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Meeting Overview • Date: May 30, 2024 • Compliance: Submitted transcript to National Stock Exchange of India and BSE Limited • Key Executive: Rajiv Mittal, Chairman and Managing Director • Focus: Company's legacy, sustainable solutions, and future outlook
Company Highlights • Centenary Celebration: 100 years of leadership in water technology • Global Presence: Operations in 25 countries • Industry Ranking: • 3rd largest private operator in water sector • 5th in global desalination • Technological Advancements: Over 125 patents supporting proprietary projects
Strategic Focus • Asset-Light Approach: Emphasis on minimizing equity investment in projects • Sustainability Commitment: • Use of seawater and recycled wastewater • Initiatives for net-zero emissions and zero discharge plants • Water Recycling: Promoted as "manufactured water" for various applications
Future Initiatives • Technology Projects: Expansion into advanced technology and global delivery capabilities • Hydrogen Production: Positioning as a water partner for hydrogen and semiconductor industries • "Blue Seed" Initiative: Supporting young entrepreneurs in the water sector
Financial Performance • FY 2023-2024 Results: • Revenue: INR 28,564 million • EBITDA Margin: >13% • PAT: INR 245 crore (9% YoY growth) • Order Book: INR 114 billion, ensuring three years of revenue visibility • Net Cash Position: Transitioned from net debt to net cash of INR 236 crore
Growth Strategy • Target CAGR: 15% to 20% over the next 3-5 years • Focus Areas: • Profitable growth • Technology and services over heavy asset investments • Operational Efficiency: Leveraging digitization to enhance productivity
Challenges and Responses • Manpower Acquisition: Expansion from 6 to 1,600 qualified staff • Debtor Days Concerns: Provisions for doubtful debts explained as necessary under accounting standards • Geopolitical Risks: Strategy to manage local relationships and mitigate currency risks
Conclusion • Commitment to Sustainability: Focus on circular economy and wastewater treatment • Celebration of 100 Years: Acknowledgment of investor support and company evolution • Future Outlook: Strong positioning for growth in the water sector with ongoing initiatives in desalination and green hydrogen.
VA Tech Wabag Limited Q3 FY24 Earnings Conference Call Summary
Submission and Overview • Date of Submission: February 16, 2024 • Conference Call Date: February 12, 2024 • Participants: Chairman Rajiv Mittal and Group CFO Skandaprasad Seetharaman • Key Focus: Company performance, strategic initiatives, and financial results
Company Milestones and Initiatives • Centennial Milestone: Celebrating 100 years in the water sector • Sustainability Commitment: Emphasis on innovation and sustainability • Recent Awards: Recognition for wastewater treatment projects • New Partnerships: Establishment of Bio-CNG plants in multiple regions
Financial Performance • Q3 FY24 Revenue: Increased by 8% year-over-year to INR 704 crore • EBITDA: INR 99 crore • PAT: INR 63 crore, reflecting 34% year-over-year growth • Nine-Month Revenue: INR 1,922 crore with a PAT of INR 173 crore, up 40% year-over-year • Order Book: Healthy order book of INR 12,000 crores
Operational Highlights • Project Execution: Successful ongoing projects and new initiatives, including: • Perur desalination plant in Chennai • Pagla STP in Bangladesh • Reliance desalination project in Jamnagar • AGCC project in Russia • New Projects: Secured industrial wastewater treatment project in Saudi Arabia
Future Outlook and Strategic Focus • Order Book Execution: Estimated 8 to 10 years for current order book • Growth Areas: Focus on green hydrogen and semiconductor sectors • International Projects: Optimism about international market opportunities despite domestic slowdown
Management Insights • Order Intake vs. Revenue: Strong order backlog providing visibility for nearly three years • Cash Management: Emphasis on payment security, margins, and technology selection • Geopolitical Considerations: Stabilization in Libya allowing project discussions to resume
Project Execution and Revenue Growth • Project Timelines: Revenue growth expected to begin this quarter • Bid Success Rate: Estimated at 15%-20% • Asset-Light Strategy: Focus on technology partnerships and monetization of investments
Bio-CNG and Sustainability Initiatives • Bio-CNG Plans: Utilizing existing facilities for biogas recovery • Initial Costs: Estimated at a couple of million dollars for existing assets
Market Conditions and Challenges • Impact of Elections: Anticipated slowdown in domestic market activity • Geopolitical Tensions: No significant impact expected on global market opportunities
Conclusion • Financial Health: Strong balance sheet and positive cash flow • Future Goals: Targeting a top line of INR 6,000 to 7,000 crores in the next five years with a CAGR of 10%-15%
Conference Call Overview • Date: November 11, 2023 • Focus: Q2 FY24 financial results • Key Participants: • Rajiv Mittal (Chairman and Managing Director) • Skandaprasad Seetharaman (Chief Financial Officer) • Compliance: Transcript available on the company website per SEBI regulations • Format: Included forward-looking statements and Q&A session
Company Highlights • Global Positioning: Fifth largest desalination plant supplier globally • Business Strategy: "Wriddhi" focuses on: • Profitable growth • Global market leadership • Improved cash generation • Market Focus: Expansion in Middle East and Africa; reduced focus on Europe • Order Backlog: Over Rs. 12,000 crores, with significant international contributions • Sustainability Initiatives: Growth in green hydrogen and bio-CNG sectors
Financial Performance • H1 FY24 Revenue: Rs. 1,218 crores; Q2 revenue Rs. 665 crores • EBITDA: Rs. 164 crores, improved execution efficiencies • Profit After Tax: Increased by 43% on a consolidated basis • Asset-Light Strategy: Return on capital employed exceeds 20%
Future Growth and Strategy • Order Book: Projected 15-20% growth; 60% construction, 40% operational projects • Emerging Markets: Focus on O&M projects for better margins • Bids: Over USD 1 billion in projects in the Middle East
Key Initiatives
- Biogas to Bio-CNG: Transitioning to higher value production
- Green Hydrogen: Partnerships for water supply in hydrogen production
- Semiconductor Manufacturing: Providing ultra-pure water for local production
- AI Integration: Enhancing operational efficiency through digitalization
Management Insights • Mergers and Acquisitions: Open to opportunities but no active plans • Resource Allocation: Strategic exit from Europe to focus on emerging markets • Operational Efficiency: Emphasis on cash flow and margins in order selection
Q&A Highlights • Municipal Orders: Focus on projects with payment security • AI Partner Role: Standardizing services across projects • Project Margins: Clarification on margins for construction projects
Conclusion • Outlook: Confidence in revenue growth for H2 FY24 and beyond • Management Strength: Assurance of sustainable margins and ongoing recruitment • Closing Remarks: Invitation for further inquiries and well wishes for Diwali
Submission Details • Date of submission: August 19, 2023 • Conference call date: August 14, 2023 • Compliance: Submitted transcript to National Stock Exchange of India and BSE Limited • Participants: Chairman Rajiv Mittal and CFO Skandaprasad Seetharaman • Communication signed by: Anup Kumar Samal, Company Secretary
Financial Highlights • Consolidated Revenues: Rs. 553 crores • EBITDA: 11.9% (10% YoY increase) • Profit After Tax (PAT): Rs. 50 crores (66% increase) • Return on Capital Employed: 19.6%
Business Strategy • Strategy Name: "Wriddhi" • Focus Areas: • International markets • Industrial projects • Advanced technology • Revenue Sources: Nearly 50% from international operations, especially in the Middle East and North Africa • O&M Business: Constitutes 42% of the order backlog
Project Updates • India Projects: • Reliance desalination project • Chennai desalination plant (foundation stone on August 21, 2023) • International Projects: • MARAFIQ STP project in Saudi Arabia • Ongoing projects in Tunisia and Jeddah
Market Outlook • Order Book: Exceeds Rs. 12,500 crores • Future Orders: Optimism about order inflow for the fiscal year • Geographic Focus: India, Southeast Asia, Middle East, and Africa
Management Insights • Execution Concerns: Attributed to project start timings and focus on technology jobs • Recruitment: Long-standing training program for engineers • Desalination Projects in Egypt: Prequalified for high-capacity plants
Financial Management • Divestment Impact: Reduction of order book by Rs. 900 crores due to divestment of two European subsidiaries • Cost Reduction: EUR 5 million in fixed costs annually from divestment • Receivables: Approximately Rs. 1,500 crores
Future Projections • Return on Capital Employed: Targeting 18%-20% • Return on Equity: Expected around 15%-16% • Zero Liquid Discharge (ZLD): Increasing inquiries in sectors like mining and oil and gas
Conclusion • The call concluded with a positive outlook for continued growth and profitability, with further information available on the company's website.
Submission Details • Date of submission: May 29, 2023 • Event date: May 23, 2023 • Directed to: National Stock Exchange of India and BSE Limited • Document signed by: Anup Kumar Samal, Company Secretary
Opening Remarks • Rajiv Mittal expressed gratitude for attendees after a four-year hiatus. • Emphasized direct interaction with shareholders and introduced the management team. • Wabag operates in 25 countries and will celebrate its 100th anniversary next year.
Company Focus and Strategy • Commitment to sustainability, advanced technology, and R&D. • Shift towards Engineering and Procurement (EP) projects to enhance margins. • Focus on an asset-light model, outsourcing manufacturing while maintaining design capabilities. • Addressing climate change challenges in water resources.
Water Management Approach • Differentiation between "God given water" and "Manufactured Water." • Plans to expand desalination projects, leveraging a successful plant in Chennai. • Emphasis on wastewater treatment for economic opportunities.
Market Opportunities • Anticipation of significant investment in the water sector due to government initiatives. • Focus on sustainable practices, including water reuse and biogas recovery. • Projected $80 billion potential in untapped biogas resources.
Financial Performance • CFO Skandaprasad Seetharaman reported a 43% increase in EBITDA and a 74% rise in profit after tax (PAT). • Historic order book of INR 13,200 crores, providing revenue visibility. • Shift in focus from order book growth to profitable growth and cash generation.
Challenges and Concerns • Outstanding receivables of approximately INR 1,500 crores due to new international projects. • Discussion on the balance between EP and EPC projects, with a focus on increasing EP projects.
Future Growth and Opportunities • Confidence in achieving double-digit growth driven by a strong order backlog. • Focus on green hydrogen and semiconductor industries for future projects. • Emphasis on securing payment guarantees before commencing work on framework orders.
Operational Insights • Order book stands at INR 13,300 crores, with INR 2,700 crores for Operations & Maintenance (O&M). • EPC projects typically have a three-year execution timeline; O&M projects offer revenue visibility for nearly a decade. • Minimal receivables written off, primarily related to APGENCO and TSGENCO.
Conclusion • Strong focus on enhancing O&M revenues and securing contracts based on technical reliability. • Strategy to partner with experienced firms for renewable energy projects. • Economic viability of solar power in desalination will depend on cost comparisons with thermal energy.
Conference Call Overview • Date: February 13, 2023 • Participants: Key management including Rajiv Mittal (Chairman), Pankaj Malhan (Deputy MD & Group CEO), Skandaprasad Seetharaman (CFO). • Focus: Financial results, business prospects, and forward-looking statements.
Company Performance and Strategy • Leadership Transition: Pankaj Malhan introduced as the new Group CEO. • Growth Focus: Emphasis on international projects, advanced technology, and long-term O&M services (35% of order book). • Sustainability Commitment: Focus on water resource recovery and renewable energy. • Project Pursuits: Active in desalination and wastewater treatment across India, Middle East, and Europe. • Order Strategy: Prioritizing engineering and procurement (EP) orders to enhance margins.
Capital Projects Update • Key Projects: • 187 MLD KMDA STP project nearing completion. • STP HAM project for BUIDCO progressing well. • 40 MLD Ghaziabad tertiary treatment plant initiated (25% completed).
Service Business Insights • Order Book: INR 3,200 crores in service sector (37% of total). • Revenue Growth: Anticipated as EPC components conclude and O&M revenues begin. • Overall Order Book: Exceeds INR 10,000 crores, indicating strong future value generation.
Financial Highlights • Revenue: Consolidated revenues of INR 2,034 crores for first nine months of FY '23. • Profit Growth: 45% increase in profit after tax. • Order Backlog: Strong visibility with backlog primarily from international projects.
Q&A Highlights • Revenue Stagnation: Shift to EP projects impacting revenue; confidence in FY '24 growth. • Domestic Opportunities: Discussion on new MD appointment for operational efficiency. • Dividend Considerations: Balancing dividends with investments in HAM projects. • Project Updates: Chennai desalination project as a preferred bidder; focus on Zero Liquid Discharge technology.
Market Focus • Russian Market: Strategic focus due to competitor exit; expected revenue contributions. • Order Distribution: 60% from India, 40% from international markets; emphasis on large, complex projects.
Conclusion • Outlook: Strong order book and optimistic growth prospects in the water sector, with a focus on sustainability and risk management.