Antony Waste Handling Cell Limited (AWHCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q4 FY '25 Earnings Conference Call of Antony Waste Handling Cell Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] I now hand the conference over to Mr. Jose Jacob, Chairman and Managing Director from Antony Waste Handling Cell Limited. Thank you, and over to you, sir.

Good afternoon, everyone, and thank you for joining us for our Q4 and FY '25 earnings conference call. With me, I have Mr. Mahendra Ananthula, our Group President, Operations, Business Development and Diversification; Mr. Subramanian, our Group CFO; and SGA, our Investor Relations Advisers. Our investor presentation for Q4 and FY '25 is now available on the stock exchange and on our company website. For the full year, the company has exhibited strong operational performance across all sites, efficient management -- efficiently managing high-tonnage volumes, demonstrating the strength and scalability of its operations. The company has successfully demonstrated exceptional operational efficiency, achieving an impressive plant load factor of approximately 82% in its flagship waste-to-energy facility at PCMC, highlighting the plant's reliability and effectiveness in generating clean energy from wastes. Additionally, our construction and demolition waste recycling initiative set a new industry benchmark, reaching a remarkable recycling rate of 96%. Additionally, the successful conclusion of an arbitration process has resulted in a favorable settlement, yielding substantial onetime gains of INR 28 crores, and the fund has been credited to our account. These extraordinary line item has further supported the company's financial position and our overall stability. This favorable outcome not only affirms our unwavering commitment to strict adherence to tender conditions, but also strengthens our confidence that the remaining amounts currently involved in ongoing arbitration proceeding will be resolved in a similarly positive manner. Now let me begin with the financial performance for the fourth quarter and for the full year 2025. We closed the Q4 with a high record operating revenue of INR 223 crores, reflecting a solid growth of 14% compared to the Q4 FY '24. This achievement highlights the continued strength of our operating model and the effective execution across all business segments. For the full year, we reported operating revenue of INR 842 crores, representing a healthy 10% increase over FY '24. This performance was boosted by multiple factors, including higher volume, increased sales of Compost and Refuse Derived Fuel, enhancing tipping fees, steady power generation from our waste-to-energy facility, contribution from the CIDCO biomining and the commercial commencement of our construction debris project in Dahisar, Mumbai. Collectively, these drivers contribute significantly to our top line growth and position us well for the continued success in the upcoming fiscal year. During the quarter, our C&T business revenue stood at INR 141 crores and for FY '25, stood at INR 581 crores. The processing entities showed robust progress, posting 48% year-on-year growth this quarter with revenue of around INR 82 crores. And for FY '25, processing revenue growth by impressive 25%, reaching to INR 261 crores compared to FY '24. This growth was driven by higher power sales from PCMC waste-to-energy plant, steady contribution from the CIDCO biomining project and revenue from our construction and demolition waste processing. These results highlighted our integrated waste management strategy, blending operational excellence with strategic infrastructure investments that are now delivering consistent returns. Our EBITDA for Q4 stood at INR 58 crores, reflecting a significant 33% year-on-year growth, with margin standing at 23%. And for FY '25, EBITDA stood at INR 220 crores, reflecting a year-on-year growth of 9% with margin standing at 23%, consistent with our stated guidance. This strong financial performance highlights our continued focus on operational excellence and our enhanced efficiency in waste processing operations, showcasing our ability to effectively utilize assets while reinforcing our unwavering commitment to sustainable waste management practices. Additionally, our wholly owned subsidiary, AG Enviro, has commenced ward-wise operation under the recent renewed Navi Mumbai Municipal Corporation contract. This strategic renewal showcases the company's strong foothold in the region and showcases its ability to effectively resecure and manage collection and transportation projects. Furthermore, as part of our strategic initiative aimed at optimizing both operational performance and financial strength, the company has commenced the processing of merging AG Enviro, its large wholly owned subsidiary, with the publicly listed holding company. This planned restructuring of integrating AG Enviro into the holding company, the organization anticipates significant improvement in operational synergy, cost effectiveness and overall financial stability, positioning itself for sustained growth. Looking ahead, we remain steadfast in our commitment to scaling up investment in sustainable waste management projects and enhancing operational excellence. By leveraging our expertise in MSW management, optimizing operational efficiency and pursuing strategic expansion opportunities, we are dedicated to delivering strong, sustainable and long-term value. Through these efforts, we aim to build a cleaner, greener future, positively impacting the communities we serve and setting new standards in responsible waste management. Thanking you. And I'm now turning to the operational aspect. Let me get Mahendra in. Mahendra, over to you. Thank you.

Thank you, Jose. Before I get on to the operational performance of Antony Waste Handling Cell Limited, let me give a short brief on the recent Bombay High Court order ruling around the Kanjur project. On 2nd May 2025, Bombay High Court set aside the 2009 de-notification of approximately 120 hectares at the Kanjurmarg landfills, thereby restoring its status as a protected forest under the Forest Conservation Act 1980 and the Indian Forest Act 1927. The court found this de-notification to be noncompliant with statutory procedure, holding that the 2008 notification conferring protected mangrove forest status was based on due process and factual assessment, not clerical error, as suggested by the state of Maharashtra and BMC. The BMC is directed to effectuate restoration of forest status within 3 months, during which waste disposal may continue. Municipal solid waste management, including collection, transportation, treatment and disposal is considered an essential service under the Essential Services Maintenance Act 1981. This order significantly impairs Mumbai's waste management regime as the Kanjurmarg site processes majority of the city's solid waste and no immediate alternative exists. The state of Maharashtra and BMC intend to challenge the order before the Supreme Court while landfill operations and concession rights and protection under the concession agreement remain intact, which includes seeking compensation for losses from premature cessation, decommissioning costs, third-party claims, invested capital and foregone revenue for the remaining concession period. In short, the state government and BMC have decided to challenge this decision in Supreme Court. They are exploring legal options on this subject because BMC, other than the Kanjur site, has no other option in the city for scientific disposal of MSW. Now on to the operational aspect. The company's waste-to-energy facility in PCMC delivered exceptional operational performance, achieving a remarkable plant load factor of approximately 90%, a significant increase from 76% in the preceding quarter. For FY '25, the facility maintained a strong average PLF of about 82%, reflecting sustained operational excellence and robustness of the underlying technology. This performance highlights the plant's reliability and efficiency in converting waste into clean energy, reaffirming the company's confidence in its WTE capabilities. Furthermore, Antony Waste's construction and demolition waste recycling initiative established a new industry benchmark by achieving an impressive 96% recycling rate, effectively transforming waste into valuable resources and advancing the circular economy goals. During the quarter, our collection and transportation operations efficiently managed about 0.49 million tonnes of waste and processed around 0.87 million tonnes of municipal solid waste, showcasing the year-on-year growth of 7% and 30%, respectively. The total tonnage for quarter 4 of FY '25 stood at about 1.36 million tonnes, representing a notable 20% year-on-year increase. Over the course of FY '25, we managed a total MSW volume of about 4.93 million tonnes, reflecting a 6% year-on-year growth. This robust performance highlights the strength of our operations and strengthens our confidence in achieving our internal volume growth targets. In quarter 4 FY '25, we started the new Navi Mumbai collection and transportation contract in a phased manner, and all the wards will be fully operational in quarter 1 of FY '26. On the waste-to-energy front, our PCMC waste-to-energy plant generated over 26 million green units in quarter 4 of FY '25, highlighting our ongoing commitment to reduce reliance on fossil fuels and lowering carbon emissions. Through these efforts, we also avoided 2,629 tonnes of CO2 equivalent, reinforcing our dedication to sustainability and environmental stewardship. The company achieved record annual sales for both Compost and RDF, underscoring the growing momentum of our waste valorization initiatives. In the March quarter itself, RDF sales reached about 45,200 tonnes, while Compost sales stood at around 4,500 tonnes. For the full fiscal year, RDF sales increased to about 148,000 tonnes and Compost sales nearly doubled to around 21,200 tonnes compared to 146,000 tonnes and 10,000 tonnes, respectively, in the previous year. This robust growth reflects our continued commitment to transforming waste into valuable resources while also indicating rising market acceptance and demand for our high-quality sustainable products. On the ESG front, our Scope 1 and Scope 2 emissions for the year totaled about 26,000 tonnes and 2,700 tonnes of carbon dioxide equivalent, respectively, with avoided emissions amounting to around 12,800 tonnes. Additionally, our ground staff strength currently stands at 10,766, reflecting our continued investment in skilled workforce to support our operations and sustainability initiatives. Going forward, the company remains deeply committed to fostering sustainable growth while continually enhancing operational efficiency. Our journey is anchored in a robust track record of performance, underpinned by a culture of adaptability and an unwavering dedication to excellence. These core strengths position us to not only meet but exceed our internal objectives as we align our operations with evolving environmental standards. Thank you, and I'll now hand over the call to N.G. for financials.

Thank you, Mahendra. Good afternoon, everyone. For the fourth quarter ending March '25, our operating revenue witnessed a strong growth of 14%, reaching a record high of INR 223 crores compared to the same period last year. For the full year, this figure stood at INR 842 crores, a growth of 10% on a year-on-year basis. The total operating revenue, which includes income from sale of recyclables and RDF, but excludes contract revenue, stood at INR 247 crores for the quarter, reflecting a 15% year-on-year growth. And for the full year, this number stood at INR 933 crores, a growth of 8%. In FY '25, we have observed a shift in our revenue composition. MSW C&T contributed 61% of the revenue, with processing accounting for 27% and contracts and other at 12%. This reflects a change from FY '24, where these numbers were 62%, 23% and 14%, respectively. Our diversified revenue streams continue to offer strategic flexibility and position the company for long-term sustained growth. The group reported an EBITDA of INR 58 crores for the quarter, which is a 33% year-on-year growth with margins at 23%. For '25, the EBITDA stood at INR 220 crores, reflecting a year-on-year growth of 9% and EBITDA margin of 23%, in line with our stated guidance. These results underscore its efficiency and the financial discipline adopted by the company. For the quarter, the profit before tax before exceptional items stood at INR 25 crores, reflecting a substantial growth of 90% on a year-on-year basis. And for the full year, the profit before tax was INR 95 crores versus INR 109 crores. On a year-on-year basis, this decline was primarily attributable to higher interest and depreciation expenses following the commissioning of our WTE and the C&D projects. Notably, cash profit before taxes has increased by 16% to INR 188 crores, further enhancing our financial flexibility and resilience. The PAT for the quarter was INR 46 crores, a growth of 53% on a year-on-year basis. And for FY '25, it stood at INR 101 crores, a marginal growth of 1%. During fourth quarter, the company achieved an extraordinary gain of INR 23.9 crores, a direct result of a decisive victory in arbitration proceeding upheld by the Bombay High Court. This landmark outcome reaffirms our uncompromising commitment to upholding tender conditions and sets a strong precedent for our continued adherence to the highest standards of compliance. As of March '25, the group's gross debt stood at approximately INR 473 crores with cash and bank balances of around INR 132 crores, resulting in a net debt of approximately INR 341 crores. This indicates a net debt to equity of 0.4x. The group's weighted cost of debt is approximately 9.1%, and the DSOs remained stable at 101. Cash flow from operations post taxes has improved by 34% year-on-year to INR 187 crores from INR 140 crores last year. Looking ahead, we remain steadfast in our commitment to operational efficiency and excellence. The efficient performance of our WTE project, the successful commercial launch of our C&D project, the commencement of revenue generation from our new C&T contract effectively helps us to report stable growth going forward. Escalations, which is a part of business, has been slightly sticky in the last period, which we feel can be made up with the [ appropriate ] approvals coming in time. We anticipate steady and sustainable progress in the upcoming fiscal years, which is aided by a healthy order book position of approximately INR 8,300 crores, which further reinforces our confidence in achieving the company's long-term strategic objectives. That concludes our remarks. We would now like to open the floor for Q&A.

[Operator Instructions] Our first question comes from the line of [ Atul Daga from Daga Securities ].

Sir, just 2 questions from my side. Have we recently submitted any bids for new contracts, if could you provide some insights into? And which projects are we focusing on collection and transportation or processing, considering that processing is better margin product?

So when it comes to processing projects, we have already submitted 2 waste-to-energy tenders in South of India. And currently -- 3 actually, we have submitted 3, 2 in South and 1 in Western part of the country. And 2 more waste-to-energy projects, we are currently working on the tenders. So there are 5 processing projects, to answer your question. And in the collection and transportation segment, as we speak, we are currently working on the Mumbai C&T tenders. The 8 packages in Mumbai, they have come up for tender last week. So we are working for that. We'll be bidding for it. And apart from this, there is also 1 package in South of India, which we'll be bidding for.

Okay. Sir, another question from my end. As our objective, which is to reduce dependency on municipal corporations, so are we actively looking on any new opportunities? And if we are, then can you please share the update on the tire recycling and vehicle scrapping front as well?

Thank you for asking this question because as we had always maintained that we are also -- we are always trying to look for nonmunicipal clients. So as we speak, we are in the advanced stage of discussion with a very large Indian corporate to supply for a waste-to-steam project. So unlike a waste-to-energy project where we process RDF to generate electricity, this would be producing processed steam. And this corporate would be using it for their captive manufacturing facility. So this is a project that we are very excited about. And coming to the end-of-life vehicle scrapping and so on, as we had mentioned in the previous earnings call, we wanted to buy land for the project. So we are pleased to announce that we have identified one piece of land, and we should be closing this deal in the next couple of months. And hopefully, in the next earnings call, we will be giving an update on that.

[Operator Instructions] Our next question comes from the line of Rupam Jaiswal from Investwell Agents.

Sir, I just had one question. Like in this current quarter, you got a receivable -- long due receivable of INR 4 crores and you got an interest payment around INR 23 crores. So like this, how many cases are pending with you all, like long due cases?

So we have one large case, which is pending in the Supreme Court for the final hearing. So that would be to the tune of around INR 15 crores. And additionally, there are around INR 19 crores of unbilled revenues waiting confirmation from the clients. So these are the 2 large revenue blocks, which is still outside, for which we are awaiting clarification and confirmation from the legal body and from the clients.

So in a way, like how long is this case pending? Like this INR 4 crores was just the book value, but you got an interest payment of INR 23 crores. Like how long was this case pending...

This was close to 14 years for us.

14 years. And the rest cases, which you have said about INR 15 crores; and the rest, the unbilled revenue, so [indiscernible] all the book value...

In case of the INR 15 crore amount, we don't expect any interest payouts from that because this has been cleared from the standing committee of that particular municipal corporation. So we don't foresee any additional revenue from that. And on the escalation amount, I think this will keep on adding as and when the time increases.

Okay. So these are the only 2 cases which are pending with you all guys as of now?

Yes. These are the only 2 points, and these are all pre-2016 events. So as and when we -- post 2016, our contracts have been much more cleaner and much more transparent in terms of interpretation. So that helps the tendering team and the client.

Our next question comes from the line of Rohit Maheshwari from Tata AIG General Insurance.

Sir, I have -- first question I have, you said in your opening remark that you have an order book of INR 8,300 crores, yes?

Yes.

Sir, can you give a breakup of this INR 8,300 crores and the time given duration of this INR 8,300 crores to get executed?

So we -- of the INR 8,300 crores on a percentage basis, close to 58% is having a long tail, which will expire by 2040. The balance would be executed over the next 12 years.

Next?

12 years.

12 years. [Foreign Language] it has a 15 year -- on an average, it will be 13 to 14-odd years?

Yes.

Okay. Sir, just to understand because you are in a sector where the TAM is too large [indiscernible] I don't think so the TAM is a problem. But I guess the problem is considering the size of your company, we are not seeing a growth of like 15%, 17% type of growth at the top line and the bottom line level. So does the expectation of investors from your company of 15%, 17% is wrong, and we should tone it down to 7%, 8% type of growth or something I'm going to wrong direction?

So let me put this into perspective. If you were to look at our last 5-year trend, I mean, my revenue in 2021 was INR 480-odd crores, and I'm doing around INR 960-odd crores today. So in a span of 5 years, I think I've almost doubled my revenue. Now if you were to look at on a year-on-year basis, FY '24 was INR 890 crores and FY '25 was INR 960 crores. So not a big number. As we have been reiterating at time ad nauseam, we cannot show a linear growth of 15%, 20% on a year-on-year basis. We will be showing a CAGR growth, which will be stepped up growth for us because as and when we bag a contract, the revenue starts coming in C&T business after 8 months and in case of processing after 2.5 years. So we will not be able to show a 10%, 15%, 20% year-on-year growth. But if you look at CAGR growth, that's the historical trend, and that is the pathway that we have. The company's balance sheet also supports such kind of large jumps in new projects, and that's how you will see the net debt to be kept at 0.4 and it's not at 1.1 consistently. So the moment we get new contracts, which meets our threshold returns, which meets our risk parameters, which meets our internal milestones, then we go with those projects and we deploy the capital adequately. This is a very tough industry when it comes to managing waste, and it's also -- it's a tough industry, given the fact that it's a B2G kind of a concept.

So basically -- if I got you right, so basically, you're saying it's not a company to see from a year-on-year perspective, you need to see the company from a 5-year perspective. And on a 5-year perspective, the CAGR can be 15% to 17-odd percent, year-on-year cannot be a CAGR of 15%. So this is what the key takeaway I can take out?

Yes, that's a good way to summarize this.

Okay. Sir, second is, I guess I've read somewhere, in FY '25, you had some revenue from construction and demolition, yes?

Yes.

So what was that amount?

We normally don't comment on unit-wise numbers, but it's -- on a broad basis, we handled around 250 to 300 tonnes per day for the last 4 months. And the average realization would be around INR 1,405 per tonne. That's our trend. So we expect a jump from those...

So we expect that in the next 6 months, I mean, this number of 250, 300 tonnes per day kind of processing will increase to 600 to 700 tonnes. So the plant is designed or capable of processing close to 1,000, 1,200 tonnes per day. But -- so we are -- but the quantity here will ramp up over a period of time.

It's a 20-year project for us.

But the contract value will always be between INR 50 crores to INR 75 crores, correct?

That assumes only tonnage for tipping fees. There is also additional revenue from sale of byproducts like M-sand and your rocks and aggregates. So realization of that will also be something that will add to the top line.

I would say that in our business plan, we have -- we are working with a 600 tonnes per day kind of number. So with the kind of tipping fee that we have, so we'll have about INR 30 crores to INR 32 crores of annual revenue.

Okay. Okay. And can I -- just to like one step before I was asking 15%, 17% CAGR, so do you see your company in the next 5 years to be a top line of INR 2,000 crores type of top line and a bottom line of INR 200-odd crores plus top -- bottom line?

Rohit, if you were to look at the kind of projects that we're bidding for, it will be very ambitious for us to say those numbers today. So I think as the time evolves, we will be in a better position to say numbers and stick our neck out.

[Operator Instructions] Our next question comes from the line of [ Ketan R Chheda ], who's a retail investor.

My first question is with regards to the debt and the cash that we have on the balance sheet, so I believe we have about INR 130-odd crores of cash. Do we have any plans to retire any of the debt so that our interest cost can reduce in the next financial year?

So of the INR 132 crores of debt, bulk of them have been given as collateral for bank guarantees and earnest money deposit for our ongoing contracts. INR 28 crores of cash is recently received as of the month end from the arbitration proceeds that we won. So the plan is to use the capital in a very judicious manner. There are a couple of upcoming projects which Mahendra had mentioned. So we will be using this as an equity contribution towards those new projects. And if nothing fructifies, then yes, we will be applying the same towards debt repayment.

Okay. And just a continuation to that, we were to receive the VGF amount for our PCMC WTE plant. Have we received the full consideration of the viability gap funding amount?

So we have received -- out of the INR 50 crores, we have received INR 45 crores of the VGF funds. And the same has been used to retire debt and provide collateral to the lender. The balance INR 5 crores is due in the next 6 months' time, which the company is following it up.

Okay. And my another question is with respect to the Kanjur court case. Now again, this is a very hypothetical scenario. So please bear with me. But say, for example, in a worst-case basis, if the Supreme Court also kind of gives a similar verdict and we have to cancel the project at the Kanjur, so what is it that we will receive for the termination of the contract, what would be the amount, the quantum of the amount that we would receive?

So we are actually engaging one of the Big 4s for doing an independent valuation exercise for the same for exactly the same reason. But as you rightly said, I mean, this is a hypothetical situation because as you would have noticed that BMC officially has made a statement that the city will come to a standstill if this project had to stop because they have no other alternative site to sell. But we are very clear, and as we said also in our commentary that -- so as per -- in case, the worst-case scenario, if the project is terminated, then we will be -- then we will get -- and as per the concession agreement, our rights are protected. And we will seek the decommissioning cost, the third-party claims, so the amount invested and the loss of revenue. So we will be looking at all that thing. So any effort to get to a number, we are taking help of one of the Big 4 audit firms.

As Mahendra mentioned, the legal opinion clearly states that the [Audio Gap] cessation of work. Any decommissioning cost incurred that will be reimbursed. Any third-party claims from lenders will also be reimbursed. Invested capital and foregone revenue for the remaining concession period will also be paid. So basically, I mean, the operator doesn't have anything to lose here. The city will.

Sure, sure. And my last question is on your tire recycling and the vehicle scrappage project, so is there a tentative time line by when we can start commercializing and start booking revenues for that project? I know it's delayed due to your land acquisition process. But just any time lines that you have set right now as of now?

Yes. As I mentioned, I mean, we have already identified the land. We expect to close the land deal in the next 4 months, okay? And then it's a 6 to 8 months -- 6 to 9 months process for commissioning of -- for implementation of the project. So you can say, from FY '26 onwards, it will be the operational phase for the project -- FY '27, sorry. FY '27, it will be operational.

[Operator Instructions] Our next question comes from the line of [ Karan Sharma from KF Capital ].

I just had one question. Sir, we have always guided to the market that we would be growing our operating revenue by around 20%. But this year, we could achieve only 10%. So what's the future outlook as in like for the next year and the years to come?

So we have been guiding a 20% to 25% CAGR growth on our operating cash flow, not a year-on-year growth. As I mentioned, I mean, it's very difficult for us to maintain that kind of a year-on-year growth. So if you look at a bunch of 3 to -- 5 years, I would say, is a total CAGR growth is what we have been guiding, and that is something that we feel a 20% to 25% is achievable based on the project pipeline that we have. In the current financial year, if you look at the soft core operating revenue of 10%, that's mainly because of a few of the clients' escalation amounts not getting recognized in the reported period because we are still awaiting clarification and confirmation from the client. So once the same were to come, the same will be recorded in the current financial year.

Our next question comes from the line of Soumya S from Insightful Investments.

I just wanted to clarify the 250 to 300 tonne per day collection that we do, what was the realization that you said for the same?

We are paid tipping fee for the waste collected, transported and processed. So the tipping fee for that is INR 1,400 per tonne, which BMC pays us.

And another clarification was when you spoke about the INR 8,300 crore order, which is to be split completion by FY '40 and over the next 12 years, what was that exactly regarding, which project is it?

So this is a cumulative of all the projects that we have. We have 26 projects of different tenures, and we have an existing tonnage and we have an existing rate. So if you multiply that, this is a total value of projects that we need to execute based on contracts that we have already signed or executing as of today.

This is the value of the project, which is still -- which still needs to be executed over the years.

[Operator Instructions] Our next question comes from the line of [ Sevanth Bommannagiri ], an investor.

Sir, my question is like based on more direction-wise. So generally, the moat is in the processing contracts, right? It's not in the C&T. C&T is like [ a price war ], right? So why are we not winning more processing-based contracts like the Kanjurmarg plant?

As I mentioned earlier that we are currently bidding for 5 projects, 4 of which are waste-to-energy projects and 1 is a waste preprocessing project. So there are 5 processing tenders that we are currently bidding. Over and above that, as I mentioned, we also are in advanced stage of discussion with a private corporate for waste-to-steam project. So that would be, you can say, a private entity merchant plant.

So any revenue size from that?

I'm sorry?

Any revenue size for that corporate deal?

No. So it's too early. I mean we are currently finalizing the technical and the commercial conditions, okay? And as and when it matures, I mean, we will be happy to share the details.

Okay. My second question is, what's the revenue from WTE plant in FY '25?

It is INR 62 crores.

Okay. Can I consider EBITDA of maybe 40%?

We normally don't comment on plant-wise EBITDA numbers over here, but 40% is a low range for such projects.

Okay. Okay. Sir, my last question is, so from now on, we'll bid more for WTE plants than collection and transportation and processing contracts because the more contracts are being bid for WTE plants, is that the right statement?

No. I mean we actually want to have a balance of the two because both have their advantages and disadvantages. So -- but in collection and transportation contracts, we are also very choosy. So that's why we are bidding only for large cities or large municipalities, who have the ability to pay and have a good track record of payment.

Okay. Yes. Can I ask one more question? So in your opinion, how many cities are doing processing like Mumbai, sir?

I mean, [indiscernible] 5 I have already mentioned, right? So I mean, you can say another -- maybe another 4 or 5 are in advanced stage of tender preparation. So you can say 10 maybe.

Yes. No, no. My question was more based on these Tier 2 and Tier 3 cities, right? They don't process waste, they just dump in the open grounds, right? So why are they not tendering processing contracts is, I mean, what my question was.

It has got to do with the affordability of those cities, but it is not that every city is looking at only waste-to-energy. I mean there are several cities which are looking at composting as an option. They are looking at MRF and composting and RDF as a solution. They are looking at [ bio-CNG ] projects as a processing option. So there are -- different cities are looking at different kind of waste processing technologies and processes. Waste-to-energy happens to be one of them, which is a good solution for a city of, let's say, a size of 1 million-plus population.

[Operator Instructions] Our next question comes from Ronak Shah from Equirus Securities Private Limited.

My first question is regarding the volume. So when we look at the fourth quarter's volume growth, the total tonnage what we have handled plus processed is at around 19-odd percent. So is this a like-to-like comparison or something which I am missing over here?

Sorry, can you speak clearly?

Yes, sir. So for the quarter, the total tonnage, including the collection and processing, the growth is at 19-odd percent. So is this a like-to-like comparison or something which we are missing over here?

Yes. So this is not like-to-like comparison because we have adjusted the numbers for the Mangalore project, which had a runoff. So this is on our existing contracts that we are talking about that this is a growth on our existing numbers of the live contracts. So that is why you see a disparity in our volumes growth versus the revenue growth.

Okay, sir. So from a like-to-like basis, what can be the steady-state growth going forward in next 2 to 3 years?

If we were to work on our existing projects on the C&T business with escalation and the volumes growth, we will be looking at anywhere between 8% to 11%, depending upon the escalation again. We normally see a volumes growth of around 3% to 4% and the escalation gives additional 3% to 8%, depending upon the minimum wage change and the HSD component price swings.

Okay. Got it. And sir, second question is regarding to the margin. So when we compare the guidance vis-a-vis the actual performance, so our operating -- core operating EBITDA margin, excluding the other income stores between the range of 20% to 21-odd percent. So how company is seeing this margin panning out over the next 2 to 3 years?

So bulk of our CapEx at our processing units are almost at the fag end of our life, so I would say the core EBITDA margins and the reported EBITDA margins should kind of merge over the next 2 to 3 quarters. I think post-monsoon, there may be additional 2 quarters of CapEx. But post that, we don't foresee significant CapEx movements in our existing processing contracts.

Okay. So I can expect similar 20% to 21% kind of EBITDA margin in 5 years...

No. Actually, the core EBITDA margin will move towards 22% to 23%.

As there are no further questions from the participants, I now hand the conference over to Mr. Jose Jacob for closing comments.

I want to take a moment to thank our dedicated team for their incredible contributions to our success. Your tireless efforts have been essential in achieving our goals, and we are building on that momentum. Our focus remains on delivering consistent results and creating long-term value for our shareholders. We are committed to investing in innovation and leveraging our expertise to strengthen our market position and drive sustainable growth. I'm particularly excited about our path towards a cleaner and greener future. Thank you for all [Technical Difficulty]

Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we connect the line for the management. Ladies and gentlemen, we have the management reconnected with us. Please go ahead, sir.

I want to take the moment to thank our dedicated team for their incredible contribution to our success. Your tireless efforts have been essential in achieving our goals, and we are building on that momentum. Our focus remains on delivering consistent results and creating long-term value for our shareholders. We are committed to investing in innovation and leveraging our expertise to strengthen our market position and drive sustainable growth. I'm particularly excited about our path towards a cleaner and greener future. And I wish you all a very pleasant evening, and thank you.

On behalf of Antony Waste Handling Cell Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.