Detailed Narrative
Strong Consolidated Performance Driven by International Business
WPIL Limited delivered a robust Q1 FY27, with consolidated revenue from operations increasing by 32% year-on-year to INR501 crores. This growth was primarily fueled by the international business, which saw revenues rise substantially to INR386 crores from INR197 crores in the corresponding period last year. Consolidated EBITDA margins improved to 15.04%, resulting in a PAT of INR59 crores, reflecting healthy profitability.
Subdued Domestic Project Segment and Stand-alone Underperformance
In contrast to the international segment's strong showing, the domestic project division remained subdued, contributing only INR43 crores to revenue. This led to a 37% year-on-year decline in stand-alone revenue to INR115 crores and a lower stand-alone EBITDA margin of 12.21%, with net profit at INR6 crores. Management attributed this underperformance to drastically lower project invoicing and delayed fund releases due to sector-wide issues, particularly affecting the Jal Jeevan Mission projects.
Healthy Order Book and Strategic Focus on International Growth
The company's total order book stood at a healthy INR5,270 crores at the end of Q1, providing strong revenue visibility for future quarters. The international order book accounted for INR2,891 crores, while the domestic product and project order books were INR459 crores and INR1,921 crores (including INR530 crores of O&M), respectively. WPIL continues to witness strong momentum in its international operations, with Gruppo Aturia, Sterling and United, and WPIL Thailand securing healthy orders, and PCI Africa commencing execution of large contracts.
Addressing Domestic Project Challenges and Receivables
WPIL is actively addressing challenges in its domestic project business, including a debarment notice from the MP government that restricts bidding on new projects until existing ones are completed. Management expects these issues to be resolved, with invoicing and execution picking up in the second half of the year. The company also anticipates a substantial inflow of roughly INR300-350 crores in outstanding receivables from the Jal Jeevan Mission during the current quarter, which will improve liquidity.
Long-term Margin Targets and Subsidiary Stake Reduction Strategy
Management reiterated its target to operate within a consolidated EBITDA margin range of 15% to 20%, expecting further improvement from the current 15.04%. Strategically, WPIL aims to reduce minority shareholdings in its subsidiaries over the medium term⏳ (2-3 years). For instance, in the recently acquired PCI Africa, there is an understanding to buy out other shareholders within three years to achieve 100% ownership, aligning with the goal of gaining full control over key international assets.