Detailed Narrative
Q3 FY26 Performance and 9M FY26 Growth Overview
Denta Water reported a moderated Q3 FY26 revenue of ₹53.52 crores, reflecting a 4.22% year-on-year increase from ₹51.353 crores in Q3 FY25. This slowdown was attributed to project-based timing, delayed billing in government projects, and the monsoon season in Karnataka. Despite the quarterly moderation, the nine-month period (9M FY26) demonstrated strong performance, with revenue growing by 30.8% year-on-year to ₹195.07 crores, up from ₹149.133 crores in 9M FY25.
EBITDA Expansion and Healthy Order Book
The company's EBITDA for 9M FY26 reached ₹70.85 crores, marking a 34.02% increase compared to ₹52.86 crores in 9M FY25. This led to an improved EBITDA margin of 36.32% for 9M FY26, driven by a favorable project mix, enhanced execution, and effective cost control. As of December 31, 2025, Denta Water maintained a robust order book of ₹841.48 crores, which management believes provides revenue visibility for the next two to two and a half years.
Strategic Focus on Water Infrastructure and Project Wins
Denta Water continues to focus on end-to-end water sustainability solutions, including irrigation, drinking water, and wastewater management. The company recently secured new orders for sewage treatment plants and one water supply project valued at approximately ₹20.8 crores. Management emphasized a selective bidding strategy for high-quality projects with attractive margins, particularly in its core expertise of groundwater recharging and water-based infrastructure.
Working Capital Management and Funding Strategy
A significant concern highlighted was the near-doubling of working capital days by December 31, 2025, compared to March 31, 2025, with inventory accumulation due to slow billing and collections. Management acknowledged this and committed to improving the working capital cycle to 95-120 days in Q4 FY26. The company remains almost debt-free for fund-based facilities, relying on internal accruals and non-fund-based bank guarantees from Kotak Bank and SBI for collateral in new project bids.
Future Growth Outlook and Project Pipeline
Denta Water projects a 20% year-on-year revenue growth for Q4 FY26, targeting approximately ₹65 crores. For FY27, the company anticipates a 30% increase in revenue, with a projected 15% annual growth rate after three years due to a larger base. The company is actively seeking new projects in the ₹100-300 crore range, with individual execution capacity up to ₹150-200 crores before considering joint ventures for larger projects.