Antony Waste han

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.

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.

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.

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.

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.

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.

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.