Concord Enviro Systems Ltd (NSE: CEWATER) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Kanav Khanna — Investor Relations Practice, EY
Prayas Goel — Managing Director
Prerak Goel — Executive Director
Analysts:
Unidentified Participant
Dheeraj Ram — Analyst
Sonia Varnekar — Analyst
Ankur Gulati — Analyst
Dhavan Shah — Analyst
Maulik Patel — Analyst
Jay Bharat Trivedi — Analyst
Harshit Rathi — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1 FY26 earnings conference call for Concord Enviro Systems Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kannav from EY. Thank you and over to you sir.
Kanav Khanna — Investor Relations Practice, EY
Thanks and good morning to all the participants on the call and thanks for joining in our Q1 FY26 earnings call of Concorde Enviro Systems Limited. Please note that we have mailed out the results to everyone and you can also see these on our website and it’s been uploaded on the stock exchanges as well. In case you have not received it, you can write to us. We’d be happy to send it over. And before we proceed to the call, let me remind you that the discussions may contain some forward looking statements that may invoke known or unknown risks, uncertainties and factors.
It must be viewed in conjunction with our business and could also cause future results or performance to vary significantly from what we have expressed or implied. To take the results of this quarter and answer to all of your questions, we have the management of Concorde Enviro Systems Limited. Please welcome Mr. Goyal, Chairman and Managing Director, Mr. Prerak Goyal, Executive Director, Mr. Anish Goel, Group CFO and Mr. Abhijit Kalke, Head of Strategy and M and A. We’ll be starting the call with a brief overview of the quarter gone past and then we’ll follow it up with some question and answers.
Now with that being said, I transfer the call to Mr. Prayas Ghul. Over to you sir.
Prayas Goel — Managing Director
Thank you Kanav. Good morning ladies and gentlemen. A very warm welcome to Concord Enviro’s quarter one financial year 26 earnings call. I thank you all for joining us today. Let me begin with a brief introduction to our company followed by an overview of our performance for the quarter. With over three decades of experience in wastewater and water management, Concorde Enviro is a globally integrated, technology enabled provider of water and wastewater treatment solutions. Our strong focus remains on zero liquid discharge and energy efficient technologies related to water.
At the core of our business is enabling industries to achieve water sustainability goals while optimizing the operational costs. Our business today is built around three key systems and plants. This includes effluent treatment plants, anaerobic digesters, ETPs, membrane bioreactors, sewage treatment system and a range of membrane based technologies like ultrafiltration, nanofiltration, reverse osmosis and waste heat evaporators. Our latest addition in this space is Compressed Biogas Systems which We launched in April 2024. This solution converts organic waste into renewable energy, aligning with India’s push for clean fuel and energy dependence. The second of the three segments is Consumables and Spares.
Here we cover the critical components such as membranes, plant chemicals and other essential parts needed for ongoing operations of zero liquid discharge systems. The third segment is the operation, maintenance and Digitization. This encompasses both encore and third party systems with a strong focus on IoT driven optimization. We serve a strong base of clients across pharmaceuticals, chemicals, food and beverages, defense, automotive energy, steel and textiles highlighting the cross sector relevance of our solutions. On the R and D front, our dedicated 31 member team continues to drive innovation in membrane design and system efficiency. As of this quarter we hold 9 Indian patents with 21 additional applications in process.
This deep in house development approach defines our unique value proposition engineering from first principles rather than just assembling off the shelf components. Our solutions are designed to be cost effective, energy efficient and operationally sustainable. By delivering the lowest long term operating costs in the industry, we help clients improve performance and sustainability outcomes, both of which are increasingly non negotiable in today’s environment. Now turning to our Q1 FY26 performance, I’m pleased to share that this has been a quarter of strong momentum and positive traction across segments. Quarter one is more focused on setting the strategic focus for the year and preparing execution strategies for the large orders we have including design completion while our order book and smaller ticket size order.
Our current order book sorry has a H2 heavy delivery schedule including on the export and the CBG front. That’s something you will see different from the previous financial year. While order book and ticket size and smaller ticket size orders that we are likely to close out in the coming months project a growth of 18 to 20% this fiscal. We continue to aim for a few strategic orders to strengthen and build on that order book. The major developments that I’d like to share with you during the quarter have been We’ve successfully onboarded marquee clients across core sectors for the reinforcing our position as a trusted sustainability partner.
Our product business is showing promising traction and we expect this segment to scale up meaningfully to about 10% of overall sales over the next three years. We’re also making early moves into high potential domains such as solar photovoltaics green hydrogen, carbon capture and semiconductors, engaging with industry leaders in these spaces to co develop future ready solutions to add value to their businesses. As on 30 June 2025 our order book stood at 5,366 crores up from 5,327 crores as of 31 March 2025. Our R& D team is currently working on key initiatives in not only wastewater applications but also process separation applications.
We recently bagged our first order in product concentration for a pharmaceutical product company replacing evaporation. We are also developing several applications using our thermal solutions to enter into such process separation projects. Segment wise, about 59% of our order book relates to ZLD type projects, 15% to compressed biogas or CBG orders and 26% is linked to our operation and maintenance contracts. In addition, we are actively pursuing quotes under discussions of approximately 2,500 crores with healthy conversion prospects. On the project execution front, our international projects are progressing well. In particular, our first Mexico project was successfully commissioned in July 2025.
In the O and M segment we recently secured significant orders 800 million rupee order from a large listed customer and 125 million order from a customer in Mexico. In the S and P of the systems and plant side, we received an order of 150 million from another big automobile client for FY26. From an organizational perspective, we continue to invest in strengthening our leadership and onboarding senior talent across strategic functions such as supply chain and project execution in preparing ourselves to deliver efficiently on all of the exciting growth that we can see coming our way from the pipeline.
This is reaffirming our commitment to operational excellence and long term growth. With that I now like to hand over to Mr. Predha Goel, executive Director to take us through the financial performance for quarter one FY26.
Prerak Goel — Executive Director
Hi good morning all. I’d just like to talk about the Q1 performance in FY26. So our revenue for the quarter stood at 1024 million, broadly similar to the Q1 of FY25. EBITDA came in at 107 million up from 15 million in the same period. This does include some gains on the peso exposure and also some IPO related cost recoveries offset partially by a loss from our discontinued Blue Water business.
The adjusted EBITDA excluding these one offs stood at 27.5 million. PAC for the quarter was 51 million compared to a loss of 26 million in Q1 FY25. To conclude, I would like to reiterate the three key structural drivers that we believe will continue to support our and our water treatment and we use industries growth and our long term positioning. The first one being the increase in regulatory stringency around water treatment and discharge norms. The second being the rising importance of water security. This is both in terms of the availability and the acquisition cost of water and lastly the growing emphasis on ESG compliance, particularly by large global corporations.
With that I now open the floor for questions. Thank you once again for your continued support and interest in concordenviro.
Questions and Answers:
operator
Thank you very much. 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 remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will meet for a moment while the question queue assembles. It. Ladies and gentlemen, a reminder to all Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Dheeraj Ram from Ashika Group. Please go ahead.
Dheeraj Ram
Hi sir, thank you for taking up the question. So there is a bit in EBITDA margin if you kind of exclude the other income. So even the yoy. So could you please let me know why there’s a dip and how should we look at for the entire year?
Prerak Goel
Hi, thanks for that question. So there’s a change in the projections for this year. The current quarter one EBITDA is negative primarily after excluding other income is negative primarily on account of the employee expenditure. If you look at the expenditures pretty much in line with Q4 of FY25, this is obviously the ramp up that we have done to kind of support the execution and the large turnover growth that the company is expecting. So over the year as we achieve our targeted growth rates, this will help the EBITDA will fall in line with what our margin profile has been for the previous years.
Dheeraj Ram
Okay, and you said that your order pipeline is 2,500 crores. What can be the conversion and what are you expecting the ordering flow for FY26.
Prerak Goel
So generally our blended, I mean we have a both domestic and international pipeline. Our international pipelines are conversion rates are slightly better but on a blended basis we generally look at about 25% of these getting converted. So yeah. Our order intake for the full year should be in the range of 7, 600 to 700 crores which will give us the projected growth rates for the oncoming years.
Dheeraj Ram
Okay, so last question sir. Since you’re maintaining the growth guidance of 18 to 20% and we are saying H2 will be, how do you see how much revenue expected to come in Q4?
Prerak Goel
I mean yeah, we probably don’t have a quarter to quarter breakup at the moment but yeah, I mean we expect generally H2 has been about 60% of overall growth rates. So yeah, I mean it will be in the range of 60, 65% H2 will be in the range of that. Now Q3 depending on how deliveries go and you know they should be almost equal I would say.
Dheeraj Ram
Okay, thank you.
operator
Thank you. Our next question is from the line of Sonia Varnekar from Dalal and brochure pms. Please go ahead.
Sonia Varnekar
Hello sir. Am I audible?
operator
Yes ma’, am, you’re audible.
Sonia Varnekar
Yeah, yeah. So thank you for the opportunity. So my first question is on the quarterly run date of the execution of the orders. I know why, know why? It’s there’s not much change but if you see quarter, quarter, it has come down drastically. So if you can explain on what has led to that, that is first question and second question is again on the other income. What if you can briefly explain it, how much portion of that is in one off kind of a nature and how much is like a regular other income.
Prerak Goel
Okay, so let me just talk about the quarter to quarter movement in sales in terms of our project business and which is primarily composing of the S and P sales. This is a bit lumpy. Right. So depending on the type of orders we’ve got and the delivery schedules that we’ve agreed with our clients, there would be some lumpiness in our project to project business generally based on the industry there is a lot of capex cycle which turns into orders in, in let’s say the closure of H1 or beginning of H2 and then these projects tend to get delivered towards the Q4 period.
So Q4 has always been one of our strongest quarters and this has been historically the case and I believe it’s similar for most players in this sector. So the quarter to quarter is very difficult to kind of judge because you know the project business is going to be lumpy there. If you see our non project business which is the O and M and the S and P, you will see that the run rates are pretty much similar to what they have been and there’s growth There. So those obviously segments are definitely growing. Coming to the second question in terms of the other income, so there’s a total other income of about 15 crores.
There was some IPO expense recovery to the tune of 4.5 crores and there was some peso gain that we had reversal which was to the tune of 4 crores. So I would say this 8.5 crores is pretty much one time we don’t see a repeat of that. The other expenses are interest income and some gain which is in the normal course of business is not a one time kind of a thing. We do have those movements because of Interco transactions and some of other transactions which will continue to be on the books. So whether it’s a loss or whether it’s a gain, it doesn’t get excluded from our EBITDA calculations.
Sonia Varnekar
Okay, thank you. Sir. I have one more question for the current order book in hand. What is the execution timeline for that?
Prerak Goel
So I mean see the blended period would be about a year. So I mean if you look at it, most of the S and P orders we have, I think, you know, barring the commissioning payments, it would be completed in this year. As always, the O and M order book that we’ve given you is the 12 month rolling order book. So we do not give in orders which are. Even though orders are signed for longer periods, the number in the order book is only the next 12 months order. So there nine months of those orders will obviously get again executed in this year.
The consumables and spares are current orders which are expected to get delivered. So on a blended basis I would tell you it’s generally about nine to 12 months.
Sonia Varnekar
Okay, thank you sir. That’s it from the.
Prerak Goel
Thank you.
operator
Thank you. Our next question is from the line of Ankur Gulati from Genuti Capital. Please go ahead.
Ankur Gulati
Hi guys. What is the value of pure EPC work done in this quarter?
Prerak Goel
If you look at the EPC work that we’ve done this quarter is to the tune of about 50 CI 50.7 cr. Yeah, you’re talking about that system and plan. So you’re talking about the value of EPC in this.
Ankur Gulati
Yeah, I mean if you take a bigger project for a client, you also need basic civil rights. Right.
Prerak Goel
So in this particular quarter we didn’t have any major EPC execution that we had. We have a couple of orders which are, you know, have some civil and some last mile installation work. But those are likely to get executed in H2. So in this quarter we have not had any EPC turnover.
Ankur Gulati
And of the total audit book in hand, what percentages beyond water treatment, pure EPC or saving works.
Prerak Goel
So see in our export order book we have two projects in Africa and of that about two and a half million dollars worth of orders are. I mean let’s say not orders but $2.5 million worth of work is civil and installation work. So about 20 odd crores out of the overall book of 520 crores would be let’s say an EPC, pure EPC where we are doing civil and installation.
Ankur Gulati
What I’m trying to understand is why if the EPC component is low, the GP has come down to 41% if I exclude other income.
Prerak Goel
So you’re saying the GP has moved to 41%?
Ankur Gulati
41%. What I’m doing is I’ve taken operating revenue and comps of gross profit. There is no epc.
Prerak Goel
I don’t know the way we’re calculating it’s gross margin is about 50. So I’m not so sure how you’re calculating it.
Ankur Gulati
Okay, anyways, your employee cost of 24cr, that is I guess good enough for you guys to achieve whatever revenue growth right as you have given it.
Prerak Goel
Yeah.
Ankur Gulati
So what we need to do is basically normalize, that’s where yes, it will not go away above 24cr for quarter.
Prerak Goel
It will be in that range, I mean plus or minus small because there are some hirings in process but again nothing which is going to substantially increase that.
Ankur Gulati
And same with depreciation.
Ankur Gulati
Depreciation, I think, yeah, because I mean if you look at the current investments that we’re doing, at least right now there’s not much major investment that is happening. We had the one of our product investments that came in last year, but yeah, nothing.
Ankur Gulati
Any further progress or discussions on BOT models? Are you planning to bid for something.
Prerak Goel
The bot?
Ankur Gulati
Yeah, I guess. You have a small joint.
Prerak Goel
Bot business is obviously showing a lot of potential. We have some marquee orders that we signed off on that in this quarter in fact, which is ongoing right now. So I can’t talk about it directly but yeah, I mean that’s been a business which is as usual showing a lot of exciting growth. And yeah, we definitely believe that that’s going to be the next growth phase. Water as a service is something that is kind of picking up rapid.
Ankur Gulati
Can you just give us some broad color? One is of course the home execution order book comes in and then on.
Prerak Goel
An annual basis what kind of O. And M numbers will that throw? Let’s say if you’re putting 20 crores then what will be the O and M revenue as percentage of the 20 crore invested in?
Prerak Goel
So I mean see the O and M is generally about 8 to 15% of the CapEx that a customer invests in. So that’s generally the window obviously when it comes to bot. Then you know there is also the recovery. So but I mean the way it’s accounted in our in the Concord books it would be a turnover for between 8 to 15 depending on the type of industry we’re dealing with.
Ankur Gulati
Minority. You’re not taking the majority.
operator
Sorry to interrupt. Ankur sir, can you please take your device a bit distant from you because your audio is muffling.
Ankur Gulati
Sorry, you guys are not taking any majority.
Prerak Goel
Yeah, Concord will continue to hold a minority position in this company. We’re in fact looking at investments there. So yeah, it will continue to keep holding minority.
Ankur Gulati
And how’s the Dubai business shaping up? I guess you have some sort of a joint.
Prerak Goel
The Dubai joint venture is into our thermal solutions. So yeah, I mean that’s again taking some exciting turns. We’ve you know a lot of products we’ve put out in the evaporation space in this last two years. We currently, in fact, you know, as we talked about it, we’re currently broadening that scope of that thermal solutions to even go into product concentration solutions. So that’s something which we are quite excited about. All right, thank you.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and one on their touchstone telephone. Our next question is from the line of Dhawan Shah from Alpha Curate Advisors. Please go ahead.
Dhavan Shah
Yeah, thanks for the opportunity sir. So my question is on the order book of the business. If I look at, you know, there is hardly any growth in the order book over the last 2, 3/4 despite, you know that is 2500 crores of order pipeline. So if you can help us to understand, you know, segment wise these three segments, what kind of order inflows do we expect during this year versus the last year? That is my first question. And what kind of you know the order book do envisage to close by the end of this year across all these three segments?
Prerak Goel
Thanks for the question. So a couple of things. I mean see we have a. The way we’re kind of projecting order book is you know we kind of talking about the orders that we have the value of which we’re going to be executing in 12 months especially on the O and M side. So for example we spoke about an 800 million order we got from a large listed player on the, for the O and M side. Now this is a ten year contract, right. So I mean there are a lot of orders which are signed.
But it’s just the way that we have been projecting order book because the relevance is what we’re going to execute in the 12 months. So that’s what we’re talking about right now on the S and P side. Yes, things have been, you know, I would say, you know, we’re executing and we’re kind of picking up similar order values. So the order book presented is you’re looking at the range of about 530, 540 on a regular basis. But we have those short term orders that we keep closing and we keep getting executed. In the next three to four months this kind of cycle will continue with us where we have a mix of short term as well as long term orders.
As projected, we do have a target of closing our FY26. We intend to close that with our opening order book of about 600 crores for FY27. So that’s really the target. But I mean obviously there’s a lot of opportunities out there.
Dhavan Shah
Understood sir. And in terms of the revenue guidance, I think in FY25, I look at, you know, despite the order which is more or less the same in FY25 versus 24, still I think we did roughly 20% Y growth. That is also you mentioned that because of the short cycle order. So in FY26, what kind of revenue growth are we expecting?
Prerak Goel
So yeah, we are expecting about 18 to 20% revenue growth in FY26. And if you see, if you compare the order book back to 24 when there were a lot of the large international orders. This time instead of that you’ll see there’s a more kind of spread of small to medium sized orders and those are the ones which we expect strong closures. In fact among that 2,500 crore kind of pipeline there are probably about 120, 150 crores which are kind of eminent closures which will, you know, which we are very confident to bring that kind of growth coming into this FY26.
Dhavan Shah
If I want to calculate the FY26 numbers, I think we are expecting roughly 700 crore, 720 crores kind of the top line numbers on full year basis of which I think we did 100. Odd crore in first quarter. So this 600 crore execution we are expecting how it will be pan out over the next three quarters.
Prerak Goel
Yeah, so typically I would say 60 to 65% of the turnover is going to be in H2. So about 35 to 40% will be in H1. So yeah, I mean if you look at the numbers and totally about we should run about 150 odd crawls on an average. I mean in Q2 and then it will be in the range of 200, 215 crores in Q3 and Q4. But obviously they see that there are going to be some changes because there is deliveries dependent on how clients sometimes client civil works are going or how the project delivery that the client is taking.
So but not at the current moment that that’s what we are probably forecasting.
Dhavan Shah
Understood. And how do we expect you know internally margin wise? I think more or less gross margins are almost at around 4950 odd percent.
Prerak Goel
Yes.
Dhavan Shah
So how do you see the margin trajectory? Because until unless you know we reach to the thousand crore top line numbers I think more or less the fixed cost would not be absorbed to that level. So any ballpark number for F26 and F27 also.
Prerak Goel
I mean the margin profile we’ve been doing about 16% EBITDA as what you did last year. We don’t expect the margin profile to change. In fact in the 16% we had a couple of one time which obviously had gone away and so there should be same similar kind of a trend. We do plan our overheads in conjunction with the growth that we are going to achieve. So yeah, not compromising on margins but yeah, at the same time I think there is a lot of growth opportunities we’re tapping into and you will see the team building is more tuned towards that.
But I don’t see any immediate impact on projected margins for this year at least.
Dhavan Shah
Understood. And based on the order pipeline and the negotiation whatsoever we are doing with the customers are we hopeful that F27 can end up with thousand crore stop lines?
Dhavan Shah
Difficult to say but I mean at least we think that the business can grow at 20% plus quite easily. So that’s the target that we’re going with. We want sustainable growth, we want profitable growth. That’s the focus. So yeah, I mean we want to kind of making sure that we balance both objectives.
Dhavan Shah
Yeah, that’s all from my side. Thank you sir.
Prerak Goel
Thank you so much.
operator
Thank you. The next question is from the line of Malik Patel from Equidius. Please go ahead.
Maulik Patel
Yeah. Hi. Thanks for the opportunity. About two opportunities, one in solar and second is in semiconductor. Are those orders are part of that the 2400 crore of the order Book opportunity which you mentioned there and what kind of opportunities specifically have in semiconductor.
Prayas Goel
Yeah, so thank you Miss Molly for the question. Yes, a small part of that opportunity is in that 2500 crore because we have those kind of bids which are nearing finalization and there would be good opportunities from zero liquid discharge in semiconductor especially on the secondary front wherein we kind of bring in all of our OPEC’s advantages and we do have a significantly large like a 7,7 million liter per day 7 MLD ZLD opportunity on solar which we are, which we are pursuing and you know hope to close very soon.
Maulik Patel
Okay, and in order book you presentation you mentioned that you got OMM orders from a large ETC player. Are these orders for many years or is it only for a single year which you mentioned because typically lasts for a longer period of time, right?
Prerak Goel
Yeah. So this is a 10 year contract. So what we’ve given in the presentation is the value of the order which is to be executed over 10 years. But in our order book only the first year value which is roughly about 10% of that has been considered. So the order book number 536 only has about 8 crores of that order. In the, in the calculation the, the order value is worth 80 crores.
Maulik Patel
What I. So if, and similarly for this the, the Biagio OM also it’s a similar thing. You only included the first order potential in the order book.
Prerak Goel
Yeah, so the 12 and a half crores for Mexico is actually the one year value of that contract. It’s not because that’s a, that’s a Z project. So that’s only the order value of the first one year.
Maulik Patel
Okay. And the last question, employee expenses this year has this particular quarter has gone up significantly? I mean anything specifically, is it something on a normal hike or you have building the capabilities and hire the people for that and that’s why the employee expenses have gone up.
Prerak Goel
So Monik, I mean it’s very similar to Q4 of FY25. So it was about 23 crores. Yeah, it’s about 24 crores. So it’s roughly in line with what we had. But yes, there is a lot of team building exercise that we’re continuing. So last quarter we had people in the projects division join us and you know we kind of thing the execution team because as we move into larger projects the execution needs to be upgraded. So it’s all towards putting in the various people at the right positions to make sure that we can deliver the. Growth that we committed to.
Maulik Patel
Thanks for this one I wish you all the.
Prerak Goel
Thank you.
operator
Thank you. A reminder to all participants, anyone who wishes to ask a question, press star and one on the touchstone telephone. Our next question is from the line of Jai Bharat Trivedi from Incred amc. Please go ahead.
Jay Bharat Trivedi
Yeah, hello. Am I audible?
operator
Yeah, yeah.
Jay Bharat Trivedi
Thanks for the opportunity. First question is, what would be your order book last year at the end of Q1, Q1 FY25 closing order book.
Prerak Goel
Don’t have that number handy right now, Jay, but I think it would be in the similar lines. I think maybe 480 or 500 something in that range, but I don’t have the exact figure. Sorry.
Jay Bharat Trivedi
Okay. And the current overhead run rate that we are running on is around 40, 45 crores. Correct me if I’m wrong. Is it right?
Prerak Goel
Including other employee expenses and other overhead?
Jay Bharat Trivedi
Yeah, all over. It’s all over it, yeah. So how much it can grow in the next one to two years? This number, quarterly run rate.
Prerak Goel
So I mean, Jay, I think, see the enhancement that is happening right now, at least on the employee side, is more, you know, where we’re kind of putting in certain heads in certain critical positions, as I said, to kind of enhance execution. Obviously this is not something that will keep expanding. There will be some junior level hires as we keep going to kind of support the business. But yeah, I mean, barring new initiatives that the business is taking, I think they should relatively be in the normal range of 5 to 10%, adjusted for inflation and some hiring.
Jay Bharat Trivedi
So on an annual basis 5 to 10% incremental is what?
Prerak Goel
Yeah, I mean, on a baseline basis there are other avenues that the company always continues to look at. So depending on how those things go, if there’s something changes, which, you know, there would be some additions there, but obviously it would come with growth and top lines as well.
Jay Bharat Trivedi
Okay. And last year, similar period, I guess Q2 or Q3, if I’m not wrong. We had an exceptional foreign loss. So how have we improved on those processes or what changes are we done?
Prerak Goel
Yeah, So I mean our biggest loss that had come from was the peso order in Mexico.
Jay Bharat Trivedi
Yeah.
Prayas Goel
So as you see, I mean, I think the entire loss was to the tune of about 10cr. I think, you know, we’ve clawed back about 4, 4.5cr in this quarter. That project is, you know, nearing an end. We started commissioning the. There were three projects, the first of which got commissioned in July. So we expect the cash flows from that project to completely come in towards the, let’s say Q3, Q2 Q3 period and all of that as the cash flows are kind of getting definitive, we are hedging those cash flows to ensure that there is no repeat of the loss we had last year.
Jay Bharat Trivedi
So any risk mitigation techniques or anything? Sorry.
Prerak Goel
So mainly hedging, but I mean I think what we’ve done is we’ve kind of converted a lot of the orders that we have in dollars. So we kind of now focusing on taking new orders in dollars and avoiding exposure to currencies which are, let’s say, not entirely under our control or difficult to monitor or hedge for the business.
Jay Bharat Trivedi
Okay. So safe to say more than 90% of our order book, international order book is in dollar denomination?
Prerak Goel
At the, at the current moment. Yes.
Jay Bharat Trivedi
Yeah. Okay. And lastly, in terms of each of a segment, which of the segment you would say that we don’t have any reasonable competition, at least from a domestic player. Maybe it’s a ZLD or the new ventures that you are getting into. So can you reform that?
Prayas Goel
I would say that, you know, we have competition everywhere but the kind of solutions which we provide. There are very few sectors that we really have. Competition is providing the kind of solutions that we are providing, like especially on the O and M side, you know, the kind of solution with a guaranteed kind of a per cubic meter cost with an annual escalation. There’s hardly anybody else in the market is providing that.
Jay Bharat Trivedi
Okay. So cost is a factor which helps us.
Prayas Goel
The life cycle ownership cost, the energy cost, the carbon footprint. That’s kind of more the. Because the capex is a one time. The customer can look at that capex and look at it different ways, but the customer is more. We need to run this for the next 20 years and that’s going to be an annual cost that we got to bear. So the focus is more looking at that annual cost rather than just the capex today.
Jay Bharat Trivedi
Okay, got it. And with this plant capacity that you have, what is the maximum revenue we can clock barring the other variables, capacity.
Prerak Goel
So I think, I mean if you look at our, you know, the CapEx that we have envisaged through the IPO proceeds, that should kind of get us, I mean you see our anticipation is that up to a, up to a turnover of about 1300, 1400 crores, the current in planned investment should get us there without any additional CapEx.
Jay Bharat Trivedi
Okay, yeah. So those are the questions and from all the rest.
Prerak Goel
Thank you, Jay. Thank you.
operator
Thank you. Our next question is a follow up question and it’s from the line of Ankur Gulati From Genuity Capital. Please go ahead.
Ankur Gulati
Thanks. Can you just go Profit margins and EBITDA margins of all three.
operator
Sorry to disturb, your voice is muffling.
Ankur Gulati
Hi. Better now?
operator
Yes, now it’s better. Thank you.
Ankur Gulati
Give us the margin profile for efficient share margin profile for all three segments again please. System Plant Consumer and ONM.
Prerak Goel
Asankur. I mean the way we structured, I can just say that directionally obviously the after sales numbers are higher but yeah, we don’t kind of have specific numbers that we can share on the EBITDA profile.
Ankur Gulati
That’s. And for F26 guidance, O&M will be what, 2, 3% of revenue or it will be higher.
Prerak Goel
For FY26.
Ankur Gulati
Yes,
Prerak Goel
the O&M is generally about 20% of the overall business. And you know, this year or last year we had started the, what we call the third party O& M division where we’re doing, you know, O and M for the EPC players. So I think given that combined O and M profile which will be ours and for third party we expect that to be in the range of 23 to 24% on an analyzed basis.
Ankur Gulati
So logically there has to be some margin bump because of that. Right. So let’s say last year was 16%. There should be slight bump in that if O and M percentage increases.
Prerak Goel
Yeah. So as I said, you know, see there are a couple of things there because we also incubating a couple of businesses. So hence the guidance has been that you know, we’ll at least keep our margins in the range. There is some things which are contributing more, there’s some things which are, let’s say in kind of, you know, ramp up mode. So there will be a little bit of a push and pull but on an overall basis they should be made sense.
Ankur Gulati
Makes sense. And second, again so on the employee base, let’s say your annual employee bill is roughly 100cr today. What level of revenue can it sustain? Can it sustain 1200, 1300.
Prerak Goel
So see, I think we have the O and M business, right. Which is a little bit manpower heavy. So as that grows, you will see that there will be an employee cost which will grow because part of the O and M involves putting labor on the project side. So there is, let’s say a definite or direct variable employee cost to revenue kind of a correlation for the ONM business. For the rest of the business, if you look at our SNP, I think we can go to 1000 odd crores which we can get to. But you know, the senior management, what we’re looking at is the senior management is in place and that will continue.
So the project team, as execution increases, they will kind of increase. But on the OM side you will see that direct correlation. So it would keep having some impact as we go.
Ankur Gulati
Thank you.
Prerak Goel
Thank you.
operator
Thank you. Our next question is from the line of Surya from pcg. Please go ahead.
Unidentified Participant
Good evening. Thank you for the opportunity. First of all, I would like to know about the recent acquisition that you have done, particularly Cabinet Ltd. So could you explain what’s the basis behind this acquisition and is there any more scope of such kind of acquisition going forward?
Prerak Goel
So yeah, this is basically, you know, done for the third party O and M division wherein for certain orders that we are working with, pre qualification is required. So the acquisition is more to obtain that pre qualification. We expect these to be small because they give you the pq and then incrementally you can grow the business. There are always discussions and opportunities around further acquisitions. And if there is something that we feel is a good opportunity and it is in conjunction with the business that we are trying to do, then you know, we always open to those opportunities.
So yeah, we do keep track of that.
Unidentified Participant
What’s the budget you have kept for this kind of M and A activity?
Prerak Goel
So if you look at, you know, what we’ve done in the IPO is we had kind of raised a sum of a total of about 23 crores for new tech. And you know, and this was more from licensing or acquisition perspective. So you know, let’s say a significant portion of that today is unused. I think we’ve only dipped into that to the extent of 3 or 4 crores. So yeah, about 20 crores is available for us to look at such acquisitions and opportunities.
Unidentified Speaker
Understood, sir. The second question I have is regarding your Sharjah entity. So historically there was no tax for any business or revenue that you generate from that entity. But recently there’s a 9% corporate tax that has the UAE government has implemented. So how do you see the blended tax rate going further?
Prerak Goel
Yeah, so actually, I mean, you know, we are based out of a free zone and basis of the corporate tax laws that UAE has come up with. Since that entity is exporting its goods to other jurisdictions, the local corporate tax is not applying to us. So there’s really no change in the, in the overall tax rate or the blended tax rate for the, for the business? Yeah, I believe the tax is applicable if you’re selling to the mainland.
operator
Thank you. Our next question is from the line of Harshit Rathi from HR Investing Please go ahead.
Harshit Rathi
Hello. Hi, sir. Last quarter we have said that we have approximately 2,000 shares of orders in our pipeline and the conversion rate is approximately 20 to 25%. So during the past quarters, have we received any orders or have we converted some of the orders or it is just only in the pipeline and there we are thinking of this, the conversion rate, or actually we have been executing or we have got some orders from the companies.
Unidentified Speaker
Yeah, yes, definitely. We have closed order during Q1 from that pipeline. And also new orders have come into that pipeline.
So, yeah, to answer your question, yes, we did close orders during Q1.
Harshit Rathi
Okay, answer. The employee cost, as we could see, it is approximately 24%. So it is the maximum range that we could see. Or during the next quarters, it might reduced to 15 to 20% also.
Unidentified Speaker
Yeah, see, it will reduce because obviously it’s a function of, you know, the kind of turnover we have in a particular quarter. Obviously we are forecasting Much better H2. So the full year you will see that normalizing to a lower number in terms of percentage of overall sales.
Harshit Rathi
And how has been the demand from the international client as Dio and some of the major banks that we are into?
Prayas Goel
I think demand across international is very strong.
Obviously there, as you see the international space, there’s been some resets as well. But however, looking at the overall kind of pipeline and the conversations which are ongoing in different markets, I can say that the India pipeline is very, very exciting. But the international pipeline also remains exciting.
Harshit Rathi
Okay, so thank you so much. Thank you.
operator
Thank you. Our next question is from the line of Agam Shah, an individual investor. Please go ahead.
Unidentified Participant
Quick question. Can you talk on the. You spoke up a lot about, you know, new initiatives and all you’re doing. So in terms of technology. Sir, Hello, Am I audible?
operator
Yes, but your voice is not clear. Sir, can you please take the device a little bit distant from you?
Unidentified Participant
Yeah. Am I audible now?
operator
Yes, sir, now you’re audible. Please go ahead.
Unidentified Participant
Yeah. So can you talk on the new initiative, particularly on the technology side and R and D, what are we doing? And also on the new verticals of carbon and cbg.
Prayas Goel
Sure. So let me start with kind of the new technology initiatives in the water business. Of course, we have stuff like, you know, membranes which are capable of treating raw effluents directly, which is, you know, very excited about. We have the whole process separation piece, which, you know, bringing in. In process separations by using membranes and other thermal separation pieces. So those are very exciting. If you look at carbon capture, I think this is Just a start. And let’s say the addressable market there is, I think it’s immense. If we just look at what the government of India has now set policy for the key sectors such as aluminium, steel, cement, those itself are massive opportunities for carbon capture.
On the cvg. We remain, you know, kind of tentative on that to the extent that we are focusing more on industrial waste, organic waste type of projects rather than the whole biomass type of projects, which we know, you know, there are concerns related to availability of materials.
Unidentified Participant
So what are we doing in the carbon capture thing?
Prayas Goel
So the carbon capture, we have a technology which is a biological carbon capture capture and sequestration technology and also has the ability to convert it into byproduct. And so we are under our first kind of PoC, semi commercial install by the end of this year.
Unidentified Participant
Okay, and how big can these two verticals become.
Prayas Goel
On the cbg? As I said, you know, it’s way kind of contentative. So we’re saying like, you know, three to five projects a year, typically about, I would say about 100 crores. So we can come back to you with detail on CO2. We’ve not yet kind of charted numbers there, but yeah, I would say that has, you know, multifold potential compared to cbg.
Unidentified Participant
And this year from the IPO funds, debt repayment going down. Can we say bottom line growth of also 20, 25%.
Prerak Goel
I’m sorry, I didn’t get that question. You’re saying the bottom line.
Unidentified Participant
I’m saying with the 20% this year. So bottom line should also be in line with that, right?
Prerak Goel
Yeah, yeah. Bottom line also should be in line with that. In fact, it will create some operational efficiency. So we hope that it’s slightly better.
Unidentified Participant
Than.
operator
Thank you. Ladies and gentlemen. As there are no further questions, we would conclude a call. Thank you. On behalf of Concord Enviro Systems Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Prayas Goel
Thank you, everyone.