsoon related some disruption?

So on the Andhra project, we have got pos session of land at both the sites Kadapa as well as Kurnool. As we had indicated in our earlier calls, the technology and the EPC contractor JFE India has already completed the civil designs. We have also appointed the civil contractor and the civil contractor has mobilized its equipment in Kadapa. Kurnool should happ en in the next couple of weeks. So things are going as per schedule. I think NG has already brief to you earlier about the financial closure, which is also almost at the last stage. So we are confident of completing these projects as per schedule.

C&D actually has recovered. I mean BMC came up with 2 policy decisions, which ensured that all the large builders start sending part of their construction demolition waste to the processing plant, which means that it became mandatory on their part, on the builders part to get their waste processed. So that has really helped us in achieving the tonnages that was a problem in the initial year. Now we are getting close to 600 to 650 tons per day, and we have a capacity of 600 tons per day, plus or minus 10% that we can process. So, I think that plant has started giving better financial results.

The next question is from the line of Manish Agarwal from Tradeswift.

I have a couple of questions. My first question is, sir, can you give a brief on CIDCO bio-mining project? Can you explain the economics of the project like revenue expected margin and transportation cost per ton? What I actually want to understand is this ₹10 crores incremental transportation, which we incurred in Q1, how much was timing related and how much in the project cost?

So the revenue model for the bio -mining project is basis the tipping fee that we get from the client plus the sale of RDF revenue that we get by selling it to the cement companies, okay . So these are the 2 revenue streams. And the cost is the cost of transportation that you incur for paying to the transporters and disposal of inert in the low-lying areas.

Okay. So is this ₹10 crores incremental just for 1 quarter or is it like increase in the project cost itself?

It's a cumulative effect. So what happens when you do bio-mining is as and when you bio-mine a particular area, the inert are kept aside and you dispose of the RDF material to the cement companies, as Mahendra mentioned. Now after the project nears this end, there are a lot of inert which cannot be sold to cement companies because they need RDF and not inert. So the last quarter was reflective of the disposal costs related to the inert to low-lying areas as earmarked by the corporation and the authority. So the last part of any bio-mining contract would see a jump in transportation/disposal cost. Similarly, in what we have incurred in Greater Noida bio-mining as well.

You can say it is the closure cost of the project.

We can expect this will not be forward-looking like for the next quarter or whatever?

CIDCO bio-mining tender is over. We have already completed the project. So it's completed.

So yes, to answer your question, this is not a repetitive line item for you.

Okay. So my second question is like our processing volume has grown by 6%, but our RDF sales have declined by 28%. So is this purely a timing issue in dispatches, inventory

accumulation or a weaker customer demand? How should we look at it? And what is the realization per ton?

It's only a timing issue. I mean because we also are in the process of adding more and more customers. So the more customers -- and also selling from our PCMC plant apart from CIDCO and Kanjurmarg from where we are already selling. In terms of realization, we make a net realization of -- it's a positive realization of upwards of ₹300 per ton.

What it was in last year?

It was ₹250 or so.

Okay. Realization have improved basically. Sir, my last question. Sir, on refinance, what -- you said that outstanding amount was close to, if I'm not wrong, it was ₹40 crores. So for that, we have incurred additional ₹7 crores prepayment cost and we are saving downpayment reduction in interest cost. So what is the payback period for that, sir?

The amount that got refinanced is ₹140 crores, not just ₹40 crores.

Okay, ₹140 crores. Okay. So, what would be the payback period?

The payback for it is 15 years.

15 years?

Sir, we are talking about the tenure is now extended to 15 years and we're having a net benefit of ₹14 crores despite paying the ₹6 crores of prepayment charge.

The next question is from the line of Taha Ansari from Taha Capital Management.

Yes, Sir, I am talking about your C&T business, your Collection and Transportation business. We did around ₹166 crores of revenues and around 5.5 lakh ton of tonnage in the very first quarter. So, sir, what should we assume as our revenue or sales per ton for this C&T business?

So it will be very difficult to quantify because of 2 facto rs. One is the Collection and Transportation revenue also includes revenue from 3 other projects where the billing terms are not on tonnage, but it's on number of households and the number of trips. So like the ones in Thane, Jhansi and Varanasi, the billing is on the number of units/household/commercial units and the number of trips that we run. So that tonnage is not getting captured in the tonnage group. Second, more importantly, the scope of each project is different. So it will be very difficult to quantify on a per ton revenue rate what will be the price because each contract has a different scope, the tipping fee ranges between ₹1,800 to ₹4,200, depending on the scope, depending on the number of vehicles and the number of years within which the work needs we completed.

Okay. I got it. It is up to the area and up to the size of the project. If you give me a EBITDA margin idea for this Collection and Transport business, it might be difficult, but if you can put a number into it.

We never comment on each division's performance, and it's very difficult because it's a B2 G market, right? So these are pretty commercially sensitive points to discuss.

Can i get an idea of what are the receivables?

So we have 114 DSOs is what we have reported for the first quarter. So normally, our DSOs range anywhere between 90 to 115 kind of a number. So that's the range that we have over the last 18 quarters.

Okay, sir. You're talking on a consolidated basis or I am just asking about...

Consolidated basis.

Okay, on a consolidated basis you are talking.

The next question is from the line of Mihir Shah from MB Securities.

So I would like to know which of our current segments offer the strongest growth opportunity going ahead from now? Like is it C&T, processing, WtE segments?

So going forward, I think given focus of the management is to concentrate more on waste processing/WtE projects for us. But having said that, Collection and Transportation is also an area where we have been growing by leaps and bo unds. I mean the last 4 years, we have got more C&T contracts and mechanical sweeping contracts. And even yesterday, we got a new contract from the Greater Noida Municipal Corporation. So I mean for us, growth will come from both the sites. But the focus where it's more margin accretive and more capex intensive, it is waste processing/WtE for us.

Just to add to what NG said, I mean, it's about maintaining a balanced portfolio. We used to be essentially 70% Collection and Transportation and 30% of processing. We are actually moving towards 50-50 kind of portfolio, and that's our target.

So just to understand, you are moving towards more Waste-to-Energy portfolio?

Processing and waste-to-energy portfolio. Yes.

Okay. And sir, going forward, like how much of the company's future growth can be achieved through our existing portfolio versus like winning new contracts?

So our existing portfolio gives us a scope of anywhere between 6% to 9% depending upon the tipping fee escalation that gets registered and clocked in. The new businesses, new scope of additional growth will give us around 10% to 15% additional growth coming from that.

And these would be slightly lumpy because, I mean, even if we bag a contract, like, for example, we bagged the BMC contract 2 quarters back. I mean it's only in the current quarter that we started one of the zone. So, bagging a contract and singing the LOA, and that translating into P&L line item takes at least 2 to 3 quarters for us. So the recognizing revenue growth will be slightly staggered, but that's the trend for us.

The next question is from the line of Ketan Chheda, a Retail Investor.

First, bookkeeping question. Could you just share what is the long-term and short-term debt that we have?

The long-term debt is around ₹220-odd crores. The balance entirely will be short -term debt for us. So that's like around ₹140-odd crores. So, the total debt is around ₹420 crores for us. That's the split between...

₹220 crores and ₹140 you said?

Yes.

But then that could come to ₹360 crores. It wouldn't...

Cash and cash balance of ₹111 crores. So that kind of knocks off for us. So, I mean if you look at ₹435 crores, I would say around ₹300 crores would be long-term debt for us in that sense. I'm just netting out the EMD, which is available for us. So, of the ₹435 crores of long -term debt, ₹350 crores would be the debt due over the next 3 to 5 yea rs. And the debt due in the next 12 months is around ₹28 crores plus ₹12, so that's ₹40-odd crores.

Okay. On a overall basis, has our borrowing increased as compared to Q4?

Compared to Q4, my total borrowing has increased by around ₹22 crores at a gross level.

Okay. And this is towards specific project?

So, we have started working on the AP WtE project. So that is an incremental debt at that part. And secondly, we have also got the BMC contract, the new C&T contract which started in the Q1, so that has been incremental debt towards that project as well.

Okay. And the other question I have is the more strategic level have we evaluated getting into compressed biogas under this new scheme that the government has launched, the GOBARdhan scheme. Because there is one element where you can have municipal solid w aste as a input for the generation of compressed biogas? And there is a defined offtake agreement also, a long -term offtake agreement that you can sign with certain companies like city gas distributors or some of the oil marketing companies. So, have you evaluated that?

Yes, we have evaluated and we are indeed looking at CGB project, but it's a part of the integrated waste project. What it means is that the city is responsible for sending 1,000 tons of waste. And while the waste-energy plant will take care of the dry fraction, the wet fraction will be sent to the CBG plant. So, to that extent, I mean, as we think the CBG plant on a stand -alone basis is too small. It makes more sense when it's part of a larger integrated project.

So, I mean does it mean that we are planning to get these kind of contracts in the future?

That's right.

Okay. And with respect to the employee expenses also, the employee expenses have shot up significantly. Were we aware that this is going to happen in Q1 of this financial year?

It was not completely anticipated. There were 2 factors that led to it. One is the Labour Code change that came and restated our assumptions on the actuaries and everything. So that led to a restatement in the numbers and also the incremental headcount in the new project that we have got. So these are the 2 facto rs. Part of it was anticipated with the new project start, but the quantification due to the new Labour Code, that was the surprise item for us.

Okay. So this incremental thing would be passed on to the customers, right? Eventually.

Bulk of it would be a part of the escalation adjustment as per the tender condition, but that will be a timing mismatch because we get an annual escalation and the cost will be incurred today. So maybe after 6 months from now based on the annual life of th at particular contract, we'll go for an escalation as per the tender condition.

Right. Is it safe to assume that in our next financial year, not in FY'27 but in FY'28 our margin trajectory would be back to historic levels?

It should be because if you look at the labour cost as a percentage of revenue, historically, it has been in the range of around 30% to 31%. This time it spiked to 34%, which is an aberration for us. So normally in the next 3 quarters, I think it will be normalized to those levels and then the margin expansion will step in.

I'm assuming that by that time, when FY28 starts would have passed on approvals for all the escalations related to the labour charges, labour costs.

Yes. That is right assumption.

The next question is from the line of Nitesh, an Individual Investor.

My question to the management is why every time we keep hearing new surprises, okay? So, I've been following this company for several years, okay? I will probably share what concerns I have. First, I have seen the management interview over TV saying, we will get into vehicle scrapping.

And then in subsequent calls, we said that, we have identified land and then machinery will be ordered. And then down the line after 1 year, we say that, okay, now we are not going to proceed with it. We don't see much ROI and there's a lot of issues related to vehicle scrapping, okay? And similarly, right, now again, in this quarter, we see the margins have gone for a toss and this was not called out in previous con calls, you were always saying that our margin profile will be in the range of 22%, 24%, depending upon the contracts what we have, okay? So that's my first question. Why we always keep seeing surprises?

Waste management as a business, I mean, it's the way we look at business is we need to be viewed on an annual basis. Looking at the company on a quarterly performance, it will be very difficult to target that. When we got listed in 2021, our total revenue was around ₹400 crores to where we now a ₹1,000 crores company. And we have been able to get new contracts at prices which is attractive. But if you were to look at our margin profile over the last 4 years, it's been largely been steady. It's been upwards of 20%, 22% EBITDA margin for us. Yes, you are right. Each quarter comes out with some surprises because in this line of activity where 60% to 70% of my operating expense is labour-centric, which is fuel-centric, repairs and maintenance-centric and it's also related to the tonnage inflow mechanism. There are certain items which is beyond the company's control on a quarterly basis. So if there is a DA increase, there is no way that we can quantify that and forecast it to an exactitude. Similarly, fuel prices pre -2018 or even before that, versus as adjusted prices today, fuel is something which is very volatile. Not only that. I mean the cost of repairs and maintenance, the cost of additives over the last 3 quarters has spiked through the roof. I mean if you look at the cost of additives, the cost of fabrication, the cost of gases used for cutting and repairing metals, it's become very expensive, especially after the recent war that's happening in the Gulf of Hormuz. So for a larger canvas on the cost spread, though we got an escalation which covers 80% of operating cost. So instead of looking at a company's performance on a quarterly basis, we would suggest look at it from a longer aspect, look at the performance in b atches of years, look from 2014 to 2018, 2018 to 2021 and 2021 to 2025. Because waste management, it's entirely is like a utility business . I mean the waste comes in, you need to process it. Monitoring each quarter's performance versus the previous quarter's performance may not actually reflect the underlying complexities that gets reflected in the system. And on the auto scrap business, I mean, we are still evaluating. I mean it's a capital part of it, but looking at the way the canvas is there, looking at the way the business is turning out, we don't want to rush into a business and do things, but we are definitely looking at that part as a potential area of diversification.

Okay. My next question is just looking at the results, audited results somewhere I saw one line item, okay, where I think the auditors have called out saying, there is some compliance issue the way we handle the plant. And then there is a review being done today, if at all, they have addressed all of these, okay? Can you just elaborate what concerns we have? Did we comply with any of the regulations, is it?

No, no. So the compliance is not on the part of it. It's basically once there is a certain structural damage to the plant, which needs to be reviewed by the OEM suppliers. So based on the report, the further cost estimates would be worked out. So it's a landslide that happened. It has damaged certain parts -- so visibly there doesn't seem to be any damage. But till the time the experts come and look at the plant and give us a certificate, yes, this is a cost expenditure that needs to be done. There are repairs that needs to be done. Only then will be to a certain certitude -- can we say this is an actual cost. And that is what is being called out by the auditors, which we plan to do in the second quarter.

Okay. Perfect. One last question from my end. I also saw in the report that there is a joint petition being applied by Antony Waste and state of Maharashtra. And tomorrow, there is hearing from Supreme Court on 12th of August, okay? So suppose we get anything against the government and Antony waste, do you see any impact to us? I understand we have covered in terms of -- we have various clauses. But in case something goes wrong, what will be the impact to our business? I am talking about the Kanjurmarg plant.

I know. I don't think there is anything which can go wrong for the simple reason that Supreme Court in the last hearing has said that before we take any action, we would like to see the practicality of BMC shifting the project to some other location or fin ding an alternate source. But clearly, there is not an option. So that's why we don't think that this project is going to move away from Kanjurmarg from where it is today. On the other hand, the monitoring committee, which has been appointed by High Court of Bombay has been extremely supportive. They have been very appreciative of the kind of efforts and the kind of initiatives we have taken in Kanjurmarg. Thanks to these re gular visits by the monitoring committee. People have started appreciating the good work which has happened in Kanjurmarg. And going forward, if at all there is some change, it is only going to be in the context of change in technology, which is what we have been referring to, saying that city of Bombay needs to switch to CBG and waste to energy as technology options. And the High Court and Supreme Court also are more likely to move into that direction.

Can you please request you to come back in the queue for your follow-up question?

Yes.

The next question is from the line of Neerav Dalal from MIB Securities India.

So just on the additional costs that we've incurred in this quarter, I'm assuming the ₹10 crores, how much of that would be recurring in the coming quarters? That is my first question.

Okay. On the recurring cost of ₹10 crores of bio-mining, we don't see any of it getting repeated in the current quarter because that was related to the CIDCO bio-mining and we have completed with the contract. So that was a last part of activity of disposal of inert from the site. And since the contract is over, there is no related cost to be borne in the forthcoming period.

Okay. That is my first question. The second thing is in terms of the volume growth that we are expecting now for the next 9 months, what is the additional volume or the new contract that has come in? How much do you think that would contribute to the volume growth?

So, I mean we can give you contract-wise number kind of a detail, but it will not be for the full year. For example, the BMC contract by itself will add around 1,500 tons per day. The Atkoli project that we have got in Thane processing will add another 600 to 800 tons per day, but that's not for the full year. It will start either on Q4 or Q3 of the current financial year. So these are the incremental numbers that is going to come over the next 2 quarters. Maybe in the next financial year, first quarter, you will know a steady state of tonnage that we are handling.

Okay. Okay. So just to be very clear, in terms of the volume growth that we've got in this quarter it would be what we should assume in the current year with whatever incremental that comes in from the new contracts in the latter half of this year. Would that be the right assumption?

That would be one way of looking at it. For example, of the BMC 7 wards that we bag, we started with 1 ward which had only 7 days of operation. So, the second quarter will give a slightly better number on the tonnage. The third quarter and the fourth quarter will give you a full state of operation, which we have bagged from the BMC contract. Similarly, the Atkoli project will also give you a full volume b y Q4. So, in Q4 would be your test of the total volumes that we handle. And going forward, that will be the base for the company.

Correct. And just lastly, in terms of any one-offs, so except for the WtE contract, we would not have any other one-offs that would now we will see in this current financial year.

No, we don't anticipate any one-off such expenses. The WtE one is something that will be in the second quarter for us.

Correct. And we are expecting that to start off in October or so.

Got it. So we'll be at full capacity in the fourth quarter?

Yes.

Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to Mr. Jose Jacob, sir, for his closing comments. Thank you, and over to you, sir.

Before we conclude, I want to take a moment to express my heartfelt appreciation to our entire team for their unwavering commitment and exceptional contribution. Your dedication and hard work have been instrumental in driving our success and sustaining our growth momentum. As we look ahead, our focus remains firmly on delivering consistent performance, enhancing shareholder value and strengthening our leadership in sustainable waste management. We will continue to invest in innovation, technology and operational excellence t o further consolidate our position in the industry. I'm truly excited about the journey ahead as we continue to build a cleaner, greener and a more sustainable future for our community and stakeholders. Thank you once again for your continued trust and support. And I wish everyone a very pleasant evening.

Thank you. On behalf of Antony Waste Handling Cell Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.