Kalpataru Power Transmission Q4FY10 Earnings Call

Transcription

1 Kalpataru Power Transmission Q4FY10 Earnings Call MODERATORS: MR. MANISH MOHNOT - EXECUTIVE DIRECTOR MR. KAMAL JAIN - CHIEF FINANCIAL OFFICER MS. BHOOMIKA NAIR - IDFC SECURITIES Page 1 of 16

2 Ladies and gentlemen, good morning and welcome Q4FY10 earnings call of Kalpataru Power Transmission hosted by IDFC Securities. As a reminder for the duration of the conference, all participant lines are in the listen-only mode and there will be an opportunity for you to ask questions at the end of today s presentation. Should you need assistance during the conference please signal an operator by pressing * and then 0 on your touch-tone phone. Please note that this conference is being recorded. At this time, I would now like to hand the conference over to Ms. Bhoomika Nair thank you and over to you ma am. Bhoomika Nair Yes thanks Vivian good morning everyone and welcome to Kalpataru Power post results conference call. We have the management being represented by Mr. Executive Director and Mr. CFO. I would now like to hand over the call to Mr. for his initial remarks post which we will take over the Q&A. Over to you sir. Thank you Bhoomika. Good morning to everyone and sorry for the slight delay. Our audited results along with the quarter four results were declared on 28 th May, Friday. The sales for the quarter is at Rs. 838 crores against Rs. 548 crores for the corresponding quarter in the previous year. Our EBITDA margin for the quarter is at Rs. 100 crores against Rs. 65 crores which we declared in the previous year. The year end revenues stands at Rs.2600 crores approx which is a growth of approximately 37% as compare to the previous year. Consolidated EBITDA is at Rs. 338 crores which is approximately 13%. If you look at the segmental performance the TL domestic division revenue is at Rs crores as compared to Rs crores in the previous year. Infrastructure is at Rs. 361 crores as compared to Rs. 172 crores in the previous year We feel very proud to announce that our international divisions revenue have crossed Rs crore mark and in the last five years where we started zero in , we have reached Rs crores in the last five years. If you look at the consolidated revenue which is Kalpataru Power JMC and Subham Logistics we have crossed Rs. 4,000 crores for which is a growth of approximately 23% as compared to the previous year. Our net worth has crossed to Rs crore mark, which will help us to bid for a lot many BOT projects and other ownership projects over the next couple of years. KPTL standalone order book is an excess of Rs crores and JMC s order book is Rs crores. The consolidated order book we have visibility of around Rs crores which gives us closer to two year s visibility in terms of turnover for both the companies. Our console EPS is at Rs. 67 and if you look at standalone KPTL is at Rs and JMC Rs. 19. We feel very proud in announcing that we have recently secured the first state BOT project at Haryana for transmission line along with substation. The approximate project size would be in the range of Rs. 500 plus crores. We have 51% stake in that project and our project partner is Techno Electric. We are keeping a close watch on BOT transmission assets and have plans to have at least kitty of two or three assets over the next couple of years. On the competition front, we see a lot of big market in India as well as overseas. We have seen lot of traction coming in from the African market from CIS countries, from the GCC countries and India continuous to be the largest market for us. We have seen some competition coming in but given that the market is growing at a good pace, we still believe that we will be easily able to grow at 20%, 25% for the next two three years. Kamal if you want to add anything otherwise I would like to keep the conference open for all calls. Page 2 of 16

3 Ladies and gentlemen we will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touch-tone phone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Anyone who has a question may kindly press * and 1 at this time. The first question is from the line from Enam Asset Management, please go ahead. Congratulation for good set of numbers sir. Few questions. Could you just give us a breakup of our order book in terms of T&D, construction, and international order book? Sure, if you look at the order book domestic is 70%, overseas is 30%. If you look at the order book from a transmission distribution and infrastructure perspective, transmission is closer to 90%, distribution is 5% and infrastructure is 5%. 60% of our order book is variable price and around 40% is fixed price. An update on our balance sheet numbers if you can, standalone and consolidated debt? Standalone debt for KPTL is in the range of 600 plus crores, precise number 604 crores and if you look at console it will be in the range of 900 crores. This is FY10 closing consolidated? Yes. Would you just throw some light on our order pipeline currently in domestic as well as in our international market? We are currently L1 in four tenders out of which two are overseas, one is the infrastructure and on is TL domestic. I would not like to quantify the value right now because as a policy we have said orders where the L1we would not like to declare. Besides that we have bid for more than 22 tenders which are yet to be opened and we expect all those tenders to be opened in the next month or so. Sir there are lot of talks, there are lot of articles which are quoting in newspapers that 64,000 crore kind of power transmission corridors are going to get open, your outlook on that sir? Our outlook is very positive in a sense we feel good about those articles and I am sure, power grid will be able to maintain the growth rate they have promised. What was the share of the order book? At the year end the share of the order book is around 15%. Okay and when do you see this 64,000 crores order inflows will come into picture for transmission companies as such? Page 3 of 16

4 Over the next three to four years you should see these numbers coming up because this is primarily for the next five year plan a lot of it and if it is for the next five years plan, the order should start getting placed from the if not from as such. Okay, where do you see our industry growth across our segment in T&D infra and construction? Maintaining a growth of 20%, 25% should not be issue, the only challenge is primarily we have two one is availability of labor and second is, it is typically when you see this kind of articles of huge orders being placed by Power Grid competition increases, which historically has been a temporary phenomena but sometimes margins get impacted due to that competition. So then sir whatever margins we have done for consolidated level for FY10, would those margins were sustainable in FY11 or we would into? Starting on a current order book we definitely will sustain the margin which we have declared in and hopefully try and improve but not significantly in the range of 25 to 50 basis points but the new orders is something which we would have to wait and watch. Okay sir last question on a balance sheet. If you could give us CapEx details for current year? In the sense 09-10? No sir FY11 expected CapEx? FY10-11 expected CapEx for Kalpataru Power is in the range of 100 to 125 crores and for JMC it would be, console it would be closer to 200 crores plus. This includes our investment in BOT project which JMC impact? No, this does not include the investment in BOT, that would not be CapEx that would be equity contribution right? Sir if you could throw some light what will be your broad number for that investment? The final numbers would get finalized when the financial closure happens for both the projects, one is the Rohtak Bawal of JMC and Jhajjar of Kalpataru, but the equity investment would be in the range of 150 to 175 crores for this project. Both the projects put together? Yes. Okay and that primarily will come from our QIP which we did? Page 4 of 16

5 Perfect, at least equity investment and all that long term BOT projects would come in from the QIP funds which we raised recently. What is our cash currently sir, consolidated cash? Consolidated cash, Kalpataru s cash in the balance sheet is Rs. 40 crores and consolidated cash would be in the range of Rs. 70 crores. This is after QIP you are saying it? No, see the QIP is post 31 st March, so this is as of the balance sheet date. So, apart from the investment in this BOT and for the construction projects are, what are the other plans for QIP utilization? There are five key areas where we plan to invest the money, one of them or two of them are BOT projects which we have already won, the Jhajjar as well as the Rohtak Bawal. We are also looking at some capacity expansion in the transmission line. We are looking at setting up a new factory somewhere in Central India. There is an amount of around 50 crores which we have kept aside for investments and subsidiaries, out of the 450 crores funds raised, we have clarity on around 300 plus crores and the balance amount is kept because we want to focus on few more BOT assets as a road on transmission over the next 6 to 12 months. But sir there are no acquisitions currently on our pipeline? No, as of today there aren t any, we are looking at a few but I would not say that we are again is close to seeing that there are acquisitions in the pipeline, but as of today there is nothing in the pipeline. Fair enough sir thanks a lot and wish you good luck sir. Thanks. Thank you Ms. Dalvi. The next question is from the line of from UTI Mutual Fund, please go ahead. Good morning sir. Congratulations on good set of numbers. Sir, there are few questions on the P&L itself for the quarter. First is before going to P&L, what is the order inflow for the current quarter and full year if you can give me that for standalone? Order inflow for the current quarter is in the range of 700 crores and if you look at for full year it has been under range of 2700 crores. Okay sir my second question is on the P&L is as far as interest cost for the quarter is concerned, it seems to be pretty low, is there any adjustment in that? Page 5 of 16

6 Kamal do you want to answer that question, please. No, in that there is a foreign currency gain. How much sir? There is 4.5 crores for full quarter. For full year is there any gain? In full year it is 17 crores gain. Okay sir, next question was on the segmental numbers, is that we see the biomass energy division for the quarter has earned very muted PBIT or EBIT numbers, is there some issue with that? As far as revenue is concerned 5% growth is there and the only 5% can be achievable growth because the PPA is signed and there is a 5% escalation every year. Sir, because if I compare this to last quarter that is the December quarter it was Rs. 3 crores right now it is around Rs. 1 crore and last year same quarter the PBIT for the division was Rs. 5 crores? Yes mainly it is because of the higher raw material cost and due to the draught the availability of the raw material was very less. So, how is the situation now on the raw material front? That will depend upon the current year s monsoon, one of the plant has been temporarily shut down because of the water scarcity, there may not be growth next year in the biomass. Sir last question on Shubham, we have taken the initiative long back, if you can give us some number on this revenue and how we would expect that business to pick up? Manish, would you like to answer? Yes sure. On Shubham in the current year we have done revenue in the range of 90 plus crores and at the PBT level there is a negative margin of 5 plus crores. The reasons for the negative margin were two or three. One was that all of the logistic powers got operational during the year, while we had a hit of interest for majority part of the year, since they became operational it took some time for the capacities to go up. It was in line with what we had prepared in our internal budget, that the first couple of years would be loss making. We have also signed a very strategic MOU with Rajasthan State Warehousing Corporation where we are managing 30 years of their large logistic parks on a revenue sharing basis. Next year we expect Shubham s revenue to be in the range of 170 plus crores and it would definitely be positive in terms of PBT levels anywhere in the range of 5% plus. Page 6 of 16

7 Sir you said this year, current year the year gone by that is FY10 we have 5 crores loss on Shubham right of 5%? Yes. Okay 5 crores loss and sir what is the investment that we have done till date in Shubham and is there any further increase in investments? The total investment, if you look at the equity part of it or the capital part of it is around 40 plus crores, equity preference put together and we have plans to invest further in the current year primarily to get into MP and Maharashtra because Rajasthan agree all our 11 logistic park set up and running now, Rajasthan and Gujarat. We have plans to further extent into MP and Maharashtra in the current year and that would be done primarily out of the QIP funds, we have year mark to 50 crores out of the QIP funds for the expansion and MP and Maharashtra. Okay fair sir, thanks a lot for taking my question. Thank you. Thank you Mr. Trivedi. The next question is from the line of from Karvy Stock Broking please go ahead. Hello sir. Congratulations on good set of numbers. Sir, could you please explain on the BOT project from Haryana that how the structure of project funding is likely to end, how the revenue sharing and what is the time line of the project? This is the transmission project you are talking of? Yes, IPTC, BOT project. Perfect, we have just signed our MOU with the government or the transmission service agreement on 28 th which was just two three days ago. The project has to be completed in a period of six months for financial closure and after that 18 months for execution of the projects. The project is annuity based project which is 25 years or 35 years depending upon the call of the government. It is a fixed annuity of 4.5 crores per month, escalated for inflation index every year. At the end of the 25 th year we will get a return down value of 20 months value of the annuity at that point of time. The government has the right to extend it from 25 to 35 years and if the extended it will be at the same, whatever the tariff at that point of time the same rule will continue but at the end of 35 th year they will pay us zero WD. The total project cost we believe would be in the range of let us say 470 plus crores and we see a post tax IRR return in excess of 15% excluding the EPC margins. Okay. KPTL has a 51% stake in this project and Techno Electric has a balance of 49% stake. Page 7 of 16

8 Okay sir coming to the next considering the projects that you are bidding for considering the order book that we have already in the T&D space, what kind of sales we can convert into this FY11? Now it is in minimum growth of 20% and I would say in the range of 20% to 25% should be the minimum growth, the challenge today is not the order book, the challenge today is labor, the order book can grow easily, margins while there is competition, there are still projects where you did not get the margins but the true challenge which at least we face across the group, which is not only true for KPTL but across the group is availability of labor and all of us know the reasons for it including some policy with the government (21.47). Okay and sir the news coming out adding capacity in transmission capacity, in Raipur that you are looking at which is a green field project I believe, why is Raipur has been chosen like that part of India, I mean you see some? We are looking at Central India, we are looking at choice between two or three locations, it is not that we have got land at few of them. The reason to look at Central India is primarily to save on freight cost both inward and outward space, while our Gandhinagar plant would continue to focus on the overseas market and the western belt but the central and the eastern belt where we see a lot of projects commence would be done by that plant. Fine sir I understood. Just coming down on the JMC project scenario. What kind of growth done, on the top line we can see and on the margin side can we maintain that, 8.2% kind of EBITDA margin? On a top line basis you should definitely see JMC doing 20% plus in the current year given that the previous year where it was a flattish growth which was a conscious call of the management because the year before last, we decided to reduce and go slow on order book that is when all the economy, all the signals were very different in economy. We expect growth to be at least 20 is not minimum, 25 I would say. On the margins front, we will definitely improve from here because a lot of areas where we have invested like power sector and like infrastructure which over the last two three year is invested in those sectors because when we acquired JMC, it was primarily present only in factories and buildings but over the last two-three years we have diversified across various sectors. So, we have started contributing, so you should see some decent improvement in EBITDA level also. Okay fine sir that is it thank you sir. Thank you Mr. Panda. The next question is from the line of Kashish Tandon from JM Financial, please go ahead. Kashish Tandon Just a question on the P&L front, we see quite a jump in erection and subcontracting expenses, it is highly because of product mix or something more to it? Two key reasons one if you look at pipeline, which is primarily only labor right, there is no raw material to be that has doubled as compared to the previous year and overall also if you see our erection or in contracting expenses for the current year are much high as compared to the previous year. Page 8 of 16

9 Kashish Tandon It is almost doubled that is what I see on the consolidated. Yes. Kashish Tandon It has more or less doubled, so is there is a regular trend that we see or some sort of correction that happened in that front? If you look at the last 12 months, there is definitely a correction because from international perspective our order book grew significantly and also on the domestic suddenly if you look at the company we use to be in the range of crore order book now we are under 5000 plus crores range order book. So, from that perspective whatever transition you have seen in the previous year is what is one time event of our erection and subcontracting expenses doubling in the previous year because revenue also doubled but now in terms of proportion you will always find raw material cost in the range of 50 plus percentage and the balance would be this that is typically upright. Kashish Tandon Okay thanks a lot. Just on the debt side, how much is the consolidated debt? In the range of 900 plus crores? Yes 900, correct. Including Shubham Right. Kashish Tandon On the BOT project how much of the value that you quoted for BOT project? Sorry how much is the? Kashish Tandon Value have been quoted from figure of 470 crores, what was that I missed out on that? No that was an approximate TPC in the range of 470 to 500 crores the total project cost, we would still not have the final answer till the financial closure happens, which is the process has begin now but it would be in that range. Kashish Tandon Okay and how long you expect financially to be closed? Somewhere in September-October. Kashish Tandon September-October, okay thanks a lot sir that is all from my side thank you and all the best. Thank you Mr. Tandon. The next question is from the line of from HSBC Securities, please go ahead. Page 9 of 16

10 Thanks a lot for taking the questions. My question first on the order book sir how much of the Kuwait order has been executed and what is the status on MSCB money to be received during the year, have everything being cleared? Sandeep first Kuwait, we have nearly done 45% to 50% of the Kuwait project has been executed and the balance execution would happen in the current year, with a small portion may be closure to 5% which might go to the next year. On the MSCB front, we have nearly completed the project, we have done more than 90% of what was required to be done. On the collections front whatever was due from the client majority of it has been paid on 31 st March, we still have in the range of 175 plus crores which is pending there, out of which retention would be around crores and the balance would be around normal bills which we would have raised in the last month or so, typical the payment cycle is 60 to 90 days. Sir my second question is on the ForEx gain you said that for the current year it is 17 crores, is this has been adjusted to interest cost and what will be the subsequent FY09, ForEx loss and gain, if any? Kamal. Foreign gain of 17 crores that we will adjust again the interest or during the year and in future it will depend upon how the rupee dollar moves. So what has been the number in FY09 which is last year? Last year was minus 18 crores. Sir, for the current year what has been the CapEx if I can ask then secondly, you have given a CapEx guidance of close to 100 to 125 crore on standalone and 200 on a consolidated, can you give a breakup how this 200 crores and crores would be spend during the year? Sure, if you look at the CapEx plans for the next year significant portion of Kalpataru s CapEx would go in two areas, one is equipments and secondary equipments which will be both for international oil and gas as well as domestic, okay primary retention stringing and the related equipment is required for the coal business. Second, would be the investment in setting up a new plant and so that also would come in as CapEx as well. The balance portion if you look at it JMC would be in the range of 75 to 100 crores it depends clearly on what orders you get, and it would be primarily in the form of equipments for the infrastructure and for the power sector division. So you have got a large order of close to 1000 crores for the road, which I presume will be executed by JMC itself so on that execution do you did an incremental equipment and let us say you are spending part of the 75 to 100 odd crores? We might need some additional equipment on that may be not a lot because we have already built a good equipment best for the road side over the last two years. For minimal equipments might be required but not significant. Page 10 of 16

11 Sir last to one first as far as other income is concern for the year it has been around 35 odd crores, what is the other income has been driven from whether it would be recurring and secondly is that out of the 450 odd crores of QIP money raised, how would this 450 crores will be deployed say in FY11-FY12 and FY10 what could be the possible break up of this deployment? Let me answer the second question first and for the first one I will hand it over to Kamal. On the 450 crores we have clarity of closure to 300 crores while we speak and we believe that that deployment should all happen in the next six to nine months and the balance 150 crores primarily depends on what kind of projects we win, it is primarily meant for long term BOT projects, so well I do not have answered today but I am very hopeful that in we should be able to invest that money also in long term BOT projects. Right sir. As far as other income is concerned, we will continue to remain in the same range. So, what is the nature of this other income around? One is the interest income and second is sometimes insurance claims or any CER whatever we generate on the biomass power plant so that is the other income. So, this will continue to be in- In carbon credit, primary carbon credit, interest income and dividend. Yes dividend that is it sir. Thank you gentlemen. Thank you Mr. Somani. The next question is from the line of from HSBC, please go ahead. Good morning. I have a question regarding the JMC project order from NHAI. If you can just give us a brief about the project what is the annuity that will be received, whether the financial closure has been completed project cost and other details? I will be able to share with you the data which is shareable with us today because the financial closure is still pending but we will be able give you lot which will give you the comfort. First of all this is not annuity based and this is toll base project, where your income is dependent on the traffic which flows. The Rohtak Bawal is a very important corridor in the dedicated if you look at the dedicated freight corridor line which has been planned Bombay Delhi, you will find Rohtak Bawal is a part of it, it connects between Rajasthan to Haryana, it is a project which needs to be done in 36 months, the total project cost would be in the range of 1000 crores and the EPC cost as I said, till the financial closure happens those things do not get firmed up. Yes, but if you can just give us ballpark number, the EPC cost would range in around? Page 11 of 16

12 In the range of 750 to 800 crores but there is partner also, we have Srei who has 49% stake and we had 51% stake, so the call in terms of how much EPC will be done by them and us is still being discussed and that would happen over a period of time. Alright and in terms of debt equity mix, it will be 750? This is entirely something which happens during financial closure typically you bid at anywhere in the range 730 to 820. Alright and is there some escalation clause which is adjusted would be traffic, with the average revenue that would be on for traffic unit or that has been signed nothing on that thought? No, nothing it is the same NHAI policies which work, right so everything is clearly defined except the traffic. Okay alright, that is all regarding this project. My second question is regarding the effective tax rate for Kalpataru and JMC projects both. For JMC and Kalpataru for the entire year the tax rate has been a little lower for JMC specifically, it is in the range of 25%, so what is the guidance for next few years. Kamal can you answer that? It will be meant between 30% to 33%. Yes this year it is 25%. Yes. Any specific reason for that? No, because there is an income from joint venture company. Next year there will be some API project, so it will remain around 30% to 33%, 30% around next year. 30% for next year, okay sir and for Kalpataru the effective tax rate will be in the range of 25% to 26% going forward? Going forward it may be around 26% to 27%? This is with revenue from tax benefit that we are awaiting? Yes tax benefit we have for our EOU unit and secondly we have for biomass power project and both the project the growth may not be as fast as in the domestic units. So, the tax rate will go up by 1% to 2%. Alright and lastly sir regarding the margins for Kalpataru, it had reported very strong margin of 12.9% the second quarter, worst which there has been some decline in EBITDA that has been reported and last quarter was 11%. I just wanted to know whether the margin of will be possible to achieve and what will be the guidance for next two years for Kalpataru? Page 12 of 16

13 On the margins front the one point which is very important for all of us to understand, as business typically gets driven lot of external factors, so quarter-on-quarter margins a lot of it depends beyond us on the client and some external factors also but on an overall basis we expect EBITDA to be in the range of 12 plus percent for the next year for Kalpataru Power. That is all from my side thanks a lot sir. Thank you Ms. Pandey. The next question is from the line of Vikas Verma from B&K Securities, please go ahead. Vikas Verma Hello sir. Vikas Verma Only two questions on JMC projects. Does the 31 billion order book include the order book order from Rohtak Bawal project? We have taken approximate 50% of the EPC cost in our order book because that is sure we will be doing it and balance is not taken? Vikas Verma What is the breakup for the 31 billion order book? Kamal. I will just take it. The order break up is factory buildings will be 45% and the infra will be around 26% and 27% will be the power. Vikas Verma Okay sir and what is the current debt of JMC projects right now? What -? Vikas Verma Current debt? Current debt is 154 crores. Vikas Verma Okay sir thank you very much. Thank you Mr. Verma. The next question is from the line of from Enam Asset Management, please go ahead. Sir just one follow up question. In infra division our margins are very volatile PBIT margins, so what are the sustainable margins we foresee in the current year? If you look at the margins are volatile for two or three reasons, one our growth has been very high continuously in the last two years, so we have seen different kind of project one some long some 48 inch pipeline which is really important for us to qualify for long projects. We expect margins to be in the same range as we have reported in the current year. We are L1 in one large order and we think we should get that Page 13 of 16

14 order in the next week or so, but at the EBITDA level we expect margins to be in the range of a lower doubledigit number. For this particular order sir? No, for the overall infra sector. Okay but we do not see those early margins like the 10 plus percent coming say in next two years also? You might see those coming up in the next year but today given the clarity what we have I would say, we might be in the range of 10 plus only. Okay sir thanks a lot. Thank you. The next question is from the line of from HSBC Securities, please go ahead. Sir just a follow up question this capital employed in the business which is for transmission has remained almost flat while you expected this to go down given the fact that MSEB money would be released, do you see this happening over time that capital employed in this business might go down once you receive and the debtor debts come into the targeted say days? Sandeep to be very frank, internally on all our benchmark which we had the only benchmark where as Kalpataru we have not been up to expectation of our goal is debtor days two key reasons for this, so one yes Maharashtra a lot of money has come back, but given that international revenue has picked up significantly what happens in international is your retention is typically high. I will give you an example Kuwait the payment terms are 1055, 2510, which means for whatever supply you have got, you have got only 65% payment, the balance 25% would happen once the erection gets complete. Now, that is something in the cost, the interest component is in-build in the cost but the debtors will go up. So, typically yes our internal target is to get debtors in the range of 40 next year, definitely it is not below that and we are working hard to ensure that that happens. Okay thanks a lot sir. Thank you Mr. Somani. We do have a follow up question from the line of from Karvy Stock Broking please go ahead. Sir debtor and cash position as of FY10, could you give those numbers? Sure, Kamal can you give him the details? I could not get your question, cash is around 40 crores in case of Kalpataru and consolidated is 52 crores. Sir, on debtor side? Page 14 of 16

15 Debt side? No, debtor? Debtor Kalpataru is 1322 crores. And consolidated basis? Consolidated debtors are around Okay sir thank you sir that is it. Thank you. Thank you Mr. Panda. The next question is from the line of Ruchir Khare from Kotak please go ahead. Ruchir Khare Hi sir. Congratulations on good set of numbers. Just one question sir, how are our investments related to Indore and Thane real estate ventures planning out sir? For both the properties, from one of them the financial closure is already done, which is the Thane one and in one is at the final stages is nearly done. We have commenced construction already at the Thane one and Indore should start anytime now. We expect the property to be completed somewhere in the last quarter of or in two quarters and it should start giving us revenues from onwards. Ruchir Khare What was the total investments we made in the space sir both Thane and Indore? both put together is in the range of 150 plus crores, Kamal can you correct me if I am wrong, 150 plus crores. Ruchir Khare Fine sir. Sanjeev Hello sir I am Sanjeev here, I am colleague of Ruchir. Sir, just wanted to know the cost of borrowings as of now and is it likely to go down next year, I am sorry-? No, it is not Kamal can you answer that one? As the interest cost is around 8 to 8.5% looking to the recent development etc it should remain between 8 to 8.5 average in this quarter. Sanjeev Okay that is it from my side and all the best thank you. Thank you Mr. Khare. Ladies and gentlemen there are no further questions at this time. I would now like to hand the conference over to Ms. Bhoomika Nair for closing comments. Page 15 of 16

16 Bhoomika Nair I would like to thank everyone for being on the call, especially the management for taking time out and answering all the queries for the investors. Thank you very much sir. Thank you. On behalf of IDFC Securities that concludes this conference. Thank you for joining us, you may now disconnect your lines. Page 16 of 16