WPIL Limited (WPIL.BO) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to WPIL Limited Q3 and 9 Months FY '26 Earnings Conference Call hosted by Arihant Capital Markets Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Balasubrimanian from Arihant Capital Markets Limited. Thank you and over to you, sir.

Thank you, Bumi. Good evening, everyone. On behalf of Arihant Capital, I welcome you to the earnings call of WPIL Limited for Q3 FY '26. From the management side today, we have Mr. Prakash Agarwal, Managing Director; Mr. Krishna Kumar Ganeriwala, Executive Director. We welcome the management of WPIL Limited on this call. Now I invite the management to WPIL's opening remarks, following which we will open floor for Q&A. Over to you, sir.

Thank you. Good evening, everyone. It is a pleasure to welcome you all to our earnings conference call for the third quarter and 9 months of the financial year 2026. Let me first take you through the financial performance of the company, followed by the operational highlights. For the quarter under review, consolidated revenue from operations stood at INR 539 crores, increasing by 41% Y-o-Y. EBITDA was INR 113 crores, up by 134% year-on-year with EBITDA margins for the quarter at 20.88%. Profit after tax amounted to INR 76 crores, reflecting a rise of 104% Y-o-Y, and PAT margins were at 14.03%. On a stand-alone basis, revenue stood at INR 204 crores, down by 6% year-on-year, while EBITDA stood at INR 49 crores, rising by 38% and EBITDA margins at 23.83%. Net profit stood at INR 33 crores, a rise of 61% Y-on-Y, PAT margins were at 16%. For the 9 months under review, consolidated revenue from operations stood INR 1,343 crores, up by 9% Y-o-Y. EBITDA was INR 242 crores, rising by 14% Y-on-Y with EBITDA margins for the quarter at 18.03%. Profit after tax amounted to INR 153 crores, up by 2% Y-o-Y and PAT margins were at 11.4%. On a stand-alone basis, revenue stood at INR 561 crores, declining by 29% Y-o-Y while EBITDA stood at INR 112 crores, declining by 18% and EBITDA margins at 19.96%. Net profit, INR 77 crores, PAT margins were at 13.66%. Domestic business for the 9 months under review, the product business reported a robust 50% Y-on-Y revenue growth, driven by stronger margins. Order booking and the order backlog continued to improve with an order backlog of INR 428 crores during the period, supported by an exceptionally strong inquiry pipeline. This healthy momentum provides clear visibility for medium-term revenue growth. The company secured a major breakthrough order for 30-megawatt large pumps for the Rajasthan Eastern Canal Project, which is a river linking project between Rajasthan and Madhya Pradesh. While project business remains subdued, O&M activity showed a clear pickup supporting near-term revenue stability. Execution of ongoing projects is progressing as planned, reflecting continued focus on timely completion and commissioning. The order backlog for the project division stood at INR 2,080 crores. The government's budget allocation of INR 17,000 crores for '25, '26 and an additional INR 67,670 crores for 2026- '27 is expected to provide a significant boost to Jal Jeevan Mission projects. Moving to the international business. International revenues increased to INR 822 crores for 9 months FY '26, representing an 81% Y-on-Y growth and now contributing 60% of total revenues. International EBITDA margins improved to 15% for the 9-month period, supported by a strong performance in Q3. The international order backlog stood at INR 608 crores for the product business and INR 2,114 crores for the project business. PCI Africa secured large strategic contracts for the Trans-Caledon Tunnel project, which is about ZAR 821 million and the Macassar Wastewater project of ZAR 1.1 billion, which are expected to drive medium-term revenue growth. Gruppo Aturia expanded its position in the water segment in MENA region with new contracts. The Australian business outlook is improving given the announcement of new LNG projects, while WPIL Thailand delivered record Q3 revenue strengthening its competitive position in the Thai market. MISA Italy successfully completed legacy contracts and is now actively pursuing new project opportunities. Eigenbau secured a significant contract in Nigeria further consolidating a strong market presence in the country. These developments position the international portfolio for sustained growth across multiple regions. With this, we can proceed to the question-and-answer session.

[Operator Instructions] Our first question comes from the line of Saket Kapoor from Kapoor and Company.

Sir, can you just reiterate what was -- first of all, I'm audible to you? Hello?

Yes, you are. Yes, you are audible.

Sir, firstly, can you reiterate what was the product order book closing position? You mentioned INR 1,080 crores?

Sorry? product order, yes, it will be about that much between domestic and international.

Okay. Because, sir, our Slide #17 mentioned at INR 1,036 crores.

So the product order backlog is INR 1,035 crores with split of 41% in domestic and international 58.7%.

So this number is INR 1,035 crores not INR 1,080 crores?

Yes, INR 1,035 crores. It is INR 608 crores, I got for international and INR 428 crores so yes, INR 1,035 crores.

Okay. Sir, and what would be the execution period for this product order book? By what time we will be executing...

It varies across different regions.

Okay. But just taking into account the average, what -- by what time we will be in...

It is not possible because there are different product lines with different requirements. Aftermarket is different. Product order backlog is just what is required it's robust, it increases. So therefore, there is more opportunities.

Okay. Sir, you have also mentioned in the domestic portfolio about this Rajasthan pump order. Can you give -- throw some more light on the same, on the quantum and this is the product business itself about the 30-megawatt large pumps for Rajasthan. And when will this get in the revenue -- flow through the revenue?

Actually, we have been discussing regarding river linking projects. So we had supplied river linking projects for the Kaleshwaram Project 30 megawatt, which was successfully commissioned a few years ago. And this is a great breakthrough because this is a new large project in Rajasthan, and we have the pump orders. So this is a product order, and we are executing it for a large contractor.

Okay. And what is the value, sir?

Value is about INR 320 crores.

INR 320 crores. And this will get executed over a period of a larger time frame or within...

Yes. These are large projects, large plants. So they are...

Okay. Sir, now coming to this our noncontrolling interest part, sir, if you could explain -- when we look at our profitability, the noncontrolling interest. So can you explain to us what -- how should investors read into this line item of the noncontrolling part? And how are our stake planned in the various foreign subsidiary, which we have mentioned, I think, so in Slide #6, our group business structure.

I think there is no change. All I can confirm is there is no change in any shareholding structure in this period. And the rest was there in the annual accounts. So you can see from there, it's quite complicated. There are different structures. But primarily, we hold our international business through our international subsidiary. So that is where the noncontrolling stake is.

Okay. But -- a very small point, and then I'll join the queue also. Sir when we look at the noncontrolling part, it is 28% of the total profitability. So INR 75 crores -- INR 75.56 crores is our net profit number and attributable to the noncontrolling interest is INR 21 crores. That is 28%. So just wanted to understand any steps we are taking to create, to make these subsidiaries into wholly owned subsidies and thereby the entire profit will be attributed to your shareholders at WPIL or what's the thought process going ahead?

It costs a lot of money. It will cost a lot of money because of the valuation. So I don't know. We will have to review whether it is good for the company.

Okay. And lastly, since we have always seen post monsoon the period. There is a pickup in the project part and also the deliverables for the product also improve. So taking into account that we are in the final quarter now already 1 month gone what should be the likely expectation in terms of the revenue growth that we may anticipate for the year to close, both as a whole, if you could just give a understanding, sir?

I think we are on track. I think if you see the 9-month performance, we are on track. The only variable there is the domestic project business where we have mentioned that the yesterday's budget has again, given allocation for their contribution, their centers contribution. So that should boost the Jal Jeevan Mission projects. But so we wait to see how that plays out, even monsoon.

Okay. And lastly, on the MSC update, sir, listing when can we expect the listing?

We're working on it. We are in the process.

We have filed the necessary documents or that has not been -- at what stage are we?

There are certain conditions we have to meet, so we are in the process.

I'll join the queue, sir. But the color what I'm trying to understand is that if you could just give us some understanding of how we can perform for Q4 in terms of the revenue profile since now we have a strong international order book in both in the project and the product business. So will that revenue start kicking for the project part also for Q4? Or we will be needing preparation time and that revenue will be kicking in the next financial year? I am talking about the orders in Africa that INR 630 crores and INR 469 crores in the Mozambique.

I think the recent orders which have been received and which are of 3- to 4-year time horizon will take some time to come into revenue. So that will be -- the recent orders in South Africa would take some time. But the business, as you can see, in this quarter, is performing very well.

We can look forward for the same. So this is what the trend should be going ahead.

Sir, I'll have to interrupt you, sir.

Yes, ma'am I'm joining, only sirs last point on the same?

Let's keep less questions, too many questions.

Our next question comes from the line of Jainam Doshi from [ Chris BMS ].

Congratulations on a good set of numbers. Just wanted to understand like what is our current exposure to the JJM both in terms of order backlog and in terms of receivables, like we had around INR 200 crores, INR 250 crores outstanding as on 30th September. So what is the current outstanding and the increase in the budget allocations, when are we expecting the fund flows to happen?

I think with JJM, as we have been mentioning that we are reducing our exposure constantly. But at the same time -- so we are reducing our exposure by executing backlog, and we received some funds, but most of that is adding to the outstanding. We are INR 300 crores outstanding. Hopefully, yesterday's announcement, which gave -- mentioned on both sides. One is for the '25, '26, which is February, March, next 2 months and INR 67,670 crores for the next financial year. So this outlook should be translated soon. I'm sure the government is also understanding the criticality of the situation. But I think we should wait for some -- I think we have mentioned the cabinet meeting is to be held. So we should wait for that.

Okay. Got it. And the new project orders, which are being secured by PCI South Africa are also at similar margins like we'll be able to maintain this 15% EBITDA, which we are able to do like overall consolidated basis for the international business?

Yes. That is our business, that is our business model. So between 15% to 20% is our focus area, and all businesses are aligned. As you can see, even by these results, which are primarily coming from Africa.

And also like we have developed products for Navy like drainage and there are also specialized firms which we have developed for LNG. So like a lot of activities happening on LNG even in domestic as well as in Australia, as you have rightly pointed out. So like what is our outlook like for these particular products? And whether going ahead, we expect it to contribute meaningfully to our product business?

Yes, of course. I think what we are trying to highlight there is that all our businesses are well positioned and completely aligned to their markets. So the Australian market as we executed a large number of refinery projects. Now these LNG projects, which were in a hole for some years are being restarted. So the outlook is very good there. And in the Indian market, as you said, Navy. So our Navy contracts are proceeding well, and we expect due when the new ships are announced, we will get more opportunity there.

[Operator Instructions] Our next question comes from the line of Balu Lamkhade from Parami Financial Services Private Limited.

Yes. Congratulations Prakash-ji for a good set of numbers. I had 2 questions, but it has got answered in previous 2 questions.

Our next question comes from the line of Sahil Shah from WPIL Limited. As there is no response, sir, can we move on to the next participant?

Yes, please.

Our next question comes from the line of Rohan Baranwal from Trinetra Investment Capital.

My question was on the O&M business. The business is actually projected to generate close to INR 700 crores by FY '27. So what kind of margins and capital would be needed for the annuity business? And does this business require dedicated working capital? And how does it contract structure in terms of project business?

So the operation and maintenance activity is post the closure of the EPC part. And most of these projects are between 5 years to 10 years to 15 years time frame, where we will be running these projects. This includes all the -- there are obviously costs, there are electricity costs and consumable costs and manpower costs. But it allows us to be close to the customer and monitor the project for a period, and that is our intention.

And sir, on the margin side, like what is the associated margin for these kind of projects? And how much would be the capital requirement for businesses like annuity like stream?

These are not annuities, so the capital is not. These are O&M, they are not annuity. So the ownership remains with the client. They are handling it as a service contract to us.

Okay, sir. And sir, the right question is on the PCI Africa, which has secured a large contract. So what is the pipeline for a similar large ticket projects in Africa and other regions?

So PCI Africa has a very strong pipeline for new contracts. And that is what our main intention was by focusing on Africa and building an international business so that we have -- we are well positioned, especially in Africa to take advantage of the opportunities there.

And how does WPIL plan to balance growth between engineered products and turnkey project internationally?

Could you repeat your question?

My question was sir, like how company plan to balance growth between engineered products and turnkey projects internationally?

So WPIL plans to focus to keep balance as we have been mentioning. So this time, as you can see, one is the balance between the international, which is now 60% roughly and domestic 40%, which is a healthy balance because considering the size of the economies globally. Similarly, in products and projects, our idea of projects was to build this capability where we can offer solutions and we can get involved in the operational maintenance, downstream areas. And we want to keep it at -- the product business will be the core and the project business would be balanced there. So I think we are close to the split we are looking at. And our focus product business would increase. So I think...

Yes, sir. One last question, then I'll be joining the queue. Question was like what is the revenue contribution between the O&M and the new projects versus the new projects?

As the business model matures, the O&M from the present projects as they are getting completed, will keep increasing. And as more and more projects come into O&M, the percentage will go up. We hope to reach a balance in 5 years' time, if you take it, outlook to be at about 25% to 30% from O&M and 70% from new contracts.

Our next question comes from the line of Mukta Chandani an Individual Investor.

Hello, may I know if I'm audible or not?

Yes, ma'am, you're audible, please go ahead with your question.

So my question relates to PCI Africa large contracts which are noted as enhancing medium-term visibility. What is the exact revenue recognition time line for these projects over the next 8 quarters? How does the margin profile of these large strategic contracts compared to division's historical average?

So the margin profile, as we have mentioned, would be as between the range of 15% to 20% as per our business model, that's our targeted margin profile, EBITDA as in, in EBITDA sense. Secondly, execution-wise, the projects vary. But if you take it, there are 3 to 4 years, and there will be a peak revenue which is at about -- we're looking at when about 30%. I think peak revenue is around when 30% of the time frame is executed.

Okay. And for the acquired international entity, what are the specific synergy targets set for FY '27? And what is the tracking mechanism. Is there a risk of margin dilution as these companies scale up execution?

Could you repeat your question?

Okay. For the acquired international entities, what are the specific synergy targets set for FY '27, like cost, cross-selling procurement, and what is the tracking mechanism for you?

So all our businesses are in the same sector. So we are working in either -- the project business primarily works in India, Africa and say, the Middle East areas. And in Europe, we work in Italy. So this is the areas of our project business. And the product business primarily works in, say, industrial, which includes oil and gas, energy and municipal and irrigation. So we work in these segments, they are all in the same area. So that gives us a lot of synergy going forward. And these businesses are very strong, and we are looking at market share increase in most of the markets.

Okay. So my next question to you...

Sorry to interrupt you, Ms. Chandani. Please rejoin the queue for more questions. Our next follow-up question is from the line of Saket Kapoor from Kapoor & Company.

Sir, I missed your outlook for the revenue stream between the product and the project business going ahead?

As I mentioned that they will be in line with the 9-month performance.

Correct. And sir, what was the contribution of the O&M for this quarter and for the 9 months?

To be fair, it has just started. This year, we have started O&M. So we see good traction coming in from next year. As I mentioned, in 5 years' time, from all these projects, we will be up to 25% to 30% of the debt project revenues.

Our next question comes from the line of Praveen Jayaraman from Avendus Spark Institutional Equities.

I have only one question from my side. All these international contracts, which we -- for example, the African contracts which we mentioned in rands, are these entered in current -- in their local currency? And how do we hedge these currencies against currency risk?

These businesses are -- in those geographies, they operate in the same currency of the geography. So therefore, there's no need for hedging.

Okay. So these are separate companies operating there. So we won't be -- but so basically -- sorry to interrupt, you can go ahead.

I was saying that there are separate companies operating in those geographies. So locally, these are local for them.

Yes. So this has an effect when we try to consolidate in the Indian numbers, that time the exchange rate would be having an effect in parts.

Correct. Absolutely right.

Our next question comes from the line of Sahil Shah from WPIL Limited. Our next follow-up question is from the line of Jainam Doshi from Chris PMS.

The large projects which we have secured from South Africa, like we have gotten the contracts from the government itself? And how is the funding, like are they multilaterally funded? Or like how is the funding status of the same?

I think South Africa is investing a large amount of money in water, and the government has enough resources for these projects.

Okay. So we have gotten this contract right from the government itself, right?

Yes. Yes, from different, different agencies.

Got it. And the -- for the Italian subsidiaries, like how is our execution queued, like Q3 and Q4 will usually contribute more than Q1 and Q2? Or how is it like placed?

And then typically when we find, Q4 is a strong quarter, but it varies from geography to geography, as you mentioned.

[Operator Instructions] Our next question comes from the line of Roshan Gandhi, an individual investor.

My question was on the working capital days. So from what I see from the presentation is that our working capital days is 208 days for H1. So just wanted to understand, are we comfortable with -- it's almost 7 months of working capital. Are we comfortable and if we want to improve what is the management looking at? And second question was in terms of revenue visibility. So right now, our order book is around INR 5,000 crores with a quarterly run rate of about INR 500 crores. So in terms of quality, the management has already highlighted that we are in talks with for some other orders. So just if you could quantify what is the amount of orders under discussion? That -- those were the 2 questions.

Regarding working capital days, it is higher right now if you see the previous trend, that's primarily due to the money which is blocked in Jal Jeevan projects. So hopefully, as we have said, as per budget announcements, this should be relieved in the -- actually in the next medium term, say, 6 months, like 3 months to 6 months, and that should give us some relief there and get normalized. And large projects, we are working in Africa. So Africa, there are a lot of tenders and projects, and we have a very strong company there. So I think a lot of good prospects.

[Operator Instructions] Our next question comes from the line of Nirav Sheth from Emkay Global Financial Services Limited.

Congratulations, big improvement sequentially in your numbers. I have a couple of questions. Number one is that now you've got established project business in overseas geographies, which seems to be doing very well at reasonable margins. When you look at the next 3 or 4 years, and you've got products and you've got projects in multiple geographies. Do we get the confidence that in terms of revenue visibility, I know you don't give guidance necessarily, but is it in the range of possibilities that we can comfortably double the size of the company between 3 and 4 years, which roughly points to somewhere between 18% to 22% growth rate. And you also have got O&M revenues kicking in, which will be sizable. The reason I'm asking you this because there are multiple geographies and multiple product lines, and there are different drivers to each of the business. Your own reason for the company, sir, over the next 3 or 5 years.

Thank you. I think our basic thing, which we elaborated few years ago, and again, we do now is that we will hit a lot of critical thresholds as far as our businesses are concerned. And today, we are very happy and proud to have our international business at 60%, which we have grown over the last 15 years. And it has been a slow growth because it has been on a very consolidated basis. These are now very strong businesses, very well established in their markets. So they will exceed the growth rate of those markets. And similarly, in the domestic business, we were -- we had some hiccups over the last couple of years because of regulatory issues. However, we find, we're very well positioned again because we stuck to the task at hand and kept executing. So we had our project business, we are looking at good prospects once things get back on track. And the product business, as you can see, is growing very well. So I think the outlook is very, very bright and we are very excited about the future.

Excellent. Two quick questions. After our experience in terms of executing projects with Jal Jeevan, do you think this is one-off in terms of getting stuck with receivables. Would you explore more opportunities because obviously, Jal Jeevan will continue for a few more years. Are you comfortable in terms of trying to secure more projects over there again?

Yes. I think we are waiting for things to normalize. What happened was a particular case, an incident, I don't want to go into the details of that. But I'm sure it will get normalized. We are all in -- this is a very good mission to deliver water to the people. And I think the challenges also was how to do it better. I think agencies have sorted out the mechanism, and we are excited about when things get back on track. And I think that's going to happen very quickly now.

Got it. And last question, sir. The reason I'm asking this is, it's very unusual. I don't recollect many of the companies in Indian diaspora who are able to consistently pull off acquisitions in overseas geographies with any level of success. Very, very few companies. And at the size of the company that WPIL is there, to me, it is a reasonably strong achievement. And anything that you can share with us in terms of the check list or the filters that you use to try and run this acquisition?

I'm sorry to interrupt you, Mr. Sheth. Please rejoin the queue for more questions.

Yes, just last question.

So I think this has been one of our major strengths. I think we are -- there are certain fundamentals which we are following. One is our margin focus. We are very focused on margins staying in 15% to 20% range, and we are not sacrificing margins for growth is one. And secondly, we are completely focused on our business. We are aware of all the opportunities in different geographies and product lines and we have a huge R&D technology support with us, great manpower, great manufacturing facilities. So I think we have a lot of strengths, which we leverage when we go across geographies and it's really -- as you said, it's been very heartening for us to see, especially we made 2 acquisitions in Africa and in Italy, 1 acquisition. These 3 acquisitions, just about a year time ago, and they are performing well. And then we made some acquisitions in the oil and gas space about 4, 5 years ago, and they are performing well. So I think it's very heartening and gives us a lot of confidence to keep being aggressive on the inorganic path.

Our next question comes from the line of Sahil Shah from WPIL Limited. As there is no response, we move on to the next participant. Next, we have a follow-up question from Saket Kapoor from Kapoor & Company.

Yes, sir. probably my last question. A lot of noise, sir. Sir, when we look at our -- when we look at the margin profile for our pumps and accessory segment, for this quarter, they are at 32%. So any one-off in this order book, the product mix was there that has resulted in these margins? Or taking into account what the closing order book of INR 1,038 crores is for the pumps in the accessory segment, what should be the margin profile going ahead for this segment, sir?

I think we should just stick to our focus of EBITDA between 15% and 20% for all our businesses across all geographies. And we've been consistently performing in line with that. In the last few quarters, last quarter, I think it was mentioned that our margin was lower as we had mentioned that they will be on track. So they are on track now.

Yes, sir. You are absolutely on track, not only on track, but we have improved upon. Only point, I was trying to consider bringing to my consideration was for 9 months also, we did revenue in the pumps and accessory at INR 750 crores and the bottom line PBT at INR 204 crores. So that also translated into a 27% margin outlook for 9 months also, wherein we are -- so I was just wanted to understand, is this the new product mix because of which we are posting the higher margins? Or if you could just elaborate on the same?

Again, the same thing. We are focused on keeping margins in that profile. And the margin fluctuate, different geographies, different product lines, and we cannot say the timing of it.

But these are sustainable number.

I think it's best to stay focused on the fact that we keep our margins in that range...

That was on a longer period of the company.

Yes.

Right, sir. Only point was just to deliberate was are these margins sustainable or not? When we have posted for 9 months, that should be the new profile for the sale.

I think the timing recognition, I'm not aware of that. So I think maybe some projects were -- some orders were executed, sometimes aftermarket is good, some region is good. So I think it's best to stay focused on the overall picture.

Correct, sir. But we are now poised for better performance going ahead. That is where that should be the sum and substance of what we have been eyeing now and we should be cementing our position going ahead also. That feedback, we can very well take the clearing call from the management team today.

Okay.

Sorry, I was just reiterating the fact. Am I correct on my assumption?

I can really say you're keeping on repeating that. We are in track and the numbers speak for itself and the outlook, we have all the figures there. And we mentioned that. But you have to understand that there are a lot of things which happened over a period of time, fluctuations. Like we are very positive about the Jal Jeevan, what we heard yesterday on the budget, and we hope it's realized, but we have been waiting for now more than a year for this. I think that should be kept in mind while being optimistic.

As there are no further questions, I would now like to hand the conference over to management for closing comments.

Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time, offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations manager at Valorem. Thank you. Good evening.

Thank you. On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.