‘Water market gaining traction in India, abroad’

Our order book gives us 3x revenue visibility: Wabag MD

Chennai-based Va Tech Wabag Ltd., a pure-play water technology multinational firm that offers a portfolio of solutions across water and wastewater treatment, braved the COVID-19 pandemic and posted double-digit growth last fiscal. MD Rajiv Mittal discusses how the firm secured an order book of ₹9,500 crore. Excerpts.

How did you manage to stay afloat during the second wave of the pandemic?

As you would have seen last year, in spite of a very strict lockdown, we closed the year on a positive note with a double-digit growth on top line and bottom line. During this time, our engineering and procurement functions were working at full capacity, even while operating from home, ensuring business continuity.

In recent times, there have been lockdowns in India in various States. However, we transitioned to the new normal to ensure minimum disruption, carrying forward the lessons we learnt from the first wave.

At our construction sites, we ensured provision of all basic essentials, regularly sanitised accommodation and ensured adherence to COVID safety norms for our workforce for continuity of construction with minimal disruption. Being an essential service provider, our operations and maintenance (O&M) sites were operating at full capacity to ensure safe and clean drinking water and sanitation to help people stay at home safely during the pandemic.

Tell us about your performance in Q1 of FY22?

By and large, we are ensuring operational continuity at our O&M sites, as water and sanitation falls under essential service. As far as engineering, procurement and construction sites are concerned, we are ensuring operations in our construction sites with minimal disruption. However, we are hopeful that our Q1 performance would be better compared with the corresponding period last year.

How do you foresee the rest of the fiscal year 2021-22?

Right now, we are having a strong order book and a good cash position will help us in speeding up execution. Going forward, we foresee the water market gaining traction, both in India and overseas. We will be focussing on further strengthening our order book, especially targeting the high technology jobs, which is an area of expertise for Wabag.

What is your order book value and how did you manage to get it?

Currently, we have an order book of ₹9,500 crore. Our excellent order book gives us a revenue visibility of 3x. Some large-scale orders contributing to this order book are O&M contracts of Agra and Ghaziabad under One City, One Operator model, our hybrid annuity model (HAM) projects in Kolkata and Patna, our Jeddah Airport 2 sewage treatment plant in the Kingdom of Saudi Arabia and Ipswich Biel water treatment plant in Switzerland.

What is the capex for the current year and revenue outlook for FY22?

We have always been an asset light organisation and the same will be our focus going forward.

Even for our HAM projects, we have partnered with financial partners who will be investing in debt and equity, and we will only be investing a small portion of the total project cost.

As the situation over the last two years has been uncertain owing to the pandemic, we have refrained from giving a guidance. We are confident that Wabag will continue to grow, as in the past.

What are some of the key projects the company has implemented in Tamil Nadu?

Kodungaiyur Power-Neutral WWTP, Chennai, the first waste water treatment plant in India to complete 1,10,000 hours on a single gas engine; Nemmeli desalination plant, the largest municipal desalination plant in India; and Koyambedu water reuse plant – recycling secondary treated water up to potable standards for industrial use in SIPCOT industrial areas across Oragadam, Sriperumbudur and Irungattukottai.

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