WPIL hosted a conference call on Feb 5, 2024. In the conference call the company was represented by Prakash Agarwal, MD of the company.

Key takeaways of the conference call

OB is Rs 4300 crore of which domestic order book is Rs 3835 crore and that of international was Rs 421.1 crore [Italy 47%; Australia 30%; South Africa 23%).

Domestic product and aftermarket business continue strong performance with a stable order book. Of the domestic order book of Rs 3835 crore about Rs 260 crore is product.  And balance is project order book.  Entire international order book is also product.  Two and half years are project execution cycle for project order book.

The completion of the Rutschi sale transaction in the quarter was a watershed event as it greatly strengthened the balance sheet and provided capital for inorganic growth. The company is looking at inorganic growth in its core expertise only.

Of Rutschi sales proceeds of Euro 68 mln, part of the proceeds i.e. 10% is escrow and the company parked the balance amount in fixed deposit for the time being.    The company received the money on Dec 28, 2023. The company has cash on hand of Rs 500 crore plus as of now.  

Project revenues regained traction on sequential comparison (QoQ basis) and improved from Rs 130 crore to Rs 214 crore with the momentum remains strong

Internationally, South Africa and Sterling Australia set for a major jump in revenues

As far as project order execution it expects improvement in both supplies and construction sides.  Supplies were lower in h1 and that is picking up now. Ramping up construction as well with QoQ execution on steady rise.    

For FY24, the company will improve on the project revenue of FY23

With strong product order book the company expects strong traction in products business.

Lower OPM for the quarter in case of product business is largely due to Middle East crisis, which affected the supply chain and despatch. The ME crisis has increased the ship travelling time and has resulted in despatch of products from Q3FY24 to Q4FY24 and thus the revenue recognition.  The company expect margin improvement only. When revenue shifts the EBITDA margin also shifts.  So with revenue shift to next quarter the margin of pumps and accessories segment got impacted in Q3FY24.

See good growth across all segments.  Lot of contracts from steel, cements. Irrigation is big subdued. International oil and gas is very strong market in both Australia and middle east.  Municipal water supply is big market in Africas.

Though the company exited nuclear business with Rutschi deal the domestic nuclear business is excluded and the company will execute the orders.

Second and third quarter of FY23 was a strong one with the company closed FY23 with revenue jump to Rs 1800 crore from Rs 1000 crore. Though that kind of jump will not be there but there will be good YoY growth going forward.

On project side the supply chain challenges that the company witnessed in H1FY24 is resolving now and the company has seen strong QoQ growth in projects revenue in Q3FY24.

 Major revenue triggers will start kicking in from h2fy25.

Getting order is not an issue but execution is a challenge.  

Product biz have regular orders. Project side good rampup working on good contracts. International Asia to Europe ship travelling time has increased by almost 4 weeks.