Enviro Infra

Enviro Infra Engineers Limited delivered a strong financial performance for Q4 and the full fiscal year 2025. Q4 FY25 revenue from operations grew 31% year-on-year to INR 393 crores, with EBITDA reaching nearly INR 100 crores (16% YoY growth) and a 25% margin. PAT for the quarter was INR 74 crores, up 30% YoY, at an 18% margin. For the full FY25, consolidated revenue surged 46% to INR 1,066 crores from INR 729 crores in FY24. EBITDA for FY25 increased by an impressive 61% to INR 268 crores, maintaining a 25% margin, while PAT rose 66% to INR 177 crores, with a 16% margin.

As of March 31, 2025, the company's order book stood at INR 1,185 crores, a decrease from INR 1,687 crores at the start of January 2025 due to project execution. This order book comprises 22 diverse projects, with an additional INR 806 crores in operation and maintenance (O&M) contracts. Enviro Infra has submitted bids for projects exceeding INR 5,000 crores and anticipates converting INR 1,000 to INR 1,250 crores of these into new orders, aiming for a total order book of INR 2,500 to INR 3,000 crores in the current financial year. The average project execution timeline is 18-24 months.

Enviro Infra is diversifying into the clean energy sector by establishing a new subsidiary, EIE Renewables, and a step-down subsidiary, Sunaxis Renewable. These entities, acquired for INR 10 lakhs and INR 1 lakh respectively, will focus on solar, hydro-power, green hydrogen, and 24x7 renewable solutions. The company plans an initial investment of INR 50-75 crores in EIE Renewables from IPO funds. While new to this sector, management expects to generate some revenue from renewables in FY26 and targets EBITDA margins of 18-20% for these projects, slightly lower than their core water business but still healthy.

The core water and wastewater business continues to be a key focus, with management expecting to sustain a 35-40% revenue growth rate and EBITDA margins of 22-24%. The company aims to increase the scale of its sewage treatment plant projects from 50 MLD to 200 MLD and common effluent treatment plants from 20 MLD to 50 MLD. Enviro Infra is also integrating CBG (Compressed Biogas) plants into existing wastewater treatment projects, such as an 80 MLD plant in Jaipur and two 50 MLD plants in Jodhpur, with an upcoming 135 MLD plant in Saharanpur, exploring future opportunities in agricultural waste and MSW projects.

The company achieved a significant turnaround in cash flow from operations before tax, moving from a negative INR 78 crores in FY24 to a positive INR 26 crores in FY25. Trade receivable days increased to around 70 days, primarily due to payment delays from Jal Jeevan Mission (JJM) projects in FY25. However, management noted that approximately INR 70 crores in payments were received in early April 2025, which would bring receivable days back to a normalized 45 days. They expressed confidence that the worst of the JJM payment issues are over and funds are expected to be released by June 2025.

Enviro Infra's EBITDA margin improved to 25% in FY25, reflecting a strong focus on operational efficiency and financial discipline. Management attributes its higher success ratio in bidding (40-60% historically, guiding 20-25% conservatively) to in-house design and execution capabilities, which allow for better cost control and competitive solutions. The company aims to maintain an EPC to HAM project mix of around 75:25, as HAM projects drive better margins. O&M revenues, which offer significantly higher profitability, are expected to increase by INR 10-15 crores in the current financial year and reach INR 70-75 crores in two years as more projects transition to the O&M phase.