Antony Waste Handling Cell Limited — Q2 FY26 earnings call

Call held 3 Nov 2025

Management summary

Antony Waste Handling Cell Limited delivered a strong Q2 FY26, with operating revenue growing 16% to ₹233 crores and EBITDA up 18% to ₹57 crores, maintaining a 22% margin. The company secured two new Waste to Energy projects in Andhra Pradesh valued at ₹3,200 crores in total revenue over 20 years, enhancing future visibility. While processing volumes and extended monsoon slightly impacted margins, the company's net debt to equity stood at a healthy 0.4x, and a merger with its subsidiary is in its final stages to streamline corporate structure.

Highlights

  • Operating revenue grew 16% YoY to ₹233 crores in Q2 FY26, driven by higher tipping fees and improved operational efficiency.

  • EBITDA increased 18% YoY to ₹57 crores in Q2 FY26, maintaining a solid 22% margin.

  • The company secured two new Waste to Energy projects in Andhra Pradesh, representing a total revenue potential of ₹3,200 crores over 20 years, reinforcing leadership in the sector.

  • H1 FY26 saw a strong 9% YoY growth in total tonnage processed, reaching 2.6 million tons.

  • Net debt to equity improved to 0.4x as of September 2025, reflecting financial discipline.

Concerns

  • Softer processing volumes and an extended monsoon period prevented Q2 margins from being higher.

  • Receivables (DSOs) remained stable at 114 days for the quarter, though management noted rectification to 86 days in October.

  • ROCE/ROE remained softer due to significant capital employed for ongoing, long-gestation projects.

Key financials

3 periods

Headline

  • Gross Debt (Sep 2025)
    ₹438 Cr
  • Net Debt (Sep 2025)
    ₹343 Cr
  • Net Debt to Equity (Sep 2025)
    0.4×
  • Cost of Debt (Sep 2025)
    9.4%
  • Workforce
    10,550 employees

Q2 FY26

  • Operating Revenue
    ₹233 Cr
    YoY +16%
  • EBITDA
    ₹57 Cr
    YoY +18%
  • EBITDA Margin
    22%
  • PAT
    ₹17 Cr
    YoY +13%
  • DSOs
    114 days

H1 FY26

  • Operating Revenue
    ₹456 Cr
    YoY +15%
  • EBITDA
    ₹119 Cr
    YoY +15%
  • EBITDA Margin
    23%
  • PAT
    ₹40 Cr
    YoY +10%

What they filed

Q1 FY27: revenue up 5.5%, net profit down 96.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue221 243 243 247 258 +16%262 +8%286 +18%261 +6%
EBITDA43 52 51 55 51 +19%43 −18%57 +12%37 −32%
Net profit15 18 46 23 17 +13%15 −19%37 −20%1 −97%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentShare of Total Revenue (Q2 FY26)Revenue (Q2 FY26)YoY Growth (Q2 FY26)Volume (Q2 FY26)
Collection and Transportation61%₹161 Cr14%0.54 million tons
Processing27%₹72 Cr22%0.73 million tons
Contracts and Others12%———

Order book

high confidence

Total value

₹12,500 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹3,200 Cr

Execution

24 months construction phase for new WTE projects, starting Q4 2026

The existing order book represents contracts where capex has been done and execution is ongoing, while new projects will add to the revenue visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • New Waste to Energy projects (Andhra Pradesh) ₹300 Cr
    • Auto scrapping and tire recycling venture ₹100 Cr
    So the capex over here would be slightly higher because of the time -- the PCMC one was done almost 5 years back, right? So there has been an increase in cost of machines and materials and everything. So we are seeing the capex to be around Rs.300 crores to Rs.325-odd crores. And you are right, in PCMC's case, there was an Rs.50 crore VGF. In this case, it's Rs.65 crores VGF.
  • Debt Gross ₹438 Cr · Net ₹343 Cr Cost 9.4%
    As of September 2025, the group's gross debt stood at approximately Rs.438 crores and cash and cash balances of around Rs.95 crores, reflected in a net debt of approximately Rs.343 crores. This indicates a net debt to equity of 0.4x. The group's weighted average cost of debt is approximately 9.4%
  • M&A AG Enviro Infra Projects Private Limited Merger · Pending regulatory

    Optimize operational efficiency and financial strength, streamline corporate structure, unlock operational synergies and enhance long-term shareholder value.

    As stated before, as part of our strategic plan to optimize both operational efficiency and financial strength, the company had earlier proposed a merger of AG Enviro Infra Projects Private Limited, our largest wholly owned subsidiary with Antony Waste Handling Cell Limited, our listed holding company. I'm pleased to share that this merger is now in its final stage as the Honorable NCLT Mumbai bench has admitted the Joint Company Scheme Petition.
  • Liquidity Cash ₹95 Cr Cash position dropped due to EMDs and bank guarantees for pipeline projects and a spike in working capital deployment, expected to improve in H2 FY.
    And also because during the first quarter and the second quarter, we have seen a spike in our working capital deployment. So that is one of the main reasons why we have seen a fall in our cash and bank balances on a Y-o-Y basis. We expect these things to improve in the second half of the financial year.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · Ongoing · High confidence 22.5-23%
    So we normally expect the margin to be in the range of 22.5% to 23%. I mean, that's what we have seen historically. Now, with the monsoon period slightly extending beyond the September period, we are seeing these margins to be sustainable because going forward, we expect upsides from higher process volumes to kick in. So 23% is our stated goal to achieve these margins.

    — N.G. Subramanian

Revenue

  • Revenue CAGR Revenue · Over 4-5 years · High confidence 25%
    So the guidance for a 25% CAGR growth over 4 to 5 years still holds good.

    — N.G. Subramanian

  • Auto Scrapping Venture Annual Revenue Revenue · Annual · Medium confidence ₹15-25 crores
    Till the time the assets and the market improves, we would see around Rs.15 crore to Rs.25 crore of an annual revenue there.

    — N.G. Subramanian

Volume

  • C&D Waste Processing Volume Volume · After monsoon period · High confidence 350+ tons/day
    Once the monsoon period is over, we should be back to around 350-plus tons a day.

    — N.G. Subramanian

  • Kanjurmarg Tonnage Increase Volume · Next 3-6 quarters · Medium confidence 3-7%
    We can at the most see a 3% to 7% increase going forward over the next 3 to 6 quarters.

    — N.G. Subramanian

  • C&D Tonnage Ramp-up to 600 tons/day Volume · Q2 FY27 · Medium confidence Q2 FY27
    So we expect the tonnage's ramp-up to happen maybe by second quarter of FY '27 itself.

    — N.G. Subramanian

What to watch in Q3 FY26

EPR Monetization Quantification

Next 2 quarters
Current Uncertain, based on Q1 waste characterization
Target Better quantification of total EPR

Why it matters

EPR is a new potential revenue stream, and its accurate quantification will impact future revenue projections.

So maybe in the next 2 quarters, we will be in a much better position to quantify the total EPR.

Risks & concerns

  • Delay in Kanjurmarg WTE project

    high

    Project put on hold due to pending Supreme Court clarification on land usage, impacting future capacity and revenue from this site.

    Management acknowledged

  • Softer processing volumes and extended monsoon

    medium

    Impacted Q2 margins, preventing them from being better due to under-absorption of fixed costs.

    Management acknowledged

  • Receivables from municipal clients

    medium

    DSOs were 114 days for the quarter, though management stated rectification to 86 days in October.

    Analyst acknowledged

  • Capital-intensive nature affecting return ratios (ROCE/ROE)

    medium

    High capital employed for new, long-gestation projects temporarily depresses ROCE/ROE until full revenue realization.

    Analyst acknowledged

Q&A highlights

5 direct
ROCE/ROE and Capital Intensity Direct
So there are two phases to it, Ketan. So what happens is if I bag a new WTE project, for example, I need to incur the capex on day one, right? Only after the capex has been done, do I start the operations of that front. So you will see a denominator spike up, but the revenue and EBITDA will be a smaller amount. And these are 20-year projects.

Explains why ROCE/ROE might appear softer due to the capital-intensive nature of new projects, which have a long gestation period before full revenue realization, impacting return ratios in the short term.

Asked by Ketan Shera

Receivables (DSOs) and Cash Position Partial
So you have seen a spike in our receivables during the September quarter. The same has got rectified in the month of October. And adjusted for the subsequent collection, our DSOs are around 86.

Addresses analyst concern about rising DSOs (114 days) by clarifying that the situation improved significantly post-quarter-end (86 days), indicating better cash collection.

Asked by Ketan Shera

New Waste to Energy Projects (Andhra Pradesh) Progress Direct
On the AP WTE projects, I mean, the concession agreements have been signed with all the clusters, which basically means 18 various municipal corporations have executed a contract and the concession agreement is signed. We are in the process of executing the PPA agreement with the APSPDCL. So that we expect to be completed by the end of this current month. And the financial closure to also be achieved by the end of the current calendar year. So once that is done, we'll start with the construction phase by the last quarter of the current financial year. So once that stops, we have 24 months, of construction phase to start, and that will start from Q4 2026 onwards.

Provides a detailed timeline for the newly secured ₹3,200 crore WTE projects, from agreement signing to financial closure and commencement of construction, offering clarity on future revenue streams.

Asked by Saaksha

EPR Monetization and Quantification Partial
On the EPR aspect, I think we would be slightly conservative here because the numbers are still going on because the waste characterization is not very it's a heterogeneous waste that we collect. So each month, each quarter, the quality of plastic, the quality of waste that gets burned needs to be ascertained for the EPR number to be quantified. So maybe in the next 2 quarters, we will be in a much better position to quantify the total EPR.

Indicates that while EPR is a potential revenue stream, its quantification is still uncertain due to the heterogeneous nature of waste, and more clarity is expected in the next two quarters.

Asked by Neerav Dalal

Kanjurmarg WTE Project Status Direct
So the corporation has kind of put a hold on the project for now. That is basically waiting for clarification from the Supreme Court of the country, wherein the usage of the land is being cleared for that aspect. So once we get a clarification on the same, the Waste to Energy project will be back on the table.

Reveals a significant delay in a key WTE project due to regulatory hurdles (Supreme Court clarification on land usage), impacting future capacity and revenue from this specific site.

Asked by Shivam Parakh

Risks to Margins (Fuel, Labor, etc.) and Mitigation Direct
So the fuel part and labor component for us is around 60% of the operating cost is completely passed through in all our contracts. So except for the timing mismatch, we are pretty much hedged on that front.

Provides assurance that a significant portion of operating costs (fuel, labor) are passed through in contracts, mitigating margin risk, although a slight increase in wage bill was noted.

Asked by Amit Agicha

Auto Scrapping and Tire Recycling Venture Details Direct
On the scalability of the project of auto scrapping, I mean, based on large companies like Mahindra CERO or Rosmerta, I mean, we have seen that anywhere between 20 to 80 vehicles per day is a required threshold limit to kind of scale it up. We would be looking anywhere between 40 vehicles to start with as a basic idea to kind of get the juices in. Revenue realizations would be on a gross asset turn. We don't expect it to be as high as C&T operations. We see that to be around 0.2x to 0.25x. So Rs.100 crores is your capex that you're pumping in. Till the time the assets and the market improves, we would see around Rs.15 crore to Rs.25 crore of an annual revenue there.

Gives initial financial and operational details for a new diversification venture, including capex, expected revenue, and asset turnover, indicating a new growth avenue.

Asked by Keshav Bharadia

3 min read 7 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Operational Efficiency

Antony Waste Handling Cell Limited reported a robust Q2 FY26, with operating revenue growing 16% year-on-year to ₹233 crores. This growth was fueled by higher tipping fees, steady contributions from fixed shifts, trips, and household collection fees, alongside improved operational efficiency. The EBITDA for the quarter stood at ₹57 crores, marking an 18% year-on-year growth, with a healthy margin of 22%. For the first half of FY26, total operating revenue reached ₹456 crores, a 15% YoY increase, and EBITDA was ₹119 crores with a 23% margin.

Strategic Expansion in Waste to Energy and Diversification

The company secured two new Waste to Energy (WTE) projects in Andhra Pradesh, with a combined value of ₹3,200 crores in total revenue over a 20-year period, reaffirming its leadership in the sector. These projects are similar to the PCMC WTE model, with an estimated capex of ₹300-325 crores each and viability gap funding of ₹65 crores per project. Additionally, the company is actively diversifying its revenue streams by increasing non-municipal corporation revenue, including power sales from WTE and byproduct sales from its Construction and Demolition (C&D) waste recycling facility, which achieved a 96% recycling rate.

Capital Structure and Return Ratios Under Investment Phase

As of September 2025, the company's gross debt was ₹438 crores, with cash and cash balances of ₹95 crores, resulting in a net debt of ₹343 crores and a net debt to equity ratio of 0.4x. The weighted average cost of debt was 9.4%. Management noted that ROCE and ROE have been softer due to the significant capital employed (increased from ₹591 crores to ₹1,300 crores since FY21) for long-gestation projects, which temporarily impacts return ratios until full revenue realization. However, with existing contracts, healthy growth in margins and return ratios is expected.

Receivables Management and Working Capital Dynamics

The company's DSOs remained stable at 114 days for Q2 FY26. Management acknowledged that receivables had spiked during the September quarter due to cash collection challenges from various municipal corporations. However, they reported that the situation was rectified in October, bringing the adjusted DSOs down to approximately 86 days. Efforts are underway to further improve DSOs by increasing revenue from non-municipal clients, such as power sales from WTE and EPR credits.

Progress and Hurdles in Key Projects (AP WTE, Kanjurmarg, C&D)

For the new Andhra Pradesh WTE projects, concession agreements have been signed, and the PPA execution is in process, with financial closure expected by the end of the current calendar year and construction starting in Q4 2026. However, the Kanjurmarg WTE project is currently on hold, awaiting clarification from the Supreme Court regarding land usage. The C&D business saw a slight uptick in volumes, processing around 225 tons/day, with expectations to reach 350+ tons/day post-monsoon and a ramp-up to 600 tons/day by Q2 FY27.

Cost Management and Margin Resilience

Management highlighted that approximately 60% of operating costs, including fuel and labor, are passed through in contracts, mitigating margin risks, except for timing mismatches. While there was a 14% year-on-year increase in the wage bill, it remained constant at 31% as a percentage of total revenue. The company is also leveraging centralized stores, bulk purchases, and OEM tie-ups to gain cost advantages. Despite softer processing volumes and an extended monsoon, the company maintained a 22% EBITDA margin for the quarter.

New Ventures: Auto Scrapping and Tire Recycling

The company is exploring new ventures in auto scrapping and tire recycling, currently in discussions with MIDC for land acquisition for a non-trade zone. The estimated capex for such a facility is around ₹100 crores, with an expected annual revenue realization of ₹15-25 crores. Management anticipates a gross asset turn of 0.2x to 0.25x for this segment. This diversification aims to provide better margins compared to the existing MSW business, which currently yields a 23% EBITDA and 9% PAT.

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