EMS Limited - Tapping in the growth in the water management space

[Mukesh_Poonia]

Key Points from the Earnings Conference Call

• Strong Q2 Performance:
  • Increased tender activity and revenue growth due to government push in the water sector.
  • Improved performance driven by urbanization and increased demand for sanitation and drinking water.
• Order Book and Pipeline:
  • Current unexecuted order book stands at approximately 2,345 crores.
  • Current bid pipeline is around 6,470 crores, with significant opportunities from the Amit scheme.
  • Expecting to convert a significant portion of the pipeline into orders in the next 2-3 months.
• Financial Performance:
  • Operating income for the first half of FY25 is 435.214 crores.
  • Hopeful of delivering similar performance in the coming years.
• Margins and Outlook:
  • Confident of maintaining margins around 29%.
  • Expecting a stronger H2 FY25 compared to H1 due to the monsoon season.
  • Aim to maintain the growth trajectory and improve upon past performance.
• Geographical Focus:
  • Majority of orders currently come from Uttar Pradesh.
  • Expecting increased order inflow from the water sector, particularly from the Amit scheme.
• New Projects and Diversification:
  • Secured a 700 crore project in Kolkata.
  • Actively bidding for projects in other states like Jharkhand, Chhattisgarh, and Karnataka.
  • Exploring opportunities in the power sector.
  • Considering diversification into the building and construction sector.
• Financial Position and Future Plans:
  • Comfortable with the current financial position and no immediate plans for fundraising.
  • Aim to maintain the growth rate and improve upon past performance.
  • Exploring options for monetizing the land acquired from the paper company.
  • Considering hiring a new CFO.
  • No significant penalties imposed for delayed execution or non-fulfillment of performance.
  • Secured an EN status for a 700 crore project in Kolkata.

[Ashutosh_Sancheti]

Hi VPers,

There was peculiar commentary during the company FY25Q2 concal. I will summuraise the gist of it:

The company is planning to acquire some paper company for 50 crores only for its land and then use it as mortgage for banking facilities. The paper company has annual revenue of 50 to 60 crores but the company is not interested in running the plant and would scrap it. I mean acquiring land by paying money and then using it as collateral for banking.

Why do this: is it because company has the excess cash and wants to buy a fixed asset and lose the value of money over time?

Regards,
Ashutosh

[Folok]

Here’s a piece I wrote on LinkedIn as on 25th October’24, just before the Q2 FY25 results. Contains insightful research:

Rising Above the Tide: Can EMS Ltd grab the Opportunity in India’s water Crisis

Sharing the link instead of writing as the forum restricts media rich posts for new writers.

[yogesh_bhavsar]

Key Observations:

• Growth and Performance: EMS Limited has shown strong financial growth over recent years, with significant increases in revenue, EBITDA, and net profit.

• Corporate Governance Concerns: There have been past issues related to safety and reporting inaccuracies, which have led to penalties from authorities. These issues suggest potential concerns regarding the company’s corporate governance practices.

• Dependence on Government Projects: The company’s reliance on government projects poses a risk, as changes in regulations or government priorities could affect its revenue streams.

Overall, while EMS Limited has demonstrated solid financial performance, the past issues with authorities and the dependence on government projects are areas that investors might consider as potential risks. It is important for the company to address these governance concerns to maintain investor confidence.

[yogesh_bhavsar]

I also found this

NET INCOME RSING
SO IS THE NET RECEIVABLES
CFO IS GETTING NEGATIVE

please share your understanding on the above graph

thank you

[ripzc09]

ICRA Limited

ICRA withdraws their ratings on EMS

[ripzc09]

https://www.bseindia.com/xml-data/corpfiling/AttachLive/4e21b554-9746-406e-879c-b20af60b3ede.pdf JV wins ₹416.46-crore order

[Jitendrapd94]

Receipt of letter of award from Deltabulk Shipping India Private Limited of Rs 105.08 cr for Development, Operation and Maintenance of the Multimodal Logistics Park (MMLP) at Nagpur at Sindi, in Wardha District in the State of Maharashtra through Public Private Partnership on Design, Build, Finance, Operate and Transfer (DBFOT) Basis

[ripzc09]

Results are out https://nsearchives.nseindia.com/corporate/outcome_24012025165308.pdf

[Arka]

EMS Limited | Financial Results

[ripzc09]

snippet from management commentary on their quarterly results

[Arka]

EMS Limited | Work Order

Secured a major contract for the “ORCHARDS” project at Jaypee Wish Town, Noida. Order Value: ₹27,288.65 lakhs (excluding GST).

Contract to be executed within 24 months.

[garg17793]

I want to understand one thing. They bought BRIJBIHARI PULP AND PAPER PRIVATE LIMITED for 50 crores, where Ramveer Singh is already a promoter. They mentioned that they acquired it through NCLT. They claim they are not interested in the machinery or operations, only in the land, to use it as collateral for debt.

How can we be sure that the land is actually worth 50 crores? What if the market price is much lower? This seems like a red flag to me.

Does any fellow investor have information about that land or any other insights?

[ripzc09]

Motilal Oswal mutual fund has bought EMS in February according to this link Mutual Fund Feb 2025 share holdings and fund action in EMS Ltd.

[ripzc09]

‘Crisil A-/Stable/Crisil A2+’ assigned to Bank Debt Rating Rationale

[Arka]

The acquisition value was 60 cr as per concall - how come this is different calculation ?

Anyone can explain this ?

[ripzc09]

net increase seen in mutual fund holdings in March 2025

[ripzc09]

slight concern though here as promoter has pledged a fair amount of his shares. especially with the gensol saga that has just happened. would like to get community’s view on this