Ladies and gentlemen, good day and welcome to Q3 FY 2025 earnings conference call of Enviro Infra Engineers Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchtone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectation of the company as on date of this call. These statements are not guarantees of future performance and involves risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sanjay Jain, Chairman and Whole-time Director. Thank you, and over to you, sir.
Thank you. Good afternoon, everyone. I would like to extend a very warm welcome to all of you for Enviro Infra Engineers Limited earnings conference call for the third quarter and nine months ended 31st December 2024. I would like to begin by expressing my gratitude to all of you for taking the time to join us today. We have on call with us Mr. Manish Jain, Managing Director, and Adfactors PR, our investor relations team. We have shared our results presentation. I hope you all must have gone through it. Since this is only our second earnings conference call, I would like to take you through recent developments before we get into business and financial performance for this period. It started in 2009, Enviro Infra has emerged as one of the leading and trusted players in water and wastewater treatment in India.
We specialize in designing, building, operating, and maintaining treatment plants, and also take on water supply projects for government agencies. Our work plays an essential role in supporting some of India's most ambitious national initiatives, such as Jal Jeevan Mission, the Atal Mission for Rejuvenation and Urban Transformation, and the National Mission for Clean Ganga. These projects are not just about infrastructure, they are about shaping cleaner and more sustainable communities for future generations. We take immense pride in contributing to these initiatives by delivering solutions that align with India's vision of development. In the recent budget, the emphasis on water infrastructure and urban redevelopment projects commendably steps, highlighting the government's commitment towards sustainable growth. The extension of the Potable Tap Water Mission to 2028 and the launch of INR 1 lakh crore Urban Challenge Fund demonstrate a forward-thinking approach.
At Enviro, we proudly support these initiatives and are ready to contribute to India's water sustainability and urban transformation goals. One of the aspects that we are particular about is commitment to timely project execution. In fact, one of our recent developments further highlight our ability to deliver on critical projects. We are proud to have achieved early commercial operation dates on major HAM projects, including the Bareilly project, which was completed ahead of scheduled times by more than two months. The Mathura and Saharanpur projects are progressing smoothly, with achievement of financial closure and concession of Mathura project as per schedule. These developments reinforce our reputation as a reliable and efficient partner for large-scale infrastructure initiatives. Our strong order book is a testament to our ability to win and deliver critical projects.
As of today, our projects order book stands at approximately INR 1,687 crores, comprising 22 diverse projects across multiple states. Operation and maintenance order book stands at approximately INR 738 crore worth of contracts, which provides long-term stability and recurring revenue stream. Our ability to maintain a robust order book demonstrates the trust that stakeholders and government authorities place in us. We have submitted bids for projects close to INR 2,200 crores and are expecting another INR 2,000 crores bidding in the coming months. In regards to sustainability and green energy, we are taking significant steps towards a more sustainable future. The company is in the process of forming a new subsidiary under Enviro Infra Engineers Limited. This new subsidiary will focus on solar energy, 24/7 renewable energy, pumped hydro, and green hydrogen projects.
As part of this strategic initiative, the company has already identified opportunities in existing solar assets, Solar independent power producer projects, and solar Engineering, Procurement and Construction projects. To lead this critical endeavor, we will soon have a chief operating officer who will be formally on board in the coming week or two. The appointment of this key leadership position underscores our commitment to expanding our capabilities in the renewable energy sector. Now, I would like to hand this opportunity to our MD, Mr. Manish Jain, for providing financial and operational information about the company. Over to Mr. Manish.
Thank you, Sanjay, sir. Good afternoon, everyone. I will brief you all about our consolidated financial numbers for this quarter and nine months. Our revenue from operations for Q3 FY 2025 stood at INR 247.45 crores, against INR 149.94 crore in Q3 FY 2024, growing at a rate of 65% year-on-year. EBITDA for the quarter stands at INR 53.94 crore, as against INR 27.67 crore in Q3 FY 2024, registering a growth of 95% year-on-year basis. The EBITDA margin for Q3 FY 2025 stands at 21.8% versus 18.5% in Q3 FY 2024, registering an improvement of 334 basis points. The profit after tax stands at INR 36.7 crore against INR 17.91 crore in Q3 FY 2024, registering a growth of 105% on year-on-year basis. The PAT margin for Q3 FY 2025 stands at 14.5% against 11.7% in Q3 FY 2024, so it's up by 277 basis points.
Now coming to nine-month FY 2025 numbers. Consolidated revenue from operations for nine months FY 2025 was INR 665.65 crore, vis-à-vis INR 428.57 crore in nine months FY 2024, registering a growth of 55%. The EBITDA for this period stands at INR 160.84 crore as against INR 80.64 crore in the previous corresponding period, registering a growth of 99% year-on-year basis. The EBITDA margin for nine-month FY 2025 came in at 24.2% versus 18.8% in nine months FY 2024, up by 534 basis points. Profit after tax stands at INR 103.06 crore against INR 50.86 crore, growing 103% on a year-on-year basis. The PAT margin for nine months FY 2025 was 15.1% vis-à-vis 11.7% in nine months FY 2024. During this quarter, our project order book stands at a strong level of INR 1,687 crore approx. for execution, complemented by over INR 738 crore from operation and maintenance contracts.
We are also bidding for projects, the projects of around INR 2,200 crore, which we have already bidded, and another INR 2,000 crore projects which are in line, which we are bidding in the next few months. This healthy pipeline ensures sustained growth and long-term revenue visibility. This is all from our sides. We can now open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Rahil from MAPL. Please go ahead.
Yeah. Hi, good afternoon. Am I audible?
Yeah, you are audible. Please.
Yeah. First of all, thank you for the opportunity. I actually missed the intro, so if the person was available, I would need excuses. Usually, we see EPC businesses make margin in the range of 10%-15%, sometimes 15%-18%. How is Enviro Infra doing 25%? What are we doing different to attain this?
Basically, we get differentiated from our peers, that we are having our in-house designing, which helps us in giving the most viable and most economical solutions to our end clients. Then further, we are having our in-house execution teams. The execution is being done in-house, so the timeline for execution always remains in control. There are no cost overruns which are observed. We are well in time, even if there are any challenges which we face during the execution of the projects. That way, we are not parting with the margins by giving any subcontracts. These factors are making us to make that EBITDA margins of around 24%-25% year-on-year basis.
Okay. The primary reason from what I understood is that you do not subcontract it to contractors below, and the whole execution is from Enviro itself.
Yes.
If I see your margins pre FY 2023, that is in FY 2022 and 2021, your margins were in the range of 9%-12% EBITDA. What changed in FY 2023 for you?
Basically, with the execution of project on year-on-year basis, the single ticket size projects, that size is increasing. We are having our own T&Ps. When we are deploying those T&Ps, definitely our costings are coming down as a percentage of that project. That is driving those margins, and now we have reached at a level where the EBITDA margins are getting consolidated at a level of around 24%.
Sorry, sir, I missed your part. What is coming down? I couldn't hear you clearly.
I was explaining, it was single ticket size project which we were earlier executing. Those were small. With the executions going on year-on-year basis, our pre-qualifications are improving our single ticket size projects what we are bidding. That is increasing. The machinery, the fixed cost as a percentage of the costing, that is coming down and that is driving the EBITDA margins.
Okay.
Those margins have now got consolidated at a level where we are seeing a continuous EBITDA margin of around 24% for the past two, three years.
Okay. So previously, what was the average ticket size, and what is it now?
The ticket size, if I say around three years, four years back, it was somewhere in the range of INR 30 crores- INR 50 crores.
Okay.
It was getting increased, and now the single ticket size is somewhere in the range of somewhere around INR 150 crores.
Okay. Sir, if you could exactly explain me when you say the usage of the cost basis for the machinery is coming down in the larger projects, how is that possible? Because if the project size grows, so would the expenses, right? So how is it exactly reducing, if you could explain that.
You see, the machinery says that is the T&P or the fixed asset of the company. If I am putting up a fixed asset of around 4, 5 crores for a 50 crore project, or I am putting that for a 150 crore project. Then again, the staff, the deployment. So the costing, the cost as a percentage of that sale, definitely that will come down when we will go for a higher ticket size project.
Okay, understood. Sir, if you could explain me the margins in pure sewage EPC work versus the margins we make in STP projects versus the margins in O&M.
Margin in STP is in EPC of STPs is somewhere in the range of around 24%. That for operation and maintenance, we understand that the margins are somewhere in the range of 30% or 35%. So the margins in O&M are always very better.
Okay. So we don't do any sewage work. We only do STP and the O&M, right?
We do all three type of treatment plants, which says it is water treatment plants, sewage treatment plants.
common effluent treatment plants. Along with this, we do the sewage schemes when it is an integrated package, which includes STP as well as pipelines. We also do that water supply schemes as well.
Understood. Sir, in H1, we saw that due to the external reasons of elections, et cetera, the orders had slowed down. Now that all those things are behind us, what sort of order flow we are seeing? Any pipeline that you have bid for?
Due to general election, definitely in H1, there were no fresh bids which were submitted, or it was just too small. In this H2, there is flooding of projects and a number of projects have got lined up. We are continuously bidding. Just in the last month itself, we have submitted our bids for somewhere around INR 2,000 crore projects. We understand that we are also submitting bids further for another INR 2,000 crore in next one or two months to come. The projects are definitely coming up now. It is under AMRUT schemes or the common effluent treatment plants. We are submitting our bids, we are getting good opportunity, and we are moving ahead.
Okay. And previously we were hearing that these schemes were seeing some delays in payments. Is that all behind us now, or are we still seeing some delays in payments?
There are no delays of payment in AMRUT projects or Namami Gange projects. Since March 2024, JJM had got a bit slowed down. In the recent budget, the JJM has been extended till 2028, and the central budgetary allocation of INR 67,000 crores has been confirmed. So the payments are going to be streamlined. At least if I say as of now, yes, there is some stress and there is some cash stress from JJM, but we are able to manage that cash stress from our other projects which are going on under AMRUT or Namami Gange.
Okay, that's helpful. Sir, my last question is, as you told me previously, you were targeting ticket sizes of INR 30 crores to INR 50 crores and right now it's close to INR 150 crores. So talking to a few other peers in the industry, what we understand is that in smaller ticket sizes, the competition is a lot less. So right now, as we are upwards of INR 100 crores projects, what sort of a competition are we seeing in bidding, in tenders, or is it rather only two, three, four players at max level?
There is different type of competition across different segments.
Yes.
First of all, let me explain about common effluent treatment plants. In common effluent treatment plants, generally, there is no competition, or I will say the number of players are just too less. The competition is less, the works are more challenging, and hence, the margins are also quite good.
I see.
CETP in itself is a niche. Then we come down to STPs. In STPs, the segment in which we operate in, there are generally 10, 12 players which are prevailing in that particular segment or that ticket sizes. Definitely the competition remains, but there is so much of work available, so there are some threshold margins which all the company require for executing these projects. We are quite in a position to maintain those margins.
Understood.
Third one is water and water supply schemes. We have definitely gone through this JJM phase. We are executing this INR 12,500 crore order, which we received from MP Jal Nigam. But the margins were a bit askew and DI pipeline was also a bit challenging. We are restricting ourselves to high margin projects where we are submitting our bids and we are looking for any of the water supply schemes or water treatment plants where the margins are good. We have been a bit selective now in submitting our bids.
Understood. Got it. That would be all for me. Thank you.
Thank you. The next question is from the line of Sarabjyot Chawla from Niveza. Please go ahead.
Hello.
Hello.
Hi sir, how are you?
I am fine, please.
Yeah, please continue.
Conference call, sir. Mention that the company was
Your voice is not audible. Please just speak loudly.
Am I audible now, sir?
Yeah, you are audible.
Sir, last conference call the company had given guidance that they were currently bidding for orders worth INR 4,000 crores. And given the success rate, the company would be able to secure orders worth INR 2,000 crores before the end of the financial year.
Yes.
I just want to know, are we on track with that?
The last earning call was on 18th of December.
Correct, sir.
What we have confirmed at that point of time, we are aligned with it. We have already submitted bids somewhere in the range of around INR 2,000 crore and are expecting another INR 2,000 crore order which are in line with our projects. We are definitely bidding for these projects also, and we are quite hopeful that based on our success ratio in the past, we will be having a decent order book available with us going forward.
Understood, sir. Understood. I just have one more question, sir. Given the current revenue for nine months ended FY 2025, I think that is at somewhere about INR 650 crore. Considering that the contribution in the quarter three has always been higher historically, can we look at ending FY 2025 at the top line of INR 1,000 crore?
If you see in the presentation also, the first three quarters are comparatively lower in comparison to Q4 numbers. We generally expect 20% each in the first three quarters with a delta of around 5% on positive on either side. The Q4 numbers are in general 40%. That way we are aligned. The company is moving into the same direction, and we also foresee that we will be crossing that number of
Crossing the thousand crore milestone.
Yeah.
Understood, sir. Thank you so much. Congratulations on the excellent numbers.
Thank you.
The next question is from the line of Dheeraj Ram from Ashika Institutional Equities. Please go ahead.
Hi, sir. Thank you for taking up my question. Sir, just wanted to know what is the amount of IPO proceeds that we have utilized for working capital this quarter?
Till now we have utilized INR 47 crore out of INR 181 crore, which was earmarked for the working capital requirements.
Okay. What is the amount of revenue that is stuck in receivables during the quarter?
The total amount of receivables right now is INR 238 crores.
Okay. Sir, how do you see by the end of FY 2025, sir, do you see any slowdown? Do you see this increasing by the end of the FY 2025?
To our understanding, the level of debtors and unbilled revenue, that will come down substantially as we understand that the funds in JJM are going to smoothen. So the trade receivables as well as UBR should come down. Regarding the growth of the company, that is quite satisfactory and we expect to maintain the growth going forward as such.
Okay. Sir, are we doing any UP Jal Nigam project as per your DRHP?
Yes. We are doing a number of projects in UP for UP Jal Nigam. We have recently completed this HAM project at Bareilly, and we are glad to inform that we have completed this HAM project and COD has been achieved two months ahead of time. A bonus has also been given to the company. Two of the annuities have also been released. So the project is well in line. Apart from this, we are doing one project of 55 MLD STP at Varanasi. It is under EPC. Then we are doing 160 MLD STP at Mathura and another 135 MLD STP at Saharanpur. So these two projects are under HAM.
Got it, sir. From their prior con calls, they were also doing UP Jal Nigam projects, which they have said that they are seeing a tremendous slowdown in outlay of funds from the government, especially in UP Jal Nigam projects. It is not the case for you clearly. Am I right, sir?
It is basically the scheme. In Jal Jeevan Mission throughout India, there was a slowdown. Basically, it was related to the completion of project and then extending the timelines for the project. That has got a streamline now. Apart from this, even in UP Jal Nigam, there are no other challenges. The work which I have confirmed you, these are all under NMCG. For all these projects, the funds are already aligned, and these are 100% centrally funded schemes, so there are no challenges at all.
Understood, sir. So last question, sir. How do you see the EBITDA margins going forward? Is 25% a sustainable margin for next two to three years?
These margins are because our capabilities, we are banking on those capabilities itself and the type of projects and the selection which we are doing for our projects, the way we are bidding, we understand that we will be in a position to maintain these margins.
Okay, sir. Thank you.
The next question is from the line of Prateek Bhandari from Aart Ventures. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. I wanted to understand that.
Sorry to interrupt.
you have guided for margins in the range of 22%-24%, whereas we have seen the margins to be contracting and getting below the previous quarter, in spite of the fact that we have done a top-line growth of 66% and the base for the previous quarter of the last year was relatively low. So what is the reason behind that?
Basically, it depends upon the mix of the project and the cycle of the project, in which the project is into. If you see our nine-month results, our EBITDA margins are at a healthy level of 24.16% in totality. Still we are maintaining the level which we have confirmed that the margins are somewhere in the range of 24%-25%. In Q2, if you will see, the EBITDA margin was 26.11%. Basically, it will always remain there. There will be a mix. But if you see as a whole in the year, to our understanding, those margins of around 24%, 25%, that will be maintained.
That somehow indicates that you would be ending the year around about INR 950 crores- INR 1,000 crores of top line and with the EBITDA of around about INR 240 crores- INR 250 odd crores?
The way the company is growing and the level at which the company has maintained the growth, definitely that INR 1000 crores growth seems to be quite achievable. Yes, we will be in a position to maintain those margins.
All right, sir. Just one last question on the JJM front. Sir, when do you see these payments getting normalized and the receivables getting down?
The payments are being released on a monthly basis even now. However, the pace of release of payments has gone slow. There has been a buildup in the trade receivables and UBR. We are expecting that the quantum of flows should be decent enough to pay to all the contractors for all the balances. To our understanding, by the end of this financial year, these funds should come and this is what we have got a confirmation from our departments.
All right. The trade receivables due is around about 240 odd crores, which you feel optimistic that you would be receiving by year-end.
We do hope. Definitely, we will be in a position to get these funds released.
Yeah. Okay. Thanks a lot, sir.
Welcome.
The next question is from the line of Harvik, an individual investor. Please go ahead.
Namaskar ji. Congratulations on the good set of numbers. I think most of my questions are already answered. I would just say congratulations once again, and we wish to see the company grow at good levels. Thanks a lot.
Thank you. Thanks a lot.
The next question is from the line of Shaurya from Arjav Partners. Please go ahead.
Hi, sir. Most of my questions have been answered. Just one more. What kind of top-line growth we are expecting in 2026 and 2027?
We do expect a continuous growth of 35%-40% going forward for next four to five years, because there is a huge quantum of work which is to be done in this wastewater field. We expect to achieve this top-line growth of 35%-40% on a continuous basis.
What will be the main source of this growth, as which segment will contribute more?
The segment will be wastewater, which constitutes maximum. It will be STPs or sewerage schemes followed by common effluent treatment plants, and we will drive some strength in water treatment plants. Primarily, we will be focusing on STPs and common effluent treatment plants.
What kind of margins we are expecting sustainable basis?
We expect to maintain this 24%-25% EBITDA margins.
24%-25%? Okay, sir. Thank you.
Thanks a lot.
Thank you. The next question is from the line of Mohammed Sufyan from Dinero Capital. Please go ahead. Mr. Sufyan, your line has been unmuted. Please go ahead with your question.
Hello. Am I audible now?
Yes.
Yeah. Thank you, sir, for the opportunity. Sir, I just need to ask, like, what the order book we have of INR 1,687 crore. So what will be the execution time period? And, like, INR 2,000 crores worth we have bid in that. Like, what's the success ratio we have on just for the same?
The orders which we have in our hands, the general timeline for these projects is 18 to 30 months. This entire order book is going to be executed by middle of FY 2027.
Okay. Middle of FY 2027. This 2,000 crores order book, like, what's the success ratio generally for us?
Pardon? Can you repeat please?
The order we have bid it for 2,000 crores. Generally, what's the success ratio I'm asking?
The success ratio of the company for last financial year, I will say it was around 50%, 47% or 50%, and the average success ratio was in the range of 30%-35%. We are quite hopeful that order book of around INR 2,000 crore, which we have envisages for current financial till FY 2025, at least we will see that L1 or the orders coming into our hands.
Okay. What is the confidence for the margin, like you said, compared to your peers that is better. So, like, what the authorities have bid it. Are there the margins sustainable or it should improve from here? What is giving you the confidence for the same?
It depends upon how a project is carried and how the execution, how its designing is taken forward. The way we are carrying these projects, it always remains the same for all the companies. But it is different margin for different type of companies because the way they are carrying it forward, it depends on it. The way we are going forward, we understand and we are quite hopeful that we will be in a position to maintain the margin, but we are confirming.
Okay. Just confirming again, in the previous slide, our participant who said that 40% of your revenue comes in Q4, right? On that basis, we can say for FY 2025, you will do around top line of INR 1,100 crore or something?
I have confirmed you the past trends what have been there. There will be definitely an increase in top line, and we are quite hopeful that we will be crossing INR 1,000 crore. We will definitely like to outdo those numbers.
Okay. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Tej Patel from Niveshaay. Please go ahead.
Thank you so much for the opportunity, sir. Sir, as far as I recall, in the previous concall also, you said that we have bidded for about INR 500 crores- INR 600 crores of HAM projects, and currently we have two HAM projects in hand. I wanted to get your understanding on why we are chasing HAM project. Why I am asking is this because probably you need to put 60% of your upfront capital there, and then you get your payment after three years, that also in annuity terms, right? What is the motivation there? Why we are bidding for HAM projects where we have to probably give an upfront capital, which in turn increases your long-term borrowings, and we are getting payment after three years in annuity forms. Why HAM over EPC and what is the thought process there?
What we understand is HAM are having even better margin in comparison to EPC. You have said it right that it is 60% infusion of funds from the concessionaire end. The balance sheet looks a bit heavy. However, the competition gets reduced. Attraction is always there. We have to keep a combination of HAM and EPC going forward that we can absorb some of the HAM projects in our balance sheet because we are getting good margins, and rest of the projects will go in EPC. Right now, one of the HAM is completed, COD is achieved and annuities are coming, and two HAM projects are under execution mode. For other HAM projects for which we have submitted our bids, we have not got those projects.
Got it. But then when you say high margin, how much of a high margin? In terms of competition, you said 10 to 12 players in a normal STP bid. But then in HAM, what is the competitive scenario?
In HAM, that competitive scenario reduces to around seven, eight. There is a filtration of another three, four players. The number of players are getting reduced in HAM projects.
In terms of margin, how much if you could just throw light on?
An EPC project of STP is having a margin of around 24%-25% for us, and for HAM, we look forward to a margin of somewhere around 30% plus.
Got it. Sir, just again, your viewpoint on we are expanding to other sectors like solar, as you mentioned. So what's the reason? Why I'm asking is this because although let's say the government have extended the scheme, if you look at the CapEx, especially across all the schemes, especially in the Jal Jeevan Mission, although the allocated budget was quite high, the expenditure has been almost 50% and about let's say 60%-70% under AMRUT and all. So your reason for expanding into other sectors is low order inflow or what's the thought process behind it? Because in the start of the call you said you are getting a healthy order inflows. Then why are we expanding to other sector? Do you foresee orders getting slowed down although the scheme has been extended and the budget allocations are also higher?
First of all, there is humongous work which is to be done in India in the water and wastewater sector. So the sector is very strong and the number of projects are coming up, projects are lined up and projects will come up in future as well. We are quite hopeful. The same support is there from the central government and the states and ULBs as well. So there is no challenge at all if we see to this water and wastewater sector. With the growth in this sector, we are also aligned and we are also growing at the same rate. So there are no challenges at all what we foresee in future or at least next four to five years to come.
The scenario is, it is very healthy and the sector is bullish, and there will be huge work which will come up and we are also bidding and we will be executing. The slowdown in JJM was basically what we got to understand is that the scheme was earmarked till March 2024. In this budget, the timeline for the completion of a scheme has been extended till 2028, and the funds have also been allocated for this. We do not think that there is going to be any slowdown or the funds not being made available from the government side. It was just a temporary phase which was to be handled. Now coming to when we are going bullish on this sector, there was an inorganic growth initiative which we had also foreseen, and we had also mentioned in our DRHP and RHP.
Our focus has always been on the sustainability and green energy concepts. We are putting up solar power plant as a part of the project in our various STPs which we are installing. Our focus was that we can definitely enter into this particular sector wherein as a standalone solar power project, we can also think of this line. There is humongous work again available in this green energy sector. There are commitments from the center government from India to achieve that zero emission norms. Having said that, since the sector is so bullish again, we are trying, we are taking some small steps and we are trying to develop ourselves. This new company which we will be forming will be a part and will be a subsidiary of Enviro Infra Engineers Limited. It will be double growth.
The growth which we are achieving from water and wastewater sector, it will continue at this level itself, and we expect that a small growth that will also get added to our parent company from this green energy and sustainable growth.
Got it. Interesting. Sir, if you could just throw some light on from when and which year probably we would start, let us say, bidding for projects under, let us say, the green energy segment and what type of projects exactly under also green energy segment. If you could also throw some light on team building, because scope of work is different, right? Although you did solar power projects in water, but if you could just throw some light on the team building side and when could this segment start contributing in our order book and in terms of revenue also.
The team building, that will start, we presume it will be sometime next financial year, and some revenue generation should also start from next financial year. We are already on the job. We have submitted two bids in solar as well. We are aligned to this sector, and the moment we get any of the bids wherein we are successful, that moment will start and the revenues will start accruing from that. I can say because it is just two months, the work is not going to be started, the revenues will also get generated from next financial year. It is FY 2026 when we will see some revenue contribution from this green energy sector as well. Now coming to the sector, the identification is it is solar, then it is pumped hydro, then it is 24 by 7 renewables and green hydrogen.
This is basically what we understand is green energy is all about. Our main focus and our concentration right now will remain solar. When we will have a stronghold in this solar segment, then we will go on and understand the other sector and we will move on and increase our strength there.
Sorry to interrupt, sir, but the current participant has been disconnected. We will move on to the next question. It is on the line of Sanjay from VT Capital. Please go ahead.
Yeah, thank you for the opportunity, sir. Can you hear me?
Yeah.
Yeah. So congrats on a good set of numbers. So just to mention, you are in plan of bidding for the solar project as well. How come, sir, we will be able to help those solar company in pitching all those EPC projects?
Right now we have some small capacities which we have executed in our current water projects. For bidding for a bigger, or I will say it, for which the technical experience is not available with us, we will enter into some form of joint venture or consortium with some solar company itself.
Sir, basically what we are going to do? What kind of things we are going to set up? In the water thing, we make all those canals, all those water houses, all these things. In the solar thing, what kind of things we are going to make, sir?
See, this is just a start. For the start we can be an EPC player or an integrator of solar systems. Entering into that manufacturing of solar modules, that is not in question right now. First of all, let us enter into it, do some EPC projects, have some strengths with us, we understand the industry, then we will look on what is the size available to us, how we can grow organically into that field.
Got it, sir. And just to mention in the previous participants ask questions, like the margin guidance or margin range for the different sectors of the work like treatment plant and all those for EPC and HAM. So what kind of margins we are having for the water supply projects? The sector that we are thinking of going to be participating in future.
Are you asking for the current water supply projects or for the future ones?
Current and future as well, sir. If you can throw some margin guidance for those segments as well, like what you did for the EPC and HAM projects.
Yeah. The current water supply schemes which we are executing are having margin somewhere in the range of 17%-20%. We will be fairly comfortable for the water supply scheme or projects if we are executing at a margin, a slightly lower margin, maybe around 22%-23% margin is there, then we are comparatively comfortable. Because in STP, we look for a margin of around 24%-25%. So even though if those margins are there, then definitely we will enter into those projects. We are looking for water supply schemes which are under AMRUT.
Okay. AMRUT schemes. Got it. And sir, what could be the margin guidance for the common effluent treatment plants like you told in the previous, in the initial call. These things are very complex to build up. The margins are pretty high in this segment. So if you can show some numbers to understand what kind of pricing they have compared to other segments which we operate.
When we bid for the projects in CETP domain, we expect margins somewhere in the range of around 30% on our costs. So that way, our CETP margins are almost equivalent to those HAM margins which we are bidding for STPs.
Got it. And sir, are we doing any sort of projects in water treatment plant?
Yeah, these water supply schemes includes water treatment plant as well.
Okay. So margins do differ in that segment or it is almost same like what you operate here?
I have already told the margins in water supply. A water treatment plant as a standalone project, these are just two small numbers which come individually as a treatment plant only. These two do generally come as a water supply scheme. We have to work out that scheme in totality then.
Okay. Like if you go for the water supply thing, you need to treat the water as well, right? That is what you mean to say, correct?
Yeah. A water supply scheme in itself is that it is entirely that drawing water from the river, so an intake well to be constructed, then pumps are to be installed. It is VT pumps, then a raw water pipeline, then construction of a treatment plant, then clear water reservoir, main balancing reservoir, then the distribution pipelines, ESRs, distribution pipelines. This whole gamut makes a water supply scheme.
Got it, sir. Sir, thank you so much for your time, sir. Thank you so much. Wish you all the very best, sir.
Thank you.
The next question is from the line of Siddhant from RV Investment. Please go ahead.
Am I audible, sir?
Yes, please go ahead.
Yeah.
My question is basically, we are consistently maintaining a net profit margin of 15%. Going in this different sectors like solar and other renewable energy, will we be able to maintain this margin?
First of all, our parent company, Enviro Infra Engineers Limited, as a standalone company, it is concentrating on water and wastewater segment. Our margins will remain healthy and our margin, we will continue to sustain those margins. This line is entirely different, and when we are talking about that sustainability entering into solar power, it is our start into that particular line. At the start, maintaining those level of margins may be challenging or we cannot confirm it right now. First of all, we need to enter into that segment. We need to understand the complexities there. Only then we will be in a position to confirm what exactly will be the margin.
However, having said that, those margins, even if, say, if that margin is 10%, that is getting added to the margins what we are already generating in the parent company and the growth there, that growth is not getting hampered at all with the entry into a newer segment. Basically, it will be a consolidation and it will improve to the top line and the bottom line of the company.
Okay, sir. That answers my question. Thank you very much.
Thank you. The next question is from the line of Mohammed Sufyan from Dinero Capital. Please go ahead.
Hello. Yes, sir. Almost my questions are answered. I just need to ask, what will be the tax rate for FY 2025 and going forward?
There is no change in the tax rate. The tax rates are same, which have been prevailing for the past two, three years. There is no change in the tax rates.
Okay, sir. Thank you.
The next question is from the line of Tej from Niveshaay. Please go ahead.
Yeah. Thank you so much for the chance, and I am really sorry. I do not know. For some reason, my lines got dropped. Again, the same question, sir. I am not sure if you answered this. When are we planning to enter other segment, and from when can we expect the orders coming in?
We expect to enter into this new segment in the next financial year. Basically, whatever the company has achieved during this current financial year, because the IPO was in the month of November, and the IPO funds have traveled only in the last week of November. The main growth story from these IPO funds, this will definitely get translated and replicated in FY 2026 and onwards.
Okay. And sir, although not that material, our interest cost has decreased from INR 12 crores in last quarter to about INR 8 crores this quarter, despite a higher debt base as of September. Why is this? What's the reason? One more follow-up question is, have all bank limits for the Saharanpur been sanctioned, right?
We are again glad to inform you that sanction for Saharanpur from our bankers, it was communicated on the date of signing of the concessionaire agreement itself. That entire four-month period. The closure was already there, so the time period was available for doing other condition precedents. Financial closure has already been achieved for the Saharanpur project.
Okay.
Can you please repeat your other question, please?
Yes. My first question was, our interest cost decreased from about INR 12 to INR 8 crores this quarter, right, despite a higher base as on September 2024. I'm asking why the interest cost has decreased despite a much higher base.
Basically, there has been a repayment of 120 odd crores from the term loans, which the company was having. There is a slight reduction in the interest cost.
Got it. What is the debt balance right now, as on December?
The borrowings as on September 24, it was INR 376 crore, and presently the borrowing level is INR 270 crore on a consolidation basis.
Okay. Got it. When do you expect the results for this about, let us say, 3,000 to 4,000 bids that we have submitted? Do you expect the results to come out in this quarter only?
We do expect not all, but it do take a time of somewhere around 120 days for which the bids are kept valid. At least for some of the projects, at least we will know that, yes, we are L1. The evaluation will get completed.
Any number how many orders are we in flow, in terms of inflow, are we expecting this quarter?
We are expecting we are maintaining that level of around INR 2,000 crore which should flow to the company, and at least we should get that line that either we are L1 or we are going to be awarded those level of projects.
Okay, perfect. Thanks a lot. That's all from my side.
Thank you.
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Sanjay Jain for closing comments.
I thank the entire team of Enviro Infra Engineers Limited for their untiring efforts, hard work, and dedication, which drives the company forward through various market conditions. Also, I appreciate all of you for participating in our conference call. Please do get in touch with our investor relations team for any further questions. Thank you.
Thank you.
Thank you all. Thanks.
On behalf of Enviro Infra Engineers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.