VA Tech Wabag conducted their conference call today at 4:00 pm.
"Wabag is now ranked 4th globally by GWI for ensuring safe & clean drinking water and sanitation"
Here are the key takeaways 😃
"Wabag is now ranked 4th globally by GWI for ensuring safe & clean drinking water and sanitation"
Here are the key takeaways 😃
Business Updates:
• Construction & Supply Chain came to pre-covid level.
• Achieved partnership with IFC and successfully closed 1st HAM project.
• Achieved in partnership with PTC India Financial Services Limited fir HAM project
• Completed engineering in ordering activities
• Construction & Supply Chain came to pre-covid level.
• Achieved partnership with IFC and successfully closed 1st HAM project.
• Achieved in partnership with PTC India Financial Services Limited fir HAM project
• Completed engineering in ordering activities
Project contribution in image.
• Construction side business is going well.
• Civil works are in process of completion, and expect to complete the projection till FY22.
• Construction side business is going well.
• Civil works are in process of completion, and expect to complete the projection till FY22.
Financials:
• Co. has return to net cash of 44cr and generated FCF of 96 cr.
• Gross Debt has reduced 520cr to 350cr YoY
• EBIDTA of core business stood at 9%, with ROCE stands at 24%.
• Co. has return to net cash of 44cr and generated FCF of 96 cr.
• Gross Debt has reduced 520cr to 350cr YoY
• EBIDTA of core business stood at 9%, with ROCE stands at 24%.
Revenue Mix:
• EPC grew 10%, while O&M business grew 17%.
• Overseas contribution of revenue stood at around 35%.
• Municipal: Co. don'd take any project which is state funded. It should be central funded. hence most of the order book remain strong.
• EPC grew 10%, while O&M business grew 17%.
• Overseas contribution of revenue stood at around 35%.
• Municipal: Co. don'd take any project which is state funded. It should be central funded. hence most of the order book remain strong.
Order Book:
• With strong book in hand company expects to grow well for the next year as well.
• Most of the order book is from big MNC. Current order book is healthy and not taking higher load on order as well.
• International & Industrial order is expected for higher margin.
• With strong book in hand company expects to grow well for the next year as well.
• Most of the order book is from big MNC. Current order book is healthy and not taking higher load on order as well.
• International & Industrial order is expected for higher margin.
Margin:
• Company expect margin to be in double digit margin before next 2 year.
• Company is working to improve the industrial vs municipal revenue mix and expect industrial share to increase.
• Company expect margin to be in double digit margin before next 2 year.
• Company is working to improve the industrial vs municipal revenue mix and expect industrial share to increase.
Asset Light Model:
• Co. priority remains on being asset light model only.
• However, co. don't want to loose for the Namami Ganga project, for which equity has been raised by co. (Equity fund raise of 120cr from Marquee investors).
• Co. priority remains on being asset light model only.
• However, co. don't want to loose for the Namami Ganga project, for which equity has been raised by co. (Equity fund raise of 120cr from Marquee investors).
Cost:
• Escalation in cost is not expected to impact the business profit.
• Co. has taken several measure for maintaining the cash balance, and being tough on receivable as well. This will maintain the cost of the business.
• Escalation in cost is not expected to impact the business profit.
• Co. has taken several measure for maintaining the cash balance, and being tough on receivable as well. This will maintain the cost of the business.
Bad Debt:
• Bad Debt almost stays around 1.35% of revenue, and last year was the same (except for Genco project).
• While co. don't believe to have any big bad debt except for this Genco, except for certain small litigation.
• Bad Debt almost stays around 1.35% of revenue, and last year was the same (except for Genco project).
• While co. don't believe to have any big bad debt except for this Genco, except for certain small litigation.
Bank charges: 1.9% of revenue
• Company's has rating has gone up as company has paid good amount of debt.
• While order book of co. is improving, Wabag has to provide bank guarantee, which increases bank charges. Foreign contracts are have 2x of guarantee than that of domestic.
• Company's has rating has gone up as company has paid good amount of debt.
• While order book of co. is improving, Wabag has to provide bank guarantee, which increases bank charges. Foreign contracts are have 2x of guarantee than that of domestic.
KMDC result and Ganga project is one time investment, hence this fund will be utilized in next quarter. While payable of the company is improving, and with increase in revenue the payable of the company is not impact much.
Ion Vs Va Tech:
• Ion is more into standardized project and in bacterial cleanliness and recently they have entered in large project, while Va Tech is interested more in complex and big project. Hence Ion and Va Tech is in different segment.
• Ion is more into standardized project and in bacterial cleanliness and recently they have entered in large project, while Va Tech is interested more in complex and big project. Hence Ion and Va Tech is in different segment.
Chennai Project:
• Delay for more 6-9 months delay in the project acceptance due to recent election period
Libya:
• Co. is the largest player in Libya, and co. has seen many ups and down in Libya. However the order has not been converted to order, so not recorded in order book
• Delay for more 6-9 months delay in the project acceptance due to recent election period
Libya:
• Co. is the largest player in Libya, and co. has seen many ups and down in Libya. However the order has not been converted to order, so not recorded in order book
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