Rajiv Mittal, Managing Director and S Varadarajan, Executive Director addressed the call.

Highlights of the call:

For the quarter ended December 2015, Va Tech Wabag reported a 12% rise its consolidated sales to Rs 630.77 crore. OPM improved 70 basis points to 7.1% which pulled OP up 16% to Rs 44.77 crore. PBT grew 9% to Rs 29.64 crore. Net profit grew 37% to Rs 18.90 crore.

For nine months ended December 2015, Va Tech Wabag reported a 11% rise its consolidated sales to Rs 1689.74 crore. OPM fell from 6.4% to 6.1% which pulled OP up 5% to Rs 103.34 crore. PBT fell 9% to Rs 59.76 crore. Net profit dived 40% to Rs 23.65 crore.

In the consolidated results, personnel cost directly attributable to operations and maintenance contracts have been classified as cost of materials consumed as they represent directly attributable project cost. Consequently Rs 45.21 crore for the nine months and Rs 28.44 crore for the quarter and Rs 77.02 crore for the FY 2015 have been reclassified to conform to the figures presented during the period.

During the quarter Indian business contributed 38% of the total revenue. Revenue grew 17% to Rs 253.10 crore. PBIT jumped 119% to Rs 53.71 crore and accounted for 39% of total

During the quarter Rest of the World business accounted for 62% of the total revenue. Revenue fell 1% to Rs 415.92 crore. PBIT grew 4% to Rs 85.33 crore and accounted for 61% of total

During the nine months Indian business contributed 39% of the total revenue. Revenue grew 44% to Rs 675.50 crore. PBIT rose 58% to Rs 141.73 crore and accounted for 40% of total

During the nine months Rest of the World business accounted for 61% of the total revenue. Revenue fell 3% to Rs 1078.96 crore. PBIT fell 6% to Rs 215.13 crore and accounted for 60% of total

Total Order Book stood at Rs 7950 crore

The company has delivered excellent Standalone results and the management is confident that the realignment exercise which it had carried out across the group recently will bring out the best among the various geographies and teams.  

The synergy created will help to strengthen the company's presence across regions and deliver execution excellence.

The orders secured during this year are a testament to the focus of the company on securing big ticket orders globally.

During the quarter, WABAG Turkey bagged a Euro 20.75 Million order from the Turkish Ministry of Environment and Urbanization.  The order is co-financed by the European Union.  WABAG Turkey will design and build a new municipal wastewater treatment plant with a design capacity of roughly 145,000 m3/d.  This will be one of the most modern plant design with a combination of mechanical/biological wastewater treatment based on the activated sludge process and consequent sludge treatment with anaerobic stabilization and solar sludge drying.

This order, after Siverek and Polatli WWTPs, is the third from the client – the Turkish Ministry of Environment and Urbanization – and strengthens WABAG's excellent market position in Turkey.

In Latin America, the company sees huge market for Desal, Industrial and BOOT Projects.

South East Asia is Largely untapped - Emerging economy and the company has competitiveness in the region through Indian support

In India the company enjoys high margins as it has low cost of operations

The African market is largely untapped- emerging economy. In African markets also the company enjoys competitiveness through Indian support.

Good opening backlog and increased focus on project execution has resulted in growth of sales.

Cost of Sales vary quarter on quarter depending on the mix of projects.

Increase in Other Expenses is mainly due to Increase in Provisions for receivable as per company policy

Increase in Finance Charges is due to reduction of interest income and increase in Interest expense.

Euro depreciation of 11%, delay in Nepal project due to local conditions, Oman project nearing completion, many overseas projects being under engineering completion contributed to drop in overseas revenue in December 2015 quarter.

Increase in Contribution Margin in Overseas is due to O&M projects in Bahrain & Singapore and due to provisioning in prior period in the Oman Project.

Increase in Net Finance cost is majorly due to Interest charges on account of Ujams BOOT Project in Namibia. This was IDC during prior period.

During the nine months O&M business accounted for 23% while 77% came in from EPC business.

Municipal business accounted for 56% while 44% came in from Industrial business.

India accounted for 56% of total sales during the nine months. 34% came from Europe Multi Domestic Units (MDUs) and 10% came from India International Units (IIUs).

43% of the order intake is from municipal business and 57% is from industrial.

India accounts for 40% of total order intake. 42% came from IIUs and 18% came from Europe MDUs.

Total order book was Rs 7952.4 crore.

Wabag India had order book of Rs 3305.7 crore. Wabag Overseas had order book of Rs 3104.7 crore. Framework Contracts were Rs 1542.0 crore.

The management gave guidance range of Rs 2800 crore to Rs 3000 crore for FY 16. Order book guidance range is Rs 3500 crore to Rs 3700 crore.

Chennai was battered with heavy rain and floods for two months

Recent months saw very positive decision by the GoI, namely namami gange and smart cities.

Smart cities should have adequate water supply and sanitation. This presents huge opportunities for the company.

For Namami Ganga the government has allocated Rs 25000 crore. This has been allocated for municipal waste water and industrial waste water entering Ganga.

Working Capital without cash was at 54 days.

The company has order book for one and a half years. Thus it will be choosy in future but they will not let good order go away.

Gross cash balance of 380 crore. Consolidated Debt is Rs 348 crore. Net cash is Rs 32 crore.

Standalone Debtors stands at Rs 980 crore

Consolidated Debtors stands at Rs 1500 crore.

The company always tries to get orders in the currency in which it will spend money to complete the order.

The company is expecting that the India cluster will account for 50-55% of future order book, 20%from Middle East and Africa cluster, Another 20% from Europe and 10-15% from Latin America.

Average execution period of the order book is 2.5 to 3 years.

Consolidated gross interest cost for quarter is Rs 7 crore. Finance charge is Rs 4 crore and net income of Rs 1 crore.