Thread by @Equity4Life_

Va-Tech Wabag
- VA Tech Wabag - global player in the water treatment industry
- Geographies - India, the Middle East, North Africa, Central and Eastern Europe, China and South East Asia
- More than 1400 projected completed since 1995
1/n

#Equity4Life

https://twitter.com/ash_lodha/status/1596115411065413632

-Complete life cycle solutions including conceptualization,design,engineering,procurement, supply,installation,construction n O&M services for sewage treatment, processed n drinking water treatment, effluent treatment, sludge treatment, desalination n reuse for institutional
2/n

Growth in Q2 topline
- Resumption of project in Sibur, Russia
- start of execution on other new international projects

Growth in PAT - 77%
- Increase in International EP Projects
- Faster execution pace
- Efficient Debt Control Measures
- Reduction in Borrowing Cost
3/n

Order Book :

- Rs.10300cr comprises of 3.4x of Topline
- Quality of order book is further enhanced with the majority mix of multilateral and federal government projects, industrial jobs backed by adequate payment securities
- Strong order book with excellent revenue growth
4/n

Other Triggers

- Q1 & Q2 FY23 was impacted due to suspension of large project in Russia due to war. Project just resumed
- 1HFY23 had the impact of commodity price rise, especially steel, impacting EBITDA margin,with easing out of commodity prices margins set out to improve
5/n

- It has secured a less expensive INR20bn working capital loan from ADB (Asian Development Bank) for 63 months at a reasonable interest rate
- One of the top bidders for the Japanese-funded Chennai water desalination project.
6/n

Opportunities

- Central govt agencies funded projects such as Namami Gange Mission, Atal Mission for Rejuvenation & Urban Transformation & multilateral agencies, reducing any customer default risk
- Business is well aligned with development story of Ministry of Jal-Shakti
7/n

- Water is becoming increasingly scarce and in many parts of the world, droughts and lack of water supply have become a permanent problem and countries are turning to alternative solutions.
- Water recycling emerges as a proven option.
8/n

- Agriculture accounts for about 60-70% of annual water withdrawals. Enormous volumes are needed for irrigation of cultivated areas
- Industries have recognized the potential of multiple water use and are increasingly investing in sustainable reuse systems
9/n

- Conventional municipal wastewater treatment plants with mechanical/biological treatment processes can be expanded with an additional treatment stage to achieve high quality of treated wastewater according to requirements
10/n

- Water Reuse is practiced for the irrigation of urban green areas, as service water for street cleaning or firefighting water
- Maharashtra, Haryana, Tamil Nadu, Gujarat & Karnataka now have a policy in place on treating waste water. The company is well positioned for same
11/n

Achievement

12/n

Key Clients
13/n

Investment risk
-Slowdown in domestic capex & sharp rise in commodity costs for overseas contracts
-Rising WC could pose risks to cash flows
-Execution delays could delay earnings growth, especially risks related to project completion & commissioning in international markets
14/E