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

Highlights of the call: 

For the quarter ended September 2018, Va Tech Wabag reported a 15% fall in its consolidated sales to Rs 751.96 crore. OPM fell 40 basis points to 8.4% which saw OP fall 19% to Rs 62.81 crore.  

Sales fell as key overseas projects neared completion.

The company saw continued improvement in operating margins in Europe. Margins in Europe improved due to cost control initiatives.

Currency change in Turkey from Lira to Euro has eliminating forex translation impact to some extent.

Standalone quarter saw forex gain of Rs 44 lakh against a loss of Rs 28 lakh. Forex gains were realized from export projects due to appreciation in US Dollar.

Interest rose due to interest cost for working capital.

Order intake stood at Rs 2990 crore out of which Rs 1586.4 crore was in Wabag India and Rs 1403.6 crore in Wabag Overseas.

It has order Book of Rs 8550 crore & Framework Contracts of Rs 699.6 crore.

Out of the order book, Rs 7013.8 is from EPC segment and the rest Rs 1541.1 is from the O&M.

Wabag India has order book of Rs 5563.9 crore. Wabag Overseas has order book of Rs 2991.0 crore.

Trade Receivables stood at Rs 1462.6 crore against Rs 1302.8 crore in March 2018.

Net Working Capital Days grew to 122 against 98 as of March 2018. It required additional working capital due to higher mix of construction based project where more fund is required.

Working capital situation will improve in next few quarters.

With the momentum gained through successive major order wins during the first half of FY 2019, the management is confident of delivering strong performance in the forthcoming quarters

Since 1995 WABAG has completed over 900 water and wastewater plants worldwide.

The company is a major beneficiary of Namami Gange scheme introduced by Government of India to bring life to river Ganga and rejuvenate it

Higher total cost of operations (TCO) grew due to prudent provisioning for doubtful debts on receivables.

It has bagged Rs 600-crore order in Tunisia for engineering, supply and construction of a sea water desalination plant of 50 MLD (millions of litres per day) capacity. The plant when completed, will play a significant role in meeting the water demand for Tunisia. The project is scheduled to be completed within 27 months, followed by a 12 month operations and maintenance period.

Middle East and Africa will be the next growth region for the Wabag group.

140 MLD STP built by WABAG at Varanasi was dedicated to the nation by the Honourable Prime Minister of India Narendra Modi. The treatment plant employs activated sludge process and is powered by green power from sewage (biogas), significantly reducing the carbon footprint apart from lowering operational cost,

Momentum in order intake gives it confidence of meeting sales guidance for the year.

Revenue guidance for FY 19 stands in the range of Rs 4000-4200 crore

Order Intake guidance for FY 2019 stands in the range of Rs 5300-5700 crore.

APGENCOP outstanding is Rs 570 crore and the management expects to get 50% of this in FY 2019. The recovery got delayed due to early elections in Telangana.

The company would like to be debt free in the near future as it is an asset light company.

It would like to reduce its working capital days in the next two quarters.

The company has never booked orders at the cost of margins. It hopes to get margin expansion in most of its order projects.

Because of the higher orders received in the current quarter, in the next quarter cash flow will improve and working capital will reduce.

It has 100 Patents in products and processes.