WPIL hosted a conference call on Aug 11, 2023. In the conference call the company was represented by Prakash Agarwal, MD.

Key takeaways of the call

Consolidated Order book is Rs 4603 crore of which domestic order book is Rs 3794 crore and international order book is Rs 809 crore (Italy 75%, Australia 16%, SA 9%). 

Of the domestic order book of Rs 3794 crore, the project orders were Rs 3500 crore (includes O&M orders of Rs 600 crore) and product orders of about Rs 300 crore.   While the project orders excluding O&M orders are executable over 24-30 month and the O&M orders are spread over 8-12 years.   

Project biz is cyclical in nature with always H2 of any fiscal being strong with 60% of project revenue coming in.    

Product revenue in Q1FY24 was Rs 213.8 crore (up from Rs 200.8 crore) with EBIT margin being 21.6% against 16.57%.  Project revenue in Q1FY24 was Rs 143.8 crore (up from Rs 98.4 crore) with EBIT margin being 27.15% against 15.18%.

Project execution focus is on track with good traction and strong growth expected in subsequent quarters with JJM (Jal Jeevan Mission) projects on high priority. The company ‘s  JJM water projects are largely in WB and MP.

International business performance has been steady with growth in the Australian business based on strong order backlog

Order Pipeline is very good in India for project business.

Defence business looks very prospective in the medium term based on new product developments

On 6th August, 2023 WPIL’s European subsidiary Gruppo Aturia entered into a binding share purchase agreement with Newcleo, France for sale of its interest in its nuclear business consisting of Rutschi subsidiaries, Pompes Rutschi France and Rutschi Fluid AG Switzerland for a consideration of Euro 68.7 million subject to necessary approvals. Share purchase agreement have certain condition precedent. The size of business divested has a revenue of Rs 40 crore and EBITDA of Rs 6.6 crore.  The decision to divest is as the company expects the nuclear supplier business will consolidate.  The management of WPIL considers it a win-win scenario, wherein Gruppo Aturia could use the substantial cash reserve to focus on various inorganic opportunities in their core business of industrial and water pumps, while Newcleo would benefit from the core expertise of Rutschi in nuclear pumps and finally, Rutschi would benefit from access to new growth opportunities in SMR segment and new technical expertise.

 With strong B/S the company is now aggressively looking for inorganic opportunities. Look at inorganic opportunity both in India and overseas. 

Distributed water piping there are lot of other works apart from pumps and % of pumps share in project will change depending on application.