Enviro Infra Engineers Limited (NSE: EIEL) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Sanjay Jain — Chairman & Whole-time Director
Manish Jain — Managing Director
Analysts:
Rahel — Analyst
Suprajot Chawla — Analyst
Dheeraj Ram — Analyst
Prateek Bhandari — Analyst
Hardik — Analyst
Shaurya — Analyst
Mohammed Sufyan — Analyst
Tej Patel — Analyst
Sanjay — Analyst
Siddhant — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Q3 FY25 Earnings Conference Call of Enviro Infra Engineers 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 a conference call, please signal an operator by pressing the Star than zero on your touchstone phone. Please note that this conference is being recorded.
This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involves risks and uncertainties that are difficult to predict.
I now hand the conference over to Mr. Sanjay Jain, Chairman and Whole Time Director. Thank you. And over to you, sir.
Sanjay Jain — Chairman & Whole-time Director
Thank you. Good afternoon everyone. I would like to extend a very warm welcome to all of you for Enviro Infra Engineers Limited earning conference call for the third quarter and nine months ended 31 December 2024.
I would like to begin by expressing my gratitude to all of you for taking the time to join us today. We have on call with us Mr. Manish Jain, Managing Director and Adfactors PR, our Investor Relations team. We have shared our results presentation. I hope you all must have gone through it since this is only our second earning conference call.
I would like to take you through recent development before we get into business and financial performance for this period. It started in 2009 and Enviro Infra has emerged as one of the leading and trusted players in water and wastewater treatment in India. We specialize in designing, building, operating and maintaining treatment plants and also take on water supply projects for government agencies.
Our work plays an essential role in supporting some of India’s most ambitious national initiatives such as Jal Jeevan Mission, the Atal Mission for Rejuvenation and Urban Transformation and the National Mission for Cleanup. These projects are not just about infrastructure, they are about shaping cleaner and more sustainable communities for future generations. We take immense pride in contributing to these initiatives by delivering solutions that align with India’s vision of development.
In the recent budget, the emphasis on water infrastructure and urban redevelopment is a commendable step highlighting the government’s commitment towards sustainable growth. The extension of the potable tap water mission to 2028 and the launch of 1 lakh crore urban challenge Fund demonstrate a forward thinking approach at enviro. We proudly support these initiatives and are ready to contribute to India’s water sustainability and urban transformation goal.
One of the aspects that we are particular about its commitment to timely project execution. In fact, one of our recent development further highlight our ability to deliver on critical projects. We are proud to have achieved early commercial operation date on major M projects including the Braille project which was completed ahead of scheduled times by more than two months. The Matra And Saranput projects are progressing smoothly with achievement of financial closure and construction of Matra project as per schedule. These developments reinforce our reputation as a reliable and efficient partner for large scale infrastructure initiatives.
Our strong order book is a testament to our ability to win and deliver critical projects. As of today, our project order book stands at approximately Indian Rupees 1687 crores comprising 22 diverse projects across multiple states and operation and maintenance order book stands at approximately 738 crore worth of contract which provides long term stability and recurring revenue stream. Our ability to maintain a robust order book demonstrates the trust that stakeholders and government authorities place in us. We have committed bids for projects close to 2,200 crores and are expecting another 2,000 crores bidding in the in the coming months.
In regards to sustainability and green energy, we are taking significant steps towards a more sustainable future. The company is in the process of forming a new subsidiary under Enviro Infra Engineers Limited. This new subsidiary will focus on Solar Energies 74. 7 Renewable Energy Power, hydro and green hydrogen products. As part of this strategic initiative, the company has already identified opportunities in existing solar assets, solar independent power producer projects in solar engineering, procurement and construction products. To lead this critical endeavor, we will soon have a Chief Operating Officer who will be formally on Goget in the coming week or two. The appointment of this key leadership position underscores our commitment to expanding our capabilities in the renewable energy sector.
Now I would like to hand this opportunity to our MD Mr. Manish Jain for providing financial and operational information about the company. Over to Mr. Manish.
Manish Jain — Managing Director
Thank you Sanjay, sir. Good afternoon everyone. I will brief you all about our consolidated financial numbers for this quarter and nine months.
Our revenue from operations for Q3 FY25 stood at rupees 247.45 crores against rupees 149.94 crore in Q3FY24 growing at a rate of 65% year on year. EBITDA for the quarter stands at rupees 1 at rupees 53.94 crore as against rupees 27.67 crore in Q3FY24. The listing error growth of 95% year on year basis. The EBITDA margin for Q3FY25 standard 21.8% versus 18.5% in Q3FY24 registering an improvement of 334 basis points. The profit after tax stand at rupees 36.7 crore against rupees 17.91 crore in Q3FY24 registering a growth of 105% on Y. On Y basis, the PAT margin for Q3FY25 stands at 14.5% against 11.7% in Q3FY24 so it’s up by 277 basis points.
Now coming to nine month FY25 numbers. Consolidated revenue from operations for nine month FY25 costs rupees 665.65 crore visa with rupees 428.57 crore in nine month FY24 listing a growth of 55%. The beta for this period stands at rupees 160.84 crore as against rupees 80.64 crore in the previous corresponding period registering a growth of 99% year on year basis. The eBITDA margin for nine month FY25 came in at 24.2% versus 18.8% in nine months FY24 up by 534 basis points. Profit after tax stands at rupees 1. 103.06 crore against rupees 50.86 crore growing 103% on a year on year basis. The pet margin for 9 months FY25 was 15.1% visa with 11.7% in 9 month FY24 during this quarter.
Our project our order book stands at its Strong level of Rupees 1687 crore. Approximate execution complemented by over 7.38Corrode from operation and maintenance contracts. We are also bidding for projects. The projects of around 2,200 crore which we have already bidded and another 2,000 crore projects which are in line which we are bidding in the next month, in the few next few months. This healthy pipeline ensures sustained growth and long term revenue visibility.
This is all from our side. We can now open the floor for questions.
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 hand fed while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
First question is from the line of Rahel [Phonetic] from MAPL. Please go ahead.
Rahel
Yeah, hi, good afternoon. Am I audible?
Sanjay Jain
Yeah, you are audible, please.
Rahel
Yes sir. First of all, thank you for this opportunity. I actually missed the interruption. So if the procedures. Usually we see EPC businesses make margin in the range of 10 to 15%, sometimes 15 to 18%. How is Enviro Infra doing? 25%. What are we doing different to attain this?
Sanjay Jain
Basically we get differentiated from our peers that we are having our in-house designing which helps us in giving the most viable and most economical solutions to our end clients. And then further we are having our in house execution teams. So the execution is being done in house. So the timeline for execution that always remain in control. There are no cost overruns which are observed. We are well in time even if there are any challenges which we face during the execution of the project. So that way we are not parting with the margin by giving any subcontracts. These factors are making us to meet that EBITDA margins of around 24 to 25% year on year basis.
Rahel
Okay, so the primary reason from what I understood is that you don’t subcontract it to contractors below. The whole execution is formed in pyro and price. So then if I see your margins pre FY23, that is in FY22 and ’21 your margins are in the range of 9 to 12% EBITDA. So what changed in FY23 for you?
Sanjay Jain
Basically with the execution of project on year, on year basis, the single ticket size project, that size is increasing. We are having our own TNPs. When we are deploying those TNPs, definitely our costings are coming down as a percentage of that project. So that is driving those margins. And now we have reached at a level where the EBITDA margins are getting consolidated at a level of around 24%.
Rahel
Sorry sir, I missed your part. What is coming down? I couldn’t hear you clearly.
Sanjay Jain
As I was explaining it was single ticket size project which we were earlier executing. Those were small. So with the executions going on year on year basis, our pre qualifications are improving our single ticket size projects but we are bidding so that is increasing. So the machinery, the fixed cost as a percentage of the costing that is coming down and that is driving the EBITDA margins. And those margins have now got consolidated at a level where we are seeing a continuous EBITDA margin of around 24% for the past two, three years.
Rahel
Okay. So previously what was your average ticket size of what is it now?
Sanjay Jain
The ticket size? If I say around three, three years. Four years back it was somewhere in the range of 30 to 50 crore. It was getting increased. And now the single ticket size is somewhere in the range of somewhere around 150 crores.
Rahel
Okay. Okay. And if you could exactly explain me when you say the usage of the cost basis for the machinery is coming down in the larger projects, how is that possible? Because if the project size grows so would be expensive. Right. So how is it exactly reducing. If you could explain it?
Sanjay Jain
And see the machinery says that is the TNT or the fixed asset of the company. If I am putting up a fixed asset of around 4,5 crore for a 50 crore project or I am putting that for a 150 crore project and that then again the staff, the deployment. So the costing, the. The cost as a, as a percentage of that sale, definitely that will come down when we will go for a high ticket size.
Rahel
Okay, understood. And sir, if you could explain me the margins in pure sea wage EPC work versus the margins we make in STB projects versus the margins in OLM?
Sanjay Jain
Margin in STPs in EPC of STPs is somewhere in the range of around 24%. And that for operation and maintenance we understand that the margins are somewhere in the range of 30 or 35%. So the margins in O and M are always better.
Rahel
Okay. And so we don’t do any sewage work. We only do HCP and the olm. Right?
Sanjay Jain
We do all three type of treatment plants which says it is water treatment plants, serious treatment plants, common affluent treatment plants. Along with this we do the sewage schemes when there it is an integrated package which includes STP and as well as pipelines and we also do that water supply schemes as well.
Rahel
Sir, in H1 we saw that due to the external reasons of elections etc the order flow had slowed down. Now that all those things are behind us, what sort of order flow we are seeing? Any pipeline that we have built for?
Sanjay Jain
Due to general election definitely in H1 there were no fresh bids which were submitted or it was just too small. But in this H2 there is flooding of projects and a number of projects have got lined up. So we are continuously bidding. Just in the last month itself we have cemented our bids for somewhere around 2,000 crore projects and we understand that we are also submitting bids further for another 2000 crore in next one or two months to come. So the projects are definitely coming up now it is under Amroth schemes or the common effort treatment plants. So we are submitting our bids. We are getting good opportunity and we are. We are moving ahead.
Rahel
Okay. And previously we were hearing that these teams were seeing some delays in payments. Is the is that all behind us now or are we still seeing some delays in payment?
Sanjay Jain
There are no delays of payment in Amruth projects or Namami ganga projects. Since March 24th JGM had got a bit slowed down in the recent budget. The JGM has been extended extended till 2028. And a budgetary central budgetary allocation of 67,000 crore has been confirmed. So the payments are going to be streamlined at least if I say as of now. Yes, there is some stress and there is some cash stress from jtm but that we are able to manage that cash stress from our other projects which are going on under Amrut or Namami Gandhi.
Rahel
Okay, that’s helpful. So my last question is as you told me previously we were targeting ticket sizes of 30 to 50 crores and right now it’s close to 150 crores. So talking to a few other peers in the industry what we understand is that in smaller ticket sizes the competition is a lot not new. So right now as we are upwards of 100 crore progress, what sort of a competition are we seeing in bidding in tenders? Or is it rather only 2, 3, 4 players at max?
Sanjay Jain
There is different type of competition in across different segments. First of all let me explain about common effort treatment plants. In common effort treatment plant generally the there is no competition or I will say the number of players are just too less. So the competition is less, the works are more challenging and hence the margins are also quite good. So it is in itself is an initial. Then we come down to STPs. In STP is the segment in which we operate in there are generally 1012 players where which are prevailing in that particular segment or the ticket size. Definitely the competition remains but there is so much of work available.
So there are some threshold margins which all the company require for executing these projects. So we are quite in a position to maintain those margins. Another one is water and water supply schemes. We have definitely gone through this JJM phase. We have executed. We are on executing this 12,500 crore order which we received from MP Jenny Gum. But the margins were a bit skewed and then DI pipeline was also a bit challenging. So. So we are restricting ourselves to high margin projects where we are submitting our bids and we are looking for any of the water supply schemes or water treatment plants where the margins are good. So we have been a bit selective now in submitting our bids.
Rahel
Thank you.
Operator
Thank you. The next question is from the line of Suprajot Chawla [Phonetic] from Nivesa. Please go ahead.
Suprajot Chawla
Hello.
Sanjay Jain
Hello.
Suprajot Chawla
Hi sir. How are you?
Sanjay Jain
I’m fine. Please. Yeah. Please continue.
Suprajot Chawla
[Technical Issues] conference call that the company…
Sanjay Jain
Your voice is not audible. Please speak loudly.
Suprajot Chawla
Am I audible now, sir?
Sanjay Jain
Yeah, you are audible.
Suprajot Chawla
Sir. Last. Last conference call. The company have given guidance that they were currently bidding for orders worth rupees crores. And given the success rate the company would be able to secure orders was rupees 2000 crores before the end of the financial year. To know are we on track with that?
Sanjay Jain
The last earning call was on 18th of December.
Suprajot Chawla
Correct, sir.
Sanjay Jain
What we have confirmed at that point of time we are aligned with it. We have already submitted bids some somewhere in the range of around 2000 crore. And are expecting another 2000 crore order which. Which are in line with our projects. So we are definitely bidding for these projects also. And we are quite hopeful that based on our success ratio in the past we’ll be having a decent order book available with us going forward.
Suprajot Chawla
Understood, sir. Understood. I just have one more question, sir. So given the current revenue for nine months ended FY25. I think we’re at somewhere about 650 crores. So considering that the contribution in the quarter three has always been higher historically can we look at ending FY25 at the top line of 1000 crores?
Sanjay Jain
If you see in the presentation also the first three quarters are comparatively lower in comparison to Q4 numbers. So we generally expect 20% each in the first three quarters with a delta of around 5% on positive or negative sides. And FY and the Q4 numbers are in general 40%. So that way we are aligned. The company is moving in the same direction. And we also foresee that we will be crossing that number.
Suprajot Chawla
Crossing the thousand crore milestone.
Sanjay Jain
Yeah.
Suprajot Chawla
Understood. So thank you so much. Congratulations on the great set of numbers.
Sanjay Jain
Thank you.
Operator
The next question is from the line of Dheeraj Ram from Ashika Institutional Equities. Please go ahead.
Dheeraj Ram
Hi sir. Thank you for taking up my question. Also just wanted to know what is the amount of IPO proceeds that we have utilized for working cap in this quarter?
Sanjay Jain
Till now we have utilized 47 crore out of 181 crore which was earmarked for the working capital requirements.
Dheeraj Ram
Okay. And. And what is the amount of revenue that is stuck in receivable during the quarter?
Sanjay Jain
The total amount of receivables right now is 238 crores.
Dheeraj Ram
Okay, so how do you see by the end of FY25 sir, do you see any slowdown? Do you see this increasing by the end of the FY25?
Sanjay Jain
To our understanding the level of debtors and unbilled revenue that will come down substantially as we understand that the funds in JM are going to be going to smoothen. So the trade receivables as well as UBR should come down. And regarding the growth, the growth of the company that is quite satisfactory and we expect to maintain the growth going forward as well.
Dheeraj Ram
Okay. So are we doing any UP Jal Nigam project as per your drhp?
Sanjay Jain
Yes, we are doing a number of projects in UP for UP Jal Nigam. We have recently completed this HEMP project at Bareilly and we are glad to inform that we have completed this HAM project and COD has been achieved two months ahead of time. A bonus has also been given to the company and two of the annuities have also been released. So the project is well in line. Apart from this we are doing one project of 55 ML STP at Varanasi, it is under EPC. Then we are doing 160 ML STP at Madhura and another 135 ML STP at Saharanpur. So these two projects are underhand.
Dheeraj Ram
Got it sir. So from your peer con calls they were also doing UP Jal Nigam projects which they have said that they are seeing a tremendous slowdown in outlay of funds from the government especially in UP Gentle income project. So it’s not the case for uk. Am I right sir?
Sanjay Jain
It is basically the scheme in Jal Jeevan mission throughout India there was a slowdown. Basically it was related to that completion of project and then extending the timelines for the project. So that has got a streamlined now. So the apart from this even in UP JAM there are no other challenges. I have confirmed you these are all NAMAMI under nmcg. So for all these projects the funds are already aligned and these are 100% centrally funded schemes. So there are no challenges at all.
Dheeraj Ram
Understood sir. So last question sir. How do you see the EBITDA margins going forward? Is 25% sustainable margin the next two to three years?
Sanjay Jain
These margins are because our capabilities, we are banking on those capabilities itself and the type of projects and the selection which we are doing for our projects. The way we are bidding, we understand that we will be in a position to maintain these margins.
Dheeraj Ram
Okay sir, thank you.
Operator
The next question is from the line of Prateek Bhandari from Aart Ventures. Please go ahead.
Prateek Bhandari
Yeah, hi sir. Thanks for the opportunity. I wanted to understand that we have guided for margins in the range of 22 to 24% whereas we have seen the margins to be contracting getting below the previous quarter in spite of the fact that we have done a top line growth of 66% and the base for the previous quarter of the last year was relatively low. So what is the reason behind that?
Sanjay Jain
Basically it depends upon the mix of the project and the cycle of the project in which the project is into. So if you see our nine month results, the our EBITDA margins are at a healthy level of 24.16% in totality. So still we are maintaining the level which we have confirmed that the margin will are somewhere in the range of 24 to 25%. So in Q2 if you will see the EBITDA margin was 26.11%. So so basically it will always remain there. That way there will be a mix. But how if you see as a whole in the year to our understanding those margins of around 24, 25% that will be maintained.
Prateek Bhandari
That somehow indicates that you would be ending the year round about 950, 1,000 crores of top line. And with the EBITDA of around about 240, 250 odd crores?
Sanjay Jain
The way the company is growing and the level at which the company has maintained the growth, definitely that thousand crore growth seems to be quite achievable. And yes, we’ll be in a position to maintain those margins.
Prateek Bhandari
All right sir. And just one last question on the JGM front. So when do you see these payments getting normalized and receivables getting down?
Sanjay Jain
The payments are being released on a monthly basis even now. However, the pace of release of payments has gone slow. So there has been a buildup in the trade receivables and ubr. We are expecting that the quantum of flows should be decent enough to pay to all the contractors for all the balances to our understanding, by the end of this financial year these funds should come. And this is what we have got. A confirmation from our departments.
Prateek Bhandari
All right. So the trade receivables due is around about 240 odd crores which you feel optimistic that you would be receiving by year end.
Sanjay Jain
We do hope definitely we will be in a position to get these funds released.
Prateek Bhandari
Yeah. Okay. Thanks. Thanks a lot. Sir.
Operator
The next question is from the line of Hardik, an individual investor. Please go ahead.
Hardik
Namaskar ji. Congratulations on the good set of numbers. I think most of my questions are already answered. So I would just say congratulations once again. And we wish to see the company grow at good levels. Thanks a lot.
Sanjay Jain
Thank you. Thanks a lot.
Operator
The next question is from the line of Shaurya [Phonetic] from Arjav Partners. Please go ahead.
Shaurya
Hi sir. Most of my questions have been answered. Just one more. What kind of top line growth we are expecting in 26 and 27?
Sanjay Jain
We do expect a continuous growth of 35 to 40% going forward for next four, five years. Because there is a huge quantum of work which is to be done in this wastewater field. So we expect to achieve this top line growth of 35 to 40% on a continuous basis.
Shaurya
And what will be the main source of this, which segment will contribute more?
Sanjay Jain
The segment will be wastewater which constitutes maximum. It will be STPs or sewage schemes followed by common effluent treatment plants. And we will drive some strength in water treatment plants. Primarily we will be focusing on STPs and common effluent treatment plants.
Shaurya
What kind of margins we are expecting sustainable basis.
Sanjay Jain
We expect to maintain this 24, 25% EBITDA margin.
Shaurya
24%, 25%. Okay, sir. Thank you.
Operator
Thank you. The next question is from the line of Mohammed Sufyan [Phonetic] from Dinero Capserv. Please go ahead. Mr. Sufyan, your line has been unmuted. Please go ahead with your question.
Mohammed Sufyan
Hello. I’m audible now?
Operator
Yes.
Mohammed Sufyan
Yeah. Thank you sir for the opportunity. So I just need to ask what the order book we have of 1687 crore. So what will be the execution time period and like 2000 crores. What you have bidded in that? Like what’s the success ratio we have? I just need to understand for the same.
Sanjay Jain
The orders which we have in our hands, the general timeline for these projects is 18 to 30 months. So this order book, this entire order book is going to be executed by middle of FY27.
Mohammed Sufyan
Okay, middle of FY27 and this in 2000 crores. Like what’s the success ratio generally was?
Sanjay Jain
Pardon, can you repeat please?
Mohammed Sufyan
The order we have bidded for like 2000 crores. So what will be like generally what’s the success ratio, I’m asking?
Sanjay Jain
The success ratio of the company for last financial year I will say it was around 50%, 47% or 50% and the average success ratio was in the range of 30 35%. So we are quite hopeful that order book of around 2000 crore which we have analysis for current financial till FY25 at least we will see that L1 or the orders coming into our hands.
Mohammed Sufyan
Okay. And what is the confidence for the margin though you like you said for the you know compared to your peers are doing better. So like what the order you have bidded. So are there the margins sustainable or should improve from here? What gives you the confidence for the same?
Sanjay Jain
The market depends upon how a project is carried and how the execution, how its designing is taken forward. So the way we are carrying these projects it always remains the same for all the companies. But it is different margin for different type of companies. Because the way they are carrying it forward, it depends on it. So the way we are going forward we understand and we are quite hopeful that we will be in a position to maintain the margin. But we are confirming.
Mohammed Sufyan
Okay. And if just confirming again in the previous like participant you said that 40% of your revenue comes in Q4. Right. So on that basis we can say like around the UK for FY25 you will do around top line up for like 1100 crore or something.
Sanjay Jain
I have confirmed you the past trends what have been there. So there will be definitely an increase in top line. And we are quite hopeful that we will be crossing 1000 crore and we will definitely like to outdo those numbers.
Mohammed Sufyan
Okay, thank you sir.
Sanjay Jain
Thank you.
Operator
Thank you. The next question is from the line of Tej Patel from Niveshaay. Please go ahead.
Tej Patel
Thank you so much for the opportunity. Sir. I as far as I recall in you know, in the previous Concord so you said that we have bidded for about 500 to 600 crores of hemp projects and currently we have two project M projects in hand. Right. So I wanted to get your understanding on why we are chasing him project. Why I’m asking it this because probably you need to put 60% of your upfront capital there and then you get your payments after three years. That also in annuity terms, right. So what’s the motivation there? Why we are bidding for hem projects where we have to probably, you know, give an upfront capital which, which in turn increases your long term borrowings and we are getting payments after three years in annuity forms. So why HEM over EPC and what’s the thought process there?
Sanjay Jain
What we understand is HEM are having even better margin in comparison to EPC. You have said it right that it’s 60% infusion of funds from the concessionaire end. So the balance sheet looks a bit heavy. However the competition gets reduced so attraction is always there. So we have to keep a combination of HAM and EPC going forward that we can absorb some of the hemp projects in our balance sheet because we are getting good margins and rest of the projects will go in epc. So right now one of the HEM is completed, COD is achieved and annuities are coming and two HEM projects are under execution mode. So for other HEM projects for which we have submitted our bids, we have not got those projects.
Tej Patel
Got it. But then when you say high margin. How much of a high margin? And in terms of competition you said 10 to 12 players in a normal STP bid, Right. But then in hemp, what’s the competitive scenario?
Sanjay Jain
In HEM that competitive scenario reduces to around seven, eight. So there is a filtration of another three, four players. So the number, number of players are getting reduced in HEM projects.
Tej Patel
In terms of margin, how much? If you could just throw light on.
Sanjay Jain
An EPC project of STP is having a margin of around 24, 25% for us and for HEM we look forward to a margin of somewhere around 30% plus.
Tej Patel
Got it, got it. And I just again your viewpoint on we are expending to, you know, other sectors like solar as you mentioned. So what’s the reason why I’m asking is this because although let’s say the government have extended the scheme, if you look at the Capex, especially across all the schemes, especially in the JALG1 mission. Although the allocated budget was quite high, the expected. Expenditure as a have been almost 50% and about let’s say 60, 70% under AMRUTH and all. So do you see your reason for expanding into other sectors is low order inflow or what’s the thought process behind it? Because I mean in the start of the call you said you are getting a healthy order inflows, right? Then why are we expanding to other sector? I mean do you foresee orders getting slowed down? Although there the budget has been, I mean the scheme has been extended and the budget allocation are also higher.
Sanjay Jain
First of all, there is humongous work which is to be done in India in the water and wastewater sector. So the sector is very, very strong and a number of projects are coming up, projects are lined up and projects will come up in future as well and we are quite hopeful and the same support is there from the central governments and states and ULBs as well. So there is no challenge at all if we see to this water and wastewater sector and with the growth in this sector we are also aligned and we are also growing at the same rate. So there are no challenges at all what we foresee in future or at least next four to five years to come.
So the scenario is it is very very healthy and the sector is bullish and there will be huge work which will come up and we are also bidding and we’ll be executing. The slowdown in JJM was basically what we got to understand is that the scheme was earmarked till March 2024. In this budget the timeline for the completion of a scheme has been extended till 2028 and the funds have also been allocated for this. So we don’t think that there is going to be any slowdown or the funds funds not being made available from the government side. So it was just a temporary phase which was to be handled.
Now coming to when we are going bullish on this sector there was an organic growth initiative which we had also forcing and we had also mentioned in our DRHP and RHP our focus has always been on the sustainability and green energy concepts. We are putting up solar power plant as a part of the project in our various STPs which we are installing. So our focus was that we can definitely enter into this particular sector wherein as a standalone solar power project we can also think of this line. There is humongous work again available in this green energy sector. There are commitments from the central government from India to achieve that zero emission norms.
So having said that, since the sector is so bullish again. So we are trying, we are taking some small steps and we are trying to develop ourselves. So this new company which will be forming will be a part and will be a subsidiary of Enviro. It will be double growth. The growth which we are achieving from the water and wastewater sector, it will continue at this level itself. And we expect that a small group that will also get added to our parent company from this green energy and sustainable growth.
Tej Patel
Got it. Interesting. And sir, if you could just throw some light on from when and which year probably we would start let’s say bidding for projects under, let’s say the green energy segment and what type of projects exactly? Under also green energy segment and if you could also throw some light on, you know, team building, you know, because scope of work is different, right? I mean although you did solar projects in water, but if you just throw some light on the team building side and when could you know, this segment start contributing? In our order book and in terms of revenue also.
Sanjay Jain
The team building, that will start, we presume it will be sometime next financial year and some revenue generation should also start from next financial earlier. We are already on the job. We are, we have submitted two bits in solar as well. So we are aligned to this sector and the moment we get any of the bits wherein we are successful, so that moment will start and the revenues will start accruing. From that I can say because it is just two months so the work is not going to be started. So the revenues will also get generated from next quarter, next financial year. So it is FY26 and we will see some revenue contribution from this green energy sector as well.
Now coming to the sector, the identification is it is solar, then it is power hydro, then it is 24 by 7 renewables, green hydrogen. So this is basically what we understand is green energy is all about. Our main focus and our concentration right now will remain solar. When we will have a stronghold in the solar segment then we’ll go on and understand the other sectors and we will move on and increase our extent there.
Operator
Sorry to interrupt sir, but the current participant has been disconnected. We will move on to the next question. It’s from the line of Sanjay from VT Capital. Please go ahead.
Sanjay
Yeah, thank you for the opportunity. Sir, can you hear me?
Sanjay Jain
Yeah, yeah.
Sanjay
So congrats on a good set of numbers. Like so just to mention like we are in plan of bidding for the solar project as well. So how come sir, we will be able to help those solar companies in like fixing all those EPC projects?
Sanjay Jain
Right now we have some small capacities which we have executed in our current projects, current water projects. So for bidding for a bigger, bigger or I’ll say the for which the technical experience is not available with us, we will enter into some form of joint venture or consortium with some solar companies itself.
Sanjay
So sir, basically what we are going to do, like what kind of things we are going to like set up like in a water team, we make all those canals, all those water houses, all these things. So in the solar thing, what kind of things we’re going to take.
Sanjay Jain
This is just a start. So for the start we can be an EPC player or an integrator — integrator of solar systems. So entering into that manufacturing of solar modules. So that is not in question right now. First of all, let us enter into it. Some EPC projects have some strengths with us, we understand the industry. Then we will look on what is the size available to us, how we can grow organically into that field.
Sanjay
Got it, Got it sir. And so just to mention in the previous participants answer — questions like the margin guidance or margin like range for the different sectors of the work like treatment plant and all those for EBC and ham. So what kind of margins we are having for the water supply project? The segments where we are thinking of going to be probably participating in future.
Sanjay Jain
Are you asking for the current water supply projects or for the future ones?
Sanjay
Current and future as well. So if you can throw some margin guidance for those segments as well, like what you did for the EPC and HEM projects.
Sanjay Jain
Yeah, the current water supply schemes which we are executing are having margin somewhere in the range of 17 to 20% will be fairly comfortable for the water supply scheme or projects if we are executing at a margin a slightly lower margin, maybe around 22, 23% margin is there then we are comparatively comfortable because in STP we look for a margin of around 24 to 25%. So even though if those margins are there then definitely we’ll enter into those projects. We are looking for water supply schemes which are under Amruth.
Sanjay
Okay, got it. And what could be the margin guidance for the common effluent system plants like we told in the previous these things are very like complex to build up. The margins are pretty high in this segment. So if you can throw some numbers to understand like what kind of we have compared to other segments which we offer.
Sanjay Jain
When we bid for the projects in CETP domain, we expect margins somewhere in the range of around 30% on our costs. So that way our CETP margins are almost equivalent to those hem margins which we are getting for STPs.
Sanjay
Got it. Got it. And sir, are we doing initial projects in water treatment plant?
Sanjay Jain
Yeah, these water supply schemes includes water treatment plant as well.
Sanjay
Okay. So margins do differ in that segment or it’s almost same like what we operate here.
Sanjay Jain
I already told the margin in water — a water treatment plant as a standalone project means these are just two small numbers which come individually as a treatment plant only. So these two do generally come as a water supply scheme. So we have to means work out that scheme in totality then.
Sanjay
Okay, like if you go for the water supply thing, you need to take the water as well, right? That’s what you need to say.
Sanjay Jain
Yeah, yeah. Supply scheme in itself is that it is entirely that drawing water from the river. So an intake well to be constructed, then pump pumps are to be installed. It is VT pumps. Then a raw water pipeline, then construction of a treatment plant. Then clear water reservoir main balance in the wire. Then the distribution pipelines. ESRs. Distribution. Distribution pipeline. So this whole gambit makes a water supply scheme.
Sanjay
Got it. Got it, sir. So thank you so much from your side, sir. Thank you so much. Wish you all the very best.
Sanjay Jain
Thank you.
Operator
The next question is from the line of Siddhant from RV Investment. Please go ahead.
Siddhant
Am I audible, sir?
Operator
Yes, please go ahead.
Sanjay Jain
Yeah.
Siddhant
So my question is basically we are consistently maintaining a net profit margin of 15%. So going in this different sectors like solar and other renewable energy will be able to like maintain this margin.
Sanjay Jain
First of all, our company, parent company Enviro Infra Engineers Limited as a standalone company, it is concentrating on water and wastewater segment. So our margins will remain healthy and our margin will continue to sustain those margins. So this line is entirely different. And when we are talking about that sustainability entering into solar power, so it is our start into that particular line. So at the start maintaining those level of margins may be challenging or we cannot confirm it right now. First of all we need to enter into that segment. We need to understand the complexities there. Only then we will be in a position to confirm what exactly will be the margin.
However having said that those margins, even if say if that margin is 10% that is getting added to the margins, what we are already generating in the parent company and the growth there, that growth is not getting hampered at all with the entry into a newer segment. So basically it will be a consolidation and it will improve to the top line and the bottom line of the company.
Siddhant
Okay, sir. Okay, that answers. Thank you very much.
Operator
Thank you. The next question is from the line of Mohammed Sufyan from Dinero Capserv. Please go ahead.
Mohammed Sufyan
Hello. Yes sir, all my questions are answered. I just need to ask what will be the tax rate for FY25 and going forward?
Sanjay Jain
The tax — there is no change in the tax rate. The tax rates are same which have been prevailing for the past two, three years. So there is no change in the tax rates.
Mohammed Sufyan
Okay.
Operator
The next question is from the line of Tej from Niveshaay. Please go ahead.
Tej Patel
Yeah, thank you so much for the chance. Again I’m really sorry, I don’t know. For some reason my lines got dropped. So again the same question. Sir, if you could. I’m not sure if you answered this. When are we planning to, you know, enter other segment and from when can we expect the orders coming in?
Sanjay Jain
We expect to enter into the next into this new segment in the next financial year. Basically the — whatever the company has achieved during this current financial year because the IPO was in the month of November and the IPO fund have traveled only in the last week of November. So the main growth story from these IPO funds, this will definitely get translated and replicated in FY26 and onwards.
Tej Patel
Okay. Okay. And. And I mean although not that material but our let’s say interest cost has decreased from 12 crores last product about 8 crores this quarter. Right. Despite a higher debt based ahead of September. So why is it? What’s the reason? And one more follow up question is while bank limits for the Saranpur Hem sanction. Right.
Sanjay Jain
We are again glad to inform you that the sanction for Saharanpur from our bankers it was communicated on the date of signing of the concessionary agreement itself to that entire four month period. So the closer was already there. So the time period was available for doing other condition precedents to financial closure has already been achieved for the Saharanpur project.
Tej Patel
Okay. And why the…
Sanjay Jain
Can you please repeat your other question please?
Tej Patel
Yes. My first question was our interest cost decreased from let’s about 12 to 8 crores this quarter. Right. Despite a higher base as on 9-23-2024. Right. So I’m asking why the interest cost is decreased despite a much higher base.
Sanjay Jain
Basically that there has been a repayment of 120 odd crore from from the term loans which we the company was having. So there is a slight reduction in the interest cost.
Tej Patel
Got it. And what’s the debt balance right now as on December?
Sanjay Jain
The borrowings as on September ’24 it was 376 crore. And presently the borrowing level is 270 cr consolidation basis.
Tej Patel
Okay. Got it. Got it. And when do we expect the results for this? About let’s say 3,000 to 4,000 or bits that we have submitted. Do we expect the results to come out in this quarter only?
Sanjay Jain
We do expect not all but it do take a time of somewhere around 120 days for which the bids are kept valid. So for at least for some of the projects at least we will know that yes we are L1. So the evaluation will get completed.
Tej Patel
So any number how many orders are we including terms of inflow we expecting this quarter?
Sanjay Jain
We are expecting. We are maintaining that level of around 2000 crore which should flow to the company. And at least we should get that line that either we are L1 or we are going to be awarded those level of projects.
Tej Patel
Okay, perfect. Thanks. Thanks a lot. That’s all from my side.
Sanjay Jain
Thank you.
Operator
Thank you. As there are no further questions from the participants I now hand the conference over to Mr. Sanjay Jain for closing comments.
Sanjay Jain
I thank the entire team of Enviro Infra Engineers limited for their untiring efforts, hard work and dedication which drives the company forward through various market conditions. Also I appreciate all of you for participating in our conference. Please do get in touch with our investor relations team for any further questions. Thank you.
Manish Jain
Thank you all. Thanks.
Operator
On behalf of Enviro Infra Engineers Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.