Ladies and gentlemen, we will now begin with the question -and-answer session. We will wait for a moment while the question queue assembles. The first question comes from the line of Rahul Shah with Eternal Capital. Please go ahead.

Firstly, thank you so much for the opportunity, sir and congratulations on the good set of numbers. So, on the numbers front only I had my question. So, the PAT I saw that grew by 25% and compared to the revenue growth that was just 4%. So, beyond the operating leverage, how much of this divergence is coming from the finance costs or taxation and what should we as investors consider a normalized PAT growth trajectory?

So, finance cost has come down during the quarter compared to the corresponding quarter by almost Rs. 10 crores. So, this is on account of reduction of debt in the last year. We expect the finance costs to continue on a reduced level. Corresponding to that, EBITDA margins are around the same, 13%-14%, so no major change in that. This is only majorly which has contributed to an increase in profits.

Okay, correct. And on my second part, so PAT growth trajectory, how much can we expect on that?

Current year estimates which is there is around 10% growth with EBITDA of 13 %-14% with similar interest cost every quarter.

And my second question is on the order book front. So, we have an order book of almost Rs. 14,500 crores. So, I would just like to know the execution timeline for this existing order book. And how much of this order book can be converted into revenue over the next 3 years?

So, this we are expecting to execute over 3 years.

So, any numbers?

Yes, almost. There is a book to bill ratio of around 3 only right now.

Okay, perfect. Got it. And one last if I can just squeeze this one. So, is the current order book sufficient to support a double -digit revenue growth without requiring material acceleration from new order wins or would you have to win a lot more?

So, see we are targeting around Rs. 8,000 crores new orders this year which you know with that we are expecting 10% growth in the current year and 15% in the year corresponding. So, for growth we will obviously need new orders which we are fairly confident to get.

Okay, so that answers all my questions. Thank you so much.

Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question comes on the line of Viraj Mahadevia. with MoneyGrow, please go ahead.

Congratulations, Ms. Shirvaikar and Mr. Rahul on the excellent results and the very helpful opening speech. In the past quarters or past year, you had about Rs. 150 crores of exceptionals in the two financial years. Can you give us a view of what those were exactly and are they likely to occur in any way going forward, especially in FY27?

We don't anticipate exceptional items coming this year. That was mostly on account of last year for Vivaad-Se-Vishwas settlements and some write-down of investments.

Right Okay, no more exceptionals expected this year?

Yes, we don't expect that.

No, it is 27 acres and Rs. 26 crores.

27 acres. So, you still have another 400 acres in Telangana?

Yes, we have some land parcel in Telangana.

Okay, and are there other land parcels moving towards sale discussions? The Electronic City, Convey Hill, Tamil Nadu, etc.?

Yes, we are in discussion for other land parcel also.

Great. Do you think you would use the proceeds to become term loan debt -free by end of FY27?

This year, target for non -core is between Rs. 150 crores to Rs. 200 crores. That we are fairly confident to achieve.

Okay, great. I will come back with more questions. Thank you.

Thank you. Next question comes from the line of Rajiv Rupani, an Individual Investor. Please go ahead.

Thank you for the opportunity. My first question was on the promoter pledge. Now that the rating has improved so what update can we have on the promoter pledge? By what percentage will it get reduced going forward in the next three months, four months, six months?

So, Rajiv, we are, the promoters and ourselves, we are all in discussion with the lenders. And we are hopeful that this year we will get a substantial reduction.

So, sir, I know that we are in discussion, but this has been since a long time. So, we need clarity by, let's say, in the next six months, what percentage will it get reduced?

I don't have an exact number. But right now, if I am not mistaken, around 85% to 90% of the shares are pledged. So, we expect that to come down by at least 15%-20%.

Okay, that is helpful. And my next question was on that Real Estate project, Patel Smondo. So, I think there are three towers. And so, I would like to know out of the three towers, is the OC being received, number one? How many flats have been sold into th e two towers? And what about the third tower? Is it lying vacant or what is to be done?

So, the OC is expected. There is some litigation which is still pending. So, that we are expecting a closure very soon. And after that, the OC will be received. The third tower was a service apartment tower. As soon as the OC is received, that can be occupied. That is ready to be done and just to be occupied once the OC is received.

So, sir, by when can we expect the OC to come? Approximately?

So, we are hopeful it should come in this financial year.

Okay. But there are reports that despite the non -OC, there are people staying in that two towers. Is it correct?

People have taken possession for fit-outs and all. I am not sure about whether they are staying, but they have taken possessions.

Okay. And I wanted to update these 27 acres which we have sold. So, we had 430 acres in outskirts of Hyderabad. So, out of these 27 acres have been sold. Am I correct?

That's correct. Yes.

So, sir, I think for Rs. 1 crore an acre we have sold. So, is not the price too low?

No, it was in outskirt.

Even if it's in outskirt, I think the price, Hyderabad being an important destination and a lot of development going on, the price of Rs. 1 crore seems to be too low.

Sir, it is based on market value.

Thank you. Mr. Rupani, please rejoin the queue for more questions. Next question comes in the line of Rohit Joshi, an individual investor. Please go ahead.

Hi, sir. Am I audible?

Yes.

Thank you for the opportunity. I just wanted to ask that given the company's strong positioning in the Hydropower segment, how are you balancing things between getting new or larger Hydropower projects and the historically long execution timelines that come with it, along with all the clearances, risk and everything?

So, see, if you see, the changes have happened a lot in the overall approval process and the government is taking all approvals, M oEF clearances, land acquisitions, etc. before awarding the projects. So, that's why you would have seen the projects getting awarded a bit delayed. But once it is awarded, the project is not taking that time as it was taking earlier. For example, the Subansiri project, a 2,000 megawatt project is near the verge of completion in the last 5 -6 years, which is unheard of.

Okay sir, Thank you. And sir, my next question was that what is the minimum margin and cash flow profile that you are targeting now when you are bidding for newer projects in the future?

So, we expect to maintain our EBITDA margins between 13%- 14%.

Okay, sir. Yes, that's all. Thank you.

Thank you. Next question comes on the line of Viraj Mahadevia with MoneyGro w. Please go ahead.

Hi, Rahul. Q1, last year you all did 13.4% margins. That's moved up to about 14%. Do you think we will get back to 15% anytime soon given the operating leverage and greater scale likely over the next year or two?

See, Viraj, I cannot confirm on that becau se the competition and , etc., has increased. If you have seen last year, a large project went down. We don't see the margins to improve that much. Obviously, we keep on working on various value additions and how to improve and reduce the cost and all. But still, we are confident to maintain our existing margins.

Understood. And any plans given the company should be fairly close to net debt neutral by certainly 2028 and even 2027, your net debt -to-EBITDA will be very manageable. Given the promoter shareholding of 30%-odd, any consideration to do buybacks using the spare cash and also give out ESOPs to senior management? Is that being contemplated at all at the Board level?

See, buybacks, we will consider once we close the debt. So, it may take another maybe two years, three years to reduce the major debt. ESOP, we have an ESOP trust. So, management will consider on that.

Right, okay. Thank you.

Thank you. Next question comes from the line of Ravi, an Individual Investor. Please go ahead.

Thank you for this opportunity. So, I have one question that as execution accelerates across the existing order book, how much incremental working capital and project level CAPEX will be required and how does the management intend to fund it?

See, what we expect is that whatever working capital will be required, yeah, there will be some client advances to be taken against submission of bank guarantees or surety bonds. So, that should suffice. Plus, maybe some working capital borrowings of Rs. 100 crores – Rs. 200 crores may be needed in between.

Yes. So, it should be for that only, yes.

Okay. And one last question Q1 operating margin improved to 14.02% from 13.40%. How much of this improvement is structural versus project mix or timing related?

Its mostly project mix only. See, our average margins will remain around 13 %-14% depending upon what portion of work is executed in the quarter.

And one last thing. So, as larger Hydropower projects move into more intensive execution, should we expect margins to remain around current levels or normalize?

See, there is competition pressure, but we are working because we have past experience. We are working towards optimizing various processes and hence we are confident to maintain these margins.

Thank you. Next question comes from the line of P. Jha, an Individual Investor. Sir, please go ahead.

Hi. Thank you for the opportunity. My simple question is, we have been observing, we are also getting into new areas of work, mining and more of urban infrastructure work. I am sure Management would be ahead. That's a very large chunk of opportunity. There are lesser people to execute. It is dredging. Dredging both on land as well as in water. So, are we ever considering, because in any cases we are so good at tunneling, it's a little more complicated than dredging. Are we considering to get into this and get a large pie or some small pie also would be very significant with good margins? That's one question. And second, of course, about the arbitration cases, which say is more than Rs. 1,000 crores, which we have won. What is the fate of that? Are we likely to get some of that realized during current financial year or within two years? Your thoughts on that.

So, thank you. So, we are dredging work, we are looking for those works whether alone or with other people. As far as arbitr ation is concerned, we are consistently following up on the arbitrations and considering the arbitration and land sale only we are considering Rs. 150 crores to Rs. 200 crores monetization in this year.

Yes. So, especially the ones that we have won, if they are not into prolonged litigation, especially with the public sector undertakings. So, we still have some of them which are willing to settle soon.

So, PSUs generally will take it through litigation at all levels. So, whether it is district court, high court, supreme court, unless there are some schemes. So, last year and before that there were some. So, it settled.

Best of luck. Thank you. Great set of numbers achieved this time.

Thank you.

Thank you. Next question comes from the line of Viraj Mahadevia with MoneyGrow. Please go ahead.

Hi Rahul, what were the receivable days for Q1 of this year?

Receivable days is between 40 to 45.

And that continues to remain steady including in all your new contracts, right? Because that's a marked improvement from your receivable days of 100 plus a few years ago.

Correct.

Great. And what's the execution looking like in terms of revenues for Q2 so far? And has the erratic rains played any spoil sport in your revenue bookings?

I think Q2 generally because of monsoon is a bit slower, it should be in line of the past only.

Okay. So, no major upsets.

There are a few ups and downs, but it should be okay.

And can you highlight a little bit more detail on the cost optimization that you have talked about in the past? What's being done? Is it a pilot project? Has it been rolled out across multiple sites? What is likely to be the savings on an annualized basis starting this year or next year?

We are implementing IoT at various projects, which is helping us in controlling the consumption of diesel and other costs. So, that is one. And we are also looking at various new equipment’s which comes with AI enabled and IoT enabled things so we can track the execution, improve wherever processes can. So, these are the steps. I think to give a number to them, it is difficult. That is why what we are saying is even though the competition is increasing and the otherwise margins may reduce but we are trying to maintain margins of 13-14.

Understood. There are two large projects coming up in Arunachal from what I understand in Hydro. Have we bid for that? Is that split into multiple packages? Are we likely to bid for all of it or part of the packages at what value?

So, Arunachal we bid for 9000 so far out of 20x2 or out of 20?

So, 9,000 what we have bid so far is overall. I think majority of that would be in Arunachal and the northeast only.

Right. Okay. And when are the outcomes of these bids likely by Diwali this year?

Hopefully, yes.

Okay. Great. Thank you. Thank you, great performance.

Thank you. Next question comes on the line of Raj Shah, an Individual Investor . Please go ahead.

Good morning, sir. So, I basically have a question on the verticals front. So, we have like verticals like Hydropower, Irrigation, Tunneling and all. So, for FY27 as well as FY28, which exact vertical you see will be the growth driver for the company and what will be the revenue split overall if that is the thing.

See, our order book around 60 %-62% is Hydro. So, that will almost be the kind of split for revenues also we expect. Rest is all split between Irrigation, Tunneling and others. Irrigation is around 15 %, Tunneling is around 10 % and Roads and Urban Infrastructure is balance . So, similar maybe quarter and quarter it may vary but on a two -year basis, if you see similar mix may be there.

Okay. So, what about the new orders that they are going to get? In that also you are going to see higher Hydropower or Irrigation side more or it might change?

There are many projects coming in Hydro PSP. So, that will continue to be a large focus. Plus, there are projects in Tunneling also, Urban Infrastructure also, high-speed rail, everything and we are looking at all. So, I mean, depends which project comes first but then focus will remain on these all segments.

Okay, sir. So, second question actually I have is on the JV. So, on the JV front, what kind of revenue are you seeing, like what kind of cash distribution would you see to P EL and all? So, that is something that I would like to know more.

JV front, there are some projects getting executed in JV where we take our share of revenues and profits.

Sure. Thank you, sir.

Yes, hi, sir. Thank you for the follow -up opportunity. So, I just had one question that for the government and PS U projects that you have, how much capital is currently locked up in retention money, security deposit and contractual balances?

So, see, we have retention almost 5% for every contract and almost 100, between 200 to 250 crores is there as retention on the balance sheet.

Okay. And what is the average timeline for its release?

So, we generally get it released at the end of the project, but some projects allow us to withdraw against bank guarantees.

Okay, okay. Thank you. Thank you so much.

Thank you. Next question comes from the line of Rajiv Rupani, an Individual Investor. Please go ahead.

Yes, thank you for the opportunity again. Sir, so I had a follow -up question on the land bank monetization. So, since we have sold partly and you have mentioned that up to Rs. 150 crores worth of land bank will be sold. So, can we assume that the next lot of the land bank which will be sold will be from Hyderabad only to monetize the rest of the amount in this year?

No, we are working on various land parcels. We are not, we exactly cannot say which land parcel will happen.

So, the balance amount which you tend to sell can be from other land bank also. Is that what you are saying?

Yes.

Okay. And my next question was that in your presentation, you talked about the near -term opportunity of various projects. So, last time you had mentioned that this year the following projects will come up, Sawalkote, Kalai-II and Kamla. So, have they opened up and have we bid for the same?

No, no, bidding is still to happen.

Bidding is still to happen for this. And what about the other four, that is Upper Karnali, Upper Subansiri, Kirthai and Etalin. So, that is, when will these come up for bidding?

Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I now hand the conference over to the management for closing comments.

Thank you all for joining. If you have any follow -up que stions, you can write to us or the Valorem Advisors, which are our IR Consultants. Thank you.

Thank you. On behalf of Patel Engineering Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.