Key Financial Figures

FY26 Financial Performance:

  • Standalone Revenue: Rs. 608 crores (approximately 36-37% fall from previous year)
  • Consolidated Revenue: Rs. 732 crores (approximately 36-37% fall from previous year)

Q4 FY26 Financial Performance:

  • Standalone Revenue: Rs. 84 crores
  • Consolidated Revenue: Rs. 120 crores
  • Significant decline from previous year's similar period

Inventory Impact:

  • Inventory increased by approximately Rs. 100 crores due to uncompleted milestones
  • This represents work in progress that could not be billed

Reasons for Performance Shortfall

Management attributed the poor performance to several external factors:

1. Government Permission Delays:

  • Required government permissions were not granted in time for several projects
  • Prolonged cash flow constraints on government side delayed payments to contractors

2. West Bengal Election Impact:

  • Work stopped on Rs. 780 crore West Bengal project due to election-related restrictions on road digging
  • Expected Rs. 70-80 crores revenue in Q4 reduced to only Rs. 20 crores
  • Project involves STPs and sewer laying works requiring extensive road excavation

3. Payment System Changes:

  • Government implemented new portal system (SPARSH) for state and central government alliance payments
  • System requires both central and state government shares to be deposited before payments can be made
  • Payments still not normalized due to gestation period of new system

4. Operational Challenges:

  • Bitumen supply issues from West Asia disturbance affecting Uttarakhand road restoration work
  • Heavy rainfall in Uttarakhand damaging transmission lines and requiring restoration work first
  • Labor issues due to delayed payments causing workforce to leave sites

Order Book and Future Outlook

Current Order Book:

  • As of March 31, 2026: Rs. 1,837 crores of unexecuted work
  • Additional orders: Rs. 209 crores from UP Jal Nigam in Varanasi
  • Three more tenders expected to be finalized within the month

Pipeline Projects:

  • Rs. 2,500-3,000 crores of tenders in pipeline for Delhi Jal Board and Maharashtra projects
  • Targeting to secure work in excess of Rs. 1,500 crores in current year

FY27 Guidance:

  • Revenue Target: Approximately Rs. 1,000 crores (similar to FY25 performance of Rs. 966 crores)
  • PAT Margin Target: 15%
  • EBITDA Margin Target: 25% (currently at 21% for FY26)
  • Typical project completion timeline: 2-3 years

Recovery Timeline and Strategy

Management outlined a 2-3 quarter recovery period to restore normal operations:

  • Expect to control damage and restore balance sheet normalcy by FY27
  • Q1 FY27 not expected to be strong, with improvement expected in second half of the year
  • Intensified engagement with government stakeholders to expedite permissions and payments
  • Reinforced working capital management and contingency planning
  • Reprioritizing projects and controlling discretionary spending

Specific Project Updates

West Bengal Project (Rs. 780 crores):

  • Rs. 500+ crores for CapEx work
  • Six-quarter completion timeline originally planned
  • Currently delayed due to government changes and departmental shuffling
  • Expected to resume within 10-15 days as new officials join

Uttarakhand Work:

  • Approximately Rs. 50 crores of finished work waiting to be billed in Dehradun
  • Expected to be billed in Q1 FY27
  • Road restoration work delayed due to bitumen supply issues

Long-term Growth Outlook

Management maintained long-term growth expectations despite current challenges:

  • Historical CAGR of 20% from 2013-2019 and 2019-2025
  • Target to maintain 20% CAGR through 2030
  • Expect 25-30% growth from FY26 to reach FY25 levels
  • No plans to diversify from government sector or water treatment business
  • Significant scope remaining in urban water supply and sewage treatment sector

Investor Concerns Addressed

The conference call addressed several investor concerns regarding transparency and past guidance:

  • Investors questioned discrepancies between previous guidance and actual performance
  • Management acknowledged commitments were given earnestly but external factors prevented achievement
  • Explained that Rs. 300 crores fund raising resolution was precautionary, not immediate need
  • Pledge reduction commitments affected by operational challenges

Corporate Structure and Business

  • Incorporated in 2010 by Mr. Ramveer Singh and Mr. Ashish Tomar
  • Business includes Sewerage Solution Provider, Water Supply System, Water and Waste Treatment Plants, Electrical Transmission and Distribution, Road and Allied Works, Operation and Maintenance
  • Works exclusively with Government Authorities in urban sector (not rural projects like Jal Jeevan Mission)
  • Currently operating in seven states through Housing and Urban Development Ministries projects, AMRUT projects, and Namami Gange projects