Ems Ltd (NSE: EMSLIMITED) Q4 2025 Earnings Call dated May. 30, 2025
Corporate Participants:
Ashish Tomar — Managing Director & Chief Financial Officer
H.K. Kansal — Chief Executive Officer
Unidentified Speaker
Analysts:
Aman Soni — Analyst
Darshil Pandya — Analyst
Reet Ranawat — Analyst
Pankaj Motwani — Analyst
Viraj Mahadevia — Analyst
Dinesh Kulkarni — Analyst
Rahul Agarwal — Analyst
Rishi Kothari — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen, and welcome to the Earnings Conference Call for Q4 FY ’25 for EMS Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the management discussion concludes. Should you need assistance during the conference call, please signal an operator by pressing star followed by zero on your touchstone phone.EMS Limited was incorporated in 2010 by Mr Ravi Singh and Mr Ashish and is involved in the business of seaway solution provider, water supply system, water and waste treatment plants, electrical transmission and distribution, road and allied works, operation and maintenance for wastewater scheme projects and water supply scheme projects for government authorities. Let us now begin with the introduction of the management team. We have with us today Mr Ram V Singh, Promoter and Chairman of the company. Also joining us today, Mr Ashish Tomer, Promoter and Managing Director; and Mr H.K. Kansal, CEO. I would now like to request Mr Ashish Tomer, Promoter and Managing Director of the company to introduce Mr H.K. Kansal, CEO of the company to give his opening remarks. Thank you, and over to you, sir.
Ashish Tomar — Managing Director & Chief Financial Officer
Yeah. Good afternoon, everyone. Thank you for taking time-out of your schedule for this earnings conference call. We are happy to come in front of you with good set of numbers.
So Mr SK Kansul, who has joined us in the capacity of CEO, I would like to give a introduction about him he is an IIT graduate in civil engineering and he graduated from in the IIT with Gold after that he joined UP Journalism and he had an extensive service in which he had opportunity to execute large-scale water supply in several projects. He eventually retired from UP Gen at the level of engineering chief of the whole state since then he has been our mentor and recently he joined us in the capacity of CEO. So now I would like to hand over the call to Mr for the opening remarks.
H.K. Kansal — Chief Executive Officer
I am SK Kansal. And as Mr said, I have quite a lot experience in this field. I am giving my guidance since last two years to the company and now I have formally joined as Strategic Head and CEO of the company. The company EMS Limited is all about the company who executes and maintains the work of water supply and severage and in environmental engineering and 70% to 80% business comes for armed severage and water supply works all over India in every state and mostly the works are funded by the central government agencies, Jaika World Bank or central government aided, which are executed at the state-level and the works as we know for water supply and sea, it is all executed for municipal corporations and various government programs in central governments like and Mission and other programs of World Bank, et-cetera, who fund for this and estate government with the share along with the municipal corporations.
So we are one of the top six, seven players revenue-wise in India who works in this field and we are established player since last around 10 years in this field and the Chairman of the company, Mr Rambir Singh was working for almost 20 years in government sector in this field only. That is why we thought to establish his own company and this company is growing since last 10 years with a CAGR of around 20% continuously.
As far as the results of this quarter is concerned, so if the consolidated revenue in this quarter is INR272.07 crore against the revenue year ended — quarter ended 15 31st March services to 49.245.92 and the profit is 46.92 this quarter as compared to the earlier quarter of 47.38. And as far as annual results are concerned, in FY ’25, we have achieved the revenue of INR965.83 crore against INR793.31 crores, which is a growth of 21.74% and it is a robust growth, which we are continuously giving since last eight, 10 years as a CAGR. And the PAT is INR183.78 crore against INR152.66 crores, which was in FY ’24.
This is again 20.38% growth in the — in the PAT also. And now if you see about the quarter’s earnings, the profit of the quarter is INR46.92 crore against INR47.38 crore, which is slightly less, slightly less, less than about 1% less in comparison to the previous year. While we have executed the work, while we have earned a revenue of INR265 crore against INR245 crores, which is INR20 crores higher. The basic reason is this that whatever government works we procure, usually the procurement is on competitive basis and the nature of the project, sometimes we have to procure the work on some less margins, say about 15% 20% and sometimes we have to procure the works about 30% to 35%.
And this is not a linear exploration or near — linear extrapolation of the works and the works executed in the last quarter is of the nature in which margins were slightly lower. Even then, we have maintained almost the same type of margin over an increased revenue. So this is all about this type of industry because there are certain works and the billing cycle is also typically of 75 to 19 days.
So earlier quarters billing, which is of less a margin could be realized in this quarter. And similarly, the more margin work can appear in the coming quarter or the present quarter, which is going on. So these are our robust results and we are — we were — we were guiding these results since the beginning and in so many conferences and we have achieved overall growth of around 21% to 22% in terms of revenue and 20.38% in terms of PET also. So this is all about this opening statement.
And the order — the order book at present is INR2,236 crore of unexecuted works and we are in the process of tendering in different states and in different projects, that is of the order of INR4,500 crores as of now and our conversion rate is 10%, 15% . So we can really procure the order of the order of INR600 crores INR700 crores in this quarter or in coming quarter. So that is from my side. I think I have elaborated about the results and the business of the company and our order book and our tendering in pipeline. Thank you. And one more thing to be added is that in water sector, typically we are having 20,000 rupees per-capita work-in metropolitan cities or in urban areas and INR10,000 rupees per-capita for water supply. So as a whole, it contributes about INR12 lakh crore worth scope, out of which INR4 lakh crore, INR5 lakh crore has been executed so-far. So it’s a tremendous scope and the annual budget of water supply and sea risk sector, including estates is about INR1 lakh crore per annum, which has to be executed continuously because the old assets dilepitated comes in dilepitated conditions in about 25 to 30 years in this particular sector, particularly sea risk sector due to corrosion and so many things and the expansion of the cities and density increase of the cities continuously increase the scope of the work either through the reorganization of the work or laying the parallel lines or laying the new lines in the expansion area. So we are in the business which is growing heavily until the time human being is there on the earth, the scope will remain there on in India and India is also going to be a water scared country. So desalination plants and other things and recycling of the water, reuse of the water treatment of the seaways will come into force that has already come and that will remain continuously to come. So as far as the scope is concerned, we are in the field, which has a tremendous scope and we are about 1% to 2% of the total scope of Indian context. So we are in very good business. We are growing with this sustained rate of 20% 25% per annum and we are looking-forward up to 30%, we can see 30% growth in coming years as an organic growth because there are so many retentions and so many things, the 30% growth for maintaining a positive cash-flow or something, we are very well into it. And we have shown it in the last eight, 10 years to give this type of growth. That’s all from my side. Thank you so much. If there are some calls and questions, we would be happy to reply all of them.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. We have our first question from the line of Aman Soni from Envest Analytics Advisory. Please go-ahead.
Aman Soni
Hi, am I audible?
Ashish Tomar
Yes, sir.
Aman Soni
Sir, I have three questions. One is on US AID fund stoppage and coupled with recent reduction of center share to JJMJ. So I want to understand from you what kind of impact these two changes are going to do in the next one or two years in the terms of the order inflows and our growth
Ashish Tomar
Yeah. So first of all, we do not execute any work that is funded by USED. So this stoppage of funding is not going to impact us at all. As far as your question about JJM funding is concerned. I think central government has not reduced its share. The states had sent the request for increase in budget and that I think was denied by the center and states have to finance them from their own resources. Whatever budget the central government has proposed earlier, the central government is, I think already paying it.
So the increased cost is due to, I think escalation and other factors. So if a center is going to deny it, then are you sure like states will be comfortable or they will not, they are not going to reduce the entire budget and thus our growth is going to be impacted. So the funding was carried out on the basis of estimates. In some states, the works were awarded above the estimated value. So if the government central government committed to finance 50% of the estimated cost, say a work of INR100 crores and the cent state government has awarded it at INR130 crores. So the central government is going to pay its share of INR50 crores.The work value above which it has been awarded INR30 crores, that is — that have to be financed by the state. Anyway, we are not executing any projects in the JGM sector.
H.K. Kansal
So actually JJM sector is a sector which is entrusted for water supply in the rural areas only. And we are totally handling the urban areas of for water supply and for severage also because in rural area, there is only one first priority of water supply. And in second priority, if they have to treat the water, they have to treat it not for very, not for very tight exorbitant type of treatment and that is being covered under such basically.
So eventually, we are not having the because the ticket size in rural area is not that big and we are particularly having ticket size of INR200 crore INR250 crore or more. So we are not into water supply. Even then, I will like to make clear that in Mission, there is a government, central government share and a state government share. And due to the preliminary surveys done in rural areas because I was handling with rural water supply also, the estimated cost was very tentative say for a village, it was INR50 crore. And when the detailed estimate was made, it was INR75 crores to INR80 crore. And when tender was invited, it could be INR80 crore or INR90 crore. But central government as per their condition was to fund only 50% so they had to pay only INR25 crores of the estimate which was sanctioned through the state-level technical committee under the Chairmanship of Chief Secretary.
So they are bound to give INR25 crore. Now the state government has to give billance INR50 crore, for example, if it is a INR75 crore revision. Now the state government is somewhere, some state governments are asking that they should give the additional 25%. So the government has — central government has denied it with the simple reason because this was not their condition, number-one. Number two, the thing was, key, some state couldn’t do the work-in time so central government has extended the time for the grant also.
Unidentified Speaker
So it looks virtually like central government has reduced their share, but it is not a fact because they have given the extension. So if they had to fund INR200 crore in a year, now they may be funding it in a year-ended quarter or year and a half. So it looks like that per annum budget had decreased. So that is a virtual number. It seems like that per annum budget has decreased, but actually the total budget has not decreased. Whatever was the commitment of the central government, it will remain with them. But in some states, which are not very rich in that term or they have not allocated the fund for water supply and sea rail, they may be given that money in extended period.
Eventually we are not in debt. Even then I have tried to explain what is the reason it looks like that central government has cut their share or central government has reduced the budget. Actually, it is not the fact. So this condition is like that only.
Aman Soni
Got it, sir. Very, very, very decent explanation. Sir, secondly, on the margin front, I remember when the year — when our IPO came, we used to talk about the reason for these higher margins in the range of 30% to 31% we used to get? The reason was simple like our projects were getting funded by the world organizations, right? And we were very much committed to maintain these kind of margins via participating in those tenders only which are giving us the higher margins. But if I fast-forward from ’22 to now like ’25, there is a significant Dip in the margins, like 30 — from 31%, it is now 26% kind of EBITDA margins that we are doing. So what is this sudden shift that has happened over the period of this two to three years? And how do you think like what kind of margins will we be able to maintain going ahead?
Ashish Tomar
It is a type of business, as I have already said, in which sometimes we have to take work on some strict competition basis. Otherwise, if the pupil our comparison, our peers know, key, we are going to bid for a 25% or 30% margin, we are never going to get any work-in our field. So somewhere we have to be tight also just to play with the competitors.
So in this case, what happened, if you see our standalone profit, it is still in the range of 30%. But as a consolidated, there was a SPV company who were having a lot of work last year, but not billing this year because the work has already been completed. That was a marginous work. It was a SPV and it was a good business margin work. So the margins will remain around 25% to 30% and PAT, we will try to maintain 20% to 22% type of thing. And continuously we are doing that. If we increase the business size slightly, it may impact profit and — in a very small quantity profit in this.
Because volume-wise profit is increasing, but maybe percentage transmit is slightly decreasing with — in some decimal points or something because if you grow with the price rate, some cost of the implies some cost — cost of the supervision may increase. And I think second part you have asked is key, why we maintain better PAT than other peer companies. So obviously, we have 6%, 7% higher PAT in comparison to other companies because of two, three simple reasons, these projects are EPC projects mainly.
And in EPC project, first of all, we have to do the engine of the project. That is technical design and all that even before tendering. So that is in-house facility we are having. We are having about fours of 75 engineers who look for the design who give the work. Generally, the companies of our size do not have the in-house facility of engineering and design and they have to spend 3% 2%, 3% extra cost for designing through the outsource agencies. So that is our age. Second thing is, our company, our Chairman, he was working with UP in severage and water supply system. So we know-how to play in the depth, in the data, in the material and all the things, whatever flexibility as per the bid document we have got, we utilize it to the maximum.
Third thing is we give our vendors who are our labor contractors, pity contractors, which we call the advanced payment or payment within 15 days only, nevertheless, we are getting the payment in two, three months period from the government because on that ground, we get a discount of say 3%, 4% from the vendors also. And that is how we work on-the-ground label. It’s a corporate company now, but even then, it is just like a contractors company because we are a ground label workers because basically you have.
In big companies like L&T,,, they are having a huge infrastructure in terms of manpower, in terms of TNDP, in terms of so many things. We usually hire that TNDP. Number eight, we usually give the TNP who is our labor contractor will provide the TNP to the labor contractor itself and cut the money. So he is happy that we have given him a poor clay and we have given him a JCB and we are not at any loss. We are getting discounts from him and the cost is also being recovered from his wages. So this is some management skills and management styles that we are having age of about 6%, 7% above other peer competitors in this field. So I think this answers your query.
Aman Soni
Got it, sir. And lastly on the guidance front, you mentioned a 30% growth for FY ’26, right? So does that mean the same growth will be in the bottom-line as well?
Ashish Tomar
I think we are — we are always planning to grow with the rate of 30% that could be 27% 32% like that. And we are planning to maintain the bottom-line above 20%. That is our guideline for future. So that means we are say because we have done it in last 10 years. Our CAGR is around that only,
Aman Soni
Which I agree, sir. But when you say we are growing top-line by 30% and bottom-line by 20%. So this means there will be a significant dip in the margins in this year as well, right?
Ashish Tomar
No. No, no, no, no. Actually, we are trying to get 30%. If we get 30%, our margins will also grow around 30% only and that’s obvious. But we are trying — we have achieved this 30% this year also as a standalone basis and as 22% on a consolidated basis. So if 25% is our achievement, we will feel that we have done well. And if we look at 30%, we will get it 25%. And our standalone growth is 21.74% year-on-year and our stand — our consolidated growth is also 20.38% basis. And standalone, we are — our growth is 21.55%. Actually, this is not an industry which is something manufacturing and selling day-to-day basis.
There are certain things, certain complicacies sometimes come and some more marginous works are not paid-in that particular quarter or even in that particular year also and some less marginous work can be paid-in this year, so they can enhance the revenue, but they cannot pro rataly enhance the margins. And in the next quarter, it may happen that the growth in terms of revenue is 25% and margins growth is more than 25% because more marginous works have come into payment window. So this happens in this type of industry. Sometimes too much variation is there, but in our case, it’s not too much variation, it’s a variation of about 1%, 1.3% only.
Aman Soni
Okay, sir.
Operator
Thank you. We have our next question from the line of Pandia from FinTrust Capital. Please go-ahead.
Darshil Pandya
Hello. Am I audible?
H.K. Kansal
Yes, sir.
Darshil Pandya
Hi, sir. Good afternoon. Sir, my first question would be with regards to the execution of this quarter. Did we face any execution challenges for this quarter? Because
H.K. Kansal
No, sir. No, I did not think that you faced any challenges.
Darshil Pandya
Okay. Okay, got it. And sir, just to understand from the current order book that we have around INR2,200 crores, what would be the timeline for this order book to be completed?
H.K. Kansal
I think almost above 90% of these works are going to be executed in the coming couple of years.
Ashish Tomar
So actually this order book is a continuously increasing and decreasing if you execute the works out of this order book and simultaneously you are getting the orders also. In this typical industry, we divide it by 2.5%. If we are having an order book of INR3,000 crores, we can complete the work of INR1,200 crores. This is general practice in this water supply and sea risk sector or building works. So safely, we assume that 40% of the order book we do execute.
But because this is at the time of opening year two, 36, we are likely to get minimum 1,000 crores INR1,500 crore orders in this coming two quarters. So this will keep running and flowing and we will be able to achieve our growth of 25% to 30% in terms of revenue very easily with this order book because there are certain orders which are 90% already completed. There are certain orders which are only 10%, 15% completed and we are going to get orders from that INR4,500 INR500 crore rupees in tendering, which are in pipeline.
So we will convert it every quarter at minimum 10% to 15%, that is INR500 crores INR600 crores order we will get-in every quarter. So by the year end, we can have the order book of 3,000, 3,500 or 4,000 that depends upon in how much tenders we do complete. So that’s it about.
Darshil Pandya
Thank you. Got it. That was something that I Was asking for. And last question would be, sir, on, on the — on the cash-flow side. Sir, in last three years, we have seen debtors also increasing from 84 to 142 and working capital is getting a bit heavier. Should we be concerned that more cash is being getting stuck in our system and what’s our theme? What is our team thinking about it?
Ashish Tomar
So this is the nature of the business in the government EPC business and about 10% of the project value is withheld by the government till commissioning of the project. So as our revenue increases, they are going to be increase in the debtors level also. I think — but as far as cash-flow is concerned, I think our cash-flow has been positive this year.
Darshil Pandya
Correct. Yeah. No, I just wanted to understand, sir, how our payment cycle actually work with the government 10% we get-in advance and how is unress 90%, how do we see that?
Ashish Tomar
Yeah. So the payments are carried out on monthly basis. So each and every month we prevent a running bill for the work executed in that month, then that bill is check at the division level at the at which the work was executed, then it is forwarded to the project management culture after wetting by PMC, this bill is forwarded to state headquarters mostly for payment process. So this process takes time of about 90 days to 100 days on average.
Darshil Pandya
So probably if you raise a bill in January, we get it somewhere in April, this is what —
Ashish Tomar
Yeah, this is what we are doing. Yeah. So it’s cyclical plus.
Darshil Pandya
Okay. Got it. All right. I’ll fall-back in the queue. Thank you so much for taking my questions.
Operator
Thank you. We have our next question from the line of Ranawat from Aventus Capital. Please go-ahead.
Reet Ranawat
Hello, am I audible?
H.K. Kansal
Yes, sir. Yeah.
Reet Ranawat
So could you tell me like could you provide me a detailed breakdown of those QIP that you mentioned in your last con-call? What happened about it and the utilization of that site?
Ashish Tomar
We have not yet carried progress with the QIP. But as we figured that the market conditions are not suitable, so I think we postponed it. We have postpone it and as and when the market improves, I will take a call on that.
Reet Ranawat
Sorry.
Ashish Tomar
Hello.
Reet Ranawat
Yeah, what are you saying?
Ashish Tomar
I’m saying that we have not yet gone for the QIP. We are planning on it. But since the market conditions were not favorable, there was a dip in the market. We did not go for it. We have not raised any funds. As soon as the market improves, we will take a call on that. We have no issue. We currently do not have any crunch financial crunch. We were just planning to raise the funds for future projects which we are planning to build for large large-scale hybrid annuity model projects. So for that, we would require the funds. Currently, we do not have any such requirement.
Reet Ranawat
Okay, all right. And could you tell me like to comparing to your peers like your succession ratio is low compared to the peers. So is there a reason for that?
H.K. Kansal
Yeah. So I can’t hear you properly. Can you please speak up?
Reet Ranawat
Yes. So is there a reason why your success ratio is lower than the peers in this industry?
Ashish Tomar
Success ratio of the bid — bid that you’re asking for?
Reet Ranawat
Yeah, bid ratio, yeah.
Ashish Tomar
Yeah. So I think considering the margins that we secure, I think 10% to 15% of the success ratio on the tender bid for is a good ratio. And we can always bid for more projects if we plan to take-up more projects. But this industry also has a constraint regarding how much work I can take-up. That is calculated by my bid capacity, which will progress slowly as my revenue increases. So even if I want, I cannot take-up projects more than four times my revenue.
Reet Ranawat
Okay, got it. Yeah. And so in the question was that like given your asset-light model, so how will the power in unless to verticals will split into operational, financial because could you give us an idea about that?
H.K. Kansal
So the voice is not clear. Can you please repeat the question?
Reet Ranawat
So like EMS follows an asset-light model, right? So how would power and real-estate verticals fit into EMS’s operational operations and like some idea about it?
Ashish Tomar
Yeah, so we are execu in power power sector. We are executing distribution works. So for that we do not require to invest huge amounts of money in the assets. It is mostly supply works coupled with the execution of the projects on the site. So I think it goes well with our asset-light model and I see no problem in taking such kind of works.
Reet Ranawat
And real-estate in that operate?
Ashish Tomar
In this company, we are not in any estate. In this company, we are not executing any real-estate projects. Okay, we are only taking up EPC projects, contract numbers.
Reet Ranawat
Okay, okay. Thank you.
Operator
We have our next question from the line of Pankaj Modwani from Equirus Securities. Please go-ahead.
Pankaj Motwani
Hello. Am I audible. Am I audible?
Operator
Pankaj, you need to be a little louder.
Pankaj Motwani
Yeah, okay. So sir, my question was on the part of the — on the acquisition part. So like in this balance sheet of FY ’24, so there is a INR58 crores of related-party borrowings, while the land and building value, which is our core interest for the EMS. So it is valued at around INR38 crore only. So like given that the total borrowings are exceeding the assets which we have interest, like the — and like the — even the company’s book-value is just only INR1 lakh. So like can you please explain the ratio behind paying INR7.75 crore for this 60% stake in this company, like how was this valuation derived?
Ashish Tomar
Yeah, so this company was acquired through NC NCLT and yeah, and yeah, initially we were having four partners and but since we need to put up properties in shape of collaterals to the bank, our partners exited this company at the value at which it was acquired with NCLT. So we acquired this company at the NCLT Valley only. And I think registry has already — registry has been carried out and the property in the and we are going to-market use property in the bank for our fund and non-fund based facilities.
Pankaj Motwani
And what is the value of this land and building because like because we have also the borrowings which we like as we are acquiring this company, so like we have a borrowings of INR60 crore INR60 crore also coming in our EMS books. So like I don’t understand additional behind like because the land value is much lower than the.
Ashish Tomar
Hello,
Pankaj Motwani
Hello,
Ashish Tomar
Yes, sir. I think the only borrowings on our book, I think would be in the range of about INR750 crores and almost — all of it is related to financing of a HAM project in order to create it. In our subsidiary, Miradapur projects, in this company, EMS Limited, I don’t think we have any debt.
Pankaj Motwani
No, I’m talking about the Bij book. So in Birish, there is in FY ’24 book — in FY ’24 balance sheet, there is a borrowing of INR60 crores from rated parties
Ashish Tomar
Only loan from directors and shareholders. It is a loan from directors and shareholders.
Pankaj Motwani
Yes, yes, yes. So that’s why I’m asking. So like in this Bihari FY ’24 book, there is INR60 crores of borrowing. And against which the assets are on — like the The land building which we have our core interest. So like that. So the value of the Same is only 40 crores. So like what is the rational behind fact
H.K. Kansal
That money was used to acquire the land that was acquired from ncsd. So that loan is for that. Suppose
Pankaj Motwani
What is the value of this land? I think it would safely be in excess of 60
Ashish Tomar
Value.
H.K. Kansal
Yeah.
Ashish Tomar
More than 100 cr.
H.K. Kansal
More than 7080 crores safely and we are getting the valuation done. And after that this property is going to be mortgaged with the bank.
Pankaj Motwani
As per the Company incorporated on January 23 only the balance sheet will represent only the cost part on. I think so. Like so as per the the land and building comprise of 40 crores only. So like how can you say that the market value is much above than the cost. Like I don’t understand. Like even into like in the two years the market value can double. Like the land building of value is only 40 crore as per balance sheet. So like how can the market value. Like you are seeing 80 crore of market value. Like so how can this happen in two years only?
H.K. Kansal
So the land is in excess of 1 lakh.
Ashish Tomar
1 lakh 50,000.
H.K. Kansal
About 1 lakh 50,000 square yard and 5 lakh square feet of
Ashish Tomar
Area constructed. Area is already constructed on that plot there was also plants and machinery. We bought this deal on a discounted basis as the property was stuck in NCLT. We are getting the valuation done.
H.K. Kansal
Yeah.
Pankaj Motwani
Okay. So. So can you tell me the net worth of the company? Like so what what is the network? Because there are also no revenues in this company. What is the net worth? Like the equity. What is what is the network of the company?
H.K. Kansal
We are not interested in generating any revenue in that company. That is only an asset hold. And we are going to market this land in the bank for securing bank guarantees that we need for executing our projects.
Pankaj Motwani
So just want to confirm like the as you are saying the landing building value is 80 crore and the book value is 40 crores. So am I right? Like a book value is 40 crore and the market value is 80 crores.
H.K. Kansal
Yeah.
Pankaj Motwani
Okay. And yeah. One more question. So like as per the ICRA monitoring report which was released in the January 25. So so like out of the 137 crore of IQ proceeds so 34 crores was EMR for the general corporate purpose. And out of this like 27 crore as per that report like the 27 crore was used for the advance payment for this equation. But as per your latest communication like we have paid only 7.7 per crore for this equation. So like can you clarify like where is the balance amount has been utilized?
H.K. Kansal
Sir, I think all of that money has been used to for this acquisition only. I think there must be some confusion regarding that.
Pankaj Motwani
So if you refer the.
Operator
Mr. Pankaj may please request you to rejoin the queue.
Pankaj Motwani
Hello
Operator
Mr. Pankaj, can we please request you to rejoin the queue as there are several participants waiting for their turns.
Pankaj Motwani
This question is a part of the earlier question. So I’m not. Get completed.
H.K. Kansal
Yes. I think all of that money, the general corporate purpose money has been used most of it for acquisition of this company. And I think if there is some mismatch in the figures we would check on that. But it has been spent and
Ashish Tomar
7cr was used for the purchase of machineries in Mumbai. Rest of the mountain for this quarter for purchase of machinery.
H.K. Kansal
Yeah. I think 7 crore were used for purchase of plant and machinery for a construction project in Mumbai. And rest of of that general corporate fund was used for this acquisition.
Pankaj Motwani
So it has been clearly mentioned in that report that the 27 crore was used as in for the advance payment for this acquisition. But
H.K. Kansal
Yes.
Pankaj Motwani
And the actual consideration is only 7 crore.
Ashish Tomar
So like what is the balance amount utilized it for the advance?
H.K. Kansal
Sir, 7.5 was advanced.
Pankaj Motwani
So. So. So what is the actual consideration for this equation? Like what is the equation value for this? For this Brihari company
Unidentified Speaker
7.5 was telling 7.5 cr was paid advance for the purchase of this property to the existing the old our customer director was there.
Pankaj Motwani
No has been assured 27 crore.
Unidentified Speaker
Sir just listen sir 7.5 advance paid. Ikra was telling 7.5%. 7.5 crores paid advance out of this corporate purpose rest amount was next year used. Your friend looking this report the crash at one and half year back it was there. Now there is a CRIN report is there?
Pankaj Motwani
No. I’m look looking the January 25th report only which is released in January 25th.
Unidentified Speaker
So. So there’s January 25. Not at all possible. Chrin was there sir. Nikra was not there. Now CR has given me report February end. So it is part of your disc.
Pankaj Motwani
It is part of your disclosure only. Like you you had disclosed on the. On your. On the exchange the IA monitoring
Unidentified Speaker
That is. That is. I’m telling sir exchange 7.5 cr advance given to Bihari pulp
Pankaj Motwani
Mentioned 27. So like there are 4 advance shown which is 5 cr 2.5 cr 6 cr 13 crore. So in total there it is around 27 crores.
Ashish Tomar
7.5 advanced given for the purchase of this property to the. Because the Property was purchased 2023 by the three promoters in which Ramveer Singh was the partner of 25%. 60% was the other person and 25. 5 percent was the other person he’s acquired 50% share from the other person and which for which the 7.5 cr advance was given
Pankaj Motwani
So can you clarify like the as per Your disclosure of January 25.
Ashish Tomar
I, I, I 100% sure 7.5 crore was given advance
Pankaj Motwani
Disclosure because it is shown clearly that.
Unidentified Speaker
Yes, yes yes
Pankaj Motwani
As per the disclosure dated January 24th
Operator
Can we please now request you to rejoin the queue as there are several participants waiting
Ashish Tomar
Advance payment for takeover of the company B5CR 20 August 20243 September 24 there we have paid 2.5 crore 6 crore we have paid in 7th October and 13.40 crore we have paid for this on 8th of October 36.4789 hello.
Operator
Thank you sir we have a next question from the line of Viraj Mahadeva from Moneygrove Please go ahead.
Viraj Mahadevia
Hi sir, sorry the last session went on very long out of your 10200 crore existing order book what are you likely to execute as top line in FY26?
Ashish Tomar
In F FY26 I think we’re going to see a growth of 25 to 50%
Viraj Mahadevia
So about 1300 crore should we say 1250 to 1300 crores is reasonable?
Ashish Tomar
Yeah I can’t quote exact numbers sir, but I can assure you that it’s going to be the growth is going to be in the range of 25 to 30%.
Viraj Mahadevia
Understood. So while the pat makes me good in terms of growth the cash flows is clearly an area of concern for investors the best of companies in EPC have gone wrong for one of two reasons either the debt piled up on the books so I came to know what our net debt position is or and secondly because the operating cash flows have consistently been negative so I think from the finance team from a receivables collection point of view otherwise you’re going to have an issue down the road.
Ashish Tomar
Yes sir Or I think cash flows fairly positive it’s not enough to sustain your business no. You are going to have to keep raising capital otherwise and diluting.this is value 115 crore minus method I think the situation is going to improve further.
Viraj Mahadevia
Okay good. Because That’s operating cash flow. Then you have investment, right? In Capex, your free cash flow is negative while an operating level you turn positive. Work needs to be done on working capital to make that number much more positive and then in a comfortable position.
Ashish Tomar
Sure, sir, sure.
Viraj Mahadevia
Right. Thank you. All the very best.
Operator
Thank you. We have our next question from the line of Dinesh Kulkarni from Finsight. Please go ahead.
Dinesh Kulkarni
Hello sir. Am I audible?
Ashish Tomar
Yes,
Dinesh Kulkarni
Thank you for taking my question and you know, I would appreciate good set of numbers. Sir, my question is like one of the previous participant was asking about that bridge Bihari thing. I would just request you, you know, because there is some concern or with respect to the payments and ownership of the asset, I would just say if possible just come up with one release in detail. Like what is the transaction there? Because I also had this question from the last few quarters, and I’ve been asking Mr. Ashish Tomar for the last, you know, few quarters. They just come up with all the details there and put it as a press release. Okay, this is the transaction. This was the ownership in the three years ago, two years ago, one year. When this is the ownership now because if any see the problem with the investor sees. Please understand this. If there is any related party involved, whoever it may be, Chairman, sir, CEO or CFO anywhere, if there is any related party is involved in any transactions, then it raises corporate, corporate governance questions. You may be right on your part. I’m not questioning that.
But the clarity is not there since the beginning. The transaction was announced maybe a year ago. So I just request you first of all to after this call, maybe you should come up with a one detailed press release on that. What is the ownership of the whether who’s going to have the ownership of the rest of the company? Will it be the. With the chairman, sir, or with the company? EMS Co. Or a subsidiary of it. Okay, so that’s my request to you.
Ashish Tomar
Okay? It is going to remain subsidiary of EMS and
Dinesh Kulkarni
100%
Ashish Tomar
And not 100%, 60% subsidiary.
Dinesh Kulkarni
Yeah, this is what I’m saying, sir. This is what I’m saying. This question being raised with everyone, not just me and the previous participant. Okay. I’m just saying give a complete detailed war of the ownership of the transactions of the payments made so far. And what is it to be paid? What is the book value of the company? What is the market value of the car? That asset. Okay. And what is being currently done on that asset? Like is it really usable used land or not? Or it is just a blank empty space or something? We have no idea. Put some pictures if required. Okay. That’s my request. That will help.
Okay. And now I’ll come to the question. Yeah. My question is, sir, if you look into the cost of, you know, like, even on the standalone basis, if you see the cost of services sold from the previous quarter, like last year, Last year, same quarter, it was 92 crores and it has jumped to almost 170, 167 crores. So the cost of services, right. Of sales and services has gone up from 40% to 62.5%. Exact numbers. Why is it so like. I mean are we, you know, taking orders in this quarter? Like given more orders this quarter or like what has exactly happened? Why is it so, you know, different. Different for two quarters.
Ashish Tomar
So the cost part will depend on multiple basis. Suppose in last quarter multiple projects, new projects were taken up and they were in the initial phase of execution at that time. The investment is on the higher side. But I think going forward we are going to realize revenues from these projects and the situation would improve.
Dinesh Kulkarni
So basically you’re expecting the margins which we should improve in the coming quarters, right? Including the current one.
Ashish Tomar
Yeah, because on mobilizing the sites and giving advances for procuring materials, we have to give up payments and the material usually takes time for the delivery and we don’t book any revenue in that period in the initial phase. But once that revenue cycle kicks in, I think the situation get improved.
Dinesh Kulkarni
Okay, sir, and how do you see, sir, I mean you mentioned the revenue growth and all. I appreciate that. But we have seen even other some companies as well in the same space. They’re also reporting issues with the receivables. As one of the previous participant asked, maybe there is a delay or God knows what’s happening. But really
Ashish Tomar
That issue was I think related to the GM projects. As told earlier, we’re not executing any GM projects and so I not see any receivables issue.
Dinesh Kulkarni
So the receivable date should come down or it should remain the same levels. What do you think of the business?
Ashish Tomar
I think that would stay in the range of 90, 200 days.
Dinesh Kulkarni
Okay, that sounds great. Thank you. Thanks for taking my questions and I just request you to come up, you know, with the that press release. Okay, thank you very much.
Operator
Thank you. We have our next question from the line of Rahul Agarwal from Ms. Capital. Please go ahead.
Rahul Agarwal
Yeah, hello. Yes, hello. Yeah, thanks for the opportunity. Most. While most of my questions have been answered, I just wanted to know. So. So you know, apart from we majorly work in the water. Treatment space. But we also work, you know, in other EPC projects like roads and building, etc. So I just wanted to know whether this mix is going to change going forward. You know, whether we, we might see more focus.
H.K. Kansal
I think we are going to. The mix is going to remain the same. We are going to be a water-focused company and our water business would stay in the range of 70 to 80% of the revenue going forward also.
Rahul Agarwal
All right, sir, and I just wanted to know, I might have missed this detail, but the order book that we have currently. Would you be able to just clarify how much of that is in the water space and how much of it is the rest of the stuff?
H.K. Kansal
I think our order book, that 2232cr figure is unexecuted order book. Yeah. Out of which three something is. Out of which 331 crores is for operation and maintenance works of the water projects that we executed and 1900, almost excess of 1900 crores is for capital works that are going to be executed. And out of this, I think somewhere around 1500 odd crores would be from water business and the balance would be from other businesses.
Rahul Agarwal
All right, I think that answers my question. Thanks a lot.
H.K. Kansal
Thank you.
Operator
Thank you. We have our next question from the lineup. Rishi Kothari from PI Square Investments. Please go ahead.
Rishi Kothari
Thank you so much for the opportunities. I have two questions. First thing, what exactly happened iv saw slowdown this particular quarter.
Ashish Tomar
So I think I said it. There are some cycles, I think two or three of our new projects were started in this quarter. And in the initial execution phase, we have to invest in the mobilization of the site, advances against material orders and advances to TMP operators, etc. But I think going forward this advance would turn to revenue and the situation would improve.
Rishi Kothari
Okay, got it. And apart from that, I don’t know if but we appointed a lead CEO in the company right now.
Ashish Tomar
Yes sir.
Rishi Kothari
What exactly is name?
Ashish Tomar
Mr. HK Kansulu.
Rishi Kothari
Mr. HK. Consul
Ashish Tomar
Consult.
Rishi Kothari
Sorry can you spell it? I’m not able to.
Ashish Tomar
A N S A consel cancel
Rishi Kothari
K A N S L okay And I have, I mean they were a strategic advisor to our company probably for last two, three years. Right. And now he’s actually joining the board.
Ashish Tomar
He said he, he joined recently. I was saying that he has been on a sort of a mentor but he was not at all involved in any official capacity. He is in official capacity has just joined.
Rishi Kothari
Okay and what’s the background for Mr.
Ashish Tomar
Yeah so he’s a gold medalist from IIT Roorkee in civil engineering and after that he joined UB Jilingam as engineer and he executed various large scale water water supply projects and retired at level of engineering chief.
Rishi Kothari
Okay my last question would be around are we seeing any sort of government keep exploring for now. I mean in the water segment or are we seeing the payment tax thing from them?
Ashish Tomar
Some volume is very low. Can you please speak up and repeat the question?
Rishi Kothari
Yes I’m asking are we seeing any sort of government slowdown in the water segment in terms of the capex? Is there some sort of looking at everything is intact?
H.K. Kansal
None at all sir. I think it is going to pick up and support. I think we are going to see huge business in Delhi in the coming years and the recent push on cleaning of tributaries and distributories of Ganga in addition to the main river. So I think there’s going to be huge investment in this sector and no question of any slowdown.
Rishi Kothari
Okay got it, got it. And in terms of waterline also we’ll be able to maintain the margins on next two three years of 20 odd person. Right. So as you said earlier, also because of the project we sometimes have to sacrifice the margin just to have that project enough for order.
Ashish Tomar
So just to clarify our performance must not be compared to the manufacturing companies. This is not an assembly line kind of business. So to gauge our performance I think year on year performance and comparison would be much better than quarter on quarter
Rishi Kothari
Which I get it. So that’s how we are seeing a more or less 20 odd percent margin of PAT level is more or less intact. We are not going to see on a console basis.
Ashish Tomar
Yeah. Yes.
Rishi Kothari
Okay. Just a last clarification. I mean you said that on a console standalone business we had a growth of 27 odd percent. But on a consolidation we more or less, you know, solved it in the margin. I think some sort of in spv. Right. What exactly was it?
Ashish Tomar
Hello.
Rishi Kothari
Hello. Hello. Something on standalone basis, we actually saw a good growth of 27 odd percentage. But because of the other entry that is SPV, we saw a bit of dip in the, you know, bad level as well as revenue because of that whole new project that we’re incurring. Right.
Ashish Tomar
Yeah.
Rishi Kothari
Okay. Okay, thank you. Thank you so much.
Operator
Thank you. Thank you. Ladies and gentlemen, due to time question, we’ll take the last question from the line of Amansoni from NVST analytics advisory. Please go ahead.
Aman Soni
Hi, thanks for the follow up. Sir, you mentioned about some projects coming in from Delhi, Right. So can you elaborate a bit on that? Like what kind of projects are these going to be and what is the size of opportunities and what kind of role are we going to play in these projects?
H.K. Kansal
I think the majority of the projects would be related to conserving the river Ganga and rejuvenating it. Majority of these projects would be in the area of sewerage and industry, different treatment projects. And I think the opportunity side could be anywhere about 10,000 crores.
Aman Soni
And by when are we expecting these projects to start kicking in? Like is there any bidding process or have we already.
Ashish Tomar
Tenders have already started coming in recently they were. There are three tenders that are online and I think this rate is going to pick up in the coming time.
Aman Soni
And what kind of success rate are we targeting? Because we are based out of these areas only. Right. And we are having solid regulations and execution capabilities as well. Right. So, considering that, what kind of success rate are we targeting in these projects?
Ashish Tomar
Anywhere about 15% I think would be a share target,
Aman Soni
Like 1500 cr kind of opportunity you are seeing for EMS in next one year, right? From these kind of projects. Is that understanding correct?
H.K. Kansal
Yes, sir.
Aman Soni
Got it. Thank you sir. Thank you very much.
Ashish Tomar
Okay,
H.K. Kansal
Thank you.
Operator
Thank you ladies and gentlemen. That was the last. Last question for today. And I would now like to hand the conference over to the management for closing comments. Thank you, sir. Ladies and gentlemen, on behalf of EMS Limited, that concludes today’s session. Thank you for your participation, and you may now disconnect your lines.