Concord Enviro Systems Q4 FY26 earnings call

Concord Enviro Systems reported Q4 FY26 revenue from operations at ₹206 crores, marking a 65% sequential growth, though it was flattish year-on-year. EBITDA for the quarter stood at ₹18.5 crores, a 331% sequential increase, but a 67% decline YoY, with the EBITDA margin at 9%. For the full year FY26, revenue was ₹557.8 crores, a 6.2% YoY decline, and EBITDA was ₹36.6 crores, a 57.9% YoY decline, resulting in a full-year EBITDA margin of 6.6% compared to 14.6% in FY25. Net profit after tax for FY26 was ₹19.7 crores, down from ₹51.4 crores in FY25.

The company launched its H-Xtreme Heat Exchanger, a next-generation product offering 10-25% fuel savings and up to 90% efficiency, targeting a double-digit market share in a USD40 million market within the next 3 years. Concord Enviro also entered a new industrial vertical with its first waste pickle liquor ZLD system in the steel sector. Furthermore, the company secured its first solar PV order for ultra-pure water and wastewater recycling, with discussions ongoing with leading players in the solar manufacturing ecosystem.

Concord Enviro's current order book stands at ₹536 crores, complemented by an additional pipeline of ₹3,000 crores. The company is L1 for orders worth ₹143 crores, including a significant order exceeding ₹100 crores from a major Indian steel manufacturer. The total contracted value, including longer-term O&M contracts, is ₹800 crores. The order book for FY27 delivery is ₹536 crores, with a breakdown of ₹334 crores for plants (including water and CBG), ₹41.5 crores for consumables and spares, and ₹160 crores for annual O&M services.

The company faced several external challenges^🌐 impacting FY26 performance. The Kenya project, a major contributor, was delayed due to client changes, leading to a ₹43 crores revenue shortfall in Q4. Compressed biogas projects experienced slower execution due to delays in financial closure and feedstock availability. Geopolitical tensions in the Middle East caused supply chain disruption^🌐s, particularly in Sharjah operations, resulting in missed deliveries and higher logistics costs, with ongoing issues at Jebel Ali and Khor Fakkan ports.

Concord Enviro made a strategic investment of USD2 million for a minority equity stake in a US-based polymer company to enhance material science capabilities. The company is focusing on execution discipline, technology differentiation, and building a diversified, resilient business. Key growth drivers for FY27 include CETP-related orders, strong traction in export markets, and continued momentum in the solar PV segment. The Roserve platform is also scaling, reinforcing a shift towards annuity-based revenue streams.

For FY27, Concord Enviro targets a total order inflow of ₹1,000 crores. This target is broken down into approximately ₹350-400 crores from the India S&P business, ₹200-250 crores from export markets, ₹150-200 crores from desalination and naval orders, and ₹300 crores from large EPC/CETP projects. The company sees significant opportunities in metals and mining (including steel), solar, textile, pharma, and chemical sectors, with a particular focus on industrial organic wastes for CBG projects rather than biomass.

Progress on the Diageo order is positive, with projects in Africa under execution. The Uganda orders are almost executed, while the Kenya phase, previously delayed due to a change of control, is expected to commence in phases by July. The ₹36 crores nuclear order in Vishakhapatnam has been received and is currently in the design phase, with revenue recognition anticipated to start in Q2 FY27 and commissioning targeted for Q4 FY27.