WPIL - WPIL Ltd Share Price

Management's outlook for WPIL Limited emphasizes a strong growth trajectory driven by several key factors. For the financial year FY25, the consolidated revenue reached INR 18,069 million, an 8.6% increase year-on-year, with an EBITDA of INR 2,925 million and an EBITDA margin of 16.19%. The profit after tax stood at INR 1,266 million, reflecting a PAT margin of 10.89%.

Looking ahead, management highlighted major forward-looking points including:

1. Strong Order Books: The international order book is at INR 6,670 million, while the domestic project business order book is at INR 23,430 million. The product business has an additional INR 3,500 million backlog, with domestic product business revenues seeing a 24% growth to INR 323 crores.

2. Improving Conditions: Management expects the fund situation to improve from Q2 FY26 due to the recent budget announcements regarding the Jal Jeevan Mission. They anticipate an uptick in new tenders, expecting better execution in the second half of FY26.

3. Growth in International Operations: The international business revenue grew to INR 668 crores, a 13% increase from FY24, bolstered by acquisitions. The order book for international operations also rose significantly by 46%.

4. Dependency on Government Initiatives: The management noted that 70% of their backlog (approximately INR 1,800 crores) is related to the Jal Jeevan Mission, indicating a robust market driven by government infrastructure projects.

5. Prospects for the Product Division: The product division is expected to continue its positive trajectory, supported by a solid inquiry pipeline and improved market development.

Overall, management conveyed optimism for FY26, insisting that with effective execution and market conditions improving, they foresee maintaining revenue levels and possibly achieving further growth.

Q1: Could you provide details on the receivables and contractual assets? Are payments from the JJM being received? What is the current outstanding amount?
A1: We executed projects despite delayed payments to meet milestones, which increased our outstanding receivables, now about INR350 crores. Payments for JJM have started improving, and we expect significant disbursements by the end of this month or next, which should enhance tendering prospects.

Q2: What is the status of the South African operations and acquisitions? What revenue contributions are expected from these?
A2: Our South African operations, particularly APE pumps, are thriving. We have partially consolidated Eigenbau and expect full impact in FY '26. Additionally, we anticipate closing the PCI acquisition this quarter, enhancing our project prospects and revenues.

Q3: What are your revenue and profit guidance for FY '26?
A3: We foresee strong growth in our product division and international business. The Indian water sector, boosted by budget announcements, should also recover traction. Overall, we're optimistic about our performance across these segments.

Q4: Will any surprises like the recent net profit decline due to exceptional items occur again?
A4: No, the recent decline was a one-off event related to a provisional tax from a past sale. We don't expect similar occurrences in the future, and we are pursuing recovery of this amount.

Q5: Is there any plan for NSE listing?
A5: Listing on NSE is under consideration, but there are no concrete plans at this moment.

Q6: The budget for Jal Jeevan Mission was reportedly slashed. What is the impact?
A6: The budget allocation remains intact, with anticipated support of INR60,000-68,000 crores. A reduction in state projections will affect future tendering but not current projects.

Q7: Can you explain the revenue trajectory for the project and product segments?
A7: We expect project revenues to match last year levels depending on fund disbursement in the upcoming weeks. Product revenues should grow further as we have a strong inquiry pipeline, with increasing contributions anticipated.

Q8: What margin expectations can we have, particularly for international orders?
A8: We aim to maintain EBITDA margins between 15% to 20%. Our strategies to enhance margins remain effective, and we'll keep you updated as we integrate acquisitions.

Q9: How do you plan to address rising interest costs linked to outstanding receivables?
A9: The interest cost correlates with our receivables. Once we receive pending payments, we expect these costs to decrease significantly and, consequently, improve profitability.

Q10: What are your long-term growth strategies given the completion of Jal Jeevan projects?
A10: We foresee the domestic project business shrinking while focusing on broader water project opportunities. Our execution capabilities are growing, and the addressable market for water projects is substantial, presenting significant future growth potential.