Ladies and gentlemen, good day and welcome to the Enviro Infra Engineers Limited Q2 and H1 FY 2027 conference call. Today we have with us Mr. Sanjay Jain, Chairman, and Mr. Manish Jain, Managing Director of Enviro Infra Engineers Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Sanjay Jain for his opening remarks. Thank you, and over to you, sir.
Thank you. Good afternoon, everyone. Thank you for joining us today for Enviro Infra Engineers Limited Q2 and H1 FY 2027 earnings conference call. On behalf of the entire Enviro Infra Engineers family, I would like to extend my warm wishes to all our investors, analysts, and stakeholders on the occasion of Diwali. I wish you and your families a very happy Diwali. Joining me today are Mr. Manish Jain, our Managing Director, and our investor relation team from ADFACTORS PR. We have shared our financial results and earnings presentation, and I hope you have had an opportunity to review them. The first half of the FY 2027 has been an important period for Enviro Infra Engineers as we continue to strengthen our position in the water and wastewater infrastructure sector while expanding our presence across renewable energy and other sustainable infrastructure segments.
Our long-term objective is to build on our established engineering and execution capabilities and evolve into a diversified engineering and infrastructure company. India continues to witness significant investment in water management, wastewater treatment, and clean energy infrastructure. Government initiatives such as Namami Gange and AMRUT, along with the increasing focus on water reuse and environmental sustainability, are creating meaningful opportunities for companies with strong technical expertise and execution capabilities. At Enviro Infra, our water and wastewater business continue to remain the foundation of our operation. Over the year, we have developed strong capabilities across the design, construction, commissioning, operation, and maintenance of complex water and wastewater treatment infrastructure. Our expertise spans sewage treatment plants, sewage networks, common effluent treatment plants, and advanced wastewater treatment solutions, including zero liquid discharge and treated water reuse.
During the first half, we further strengthened our HAM portfolio with the two new projects under the Namami Gange program in Varanasi, awarded by Uttar Pradesh Jal Nigam. These projects include a 45 MLD sewage treatment plant at Pandit Deen Dayal Upadhyay Nagar, valued at INR 126.78 crore, and a 60 MLD sewage treatment plant at Lohta, valued at INR 130.14 crore. Together, these projects have a combined value of approximately INR 257 crore, excluding GST, and include 15 years of O&M. With this addition, our HAM portfolio now comprises five projects. Our execution capabilities are reflected in our growing portfolio of water and wastewater treatment projects across India. We have completed 58 water and wastewater projects with a cumulative treatment capacity of 1,018 MLD built to date, demonstrating our ability to undertake complex treatment infrastructure projects.
Alongside our core business, we have continued to make significant progress in expanding our renewable energy platform. Our diversification into renewable energy is a natural extension of our existing engineering and project execution capabilities, enabling us to participate in opportunities across solar, wind, and battery energy storage systems. The acquisition of a controlling stake in Suyog Urja Limited earlier this year marks an important milestone in this journey. The acquisition has strengthened our capabilities in the wind EPC segment and provided us with access to an experienced execution team and an established project portfolio. During September, Suyog Urja received a letter of intent from Tata Power Renewable Energy Limited for EPC turnkey works relating to the 180 MW NTPC wind project at Parli, Maharashtra. The project is valued at approximately INR 190 crore, excluding GST, and includes wind turbine foundation, balance of plant infrastructure, and associated transmission work.
It is scheduled for completion by March 2027. Subsequently, in October 2026, Suyog Urja received another letter of intent worth INR 228 crore, excluding GST, from ARIE Energy LLP for EPC work related to the 100 MW Ajani Wind Power Project in Latur, Maharashtra. Together, these two wind EPC orders represent approximately INR 418 crore in project value, excluding GST, and further strengthen our execution pipeline across FY 2027 and early FY 2028. These developments demonstrate the increasing scale of our renewable energy operations and our ability to participate in larger infrastructure projects. Importantly, renewable energy contributed approximately 29% of our consolidated revenue during H1 FY 2027, reflecting the growing contribution from our diversified business portfolio. As on date, our diversified order book stands at approximately INR 6,778 crore, comprising INR 3,439 crore from water and wastewater infrastructure and INR 3,340 crore from renewable energy. This provides us with healthy execution visibility across our businesses
Beyond wind, we continue to strengthen our presence across solar and battery energy storage systems, which we believe will play an increasingly important role in India's evolving energy infrastructure. Looking ahead, our priorities remain focused on strengthening our core water and wastewater infrastructure business through timely execution, advanced treatment capabilities, and long-term O&M opportunities, while scaling our renewable energy platform across solar, wind, and energy storage. We remain committed to disciplined execution, operational efficiency, and prudent capital allocation as we convert our growing order book into sustainable revenue and profitability. We believe the combination of our established water infrastructure business and expanding renewable energy capabilities provide us with a strong foundation to participate in India's growing sustainable infrastructure requirements and create long-term value for our stakeholders.
With that, I would now like to hand over the call to Mr. Manish Jain, who will take you through our key operational developments and financial performance for the quarter. Thank you, and over to you, Mr. Manish.
Thank you, Sanjay sir, and good afternoon to you all. I will take you through our operational performance, order book composition, and financial results for the second quarter and first half of FY 2027, followed by our priorities for the remainder of the financial year. Starting with our order book, Sanjay sir has already highlighted our overall order book position. I would like to provide some additional details on its composition and execution visibility. Within the water and wastewater segment, our EPC order book stood at approximately INR 2,106 crore, while our HAM portfolio accounted for INR 346 crore. In addition, our long-term operation and maintenance order book stood at approximately INR 987 crore, providing revenue visibility beyond the construction phase. On the renewable energy side, our execution order book comprises approximately INR 111 crore in solar, INR 1,100 crore in wind, and INR 1,054 crore in wind projects.
The income generation from IPP projects, which is over a period of 15-25 years, is INR 956 crore, along with INR 109 in maintenance contracts of the optional renewable order book. For the second quarter of FY 2027, on a standalone basis, the revenue for the quarter stood at INR 267.13 crore, EBITDA stood at INR 65.13 crore, and PAT on a standalone basis stood at INR 36.87 crore. The EBITDA margin for the quarter on a standalone basis is 24.38%, and PAT margin is 13.8%. Our consolidated revenue from operations stood at INR 363.8 crore compared with INR 227.3 crore in Q2 FY 2026, registering a year-on-year growth of 60%. On a sequential basis, revenue increased from INR 359.2 crore in Q1 FY 2027. On consolidated basis, EBITDA, excluding other income, stood at INR 74.9 crore compared with INR 64.9 crore in the corresponding quarter last year, registering a growth of 15.3%.
Our EBITDA margin stood at 20.58% compared with 28.56% in Q2 FY 2026 and 21.07% in Q1 FY 2027. Profit after tax for the quarter stood at INR 39.5 crore compared with INR 49.5 crore in Q2 FY 2026. The moderation in profitability reflects the movement in operating margins along with higher depreciation and finance costs. Basic earnings per share stood at INR 2.36. For the first half of FY 2027, consolidated revenue from operations stood at INR 723 crore compared with INR 458.3 crore in H1 FY 2026, registering a growth of 54.4% year-on-year basis. EBITDA excluding other income increased 16.6% to INR 150.5 crore compared with INR 129.2 crore in the corresponding period last year. The EBITDA margin for the first half stood at 20.82%. Profit after tax stood at INR 84.7 crore compared with INR 92 crore in H1 FY 2026, while the basic earnings per share stood at INR 4.63.
The moderation in EBITDA margin at consol levels are attributed to some accounting entries on account of interest cost on the payments to be made at a later stage for acquisition of Suyog Urja Limited and reversal of profits from EPC to EPC of IPP projects. The profitability from IPP projects shall get reflected once the projects are completed and it starts generating IPP revenues. Further, from Q3 and onwards, the scale of EPC of BESS and wind projects shall increase substantially, which will result in the improved profitability for the renewables and for the company as well. Overall, the first half reflects strong revenue growth in an increasing scale of operation across our businesses. While the margin profile has moderated, our emphasis remains on cost management, project execution efficiency, and sustainable profitability.
Coming to our balance sheet and working capital, efficient capital management remains a key important focus area, particularly as we undertake projects with different execution timeline and funding requirements. As of September 2026, our consolidated trade receivables stood at approximately INR 321.8 crore compared with INR 155.3 crore as of March 2026. At the same time, our total borrowings stood at approximately INR 703.9 crore compared with INR 422.3 crore at the end of previous financial year. We continue to work towards timely certification of project milestones, improved billing and collection, and optimizing our working capital requirements. Our objective remains to ensure that the growth in our operations is accompanied by disciplined capital utilization and improved cash flow generation.
Looking ahead to the second half of FY 2027, our immediate priority will be to accelerate execution across existing water and wastewater treatment projects, progressing in the HAM portfolio, and expand on our long-term operation and maintenance. Alongside this, we will focus on the timely execution of our renewable energy projects, particularly across BESS and wind EPC, while managing procurement commitments and capital requirements efficiently. We will continue to pursue new opportunities selectively with an emphasis on the project quality, execution capabilities, and profitability. Our focus remains on converting our existing project pipeline into sustainable revenue growth while strengthening our operating and financial performance. With that, I would like to thank all our investors and analysts for their continued interest in Enviro Infra Engineers Limited. We can now open the floor for questions.
Thank you. 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Nitin Asopa with Ohm Investment. Please go ahead.
Good afternoon, board.
Good afternoon.
My name is Nitin. I would like to ask a question regarding the company's long-term growth opportunities. Given the rapid growth of semiconductor manufacturing and data centers in India, both of which require advanced water treatment solutions, is Enviro Infra Engineers evaluating an expansion into high-purity and ultra-pure water treatment systems for semiconductor fabrication facilities and advanced water recycling solutions for data centers? Does the company see these sectors as potential growth opportunities, and are there any plans to develop the necessary technological capabilities, strategic partnerships, or collaborations to enter these specialized markets? Thank you.
Nitin, company is already into the ZLD segment. At present, we are executing one of the ZLD projects, which is for a textile complex for MIDC at Ichalkaranji. If we look forward, basically ZLD is one of the key areas where the company will continue to focus. Along with ZLD, reuse of wastewater from the sewage treatment plants is gaining a lot of momentum since water is very scarce and availability of water to various industry, it is a mandated requirement right now to support the industry. Reuse will one of the key focus areas. At present, the company is not available in the ultra-pure water segment. We will continue to develop our execution capabilities, and one point of time, we look forward to entering in that segment, but presently, we would focus on the ZLD, reuse of water from the sewage treatment plant.
We would like to focus on the desalination projects as well. This is how we will continue to expand our journey across entire spectrum of water and wastewater treatment. At some point of time, when we are comfortable enough, then definitely we look forward to entering the UPW as well. At least as of now, UPW, we are not available. Advanced wastewater treatment systems for a data center, that is also, we need that capability as we are doing the ZLD system, so that is there. Apart from UPW, we are well aligned and we are moving into these type of projects. Thank you.
Thank you. The next question comes from the line of Chatrika Deshpande with Capital Advisor. Please go ahead.
Hi, sir. Good afternoon and thank you for the opportunity. Sir, my first question is, has there been any improvement in fund release under AMRUT, Namami Gange, and other government projects?
There are no challenges with respect to the release of funds under Namami Gange. If I say Namami Gange, there are two type of projects. One is HAM project and second is EPC. Under HAM projects, the funds are already parked in the dedicated escrow accounts. So, release of funds are never a challenge when we are executing a HAM project under Namami Gange schemes. The second one comes the EPC under Namami Gange. The availability of fund again is not a challenge under NMCG. There is a working capital cycle of them that is not also very stretched. It can be somewhere around 60 days time. So, Namami Gange projects, the fund release or the working capital cycle not gets bloated. Now, coming to the second aspect, AMRUT. AMRUT, it is off and on, I will say, and it is state-wise.
In some states, the funds are getting released smoothly. In some states, there are some of the issues. The issues may pertain to the local department as well, where there are some approvals which are pending with respect to the usage of funds or their signatories are not available. That type of issues can be there. Other way round, the funds are being made available even AMRUT 16th version. We understand that working capital cycle gets a bit bloated in AMRUT projects, but funds are available and the projects are moving on.
Okay. Sir, my next question is, what is company's strategy for expanding its presence in BESS segment?
In the BESS segment, presently, there is an order book of 930 MWh from NTPC. We do have one project, which is an IPP project from Bihar, which we have acquired. Right now, we are executing these two projects. To our understanding, a major chunk of these project is expected to be completed by June. We look forward to a good execution in the BESS projects, and then definitely look forward to further increasing our order book in that segment, both under EPC as well as IPP, if a good project is available.
Okay, sir. That answers my question. All the very best and thank you.
Thank you.
The next question comes from the line of Atul Kumar, an individual investor. Please go ahead.
Hello. Good afternoon, sir. Thank you for the opportunity. Sir, my question is related to the margin decline that we have seen in this quarter and also H1. Compared to the previous year, we have seen a decline of almost 800-900 basis points. What has been the main reason for this decline, sir? Also, when I was checking the results, there is an item in P&L which says other construction and operating expenses. Year on year, that has increased from INR 46 crore in last year to INR 178 crore. That's quite an increase. I wanted to know what exactly is this cost item, and also, if you can give an overall commentary on why we have seen margin declining from 27%-28% to 20% levels.
Atul, if you see our guidance for the current financial year, we had reduced the EBITDA margin guidance in the water and wastewater treatment segment to somewhere around 21%. It was on account of the war which is continuing in West Asia and this Middle East, and because of which the input pricing has increased substantially. If you see the standalone results of the company, basically we have done somewhere around INR 264 crore in the current quarter, and our EBITDA margin stands at 24%, and our PAT is also somewhere around 14%. As we see the results on a standalone basis, to my understanding, we are well sorted, and we are maintaining the guide, we are well above our guidance levels as well.
Now, coming to the renewable segment and on the consol balance sheet and profit and loss, basically, if you could have, you could just recall the speech wherein I mentioned there are some accounting entries because there has been an acquisition of Suyog Urja, which is at INR 311 crore. First installment or first tranche of INR 111 crore is what has been paid, and rest balance INR 200 crore, that will go in next two years. There has been an implication of some interest costs which has been taken as an expense. This is one of the costs which has got added. It is again a book entry. Second one is, as we are executing the EPC of the IPP projects which we are having in hand, the profits are required to be reversed in these IPP projects.
Reason being, since it is a group company, renewable is basically the parent company, and the asset is passed in the SPV. As the parent company is doing the EPC, if there are any profits at the consol level, that margins are required to be reversed. With these accounting entries and the audits, yes, on overall basis, it looks the profitability is going down. Then if you will see, the revenue has increased almost 60%. EBITDA has increased to around 20%. What we can understand is there has been an increase in the finance cost, depreciation. Depreciation because the IPP and HAM projects what we are doing, so there is a higher accounting for the depreciation. That is, as a percentage of sales, employee cost, finance cost, and depreciation have definitely increased for the first half.
But as the revenue growth will further improve in Q3 and Q4, we expect the profitability in itself, that will improve substantially, and it will improve the margin profile as well.
Okay. Okay, sir. Basically, my main question was, so I understand the finance cost, depreciation, those have increased in line of, let's say, increase in the revenue. My question was on, there is an item, sir, other construction and operating expenses. That is INR 178 crore for Q2. Could you explain, like, is that part of the payment that we have done to Suyog Urja, like INR 111 crore you are saying?
No, no. These are-
What is that?
These are direct costs which includes all the expenses which are related to the execution of the project. One is the purchase cost, and second is other construction and operation cost. Basically, all the manpower cost, the wages, the civil construction, this labor cost, all these costs, job works, these all are taken as a part of this other construction and operating expenses. I will suggest, if you will see the purchase cost along with this other construction and operating cost, if you will cumulate these two, and if you will compare these costs, I think that will make more sense, and then the actual changes what are happening in the cost of production, that will make sense.
Okay. Okay, sir. Just a request, sir, if possible, basically, I am saying, like, out of total main expenses of INR 248 crore, INR 178 crore we are seeing as other cost. I think if we can further break it down, it will be easier for investors to understand that where this other is going on, since the value is too high. My follow-up question would be, sir, since you are saying the margin is in line of what we had recommended, for the longer term, if we have to see at consol level both, since we have like 50%-50% order book of renewable and water now, what is the margin profile that we should expect going ahead? Should it be like 20%-22% or higher or lower?
The EBITDA margin profile can be expected to be somewhere around 19%-20%.
19%-20%.
You compare the standalone and the consol PAT levels. On a standalone basis, the PAT is INR 37 crore. On consol basis, the profitability is INR 39.5 crore. The main point, the profitability from renewable, basically it will get transpired as the EPC component of renewable from BESS and wind, that will increase. There is a substantial uptick which is expected. There has not been a movement or a substantial movement in the EPC execution of these projects till now. This will increase a lot, and then the profitability from EPC will come while we are executing IPP. Profitability doesn't come during the execution, it will come when the projects get executed and IPP income starts getting generated. The profitability from renewable, there should be a remarkable increase in Q3 and Q4 as we expect.
Overall, if I say, the guidance has been 21% EBITDA margins for water and wastewater treatment segment, somewhere between 15%-18% EBITDA levels for renewable. On a consol level, we should be somewhere around 19%. This is how the profile should move in further quarters.
Yeah, that is I think very helpful, sir. Thank you. One last question that I have on-
I am sorry to interrupt, Atul. I would request you to rejoin the queue for more questions. Thank you. The next question comes from the line of Manish Choraghe with Keynote Capitals. Please go ahead.
Namaste, Manish ji. I just wanted to know that our Q4 FY 2026 results were affected by two projects from Bangalore, and it was expected to be commissioned in the Q2 FY 2027. What is the update on that? The second question is, how do we look at our consol FY 2027 numbers? We stick to our guidance of sales of INR 2,000 crore, and what could be the EBITDA and PAT margins we are expecting?
Regarding the two Bangalore projects, the total value of which was around INR 220 crore, both the projects are now under execution and are moving smoothly. We are maintaining the timelines, and we expect to complete projects well ahead of schedule. These projects are now on, and there is no issue with respect to the execution in both projects. Now, coming to our guidance for FY 2027, we have been able to meet the guidance for the first two quarters as far as the revenues are concerned. We have achieved a top line of INR 700 crore, and this was primarily the guidance from our side as well. As we move forward, our guidance remains intact at INR 2,000 crore to be the total sales turnover for the current financial year.
Balance INR 1,300 crore is what we expect we should be in a position to do in Q3 and Q4. The bottom line also is expected to be somewhere in the range of around INR 240 crore-INR 250 crore. Our guidance remains intact for the financial year. We maintain our guidance. There is no change. As such, if we talk current financial year, the order book is already there in our hands, and what guidance we are giving is based on the current order book only.
When are we expecting to be OCF positive post Q3?
We look forward to be OCF positive by Q4. I don't see any chances. Again, if I give a number for the current H1, there is an increase in the service concession agreement receivables to the tune of INR 57 crore. This amount has to come over a period of 15 years. This is one which takes this OCF to negative figures. Trade payables have got reduced from 93 days to 63 days. The total outgo on that account has been to the tune of INR 102 crore. If we can just Maybe it's a reconciliation. If I would have slowed down on the payments for the trade receivables, I could have turned OCF positive. As such, operations in the company are smooth. We are moving at a rapid pace. The execution of the projects are well in control. We are executing projects well ahead of time.
That way, we still are in a confident position. OCF positive definitely on paper as it should look like. We expect that Q4 onwards, we should be OCF positive.
Okay. That is it from my side. Thank you.
The next question comes from the line of Sudeep Anand with Systematix Group. Please go ahead.
Good afternoon, sir, and wish you all a very happy Dhanteras and happy Diwali. Just a few questions. Sir, if you look at our balance sheet, our debt level has actually, gross debt has gone up significantly consol from INR 422 crore to INR 704 crore. Based on the order book which we have around INR 6,700 odd crore, what is the peak debt level that we are looking at and when it should reach out?
Good afternoon, Sudeep ji, and happy Dhanteras and happy Diwali to you as well. First of all, if we look into the debt-to-equity, even at present, our debt-to-equity is somewhere around 0.53. That says we are sitting on a comfortable level. Same if we compare it from Q1, it was somewhere around INR 423 crore, which has now increased to INR 700 crore. We can attribute it to some of the HAM projects which we are executing. Two HAM projects which we were executing in Enviro, it was a Mathura project, where we have achieved the construction completion now. The second project is Saharanpur, wherein we are moving for the fourth milestone completion. There is an increase in the term loan due to this.
There are IPP projects as well in the renewable, due to which the term loan has increased, but there is an asset which is available from which the income accruing in the future will take up the interest for those particular projects. That way, term loan definitely is expected to increase, but it will increase moderately. To an extent, there is an increase in the short-term loan as well, but we expect that as the cash flow cycle will get eased out, these, I will say, the trade payables through which we make payment to our MSME vendors, the CC limits or the WCDL, that will go down. I can look forward to this number not getting bloated too much, but to give exact number is not possible. If I say this financial year should get closed at a debt-to-equity level not more than 0.6.
Okay. Similarly with the receivables and UBR, do you think that by FY 2028, it should actually by FY 2027, it should considerably come down, or we should look at a similar kind of level by FY 2027, by March 2027?
The UBR which was there in our balance sheet because of MP Jal Nigam projects, it has now reduced significantly. What I can say is now it is not even in three digits, somewhere around the projects of this MP Jal Nigam and Arghya Jal, which we were executing. Can be somewhere around INR 100 crore or maybe less than INR 100 crore now. These projects are moving on a continuous basis. By March, we expect that it will almost be nil in the UBR. Negligible amount means some smaller ones can be there. This is one. We expect a significant improvement in the working capital cycle in other projects. A significant reduction is possible. But one thing which I would like to emphasize, the value may remain at a similar level of maybe somewhere around INR 600 crore or so.
But as a percentage of the sales or in terms of UBR days, we do expect that it should come down substantially, because as the sales will increase, that number may not be going down significantly, but UBR days should definitely come down. We are at a peak of it.
Okay.
In comparison to Q1, it has come down now.
Okay, that is great, sir. Sir, just one last question, if I ask question. Sir, if we look at the. In recent, say, last six to nine months, most of the order has come in the renewable segment. Should we consider, like, strategically we are moving towards the renewable and water where the contribution in the total order book will keep declining? Is it so, or it is just a matter of time and going forward? How should we look at, say, by FY 2028, what contribution from water you are expecting to the total order book?
Boss, there is no chance of getting shifted from the parent water and wastewater treatment business, which is the core, and we have been continuing with it for the past 35 years, and we do not see that there will be any decline in the opportunities in this particular segment. Now, coming to the order book in the past five, six months, basically, there has been some increase in the competition. We have not lowered our profitability guidance on the projects while we are bidding. Now, if we have to maintain that profit profile, so the type of projects, maybe a single ticket size project, the amounts to wastewater treatment systems, ZLD projects, reuse. So, we are focusing more on that side, since our order book is already very healthy. Last year, when we were bidding, there was a thought process that the order book was not there with the company.
We are well sorted at least for the current financial year, and we look forward to quality order book, and we can wait for certain time before we get some good projects. We are not interested in lowering the profitability guidance.
That's great, sir. Thank you so much, and all the best, sir.
Thanks a lot.
The next question comes from the line of Juzer Daruwala with Capital Advisor. Please go ahead.
Sir, am I audible to you, sir?
Yeah, yeah, please go.
Yeah. Happy Dhanteras, sir. My first question is, what is the company's order inflow target for FY 2027, and how is the current project pipeline shaping up, sir?
The order guidance for current financial year in the water and wastewater treatment segment was INR 2,500 crore.
Okay.
The order books which we have got in the current financial year, these are two HAM projects of INR 250 odd crore. The balance order pipeline is what is still to be filled, or these orders we are expecting. There are some really very good projects which are coming, like the HAM projects which are coming right now in Delhi, some ETP projects coming in U.P., a number of projects in Jharkhand, Bihar, and M.P., and Karnataka. So across all states under Namami Gange, where there is river Ganga or Ganga tributary, they are there. From Namami Gange, AMRUT, there is one more scheme from the government which is-
The person you are speaking with has put your call on hold. Please stay on the line.
Am I audible?
Yes, sir. Please go ahead.
There is one more scheme which I was telling. It is Urban Challenge Fund. Apart from AMRUT, the projects are also coming under UCF as well. We look forward to a very strong pipeline coming in the future as well. We stick to our guidance once again that this balance order book of around INR 2,250 crore, we should get in the current financial year itself. Apart from this, there are some overseas projects for which we have submitted our bids. We look forward to at least one or two projects from overseas which should get accrued in our order book. This is how we look forward, but this guidance of 2,500 remains intact.
Okay. If I look at your margin profile, do you provide any kind of margin breakup, EBITDA margin breakup in our water, wastewater, and renewable energy segment? What are the expected margin ranges for each of the segments, sir?
I had just explained it recently. I will repeat it for the sake of clarity for you.
Okay.
The EBITDA margin guidance from our side for water and wastewater treatment segment is 21%. From renewable, it will be somewhere in the range of 15%-18%. At blended level, it should be between 19%-20%. This should be on a consolidated basis, it should look to be 19%-20%.
Okay. Thank you for the detailed explanation, sir. Wish you all the best and happy Diwali to you.
Thank you. Happy Diwali.
The next question comes from the line of Shetal Shah, an individual investor. Please go ahead.
Hello, am I audible?
Yes, sir.
Yeah, yeah, you are audible. Please go.
Very good afternoon, sir. Season's greetings to you all, sir. My question is this to, sir, what will be the next growth driver for the company in the next three to five years, which will help the company to grow sustainably over a period of time, both in terms of revenue as well as in terms of profitability? A long-term view, sir. In next two to three, three to five years. Means any sectors you want to diversify, like AI or data center or something like that, or you want to grow your international presence where we can get government-funded projects like our competitors are doing? Anything like that. That would be very helpful, sir.
There are two segments in which the company is present. One is the water and wastewater treatment segment, and second is the renewable segment. First, if I come to the water and wastewater treatment segment, there are ample opportunities which are available in India. The opportunities transpire from various wastewater treatment projects in terms of the new sewage treatment plants which are coming up, upgradation of existing plants, then reuse of these sewage treatment plants, construction of new ETPs or CETPs, ZLD systems, desalination plants. So basically, these are the main drivers of growth right now in India with various government schemes. The CETPs or the ZLDs coming directly from the industrial development corporations or from the trust. And the desalination projects again coming from industrial bodies. So this is driving growth in India. Apart from this, yes, there are ample opportunities available overseas as well. We are moving overseas.
We have submitted our bids at some of the projects, and we are expecting results to be there. So it will be one of the key growth drivers for the company. The second one is the renewable wherein we entered just last year, within a span of just one year, and which is going on now further. There is a very healthy order book which we have accrued in this particular segment. The segment is interesting. The growth is really fast. There is a moderation in the margin profile. The renewable segment doesn't draw the level of margins which the water and wastewater segment draws. However, the execution cycle is really fast. So if we see on an ROE or ROCE perspective point of view, the renewable in itself also commands a lot of interest, and definitely this sector will continue to grow.
As an integration, if we say, we will continue to grow in both the segments, and both the segments will drive growth for Enviro Infra Engineers in next four to five years, which is clearly visible even as on date.
Okay. Tell me, regarding raw material inflation, is it pass-through or do we still feel that we will bear the cost?
There is a price escalation clause in the bid documents, tenders, or agreements that we do, but it does not get passed on to 100% extent. There is some price part or some cost which we have to bear as well, because of which we have lowered our EBITDA margin guidance to an extent. Though we lowered our EBITDA margin guidance in the water and wastewater segment to be 21%, still we have been able to achieve that EBITDA margin of 24% in Q2. That says our guidance has got lowered, but on the execution front, we have been able to deliver the same type of margins which we have done in the past as well. So 24% is what we have achieved in Q2 on a standalone basis.
Okay, sir. Thank you, and all the best for the future, sir.
Thanks a lot.
The next question comes from the line of Atul Kumar, an individual investor. Please go ahead.
Thanks for the opportunity again, sir. Sir, I have one question on the operation and maintenance percentages in revenue. So far, last two years, we have been doing around 3%-4% of total revenue that comes from O&M. Currently, we have order book of around INR 1,100 crore just from O&M. When are we expecting to see more and more O&M percentage in the total revenue? I am guessing the margin will be higher there, so I think that will also help us increase the overall margin. By when, let's say in next one, two, three years, what O&M percentage we are targeting as a part of overall revenue?
As the sales turnover will increase in the company, the operation and maintenance revenues will also increase. At least as of at present, what I can say is operation and maintenance revenues will continue to be in the range of 3%-4% of the total top line on a standalone basis. If there are any further projects wherein we enter into ZLD systems where the recurring cost goes high, the O&M revenues may, as a percentage, may increase. Absolute terms, operation and maintenance will increase. The operation and maintenance revenues will get generated over a period of five to 15 years. At an average level, what we can say is somewhere around INR 100 crore. I expect that as the projects will keep on completing, there are three projects right now we are almost on the completion.
The O&M revenues will start generating from these three projects as well, which is mainly Mathura, which is of the HAM project. Its construction completion is already there. We expect COD very soon. Yamuna Nagar and Amritsar, these two projects are also on the verge of completion. So, as the projects will keep on completing, the O&M revenues will keep on accruing. But as a percentage, again, I will say it will remain to be in the range of around maybe 3%-4%. Maybe it increase slightly to 5%.
Okay. Okay, sir. That's helpful. Thank you. Thank you so much.
Welcome. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Sanjay Jain for the closing remarks.
Thank you. Thank you, everyone, for your questions and for participating in today's earning call. We remain focused on strengthening our core water and wastewater treatment business, executing our existing order book, and expanding our renewable energy capabilities in a disciplined manner. We appreciate your continued support and look forward to updating you on our progress in the coming quarter. Thank you, and have a wonderful day. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of Enviro Infra Engineers Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.