As per Peak Sustainability Venture’s website their managing partner had made investments in VA tech Wabag back in 2007 pre IPO era.
Samir has 28+ years of financial markets experience, in global public and private markets, and has spent the last 7 years actively investing in sustainability. He made his first climate investment in 2007 in VA Tech Wabag, a pre-IPO deal, now a public company and one of the largest water companies in the world. From then, he has gone on to be an early investor in some of the world’s leading sustainability companies, including Waaree Energies, ION Energy, Drinkwell and GIST (Global Initiative for a Sustainable Tomorrow), HST Power and several others.
In FY25, a major portion of Chennai and Bangladesh projects is going to be executed, hence very much possible for a jump in topline, and hence bottom-line.
Yes, They are in the final stages of engineering for Chennai so likely good amount of revenue can be recorded in FY25. On the flip side, not sure of how much current revenue will be repeated since O&M is a minor portion. So I can not really estimate the FY25 revenue at this stage. However, As long as they can replace the Chennai big project with a healthy order book, rerating is very much possible.
I think the promoter holding being low has to do with the history of the company. How it diversified from Siemens water business, etc. Comparatively, even Ion Exchange has promoted holding of c. 25% (Comparatively low when compared to other Cos).
I don’t think EMS and Va Tech are true comparables as they both address different markets. EMS is all within India whereas Va Tech gets more than 50% revenue from outside India.
On a related note, you might want to look at corporate governance of EMS. I recollect their DRHP spoke about they being black listed for 2 incidents - 1) inferior quality leading to death of 5 workers and 2) incorrect disclosure for bid. I may be wrong but suggest deep diving into it if you plan to invest in EMS
Feel the same. Last time the management faced crisis due to increased WC requirements, High receivable days, Unable to convert PAT into CASH , High debt etc… . Are those lessons learnt and is the management prudent in accepting only orders that meet their criteria.
Since the promotor holding is very low do the management have any other business related or otherwise.
I see the people looking only into the macros and the order book value. No doubt the company is present in a sector which has very huge requirements but for EPC companies more that the order book the execution of those orders in a profitable way is more important.
I think the mgmt started applying corrective action plans based on the lesson learnt in the past. A few I could see from their recent presentation are:
Outsouring construction work - Core expertise focused on Engineering and Procurement; Civil activities outsourced
Reducing Debt - Reduction in net interest cost due to reduction of debt and effective utilization of bank lines
Focus on ‘Advanced technology, Value Added & High Margin’ projects enables to remain asset light (Patents, Technology Innovations, Tie up with ‘Pani Energy’ to implement applied AI, etc)
Focuses on projects funded by Central Govt., Multi Laterals & G2G Funding
Exploring future opportunities on
Green Hydrogen (They are in discussion with Hydrogen Developers for collaboration as their water partner)
Ultra pure water requirements for Semi-Conductor industry
This point is not yet clear, they are saying for the new projects, it’s only pass through via P&L.
As far my experience says, when u bid in a EPC job:
u bid on your own or
u bid along with a partner for construction, in the Bid itself, u only do E&P - This is how all western Engineering giants bid mega projects in Middle East or in geographies, where they think risk is more.
3 ) If you outsource (Subcontract) after bid/getting the job as per point 1) the risk for execution / construction is with the main bidder, even though it’s a pass through via P&L, owner can make the main bidder liable for delays in Construction.
Only via point 2) they are not liable for execution/construction.
These points to be clarified by the management, may be in the next concall, Request to raise/ask these questions.
