Concord Enviro Systems Ltd (NSE: CEWATER) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Prayas Goel — Chairman And Managing Director
Prerak Goel — Executive Director
Analysts:
Unidentified Participant
Kannav Khanna — Analyst
Kunal Ochiramani — Analyst
Saif Gujar — Analyst
Milind Karmarkar — Analyst
Harshit Rathi — Analyst
Sriram — Analyst
Aditya Arora — Analyst
Soniya Varnekar — Analyst
Ankur Gulati — Analyst
Kartik VK — Analyst
Dhavan Shah — Analyst
Jay Trivedi — Analyst
Agam Shah — Analyst
Akhilesh — Analyst
Tej Patel — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Concord Enviro Systems Ltd. Earnings conference call hosted by Eny. 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. [Operator Instructions]
I now hand the conference over to Mr. Kanav Khanna from ENY. Thank you and over to you, sir.
Kannav Khanna — Analyst
Thanks Ziko. Good morning to all the participants on the call and thanks for joining in. The Q4 and FY25 earnings call of Kung Concorde Enviro Systems Limited. Please note that we have mailed out the result to everyone and you can also see this on our website and it’s been uploaded on the stock exchanges as well. In case you have not received the same, you can write to us, we’ll 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 statement that may involve known or unknown risks, uncertainties and factors.
It must be viewed in conjunction with our business that could cause future results, performance or achievement to differ significantly from what we have expressed or implied by such forward looking statements. Now to take us through the results of this quarter and full year and answer to all your questions, we have the management of Concorde Enviro Systems Ltd. Mr. Prerak Goyal, Executive Director, Mr. Prayaz Goyal, Chairman and Managing Director, Mr. Sudarshan Kamath, Group CFO and Mr. Abhijit Kalkek, Head Strategy and MA. We will be starting the call with a brief overview of the quarter and the year gone past and then we’ll follow it up with some question and answers.
And with that being said, I’ll transfer the call to Mr. Prayas Goel. Over to you Sir.
Prayas Goel — Chairman And Managing Director
Thank you, Kannav. Good morning ladies and gentlemen. A warm welcome to the Q4 and FY25 earnings call for Concord Enviro Systems Limited. Let me begin with a brief introduction about the company and the work we do. With over 30 years of experience, we are an integrated global provider of water and wastewater treatment and zero liquid discharge solutions with focus upon energy optimization, helping industries achieve water conservation and sustainability goals. We have an in house capability to develop solutions across the entire value chain including designing, manufacturing, installation, commissioning and operation and maintenance. Along with digitization, our solutions are focused on energy efficient water recovery, helping industries achieve water conservation and sustainability goals.
While doing this, we help them to address nine out of the 17 UN Sustainable Development Goals and we ensure with our efforts to contribute to a healthier planet along with saving of our clients costs. Our journey began in 1992 when we supplied a reverse osmosis plant to the Indian Navy for user evaluation trial. In the early 2000s we expanded our operations to include supply of wastewater recycled systems through our subsidiary Separation Systems India Private Limited. After almost a decade of servicing the textile, pharmaceutical and distillery industry, we acquired Reva Enviro Systems Private Limited and broadened our focus to encompass both biological and membrane based treatment methods.
Prior to this expansion, our services were exclusively centered around membrane based solutions. Following 2009, we then established ourselves as a comprehensive solution provider for wastewater management, expanding to ZLD Solutions by 2014. Our business can be divided into four major segments. The first is Systems and Plants where we manufacture and sell water and wastewater treatment systems, zero liquid discharge and turnkey solutions. This includes effluent treatment plants, anaerobic digesters, membrane bioreactors, sewage treatment plants, membrane based systems including ultrafiltration, nanofiltration, reverse osmosis and evaporators including our waste heat evaporator technology and dryers. Next is our Consumables and Spare Parts division where we produce and supply a range of consumables and spare parts including membranes, plant chemicals and other essential materials to our customers.
Our third division is the operation and maintenance of systems and plants installed by Concorde as well as third party systems and digitalization solutions including IoT. Our latest initiatives in Systems and Plants division is compressed biogas or CBG from organic waste. High strength organic waste solids and effluents represent a valuable energy source through biogas production. Compressed biogas can then be utilized in various applications including as a fuel for transportation, energy generation and of course for domestic use. Drawing on our expertise in anaerobic digestion technology, we launched a business initiative in April 2024 focused on the design and installation of compressed biogas plants for our clients.
These convert organic waste into clean and renewable energy. The compressed biogas sector in India is set for substantial growth as the government increases its efforts to decrease dependence on imported fuels and improve energy security. Our recent prominent biogas projects include the recovery of biogas from tequila vinhas for a large Mexico based client and for an upcoming greenfield distillery in Mexico. Furthermore, we are establishing biogas facility for pharmaceutical and food based food processing clients at many locations in India. In terms of customers on company level, as of March 31, 2025, we have serviced customers across a diverse set of industries such as pharmaceuticals, chemicals, food and beverage, defense and energy, automotive and auto ancillaries steels and textiles.
We have two backward integrated manufacturing facilities, one located at Vasai in Maharashtra, India and the other at Sharjah in the uae. We develop our solutions through our in house research and development team which compromises 31 employees as of March 31, 2025. This team designs industry specific membranes for our systems and develops innovative technology and processes. As of 31 March 2025, we have been awarded nine patents in India and have filed 21 additional patent applications on the subject of R and D capabilities. We emphasize our significant investment of time in research and technological advancements to differentiate ourselves from the competition.
Having said that, I want to state that we are a company that builds from core and we are not just a systems assembly company. This also shapes our unique selling proposition which is centered on delivering highly competitive solutions that optimize cost savings. Our service stands out for its ability to offer the most efficient OPEX model for our clients while ensuring reliability and demonstrating a comprehensive understanding of wastewater management and its solutions. Our expertise allows us to navigate the complexities of wastewater systems effectively, thus reducing long term operational costs for clients. This focus on cutting down OPEX provides inherent value, particularly in a landscape where operational efficiency is paramount.
Thank you for giving us your time and that introduction I will now hand over to Mr. Prerak Goel to take us through the FY25 specifically.
Prerak Goel — Executive Director
Hi good morning everyone. I’m pleased to share the FY25 work was a meaningful year with progress and momentum for Concorde Enviro. We successfully onboarded marquee clients across key sectors such as aerospace, sustainable aluminum packaging and compressed biogas, further cementing our position as a trusted partner in sustainability. Our product business saw robust growth with membrane sales reaching 77.5 million rupees. Through our distributable model, we expect this to scale significantly, targeting 300 million in FY26 and 850 million over the next few years. On the innovation front, we continue to push boundaries having secured nine patents and filed 21 new applications as of March 25, reinforcing the strength of our R and D pipeline.
We are also expanding into high impact emerging technologies sectors such as the solar, pv, green, hydrogen, carbon capture and semiconductors where we are actively engaging with industry leaders to develop future ready solutions. Lastly, FY25 marked our entry into the US market, a milestone that sets stage for accelerated international growth in the coming years. To summarize the three major drivers which we believe will help the industry grow in the future, these are regulatory compliance, water security including availability and acquisition cost and various environmental, social and governance initiatives, particularly by large international companies. Now, before we jump into the FY25 numbers, we want to bring out the material fact that apart from the peso loss that was incurred during the year, FY25 financials have an impact on loss of discontinued operations.
This is on account of winding up one of our subsidiaries, Blue Water Trading and Treatment fze. And it’s solely for the purpose of having a simpler corporate structure. There was the forex loss that was incurred last year. We have marked it out separately and for the sake of better and correct analysis, we’re spelling out the numbers sans the impacts of both of these situations. So, just to talk about Q4, revenue in Q4 stood at 2069.93 million, up 3.4% on a year. On year basis, EBITDA for the quarter stood at 572.93 million, up 52% year on year.
EBITDA adjusted for the above mentioned Impacts was at 57.5 million, up 25% year on year. Finally, the PAT was at 471.31 million, up 68% year on year. This translated into a PAT margin of 22.8%. Talking about our full year FY25 performance, our revenue stood at 5,944.4 million rupees. This was up 19.64% year on year. Our EBITDA was at 870.82 million which was up 16.03% year on year. This translated into a margin of 14.64%. Adjusted for discontinued operations, our EBITDA was at 930 million rupees. Our PAT was at 51.514.93 million. This is up 24.26% year on year and translated into a PAT margin of 8.7%.
Our order book as it stands on 31st of March was 5327 million. On the back of healthy order book, we are confident that we will be able to achieve strong growth numbers in FY26. With that being said, I would like to open the floor for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. [Operator Instructions] Our first question comes from the line of Kunal Ochiramani with Alpha Alternatives. Please go ahead.
Kunal Ochiramani
hOn the business. Just to understand the business better. Is. Q4 always lumpy and out of the total order book how it would be categorized in all of our four segments and how much is it exports and how much is it domestic?
Prerak Goel
So yeah, I mean our business on the project side does have a lumpiness because some of the larger projects that we have done executed over the years and especially in FY25 did have some lumpiness. So if you look at Q2 last year and then obviously some projects in India which were doing Q4 last year. So on the project side, yes, you will continue to see lumpiness in our business. Our O&Ms. And spares and trading business is pretty much very stable and that kind of brings a base, kind of a growth year on year basis. Just to talk about the Q4 segments.
So if you look at our, if you look at the revenue breakup sheet, so we had a total of about 60% coming from projects and 20% coming from O&M and 20% coming from spares and plants. And from an order book perspective we currently have about 62% orders for water projects, about 15% for CBG and 23% for O& M.
Kunal Ochiramani
Yeah, domestic and exports. Secondly, what is your status of expansion. At Sharjah and guidance for next two years in terms of revenue and ebitda?
Prerak Goel
So the domestic and export split, if you look at the order book again I think you know, out of the total of 530 odd crores, about 180 crores from the international market and 350 crores is from the domestic market. In terms of, sorry if you can repeat that question again you details of.
Kunal Ochiramani
Your expansion and guidance is for next year.
Prerak Goel
Right. So our Sharjah facility is currently, you know, we just at the architectural stage getting the final drawings out and we expect to tender for the works in July 2025 and we expect the facility to be ready in about six to eight months with operationality achieved by July 26. At the out end, talking about the projections for the next two years. See from a sector perspective we are seeing very strong headwinds. There’s a lot of interest in water security. Tailwinds. Sorry and sorry, my apologies. Tailwinds. And we’re seeing a very strong interest from a lot of big corporates both in India and overseas.
Not only from a sustainability perspective but also from a water security perspective. We continue to see rising costs and lower availability of water which is driving these investments. So we do expect growth rates between 18 to 20% going forward.
Kunal Ochiramani
Any guidance on EBITDA margin from.
Prerak Goel
So margins are expected to be in the similar range. We do have some operational leverage that will kick in, but we, we generally expect margins to continue to remain healthy.
Kunal Ochiramani
Okay, thank you so much. All the best.
Prerak Goel
Thank you.
operator
Thank you. Our next question comes from the line of Saif Gujar with ICICI Prudential AMC. Please go ahead.
Saif Gujar
Yes sir. Thanks for the opportunity. Just one clarification on the CO2 capture you have mentioned. If you can explain the solutions you would be adding through. Right. What would be these? Thanks.
Prayas Goel
Yeah, hi, thanks for the question, seth. Yeah. Under CO2 capture we’ll be offering solutions essentially to capture carbon dioxide which is being emitted from chimneys of coal fired, let’s say coal fired stack. This is going to be essentially industrial steam boilers which are running on coal industrial cogen plants, whether it’s at a factory scale as well as carbon capture for large thermal power plant scale carbon capture at the same time. These solutions will also go across the core sectors which have been identified for carbon intensity targets by the government of India. That’s essentially your refineries. Cement, aluminium, pulp and paper.
Saif Gujar
Okay. And then second thing on the order book, if you can explain what type of order book to build is typically or the execution cycle, if you can explain typically what works in your type of production, ZLD and other types?
Prayas Goel
No, sorry sir, I didn’t get that completely. You’re saying what is the —
Saif Gujar
so what is the execution cycle for the, for your order book? Right. For the specific segment it’s the connecting on the ZLD side, maybe on the CBD side. So typically what book to build in terms of order book to revenue we should look at, right?
Prayas Goel
Right. Okay, understood. Sorry. So basically on the water side I think, you know, you look at most of the projects, we have an execution cycle between 12 to 18 months. I think if you look at the current order book on the water side, I think you know, most of our orders will have about a 12 to 14 month cycle. So a significant amount of the order book will get converted to revenue this year. The O and M numbers, obviously what we’re giving you is a 12 month executable number. It’s not the total signed order book. This is just the orders.
The value of O and M orders that we will execute during the year. On the CBG side I think we’re looking at cycles of about 14 months roughly so we should be able to kind of commission projects within that pivot. So that will have again a significant portion of that order book as well should get converted to doing the year. There is a small, you know, there’s a small intake of orders which get executed every three months. These are typically brownfield cases where the customer is going in for small expansion. So they would typically buy either an evaporator or an hour plant.
And typically we would execute those orders between 12 to 16 weeks. So roughly about 100 crore kind of a number is orders which we receive and execute during the year. And the last one is the trading segment. This is, you know, where customers are buying consumables, spares, membranes from us. And these orders keep coming in every month and we keep executing them within a four week period.
Saif Gujar
Sure. Thanks. I’m all the best.
operator
Thank you. Our next question comes from the line of Milind Karmarkar with Dalal & Broacha Portfolio Managers. Please go ahead.
Milind Karmarkar
Hello. Yeah, thank you for my, for taking my question. It’s congratulations on a good set of numbers. One question which I had was losses which are coming in from discontinued operations. So just wanted to understand how long these losses will last and what do these pertain to?
Prayas Goel
Yeah, thank you Manit, thank you for the compliment. So actually on the discontinued operations, this is just one of the subsidiaries that was set up where we were manufacturing part of the membranes that the company was using earlier. We are on a journey to simplify our corporate structure and this was one of the low hanging fruits where we’ve wounded up operations of the subsidiary and transferred the operations into the subsidiary Concord and waiver FZE in UAE so that operations have been consolidated. So it’s more an accounting the way the accounting has been done that because we’re kind of holding that entity now for winding up.
So it’s just the way that the accounting has come up to show a loss. But yeah, these continue to be assets and this which are in use and going forward, you know, we expect to close that entity now. So actually there won’t be any losses going forward. We’re hoping to kind of wrap that up in the next couple of months at the most.
Milind Karmarkar
Okay, thank you.
Prayas Goel
Yeah, thank you.
operator
Thank you. Our next question comes from the line of Harshit Rati with Harshit Rati Investments. Please go ahead.
Harshit Rathi
Hello.
operator
Please go ahead.
Harshit Rathi
Yes sir. So as we can see that most of our revenues, more than 30% of the revenue is from quarter four. So next year onwards. So will this trend continue or we could see others quarter also contribute to the revenues?
Prerak Goel
Yes, sir. So actually. No, sorry. Okay. No, I would just. Yeah, so. So what happens typically is that our H1 is roughly about 40% of the total annual number that we achieve. And you know, 60 is H2. Yes. The lumpiness is there because certain large projects do get executed in a kind of a one quarter out of the year. So there is definitely some lumpiness throughout the, in the four quarters. Having said that, the way that the company is expanding, going into different geographies, we do hope that we’ll be able to kind of bring more level in this going forward.
And especially with the growth of the O and M and trading business, that’s kind of adding a good substantial layer which is quite spread equally across the quarter. But I think from a guidance perspective we do expect some lumpiness to remain. And I think from a company perspective we would. It’s probably the annual number or the year to year kind of growth number which is what the focus remains for us. Sometimes quarter to quarter focuses do become challenging basis of the order cycles, the execution the customers are giving us.
Harshit Rathi
Okay, and the question, sir, what is the orders that we have in our pipeline right now and what is the conversion rate that we could convert those orders?
Prerak Goel
So roughly, if you look at the quotations that are under discussion, it’s roughly close to about 2000 crores. About 1900 odd number is the exact number. So out of that, if you look at it, there’s certain orders under discussion which what we call a hot order. So that would be close to about 400 odd crores where we have a substantial closure and winning possibility. But I think if you look at on an annual basis, we expect out of this pipeline of 2000 odd crores that we should win about 30% of this business. So that’s our order intake targets for this fiscal year.
Harshit Rathi
Okay, so thank you so much.
operator
Thank you. [Operator Instructions] Our next question comes from the line of Sriram, who’s an Investor. Please go ahead.
Sriram
Thank you for the opportunity. You know, basically you compete with companies like Kermax, Praj and Ion Exchange and few others. Right. So could you please elaborate on what your key competitive advantages are, you know, compared to these peers? And do you primarily compete on cost or is there any differentiated, you know, value proportion that you offer to your customers?
Prayas Goel
Sure, I think it’s a very relevant question. Thank you, Sriram. So yes, I think we Differentiated in two ways, Sriram. One is we differentiated in terms of our technology portfolio and how we approach wastewater recycling and zero liquid discharge. So a lot of our technologies that as our plate and frame membrane systems, our approach to pre treatment, our approach to zero liquid discharge enable us to offer the client a more simplified solution for complex wastewater which sometimes our customers would offer our competitors. Sorry, would offer a more complicated, multi stage kind of a treatment solution.
And eventually this reflects in the total cost of ownership or the life cycle cost. In terms of opex as we mentioned earlier, that would be kind of. We’d be rated as one of the lowest on the opex on energy.
Sriram
Okay, so is it possible to put some numbers on tco?
Prayas Goel
Yeah, I mean it ranges across industry, but yeah, you’d see anywhere between 10 to a 50% kind of a saving in total cost of ownership and solutions that we offer across the industry.
Sriram
No, but compared to your peers, is it.
Prayas Goel
Yeah, that’s what I’m saying. Compared to our peers we find that kind of a saving that we’re able to translate to our clients.
Sriram
Okay, and on the product portfolio, are we presented the entire range or do we still have some more room to penetrate in terms of categories?
Prayas Goel
Yeah, I think in terms of products are always coming along from our R and D from our development. So newer products keep getting added and more solutions for the industry to simplify their recycling needs.
Sriram
Okay, but no, no, my specific question was do we have, you know, our portfolio is more than your peers or how is it, how does it compare?
Prayas Goel
Oh definitely sir, Definitely. Definitely more. I mean we as compared to our peers. We manufacture everything, sir. We have technology and IP around a very large segment. So as we said, we are not assemblers. We are a core technology company and our product portfolio kind of is significantly larger than our competition.
Sriram
Okay. Okay. Thank you for this. All the best.
operator
Thank you. [Operator Instructions] Our next question comes from the line of Aditya Arora from P4 Capital. Please go ahead.
Aditya Arora
Hi Predar Kinthe’s. Congratulations on a phenomenal set of numbers. On the result and on listing of the company. My question essentially refers to page 23. If you could please double click on your growth drivers which is Green glt, zlt, third party O and M and Product membrane. You spoke about Compressed Cash biogas earlier.
Prerak Goel
Hi. Yes, sorry, I didn’t follow your question.
Aditya Arora
Yeah, so Prerak, I wanted to ask if you could please give us more Overview on Green ZLD 3rd Party OM and Product Membrane in terms of a broad drivers?
Prerak Goel
Okay. All right. So on green zld, what we basically continue to achieve for our clients is using any kind of waste heat energy or we integrating the energy that is currently being utilized to achieve zeoliquid discharge. So you know whether it is so for example, for Diageo projects in Africa, what we’re doing is we’re actually using some of the heat that was being flared. We’re using that as the source of energy for the zld. So they’re not putting in additional steam or so it’s completely a kind of a green base where the customer is not implementing or having to spend more energy in achieving zero liquid discharge.
So that continues to be the focus and on the third party O and M. So this is a segment where we’ve seen opportunity where a lot of the larger companies have been setting up larger plants and they either don’t offer O and M services or the client is looking for an alternative solutions provider or management company to kind of manage the operational maintenance services.
So what we are doing actively is we have a team now who is actively pursuing these opportunities where erstwhile the company only focused on doing O and M for its own products and solutions. Now we’ve expanded into this market. Last year we achieved about 12 crores in top line from these third party O and M contracts. And given the pipeline that we have in the order book at the current moment, we’re seeing strong traction on this segment. So we continue to kind of move into a larger O and M business. Two reasons mainly, obviously the margins.
And it gives us a good traction where the annual sales are kind of layered with a very annuity kind of a business segment on the product membrane. So these are new technologies, let’s say on the membrane side that we have been building up both with respect to membranes as well as with respect to the, you know, the finished format of the modules. And we’re looking to sell these in the international market to other OEMs. This is either through our own development or through in licensing that we are developing these products and we intend to sell them.
So if you remember about three years ago we used to do some business in China, or actually four years ago now we used to do some business in China where we were selling modules. So this is something similar as a segment we’re bringing back and, and looking to close this.
Aditya Arora
Okay, thank you.
Prerak Goel
Thank you.
operator
Thank you. Our next question comes from the line of Soniya Varnekar from Dalal & Broacha Stock BrokingPrivate Limited. Please go ahead.
Soniya Varnekar
Hello, sir. Am I audible?
Unidentified Speaker
Yes.
Soniya Varnekar
Yeah. Thank you for the opportunity. So my question is on the finance cost. So what is the breakup of actual interest payment and other bank charges in the quarterly finance cost which we have given. Hello. Hello.
Unidentified Speaker
Yeah, hi, Sonia. Yes, so. So on the finance cost, see most of this would be the actual interest payment. There would be a small element of other costs which would be to the extent of maybe about 1 and a half to 2 crores. But most of it would be actual interest payments. Just to clarify, the bank charges are not classified under finance cost. This would be under other expenses.
Soniya Varnekar
So what is actual interest rate which we are paying on the debt? And. And what’s the actual figure of the debt which we have?
Unidentified Speaker
You want the debt number, total debt?
Soniya Varnekar
Debt number and the interest rate which we are paying on that particular debt.
Unidentified Speaker
Just we’ll come back to you with the number. Sonia. Just we’ll look up the number and come back to. Maybe in the meantime we can take the next question.
Soniya Varnekar
Okay. Okay, sir. No issues. Thanks.
operator
Thank you. The next question comes from the line of Ankur Gulati from Genuity Capital. Please go ahead.
Ankur Gulati
Hi. There are some loans and advances in your cash flow statement. Can you give more details about it? What is that? 800 Internet odd million.
Prerak Goel
So the loans and advances are mainly with respect to the projects that are ongoing under execution wherein we have given advances to our suppliers for supply of materials as well as works. So there’s some part of this coming from Mexico. And the balances for projects which are in execution in India.
Ankur Gulati
So that’s the standard operating procedure. Right? I mean that’s major chunk of your operating cash flows going there.
Prerak Goel
Yes, obviously. Because we have to, you know, for some projects where we have groundworks or supplies, certain. Let’s say, you know, ZLD projects, their advances do become a significant chunk. Yes.
Ankur Gulati
So against, let’s say this 83 crores of loans and advances, is there a revenue booked or is this something you guys will book in future?
Prerak Goel
No. Yeah, it will be mainly revenue booked in future. So there’s not going to be revenue booked against this significantly at the current moment.
Ankur Gulati
So if one was to understand operating cash flow for the revenue let’s say booked in F25, we should knock off this 820, 820, 830 odd million of loans and advances. Right?
Prerak Goel
Yeah, I would say a significant. Yeah, I mean I would say 90% plus of it. You should minus it out.
Ankur Gulati
Okay. And there is an investment in bank deposits of 90 crores. How much of this is to get some sort of a BG from bank. And how much is actually free cash flow available to you?
Prerak Goel
So I think if you look at our margin money that you know where we had to put FDs, I think that would be totally across the group would be about 10 odd crores.
Ankur Gulati
So out of 90 crores in bank deposits.
Prerak Goel
Yeah.
Ankur Gulati
10 would be BG and then another 80 odd crore is available to you, r ight?
Prerak Goel
That’s the IPO proceeds. Primarily the IPO proceeds which are in bank deposits at the moment.
Ankur Gulati
Okay, thanks .
Prerak Goel
Thank you.
operator
Thank you. The next question comes from the line of Kartik VK from Suyash Advisors. Please go ahead.
Kartik VK
Yeah, good morning. Thanks for the opportunity. I’m new to your company so you’ll excuse if I’m asking you an old question. I am particularly interested in your CBG solutions. The two examples you’ve given. Both industrial projects. I was wondering if you would also be foraying into agri residue based CBG plants like what is being planned in Punjab and other places. And if yes, what do you think would be the cost difference between you and somebody like a praj who is also trying to offer. I know it’s a. I shouldn’t be asking you this question on a public forum but if you could give some, share some thoughts on the topic please.
Prayas Goel
So largely to answer the first part of your question is largely no. Our focus is strongly on industrial organic waste. Having said that if there are some very, very clear opportunities of clear waste quality, clear annual availability, as you know, the kind of issues which are currently plaguing this biomass based sector. So we’re trying to navigate away from those. Having said that, how we fare in terms of any solution, in terms of a competition, we do have backward integration especially in terms of path related to the upgradation from biogas to pure methane. So we do believe we have some competitive advantages against our peers.
Kartik VK
Right, right. The other question would be can I ask you what is the source of this technology? Would this have been developed organically or you would have tied up for this?
Prayas Goel
No, this is developed organically, sir. We’ve been offering biogas solutions for the last 30 years. So it’s, it’s. I mean it’s largely now, you know, CBG which is what the package is being called. But we’ve as we mentioned and gave some examples. We have currently also this year and in the previous years large projects and execution for industrial organic waste including sludge.
Kartik VK
Interesting. One additional question on your business model per se. You say you’re fully Integrated. Does in house fabrication really help you in your economics or would you be better off just designing and then outsourcing the fabrication part of the project? I don’t know your model perfectly well, so excuse me if I’m asking you the wrong question.
Prayas Goel
Yeah, so I mean we say we’re not assemblers and we do a significant amount of in house manufacturing. Having said that, we like to focus a lot on where the value is being added. So there is a lot of subcontracting that we undertake for very basic fabrication as well.
Kartik VK
Sure, sure. Thanks. I’ll understand your company and interact more with you. Thank you.
Prayas Goel
Welcome. Thank you.
operator
Thank you.
Prayas Goel
So I will just answer Sonia’s question just one second.
Unidentified Speaker
Yeah, Sonia, hi. Just coming back to your question. So the borrowing charges, sort of the 20 odd crore number that you see under finance costs, about 18 and a half is the borrowing charges. This includes, you know, borrowings, working capital borrowings and term loan borrowings. And also the factoring charges. Right. Somewhere we may be factoring some of the receivables that we have. So it included the factoring charges as well. So that’s about 18 and a half crores. And the balance is, you know, there are some prepayment penalties we had because we prepaid some loans plus, you know, some interest on some other dues. So I think that is about one and a half odd crores out of that number. So I hope this clarifies your question.
operator
Thank you. Our next question comes from the line of Dhavan Shah from Alfaccurate Advisors. Please go ahead.
Dhavan Shah
Yeah, thanks for the opportunity sir and congratulations for a great set of numbers. So my question is on, on the slide number 14, you mentioned that the membrane revenue this year was roughly 7, 7.8 crore and next target is 30 crore. And in the next three years the target is 85 crore. So if you can share thoughts on this business. You also mentioned that you are expanding presence in some of the emerging technologies, Green hydrogen, carbon capture, semiconductor. So if you can share thoughts on this as well, how much incremental revenues or opportunities you are seeing in next two to three years.
Prayas Goel
Yeah. Hi, thanks for the question. So yes, this is essentially related to the external membrane sales where we are having an India distributor also being appointed soon. So these will be sales of new membrane modules and elements to third party OEMs here and that will see growth in India through the distributor and also internationally in terms of some of the new sectors that we are targeting specifically, especially solar PV where we’re looking at the wastewater from cell manufacturing that’s a significant area as there’s a lot of make in India impact from this sector coming along in the green.
Hydrogen as well as semiconductor. Of course these are larger projects, slower moving. So I would say the solar PV is an area where we will see contributions in the current financial. In terms of carbon capture again there’s immense opportunity and we see that in terms of those will bring in revenues on a larger scale more FY27 onwards.
Dhavan Shah
Okay. Okay. So this solar PV and this membrane is largely a domestic business. Right.
Prayas Goel
Membranes, sorry, the membranes are both domestic and overseas. Yeah, solar PV currently we have a focus domestically but we are also, you know, evaluating opportunities or offering our solutions to such providers outside of the Indian marketplace.
Dhavan Shah
Okay, okay. And this distributed model, I mean the working capital cycle is more or less in line with the current business profile or there is higher working capital requirement plus the margin profile, al so if you can share?
Prayas Goel
I would say it should be, it should be in line. Yeah.
Dhavan Shah
Okay. Secondly, I think you also mentioned that we have expanded in the US market. So any thoughts on this? I mean the opportunity could be very large. But if you can shed numbers, what could be the additional market or maybe how much incremental revenues you are looking at for the next two to three years from the us?
Prayas Goel
Yeah, I think we can probably get back to you later with some specific numbers. But yeah we see that with a lot more manufacturing happening in the US there’s going to be a significant need and zero liquid discharge is being looked upon in that market also very much as a need now.
Dhavan Shah
Okay, okay. And so in Oanm if I look at, you know, the revenues more or less is 100 or 120 crore since last two, three years. And, and the order book is also around at the same level. So what are, you know, our plans, you know, to increase the revenue plus the order book from the O and M business?
Prayas Goel
Yeah, so see O and M has largely been, it’s a function of what plants we put out and Generally there’s a 12 to 18 month lag in terms of once the systems are put out. So if you look at historically, you know, O and Ms. Have been growing between 10 to 15%. I think last year also we just clocked about a 10% odd growth and the year before that I think was close to 15%. Now given that, you know, the substantial capacity that we have implemented over the last two, two and a half financial years, a lot of those plants are in fact coming into O and M in this calendar year.
So you know, you will See that with that lag now, there will be higher and faster growth in the O and M business. Also, you know, with the third party O and M contracts, that segment is gaining traction and that will also pick up. So basis of the book that we have today, I think we can safely say that O and M business should be growing at 20% sort of a number.
Dhavan Shah
Okay. Okay. Got it, sir.
Prayas Goel
Yeah. Thank you.
operator
Thank you. The next question comes from the line of Jay Trivedi from InCred AMC. Please go ahead. Hello. Am I audible?
Prayas Goel
Yes. Yeah. Hi, morning.
Jay Trivedi
Yeah, hey. Hi, morning. Firstly, congratulations on good set of numbers, sir. My first question is what is the margin difference between the three segments that we operate in the plant? Can you please see that?
Prayas Goel
Yeah, See, I mean, there is an inherent difference in terms of margins. I, I think if you look at our after sales business that does tend to contribute a slightly higher number. I would say there would be a difference of, you know, at least about 30 to 40% in terms of, you know, what margins we earn in the projects vis a vis what we earn on the after sales business. The export side has better gross margins on the EBITDA levels. They tend to be very similar to what business we do. But yeah, definitely after sales does contribute a higher number.
Jay Trivedi
Can you say the specific number like 30 to 40% more than the plants business?
Prayas Goel
Yeah, I mean, I’m not so sure if we can give out specific numbers on the call, but yeah.
Jay Trivedi
Okay, fair enough.Yeah. Second on the ROC target. So we have been putting capexes in Sharjah and we are scaling up there. So once our plants are operational by FY27, what is the ROCE targets or ROE targets that you have set for yourself internally?
Prayas Goel
We definitely want to put the company on a growth path where we can get up to 20% over the coming years. But obviously it’s a journey. And you know, with the capital raise that we did in FY25 and given that there will be investments going in in FY26 and let’s say a little bit tag in FY27, we do expect that cycle to be achieved post completion of this when the real revenues from that new investments will kick in. So it’s a cycle, but I think we have begun that journey as an organization and definitely we want to kind of get up to the levels of our peers, which are all in the 20% range.
Jay Trivedi
Fair enough, sir. Last on the working capital days, I see there’s a very good improvement there. So what has really changed with your FY24 performance?
Prayas Goel
So I think, see the two things and you know, I think, you know we’ve been tracking this very closely. If you look at our inventory, right. I mean some of these numbers are not growing in line with the business growth. So let’s say you know last year we clocked about a 19% growth. If you looked at, look at our growth in inventory days, it’s been a smaller number. It’s not grown in the same fashion because right now we reached inventory levels where we are, let’s say able to cater to all our businesses quite efficiently. If you look at debtors, it’s largely a component of our Q4 execution.
Now our Q4 execution in FY24, sorry, Q4 and FY24 and Q4 and FY25, you’ll see it’s in the 200 crore range. So a lot of that is what sits on in our receivable days at the end of the financial year. So these numbers are tracking. If you see there’s not much difference in our Q4 24 versus Q4 25. So debtors are relatively in the same similar level. So as such as business grows we do see more optimization. As revenue gets more evenly spread during quarters, we’ll see more improvement in working capital cycles.
Jay Trivedi
So is my. Sir, I’m just thinking out loud since we had this Diageo project last year that we had executed since it was a large project so inventories were more or less planned pre handed so that gave us this edge.
Prayas Goel
No, so I mean it’s a. See if we look at our project business it’s, it’s mainly jit, right? Because what’s happening in the project business is you’re buying materials, you’re supplying it or you’re building materials and supplying it. It’s actually for the O and M and after sales business where really the inventory does get stocked up. And because we are backward integrated with respect to our membrane manufacturing, that’s where our inventory gets backed up. So the inventory cycle is really to kind of cater to these segments and not really for our project business. So the lumpiness in the project business has continued for a long time for us and, and we don’t really see that number translating hugely onto our inventory because our shop flow times are pretty quick.
So once the materials come in it’s about a two or three week kind of execution cycle for us to turn those around and send them to site. So that’s not kind of adding a lot of numbers. It’s really the O and M and the membrane backward Integration that we have, which kind of contributes to inventory.
Jay Trivedi
Sure. So that’s it from my side. Thanks and all the best.
Prayas Goel
Thank you so much. Thank you.
operator
Thank you. Our next question comes from the line of Agam Shah, who’s an Investor. Please go ahead.
Agam Shah
Hi sir. Great execution. Just a quick question. In your presentation you have mentioned about opportunity in the solar semiconductor space. So can you elaborate a bit more on this? I mean, where are we? Have we won any orders or are we there in terms of L1 in any of the projects or will this be largely project based or how is it going to be and what are the margins going to be here?
Prayas Goel
Yeah. Hi. So as you know, the solar, especially on the cell manufacturing is quite a water intensive process and also generates a lot of hazardous waste. So we have some great technology solutions here. To answer your question specifically, we have services industry in the past, so we have orders already executed for this industry. We’re seeing a lot more interest now in recycling and are chasing several opportunities which are, let’s say, brownfield or secondary, where we are working with our customers to improve the operating efficiency of plants. And at the same time we are chasing also greenfield opportunities in the solar cell manufacturing segment.
Agam Shah
Can we expect some good execution and good orders for this year from the solar and the semiconductor verticals?
Prayas Goel
On the solar, certainly we expect good orders to come through. Having said that, I would say that it’s good to get that expansion coming in from, from this sector starting this year.
Agam Shah
Okay. Okay. Okay. Wish you the best.
Prayas Goel
Thank you.
Agam Shah
Congrats once again on a good set of numbers.
Prayas Goel
Thank you.
operator
Thank you. Our next question comes from the line of Ankur Gulati from Genuity Capital. Please go ahead.
Ankur Gulati
Hearing anything on water credits as of n ow or not really?
Prayas Goel
Yeah, there was a notification that came out, but yeah, not a lot of noise on the ground among industrial clients at least. So I don’t think it’s kind of gained the traction that would have some meaningful impact in the short term at least.
Ankur Gulati
And as of now you guys are negotiating to keep it with you or are you passing it on to clients?
Prayas Goel
No, it would be generated by the clients because I mean it’s at the end of the day it’s their facility and they would be generating it. So it’s not going to be generated at our end at least, but it’s going to be a driver for, you know, implementing more solutions because it will offset the OPEX cost for the clients. But yeah, that’s, that’s still some time away is what our view is.
Ankur Gulati
And second, any Thoughts on settings or some sort of a build own operate model where you aggregate wastewater from industrial clients or you still want to be in mostly plant sales model.
Prayas Goel
Yeah. So Concorde is a EPC company but you know, we have a JV in which we do bot solutions. So that JV has kind of, you know, about 120 crores of assets under management. And yeah, look at opportunities for growing that model. But yeah, I mean it’s a separate set of investors that sit on that book and, and kind of have a team that runs that division. So for Concord at least it’s, it’s really the EPC focus.
Ankur Gulati
So you guys provide EPC and someone else does management there, right? That’s it.
Prayas Goel
No, so we do the, we do the epc, we do the O and Ms. As well. But yeah, that’s. I mean the asset ownership is, is undertaken by that entity.
Ankur Gulati
So just on that, any plans to expand that? Because water just announced something with the more or less similar, of course at a bigger scale.
Prayas Goel
Yeah, so as I said, I mean we’ve been doing this since 2016, so not new for us. We have kind of had a lot of interaction there. But obviously see, you know, the opportunities that we are trying to assess are really industrial scale and looking at projects which do add value at the end of the day to the client because you know, it’s a Water as a service is what, you know, the, the term that has generally been coined for it. So yeah, we continue to look at opportunities looking for expansion and investors to grow that business for sure.
But yeah, it’s definitely a focus there.
Ankur Gulati
Okay, last thing. How much do you guys typically charge for let’s say one mld water treatment plan a s a rule of thumb?
Prayas Goel
It would. Really depend on the kind of sector the industry. So it’s very difficult to give a. Kind of a number. Yeah, it’s very difficult because what is different for each industry? So yeah, a number like that would be quite difficult to generalize.
Ankur Gulati
Okay, thank you.
operator
Thank you. Our next question comes from the line of Akhilesh, who’s an investor. Please go ahead.
Akhilesh
Thanks for the opportunity. Most of the questions are answered. Just wanted to know or gauge what kind of confidence we have on clothing. Let’s say 20, 25% growth over the next two to three years. And regarding the margin expansion at a company level, you know what levers are there and do we have any targets to get this margin from say 15% to 18% or something like that?
Prayas Goel
Yes. So on the first part, thanks for the question. So the first Part definitely we are seeing a very, very strong kind of traction on the inquiry level across a large set of sectors, specifically steel, food and beverage, both in India and overseas. So I think both the Indian and the international market seem to show that there’s significant traction there. Not only the signed order book, but the kind of what we call the hot about to close is also very strong. So I think we’re very strongly on track for that 20 plus percent kind of growth on the revenue side and on the margin side, again, as you’ve seen, there will be some operating leverage which kicks in which will come in there.
But I would say on the margin side we are seeing a small pickup happening.
Akhilesh
And couple of more questions. Is the revenue split per quarter, do you expect it to remain broadly as it is, which is around say 15% in Q1, 25 in Q2, Q3 and 35 in Q4. Will this continue over the next couple of years.
Prayas Goel
Especially in the next 12 to 18 months? We do expect it to continue similarly with about 40% coming in H1 and 60% coming in H2.
Akhilesh
And the split between segments, that’s whatever spread we’ve had in FY25, 60% on systems, 20 on consumables and 20 ONM. Will that also continue or will you.
Prayas Goel
No, that seems to be on. On the similar tracks.
Akhilesh
All right, thank you.
operator
Thank you. Our next question comes from the line of Tej Patel from Niveshaay. Please go ahead.
Tej Patel
Thank you so much for the opportunity and congratulation on a good execution and you know, maintaining the profitability for this quarter. Pardon me, you know, if the questions are repeated. I just wanted clarity on. So for from our current order book, how much concentration is towards diagonal any major clients? I just wanted to know the client concentration and is it currently right now all denominated in USD INR or is peso still a part of our order book?
Prerak Goel
Yeah, so if you look at Diageo, I think the total order number from Diageo current moment is 108 crores. Out of that, 17 crores worth of orders are peso denominated. But this is within Mexico itself. So, you know, there is a very small likelihood of any impact there because these are costs that are being incurred in pesos and revenue which is being booked in pesos. The 91 crores pertains to a ZLD project in Africa. And then coming to the second part of your question, yes, other than the 17 crores which is currently peso denominated, the order book is mainly comprised of USD orders We just have a small portion of, let’s say some local works to be done in Kenya and Uganda which are in the local currencies there.
But that again will be incurred by a local entity and against costs which are to be incurred locally.
Tej Patel
Got it. So 17 is the number, right? 1 7.
Prerak Goel
1 7, that’s right.
Tej Patel
Perfect, perfect. So out of about you said 109.
Prerak Goel
Is for Diageo one. So 180.
Tej Patel
Got it, got it. And major chunk is in Africa.
Prerak Goel
Yeah. So this year the major chunk is in Africa.
Tej Patel
I just wanted to get your perspective, you know, I’m very curious to know about. When you say, you know, we are getting incremental demand from India as well as abroad, but especially from the India perspective, I wanted to get your view. I mean, what, what is driving this demand? Because as far as I understand, still, let’s say in some areas the cost of fresh water is still, let’s say, cheaper than if I consider the lcoe. I’m just trying to understand what’s driving this demand up and then trying to understand the sustainability of it. And, and could this growth trickle down to MSMEs which, you know, probably right now do not have the capability of putting up zlds.
And, and do you see, you know, the cost of ZLD overall, you know, going down, I mean, due to, let’s say increasing manufacturing activity or some other reason? I’m just trying to understand how fast could, you know, penetration increase in terms of zld, especially in India.
Prerak Goel
So we are seeing a few drivers, as you said. You know, there are, there are areas where water is still cheaper, but we are seeing that change pretty rapidly now. Right. Especially with privatization of a lot of industrial infrastructure, we’re seeing that change as well. And other than the cost of just water intake, you have to consider the cost of disposal of water. So when you practice zero liquid discharge, you’re offsetting two things. One is the cost of intaking water and second is you’re offsetting the cost of disposing your water. And when you add those two together, you have to compare it to your cost of zld.
Having said that, again, in terms of zero liquid discharge, with our focus in ultra high pressure reverse osmosis waste heat evaporator in green zld, we’ve made significant dents on the, on lowering the cost of zero liquid discharge and continue to do so. So there’s a very strong drive to continue to reduce those costs.
Tej Patel
Okay, Interesting, interesting. And sir, when you say that, you know, we are putting up waste heat operators is it correct to assume that there are no system integrators who are using this technology and prob. You know, are using the conventional one?
Prerak Goel
Yeah, these are, these are solutions which are IP back. We have patents around them.
Tej Patel
Okay, but then no one else is probably using it. Right? Maybe let’s say imported part or you know tie up with any other technology in India.
Prerak Goel
Yeah, I think there’s. There we are, we are seeing that we are one of the very few players who’s focused on a complete end to end solution. You know. So we look at focus on zero liquid discharge with kind of in house technologies. Whereas you know, people are kind of more putting in third party units together.
Tej Patel
Got it, got it. And sir, what would be the current utilization of our membrane line for the full year? What would the utilization.
Prerak Goel
So I think see the current numbers are still in the range of about 40 odd percent.
Tej Patel
Okay.
Prerak Goel
Yeah. I mean if you look at the way the business is going, we’re expanding into different segments. So obviously things like biogas and everything also kind of becoming bigger. So the membranes they are currently remains at about 40%.
Tej Patel
Got it. And this can probably expand to what number? Because I assume because Q4H2 is heavy. Right. So probably maybe not this line can reach at 100%. But what number this could reach and a follow up on this was. Is my understanding correct that out of about let’s say 100210 crores of consumable and spare sales just about 7 to 8 crore was membrane rest was about let’s say your chemicals and other spare parts.
Prerak Goel
No, no. Okay. So out of the total trading sales, if you look at see that the. The product membrane that we’re talking about is membrane that we manufacture and sell particularly to third party OEMs. OEMs. So this does not include the membranes that we are selling to our but our own clients. So in the 110 odd crore, that is the total trading number membranes form at least 30 40% of that overall chunk. So the number that is given is only for the product membrane.
Tej Patel
Okay, so you are saying the 7 to 8 crore is a third party O and M. Okay, yeah.
Prerak Goel
So we’re selling that to other distributors, other OEMs. That’s the focus and balance sales is all to end clients.
Tej Patel
Perfect. Got it. Got it. And have you already incurred the CAPEX for wha or I mean have you or I mean has the civil. I just wanted to know the status of CAPEX for whe and the membrane which we were planning through the IPO proceeds.
Prerak Goel
Yeah. So that is, as I said in the beginning call, we probably looking at, you know, getting all the approvals in place in July and it will be a six to eight month civil construction and by the time we commission the facility, it will be July 26th.
Tej Patel
Okay, got it, got it. I just wanted to, you know, understand, you know, as far as I remember in the last call, the export order from Diageo was a bit of, you know, not, not that margin lucrative from the export margins perspective because the civil portion was higher on those orders. So is the scenario the same for DRG orders where, you know, the civil portion is higher and maybe let’s say the margins are not what expected in the export and can we expect, you know, similar margins for the next year as well because of a higher civil portion or as you were saying earlier, there might be a margin improvement.
Prerak Goel
Yeah. So if you look at the Mexico order, it was a greenfield. So as a result, the civil component was high. The current orders we’re executing in Africa brownfield locations. So the civil works as a total percentage of the total order is small. So no, we don’t expect any similar hit in terms of margins. In fact, we do expect margins to remain consistent.
Tej Patel
Got it. And any major client who is contributing, let’s say, more than 10, 15% of the order book. Is there any client apart from Diago?
Prerak Goel
I think, I mean, if you look at some of our larger clients after Diageo. Yeah, not to the tune of about. Yeah, I think there will be less than 10%. 8 to 10% would be a couple of them, but yeah, not, not, not to that extent.
Tej Patel
Got it, got it. And just one last question. In terms of membranes, how much would. How much of it. Let’s say for the total requirement, how much of it would be, let’s say imported and how much would be locally manufactured and supplied by the local manufacturers like us?
Prerak Goel
You’re talking about from, from an India perspective.
Tej Patel
Yeah, from an India perspective or numbers.
Prerak Goel
Probably don’t have numbers on that. But that, Yeah, I mean, imported. Sorry,
Tej Patel
major portion would be imported.
Prerak Goel
Yeah, yeah, major portion we imported. I think there are a couple of companies who are manufacturing locally and selling, but majority of it is imported.
Tej Patel
Got it. And what was the cost difference? Let’s say do we have a cost advantage in terms of import versus we supplying it to third party?
Prerak Goel
No, see, it’s a technology differentiated product. So it’s not about trying to supply something that is commonly available in the market. The tech we are using is something called printed membranes. And that’s what we are supplying to our to other people. So this is again something that is being done very uniquely.
Tej Patel
Got it, got it. And the O and M order book for our O and M order book is it to be. And what’s the timeline for it? I mean is it for two to three or is the right number to assume Right. For the ONM order book which is outstanding as on today?
Prerak Goel
No. So we are only giving the next 12 month number. So even though we have contracts which are longer, we have only given the number for guidance perspective, we’ve only given that portion of the number which is executable in FY25.
Tej Patel
Got it, got it. And since we are left to do the capex for wh, I’m just trying to understand how are we integrating? I mean, are we sourcing it from somewhere else or, or how are we developing whe when we say, you know, other IPs our own. Because the capex is still left for whe. Right?
Prerak Goel
Yeah. At the current moment there’s some subcontracting that is happening where we are, you know, building that frame overseas toward to a job work contract. And that’s what we’re looking to internalize.
Tej Patel
Okay, okay, okay. That’s all from my side. Thank you so much and all the best for the next year.
Prerak Goel
Thank you. Thank you so much.
operator
[Operator Closing Remarks].